An American private equity firm is set to acquire Moneris, a major Canadian payment processing company responsible for about one-third of all payment transactions in the country. The Royal Bank of Canada and Bank of Montreal have agreed to sell Moneris 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 expecting $600 million from the sale.
However, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty in light of the ongoing trade tensions with the U.S.
Implications on Digital Sovereignty
Digital sovereignty refers to a nation’s ability to maintain control over its digital assets. AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy that is free from external influence.
In a joint letter to Prime Minister Mark Carney, experts urged the government to safeguard Canada’s digital sovereignty against potential external pressures. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these concerns, emphasizing the importance of protecting Canadians’ data from foreign access.
Moneris, which serves over 325,000 businesses in Canada and processes billions of transactions annually, holds vast amounts of sensitive data. Polsky warned that the acquisition could potentially expose Canadians’ information to foreign entities, including law enforcement agencies.
Concerns over Transaction Data
The acquisition of Moneris comes at a critical time as Canada and the U.S. navigate trade tensions. Polsky expressed apprehension that the transaction data collected by Moneris could be exploited in trade negotiations, raising further privacy concerns.
Independent Canadian Senator Colin Deacon also voiced worries about the potential misuse of Canadians’ data by the U.S. government, highlighting the risks associated with data sharing under external pressures.
Both BMO and RBC, in response to the deal, referred to their initial press releases and declined to provide further comments. Moneris, in a separate statement, assured that its commitment to serving Canadian businesses would remain unchanged under new ownership.
Legislation for Digital Privacy
Polsky criticized Canada’s current privacy legislation, highlighting the inadequacy of existing laws in safeguarding digital privacy. She emphasized the urgent need for robust regulations to protect Canadians’ data from external influence.
The Canadian government introduced Bill C-36, aimed at enhancing digital privacy protections and establishing privacy as a fundamental right. The bill proposes significant amendments to the existing privacy framework, including conducting privacy impact assessments for data transfers outside Canada.
Despite these efforts, Polsky believes that existing legislative measures fall short of addressing the core issues of data retention and national security. The bill is undergoing legislative processes and is not yet law.
The sale of Moneris is pending regulatory approvals, including clearance under the Competition Act, and is expected to conclude by the end of the banks’ fiscal first quarter in 2027.
As Canada navigates these challenges, Polsky emphasized the need for stronger measures to protect digital sovereignty and ensure data security for Canadians.