This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 10 OTTAWA 003636 
 
SIPDIS 
 
DEPT FOR INL, WHA, CA 
JUSTICE FOR OIA, AFMLS, AND NDDS 
TREASURY FOR FINCEN 
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL 
 
E.O. 12958: N/A 
TAGS: SNAR CA
SUBJECT: INCSR PART I - CANADA 
 
REF: SECSTATE 209560 
 
¶I.  Summary 
 
The Government of Canada (GoC) recognizes that substance 
abuse is a multi-faceted, well-entrenched health and social 
issue that affects a broad spectrum of Canadians.  While 
marijuana continues to be a significant problem, 
methamphetamine has re-emerged from previous popularity in 
the 1970s and its consumption level is increasing.  In 2005, 
the Government of Canada managed and responded to this 
situation by developing a major new policy initiative, by 
promulgating legislation and by expanding law enforcement 
cooperation and programs.  Health Canada developed and 
coordinated the "National Framework for Action to Reduce the 
Harms Associated with Alcohol and Other Drugs and Substances 
in Canada," the first edition of which was released in 
November 2005.  Canada's Renewed Drug Strategy, announced in 
May 2003, offers a comprehensive federal policy response to 
the harmful use of substances and includes programs 
addressing demand reduction, harm reduction, HIV/AIDS, Fetal 
Alcohol Spectrum Disorder, the relationship of homelessness 
and substance abuse, law enforcement, research, drug analysis 
and drug control legislation. 
 
Federal legislative developments saw the side-lining of 
legislation to decriminalize possession of small amounts of 
(while increasing the penalties on producers); the 
classification of six precursors to require stringent 
licensing and stiffer penalties for illicit use and a 
reclassification of methamphetamine into the highest category 
for sentencing considerations. 
 
The growth of organized crime groups is of continuing concern 
to Canadian law enforcement.  For example, in 2005, the RCMP 
identified 108 organized crime groups operating in British 
Columbia, doubling the 2003 figure.  The Criminal 
Intelligence Service Canada notes that organized crime either 
directly controls or indirectly influences all aspects of the 
illicit drug industry from cultivation to manufacturing and 
importation to distribution.  The U.S. Bureau of Alcohol, 
Tobacco, Firearms and Explosives attributes the recent 
increase in gun violence in Canada's larger urban areas 
(Toronto, Vancouver and Montreal) to organized crime gangs 
which are also involved in drug trafficking.  Recent arrests 
of 91 individuals in Toronto under Operations Bulldog and 
Flicker indicate that organized crime groups involved in 
narcotics trafficking used guns in furtherance of their 
activities to protect their illicit products and territories. 
  Statistics Canada reports that, in 2004, 71 of the 172 
gun-related homicides were gang-related. 
 
Canada is party to three United Nations drug control 
agreements:  the 1988 Convention against Illicit Traffic in 
Narcotic Drugs and Psychotropic Substances, the 1961 Single 
Convention on Narcotic Drugs, as amended by the 1972 Protocol 
and the 1971 Convention on Psychotropic Substances. 
 
II.  Status of Country 
 
Canada is a significant narcotics-consuming country and 
remains a significant producer and transit country for 
precursor chemicals and over-the-counter pharmaceuticals used 
to produce illicit synthetic drugs.  Use of marijuana, 
MDMA/Ecstasy and methamphetamine continues to be of concern 
to the Government of Canada and remains the focus of many of 
the Government's 2005 efforts.  As of September 30, the total 
number (not weight of the seizures) of 2005 seizures at 
Canada's borders is running at a rate consistent with 2004 
end-of-year figures.  Calendar year 2004 saw 8,711 seizures 
(including cocaine, heroin, marijuana, opium, MDMA/Ecstasy 
and steroids)  while, as of September 30, there have been 
6,333. 
 
Canada is a source country to the United States for marijuana 
and MDMA/Ecstasy.  The Royal Canadian Mounted Police (RCMP) 
note, in their September 22 Strategic Intelligence Assessment 
"Drug Situation in Canada - 2004," that Canada was a source 
to Japan for MDMA, methamphetamine and marijuana.  The report 
states that Japanese authorities blame Japanese and Canadian 
criminal syndicates for creating a supply and demand 
relationship. 
 
The November 2004 Canadian Addiction Survey, the first major 
survey on substance abuse among Canadians since 1994, 
reported that the use of alcohol, cannabis and other drugs 
has increased in Canada over the past decade, with alcohol 
and cannabis continuing to be the most commonly used drugs. 
While cannabis use doubled from 7 percent to 14 percent, with 
youth between 15 and 24 comprising the most frequent users, 
rates of use of illegal drugs other than cannabis remain 
relatively low, with 2004 use levels at 3% or less. 
 
Approximately 80 percent of federal offenders -- those 
serving sentences of two years or more in federal 
penitentiaries -- have a history of alcohol or other drug 
problems, and more than half were under the influence of 
alcohol or other drugs when they committed the offense that 
led to their incarceration. 
 
