A rising convergence of Chinese state-linked chemical suppliers, Mexican drug cartels, Chinese narcotics cash brokers operating across North America, and the emergence of Canadian fentanyl “super laboratories” has triggered new concerns for United States national security agencies, according to the latest threat assessment from the Drug Enforcement Administration.
The 2025 National Drug Threat Assessment, released Thursday, describes the crisis as a transnational system driven by industrial-scale synthetic drug production and laundering networks stretching from Guangdong to Sinaloa to Vancouver. While Mexican cartels remain the dominant traffickers of fentanyl and methamphetamine into the United States, the DEA names Canada for the first time as a growing supply-side threat.
Elevated production levels in Canada—particularly from highly sophisticated fentanyl “super laboratories,” such as the type dismantled by the Royal Canadian Mounted Police in October 2024—pose a mounting concern.
The laboratory was uncovered in Falkland, British Columbia—a remote, mountainous region roughly midway between Vancouver and Calgary. While Royal Canadian Mounted Police officials released few details, law enforcement sources in both Canada and the United States confirmed to The Bureau that the raid was triggered by intelligence from the DEA.
According to these sources, the site forms part of a broader criminal convergence involving Chinese, Mexican, and Iranian networks operating across British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, and Quebec. The Bureau’s sources indicate that the Falkland facility was connected to Chinese chemical exporters sanctioned by the United States Treasury, Iranian threat actors, and operatives from Mexican drug cartels.
The 80-page DEA assessment emphasizes that while fentanyl flows from Canada remain smaller in volume compared to Mexico, the potential for Canadian production to scale quickly is a major concern. United States officials warn that law enforcement crackdowns in Mexico could prompt traffickers to shift operations northward, where precursor chemical controls and policing pressures are widely seen as more permissive.
The fallout from the Falkland raid continues to expand. Investigations in British Columbia’s Lower Mainland are probing chemical importers tied to methamphetamine and fentanyl precursor shipments from China. Authorities are examining companies suspected of misrepresenting the commercial purpose and origin of these dual-use chemicals.
One case highlighted by the DEA underscores the scale and sophistication of cartel-linked financial operations. A multi-billion-dollar smuggling and laundering scheme—spanning petroleum, methamphetamine, and heroin—was discovered involving Mexico’s state-owned oil company, Petróleos Mexicanos. The criminal network, according to the report, funneled stolen crude oil into the United States and sold it to American energy firms using trade-based money laundering mechanisms. It was linked to senior figures in multiple cartels, including Sinaloa, the Jalisco New Generation Cartel, La Familia Michoacana, and the Gulf Cartel.
“The investigation has determined that this black-market petroleum smuggling operation is the primary means by which the transnational criminal organization funds its networks,” the DEA report states. “It is estimated that Mexico is losing tens of billions in tax revenue annually, while simultaneously costing the United States oil and gas companies billions of dollars annually due to a decline in petroleum imports and exports during this same period.”
Officials describe the petroleum scheme as a major financial lifeline for cartel power, and say investigations are now expanding to examine American facilitators and corporate enablers.
The DEA further outlines how Chinese and Mexican actors evade international chemical controls through mislabeling, transshipment via third countries, and freight forwarding chains—some knowingly complicit, others unwittingly exploited. Precursor shipments often arrive in the United States or Canada under false declarations, before being diverted to clandestine laboratories in Mexico.
Distribution methods include air cargo, maritime freight, land couriers, and even border tunnels. Once drugs enter the United States, they are routed through interstate highways and distributed to urban markets by street-level dealers, many of whom are recruited through encrypted channels such as Snapchat and Telegram.
Another network detailed in the report illustrates a continent-wide money laundering system anchored by the Chinese underground banking model, with a central hub operating out of New York City. Drug proceeds from across the United States are funneled through marijuana cultivation fronts using nominee owners, casino laundering, and mortgage fraud. Sources familiar with Canadian enforcement files told The Bureau this laundering model mirrors, and is connected to, operations in Vancouver and Toronto, where Triad-linked criminal networks manage shell companies and real estate portfolios.
The report also outlines the extensive involvement of Chinese organized crime groups in illicit cannabis production—particularly in regions where recreational marijuana is legalized or poorly regulated. These groups now dominate marijuana cultivation and distribution in both Canada and the United States. They are producing what the DEA calls the most potent marijuana in the history of trafficking, with tetrahydrocannabinol content averaging between 25 and 30 percent.
