Departmental Results Report 2018–2019

For the period ending March 31, 2019


The original version was signed by
The Honourable William Francis Morneau, P.C., M.P.
Minister of Finance


ISSN 2560-8924

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Departmental Results Report (PDF version, 372 Kb)


Director and Chief Executive Officer's message

Nada Semaan, Director and Chief Executive Officer

I am pleased to submit to Parliament and Canadians the Departmental Results Report for the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) for 2018–19.

Over the past year, FINTRAC provided 2,276 disclosures of actionable financial intelligence in support of investigations of money laundering, terrorist activity financing and threats to the security of Canada. The number of disclosures that we generated has increased by more than 80 percent over the past five years, and more importantly, these disclosures are playing an important role in helping to protect Canadians and Canadian communities.

With the information that FINTRAC receives from Canadian businesses, we were able to provide financial intelligence disclosures that were critical to police, law enforcement and national security agencies. In addition, FINTRAC generated strategic financial intelligence such as operational briefs and alerts and other strategic information to federal decision makers and to businesses across the country to assist them in identifying suspicious financial transactions and improving their reporting to FINTRAC.

The impressive results that FINTRAC achieves for Canadians would not be possible without the dedicated efforts of Canadian businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). In 2018–19, we launched a comprehensive new initiative aimed at increasing the transparency of our compliance program and enhancing the support that FINTRAC provides to Canadian businesses to ensure that they understand, and are able to comply with, their legal obligations.

As part of the broader transparency initiative, we published our Compliance Framework, which captures the guiding principles that shape our supervision program. It allows businesses, with just one click, to access the information they need. We also shared our first-ever FINTRAC Assessment Manual, which provides a detailed, plain language account of our overall assessment process, the phases of an examination and the methods we use to assess compliance with the Act. In addition, we launched our revised Administrative Monetary Penalties policy, outlining very clearly our new method of calculating penalties for non-compliance with the Act and associated Regulations.

Over the past year, we also consulted extensively with businesses and their associations to revise our suspicious transaction reporting guidance. In addition to making it clearer and more concise, we also provided money laundering and terrorist financing indicators specific to each reporting sector to make it easier for businesses to fulfill their obligations.

I am honored to share the impressive results that the Centre achieved for Canadians and to congratulate FINTRAC's highly skilled and dedicated workforce for the successes achieved in the past fiscal year.

______________________
Nada Semaan
Director and Chief Executive Officer

Results at a glance

Results at a glance
Total actual spending for 2018–19 Total actual full time equivalents for 2018–19
$51,391,288 355

In 2018–19, FINTRAC continued to move forward on its transformation agenda with a focus on strengthening the effectiveness of its programs and renewing its technologies and processes. FINTRAC's 2016–19 Strategic Plan guided these activities. The Plan's strategic objectives, along with a summary of some of the key results achieved during the fiscal year are summarized below.

Strategic Objective: Strengthen and expand our partnerships

FINTRAC's financial intelligence supports Canada's broader policing, law enforcement, national security and foreign policy priorities, including in relation to the links between money laundering and criminal activity, and the resourcing of terrorist groups. It is critical that FINTRAC continue to reach out to reporting entities, regime partners, international and domestic stakeholders and academia to ensure that the role of financial intelligence and the contribution it makes to the fight against money laundering and terrorist financing is clearly understood.

Strategic Objective: Strengthen and expand our partnerships
FINTRAC Priority 2018–19 Results Achieved
Achieve compliance through collaboration and increased transparency Over the past year, FINTRAC launched a comprehensive new initiative aimed at enhancing the support that it provides to Canadian businesses and increasing transparency of its compliance program. This initiative included the publication of the Centre's Compliance Framework, a new FINTRAC Assessment Manual, a revised Administrative Monetary Penalties policy and a Voluntary Self-Declaration of Non-Compliance notice.

In 2018–19, FINTRAC with its Five Eyes partners participated in the International Supervisors Forum in Melbourne, Australia, focusing on strengthening collaboration, enhancing information sharing and discussing supervisory best practices, particularly in relation to regulating businesses dealing in virtual currency.

FINTRAC also engaged extensively with regulatory bodies, associations and reporting entities across the country to strengthen compliance. For example, the Centre signed a new Memorandum of Understanding with the Real Estate council of British Columbia (BC) to share compliance-related information in order to strengthen compliance in the real estate sector in BC.

Harness the power of financial intelligence

FINTRAC continues to play a prominent role in advancing and supporting innovative project-based public-private sector partnerships. In 2018–19, these partnerships were aimed at more effectively combatting money laundering associated with human trafficking in the sex trade, romance fraud and the trafficking of illicit fentanyl. By partnering with Canadian businesses and police and law enforcement agencies across Canada, FINTRAC was effective in following the money to identify potential subjects of interest, uncover broader financial connections and provide intelligence to advance national, project-level investigations.

Facilitate partner collaboration to achieve common objectives

During the year, FINTRAC supported the long-term legislative and regulatory goals of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime by assisting federal policymakers in understanding emerging issues, trends and patterns in the broader money laundering and terrorist financing environment. The Centre produced strategic financial intelligence identifying trends, opportunities and risks arising from the rapid growth of financial technology (FinTech) and how the technology could be used for the purposes of money laundering and terrorist activity financing. FINTRAC also developed and presented strategic analysis on various FinTech related topics, including cryptocurrency, digital identity and alternative financing to various stakeholders including the Financial Action Task Force (FATF).

