FINTRAC produces financial intelligence that assists the investigation and prosecution of money laundering and terrorist activity financing offences and other threats to the security of Canada. These investigations are carried out by national, provincial and municipal law enforcement agencies and the Canadian Security Intelligence Service. FINTRAC is an analytic, not an investigative body. FINTRAC sits at the front end of the process, making a contribution of intelligence that assists investigators.
FINTRAC has been very active in the production of case disclosures of financial intelligence, producing 168 such cases in 2005-2006, with a total value of just over $5 billion. This financial intelligence is providing value to a growing number of investigations. With each successive year, we have increased our output of these disclosures of suspected money laundering and terrorist activity financing cases.
Our governing legislation, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, places obligations on certain individuals and entities to keep records, identify their clients, and report certain financial transactions to us. These reporting entities, as we call them, include banks, credit unions, accountants, casinos, money services businesses, foreign exchange dealers, securities dealers, life insurance companies, and real estate brokers and agents.
Recently, as you know, Parliament amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, through Bill C-25. From FINTRAC's perspective there are three key thrusts to the legislative amendments:
Bill C-25 brings additional business sectors under the ambit of the legislation and regulations, such as lawyers and dealers in precious metals and stones. Their inclusion broadens and strengthens Canada's efforts to combat money laundering and terrorist financing. Second, the amendments will augment the deterrence component of the regime by creating a registry, requiring money service businesses to register with FINTRAC, and establishing a graduated system of administrative monetary penalties. This will greatly strengthen compliance with the law and the general deterrence of money laundering and terrorist activity financing. It will also ensure better information is provided for FINTRAC's analysis. Third, Bill C-25 will make it possible to enrich the intelligence product that FINTRAC can disclose to law enforcement and national security agencies by including some additional information in our disclosures while scrupulously protecting the privacy rights of Canadians. This responds to the needs of law enforcement to make FINTRAC's core product even more useful to them.
Adjusting to these legislative changes and successfully implementing them will remain a focus for FINTRAC for the year ahead and beyond.
I'll turn now to our main estimates.
In our main estimates, FINTRAC is requesting $44.9 million for 2007-2008. This represents a substantial increase of $13.8 million over last year's main estimates.
The increase for the next few years is required primarily for three reasons: workload pressures, the implementation of C-25 changes and contributions to the Egmont Group.
Our workload has steadily increased since we began operations about six years ago. This is evident in the significant year-over-year growth in transaction reports received, in our output of financial intelligence and in the demand from law enforcement and CSIS for our product. Law enforcement agencies in Canada and financial intelligence agencies in other countries are looking to FINTRAC for more and better financial intelligence to assist their work. FINTRAC is responding to this demand with the production of case disclosures that assist individual investigations, as well as strategic financial intelligence that takes a longer term view of areas that may have vulnerability to money laundering and terrorist activity financing.
The implementation of C-25 changes will also expand our workload and require the development and implementation of significant new functions such as a registry of money service businesses as well as an administrative monetary penalty system. The operation of these two elements is still being defined in greater detail through regulations based on ongoing research and consultation. We will keep Parliamentarians abreast of our progress in implementing these and other elements of C-25 through our regular reporting documents such as our annual report and future committee appearances.
Money laundering and terrorist activity financing are transnational phenomena and cooperation internationally is essential to any successful effort to curb them. The Egmont Group is an international body comprising the financial intelligence units of more than 100 countries. In 2006, the Egmont Group selected Toronto as the site of its permanent secretariat for its global operations. This is an achievement for Canada and an opportunity to help lead the global fight against money laundering and terrorist activity financing. It is the funding of this permanent secretariat that is identified in these main estimates for a contribution of $1.8 million in 2007-2008.
As for FINTRAC's overall budget, it is relatively straightforward. It largely comprises two main elements, staff costs and other expenditures in support of our operations, which are very technology intensive. FINTRAC currently employs 230 staff, who are located here in Ottawa as well as in three small regional offices: one in Montreal, one in Toronto, and one in Vancouver. That figure is expected to rise to about 270 staff next year. In terms of other expenditures, they are mainly for information technology, security and accommodation.
We believe that FINTRAC has made and will continue to make a significant contribution, along with our partners in law enforcement and national security, to combating money laundering and terrorist activity financing. This investment in FINTRAC is an investment in the safety and security of Canadians.
I will conclude my presentation here. We would be pleased to answer any questions you may have.
