FINTRAC Cost-Recovery Powers Begin

Summary#

This order fixes January 1, 2024 as the day when sections 164, 165 and 170 of the Budget Implementation Act, 2021, No. 1 come into force. Those sections mainly give the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) new powers to recover the costs of its compliance and supervision work from certain reporting entities.

What it does#

• Brings into force sections 164, 165 and 170 of the Budget Implementation Act, 2021, No. 1 on January 1, 2024.
• Lets FINTRAC advance money from the Consolidated Revenue Fund to pay operating costs and set up a cost‑recovery system so it can charge certain regulated entities for supervision and compliance activities.
• Allows FINTRAC to assess and levy binding assessment fees on prescribed persons or entities and makes a small technical change to the definition of “assessments.”
• These changes are meant to work with related regulatory amendments that spell out which entities pay and how fees are calculated.
• Related note: a separate order (described in the same Gazette entry) sets July 1, 2024 as the date when armoured‑car businesses become reporting entities under the anti‑money‑laundering rules. That is a different coming‑into‑force step and not what this order alone does.

Who's affected#

• FINTRAC — it will move from being funded only by government appropriations to partly recovering costs from the sector it supervises.
• Large financial institutions and other reporting entities that may be required to pay assessments, including:
  • Every bank covered by the Bank Act and every authorized foreign bank.
  • Every life company covered by the Insurance Companies Act.
  • Every company covered by the Trust and Loan Companies Act.
  • Any person or entity that submits 500 or more required reports (as defined in the regulations).
• Taxpayers and the general public indirectly — because funding shifts from general appropriations to fees charged to regulated entities.
• If anything about who pays or how much is unclear, the implementing regulations set those specifics.

Why it matters#

• It gives FINTRAC a more stable, long‑term funding model so it can carry out supervision and compliance work without relying solely on annual appropriations.
• That funding model may lead to new fees or assessments for large banks, insurers, trust companies and other high‑reporting entities starting in fiscal year 2024–2025.
• The change is intended to strengthen Canada’s anti‑money‑laundering and anti‑terrorist‑financing regime by ensuring the regulator has the resources to supervise and enforce rules.
• The shift aligns FINTRAC with other supervisors like the Office of the Superintendent of Financial Institutions (OSFI) and the Financial Consumer Agency of Canada (FCAC), which also recover supervision costs from the entities they regulate.
• For context, FINTRAC previously received dedicated funding of $4.6 million in Budget 2021 and $89.9 million in Budget 2022 to support supervision work ahead of these changes.