In 2018–19, FINTRAC and the Office of the Superintendent of Financial Institutions (OSFI) concluded the pilot of a joint assessment approach to conducting compliance examinations of Federally Regulated Financial Institutions (FRFIs). Going forward, the organizations have agreed that FINTRAC will assume responsibility for all PCMLTFA related activities in relation to these financial institutions, to be implemented over a two year period. This includes independent assessment, follow-up and relationship management activities. FINTRAC will continue to work closely with OSFI, including supporting its prudential work with the Centre's anti-money laundering and anti-terrorist financing input and findings. At the same time, this change will result in a streamlined process for FRFIs, with one supervisor conducting their PCMLTFA related compliance examinations.

Throughout the year, FINTRAC oversaw the design, development and delivery of specialized courses for financial intelligence units across the globe. These courses focused on a variety of topics, such as securing a financial intelligence unit and working with customs authorities. In addition, FINTRAC supported the United Nations Office on Drugs and Crime's workshop on human trafficking and migrant smuggling workshop, which focused on capacity building for financial intelligence units and law enforcement within the Middle-East and North African nations.

Strategic Objective: Leverage our expertise to anticipate and address future challenges

Given FINTRAC's role as Canada's financial intelligence unit, the Centre is uniquely positioned to provide a wide analytic perspective on the evolving nature, scope and threat posed by money laundering and terrorism financing. By continuing to modernize our business model and processes, we will enable further innovation in our analysis and provide the tools to deepen our insights.

Strategic Objective: Leverage our expertise to anticipate and address future challenges
FINTRAC Priority 2018–19 Results Achieved

Modernize the Centre's analysis and systems to support an ever-changing environment

In 2018–19, FINTRAC continued to implement the initiatives highlighted in its Information Management/Information Technology Strategy 2017–20, which focuses on the people, partnerships and services that are required to support FINTRAC's transformation agenda while continuing to meet operational demands. The Centre initiated a comprehensive review of its analytics modernization to ensure the best path forward in upgrading its analytics capabilities to allow for the full and timely use of its data and knowledge.

In alignment with the Treasury Board of Canada Secretariat guidelines, the Centre modernized its secure web-based electronic reporting system to enhance accessibility and usability. FINTRAC also upgraded many of its applications to ensure compliance with current platform standards as well as security and accessibility requirements.

Strategic Objective: Maximize the potential of our people

The global financial sector is rapidly evolving, becoming increasingly transnational and technologically innovative. At the same time, the perpetrators of money laundering and terrorism financing are also becoming more sophisticated. To fully exploit financial intelligence opportunities in the face of these emerging realities, we must maximize the potential of our greatest asset – our people.

Strategic Objective: Maximize the potential of our people
FINTRAC Priority 2018–19 Results Achieved
Grow our talent and renew our workforce

Guided by the Strategic Human Resources Plan 2016–19, FINTRAC participated in tailored engagement activities and robust people management initiatives intended to attract, develop, retain and maximize the contributions of its dedicated and talented workforce.

During the year, FINTRAC hired 31 new employees. Of these, 23 percent were students who were bridged into full-time positions. While students are not counted in FINTRAC's total employee population, the Centre's student population represented approximately seven percent of its workforce in 2018–19.

In 2018–19, FINTRAC created its first Centre-wide Mentorship Program with 22 pairings of mentors and mentees. Of the participating mentors, 50 percent were senior managers in the Centre, which demonstrates a strong commitment to developing junior employees for their careers in the public service.

In addition, the Centre also continued to promote and support bilingualism through a variety of activities and initiatives, such as group training, awareness events and language programs. Throughout the year, 47 employees across the Ottawa, Montreal and Vancouver offices attended FINTRAC's part-time maintenance and introductory Second Language Training.

Based on the employee feedback received, FINTRAC's internal PSES Working Group developed a PSES Action plan centred on fostering a performance-driven culture that is able to overcome challenges through partnership and accountability. The action plan contains a number of comprehensive initiatives grouped under four key themes: mindful leadership; transparency and communication; healthy, respectful and inclusive workplace; and career development and talent management.

For more information on FINTRAC's plans, priorities and results achieved, see the “Results: what we achieved” section of this report.

Results: what we achieved

Core Responsibilities

Core Responsibility: Compliance with Anti-Money Laundering and Anti-Terrorism Financing Legislation and Regulations

Description

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is responsible for ensuring compliance with Part 1 and Part 1.1 of the Proceeds of Crime (Money Laundering), Terrorist Financing Act (PCMLTFA), and its associated Regulations. This legal framework establishes obligations for reporting entities to develop a compliance regime in order to identify clients, monitor business relationships, keep records and report certain types of financial transactions. FINTRAC undertakes enabling and enforcement actions to ensure that the reporting entities operating within Canada's financial system fulfill their PCMLTFA obligations. These obligations provide important measures for countering patterns and behaviours observed in criminals and terrorists in order to deter them from operating within the legitimate channels of Canada's economy. FINTRAC also maintains a registry of money services businesses in Canada.

Results

FINTRAC uses a range of assistance, assessment and enforcement activities to ensure that all reporting entities fulfill their PCMLTFA obligations.

Over the past year, FINTRAC has seen major developments in its compliance program. As part of its transparency initiative, FINTRAC published important and wide-ranging information about its compliance program in an effort to assist businesses in understanding their legislative and regulatory obligations as well as to strengthen Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. Key publications include FINTRAC's Compliance Framework that captures the guiding principles shaping its compliance program, the Compliance Assessment Manual, the revised Administrative Monetary Penalties policy and calculation methodology as well as the notice on Voluntary Self-Declaration of Non-Compliance.

