Canada’s money-laundering watchdog has long been criticized for having more bark than bite, levying penalties a fraction of the size of those issued south of the border for the same offences. In 2025, that changed.

Since April—the start of the Financial Transactions and Reports Analysis Centre of Canada’s (Fintrac) fiscal year—the agency has issued about $202 million in publicly disclosed penalties against 21 companies, alleging they failed to properly keep records and follow rules designed to catch and prevent money laundering and terrorist financing. That’s more than eight times the previous annual record of $26.1 million in 2023-24, with three months still remaining in the year.

In an email, Fintrac spokesperson Lori Blair said the agency is ramping up enforcement in response to serious deficiencies in compliance among the businesses it oversees. She pointed to a 2023 speech by CEO Sarah Paquet, who warned Fintrac is “actively stepping up our enforcement action” because “some of our businesses are not where they should be.”

The increase in fines comes during a time of major changes at Fintrac. The federal government has significantly broadened the type and number of institutions that must report to the agency, and the kinds of transactions they must flag. The 2024 budget also expanded Fintrac’s powers to collect penalties. Additionally, Fintrac overhauled the electronic system small businesses use to report suspicious transactions—all while recovering from a devastating hack in 2024.

“I’m happy to see this, because I think we need to send the message that Canada’s serious about dealing with anti-money-laundering issues,” said Denis Meunier, president of DMeunier Consulting, which advises clients on anti-money-laundering compliance. “The fines have never been increased since 2008, never even kept up with inflation.”

The federal government implemented the changes in preparation for an international audit of Canada’s defences against money laundering that took place in November, with the results yet to be released. Canada is also under pressure from the U.S. to strengthen its border controls and has suffered a string of high-profile scandals, including TD Bank’s failure to prevent money laundering by drug cartels in the U.S. last October. Fintrac fined TD a then-record $9.2 million in 2024, a fraction of the US$3 billion penalty U.S. regulators imposed.

Fintrac’s next challenge will be making the penalties stick. From 2014 and 2016, the courts threw out the fines Fintrac had issued in three separate cases, ruling the agency hadn’t sufficiently explained how it calculated them. The cases led to a long chill on issuing fines while Fintrac revamped its policies. A more recent decision in May on an appeal of a fine against B.C.’s Norwich Real Estate Services ruled Fintrac should take three elements into account when levying penalties: the harm done, the business’s compliance history and a principle of encouraging compliance, rather than punishing. 

Out of the 21 businesses Fintrac has levied penalties against since April 2025, eight have filed appeals. They include two crypto businesses that received the largest fines by far—KuCoin, which faces a $19.6-million penalty, and Xeltox Enterprises, a B.C.-incorporated company. Fintrac slapped Xeltox with a whopping $177 million fine for allegedly failing to submit more than 1,000 suspicious transaction reports in July last year, including in cases with reasonable grounds to suspect a connection with child sexual abuse material, fraud, ransomware payments and sanctions evasion.

Marissa Daniels, a lawyer at Torys who advises clients in the financial services industry on regulatory compliance, said it’s unclear whether the courts will dismiss the fines Fintrac levied this year. “We’re at an ambiguous time,” she said. “We’re adopting a wait-and-see approach.”

Whether the penalties survive appeals or not, Daniels said Fintrac’s crackdown is having the intended effect of prompting businesses to spend more time and money on compliance.

“I’m seeing a lot more caution from our clients,” she said. “Everyone is concerned that they might be subject to review, and they all want to be in the best position possible.”