A prominent payment processing company handling approximately 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 revealed their plans to sell their jointly owned entity, Moneris, a leading commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO experienced a surge in their stock prices. RBC anticipates a gain of around $475 million post-tax from the sale, while BMO expects to profit around $600 million.
Despite the positive outcomes for the involved companies, some industry experts are expressing concerns about potential adverse effects on Canada’s digital sovereignty, especially amid the ongoing trade tensions with the U.S. The concept of digital sovereignty pertains to a country’s ability to maintain control over its digital assets. In a recent statement, AI Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy that is shielded from external pressures.
In a plea to Prime Minister Mark Carney, numerous experts and academics stressed the urgency of safeguarding Canada’s digital sovereignty in light of the Moneris deal. Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these sentiments, highlighting the risks associated with Canadian data being accessible to foreign governments and law enforcement agencies. Moneris, which caters to over 325,000 businesses in Canada and processes more than five billion transactions annually, holds vast amounts of transaction data that could potentially be exploited for leveraging trade negotiations.
The acquisition of Moneris by an American entity has raised concerns about the vulnerability of Canadians’ data to external influences, particularly the U.S. government. The lack of robust privacy legislation in Canada further exacerbates these apprehensions, as Polsky warns of potential compliance dilemmas for Canadian companies faced with conflicting legal obligations between the U.S. and Canada. Despite recent legislative efforts like Bill C-36 aimed at enhancing privacy protections and data governance, Polsky believes that Canada still has a considerable distance to cover in fortifying its digital sovereignty and data security framework.
Regulatory approvals, including clearance under the Competition Act, are pending for the Moneris sale, which is projected to conclude by the end of the banks’ fiscal first quarter in 2027. As the transaction progresses, the discourse around Canada’s digital sovereignty and data protection continues to underscore the importance of strengthening the country’s privacy laws and safeguarding its digital assets against external pressures.