By Peter Copeland & Cal Chrustie  for Inside Policy

Transnational organized crime is ‘no longer just criminal,’ it’s become a geopolitical weapon, says Chrustie.

As geopolitical tensions rise and domestic vulnerabilities deepen, Canada is increasingly being used as a conduit for foreign adversaries waging hybrid warfare against the United States and its allies.

From fentanyl pipelines and money laundering to campus radicalization and weak border enforcement, a concerning picture emerges of transnational organized crime (TOC) networks operating with strategic alignment to states like China, Iran, and others.

In this edition of Inside Policy, Peter Copeland, deputy director of domestic policy at the Macdonald-Laurier Institute, sits down with Cal Chrustie, a former RCMP senior intelligence officer with deep experience in national security and transnational crime.

Chrustie tells Copeland that TOC is “no longer just criminal,” it’s become a geopolitical weapon.

“It’s about destabilizing communities, overwhelming public services, and hollowing out social cohesion,” says Chrustie.

He explains that Canada is not presently well-positioned to respond to this threat.

“Canada’s legal framework is designed for a domestic, rule-of-law environment,” he says. “It’s ill-suited to confront global adversaries who don’t play by those rules.”

Their wide-ranging conversation reveals the structural, legislative, and cultural weaknesses that have left Canada uniquely vulnerable to hybrid warfare and interconnected threats—and explores what a meaningful response might look like.

Copeland: Let’s start with fentanyl. In 2023, the U.S. Drug Enforcement Administration estimated over 70,000 fentanyl-related deaths. A growing number of precursor chemicals are sourced from China and routed through networks in Mexico and increasingly Canada. How is fentanyl trafficking being used strategically by foreign actors?

Chrustie: There’s no denying the scale of fentanyl production in Canada. It far outpaces our internal consumption. While there’s uncertainty around the volume reaching the U.S.—and certainly exaggerated claims by some Americans—we know Canadian labs are supplying Australia in large quantities. The broader concern is that we don’t know the extent of what’s crossing into the U.S. from Canada because we’re not meaningfully tracking it. That lack of visibility alone is a serious national security concern. Furthermore, the media focus has typically been China, China, China. While there are obvious signs of Chinese cartels in play, but what’s often dismissed is the role of Iranian networks.

Copeland: You touched on the issue of gaps in our understanding. At MLI, we’ve documented the minimal capacity we have at our borders—limited personnel, a very small percentage of containers and vehicles physically inspected, and mostly randomized or intelligence-led searches. Given these limitations, how can we even estimate the scale of fentanyl or other cross-border activity?

Chrustie: It’s a mistake to overly focus on the border. It’s a choke point, yes, but seizures there are often the result of intelligence generated far from the physical crossing—through complex global investigations, intelligence operations, surveillance, profiling, informants, machine learning. The U.S. has robust systems for this. Canada doesn’t. So, pointing to low seizure rates at the border as evidence of low trafficking activity is misleading and isn’t overly helpful in understanding the threat. It’s more relevant in understanding what we don’t know.

Copeland: We’ve proposed mandating more information-sharing from importers and exporters to support intelligence-based inspections. What are your thoughts on this approach?

Chrustie: Transparency helps, but you must consider the risk of compliance failure. If bad actors have infiltrated parts of the supply chain—shipping firms, port operators, truckers—then even detailed regulations won’t suffice without enforcement. Foreign state actors have the cyber capabilities to manipulate these systems too. It reinforces the need to address the problem systemically, not just tactically, and appreciate corruption and compromised systems are reality, not just a possibility.

Copeland: So, more than just piecemeal fixes?

Chrustie: Absolutely. We need a strategic, whole-of-society approach. Canada hasn’t yet conducted a serious intellectual review of why our system isn’t working. Political leaders fear what they’ll find, because it would demand systemic overhauls. These systems must take into consideration the broader threat activities and their interconnectivity with corruption, electoral interference, espionage, misinformation, and threat finance. Unfortunately, these connections are largely ignored, along with the strategic recognition that national security has a symbiotic relationship with economic security. If we were to take seriously the impact of national security on countless aspects of our social fabric—from crime, and social trust, to economic security—we would have a much more robust approach to transnational organized crime.