These networks rely on a logistics model that spans the continent. Domestically grown cannabis is transported across the United States in personal vehicles, tractor-trailers, and rental trucks. Criminal groups move product from jurisdictions such as British Columbia, California, Ontario, Maine, Oklahoma and Oregon into other states and provinces. High-THC cannabis is also in high demand in international markets such as the United Kingdom, France, and Spain, with overseas shipments typically dispatched via air cargo or container shipping from Canadian ports.
The Bureau has reported extensively on how Triads and individuals linked to Chinese foreign influence efforts have acquired numerous residential and industrial and agricultural properties in British Columbia and Ontario—many of which were converted into covert cannabis grow operations. These properties are routinely purchased in cash, registered under nominee names, and later tied to underground banking flows. According to sources with access to United States enforcement files, the laundering architecture is identical to systems used to recycle fentanyl and methamphetamine profits through bulk cash pickups, informal transfer networks, and false invoicing in international trade.
Seizure statistics underscore the increasing scale and complexity of the fentanyl crisis. In 2024, United States authorities intercepted more than 61 million fentanyl pills, many disguised as prescription pharmaceuticals. Xylazine, a veterinary sedative, remains the most common fentanyl adulterant. But a new, far more powerful veterinary anesthetic—medetomidine—is now being detected in seized drug supplies. The Drug Enforcement Administration flags this trend as extremely dangerous, noting that medetomidine may be 200 to 300 times more potent than xylazine, posing life-threatening risks to drug users and first responders alike.
New data obtained by The Bureau illustrates the geography of fentanyl’s impact across the United States. A study analyzing overdose fatalities from 2018 to 2022, using data from the Centers for Disease Control and Prevention, identifies Ohio as one of the states hardest hit by the synthetic opioid epidemic. The research, conducted by Georgia-based Bader Scott Injury Lawyers, found that Ohio averaged 40.8 overdose deaths per 100,000 residents—nearly 50 percent above the national average of 27.5. The state recorded an average of 4,795 overdose deaths per year during the five-year study period, peaking at 5,397 in 2021.
West Virginia had the highest overdose fatality rate, with an average of 65.9 deaths per 100,000 people, followed by Delaware, Tennessee, Kentucky, and Maryland. Other states in the top ten included Louisiana, Pennsylvania, New Mexico, and Connecticut—all experiencing relentless waves of synthetic opioid deaths.
“These states have been particularly hard-hit by the opioid epidemic, facing challenges with prescription painkillers, heroin, and increasingly, synthetic opioids like fentanyl,” the study concludes. “A combination of socioeconomic factors, healthcare access limitations, and geographic challenges has created perfect conditions for this crisis across these regions.”
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It’s now more than four years since the federal Liberal government pledged $30 billion in spending over five years for $10-per-day national child care, and more than three years since Ontario’s Progressive Conservative government signed a $13.2 billion deal with the federal government to deliver this child-care plan.
Not surprisingly, with massive government funding came massive government control. While demand for child care has increased due to the government subsidies and lower out-of-pocket costs for parents, the plan significantly restricts how child-care centres operate (including what items participating centres may purchase), and crucially, caps the proportion of government funds available to private for-profit providers.
What have families and taxpayers got for this enormous government effort? Widespread child-care shortages across Ontario.
For example, according to the City of Ottawa, the number of children (aged 0 to 5 years) on child-care waitlists has ballooned by more than 300 per cent since 2019, there are significant disparities in affordable child-care access “with nearly half of neighbourhoods underserved, and limited access in suburban and rural areas,” and families face “significantly higher” costs for before-and-after-school care for school-age children.
In addition, Ottawa families find the system “complex and difficult to navigate” and “fewer child care options exist for children with special needs.” And while 42 per cent of surveyed parents need flexible child care (weekends, evenings, part-time care), only one per cent of child-care centres offer these flexible options. These are clearly not encouraging statistics, and show that a government-knows-best approach does not properly anticipate the diverse needs of diverse families.
Moreover, according to the Peel Region’s 2025 pre-budget submission to the federal government (essentially, a list of asks and recommendations), it “has maximized its for-profit allocation, leaving 1,460 for-profit spaces on a waitlist.” In other words, families can’t access $10-per-day child care—the central promise of the plan—because the government has capped the number of for-profit centres.
