2016–17 Report on Plans and Priorities

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


ISSN 2292-6240

Table of Contents

2016–17 Report on Plans and Priorities (PDF version, 258 KB)


Director's Message

Gérald Cossette, Director

I am pleased to present to Parliament and Canadians the 2016–17 Report on Plans and Priorities for the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

As Canada’s financial intelligence unit, FINTRAC plays a critical role in combatting money laundering, terrorism financing and threats to the security of Canada. Given its unique ability to follow the criminal and terrorist money trail, FINTRAC is a valuable resource for law enforcement, intelligence and national security agencies, the Canada Revenue Agency, the Canada Border Services Agency, and federal public safety policy makers.

In the years ahead, FINTRAC will continue to align its operations, methods and business processes in order to increase operational efficiency and improve the quality of its data holdings. The multi-year plan for the modernization of our analytics system remains our priority. In 2016–17, FINTRAC will pursue investment in a new system to support our analytical work and adopt new business methodologies to improve our ability to balance reliability, completeness and timeliness in the financial intelligence that we disclose to our partners.

We will also implement the legislative changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulatory amendments. Meant to strengthen Canada’s anti-money laundering and anti-terrorism financing efforts, these changes will come to encompass entities dealing in virtual currencies. And, we will continue to reach out to provincial securities regulators to which we can disclose financial intelligence since June 2015.

Finally, we remain committed to working with businesses, anti-money laundering and anti-terrorism financing regime partners, stakeholders and leaders of industry and academia to ensure the threats we face from money laundering and terrorism financing are understood, and to emphasize the shared responsibility we have in protecting Canada and Canadians.

FINTRAC’s employees are dedicated to producing high-quality, actionable financial intelligence and are motivated by a common purpose: to ensure the safety and security of Canadians and protect Canada’s financial system. I invite you to read this report to learn more about our plans and priorities for the 2016–17 fiscal year.

Gérald Cossette
Director

Section I: Organizational Expenditure Overview

Organizational Profile

Minister: The Honourable William Francis Morneau, Minister of Finance

Institutional Head: Gérald Cossette, Director

Ministerial Portfolio: Finance

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

Year of Commencement: 2000

Organizational Context

Raison d'être

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit. The Centre exists to assist in the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control. FINTRAC’s Financial Intelligence and Compliance programs strive to disrupt the ability of criminals and terrorist groups that seek to abuse Canada’s financial system and to reduce the profit incentive of crime.

FINTRAC acts at arm’s length and is independent from the law enforcement agencies and other entities to which it is authorized to disclose financial intelligence. It reports to the Minister of Finance, who is in turn accountable to Parliament for the activities of the Centre. FINTRAC was established by, and operates within, the ambit of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations.

Responsibilities

FINTRAC is one of several domestic partners in Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) regime, which also includes the Department of Finance as the policy and regime lead, the Royal Canadian Mounted Police (RCMP), the Canadian Security Intelligence Service (CSIS), the Canada Revenue Agency (CRA), the Canada Border Services Agency (CBSA), the Office of the Superintendent of Financial Institutions (OSFI), the Public Prosecution Service of Canada, the Department of Justice, and Public Safety Canada. FINTRAC is also part of the Egmont Group, an international network of financial intelligence units that collaborate and exchange information to combat money laundering and terrorist activity financing.

FINTRAC facilitates the detection, prevention and deterrence of money laundering, and terrorist activity financing by engaging in the following activities:

FINTRAC is headquartered in Ottawa, and its Montréal, Toronto and Vancouver regional offices have specific mandates related to compliance with the PCMLTFA.

Protecting the Privacy of Canadians

The protection of the personal information entrusted to FINTRAC is an overarching and fundamental consideration in all aspects of the Centre’s operations. The PCMLTFA establishes stringent rules that govern both the management and disclosure of information contained in the Centre’s transaction reports and other records. 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, and include the handling, storage and retention of all personal and other sensitive information under its control.

