Canada is investing in sovereign infrastructure for AI to run the country among other uses, but agentic commerce means it must also consider who controls the infrastructure through which AI acts, something that can directly affect individual citizens, residents and their businesses.

Paper 30 in the Canadian AI Sovereignty Series

It’s becoming an irreversibly interconnected world, and private companies increasingly have tremendous power over the functioning of our day to day lives. A deal was recently announced that has the potential to make that considerably more exposed to both AI and specifically agentic systems that are increasingly fly being characterized as autonomous and “rogue”, and political interference, while also impacting Canadian sovereignty as well. There’s a contradiction at the heart of our strategy. Canada is spending billions of dollars to ensure artificial intelligence can run on Canadian-owned, Canadian-located and Canadian-governed infrastructure, but add another layer and it’s on the verge of allowing exposure to both autonomous agentic behaviour and political interference to grow considerably.

This week, BMO and RBC agreed to sell Moneris, the country’s largest merchant acquirer and one of its most important commercial payment processors, to US-based Francisco Partners for approximately C$2 billion.

Those may appear to be separate stories. In an agentic economy, they are part of the same one. AI systems are moving from generating answers to taking actions. They will purchase supplies, pay invoices, renew subscriptions, reconcile accounts and manage commercial relationships. The payment infrastructure supporting those actions will become part of the functional AI stack.

Canada may have the ability to control the basic infrastructure on which an AI system operates (while we have demonstrated just how much US exposure there is in the network). But if that system must rely on foreign-controlled infrastructure every time it acts in the economy, Canadian AI sovereignty becomes even more vulnerable, at a layer that directly affects citizens, consumers, residents temporary and otherwise, visitors, and small businesses.

What is being sold

Moneris was created by BMO and RBC in 2000. The company now describes itself as Canada’s largest merchant acquirer, supporting more than 325,000 points of commerce and processing more than five billion transactions annually. According to Moneris, its customers represent approximately one in three transactions across the country.

Under the proposed transaction, BMO and RBC will each receive half of the C$2 billion purchase price. Both banks have also signed long-term agreements under which they will continue to refer customers exclusively to Moneris after giving up ownership.

The deal remains subject to regulatory approvals and is expected to close during the banks’ first fiscal quarter of 2027. Moneris announcement

Moneris is not Canada’s national clearing and settlement system. Payments Canada, a legislatively established public-purpose organization, operates Lynx, the Automated Clearing Settlement System and the forthcoming Real-Time Rail. It occupies a different layer. As a merchant acquirer and payment processor, it provides the terminals, gateways, software and processing services connecting merchants to card networks and issuing banks. It transmits transaction information, supports authorization, applies fraud controls and provides merchants with the systems through which they accept and manage payments. Moneris’s explanation of the transaction process

Saying Canada has sold its national payment rails would therefore be inaccurate. Treating the deal as an ordinary change of ownership would understate its importance.

Canada is transferring control of a high-volume commercial interface through which a significant share of Canadian businesses access the payment system. The strongest arguments for the sale is that Moneris may be an ageing platform requiring substantial and continuous investment to compete with newer payment companies; that other credit card processing systems run by other banks have already been implemented on US systems; that it doesn’t really matter who owns the asset because it technically remains under Canadian management. This is reflected by the relatively tiny size of the transaction. But management is not ownership. A recent launch also shows that Moneris is not just a declining asset approaching obsolescence. In June, the company introduced an MCP server for AI-driven payments, allowing AI agents to connect with its commerce capabilities (as we will argue, a double-edged sword). The issue is why, just as infrastructure is being adapted to become an execution layer for agentic commerce, Canada has no apparent plan to finance its modernization while retaining meaningful Canadian control.

The payment layer is becoming an AI layer

In a conventional card purchase, a human selects the merchant, product, price and timing, then authorizes that particular transaction. In agentic commerce, the human can instead authorize a mandate: buy within these categories, from approved sellers, before a deadline and below a specified amount. The agent can then discover the product, compare or negotiate offers, choose the merchant, assemble the cart and initiate payment later, while the human is absent. The human still establishes the agent’s authority, but the agent increasingly determines how and when that authority becomes an economic act.

This also introduces two separate probabilistic decision chains into a single purchase. The buyer’s agent decides what to buy, from whom and under what conditions. Payment-side systems then decide whether the proposed purchase may proceed, applying identity, fraud, sanctions, credit and account-status controls. An error or policy decision on either side can change the outcome. If the purchasing agent can respond to a rejection by revising the cart, switching merchants or trying another route, one mistaken decision can initiate an autonomous chain of further decisions, the cumulative failure dynamic described by Evans’ Law invisible in recent autonomous agentic behaviour described as “rogue.”

