On June 3, 2025, the federal government tabled Bill C-2, the Strong Borders Act (the "Bill"). Parts 10, 11, 12 and 16 of the Bill make significant amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act ("PCMLTFA") and regulations thereunder.
Key changes include major increases in the maximum amount of administrative monetary penalties, new requirements for reporting entities to enrol with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and new restrictions on Canadian businesses and charities accepting cash payments of $10,000 or more. These proposed changes represent a significant expansion of Canada's anti-money laundering regime and a dramatic increase in the potential consequences of non-compliance.
Administrative Monetary Penalties
The Bill will drastically increase the maximum administrative monetary penalties that may be imposed for certain violations (which are classified as either minor, serious, or very serious) of the requirements set out in the PCMLTFA and the regulations thereunder.
Under the new regime, the maximum penalty for a minor violation would increase from $1,000 to $40,000, the maximum penalty for a serious violation would increase from $100,000 to $4 million, and the maximum penalty for a very serious violation would increase from $500,000 to $20 million. The Bill also re-classifies certain violations related to non-compliance with the requirements under the PCMLTFA and its regulations to establish and implement a compliance program, which are currently classified as "serious" violations, as "very serious" violations, and introduces as a new "very serious" violation for non-compliance with a requirement for reporting entities to ensure that their compliance program is reasonably designed, risk-based and effective.
The Bill also increases the maximum punishments that may be imposed for certain criminal offences under the PCMLTFA.
Enrolment with FINTRAC
The Bill introduces new requirements for persons or entities referred to in section 5 of the PCMLTFA, including Canadian and foreign banks, credit unions, and life insurance companies, to register with FINTRAC. This new requirement does not apply to money services businesses (which are already required to register), employees of a person or entity referred to in section 5, or to a person or entity referred to in section 5 that acts exclusively as an employee or agent or mandatary of another person or entity referred to in that section.
Cash Deposits
Pursuant to the Bill, persons or entities engaged in "a business, a profession or the solicitation of charitable financial donations from the public" will be prohibited from accepting cash payments, donations or deposits of $10,000 or more in a single transaction. This new requirement is not limited to reporting entities and appears to apply broadly to business, professional and charitable activities.
Additionally, certain entities referred to in section 5 of the PCMLTFA will be prohibited from accepting cash deposits from third parties, except in prescribed circumstances.
Compliance Agreements and Orders
The Bill will replace the existing optional compliance agreement regime under the PCMLTFA with a new mandatory compliance agreement regime that, among other things,
- requires every person or entity that receives an administrative monetary penalty for a prescribed violation to enter into a compliance agreement with FINTRAC;
- requires the Director of FINTRAC to make a compliance order if the person or entity refuses to enter into a compliance agreement or fails to comply with such an agreement; and
- designates the contravention of a compliance order as a new violation under the PCMLTFA.
Collection and Use of Personal Information
The Bill also makes changes to the information sharing provisions of the PCMLTFA, and a reporting entity referred to in section 5 of the PCMLTFA will be permitted to collect an individual's personal information without the individual's knowledge or consent if:
- the personal information is disclosed to the reporting entity by the Royal Canadian Mounted Police or by a prescribed government department, institution or agency or a prescribed law enforcement agency; and
- the discloser of the personal information affirms to the
reporting entity in writing that it considers that:
- the disclosure is for the purpose of detecting or deterring money laundering, terrorist activity financing or sanctions evasion,
- the disclosure is made without the individual's knowledge or consent, and
- making the disclosure with the individual's knowledge or consent would compromise the ability to detect or deter money laundering, terrorist activity financing or sanctions evasion.
The reporting entity may then, without an individual's knowledge or consent, use the individual's personal information for the purposes for which it was disclosed to them or for the purpose of detecting or deterring a contravention of the laws of Canada or a province that relates to money laundering, terrorist activity financing or sanctions evasion.
Looking Ahead
The proposed amendments set out in the Bill represent a substantial expansion of Canada's anti-money laundering regime and a major increase in the potential consequences of non-compliance. Reporting entities should revisit their assessment of the potential risks relating to anti-money laundering compliance as a result of these changes. The Bill will need to go through the parliamentary process before coming into force, and is subject to change. Fasken's Financial Services team will closely monitor the progress of the Bill.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
