Having received royal assent on March 26, 2026, Bill C‑12, the Strengthening Canada’s Immigration System and Borders Act, has significantly reshaped Canada’s anti‑money laundering (“AML”) landscape. The bill established higher monetary penalties and stricter compliance requirements by, among other things, amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”) and enhancing oversight by the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”). Indeed, entities and individuals now face heightened penalties and more stringent requirements, while, at the same time, enrolment obligations have been extended to a broader range of parties. Below, we will discuss some of the most prominent updates being implemented.
Unprecedented penalties
Further to our commentary dated July 15, 2025 regarding Bill C-2, several of the amendments initially contemplated therein were restated in Bill C‑12. In fact, one of the most anticipated changes was the increase of administrative monetary penalties (“AMPs”) to forty times their previous levels, as can be seen in the table below:
| Violation Class | Old Maximum Penalty | New Maximum Penalty |
|---|---|---|
| Minor | CA$1,000 | CA$40,000 |
| Serious | CA$100,000 | CA$4,000,000 |
| Very serious | CA$500,000 | CA$20,000,000 |
Similarly, the maximum penalty for a violation has gone from $100,000 to $4,000,000 if the violation is committed by a person, and from $500,000 to $20,000,000 if the violation is committed by an entity. Consequently, the financial burden of a penalty has significantly increased and ensuring compliance has become increasingly pressing.
Cumulative maximums
Moreover, if multiple violations take place, a violating person can face a cumulative maximum penalty of the greater of $4,000,000 and 3% of such person’s gross global income in the year prior to the one in which the penalty is established. When it comes to a violating entity, such a cumulative cap would correspond to the greater of $20,000,000 and 3% of such entity’s gross global revenue in its prior financial year. Furthermore, if a violating entity is part of a group of affiliated entities, in the calculation of the maximum penalty, the gross global revenue is that of such group of entities as opposed to being limited to that of the single entity in question. As a result, the application of the 3% threshold may meaningfully increase the maximum potential penalty.
Compliance, not punishment
While the changes considerably increase penalties, the goal behind such changes is to ensure compliance rather than punish. In fact, when determining the amounts of certain penalties, FINTRAC would be taking into account such a purpose, along with the damage caused by the violation and the violating party’s ability to pay. In other words, the specific circumstances would be taken into account by FINTRAC in its determination of penalties.
Efficient compliance programs
Bill C-12 has also imposed a more stringent requirement with respect to the establishment by entities of a compliance program. In fact, the bill requires the entities to put in place a compliance program which is “reasonably designed, risk-based and effective”. In practical terms, FINTRAC would no longer limit its oversight to the formal existence of a compliance program, but would scrutinize its effectiveness and its likelihood of achieving meaningful compliance outcomes.
Expanded enrolment requirement
While money services businesses have always been required to enrol with FINTRAC, Bill C-12 has expanded such a requirement to apply to all reporting entities. Such an expansion would therefore impact several new players in the financial services landscape. Effectively, certain banks, credit unions and trust companies would thereby need to enrol with FINTRAC. To do so, reporting entities or persons would need to not only make the initial enrolment, but also proceed with renewals and notify FINTRAC of any updates to the reported information.
Anonymity of clients or accounts
Bill C-12 additionally prohibits any reporting persons or entities from opening anonymous accounts or accounts for anonymous clients. In fact, reporting parties need to be able to properly validate the identity of the clients. Also, the bill states that a client with an “obviously fictitious” name would be considered anonymous.
As seen above, there are several considerations which reporting entities and persons need to keep in mind going forward. Miller Thomson’s Canadian Financial Services lawyers can help institutions assess the impact of Bill C‑12 on their AML programs, governance structures, and regulatory preparedness.
