The news: Canada reversed its November 2024 order to shut down TikTok’s local operations, opting instead for strict regulatory oversight for business continuity, per Bloomberg.

Canada’s approach diverges sharply from the US’. It imposed tighter regulations to govern TikTok’s operations, while the US pursued a “sell-or-be-banned” strategy requiring structural divestiture and a change in ownership.

“The decision follows a thorough assessment of the information and evidence gathered during the review process. … Protecting Canadians’ data and the safety of children online will always be a top priority of the government,” Industry Minister Mélanie Joly said in a statement.

The new rules permit TikTok Technology Canada to continue operating under legally binding security commitments modeled on the EU’s Digital Services Act framework, preserving local jobs and adding cultural investments.

• TikTok must implement “new security gateways and privacy-enhancing technologies to control access to Canadian user data,” Joly said.
• An independent third-party monitor will continuously verify compliance, mirroring EU transparency protocols.
• Enhanced protections for minors will be enforced, aligning with requirements from Canada’s privacy commissioner’s joint investigation.
• TikTok’s parent company, ByteDance, committed to investing in Canada’s cultural sector, supporting creators and Indigenous language content on TikTok.

Why it’s worth watching: For the 613,000 small and medium-sized businesses on TikTok in Canada—which contributed $2.3 billion to the economy in 2024, according to the platform—the ruling means it’s business as usual, now with stronger security measures in place. 

We forecast that TikTok’s Canadian user base will grow 5.1% YoY to 14.2 million in 2027, representing more than a third of its population. Government approval ensures it has the opportunity to continue catering to its Canadian users.

Industry impact: Canada forged a third path regarding TikTok—neither outright ban nor forced divestiture.

This managed-risk model, grounded in enforceable data sovereignty safeguards and third-party audits, could become a template for countries seeking to balance security concerns with economic continuity.

Marketers should anticipate stricter compliance from platforms and view Canada’s actions as a blueprint for enforceable digital policy, making data governance a core part of campaign strategy.