{"id":10774,"date":"2026-05-24T17:30:47","date_gmt":"2026-05-24T17:30:47","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/financial-crime-in-focus-fintrac-federal-policing-and-a-new-enforcement-trend-stikeman-elliott-llp\/"},"modified":"2026-05-24T17:30:47","modified_gmt":"2026-05-24T17:30:47","slug":"financial-crime-in-focus-fintrac-federal-policing-and-a-new-enforcement-trend-stikeman-elliott-llp","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/financial-crime-in-focus-fintrac-federal-policing-and-a-new-enforcement-trend-stikeman-elliott-llp\/","title":{"rendered":"Financial Crime in Focus: FINTRAC, Federal Policing, and a New Enforcement Trend? | Stikeman Elliott LLP"},"content":{"rendered":"\n<div id=\"html-view-content\">\n<p><strong>The first four months of 2026 have brought a wave of developments in Canada\u2019s financial crimes landscape notable for their potential to reshape enforcement trends. A new bill before Parliament proposes to establish a dedicated federal police agency focused on combatting financial crime. Meanwhile, significant amendments to the <em>Proceeds of Crime (Money Laundering) and Terrorist Financing Act<\/em> (PCMLTFA), Canada\u2019s existing seminal AML statute, have expanded the enforcement powers of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) while enhancing the regulatory obligations of reporting entities. Businesses, especially those subject to the PCMLTFA, should take note of these developments as they signal that the federal government may be shifting towards a posture of greater enforcement of existing (and strengthened) financial crime laws.<\/strong><\/p>\n<h2>The Financial Crimes Agency<\/h2>\n<p>On April 27, 2026, the federal government introduced <strong><a href=\"https:\/\/www.parl.ca\/DocumentViewer\/en\/45-1\/bill\/C-29\/first-reading\" rel=\"nofollow noopener\" target=\"_blank\">Bill C-29<\/a><\/strong> in Parliament, which proposes to establish the Financial Crimes Agency (FCA) with the mandate to investigate serious and complex financial crimes, contribute to the recovery of proceeds of crime and participate in international efforts to counter financial crimes.<\/p>\n<p>Under the proposed legislation, the FCA will be formed as a dedicated, independent federal law enforcement agency, with certain employees designated as police officers and granted powers under the Criminal Code, with the stated intention of bringing together traditional police powers with civilian expertise in a single specialized body. Its statutory mandate is set to be broad, giving the new Commissioner of the FCA the ability to investigate \u201cany financial crime or any offence under an Act of Parliament committed in relation to a financial crime,\u201d on the Commissioner&#8217;s own initiative or in collaboration with any law enforcement agency or public body in or outside Canada. The bill\u2019s definition of \u201cfinancial crime\u201d is similarly expansive, and includes any offence under an Act of Parliament relating to financial assets (including digital assets), financial services or markets, including:<\/p>\n<ol style=\"list-style-type: lower-alpha;\">\n<li>an offence under any Act of Parliament involving (i)\u2002laundering, trafficking or possession of proceeds of crime, or (ii)\u2002any conduct that adversely affects, or has the potential to adversely affect, the security or integrity of Canada\u2019s economy or financial system or of any financial market in Canada;<\/li>\n<li>a designated offence, as defined in subsection 462.\u200d3(1) of the Criminal Code, from which proceeds of crime are obtained or derived directly or indirectly; and<\/li>\n<li>an offence under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.<\/li>\n<\/ol>\n<p>The definition notably includes offences relating to digital assets such as cryptocurrency. Financial institutions, crypto exchanges, stablecoin issuers, payment providers and fintechs should be prepared for dedicated federal investigative attention on top of existing FINTRAC and provincial securities regulatory oversight.<\/p>\n<p>If implemented, the FCA will be headed by a new Commissioner appointed by the Governor in Council and reporting to the Minister of Finance. The Spring Economic Update proposes to provide over $350 million over five years to the FCA beginning in 2026-2027. Bill C-29 is currently in its second reading before the House of Commons.<\/p>\n<h2>Major Updates to the <em>Proceeds of Crime (Money Laundering) and Terrorist Financing Act<\/em><\/h2>\n<p>There has also been a concerted effort to strengthen Canada\u2019s existing financials crime laws, particularly in relation to Canada\u2019s anti-money laundering framework. On March 26, 2026, the <strong><a href=\"https:\/\/www.canada.ca\/en\/services\/defence\/securingborder\/strengthen-border-security\/understanding-stregthening-canada-immigration-system-borders-act.html\" rel=\"nofollow noopener\" target=\"_blank\"><em>Strengthening Canada&#8217;s Immigration System and Borders Act<\/em><\/a><\/strong> received Royal Assent, introducing several important immediate changes to the PCMLTFA and setting the stage for others to come into force at a later date, notably including universal enrollment with FINTRAC. Administered by FINTRAC, Canada\u2019s financial intelligence reporting unit, the PCMLTFA imposes monitoring and reporting obligations on businesses and individuals in certain industries, including financial institutions and securities dealers.