A major American private equity firm is set to acquire a payment processing company that handles about a third of all payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal have confirmed the sale of Moneris, a leading commerce solutions provider in Canada, to Francisco Partners for $2 billion. Following the announcement, both RBC and BMO witnessed a positive surge in their stock prices. RBC anticipates a post-tax gain of approximately $475 million, while BMO expects to gain around $600 million from the transaction.
Despite the financial benefits for the Canadian banks, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty, especially amid the ongoing trade tensions with the U.S. Digital sovereignty broadly refers to a country’s ability to maintain control over its digital assets. In a recent statement, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy that is not subject to external pressures.
In a joint open letter addressed to Prime Minister Mark Carney, numerous experts and academics urged the government to safeguard Canada’s digital sovereignty and shield the nation from external influences, particularly in light of the Moneris deal. Sharon Polsky, President of the Privacy and Access Council of Canada, echoed these concerns, highlighting the risks associated with Canadian data being accessible to foreign governments and law enforcement agencies. Polsky warned that sensitive transaction data could potentially be exploited for trade negotiations, especially given the current trade war dynamics between Canada and the U.S.
The looming acquisition of Moneris has sparked apprehensions among stakeholders, including Independent Canadian Senator Colin Deacon, who expressed worries about potential data sharing with the U.S. government. The concerns raised by Polsky and Deacon underscore the importance of digital privacy legislation in Canada. While efforts are being made to enhance privacy laws, including the introduction of Bill C-36, there are lingering gaps that need to be addressed to safeguard data sovereignty.
The sale of Moneris is subject to regulatory approvals, including clearance under the Competition Act, and is projected to be finalized by the end of the banks’ fiscal first quarter in 2027. The deal signifies a significant shift in ownership that could have far-reaching implications for Canada’s digital landscape, leaving stakeholders grappling with the challenges of preserving data sovereignty in an increasingly interconnected global economy.