Federal government reveals it ordered national security review of TikTok

The federal Liberals say they ordered a national security review of popular video app TikTok in September 2023 but did not disclose it publicly.

"This is still an ongoing case. We can't comment further because of the confidentiality provisions of the Investment Canada Act," a spokesperson for Industry Minister Francois-Philippe Champagne said this week.

"Our government has never hesitated to (take) action, when necessary, if a case under review is found to be injurious to Canada's national security."

The revelation comes after the U.S. House of Representatives passed a bill Wednesday to ban TikTok unless its China-based owner sells its stake in the business.

Asked whether the Canadian government would consider a measure similar to the U.S. bill, Champagne's office said the Liberal cabinet "issued an order for the national security review of TikTok Canada" on Sept. 6.

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It said the review was based on the expansion of a business, which it said constituted the establishment of a new Canadian entity. It declined to provide any further details about the expansion it was reviewing.

The office said the cabinet order was not accessible online, as is routine, because the information is protected and confidential under the Investment Canada Act.

It indicated TikTok would be subject to "enhanced scrutiny" under the act through a new policy on foreign investments in the interactive digital media sector, which was released by the government earlier this month.

During a press conference in Windsor, Ont., on Thursday, Prime Minister Justin Trudeau said he could not comment on the review.

"Canada made the determination that no government phones or devices can have the TikTok app, that's a matter of security and safety. We're watching, of course, the debate going on in the United States and I can't comment on national security reviews," he said.

The federal policy statement issued earlier this month says "hostile state-sponsored or influenced actors may seek to leverage foreign investments in the interactive digital media sector to propagate disinformation or manipulate information in a manner that is injurious to Canada's national security."

The federal government banned TikTok from its mobile devices in February 2023 after federal and provincial privacy commissioners launched their own investigation of the platform.

The Canadian review is not related to the proposed U.S. bill, which is driven by concerns that the company's current ownership structure is a national security threat.

U.S. cranks up pressure

TikTok is a wholly owned subsidiary of Chinese technology firm ByteDance Ltd.

U.S. lawmakers contend ByteDance is beholden to the Chinese government, which could demand access to the data of TikTok's U.S. consumers through Chinese national security laws that compel organizations to assist with intelligence gathering.

The bill must still pass the Senate, where lawmakers have indicated it will undergo a thorough review. U.S. President Joe Biden has said if Congress passes the measure, he will sign it.

Nearly 30 per cent of Canadian respondents to an October 2022 survey by Toronto Metropolitan University said they were on TikTok.

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The U.S. House of Representatives passed a bill that many say could lead to the end of TikTok in the country. About That producer Lauren Bird breaks down the bill, its constitutionality and what it could mean for app users if it becomes law. An earlier version of this video labelled Seth Moulton as a Republican Representative. He's a Democratic Representative.

For many Canadian creators who make TikTok content, the U.S. market is paramount, said Scott Benzie, executive director of Digital First Canada. The organization advocates for digital creators and has in the past received funding from TikTok.

"If a ban actually goes through in the U.S., Canadian careers on TikTok are over," he said.

For creators who earn money through sponsorships, he said, "obviously most of those brands want to connect with U.S. audiences, and if that's not a possibility then that money just goes away."

Nathan Kennedy, a personal finance content creator from Hamilton, Ont., said he's "pretty calm" about the situation, noting threats to ban TikTok have been around for years.

It's his biggest platform, and the majority of his audience is in the United States. He became a full-time content creator two and a half years ago.

"You kind of just have to be even-keel about the whole thing. I literally cannot do anything," he said.