Significant GoC action in 2005 includes increased regulation 
of and penalties for violation for methamphetamine. 
Reclassification from Schedule III to Schedule I requires not 
only tighter control but also increased maximum penalties. 
The GoC has passed legislation requiring increased standards 
for six pre-cursor chemicals.  These requirements will go 
into effect on January 31, 2006.  Recently passed legislation 
strengthens the Government's ability to seize assets from 
those convicted of financially benefiting from their illegal 
activities as well as enhancing cross-border intelligence 
sharing. 
 
Cooperative cross-border law enforcement efforts include 
major seizures of marijuana and MDMA/Ecstasy (Operations 
Sweet Tooth and Medicine Man).  Efforts continue to 
institutionalize the Integrated Border Enforcement Teams 
(IBET) and to expand cross-border law enforcement authority. 
 
The 2005 National Framework for Action to Reduce the Harms 
Associated with the Use of Alcohol and Other Drugs and 
Substances in Canada, which evolved from ten cross-country 
roundtables dealing with substance abuse in Canada, provides 
the policy response to this growing concern.  The Framework 
is meant to generate dialogue across jurisdictions, sectors 
and functions by articulating a vision, setting strategic 
priorities, defining and clarifying roles, providing a 
coordinating mechanism and providing funding. 
 
III.  Country Action Against Drugs in 2005 
 
Policy Initiatives: 
 
Health Canada has responsibility for overall coordination of 
the nation's drug strategy, although other departments, as 
well as municipal and provincial/territorial governments are 
involved in addressing the domestic use of illicit drugs -- 
particularly in the areas of treatment delivery, direct 
services and drug education and drug prevention programs. 
 
In 1987, the GoC launched its federal Drug Strategy that 
focused on prevention, treatment, enforcement and harm 
reduction.  The GoC renewed the Strategy in May 2003 and 
allocated approximately $355 million annually (Note:  All 
monetary figures in this report are in U.S. dollars) to 
support initiatives on leadership development, research and 
monitoring, partnerships and intervention and legislation. 
The GoC's comprehensive and central piece of drug control 
legislation is the 1996 Controlled Drugs and Substance Act. 
It came into force in 1997 and replaced the previous Narcotic 
Control Act. 
 
In August 2005, the GoC moved methamphetamine from Schedule 
III to Schedule I of the Controlled Drugs and Substances Act. 
 Placement in this category increases maximum penalties for 
possession, trafficking, importation, exportation and 
production of methamphetamine and puts it in the same 
category as cocaine.  The maximum penalty for production and 
distribution of methamphetamine was increased from ten years 
to life in prison. 
 
In November, the Government implemented the Precursor Control 
Amendments, the first major amendments to augment the 2003 
Precursor Control Regulations.  These amendments strengthen 
verification of import and export licensing procedures, 
require that companies requesting those licenses provide 
additional detail in their initial requests, provide 
guidelines on the suspension and revocation of licenses for 
abusers and add controls of six chemicals that can be used to 
produce GHB and/or methamphetamine.  They are:  gamma 
butyrolactone, 1,4 butanediol, red phosphorus, white 
phosphorus, hypophosphorous acid and hydriodic acid.  Health 
Canada is currently hiring eight new regional inspectors 
whose focus will be to monitor these new regulations.  The 
new staff members will be in place in early 2006 and 
supplements current number of XXX (Health Canada has yet to 
get back to me). 
 
In November, the Parliament passed a Proceeds of Crime Bill, 
amending previous legislation that targets the illicit 
proceeds of organized crime, including serious drug offenses, 
and authorizes the courts to order the forfeiture of property 
of those convicted of either membership in a criminal 
organization or certain drug-related offenses.  While the 
Criminal Code has permitted the seizure, restraint and 
forfeiture of proceeds of crime since 1989, this new 
legislation makes it easier for the authorities to seize 
property from criminals and drug traffickers by placing the 
burden on them to prove that their proceeds did not derive 
from illegal activity.  This recent change also enhances 
cross-border intelligence sharing efforts that had previously 
been more limited by Canadian law. 
 
Due to Canada's confederation system, drug awareness 
education programs, while supported by Health Canada, are 
delegated to and implemented at the provincial level. 
Federal regulations provide guidelines to provinces that, in 
some cases, implement tighter regulations than those required 
by the federal government. 
 
In November, Manitoba and Saskatchewan amended their drug 
schedules regulations to require that single-source cold 
remedies containing only pseudoephedrine be sold from behind 
pharmacy counters.  Manitoba passed a regulation classifying 
pseudoephedrine as a drug under the Pharmaceutical Act and 
has mandated the change effective January 15, 2006. 
 
In November, Manitoba Meth Task Force, led by Manitoba Health 
and Manitoba Justice, launched a $226,000 public awareness 
campaign to counter crystal methamphetamine use, as part of 
the province's approach to restrict supply and reduce demand. 
 
 
NDMAC, a non-profit industry association whose members 
manufacture health care products, including over-the-counter 
medicines, implemented MethWatch in November 2004, with a 
launch in early 2005.   This voluntary program focuses on 
retailers -- rather than manufacturers who are the target of 
the 2003 Precursor Control Regulations -- and trains 
participants to monitor and identify irregular sales of 
various crystal methamphetamine precursors.  Developed in 
conjunction with RCMP and Health Canada as the 2003 Precursor 
Legislation was passed, MethWatch is modeled after a 
successful public-private partnership program in Kansas. 
During 2005, about 75% of the Canadian pharmacies, including 
the major drug chains, have begun to participate in the 
program that uses RCMP's Chem-Watch Hotline to compile 
intelligence and track trends.  Implementation at the 
community level is ongoing, particularly in British Columbia, 
and the program focuses on preventing the diversion of 
chemicals from pharmacies that could be used in the illicit 
production of crystal methamphetamine in home-based 
environments. 
 
