Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Canadian currency is shown in this file photo.

Kip Frasz/The Canadian Press

The federal government is taking steps to clean up Canada's act when it comes to anti-money laundering and terrorist financing laws, though details about the expected changes are scarce.

The federal budget released Wednesday includes a trio of proposed changes to anti-money laundering laws and regulations "to support a resilient financial sector."

In recent years, Canada has received middling to low marks on a series of reports gauging countries' effectiveness at combatting financial crimes such as money laundering and terrorist financing. Varying estimates suggest that as much as billions of dollars – or even tens of billions – may be laundered through Canada each year.

Story continues below advertisement

Last fall, an international evaluation by the Financial Action Task Force (FATF), an intergovernmental body that sets worldwide standards, gave Canada a lukewarm review. The report said Canada had made "significant progress" since 2007, but also raised several concerns about gaps in the country's efforts.

A senior manager in the financial intelligence unit at one of Canada's largest banks said the budget's new measures, "although brief," are "a step in the right direction."

Firstly, the federal government will give the Department of National Defence and Canadian Armed Forces more information to fight crime and detect threats by allowing the country's watchdog for financial transactions – the Financial Transactions and Reports Analysis Centre of Canada, or FinTRAC – to share data with them. But the legislation will set a high bar to access the information.

The government also plans to work with provinces and territories on a national strategy that would make it easier to reveal the beneficial owners of corporations and other legal entities.

And finally, the budget promises unspecified technical changes to strengthen the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or PCMLTFA, to "ensure the legislation functions as intended."

"That basically is bureaucratic jargon that we may need to start clamping down more on financial institutions because they're not complying with the legislation," said Stephen Schneider, an associate professor of criminology at Saint Mary's University, who studies money laundering.

The latter two measures, to improve transparency around ownership and retool the PCMLTFA "have got to be Parliament's intended response to the findings in the last FATF report," said Bruce McMeekin, a corporate lawyer at J. Bruce McMeekin Law who specializes in anti-money laundering compliance issues.

Story continues below advertisement

Last year, the FATF raised "important concerns" about identifying beneficial ownership, concluding "little is done by [Canadian financial institutions] to verify the accuracy of beneficial ownership information."

It is too soon to know whether the proposed changes will move the needle on enforcement, or make compliance any easier. "Really, the proof is in the pudding. It's really how they flesh out these very broad principles and guidelines that they laid out in the budget," Prof. Schneider said.

Matthew McGuire, an expert in financial crime and advisor at consulting firm The AML Shop, largely dismissed the changes as "window dressing." But he expects that allowing financial intelligence disclosures to Defence and the Armed Forces will "likely lead to expectations on [financial institutions] to pay more attention to threats to the security of Canada beyond terrorist financing and money laundering."

According to Mr. McGuire, Canada's domestic banks collectively spend about $1.3-billion each year to find and combat money laundering.

Canada is also keen to show progress after a 2013 report from Canada's Senate raised serious questions about the country's efforts to combat money laundering. The Senators concluded there was a lack of "clear and compelling" evidence that Canada's regime was detecting and deterring money laundering and terrorist financing.

As recently as 2016, the U.S. State Department pegged Canada as a country "of primary concern" for money laundering – a category that also includes countries such as the U.S., Russia, Iran and the Cayman Islands.

Story continues below advertisement

Want to interact with other informed Canadians and Globe journalists? Join our exclusive Globe and Mail subscribers Facebook group

Report an error Editorial code of conduct
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies