About a year ago, I attended the Elevate Festival in Toronto, which I recommend if you haven't had the chance to experience it. The event was very inspiring because of its focus on business, technology, and entrepreneurship. It was interesting to see people at various stages of their careers; some executives, others developing their startups, a few in between, and some simply there to gain insights and knowledge.
There was a unique atmosphere, influenced by the current political situation between Canada and the US. Many discussions centred around data sovereignty, cloud infrastructure independence, and ensuring that Canadians' data remained safe and secure within the country's borders or trusted allies.
Building trust requires considerable effort, yet it can be shattered very quickly… and once broken, repairing it becomes extremely difficult, if not impossible.
Considering the current geopolitical landscape, it is unclear where we go from here... but it seems the rules have shifted permanently. This situation highlights the need to diversify relationships and to return to a pioneering spirit, particularly in fields like technology, cybersecurity, sustainability, and renewable energy; positioning Canadians in the market as responsible and ethical technology providers.
As advocates for free trade and global cooperation to support shared economic growth, what strategies are in place when some participants don't play by the rules? How can you safeguard your investment?
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You do that by protecting the core of your business. Given that, why do major companies within a country continue to sell their brands, services, and enterprises?
What are we looking at?
Over the past two decades, several major acquisitions of Canadian icons and critical service infrastructure by U.S. entities have sparked debates over national identity, consumer sentiment, and digital sovereignty.
If we break some of those acquisitions down the we can categorised them into:
- Brand and consumer identity. This relates to sentiment.
- Infrastructure and digital sovereignty. This relates to sensitive data, financial transactions and core technologies.
The main issues with transactions involving core financial activities, personally identifiable information (PII), or hosting and cloud storage arise when they lack appropriate agreements, making them subject to the laws of the host country. In such situations, U.S. laws such as the CLOUD Act or the USA PATRIOT Act apply, potentially requiring U.S.-owned companies to provide U.S. law enforcement with access to data stored on their systems, no matter where the servers are located.
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A few cases to review.
In full disclosure, the recent Moneris sale has reignited concerns, which is why we initiated this research to examine other notable Canadian business cases.
RBC and BMO agreed to sell Canada’s largest payment processor to San Francisco-based private firm Francisco Partners for two (2) billion dollars
Here are just a few:
- Moneris Solutions. 2026. RBC and BMO agreed to sell Canada’s largest payment processor to San Francisco-based private firm Francisco Partners for two (2) billion dollars.
- Aeryon Labs (2019). Waterloo-based drone manufacture, acquired by US defence company FLIR Systems for Two hundred (200) million dollars.
- Radian6. The New Brunswick’ social analytics was bought by Salesforce in three hundred twenty six (326) millions.
- Eloqua. The Toronto’s marketing automation that was acquired by Oracle for eight hundred and twenty one (871) millions.
- Canada Goose. New York-based private equity firm Bain Capital acquired a majority stake in Canada Goose Holding Inc.
A notable example that might set apart the previously mentioned cases:
Tim Hortons. A twelve and a half (12.5) billion dollar deal. This iconic brand gets acquired by Burger King Worldwide. RBI (Restaurant Brands International) was formed in 2014 through the merger of US based Burger King and Canadian coffee shop, Tim Hortons. RBI is the owner of restaurants such as Burger King, Tim Hortons, Popeyes and Firehouse Subs. The interesting part of this one, which makes it a unique case, is that RBI is a Canadian and US multinational fast food holding company.
The impact.
The above has an impact when countries, that once upon a time were allies, now fall into polarised views, trade fights, and trust erodes. In that case, the country without a contingency plan, full ownership of their foundations and a proper distribution (in plain words, not putting all their eggs in one basket) loses their edge and leverage and becomes a hostage,
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of the one they once thought it was it's trusted partner. This has the following impact:
- Data residency. PII and sensitive data is subject to risk. We are referring here to cardholder data, merchant analytics, personal addresses and consumer behaviour data. In the cases such as Moneris and Eloqua, the US Cloud Act is a direct risk to the privacy around this Canadian data. Just in the case of Moneris alone, it is calculated that it processes 1 in 3 transactions across Canada.
- Digital Sovereignty. When you have a systematic dependency where your core infrastructure answers to a foreign board, it impacts your customers’ and your local businesses operations, which are essential for your national economy.
- Sentiment on heritage. Canadian iconic brands such as Tim Hortons and Canada Goose with their “canadian-ness”, and this feeling among many that some of it has gone away after the acquisitions. This carefully crafted storytelling behind the narrative has built an emotional connection with consumers that should not be taken for granted, as without it, they become endangered as a business.
- Intellectual property. IP falls in the hands of the buyer, giving valuable elements such as economic telemetry (e.g. POS data), omnichannel gateways, fraud detection algorithms, trademarks, patents around design; just to name a few.
- Defence and tactical. This has a direct impact on national security and surveillance capabilities.
Final remarks.
The question arises on how do we navigate sovereignty, innovation and global partnerships?
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In my view, it is not impossible to achieve some sort of balance if we
achieve it with collaboration. After all, the goal is not isolation and
protectionism; and instead is about strategic independence. If you take
Digital Sovereignty as one aspect to tackle, that should not be seen as a
cost, and more as a competitive advantage; that addresses aspects of
ethical AI, local skillsets (as well as associating with great talent
from abroad) and infrastructure.
Canadians are the owners of our
destiny, our people and policies. We are here to put our part to shape
global standards, not to hide from them. We can trade freely, however
negotiating from a position of strength, making sure reciprocity and
security is present.
Canada is “nice” and has so much to offer; and its future depends on being agile, principled and bold.
