A U.S. private equity firm is set to acquire Moneris, a major commerce solutions provider in Canada 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 RBC and BMO, with their shares surging post-announcement. RBC anticipates a $475 million post-tax gain from the sale, while BMO expects $600 million.
However, concerns have been raised by industry analysts about potential negative implications for Canada’s digital sovereignty in the midst of the ongoing trade tensions with the U.S. Digital sovereignty pertains to a nation’s ability to maintain control over its digital assets, free from external influence.
In September, AI Minister Evan Solomon emphasized the need for Canada to establish a sovereign digital economy to safeguard against coercion. A group of experts and academics penned an open letter urging Prime Minister Mark Carney to defend Canada’s digital sovereignty from external pressures. Sharon Polsky, president of the Privacy and Access Council of Canada, echoed these concerns, emphasizing the importance of protecting Canadians’ data from foreign entities.
Moneris serves thousands of businesses in Canada, processing over five billion transactions annually. Polsky warned that the deal could potentially expose Canadians’ data to foreign governments and law enforcement agencies, posing privacy risks. The transaction, occurring amid trade tensions between the U.S. and Canada, raises fears that consumer data could be exploited for trade negotiations.
Colin Deacon, an Independent Canadian senator, expressed apprehension about the U.S. government accessing Canadians’ data through this deal. Both BMO and RBC declined to comment further on the deal, emphasizing Moneris’s continued commitment to serving Canadian businesses.
Polsky highlighted the inadequacy of Canada’s current privacy legislation, underscoring the need for stronger protections. She emphasized the potential consequences if a Canadian company is pressured to comply with U.S. laws over Canadian regulations. The Canadian government introduced Bill C-36, aiming to enhance digital privacy protections by establishing privacy as a fundamental right and requiring privacy impact assessments for data transfers outside Canada.
Despite these efforts, Polsky criticized the legislation for not adequately addressing data retention within Canada for national security or data sovereignty purposes. Bill C-36 represents the government’s latest attempt to update privacy laws, following previous unsuccessful endeavors. The sale of Moneris is pending regulatory approvals and is expected to conclude by the end of the banks’ fiscal first quarter in 2027, leaving Canada striving to strengthen its digital sovereignty protections.