Canada’s new national AI strategy describes a value chain extending from energy and chips through compute, models and applications. It acknowledges that Canada remains dependent on foreign providers at several points in that chain and promises sovereign compute infrastructure that is resilient and under Canadian governance. Canada’s National Artificial Intelligence Strategy

There are two risks here. One is technical, buried under layers of infrastructure, based on agentic AI, the behaviour of which has become all too clear in recent disclosures about seemingly autonomous activity.

The proposed Moneris transaction exposes another layer that sovereignty planning must include: economic execution. A model can recommend or even make a purchase without access to a payment system. An agent authorized to complete that purchase needs identity controls, payment credentials, transaction APIs, fraud screening, authorization and a process for resolving errors or disputes. The current reality is delegated autonomy, not financial independence:

At that point, the payment provider is no longer an adjacent utility. It becomes part of the agent’s operational architecture.

Payments Canada has already described this transition. In a March 2026 discussion of the future of payments, participants outlined a progression from AI assistants to digital colleagues and then to autonomous business processes. One example involved an agent searching for a product, comparing options and completing the purchase using saved credentials without sending the customer to a merchant website.

The discussion identified consent, agent authentication, fraud, tokenization, liability and explainability as central unresolved issues. It also suggested that agentic commerce could begin transforming payments within the next 12 to 24 months. Payments Canada discussion on AI and agentic commerce

The organizations controlling payment gateways and merchant relationships will help determine:

• Which AI agents can initiate transactions.
• How an agent proves it has authority to spend.
• Which activities trigger fraud controls.
• What transaction information is available to agents and merchants.
• How liability is assigned when an autonomous system makes a mistake.
• Which technical standards businesses must adopt to participate in agentic commerce.

These are commercial decisions. They are also governance decisions.

Moneris is part of a larger pattern

The Moneris sale is not an isolated shift. In 2025, TD entered a strategic relationship with Fiserv that included the sale of a selected portfolio of approximately 3,400 merchant relationships covering 30,000 locations. Those merchants were to migrate to Fiserv’s processing system and Clover platform. Fiserv’s announcement

Scotiabank has an exclusive merchant-services partnership with Chase Payment Solutions, while CIBC directs business customers seeking merchant services to Global Payments. Scotiabank CIBC

Each arrangement has its own commercial logic. Payment technology requires continuing investment, global scale and increasingly sophisticated cybersecurity and fraud capabilities. Partnerships with large international processors can give Canadian banks and their customers access to technology that would be expensive to reproduce.

The cumulative effect is still significant. A growing share of the infrastructure connecting Canadian merchants to the payment system is being provided or owned by foreign, and specifically, American, companies. That matters more as payment processors evolve from moving transaction messages to operating AI-enabled platforms for fraud detection, merchant analytics, personalization, identity and autonomous commerce.

Residency is not the same as sovereignty

Moneris says that almost 2,000 employees, its head office and its technology infrastructure will remain in Canada following the transaction. The sale doesn’t immediately establish that Canadian transaction data will suddenly leave the country, that Francisco Partners will receive unrestricted access to it or that Moneris will cease to be regulated under Canadian law.

It does, however, illustrate the difference between residency and governance. Infrastructure can be physically located in Canada while its corporate strategy, capital allocation, product roadmap and integration with other platforms are ultimately determined elsewhere.

Canada’s own AI strategy recognizes this distinction. Its sovereign-compute objective concerns infrastructure operating under Canadian governance, rather than infrastructure merely occupying Canadian real estate. The same test should be applied to other systems that give AI operational reach.

The second risk is political, but also practical. The exposure of foreign control over payment infrastructure has already moved from theoretical to demonstrated coercive power. US sanctions against UN Special Rapporteur Francesca Albanese and senior International Criminal Court officials caused bank accounts to be closed and credit cards to be cancelled far beyond the United States; Albanese had to borrow cards from friends, while Canadian ICC judge Kimberly Prost lost her credit cards along with Amazon and Google access. Albanese was briefly removed from the sanctions list following a federal-court ruling and then returned to it eight days later pending appeal, an extraordinary demonstration of how quickly access to ordinary economic life can be switched off. Reuters documented the financial consequences, while sanctioned ICC judges described cards issued outside the United States being cancelled. This does not mean Francisco Partners could independently disconnect a Moneris customer. It demonstrates how US legal power travels through globally dependent banks, card networks and technology providers, especially when the Trump administration describes the ICC as a threat to be dismantled and says no diplomatic option is off limits.

This risk has been discussed by Jon Shell, who argued that selling Moneris to a US owner should be assessed through the experience of Canadian ICC judge Kimberly Prost, whose credit cards and US technology accounts were disabled following Trump administration sanctions. His argument is essentially that infrastructure processing a third of Canadian card transactions could become exposed to the same jurisdictional pressure. Jon Shell’s post⁠

As sanctions screening, identity matching, fraud detection and transaction authorization are delegated to AI, this political exposure acquires a second, statistical one. These systems remain probabilistic and subject to the failure dynamics described by Evans’ Law: as context, ambiguity, entity matching and autonomous steps accumulate, so does the cumulative probability of error. The payment tap can be shut off deliberately as policy or mistakenly through a false match and automated over-compliance. Systems capable of removing access to economic life require deterministic authorization boundaries, auditable decision records, mandatory human review, rapid appeal mechanisms and domestic capacity to continue operating when a foreign government or network provider decides otherwise.

