Canada Flags Organized Crime, Fraud, & Emerging Tech as Money Laundering Threats in 2025 Risk Assessment

Key Takeaways

• Organized Crime and Fraud: Between $33–84 billion (CAD 45–113 billion) is laundered annually in Canada, with drug trafficking, fraud, and tax crimes leading the way.
• Terrorist Financing: Low in volume but potentially devastating, often linked to crowdfunding, crypto, and non-profit abuse.
• Vulnerable Sectors: Banks, trusts, crypto assets, and MSBs remain top targets, requiring stronger controls and due diligence.
• Emerging Risks: AI-driven fraud, foreign interference, and crime–terrorism links are shaping the next wave of threats.

Deep Dive

Canada has taken another hard look at the shadow economy running through its borders, and the picture is as sobering as ever. In its 2025 National Risk Assessment on Money Laundering and Terrorist Financing, the government says organized crime groups, fraud schemes, and new twists driven by technology like artificial intelligence remain the most urgent threats to the integrity of the financial system.

The report, published by FINTRAC, isn’t just another policy document destined to gather dust. It’s meant to be the playbook for thousands of Canadian businesses that carry legal obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Whether you’re a major bank, a crypto exchange, or a small money services business, the expectation is that you need to take this risk map seriously and build it into your compliance strategy.

The numbers alone are staggering. According to the government’s own intelligence, somewhere between $33–84 billion (CAD 45-113 billion) is laundered through Canada every year. Most of it is driven by organized crime networks working hand-in-hand with professional enablers who, for a fee, provide the expertise to wash illicit proceeds clean.

Drugs remain the top fuel for these laundering engines, but fraud, trade-based money laundering, and tax crimes also rank near the top. From auto theft rings to ransomware groups, the web of illicit finance stretches across the country and beyond, leaving behind more than just financial loss, but also community harm, insecurity, and in some cases, lives lost.

Low-Dollar, High-Stakes

On the terrorism side of the ledger, the picture looks different. The assessment finds that most financing connected to terrorism in Canada is relatively low in volume and value, often linked to lone actors carrying out ideologically motivated attacks. But that doesn’t mean complacency is an option.

The report notes that international groups with religious or political motives still use Canada’s financial system as a touchpoint, sometimes via crowdfunding, cryptocurrency, or even through misuse of non-profits. The amounts may be small compared to drug trafficking, but the consequences of a single successful transfer can be catastrophic.

Where the System is Vulnerable

Canada’s big banks and corporations remain the most tempting targets simply because of their size and reach. Add to that express trusts, crypto assets, and certain money services businesses, all of which can offer speed, global access, and sometimes anonymity, and you have a financial environment that criminals are all too eager to exploit.

The assessment also flags the risks of doing business with politically exposed persons or in jurisdictions with weak AML frameworks. For compliance officers, that means enhanced due diligence isn’t just a best practice, it’s non-negotiable.

For the more than 38,000 reporting entities across the country, the message from FINTRAC is straightforward: use this report as a foundation for your compliance program. That means updating your internal risk assessments, sharpening your know-your-client (KYC) processes, and taking a closer look at transaction monitoring. The expectation is that businesses won’t treat this report as a box-ticking exercise but as a tool to actually detect and prevent suspicious activity.

Done right, that also improves the quality of suspicious transaction reports flowing back to FINTRAC, intelligence that law enforcement and regulators rely on to chase the biggest networks.

AI, Disinformation, and Foreign Interference

The report doesn’t stop at today’s risks; it looks over the horizon too. Fraud is evolving quickly, with artificial intelligence and online disinformation making it easier to dupe Canadians into handing over money. The government also points to foreign interference (attempts to destabilize communities, democratic institutions, and national interests) as a growing risk factor. And then there’s the unsettling overlap between organized crime and terrorism, with some groups blurring lines between profit and ideology.

Since 2018, Canada has poured nearly $348 million (CAD 470 million) into strengthening its defenses, inclduing investments into more data resources, more intelligence sharing, more investigative muscle. But the landscape isn’t standing still, and neither can compliance teams.

The 2025 National Risk Assessment is meant to be dynamic, a living document that businesses, regulators, and policymakers alike use to anticipate threats rather than react after the fact. It’s not perfect, but it’s a snapshot frozen as of December 2024. But paired with FINTRAC’s ongoing guidance and intelligence, it offers a compass for navigating the murky waters of financial crime.

It is important to treat this assessment as the floor, not the ceiling. Criminals are creative, opportunistic, and quick to exploit weaknesses. Staying ahead requires the same agility, and a willingness to see risk management not as a cost of doing business, but as a safeguard for Canada’s financial system and the Canadians who rely on it.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.