The Canadian government has earmarked $56 million over five years to establish a National Counter-Foreign Interference Office to strengthen Canada’s Financial System, as well as other measures aimed at combating foreign interference and threats. The move comes amid ongoing allegations of Chinese interference in recent federal elections. The Royal Canadian Mounted Police(RCMP) are set to receive most of the allocated funding before April 2026, to support their efforts to investigate threats and work proactively with diaspora communities at risk of being targeted by foreign interference. The new office will be created within the Department of Public Safety, though no timeline for its launch has been announced.
Additional OSFI Powers Coming
The Liberal government has also proposed legislative amendments to give a federal banking watchdog the task of determining whether large financial institutions have adequate policies and procedures to protect themselves against threats to their integrity and security, including protection against foreign interference. The Office of the Superintendent of Financial Institutions would be given the power to take control of a bank where there are national security risks. Additionally, the government plans to strengthen its money-laundering regime and policies tackling terrorism funding through a series of proposed amendments, following an internal assessment that found weaknesses in how departments share information, few prosecutions being pursued, and gaps in how the rules apply to lawyers.
New Federal Beneficial Ownership Registry
The proposed legislative changes would introduce whistleblower protections and crack down on people who avoid reporting requirements by using a series of small transactions. Banks would be compelled to report on assets held by people who are subject to sanctions, beefing up existing rules that generally only compel such reporting on clients suspected of terrorist financing and money laundering. The budget also reveals that the Liberals plan to implement a Federal Beneficial Ownership Registry by the end of this year, with a mandate to be publicly shared by this fall.
In another measure related to terrorist financing, the budget allocates $16 million over the coming two years to implement proposed legislation aimed at allowing humanitarian groups to work in Afghanistan. Currently, aid workers cannot operate in that country without paying taxes to the government and therefore run the risk of being prosecuted for financially supporting the Taliban. The bill proposes a regulatory program to issue exemption permits. Officials said the funding would be needed to assess applications for permits and probe the risk of the exemptions benefiting terror groups.
The RCMP Additional Powers
The Canadian government’s measures to combat foreign interference, money laundering, and terrorism financing are a welcome step toward strengthening national security. The proposed establishment of a National Counter-Foreign Interference Office shows that the government is taking the issue seriously and is willing to take proactive steps to protect its citizens and democratic institutions. The additional funding and powers given to the Mounties and the Office of the Superintendent of Financial Institutions will enable them to carry out their responsibilities more effectively and efficiently.
The proposed legislative changes aimed at strengthening Canada’s money-laundering regime and policies tackling terrorism financing are essential to safeguarding the country’s financial system from abuse by criminal and terrorist networks. The introduction of whistleblower protections will encourage people to report any suspicious activities, ensuring that authorities can investigate and prosecute those who break the law. The proposed Federal Beneficial Ownership Registry and the compulsory reporting of assets held by people subject to sanctions are necessary to increase transparency and prevent the misuse of the financial system for illicit purposes.