Public Safety Committee on Nov. 18th, 2025

[Sima Acan, Liberal, Oakville West, ON]

How does Canada compare to its closest allies and partners, like the Five Eyes, in terms of anti-money laundering operations and technology? Does Bill C-12 help bring Canada up to speed with these partners?

[Hartland Elcock]

It would be inappropriate for me to comment on the Canadian government's capabilities in comparison with its peers in the Five Eyes network.

[Sima Acan, Liberal, Oakville West, ON]

Thank you.

Do I still have time, Mr. Chair?

[The Chair, Liberal, Jean-Yves Duclos]

You have two minutes.

[Sima Acan, Liberal, Oakville West, ON]

Can I share my time with my colleagues?

[The Chair, Liberal, Jean-Yves Duclos]

Of course, you can.

Madam Dandurand.

[Marianne Dandurand, Liberal, Compton—Stanstead, QC]

Thank you, Mr. Chair.

Thank you very much to the witnesses for being here.

Mr. Elcock, in general, to what extent will the act, as written, give financial institutions more teeth or the capacity to detect financial crime, and what positive impact will that have, in your opinion?

[Hartland Elcock]

Again, I think Bill C-12 as written currently is largely focused on supervision and enforcement. We believe there should be minor adjustments to those powers for guardrails to create predictability and transparency in their application.

Ultimately, we think this will drive forward a more efficient and effective AML regime, helping to ensure, for example, that we don't have unintended consequences flowing from opaque powers. Some of those unintended consequences could be over-reporting. What we want is the needle in the haystack. I think we've seen this discussed in various different forums before our meeting today. What we'll see, I think, by a properly crafted Bill C-12—again with very minor amendments that we don't think will change the fundamental nature of the bill—is a bill that helps to preserve a risk-based approach within the regime, one that helps to drive efficiency and effectiveness, a fit-for-purpose regime that gets FINTRAC the reporting it needs to generate financial intelligence for law enforcement to then carry out prosecutions and investigations. We're happy to have this discussion today with you.

[The Chair, Liberal, Jean-Yves Duclos]

Thank you, Ms. Dandurand.

Mrs. DeBellefeuille, you have the floor for six minutes.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Thank you, Mr. Chair.

Mr. Elcock, you came to the Hill to promote anti-fraud efforts. I gather from what you've told us that detecting fraud and the actors who commit fraud is a way to combat fraud. You've been quite actively promoting the fight against fraud.

To what extent could the sharp increase in monetary penalties set out in Bill C‑12 disrupt fraudsters and therefore curb fraud?

[Hartland Elcock]

Thank you so much.

We're here today to speak to Bill C-12. The anti-money laundering regime is focused on the reporting of money laundering, sanctions evasion and anti-terrorism financing.

If you would like to speak to the CBA about its involvement in the Canadian anti-scam coalition, we'd be happy to follow up with your office and engage in those discussions.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Earlier, you recommended delaying the application of monetary penalties or sanctions. Can you explain to me exactly why you're recommending this, and perhaps even proposing an amendment?

[Hartland Elcock]

As you'll note in the brief that we provided to the committee, our intent is not to amend the proposed administrative monetary penalties in any way. The idea would be to delay their coming into force until there are clear regulatory criteria around their application. This would provide predictability and transparency in their application for all entities, not simply banks, but for all entities under the regime.

Through that predictable and transparent application, we can be assured that significant penalties will be used to encourage compliance, particularly where there are egregious or systemic issues. As you'll note in the appendix to the brief that we provided the committee, we do suggest various different criteria that could be included. These criteria are all focused on the core purpose of AMPs, which is to encourage compliance, including what steps, for example, did an entity take to mitigate some of the challenges, or any of the issues that may have encouraged an AMP. What we want, and what the AML regime is designed to do, is to encourage compliance. Transparency and predictability will help to meet that policy goal.

[Claude DeBellefeuille, Bloc, Beauharnois—Salaberry—Soulanges—Huntingdon, QC]

Any bill that passes and gets royal assent doesn't necessarily come into force the next day. The regulations must be adopted first. So you're telling us that the whole issue of monetary penalties must be set out in very clear regulations to specify to who could be subject to them and under what circumstances. If that were not done, what impact would that have on you?

