.svg)
A suite of new amendments to the country’s anti-money laundering and counter-terrorism financing (AML/CTF) framework is set to come into force in October 2025.
Earlier this month, Canada’s Department of Finance provided further information on the implementation of the federal government’s latest AML/CTF initiatives.
According to the department, the amendments will strengthen Canada's efforts to combat money laundering, transnational crime and drug trafficking, particularly fentanyl trafficking.
They will also complement the federal government’s Border Plan and its Joint Strike Force — a partnership with US authorities that aims to tackle cross-border crime and financial crime.
The amendments will apply to Canada’s existing 25,000 AML reporting entities, including financial institutions, money services businesses (MSBs), casinos, accountants, real estate developers and others.
They will also lead to the creation of almost 900 new reporting AML entities, drawn from the factoring, cheque-cashing, financing and leasing sectors.
What’s in the amendments?
The amendments are grouped into six areas, each of which will make significant changes to Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
First, more than 270,000 importers, exporters, customs service providers and carriers will be required to report on the movement of goods for the purpose of detecting, disrupting and deterring trade-based financial crime.
The reports will be filed to the Canada Border Services Agency (CBSA), where they will support the work of the CBSA’s Trade Fraud and Trade-Based Money Laundering Centre of Expertise.
Launched in 2020, the centre is credited with strengthening the CBSA's ability to identify and investigate complex trade fraud and refer cases of trade-based money laundering to federal law enforcement.
Second, the amendments will authorise the creation of a new system that allows AML reporting entities to share financial crime information with each other, while maintaining privacy protections for personal information.
The Office of the Privacy Commissioner (OPC) of Canada will be given a new oversight role in relation to these new powers, as will the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
AML reporting entities will be asked to develop new codes of practice o participate in information-sharing, and these must be reviewed by the OPC and FINTRAC.
However, participation in information-sharing will be voluntary, as will the use of financial crime information obtained from other institutions.
Third, the amendments will implement new measures that are designed to improve corporate beneficial ownership transparency for AML purposes.
Under these amendments, AML reporting entities that find “material discrepancies” in company registry information will be required to report these discrepancies.
This requirement will be triggered in cases where reporting entities judge the discrepancy to pose a high risk of a money laundering or terrorist financing.
The requirement will also ensure that company registry information held by AML reporting entities is consistent with that held by the federal government through Corporations Canada.
Penalties for failures to report such discrepancies are classified as “minor”, ranging from C$1 to C$1,000 ($0.7 to $700) per violation.
The fourth, fifth and sixth areas covered by the amendments concern the expansion of Canada’s AML/CTF framework to the factoring, cheque-cashing, financing and leasing sectors.
Previously, these sectors were not explicitly listed as "reporting entities", which would require the mandatory reporting of suspicious transactions, large cash transactions and other types of activity to FINTRAC.
Canadian authorities mindful of FATF evaluation
In November 2025, the Financial Action Task Force (FATF) is set to begin its next mutual evaluation of Canada’s AML/CTF framework.
At present, Canada is rated “compliant” with 11 out of 40 FATF recommendations, “largely compliant” with 23, “partially compliant” with five and “non-compliant” with one.
Canada’s sole area of “non-compliance” is its existing regulations on transparency and beneficial ownership of legal arrangements.
Meanwhile, Canada is seen as “partially compliant” in areas such as non-profit organisations, transparency and beneficial ownership of legal persons, and designated non-financial businesses and professions (DNFBPs).
In Canada’s most recent evaluation, conducted in 2016, FATF identified trade-based money laundering as a primary money laundering and terrorist financing threat.
The Department of Finance said that expanding Canada’s AML/CTF regime to the new sectors mentioned above will mitigate risk and create a level playing field for firms providing financial services.
It will also help to bring Canada further into line with the international standards set by FATF for these entities.
Counting the costs
According to the Department of Finance, the total compliance costs associated with the amendments are expected to be C$74m (US$51m) over the next ten years.
This figure is made up of C$52m ($36m) in compliance costs and C$22m ($15m) in administrative costs, borne both by AML reporting entities and by regulatory agencies.
For reporting entities, the most significant costs are expected to be incurred through the implementation of internal compliance changes to enable discrepancy reporting.
The next most-significant cost is expected to be borne by factoring companies, which will need to develop extensive AML compliance programmes and record-keeping systems for the first time.
In contrast, the development of a code-compliant system for information sharing is not expected to represent a significant cost for reporting entities.
Since participation in the information-sharing system will be voluntary, the Department of Finance expects only the three highest tiers of reporting entities to take part.
These entities may be required to make significant one-time expenditures to implement the information-sharing system and develop codes of practice, but they are not expected to incur significant compliance costs from then on.
