The Carney government’s steady reset of Canadian digital policy continues as it has now backed off plans to ban TikTok from operating in Canada. The government’s approach, first announced in November 2024, never made any sense since the TikTok app remained available without restriction and the corporate ban weakened privacy enforcement and resulted in millions in lost cultural support. The policy was a true lose-lose-lose and seemed premised on piggybacking on U.S. legislation to ban the app. The change in U.S. administration effectively nixed those plans, leaving Canadians with the worst of both worlds: a corporate ban that created real harms with no discernible benefit and a Canadian TikTok app that would ultimately offer fewer safeguards than the U.S. equivalent.
The reset on the TikTok ban came through what amounts to a settlement between the government and TikTok that was made official yesterday by the federal court. TikTok had challenged the government’s ban order as part of a judicial review process. While initial reports suggested that the court had overturned the government’s order banning the company, as the screenshot from the judgment shows, the reality is that the government asked the court to do so as it filed the motion asking that the order be set aside.
TikTok ruling screenshot, January 21, 2026
Both parties agreed to a settlement in which the court set aside the previous order and sent the matter back to Industry Minister Melanie Joly for a new review. It should be noted that the court did not rule on, or even examine, the substantive issues in the case. Instead, both sides agreed on a settlement in which the government effectively withdrew the initial order and TikTok agreed to a future review that could lead to new demands on the company.
Viewed from TikTok’s perspective, the settlement was undoubtedly viewed as good outcome since the immediate threat of closure is now over. The government’s decision to cave on the issue is more notable as the TikTok reversal now sits alongside last year’s digital services tax and AI regulation reversals. Years of failed digital policies are slowly being reset, which is likely to fuel more speculation that the Online Streaming Act (which has generated practically nothing for the industry and faces years of court challenges) and the Online News Act (which has led to 2 1/2 years of blocked news links on Facebook and Instagram) are next, particularly if the U.S. pressures Canada for changes in forthcoming trade talks.
Regulation is still very much needed, but the government is rightly jettisoning failed policies that seemed to prioritize public battles with tech companies rather than developing digital policies in the national interest. The government never could adequately explain what it was doing on TikTok and this week’s developments bring a bad policy choice to an end.
