As the autumn sun casts long shadows over Parliament Hill, the often-overlooked machinery of Canada’s trade sanctions regime is facing unprecedented strain. Legal experts and industry insiders are sounding increasingly urgent alarms about what they describe as a “dangerously underfunded” enforcement system that threatens to undermine Canada’s international commitments.
“We’re asking people to police a border with a flashlight when they need floodlights,” says Martha Connelly, a trade compliance attorney with over two decades of experience navigating Canada’s sanctions landscape. “The expertise exists, but the resources simply don’t match the expanding mandate.”
The warning comes as Canada has dramatically expanded its sanctions portfolio in recent years, targeting regimes in Russia, Iran, and Myanmar, while enforcement funding has remained largely stagnant. According to Treasury Board allocations published last quarter, the special economic measures enforcement unit saw only a 3% budget increase despite a 47% rise in sanctioned entities requiring monitoring.
I spent yesterday morning at a roundtable discussion hosted by the Canadian Bar Association, where trade lawyers from across the country gathered in Ottawa to discuss what many described as a perfect storm brewing in our sanctions enforcement capabilities. Their concerns transcend the usual partisan divides that characterize so much of our political discourse.
“This isn’t about politics—it’s about whether Canada means what it says on the world stage,” explained Dominic Chen, former advisor to Global Affairs Canada and now partner at Blackwell Trade Advisory. “When we announce new sanctions with great fanfare but can’t properly enforce them, we’re signaling to bad actors that our commitments may be more symbolic than substantive.”
The tension plays out most visibly at the Canadian Border Services Agency (CBSA), which bears significant responsibility for intercepting sanctioned goods. Officers I’ve spoken with describe a frustrating reality where sophisticated screening tools remain on wish lists rather than in operation.
“We’re trying to catch complex evasion schemes with systems designed for a simpler era,” confided one senior CBSA official who requested anonymity. “Meanwhile, those intent on circumventing sanctions employ increasingly sophisticated methods to disguise origins and supply chains.”
The challenges facing Canada’s sanctions regime reflect a broader pattern where federal enforcement agencies struggle to keep pace with expanding mandates. Recent polling by Abacus Data suggests 72% of Canadians support strong international sanctions against human rights violators, yet only 23% express confidence that Canada effectively enforces these measures.
In Windsor, where cross-border trade forms the economic lifeblood of the community, local business leaders express mounting frustration. “We want to do the right thing and comply fully with all sanctions requirements,” says Juliette Moreau, director of the Windsor-Essex Regional Chamber of Commerce. “But when guidance is unclear and enforcement seems inconsistent, it creates unnecessary business uncertainty.”
The funding shortfall affects more than just border operations. Financial intelligence units responsible for tracking sanctioned assets report being overwhelmed by the volume of cases. Documents obtained through access to information requests reveal that FINTRAC, Canada’s financial intelligence unit, flagged its “critical resource gap” to the Finance Ministry three times in the past year.
For everyday Canadians, the esoteric world of trade sanctions may seem distant from kitchen table concerns. Yet the implications touch everything from pension fund investments to consumer goods availability and ultimately our national security posture.
“When we fail to properly enforce sanctions, we’re not just undermining our foreign policy—we’re potentially enabling proceeds of corruption or conflict to flow through our economy,” warns Senator Pauline Martin, who sits on the National Security and Defence Committee.
The situation has created strange bedfellows, with business groups and human rights organizations finding common cause. Both want more predictable, better-resourced enforcement—albeit for different reasons.
At last month’s parliamentary committee hearings, representatives from Amnesty International Canada sat alongside industry association leaders, both calling for enhanced funding. The business community seeks clarity and consistency, while rights advocates want meaningful enforcement of measures targeting human rights abusers.
“When sanctions are properly enforced, they can help protect vulnerable populations facing oppression,” testified Maria Alvarez from the Canadian Centre for International Justice. “But empty gestures ultimately harm those same populations by creating false hope.”
Finance Ministry officials defend their approach, pointing to recent investments in advanced analytics and cross-border cooperation. “We’re developing more sophisticated tools to identify evasion patterns,” stated Deputy Minister Richard Groves in a recent department release. “But we acknowledge this is an area where capacity building remains essential.”
Yet for those on the frontlines, the gap between rhetoric and resources remains stark. Customs brokers report growing backlogs in screening shipments against increasingly complex sanctions lists. Banks struggle to monitor thousands of potential shell companies that might conceal sanctioned entities.
“The typical midsize Canadian bank simply doesn’t have the tools to effectively screen for sophisticated sanctions evasion,” notes financial compliance expert Tariq Mohammed. “The regulations demand a level of scrutiny that current resources can’t deliver.”
As Parliament reconvenes next week, several committees are expected to take up the issue. Trade associations have submitted a joint proposal calling for a 40% increase in sanctions enforcement funding, improved coordination between agencies, and clearer guidance for businesses navigating compliance requirements.
Whether this issue can gain traction amid competing priorities remains an open question. But as global tensions escalate and Canada takes increasingly bold positions on the world stage, the gap between our diplomatic promises and enforcement capabilities grows more consequential by the day.
For now, those responsible for upholding Canada’s sanctions commitments continue doing more with less—a situation that experts across the political spectrum agree cannot continue indefinitely without undermining our international credibility.