FINTRAC is committed to working with businesses across the country to assist them in understanding and complying with their obligations. Throughout the year, FINTRAC engaged in 135 outreach and engagement activities, through participation, for example, in working groups, conferences, presentations, training sessions and meetings with businesses and stakeholders.

During the year, FINTRAC's outreach efforts were also focused on increasing awareness and understanding, as well as eliciting feedback on the new regulatory amendments developed by the Department of Finance Canada. In February 2019, FINTRAC created a new Reporting Working Group to prepare, in a collaborative manner, for the impending regulatory amendments. Meetings included participants from numerous businesses and the Canadian Bankers Association, and focused on implementing improvements and efficiencies associated with transaction reporting. FINTRAC also engaged extensively with real estate regulatory bodies, associations and businesses across the country to strengthen compliance in the sector, particularly in relation to reporting.

Over the past year, FINTRAC also provided 401 policy interpretations, at the request of businesses, to clarify its approach to the application of the Act, a seven percent increase over the previous year. The most common interpretations were related to ascertaining identity, reporting international electronic funds transfers and determining if a business was considered a reporting entity under the Act. FINTRAC's policy interpretations, many of which involve complex business models, are often posted on its website without identifying information, to assist other businesses that may have similar questions.

Number of Queries Answered
2018–19 — 5,991
2017–18 — 6,652
2016–17 — 5,719

In addition, the Centre responded to 5,991 enquiries from businesses in every reporting sector on a broad range of issues, including reporting obligations, access to reporting systems and the registration of money services businesses.

In 2018–19, FINTRAC also published its revised suspicious transaction guidance, making it clearer and more concise. This was the first official guidance that also explained the concept of a “reasonable grounds to suspect” threshold with respect to triggering the requirement to submit a suspicious transaction report to FINTRAC. Although the obligations themselves did not change, the new guidance will help businesses better understand what suspicious transactions are, the value they provide and when they must be submitted to FINTRAC.

In addition to assisting reporting entities in understanding their PCMLTFA obligations, FINTRAC has a number of different assessment tools in place to verify the compliance of thousands of businesses across the country. This includes examinations and follow-up examinations, the issuance of compliance assessment reports, the monitoring of financial transaction reports, observation letters and validation reviews. These activities are planned and undertaken based on risk, with a larger proportion of the Centre's higher intensity assessments activities allocated to medium and higher-risk reporting entity sectors, and lower intensity awareness and assistance activities assigned to lower-risk sectors.

In 2018–19, examinations remained the Centre's primary instrument for assessing the compliance of businesses subject to the Act. FINTRAC uses a risk-based approach to select the businesses that will be examined every year, focusing a sizable portion of its examination resources on businesses that are at a higher risk of being deficient or exploited by money launderers or terrorist financing.

During the year, FINTRAC conducted 497 compliance examinations, the largest number was focused on the real estate sector (190), followed by money services businesses (112) and securities dealers (57).

Follow-up examinations are an assessment tool that FINTRAC can use, when appropriate, to assess if a business has addressed previous non-compliance. In 2018–19, the Centre conducted 19 follow-up examinations and identified improvement in compliance behaviour in 79 percent of cases over the previous examination. In instances where a negative change in behavior (21 percent) was observed, additional compliance and enforcement activities are planned.

Under the PCMLTFA, FINTRAC may disclose cases of non-compliance to the police when it is extensive or if there is little expectation of immediate or future compliance. In 2018–19, the Centre disclosed seven such cases.

Results achieved
Departmental results Performance indicators Target Date to achieve target 2018–19
Actual results
2017–18
Actual results
2016–17
Actual results
Reporting entities understand their role and contribution in combating money laundering and terrorist activity financing Percentage of follow-up examinations where reporting entities demonstrate higher rates of compliance with their money laundering and terrorism financing legislative and regulatory obligations Greater than or equal to 80% March 31, 2019 79% Not available Not available
Reporting entities meet their reporting obligations to FINTRAC and provide accurate transaction data that can be used to produce actionable financial intelligence Percentage of follow-up examinations where reporting entities demonstrate improvement in the quality of their reporting to FINTRAC Greater than or equal to 80% March 31, 2019 100% Not available Not available
Percentage of Financial Transaction Reports submitted to FINTRAC that meet quality requirements Greater than or equal to 80% March 31, 2019 91.7% Not available Not available
Budgetary financial resources (dollars)
2018–19
Main Estimates
2018–19
Planned spending
2018–19
Total authorities available for use
2018–19
Actual spending
(authorities used)
2018–19
Difference
(Actual spending minus Planned spending)
17,048,431 17,048,431 18,016,796 17,486,737 438,306
Human resources (full-time equivalents)
2018–19
Planned full-time equivalents
2018–19
Actual full-time equivalents
2018–19
Difference (Actual full-time equivalents minus Planned full-time equivalents)
124 129 5

Financial, human resources and performance information for FINTRAC's Program Inventory is available in the GC InfoBase.

