Canada AML update: Three bills make major amendments to the PCMLTFA

Canada’s anti-money laundering and anti-terrorist financing regime is undergoing its most significant transformation in years. Three Parliament bills collectively introduce sweeping changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). These amendments materially alter compliance obligations, expand regulatory oversight, and redefine how money laundering and terrorist financing risks are addressed nationwide. This overview highlights the key provisions of each bill and examines their impact on Canada’s anti-money laundering and anti-terrorist financing regime.

Changes under Bill C-15 affecting the PCMLTFA

The Budget 2025 Implementation Act, No. 1 (Bill C-15), introduces reforms to the PCMLTFA. The changes introduce several important clarifications that affect how entities manage compliance and sensitive information. These reforms primarily focus on issues such as the treatment of certain donations, restrictions on disclosing beneficial ownership verification information, and the application of regulations to mortgage administrators, brokers, and lenders. Together, these updates strengthen Canada’s anti-money laundering framework while providing clearer rules on reporting and information sharing.

Bill C-15 received Royal Assent on March 26, 2026 and the below changes are in effect as of that date, except for “Client Identification”, which is deemed to have come into force on October 1, 2025.

Bill C-15 contains the following changes:

Charitable donations: Clarifies that paragraph 36(3.01)(b) of the PCMLTFA relating to disclosure and use of information applies to donations that are not charitable donations, extending the provision to cover entities that solicit financial donations from the public, not just registered charities. Additionally, paragraph 138(5)(b) of the PCMLTFA regulations relating to entity identity verification is amended to clarify it applies to donations that are not charitable donations (i.e., organizations that solicit financial donations from the public generally).

Report disclosure: Prohibits the disclosure of reports—or the information contained in them—related to discrepancies in information discovered in the course of verifying the identity of persons having beneficial ownership or control of an entity. Additionally, prohibits any agency or other public authority that collects a report required by regulation (or a similar report voluntarily submitted) from disclosing the report or the information it contains, except as provided by regulation. The prohibition on disclosure by public bodies does not apply to disclosures to FINTRAC, the appropriate police force, the Canada Revenue Agency, the Agence du revenu du Québec, agencies or bodies administering incorporation legislation, or other prescribed entities.

Client identification: Amends the PCMLTFA regulations regarding client identification to clarify their application to real estate brokers, sales representatives, real estate developers, mortgage administrators, mortgage brokers, mortgage lenders and title insurers. This change is deemed to have come into force on October 1, 2025.

Minister of Finance: Clarifies that all regulations made under the PCMLTFA are to be made on the recommendation of the Minister of Finance.

Changes under Bill C-2 affecting the PCMLTFA

The Strong Borders Act (Bill C-2) also introduces various reforms to the PCMLTFA. The proposed changes signal a rigorous and far-reaching regulatory posture aimed at combatting financial crime and protecting the integrity of Canada's financial system. Bill C-2 is undergoing its second reading in the House of Commons.

Bill C-2 contains the following proposed changes:

Anonymous accounts: Bill C-2 replaces section 9.2 of the PCMLTFA to strengthen the prohibition on anonymous accounts. Under the amended provision, no person or entity referred to in section 5 may open an anonymous account or an account for an anonymous client. A client is defined as "anonymous" if their identity cannot be verified in accordance with the regulations, or if their name is obviously fictitious.

Cash transaction restrictions: Bill C-2 introduces new prohibitions on cash transactions. Certain financial entities (those under paragraphs 5(a), (b), (d), (e), (e.1), (f), or (l)) are prohibited from accepting cash deposits into an account from a depositor who is not the account holder or who is not authorized to give instructions on that account, except in prescribed circumstances. Further, any person or entity engaged in a business, profession, or the solicitation of charitable donations from the public commits an offence if it accepts a cash payment, donation, or deposit of $10,000 or more in a single transaction or in a prescribed series of related transactions totalling $10,000 or more. On indictment, the maximum fine for this new offence is three times the amount of the payment, donation, or deposit accepted.

Collection and use of personal information: Bill C-2 adds a new Part 1.2 to the PCMLTFA, permitting reporting entities to collect and use an individual's personal information without that individual's knowledge or consent where: (a) the information is disclosed to the entity by the RCMP or a prescribed government department, institution, or law enforcement agency; and (b) the discloser affirms in writing that the disclosure is for detecting or deterring money laundering, terrorist activity financing, or sanctions evasion, and that making the disclosure with the individual's knowledge or consent would compromise those objectives. Entities may use the collected personal information only for the purposes for which it was disclosed, or for detecting or deterring contraventions of laws related to money laundering, terrorist activity financing, or sanctions evasion, and must not use the information with the intent to prejudice a criminal investigation. Good faith immunity from criminal and civil proceedings is provided to persons or entities that collect or use personal information under this new Part 1.2.
The following categories of proposed changes are the same as those enacted under the Strengthening Canada's Immigration System and Borders Act “Bill C-12) below:

• new enrolment requirement;
• increased administrative monetary penalties;
• increased criminal penalties;
• mandatory compliance agreement regime; 
• compliance orders; and
• enhanced compliance program requirements.