<\/p>\n<p>These changes affect not only the obligations of reporting entities but also FINTRAC\u2019s ability to enforce violations of those obligations.<\/p>\n<ul>\n<li><strong>Increased Penalties<\/strong>. Where FINTRAC has reasonable grounds to believe that a reporting entity has violated a requirement under the PCMLTFA, the maximum administrative monetary penalty (AMP) amount has been increased 40 times such that the per\u2011violation maximums are now $40,000 (for \u201cminor\u201d violations), $4 million (for \u201cserious\u201d violations) and $20 million (for \u201cvery serious\u201d violations). FINTRAC must now assess the ability of the reporting entity to pay in determining the amount of any issued AMP.<\/li>\n<\/ul>\n<ul>\n<li><strong>Mandatory Compliance Agreements<\/strong>. Every person or entity that receives an AMP from FINTRAC for a prescribed violation under the PCMLTFA shall be required to enter into a compliance agreement with FINTRAC, setting out required remedial measures and the applicable deadline.<\/li>\n<\/ul>\n<ul>\n<li><strong>Compliance Orders<\/strong>. If an individual or entity refuses to enter into a compliance agreement, or fails to comply with it, FINTRAC shall issue a compliance order. A breach of a compliance order is also a new violation under the PCMLTFA.<\/li>\n<\/ul>\n<ul>\n<li><strong>Compliance Programs<\/strong>. Compliance programs implemented by reporting entities under the PCMLTFA must now be \u201creasonably designed, risk-based and effective\u201d, representing a higher and more substantive standard than the previous requirement that such programs be merely \u201cintended to ensure\u201d compliance with the PCMLTFA.<\/li>\n<\/ul>\n<ul>\n<li><strong>Universal Enrolment<\/strong>. All reporting entities will be required to enroll with FINTRAC, not only those which must already register such as money service businesses (MSBs). The expected timeline of this mandatory universal enrolment has not yet been released. Enrollment will require not only initial registration but also ongoing regulatory obligations (such as providing updates to FINTRAC on certain business information changes). FINTRAC will have the authority to revoke a reporting entity\u2019s enrolment in certain prescribed circumstances, such as failure to respond to an information request from FINTRAC within 30 days.<\/li>\n<\/ul>\n<p>Separately on March 26, 2026, the <strong><a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2026\/03\/legislation-passes-to-implement-budget-2025-canada-strong.html\" rel=\"nofollow noopener\" target=\"_blank\"><em>Budget 2025 Implementation Ac<\/em>t<\/a><\/strong> also received Royal Assent, bringing into force several other notable changes, several of which have not yet come into force, including:<\/p>\n<ul>\n<li><strong>A New Stablecoin Act<\/strong>. Entities that create stablecoins and make them available for purchase, directly or indirectly, by persons in Canada will be required to register with FINTRAC as MSBs dealing in virtual currency. The Bank of Canada will maintain a public registry of stablecoin issuers. The details of the obligations for stablecoin issuers and the expected timeline for registration under the PCMLTFA have not yet been released. For more details on the Stablecoin Act itself, see our previous post on this <strong><a href=\"https:\/\/www.stikeman.com\/en-CA\/kh\/canadian-securities-law\/2025\/11\/newly-minted-canadas-proposed-federal-stablecoin-act\/\" rel=\"nofollow noopener\" target=\"_blank\">topic<\/a><\/strong>.<\/li>\n<\/ul>\n<ul>\n<li><strong>Expanded Sanctions Evasion Offence<\/strong>. The definition of \u201csanctions evasion offence\u201d in the PCMLTFA was expanded to include offences tied to contraventions under the United Nations Act, Part 1 of the Special Economic Measures Act, and the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), and orders and regulations established under the same. For more details on the relatively new Sanctions Evasion Offence, see our previous post on this <strong><a href=\"https:\/\/www.stikeman.com\/en-CA\/kh\/competitor\/2024\/07\/26\/14\/12\/sanctions-evasion-canada-takes-aim-with-new-fintrac-reporting-requirements-for-reporting-entities\/\" rel=\"nofollow noopener\" target=\"_blank\">topic<\/a><\/strong>.