The legislation also establishes that the Centre can only make a financial intelligence disclosure to prescribed police, law enforcement and security agencies. Furthermore, the PCMLTFA clearly defines what information may be disclosed and sets out specific thresholds that must be met before FINTRAC is able to disclose. Any other disclosure of information is prohibited and can result in severe penalties, including a fine of up to $500,000 and/or up to five years’ imprisonment for FINTRAC employees or persons conducting work for or on behalf of FINTRAC.

FINTRAC’s premises and information systems are protected by multi-layered and integrated security systems. All personnel including contractors must obtain and maintain security clearance at the highest level of integrity as a condition of employment. Access to sensitive information is on a need-to-know basis. Responsibilities involving the protection of personal information are clearly communicated and measures are in place to ensure that responsibilities in relation to the protection of personal information are formally acknowledged by all personnel.

Strategic Outcome and Program Alignment Architecture (PAA)

To effectively pursue its mandate, FINTRAC aims to achieve a single Strategic Outcome supported by the Program Activity Architecture (PAA) summarized below.

Organizational Priorities

Priority: Implementation of the multi-year plan for the modernization of FINTRAC’s analytics system

Description: FINTRAC’s existing analytics system is based on a dated design that is increasingly unable to efficiently and effectively meet the demand for the production of financial intelligence. The implementation of the multi-year plan for the modernization of FINTRAC’s analytics system will allow FINTRAC to retire legacy financial intelligence systems and licences and replace them with a new analytics system that will be better able to balance reliability, completeness and timeliness in the production of financial intelligence.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • In 2016–17, FINTRAC will continue with the implementation phase of the analytics system modernization project by introducing a first release of the solution for testing, evaluation and training.
4th Quarter, 2015 1st Quarter, 2017
  • Financial Intelligence Program
  • Internal Services
  • In 2017–18, following a second release of the solution into production, FINTRAC’s new analytical solution is expected to be fully operational. The Centre will then be able to retire its legacy financial intelligence systems and licences.
1st Quarter, 2017 4th Quarter, 2018

Priority: Implementation of the legislative changes to the PCMLTFA and development of associated regulatory amendments intended to strengthen Canada’s AML/ATF regime

Description: In 2016–17, FINTRAC will continue to work closely with the Department of Finance to support the implementation of the legislative changes to the PCMLTFA and the development of associated regulatory amendments to strengthen Canada’s AML/ATF regime. The amendments to the PCMLTFA enacted during 2014 and 2015 enhanced FINTRAC’s ability to disclose financial intelligence to regime partners on threats to the security of Canada. They also provided FINTRAC with the ability to disclose information to provincial securities regulators when the Centre has reasonable grounds to suspect that the information would be relevant to investigating or prosecuting a money laundering or a terrorist activity financing offence and that it has reasonable grounds to suspect that the information would be relevant to investigating or prosecuting an offence under provincial securities legislation.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • FINTRAC is developing an implementation plan that provides for information technology system changes, guidance and outreach for reporting entities, and the preparation of guidelines. The implementation plan will guide the Centre’s activities during the final implementation phase, once the final regulatory amendments are published in the Canada Gazette.
Ongoing Ongoing
  • Financial Intelligence Program
  • Compliance Program
  • Internal Services

Priority: Preparation for the Financial Action Task Force’s (FATF) mutual evaluation report on Canada’s AML/ATF regime

Description: During the 2016–17 fiscal year, the Financial Action Task Force (FATF) will finalize its mutual evaluation report of Canada’s AML/ATF regime. This exercise will be critical for FINTRAC as the mutual evaluation will identify areas of strengths and weaknesses in Canada’s AML/ATF regime’s technical compliance and effectiveness, and will recommend that FINTRAC and other regime partners take certain steps to improve the regime.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • FINTRAC will continue to assist the Department of Finance in preparing for the FATF discussion of Canada’s mutual evaluation report by providing comments, advice and any other required support.
Ongoing Ongoing
  • Financial Intelligence Program
  • Compliance Program
  • Internal Services
  • FINTRAC will also propose possible next steps for addressing the recommendations of the FATF mutual evaluation of Canada.
Ongoing Ongoing