In 2005, the Department of Justice, whose prosecutors manage 
some 80% of the federal drug prosecutions across Canada under 
the Controlled Drugs and Substances Act, designated one 
prosecutor in nine of the ten provinces (with the exception 
of Prince Edward Island) as the point of contact for 
methamphetamine prosecutions.  These individuals are charged 
with developing an expertise in managing prosecutions with 
this growing problem. 
 
In the absence of minimum sentences for drug offenses but in 
an effort to promote consistent sentencing standards, the 
Department of Justice has developed a prosecutorial manual to 
encourage judges to assign the maximum penalties possible 
when sentencing people convicted of managing grow-ops. 
Presented as a template, this support document reminds 
prosecutors and judges of the extenuating and aggravating 
circumstances as well as case law when arguing their cases 
and rendering their decisions.  (Note:  Canada had minimum 
sentences for drug offenses for approximately seven years 
until a 1987 Supreme Court ruling eliminated them.) 
Department of Justice officials indicate that there is 
increasing interest in instituting stricter penalties for 
those convicted of grow-op marijuana production as well as 
talk about the establishment of a Task Force to look at 
sentencing issues and standards. 
 
In anticipation of the future passage of pending impaired 
driving legislation that includes drugs and alcohol, the RCMP 
has instituted a three-year $10.2 M training program to train 
trainers on drug recognition evaluation (D.R.E.) and 
Standardized Field Sobriety Testing (S.F.S.T.).  By 
2007-2008, Canada plans to have more than 3,500 officers 
trained to administer the S.F.S.T., close to 400 officers 
trained as Drug Recognition Experts and 175 D.R.E. 
instructors.  Current statutes do not permit law enforcement 
officials to require roadside physical sobriety tests, D.R.E. 
at police stations or to acquire samples of body fluids. The 
new legislation, expected to be reintroduced in the 
post-election legislative push, will mandate compliance and 
provide criminal penalties for refusal.  The RCMP in British 
Columbia, inspired by access to California's similar program, 
currently uses this program on a voluntary basis and has 
received convictions.  Manitoba currently has provisions in 
its highway legislation that permits its law enforcement 
officers to require tests. 
 
Accomplishments: 
 
The United Nations Office on Drugs and Crime noted Canada's 
compliance with the 1988 Convention with regard to chemical 
importation, including, but not exclusively, ephedrine and 
pseudoephedrine. 
 
In response to the growing international and chemical 
diversion problem, the RCMP instituted the National Chemical 
Precursor Diversion Program in 2001 and designated five 
national coordinators in Montreal, Toronto, Edmonton, 
Vancouver and Ottawa.  These coordinators liaise with the 
chemical industry, assist drug investigators conducting 
clandestine laboratory investigations and provide training to 
the chemical industry.  A 2005 funding request that would 
have provided additional resources for the program has been 
tabled until after the January 2006 Canadian elections. 
 
Law Enforcement Efforts: 
 
During the 2004-2005 fiscal year, the RCMP conducted a total 
of 430 marijuana grow operation (MGO) investigations and 87 
investigations of clandestine laboratories (clan labs). 
During the year, a total of 570 MGOs and 36 clan labs were 
disrupted, contributing to the seizure of nearly 250,000 
plants from MGOs and 64,000 dosage units of illicit or 
harmful substances from the clan labs. MDMA/Ecstasy 
represented over one-third of the substances seized from the 
clan labs. During the same year, a total of 283 arrests 
linked to organized crime were made in relation to MGOs, 
compared to five arrests in relation to the clan labs. 
 
Operation Sweet Tooth, a 24-month investigation that targeted 
international MDMA/Ecstasy and marijuana trafficking rings 
whose drug smuggling and money laundering operations ranged 
from the Far East to Canada and the U.S., resulted in the 
arrest of 291 individuals and the execution of 98 search 
warrants both in the U.S. and Canada.  The seizures totaled 
931,300 MDMA tablets; 1,777 pounds of marijuana; and $7.75 
million in U.S. assets.  DEA, with assistance from the RCMP 
and the Canada Border Services Agency, dismantled two major 
drug transportation rings with ties to 61 separate domestic 
investigations.  The Operation Sweet Tooth organizations were 
responsible for distributing 1.5 million tablets of MDMA per 
month, which is equivalent to approximately 22.7% of the 
estimated 8 metric tons of MDMA imported into the U.S. in 
¶2003.  The financial aspects of the investigation revealed 
that the drug trafficking syndicates laundered millions of 
dollars in drug proceeds through the use of bulk courier 
transport, money remitters and the Vietnamese underground 
banking system. 
 
In July, Canadian officials arrested three Canadians under a 
warrant issued in Seattle and in accordance with the MLAT 
agreement.  They are charged with conspiracy to distribute 
marijuana, conspiracy to distribute marijuana seeds and 
conspiracy to engage in money laundering.  The U.S. is 
seeking their extradition to stand trial in Washington State. 
 