Changes under Bill C-12 affecting the PCMLTFA

Bill C-12 dramatically increases both administrative and criminal penalties, introduces a mandatory compliance agreement and compliance order regime to ensure that non-compliant entities and individuals are brought into line, and creates a new enrolment system that will give FINTRAC greater visibility. Overall, Bill C-12 reflects a legislative effort to close compliance gaps, impose more meaningful consequences for violations, and modernize the regulatory tools available to FINTRAC in an evolving threat environment.

Bill C-12 received Royal Assent on March 26, 2026 and the below changes are in effect as of that date.  Bill C-12 was introduced to enable Parliament to quickly advance legislative priorities where there was the most agreement, while taking the time necessary to debate the provisions remaining in Bill C-2 that were of concern. 

Bill C-12 contains the following changes:

Increased administrative monetary penalties: Bill C-12 significantly increases the maximum administrative monetary penalties that may be imposed for prescribed violations. For a prescribed violation, the maximum penalty is $4,000,000 for a person and $20,000,000 for an entity. In addition, Bill C-12 introduces a cumulative maximum for all prescribed violations identified on a single notice of violation: for a person, the greater of $4,000,000 and 3% of their gross global income in the preceding year; and for an entity, the greater of $20,000,000 and 3% of the entity's gross global revenue in the preceding financial year. Where an entity is part of a group of affiliated entities, the entity's gross global revenue is deemed to be that of the entire group. 

Increased criminal penalties: Bill C-12 also raises the maximum penalties for several criminal offences under the PCMLTFA. For offences related to non-compliance with record keeping, identity verification and financial transaction reporting obligations, the maximum fine on summary conviction increases to $2,500,000 (with imprisonment of up to two years less a day), and on indictment to $5,000,000 (with imprisonment of up to five years). For offences related to the reporting of transactions connected to the commission or attempted commission of a money laundering, terrorist activity financing or sanctions evasion offence, the maximum fine on summary conviction increases to $10,000,000 and on indictment to $20,000,000. For offences relating to report disclosure, the maximum fines are raised to $1,000,000 on summary conviction and $2,500,000 on indictment. A new offence is created for knowingly withholding material information or providing false or misleading information to FINTRAC, with penalties of up to $2,500,000 (with imprisonment of up to two years less a day), and on indictment to $5,000,000 (with imprisonment of up to five years). The limitation period for proceedings under several  of these new provisions is set at five years.

Mandatory compliance agreement regime: Under the new framework, after proceedings in respect of a prescribed violation have ended, FINTRAC is required to compel the person or entity to enter into a compliance agreement. The compliance agreement must identify the prescribed violation and the relevant provision, set out the measures to be taken to achieve compliance, and include a deadline for compliance. FINTRAC may extend the deadline by up to one year if the person or entity is making substantial progress.

Compliance orders: If a person or entity refuses to enter into a compliance agreement (or is deemed to have refused after six months) or fails to comply with one, the Director of FINTRAC is required to make a compliance order. The compliance order must require the person or entity to comply with the relevant provision, to make public the measures taken or to be taken, and must set a deadline for compliance with the order. The Director of FINTRAC may include reasons in the order and must make it public as soon as feasible. Contravention of a compliance order constitutes a new "compliance order violation," which attracts its own penalty: for a person, the greater of $5,000,000 and 3% of gross global income; for an entity, the greater of $30,000,000 and 3% of gross global revenue. 

New enrolment requirement: Bill C-12 introduces a new enrolment requirement for persons and entities referred to in section 5 of PCMLTFA, such as financial institutions or real estate brokers. These persons and entities must submit an enrolment application to FINTRAC in the prescribed form and within the prescribed period. Certain exceptions apply, including for persons or entities referred to in paragraphs 5(h), (h.1), or (m), and those acting exclusively as employees or agents of another reporting entity. Enrolled persons and entities must renew their enrolment within prescribed periods and notify FINTRAC of any changes to their information within 30 days. FINTRAC may deny an enrolment or renewal application, or revoke an enrolment, if the person or entity has failed to pay a penalty for a compliance order violation or prescribed violation. 

Enhanced compliance program requirements: Bill C-12 adds a new requirement that compliance programs maintained by reporting entities must be "reasonably designed, risk-based and effective."  Non-compliance with this new program standard is classified as a "very serious" violation.

Conclusion

Taken together, these bills represent the most significant overhaul of Canada's anti-money laundering and anti-terrorist financing regime in years. These amendments collectively expand regulatory oversight, strengthen compliance obligations, dramatically increase both administrative and criminal penalties, and equip FINTRAC with modernized enforcement tools. If you are concerned that your business may be impacted, contact a member of our Financial Services or Compliance team for assistance.