As the federal government moves ahead with creating a new Financial Crimes Agency (FCA), a key question emerges: Will it transform Canada’s response to terrorist financing or simply add redundancy to an already crowded, ineffective system?

Terrorist organizations rely on complex networks to move funds across borders. To disrupt these flows, Canada needs an agency capable of bridging intelligence and enforcement. The success of the FCA will depend on whether it becomes a dedicated national police force capable of targeting the financiers of terrorism at home and abroad.

Canada’s largest metropolis is now joining global cities such as London and Paris, where tactical officers armed with rifles patrol high-risk public places. The Toronto Police’s new Counter-Terrorism Security Unit is a visible reminder that terror attacks are not distant threats. However, increasing police resources is only part of the solution. Going after the financial lifelines that enable terrorist activity is just as critical.

The FCA can do just that if it is designed to deliver real impact. It should be housed within Public Safety Canada to achieve a security purpose and operational autonomy; absorb FINTRAC to strengthen co-ordination and collaboration; and operate as a full-fledged law enforcement agency with police powers to investigate, arrest and charge perpetrators.

Intelligence gathering alone doesn’t dismantle terrorist networks

Canada’s current approach still suffers from an intelligence‑to‑enforcement gap. Despite a two-decade-old system for monitoring suspicious transactions, the country lacks effective financial crime enforcement.

FINTRAC, the Financial Transactions and Reports Analysis Centre of Canada, is a civilian body that collects and analyzes reports from banks, credit unions and money services businesses. It is not a law enforcement agency. It does not directly fight criminals and terrorists. It cannot conduct criminal investigations, freeze or seize funds, obtain warrants or make arrests. Its role is purely information sharing when certain thresholds are met.

It typically provides personal identifiers and transaction details to law enforcement, which must then follow the paper trail. If the RCMP, the Canadian Security Intelligence Service (CSIS) and the Canada Border Services Agency (CBSA) want to dig deeper, they must obtain a court order. In the fast-paced, high-risk counterterrorism arena, the point at which intelligence becomes evidence is critical.

Canada has no shortage of legal tools to fight terrorism. Financial institutions are obligated to report suspicious transactions to FINTRAC. However, whether these reports make it to the RCMP, CBSA or CSIS depends on FINTRAC’s analysis.

Further, 90 terrorist entities are listed under the Criminal Code, enabling financial institutions to freeze assets and restrict dealings. However, reporting and listing go only so far. Tangible outcomes require tough enforcement measures. More reporting may produce more data, but it does not automatically generate arrests or prosecutions.

Compliance is not a substitute for policing and police work should not be delegated to banks and credit unions.

The Cullen Commission into money laundering in British Columbia bluntly called out FINTRAC’s inability to pass timely, actionable intelligence to police, despite the high volume of reports it receives from financial institutions, but also found the RCMP’s response to complex financial crimes to be lacklustre.

The commission was not alone in that observation. The RCMP’s Management Advisory Board and the National Security and Intelligence Committee of Parliamentarians questioned the force’s ability to effectively fulfil its national security policing mandate.

Much of this shortcoming can be attributed to the force’s exceptionally broad mandate, which requires it to balance federal policing priorities with provincial and municipal contract policing obligations.

The RCMP has historically struggled to have the essential financial investigative capacity to fight terrorist financing. As the federal government responds to calls for RCMP reform, there is a clear opportunity to review the force’s role in combating terrorist financing with the establishment of the FCA.

The FCA must be built as a law enforcement agency

Taken together, these challenges suggest that Canada has an opportunity to strengthen its approach to combating terrorist financing through institutional transformation.

First, the new FCA should sit within Public Safety Canada alongside the RCMP, CSIS and CBSA. Criminal investigations require operational autonomy, professional discipline and the ability to pursue complex cases over long periods without political intervention.

Housing the agency within the operational side of government reinforces its security purpose and supports investigative independence.

Second, FINTRAC should be integrated into the FCA so analysts and investigators can work in the same operational environment. The United Kingdom’s National Crime Agency and Ireland’s An Garda Síochána are examples of how this approach can enable effective case management and improve the chances that intelligence becomes admissible evidence.

The Financial Action Task Force, the global money laundering and terrorist financing watchdog, and the Egmont Group, the international body of financial intelligence units, require FINTRAC to be operationally autonomous. With the right firewall, this requirement can still be met when part of the FCA. Moreover, being part of a law enforcement agency provides greater independence from political interference.

Third, the FCA must have the full authority of a police force. While integration would narrow the distance between intelligence and enforcement, it is not enough unless the FCA can conduct investigations, obtain warrants, restrain assets, make arrests and lay charges.

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FCA investigators must receive law enforcement training and hold police powers. They need skills in surveillance, evidence gathering, digital forensics and covert techniques.

Done poorly, the FCA risks becoming another bureaucratic layer that produces reports rather than arrests. Done properly, it can fill the gap between solid intelligence and impactful enforcement. Canada already has tough laws, from terrorist listings to mandatory reporting and asset freezing. The next step is ensuring that those laws are matched by a modern law enforcement organization.

A properly designed FCA, integrated with FINTRAC, staffed with trained specialist investigators and equipped with full police powers, could provide Canada with something it currently lacks – a national law enforcement agency built to disrupt terrorist financing at a large national and global scale, rather than relying on piecemeal enforcement.

Recent terror threats at home and abroad remind us why cutting off the money means denying the financial resources terrorists need to recruit, train and execute attacks. Disrupting terrorist financing is not just about following the money trail. It’s about fewer attacks and fewer lives lost.

Canada now has a window to build an institutional weapon to help confront national security threats. The FCA must be empowered to effectively and quickly dismantle the Canadian networks that fund terrorism.