 
In July, 1,778 kg of MDP-2-P was intercepted in the Port of 
Vancouver concealed in a container arriving from China.  This 
amount of precursors was sufficient to manufacture 1,400 kg 
of pure MDMA/Ecstasy which represents a potential of 14 
million tablets. 
 
In July, French police -- aided by DEA and an ongoing RCMP 
investigation -- arrested and charged two Canadians after 
stopping their boat, containing 1.5 tons of cocaine, off the 
coast of Martinique.  Police say the seizure was worth $30 
million and that there were indications of organized crime 
involvement. 
 
In July, as a result of a cross-border multi-month 
surveillance and intelligence-gathering operation, U.S. 
police, working with inspectors from the Canada Border 
Services Agency, arrested three Canadians, who had 
constructed a 110-meter (120-yard) underground tunnel from 
B.C. to Washington State to transport marijuana into the U.S. 
 They were charged with conspiracy to distribute marijuana 
and conspiracy to import marijuana.  The tunnel was 
subsequently destroyed. 
In August, police in Alberta made the largest-ever Ecstasy 
bust in the province's history and seized some $3.7 million 
worth of street drugs including 213,000 tablets of 
MDMA/Ecstasy laced with methamphetamine.  This follows a 
seven-month RCMP drug and organized crime investigation that 
saw 35 people arrested in February in Edmonton for 
trafficking in a controlled substance, possession of a 
controlled substance, possession of the proceeds of crime and 
firearms offenses. 
 
In September in Richmond, B.C., the RCMP intercepted a 
shipment of 600 kilograms of sodium borohydride on its way to 
a home owned by a real-estate agent. This is enough to make 
15 million pills, estimated at $261.8 million.  During the 
seizure, they found 200 kilograms of liquid Ecstasy with a 
street value of $13 million. 
 
Over several days in September in rural New Brunswick, police 
uncovered a marijuana grow-operation with more than 20,000 
plants, one of the largest outdoor grow-ops in Canadian 
history.  Authorities arrested five people with Asian 
criminal organization connections, providing evidence of 
criminal organizations' west to eastward movement through 
Canada. 
 
An 18 month trans-border investigation by the Drug 
Enforcement Administration (D.E.A.) and the RCMP, designated 
Medicine Man and concluded in September, led to the arrests 
of 45 individuals, including Canadian nationals, and the 
seizure of over 600 pounds of Canadian-grown marijuana, 
80,000 MDMA/Ecstasy tablets, over $2.3 million in assets (of 
which $1.3 million was U.S. currency), and seven guns. 
 
Working collaboratively with the D.E.A. and Spanish 
authorities, the RCMP assisted in the seizure of a yacht 
containing one ton of cocaine off the coast of Spain. Four of 
Canada's largest drug kingpins were arrested during the 
operation that was related to earlier seizures during the 
summer of 1.5 tons of cocaine in various yachts in the middle 
of the Atlantic Ocean. The four men are part of a Canadian 
organized crime ring operating in Europe that ships Colombian 
cocaine through the Caribbean and on to Spain. 
 
Corruption: 
 
Canada holds its officials and law enforcement personnel to a 
high standard of conduct and has strong anticorruption 
controls in place. Pursuant to the January 2004 initiative to 
improve transparency in government that included the 
releasing on a quarterly basis the public expenditures of 
senior government officials, the Government publishes expense 
information on individual ministerial websites and at the 
following centralized website: 
http://www.tbs-sct.gc.ca/pd-dp/gr-rg/index e.asp.  In spite 
of this legislation, concern exists about lack of oversight 
and the lack of transparency in Canadian politics, as well as 
lack of enforcement of Whistleblower legislation. 
Transparency International's latest report, released in 
October, indicated that Canada has slipped for three 
consecutive years (landing in fourteenth place) in their 
annual index of ethical governments. 
 
Civil servants found to be engaged in malfeasance of any kind 
are removed from office and are subject to prosecution. 
Investigations into accusations of wrongdoing and corruption 
by civil servants are thorough and credible. No senior 
government officials engage in, encourage, or facilitate the 
illicit production or distribution of narcotic or 
psychotropic drugs or other controlled substances, or the 
laundering of proceeds from illegal drug transactions.  As a 
matter of government policy, Canada neither encourages nor 
facilitates illicit production or distribution of narcotic or 
psychotropic drugs or other controlled substances, or the 
laundering of proceeds from illegal drug transactions. 
 
Canada does not receive any INL funding for counter-narcotics 
efforts or programs. 
 
In September, the MESICIC (the Follow-Up Mechanism for 
Implementation of the Inter-American Convention Against 
Corruption) reported that Canada was compliant with select 
provisions of the Inter-American Convention Against 
Corruption. 
 
