A significant proportion of payment transactions in Canada will soon be under the ownership of an American private equity firm as The Royal Bank of Canada and Bank of Montreal announced the sale of Moneris, a leading commerce solutions provider in Canada, to Francisco Partners for $2 billion. Both RBC and BMO have seen positive outcomes from the deal, with their share prices rising post-announcement. RBC anticipates a post-tax gain of approximately $475 million, while BMO expects to gain around $600 million from the sale.
Concerns have been raised by some industry experts regarding the potential negative impact on Canada’s digital sovereignty due to the ongoing trade tensions with the U.S. Digital sovereignty pertains to a country’s or individual’s ability to maintain control over their digital assets. In September, AI Minister Evan Solomon emphasized the importance of establishing a sovereign digital economy independent of external influence.
Amidst calls to safeguard Canada’s digital sovereignty, the acquisition of Moneris by an American entity has raised apprehensions about the exposure of Canadians’ data to foreign entities, including law enforcement agencies. The deal could potentially lead to sensitive transaction data being accessed by foreign governments, posing privacy risks for Canadian businesses and consumers.
The transaction has prompted concerns about the leverage that could be derived from the vast amount of data generated by Canadians’ transactions, especially in the context of the ongoing trade disputes between the two countries. Experts warn that the deal could potentially enable the U.S. government to utilize Canadians’ data for trade negotiations and other purposes, raising questions about data privacy and security.
Despite the implications of the transaction on digital sovereignty, both BMO and RBC have emphasized their commitment to maintaining service standards for Canadian businesses under the new ownership. However, privacy advocates stress the need for stronger privacy legislation in Canada to protect against potential data breaches and unauthorized data sharing.
Efforts are underway to enhance digital privacy laws in Canada, with the introduction of Bill C-36 aiming to revamp the private sector privacy framework and reinforce privacy rights for Canadians. The bill includes provisions for privacy impact assessments and restrictions on data transfers outside of Canada. However, critics argue that these measures may not go far enough in ensuring data sovereignty and national security concerns are adequately addressed.
The sale of Moneris is still subject to regulatory approvals, including clearance under the Competition Act, with the expected completion by the end of the banks’ fiscal first quarter in 2027. As Canada navigates the evolving landscape of digital commerce and data protection, there are ongoing discussions about the need for stronger regulatory frameworks to safeguard the country’s digital sovereignty in an increasingly interconnected world.