Canada's Financial Crimes Agency: From Consultation To Confirmation

After years of consultation and planning following Canada's announcement of a proposed Financial Crimes Agency ("FCA") in 2022, Canada's new FCA is set to be established through legislation in Spring 2026. Positioned as the centrepiece of Canada's first-ever National Anti-Fraud Strategy, the FCA will be "dedicated to investigating sophisticated financial crimes and recovering illicit proceeds from criminals."¹ The move from consultation to reality reflects the escalating fraud crisis in Canada, with the FCA bringing together expertise from various bodies under one roof to improve coordination and effectiveness in combatting financial crimes.

The Genesis of the Agency

The federal government first announced its intention to create the FCA in its 2022 Budget, following Prime Minister Justin Trudeau's 2021 mandate to the Public Safety Minister to create Canada's first-ever nation-wide agency with the sole purpose of investigating complex financial crimes.² The 2022 Budget dedicated $2 million to Public Safety Canada to undertake initial design work.³

Subsequently, the federal government's 2023 Budget announced that the FCA would bring together the "expertise necessary to increase money laundering charges, prosecutions and convictions, and asset forfeiture results in Canada."⁴ Such matters are currently handled by a mix of federal and provincial law enforcement, prosecution and regulatory agencies.

On June 6, 2023, Canada's Department of Finance published a consultation paper seeking views on planned and possible changes to Canada's anti-money laundering and anti-terrorist financing regime (the "AML/ATF Regime"), including the development of the FCA.⁵ The 2023 Consultation Paper recognized "negative perceptions of Canada as a jurisdiction that is not hostile to money laundering or other financial and profit-motivated crime" as well as declines in Canadian money laundering investigations and prosecutions.

Canada's reputation in combating financial crime has suffered in recent years. In the 2024 Corruption Perceptions Index published by Transparency International, Canada scored 75 out of 100 and ranked 15th out of 180 countries, its lowest-ever ranking in the 30 years of the Index.⁶ Additionally, in June 2022, the Cullen Commission released its final report on its inquiry into money laundering in British Columbia, finding that millions, if not billions of dollars, are being laundered through the B.C. economy alone on an annual basis.⁷ The report faulted the AML/ATF Regime for the decline in money laundering investigations and prosecutions.

The 2023 Consultation Paper sought input on three potential operational models for the FCA: (i) a sub-agency (a specialized unit within an existing organization), (ii) a dedicated agency (a separate, specialized organization with defined goals and dedicated resources), or (iii) an inter-agency (an organization integrating resources and expertise from various connected organizations). The October 2025 announcement indicates that the government has chosen the dedicated agency model.

What To Expect from the FCA

A Clearer Mandate

The 2023 consultation paper contemplated that the FCA would tackle a wide array of potential crimes including: white-collar offences (e.g., fraud, securities crime, bribery), fiscal crimes (e.g., tax evasion, customs offences), profit-motivated crimes that generate proceeds for money laundering (e.g., drug trafficking, human trafficking), and threats to national security (e.g., terrorist financing, sanction evasion).The October 2025 announcement suggests a narrowing of the mandate of the FCA, which will focus on:

• Investigating money laundering;
• Investigating online fraud and financial scams;
• Investigating organized criminal activity; and
• Recovering illicit proceeds from criminals.

At the same time, the October 2025 announcement emphasized that the FCA will investigate "sophisticated financial crimes" and "organized criminal activity". The final scope of the agency's mandate will likely be clarified when legislation is introduced in Spring 2026.

National Anti-Fraud Strategy

The FCA anchors a comprehensive National Anti-Fraud Strategy, reflecting rising concerns about fraud across the country. According to the Canadian Anti-Fraud Centre, Canadians lost $643 million to fraud in 2024, a near 300% increase since 2020.⁸

As part of this strategy, the federal government is set to:

• Bank Act amendments: Require banks to implement policies to prevent and address consumer-targeted fraud, while giving consumers greater control over their bank account capabilities and transaction limits;
• Tackle economic abuse: Coordinate with banks and stakeholders to establish a voluntary Code of Conduct aimed at preventing economic abuse, a form of harm where an individual controls another's access to financial resources, leaving them dependent;
• Cross-sector policy actions: Explore new measures across technology and telecommunications sectors to tackle financial fraud more broadly; and
• Industry collaboration: Build upon existing industry-led initiatives such as the Canadian Anti-Scams Coalition.

