By Sean Parker, Dawn Jutla, and Peter Copeland for Inside Policy
To promote better results, we lay out a collaborative approach
Despite exaggerated claims about how much fentanyl is trafficked across the border from Canada to the United States, the reality is that our detection, search, and seizure capacity is extremely limited.
We’re dealing with a “known unknown”: a risk we’re aware of, but don’t yet have the capacity to understand its extent.
What’s more, it may be that the flow of precursor chemicals—ingredients used in the production of fentanyl—is where much of the concern lies. Until we enhance our tracking, search, and seizure capacity, much will remain speculative.
As border security is further scrutinized, and the extent of fentanyl production and trafficking gets brought into sharper focus, the role of the federal government’s Precursor Chemical Risk Management Unit (PCRMU)—announced recently by Health Canada—will become apparent.
Ottawa recently took action to enhance the capabilities of the PCRMU. It says the new unit will “provide better insights into precursor chemicals, distribution channels, and enhanced monitoring and surveillance to enable timely law enforcement action.” The big question is, how will the PCRMU track the precursor drugs entering into Canada that are used to produce fentanyl?
Key players in the import-export ecosystem do not have the right regulatory framework and responsibilities to track and share information, detect suspect activities, and be incentivized to act on it. That’s one of the reasons why we know so little about how much fentanyl is produced and trafficked.
Without proper collaboration with industry, law enforcement, and financial institutions, these tracking efforts are doomed to fail. To promote better results, we lay out a collaborative approach that distributes responsibilities and retools incentives. These measures would enhance information collection capabilities, incentivize system actors to compliance, and better equip law enforcement and border security services for the safety of Canadians.
Trade-off bottleneck: addressing the costs of enhanced screening
To date, it’s been challenging to increase our ability to detect, search, and seize illegal goods trafficked through ports and border crossings. This is due to trade-offs between heightened manual search and seizure efforts at ports of entry, and the economic impacts of these efforts.
In 2024, the Canada Border Services Agency (CBSA) admitted over 93 million travelers. Meanwhile, 5.3 million trucks transported commercial goods into Canada, around 3.6 million shipments arrived via air cargo, nearly 2 million containers were processed at Canadian ports, roughly 1.9 million rail cars carried goods into the country, and about 145.7 million courier shipments crossed the border. The CBSA employs a risk-based approach to border security, utilizing intelligence, behavioral analysis, and random selection to identify individuals or shipments that may warrant additional scrutiny. This triaging process aims to balance effective enforcement with the facilitation of legitimate travel and trade.
Exact percentages of travelers subjected to secondary inspections are not publicly disclosed, but it’s understood that only a small fraction undergo such scrutiny. We don’t learn about the prevalence of these issues through our border screening measures, but in crime reporting data—after it’s too late to avert.
It’s key to have an approach that minimizes time and personnel resources deployed at points of entry. To be effective without being economically disruptive, policymakers, law enforcement, and border security need to strengthen requirements for information gathering, live tracking, and sharing. Legislative and regulatory change to require additional information of buyers and sellers—along with stringent penalties to enforce non-compliance—is a low-cost, logistically efficient way of distributing responsibility for this complex and multifaceted issue. A key concept explored in this paper is strengthening governance controls (“controls”) over fentanyl supply chains through new processes and data digitization, which could aid the PCRMU in their strategic objectives.
Enhanced supply chain controls are needed
When it comes to detailed supply chain knowledge of fentanyl precursor chemicals moving in and out of Canada, regulator knowledge is limited.
That’s why regulatory reform is the backbone of change. It’s necessary to ensure that strategic objectives are met by all accountable stakeholders to protect the supply chain and identify issues. To rectify the issues, solutions can be taken by the PCRMU to obtain and govern a modern fentanyl traceability system/platform (“platform”) that would provide live transparency to regulators.
A fresh set of supply chain controls, integrated into a platform as shown in Fig. 1, could significantly aid the PCRMU in identifying suspicious activities and prioritizing investigations.
Fig. 1. Canadian purchasers and transporters would authenticate packaging, documentation, and contents for shipments of fentanyl and its precursor chemicals in a live tracking system. They would provide transparency into shipments, and share discrepancies, payment intermediaries, and payment recipients with regulators. Banks would share payment information for fentanyl shipments with regulators. Figure provided by the authors.
