International financial crime auditors have carried out an extensive review of Canada’s anti-money laundering framework, visiting the country weeks after TD Bank paid a record U.S. penalty for compliance failures. The review, which involved interviews with major financial institutions and government bodies, has drawn unusual attention because of its timing and the potential consequences for Canada’s financial reputation.
According to people familiar with the process, delegates interviewed executives from Canadian financial firms and officials from 13 government agencies during a three-week visit in November.
The discussions included senior figures at TD Bank, which last year agreed to pay roughly $3 billion to settle U.S. allegations that it failed to prevent large-scale money laundering through its systems.
Under normal circumstances, the review would have attracted little public attention. The Financial Action Task Force, or FATF, conducts these assessments roughly once every decade. This time, however, the visit has caused concern in Ottawa and in Toronto’s financial sector.
Canada is still grappling with the fallout from TD’s historic fine, while authorities have also brought new indictments against fugitive former Olympic snowboarder Ryan Wedding, who now faces allegations tied to international cocaine trafficking.
Concerns resurface over Canada’s anti-money laundering record
A negative assessment from FATF could affect foreign investment and damage Canada’s standing in global financial markets. That risk carries particular weight as Prime Minister Mark Carney works to strengthen productivity and reduce the country’s reliance on the United States for economic growth.
Canada entered the review hoping to demonstrate progress since its last evaluation in 2016. At that time, FATF said the country needed to improve oversight, especially in tracking companies incorporated in Canada and identifying their beneficial owners. Critics argue that reforms have moved too slowly.
“We have had nearly a decade to make meaningful changes, and the gaps remain significant,” said Christian Leuprecht, a professor at the Royal Military College of Canada and author of a book on financial crime. He added that recent high-profile cases have made the timing especially damaging.
Carney’s office referred questions to the Finance Ministry, which said the FATF review remains confidential and that results will not be released until mid-2026. Meanwhile, law enforcement estimates underline the scale of the issue. Criminal Intelligence Service Canada has said as much as C$113 billion may be laundered through anonymous Canadian companies each year, an amount equal to roughly 5% of the national economy.
Sources said experts and regulators from countries including Italy, Japan, the United Kingdom, and Australia took part in the interviews. Representatives of FATF also attended. The panel questioned both federal and provincial authorities about enforcement rules and examined how individual companies design and apply their internal compliance systems.
Some participants expected questions to focus on cooperation with law enforcement. Instead, reviewers pressed firms on the strength of their own risk controls and monitoring programs. Compliance specialists said the panel will also factor in TD Bank’s U.S. penalty, which involved allegations that hundreds of millions of dollars linked to criminal networks moved through the bank. TD declined to comment on the review.
The Canadian Banking Association also declined to discuss specific interviews. It said, however, that banks have supported reforms ahead of the evaluation, including expanded information sharing and the creation of a federal registry to track corporate ownership.
Carney has proposed new measures to strengthen enforcement, including a federal financial crime agency and C$1.8 billion in additional funding. Although lawmakers first discussed such an agency in 2022, the government has yet to establish it.
Advocacy groups say the stakes remain high. A favorable outcome could reassure investors and trade partners that Canada’s financial system is trustworthy. While analysts do not expect FATF to place Canada on its so-called grey list, they say criticism may focus on how effectively existing laws are enforced rather than on gaps in legislation.