This legislation follows policy direction laid out in the 2024 Fall Economic Statement and builds on ongoing reforms to modernize Canada's approach. If enacted, Bill C-2 will implement substantial changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and related legislation—including the Criminal Code, Canada Evidence Act, and Personal Information Protection and Electronic Documents Act (PIPEDA).

 

Key Changes in Bill C-2

1. Mandatory FINTRAC Enrollment for All Reporting Entities

Under the proposed changes:

• All reporting entities—including banks, credit unions, securities dealers, insurers, real estate professionals, and leasing/factoring businesses—must formally enroll with FINTRAC.

• FINTRAC will be able to revoke enrollment if an entity fails to respond to an information request within 30 days or otherwise fails to comply.

• This enrollment requirement does not apply to MSBs already registered under the current regime.

Enrollment entails ongoing obligations, including notifying FINTRAC of material changes and submitting renewal applications on time.

2. Major Increase in Administrative Monetary Penalties (AMPs)

Bill C-2 proposes a 40-fold increase in FINTRAC’s ability to penalize non-compliance.

*For individuals: up to $4M or 3% of gross global income—whichever is greater.
*For entities: up to $20M or 3% of global group revenue—whichever is greater.

This expansion means a Canadian subsidiary may be penalized based on the global revenue of its parent company.

3. Escalated AML Compliance Program Standards

Current law requires programs that are “intended to ensure” compliance. Bill C-2 raises the bar significantly:

• Programs must be “reasonably designed, risk-based and effective”.

• Failures in this area will now be treated as “very serious” violations, not just “serious.”

• FINTRAC will also gain the authority to examine any entity it believes is a reporting entity, not just those already registered.

4. Mandatory Compliance Agreements and New Offences

Under Bill C-2:

• Any entity fined under the AMP regime must enter into a compliance agreement with FINTRAC.

• Refusal, or failure to comply with the agreement, results in a compliance order, and breach of that order constitutes a new violation.

• It becomes an offence to knowingly withhold material information or make false or misleading statements, including through omission.

• Anonymous accounts and accounts for fictitious individuals (“anonymous end clients”) are explicitly banned.

5. Ban on Large Cash Payments

A new prohibition will apply to all persons and entities—including charities—barring them from receiving cash payments of C$10,000 or more for business or donation purposes, unless a regulatory exemption applies.

6. Enhanced Information Sharing Across Sectors

Bill C-2 proposes to improve coordination between public and private bodies through amendments to the PCMLTFA, PIPEDA, and related acts.

If adopted:

• Reporting entities will be allowed to collect and share personal information without individual consent for AML, ATF, or sanctions evasion purposes, or a related purpose.

• FINTRAC may share information with regulators like:

  • The Superintendent of Financial Institutions

  • The Financial Consumer Agency of Canada

  • The Bank of Canada

  • The Canada Deposit Insurance Corporation

  • The Deputy Minister of Finance

  • The Commissioner of Canada Elections (where relevant)

These changes address long-standing limitations on AML-related intelligence sharing in Canada.

7. Criminal Code Amendment: Subscriber Data Access

The bill introduces provisions enabling law enforcement to access subscriber information—such as online identifiers, transmission data, and IP addresses—through judicial authorization. This is intended to enhance digital investigations into money laundering and related crimes.

Implications for Compliance Leaders

If passed, Bill C-2 will significantly raise expectations for regulated entities:

• All compliance programs must be reassessed for real-world effectiveness and risk alignment.

• Fines will scale with global revenues—requiring greater coordination with foreign headquarters.

• Internal controls, KYC protocols, and governance systems should be revisited now to prepare for enrollment obligations and possible audits.

What to Expect Next

While Bill C-2 is still under review, further regulatory changes are anticipated. Future legislation may target:

• Beneficial ownership transparency

• AML expansion to real estate, luxury goods, and professional services

• National registries and tighter sanctions enforcement

Now is the time for businesses to proactively prepare.

How AML Incubator Can Help

At AML Incubator, we’re already supporting firms navigating Bill C-2’s requirements through services like:

• CAMLO/MLRO Services

• MSB Registration

• Effectiveness Review

If you’re unsure how these reforms impact your obligations, our team can help assess your exposure and build a roadmap for readiness.

Your Trusted Partner in Regulatory Excellence.