What happens when the safest place to hide dirty money is inside the national economy itself?
Today, Canada is a financial safe haven and one of the weak links in the international financial system for bad actors.
Across Canada, criminal networks continue to profit handsomely from an array of illicit activities that are endangering the health and safety of its citizens, imperiling the country's national security, threatening global peace, and financing greater insecurity around the world through the criminality of Mexican cartels, Chinese triads, Iranian-backed illicit finance networks, and state-sponsored malign influence networks.
The greatest organized crime threat in Canada is money laundering.
Canada's Criminal Intelligence Service estimated that $45 billion to $113 billion was being laundered and fully integrated into Canada's economy annually. This includes proceeds from illegal drug trafficking, fraud, corruption, counterfeiting, and other crimes.
Criminals exploit legitimate sectors to clean their profits.
Casinos: money is laundered through high-stakes gambling transactions in British Columbia and Ontario casinos. In recent years there have been significant advancements mitigating the laundering through casinos in BC. And while progress is being made, the illicit finance activity has now moved into digital currency and online gaming globally.
Real estate: dirty money is funneled into high-value property purchases, particularly in Toronto and Vancouver, where criminals use luxury real estate to clean illicit profits.
Underground banking: Chinese underground banking systems are crucial for moving millions across borders for Mexican cartels and Asian syndicates, including through WeChat, social messaging, and e-payment systems.
As the Cullen Commission and numerous recent news reports have indicated, banks in provinces across Canada have helped to launder tens of billions of dollars over the years for drug cartels, terrorist financiers, kleptocrats, oligarchs, and other criminals and rogue syndicates.
Similarly, law enforcement agencies in Canada and the United States have found connections between government casinos in British Columbia, casinos in Macau and Las Vegas, and international drug traffickers. Even Canadian banks, operating retail branches on both sides of the border, are attractive to criminal networks because they reduce detection risk. In October 2024, Canada's TD Bank pleaded guilty and paid $3 billion in penalties to the U.S. Departments of the Treasury and Justice for laundering the dirty money of the Mexican drug cartels and other organized criminal networks.
Furthermore, law enforcement investigations and intelligence assessments have repeatedly implicated the WeChat platform as facilitating the movement of billions of dollars of the cartels' illicit drug proceeds by Chinese money laundering networks. The encrypted nature of WeChat allows narco-traffickers to coordinate discreetly, moving billions of dollars from the United States to China, and ultimately back to Mexico, where the majority of fentanyl is produced.
Money laundering in Canada is its national security Achilles heel. It fuels greater criminality and weaponizes its economy, allowing cartels to grow their dirty money empires.
While the money hides in skyscrapers, the physical smuggling routes are moving to the margins, exploiting ancient paths and vulnerable communities.
