A major American private equity firm is set to acquire a leading Canadian payment processing company that handles about a third of all transactions in the country. The Royal Bank of Canada and Bank of Montreal recently announced the sale of Moneris, a key commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the news, both RBC and BMO experienced a boost in their stock prices. RBC anticipates a post-tax gain of approximately $475 million, while BMO expects to gain $600 million from the transaction.
Despite the positive financial impact on the banks, some industry experts are expressing concerns about the potential implications for Canada’s digital sovereignty, particularly in light of the ongoing trade tensions with the U.S. The concept of digital sovereignty pertains to a nation’s ability to maintain control over its digital assets. In a statement, AI Minister Evan Solomon emphasized the importance of establishing a sovereign digital economy that is free from external influence.
In a joint open letter, numerous experts urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty in the face of potential external pressures. Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these sentiments, highlighting the risks associated with a foreign entity having access to sensitive Canadian data through the Moneris acquisition.
With Moneris servicing over 325,000 commerce points and processing billions of transactions annually, concerns have been raised about the potential exposure of Canadians’ data to foreign governments and law enforcement agencies. Polsky raised the example of U.S. border officials scrutinizing individuals’ transaction histories, potentially impacting their entry based on purchase records.
The timing of the acquisition amid trade tensions between Canada and the U.S. has further fueled apprehensions about the deal. Polsky and Independent Canadian Senator Colin Deacon expressed worries about how the U.S. government could leverage Canadians’ transaction data for various purposes, including trade negotiations.
Both BMO and RBC refrained from elaborating beyond their initial press releases announcing the sale. Moneris assured that its commitment to Canadian businesses would remain unchanged under new ownership. Polsky emphasized the importance of robust privacy legislation in light of the transaction, citing potential conflicts between Canadian and U.S. data laws.
The Canadian government has taken steps to enhance digital privacy protections through Bill C-36, which aims to modernize the country’s privacy framework and strengthen individuals’ rights over their data. Despite these efforts, Polsky believes that existing legislation falls short in addressing critical issues related to data retention and national security, leaving Canada trailing in safeguarding its digital sovereignty.
The completion of the Moneris sale is pending regulatory approvals, including clearance under the Competition Act, and is expected to conclude by the end of the banks’ fiscal first quarter in 2027. Amidst these developments, Polsky emphasized the urgency for Canada to bolster its regulatory framework to protect its digital assets effectively.