A major American private equity firm is set to acquire a payment processing company that handles about one-third of all payment transactions in Canada. The Royal Bank of Canada and Bank of Montreal have confirmed the sale of Moneris, one of the country’s leading commerce solutions providers, to Francisco Partners for $2 billion. Following the announcement of the deal, both RBC and BMO saw an increase in their stock prices. RBC anticipates a post-tax gain of around $475 million from the transaction, while BMO expects to gain $600 million.
While the sale has been beneficial for the two Canadian banks, concerns have been raised by industry analysts regarding the potential negative impact on Canada’s digital sovereignty, especially with the ongoing trade tensions between Canada and the U.S.
The concept of digital sovereignty involves the ability of a country or individual to maintain control over their digital assets. In a statement made in September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy free from external pressure. In the same month, a group of experts and academics urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield the nation from external influences.
Sharon Polsky, the president of the Privacy and Access Council of Canada, echoed these concerns, highlighting the risk of Canadians’ data being accessible to foreign governments and law enforcement agencies. With Moneris serving thousands of businesses in Canada and processing over five billion transactions annually, the potential exposure of personal data has raised red flags within the privacy advocacy community.
The fears surrounding the Moneris deal are compounded by the ongoing trade war between Canada and the U.S., with experts warning that transaction data could be exploited in trade negotiations. Colin Deacon, an Independent Canadian senator, expressed apprehension over the possible misuse of Canadians’ data by the U.S. government.
Both BMO and RBC have refrained from providing additional comments on the sale, stating that Moneris’s commitment to Canadian businesses will remain consistent under new ownership. Polsky emphasized the inadequacy of Canada’s current privacy legislation and the potential ramifications of sharing data with foreign entities.
The Canadian government has introduced Bill C-36, aimed at enhancing digital privacy protection and establishing privacy as a fundamental right. However, critics argue that the bill falls short in addressing national security and data sovereignty concerns. As the sale of Moneris awaits regulatory approvals and the finalization of the deal, questions loom over Canada’s preparedness in safeguarding its digital assets and sovereignty.
