FINTRAC expense assessment rules

Summary#

These final rules, the Financial Transactions and Reports Analysis Centre of Canada Assessment of Expenses Regulations, set how the Financial Transactions and Reports Analysis Centre of Canada (the Centre) can recover certain operating costs from reporting entities. They spell out which institutions pay, how much they may be asked to pay, and the basic formulas used to divide the Centre’s expenses.

What it does#

• Defines the Centre’s prescribed expenses as costs tied to enforcing Parts 1 and 1.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Centre’s work under sections 51.1 to 51.3 of that Act.
• Lists which bodies are required to share these costs:
  • every bank covered by the Bank Act and every authorized foreign bank;
  • every life insurance company covered by the Insurance Companies Act;
  • every trust and loan company covered by the Trust and Loan Companies Act;
  • any other person or entity that made 500 or more “specified reports” in the relevant fiscal year.
• Sets two types of charges:
  • a base assessment that depends on the filer’s asset size in Canada. The base amounts are:
    • assets ≥ $1 trillion → $250,000
    • ≥ $500 billion and < $1 trillion → $200,000
    • ≥ $100 billion and < $500 billion → $150,000
    • ≥ $10 billion and < $100 billion → $100,000
    • ≥ $1 billion and < $10 billion → $75,000
    • ≥ $500 million and < $1 billion → $50,000
    • ≥ $100 million and < $500 million → $25,000
    • ≥ $10 million and < $100 million → $10,000

    • 0 and < $10 million → $5,000

    • ≤ 0 → nil
  • a proportional assessment that adjusts the remaining Centre expenses across filers based on:
    • how many “specified reports” each group or entity submitted, and -, for banks, the value of assets in Canada compared with other banks.
• Says the base amounts are adjusted using the Consumer Price Index, comparing the highest CPI from 2024 up to the relevant year with the CPI for 2024.
• Requires that any assessment or interim assessment be made in writing.
• States that subsidiary assets are excluded when calculating an entity’s assets in Canada for the base amount.
• Coming into force: the regulations come into force on the day section 170 of the Budget Implementation Act, 2021, No. 1 comes into force, or if registered after that day, on the day they are registered. (This instrument was registered September 26, 2023 and published October 11, 2023.)

Who's affected#

• Banks covered by the Bank Act and authorized foreign banks — these are explicitly named and will have both base and proportional components.
• Life insurance companies covered by the Insurance Companies Act.
• Trust and loan companies covered by the Trust and Loan Companies Act.
• Any other person or entity (for example, certain money services businesses or other reporting entities) that made 500 or more “specified reports” in the fiscal year in question.
• Smaller reporting entities that made fewer than 500 specified reports are generally not assigned a proportional share (their proportional assessment is nil), though banks and the named institutions still face base amounts.

Why it matters#

• These rules translate the Centre’s operating costs into fees charged to regulated institutions. That can change the compliance costs that banks, insurers, trust companies and large reporters face.
• The charge mixes a fixed base fee tied to asset size and a proportional share tied to reporting activity. That means big asset-holders pay a fixed minimum, while frequent reporters also shoulder extra costs.
• The base amounts are indexed to inflation (CPI), so the fixed charge adjusts over time.
• For most small reporters (fewer than 500 specified reports) the proportional charge is nil, so only larger and more active filers are likely to see a new or higher bill.
• The coming-into-force rule links when the charges can be applied to the timing of another law (section 170 of the Budget Implementation Act, 2021, No. 1) or to the regulations’ registration date.