Copeland: Let’s take a step back. Most people probably picture transnational organized crime as gangs seeking profit, often disconnected from foreign governments. But you’ve argued that TOC is used by hostile states as a weapon in hybrid warfare. What does that mean, and how should we reframe our understanding?

Chrustie: Hybrid warfare is the blending of military and non-military means to weaken or destabilize a target. For hostile states, transnational crime is a tool—just like cyberattacks or disinformation. China, Russia, Iran, North Korea—the CRINKs—use TOC to raise money, create chaos, and undermine our institutions. TOC is no longer just criminal—it’s geopolitical.

Copeland: So the fentanyl flooding North America isn’t just a public health disaster—it’s also a weapon?

Chrustie: That’s right. It’s about destabilizing communities, overwhelming public services, and hollowing out social cohesion. Just like the Soviets used propaganda and the KGB used disinformation, modern adversaries use drugs, money laundering, and crime networks to erode their adversaries from within.

Copeland: Is Canada the main target, or are we a launchpad to attack the U.S. and our allies?

Chrustie: Both. Threat actors don’t view the Five Eyes or NATO countries in isolation—they see the alliance. So, attacks on Canada are also attacks on the U.S., Australia, the UK, and vice versa. They exploit Canada’s weaknesses, especially in places like Vancouver, where strategic assets such as ports, shipping companies and supply chain infrastructure are key hybrid warfare targets and impact the national and economic security of our allies. In the case of Vancouver, the intent is to target the US and Mexico (i.e. North America), through Vancouver-based assets as it’s a location of lower risk to operate in.

Copeland: You mentioned encrypted phone networks. Could you elaborate?

Chrustie: At one point, more encrypted communication companies linked to TOC and terrorist financers were based in Vancouver than anywhere else in the world. These platforms were used globally—by cartels, arms traffickers, terrorists, state proxies. That tells you all you need to know about how Canada is perceived by adversaries.

Copeland: What structural weaknesses are they exploiting?

Chrustie: First, we lack a national security strategy. Other countries—Australia, the U.S.—have all-of-government approaches. We don’t. Second, our institutions are siloed. Policing is on the front line, but CSIS, CBSA, military and CSE aren’t always integrated. Third, our systems—immigration, legal, financial—are outdated and easily gamed. Finally, there’s our culture: we’ve been complacent about national security.

Copeland: What does a serious strategy look like?

Chrustie: It starts with clear national priorities: identifying top threat actors (China, Iran, Russia, North Korea), coordinating agencies, aligning law enforcement and intelligence. It also means acknowledging our legal framework can’t always meet the challenge. Disruption and foreign operations—working with allies to stop threats before they reach our shores—will be critical.  Also, the historical paternalist approach of governments and bureaucrats—of “we know best, and we won’t discuss these issues in public, it’s too sensitive and we are the experts,”—I think that’s dated, and China, Russia, Iran and North Korea are the biggest fans of this arrogant and naïve thinking. We need to shift immediately, engage the communities, business leaders, the legal community, and others. The solutions are in the communities, not in the siloed offices of governments.

Copeland: That raises a point about legal constraints. Are you saying our rights framework is part of the challenge?

Chrustie: Yes. Canada’s legal framework is designed for a domestic, rule-of-law environment. It’s ill-suited to confront global adversaries who don’t play by those rules. We either need carve-outs with enhanced powers for TOC-related and foreign threat activities investigations, or we need to rely more on foreign-facing disruption efforts—working abroad, with allies and accept prosecutions are secondary in measuring success. We can’t pretend that our current legal framework is workable, as the threat actors have figured this out and are taking advantage of it.

Copeland: Let’s talk about antisemitism and extremism. In the past year, we’ve seen a sharp rise on university campuses. What’s driving it?

Chrustie: Some of it is ideological, but we’re ignoring the role of transnational organized crime and foreign money. Iranian networks, for example, have long been tied to money laundering and extremist financing. These aren’t disconnected trends. The same threat actors behind fentanyl and money laundering are often involved in radicalization efforts. These are the same networks aligned to China and the Mexican cartels; they don’t operate in boxes. An old school bureaucratic lens on terrorism from the middle east, or terrorist financing analysis from a regional lens, is placing Canadians and others at risk.

