Canada has a big problem: between $45 billion and $113 billion is laundered domestically each year, the 2025 Assessment of Money Laundering and Terrorist Financing Risks in Canada finds. This makes money laundering—driven primarily by organized crime groups and specialized third-party enablers—the dominant financial crime risk in the country.
Further, the report identifies illegal drug trafficking as the highest money-laundering threat, followed by fraud, commercial trade fraud/trade-based money laundering, and tax crimes. Each of these generate billions in illicit proceeds annually.
Additional substantial threats include illegal gambling, human smuggling/trafficking, robbery and theft (including auto theft), cross-border smuggling, corruption, ransomware, and other extortion, with networks operating at national and international scale.
By contrast, terrorist financing in Canada is assessed as low volume and low value. Most attacks over the past decade were carried out by ideologically motivated lone actors with limited resource needs. Foreign-based actors with links to Canada rely on diversified methods including crowdfunding, cryptocurrencies, informal value transfer systems, state sponsorship, abuse of non-profit organizations, and criminal activity.
Canada’s vulnerability landscape is described as relatively stable. The most inherently vulnerable channels are domestic systemically important banks, private corporations, express trusts, crypto assets, and certain money services businesses—all widely accessible, high-volume, and fast-moving, with opportunities for reduced transparency.
Entities dealing with politically exposed persons or higher-risk jurisdictions face elevated exposure requiring enhanced due diligence.
Most higher-risk sectors are regulated under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and oversight extends to others through professional or provincial regimes. While these measures lower risks, they do not eliminate inherent vulnerabilities. The assessment emphasizes that the vast majority of NPOs present little to no risk, with only a small subset vulnerable to terrorist-financing abuse under specific circumstances.
Since 2018, Ottawa has allocated nearly $470 million to bolster data resources, financial intelligence, information sharing, and investigative capacity, alongside public-private partnerships targeting priority threats. The national regime comprises 13 federal departments and agencies coordinating with more than 38,000 reporting entities.
Looking ahead, the government says it is monitoring foreign interference, the rapid growth of technology-enabled fraud (including AI), and a growing crime-terror nexus, and will continue developing risk-based responses and guidance informed by ongoing national assessments and operational intelligence.
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