Financial crime

Liberals’ plan for new financial crimes agency raises questions about RCMP role

Posted April 8, 2022 3:30 pm

The Liberals’ proposal to set up a new law enforcement body to tackle financial crime is raising questions about the RCMP’s role in investigating money laundering and organized crime.

Finance Minister Chrystia Freeland’s 2022 budget, released Thursday, included a passing mention of plans to set up a Canada Financial Crimes Agency. The new law enforcement agency would be tasked with “quickly (responding) to complex and fast-moving cases of financial crime.”

It’s the latest in a series of attempts by the Liberal government to crack down on financial crimes and to come up with a co-ordinating body that can bring the necessary expertise to bear on complex investigations.

That’s a role currently held by the Mounties, who investigate money laundering, track the resources and assets of organized crime, and investigate “serious fraud and corruption” – among other finance-related crimes.

According to a government source, who agreed to discuss the initiative on the condition they not be named, it has yet to be decided whether the agency would be a stand-alone law enforcement agency – with the ability to lay charges – or a co-ordinating body assisting in financial crimes investigations.

The scale of financial crime in Canada is difficult to estimate. But Jessica Davis, a security consultant and former Canadian security official, said financial crime in Canada is “pervasive” and that “we don’t know” the extent of the issue.

“To me, (the Financial Crimes Agency) seems a little bit like setting up this new agency to solve all the problems that we refuse to solve otherwise,” Davis said in an interview.

“Resources to investigate, expertise to investigate. Depending on how it’s structured, I have a bit more optimism that we could maybe at least protect the expertise within a financial crimes agency instead of the RCMP.”

The Liberals proposed just $2 million for Public Safety Canada – the same department responsible for the RCMP – to “undertake initial work to develop and design the new agency.”

Further details have been promised in the Liberal government’s Fall Economic Statement later this year. In the 2021 election, the Liberals suggested the new agency would bring together the RCMP, the Financial Transactions and Reports Analysis Centre (FINTRAC) and the Canada Revenue Agency “under one roof.”

But even the idea of giving responsibility for financial crimes to a separate federal law enforcement agency will likely lead to another round of questions about the RCMP’s future as Canada’s national police force.

The RCMP occupies a dual role in Canadian policing. The force is responsible for contract policing, which is where most Canadians encounter them – as the contracted police force for provinces and territories, including in rural and remote communities.

But the Mounties are also the federal police force, responsible for high-profile and highly sensitive investigations into things like terrorism, organized crime and corruption.

The tension between the two roles – and how the RCMP allocates limited resources and officers between them – has been a simmering policy issue for years. Former RCMP commissioner Bob Paulson, testifying before the Senate’s national security committee in 2017, said the force has to “prioritize” its resources “based on the threat that the criminal problem presents to us.”

“Regarding terrorism there is zero appetite in Canada for any sort of level of terrorism to exist. Therefore we have a zero-fail approach. It’s very resource-intensive,” Paulson told senators at the time.

“That’s why we’re taking some of the resources out of some of the other areas which may not have the same priority level. Meanwhile, we argue and demonstrate that we need more resources to do those new pieces of work.”

The RCMP spent $533.4 million on “National Police Services” – which includes financial crimes – in 2018-19. Planned spending on National Police Services for 2021-2022 came in at $498.4 million, and is projected to decline slightly in both the 2022-23 and 2023-24 fiscal years.

An internal RCMP email obtained by the Toronto Star suggested that, after an April 2019 review of federal policing priorities, the Mounties would shift resources away from financial crime to focus on three core themes: national security, transnational serious and organized crime, and cybercrime.

According to the Star, the 2019 email indicated as a result “financial crime was no longer a stand-alone priority.”

That same year, the Liberal government – which was staring down a re-election campaign – promised to devote roughly $20 million a year in ongoing funding for the RCMP to tackle financial crime. The 2019 budget also tasked Public Safety Canada with setting up what they called the ACE Team, tasked with co-ordinating between intelligence and police agencies to “address significant money laundering and financial crime threats.”

The ACE Team, now called the Financial Crime Coordination Centre (FC3), is in its third year of a five-year pilot project.


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