On November 3, 2026, the Canadian government introduced Bill S-8, the Combatting Financial Crimes and Drug Trafficking Act, proposing significant changes to how Canada prevents, detects and investigates financial crime.
The legislation targets several vulnerabilities in Canada’s financial system, including money services businesses (MSBs), cryptocurrency ATMs, large cash transactions and information sharing between law enforcement and regulated organizations.
For Canadian financial institutions and other businesses subject to anti-money laundering (AML) requirements, the proposed legislation signals a continued focus on strengthening oversight, addressing emerging financial crime risks and improving the effectiveness of AML controls.
While Bill S-8 has not yet become law, compliance teams should understand what is being proposed and consider how these changes could affect their existing risk management practices.
Five Key Changes Proposed Under Bill S-8
1. Stronger Oversight of Money Services Businesses
MSBs play an important role in Canada’s financial system, facilitating remittances, currency exchange and digital payments. However, their exposure to money laundering, terrorist financing and fraud has made them an increasing focus of regulatory attention.
Bill S-8 proposes several measures to strengthen MSB oversight, including:
- Expanding FINTRAC’s authority to refuse or revoke MSB registrations.
- Increasing criminal record screening requirements for MSB owners and investors by lowering the ownership threshold from 20% to 5%.
- Introducing additional ministerial powers to suspend registrations and impose enhanced due diligence requirements in prescribed circumstances.
- Strengthening requirements for MSBs to provide accurate and up-to-date business information.
What this means for compliance teams:
MSBs should review their ownership structures, registration information and due diligence processes to identify potential gaps ahead of any regulatory changes.
Financial institutions that provide banking services to MSBs may also want to reassess their third-party risk management practices, particularly around beneficial ownership, customer risk ratings and ongoing monitoring.
2. New Restrictions on Cryptocurrency ATMs
Cryptocurrency ATMs have become an increasingly attractive channel for fraudsters and other financial criminals.
According to the Department of Finance, the Canadian Anti-Fraud Centre estimates that Canadians lost between $142 million and $284 million to fraud facilitated by cryptocurrency ATMs in 2024.
Bill S-8 proposes making it a criminal offence to operate a cryptocurrency ATM without the required provincial or territorial MSB licence. It would also introduce enhanced federal regulatory requirements for permitted operators.
The proposed ban would take effect 18 months after Royal Assent, while certain regulatory changes would take effect sooner.
What this means for compliance teams:
Organizations with cryptocurrency exposure should review how they identify and monitor transactions involving crypto ATM operators and other virtual asset service providers.
This includes evaluating customer due diligence procedures, transaction monitoring scenarios and processes for identifying unusual activity involving cash-to-crypto transactions.
3. Restrictions on Large Cash Transactions and Third-Party Deposits
Cash remains an attractive payment method for criminals because it can be difficult to trace, particularly when funds move through multiple accounts or individuals.
Bill S-8 proposes restrictions on cash transactions of $10,000 or more and third-party cash deposits, subject to the legislation’s scope and exemptions.
Importantly, banks and credit unions would be exempt from the proposed restriction on large cash transactions, allowing customers to continue depositing cash into the financial system.
These proposals are intended to make it more difficult for criminals to introduce illicit funds into legitimate financial channels.
What this means for compliance teams:
Even where financial institutions are exempt from specific restrictions, monitoring suspicious cash activity remains an important component of an effective AML program.
Compliance teams should consider whether their existing controls adequately identify:
- Unusual cash deposits inconsistent with a customer’s expected activity.
- Multiple transactions potentially structured to avoid reporting thresholds.
- Third-party activity that may indicate money mule arrangements.
- Patterns of deposits and transfers across multiple accounts.
The objective is not simply to identify transactions above a particular threshold. It is to recognize patterns of activity that may indicate elevated financial crime risk.
4. Expanded Law Enforcement Powers to Investigate Illicit Mail
Bill S-8 also proposes changes to the Canada Post Corporation Act that would allow law enforcement to search and seize mail when authorized under applicable criminal or drug legislation.
The changes are intended to address the use of postal services to transport illegal drugs, counterfeit currency and other contraband.
