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Globe and Mail
31 minutes ago
- Globe and Mail
Ottawa to overhaul financial-crime laws in new border security bill
The federal government is aiming to overhaul Canada's financial-crime laws, including new restrictions on large cash transactions to curb money laundering. A border security bill tabled Tuesday by Prime Minister Mark Carney's Liberal government includes a number of measures intended to disrupt the flow of money from illicit activities through the financial system. The changes are the latest in a string of announcements from Ottawa aimed at reinforcing border measures with the United States after President Donald Trump said that Canada has not done enough to stop illegal crossings and fentanyl trafficking. Among the measures is a ban on businesses other than financial institutions accepting cash payments of $10,000 or more. The new legislation also introduces significant increases to the fines that companies can face for failures in their anti-money-laundering controls. Those increases were first announced in the fall economic statement late last year, prior to the April federal election. Border bill would give authorities sweeping security powers and restrict asylum claims Editorial: Trump crosses the line on the U.S.-Canada border The legislation was introduced ahead of a review of Canada's anti-money-laundering regime by the Financial Action Task Force (FATF) slated for this fall. The task force is an international, intergovernmental organization that sets standards for combatting money laundering and terrorist financing, and that seeks to ensure that those standards are effectively implemented through a process of mutual country evaluations. 'There is a spotlight because we have the FATF review, but now there's more of a spotlight because of the new U.S. administration that is very focused on their mandate on cross-border financial crime and the impact of money laundering,' Borden Ladner Gervais financial services lawyer Suhuyini Abudulai said in an interview. Countries that are found to be deficient in managing financial crime risks are added to the task force's grey list, which can have serious negative consequences for a country, such as curtailing foreign investment into it. Alana Scotchmer, a partner who specializes in financial services regulation at Gowling WLG, said the amendments to Canada's financial-crime laws will need to be implemented swiftly if they are to be factored in to the FATF review. 'Now that we are on the eve of the next evaluation, making a lot of these changes and cleaning up a lot of the things that need to be cleaned up is a more urgent exercise,' Ms. Scotchmer said. Jessica Davis, president and principal consultant of advisory firm Insight Threat Intelligence, said legislation that prohibits non-financial-institution businesses from accepting large cash payments is intended to make it more difficult for criminals to introduce dirty money into the financial system – a process known as placement that is the first stage of money laundering. 'You can't do a $10,000 cash buy into the casino any more. If you have $10,000 in cash and you want to take it to a casino, you have to take it to a bank first,' Ms. Davis said. The bank would then have to transmit the funds to a casino – through a wire transfer, for instance. 'Will this stop money laundering? Of course not, but it will push it so that the placement stage of money laundering is going to be happening in financial institutions, which in theory are best placed to be catching this kind of stuff, because they're going to have the full client history,' she said. The European Union recently announced an EU-wide cap of €10,000 (about $15,600) for cash payments to make it more difficult for criminals to launder money. Canada's new legislation also increases the administrative monetary penalties (AMP) for businesses that violate anti-money-laundering laws – a change that experts have long advocated. The maximum penalty for a violation would be $4-million if the violation is committed by a person and $20-million if committed by an entity. Ottawa has become increasingly critical of Canada's anti-money-laundering practices, putting pressure on the Financial Transactions and Reports Analysis Centre of Canada to crack down on financial crimes. 'You've certainly seen in the last few years more public communication from FinTRAC with respect to their AMP activities and enforcement,' Ms. Abudulai said. While Canadian regulators take enforcement seriously, certain U.S. regulators are known for their determination in levying fines, even for first-time violations, she said. 'Whereas here in Canada, we have some idea – in terms of certain violations – that there may be some flexibility that they may not necessarily receive an AMP immediately, and maybe it's just a matter of discussions with the regulator to address the matter,' Ms. Abudulai said. In May, FinTRAC imposed its largest-ever monetary penalty on Toronto-Dominion Bank – nearly $9.2-million – after a compliance examination found the lender had gaps in its anti-money-laundering controls. In late 2023, the financial crimes watchdog also fined Canadian Imperial Bank of Commerce and Royal Bank of Canada for anti-money-laundering failings. The penalties pale in comparison to the hefty fines and restrictions levied by U.S. regulators and law enforcement. In October, Toronto-Dominion Bank was fined more than US$3-billion and was dealt a host of non-monetary penalties after becoming the first lender in U.S. history to plead guilty to conspiracy to commit money laundering. 'I am interested to see, following all of these changes relating to FinTRAC enforcement powers, how FinTRAC actually uses these powers that it's being given,' Ms. Scotchmer said. 'The question for me is: Are all these added tools and added powers on the enforcement side going to lead to more enforcement activities, different enforcement activities? And I think we will need some time to see how that plays out.'
