Canada is set to create a powerful new law enforcement agency dedicated to investigating financial crime, a move that sharply contrasts with the United States, where federal investigators have been weakened and the White House has pardoned convicted money launderers.
New Financial Crimes Agency
A bill to establish the Financial Crimes Agency (FCA) passed its first reading in parliament this week. Introduced by the governing Liberal Party, which holds a parliamentary majority, the legislation is expected to move swiftly through both houses of government.
The agency's mandate is to investigate and prosecute financial crimes, stemming from a public inquiry that found Canada lacked a cohesive anti-money laundering strategy, lagging behind international peers.
Jessica Davis, a former intelligence analyst with Canada's spy agency who focuses on terrorism and illicit financing, commented: "The fact we're actually seeing the creation of a new enforcement agency is a meaningful investment and hopefully signals the understanding of the seriousness of the challenge."
Ban on Cryptocurrency ATMs
In addition to the new agency, Canada will ban cryptocurrency ATMs, which officials say have been exploited by scammers to defraud victims and by criminals to launder illicit proceeds. Canada has nearly 4,000 cryptocurrency ATMs, the highest per capita in the world.
Current Financial Intelligence Unit
For over 25 years, the Financial Transactions and Reports Analysis Centre (Fintrac) has served as Canada's financial intelligence unit. Last year, Fintrac uncovered $45 billion in transactions related to money laundering, counterterrorist financing, sanctions, and evasion disclosures.
Davis noted, "It's a figure that could be too high or far too low – we just don't fully know the scope of financial crime in this country."
Fintrac does not track or arrest criminals; instead, it refers its investigations to police and prosecutors. Under the new legislation, the FCA will take on investigation and prosecution duties, reducing the scope and mandate of Fintrac and the Royal Canadian Mounted Police (RCMP).
Davis explained, "The challenge is that the RCMP has been unable and unwilling to actually investigate and sustain investigations related to financial crimes. There is a lack of funding, a lack of skills, lack of resources, and a lack of political will. But financial crimes investigations are long, complex and require sustained resources, which I'm hopeful we're now going to see put in place."
Global Context
A 2024 report on the scale of financial crimes estimated that over US$3 trillion in illicit funds moved through the global financial system in the previous year. Major contributors included money laundering for human and drug trafficking, as well as terrorist financing. A US Treasury Department report found these efforts had "devastating economic and social impact" on citizens.
Contrast with US Approach
Canada's initiative stands in stark contrast to the current US administration's approach to financial crime. President Donald Trump's government issued a high-profile pardon to Changpeng Zhao, the self-styled "king" of cryptocurrency, after he pleaded guilty to money laundering charges. His company, Binance, was ordered to pay a record $4.3 billion penalty for facilitating terrorist financing.
In a January letter to federal watchdogs, senior Democrats called for an investigation into Trump's decision to reassign over 25,000 personnel from investigating fraud, tax evasion, and money laundering to immigration enforcement.
Senator Elizabeth Warren of Massachusetts stated, "The Trump administration is letting white-collar criminals off the hook for all kinds of wrongdoing. Instead of protecting American families from fraud and predatory behaviour, the administration is diverting resources to pursue its inhumane immigration agenda. Nobody is above the law, and the Trump administration needs to stop treating white-collar criminals with kid gloves."
Davis remarked, "Canada and the US are diverging," but noted that the US remains "far ahead of us in terms of its ability to prosecute and invest, investigate and prosecute financial crimes. We're still playing quite a bit of catch-up now. Hopefully Canada will shore up our own abilities to protect Canada. Because the things that happen in the US do tend to happen in Canada. And so this new agency is a bulwark against that."
Reactions and Challenges
Anti-corruption groups applauded the creation of the new agency. Salvator Cusimano, executive director of Transparency International Canada, said: "The government is proposing an ambitious but realistic mandate for this agency, which bodes well as a much-needed first step in improving our enforcement of financial crimes. Once established, the agency must coordinate closely with other enforcement and regulatory agencies across the country, and build on their efforts, if it is to achieve its potential."
However, it remains unclear how smoothly the agency will work alongside the RCMP, where it will be based, and whether it will draw key resources from other units.
Davis concluded: "This agency matters to Canadians because when you start to combine things like economic pressures, the cost of living, and really difficult existence for everyday people, we start to have less tolerance for people making money off of us. This is a massive and necessary investment for Canada. But we'll also have to keep pressuring the government to continue to fund it, continue to prioritise it, to actually get some of those outcomes that we're looking for."
