Canada is facing record levels of illicit funds moving through our economy. For more than a decade, illegal drug trafficking has remained the country’s top money laundering (ML) threat, followed by fraud, trade-based ML, and tax evasion—each generating an estimated $1 billion or more in criminal proceeds.
Our defenses are working harder than ever. Between 2024–2025, Canada’s anti-money laundering (AML) system produced 6,236 financial intelligence disclosures, the highest on record. In one case, FINTRAC intelligence supported charges against 10 individuals in Barrie, Ontario, tied to an international drug trafficking network spanning the Middle East, Manitoba, and British Columbia. It’s only one example among many.
Yet despite these gains, the broader reality is sobering: we’re losing ground.
For example, mortgage fraud continues to rise—including a $500 million scheme uncovered earlier this year involving falsified financial documents. FINTRAC also issued its two largest penalties ever against foreign virtual currency operators for complete noncompliance, and news headlines continue to highlight AML breakdowns at major institutions across the country.
The Proceeds of Crime and Terrorist Financing Act (PCMLTFA) applies to a wide range of sectors, including financial institutions, securities dealers, real estate participants, casinos, remittance and currency exchange platforms and virtual currency dealers.
As a founding member of the Financial Action Task Force (FATF), Canada is currently under peer review—bringing heightened scrutiny at a time when illicit funds are at an all-time high and increasingly linked to violent crime in our communities.
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Agents of the Crown |
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◦ Armoured cars ◦ Cheque cashers |
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and precious stones |
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Canada’s approach can be viewed through a national adaptation of the three lines of defense (3LOD) framework.
Forensic experts, including Doane Grant Thornton’s forensic team, led by Jennifer Fiddian-Green, are increasingly called upon to provide clarity in complex cases. Despite this, systemic pressure persists across all three lines.
We need our first line to start saying “No, thank you.” Not punitively, but prudently.
Canada’s AML regime doesn’t require businesses to refuse service except in sanctions related scenarios. The model is largely reactive: identify, monitor, report—and continue the relationship if you choose. This normalizes unexplained or economically irrational funds as part of routine business.
If we want better outcomes, the first line must change its first move. Saying “no” at the outset reduces strain on regulators, law enforcement, and ultimately, the courts.
Yet compliance systems today often penalize inconsistency more than they reward prevention. Boards fear regulatory consequences more than criminal exposure. This must change.
Whistleblowing mechanisms—now more widely adopted—should also be integrated into AML efforts so that a “no” in one organization can help others validate and make informed decisions.
There are encouraging policy steps. Unexplained Wealth Orders (UWOs)—now adopted in British Columbia, Saskatchewan, Nova Scotia, and Manitoba and upheld in court—shift the burden of proof to alleged owners of suspicious assets. It’s a constructive beginning.
And yes, declining risky business may impact business growth in the short term. But growth powered by illicit funds weakens Canada and strengthens criminal networks.
In 2024–2025, the first line filed more than 65 million transaction reports. But our justice system cannot keep pace.
Trials must begin within 18–30 months, and with limited capacity, many fraud cases never make it to conviction. As of December 2025, only ~10% of cases resulted in charges, and more than half of those were dismissed.
Illicit funds that never enter the economy don’t need to be investigated, prosecuted, or forfeited. Prevention strengthens our communities and relieves pressure on every subsequent line of defense.
Saying “no” means declining to provide services when a person or organization cannot credibly explain the source of their funds. It means stepping back when serious questions or inconsistencies emerge about a prospective client or the money they are introducing into your business. In those moments, we need you—our business leaders—to have the confidence to simply say no.
This responsibility spans across all sectors of our economy--real estate, mortgages, vehicle and luxury goods sales, securities firms, wealth management, casinos, online gaming, and more. Across these sectors, declining a relationship is often not only appropriate; it’s necessary.
Casinos:
VIP players often trigger repeated suspicious cash related reports. Filing those reports is required, but not supporting our long-term community health. Businesses can—and should—require verified sources of funds before allowing play and if funds can’t be verified, then say “no”.
High-value purchases:
Buyers with legitimate sourced funds rarely use tens of thousands of dollars in cash for vehicles, land, art, or jewelry. When the behaviour or the economics of a transaction don’t make sense, discernment—not facilitation—is the right response.
Opaque land ownership:
Only British Columbia has a comprehensive landowner transparency registry. Other provinces still allow ownership structures that obscure beneficial owners, enabling unexplained money to enter the real estate market with little scrutiny.
No matter the sector, the central questions are the same:
Does this transaction make sense? And is the source of funds clear? If not, the answer should be clear.
Canada’s wide network of service providers—across online gaming, mortgage lending, real estate, financial services, securities, and wealth management—creates countless entry points for illicit funds. Given our relatively small population, the scale of activity suggests a significant volume of tainted money is moving through the system.
The mortgage market illustrates the challenge. Public data from CMHC, Statistics Canada, and OSFI indicates there are roughly 6.93 million residential mortgages in Canada, serviced by banks and credit unions. Based on our work with industry stakeholders, this almost certainly undercounts the true total—especially as private lending has grown rapidly and only came under regulation in October 2024.
Canada has about 16.8 million households, with roughly 8.33 million owner occupied homes in the under 60 age group (the cohort most likely to carry a mortgage). That means, even using only publicly tracked data, Canada has nearly one mortgage for every owner-occupied household—before including unreported or less visible private mortgages.
At a macro level, we must ask: Does the sheer volume of private, hard to track lending make sense? If it does not, what does that suggest about the sources and flow of money within our economy?
A similar pattern appears in the securities sector. Canadian dealers are frequently targeted by international individuals and entities, or international sourced funds, seeking to move funds into and out of Canada with relative ease. While some firms apply rigorous due diligence, many don’t—making it difficult to establish the true origin or purpose of the funds being invested. Businesses must start recognizing the bigger picture: how realistic is it that an offshore client would legitimately need a Canadian domiciled investment account?
Real change will happen when business and board leaders draw a clear line: if you don’t know who the client is or where their money comes from—say no.
This is not solely a banking issue; it applies to everyone.
The world is becoming more complex and risky. Fraud and other predicate crimes are generating unprecedented levels of illicit funds. Our first line—companies across every sector—must strengthen the front-end defense.
Let’s be far-sighted in what we say yes to. And when something doesn’t make sense, let’s have the courage to say no.
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