Identifier
Created
Classification
Origin
04OTTAWA3402
2004-12-17 20:39:00
UNCLASSIFIED
Embassy Ottawa
Cable title:  

CANADA: 2004-2005 INTERNATIONAL NARCOTICS CONTROL

Tags:  SNAR PREL KSEP CA 
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This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 08 OTTAWA 003402 

SIPDIS

FOR INL AND WHA/CAN
JUSTICE FOR OIA, AFMLS, AND NDDS
TREASURY FOR FINCEN
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL

E.O. 12958: N/A
TAGS: SNAR PREL KSEP CA
SUBJECT: CANADA: 2004-2005 INTERNATIONAL NARCOTICS CONTROL
STRATEGY REPORT (INSCR) PART I

REF: STATE 249035

UNCLAS SECTION 01 OF 08 OTTAWA 003402

SIPDIS

FOR INL AND WHA/CAN
JUSTICE FOR OIA, AFMLS, AND NDDS
TREASURY FOR FINCEN
DEA FOR OILS AND OFFICE OF DIVERSION CONTROL

E.O. 12958: N/A
TAGS: SNAR PREL KSEP CA
SUBJECT: CANADA: 2004-2005 INTERNATIONAL NARCOTICS CONTROL
STRATEGY REPORT (INSCR) PART I

REF: STATE 249035


1. Unclassified entire text.

--------------

I. Summary
--------------


2. The Government of Canada is committed to reducing the
harm and availability of illicit drugs within its borders.
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
equally involved in addressing the domestic use of illicit
drugs. In addition, Canadian law enforcement officials
coordinate closely with U.S. counterparts to stem the flow of
narcotics into North America.


3. In September 2004, the government reintroduced
legislation (now Bill C-10) to change the penalties
associated with the possession of small amounts of marijuana
for personal use. It is expected to pass. Highlights of the
Canadian Addiction Survey were made public in November and
reported that substance abuse among Canadians has increased
over the past decade, with alcohol and cannabis being the
most commonly used substances. According to the Royal
Canadian Mounted Police (RCMP),cannabis cultivation, because
of its profitability and relatively low risk of penalty, is a
thriving industry in Canada. In 2004, the RCMP estimated that
annual Canadian marijuana production ranges between 960 and
2400 metric tons. Additionally, the RCMP estimates, the
overall drug trade in Canada has the potential to generate
proceeds for criminal groups in excess of USD 3 billion at
the wholesale level and USD 13.5 billion at the street level.
In early 2005, the Government of Canada is expected to
designate Colombian drug traffickers and money launderers in
Canada as law enforcement intelligence targets.

--------------
II. Status of Country
--------------


4. Canada has been and continues to be a significant
producer and transit country for precursor chemicals and
over-the-counter drugs that are used to produce illicit
synthetic drugs. For instance, Pseudoephedrine (PSE),a
common cold remedy and the main component in the
manufacturing of methamphetamine, is legally imported into
Canada from China, India, and Germany. Until recently, the

flow of large quantities of PSE from otherwise legitimate
Canadian supply sources to methamphetamine 'Super Labs' in
the United States highlighted law enforcement concerns
regarding the diversion and the eventual cross-border
trafficking of PSE for illegal purposes. In 2003, licensed
dealers in Canada were authorized to import 49,407 kilograms
of PSE and to export 43,860 kilograms of PSE to the United
States. The implementation of new regulations in Canada in
2003 together with increased US and Canadian law enforcement
efforts appear to have had a substantial impact in reducing
the trafficking of this substance.


5. Nevertheless, traffickers continue to attempt chemical
diversion from legitimate importers and have sought to
supplement or replace PSE with ephedrine. This is reflected
in both law enforcement intelligence and recent seizures at
US ports of entry. In 2004, 1,240 pounds of ephedrine were
seized entering the US from Canada by US law enforcement
officials. Data shows that increasing amounts of ephedrine
have been imported into Canada mainly from China and India
during the last several years, and authorities suspect that
some of this is being diverted to the domestic production of
synthetic drugs.