Priority: Engage with key partners on a future-oriented research agenda to increase the understanding and awareness of money laundering and terrorist financing issues, and to maximize the value of financial intelligence

Description: FINTRAC’s financial intelligence supports Canada’s broader policing, 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 businesses, regime partners, international and domestic stakeholders and academia to ensure that the role of financial intelligence and the contribution it makes is clearly understood, to emphasize the shared responsibility of all AML/ATF regime partners in protecting Canada and Canadians, and to support Canada’s national security priorities.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • FINTRAC will continue to work closely with its AML/ATF regime partners, and will reach out to other stakeholders (e.g., businesses, international partners, academics, etc.), to share expertise on money laundering and terrorism financing. Working closely with these partners will keep FINTRAC aware of their most pressing priorities and will assist in identifying vulnerabilities that may need to be addressed to strengthen the regime.
Ongoing Ongoing
  • Financial Intelligence Program
  • Compliance Program
  • Internal Services
  • FINTRAC will continue to support the Department of Finance, the lead in Canada’s AML/ATF regime, through its assessments of potential vulnerabilities and opportunities, in order to evaluate potential enhancements to the AML/ATF regime. The consideration of these potential regime enhancements will be done in close collaboration with regime partners.
Ongoing Ongoing

Priority: Strengthen leadership capacity across the Centre to support key modernization and people management initiatives

Description: In addition to delivering on the Centre’s mandate, FINTRAC will be implementing a number of significant transformational initiatives over the planning period. To be successful, FINTRAC will need to continue to attract and maintain an engaged workforce with the leadership strength, expertise and skills to deliver on operational priorities as well as to adapt to the Centre’s evolving business context. FINTRAC is also committed to responding to the results of the 2014 Public Service Employee Survey and contributing to the modernization of the Public Service through Blueprint 2020. To succeed in these initiatives, it will be essential for the Centre to strengthen leadership capacity not only within the executive cadre but at all levels of the organization.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • FINTRAC’s leadership competencies are integrated throughout its People Management Framework. In 2016–17, FINTRAC’s leadership capacity will continue to be strengthened through engagement, learning and performance management activities, supported by appropriate policies, programs and tools, including optimized recruitment strategies.
Ongoing Ongoing
  • Financial Intelligence Program
  • Compliance Program
  • Internal Services
  • FINTRAC will also continue to employ an integrated approach to its recruitment, learning, engagement and performance management activities that help strengthen the Centre’s capacity for business performance.
Ongoing Ongoing

Priority: Continue to strengthen the Centre’s approach to its security posture to ensure a high level of assurance that information, assets, and services are protected against compromise

Description: In accordance with the PCMLTFA, the safeguarding of information entrusted to FINTRAC is an overarching and fundamental consideration in all aspects of the Centre’s operations. The protection of information, assets, and services against compromise is critical to maintaining Canadians’ confidence in FINTRAC and the broader AML/ATF regime.

Priority Type: Previously committed to

Key Supporting Initiatives

Key Supporting Initiatives
Planned Initiatives Start Date End Date Link to Department’s Program Alignment Architecture
  • Continue to implement measures to strengthen personnel, physical, information and information technology security programs that support establishing a high level of assurance that information, assets, and services are effectively protected against compromise.
Ongoing Ongoing
  • Financial Intelligence Program
  • Compliance Program
  • Internal Services
  • Continue to collaborate closely with Shared Services Canada to evaluate and implement targeted security enhancements that will align with FINTRAC operational and security requirements.
Ongoing Ongoing

For more information on organizational priorities, see the Minister of Finance’s mandate letter on the Prime Minister of Canada’s website.


Risk Analysis

FINTRAC operates in a dynamic environment that constantly changes. With these changes come unpredictability, uncertainty, and ultimately risk. FINTRAC defines risk as the uncertainty that surrounds future events and outcomes. It is something that may or may not happen, which must be taken into account during decision-making at all organizational levels.

