A major American private equity firm is set to acquire a leading Canadian payment processing company, Moneris, jointly owned by the Royal Bank of Canada and Bank of Montreal. The $2 billion deal has already had a positive impact on both RBC and BMO, with their shares rising following the announcement. RBC anticipates a post-tax gain of approximately $475 million, while BMO expects around $600 million.

However, concerns have been raised by industry analysts regarding potential negative implications for Canada’s digital sovereignty in the midst of the country’s trade tensions with the U.S. Digital sovereignty refers to a nation’s ability to maintain control over its digital assets, free from external influence. Minister Evan Solomon emphasized the necessity for Canada to establish a sovereign digital economy to safeguard against coercion.

In a recent open letter, experts urged Prime Minister Mark Carney to defend Canada’s digital sovereignty amidst the Moneris deal. Sharon Polsky, President of the Privacy and Access Council of Canada, expressed worry that the acquisition could expose Canadians’ data to foreign governments and law enforcement agencies. Moneris currently serves over 325,000 points of commerce and processes more than five billion transactions annually.

The concern is heightened by ongoing trade disputes between Canada and the U.S., raising fears that transaction data could be used as leverage during negotiations. Colin Deacon, an Independent Canadian senator, voiced apprehensions about potential misuse of Canadians’ data by the U.S. government. BMO and RBC declined to comment further on the deal, emphasizing Moneris’ commitment to Canadian businesses.

Despite efforts to bolster digital privacy legislation, critics argue that existing measures fall short of ensuring data protection and sovereignty. The proposed Bill C-36 aims to revamp Canada’s private sector privacy laws, emphasizing privacy as a fundamental right and introducing stricter regulations for data transfer. However, concerns persist that current legislation does not adequately address data retention within Canada for national security reasons.

While the sale of Moneris is pending regulatory approvals and expected to close in 2027, questions remain about Canada’s position in safeguarding its digital sovereignty. Polsky stressed the need for stronger measures to protect Canadian data and ensure the country does not fall behind in safeguarding its digital assets.