6. An increase in laboratory seizures over the last few
years indicates increasing ecstasy (MDMA) production,
particularly in the provinces of British Columbia, Ontario,
and Quebec. According to the RCMP, Canadian law enforcement
dismantled 6 labs in 2000, 8 labs in 2001, 11 labs in 2002,
and 12 labs in 2003. In addition to synthesis labs,
sophisticated tableting operations are increasingly being
discovered in Canada. In a 2003 Canadian investigation
involving the dismantling of major organized crime MDMA
tableting operations, intelligence determined that the pill
presses seized at the sites originated from legitimate
sources in China and the United States. Canada does not have
regulations in place requiring the registration of pill
presses.


7. According to the RCMP, the importation of ecstasy from
Europe (notably, the Netherlands) to Canada continues at a
significant level. At the same time, the domestic
manufacture of ecstasy and its analogue, MDA, appears to be
on the rise. In 2004 there were four large MDMA lab and
storage facility seizures in the Toronto area. In 2004, 642
pounds of ecstasy was seized entering the US from Canada by
US law enforcement officials.


8. Other precursor chemicals available in Canada and used in
the production of synthetic drugs are sassafras oil,
piperonal, and gamma buturolactone (GBL). These precursors
are used in the manufacture of ecstasy
(methulenedioxyamphetamine or MDA),and gamma hydroxybutyrate
(GHB). A variety of other synthetic drugs are also produced
in Canada, including MDA and GHB, and are trafficked into the
United States. In 2003, licensed dealers were authorized to
import 0.67 kilograms of ephedrine hydrochloride into Canada.
There have been no legal exports of this substance to the
United States.


9. Law enforcement reports indicate that cross-border
smuggling of methamphetamine occurs in both directions, but
is limited. According to the RCMP the bulk of methamphetamine
available in the Canadian illicit market derives from
domestic supply. The RCMP also reported that clandestine
methamphetamine laboratories seized in Canada were 24 in
2000, 13 in 2001, 25 in 2002, and 37 in 2003. In 2004, 46
pounds of methamphetamine were seized entering the US from
Canada by US law enforcement officials.


10. While Canadian-produced marijuana accounts for
approximately 2 percent of overall US marijuana seizures at
its borders, the two governments are very concerned about an
upward trend in seizures, which have increased 259 percent
since 2001. Both countries recognize that, despite their best
efforts, law enforcement authorities likely seize only a
small portion of marijuana smuggled across the border. The
RCMP estimates 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. Significant production levels are now
reported in Ontario and Quebec with combined seizures
exceeding those in British Columbia. In 2004, 40,064 pounds
of marijuana was seized entering the US from Canada by US law
enforcement officials.


11. Some US experts suggest that the value of Canadian grown
marijuana entering the United States annually approaches USD
5 billion or more. The RCMP reports that Vietnamese
organizations may have mastered technologically advanced
organic grow methods and that hydroponic hothouse operations
in Canada are now producing high THC level marijuana.
Canadian law enforcement officials have also seized a few
aeroponic installations, where roots are suspended in mid-air
and sprayed regularly with a fine midst of nutrient-enriched
water. The widespread demand for marijuana in Canada, however
does not appear to be met by domestic production. Between
2000 and 2003 inclusive, Canadian authorities seized a total
of 7.8 metric tons of marijuana at Canadian ports of entry.
Countries of origin include the US, Mexico, Colombia, the
Caribbean, the Middle East, and to a lesser degree, Thailand
and Morocco. In addition, the RCMP estimates that hashish
seizures in Canada in 2003 amounted to approximately 10,903
kilograms while liquid hashish smuggled into Canada is
estimated at between 6 and 8 tons.


12. Canada is also a narcotics consuming country. In November
2004, Health Canada, the Canadian Executive Council on
Addictions and the Canadian Center on Substance Abuse
published highlights from the Canadian Addiction Survey, the
first major survey on the use of substance abuse among
Canadians since 1994. This survey suggests that reported use
of alcohol, cannabis and other drugs has increased in Canada
over the past decade -- with alcohol and cannabis being the
most commonly used drugs. This report suggests that 14
percent of all Canadians have used cannabis in the past year,
a rate nearly double that reported in 1989. Reported youth
rates showed almost 30 percent of 15 to 17 year-olds and just
over 47 percent of 18 to 19 year olds as having used cannabis
in the past year. In 2003, a total of 41,237 marijuana
possession charges were reported in Canada. Cannabis
possession accounts for nearly half of all reported drug
crimes. In 2004, 22 pounds of hashish were seized entering
the US from Canada by US law enforcement officials.


