Ottawa wants to make “snow-washing” a thing of the past.
Driving the news: The federal government is establishing a new financial crime agency that will be responsible for investigating money laundering, corruption, and other white-collar crimes in Canada. The Financial Crime Agency (FCA) will act as a standalone police force, with the power to investigate, arrest, and prosecute financial criminals.
In this week's spring economic update, the feds earmarked $352 million to get the FCA up and running over the next five years.
Catch-up: These types of crimes have historically been handled by Fintrac and the RCMP, but neither has had the authority or resources to really go after financial criminals. Fintrac can only issue relatively small fines and simply hands off its investigation findings to police.
A federal intelligence commission wrote in a 2023 report that the RCMP’s wide mandate has meant money laundering and other financial crime cases — which are often complex and time-intensive — are slipping through the cracks.
Why it matters: Up to $130 billion of dirty money flows through Canada’s financial system every year, earning the country a reputation as a money laundering haven. Having a dedicated agency focused on investigating and prosecuting these types of cases could turn around that bad rap.
Bottom line: In the 2023-24 fiscal year, Fintrac flagged $44 billion in transactions that were likely tied to money laundering, terrorist financing, or other financial crimes. If that money were clean and contributing to Canada’s economy, it would likely be a top 20 sector for the country’s GDP.—LA
