China is fuelling Canada's fentanyl crisis
Most fentanyl entering Canada comes from China. Tackling this crisis requires working with Beijing, but things are more complicated than they appear.
Just the Basics
Most of the fentanyl entering Canada comes from underground Chinese labs, as some pharmaceutical companies look the other way when selling stock to the black market
Loopholes in Canadian policing and government regulations only make it easier for Chinese-made fentanyl to enter the country
Beijing’s announcement of a ban has been welcomed, but similar promises have been made before: lingering Sino-Canadian tensions could still hamper its implementation
Jason Barry and Daniel Ceron have just been charged with running a drug smuggling network. Such an announcement sounds like a typical story about a vice sting, but there is more to this story from 2017 than meets the eye. The fact the Barry and Ceron managed to run this drug operation while behind bars in a Quebec jail outside of Montreal is surprising in its own right. Not only were the two men doing business with Canadian drug dealers while in prison, they were also part of an international partnership with Chinese drug kingpin, Jian ‘Hong Kong Zaron’ Zhang, who was helping the pair import fentanyl from China.
This nefarious gang is just one thread among many that ties China to Canada’s opioid crisis. In recent years, the emergence of fentanyl and related substances has rapidly supplanted drugs like heroin to become the dominant force in Canada’s opioid black market. The potency and toxicity of fentanyl has led to an explosion of overdose deaths across the country in general, and in British Columbia in particular. Fentanyl, which is fifty to 100 times stronger than morphine, now accounts for seventy-two percent of all opioid related drug deaths in Canada, according to figures from 2017, an increase from fifty-five percent in 2016. This is only made worse that as of September 2018 there was no national surveillance system in Canada tracking fatal overdoses.
Canada’s first fentanyl bust occurred in April 2013, with the drug first appearing in B.C before quickly spreading to the rest of the country. In 2016 alone, the RCMP opened at least twenty fentanyl investigations. Just three years later, fentanyl is responsible for more Canadian deaths than any other national health crisis since the 1918 Spanish Flu pandemic. As the drug tears through communities across the country, fentanyl has become top of mind for average Canadians and the nation’s politicians alike. Alongside increased support for health and recovery programs, a key step to tackling Canada’s fentanyl crisis is to cut off local drug dealers from their Chinese suppliers.
How China became ground zero for fentanyl production
China has become the primary source for fentanyl entering Canada due to several factors. Firstly, fentanyl is produced by various Chinese companies for legal for health sector customers, so the know-how and means for fentanyl production is already present in China. Not that creating fentanyl is very difficult, as easily sourced lab equipment and a basic understanding of chemistry are all that is required to begin manufacturing the drug. The outsourcing of pharmaceutical production to China has also increased the number of companies working in that sector, creating a very crowded pharmaceutical market. The Chinese drug market is extremely fractured, with some 5,000 companies producing $100 billion worth of pharmaceuticals per year. The vast majority of these small companies are not world leading innovators, focusing instead on generic medicines and other low-cost drugs. Consequently, thin margins and intense competition push some firms to sell to the black market or look the other way at middlemen selling their products to dubious clients.
A lack of regulation and oversight all contribute to this trend, with figures from 2015 showing that there were only 2,065 government inspectors responsible for more than double that number of companies. “Gaps in regulatory design, the divisions of responsibility between provincial and central governments, and lack of oversight and government and corporate accountability, increase opportunities for corruption,” notes Bryce Pardo, a drugs policy expert at the Rand Corporation.
Moreover, until recently, fentanyl was not regulated in China and did not appear on government lists of restricted substances. While, the Chinese government has made efforts to correct this, it has so far reviewed each variant on a case by case basis, which takes considerable time. Even as the list of restricted fentanyl variants grows, the drug is surprisingly easy to alter, with underground labs simply tweaking minor elements in the formula to create strains not on government lists, and thus not technically illegal. Some of these strains are orders of magnitude more potent than unmodified fentanyl: one of the most popular - alphamethyl fentanyl - colloquially known on Canadian streets as ‘China White’.
Few remember that when fentanyl was legalized for pain use in the 1970s, there was an initial upswing in abuse as fentanyl hit Canadian streets, but international agreements at the time were able to quickly put a stop to this trend. The problem today is that the growth of international supply chains, logistics networks, and the rise of the Internet and e-commerce have drastically altered drug distribution channels.