13. The Statistics Canada study reveals that the increase
hasn't been confined to cannabis, which includes marijuana,
hashish and hash oil. The survey also found that a higher
proportion of Canadians were taking other illegal drugs:
cocaine or crack, ecstasy, LSD and other hallucinogens,
amphetamines (speed) and heroin. Continuing, it states that
2.4 per cent of the survey's almost 37,000 respondents, all
aged 15 or older, reported using at least one of these other
drugs in the previous year, up from 1.6 percent in 1994. And
1.3 percent, or an estimated 321,000 Canadians, had used
cocaine or crack, making it the most commonly used of these
illicit, harder drugs.


14. The report also found that British Columbia has the
highest rate of drug crimes among the provinces for the past
20 years. It was the only province to show an increase (by 6
percent) in reported drug charges in 2003, including a 3
percent hike in prosecutions of cannabis possession. The
Correctional Service of Canada suggests that almost 70
percent of offenders entering federal institutions have
problems with alcohol and/or other drugs and that more than
half of all offenders were under the influence of alcohol or
other drugs when they committed their offense.


15. Outlaw motorcycle gangs and Asian, Colombian, and
Italian-based criminal organizations cooperate with one
another to varying degrees in the trafficking and
distribution of illegal drugs. According to the RCMP,
Colombian drug trafficking organizations and Italian
organized crime groups are the most influential smugglers of
cocaine into eastern Canada. Over the past few years, the
importation of hundred kilogram quantities of cocaine into
Canada is increasingly being carried out via sailing or
fishing boats. This trend departs from earlier trends when
the preferred smuggling method involved the use of marine
containers. It is estimated that approximately 15 to 24 tons
of cocaine enter Canada annually, and it is it is believed
that approximately 25 percent of the seized cocaine destined
for Canadian markets either transits or is intended to
transit the United States. Between 2000 and 2003 inclusive,
Canadian authorities seized a total of 4.7 metric tons of
cocaine at Canadian ports of entry. Law enforcement
reporting indicates that relatively little cocaine is
smuggled from Canada into the United States (1.4 pounds were
seized entering the US from Canada by US law enforcement
officials).


16. Other illegal substances are also used by Canadians.
Asian-based organized crime dominates the trafficking of
heroin from Southeast Asia to Canada. The RCMP estimates
that one to two tons of heroin are required annually to meet
the demand of Canada's estimated 25,000 to 50,000 heroin
users and that this amount is smuggled into Canada yearly.
Canadian authorities seized a total of 305 kilograms of
heroin at Canadian ports of entry in 2003. Also in 2003,
Canadian authorities reported seizing 5.64 million ecstasy
(MDMA) tablets at ports of entry, representing a 213 percent
increase over 2002. Members of Asian, Eastern European and
Israeli organized crime groups, as well as OMGs, particularly
the Hells Angels Motorcycle Club, are involved in
cross-border MDMA trafficking. Asian crime groups based in
Canada are known to be extensively involved in the production
and importation of MDMA for the North American market.
According to the RCMP and Health Canada, the demand for MDMA
in Canada is increasing, and the drug appears to be preferred
among adolescents and young adults. The results of a
national study of Canadian university students in 1999
concluded that 2.4 percent of the students have used MDMA in
the past year. The Ontario Student Drug Use Survey,
published in 2003, revealed that adolescent MDMA use
increased from 0.6 percent in 1993 to 6 percent in 2001.


17. In addition, law enforcement intelligence indicates that
the abuse of methamphetamine has increased, particularly in
western Canada. According to the RCMP, the domestic
production and trafficking of methamphetamine has
dramatically increased while its distribution and use have
reportedly skyrocketed in some regions in Canada. The number
of methamphetamine labs dismantled by Canadian law
enforcement has varied each year since 2000 with 24 labs
seized in 2000, 13 in 2001, 25 in 2002 and 39 in 2003.
Between 2000 and 2003, Canadian authorities seized a total of
6,510 pills and 14.1 kilograms of methamphetamine at Canadian
ports of entry.


18. Overall, the RCMP estimates, the drug trade in Canada
has the potential to generate proceeds for criminal groups in
excess of USD 3 billion at the wholesale level, and USD 13.5
billion at the street level.

