Canada is on track to significantly strengthen its anti-money laundering laws with the introduction of Bill C-2, known as the “Strong Borders Act.” Unveiled in Parliament in June 2025, the bill represents one of the most sweeping reforms of the country’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in decades. If passed, it will impose strict new obligations on businesses and grant expanded enforcement powers to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
At the core of the legislation is a shift toward mandatory compliance with clearly defined penalties. Institutions that fail to implement effective, risk-based AML programs will face significantly higher administrative monetary penalties. The maximum fine for minor violations will rise from C$1,000 to C$40,000. Serious violations will increase from C$100,000 to C$4 million, and very serious offenses can draw fines up to C$20 million. For larger entities, penalties may also reach up to 3 percent of global revenue, a change that could result in billion-dollar liabilities for multinational firms.
One of the most notable changes is the reclassification of ineffective compliance programs as “very serious” violations. Under the proposed law, an AML program must not only exist—it must be demonstrably effective, covering areas such as internal controls, risk assessments, employee training, and senior management oversight. This marks a clear departure from previous frameworks, which allowed more flexibility in program design and implementation.
All reporting entities under the PCMLTFA, including financial institutions, securities dealers, insurers, money service businesses, and real estate professionals, will be required to register with FINTRAC and regularly renew that registration. Failure to do so could result in suspension or revocation of registration, effectively barring a business from operating in regulated sectors.
Bill C-2 also targets high-risk practices by prohibiting large cash transactions over C$10,000 for businesses and charities, and by banning the use of anonymous or fictitious account names. These measures are designed to reduce avenues for illicit funds to enter the financial system.
Additionally, firms fined under the new rules will be compelled to sign compliance agreements with FINTRAC. If they fail to comply, they could be subjected to further penalties and legal orders. The bill also introduces new offenses for knowingly providing false information or omitting key details during regulatory investigations.
Another significant provision expands FINTRAC’s authority to share intelligence. This includes data-sharing with federal financial and law enforcement agencies such as the RCMP, Bank of Canada, OSFI, and even the Office of the Commissioner of Elections. Private-sector AML actors will also be permitted to share limited data with one another under tighter privacy standards.
Some elements of the legislation have already taken effect as of April 1, 2025, including rules aimed at trade-based money laundering and new categories of reporting entities. The broader reforms are expected to roll out over the remainder of the year, pending parliamentary approval and regulatory finalization.
These sweeping reforms underscore Canada’s intent to modernize and toughen its AML regime. With penalties tied to global operations and expectations of program effectiveness clearly spelled out, businesses will face unprecedented scrutiny. Companies operating in or through Canada should begin reassessing their compliance infrastructure now—before the cost of falling behind becomes a legal and financial crisis.Tools
