The Globe and Mail With files from Marie Woolf

Lawful access’ bill draws growing corporate backlash

The news: Swiss tech-privacy company Proton says it has stopped eyeing Canada for a North American headquarters, and if Ottawa’s lawful-access bill passes in its current form, expansion here would be impossible.

Bart Butler, the company’s chief technology officer, told The Globe’s Marie Woolf that Bill C-22 could compromise privacy safeguards for Canadian users.

The background

The fight is drawing attention to how Canada reconciles digital law enforcement with an urgent push to attract and retain talent – as well as corporate investment.

The Liberal government’s lawful-access bill would require telecoms, internet companies and other digital service providers to make changes to their systems to give surveillance and monitoring capabilities to police services and the Canadian Security Intelligence Service.

CSIS and law enforcement have long argued that Canada is lagging behind its Five Eyes intelligence partners in not having such a lawful-access regime to help investigations. Tech companies say the bill’s requirements go further than those regimes, and could weaken or break encryption and threaten users’ privacy.

Growing company

Proton, which has more than 100 million customers worldwide and uses end-to-end and zero-access encryption, joins a growing list of companies who have warned the bill, if passed, would restrict their ability to expand in Canada or even continue to provide their services.

Earlier this month, Toronto-based Psiphon said it has started drawing up plans to move its operations out of Canada. The service has millions of users globally, including in Iran, Russia and China.

In May, secure messaging service Signal said the company would rather pull out of the country entirely than “be compelled to compromise on the privacy promises we have made to our users.”

Windscribe, a Canadian online-privacy company with more than 100 million registered users, has warned it would also consider leaving the country. Windscribe’s CEO said the bill would make Canada an “untenable place for most companies to operate in, foreign and domestic.

Global risks

Windscribe isn’t blowing smoke. Companies already doing business in Canada are threatening to pull up stakes, and the legislation is running up against a wave of global opposition.

European civil rights organizations used Prime Minister Mark Carney’s high-profile visit last month to warn Canada’s bill could force EU companies operating in Canada to weaken encryption and retain the metadata of European users. “A partner cannot credibly seek deeper digital trade integration while legislating the power to compel European providers to weaken their products in secret,” they said in a letter.

What’s next?

Canada’s efforts to manage its digital space have been the source of trade and corporate friction for years. The country drew the ire of the U.S. government in 2023 when it moved ahead with its Online Streaming Act, and its Online News Act triggered an outright war with Silicon Valley that led to Meta blocking news across Canada.

Ottawa then defied the consensus of the OECD by breaking an international moratorium to push its own unilateral digital services tax in 2024 – a move that became such a major trade irritant with U.S. President Donald Trump that the government completely rescinded the tax in June, 2025, to salvage trade talks. (To the sole benefit of Trump, former cabinet minister Chrystia Freeland wrote in her recently published memoir.)

After passing through the House of Commons in June, Bill C-22 is now getting a sober second thought in the Senate, where changes could be insisted upon before being sent back to the House of Commons, where more changes could be made before another vote, and so on. If it makes it back to Senate, its existence depends entirely upon the Liberal government’s ability to keep a voting coalition together long enough to pass it.

In short, Ottawa’s push for Bill C-22 could stretch on indefinitely – intensifying a battle with domestic and foreign digital companies just as the government aims to paint the country as a more attractive and reliable place to invest.