In recent years, FINTRAC has broadened its understanding of the corporate risks associated with its operational environment. In general, these risks are well identified, and the associated risk response activities are integrated and stable. While the risk remains, the risk management strategies currently employed aim to reduce the probability of occurrence and provide a greater level of comfort with the remaining risk exposure.

FINTRAC’s planning approach to the identification, assessment and management of risks supports the use of risk information on a systematic and continuous basis and allows for oversight and collaboration in managing common risk elements. The following is an analysis of the four risk areas that FINTRAC’s 2015 corporate risk profile identified as having the greatest significance to FINTRAC in relation to achieving its objectives along with highlights of the Centre’s risk management strategies.

Key Risks
Risk Risk Response Strategy Link to Program Alignment Architecture
Relationships – FINTRAC depends on relationships with external partners to advance its priorities and initiatives and maximize its value to Canadians.

FINTRAC has mechanisms in place to align its work with the priorities of its partners; however partner organizations may alter their priorities at any time. In the case of law enforcement and national security partners, shifts in investigative priorities may impact the usefulness of FINTRAC disclosures. In other instances, partners’ operational priorities may have an impact on FINTRAC’s ability to implement its own priority initiatives. To ensure FINTRAC manages these relationship risks effectively, the Centre employs a number of controls including:

  • FINTRAC works with law enforcement and national security partners to build and maintain relationships, to ensure that priorities are understood and aligned, and to gather feedback.
  • FINTRAC maintains a trained complement of Compliance Officers having functional relationships with reporting entities, industry associations and other regulators and supervisors.
  • FINTRAC engages with domestic and international partners to support business strategies and processes (services / training / outreach).
  • Through participation in discussions with the Department of Finance and other AML/ATF regime partners; the Financial Action Task Force; and the Egmont Group, FINTRAC contributes to the exchange of knowledge and supports efforts to strengthen Canada’s AML/ATF policy frameworks.
  • Compliance Program
  • Financial Intelligence Program
  • Internal Services
Security and Privacy – The protection of information that FINTRAC receives, analyzes and discloses is an integral part of the Centre’s mandate.

FINTRAC employs a comprehensive suite of safeguards and controls to address security and privacy risk from both internal and external threats. Some of the most important of these include:

  • FINTRAC’s Personnel Security Program ensures that all personnel and contractors are screened to appropriate levels.
  • Security policies and procedures, and mandatory training and awareness activities are established to secure the Centre’s information and systems. Access controls are also implemented to secure FINTRAC’s infrastructure.
  • A Privacy Management Framework is in place to ensure that privacy protection is reflected in all aspects of program operations.
  • Information Management and Security programs provide direction and guidance on the capture, storage, protection, access to, classification, dissemination and eventual disposition of all information at FINTRAC.
  • Internal Services
Resource Management – FINTRAC’s ability to successfully deliver its programs is directly linked to the adaptability, skills and engagement of its employees, and the tools and resources that are available to support their work.

FINTRAC places a strong focus on the effective management of both human and financial resources especially during periods of change and transformation. As a small organization, FINTRAC faces a number of challenges and limitations regarding its human resources capacity and its flexibility to cash manage funds. To ensure that FINTRAC is able to manage its resource management risks and ensure the effective stewardship of public resources, the Centre employs a range of controls, including:

  • Budget and resource allocations to sectors/directorates/initiatives established by the Centre’s Executive Committee, representing the most senior level of executive management;
  • Guidance of the Chief Human Resources Officer and the Chief Financial Officer – as members of FINTRAC’s Executive Committee and as leaders of robust frameworks of people and financial management; and
  • HR planning strategies that include annual demographics analysis and staffing forecasts to anticipate and respond to capacity and change management issues.
  • Compliance Program
  • Financial Intelligence Program
  • Internal Services
Business Processes and Systems – FINTRAC’s ability to deliver its mandate is dependent on the availability and use of key business processes and systems, many of which are currently undergoing transformation.

