TikTok Fights Canadian Shutdown Order

TikTok is contesting a Canadian government directive to cease its business operations, citing national security concerns.

The company filed an application for a judicial review with the Federal Court in Vancouver on Dec. 5, seeking to overturn the order mandating the dissolution of TikTok Technology Canada Inc.

Last month, Canadian Industry Minister François-Philippe Champagne announced plans to shut down TikTok’s Canadian entity.

This followed a national security review of its Chinese parent company, ByteDance Ltd.

TikTok has argued there are “less onerous” solutions than the shutdown route taken by Prime Minister Justin Trudeau’s government.

Despite the order, Canadians can still access TikTok, as the app itself remains unaffected by the directive.

How Did the Canadian Government Decide This?

Minister Champagne emphasized that the decision was informed by comprehensive advice from Canada’s security and intelligence community.

He also urged Canadians to use TikTok “with eyes wide open.”

The review was conducted under the Investment Canada Act, which allows the government to investigate foreign investments that could pose national security threats.

TikTok contends the government failed to engage with the company about the concerns prompting the order. The company alleges that the measures imposed “bear no rational connection to the national security risks” and described the rationale as “unintelligible” and “rife with logical fallacies.”

While TikTok remains accessible to Canadians, the future of its business operations hinges on the outcome of the judicial review.

TikTok Argues ‘Unfair’ Procedures

The government defended its actions as necessary to address “specific national security risks” linked to ByteDance’s operations in Canada.

In its court filing, TikTok described Minister Champagne’s decision as “unreasonable” and “driven by improper purposes.” The company further claimed the order is “grossly disproportionate” and that the national security review was “procedurally unfair.”

TikTok reports having 14 million users in Canada—approximately one-third of the population—with offices in Toronto and Vancouver.

The company has warned of significant economic fallout from the shutdown. “Shutting down TikTok’s Canadian offices and destroying hundreds of well-paying local jobs is not in anyone’s best interest,” it said in a statement last month.

Similar Issues Faced in U.S.

The situation in Canada mirrors challenges TikTok is facing in the U.S.

President Joe Biden signed legislation requiring ByteDance to sell its U.S. assets by Jan. 19, 2025, to avoid a nationwide ban. TikTok and ByteDance are appealing the law, arguing it infringes on free speech rights.

A federal appeals court recently upheld the ruling, stating that the legislation was “carefully crafted to deal only with control by a foreign adversary” and designed to “counter a well-substantiated national security threat posed by the PRC (People’s Republic of China).”

Analysts estimate that a U.S. ban could cost small businesses over $1 billion in revenue and creators nearly $300 million in earnings within a single month.

This article includes reporting by The Associated Press.