A major U.S. private equity firm is set to acquire Moneris, a prominent payment processing company that handles about one-third of all transactions in Canada. The Royal Bank of Canada and Bank of Montreal jointly announced the sale for $2 billion, resulting in a positive response from investors as both RBC and BMO stand to gain significantly from the deal. However, concerns have been raised by industry analysts regarding the potential impact on Canada’s digital sovereignty amidst the ongoing trade tensions with the United States.
The concept of digital sovereignty pertains to a country’s ability to maintain control over its digital assets. In a recent statement, AI Minister Evan Solomon emphasized the need for Canada to establish an independent digital economy free from external influence. This sentiment was echoed in an open letter signed by numerous experts urging Prime Minister Mark Carney to safeguard Canada’s digital sovereignty from foreign interference.
Sharon Polsky, President of the Privacy and Access Council of Canada, expressed apprehension over the implications of the Moneris acquisition. She highlighted the risk of Canadians’ data being accessible to foreign governments and law enforcement agencies, potentially compromising individual privacy. Polsky cited the example of U.S. border authorities using transaction records to make entry decisions based on sensitive information.
The concern is further amplified by the ongoing trade dispute between Canada and the U.S., raising fears that transaction data from Moneris could be exploited for strategic purposes during negotiations. Colin Deacon, an Independent Canadian senator, underscored the potential risks associated with the U.S. government having access to Canadian data, emphasizing the importance of protecting sensitive information.
Both BMO and RBC refrained from elaborating on the deal beyond their initial press releases, emphasizing continuity in Moneris’ service to Canadian businesses under new ownership. Polsky emphasized the urgent need for robust privacy legislation in Canada to protect citizens’ digital rights and prevent potential data breaches.
The Canadian government has introduced Bill C-36, the Protecting Privacy and Consumer Data Act, aimed at enhancing digital privacy regulations and establishing privacy as a fundamental right. However, critics like Polsky argue that current legislative efforts fall short of addressing key concerns related to data sovereignty and national security. Despite ongoing regulatory approvals for the Moneris sale, concerns persist about Canada’s readiness to navigate the evolving digital landscape and safeguard its citizens’ data privacy.