Hearing into snow washing must look beyond TD

The Parliamentary finance committee will soon consider holding hearings into the money laundering crisis at the Toronto-Dominion Bank.

- DAVID OLIVE

The hearings should extend far beyond the high-profile TD case to an entire Canadian financial sector plagued by deficient anti-money laundering (AML) practices.

Canada has suffered a worsening reputation as a haven for global financial criminality at least since 2019, when a U.S. State Department report identified Canada as a “major money laundering country.”

Today, AML experts estimate that as much as $130 billion in suspect transactions flow through Canada’s financial system each year.

Much of that dirty money, deemed “snow washing” for Canada’s pristine image, enables fraud schemes worldwide, trafficking in illicit drugs and firearms, and terrorism financing.

Toronto-Dominion is only the most high-profile case of alleged deficiency in AML, with at least two investigations of Canada’s second-largest lender underway by the U.S. Justice Department.

The company’s large U.S. retail bank is alleged by U.S. regulators and prosecutors to be one of the main financial institutions that Chinese money brokers used to launder an estimated $653 million (U.S.) in proceeds of Mexican drug cartels.

And TD is expected to be hit with U.S. fines of $2 billion (U.S.) or more, and possible growth restrictions on its U.S. operations during a lengthy probation.

But AML complacency is widespread in Canada's financial sector, as revealed in last month when a November report by Fintrac, Canada's AML watchdog, first became public.