Core Responsibility: Production and Dissemination of Financial Intelligence

Description

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is mandated by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to produce actionable financial intelligence, including disclosures that assist Canada's police, law enforcement, national security and other partner agencies in combatting money laundering, terrorism financing and threats to the security of Canada, while protecting the personal information entrusted to FINTRAC. FINTRAC also produces strategic financial intelligence for law enforcement and intelligence partners, federal policy and decision-makers, reporting entities across the country, international partners and other stakeholders. FINTRAC's strategic intelligence provides a wide analytic perspective on the nature, scope and threat posed by money laundering and terrorism financing.

Results

In 2018–19, FINTRAC provided 2,276 disclosures of actionable financial intelligence to its regime partners, an increase of more than 80 percent over the past five years. Of these, 1,702 were associated solely with money laundering, 373 dealt with cases of terrorist activity financing and other threats to the security of Canada, and 201 had associations with all three areas.

Throughout the year, the Centre's case disclosures contributed to a significant number of investigations at the federal, provincial and municipal levels across the country including 296 project-level investigations. In 2018–19, FINTRAC's financial intelligence was used in a wide variety of investigations, where the origins of the suspected criminal proceeds were linked to fraud, drug trafficking, tax evasion, corruption, theft and other criminal offences. Canadian police forces — particularly the Royal Canadian Mounted Police — continue to be the main recipients of FINTRAC's financial intelligence.

The disclosure was received in a very timely manner. Combined with previous related proactive disclosures from FINTRAC, it has expanded the scope and understanding of the investigation considerably.

Royal Canadian Mounted Police

FINTRAC maintains productive working relationships with Canada's police, law enforcement and national security agencies to ensure that its financial intelligence is relevant, timely and valuable. In 2018–19, FINTRAC conducted 165 outreach presentations across the country with disclosure recipients. The Centre also seeks feedback on its financial intelligence from disclosure recipients at the municipal, provincial and federal levels. Over the past year, FINTRAC received 318 completed disclosure feedback forms with the level of positive feedback from partners exceeding targeted levels (see Results Achieved Table). The Centre's contributions were also recognized publicly by several law enforcement agencies as providing valuable assistance to criminal investigations that led to successful disruption of money laundering schemes. This is a clear and significant measure of the effectiveness of, and results achieved by, FINTRAC under the PCMLTFA.

Another significant success for FINTRAC has been its prominent role in advancing and supporting innovative public-private sector partnerships. These partnerships are currently aimed at more effectively combatting money laundering associated with human trafficking in the sex trade, romance fraud and the trafficking of illicit fentanyl. By working alongside Canadian businesses, police and law enforcement agencies across Canada, FINTRAC has been effective in following the money to identify potential subjects, uncovering broader financial connections and providing intelligence to advance national, project-level investigations.Footnote 1

In addition to case disclosures, FINTRAC uses the information it receives from regime partners and businesses across the country, as well as other sources of information, to produce valuable strategic intelligence in the fight against money laundering and terrorist activity financing. Through the use of analytical techniques, FINTRAC is able to identify emerging characteristics, trends and tactics used by criminals to launder money or fund terrorist activities. The goal of the Centre's strategic intelligence is to inform regime partners and policy decision-makers, businesses, Canadians and international counterparts about the nature and extent of money laundering and terrorist activity financing in Canada and throughout the world.

In 2018–19, FINTRAC produced nine strategic financial intelligence assessments and reports and contributed its financial intelligence insight and expertise to numerous other regime partner projects. The majority of the Centre's strategic intelligence was focused on specific money laundering and terrorism financing issues, including a number of terrorism financing jurisdictions of concern. This intelligence was generated to support FINTRAC's own intelligence work as well as that of the Canadian security and intelligence community.

Over the past year, FINTRAC also produced strategic intelligence to assist Canadian businesses in understanding the potential risks and vulnerabilities in their sectors and in complying with their obligations under the PCMLTFA. In addition to publishing indicators relating to the Laundering the Proceeds of Romance Fraud, the Centre also issued an operational alert regarding Professional Money Laundering Through Trade and Money Services Businesses.

Lastly, FINTRAC focused its strategic intelligence efforts on identifying trends, opportunities and risks arising from the rapid growth of financial technology (FinTech) and how the technology could be used for the purposes of money laundering and terrorist activity financing. FINTRAC produced and presented strategic analysis on various FinTech related topics, including cryptocurrency, digital identity and alternative financing to support federal policymakers in understanding emerging issues, trends and patterns in the broader money laundering and terrorist financing environment.

Results achieved
Departmental results Performance indicators Target Date to achieve target 2018–19
Actual results
2017–18
Actual results
2016–17
Actual results
Financial intelligence disclosures make an important contribution to investigations of money laundering and terrorist financing while respecting specific legislative thresholds and information limits Number of police, law enforcement, national security and other partner agency major and project-level investigations supported by FINTRAC financial intelligence disclosures Greater than or equal to 100 March 31, 2019 296 Not available Not available
Percentage of FINTRAC's financial intelligence disclosures that align with partner investigative priorities Greater than or equal to 85% March 31, 2019 100% Not available Not available
Law enforcement, partner agencies and international partners receive financial intelligence that is actionable Percentage of feedback from disclosure recipients that indicates that the FINTRAC financial intelligence disclosure was actionable Greater than or equal to 85% March 31, 2019 90% Not available Not available
Percentage of feedback from proactive disclosure recipients that indicates that the independent analysis provided by FINTRAC was actionable Greater than or equal to 75% March 31, 2019 84% Not available Not available
Key Stakeholders are well-informed on issues, trends, and risks in money laundering and terrorism financing Number of strategic financial intelligence products recognised by recipients for making a significant contribution to their understanding of money laundering and terrorism financing issues, trends and risks Greater than or equal to 5 March 31, 2019 8 Not available Not available
Budgetary financial resources (dollars)
2018–19
Main Estimates
2018–19
Planned spending
2018–19
Total authorities available for use
2018–19
Actual spending
(authorities used)
2018–19
Difference
(Actual spending minus Planned spending)
16,879,800 16,879,800 17,642,397 15,918,187 -961,613Footnote 2
Human resources (full-time equivalents)
2018–19
Planned full-time equivalents
2018–19
Actual full-time equivalents
2018–19
Difference
(Actual full-time equivalents minus Planned full-time equivalents)
109 111 2

Financial, human resources and performance information for FINTRAC's Program Inventory is available in the GC InfoBase.

