A major American private equity firm is set to acquire a prominent payment processing company responsible for a significant portion of payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal have revealed plans to sell their jointly owned Moneris, a leading commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the announcement of the deal, both RBC and BMO have seen an increase in their stock prices. RBC anticipates a post-tax gain of approximately $475 million from the sale, while BMO expects around $600 million.
Despite the positive outcomes for the banks, some industry experts are expressing concerns about potential adverse effects on Canada’s digital sovereignty amidst the ongoing trade tensions with the U.S. Digital sovereignty broadly refers to a country 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 independent from external influence.
In the same month, a group of experts and academics issued an open letter urging Prime Minister Mark Carney to defend Canada’s digital sovereignty and shield the nation from external pressures. Sharon Polsky, the president of the Privacy and Access Council of Canada, echoed these sentiments, emphasizing the importance of Canadians being vigilant about their data security.
Moneris, which serves thousands of businesses in Canada, manages over 325,000 points of commerce and processes more than five billion transactions annually. Polsky highlighted concerns that with the acquisition, Canadians’ data could potentially be accessible to foreign governments and law enforcement agencies, posing privacy risks.
The transaction’s timing during the trade conflict between Canada and the U.S. raises further apprehensions. Polsky warned that the vast data derived from Canadians’ purchases could be exploited for trade negotiations, potentially compromising individuals’ privacy. Independent Canadian Senator Colin Deacon also expressed worries about potential misuse of Canadians’ data by the U.S. government.
Both BMO and RBC, as well as Moneris, have refrained from providing additional comments beyond their press releases regarding the deal. Polsky noted that Canada’s current privacy legislation is insufficient to safeguard digital privacy effectively, emphasizing the need for stronger regulations to protect Canadians’ data sovereignty.
The government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, as part of efforts to enhance Canada’s private sector privacy framework. The proposed legislation aims to redefine privacy as a fundamental right and impose stricter regulations on data transfers outside Canada. However, Polsky criticized these measures as inadequate in addressing the core issues of data retention and sovereignty.
The Moneris transaction is pending regulatory approvals, including clearance under the Competition Act, and is expected to finalize by the end of the banks’ fiscal first quarter in 2027. Despite these developments, concerns persist about Canada’s digital sovereignty, with Polsky noting that the country still has progress to make in safeguarding its data independence.
[Source](https://www.cbc.ca/news/politics/moneris-deal-canadian-digital-sovereignty-9.7304962)