Similarly, according to Halton Region’s pre-budget submission to the provincial government, “no additional families can be supported with affordable child care” because, under current provincial rules, government funding can only be used to reduce child-care fees for families already in the program.
And according to a March 2025 Oxford County report, the municipality is experiencing a shortage of child-care staff and access challenges for low-income families and children with special needs. The report includes a grim bureaucratic predication that “provincial expansion targets do not reflect anticipated child care demand.”
Child-care access is also a problem provincewide. In Stratford, which has a population of roughly 33,000, the municipal government reports that more than 1,000 children are on a child-care waitlist. Similarly in Port Colborne (population 20,000), the city’s chief administrative officer told city council in April 2025 there were almost 500 children on daycare waitlists at the beginning of the school term. As of the end of last year, Guelph and Wellington County reportedly had a total of 2,569 full-day child-care spaces for children up to age four, versus a waitlist of 4,559 children—in other words, nearly two times as many children on a waitlist compared to the number of child-care spaces.
More examples. In Prince Edward County, population around 26,000, there are more than 400 children waitlisted for licensed daycare. In Kawartha Lakes and Haliburton County, the child-care waitlist is about 1,500 children long and the average wait time is four years. And in St. Mary’s, there are more than 600 children waitlisted for child care, but in recent years town staff have only been able to move 25 to 30 children off the wait list annually.
The numbers speak for themselves. Massive government spending and control over child care has created havoc for Ontario families and made child-care access worse. This cannot be a surprise. Quebec’s child-care system has been largely government controlled for decades, with poor results. Why would Ontario be any different? And how long will Premier Ford allow this debacle to continue before he asks the new prime minister to rethink the child-care policy of his predecessor?
Canada caved to President Donald Trump demands by pulling its digital services tax hours before it was to go into effect on Monday.
Trump said Friday that he was ending all trade talks with Canada over the digital services tax, which he called a direct attack on the U.S. and American tech firms. The DST required foreign and domestic businesses to pay taxes on some revenue earned from engaging with online users in Canada.
“Based on this egregious Tax, we are hereby terminating ALL discussions on Trade with Canada, effective immediately,” the president said. “We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.”
By Sunday, Canada relented in an effort to resume trade talks with the U.S., it’s largest trading partner.
“To support those negotiations, the Minister of Finance and National Revenue, the Honourable François-Philippe Champagne, announced today that Canada would rescind the Digital Services Tax (DST) in anticipation of a mutually beneficial comprehensive trade arrangement with the United States,” according to a statement from Canada’s Department of Finance.
Canada’s Department of Finance said that Prime Minister Mark Carney and Trump agreed to resume negotiations, aiming to reach a deal by July 21.
U.S. Commerce Secretary Howard Lutnick said Monday that the digital services tax would hurt the U.S.
“Thank you Canada for removing your Digital Services Tax which was intended to stifle American innovation and would have been a deal breaker for any trade deal with America,” he wrote on X.
Earlier this month, the two nations seemed close to striking a deal.
Trump said he and Carney had different concepts for trade between the two neighboring countries during a meeting at the G7 Summit in Kananaskis, in the Canadian Rockies.
Asked what was holding up a trade deal between the two nations at that time, Trump said they had different concepts for what that would look like.
“It’s not so much holding up, I think we have different concepts, I have a tariff concept, Mark has a different concept, which is something that some people like, but we’re going to see if we can get to the bottom of it today.”
Shortly after taking office in January, Trump hit Canada and Mexico with 25% tariffs for allowing fentanyl and migrants to cross their borders into the U.S. Trump later applied those 25% tariffs only to goods that fall outside the free-trade agreement between the three nations, called the United States-Mexico-Canada Agreement.
Trump put a 10% tariff on non-USMCA compliant potash and energy products. A 50% tariff on aluminum and steel imports from all countries into the U.S. has been in effect since June 4. Trump also put a 25% tariff on all cars and trucks not built in the U.S.
Economists, businesses and some publicly traded companies have warned that tariffs could raise prices on a wide range of consumer products.
Trump has said he wants to use tariffs to restore manufacturing jobs lost to lower-wage countries in decades past, shift the tax burden away from U.S. families, and pay down the national debt.
A tariff is a tax on imported goods paid by the person or company that imports them. The importer can absorb the cost of the tariffs or try to pass the cost on to consumers through higher prices.
Trump’s tariffs give U.S.-produced goods a price advantage over imported goods, generating revenue for the federal government.
