From the Frontier Centre for Public Policy

By Scott McGregor

Scott McGregor warns that Chinese hybrid warfare is no longer hypothetical—it’s unfolding in Canada now. TD Bank’s closure of CCP-linked accounts highlights the rising infiltration of financial interests. From cyberattacks to guanxi-driven influence, Canada’s institutions face a systemic threat. As banks sound the alarm, Ottawa dithers. McGregor calls for urgent, whole-of-society action before foreign interference further erodes our sovereignty.

Chinese hybrid warfare isn’t coming. It’s here. And Canada’s response has been dangerously complacent

The recent revelation by The Globe and Mail that TD Bank has closed accounts linked to pro-China groups—including those associated with former Liberal MP Han Dong—should not be dismissed as routine risk management. Rather, it is a visible sign of a much deeper and more insidious campaign: a hybrid war being waged by the Chinese Communist Party (CCP) across Canada’s political, economic and digital spheres.

TD Bank’s move—reportedly driven by “reputational risk” and concerns over foreign interference—marks a rare, public signal from the private sector. Politically exposed persons (PEPs), a term used in banking and intelligence circles to denote individuals vulnerable to corruption or manipulation, were reportedly among those flagged. When a leading Canadian bank takes action while the government remains hesitant, it suggests the threat is no longer theoretical. It is here.

Hybrid warfare refers to the use of non-military tools—such as cyberattacks, financial manipulation, political influence and disinformation—to erode a nation’s sovereignty and resilience from within. In The Mosaic Effect: How the Chinese Communist Party Started a Hybrid War in America’s Backyard, co-authored with Ina Mitchell, we detailed how the CCP has developed a complex and opaque architecture of influence within Canadian institutions. What we’re seeing now is the slow unravelling of that system, one bank record at a time.

Financial manipulation is a key component of this strategy. CCP-linked actors often use opaque payment systems—such as WeChat Pay, UnionPay or cryptocurrency—to move money outside traditional compliance structures. These platforms facilitate the unchecked flow of funds into Canadian sectors like real estate, academia and infrastructure, many of which are tied to national security and economic competitiveness.

Layered into this is China’s corporate-social credit system. While framed as a financial scoring tool, it also functions as a mechanism of political control, compelling Chinese firms and individuals—even abroad—to align with party objectives. In this context, there is no such thing as a genuinely independent Chinese company.

Complementing these structural tools is guanxi—a Chinese system of interpersonal networks and mutual obligations. Though rooted in trust, guanxi can be repurposed to quietly influence decision-makers, bypass oversight and secure insider deals. In the wrong hands, it becomes an informal channel of foreign control.

Meanwhile, Canada continues to face escalating cyberattacks linked to the Chinese state. These operations have targeted government agencies and private firms, stealing sensitive data, compromising infrastructure and undermining public confidence. These are not isolated intrusions—they are part of a broader effort to weaken Canada’s digital, economic and democratic institutions.

The TD Bank decision should be seen as a bellwether. Financial institutions are increasingly on the front lines of this undeclared conflict. Their actions raise an urgent question: if private-sector actors recognize the risk, why hasn’t the federal government acted more decisively?

The issue of Chinese interference has made headlines in recent years, from allegations of election meddling to intimidation of diaspora communities. TD’s decision adds a new financial layer to this growing concern.

Canada cannot afford to respond with fragmented, reactive policies. What’s needed is a whole-of-society response: new legislation to address foreign interference, strengthened compliance frameworks in finance and technology, and a clear-eyed recognition that hybrid warfare is already being waged on Canadian soil.

The CCP’s strategy is long-term, multidimensional and calculated. It blends political leverage, economic subversion, transnational organized crime and cyber operations. Canada must respond with equal sophistication, coordination and resolve.

The mosaic of influence isn’t forming. It’s already here. Recognizing the full picture is no longer optional. Canadians must demand transparency, accountability and action before more of our institutions fall under foreign control.

Scott McGregor is a defence and intelligence veteran, co-author of The Mosaic Effect: How the Chinese Communist Party Started a Hybrid War in America’s Backyard, and the managing partner of Close Hold Intelligence Consulting Ltd. He is a senior security adviser to the Council on Countering Hybrid Warfare and a former intelligence adviser to the RCMP and the B.C. Attorney General. He writes for the Frontier Centre for Public Policy.