FINTRAC

Despite our vigorous opposition, it seems the Federal Government has plowed ahead with yet another layer of needless bureaucracy for dealers to contend with. Much of this haste was driven by a burning desire in Ottawa to try to appease the U.S. administration’s obsession with border security.

They must have hoped it would make some kind of difference down there. It actually won’t make much difference on either side of the border, as it is a solution to a problem that never existed in the first place, but no one is listening to that kind of logic these days.

Effective April 1, 2025 all dealers who finance or lease passenger class vehicles (or other vehicles valued over $100,000) will be expected to report to FINTRAC.

A Financing or leasing entity is a person or entity that is engaged in the business of financing or leasing.

A financing or leasing entity is subject to the Act and associated Regulations when they engage in the financing or leasing of:

  • property for business purposes, other than real property or immovables
  • property valued at $100,000 or more, other than real property or immovables
  • passenger vehicles in Canada

A passenger vehicle is a motor vehicle – other than an ambulance, a hearse, a motor vehicle that is clearly marked for policing activities, a motor vehicle that is clearly marked and equipped for emergency medical response activities or emergency fire response activities or a utility truck – that is designed or adapted primarily to carry no more than 10 individuals on highways and streets.

Likely in recognition that this was all done so fast that no one really knows what it all means, FINTRAC have signaled that, for this first year, they are really going to focus on education rather than enforcement, which is the only good news we have for you on this at this point:
https://tinyurl.com/2tefmchw

“In the first year following the coming into force dates, FINTRAC will put emphasis on engagement, outreach and guidance activities related to new regulatory obligations in order to foster greater awareness and understanding amongst new reporting entities. This will include industry consultation to develop guidance so new reporting entities will be well positioned to implement and mature their compliance programs.”

As we reported in our January Front Line, we submitted our responses to the consultations and raised the following points, all of which we not only ignored, it seems implementation was sped up to April when it was supposed to be October 1, 2025.

The UCDA submitted its comments on the proposed Regulatory changes and made points on the:

  • lack of consultation
  • short window for comments (Nov. 30 to Dec. 30, 2024)
  • short window for implementation (by October 2025)
  • fact the $100,000 trigger should apply to passenger vehicles too
  • negative effect this will have on many small businesses in Ontario
    that engage in vehicle leasing and financing

The FINTRAC link contains useful guidance on how you can set yourself up for compliance and avoid the fines and penalties for failing to do so by 2026.