Proton drops Canadian expansion plans over lawful-access bill
The Swiss tech company says the Liberal government's proposed surveillance legislation would make expansion in Canada impossible.
Swiss privacy firm Proton has abandoned plans to establish a North American headquarters in Canada, citing the federal government's proposed lawful-access legislation. The company's chief technology officer, Bart Butler, said Bill C-22 could undermine privacy protections for Canadian users. Proton, which offers encrypted services to over 100 million global customers, said expansion in Canada would be impossible if the bill passes as written. It joins several other tech firms warning the legislation would force them to curtail operations or leave the country.
The bill would compel telecommunications firms, internet providers and other digital services to alter their systems to provide new surveillance capabilities for police and the Canadian Security Intelligence Service. Security agencies argue Canada lacks the legal tools its Five Eyes intelligence allies possess to aid investigations. Technology companies counter that the bill's demands exceed those in other countries and risk weakening or breaking encryption, thereby threatening user privacy. Toronto-based Psiphon recently began planning to move its operations out of Canada. In May, the secure messaging app Signal stated it would rather exit the Canadian market than "be compelled to compromise on the privacy promises we have made to our users." Windscribe, a Canadian online privacy service with more than 100 million registered users, also warned it may leave, with its CEO saying the bill would render Canada an "untenable place for most companies to operate in, foreign and domestic."
European civil rights groups raised concerns during Prime Minister Mark Carney's visit last month, arguing the bill could force European companies in Canada to weaken encryption and retain user metadata. They said in a letter that "a partner cannot credibly seek deeper digital trade integration while legislating the power to compel European providers to weaken their products in secret." Canada's digital policies have repeatedly sparked international trade disputes in recent years. The Online Streaming Act and Online News Act previously provoked conflicts with the United States and Silicon Valley, leading Meta to block news in Canada. Ottawa also enacted a unilateral digital services tax in 2024, breaking an international moratorium, but rescinded it in June 2025 after it became a major irritant in trade talks with the U.S. The lawful-access bill passed the House of Commons in June and is now under review in the Senate, where amendments could be demanded before it returns to the House for further debate and voting. The legislation's fate hinges on the Liberal government's ability to maintain a voting coalition long enough to secure its passage. This political uncertainty means the debate over Bill C-22 could extend indefinitely, escalating tensions with the tech sector even as the government seeks to promote Canada as a stable destination for investment.
With files from The Globe and Mail