[Hartland Elcock]

Just to confirm, yes, we do believe it's important for the AMPs regime to be very clear and transparent before it's brought into force. This flows through the entire bill. I think this has positive benefits for the entire bill, including around what makes a reasonably designed and risk-based effective regime. It's helpful to understand regulatory expectations and to understand what potential violations could attract in terms of an AMP.

However, fundamentally, if we don't have this, the impact could be that a lack of transparency or predictability can create an environment where organizations over-report. On an STR, for example, an institution needs to determine if there are reasonable grounds to suspect money laundering, terrorist financing or sanctions evasion before they can legally report to FINTRAC.

What we don't want is over-reporting. It's key that FINTRAC receives actionable financial intelligence from financial institutions, which it can then analyze and collate into its products for law enforcement.

Predictability and transparency in the AMPs regime is important because we don't want an environment of over-reporting, and we believe that if you have an opaque or unclear regime, it may be a potential impact. Therefore, long term we think it's much healthier for the regime to have those transparent and predictable elements outlined in regulation.

[The Chair, Liberal, Jean-Yves Duclos]

Thank you, Mrs. DeBellefeuille.

I now give the floor to MP Gill for five minutes.

[Sukhman Gill, Conservative, Abbotsford—South Langley, BC]

Thank you, Chair.

I will be splitting my time with MP Motz.

Thank you to the witnesses for coming here today and testifying.

Could you outline the expected financial impacts of Bill C-12 on financial institutions, particularly in light of how the bill significantly increases compliance obligations?

[Hartland Elcock]

It would be inappropriate for me to comment on the individual impacts on a member. I don't have a line of sight on that level of spend. However, what I can say, just to answer your question, is that the changes we see—these technical minor changes that don't substantively change the bill—will drive efficiencies and effectiveness, and will help to ensure that implementation is efficient and effective, which overall means that more resources can be focused on targeting risk and protecting Canadians.

[Sukhman Gill, Conservative, Abbotsford—South Langley, BC]

Given the heightened obligations introduced under Bill C-12, do you foresee a realistic possibility that the increased compliance costs could be passed down to the consumers? I'll give the examples of higher service fees, reduced service availability and things like that.

[Hartland Elcock]

I can't comment. I don't have a line of sight on what an individual institution would choose to do.

Again, I think our goal is to create the most effective and efficient AML regime to ensure that resources, bank resources, are focused on risk, are focused on providing key intelligence to FINTRAC to detect and deter money laundering.

[Sukhman Gill, Conservative, Abbotsford—South Langley, BC]

Can you say anything about any costs being passed down to the consumer?

[Hartland Elcock]

It would be inappropriate for me to comment.

[Sukhman Gill, Conservative, Abbotsford—South Langley, BC]

Okay. Thank you.

I'll pass my time to Glen Motz.

[Glen Motz, Conservative, Medicine Hat—Cardston—Warner, AB]

Thank you very much, Chair.

Gentlemen, you mentioned a couple of things today that intrigued me.

One is that you've focused on supervision and compliance, which is the heart of what you're talking about. FINTRAC has 35,000-plus entities that report to them.

We know the history of criminals. They seek out exploitation, and they don't follow the rules. They're exploiting the current system, and they will undoubtedly exploit provisions in Bill C-12.

There are holes—I was going to call them gaps, but really they are huge holes—in the current system, where money laundering is a multi-billion dollar Canadian industry. If you had a magic wand and said that Bill C-12 is a step in the right direction, which we all believe it is, what are some things you could add to further ensure that the criminals who exploit our current system, and who will exploit Bill C-12 to its degree...? What will close those holes, those gaps, at least a bit more?

You've proposed some amendments. I think there's still more that can be done. In the final minute or so that I have, I would ask you to provide your thoughts on that.

[Hartland Elcock]

I'd look to our opening remarks. We certainly have worked extensively with the government on changes around enhancing beneficial ownership in Canada or the transparency of beneficial ownership in Canada.

We're also supporters of private-to-private information sharing, as stated earlier. Responsible information sharing in the AML space balances the interests of Canadians' privacy with combatting—