A US private equity firm will soon own a Canadian payment processing company that handles about one in three transactions.

The Royal Bank of Canada and Bank of Montreal are selling Moneris to Francisco Partners for $2 billion.

The deal is good for RBC and BMO, with their shares rising after the announcement. RBC will get about $475 million, and BMO will get $600 million.

Some analysts are worried that this deal could hurt Canada's control over its digital information.

Digital sovereignty means a country or person has control over their digital assets.

Canada's AI minister said the country needs a digital economy that is free from outside control.

The AI minister thinks it's time to update Canada's privacy laws.

Many experts wrote a letter to the prime minister, asking him to protect Canada's digital sovereignty.

Sharon Polsky, a privacy expert, agrees with this idea.

Polsky said Canadians should be worried because their information is at risk.

A Canadian company that handles data will now be owned by a US firm, making it available to other governments.

Moneris works with thousands of businesses and handles over $5 billion in transactions each year.

Polsky said Canadians' data could be available to foreign governments and law enforcement.

She gave an example of US border agents checking someone's purchase history before letting them into the country.

Polsky asked if someone would be stopped at the border because they bought something with THC, a chemical in cannabis.

It's possible that this could happen now more than ever.

The deal is happening during a trade war, which makes Polsky even more worried.

Polsky thinks the US could use Canadians' purchase data to inform trade negotiations.

Colin Deacon, a Canadian senator, is also worried about how the US could use Canadians' data.

Deacon said the US government could ask for and share Canadians' data.

A Canadian senator is concerned about the US buying a Canadian payment processor.

There are many ways the US president could control services Canadians use.

BMO and RBC won't comment on the deal, pointing to their press releases.

Moneris said it will still serve Canadian businesses the same way.

Canada's laws to protect digital privacy are not strong enough, according to Polsky.

Polsky said Canada is not ready.

If a Canadian company is forced to give data to the US, it will comply with US law.

The Canadian government has taken steps to address digital sovereignty, introducing Bill C-36.

The new bill would give Canadians the right to ask companies to delete fake AI content.

The bill proposes a big change to Canada's private sector privacy framework, making privacy a fundamental right.

The bill requires companies to do a privacy impact assessment before transferring personal data outside Canada.

The government said the law would apply to any company with a substantial connection to Canada.

Polsky said the bill and other attempts to update Canada's digital privacy laws don't address the real issues.

The bill doesn't talk about keeping data in Canada for national security or data sovereignty.

Bill C-36 is the Liberal government's third attempt to update privacy regulations, and it has a long way to go before becoming law.

The sale of Moneris still needs regulatory approvals and is expected to close by the end of 2027.

Where does this leave Canada?

Polsky said Canada is behind.

Canada is trying to look strong, but it has a long way to go.