Question Period Note: Money Laundering and the Cullen Commission of Inquiry into Money Laundering in British Columbia

Measures taken by the Government to combat money laundering and strengthen Canada’s Anti-Money Laundering / Anti-Terrorism Financing Regime, and support the Commission of Inquiry into Money Laundering in British Columbia.

• The Government of Canada is committed to a comprehensive and coordinated approach to combatting money laundering. This includes continuously reviewing Canada’s Anti-Money Laundering framework and relevant legislation to ensure they are responsive to new developments and evolving risks.

• In 2021 we committed to establishing a dedicated unit to investigate all forms of serious financial crimes and developing a proposal for the establishment of the Canada Financial Crimes Agency, whose sole purpose will be to investigate these complex crimes. This work will be supported by the Minister of Justice and Attorney General of Canada, and the Deputy Prime Minister and Minister of Finance.

• Furthermore, our Government has provided over $220 million since 2019 to support concrete anti-money laundering efforts. This includes $24 million for the Financial Crime Coordination Centre (FC3) within Public Safety Canada, and approximately $28 million over four years and $10 million ongoing to create a Trade Fraud and Trade-Based Money Laundering Centre of Expertise at the Canada Border Services Agency.

• In addition, we have committed $98.9 million to strengthening the RCMP’s Federal Policing capacity, including $19.8 million to establish Integrated Money Laundering Investigative Teams in Quebec, Ontario, Alberta and British Columbia to undertake complex money laundering investigations. These teams are fully staffed with the RCMP complement and undertaking investigations. The RCMP is in the process of integrating partners from Canada’s AML/ATF Regime.

• Furthermore, Budget 2021 committed to implementing a publicly accessible corporate beneficial ownership registry by 2025 for federally registered companies. The creation of this registry will enhance Canada’s ability to identify and prosecute those who attempt to launder money, evade taxes, or commit other complex financial crimes.

• Canada’s progress has been recognized internationally. The Financial Action Task Force (FATF) recently concluded that Canada had made sufficient progress in addressing certain strategic AML/CFT deficiencies and elevated Canada’s international standing in compliance with FATF Recommendations and Standards.

If pressed, on the Cullen Commission of Inquiry into Money Laundering in British Columbia (the Commission):
• We commend the Government of British Columbia’s leadership and commitment to combatting money laundering and are carefully following the activities and findings of the provincial Commission of Inquiry into Money Laundering in British Columbia.

• Since Fall 2019, our Government has cooperated with the Commission by identifying and disclosing hundreds of relevant documents and making dozens of officials available for interviews and testimony.

• The Government of Canada has supported the Commission’s efforts to make findings related to the extent of money laundering in British Columbia, its causes and identify potential solutions, and we look forward to reviewing its final report.

Canada’s Anti-Money Laundering Regime (AML) was established in 2000 with the enactment of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The Regime’s legislative framework is complemented by other legislation, including the Criminal Code, the Customs Act, and the United Nations Act. The AML/ATF Regime is led by Department of FINANCE and includes 13 federal departments and agencies, including Public Safety Canada (PS) and PS Portfolio agencies, such as the RCMP, CBSA and CSIS.

On May 15, 2019, British Columbia (B.C.) Premier John Horgan announced the establishment of a Commission of Inquiry into Money Laundering in the province, to be led by B.C. Supreme Court Justice Austin Cullen. The objective of the Commission is to examine the money laundering challenges facing B.C., report on its findings and make recommendations. The Commission has a mandate to examine the full scope of money laundering in B.C., including activity in real estate, gaming, financial institutions, luxury goods, and the corporate and professional services sectors, through both study and hearing components. The Commission is also mandated to review the acts and/or omissions of regulatory authorities or individuals responsible for regulating these sectors in order to determine whether those acts or omissions have contributed to money laundering in the province or amount to corruption.

The Government of Canada is a voluntary participant with standing in the Commission, and federal AML/ATF officials from twelve departments and agencies have provided expert interviews and appeared as witnesses for Commission hearings. In total, the Government facilitated presentations and interviews with 53 federal officials; 32 of which testified to the Commission, and produced 1,800 documents to the Commission. The Commission’s final report is expected to be submitted to the province of British Columbia by May 20, 2022.

In recent years, the Government has taken concrete action to strengthen Canada’s AML/ATF Regime. For instance, Budget 2019 proposed a number of measures to modernize Canada’s AML framework, including the launch of Public Safety’s Financial Crime Coordination Centre (FC3). FC3 provides coordination and support to increase Canada’s enforcement capacity to combat money laundering and financial crime. Funding was also established for the creation of a Trade Fraud and Trade-Based Money Laundering (TBML) Centre of Expertise to strengthen capacity at CBSA.

In November 2020, the RCMP received funding of $98.9 million over five years to enhance its operational capacity, modernize its technology, and create Integrated Money Laundering Investigative Teams (IMLITs) in British Columbia, Alberta, Ontario, and Quebec. RCMP staffing processes for the IMLITs have been finalized, and the teams are undertaking investigations. Work is ongoing to bring in partners from the AML/ATF Regime to enhance the integration of the teams. CRA has committed resources for each of these teams but engagement differs between provinces. The Forensic Accounting Management Group and PPSC have committed resources and discussions are underway to finalize participation.

In addition to ongoing domestic-focused work, the Government of Canada is also actively involved in international AML and ATF efforts. The Regime engages with the Financial Action Task Force (FATF), which is an intergovernmental body that aims to maintain the integrity of the global financial system by, among other things, setting global AML/ATF standards. FATF’s 2016 Mutual Evaluation Report of Canada found that, while Canada was deemed to have strong AML/ATF legislation and regulations, there were some challenges identified, including the need for a beneficial ownership registry and a more appropriate level of resources dedicated to money laundering investigations and prosecutions.

Since the adoption of its Mutual Evaluation Report in 2016, Canada has reported back on the actions it has taken to strengthen its AML/CFT Regime. In Canada’s most recent follow-up report, published on October 1, 2021, the FATF recognized the major improvements Canada has made to its AML/ATF Regime. Notable enhancements include: capturing businesses dealing in virtual currency under the AML/ATF Regime; improving customer due diligence measures; and requiring suspicious transaction reports to be submitted promptly to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada’s financial intelligence unit. In recognition that many previous deficiencies have been addressed or largely addressed, the FATF elevated Canada’s international standing in compliance with the FATF standards.

The Prime Minster of Canada’s 2021 mandate letter to the Minister of Public Safety affirmed Canada’s commitment to establish a dedicated unit to investigate all forms of serous financial crimes and develop a proposal for the establishment of the Canada Financial Crimes Agency, whose sole purpose will be to investigate these complex crimes. The establishment of a dedicated unit to investigate all forms of serious financial crimes and a proposal for the FCA will be led by Public Safety Canada and supported by the Minister of Justice and Attorney General of Canada, and the Deputy Prime Minister and Minister of Finance.

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