A major American private equity firm is set to acquire a leading payment processing company that handles about one-third of all payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal recently announced the sale of Moneris, a prominent commerce solutions provider, to Francisco Partners for $2 billion. This move has already had a positive impact on both RBC and BMO, as their shares surged following the announcement. RBC anticipates a post-tax gain of approximately $475 million from the transaction, while BMO expects around $600 million.
Despite the financial gains, concerns have been raised by industry analysts regarding the potential negative implications for Canada’s digital sovereignty, especially amid 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 need for Canada to establish a sovereign digital economy that is free from external pressures. Several experts and academics penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield the nation from external influences.
Sharon Polsky, President of the Privacy and Access Council of Canada, expressed apprehension about the acquisition, highlighting the risk of Canadians’ data becoming accessible to foreign entities, including governments and law enforcement agencies. Moneris currently serves thousands of businesses in Canada, processing over five billion transactions annually.
The concerns are further exacerbated by the trade war between Canada and the U.S., as the vast amount of data from Canadian purchases could potentially be exploited to influence trade negotiations. Colin Deacon, an Independent Canadian senator, echoed these concerns, warning about the possible misuse of Canadians’ data by the U.S. government.
Both BMO and RBC reiterated their commitment to serving Canadian businesses following the sale, as indicated in press releases. Meanwhile, Polsky emphasized the urgency for Canada to enhance its privacy legislation to protect citizens’ data and digital sovereignty effectively.
Canada recently introduced Bill C-36, the Protecting Privacy and Consumer Data Act, aiming to enhance the country’s privacy framework and establish privacy as a fundamental right. The legislation includes provisions for privacy impact assessments and restrictions on transferring personal data outside Canada. However, critics like Polsky believe that these efforts fall short in addressing the core issues of data retention and national security.
The acquisition 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 regulatory processes, concerns persist about Canada’s position in safeguarding its digital sovereignty, with Polsky highlighting the need for stronger measures to protect citizens’ data and privacy.