--------------
Country Actions Against Drugs in 2004
--------------


19. POLICY INITIATIVES: The Government of Canada recognized
that Canada needed to adopt a regulatory and administrative
framework to better control precursor chemicals. As a
result, in early 2003 Canada enacted new regulations to its
Controlled Drugs and Substances Act, which strengthened
Canada's ability to monitor and control precursors and other
substances used in the clandestine manufacture of synthetic
drugs. Companies must now be properly licensed in order to
import, export, produce, or distribute precursor chemicals.
The Government of Canada has granted licenses to almost 300
companies and issued over 400 export and 800 import permits
for class A precursors. The new legislation encourages
legitimate companies to work with Canadian authorities to
identify suspicious trafficking activity; however, to date
reporting of such activity is voluntary rather than
compulsory. In addition, the legislation does not require
companies to undergo mandatory on-site visits prior to being
registered and fails to grant law enforcement officials
access to all records of regulated transactions.
Nevertheless, the implementation of these new regulations
together with US and Canadian law enforcement efforts appears
to have had a substantial positive impact in reducing the
trafficking of these substances.


20. On November 1, the GoC re-introduced legislation that
proposes changing the penalties associated with the
possession of small amounts of marijuana for personal use.
Should it pass in its current form, an adult caught with 15
grams or less of marijuana could receive a fine of USD 115.
A youth caught with 15 grams or less of marijuana could
receive a fine of USD 75. The bill also proposes new
graduated sentencing criteria for the cultivation of
cannabis, based on the number of plants seized, as follows: a
fine for cultivating 1-3 plants; a maximum five years
imprisonment for cultivating 4-25 plants; a maximum ten years
for cultivating 26-50 plants; and a maximum of 14 years for
cultivating 51 or more plants. This bill is complemented
with another, also introduced on November 1, which if passed,
would give Canadian police authorities the powers to arrest
and charge individuals found driving under the influence of
drugs. It could also make resources available to law
enforcement officers for training in the detection of
automobile drivers operating their vehicles while under the
influence of narcotic substances and marijuana. Canadian law
currently provides for the legal use of marijuana for medical
purposes and Health Canada makes marijuana available to some
700 Canadians with medical authorization.


21. To address the organized crime element behind the
proliferation of marijuana grow operations in Canada, the
RCMP is establishing teams across the country to identify and
dismantle these threats. A National Coordinator oversees the
activities conducted by these special investigative teams,
which are currently active in British Columbia, Alberta, and
Quebec.


22. In September 2003, the first supervised drug injection
site in North America opened in Vancouver. This site costs
approximately USD 1.5 million a year to operate, is located
in the downtown Eastside of Vancouver, and services an
estimated 4,000 injection drug users. The government of
British Columbia is financing the project; however, Health
Canada commits about USD 1.15 million for research as to the
site's viability and public good.


23. ACCOMPLISHMENTS: In May 2003, the GoC announced the
renewal of its comprehensive drug strategy. Health Canada
committed USD 186 million over five years to reducing both
the demand for, and the supply of illegal drugs in Canada.
The renewed strategy will attempt to accomplish its goals
through education, prevention, and health promotion
initiatives, as well as stronger enforcement efforts. The
strategy also provided new funding for statistical research
on Canadian drug trends to enable more informed
decision-making. Under the renewed Comprehensive Drug
Strategy, the RCMP in January 2004 established dedicated
investigative teams to target and dismantle marijuana grow
operations and clandestine laboratories that produce
synthetic drugs such as methamphetamine in Canada. These
teams are placed throughout the country where organized crime
operations are most prevalent. Also in 2004, a National
Coordinator was selected to oversee their efforts. In
November, health-care workers, police and social service
providers from western Canada met in Vancouver to discuss the
prevalence of methanphetamine and develop approaches to
counter its use and availability. In early 2005, the
Government of Canada is expected to designate Colombian drug
traffickers and money launderers in Canada as law enforcement
intelligence targets.


24. LAW ENFORCEMENT EFFORTS:

--In January 2004, Canadian law enforcement uncovered a large
indoor grow operation inside a former brewery in Barrie,
Ontario and seized 20,100 marijuana plants.

--In March 2004, as a result of Operation Candy Box / Project
Okapi / Project Codi, Canadian and US law enforcement jointly
dismantled a large criminal network producing MDMA and
marijuana in Canada and distributing it throughout the United
States. Over 130 individuals in 19 cities were arrested, and
more than 877,000 MDMA pills, 120 kilograms of MDMA powder,
over USD 6 million in currency, and more than 1,000 marijuana
plants were seized by US and Canadian law enforcement.

