The harsh truth is that Canada must always accept some U.S. overreach

John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.

The trade war and the rupture of what is arguably the world’s closest partnership have sparked anti-American sentiment and economic nationalism. Given the way Canada has been treated by the Trump administration, that is no surprise.

But sometimes rhetoric goes too far, and dreams turn too fanciful. Sometimes we forget the unforgiving pull of geography and the harshness of economic reality. A shining example of that is the recent dust-up in the financial sector.

Canada’s payment system is not for sale! Our trade war with the United States has inspired a sudden interest among new and born-again economic nationalists in the ownership of Canadian financial infrastructure.

It comes after the Aug. 11 announcement that Moneris Solutions Corp., the point-of-sale system that Royal Bank of Canada RY-T and Bank of Montreal BMO-T jointly founded in 2000, may be sold to Francisco Partners, a U.S. technology investment firm. The deal is subject to Canadian regulatory approval, raising hopes for some that it could be killed.

The proposed Moneris sale, during the tumult and swirl of U.S. tariffs and our countermeasures, is a check on the limits of Canadian economic nationalism. The episode underscores a harsh truth: Our economy needs a financial system that welcomes innovation and competition – even from the U.S. – and a financial system that reaches south for growth, foreign capital and profits for Canadian shareholders. We have to accept some degree of U.S. extraterritorial reach into our land.

It is a path to prosperity we cannot close.

Moneris’s point-of-sale technology is used by about 325,000 merchants across the country to process five billion debit and credit-card transactions annually, about a quarter of all such transactions. Sharon Polsky, from the Privacy and Access Council of Canada, told CBC “Canadians should be concerned because this is their information.”

Opinion: Moneris, a big payments processor, is being sold to U.S. private equity. This should worry us

Adding his voice to the chorus of concern and protectionist fervour was Senator Colin Deacon who imagines scenarios where Canadian transaction data “under force and under request from the U.S. government could be then shared on an individual basis.”

The sovereignty illusion – that somehow blocking the sale of Moneris will protect the transaction data of Canadians – quickly falls apart when the current state of payment players operating in the country is revealed. Most of them are U.S. owned. All were welcomed into Canada to offer merchants more choice, improve competition, and drive innovation.

Conversely, Canadian banks serve an estimated 15 million Americans and have access to billions of U.S. transaction data points. Should Americans be concerned because this is their information?

A quick read of financial reports from Canada’s five largest banks makes it clear that there is no turning back on the integration of the Canadian and American financial systems.

Royal Bank of Canada

RBC had more than a trillion dollars in assets under administration in the U.S. at the close of its 2025 fiscal year. Its capital markets division generated $14.4-billion in total revenue in 2025, almost 50 per cent of it in the U.S., versus 28 per cent in Canada.

Roughly 26 per cent of the bank’s total revenue is generated from its U.S. operations.

Bank of Montreal

Approximately 37 per cent of revenue for Bank of Montreal was generated through its U.S. lines of business in 2025.

Toronto-Dominion Bank

At Toronto-Dominion Bank TD-T $68-billion in revenue was recorded in its books at the end of fiscal 2025 and 50 per cent of that came from its U.S. businesses.

CIBC

CIBC CM-T generated 11 per cent, or $3.2-billion, of its total revenue in 2025 through its U.S. Commercial Banking and Wealth Management business segments and intends to focus on growing its American footprint.

Bank of Nova Scotia

The Bank of Nova Scotia BNS-T has similar ambitions to grow its presence in America. In 2025, Scotiabank made about 12 per cent of its revenue from U.S. operations.

Canadian banks have long paid to play in U.S. financial markets. That price has been accepting the extraterritorial legal reach of U.S. administrations into the Canadian banking system. Canadian governments have allowed it because the growth of Canadian banks in the U.S. market is a boon to the Canadian economy.

Soon after the Sept. 11, 2001, terrorist attacks on the U.S., American legislators passed the Patriot Act. It expanded the powers of the U.S. government to detect, prevent and prosecute terrorists.

The Patriot Act, which was bolstered in 2021 by the U.S. Anti-Money Laundering Act, allows U.S. officials to issue a subpoena to any Canadian bank operating in the U.S. for data on their Canadian customers that are subject to a U.S. criminal investigation. Non-compliance isn’t an option.

Data privacy in the Canadian financial system was lost to prying U.S. legal action long ago.

Marsha Lederman: Is it 2026 or 1984? There is no privacy in the digital age

The price of American extraterritorial power became particularly costly for our banks after the Great Financial Crisis of 2008-2009 when material changes to the U.S. financial system were adopted in America, and by extension in Canada too, through the Dodd-Frank Act, passed into law in the U.S. in 2010.

Dodd-Frank required Canadian banks, for instance, to completely reorganize their capital markets trading desks and reporting in the U.S., Canada, and globally to meet U.S. regulator requirements. It cost them hundreds of millions in compliance costs in Canada. It continues to cost them millions today to maintain.

In 2010, U.S. legislators also took it upon themselves to pass the Foreign Account Tax Compliance Act, or FATCA. Its purpose is to prevent U.S. citizens from avoiding U.S. taxes by holding unreported investment income in foreign banks, such as Canadian banks.

FATCA compels Canadian banks to act as an arm of the U.S.’s Internal Revenue Service and share Canadian customer data in cases where customers have accounts that hold or can hold U.S. investments. That information is shared with the Canada Revenue Agency, which then passes that individual data along to the IRS.

As the era of trade agreements closes and is replaced by managed trade that is iterative in nature and demands Ottawa’s continuing attention, Canadians need to recognize the battles that serve our economic interests and those that undermine them.

Business leaders brace for lengthy trade war after talks break down

Trying to stop the Moneris sale is one such example. Canadian governments long ago decided to accept American extraterritorial legal power as the price for securing a place for our financial institutions in American financial markets. It was a price worth paying.

It remains so and is a critical path that Canada’s future prosperity depends on.

Prosperity’s Path

To dance and deal with the Donald: Why the long game wins the trade war

Fixing the broken dream of $10-a-day child care

AI data centres are the future. Canada must overcome the backlash