Why more fentanyl production could be moving to Canada

Yahoo

3 days ago

Although there's no evidence of any significant flows of fentanyl into the United States from Canada, an American authority on 'criminal supply chains' warned Friday that that could change abruptly if U.S. efforts to better seal its border with Mexico are successful.
Jonathan Caulkins, who researches supply chains that support illegal markets for the Manhattan Institute think tank and Carnegie Mellon University. said the drug cartels that control the North American fentanyl trade may well shift large chunks of their operations to Canada if the northern border becomes the path of least resistance.
Caulkins, the co-author behind a recent Manhattan Institute study of fentanyl supply chains, said the cartels are sophisticated, mobile and will adjust quickly if their cross-border routes are choked.
'They're not trying (now), but they sure could,' he said in an interview hours after U.S. President Donald Trump signed an executive order to increase tariffs on some Canadian exports (those products that aren't captured by the Canada-U.S.-Mexico free trade agreement) to the U.S. to 35 per cent from 25 per cent. Those tariffs, which kicked in earlier Friday, were necessary, according to Trump, because Canada has failed to co-operate with U.S. efforts to curb 'the ongoing flood of fentanyl and other illicit drugs.'
Candace Laing, chief executive of the Canadian Chamber of Commerce, said Trump's fact sheet on the tariffs should be called a 'fact-less sheet' when it comes to using fentanyl as a justification for trade decisions about Canada. 'More fact-less tariff turbulence does not advance North American economic security,' she said.
In the Manhattan Institute study, Caulkins and colleague Bishu Giri found that the vast majority of the fentanyl entering the U.S. from within North America is coming from Mexico, not Canada.
They used new data from 2023–24 to show that about 40 per cent of the large seizures of fentanyl in the U.S. occurred in counties along the Mexican border, while just 1.2 per cent of the fentanyl powder and 0.5 per cent of pills along the Canadian border.
To effectively combat the problem, the researchers wrote, law enforcement and legislators need to begin with accurate information. Caulkins said that fentanyl producers in Mexico and Canada are different in that the Canadian operations tend to produce opioids from imports that are nearly completely assembled with just the finishing ingredients added here, while the cartels in Mexico assemble all the ingredients to make opioids in that country to export to the U.S.
In both cases, he said, the imports are believed to come mostly from China, although India may also be a source.
Since Trump first raised the allegation earlier this year about fentanyl 'pouring' into the U.S. from its northern neighbour, Canada has taken a number of steps to combat the flow of illegal drugs, and to be seen to be doing so, into the U.S.
The steps included: reinforcing the Canada-U.S. border with additional technology, helicopters and personnel; allocating $78.7 million to expand Health Canada's regulatory capabilities; increasing co-ordination with American law enforcement counterparts; hiring a fentanyl 'czar'; and launching consultations on improving crackdowns, as well as tabling Bill C-2, the Strong Borders Act to give Ottawa more law-enforcement powers.
Kevin Brosseau, the fentanyl czar, was not made available for an interview this week, but in an interim report released in June he pointed out that U.S. Customs and Border Patrol data show that only 0.1 per cent of fentanyl seizures at U.S. borders are at the Canada-U.S. border, far less than the flow of illegal narcotics into Canada from the U.S.
One thing that the players in the fight against illicit drugs seem to agree on is that the problem requires a multi-faceted response that addresses the border, legislative changes, money laundering and other financial angles, and enforcement that targets both precursors and fentanyl itself.
The RCMP also declined an interview this week, but stated in an email that it intends to hit organized crime 'harder and faster' and that one of its priorities is to work with industry to prevent the diversion of precursors that are used to make fentanyl.
Jamie Tronnes, executive director for the Center for North American Prosperity and Security, the U.S.-based office of the Macdonald-Laurier Institute, said Canada seems to be doing a good job of cracking down on the fentanyl trade, and ensuring that those efforts are seen by Trump and others in the White House. 'I believe that Canada is doing everything it can to demonstrate it's taking it seriously,' Tronnes said.
She said Canada could focus more, however, on money laundering and other international financial crimes.
Darren Gibb, head of communications at the Financial Transactions and Report Analysis Centre (FINTRAC), which works with police and financial institutions to target crimes such as money laundering and terrorist financing, said hiding profits from illegal activities such as fentanyl production isn't easy. 'It's their Achilles' heel,' he said of the drug cartels.
National Post
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