Why Canada Took the Rare Step of Telling TikTok to Pack Its Bags

A man holds a phone displaying the TikTok app, in this file photo, on Aug. 11, 2024. Oleksii Pydsosonnii/The Epoch Times

Ottawa told the Chinese makers of the popular and controversial app TikTok to close its operation in Canada this week following a national security review, but few details were released and the app remains accessible to use.

All foreign direct investments big or small are subject to a national security review under the Investment Canada Act. It applies to the establishment of a new Canadian business by a non-Canadian or the takeover of an existing business.

The process is conducted behind closed doors and involves security and intelligence agencies.

The national security review of TikTok Technology Canada, a subsidiary of ByteDance, was launched in September 2023 without a public announcement. The Canadian Press first reported on the review in March.

Industry Minister François-Philippe Champagne said on Nov. 6 he had ordered the “wind up” of TikTok Technology Canada to address “specific national security risks” related to its operations. He did not name the risks.

The decision was made based on information and evidence collected during the review, and on advice received from the intelligence community, Champagne added.

The Epoch Times reported in July that as TikTok and ByteDance faced increased pressure and a total ban in the United States, it had begun expanding its operations in Canada. The company increased job postings in Canada, offered incentives for China-based employees to move to Canada, and was also planning additional R&D centres here.

The company issued a statement in response to the shut-down on Nov. 6, saying it would challenge the order in court.

“Shutting down TikTok’s Canadian offices and destroying hundreds of well-paying local jobs is not in anyone’s best interest, and today’s shutdown order will do just that,” the statement said.

Ownership

The Chinese ownership of TikTok has been a longstanding topic of concern by security agencies. The concerns centre on the ways in which user data is processed and stored, and how the company can use its algorithm to suppress or boost information.

“[Security concerns] include the possibility that the Chinese government could use it to control data collection on millions of users or control the recommendation algorithm, which could be used for influence operations if they so chose, or to control software on millions of devices which gives it opportunity to potentially technically compromise personal devices,” FBI Director Christopher Wray said in 2022.

Yintao Yu, a former ByteDance executive in the United States, alleges in a 2023 lawsuit that the company has been “responsive” to the requests of the Chinese Communist Party (CCP) “even to elevate or remove content at the request of the CCP.”

He also alleges having seen the backdoor channel in the code allowing certain “high level persons to access user data, no matter where the data is located.”

The company denies Yu’s allegations.

“We plan to vigorously oppose what we believe are baseless claims and allegations in this complaint,” a spokesperson for the company previously told The Epoch Times.

Chinese law requires all organizations and citizens to support the state in the collection of intelligence.

TikTok says it doesn’t store user data in China, but as late as 2023 its CEO said China-based employees had access to some U.S. data.

Another TikTok executive recently confirmed the matter while testifying at a House of Commons committee in October 2023. David Lieber, head of TikTok’s privacy public policy for the Americas, responded “yes” when asked by an MP if the parent company has access to user data in China.

Lieber didn’t comment on whether ByteDance has been compelled to provide data to the Chinese regime, in accordance with the intelligence law. He said, however, that Beijing has never requested user data from them, and that they “would not disclose user data to the Chinese government if we were requested to do so.”

The need for such a request would be moot if a backdoor can be used, as Yu has alleged.

Federal Ban

Ottawa’s shut-down order to TikTok follows another measure last year pertaining to government usage of the app.

TikTok was banned from government devices in February 2023, with Ottawa citing an “unacceptable level of risk to privacy and security.” The move was portrayed as precautionary by then-Treasury Board president Mona Fortier who said there was no evidence government information had been compromised.

“On a mobile device, TikTok’s data collection methods provide considerable access to the contents of the phone,” she said, adding there are concerns about the legal regime that governs the information collected.

The government has not levelled more serious accusations against TikTok. The country’s electronic spying agency has encouraged good cybersecurity practices but has refrained from singling out the Chinese app.

The Communications Security Establishment’s Cyber Centre “is not a regulatory agency and as such does not endorse or ban social media applications,” it said in a parliamentary note last year.

The U.S. government has been more pointed in its criticism of TikTok. Top cyber official John Plumb told a U.S. House committee last year that TikTok is a “potential threat vector” to the U.S. because China may have the ability to direct misinformation and collect data through the app.

“If you consider one-third of the adult population receives their news from this app, one-sixth of our children are saying they’re constantly on this app, if you consider that there’s 150 million people every single day that are obviously touching this app, this provides a foreign nation a platform for information operations, a platform for surveillance, and a concern we have with regards to who controls that data,” said now-retired Gen. Paul Nakasone, testifying alongside Plumb. Nakasone was the commander of the U.S. Cyber Command and chief of the National Security Agency at the time of his statement.

Washington ordered TikTok be deleted from all government-issued phones last year around the same time as Ottawa.

U.S. President Joe Biden signed a law in April that will ban TikTok in the U.S. if it is not sold within a year. ByteDance and TikTok are challenging the law in court, arguing it violates free speech protections.

National Security Reviews

More in-depth national security reviews of foreign investments, such as those that led to the recent order against TikTok Technology Canada, are not uncommon.

The latest annual report for the Investment Canada Act says a “record number” of investments—32—were subjected to extended reviews in fiscal year 2022-2023 compared to 24 in the previous year.

Out of the 32, 22 were subject to further reviews ordered by the industry minister, with 16 being related to China.

In five cases, Ottawa ultimately allowed unspecified China-linked entities to establish a new Canadian business or takeover an existing one, in the fields of computer systems design and scientific research. In other cases, China-linked entities withdrew proposed investments in mining or the film industry.

Ottawa ordered Chinese entities to divest from mining investments on three occasions in 2022-2023. This move was publicized in November 2022 and relates to the lithium sector, also known as critical minerals.

Sinomine (Hong Kong) Rare Metals Resources Co. Ltd., Chengze Lithium International Ltd., and Zangge Mining Investment (Chengdu) Co. Ltd. were told to divest on the grounds of national security.

Andrew Chen, Aldgra Fredly, and Reuters contributed to this report.