Agreements and Treaties: 
 
Canada is party to the 1988 UN Drug Convention, the 1971 UN 
Convention on Psychotropic Substances, and the 1961 UN Single 
Convention on Narcotic Drugs as amended by the 1972 Protocol. 
Canada is also a party to the Inter-American Convention on 
Mutual Legal Assistance in Criminal Matters and the 
Inter-American Convention Against the Illicit Manufacturing 
of and Trafficking in Firearms, Ammunition, Explosives and 
Other Related Materials. Canada has also signed the 
Inter-American Convention Against Corruption. Canada is a 
party to the UN Convention against Transitional Organized 
Crime and its protocols on migrant smuggling and trafficking 
in persons. Canada has ratified all 12 United Nations 
Security Council Resolutions pertaining to terrorist 
financing. Canada actively cooperates with international 
partners; for example, the GOC has signed 30 bilateral mutual 
legal assistance treaties and 87 extradition treaties with 
other nations. Judicial assistance and extradition matters 
between the U.S. and Canada are made through an MLAT and an 
extradition treaty and protocols. The U.S. and Canada have 
shared forfeited assets through a bilateral asset sharing 
agreement. 
Canada actively participates in numerous international 
activities aimed at reducing illicit drug use. Canada held 
the Chairmanship of the Organization of American States, 
Inter-American Drug Abuse Control Commission (CICAD) from 
November 2003 until November 2004, during which time CICAD 
expanded its work promoting active cross-border cooperation 
and combating transnational organized crime.  Canada 
currently holds the Chairmanship for two CICAD working 
groups:  1)  the Intergovernmental Working Group tasked with 
reviewing the Multilateral Evaluation Mechanism (MEM) (2005 - 
2006) and 2)  the Expert Group on Demand Reduction (2004 - 
2006).  The GOC provides $870,000 annually to CICAD for 
support of the Multilateral Evaluation Mechanism (MEM) as 
well as partnership projects between health and law 
enforcement agencies to confront drug-related problems in a 
more comprehensive manner. The GOC also participates actively 
in the Dublin Group of international program donors and the 
Commission on Narcotic Drugs (CND) of the UN Office on Drugs 
and Crime (UNODC) to which it provides $1.74 million 
annually.  In April 2005, Canada was elected as a member of 
the UN Commission on Narcotic Drugs. 
Cultivation/Production: 
Cannabis cultivation, because of its profitability and 
relatively low risk, is a thriving industry in Canada.  In 
2004, the RCMP estimated that annual Canadian marijuana 
production ranges between 960 and 2400 metric tons.  While 
viewed as a nationwide problem, marijuana is heavily 
cultivated in British Columbia, although significant 
production levels are now reported in Ontario and Quebec.  A 
September 2005 seizure of 20,000 marijuana plants in New 
Brunswick indicates that grow operations are moving into 
non-traditional areas.  Though outdoor cultivation continues, 
use of indoor grow operations is increasing because it allows 
production to continue year-round; they are also becoming 
larger and more sophisticated.  The RCMP reports the 
involvement of ethnic Chinese and Vietnamese organized crime 
organizations in technologically-advanced organic grow 
methods and that hydroponic hothouse operations in Canada 
produce marijuana with elevated THC levels. 
The demand for and production of illegal synthetic drugs also 
appears to be on the rise with the manufacture of 
methamphetamine and MDMA/Ecstasy exhibiting a dramatic rise 
over the past two years.  The clandestine laboratories where 
these drugs are manufactured, traditionally located in rural 
areas but expanding into urban, residential neighborhoods, 
are becoming increasingly larger and more sophisticated. Over 
the past five years, methamphetamine labs have represented 
approximately 60 percent of all clandestine labs seized in 
Canada.  Clandestine laboratories, particularly those 
producing methamphetamine, continue to grow rapidly and are 
being reported in British Columbia, Alberta, Saskatchewan, 
Manitoba, Ontario and Quebec. 
Reports of both voluntary and involuntary use of 
Gamma-hydroxybutyrate (GHB) are increasing, as is the illicit 
market accompanied with it. 
 
Drug Flow/Transit: 
 
Marijuana is smuggled from Canada (primarily B.C., Ontario 
and Quebec) into the U.S. by land, air and water transport. 
Organized crime groups occasionally transship marijuana 
produced in B.C. to the U.S. via Ontario. In spite of the 
domestic supply of marijuana, importation conspiracies 
continue.  Most of the seizures were made at airports, where 
the drugs were concealed on commercial flights arriving from 
Jamaica and Mexico.  While, in general, organized crime 
networks, including Hells Angels, Italian and Vietnamese 
groups, operate and co-exist, acts of violence associated to 
the marijuana trade have increased with the expansion of 
criminal activity.  For example, in Richmond, B.C., over a 
three and a half month period, members of organized crime 
groups conducted ten home invasions, believing that the 
addresses housed marijuana grow operations.  However, only 
six were actual marijuana growth operations (MGOs).  The 
cross-border movement of marijuana as well as MDMA/Ecstasy to 
the U.S. has resulted in an abundance of U.S. currency in 
Canada.  Traffickers use casinos, monetary instrument 
purchases or electronic funds transfers to launder some of 
their proceeds. Canada Border Services Agency noted that, as 
of September 30, 360.4 kilograms of marijuana were seized at 
the border. 
 
