An American private equity firm is set to acquire Moneris, a major Canadian payment processing company that handles about one-third of payment transactions in the country. The Royal Bank of Canada and Bank of Montreal have announced the sale of Moneris to Francisco Partners for $2 billion, resulting in positive market reactions for both banks. RBC anticipates a profit of around $475 million post-tax, while BMO stands 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 U.S. Digital sovereignty refers to a nation’s or individual’s ability to maintain control over their digital assets. Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy free from external influence.
In a separate development, a group of experts urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty in the face of the Moneris deal. Sharon Polsky, President of the Privacy and Access Council of Canada, highlighted the risks of Canadian data being accessed by foreign governments and law enforcement agencies due to the acquisition.
The concerns are amplified by the trade war between Canada and the U.S., with fears that transaction data from millions of Canadians could be used as leverage in negotiations. The lack of robust digital privacy legislation in Canada further compounds these worries, as companies may prioritize compliance with foreign laws over Canadian regulations.
The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, to strengthen privacy protections and address data sovereignty issues. However, critics like Polsky argue that more comprehensive measures are needed to ensure data retention within Canada for national security and sovereignty reasons.
The sale of Moneris is pending regulatory approvals and is expected to be finalized by the end of the banks’ fiscal first quarter in 2027. Despite efforts to update digital privacy laws, Canada is perceived to be lagging behind in safeguarding its digital sovereignty, leaving room for further progress in this area.