Internal Services including Privacy Protection

Description

Internal Services are those groups of related activities and resources that the federal government considers to be services in support of programs and/or required to meet corporate obligations of an organization. Internal Services refers to the activities and resources of the 10 distinct service categories that support Program delivery in the organization, regardless of the Internal Services delivery model in a department. The 10 service categories are: Management and Oversight Services; Communications Services; Legal Services; Human Resources Management Services; Financial Management Services; Information Management Services; Information Technology Services; Real Property Services; Materiel Services; and Acquisition Services.

Results

FINTRAC's Internal Services support the Centre's core responsibilities and programs. An important aspect of this work is ensuring the protection of personal information entrusted to FINTRAC. More specifically, all facets of FINTRAC's operations are subject to rigorous security measures that ensure the safeguarding of the Centre's physical premises and IT systems, including the handling, storage and retention of all personal and other sensitive information under its control.

In 2018–19, Internal Services supported the development and delivery of effective and integrated services, policies, advice and guidance in the fields of finance, human resources, security, communication, procurement, administration, information management, and information technology. The overall objective of the program was to ensure that FINTRAC had the proper capacity, processes and systems to allow its workforce to focus on, and perform well, in meeting their operational objectives and core mandate.

During the year, FINTRAC participated in tailored engagement activities and robust people management initiatives intended to attract, develop, retain and maximize the contributions of its dedicated and talented workforce.

The Centre's participation rate in the 2017 Public Service Employee Survey (PSES) was 91 percent, the highest amongst small, medium, and large departments and agencies in the public service. More importantly, based on the input of its employees, FINTRAC was ranked sixth for the best place to work in the federal public service. This was a significant achievement and FINTRAC remains committed to ongoing improvement and excellence.

In 2018–19, FINTRAC focused on implementing its recruitment strategy to better promote the role the Centre plays and the results it achieves for Canadians, as well as to highlight the benefits of working at FINTRAC. The Centre continued to increase the efficiency of its hiring process by leveraging its recruitment inventory for intelligence analyst and compliance officer positions. The Centre also participated in the Federal Safety, Security and Intelligence Career Fair in November. This major recruiting event allowed FINTRAC, the Canada Border Services Agency, the Canadian Armed Forces, the Canadian Security Intelligence Service, the Communications Security Establishment, the Royal Canadian Mounted Police and others to meet with potential candidates considering a career within Canada's security portfolio.

FINTRAC hired 31 new employees in 2018–19. Of these, 23 percent were students who were bridged into full-time positions. In addition, FINTRAC provided 77 work term opportunities to students, which resulted in 50 students hired at FINTRAC throughout 2018–19. While students are not counted in FINTRAC's total employee population, FINTRAC's student population throughout the year represents approximately 7 percent of our workforce.

As an organization committed to expertise and excellence, learning and development for FINTRAC's employees remained a priority for the Centre over the past year. In addition to providing extensive sector-specific training, FINTRAC held monthly internal learning sessions in both official languages, which gives subject-matter experts the opportunity to share their knowledge with their colleagues. The sessions, which are offered to 40 employees at a time, are often waitlisted, which demonstrates a tremendous internal appetite for employees to expand their knowledge of the organization. Recent FINTRAC 101 sessions have covered a broad range of topics from every team across the Centre such as Relationship Management with Reporting Entities, the 2018 Terrorist Financing Assessment and Recognizing and Identifying Insider Threats.

As part of the Centre's commitment to a respectful workplace, FINTRAC created a new Ombuds Office. This new office is the result of the Centre's PSES engagement sessions and it builds on the Treasury Board of Canada Secretariat's Federal Public Service Workplace Mental Health Strategy as well as the federal government's initiative, Safe Workspaces: Starting a Dialogue and Taking Action on Harassment in the Public Service. Reporting to the Director and CEO of FINTRAC, the Ombuds Office will provide a safe, respectful and judgement-free area to support staff and, when needed, guide parties to resolve problems as quickly and as informally as possible.

In addition to the work to grow the skills and adaptability of its workforce, another significant area of focus for FINTRAC was investing in its technology. FINTRAC depends on a sophisticated information technology infrastructure to receive, store and secure approximately 25 million new financial transaction reports every year. At the same time, this infrastructure allows intelligence analysts to filter the information, analyze it, and generate actionable financial intelligence for Canada's police, law enforcement and national security agencies. This is only possible with a modern system that can manage the high volume of information, make the connections and produce the needed results, all in real-time or close to it. In 2018–19, FINTRAC initiated a comprehensive review of its analytics modernization to ensure the best path forward in upgrading its analytics capabilities to allow for the full and timely use of its data and knowledge.