Significant seizures of MDMA/Ecstasy and methamphetamine 
seized from domestic clandestine laboratories indicate the 
spread of larger and more sophisticated organized crime 
operations.  Prior to 2004, MDMA arrived mainly in tablet or 
powder form from Europe.  In 2004, importation of MDMA 
decreased as traffickers began to produce the drug on a large 
scale in Canada.  Clandestine lab seizures throughout the 
country during 2004 show evidence of an Asian organized crime 
network that, among other activities, imports precursor 
chemicals directly from source countries such as China. 
Despite the surge in domestic manufacturing, shipments of 
MDMA powder and tablets continue to be intercepted at 
Canadian ports of entry, notably Montreal, Toronto and 
Vancouver. Canada Border Services Agency noted that, as of 
September 30, 54,194 doses of MDMA/Ecstasy were seized at the 
border. 
 
Another significant shift in illicit synthetic drug activity 
over the last year has been the continuing rise in 
methamphetamine trafficking and availability.  The bulk of 
methamphetamine available in Canada is derived from domestic 
clandestine laboratories spread Canada-wide and expanding 
eastward.  Over the last several years, Alberta has emerged 
as a methamphetamine hot spot and has experienced a surge in 
clandestine lab activity, coupled with associated rises in 
other crimes such as theft, assault, and petty larceny. 
Evidence of increased involvement by outlaw motorcycle gangs 
and independent and Asian organized crime networks exists in 
methamphetamine production, trafficking and distribution in 
Western Canada and Quebec.  Approximately 95 percent of the 
methamphetamine sold on the main-stream illicit market 
originates from multi-kilogram operations.  By contrast, most 
of the methamphetamine labs seized in Ontario over the past 
two years were small labs operated by individuals in rural 
areas in the southern part of the province.  In Quebec, 
methamphetamine traffickers manufacture and market most of 
the product in tablet form, a trend consistent with the 
growing demand by users in the rave/club scene. 
 
The Caribbean islands of St. Lucia, St. Martin, Trinidad, 
Haiti, Jamaica and Antigua are the most common transit points 
for cocaine en route to Canada.  The U.S. is another major 
transit point for cocaine shipment destined for Canada.  The 
amount of cocaine seized at the land border entering British 
Columbia almost doubled in 2004, although there were fewer 
actual seizures of increased quantity.  Traffickers of large 
cocaine shipments intercepted in 2004 used, for the most 
part, small, privately-owned sailboats to smuggle the drugs 
into Canada, where they unload shipments in isolated areas 
along the Canadian coast.  Traffickers transport the drugs, 
usually overland, to urban centers.  Outlaw motorcycle 
groups, Italian and Caribbean crime groups in addition to 
Canadian-based independent organized groups are the major 
smugglers of large cocaine shipments into Canada, although 
Colombian brokers serve as intermediaries between Canadian 
organizations and Colombian producers.  Canada Border 
Services Agency noted that, as of September 30, 1,165.7 
kilograms of cocaine were seized at the border. 
 
Opium and heroin seizures in Canada have risen steadily. 
Often, supplies of these drugs arrive concealed in luggage, 
picture frames and courier parcels at Canadian marine and air 
ports of entry.  The opium and heroin, originating in 
Afghanistan, Pakistan, Iran and India, is usually routed 
through a European country or the U.S., often by Southeast 
Asian and Southwest Asian traffickers.  Canada Border 
Services Agency noted that, as of September 30, 159.4 
kilograms of opium and heroin were seized at the border. 
 
As of September 30, the total number (not weight of the 
seizures) of 2005 seizures at Canada's borders is running at 
a rate consistent with 2004 end-of-year figures.  Calendar 
year 2004 seizures (including cocaine, heroin, marijuana, 
opium, MDMA/Ecstasy and steroids) were 8,711 while, as of 
September 30, authorities have made 6,333 seizures. 
 
Domestic Programs: 
 
The Government of Canada, under the Drug Strategy and through 
Health Canada, provides funds for demand reduction, 
education, treatment and rehabilitation efforts, the delivery 
of which is primarily the responsibility of the provincial 
and territorial governments.  The National Framework for 
Action to Reduce the Harms Associated with the Use of Alcohol 
and Other Drugs and Substances in Canada, developed at a 
national forum in Montreal in June and published in November, 
is the most recent mechanism to meet the societal challenges 
posed by substance abuse.  Under the Framework and through 
the Canada Drug Strategy, the Government will bring together 
all concerned parties to identify priority issues for joint 
action and program implementation. 
 
The Government contributes $12.2 million annually through the 
Alcohol and Drug Treatment and Rehabilitation Program (ADTR) 
for provincial and territorial drug treatment and 
rehabilitation services for women, young Canadians and other 
high-risk groups.  An additional $60.8 million for the 
National Native Alcohol and Drug Abuse Program and the 
national youth Solvent Abuse Program plus $8.7 million 
annually for community projects focusing on substance abuse 
through the Drug Strategy Community Initiatives Fund (DSCIF), 
established in April 2004.  The DSCIF was created with a 
budget of approximately $8.5 million to facilitate the 
development of national and community-based solutions to 
substance abuse problems in two main areas:  public awareness 
promotion and prevention and harm reduction. Funding is 
provided for initiatives at the national, provincial, 
territorial, regional and local levels.  Approximately 150 
projects have been funded. 
 
