A major American private equity firm is set to acquire a leading payment processing company in Canada, responsible for handling approximately one-third of the country’s payment transactions. Royal Bank of Canada and Bank of Montreal jointly announced the sale of Moneris, a prominent commerce solutions provider, to Francisco Partners for $2 billion. Following the news of the deal, both RBC and BMO witnessed a positive impact on their share prices, with RBC expecting to net around $475 million post-tax and BMO $600 million from the transaction.
Despite the financial gains for the Canadian banks, some industry experts are expressing concerns about the potential negative implications on Canada’s digital sovereignty, especially in the midst 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, free from external influence. In a recent statement, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy that is independent and secure.
In a related development, a group of experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty, highlighting the risks of foreign interference in the country’s data affairs. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these concerns, emphasizing the potential implications of sensitive Canadian data falling into the hands of foreign governments and law enforcement agencies.
Moneris, which caters to thousands of businesses in Canada, processes over five billion transactions annually, serving more than 325,000 points of commerce. The acquisition has raised fears that Canadian transaction data could be accessed by foreign entities, potentially compromising individual privacy and security. Concerns have been voiced regarding the possibility of U.S. border authorities scrutinizing individuals’ purchase histories, leading to potential issues for travelers.
The timing of the acquisition amid trade tensions between the two countries has further fueled apprehensions about the deal. Experts like Sharon Polsky and Independent Canadian Senator Colin Deacon have highlighted the risks of leveraging Canadian transaction data for trade negotiations and the potential consequences of sharing sensitive information with foreign governments.
Both RBC and BMO have refrained from commenting further on the deal, emphasizing continuity in serving Canadian businesses under the new ownership. However, the lack of robust privacy legislation in Canada has raised alarms about the vulnerability of Canadian data to external pressures. Polsky stressed the urgency of enhancing privacy laws to protect digital sovereignty and prevent undue influence from foreign jurisdictions.
The Canadian government has introduced Bill C-36, the Protecting Privacy and Consumer Data Act, aimed at strengthening privacy regulations and safeguarding digital assets. The bill proposes significant reforms to Canada’s privacy framework, emphasizing privacy as a fundamental right and setting guidelines for data transfer outside the country. While these legislative efforts are underway, concerns persist about the adequacy of current laws in safeguarding Canadian data sovereignty.
The sale of Moneris is subject to regulatory approvals, including clearance under the Competition Act, and is expected to conclude by the end of the banks’ fiscal first quarter in 2027. Despite these developments, experts like Polsky emphasize the need for Canada to bolster its digital sovereignty measures to navigate the evolving landscape of data security and privacy.
[Source](https://www.cbc.ca/news/politics/moneris-deal-canadian-digital-sovereignty-9.7304962)