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Canada is fighting financial crime in fits and starts.

The federal government conveyed this week that money laundering, terrorist financing and evasion of sanctions are “real threats” that harm the “integrity of our financial system and have real costs for the Canadian economy.”

That’s why it was disappointing the fall economic statement kicked the can down the road on taking decisive action to solve these pressing problems.

Ottawa also missed a self-imposed deadline to unveil plans for a new enforcement agency that would combat financial crime – another development that sent a mixed message to the business community about the importance of compliance.

“The global financial system is facing new and significant challenges which are having an impact on the Canadian financial sector and the day-to-day lives of Canadians,” the fall economic statement said.

That is certainly true, which is why the fall economic statement was a missed opportunity for the government to show real leadership on this issue.

Sure, it offered incremental details about future plans, including new reporting requirements for title insurers and real estate representatives, along with enhanced powers for the Canada Border Services Agency to disrupt trade-based financial crime. Those are important issues, to be sure.

The government, however, neglected to hold itself accountable by specifying timelines to achieve those goals and to close loopholes in the Criminal Code and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Perhaps the most telling sign of Ottawa’s lack of urgency was its failure to keep a mere months-old promise to provide details about the structure and mandate of the forthcoming Canada Financial Crimes Agency.

The 2023 federal budget, unveiled this past March, included a commitment to provide the government’s vision for the CFCA “by the 2023 fall economic and fiscal update.”

This new enforcement agency is supposed to take the lead on improving Canada’s dismal track record on asset forfeiture and prosecutions for financial crimes. Yet the government can’t stick to a schedule to finalize its mandate.

It’s still not known, for instance, if the CFCA’s bailiwick will include human trafficking. That illicit activity is expected to increase as the economy slows, creating risks for industries including banking, technology, telecommunications, airlines, trucking, hospitality and health care.

The Department of Finance declined to comment on when it would provide an update about the CFCA.

Creating a new enforcement agency is undoubtedly a complex undertaking. But if the government treats its own deadlines as suggestions, then companies will approach their compliance efforts in a similar fashion.

It’s a worrisome prospect because businesses are already grappling with stretched budgets. Compliance costs have already reached US$206-billion worldwide, according to a 2023 study conducted by Forrester Consulting on behalf of LexisNexis Risk Solutions.

Of that total, North American financial institutions spent a whopping US$61-billion as they recorded a 78-per-cent increase in technology costs, the report said.

The government’s go-slow approach also undermines a recent warning by the Financial Transactions and Reports Analysis Centre of Canada, or FinTRAC, that it is cracking down on businesses of all sizes that cut corners on compliance.

“We need to be firm to ensure that businesses are doing their part and taking the action they need to comply,” Sarah Paquet, chief executive officer of FinTRAC, said at a financial-crimes conference in Toronto last week.

She delivered a pointed message to the private sector: Combatting money laundering and terrorist financing should never be viewed as a cost centre or an expense.

“Don’t see your work as something that is only costing money to your business. It’s not,” Ms. Paquet told delegates.

“It is a moral and a social imperative. This is our duty and this is when we take it seriously so that we can actually stop those crimes.”

Some businesses have “huge deficiencies” in their compliance efforts, she said, adding those systemic problems include “obvious suspicious transaction reports that were not filed” for crimes that generated national headlines.

“That is not acceptable,” Ms. Paquet said. “It needs to be reported and it needs to be taken seriously.”

Not only will FinTRAC increasingly confront businesses that flout the rules, but it also plans to be “more open and transparent” about the nature of their violations. The regulator is already conducting blitzes that target multiple businesses at the same time.

FinTRAC’s modernization, which will harness technology to conduct faster analysis and provide real-time feedback to businesses, is expected to begin over the coming months.

The goal is to provide businesses with “an instant report card” about their efforts to identify risk, including the number of suspicious transaction reports (STRs) filed annually.

“There’s a lot we can say about the quantity and there’s a lot we can say about what a very good STR looks like,” Ms. Paquet later said in an interview.

Ms. Paquet is right when she says the status quo is not an option. Her political masters would do well to take her message to heart.

No one expects a fall economic statement to provide an exhaustive list of actions, but a slow-moving government sets the tone from the top.