A major American private equity firm is set to acquire a leading Canadian payment processing company responsible for about a third of all payment transactions in the country. The Royal Bank of Canada and Bank of Montreal recently announced the sale of their jointly owned Moneris to Francisco Partners for $2 billion. This move has been well received by both banks, as their shares surged following the announcement. RBC anticipates a profit of around $475 million after taxes, while BMO expects to gain $600 million from the transaction.
However, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty amidst the ongoing trade tensions with the United States. Digital sovereignty refers to a country’s ability to maintain control over its digital assets. In September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy free from external influences.
A group of experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty in light of the Moneris deal. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed concerns about Canadian data potentially becoming accessible to foreign governments and law enforcement agencies. The acquisition of Moneris, which services over 325,000 points of commerce and processes more than five billion transactions annually, could expose Canadians’ data to external entities.
The concern is amplified by the ongoing trade war between Canada and the U.S., with fears that transaction data from millions of Canadians could be exploited for trade negotiations. Privacy advocates worry that the deal could lead to the sharing of Canadians’ data with the U.S. government, raising issues of data privacy and security.
Despite the potential implications, both BMO and RBC have declined to provide further comments on the matter. Polsky emphasized the inadequacy of Canada’s current privacy legislation in protecting digital sovereignty and urged for stronger measures to ensure data remains secure within the country. The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, to enhance the private sector privacy framework and establish privacy as a fundamental right.
While regulatory approvals are pending for the Moneris sale, concerns persist regarding the protection of Canadian data sovereignty and privacy in the face of increasing foreign ownership. The deal is expected to close by the end of the banks’ fiscal first quarter in 2027, leaving Canada with challenges in preserving its digital autonomy.