Executive Summary: Key Legal and Evidentiary Issues

• Judicial review was sought of a government order requiring Hikvision Canada to cease operations due to national security concerns under the Investment Canada Act (ICA).

• The applicants requested a stay of the order pending the outcome of the judicial review, arguing irreparable commercial harm.

• The government contended that national security risks from continued operations outweighed the applicants’ commercial interests.

• Evidence included affidavits from both parties, with the government relying on third-party intelligence and policy reports.

• The court found the public interest in national security outweighed the applicants’ evidence of commercial harm.

• No costs or damages were awarded to either party.

Facts and outcome of the case

Background and facts

This case involves Hikvision Canada Inc. and Hangzhou Hikvision Digital Technology Co., Ltd., subsidiaries of a Chinese technology company, challenging a Canadian government order under the Investment Canada Act (ICA). The government order required Hikvision Canada to wind up its business and cease all operations in Canada within 120 days, citing national security concerns. The government’s decision was based on findings that Hikvision’s ownership structure and ties to the Chinese state created risks of espionage and unauthorized data collection, given the nature of its products, which include security cameras and other Internet of Things (IoT) devices.

Hikvision Canada had operated in Canada since 2015 but only filed the required ICA notification in 2024, after being prompted by Canadian authorities. Following a national security review, the government concluded that continued operation of Hikvision Canada would be injurious to Canada’s national security. The applicants filed for judicial review of the order and sought an interim stay to allow them to continue operations while the review was pending.

Legal arguments and evidentiary issues

The applicants argued that the order would cause them irreparable harm, including loss of revenue, damage to business relationships, loss of employees, and harm to reputation. They presented affidavits detailing these harms and asserted that the national security concerns were speculative and unsupported by direct evidence. The government, on the other hand, relied on intelligence assessments, policy reports, and the principle that enforcement of national security legislation is presumed to be in the public interest.

The court considered the three-part test for granting a stay: whether there was a serious issue to be tried, whether the applicants would suffer irreparable harm, and where the balance of convenience lay. While the court accepted that there was a serious issue and that the applicants would suffer some irreparable harm, it found that the public interest in national security outweighed the applicants’ commercial interests.

Outcome of the case

The court dismissed the motion for a stay, allowing the government’s order to remain in effect. The court emphasized that the ICA’s national security provisions are forward-looking and that the risk of harm to the public interest from continued operations by Hikvision Canada was sufficiently substantiated by the government’s evidence. The court also noted that the applicants’ failure to comply with ICA notification requirements for several years contributed to their current predicament. No costs or damages were awarded to either party. The judicial review application will proceed under case management, but Hikvision Canada must comply with the government’s order in the interim.