Federal Government:1)Hundreds of public servants to learn about job cuts in the new year; 2)Dramatic increase in Fintrac fines coming, but their effectiveness is less clear

1)Hundreds of public servants to learn about job cuts in the new year

Courtesy Barrie360.com and Canadian Press

By Catherine Morrison, December 21, 2025

Federal public servants are expected to learn about job cuts in their departments when they return from their holiday break.

Departments such as Immigration, Refugees and Citizenship, Environment and Climate Change and Employment and Social Development have told their staff already that news on job cuts will be shared in the new year.

Ottawa is looking to cut program spending and administration costs by about $60 billion over the next five years through its “comprehensive expenditure review.”

The latest federal budget said the exercise will involve “restructuring operations and consolidating internal services.” It said it also will deploy workforce adjustments and attrition to return the size of the public service to “a more sustainable level.”

Environment and Climate Change Canada said in a message to its employees that the department will implement expenditure review decisions in mid-January. It said employees whose positions may be affected will be notified at that time “in accordance with workforce adjustment and career transition provisions.”

“While there is no perfect timing for these conversations, proceeding with implementation in the new year will allow us to provide clear information to all employees,” the department said. “You may be hearing news from other departments as they begin implementing their decisions.”

Employment and Social Development Canada said an adjustment in its staffing levels, including for permanent positions, will begin in January.

“We cannot confirm how many positions will be reduced at this time,” department spokesperson Mila Roy told The Canadian Press in early December. “However, ESDC will continue to leverage attrition and workforce planning, aiming to minimize impacts on employees to the maximum possible extent.”

The government plans to cut the number of public service jobs by about 40,000 from a peak of 368,000 in 2023-24. About 10,000 jobs have been eliminated from the federal public service over the past year.

The plan will see a reduction of 1,000 executive positions over the next two years, and a 20 per cent cut to spending on management and consulting services over three years.

The immigration department shared a message with employees stating it expects to eliminate around 300 positions over the next three years.

“Additional reductions will likely be required to align with anticipated adjustments to immigration levels-related funding,” the message said.

The department said roughly half of those jobs will be dropped through attrition and the non-renewal of term positions, with the remaining addressed through the government’s upcoming early retirement program and workforce adjustment.

The federal government has sent letters with information on its planned early retirement program to almost 68,000 public servants who may be eligible.

The government says it’s trying to boost the rate of attrition and avoid cutting younger workers by offering a voluntary program allowing workers to retire earlier without incurring a pension penalty.

The recent federal budget said the government intends to implement the one-year early retirement program as soon as January, though legislation is still required to move the plan forward.

Immigration, Refugees and Citizenship Canada said in its message that Prime Minister Mark Carney has been clear about the need to reduce the number of executives across government and the Treasury Board of Canada Secretariat is providing each federal organization with a specific target.

It said it anticipates a reduction in executive positions of roughly 10 to 15 per cent. Those cuts will be in addition to the 300 positions, the department said.

Government data shows that 11,148 people were working at Immigration, Refugees and Citizenship as of March 31, with 293 of them in executive positions.

The department, which earlier this year announced a plan to cut more than 3,300 jobs over three years, said it plans to inform the affected individuals starting in mid to late January.

“We hope this update provides a bit more clarity with regard to the impacts of (the comprehensive expenditure review) and immigration levels for our department, and that you have a chance to rest and recharge over the holidays,” the message said.

Hundreds of federal employees have been warned in recent weeks they may lose their jobs as the government moves to shrink the size of the public service.

The Public Service Alliance of Canada said in early December that 219 of its members at Natural Resources Canada received notices this week saying their jobs might be cut.

The Professional Institute of the Public Service of Canada said Friday about 200 of its own members at Natural Resources Canada received those notices.

Another 109 people at the Public Service Commission of Canada, 92 people at Crown-Indigenous Relations and Northern Affairs Canada and 74 staffers at the Department of Finance received similar notices, the union said.

David Macdonald, a senior economist with the Canadian Centre for Policy Alternatives, told The Canadian Press he believes those cuts are the “tip of the iceberg.”

Macdonald said many public servants have been told — or likely will told soon — that their jobs are on the chopping block, though that doesn’t necessarily mean they’ll be laid off.

“If there are sufficient retirements or people pull the chute and get out of that department, then that means fewer people will face actual layoffs,” he said.

Macdonald saidseveral departments are facing large operational cuts and “it’s not entirely clear” how they’ll accomplish them without layoffs or cuts to services. Those departments, he said, include Environment and Climate Change Canada and Statistics Canada.

Macdonald said more concrete details likely will be shared through organizations’ departmental plans.

Sharon DeSousa, national president of the Public Service Alliance of Canada, said earlier this month the government still hasn’t clearly outlined where the sweeping public service cuts will hit the hardest.

“Drawing on past intelligence, we do know that Employment and Social Development Canada, Immigration, Refugees and Citizenship Canada and the Canada Revenue Agency have been signalled as top targets,” she said.

