Question Period Note: Money Laundering

Measures taken by the Government to combat money laundering and strengthen Canada’s Anti-Money Laundering / Anti-Terrorism Financing Regime.

• Our Government is committed to combatting money laundering, which continues to pose a threat to Canada’s national security and the integrity of our financial sector.

• Since 2019, our Government has provided over $220 million to anti-money laundering efforts, including strengthening legislation, and investing in law enforcement and technology to support investigations.

• This funding includes $24 million for an Anti-Money Laundering Action, Coordination and Enforcement Team to identify and address significant money laundering and financial crime threats. The team will become operational in April 2021.

• In addition, funding of approximately $29 million over 4 years and $10 million ongoing has been committed to create a multi-disciplinary Trade Fraud and Trade-Based Money Laundering Centre of Expertise within the CBSA, which will strengthen our capacity to tackle this borderless crime.

• Just recently, $98 million in RCMP spending was approved to modernize and create dedicated Integrated Money Laundering Investigative Teams in four provinces.

● Finally, Public Safety Canada is supportive of the Cullen Commission of Inquiry into Money Laundering in British Columbia and will support Minister Freeland in responding to the Commission’s final recommendations.

Canada’s Anti-Money Laundering (AML) Regime was established in 2000, with the Anti-Terrorist Financing (ATF) mandate added in 2001. The Regime’s legislative framework is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, combined with operational powers under various standing authorities, such as the Criminal Code, Customs Act and the United Nations Act. This anti-money laundering framework is a highly effective tool for blocking organized crime groups’ access to funds, disrupting organized crime activities and protecting the integrity of the Canadian financial sector. Across federal departments, the AML/ATF Regime is a horizontal initiative that involves more than a dozen departments and agencies, including Public Safety Canada (PS), the RCMP, CBSA and CSIS. It is coordinated through senior-level interdepartmental committees co-chaired by the Department of Finance and Public Safety Canada.

Funding

Budget 2019 proposed a number of measures to modernize Canada’s AML and ATF framework, including the creation a Public Safety Action, Coordination, Enforcement (ACE) Team. This five-year pilot initiative brings together experts from intelligence and law enforcement to strengthen coordination and enforcement efforts required to counter significant ML and financial crime threats. It is expected to become operational in April 2021.

Funding was also established for the creation of a multi-disciplinary Trade Fraud and Trade-Based Money Laundering (TBML) Centre of Expertise, to strengthen the Canada Border Services Agency’s ability to target trade fraud and identify TBML. This Centre of Expertise will complement the ACE Team’s efforts.

Budget 2019 also provided $68.9 million over five years beginning in 2019-20, and $20 million per year thereafter, to strengthen the operational and investigative capacity of RCMP Federal Policing, including to fight money laundering. Furthermore, in November 2020, Treasury Board approved $98 million in spending by the RCMP towards modernization, including the creation of dedicated Integrated Money Laundering Investigative Teams in British Columbia, Alberta, Ontario and Quebec.

Provincial Considerations

On May 15, 2019, the Government of British Columbia (BC) announced a public Commission of Inquiry into money laundering (the Cullen Commission), headed by BC Supreme Court Justice Austin F. Cullen. The mandate of the Commission is to inquire, report and make recommendations related to countering money laundering (ML) in BC, including exploring regulatory efforts and identifying barriers to effective ML-related law enforcement activities in the province. The Commission’s focus thus far has been on ML through casinos, beneficial ownership registries and the use of professionals (e.g. lawyers, accountants) in BC. The Commission released its interim report to the public on December 10, 2020.

While the Department continues to examine and assess the report, a few key findings can be reported at this early stage. From a Government of Canada perspective, the most significant aspect is the report’s assessment of Canada’s cooperation with the Inquiry. The Commissioner indicates that Canada’s level of engagement has fallen short of expectations in the areas of: the speed and extent to which federal agencies have complied with the obligation to list and provide documents; the apparent over-redaction of federal documents; and the insistence of PPSC prosecutors to only be interviewed in writing. However, the Commissioner acknowledges that recently Canada’s engagement with the Commission has improved.

The Report also contains the Commissioner’s expectations regarding the type of information he expects Canada to provide to the Commission in the future, such as: information about resources assigned to AML duties; the number of AML investigations; the extent of ML in BC; the status of Budget 2019 AML initiatives; the efficiency of information flow between federal organizations; and additional details from the RCMP regarding its plans for expanding resources in BC. Finally, the Commissioner acknowledges that he cannot make findings or recommendations with respect to the administration and management of federal agencies such as FINTRAC and the CRA. However, he notes that he is not precluded from examining the nature and effectiveness of the federal anti-money laundering regime, including the role played by FINTRAC, the RCMP, and the CBSA.

The Commission intends to request a deadline extension beyond the scheduled conclusion in May 2021.

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