The Correctional Service of Canada (CSC) estimates that 
nearly 80% of federal offenders have a history of alcohol 
and/or other drug abuse and, 21% of offenders have at least 
one drug-related conviction.  The CSC manages substance abuse 
programs for its audience, including the male prison 
populations as well as special programs for Aboriginal and 
women offenders.  The Aboriginal Offender Substance Abuse 
Program (AOSAP) is currently being implemented as a pilot 
project, and the Women Offender Substance Abuse Program 
(WOSAP) is in the implementation phase.  Methadone 
Maintenance Treatment Programs are available for offenders 
who meet the program criteria, and Intensive Support Units 
exist for offenders who are committed to living a drug-free 
lifestyle while incarcerated.  The CSC has pioneered the use 
of a para-professional model for treatment delivery and 
correctional intervention that employs more than 200 CSC 
trained and certified staff to deliver these programs in 
institutions and in the community.  More than 5,000 offenders 
are involved in substance abuse interventions each year, with 
some 3,000 per year participating in the accredited substance 
abuse programs. 
 
The GoC, under the Drug Treatment Court (DTC) Funding Program 
of Canada's Drug Strategy, has expanded its Drug Treatment 
Court program from the original two -- in Toronto and in 
Vancouver -- to include courts in Ottawa, Regina, Winnipeg 
and Edmonton.  Inspired by the U.S. model but adapted to meet 
Canadian needs, the Drug Treatment Courts offer voluntary 
participants a structured, court-guided and monitored 
environment through which to overcome their addiction and 
reintegrate into society and the economy.  The programs focus 
on harm reduction and law enforcement provide an alternative 
to court-imposed jail time for offenders who often have 
extensive criminal records but, according to community-based 
standards, have not been incarcerated.  The Government plans 
to establish standardized performance measures and outcomes 
and develop a centralized system to gather and analyze 
outcome-based data within and across drug treatment courts. 
 
The Toronto Drug Treatment Court, opened in 1999 as the first 
such center outside the United States, provides technical 
assistance and funding to five Caribbean countries and 
Brazil, the result of which has been the establishment of 
their own drug treatment courts. 
 
In collaboration with its federal partners, Health Canada 
released two key products in early 2005: an information 
booklet to encourage informed dialogue between parents and 
youth about marijuana and an interactive website, 
(www.drugwise.gc.ca), aimed at discouraging harmful substance 
use among youth. While the initial focus of the website is on 
marijuana, alcohol, methamphetamine and drug-impaired 
driving, it will evolve to include information on other 
harmful substances.  The RCMP, through its Drug Awareness 
Service, continues its outreach programs to schools and 
communities to deliver information to youth on the 
consequences associated with drug use. 
As part of the National Chemical Diversion Program, 
established in 2001, the RCMP hosted a Chemical Diversion 
Awareness Conference in September in Ontario. 
Part IV -- U.S. Policy Initiatives and Programs: 
 
Bi-lateral Cooperation: 
 
Canada and the United States enjoy a close and dynamic law 
enforcement relationship. The two countries cooperate closely 
at the federal, state/provincial, and local levels, and this 
collaboration also extends into the multilateral arena. The 
annual U.S./Canada Cross-Border Crime Forum engages 
policy-makers and senior operational directors in a joint 
effort to guide the relationship strategically, to develop a 
common agenda, and to enhance operational coordination. The 
Forum,s technical working groups continue to identify 
priorities and areas for increased cooperation, such as 
intelligence sharing. For instance, at the October 2004 
Forum, the U.S. Department of Justice and the Department of 
Public Safety and Emergency Preparedness Canada (PSEPC) 
released a joint interagency threat assessment on the 
cross-border illegal drug trade. Project North Star is an 
ongoing mechanism for law enforcement operational 
coordination at the state and local level. The successful 
joint Integrated Border Enforcement Teams (IBETs) have become 
a primary tool in ensuring that criminals cannot exploit the 
international border to evade justice.  Currently, there are 
15 IBET regions supported by 25 IBET teams, in which U.S. and 
Canadian law enforcement routinely work in tandem on border 
security matters. 
 
The recently concluded and implemented Shiprider concept may 
provide a new tool for future joint law enforcement efforts 
by providing trans-border law enforcement authority to 
Canadian law enforcement in the border environment -- 
including counter-narcotics.  During the first trial 
operation in September, the U.S. Coast Guard (USCG) and RCMP 
officers worked together on maritime law enforcement issues 
in the Great Lakes, and provided a basis for the expansion of 
similar cooperative efforts along the shared border. 
Because of the high level of mutual confidence, the RCMP and 
U.S. law enforcement agencies provide reciprocal direct 
access to each other,s criminal databases, including the 
Canadian Police Information Center (CPIC), a firearms 
identification database, and a unique automotive paint chip 
database. Canadian law enforcement benefits from access to 
the El Paso Intelligence Center (EPIC) and the National Drug 
Intelligence Center (NDIC). However, while some recent 
legislation has enhanced trans-border intelligence sharing, 
some aspects of Canada,s criminal justice system, such as 
Canada,s strict privacy laws, limit timely information 
exchange in some areas. 
The two governments have a broad array of agreements in place 
to facilitate cooperation in legal matters, such as the 
extradition and mutual legal assistance treaties, an 
information-sharing agreement, and an asset sharing 
agreement. Canada is the USG,s principal extradition 
partner. 
The United States-Canada Border Drug Threat Assessment, most 
recently published in October 2004, is being revised under 
the Security and Prosperity Partnership and is scheduled for 
release in 2006. 
Road Ahead: 
 