Until the completion of the Analytics Modernization Project, FINTRAC will continue to rely on existing, aging infrastructure for the analysis and production of financial intelligence. As FINTRAC’s infrastructure is now an asset of Shared Services Canada (SSC), FINTRAC works closely with SSC to ensure uninterrupted availability of its analytical systems and business processes during the transformation period. To address ongoing risks, FINTRAC employs a number of important safeguards and controls, including:

  • Optimizing the use of existing systems and tools through training and awareness, and enhanced internal communications;
  • Conducting technical analysis to ensure the Centre has the tools and resources required to address day-to-day operational issues and to provide input into future business processes and systems;
  • Focusing on strategic planning and management of the ongoing Analytics Modernization Project to ensure delivery of a timely solution; and
  • Leveraging SSC’s support and expertise on all information technology related initiatives including SSC Workload Migration, Analytics modernization implementation, Email Transformation Initiative and the broader Government of Canada Business Continuity maintenance and recovery strategy.
  • Compliance Program
  • Financial Intelligence Program
  • Internal Services

Planned Expenditures

Budgetary Financial Resources (dollars)
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
56,697,062 59,662,547 51,747,876 51,140,766

Human Resources (Full-Time Equivalents [FTEs])
2016–17 2017–18 2018–19
364 365 366

Budgetary Planning Summary for Strategic Outcome and Programs (dollars)
Strategic Outcome, Programs and Internal Services 2013–14
Expenditures
2014–15
Expenditures
2015–16
Forecast Spending
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
Strategic Outcome: A Canadian financial system resistant to money laundering and terrorist financing
Financial Intelligence Program 21,668,241 20,873,133 25,121,180 26,976,466 28,387,444 22,752,065 22,027,100
Compliance Program 21,702,134 21,678,510 22,370,591 22,350,495 23,519,516 21,576,601 21,696,360
Subtotal 43,370,375 42,551,643 47,491,771 49,326,961 51,906,960 44,328,666 43,723,460
Internal Services 8,333,808 8,852,787 7,527,702 7,370,101 7,755,587 7,419,210 7,417,306
Total 51,704,183 51,404,430 55,019,473 56,697,062 59,662,547 51,747,876 51,140,766

As announced in Budget 2014, FINTRAC received funding to implement legislative amendments and to modernize its analytical system. The approved funding profile for legislative amendments is $1,747,592 in 2015–16, $2,050,750 in 2016–17, $1,028,014 in 2017–18 and $1,153,168 in 2018–19. The approved funding profile for analytical system modernization is $3,839,764 in 2015–16, $5,907,882 in 2016–17, $1,258,462 in 2017–18 and $538,892 in 2018–19.

Planned spending for all three years includes an estimate for the Reimbursement of Eligible Paylist Expenditures. Planned spending for FY 2016–17 includes an estimate for the Operating Budget Carry-Forward (OBCF).

Alignment of Spending With the Whole-of-Government Framework

Alignment of 201617 Planned Spending With the Whole-of-Government Framework (dollars)
Strategic Outcome Program Spending Area Government of Canada Outcome 2016–17
Planned Spending
1 A Canadian financial system resistant to money laundering and terrorist financing 1.1 Financial Intelligence Program Social Affairs A Safe and Secure Canada 28,387,444
1.2 Compliance Program Social Affairs A Safe and Secure Canada 23,519,516

Total Spending by Spending Area (dollars)
Spending Area Total Planned Spending
Economic affairs -
Social affairs 51,906,960
International affairs -
Government affairs -

Departmental Spending Trend

Departmental Spending Trend Graph

Chart illustrating spending trend by fiscal year from 2013–14 to 2018–19 in millions of dollars

Actual Spending (2013–14 and 2014–15)

The resources available for spending in 2013–14 and 2014–15 were $53,288,233 and $52,558,499, respectively. Resources available for spending decreased by $729,734 from 2013–14 to 2014–15 primarily as a result of:

Actual spending for 2013–14 was $51,704,183 and 2014–15 was $51,404,430.

Forecast Spending (2015–16)

Forecasted spending for 2015–16 is $55,019,473.

