Ottawa orders dissolution of TikTok's Canadian branch

Photo: Martin Meissner Associated Press The federal government has announced that it is ordering the dissolution of TikTok Technology Canada.

The Canadian Press in Ottawa

Published yesterday at 5:35 p.m. Updated yesterday at 10:18 p.m.

• Canada

The federal government has ordered the dissolution of TikTok’s Canadian arm following a national security review of the Chinese company behind the social media platform.

Industry Minister François-Philippe Champagne said in a news release Wednesday that the move was intended to address “national security risks” related to the creation of TikTok Technology Canada by the company ByteDance.

“This decision was made based on information and evidence gathered through the review, as well as advice provided by Canada’s national security and intelligence agencies and other government partners,” he said.

Champagne said the move would not block Canadians from accessing the TikTok app.

However, he stressed the importance of Canadians adopting good cybersecurity practices, including protecting their personal information.

“The decision to use a social media application or platform is a personal choice. It is still important that Canadians adopt good cybersecurity practices and assess the risks associated with the use of social media applications and platforms, including the protection, management, use and sharing of their personal information by foreign actors, as well as the applicable laws of the countries in question,” he said.

The dissolution order was made pursuant to the Investment Canada Act, which allows for the review of foreign investments that could harm Canada’s national security.

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Champagne’s office did not immediately respond to a request to detail the evidence that led to the government’s decision, the time frame ByteDance has to comply and why the app is not being banned.

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TikTok to challenge order

A TikTok spokesperson said in a statement that closing its Canadian offices would result in the loss of hundreds of jobs well-paid jobs.

“We will challenge this order in court. The TikTok platform will remain available for creators to find audiences, explore new interests and allow businesses to thrive,” he said.

The federal Liberals ordered a national security review of TikTok in September 2023, but that information was not publicly disclosed until The Canadian Press reported last March that the government was investigating the company.

At the time, the Trudeau administration said the review was based on the expansion of a company, which it said constituted the creation of a new Canadian entity. It declined to provide further details on the expansion it was reviewing.

A government database revealed a notification of new activities from TikTok in June 2023. It indicated that Network Sense Ventures was engaged in “marketing, advertising and content development activities related to the use of the TikTok app in Canada.”

Even before the review, ByteDance and TikTok were a lightning rod for privacy and security concerns, as China’s national security laws require organizations in the country to assist in intelligence gathering.

Such concerns led the U.S. House of Representatives to pass a bill last March to ban TikTok unless its China-based owner sold its stake in the company.

Champagne’s office has maintained that Canada’s review is unrelated to the American bill, which has not yet been adopted.

“The government’s decision was made in accordance with the Investment Canada Act, which provides for a review of foreign investments that could be injurious to Canada’s national security,” the Minister of Innovation, Science and Industry said in a news release.

While the federal government can force investors to sell parts of a company or shares, Champagne said the law does not allow him to disclose details of the review.

The Trudeau government banned TikTok from mobile devices in February 2023 after federal and provincial privacy commissioners launched an investigation into the company.

The lack of information being shared with Canadians worries Brett Caraway, a professor of media economics at the University of Toronto.

“The government is not telling us anything substantive about its analysis,” he said in an email.

“While the Investment Canada Act gives the government jurisdiction over social media platforms like TikTok, I think it would be in the public interest for the federal agency Innovation, Science and Economic Development Canada to be more open about the nature of its findings.”