In Ontario, campaigns have raised over $110 million this year, accounting for nearly 40% of the national total. In Toronto, a single campaign for a child’s experimental neuromuscular treatment drew over $1M from 15,000 donors — illustrating the trust placed in these platforms to support families and supplement national healthcare in times of need.

Yet these platforms exemplify a modern paradox: they are both a testament to human generosity and a casualty of well-intentioned regulations that struggle to distinguish between malice and goodwill.

Canada’s anti-money laundering (AML) and know-your-client (KYC) rules, designed to combat financial crime, now inadvertently risk hindering the very platforms that enable rapid, community-driven support. The challenge lies not in the rules’ intent but in their blunt application—a mismatch that risks stifling civic resilience.

Crowdfunding platforms occupy a unique niche in the modern social infrastructure. They empower individuals to act where institutional responses lag, whether during disasters, medical emergencies, or local hardships. When a wildfire forces an evacuation or a family faces sudden medical bills, these platforms channel collective compassion into tangible aid, often within hours. These platforms are themselves simply technology solutions, which are themselves powered by banks and payment processors already subject to some of the most stringent compliance requirements in the world.

Their strength lies in agility. Giving people in moments of acute need the tools to overcome bureaucratic inertia to help themselves and the people they love. Yet this agility depends on a regulatory environment that recognizes the importance of abetting a time-bound fundraiser for a flooded town.

The federal government considers that crowdfunding platforms are “money service businesses”. It therefore wishes to impose on them the same requirements as it does on entities that provide financial services through ATMs or that operate as exchange bureaus. Such a scenario would impose a significant burden on platforms like GoFundMe: duplicative paperwork that is already handled by our banks and payment processors, strict identity checks on customers who don’t expect it, and delays in transferring funds, particularly in crisis moments.

These requirements will have far-reaching consequences. Last year, 24,000 Canadians donated over $1,000 to GoFundMe campaigns, raising nearly $40 million for causes of all kinds. The application of such rules to platforms require each of these generous donors to undergo a cumbersome identity verification process. This would undoubtedly discourage many of them—and ultimately hurt the very people they aim to support.

Behind every GoFundMe campaign for a wildfire survivor or flood victim lies an invisible battle—one fought not against disaster, but against bureaucracy. Canada’s AML/KYC regulations, crafted to deter financial crime, now impose a triple burden on platforms striving to channel grassroots generosity. Further, the government is burdened by duplicate reporting obligations, which threaten to overwhelm financial intelligence units.

First, operational strain. Compliance costs force platforms to divert resources from crisis response to paperwork. Small operators, already stretched thin, juggle verification teams and legal reviews instead of optimizing aid delivery. Second, donor friction. Lengthy identity checks—meant to unmask criminals—often deter everyday contributors and do little to mitigate misuse. Third, delayed aid. Manual transaction reviews create bottlenecks, rendering donations tragically tardy. It’s akin to deploying snowplows after the blizzard has passed—a gesture of help that arrives too late.

A Blueprint for Balance

The solution lies not in abandoning safeguards but in sharpening them. Three reforms could align security with urgency.

First, risk-proportional compliance. Exempting small, urgent campaigns—those under $100,000 or 30 days—from full AML/KYC requirements would free platforms to focus on genuine threats. Algorithmic monitoring could flag anomalies without manual scrutiny of every $1000+ donation. Second, emergency exemptions. During provincially declared crises, as seen in the UK after Grenfell Tower, simplifying compliance protocols would let aid flow first and face audits later—a model proven to maintain fraud rates well below 1% while saving lives. Third, collaborative oversight. Trusted platforms could share real-time data with FINTRAC, replacing redundant checks with transparency. This approach mirrors partnerships between U.S. regulators and platforms, which have streamlined oversight without sacrificing accountability.

The path forward isn’t revolutionary—it’s pragmatic. By acknowledging that not all transactions carry equal risk, Canada can protect both its financial systems and its communities’ capacity to care.

In other countries, where regulations require fundraisers to obtain government licenses, there has been a significant drop in charitable donations. In one such country, the average person donates the equivalent of only 25 cents, or just 5% of the average contribution in Canada. If a similar drop occurs here, it could lead to a significant decline in donations across Canada.

A Shared Priority

The stakes extend beyond regulatory efficiency. Crowdfunding platforms reflect a societal value shift toward decentralized, community-led support—a trend Canada should nurture, not stifle. By modernizing AML/KYC rules, policymakers can achieve dual aims: curtailing financial crime and empowering civic solidarity. 

Avoiding an unnecessary cap on goodwill and generosity

Canada’s regulations must evolve to recognize new models of community resilience. This means embracing nuance—crafting rules that protect against bad actors without penalizing goodwill. The alternative is a future where red tape dulls the instinct to help, leaving crises met with bureaucracy rather than compassion.

John Coventry, Vice President, Corporate Affairs