Unlike certain earlier proposals, Bill S-8 would not authorize postal inspectors to open letters.
Although these measures are less directly related to day-to-day AML compliance obligations, they form part of the government’s broader effort to disrupt organized crime and the movement of illicit proceeds.
5. Improved Information Sharing Between Law Enforcement and Financial Institutions
One of the most significant proposals for AML professionals involves information sharing.
Bill S-8 would clarify the ability of regulated businesses to receive and use information disclosed by law enforcement for AML purposes.
This would support Canada’s Integrated Money Laundering Intelligence Partnership, which brings together law enforcement and major Canadian banks to improve financial crime detection.
What this means for compliance teams:
Access to additional intelligence could help financial institutions identify suspicious activity, strengthen investigations and make more informed risk decisions.
However, making effective use of that information requires more than simply receiving it.
Organizations need processes to assess new intelligence, connect it to relevant customer and transaction information, determine whether further investigation is warranted and document the resulting decisions.
For compliance teams, this reinforces the importance of maintaining accurate customer information, effective case management processes and clear audit trails.
What Should Canadian AML Compliance Teams Do Now?
Bill S-8 is proposed legislation, and its requirements may change as it moves through Parliament. However, organizations do not need to wait for new rules to assess whether their existing controls are working effectively.
There are several practical steps compliance teams can take today.
Review your risk assessments. Consider whether your organization has adequately evaluated exposure to MSBs, virtual assets, cash-intensive businesses and other higher-risk activities.
Evaluate transaction monitoring effectiveness. Review whether monitoring rules and thresholds identify relevant suspicious activity patterns, including structuring, unusual cash movements and potential money mule activity.
Strengthen customer due diligence. Confirm that beneficial ownership information, customer risk profiles and ongoing monitoring processes remain accurate and appropriate for the risks involved.
Assess investigation and information-sharing processes. Determine how new risk intelligence would be incorporated into customer reviews, investigations and escalation decisions.
Review documentation and audit trails. Ensure your organization can demonstrate how risks are identified, investigated, escalated and resolved.
These steps support a broader objective: building an AML program that is not only compliant with regulatory requirements but also effective at detecting and responding to financial crime.
How Alessa Supports Effective AML Compliance
As Canada’s financial crime framework continues to evolve, compliance teams need the ability to adapt their controls without introducing unnecessary complexity or increasing operational workloads.
Alessa helps financial institutions and other regulated organizations strengthen their AML programs through integrated, configurable capabilities, including:
- Customer Due Diligence and Risk Scoring: Assess customer risk, maintain accurate profiles and support ongoing monitoring as risk factors change.
- Transaction Monitoring: Identify unusual transaction patterns, including suspicious cash activity, structuring and other potentially high-risk behaviours.
- Sanctions and Watchlist Screening: Screen customers and related parties against relevant sanctions, watchlist and politically exposed person data.
- Case Management: Centralize investigations, document decisions and maintain audit trails that support internal reviews and regulatory examinations.
- Regulatory Reporting: Streamline the preparation, validation and submission of applicable FINTRAC reports.
With a modular approach, organizations can strengthen specific areas of their AML programs while maintaining flexibility as regulatory expectations and business needs evolve.
Looking Ahead: A Continued Focus on AML Effectiveness
Bill S-8 is another indication that Canada is placing greater emphasis on disrupting financial crime through stronger oversight, more effective controls and improved collaboration.
For financial institutions, the takeaway extends beyond the proposed legislative changes.
An effective AML program should be able to identify emerging risks, recognize suspicious patterns, support informed investigations and demonstrate how compliance controls contribute to meaningful outcomes.
Organizations that regularly assess and improve these capabilities will be better positioned to respond as Canada’s regulatory framework evolves.
Is your AML program keeping pace with changing risks and regulatory expectations?
Explore how Alessa can help your organization strengthen transaction monitoring, customer due diligence and regulatory reporting while making better use of your compliance resources.
Note: Bill S-8 remains proposed legislation as of November 9th, 2026. Organizations should monitor its progress and any subsequent regulatory guidance before treating the proposed measures as binding requirements.
