The United Nations International Atomic Energy Agency in Vienna warned two weeks ago that Tehran was more than likely on the way to acquiring nuclear weapons and pointed to several troubling signs.
House leader Peter Van Loan told the Commons that Canada would expand previous sanctions to block "virtually all" transactions with Iran's central bank.
"We will do what it takes to isolate the regime and to minimize the risk that it poses to global peace," he said.
In July 2010, Canada imposed sanctions on Iran under the Special Economic Measures Act, aimed at restricting Iran's nuclear program.
Iran has steadfastly maintained the program is for peaceful purposes.
The U.S. sanctions, announced Monday, target Iran's oil and petrochemicals industry and Iranian companies involved in nuclear procurement.
The U.S. government has also declared Iran's banking system a centre for money laundering — a stern warning to financial institutions around the world to think twice before doing business with Iran.
U.S. President Barack Obama said Iran had a choice: come clean on its nuclear program and reap the benefits of closer economic co-operation with the world, or face even more pressure.
Britain's Treasury chief George Osborne said Monday that Britain was cutting financial ties with Iranian banks.
Osborne said all British financial institutions would cease business relationships and transactions with all Iranian banks, including the Central Bank of Iran on Monday. The ban extends to all branches and subsidiaries of Iranian banks.
It is the first time the British government has cut an entire country's banking sector off from Britain's financial sector, Osborne said.
The sanctions are aimed at "preventing the Iranian regime from acquiring nuclear weapons," he said.
The move comes after Canada once again followed the U.S. and Britain by slapping sanctions last month on five Iranian nationals accused of plotting to kill the Saudi Arabian ambassador to the United States.
The three countries froze the individuals' assets and prohibited Canadians from having financial dealings with them.
They include two men charged in the alleged plot — Manssor Arbabsiar, an American who also holds Iranian citizenship, and Ali Gholam Shakuri, said to be a member of a special unit of Iran's Revolutionary Guard.