A significant American private equity firm is set to acquire a major Canadian payment processing company that conducts about one-third of all payment transactions in the country. The Royal Bank of Canada and Bank of Montreal made the announcement that they would be selling their jointly owned Moneris to Francisco Partners for $2 billion. Following the news, both RBC and BMO witnessed an increase in their shares, with RBC expecting to gain around $475 million and BMO $600 million from the sale after taxes.
While this development has been favorable for the two banks, some industry experts are expressing concerns about the potential negative impacts on Canada’s digital sovereignty amid the ongoing trade tensions with the U.S.
Digital sovereignty broadly refers to a country’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 pressures. A group of experts and academics penned an open letter urging Prime Minister Mark Carney to defend Canada’s digital sovereignty swiftly to shield the country from external influences.
Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these sentiments, highlighting the potential risks of Canadians’ data being accessed by foreign governments and law enforcement agencies due to the Moneris deal. Thousands of Canadian businesses rely on Moneris, which services over 325,000 points of commerce and processes more than five billion transactions annually.
The concerns are further amplified by the ongoing trade tensions between Canada and the U.S., raising fears that the vast amount of data from Canadian purchases could be exploited in trade negotiations. The lack of robust privacy legislation in Canada is also a point of worry, as Polsky emphasized the potential consequences if Canadian companies are compelled to comply with less stringent Canadian laws over more stringent U.S. regulations.
The sale of Moneris is subject to regulatory approvals and is expected to conclude by the end of the banks’ fiscal first quarter in 2027. Despite government efforts to strengthen data privacy laws, there are lingering concerns about Canada’s readiness in safeguarding its digital sovereignty in the face of such transactions, leaving the country lagging in this aspect.