Takeaways

The move to creating the FCA in the Spring of 2026 signals that there will be more robust action against complex financial crime in the coming years:

1. Expect increased enforcement activity: With a dedicated agency in place, organizations should anticipate an uptick in investigations and prosecutions of financial crimes compared to the current fragmented approach. This will present organizations with greater opportunities for effective reporting of financial crimes and behoove them to ensure their own compliance.
2. Fraud as a central priority: The significant increase in recent fraud losses underscores that tackling fraud will be at the forefront of the FCA's mandate, affecting businesses across multiple sectors including financial services, technology, and telecommunications.
3. Complex transactions warrant extra attention: Organizations engaged in large-scale transactions should expect heightened scrutiny, as the FCA will strengthen capabilities to tackle complex cases such as investment scams, cyber-enabled schemes, and cross-border financial crimes.
4. Incident response preparedness: Organizations should develop or update protocols for responding to government inquiries, investigations, and potential enforcement actions, including preservation of evidence and internal investigation procedures.
5. Proactive compliance: Early adoption of robust financial crime prevention measures, enhanced due diligence, and strong governance protocols will position organizations favourably as enforcement is expected to increase.
6. Increased cross-border risks: Canada's National Anti-Fraud Strategy complements the U.S. Department of Justice's white collar crime enforcement priorities as set out in a memorandum released earlier this year. Further, in the Spring of 2025, Canada's Minister of Public Safety announced the launch of a Canada-U.S. Joint Strike Force to combat organized crime. Businesses with U.S./Canadian reach should expect increased cross-border cooperation and regulatory risks and reporting in both jurisdictions.

Organizations in the financial services sector as well as other industries that have potentially greater exposure to fraud, corruption, and money laundering risks should be closely monitoring these developments and their impact on their operations in Canada and abroad.

Footnotes

1. See: Department of Finance Canada, "Combatting financial fraud, protecting Canadians against scams and abuse" (October 20, 2025): www.canada.ca/en/department-finance/news/2025/10/combatting-financial-fraud-protecting-canadians-against-scams-and-abuse.html; Department of Finance Canada, "Minister Champagne takes aim at financial scams and abuse, announces Anti-Fraud Strategy and new Financial Crimes Agency" (October 20, 2025): www.canada.ca/en/department-finance/news/2025/10/minister-champagne-takes-aim-at-financial-scams-and-abuse-announces-anti-fraud-strategy-and-new-financial-crimes-agency.html.

2. Office of the Prime Minister, "Minister of Public Safety Mandate Letter" (December 16, 2021): www.pm.gc.ca/en/mandate-letters/2021/12/16/minister-public-safety-mandate-letter.

3. Government of Canada, "Budget 2022": budget.canada.ca/2022/home-accueil-en.html.

4. Government of Canada, "Budget 2023": budget.canada.ca/2023/home-accueil-en.html.

5. Department of Finance Canada, "Consultation on Strengthening Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime" (June 6, 2023): www.canada.ca/content/dam/fin/consultations/2023/Consultation-amlatfr-rclrpcfat-eng.pdf.

6. Transparency International, "Corruption Perceptions Index" (2024): www.transparency.org/en/cpi/2024/index/can.

7. Commission of Inquiry into Money Laundering in British Columbia, "Final Report" (June 2022): cullencommission.ca/files/reports/CullenCommission-FinalReport-Full.pdf.

8. Department of Finance Canada, "Minister Champagne takes aim at financial scams and abuse, announces Anti-Fraud Strategy and new Financial Crimes Agency" (October 20, 2025): www.canada.ca/en/department-finance/news/2025/10/minister-champagne-takes-aim-at-financial-scams-and-abuse-announces-anti-fraud-strategy-and-new-financial-crimes-agency.html.

To view the original article click here

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.