Our described system has two distinctive streams: one which leverages a combination of physical controls such as package tampering and altered documentation against a second stream that looks at payment counterparties. Customs agencies, transporters, receivers, and financial institutions would have a hand in ensuring that controls in the platform are working. The platform includes several embedded controls to enhance supply chain oversight. It uses commercially available Vision AI to assess packaging and blockchain cryptography to verify shipment documentation integrity. Shipment weight and quantity are tracked from source to destination to detect diversion, while a four-eyes verification process ensures independent reconciliation by the seller, customs, and receiver. Additionally, payment details are linked to shipments to uncover suspicious financial activity and support investigations by financial institutions and regulators like FINTRAC and FINCEN.
A modern platform securely distributes responsibility in a way that’s cost effective and efficient so as not to overburden any one actor. It also ensures that companies of all sizes can participate, and protects them from exploitation by criminals and reputational damage.
In addition to these technological enhancements and more robust system controls, better collaboration between the key players in the fentanyl supply chain is needed, along with policy changes to incentivize each key fentanyl supply chain stakeholder to adopt the new controls.
Canadian financial institutions: a chance for further scrutiny
Financial institutions (FIs) are usually the first point of contact when a payment is being made by a purchaser to a supplier for precursor chemicals that could be used in the production of fentanyl. It is crucial that they enhance their screening and security processes.
Chemicals may be purchased by wires or via import letters of credit. The latter is the more likely of the two instruments to be used because this ensures that the terms and conditions in the letter of credit are met with proof of shipment prior to payment being released. Payments via wire require less transparency.
Where a buyer pays for precursor chemicals with a wire, it should result in further scrutiny by the financial institution. Requests for supporting documentation including terms and conditions, along with proof of shipment and receipt, should be provided. Under new regulatory policy, buyers would be required to place such supporting documentation on the shared platform.
The less transparent a payment channel is in relation to the supply chain, the more concerning it should be from a risk point of view. Certain payment channels may be leveraged to further mask illicit activity throughout the supply chain. At the onset of the relationship the seller and buyers would link payment information on the platform (payment channel, recipient name, recipient’s bank, date, and payment amount) to each precursor or fentanyl shipment. The supplier, in turn, should record match payment information (payment channel, supplier name, supplier’s bank, date, and payment amount).
Linking payment to physical shipment would enable data analytics to detect irregularities. An irregularity is flagged when the amounts and/or volume of payments far exceed the value of the received goods or vice versa. The system would be able to understand which fentanyl supply chains tend to use a particular set of FIs. This makes it possible to conduct real-time mapping of companies, their fentanyl and precursor shipments and receipts, and the payment institutions they use. With this bigger picture, FIs and law enforcement could connect the dots faster.
Live traceability reporting
Today, suppliers of fentanyl precursors are subject to the Pre-Export Notification Online (PEN Online) database. This database enables governments to monitor international trade in precursor chemicals by sending and receiving pre-export notifications. The system helps prevent the diversion of chemicals used in the illicit manufacture of drugs by allowing authorities to verify the legitimacy of shipments before they occur.
To further strengthen oversight, the platform utilizes immutability technologies—such as blockchain or secure immutable databases—which can be employed to encrypt all shipping documents and securely share them. This presents an auditable form of chain-of-custody and makes any alterations apparent. Customs and buyers would have the capability to verify the authenticity of the originating documents in a way that doesn’t compromise business confidentiality. With the use of these technologies, law enforcement can narrow down their investigations.
An information gap currently exists as the receivers of the shipments don’t share their receipts information with PEN. To strengthen governance on fentanyl supply chains, regulatory policy and legislative changes are needed. The private sector should be mandated to report received quantities of fentanyl or its precursors, as well as suspicious receiving destinations. This could be accomplished on the platform which would embed the receiving process, a reconciliation process of the transaction, the secure upload and sharing of documents, and would be minimally disruptive to business processes.
Additionally, geo-location technology embedded in mobile devices and/or shipments would provide real-time location-based tracking of custody transactions. These geo-controls would ensure accountability across the fentanyl supply chain, in particular where shipments veer off or stop too long on regular shipping routes. Canadian transporters of fentanyl and its precursor chemicals should play an important role in detecting illicit diversion/activities.
Digital labelling
Licensed fentanyl manufacturers could add new unique digital labels to their shipments to get expedited clearance. For example, immutable digital labelling platforms enable tamper-proof digital labels for legitimate fentanyl shipments. This would give pharmacies, doctors, and regulators transparency into the fentanyl’s:
Chemical composition and concentrations (determining legitimate vs. adulterated versions of the drug)
Manufacturing facility ID, batch ID, and regulatory compliance status
Intended buyer authentication (such as licensed pharmaceutical firms or distributors)
Immutable digital labelling platforms offer secure role-based access control. They can display customized data views according to time of day, language, and location. Digital labels could enable international border agencies and law enforcement to receive usable data, allowing legal shipments through faster while triggering closer shipment examinations for those without of a digital label.
