A major American private equity firm is set to acquire a prominent payment processing company that handles about one-third of all transactions in Canada. The Royal Bank of Canada and Bank of Montreal recently announced the joint sale of Moneris, a leading provider of commerce solutions in Canada, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO experienced a boost in their stock prices. RBC anticipates a post-tax gain of approximately $475 million from the transaction, while BMO expects to gain $600 million.
Despite the positive reactions from the banks, there are concerns raised by industry analysts about potential implications for Canada’s digital sovereignty in light of the ongoing trade tensions with the United States. Digital sovereignty broadly refers to a country’s ability to maintain control over its digital assets. In September, AI Minister Evan Solomon emphasized the importance of establishing a sovereign digital economy 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 the potential risks associated with sensitive data being accessible to foreign entities.
Moneris, which serves thousands of businesses in Canada and processes over five billion transactions annually, plays a pivotal role in the nation’s commerce landscape. The deal has raised fears that Canadians’ data could be vulnerable to foreign government surveillance, including law enforcement agencies. The acquisition could potentially enable foreign entities to access individuals’ transaction histories, leading to privacy and security concerns.
The timing of the acquisition amidst the trade tensions between Canada and the U.S. has heightened worries about the potential misuse of Canadians’ data for trade negotiation purposes. The lack of robust digital privacy legislation in Canada further compounds these concerns, with experts highlighting the need for stronger measures to protect citizens’ data and ensure national security.
As the Moneris deal progresses, regulatory approvals will be required, including clearance under the Competition Act, with the transaction expected to close by the end of the banks’ fiscal first quarter in 2027. Despite ongoing efforts to enhance digital privacy laws in Canada, there is a consensus that more stringent measures are needed to safeguard the nation’s digital sovereignty and privacy rights.
