A major American private equity firm is set to acquire a significant payment processing company in Canada, responsible for about one-third of the country’s payment transactions. The Royal Bank of Canada and Bank of Montreal have announced the sale of Moneris, a leading commerce solutions provider, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO saw an increase in their stock prices, with RBC expecting to gain approximately $475 million and BMO $600 million from the transaction.
Despite the positive financial implications for the banks, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty amid the ongoing trade tensions with the U.S. Digital sovereignty refers to a country’s ability to maintain control over its digital assets.
In September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy that is independent of external influences. An open letter signed by numerous experts urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty from potential external pressures.
Sharon Polsky, president of the Privacy and Access Council of Canada, expressed apprehension over the deal, highlighting the potential risks associated with Canadian data being accessible to foreign entities, including law enforcement agencies. Thousands of businesses in Canada rely on Moneris for payment processing services, handling over five billion transactions annually.
The concerns escalate as the transaction unfolds amidst trade tensions between the two countries. Polsky and Independent Canadian Senator Colin Deacon voiced worries about the implications of U.S. ownership of Canadian data. They highlighted the possibility of leveraging transaction data for trade negotiations and potential data sharing with U.S. authorities.
Both RBC and BMO refrained from providing additional comments beyond the official press releases about the deal. Moneris assured that its commitment to Canadian businesses will remain unchanged under new ownership.
Polsky emphasized the urgency for enhanced privacy legislation in Canada to protect digital privacy and sovereignty. The government introduced Bill C-36, aiming to strengthen privacy laws and establish privacy as a fundamental right, but critics argue that more robust measures are needed to ensure data protection and national security.
The sale of Moneris is subject to regulatory approvals and is anticipated to be finalized by the end of the banks’ fiscal first quarter in 2027. The acquisition raises questions about Canada’s stance on digital sovereignty and the adequacy of its privacy laws, with concerns about potential vulnerabilities in the nation’s digital landscape.