Deloitte urges Canada regulatory reform to boost growth

Deloitte Canada has released a report series on regulatory modernisation in Canada, arguing that smarter regulation could support investment and productivity.

The first instalment focuses on anti-money laundering rules and sets out recommendations developed in consultation with the Canadian Bankers Association. The four-part series examines how regulation affects several parts of the economy as Canada looks to improve competitiveness amid weak investment and external economic pressure.

Deloitte argues that increasingly complex and fragmented requirements are holding back growth, innovation and the delivery of national priorities. It cited chief executive surveys by the Business Council of Canada between 2023 and 2025 that identified regulatory burden as the leading factor in decisions on whether to invest in Canada.

Canada's federal government launched a Red Tape Review initiative in 2025, which Deloitte described as an important step towards reform. Its analysis argues that faster progress is needed and that outcomes-focused regulation should create more certainty for businesses and investors.

AML focus

The opening chapter, titled Five ways to strengthen Canada's anti-money-laundering outcomes, examines how changes to the country's anti-money laundering framework could improve intelligence sharing, enforcement and the recovery of criminal proceeds. Citing estimates from Criminal Intelligence Service Canada, Deloitte said money laundering may account for as much as CAD $113 billion moving through the economy each year.

The report argues that despite years of investment in Canada's anti-money laundering regime, enforcement results have lagged. Deloitte estimated that reforms cutting money laundering activity by 30% could raise Canada's real GDP by CAD $216 billion between 2027 and 2036 and add an average of 67,000 jobs a year.

The proposed changes centre on three areas: greater information sharing among financial institutions, law enforcement and government agencies; updates to legislative and reporting frameworks; and stronger enforcement and asset recovery tools. Deloitte said these measures would reduce unnecessary complexity while improving outcomes.

"This new Deloitte series underscores the critical role that smart and effective regulation plays in driving and protecting investment, enabling innovation, and supporting economic growth for our country," said Nino Montemarano, Regulatory and Risk Leader at Deloitte Canada and lead author of the series.

"Regulatory modernization is a powerful, controllable policy tool as Canada navigates heightened trade and geopolitical uncertainty. It's imperative that the country's regulatory framework is efficient, coordinated, and designed to reduce unnecessary complexity and unlock economic growth across all sectors," Montemarano said.

The banking industry body involved in the first chapter said reform should be treated as a national priority, linking anti-money laundering changes to both financial crime prevention and the wider investment climate.

"Canada's banks are deeply committed to safeguarding the financial system, and this Deloitte research validates the importance of all stakeholders working together to make updating our anti-money laundering regime a vital national priority," said Anthony G. Ostler, President and Chief Executive Officer of the Canadian Bankers Association.

"In today's environment of global economic uncertainty, we must sharpen our focus on the variables we can control. Transparent, predictable and risk-based regulation provides a powerful lever to modernize our sector and unlock the full potential of our national economy. By adopting these forward-looking reforms, we can strengthen our collective fight against financial crime while cementing Canada's position as a highly competitive, secure and attractive destination for global investment," Ostler said.

Broader agenda

The remaining chapters in the series will examine regulation in energy and infrastructure, defence, and fraud. Consultations for those sections involved the Canadian Association of Petroleum Producers, the Canadian Defence & Security Industries Association, and the Canadian Anti-Scam Coalition.

Comments from those groups point to a broader debate about how Canada balances oversight with economic efficiency. In energy, the issue centres on certainty and speed in attracting capital. In defence, it is linked to procurement reform, domestic production and long-term planning. In fraud, the emphasis is on coordination among financial institutions, telecoms providers, digital platforms, regulators and police.

The spread of sectors suggests the series is intended to place regulation at the centre of Canada's economic policy discussion rather than treat it as a narrow compliance issue. By combining sector-specific recommendations with economic modelling, Deloitte argues that regulatory design has direct implications for growth, investment decisions and labour market outcomes.

The anti-money laundering chapter also highlights a persistent policy gap in Canada: stronger rules and higher compliance spending have not necessarily produced better enforcement results. Deloitte's proposed answer is not broad deregulation but a more targeted, risk-based approach that it says would improve the quality of financial intelligence and make enforcement more effective.

For business groups and policymakers, that distinction matters because Canada is trying to address several pressures at once, including trade uncertainty, geopolitical risks and sluggish productivity. The report series argues that while many external forces are beyond Ottawa's control, domestic regulatory structure is not.