<\/li>\n<\/ul>\n<p>Finally, as part of the <strong><a href=\"https:\/\/budget.canada.ca\/update-miseajour\/2026\/home-accueil-en.html\" rel=\"nofollow noopener\" target=\"_blank\">Spring Economic Update<\/a><\/strong> released on April 28, 2026, the government has proposed further amending the PCMLTFA, with a focus on changes directed at MSBs. Specifically, the government has proposed at a high level:<\/p>\n<ul>\n<li>introducing new Ministerial Directive powers to safeguard national security and the integrity of the financial system;<\/li>\n<\/ul>\n<ul>\n<li>expanding FINTRAC\u2019s ability to refuse or revoke registration of MSBs;<\/li>\n<\/ul>\n<ul>\n<li>preventing the re-registration of non-compliant MSBs;<\/li>\n<\/ul>\n<ul>\n<li>addressing \u201cshelf\u201d MSBs;<\/li>\n<\/ul>\n<ul>\n<li>increasing the number of criminal record checks for MSBs; and<\/li>\n<\/ul>\n<ul>\n<li>enhancing FINTRAC\u2019s understanding of MSB risks by ensuring it has accurate and up-to-date information regarding the commencement of business and services provided by MSBs.<\/li>\n<\/ul>\n<p>The government also proposes banning crypto ATMs for the stated purpose of shutting down a primary method for scammers to defraud victims and for criminals to launder their cash proceeds of crime.<\/p>\n<h2>Potential to Reshape Financial Crime Enforcement in Canada<\/h2>\n<p>The Canadian government has long recognized deficiencies in Canada\u2019s financial crime enforcement. In 2021, the Prime Minister <a href=\"https:\/\/www.pm.gc.ca\/en\/mandate-letters\/2021\/12\/16\/minister-public-safety-mandate-letter\" rel=\"nofollow noopener\" target=\"_blank\">tasked<\/a> the then-Minister of Public Safety Marco Mendicino to establish a new financial crimes agency whose purpose was to investigate highly complex financial crimes. Five years later, the government\u2019s introduction of Bill C-29 begins to action this stated priority.<\/p>\n<p>Bill C-29 and the various amendments to the PCMLTFA signal a shift in tone toward addressing some of these longstanding concerns. The centralization of authority in a new FCA, combined with enhanced FINTRAC powers, marks a departure from the current model under which analysis, investigation and prosecution responsibility is dispersed across multiple bodies including the RCMP, the Canada Revenue Agency and provincial securities regulators.<\/p>\n<p>FINTRAC\u2019s recent enforcement activity offers a concrete illustration of this shifting posture. Since the beginning of 2026, FINTRAC has revoked 142 MSB registrations \u2013 more than double the combined total of the previous three years (23 in 2025, 16 in 2024, and 16 in 2023). This surge coincides with Canada\u2019s 5th Round Mutual Evaluation by the Financial Action Task Force (FATF), an intergovernmental body that sets international standards to help prevent money laundering and terrorist financing, with the assessment report expected in Spring 2026. Canada\u2019s last evaluation (in 2015-2016) resulted in a \u201cnon-compliant\u201d or \u201cpartially compliant\u201d rating in several key areas, including supervision and sanctions. The current evaluation cycle appears to have prompted a demonstrable uptick in enforcement as Canada seeks to improve its standing. It is unclear whether the uptrend in enforcement intensity will moderate once the evaluation cycle by the FATF concludes.<\/p>\n<h2>Takeaway for Businesses<\/h2>\n<p>The recent PCMLTFA amendments and proposed reforms significantly heighten enforcement risk by increasing penalties, mandating compliance agreements, expanding enrolment requirements and signaling more intensive supervision, particularly for MSBs and virtual asset businesses. At the same time, the prospective creation of a dedicated Financial Crimes Agency and the introduction of a new \u201creasonably designed, risk based and effective\u201d compliance program standard make it critical for businesses to proactively review and strengthen their compliance frameworks, investigation readiness and documentation practices in anticipation of sustained regulatory scrutiny.<\/p>\n<p>[<a href=\"https:\/\/stikeman.com\/en-CA\/kh\/competitor\/financial-crime-in-focus-fintrac-federal-policing-and-a-new-enforcement-trend\" target=\"_blank\" rel=\"nofollow noopener\">View source<\/a>.]<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The first four months of 2026 have brought a wave of developments in Canada\u2019s financial crimes landscape notable for their potential to reshape enforcement trends. A new bill [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":10775,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[8023,3199,1385,554,212,8024,2738,7550,8025,8026,1479],"class_list":["post-10774","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lawyers","tag-crime","tag-elliott","tag-enforcement","tag-federal","tag-financial","tag-fintrac","tag-focus","tag-llp","tag-policing","tag-stikeman","tag-trend"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10774","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=10774"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/10774\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/10775"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=10774"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=10774"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=10774"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}