Throughout the year, the Centre continued to implement the initiatives highlighted in FINTRAC's Information Management/Information Technology Strategy 2017–20, which focuses on the people, partnerships and services that are required to support FINTRAC's transformation agenda while continuing to meet operational demands. In alignment with the Treasury Board of Canada Secretariat guidelines, the Centre modernized its secure web-based electronic reporting system to enhance accessibility and usability.

Lastly, in 2018–19, FINTRAC conducted a comprehensive internal exercise developing a new vision, Strategic Plan and strategic priorities. FINTRAC developed a new internal audit and evaluation capacity to increase accountability, transparency and collaboration within the Centre. It also introduced a new internal governance structure to enhance transparency in the Centre's decision-making process and increase meaningful discussions on broad, horizontal files such as emerging technologies and innovation, intelligence priorities, policy innovations, change management and internal communications.

In addition to its Executive Committee and Management Advisory Committee, FINTRAC added four new sub-committees to provide employees with a forum for engagement in the decision-making process and ensure openness across all levels of the organization through real time updates on committee discussions and activities.

Budgetary financial resources (dollars)
2018–19
Main Estimates
2018–19
Planned spending
2018–19
Total authorities available for use
2018–19
Actual spending
(authorities used)
2018–19
Difference
(Actual spending minus Planned spending)
17,962,944 17,962,944 18,930,169 17,986,364 23,420
Human resources (full-time equivalents)
2018–19
Planned full-time equivalents
2018–19
Actual full-time equivalents
2018–19
Difference
(Actual full-time equivalents minus Planned full-time equivalents)
120 115 -5

Analysis of trends in spending and human resources

Actual expenditures

Departmental spending trend graph

Departmental spending trend. Details in text following the graph.
View the text equivalent for Departmental Spending Trend
Departmental Spending Trend
Fiscal year Statutory Voted Total
2016–17 4,963 50,444 55,407
2017–18 5,073 50,175 55,248
2018–19 4,926 46,465 51,391
2019–20 5,427 46,230 51,657
2020–21 5,424 46,100 41,524
2021–22 5,445 46,254 51,699

Actual Spending (2016–17 to 2018–19)

In 2016–17, the total authorities available for use were $58.6M. Actual spending was $55.4M.

In 2017–18, the total authorities available for use were $56.6M. The decrease in total authorities available for use of $2.0M is mainly attributable to:

Actual spending for 2017–18 of $55.2M remained fairly consistent with 2016–17.

In 2018–19, the total authorities available for use were $54.6M. The decrease in total authorities available for use of $2.0M is mainly attributable to:

Actual spending in 2018–19 was $51.4M. This is a decrease of $3.8M compared to 2017–18 spending. The reduction primarily consists of the following:

Planned Spending (2019–20 to 2021–22)

Planned spending decreases in 2019–20 and 2020–21 is fairly consistent with actual spending in 2018–19. The Budget 2014 funding for the modernization of the analytical system ended in 2018–19, so there is a small decrease in 2019–20 and beyond. Budget 2014 funding to implement legislative amendments, and Budget 2015 funding for disclosing to provincial securities regulators, was approved on an ongoing basis starting in 2019–20. The ongoing funding profile is equal to the funding level of 2018–19, so planned spending for these initiatives remains consistent.

Budgetary performance summary for Core Responsibilities and Internal Services (dollars)
Core Responsibilities and Internal Services 2018–19
Main Estimates
2018–19
Planned spending
2019–20
Planned spending
2020–21
Planned spending
2018–19
Total authorities available for use
2018–19
Actual spending (authorities used)
2017–18
Actual spending (authorities used)
2016–17
Actual spending (authorities used)
Compliance with Anti-Money Laundering and Anti-Terrorism Financing Legislation and Regulations 17,048,431 17,048,431 17,216,674 17,591,535 18,016,796 17,486,737 21,475,777 20,353,044
Production and Dissemination of Financial Intelligence 16,879,800 16,879,800 16,292,693 15,373,434 17,642,397 15,918,187 25,228,215 27,084,324
Subtotal 33,928,231 33,928,231 33,509,367 32,964,969 35,659,193 33,404,924 46,703,992 47,437,368
Internal ServicesFootnote 3 17,962,944 17,962,944 18,147,561 18,558,905 18,930,169 17,986,364 8,543,798 7,969,157
Total 51,891,175 51,891,175 51,656,928 51,523,874 54,589,362 51,391,288 55,247,790 55,406,525

Actual human resources

Human resources summary for Core Responsibilities and Internal Services (full-time equivalents)
Core Responsibilities and Internal Services 2016–17 Actual full-time equivalents 2017–18 Actual full-time equivalents 2018–19 Planned full-time equivalents 2018–19 Actual full-time equivalents 2019–20 Planned full-time equivalents 2020–21 Planned full-time equivalents
Compliance with Anti-Money Laundering and Anti-Terrorism Financing Legislation and Regulations 159 151 124 129 126 126
Production and Dissemination of Financial Intelligence 160 166 109 111 109 109
Subtotal 319 317 233 240 235 235
Internal ServicesFootnote 4 53 49 120 115 133 133
Total 372 366 353 355 368 368

FTEs have been declining from 2016–17 to 2018–19. Given FINTRAC's enhanced security posture and unique position as an agency outside the core public service, the lead time to screen qualified candidates and fill vacant positions can be lengthy at times. Actual FTEs in 2018–19 are similar to planned FTEs for the fiscal year. FTEs are expected to increase in 2019–20 as vacant positions are filled. Ongoing funding approved for implementing legislative amendments and disclosing to provincial securities regulators, is reflected in the planned FTEs for 2019–20 and 2020–21.