Ottawa is reviewing the transaction

Under the Retail Payment Activities Act, a registered payment service provider must submit a new registration application before another entity acquires control. The Bank of Canada shares completed applications with FINTRAC and the Department of Finance. The process gives the Minister of Finance an opportunity to conduct a national-security review.

The Moneris transaction also requires clearance under the Competition Act. Bank of Canada acquisition-of-control process

The important question is whether the reviews are examining the capabilities that will become strategically important as AI and payments converge.

Regulators should be asking:

• Will the commitment to keep Moneris’s technology infrastructure in Canada be enforceable after the transaction closes?
• How will transaction data and insights derived from that data be used across the new owner’s portfolio?
• Will Canadian merchants retain control over their data, integrations and payment credentials?
• Can merchants move to another provider without losing access to essential records or rebuilding their entire technology stack?
• How will Moneris authenticate AI agents and establish limits on their authority?
• Will merchants and regulators be able to audit automated fraud, authorization and risk decisions?
• Do the exclusive referral agreements with BMO and RBC reduce competition or deepen structural dependence?
• What continuity arrangements would allow Canadian commerce to keep operating during a geopolitical, corporate or technological disruption?

These questions establish what Canada would need to preserve genuine operational sovereignty after approving it, should it be approved. Some would apply even if it isn’t.

What Canadian businesses should understand

For businesses, payment processors will increasingly influence much more than the cost of accepting a card. Consider Shopify. It provides checkout, order management, fraud tools and payment orchestration. It can decide what payment methods appear and route transactions. Stripe performs the actual processing and settlement for Shopify Payments in Canada. Shopify’s current legal processor list identifies Stripe, not Shopify or Moneris, as the Canadian processor. Control is layered. Shopify can reject or route it; Stripe or Moneris can process, flag or stop it; Visa or Mastercard can apply network rules; and the issuer can ultimately decline it.

The Moneris sale doesn’t transfer control of every Canadian card decision. It transfers Canadian ownership of one important decision-making and execution layer. Even Canada’s flagship commerce platform relies primarily on Stripe for payments. Shopify represents a Canadian-owned commerce and orchestration layer; Moneris represents one of the few remaining Canadian-owned processing layers beneath it.

These functions will shape access to AI-mediated customers, determine compatibility with agentic purchasing systems, apply automated fraud decisions and control some of the data businesses use to understand their own customers.

Payment-provider contracts should therefore be examined as strategic technology agreements. Businesses will need clarity on data location, permitted uses of transaction data, AI training, model-derived insights, API access, interoperability, audit rights, incident recovery and the practical ability to change providers.

A company may believe it owns an AI agent because it selected the model and controls the instructions. Its operational reach will still depend on the external systems willing to recognize its authority and execute its requests.

The same is true at the national level. Canada does not need to own every component of every technology system. Sovereignty requires sufficient domestic capacity, regulatory authority and operational alternatives to make meaningful choices and continue functioning when relationships or conditions change.

Canada has begun mapping the minerals, energy, chips, compute, models and applications required for sovereign AI. The Moneris sale reveals another missing layer: the commercial infrastructure through which intelligent systems will act. An AI system that remains sovereign only until it attempts to do something is not fully sovereign.

The Risks are Real

For well over a year now Donald Trump has been threatening CANADA with everything from tariffs to takeovers he’s threatened to dissolve our border. He keeps putting up pictures of CANADA with an American flag over it. He calls our leadership nasty his minions say that we are failing as a country. The rhetoric is not just rhetoric. It never is. it’s soft, sounding and gaining support for the action once it occurs. Prior to invading Venezuela and kidnapping the leader and his wife, similar rhetoric happened. He’s been talking about buying or taking over Greenland for well over a year, to the point where both Greenland and NATO had defensive plans in motion, and now it has recently come out that there’s a contract to start drilling in Greenland sovereign territory.

We should not take these as just insults or idle threats. We are resisting by not travelling to the United States and by not buying American products. Allowing an American company to have access to Canadian buying power at this juncture is a terrible idea, regardless of how independent the company appears. Trump and other leaders have demonstrated they have little compunction about using their power wherever possible, even illegitimately. This is not a deal that is good for Canadians. The Cloud act is bad enough. This is a deal the Canadian government, which is reviewing it now, should reject, and look into options that expand our domestic processing capabilities to cover our population and businesses that depend on these transactions.