Canada Tightens AML Regime and Increases Penalties with Regulatory Reforms

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Canada has made extensive changes to its AML regime after Bill C-12 received Royal Assent on March 26, 2026, introducing much higher penalties for violations and increased compliance expectations.

This legislation amends the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and significantly expands Canada’s administrative monetary penalties. Maximum fines have been increased by 40 times their previous levels. 

Minor violations can now be fined C$40,000 (approx. US$28,700) instead of C$10,000 (approx. US$7,100). Serious and very serious breaches now carry penalties of up to C$4 million (approx. US$2.8 million) and C$20 million (approx. $14.3 million), respectively.

The reforms also expand what qualifies as a very serious violation, now covering failures across all compliance program requirements, including risk assessments and effectiveness testing.

Cumulative penalties are capped at the greater of C$20 million or 3% of global revenue, potentially exposing large institutions in Canada to fines exceeding C$1 billion (approx US$718 million).

AML frameworks must also now be “reasonably designed, risk-based and effective,” introducing a new standard that gives regulators greater scope to assess practical performance.

The changes strengthen FINTRAC by enabling it to question entities that report unusually low levels of suspicious activity compared to peers.

The Bill also introduces a planned enrollment program requiring all reporting entities to register with FINTRAC and maintain updated information. 

Minister of Public Safety, Gary Anandasangaree, said:

The increasing complexity of transnational organized crime means that our law enforcement and intelligence agencies must constantly adapt. This Bill is crucial to providing our law enforcement agencies with more tools and authorities that they need to combat transnational organized crime and keep Canada and everyone who lives here safe and secure.

Complementing these changes, Bill C-15, which is also in force, clarifies rules around charitable donations, beneficial ownership reporting, and client identification. Meanwhile, Bill C-2, still under parliamentary review, proposes additional restrictions, including a strengthened ban on anonymous accounts and expanded powers to collect and use personal data for financial crime investigations.