A prominent payment processing company facilitating about one-third of all payment transactions in Canada is set to be acquired by an American private equity firm. The Royal Bank of Canada and Bank of Montreal recently announced the sale of Moneris, a leading commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the news, both RBC and BMO witnessed an increase in their stock prices. RBC anticipates a post-tax gain of approximately $475 million from the transaction, while BMO expects around $600 million.
Despite the positive outcomes for the banks, some industry experts are expressing concerns about potential adverse effects on Canada’s digital sovereignty in light of the ongoing trade tensions with the U.S. Digital sovereignty broadly refers to a nation’s or individual’s ability to maintain control over their digital assets. In September, AI Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy that is free from external influences.
In the same month, a group of experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty amid the uncertainties stemming from the U.S. administration. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these sentiments, cautioning Canadians about the implications of their data being accessible to foreign entities.
Moneris serves thousands of businesses in Canada, handling over five billion transactions annually through more than 325,000 points of commerce. Polsky highlighted the potential risks of Canadians’ data being exposed to foreign governments and law enforcement agencies, raising scenarios like U.S. border officials scrutinizing individuals’ transaction histories.
The acquisition of Moneris coinciding with the trade tensions between the two countries has raised further concerns about the leverage that could be derived from the transaction data of millions of Canadians. Polsky and Independent Canadian Senator Colin Deacon underscored the risks of data exploitation by the U.S. government.
Both BMO and RBC referred to their press releases regarding the deal and declined to offer additional comments. Moneris assured that its commitment to serving Canadian businesses would persist under the new ownership. Polsky highlighted the inadequacies in Canada’s privacy legislation, emphasizing the need for stronger regulations to protect digital privacy and data sovereignty.
The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, to strengthen the private sector’s privacy framework and establish privacy as a fundamental right. However, Polsky criticized the legislation for not adequately addressing data retention and sovereignty concerns. The bill is still in the legislative process, while the Moneris sale is pending regulatory approvals and expected to close by the end of the banks’ fiscal first quarter in 2027. Despite these efforts, Polsky believes Canada has work to do to fortify its stance on digital sovereignty.