Expenditures by vote

For information on FINTRAC's organizational voted and statutory expenditures, consult the Public Accounts of Canada 2018–19.

Government of Canada spending and activities

Information on the alignment of FINTRAC's spending with the Government of Canada's spending and activities is available in the GC InfoBase.

Financial statements and financial statements highlights

Financial statements

FINTRAC's financial statements (unaudited) for the year ended March 31, 2019, are available on the departmental website.

Financial statements highlights

Condensed Statement of Operations (unaudited) for the year ended March 31, 2019 (dollars)
Financial information 2018–19
Planned results
2018–19
Actual results
2017–18
Actual results
Difference (2018–19 Actual results minus
2018–19 Planned results)
Difference (2018–19 Actual results minus
2017–18 Actual results)
Total expenses 54,649,688 52,033,152 56,520,732 -2,616,536 -4,487,580
Total revenues 0 217 151 217 66
Net cost of operations before government funding and transfers 54,649,688 52,032,935 56,520,581 -2,616,753 -4,487,646

In 2018–19, total expenses of $52M were $4.5M lower than in 2017–18, a decrease of 9 percent. The decrease is largely attributed to a decrease in salaries and wages of $3.3M, due to retroactive payments paid to employees in 2017–18 for economic increases retroactive to 2014. The decrease in expenses is also attributable to a decrease in employer contribution costs, severance benefits and health and dental plans of $449K. The remaining difference is attributed to a decrease in professional services and rentals.

Salaries and employee benefits, in the amount of $40.5M, represented the largest portion of FINTRAC's expenses at 78 percent of the total. Other operating expenses (e.g. accommodations, professional and special services and rentals) accounted for the remaining 22 percent ($11.5M) of FINTRAC's expenses.

Condensed Statement of Financial Position (unaudited) as of March 31, 2019 (dollars)
Financial Information 2018–19 2017–18 Difference
(2018–19 minus 2017–18)
Total net liabilities 8,982,382 9,819,660 -837,278
Total net financial assets 5,447,032 6,379,448 -932,416
Departmental net debt 3,535,350 3,440,212 95,138
Total non-financial assets 18,613,600 16,403,793 2,209,807
Departmental net financial position 15,078,249 12,963,581 2,114,668

The departmental net financial position increased in 2018–19 by $2.1M compared to 2017–18. This increase is due to the change in tangible capital assets which is primarily attributable to the analytics modernization costs that have been capitalized as work in progress in 2018–19 ($2.3M).

Supplementary information

Corporate information

Organizational profile

Appropriate minister: The Honourable William Francis Morneau, Minister of Finance

Institutional Head: Nada Semaan, Director and Chief Executive Officer

Ministerial portfolio: Finance

Enabling instrument: Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17. (PCMLTFA)

Year of commencement: 2000

Raison d'être, mandate and role: who we are and what we do

"Raison d'être, mandate and role: who we are and what we do" is available on FINTRAC's website.

Operating context and key risks

Information on operating context and key risks is available on FINTRAC's website.

Reporting Framework

FINTRAC's Departmental Results Framework and Program Inventory of record for 2018–19 are illustrated below.

Departmental Results Framework

Core Responsibility 1: Compliance with Anti-Money Laundering and Anti-Terrorism Financing Legislation and Regulations
  • Departmental Result: Reporting entities understand their role and contribution in combating money laundering and terrorist activity financing
    • Indicator: Percentage of follow-up examinations where reporting entities demonstrate higher rates of compliance with their money laundering and terrorism financing legislative and regulatory obligations
  • Departmental Result: Reporting entities meet their reporting obligations to FINTRAC and provide accurate transaction data that can be used to produce actionable financial intelligence
    • Indicator: Percentage of follow-up examinations where reporting entities demonstrate improvement in the quality of their reporting to FINTRAC
    • Indicator: Percentage of Financial Transaction Reports submitted to FINTRAC that meet quality requirements
Core Responsibility 2: Production and Dissemination of Financial Intelligence
  • Departmental Result: Financial intelligence disclosures make an important contribution to investigations of money laundering and terrorist financing while respecting specific legislative thresholds and information limits
    • Indicator: Number of police, law enforcement, national security and other partner agency major and project-level investigations supported by FINTRAC financial intelligence disclosures
    • Indicator: Percentage of FINTRAC financial intelligence disclosures that align with partner investigative priorities
  • Departmental Result: Law enforcement, partner agencies and international partners receive financial intelligence that is actionable
    • Indicator: Percentage of feedback from disclosure recipients that indicates that the FINTRAC financial intelligence disclosure was actionable
    • Indicator: Percentage of feedback from proactive disclosure recipients that indicates that the independent analysis provided by FINTRAC was actionable
  • Departmental Result: Key Stakeholders are well-informed on issues, trends, and risks in money laundering and terrorism financing
    • Indicator: Number of strategic financial intelligence products recognised by recipients for making a significant contribution to their understanding of money laundering and terrorism financing issues, trends and risks

Program inventory

Program: Compliance Program

Program: Strategic Policy and Reviews

Program: Financial Intelligence Program

Program: Strategic Intelligence and Research

Supporting information on the Program Inventory

Financial, human resources and performance information for FINTRAC's Program Inventory is available in the GC InfoBase.