FINTRAC's overall spending is expected to increase compared to 2014–15 commensurate with the organization's increase in authorities due to the profile of funds received via Budget 2014. In 2015–16, FINTRAC received $0.9M in additional funds to implement legislative amendments and $3.4M in additional funds to modernize the analytical system compared to 2014–15.

Planned Spending (2016–17 to 2018–19)

Planned spending is expected to be $59,662,547 in 2016–17 and $51,747,876 in 2017–18, a decrease of $7,914,671. Planned spending is lower in 2017–18 primarily due to:

Planned spending is expected to be $51,747,876 in 2017–18 and $51,140,766 in 2018–19, a decrease of $607,110. Planned spending is lower in 2018–19 due to the profile of funds received via Budget 2014.

Estimates by Vote

For information on FINTRAC's organizational appropriations, consult the 2016–17 Main Estimates on the Treasury Board of Canada Secretariat website.


Section II: Analysis of Programs by Strategic Outcome

Strategic Outcome: A Canadian financial system resistant to money laundering and terrorist financing

Program 1.1: Financial Intelligence Program

Description

FINTRAC’s Financial Intelligence Program, mandated by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), is a component of the broader national security and anti-crime agenda. The program strives to disrupt the ability of criminals and terrorist groups that seek to abuse Canada’s financial system and to reduce the profit incentive of crime. The main method of intervention used by the program is to analyze reported financial transactions and other information the Centre is authorized to receive under the PCMLTFA to produce financial intelligence products including tactical case disclosures and strategic intelligence products that are relevant to the investigation, prosecution or understanding of money laundering and terrorist financing activities.


Budgetary Financial Resources (dollars)
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
26,976,466 28,387,444 22,752,065 22,027,100

Human Resources (FTEs)
2016–17 2017–18 2018–19
150 150 150

Performance Measurement
Expected Results Performance Indicators Targets Date to Be Achieved
Disclosures of financial intelligence make an important contribution to investigations of money laundering and terrorist financing. Percentage of disclosure recipients indicating disclosure provided information that was helpful to the investigation. 70% 2016–17

 

Percentage of disclosure recipients indicating that information provided was actionable. 50% 2016–17
Strategic financial intelligence products align with the priorities of investigators, intelligence analysts, policy and decision-makers. Percentage of primary recipients indicating increased awareness and understanding of ML/TF subject matter as a result of FINTRAC’s strategic financial intelligence products. 75% 2016–17

Planning Highlights

FINTRAC provides actionable financial intelligence, including case disclosures that assist in investigations of suspected money laundering, terrorism financing, and other threats to the security of Canada. In addition, the Centre supports the priorities of the AML/ATF and national security policy-making communities, domestic regime partners, and the broader security and intelligence community.

FINTRAC case disclosures contain designated information that identifies individuals and entities, as well as account and transaction information, where the Centre has reasonable grounds to suspect that the information would be relevant to the investigation and prosecution of money laundering or terrorist activity financing offences or the investigation of threats to the security of Canada. This financial intelligence is used to assist money laundering and terrorist activity financing investigations in the context of a wide variety of criminal investigations, where the origins of the suspected criminal proceeds are linked to drug trafficking, fraud, tax evasion, corruption, and other criminal offences.

Increasingly, FINTRAC’s financial intelligence is also used by investigative partners to identify assets for seizure and forfeiture, reinforce applications for the listing of terrorist entities, negotiate agreements at the time of sentencing and advance the government’s knowledge of the financial dimensions of threats, organized crime and terrorism.

FINTRAC also produces valuable strategic financial intelligence, providing a wide analytic perspective on the nature, scope and threat posed by money laundering and terrorism financing. Produced for the Canadian security and intelligence community, federal policy and decision-makers, reporting entities across the country, international partners and other stakeholders, the Centre’s strategic financial intelligence is invaluable in strengthening Canada’s ability to prevent, detect, deter and disrupt the methods and techniques used by criminals to launder money or fund terrorist activities.

FINTRAC’s Financial Intelligence Program encompasses all of the Centre’s financial intelligence activities. These activities are complemented by research, partnership and government relationship activities, both domestically and internationally.

