A major American private equity firm is set to acquire a leading Canadian payment processing company that handles about one-third of all payment transactions in the country. The Royal Bank of Canada and Bank of Montreal announced the sale of Moneris, a prominent commerce solutions provider, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO experienced a surge in their stock prices. RBC anticipates a post-tax gain of approximately $475 million, while BMO expects $600 million from the transaction.
However, concerns have been raised by industry analysts regarding potential negative impacts on Canada’s digital sovereignty amidst the ongoing trade tensions between Canada and the U.S. Digital sovereignty refers to a nation’s or individual’s ability to maintain control over their digital assets. In a statement in September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy free from external influence.
In the same month, a group of experts urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield the country from external pressures. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed apprehension over the deal, emphasizing that Canadians should be wary of their data being accessible to foreign entities, including foreign governments and law enforcement agencies.
Moneris services over 325,000 points of commerce and processes more than five billion transactions annually for thousands of businesses in Canada. Polsky highlighted the potential risks of Canadians’ data being scrutinized by foreign authorities, such as U.S. border agents reviewing individuals’ transaction histories.
The timing of the acquisition amid trade tensions between Canada and the U.S. has raised further concerns about how transaction data could be exploited during trade negotiations. Polsky and Independent Canadian Senator Colin Deacon both voiced worries about the implications of the U.S. government accessing Canadian data through this deal.
Despite inquiries, both BMO and RBC declined to provide additional comments beyond their initial press releases. Moneris assured that its dedication to serving Canadian businesses will remain consistent under the new ownership.
Polsky underscored the inadequacy of Canada’s current privacy legislation in protecting digital privacy, warning that Canadian companies could be compelled to comply with foreign laws over Canadian regulations. The introduction of Bill C-36, the Protecting Privacy and Consumer Data Act, aims to revamp Canada’s private sector privacy framework, emphasizing privacy as a fundamental right and imposing new requirements on companies transferring personal data outside of Canada.
However, Polsky criticized the legislation for not fully addressing data retention in Canada as a matter of national security or data sovereignty. Bill C-36, the government’s third attempt to update privacy regulations, is still in the legislative process and is expected to undergo further steps before enactment.
The sale of Moneris is subject to regulatory approvals, including clearance under the Competition Act, and is projected to conclude by the end of the banks’ fiscal first quarter in 2027. Despite these developments, Polsky expressed concerns about Canada falling behind in safeguarding its digital sovereignty and emphasized the need for stronger measures to protect Canadian data.