The U.S.G. has identified a series of high profile 
anti-narcotics goals that it plans to achieve with its 
Canadian counterparts: 
 
--  continue and expand the effectiveness of bilateral 
cooperation and operations against trafficking organizations 
involved in all illicit drug growth, production and 
distribution, 
--  monitor and track illicit pre-cursor chemical activity 
and intercept shipments identified for illegal production 
activity, 
--  target and eliminate the recent trend of ethnic Chinese 
groups' production of MDMA in Canada, in addition to efforts 
to interrupt general organized crime activity, 
--  identify and interrupt money laundering operations in 
Canada, 
--  persuade Canada to more expeditiously investigate, arrest 
and prosecute individuals and organizations suspected of 
participating in Canada's illegal drug trade and 
--  encourage Canada to continue the strengthening of its 
pharmaceutical regulations and industry compliance so 
precursor chemicals are not diverted to the U.S. for criminal 
use. 
 
The RCMP will host the annual DEA-sponsored International 
Drug Enforcement Conference (IDEC) in May 2006 in Montreal. 
The conference brings together high ranking law enforcement 
officials from 70 countries to share drug-related information 
and develop a coordinated approach to law enforcement 
efforts.  The conference identifies emergent global trends, 
identifies legislative needs in developing countries and 
develops strategies to better equip those countries to target 
international drug organizations. 
 
Major Precursor or Essential Chemical Source Countries 
 
Canada remains a significant producer and transit country for 
precursor chemicals and over-the-counter pharmaceuticals used 
to produce illicit synthetic drugs.  Health Canada, the RCMP 
and the Canada Border Services Agency are the agencies 
responsible for chemical control.  Health Canada, the 
competent authority for managing the export of pre-cursor 
chemicals under the 1988 UN Convention as well as for the 
2003 Precursor Control Regulations, is tasked with monitoring 
and addressing the diversion of chemicals that have 
legitimate uses but are instead used in the illegal 
production of illicit drugs.  In October, the United Nations 
Office on Drugs and Crime registered Health Canada as the 
competent authority for the U.N. Convention on Chemical 
Importation and noted the Government's compliance. 
 
In August 2005, the GoC moved methamphetamine from Schedule 
III to Schedule I of the Controlled Drugs and Substances Act 
to increase maximum penalties for possession, trafficking, 
importation, exportation and production of methamphetamine. 
The maximum penalty for production and distribution of 
methamphetamine was increased from ten years to life in 
prison.  The maximum penalty for simple possession increased 
from three years to seven. 
 
In November, amendments to the Precursor Control Regulations 
(PCR) were approved and will come into force in January 2006. 
 One amendment adds six substances to Part I, Schedule VI of 
the Controlled Drugs and Substances Act and the PCR.  The 
result is that gamma butyrolactone, 1,4 butanediol, red 
phosphorus, white phosphorus, hypophosphorous acid and 
hydriodic acid will receive the strictest control.  Other 
amendments strengthen the existing regulatory framework by 
adding a requirement to hold a license to possess a precursor 
for the purpose of producing a controlled substance, which 
will allow charges to be laid when no controlled substance is 
found at the site; strengthening the authority to refuse, 
revoke or suspend a license or permit when Health Canada has 
the required information; and adding a provision to 
allow-pre-license inspections to validate a company's 
application for a license related to precursor chemicals. 
The illegal possession of these precursors is an offense 
fineable up to $4,347, three years imprisonment or both. 
 
Canada complies with the national and international record 
keeping and reporting requirements in the 1988 UN Drug 
Convention, as well as those required under the PCR.  Under 
the 2003 Precursor Control Regulations and the new 
amendments, Health Canada requires that the approximately 380 
licensed dealers track and record all sales and purchases of 
Class I and II chemicals, according to the law, and provide 
end use declarations. Licensed dealers are required to have 
security and record keeping systems in place as part of their 
license application.  These records must be made available to 
an inspector or, upon request, by the Minister.  It is 
mandatory under the regulations to the Controlled Drugs and 
Substances Act to report the loss or theft of a controlled 
substance or precursor.  In the event that a shipment of 
precursor chemicals is not accompanied by the appropriate 
permit, the shipment may be seized by a Canada Border 
Services Agency officer. 
 
Under the PCR, Canada can request and use information from 
international sources to determine administrative actions 
against offenders.  In the event of suspect criminal 
activity, RCMP is authorized to handle the case.  These same 
provisions permit Health Canada, in some cases, to provide 
information to international competent authorities, like the 
Drug Enforcement Administration, when requested. 
 
Canada, through Health Canada and the RCMP, participates 
actively in Project Prism and is a member of the working 
group for North America.  Although it supports Operations 
Purple and Topaz and contributes to them on an ad hoc basis, 
Canada does not engage actively in either initiative. 
 
Visit Canada's Classified Web Site at 
http://www.state.sgov.gov/p/wha/ottawa 
 
WILKINS