As the grace period for Canada’s new anti-money laundering regulations officially ends, the financing and leasing sector faces a new reality of rigorous audits and heavy penalties. Marcel Buerkler of the CFLA joins us to break down what companies must do to move from simple “checkbox” compliance to a robust, defensible strategy.
The landscape for the Canadian financing and leasing industry shifted significantly on April 1, 2026. With the conclusion of the “educational phase” regarding anti-money laundering (AML) and anti-terrorist financing (ATF) regulations, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has moved into full enforcement.
In a recent Monitor podcast episode, Rita Garwood, Editor-in-Chief of Monitor, spoke with Marcel Buerkler, Director of Advocacy and Industry Intelligence at the Canadian Finance and Leasing Association (CFLA). They discussed why the sector was targeted, the operational hurdles of “Know Your Customer” (KYC) protocols and the substantial risks —both financial and reputational — facing businesses that fail to adapt.
Watch the full episode here on YouTube, or listen here on Spotify.
Rita Garwood: The CFLA has noted that the new anti-money laundering regulations aim to close a regulatory gap. Why was the financing and leasing sector specifically targeted, and why was now the right time to do it?
Marcel Buerkler: There are two main factors. First, Canada has international obligations as a member of the Financial Action Task Force (FATF). Historically, Canada was only partially compliant or non-compliant on several of FATF’s 40 recommendations. An on-site evaluation last November provided the urgency to catch up with jurisdictions like Australia or the UK, where leasing and financing were scoped in long ago.
Second, this happened against the backdrop of a U.S.-Canada trade dispute regarding border security and cracking down on illicit activity. The confluence of these developments resulted in a sped-up timeline. It’s also part of a general trend to include entities beyond traditional banks, reflecting the growing diversification of financial markets.
Garwood: The new rules apply to entities financing business property, passenger vehicles, or any property valued over $100,000. Are there examples of businesses that might not realize they are now reporting entities under FINTRAC?
Buerkler: It is less about the type of business and more about the activity. The requirements target three scenarios:
- Movable property for business purposes (B2B).
- Passenger vehicles.
- High-value consumer goods valued at or above $100,000.
Crucially, B2B transactions and passenger vehicles do not have a monetary threshold. If you are lending an $8,000 photocopier, full AML regulations apply. This includes brokers who run their own books and dealerships with in-house financing. Even if you aren’t a reporting entity, lenders will now legally require you to collect expanded information, such as beneficial ownership checks and third-party determinations.
Garwood: How does the CFLA help members translate these complex legal requirements into daily practical guidance?
Buerkler: We partnered with KPMG to develop an AML toolkit to help members navigate the path to compliance. We also aggregate information on our AML Resources hub, host webinars, and hold AML summits. Even though enforcement has begun, this remains mission-critical, and we will continue to support the industry through these efforts.
Garwood: The transition period has ended and full enforcement is now underway. How is FINTRAC approaching compliance differently now?
Buerkler: From April 2025 to April 2026, FINTRAC emphasized outreach and guidance — essentially an informal pause on enforcement. As of April 1, 2026, that period is over. FINTRAC will now conduct full assessments and audits for anyone in the Canadian leasing and financing sector.
Garwood: What does a typical compliance examination look like, and what are the most common red flags?
Buerkler: Assessments vary. They can range from “desk examinations” or remote reviews of specific categories to full on-site examinations involving interviews and walkthroughs.
Common red flags include:
- Incomplete KYC information: Missing or inconsistent data.
- Reporting failures: Filing suspicious transaction reports late or not at all.
- Generic risk assessments: FINTRAC wants a well-documented methodology tailored to your specific business.
The overarching principle is that your process must be defensible and demonstrable.
Garwood: FINTRAC has the authority to issue administrative monetary penalties. What is the scale of these consequences?
Buerkler: They are substantial. Penalties are categorized as minor ($40k max), serious ($4 million max), or very serious($20 million max). These are per violation and are not capped per examination; they add up. Beyond the money, there is significant reputational damage, as FINTRAC publicly lists penalized businesses on what is essentially a “wall of shame”.
Garwood: What are the biggest operational hurdles companies face when implementing KYC procedures for the first time?
Buerkler: The biggest challenge is that the regime is risk-based, not prescriptive. You have to figure out your own processes and prove they work. Specific hurdles include:
- Beneficial Ownership: Getting to the bottom of complex structures like shell companies or trusts.
- Data Quality: Inconsistent formats across different platforms.
- Customer Friction: The tension between strict compliance and maintaining a frictionless onboarding experience.
- Ongoing Monitoring: Screening for sanctions or politically exposed persons isn’t a one-time event; it must be continuous.
Garwood: If a CFLA member feels overwhelmed, what resources should be their first stop?
Buerkler: The AML toolkit, for CFLA members. It has an AML Program Guide to identify key elements for complianceand an AML Policy Guide that serves as a template for internal policies. It’s not a “copy-paste” solution, but it’s the best place to start.
Garwood: If you could give one piece of advice to a CEO in the equipment finance space regarding their AML posture for 2026, what would it be?
Buerkler: Stop treating AML as a background task for the compliance team. Treat it as a core business function and strategy. It must be embedded across all processes — from deal origination to client relationship management. Ensure your program is risk-based, consistent, and demonstrably effective.
