A significant portion of the payment processing market in Canada, accounting for about one-third of all transactions, is set to change hands as an American private equity firm moves to acquire Moneris, a leading commerce solutions provider jointly owned by the Royal Bank of Canada and Bank of Montreal. The deal, valued at $2 billion, has already had a positive impact on the stock prices of both RBC and BMO since its announcement. RBC anticipates a post-tax gain of approximately $475 million from the transaction, while BMO expects around $600 million.
While the sale has been beneficial for the involved parties, concerns have been raised by industry analysts regarding the potential negative implications for Canada’s digital sovereignty, particularly in light of the ongoing trade tensions with the U.S. Digital sovereignty refers to a country’s ability to maintain control over its own digital assets, free from external influence or coercion.
In a call for action, AI Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy during a speech in September. A group of experts and academics also penned an open letter urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty from external pressures, emphasizing the importance of protecting citizens’ data.
Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these concerns, highlighting the potential risks associated with foreign ownership of a company like Moneris, which handles vast amounts of transaction data for Canadian businesses. Polsky warned that such ownership could expose Canadians’ information to foreign governments and law enforcement agencies, potentially compromising individual privacy and security.
The implications of the Moneris deal are further underscored by the ongoing trade dispute between Canada and the U.S., raising fears that transaction data could be exploited for leverage in trade negotiations. The lack of robust privacy legislation in Canada adds to these concerns, as Polsky emphasized the need for stronger regulations to protect citizens’ data and ensure national security.
Despite reassurances from Moneris about maintaining its commitment to Canadian businesses, questions remain about the potential consequences of foreign ownership on data privacy and security. The proposed legislation, Bill C-36, aims to strengthen privacy protections and update Canada’s privacy framework, but critics argue that more comprehensive measures are needed to safeguard digital sovereignty and data retention within the country.
As the sale of Moneris progresses, regulatory approvals are still pending, including clearance under the Competition Act, with the transaction expected to be finalized by the end of the banks’ fiscal first quarter in 2027. The acquisition highlights the challenges Canada faces in protecting its digital assets and maintaining control over its data in an increasingly interconnected global economy.