International and domestic transporter controls
Transporters act as intermediaries in the supply chain. Their operations could be monitored through a regulatory policy that mandates their participation in the platform for fentanyl and precursor shipments. The platform would support a mobile app interface for participants on-the-move, as well as a web portal and application programming interfaces (APIs) for large-size supply chain participants. Secure scanning of packaging at multiple checkpoints, combined with real-time tracking, would provide an additional layer of protection against fraud, truckers taking bribes, and unauthorized alterations to shipments and documents.
Regulators and law enforcement participation
Technology-based fentanyl controls for suppliers, buyers, and transporters may be reinforced by international customs and law enforcement collaboration on the platform. Both CBSA and law enforcement could log in and view alerts about suspicious activities issued from the FIs, transporters, or receivers. The reporting would allow government personnel to view a breakdown of fentanyl importers, the number of import permit applications, and the amount of fentanyl and its precursors flowing into the country. Responsible regulatory agencies—such as the CBSA and PCRMU—could leverage the reporting to identify hot spots.
The platform would use machine learning to support CBSA personnel in processing an incoming fentanyl or precursor shipment. Machine learning refers to AI algorithms and systems that improve their knowledge with experience. For example, an AI assistant on the traceability system could use machine learning to predict and communicate which import shipments arriving at the border should be passed. It can base these suggestions on criteria like volume, price, origin of raw materials, and origin of material at import point. It can also leverage data from other sources such as buyers, sellers, and banks to make predictions. As an outcome, the shipment may be recommended to pass, flagged as suspicious, or deemed to require an investigation by CBSA.
It’s necessary to keep up to date on new precursor chemicals as the drug is reformulated. Here, Health Canada can play a role, using its new labs and tests—expected as part of the recently announced Canadian Drug Analysis Centre—to provide chemical analysis of seized fentanyl. This would inform which additional chemical supply chains should be tracked in the PCRMU’s collaborative platform, and all stakeholders would widen their scope of review.
These new tools would complement existing cross-border initiatives, including joint U.S.-Canada and U.S.-Mexico crackdowns on illicit drug labs, as well as sovereign efforts. They have the potential to play a vital role in addressing fentanyl trafficking.
A robust, multi-pronged strategy—integrating existing safeguards with a new PCRMU traceability platform—could significantly disrupt the illegal production and distribution of fentanyl. By tracking critical supply chain events and authenticating shipment data, the platform would equip law enforcement and border agencies in Canada, the U.S., and Mexico with timely, actionable intelligence. The human toll demands urgency: from 2017 to 2022, the U.S. averaged 80,000 opioid-related deaths annually, while Canada saw roughly 5,500 per year from 2016 to 2024. In just the first nine months of 2024, Canadian emergency services responded to 28,813 opioid-related overdoses.
Combating this crisis requires more than enforcement. It demands enforceable transparency. Strengthened governance—powered by advanced traceability technology and coordinated public-private collaboration—is essential. This paper outlines key digital controls that can be implemented by global suppliers, Canadian buyers, transporters, customs, and financial institutions. With federal leadership, Canada can spearhead the adoption of proven, homegrown technologies to secure fentanyl supply chains and save lives.
Sean Parker is a compliance leader with well over a decade of experience in financial crime compliance, and a contributor to the Macdonald-Laurier Institute.
Dawn Jutla is the CEO of Peer Ledger, the maker of a traceability platform that embeds new control processes on supply chains, and a professor at the Sobey School of Business.
Peter Copeland is deputy director of domestic policy at the Macdonald-Laurier Institute.
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Federal deregulation and tax credit cuts are reshaping the auto industry, as Ford Motor Co. and General Motors Co. scale back electric vehicle production and redirect billions into hybrids and traditional gas-powered cars.
Yet, the Michigan automotive industry could see increased investments from those same companies as they reallocate that funding.
While both Ford and GM previously announced ambitious targets to expand electric vehicle fleets over the next decade, they are now cutting back on electric vehicle production.
That comes in response to federal deregulation of gas-powered vehicles, tax credit cuts, and the prospect of slowing consumer demand.
In August, Ford stated it was canceling plans to build a new electric three-row SUV. Instead, it is turning its focus to hybrid vehicles, including a massive $5 billon investment into a new “affordable” hybrid truck.
GM announced similar plans earlier this month. It will be cutting back electric vehicle production at Kansas and Tennessee plants, anticipating a decline in demand once federal tax credits end Sept. 30.
This all could have a real impact on the electric vehicle industry across the nation and experts are already anticipating that.