Copeland: You’re suggesting that protests, radical activism, even antisemitic incidents may be downstream of the same networks enabling fentanyl and laundering billions?

Chrustie: Exactly. We’re talking about convergence. These networks exploit every vulnerability—from public health to political discourse. Failing to connect the dots between TOC, extremism, and foreign interference means we’re always reacting too late. Let’s look at the historic HSBC case, in which hundreds of millions had been laundered by the Sinaloa cartel due to lax anti-money laundering compliance by the bank, resulting in a $1.9 billion fine being levied against it. The same cartel networks that emerged through the HSBC probe are engaged in Canada today. Experts need to focus on what they don’t know versus what they think they know—look at the strategic and historical activities, accept that we are not in the middle east and accept the complexities of TOC of other activities, including terrorism and extremism.

Copeland: Lastly Calvin, I want to talk about the big picture. Evidently, Canada is seen as an easy target by our adversaries. What structural weaknesses are they exploiting?

Chrustie: This is where I think about it in four layers: strategy, structure, systems, and culture.

First, strategy. We lack a cohesive, public national security strategy. Unlike the United States or Australia, Canada doesn’t clearly define TOC as a strategic national threat. We don’t have a single, unified doctrine coordinating our federal agencies—police, intelligence, border services, foreign affairs. And without that, every department works to its own mandate, and TOC thrives in those gaps. We need to name top threat actors—China, Iran, Russia, North Korea—and make their proxies part of the strategy. We also need to shift from a policing mindset to one focused on disruption and prevention, including operations overseas.

Second, structures. Right now, the RCMP is expected to shoulder most of the burden. But that’s unsustainable. We need an all-agency model—where the Canadian Security Intelligence Service (CSIS), Canada Border Services Agency (CBSA), Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and Communications Security Establishment (CSE), the Department of Justice, Global Affairs, and others are all responsible for TOC enforcement and disruption. In the U.S., agencies are compelled to coordinate on TOC. In Canada, they’re siloed. And without a lead co-ordinating body or national TOC co-ordinator, those silos are growing.

Third, systems. Our legal system is outdated. Charter protections, disclosure rules from cases like Stinchcombe, and overly complex evidentiary requirements mean that complex cases fall apart or never get prosecuted. We also lack a dedicated foreign intelligence service like the CIA or MI6. Our immigration system is overwhelmed—there’s no way current vetting can match immigration volumes. And our financial system, particularly in real estate and casinos, has become a playground for laundered money. We need a legal and regulatory framework built for transnational threats, not 1980s-era domestic crime.

Fourth, culture. This is the most overlooked piece. Canadians are culturally indifferent to national security. We’ve taken a maternalistic approach—shielding the public from harsh realities, hoping to avoid panic or xenophobia. But that silence has allowed foreign actors to operate here with little resistance. Until we educate the public and foster a culture that values sovereignty and security, there will be no pressure to change the strategy, structure, or systems.

Copeland: Final thoughts?

Chrustie: We need to stop thinking of TOC as a law enforcement issue. It’s a military, intelligence, legal and most importantly, an all-Canada problem. There is no room for spectators.  We need to stop thinking its someone isolated from all other threats and threat actors. It’s a national security crisis and its part of the slow play to weaken our political, social, and economic structures. We are years behind our allies. If we don’t get serious—strategically, structurally, and culturally—we will pay the price.

Copeland: Here’s my takeaways: In summary, we can see that Canada is uniquely vulnerable to transnational organized crime which makes it vulnerable for the broader foreign threats. Our agencies are siloed, and we lack a comprehensive strategy to effectively address issues like drug and human trafficking, to the presence of radicalization and extremism on our campuses. What’s more, our legal framework is such that we don’t have the same kinds of tools as our allies, that allows law enforcement, military, and intelligence agencies to act swiftly where issues of national security are in play.

Peter Copeland is deputy director of domestic policy at the Macdonald-Laurier Institute.

Cal Chrustie is a former RCMP senior intelligence officer with deep experience in national security and transnational crime.