DeSousa said fewer public servants will mean longer wait times for services like passports, employment insurance, child care and pension benefits, and tax returns.

“Reckless public service cuts are not how you build a stronger Canada — they weaken it,” she said.

2)Dramatic increase in Fintrac fines coming, but their effectiveness is less clear

Courtesy Barrie360.com and Canadian Press

By Ian Bickis, Dec. 21, 2025.

The cost of doing business is set to go up, dramatically, for companies that don’t keep a close eye on anti-money laundering obligations.

A broad range of firms that handle large transactions, from jewellers to big banks, face potential penalties 40 times higher than existing rates. The changes are part of Bill C-12, which passed in the House of Commons on Dec. 11 and is waiting for a final stamp of approval from the Senate.

“That legislation, if enacted, will significantly transform the enforcement framework,” said Vladimir Shatiryan, a partner at Blakes who focuses on financial regulations.

The changes would mean that, for example, if TD Bank Group were to again be fined for failing to report 20 suspicious transactions, as it was in 2024, it could face $400 million in penalties rather than the $9.2 million it paid last year.

The notable increase comes as part of wider efforts in Canada to step up anti-money laundering measures, including a significant ramp up in penalties using existing rules, but experts are skeptical the higher fines themselves will do much to fix the gaps in the system.

The size of the potential penalties mean that firms will likely submit many more transactions for review, even ones they don’t necessarily think are suspicious, said Shatiryan.

“Someone told me ‘Smile and file,’ rather than, you know, be more judicious and deliberate in identifying suspicious transactions when reporting,” he said.

“Because overreporting doesn’t result in penalties, but under-reporting certainly does.”

It’s a concern shared by Jeffrey Simser, a former legal director with Ontario’s Ministry of the Attorney General who wrote a book about anti-money laundering laws.

“There’s going to be more noise and less signal in the system as a direct consequence of what they’re doing.”

The measures, however, should help empower compliance staff to convince companies to spend on oversight, said Simser.

“The good part of the fines is you can then say to your boss, yeah, I know it costs money, but guess what? If we don’t do this, we’re going to get a fine.”

Fintrac said in a statement that it has the modern systems and processes needed to fulfil its mandate, even with higher submissions, while chief executive Sarah Paquet has said the agency is also leaning more into artificial intelligence to sift through submissions.

The significant increase in potential penalties will also likely lead to many more court challenges, said Shatiryan, as the fines would justify the costs of litigation.

Fintrac has seen numerous court challenges in the past, including one that led to a 2016 Supreme Court ruling that forced the agency to halt penalties for years as it reviewed its policies and made more transparent how it calculates penalties.

More challenges are also likely as Fintrac ramps up enforcement more generally.

Paquet said in a November 2023 speech, about a month after TD announced a US$3.1 billion settlement in the U.S. over anti-money laundering failures, that the status quo was no longer acceptable.

“We are actively stepping up our enforcement action,” said Paquet, who was not available for an interview.

“We will confront those businesses that are not meeting their moral and social responsibilities.”

The change can be seen in Fintrac penalties in recent years.

The 2020-21 financial year saw $538,000 in penalties across nine charges, then $3.5 million and $1.1 million in the next two years. The 2023-24 year jumped to more than $26 million in fines on 12 violations, and last year had 23 notices of violation (the most ever) as well as more than $25 million in fines.

This year has seen a further dramatic escalation, including a $177 million fine against Xeltox Enterprises Ltd., operating as Cryptomus, and a $20 million fine against Peken Global Ltd., operating as KuCoin. Cryptmous has appealed its record fine.

Fintrac has also levelled fines on numerous other firms this year including Spence Diamonds Ltd., the Canadian National Exhibition Association, Canaccord Genuity Corp. and a range of casinos, credit unions and real estate brokers.

The actions come as more firms become subject to Fintrac rules, and as the G7-backed Financial Action Task Force conducted a high-profile review of Canada’s anti-money laundering controls this year.

Fintrac’s step up in fines have definitely made companies take the rules more seriously, said Jessica Davis, president and principal consultant at Insight Threat Intelligence.

But she said the problem is that law enforcement agencies don’t have the capacity to deal with more submissions, so even if Fintrac submitted 10 times more suspicious transactions she doubts it would result in more enforcement action.

“We just don’t really have much in the way of a financial crimes enforcement capacity in Canada,” said Davis.

The federal government promised in its fall budget to move ahead with a financial crimes agency, but it was also a Liberal campaign promise in 2021, so she’s waiting to see what actually happens.

Simser said that even if the initiative gets going soon, it takes years to properly train investigators to sift through complex financial filings, and none of it is cheap.

“The biggest challenge, I think, is implementing and building the infrastructure to actually enforce the law,” said Simser.

“It’s going to take some time and it’s going to be hard work and it’s going to call for resources, and there’s never enough resources.”