Advocates for a tougher crackdown on white-collar crime in Canada applauded the broad mandate the federal Liberals have given a forthcoming new federal agency tasked with fighting serious financial offences.

On Monday, the House of Commons completed the first reading of legislation outlining the powers of the new Financial Crimes Agency (FCA). The Liberals announced in Tuesday’s spring economic update that the agency will receive $352.7 million over the next five years, with additional funds going to other government departments involved in creating it. The FCA will have a mandate to investigate a wide variety of financial crimes—from money laundering to corruption—and will work both on its own and in partnership with law enforcement agencies in Canada and around the world.

Amber D. Scott, co-founder and chair of Toronto compliance consulting firm Outlier Solutions, said in an email she was “delighted” to see the agency receive substantial funding. “Financial crime investigations are complex and require different skills to investigate and prosecute than those required for many other crimes,” she said. “Canadians deserve a policing agency with the tools, talent and mandate to fight back at scale.”

The federal Liberals first promised to establish the FCA during the 2021 election campaign as part of a proposed broad crackdown on financial crime. The following year, the final report of an inquiry into money laundering in B.C., known as the Cullen Commission, found Canada has “no comprehensive economic crime strategy, no real understanding of the money laundering threats facing the country, and no meaningful evaluation of the effectiveness of the anti–money laundering measures put in place by the federal government.” In a 2023 consultation paper, the Department of Finance admitted it has been a “challenge” to implement an effective anti-money laundering framework in the country, potentially contributing to “negative perceptions” of Canada.

Salvator Cusimano, executive director of the anti-corruption advocacy organization Transparency International Canada, said the new agency offers a chance to reset that narrative. Canada has a reputation for being “good at window dressing but not following through” when it comes to cracking down on white-collar crime, he said. “It’s a chance to prove that notion wrong.”

Transparency International Canada has advocated for the FCA’s remit to go beyond money laundering and fraud to include capital markets crimes and corruption. Cusimano said he was happy to see Ottawa took the organization’s advice, but noted the FCA will have to be careful to build expertise in financial crimes rather than poaching scarce talent from existing agencies. “If this agency doesn’t find a will to create more capacity in Canada, rather than robbing Peter to pay Paul, there’s a risk that you would create more dispersal of this really precious talent,” he said.

Steve Boms, executive director of the Financial Data Technology Association, a trade association representing fintechs, said in an email he thinks the FCA could be “an important tool to protect Canadians,” but only if it doesn’t step on the toes of other regulators. He said he would like it to serve as a co-ordination and intelligence hub, not “a parallel enforcement body that duplicates or conflicts with the supervisory roles of existing regulators and frameworks.”

Early legislative language suggests the government intends for the FCA to be more than just a co-ordination hub. It grants Canada’s attorney general the power to prosecute any financial crime investigated under the act, even asserting jurisdiction over the provinces if necessary. It explicitly describes the FCA as “a specialized federal law enforcement agency,” working under a formal arrangement with the RCMP, which is required to provide it with services and assistance.

Marilyn Abate, a financial crime expert and a partner at KPMG Canada, said in an email that businesses should expect scrutiny of their compliance controls to increase as the new agency prepares to launch. Companies should start preparing now, she said. “The biggest business risk right now is waiting for every regulation to be finalized.”