-- Also in March 2004, Toronto police seized over 800
marijuana plants being grown on the 18th floor of a high rise
apartment building. Several apartments reportedly contained
some USD 40,000 in specialized growing equipment.

-- In June, DEA announced the arrest of 50 drug traffickers
in Colombia, Panama, Jamaica, the Bahamas, the US and Canada
believed responsible for the US distribution of three metric
tons of cocaine every month.

-- Also in June, Canadian police made a series of arrests in
the Toronto and Windsor area resulting in 157 charges with 49
counts under the Controlled Drugs and Substances Act and the
Criminal Code of Canada against 24 individuals.

-- In July, the York Regional Police seized two MDMA labs in
Markham, Ontario with approximately 100 kilograms of ecstasy,
2 pill presses, and Canadian currency.

-- In August, US Coast Guard officials seized a Canadian flag
vessel in the Caribbean and interdicted 350 kilos of cocaine.

-- In September, RCMP and DEA enforcement officials conducted
Operation Brain Drain and executed 53 search warrants in
western Canada and the US and the RCMP obtained arrest
warrants for 25 individuals in Canada. Resulting illegal
substance seizures in Canada included approximately 1.5
million tablets of ephedrine, 600 kilos of bulk ephedrine and
between USD 1.5 and 2.5 million in currency. Additionally, a
third MDMA facility was seized in Markham, Ontario with over
200 kilograms of MDMA and precursor chemicals that could have
produced an additional 300 kilograms.

-- From October 15 through November 7 a Canadian police task
force seized 15,000 marijuana plants, with a street value of
some USD 15 million, in Southern Alberta. During this
operations 42 search warrants were issued, all but one were
for residential houses. One warehouse was also raided.
Canadian law enforcement speculated that most of the seized
drugs were heading to the US where they would be exchanged
for cocaine.

-- In November local police authorities seized 116 pounds of
MDMA from three Toronto residences.


25. CORRUPTION: Canada holds its officials and law
enforcement personnel to a very high standard of conduct and
has strong anti-corruption controls in place. Government
personnel 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 government officials are thorough and credible. 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.


26. 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. According to RCMP seizure data, 1,102,198 marijuana
plants were seized in 2000, 1,367,321 in 2001, 1,275,738 in
2002, and 1,400,026 in 2003. In January 2004, Canadian law
enforcement uncovered the largest indoor grow operation to
date inside a former brewery in Barrie, Ontario, seizing a
total of 20,100 marijuana plants. 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.


27. DOMESTIC PROGRAMS (DEMAND REDUCTION): Health Canada is
the focal point for the nation's drug control policy and
emphasized demand reduction as an integral component of its
drug control strategy. In an effort to decrease demand,
Health Canada has financed a number of public education
campaigns, many with a specific focus on youth. The GoC,
along with NGOs, also offers extensive drug abuse prevention
programs Drug treatment courts in Vancouver and Toronto
offer alternatives to jail for convicted drug abusers facing
incarceration for non-violent drug possession offenses.


28. 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 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 has ratified the UN Convention against
Transitional Organized Crime. Canada has ratified all 12
United Nations Security Council Resolutions pertaining to
terrorist financing.


29. Canada actively participates in international activities
aimed at eliminating illicit drugs. From November 2003 until
November 2004 Canada held the Chairmanship of the
Organization of American States' Inter-American Drug Abuse
Control Commission (CICAD). In 2004, Canada provided
technical assistance and USD 115,000 to CICDA for specific
counter-narcotics related projects, including developing
partnerships between health and law enforcement officials on
drug issues. The GoC participates actively in the Dublin
Group and the Commission on Narcotic Drug (CND) of the United
Nations Office on Drugs and Crime (UNODC).

--------------
U.S. POLICY INITIATIVES AND PROGRAMS
--------------


30. BILATERAL COOPERATION: Canada and the United States
have an extensive cooperative law enforcement relationship.
The two countries collaborate closely at both the federal and
state/local levels, and this also extends into the
multilateral arena. An important bilateral cooperative forum
is the annual Cross-Border Crime Forum, which engages
policy-makers in a joint effort to guide the relationship and
to enhance coordination. The Forum's technical working
groups continue to identify areas and priorities, such as
intelligence sharing, where the two countries can better
advance a common agenda. For instance, at the October 2004
Forum, the US Department of Justice and the Canadian
Department of Public Safety and Emergency Preparedness Canada
(PSEPC) released a joint threat assessment on the common
threat posed by the cross-border illegal drug trade. In
addition, Project North Star is an ongoing mechanism for law
enforcement operational coordination. The two governments
also 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.