Supplementary information tables

Federal tax expenditures

The tax system can be used to achieve public policy objectives through the application of special measures such as low tax rates, exemptions, deductions, deferrals and credits. The Department of Finance Canada publishes cost estimates and projections for these measures each year in the Report on Federal Tax Expenditures. This report also provides detailed background information on tax expenditures, including descriptions, objectives, historical information and references to related federal spending programs. The tax measures presented in this report are the responsibility of the Minister of Finance.

Organizational contact information

Financial Transactions and Reports Analysis Centre of Canada
234 Laurier Avenue West Ottawa,
Ontario K1P 1H7
Canada

Telephone: 1-866-346-8722
Fax: 613-943-7931
Website: https://www.fintrac-canafe.gc.ca/intro-eng

Appendix: definitions

appropriation (crédit)
Any authority of Parliament to pay money out of the Consolidated Revenue Fund.
budgetary expenditures (dépenses budgétaires)
Operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations.
Core Responsibility (responsabilité essentielle)
An enduring function or role performed by a department. The intentions of the department with respect to a Core Responsibility are reflected in one or more related Departmental Results that the department seeks to contribute to or influence.
Departmental Plan (plan ministériel)
A report on the plans and expected performance of an appropriated department over a three year period. Departmental Plans are tabled in Parliament each spring.
Departmental Result (résultat ministériel)
A Departmental Result represents the change or changes that the department seeks to influence. A Departmental Result is often outside departments' immediate control, but it should be influenced by program-level outcomes.
Departmental Result Indicator (indicateur de résultat ministériel)
A factor or variable that provides a valid and reliable means to measure or describe progress on a Departmental Result.
Departmental Results Framework (cadre ministériel des résultats)
Consists of the department's Core Responsibilities, Departmental Results and Departmental Result Indicators.
Departmental Results Report (rapport sur les résultats ministériels)
A report on an appropriated department's actual accomplishments against the plans, priorities and expected results set out in the corresponding Departmental Plan.
experimentation (expérimentation)
Activities that seek to explore, test and compare the effects and impacts of policies, interventions and approaches, to inform evidence-based decision-making, by learning what works and what does not.
full time equivalent (équivalent temps plein)
A measure of the extent to which an employee represents a full person year charge against a departmental budget. Full time equivalents are calculated as a ratio of assigned hours of work to scheduled hours of work. Scheduled hours of work are set out in collective agreements.
gender-based analysis plus (GBA+) (analyse comparative entre les sexes plus [ACS+])
An analytical process used to help identify the potential impacts of policies, Programs and services on diverse groups of women, men and gender differences. We all have multiple identity factors that intersect to make us who we are; GBA+ considers many other identity factors, such as race, ethnicity, religion, age, and mental or physical disability.
government-wide priorities (priorités pangouvernementales)
For the purpose of the 2018–19 Departmental Results Report, those high-level themes outlining the government's agenda in the 2015 Speech from the Throne, namely: Growth for the Middle Class; Open and Transparent Government; A Clean Environment and a Strong Economy; Diversity is Canada's Strength; and Security and Opportunity.
horizontal initiative (initiative horizontale)
An initiative where two or more departments are given funding to pursue a shared outcome, often linked to a government priority.
non budgetary expenditures (dépenses non budgétaires)
Net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.
performance (rendement)
What an organization did with its resources to achieve its results, how well those results compare to what the organization intended to achieve, and how well lessons learned have been identified.
performance indicator (indicateur de rendement)
A qualitative or quantitative means of measuring an output or outcome, with the intention of gauging the performance of an organization, program, policy or initiative respecting expected results.
performance reporting (production de rapports sur le rendement)
The process of communicating evidence based performance information. Performance reporting supports decision making, accountability and transparency.
plan (plan)
The articulation of strategic choices, which provides information on how an organization intends to achieve its priorities and associated results. Generally a plan will explain the logic behind the strategies chosen and tend to focus on actions that lead up to the expected result.
planned spending (dépenses prévues)
For Departmental Plans and Departmental Results Reports, planned spending refers to those amounts presented in Main Estimates.

A department is expected to be aware of the authorities that it has sought and received. The determination of planned spending is a departmental responsibility, and departments must be able to defend the expenditure and accrual numbers presented in their Departmental Plans and Departmental Results Reports.
priority (priorité)
A plan or project that an organization has chosen to focus and report on during the planning period. Priorities represent the things that are most important or what must be done first to support the achievement of the desired Strategic Outcome(s) or Departmental Results.
program (programme)
Individual or groups of services, activities or combinations thereof that are managed together within the department and focus on a specific set of outputs, outcomes or service levels.
result (résultat)
An external consequence attributed, in part, to an organization, policy, program or initiative. Results are not within the control of a single organization, policy, program or initiative; instead they are within the area of the organization's influence.
statutory expenditures (dépenses législatives)
Expenditures that Parliament has approved through legislation other than appropriation acts. The legislation sets out the purpose of the expenditures and the terms and conditions under which they may be made.
Strategic Outcome (résultat stratégique)
A long term and enduring benefit to Canadians that is linked to the organization's mandate, vision and core functions.
target (cible)
A measurable performance or success level that an organization, program or initiative plans to achieve within a specified time period. Targets can be either quantitative or qualitative.
voted expenditures (dépenses votées)
Expenditures that Parliament approves annually through an Appropriation Act. The Vote wording becomes the governing conditions under which these expenditures may be made.
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