In order to achieve the expected results for 2016–17, FINTRAC plans to undertake the following activities during the planning period:

Program 1.2: Compliance Program

Description

FINTRAC’s Compliance Program is responsible for ensuring compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations. The Compliance Program utilizes a risk-based approach to deliver enforcement, and relations and support activities that help ensure compliance with legislative and regulatory obligations that apply to individuals and entities operating in Canada's financial system.

Budgetary Financial Resources (dollars)
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
22,350,495 23,519,516 21,576,601 21,696,360

Human Resources (FTEs)
2016–17 2017–18 2018–19
161 162 163

Performance Measurement
Expected Results Performance Indicators Targets Date to Be Achieved
Non-compliance among reporting entities is detected and addressed. Percentage of cases where corrective actions taken are commensurate with the level of non-compliance detected. 100% 2016–17
Entities have access to timely and accurate information. Percentage of general inquiries answered within established timeframes. 90% 2016–17

Planning Highlights

FINTRAC’s Compliance Program promotes the concept of “Compliance for Intelligence” in its operational and strategic decision-making. This concept recognizes that the overall effectiveness of Canada’s AML/ATF regime, including the financial intelligence that is produced, is dependent upon reporting entities submitting high quality and timely financial transaction reports.

Integrated within the “compliance for intelligence” concept is FINTRAC’s risk-based approach to compliance, which sees more resources directed at higher-risk reporting entities and ensures that all compliance activities are proportionate given the likelihood and the consequence of non-compliance. A reporting entity’s likelihood of non-compliance is based on several factors surrounding their business profile, compliance history, reporting behaviour, and other intelligence from internal and external sources. The measures for the potential consequence of non-compliance look at a reporting entity’s vulnerabilities to money laundering and terrorist financing along with the overall impact on Canada’s financial system should an entity not comply with its PCMLTFA obligations. This in-depth understanding of the risks is used to ensure that compliance activities are proportionate and focused in areas assessed to be at higher risk of non-compliance.

To ensure compliance with the PCMLTFA and the production of actionable financial intelligence, FINTRAC undertakes a suite of risk-based activities including guidance, feedback, assessment and enforcement actions based on a sector's level of knowledge regarding its obligations and past compliance behaviour. The intensity of activity is based on the risks associated with non-compliance. Activities are categorized into two main themes:

During the planning period, FINTRAC will undertake the following activities to support the Centre’s compliance priorities:

Internal Services

Description

Internal Services are groups of related activities and resources that are administered to support the needs of programs and other corporate obligations of an organization. Internal Services include only those activities and resources that apply across an organization, and not those provided to a specific program. The groups of activities 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.


Budgetary Financial Resources (dollars)
2016–17
Main Estimates
2016–17
Planned Spending
2017–18
Planned Spending
2018–19
Planned Spending
7,370,101 7,755,587 7,419,210 7,417,306

Human Resources (FTEs)
2016–17 2017–18 2018–19
53 53 53

Planning Highlights

FINTRAC’s Internal Services support the Centre’s Financial Intelligence and Compliance programs. They are focused on the development and delivery of effective services, policies, advice and guidance in the fields of finance, human resources, security, communication, procurement, administration, and information management and information technology. The overall objective of the program is to ensure that FINTRAC has the proper capacity, processes and systems to allow its workforce to focus on and perform well in meeting their operational objectives.

Over the planning period, Internal Services will focus on activities that leverage advancements in information technology, enhance the leadership capacity of FINTRAC’s workforce, and strengthen the Centre’s security posture to ensure that its information, assets and services are protected against compromise. To realize these objectives, FINTRAC will undertake the following activities:


Section III: Supplementary Information

Future-Oriented Statement of Operations

The future-oriented condensed statement of operations presented in this section is intended to serve as an overview of FINTRAC’s operations. The forecasted financial information on expenses and revenues are prepared on an accrual accounting basis to strengthen accountability and to improve transparency and financial management.

