Canada’s AML/CFT regime is undergoing its most sweeping transformation in a generation. The creation of the Canada Financial Crimes Agency (CFCA), combined with far-reaching amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), has created a perfect storm of regulatory change for financial institutions operating in the country.
According to ComplyAdvantage, this upheaval is unfolding against a backdrop of global geopolitical turbulence and the imminent arrival of Real-Time Rails (RTR) in 2026. Canada remains the only G20 nation yet to operate a real-time payments infrastructure, and the introduction of RTR will require financial crime detection to keep pace with instant transactions — a formidable challenge for compliance teams across the industry.
To help firms chart a course through this new environment, ComplyAdvantage hosted a webinar bringing together industry experts to share practical guidance.
Preparing for major regulatory shifts
The Canadian government has moved decisively from consultation to enforcement, rolling out several initiatives aimed at closing longstanding regulatory loopholes. Central to this effort is the establishment of the CFCA, a dedicated body mandated to support investigations, prosecutions and asset recovery connected to criminal activity.
HomeEquity Bank chief compliance officer Andrew Oakden said, “From speaking with industry colleagues over the past couple of years, this certainly seems like a step in the right direction. Hopefully, the establishment of this agency will really go a long way towards making sure that the resources are all aligned… and that both sides are working towards the common goal.”
Beyond new institutional structures, the regulatory perimeter is widening to draw in non-traditional participants. Thousands of mortgage brokers and lenders are now subject to oversight by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and are required to implement full AML programmes comparable in scope to those of major banks.
Meanwhile, momentum is building towards public beneficial ownership registries, though the operational complexities of establishing such frameworks remain a significant hurdle. Oakden cautioned that “You don’t need very many holes [in the sieve]” for bad actors to exploit — a reminder that comprehensive public data is essential to plugging the gaps.
Canada’s vulnerability to illicit financial flows also came under scrutiny during the session. Rudich Advisory director and ElementaryB co-founder and CCO Denisse Rudich highlighted that the country functions as a “destination country” for criminal proceeds, owing to its stable currency and steadily appreciating property market — factors that continue to attract bad actors.
FINTRAC’s compliance checklist for the mortgage sector
For mortgage brokers, lenders and brokerages newly brought within FINTRAC’s remit, building a compliant AML programme now demands several core components. Firms must appoint a dedicated compliance officer to oversee the programme and maintain written policies and procedures that are kept current.
A thorough, documented risk assessment of the business’s exposure to money laundering and terrorist financing is also required, alongside a comprehensive written training programme to ensure staff and agents can identify and report suspicious activity. Institutions must additionally establish robust systems for filing suspicious transaction reports (STRs) with FINTRAC and maintaining the requisite records. Finally, compliance programmes must be formally reviewed every two years to assess their effectiveness.
How to build an innovative AML programme
Developing a genuinely effective AML programme demands a close partnership between advanced technology and skilled human oversight. Research from the State of Financial Crime 2024 found that 65% of Canadian financial institutions (FIs) struggle with insufficient data accuracy and quality to support detection and investigation work.
ComplyAdvantage global head of FCC strategy Andrew Davies underscored the urgency of evolving monitoring capabilities as RTR approaches. Davies said, “Right now, there are 79 real-time payment infrastructures around the world. Which means that financial crime monitoring and detection needs to be real-time as well… uncovering nefarious activity needs to move at the speed of these financial services.”
To build a programme fit for this environment, FIs should prioritise several areas. First, adopting AI-driven explainability tools — machine learning models capable of generating natural language explanations for why a particular activity was flagged — can help analysts and regulators understand decision-making processes rather than relying on opaque, black-box outputs.
Second, expanding the scope of detection to cover predicate crimes, not just the laundering activity itself, is increasingly important. Rudich noted that Canada is distinctive in formally recognising offences such as pollution crime and ideologically motivated extremism within its national risk assessments.
Third, investing in human training remains critical: Oakden stressed the importance of equipping staff to identify the telltale signs of financial crime and to understand the threshold of Reasonable Grounds to Suspect (RGS) — even where a firm has not yet formed a firm belief that a crime has occurred.
Challenges and opportunities on the horizon
As RTR becomes a reality, FIs must adapt to real-time payment infrastructure and strengthen cross-border collaboration to keep pace with the evolving AML landscape. The introduction of the ISO 20022 messaging standard presents a genuine opportunity, enabling richer transactional data that can improve the detection of risks such as sanctions evasion. However, the rise of Crime-as-a-Service (CaaS) represents a persistent and growing global threat, with criminals increasingly leveraging artificial intelligence and open-source tools to carry out sophisticated social engineering attacks.
Canadian institutions that move beyond mere regulatory box-ticking and embrace a genuine moral imperative to protect consumers will be best placed to turn today’s compliance challenges into a competitive advantage. By harnessing the wealth of data now available to fight financial crime with the same sophistication used by those perpetrating it, the sector has an opportunity to emerge from this period of disruption stronger and more resilient.
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