TikTok Wins Breathing Space as Canada Reconsiders Shutdown Order

ByteDance will be allowed to continue operating TikTok in Canada for now after a federal court paused an earlier government order that required the company to wind down its business in the country.

In November 2024, Canada, under then Prime Minister Justin Trudeau, had directed ByteDance to shut down its Canadian subsidiary, TikTok Technology Canada Inc, following a national security review.

However, that decision was set aside this week after the country's Federal Court sent the matter back to Industry Minister Melanie Joly for a fresh review under the Investment Canada Act, Bloomberg reported. The court asked the minister to “undertake a new further review,” effectively shelving the shutdown order until the reassessment is completed.

The original decision was based on evidence and advice from Canada’s security and intelligence agencies. While the move targeted TikTok’s business operations in Canada, it did not amount to a ban on the app itself.

Reacting to the ruling, a TikTok spokesperson told Bloomberg that the company looks forward to working with the Canadian government “towards a resolution.” TikTok currently has more than 14 million users in Canada, representing roughly one-third of the country’s population.

The court’s decision comes at a sensitive diplomatic moment. It follows Prime Minister Mark Carney’s recent visit to China, the first by a Canadian leader in over eight years, during which both sides signalled a thaw in trade relations and discussed easing tariffs with Chinese President Xi Jinping.

Notably, TikTok’s ownership and operations have faced heightened scrutiny globally, particularly in Western countries, over concerns related to data security and potential foreign influence.

In the United States, ByteDance was compelled last year to divest TikTok’s American operations under a law driven by national security concerns. As part of the arrangement, the Chinese company agreed to create a US-based joint venture in which Oracle, Silver Lake, and MGX together hold a 50% stake.

ByteDance continues to retain control over TikTok’s profitable e-commerce and advertising businesses, while the newly formed entity is tasked with overseeing data security and managing the platform’s algorithms to address regulatory concerns. Notably, the deal is expected to close today (January 22, 2026), according to multiple reports.

Meanwhile, TikTok has already been banned in India since June 2020. The Indian government blocked the app, along with several other Chinese platforms, citing concerns over data privacy, national security, and sovereignty following heightened tensions along the India-China border.