CTV News
31 minutes ago
- CTV News
SAAQclic: Cost overruns possibly a ‘small detail' overlooked
Monitors are seen in the courtroom of the Gallant Commission, a public inquiry into the failures of the Société de l'assurance automobile du Québec's platform, SAAQclic, in Montreal on Thursday, Apr 24, 2025. (Christinne Muschi/The Canadian Press) It is 'quite possible' that the Société de l'assurance automobile du Québec (SAAQ) failed, at the time of the call for tenders, to consider a scenario in which its digital transformation budget was completely exhausted, according to testimony from a former strategic advisor. On Wednesday, the Gallant commission examined how the call for tenders was developed to find the consortium tasked with creating the SAAQclic platform. It heard from individuals who supported the Crown corporation during that process. Madeleine Chagnon, an external strategic advisor hired for the project, found herself defending what the SAAQ had included in the tender documents in case of cost overruns beyond the initial budget envelope. Chagnon pointed to a risk-sharing clause that outlined certain mechanisms, including potential rate reductions and the option to draw from savings achieved by completing parts of the project more efficiently than expected. She also mentioned a contingency — a percentage of the original budget set aside for unforeseen issues. Commission lawyer Vincent Ranger pressed Chagnon on what had been planned in the event all those funds were used up. 'I think that behind these big ideas of risk-sharing and innovation, a small detail may have been forgotten in the original call for tenders — namely, what would happen in the event of cost overruns. Is that possible?' the lawyer asked. 'We added the concept of zero additional costs and, afterwards, look — maybe. I can't tell you no. It's possible, quite possible,' Chagnon replied. Ranger then presented a document showing questions submitted by potential suppliers during the tendering process. One of them asked how cost overruns would be handled if the entire contingency amount was spent. The response was that it was a 'risk that must be managed,' and that the phased approach to the project 'would help anticipate that type of situation.' It was also noted that the SAAQ did not foresee 'any increase to the budget envelope' and that 'should that envelope be exceeded,' the corporation 'may terminate the business relationship.' The SAAQ's tech modernization project could cost at least $1.1 billion by 2027 — $500 million more than originally planned, according to calculations by the Auditor General. This report by The Canadian Press was first published in French June 4, 2025.
CTV News
32 minutes ago
- CTV News
Mayor's budget squeeze on city hall's external boards and agencies yet to yield tax savings
London mayor asked several agencies to find budget savings in order to meet his property tax increase target of below five per cent, reports Daryl Newcombe. Mayor Josh Morgan believes it's too early to tell if he can still meet his property tax target of below 5 per cent in 2026. Earlier this spring, Morgan and Budget Chair Coun. Elizabeth Peloza contacted 12 city-funded agencies, boards and commissions (ABCs) requesting they provide opportunities for potential budget reductions, provincial/federal advocacy and new revenue generation. However, just two response letters appear on the agenda of next week's Budget Committee meeting. '(Some) other organizations we're still in discussions with, and other boards just need some time to dig into their budgets,' Morgan tells CTV News. The letters on the agenda from the Middlesex London Health Unit (MLHU) and Museum London both include blunt warnings against another budget reduction in 2026. 060425 - Property tax Exterior of Museum London. (Daryl Newcombe/CTV News London) 'Further budget reductions from the City will necessitate reduced operating hours, impact jobs, and reduce our ability to attract investment from all levels of government, sponsors and donors,' reads the letter from Museum London. The MLHU writes, 'further reducing the funding from the City by an additional 1.5% would lead to a deficit of over $1 million dollars for the Health Unit next year.' 060425 - Property tax Exterior of Middlesex London Health Unit. (Daryl Newcombe/CTV News London) Peloza explains that the 2024-2027 municipal budget already includes savings from both agencies, 'In their letters it's stated that at the beginning of the multi-year budget they already took their (budget) cut then. Now they're saying, 'I don't have more to give.'' 'I'm not surprised by their responses,' admits the mayor. 'I met with both of them individually, and as I said all along, there's going to be some organizations that are facing different types of pressures than others.' Outreach to the city's ABCs was an extensive undertaking by Morgan and Peloza earlier this spring. 060425 - Property tax Projected property tax increase in 2024-2027 Budget. (City of London) Joint Meetings with the Mayor and Budget Chair: • RBC Place • Middlesex-London Health Unit • Upper Thames River Conservation Authority • London Middlesex Community Housing Meetings with the Mayor: • London Public Library Meetings with the Budget Chair: • London Police Services Board – Finance Committee • Museum London • Tourism London • London Transit Commission Written Correspondence Provided to: • Kettle Creek Conservation Authority • Lower Thames Valley Conservation Authority • Eldon House The mayor emphasizes ABCs can still respond to City Hall about potential budget savings in the coming weeks and months. 'Given their board (meeting) cycles, (and) the amount of time their staff need to look into things in a meaningful and serious way, they're going to need a little bit more time,' he explains. 'What I've said to them is there's no bad time to bring forward a budget savings.' The London Police Services Board's finance committee recently began looking for between $1 million and $1.5 million in budget savings that would not impact police operations. The appointment of a temporary London Transit Commission (LTC) made up of Council members has delayed an analysis of the net financial impact of two unanticipated events when the LTC's multi-year budget was first approved: lower fuel prices and declining international student enrolment at Fanshawe College. London's initial property tax rate increase in 2026 was projected to be 6.4 per cent, but the mayor set his own target of below 5 per cent. 060425 - Property tax 2024-2027 Municipal Budget Documents. (File) Achieving the mayor's target requires finding savings and/or revenue totaling about $13 million. Peloza believes budget savings from external agencies, boards, and commissioners will be needed for the mayor to reach his target. 'I'm going to assume that we were banking on them, and the mayor was especially banking on them as he made a target to get under a certain percentage,' she admits. 'It's going to get to the point of which ones can we cut, which ones can't we cut. Those decisions will start with him and then go to council for consideration.' Council deliberations about the mayor's draft budget begin in late November. Morgan says it's still too early to determine if his tax target will be reached. 'I don't know yet, but what we are doing is we're tracking in the right direction,' he says. Representatives of the Health Unit and Museum London have asked to speak at the Budget Committee meeting on June 11.
