Points to international models as potential benchmarks for reform
The head of a national private lending association is calling for a revamp of how Canada’s anti-money laundering (AML) regulator imposes fines on small brokerages, arguing the current system punishes minor paperwork missteps as harshly as organised crime.
In a written commentary, Samantha Gale, CEO of the Canadian Association of Private Lenders (CAPL), said the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has a credibility problem – not because AML enforcement is unnecessary, but because penalty outcomes are increasingly difficult to defend as proportionate.
Gale pointed to a $148,912.50 administrative monetary penalty (AMP) issued against Century 21 Heritage Group Ltd., an Ontario real estate brokerage that is now under appeal at the Federal Court, as a concrete example. The brokerage’s managing partner, Eryn Richardson, previously told Real Estate Magazine that a suspicious transaction report (STR) was filed, but that FINTRAC determined it should have been submitted earlier based on its own interpretation of risk indicators.
Richardson disputed the penalty as failing to reflect the circumstances, noting that no criminal activity was identified. Gale said the case illustrates a critical distinction the current regime fails to make – the difference between not filing a report at all and filing one later than FINTRAC believes was appropriate.
Effect of one-size-fits-all fines
Gale also drew a contrast between how fines affect large banks and smaller brokerages. She noted that Royal Bank of Canada paid approximately $7.48 million to FINTRAC against roughly $15 billion in net income – about 0.05% – while TD Bank’s $9.185 million penalty represented around 0.08% of its approximately $12 billion in net income. For a small mortgage brokerage, she argued, a $150,000 fine could represent a full year of profit.
“A $150,000 penalty is not a ‘cost of doing business,’” Gale wrote, adding that for many firms it could wipe out their capacity to invest in training and compliance systems.
She called on FINTRAC to adopt a graduated enforcement approach, beginning with warnings and mandatory remediation plans for first-time or technical violations, followed by short-interval reviews, and reserving escalating fines for repeated or wilful non-compliance.
Gale also cited enforcement models in the United Kingdom, the United States, and Australia as examples of proportional AML regimes that distinguish between fixable deficiencies and deliberate misconduct.
“Canada does not need weaker AML rules,” she wrote. “It needs practical rules, enforced with proportion, predictability, and real engagement.”
Complaints about FINTRAC’s AMP process
Critics have raised concerns about the procedural fairness of the penalty process itself – particularly after a policy update in August 2025 that further restricted the rights of firms under examination.
Under the revised administrative monetary penalty (AMP) policy, FINTRAC will no longer share its findings and observations with reporting entities before those findings are finalised, meaning a notice of violation can be issued immediately after an assessment. Legal experts and compliance professionals say the change eliminates a critical window that firms previously used to correct errors, provide context or dispute factual conclusions before a penalty was finalised.
The revised policy is also less prescriptive than its predecessor, and the changes appear to reflect FINTRAC’s effort to expand its discretion in decision-making when imposing and calculating AMPs. Industry observers say that broader discretion, combined with less advance notice, creates uncertainty for smaller firms that may not have the legal resources to mount a swift challenge.
When a notice of violation is issued, firms have 30 days to submit written representations to FINTRAC’s director and chief executive officer. Further deadlines for appeal to the Federal Court may follow. Critically, once an AMP is paid, the firm is deemed to have committed the violation and appeal is no longer possible.
Public disclosure adds another layer of pressure. When FINTRAC issues an AMP, it publishes a public notice summarising both the deficiencies and the amount of the penalty, exposing firms to reputational risk alongside financial risk. For small brokerages operating in close-knit professional networks, being named on FINTRAC’s public penalty register – regardless of whether the underlying dispute involves timing rather than intent – can affect relationships with lenders, clients, and investors before any appeal is heard.
The British Columbia Lottery Corporation (BCLC) is among the entities that have challenged this process, appealing to the Federal Court after FINTRAC upheld a $1,075,000 penalty for administrative deficiencies. No criminal activity was alleged, and BCLC maintained it had fully complied with its legal and regulatory obligations.
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