31. Canada is one of the USG's principal extradition
partners.


32. The RCMP and US 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
USG's tactical National Drug Intelligence Center (NDIC).
However, some aspects of Canada's criminal justice system,
such as Canada's strict privacy laws, limit timely
information exchange in some areas.

33. THE ROAD AHEAD: The US is confident that law
enforcement cooperation and coordination with Canada will
continue to expand in the future. Specifically, the USG
remains particularly interested that Canada continues its
efforts to strengthen its chemical control regulations so
that these regulations can become even more effective
instruments in the effort to stem the diversion of precursor
chemicals into the United States or other countries.
Additionally, given the already significant amount of
Canadian-produced marijuana entering the US, the USG is
concerned that Canada's proposed cannabis reform package now
in Parliament would have negative consequences for our
bilateral efforts to keep our shared border open to
legitimate goods, services, and travelers while keeping
illicit substances from being trafficked into the United
States.


34. To further improve cooperation with Canada, the USG is
committed to:

-- supporting Canadian efforts to further strengthen
chemical control legislation and regulatory practices,
consistent with international standards and practices;

-- maintaining and expanding two-way intelligence sharing to
include the timeliness and relevance of the information
provided;

-- expanding professional exchanges and cooperative training
activities between our law enforcement agencies;

-- working with the GoC to increase the risks and penalties
for criminals engaged in drug trafficking and other organized
crimes;

-- maintaining joint cross-border investigations and
operations, and expanding these to include joint operations
on the Great lakes and Saint Lawrence Seaway; and

-- actively promoting drug abuse awareness and prevention,
particularly among our young people.

--------------
Chemical Control
--------------


35. Canada is a transit and producer country for precursor
chemicals and over-the-counter drugs used to produce
synthetic drugs, particularly methamphetamine. The chemical
most widely used for this purpose is pseudoephedrine, a
regulated chemical on Table 1 of the 1988 UN Drug Convention.
Other precursor chemicals available in Canada that are used
in synthetic drugs manufacture include sassafras oil,
piperponal and gamma butyrolactone. Canada is party to the
1988 UN Drug Convention.


36. Until 2003, Canada did not effectively control imports
of pseudoephedrine, with the result that legal imports
increased, primarily from China, India and Germany.
Significant amounts of these imports were smuggled into the
United States, either in bulk, or in tablet form as an
antihistamine, for use in U.S. methamphetamine labs. Canada
tightened its Controlled Drug and Substances regulations in
early 2003. The new regulations provided for control of the
23 chemicals listed in the 1988 UN Drug Convention, and for
the proper licensing of companies in order to import, export,
produce, or distribute controlled substances. The agency
with primary responsibility for implementing the new
regulations is Health Canada, but the lead law enforcement
responsibility lies with the Royal Canadian Mounted Police.
Cooperation on regulatory matters between DEA and Health
Canada is very good and ongoing.


37. Law enforcement cooperation is excellent and includes
information sharing. In March 2004, as a result of
Operation Candy Box / Project Okapi / Project Codi, Canadian
and US law enforcement jointly dismantled a large criminal
network producing MDMA and marijuana in Canada and
distributing it throughout the United States. Over 130
individuals in 19 cities were arrested, and more than 877,000
MDMA pills, 120 kilograms of MDMA powder, over USD 6 million
in currency, and more than 1,000 marijuana plants were seized
by US and Canadian law enforcement. In July, the York
Regional Police seized two MDMA labs in Markham, Ontario with
approximately 100 kilograms of ecstasy, 2 pill presses, and
Canadian currency. And, in September, RCMP and DEA
enforcement officials conducted Operation Brain Drain and
executed 53 search warrants in western Canada and the US and
the RCMP obtained arrest warrants for 25 individuals in
Canada. Resulting illegal substance seizures in Canada
included approximately 1.5 million tablets of ephedrine, 600
kilos of bulk ephedrine and between USD 1.5 and 2.5 million
in currency. Additionally, a third MDMA facility was seized
in Markham, Ontario with over 200 kilograms of MDMA and
precursor chemicals that could have produced an additional
300 kilogram


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