Ottawa also relies on outdated or partial information to quantify the prevalence of financial crimes on Canadian soil. The lack of recent data hinders crime-prevention efforts.Sammy Kogan/The Globe and Mail
The federal government recently published a new report that provides a national risk assessment for money laundering and terrorist financing – and it did so with little fanfare.
Formally known as the 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada, the document is intended to serve as foundational guidance for tens of thousands of businesses, including banks, that have mandatory reporting obligations under federal law.
Notably, those companies are expected to use Ottawa’s threat analysis to update their own risk strategies to detect and disrupt financial crimes, which are increasingly jeopardizing the integrity of Canada’s economy and financial system.
The national risk assessment, released on Aug. 22, is only Canada’s third such report over the past 10 years. One would think that a long-awaited report containing critical advice on countering existential threats to our country would merit more than just a press release in the dead of summer.
But after reading the document, it is obvious why Ottawa took a subdued approach. It didn’t want anyone to read it.
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The government, it seems, would rather obscure the fact that Canada remains a laggard when it comes to providing up-to-date guidance to private-sector businesses.
Many of our allies, including the United States, Britain and Australia, publish national risk assessments more frequently and provide more substantive guidance with each iteration.
The United States, for instance, has provided four updates to its national risk assessments since 2015.
What’s more, Washington deliberately produces separate reports on money laundering, terrorist financing and funding that fuels the proliferation of weapons of mass destruction to provide comprehensive analyses.
Britain, which lumps money laundering and terrorist financing threats into a single report like Canada, has also produced four national risk assessments over the last decade. Its latest update was circulated this past July and covers an array of techniques employed by criminals.
Australia, meanwhile, arguably takes the most rigorous approach.
Canberra last updated its separate national risk assessments for money laundering and terrorist financing in 2024. Those reports followed the publication of an analysis of proliferation financing in 2022.
Importantly, Australia’s approach to conducting risk assessments has garnered praise from the Financial Action Task Force.
(The FATF is a global body that sets standards to combat money laundering and terrorist financing. It is conducting a review of Canada’s efforts to combat financial crime this year.)
Specifically, Australia has conducted and released 13 risk assessments of specific sectors and a risk assessment on traveller’s cheques since 2018. Those efforts were in addition to the five sectoral risk assessments, two regional risk assessments and an analysis on remittances completed since 2015, according to the FATF.
Canada’s updated national risk assessment is a prerequisite for the FATF’s impending review of our country’s anti-money laundering and anti-terrorist financing regime.
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Trouble is, the document provides thin gruel for businesses and provides little evidence of criminal convictions.
The problem isn’t that Canada shoehorns money laundering and terrorist financing into a single report, but that its national risk assessment lacks depth. I learned nothing new from reading it.
Ottawa also relies on outdated or partial information to quantify the prevalence of financial crimes on Canadian soil.
I’ll give you an example. The report, which was prepared by the Department of Finance, suggests that between $45-billion and $113-billion is laundered in Canada each year. In doing so, it cites a five-year-old estimate from the Criminal Intelligence Service Canada.
Why doesn’t Ottawa have more recent data?
The national risk assessment doesn’t even attempt to quantify terrorism financing, simply suggesting it remains “low volume and low value” in Canada. Proliferation financing, meanwhile, is only briefly mentioned twice in the entire document.
It is naive to think that terrorism financing and the funding of weapons of mass destruction do not happen here.
Canada’s national risk assessment also uses a “residual risk lens” to assess inherent vulnerabilities to money laundering and terrorist financing to provide “a more nuanced understanding of risk in the Canadian context.”
Smells like spin.
The glossing over of such problems betrays Ottawa’s ignorance of transnational money laundering and terrorist financing risks.
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Indeed, just last month, the International Monetary Fund urged the Canadian government and financial regulators in the country to deepen their understanding of cross-border money laundering and terrorist financing risks.
The IMF also noted that while Canadian authorities acknowledged the benefit of doing so “to supplement their risk assessment foundation,” they also believed that enhancing supervision “need not necessarily require additional resourcing.”
Talk about cognitive dissonance.
The Financial Transactions and Reports Analysis Centre of Canada, the federal financial crime watchdog, is planning for 535 full-time equivalent staff in 2025-2026.
Of that total, 278 are being earmarked for compliance and 178 for the production and dissemination of financial intelligence.
Yet, FinTRAC is responsible for supervising more than 38,000 businesses. It is completely outgunned.
If Canada is serious about fighting financial crime, the government must be clear-eyed about the risks.
Businesses, including banks, are collectively spending billions of dollars on financial-crime compliance each year. Ottawa has a responsibility to provide them with robust guidance.