A major American private equity firm is set to acquire Moneris, a prominent Canadian payment processing company responsible for about one-third of the country’s payment transactions. The Royal Bank of Canada and Bank of Montreal recently announced the sale of Moneris to Francisco Partners for $2 billion, resulting in a positive market response for both banks. Following the deal, RBC anticipates a post-tax gain of approximately $475 million, while BMO expects to gain around $600 million.
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 refers to a nation’s ability to maintain control over its digital assets, ensuring independence from external influences. AI Minister Evan Solomon emphasized the importance of establishing a sovereign digital economy that is free from coercion.
In a joint open letter, numerous experts urged Prime Minister Mark Carney to safeguard Canada’s digital sovereignty and shield the nation from external pressures. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed concerns about the implications of the Moneris acquisition on Canadians’ data privacy. The deal could potentially expose Canadians’ information to foreign governments and law enforcement agencies, raising security and privacy issues.
The transaction, occurring amid trade tensions between the U.S. and Canada, has heightened worries about the potential misuse of Canadians’ purchase data in trade negotiations. There are apprehensions that sensitive data could be leveraged by the U.S. government, compromising individual privacy and national interests.
Despite the concerns raised, both RBC and BMO have emphasized their commitment to Canadian businesses through Moneris. However, privacy advocates like Polsky argue that existing privacy legislation in Canada is inadequate and fails to address the challenges posed by cross-border data transfers.
The Canadian government introduced Bill C-36, the Protecting Privacy and Consumer Data Act, to strengthen the country’s privacy framework and establish privacy as a fundamental right. The bill mandates companies to conduct privacy impact assessments before transferring personal data outside Canada, aiming to enhance data protection measures.
While the Moneris deal awaits regulatory approvals and is expected to close by 2027, concerns persist about the implications for Canada’s digital sovereignty. Polsky emphasized the need for robust data protection laws that prioritize national security and data sovereignty, indicating that Canada still has progress to make in safeguarding its digital assets.