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.

• Also through Budget 2019, the Government announced in November funding for the Royal Canadian Mounted Police to staff new positions dedicated to money laundering and proceeds of crime across the country, including British Columbia. The Royal Canadian Mounted Police is now in the process of implementing this investment.

• 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, which will strengthen capacity at the Canada Border Services Agency to target these growing threats. The Centre became operational on April 1st of last year.

If pressed, on money laundering in British Columbia:
• Our Government commends the Government of British Columbia’s leadership and commitment to combatting money laundering in the province, and we are committed to ongoing collaboration to address issues of joint concern and responsibility.

If pressed, on Cullen Commission of Inquiry into Money Laundering in British Columbia:
• 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.

The Anti-Money Laundering Regime (AML) was established in 2000, with the Anti-Terrorist Financing (ATF) mandate being 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 (e.g. the Criminal Code, Customs Act, United Nations Act). This is the main framework for addressing money laundering in Canada, and an important and highly effective tool for blocking access to funds by organized crime groups, disrupting organized crime activities and protecting the integrity of the Canadian financial sector. The AML/ATF is a horizontal initiative involving more than 13 departments and agencies, including Public Safety (PS) and PS Portfolio agencies, such as the RCMP, CBSA and CSIS. The Regime’s work is coordinated through an ADM-level Committee co-led by the Department of Finance and Public Safety Canada.

Budget 2019 proposed a number of measures to modernize Canada’s anti-money laundering and anti-terrorist financing framework; chief among them is strengthening inter-agency cooperation, financial intelligence and information sharing through its Anti-Money Laundering Action, Coordination and Enforcement (ACE) team. This five-year, $24 million pilot initiative will bring together dedicated experts from across intelligence and law enforcement agencies to strengthen inter-agency coordination and cooperation to identify and address significant money laundering and financial crime threats.

Funding was also established for the creation of a multi-disciplinary Trade Fraud and Trade-Based Money Laundering (TBML) Centre of Expertise to strengthen capacity at CBSA and Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to target trade fraud and identify TBML.

Budget 2019 also provided $68.9 million over five years beginning in 2019-20, and $20 million per year thereafter, in net-new funding to strengthen the RCMP’s Federal Policing operational and investigative capacity, including to fight money laundering. In November 2020, Canada committed to invest $98.9M over five years to strengthen the RCMP’s Federal Policing foundations, including technology and investigative support services for all Federal Policing. Of this funding, $20 million is directed to the creation of Integrated Money Laundering Investigative Teams (IMLITs). These teams will be established in British Columbia, Alberta, Ontario, and Quebec.

The 2018 House of Commons Committee on Finance (FINA) Report, entitled “Confronting Money Laundering and Terrorist Financing: Moving Canada Forward”, was tabled on November 8, 2018. The Report consists of 32 recommendations that cover legislative and regulatory gaps, information sharing, intelligence and enforcement capacity. Government of Canada partners continue to be active in policy work to support the development of new anti-money laundering approaches, and explore options to address recommendations contained in the Report.

Canada is also actively involved in international efforts to combat money laundering and terrorism financing. The Regime engages with the Financial Action Task Force (FATF), an intergovernmental body that sets global standards for AML/ATF and whose goal is to maintain the integrity of the global financial system. In 2015-16, the FATF conducted a 4th round of evaluation of Canada against its technical compliance and effectiveness standards. The report found that Canada has a strong set of AML/ATF legislation and regulations. However, a number of weaknesses were identified, including that some types of businesses are not covered by the regime, a lack of availability of accurate beneficial ownership information and its use by competent authorities, and inadequate resourcing devoted to money laundering investigations and prosecutions.

British Columbia (BC) in particular has been focusing its efforts to address money laundering. On September 27, 2018, the province announced a review of vulnerabilities in the real estate and financial sectors. Specific to this, the BC and Federal governments have created an ad-hoc working group whose mandate is to enhance communication, information sharing, and alignment amongst relevant operational and policy partners to explore and better address issues and risks related to fraud, money laundering, and tax evasion through real estate in BC.

On May 15, 2019, the Government of 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 in BC, including exploring regulatory efforts and identifying barriers to effective money-laundering-related law enforcement activities in the province. The Commission’s focus thus far has been on money laundering 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. The Commission intends to request a deadline extension beyond the scheduled conclusion in May 2021.

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