A major American private equity firm is set to acquire a prominent 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 their jointly owned Moneris to Francisco Partners for $2 billion, resulting in a positive market response with increased share prices for both banks. The transaction is expected to yield approximately $475 million for RBC and $600 million for BMO after taxes.
However, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty amidst the ongoing trade tensions with the U.S. Digital sovereignty encompasses the ability of a country or individual to maintain control over their digital assets. In a recent statement, AI Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy that is immune to external pressures.
The acquisition of Moneris has sparked worries about the security and privacy of Canadians’ data. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed apprehension about the sale, highlighting the risk of sensitive information falling into the hands of foreign governments and law enforcement agencies. With over 325,000 points of commerce and processing more than five billion transactions annually, Moneris plays a significant role in the Canadian business landscape.
The deal’s timing amidst trade disputes between Canada and the U.S. has further amplified concerns regarding potential data leverage for trade negotiations. Experts fear that the vast data from Canadian purchases could be exploited to influence trade deals. Senator Colin Deacon also raised alarms about the potential misuse of Canadians’ data by the U.S. government.
Both BMO and RBC have refrained from elaborating further on the transaction, reiterating their commitment to continuing service for Canadian businesses under new ownership. As debates on digital privacy legislation continue, Polsky emphasized the urgency for Canada to enhance its privacy laws to safeguard against data breaches and external pressures.
The Canadian government recently introduced Bill C-36, the Protecting Privacy and Consumer Data Act, which aims to strengthen the country’s privacy framework by recognizing privacy as a fundamental right and implementing stricter regulations for data transfers. However, critics argue that the legislation falls short of addressing critical issues related to data sovereignty and national security.
While the Moneris acquisition awaits regulatory approvals, including clearance under the Competition Act, it is expected to conclude by the end of the banks’ fiscal first quarter in 2027. Despite ongoing efforts to bolster digital privacy laws, Canada is perceived to be lagging in safeguarding its digital assets, prompting calls for stronger legislative measures to protect data sovereignty.
