A major American private equity firm is set to acquire a leading payment processing company that handles approximately one-third of all payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal recently announced the sale of their jointly owned company, Moneris, a prominent commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO saw a surge in their stock prices. RBC anticipates a post-tax gain of around $475 million, while BMO expects to gain $600 million from the transaction.
Despite the positive financial impact on the banks, concerns have been raised by industry analysts regarding the potential negative implications for Canada’s digital sovereignty, particularly in light of 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 importance of establishing a sovereign digital economy that is free from external influence.
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 and shield the nation from external pressures. Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these concerns, emphasizing that Canadians should be wary of their data being accessible to foreign governments and law enforcement agencies.
Moneris, utilized by thousands of Canadian businesses, handles over 325,000 points of commerce and processes more than five billion transactions annually. Polsky highlighted the risk of Canadians’ data being exposed to foreign entities, such as U.S. law enforcement, potentially impacting individuals’ cross-border movements based on their transaction history.
The timing of the acquisition amid trade tensions between the two countries has further fueled apprehensions about the potential leverage of transaction data in trade negotiations. Polsky and Independent Canadian Senator Colin Deacon expressed worries about the U.S. government’s access to and use of Canadians’ data, emphasizing the need for stringent privacy legislation to protect digital assets.
Both BMO and RBC, the sellers of Moneris, refrained from providing additional comments beyond their press releases, assuring that Moneris would maintain its commitment to Canadian businesses under new ownership. Polsky stressed that Canada’s current privacy legislation falls short in safeguarding digital assets, emphasizing the need for stronger protections.
Legislative efforts, such as Bill C-36, aim to enhance Canada’s privacy framework by treating privacy as a fundamental right and imposing stricter regulations on data transfers outside the country. However, Polsky criticized these efforts as insufficient in addressing data sovereignty concerns. The bill, currently in the legislative process, signifies the government’s ongoing efforts to update privacy laws to meet evolving digital challenges. Regulatory approvals are pending for the Moneris sale, expected to conclude by the end of the banks’ fiscal first quarter in 2027, leaving Canada with work to do in strengthening its digital sovereignty protections.