Sam Cooper

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.

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.”

The Montreal Economic Institute

• Federal personnel costs were on track to exceed $70 billion last year
• One in seven federal dollars now funds the bureaucracy

If it is serious about reining in spending and controlling the size of its bureaucracy, Ottawa should take a page from the Chrétien government’s 1994 Program Review, states a new MEI Viewpoint released this morning.

“Over the course of Justin Trudeau’s tenure as prime minister, Ottawa underwent an unprecedented hiring spree,” said Renaud Brossard, vice president of communications at the MEI and contributor to the publication. “If Prime Minister Mark Carney is serious about changing course from his predecessor, his government would be wise to draw lessons from what worked in the past.”

In the last federal election campaign, Prime Minister Carney promised to cap the size of the federal workforce.

Under his predecessor, Justin Trudeau, the number of federal bureaucrats rose by over 110,000 employees – a 43 per cent increase – bringing the current total to 367,772.

That’s 9.0 federal employees per 1,000 residents, up from 7.2 when he took office.

By contrast, the government of the United Kingdom requires only 7.4 employees per 1,000 inhabitants to oversee more responsibilities than Canada’s federal government.

Meanwhile, the government of Germany, which has similar sets of responsibilities to our federal government, employs just over 6.2 employees per 1,000 inhabitants.

“When we compare Canada’s federal bureaucracy with its international peers, we can see just how inefficiently our money is being allocated,” added Mr. Brossard. “This represents billions of extra dollars that we wouldn’t have to spend if it weren’t for the lax governance of previous years.”

Federal personnel costs were on track to exceed $70 billion last year, up from $40 billion in 2016-17. This represents one out of every seven dollars the government spends.

The MEI argues that much of this expense is financed by large deficits. Just last year, the federal government posted a $61.9 billion deficit, far exceeding its promise to keep it below $40.1 billion.

The MEI publication points out that, in 1993, Canada grappled with persistent deficits, a similarly high ratio of bureaucrats, and an unsustainable national debt.

In the following year, the Chrétien government launched the Program Review, which applied clear criteria to evaluate federal programs based on public need and fiscal capacity. These standards guided decisions on whether to retain, restructure, or eliminate positions while protecting essential services.

The Program Review reduced the size of the federal workforce by over 42,000 employees, or 17.4 per cent.

A similar reduction today would mean eliminating approximately 64,000 positions, returning the bureaucracy to its pre-Trudeau per capita size, and permanently lowering government spending by nearly $10 billion annually by 2029.

“Chrétien’s reforms worked because they were targeted and pragmatic,” explains Mr. Brossard. “His government proved that it is possible to provide essential services while tackling overspending.

“All it took was a sense of urgency and a little political courage.”

The MEI Viewpoint is available here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.