Finance Minister Francois-Philippe Champagne arrives at a cabinet meeting on Parliament Hill in October. Mr. Champagne says a new agency will be established to investigate sophisticated schemes that are often linked to organized crime.Sean Kilpatrick/The Canadian Press
Finance Minister François-Philippe Champagne says a new Financial Crimes Agency will use funding for the RCMP to create a specialized team focused on money laundering and online fraud.
The minister introduced the plan on Parliament Hill Monday as part of a series of announcements the government is making that reveal some new budget measures before the full document is released on Nov. 4.
While there are several existing federal bodies with responsibilities for tracking and preventing financial offenses, the minister said the international nature of such crimes requires a new agency that will build on what Canada already has in place.
Canadians lost $643-million to fraud in 2024, according to the Canadian Anti-Fraud Centre.
The new office will investigate sophisticated schemes that are often linked to organized crime.
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It will be part of a broader federal anti-fraud strategy that will include legislation updating the Bank Act.
The legislative amendments would require banks to have policies and procedures in place to detect and prevent consumer-targeted fraud; obtain clear consent from bank account holders before enabling services like e-transfers; and collect data on financial fraud and report it to the Financial Consumer Agency of Canada.
Ottawa will also be launching consultations on a voluntary code of conduct for the prevention of economic abuse, which the government says will set clear expectations for financial institutions.
Mr. Champagne said the new agency would work with existing national organizations that focus on financial crime.
There is currently a Canadian Anti-Fraud Centre that is described on its website as “a national police service that gathers intelligence on fraud across Canada and assists Police of Jurisdiction with enforcement and prevention efforts.”
There is also a federal body called FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada.
The organization describes itself as “Canada’s financial intelligence unit and anti-money laundering and anti-terrorist financing supervisor.”
Meanwhile, the Office of the Superintendent of Financial Institutions regulates and supervises more than 400 financial institutions and more than 1,200 pension plans in Canada.
And the Financial Consumer Agency of Canada “is responsible for protecting the rights and interests of consumers of financial products and services,” according to its website.
Mr. Champagne said the new agency is inspired by similar investigation teams in Italy, the United Kingdom and the United States.
“You need something different. You need something which is best in class in the world,” he said when asked if the new agency would duplicate work that is already taking place by existing federal organizations.
“You need the type of agents that would have the investigative power, the skills needed and the ability to really go after organized crime, money laundering, transnational crime,” he said.
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Monday’s announcement did not include a specific cost for the new agency. A government document said it will be funded by “leveraging investments in federal law enforcement capacity.”
Prime Minister Mark Carney announced last Thursday that the budget will include $1.8-billion over four years to increase federal policing capacity to combat crime, including online fraud, money laundering, online child exploitation and organized crime.
That announcement also said the money would fund 150 new RCMP personnel to tackle financial crimes.
Canadian Bankers Association President and CEO Anthony Ostler attended the news conference with the minister and said the new agency is welcome.
He said existing agencies like FINTRAC are limited in what they can review, while the new agency will be more focused on the specific frauds that generate proceeds of crime.
“We need professionals that 100 per cent focus their time on financial crime,” he told reporters following the announcement.
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He said the agency could help local law enforcement determine if a specific scam in their area is part of a much larger operation.
“We need a financial crime agency so we can connect the dots,” he said.
He also said discussions will need to take place on how the new rules and guidelines are implemented.
“The key thing is trying to make sure that in our effort to protect people, that we’re not adding endless compliance or costs,” he said.
The Liberal government promised a new “Canada Financial Crimes Agency” in the 2022 federal budget, which included $2-million for initial design work. That followed a 2021 Liberal platform pledge to create such an agency, saying it would “bring together, under one roof,” FINTRAC, existing RCMP law enforcement resources and the Canada Revenue Agency.
It was not clear from Monday’s announcement if that remains the planned structure of the new agency.
Mr. Champagne was asked Monday why that 2022 budget pledge was never implemented.
“I’m taking that over now, so it’s going to happen,” he said.
Duff Conacher, co-founder of the advocacy organization Democracy Watch, criticized the measures as “weak” and mostly voluntary. He said similar policies in other countries, such as the U.K., include stronger protections to ensure companies provide compensation to customers who are victims of fraud.
Mr. Conacher said banks should be subject to outside audits and should face penalties if their procedures are found to be lax.