Canada’s AML Framework Is Entering a New Era and the Stakes Just Got Much Higher
Recent legislative reform in Canada, specifically Bill C-12, is poised to reshape the anti-money laundering and anti-terrorist financing (AML/ATF) landscape for reporting entities. While the bill still awaits final parliamentary approval, its proposed amendments reflect a decisive shift toward stricter enforcement, substantially higher penalties, and expanded regulatory obligations for businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
For businesses across sectors, this marks a dramatic escalation in regulatory risk, far beyond the relatively modest penalties that have defined AML enforcement in Canada to date. It underscores that AML compliance is no longer a checkbox exercise, but a critical enterprise risk management priority.
Bill C-12 — A Radical Increase in Financial and Regulatory Consequences
Under the current PCMLTFA framework, administrative monetary penalties (AMPs) are capped at:
Up to $1,000 for minor violations
Up to $100,000 for serious violations
Up to $500,000 for very serious violations
These figures, while significant for smaller businesses, have historically been manageable for many larger firms.
Bill C-12 proposes dramatic increases that fundamentally alter the cost of non-compliance:
Minor violations: Up to $40,000
Serious violations: Up to $4,000,000
Very serious violations: Up to $20,000,000
Moreover, cumulative penalties for multiple violations could be capped at the greater of $20 million or 3 per cent of gross global revenue for entities with revenues above $20 million. For multinational groups, such caps could result in exposure far exceeding traditional limits.
These changes transform AML non-compliance from a financial annoyance into an existential business threat.
Mandatory Compliance Agreements & Expanded Enforcement Tools
In addition to escalating penalties, Bill C-12 will reshape how enforcement unfolds:
Mandatory Compliance Agreements: Any entity that receives an AMP must enter into a compliance agreement with FINTRAC (Financial Transactions and Reports Analysis Centre of Canada). This replaces the current optional compliance agreement regime.
Compliance Orders: If entities refuse or fail to comply with these agreements, FINTRAC can issue compliance orders, the breach of which constitutes a new violation with its own significant penalties.
Mandatory FINTRAC Registration: Reporting entities, including real estate companies, dealers in precious metals and stones, mortgage investment companies, financing and leasing companies, banks, credit unions and others, may be required to enroll with FINTRAC if they fall under the categories outlined in the PCMLTFA amendments.
These tools give regulators greater leverage to enforce remediation and monitor ongoing compliance, rather than merely issuing financial penalties.
Compliance Program Standards Become Enforceable Law
Bill C-12 elevates compliance program requirements from best practice guidelines to mandatory statutory obligations. Reporting entities must ensure that their AML compliance programs are reasonably designed, risk-based and effective in light of their size, complexity and risk profile.
That means regulators can now classify deficiencies in core program design, such as flawed risk assessments, ineffective transaction monitoring, or insufficient governance, not just as gaps against guidance manuals, but as very serious violations under the PCMLTFA.
The Broader Regulatory Impact: More Entities, More Scrutiny
Beyond penalties, Bill C-12 is part of a broader shift to expand Canada’s AML/ATF regime. Recent changes already brought additional sectors under FINTRAC’s ambit, and future reforms may continue to redefine who must comply and how. For example, the Strong Borders Act and related amendments have widened the definition of reporting entities and their obligations.
As enforcement activity grows, with dozens of penalties issued in 2025 already, totaling millions in fines, the risk of regulatory action for oversight, inadequacies or documentation failures is increasing.
With penalties that can reach tens of millions of dollars, and compliance program effectiveness becoming a matter of statutory obligation, businesses face a new reality:
Penalties of up to $20 million or more for non-compliance
Mandatory compliance agreements that require corrective action plans
Regulator scrutiny that includes detailed reviews of compliance program design
Expanded registration and reporting requirements for a wider set of entities
For many organizations, internal compliance teams are already stretched thin, between risk assessments, monitoring obligations, report filings, and training requirements.
Expert AML advisory support is now essential not only to avoid financial penalties but to build a defensible, risk-based compliance framework that satisfies regulators and protects your business reputation.
How Platino Consulting Helps Protect Your Business
Platino Consulting can help you:
Assess and harden your compliance program in line with statutory standards
Prepare for and respond to FINTRAC supervision or exams
Develop robust, risk-based policies, procedures and training
Perform independent effectiveness reviews before regulators do
Support remediation planning after enforcement action or near misses
Given the scale of potential penalties and the expanding scope of regulatory obligations, proactive investment in expert AML support is a strategic imperative, not just a compliance nicety.
Bill C-12’s reforms mark a fundamental shift in how AML compliance risk is quantified and enforced in Canada. With multi-million dollar penalties, mandatory compliance orders, and more granular review of program effectiveness, regulatory non-compliance has moved from a technical risk to a business risk that boards and executives cannot ignore.
Before Bill C-12 becomes law, now is the time to evaluate your AML readiness, with guidance from specialists who understand how to anticipate regulatory expectations and implement defensible, sustainable compliance frameworks.