Because the Future-Oriented Condensed Statement of Operations is prepared on an accrual accounting basis, and the forecast and planned spending amounts presented in other sections of the Report on Plans and Priorities are prepared on an expenditure basis, amounts may differ.

A detailed FINTRAC’s future oriented statement of operations and associated notes, including a reconciliation of the net costs of operations to the requested authorities, can be found in the publications section of FINTRAC’s website.

Future-Oriented Condensed Statement of Operations
For the Year Ended March 31, 2016
(in thousands of dollars)
Financial Information 2015–16
Estimated Results
2016–17
Planned Results
Difference
(2016–17 Planned Results minus 2015–16 Forecast Results)
Total expenses 54,677 55,263 586
Total revenues - - -
Net cost of operations before government funding and transfers 54,677 55,263 586

FINTRAC is projecting approximately $55.3M in expenses based on 2016–17 Main Estimates, estimated allocations from Treasury Board central votes, and accrued information. Amounts for 2016–17 do not include Supplementary Estimates and represent an increase of $0.6M from 2015–16 results. The estimated increase in expenses in 2016–17 is due to the projection of a nil budgetary lapse, an increase in funding related to analytics modernization and legislative amendments, as well as other technical adjustments. As FINTRAC’s revenues consist of only non-respendable amounts for Administrative Monetary Penalties, total revenues are presented as nil.

Supplementary Information Tables

Tax Expenditures and Evaluations

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 publishes cost estimates and projections for these measures annually in the Tax Expenditures and Evaluations publication. The tax measures presented in the Tax Expenditures and Evaluations publication are the responsibility of the Minister of Finance.


Section IV: 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


Appendix: Definitions

appropriation: Any authority of Parliament to pay money out of the Consolidated Revenue Fund.

budgetary expenditures: Include operating and capital expenditures; transfer payments to other levels of government, organizations or individuals; and payments to Crown corporations.

Departmental Performance Report: Reports on an appropriated organization’s actual accomplishments against the plans, priorities and expected results set out in the corresponding Reports on Plans and Priorities. These reports are tabled in Parliament in the fall.

full-time equivalent: Is 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.

Government of Canada outcomes: A set of 16 high-level objectives defined for the government as a whole, grouped in four spending areas: economic affairs, social affairs, international affairs and government affairs.

Management, Resources and Results Structure: A comprehensive framework that consists of an organization’s inventory of programs, resources, results, performance indicators and governance information. Programs and results are depicted in their hierarchical relationship to each other and to the Strategic Outcome(s) to which they contribute. The Management, Resources and Results Structure is developed from the Program Alignment Architecture.

non-budgetary expenditures: Include net outlays and receipts related to loans, investments and advances, which change the composition of the financial assets of the Government of Canada.

performance: 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: 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: The process of communicating evidence-based performance information. Performance reporting supports decision-making, accountability and transparency.

planned spending: For Reports on Plans and Priorities (RPPs) and Departmental Performance Reports (DPRs), planned spending refers to those amounts that receive Treasury Board approval by February 1. Therefore, planned spending may include amounts incremental to planned expenditures presented in the 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 RPPs and DPRs.

plans: 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.

priorities: Plans or projects 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).

program: A group of related resource inputs and activities that are managed to meet specific needs and to achieve intended results and that are treated as a budgetary unit.

Program Alignment Architecture: A structured inventory of an organization’s programs depicting the hierarchical relationship between programs and the Strategic Outcome(s) to which they contribute.

Report on Plans and Priorities: Provides information on the plans and expected performance of appropriated organizations over a three-year period. These reports are tabled in Parliament each spring.

results: 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.

Strategic Outcome: A long-term and enduring benefit to Canadians that is linked to the organization’s mandate, vision and core functions.

sunset program: A time-limited program that does not have an ongoing funding and policy authority. When the program is set to expire, a decision must be made whether to continue the program. In the case of a renewal, the decision specifies the scope, funding level and duration.

target: 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.

whole-of-government framework: Maps the financial contributions of federal organizations receiving appropriations by aligning their programs to a set of 16 government-wide, high-level

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