A new forecast by Ernst & Young Global Limited now predicts a five-year delay in electric vehicles making up 50% of the new car marketshare. While previous forecasts predicted America would reach that mark by 2034, the new forecast pushed that back to 2039.
“The U.S. faces policy uncertainty, high costs, and infrastructure gaps,” said Constantin M. Gall, the company’s global aerospace defense and mobility leader.
Clean energy advocacy groups are decrying this move away from electric vehicle initiatives, largely blaming the Trump administration.
“The transition to electric vehicles now faces significant roadblocks,” said Ecology Center in an April report. “The Trump administration has rolled back key policies supporting clean transportation.”
It also pointed to a nationwide deregulation of the gas-powered vehicle industry for allowing those to remain “dominant” over electric vehicles.
“These actions prioritize fossil fuels over clean energy, threatening progress toward a sustainable transportation future,” the report stated.
While bad news for electric vehicle supporters, the Michigan automotive industry could be a winner as companies re-shift focus back to gas-powered and hybrid vehicles.
With billions of dollars previously allocated to federal pollution fines and electric vehicle costs now available for investment, GM now plans to increase production at a Detroit-area plant by 2027.
The Michigan-based company also recently announced plans to invest billions into another Michigan plant in Lake Orion Township.
For similar reasons, Ford’s CEO Jim Farley told analysts that the company anticipates monetary savings “has the potential to unlock a multibillion-dollar opportunity over the next two years.”
While Gov. Gretchen Whitmer has long been a proponent for the electric vehicle industry, she did recently emphasize her support for all Michigan-based manufacturing, no matter the type.
“We don’t care what you drive – gas, diesel, hybrid, or electric – as long as it’s made in Michigan,” she said following the GM Orion announcement. “Together, let’s keep bringing manufacturing home, growing the middle class, and making more stuff in Michigan.”
Elyse Apel is a reporter for The Center Square covering Colorado and Michigan. A graduate of Hillsdale College, Elyse’s writing has been published in a wide variety of national publications from the Washington Examiner to The American Spectator and The Daily Wire.
The Trump administration’s immigration policies are leading to worker shortages and delayed projects across the construction industry, according to a new report.
A survey conducted in July and August by the Associated Contractors of America and the National Center for Construction Education and Research found more than one in four respondents said their firms were affected by increased immigration enforcement in the past six months.
Respondents said increased immigration enforcement is making it more difficult for firms to recruit workers. Ten percent of firms reported using the H-2B visa program, which is used for recruiting nonagricultural foreign workers, to recruit salaried and hourly workers.
Congress set the cap for H-2B visa allowances at 66,000 in fiscal year 2026. The program offers temporary work for the first and second halves of the year to foreign employees.
Jordan Fischetti, an immigration policy fellow with Americans for Prosperity, said government allowances for visa programs do not meet the demand of the current workforce.
“Immigration for a long time has been centrally planned, so there’s just not a very strong appetite for letting the market do its work,” Fischetti said.
The report found 83% of firms with craft worker openings reported that positions are hard to fill or harder to fill than one year ago. Eighty-four percent of firms with openings for salaried workers also reported it was hard or harder to fill positions than one year ago.
Five percent of respondents reported their jobsites or work sites were visited by immigration agents and 10% said workers did not report or quit due to rumored immigration enforcement allegations.
Contractors in Georgia, Virginia, Alabama, Nebraska and South Carolina were more likely to be impacted by immigration enforcement, according to the report.
The report found worker shortages were the most commonly listed reason for project delays. Two-thirds of firms reported at least one project in the last six months was postponed, canceled or scaled back. The survey took into account more than 1,300 individuals across various contracting and construction firms.
Michele Waslin, assistant director of the University of Minnesota’s immigration history research center, said the construction and agricultural industries have been deeply affected by the Trump administration’s immigration policies.
“Some businesses really do have a labor shortage, and they’re unable to hire American workers, and they want to hire foreign workers and it’s not that easy to do in many cases,” Waslin said.
A separate poll commissioned by The Center Square found 85% of registered voters think it is either somewhat or very important to create legal pathways for construction workers to live and work in the United States.
The poll, conducted by RMG Research in conjunction with Neapolitan News Service, surveyed 1,000 registered voters in August and found vast agreement across partisan lines, age and race in its support for legal pathways in construction.
Fischetti said both employers and the American public have expressed interest in allowing more flexibility in the immigration system and he wants to see Congress modernize in response.
“We really need to work on providing pathways,” Fischetti said. “I don’t just mean pathways to legalization, pathways to certainty.”
