The backstory here is that Pope Benedict XVI has mandated that Catholics' liberty to assist at the Latin Mass is to be affirmed as widely and as generously as possible. He has made it clear that this is the canonical right of Catholics.
It is possible to question whether a bishop is permitted to cancel these Masses upon any pretext. And if the business about virus-spreading were the compelling issue, there would be far less restrictive ways to address that. An obvious one would be a slower and more careful distribution of the Sacrament.
It’s sounds like it’s a liability issue, based on requests from the Canadian government. Such requests don’t have to be legal mandates to form the basis for expensive lawsuits. Canada isn’t as lawsuit-addicted as the US, but it’s still a significant issue. As long as these Latin Mass groups remain part of the Roman Catholic Church, then their actions put the assets of the Roman Catholic Church at risk, and it’s appropriate for the designated agents of the Roman Catholic Church in a particular area to have authority over matters which risk the Church’s assets. One could certainly argue that competent adults are assuming the risk, and that their lawsuits wouldn’t get far as long as the parishes in questions gave prominent notice that the government was advising against direct-to-mouth communion. However, masses are also attended by minors, adults who are retarded and already classified as mentally incompetent for legal purposes, and elderly people who may be found mentally incompetent to assume such a risk if a legal issue arises.