For instance, through the use of fake business and email addresses (one of Zhang’s was Canada.email@example.com) and third-party sales agents, Chinese fentanyl producers can easily bring their product to market, which can be purchased via Google in just a few clicks; this confluence of e-commerce and international shipping networks facilitates fentanyl purchases. Canadians using proxy servers can readily access Chinese drug peddlers on the dark web, making shopping for fentanyl no more complicated than perusing Amazon.
A key factor behind the fentanyl smuggling boom are the immense profits the drug can reap. Fentanyl ingredients are fairly cheap, and the fact that only a tiny amount of product (a fatal dose is two milligrams) is needed, means even a modest investment goes a long way. For instance, by purchasing $1,000 worth of heroin and chopping it up for retail sale in a small town in the United States, drug dealers can expect to make a profit of $4,000. In contrast, buying $1,000 worth of fentanyl from China can net sellers a up to $7.8 million, with pills selling for $20 apiece. Similarly, one undercover operation bought $3,800 worth of fentanyl, which when processed into tablet form, could fetch up to $30 million. “Fentanyl is a smuggler’s dream,” says Stratfor VP Scott Stewart. “It’s compact, it’s valuable. It’s fantastic for smugglers and it’s terrible for law enforcement.”
Canadian laws are making it easier for fentanyl to enter the country
The tiny amounts of fentanyl needed to reap an eye watering profit makes the drug very easy to conceal and smuggle into Canada. Current anti-drug infrastructure is not set up to handle such an easily concealable narcotic; current U.S and Canadian law enforcement tactics are designed to intercept trucks with tons of cocaine or cannabis, not individuals with grams.
It should be noted that alongside Chinese drug smugglers, the idiosyncrasies of Canadian law are also helping fuel the opioid crisis. For instance, dark web sellers almost always list Canada Post as the standard shipping option, with buyers preferring to use Canada Post over expensive personal couriers. “Sending through Canada Post can never be a 100 percent sure-fire way to beat the cops, but it works 99.999999 percent of the time,” one anonymous London, Ontario drug user explained to Macleans. This preference for Canada Post is due to the restrictions on mail searching imposed on the crown corporation. A 1981 law concerning mail tampering has enshrined mail tampering as an almost unthinkable violation of personal privacy.
This legislation was written before the e-commerce boom and the exponential growth in parcel delivery. By lumping letters and parcels together as ‘mail’, the privacy protections afforded to the former carried over to the latter, a legislative relic ill-suited for the 21st century. Even the Canadian Civil Liberties Union agrees that these loopholes need to be closed, as doing so would not threaten privacy protections for mail (read letters). Nevertheless, Canada Post has maintained that everything is fine, and as of March 2019, the Liberal government has still not acted, according Macleans. “We have not yet understood why Canada Post has a resistance with us getting new authorities that are similar to other companies,” remarks Mike Serr, co-chair of the Association of Chiefs of Police Drug Advisory Committee.
This legal loophole means that police must ask a postal inspector to look at suspicious parcels, with the inspector having final say on whether the package warrants being handed over. One exception exists for the Canada Border Services Agency (CBSA), whose officers can screen mail at Canada Post’s international mail sorting facilities. CBSA personnel can then choose to hand over packages to police, adding an unnecessary step in the process. Until recently, legislation prevented border agents from opening packages weighing less than thirty grams, with this cut-off determining the difference between mail and parcels. Since smugglers only need to get a tiny amount of fentanyl into Canada to make a profit, this restriction was another advantage, with smugglers deliberately targeting this weight range to avoid interception.
Even with reasonable cause, police cannot receive a warrant to seize mail when it is in transit, which includes when it is in mailboxes or at Canada Post offices. Bizarrely, these restrictions only apply to Canada Post, as police have the power to search packages shipped by private companies such as FedEx and UPS, hence the preference among drug dealers for the services of Canada Post. Such is the confidence of smugglers that many online fentanyl suppliers offer guaranteed re-shipment to Canada if packages are intercepted: in 2018, Canadian police intercepted enough fentanyl to kill seven million Canadians.
Fortunately, some changes have been made in other areas. Alberta police chiefs complained back in 2015 that there were no regulations on the import, export, sale or possession of commercial pill presses. In response, the Liberals passing Bill C-37 in 2017 which bans the importation of pill presses, as cheap presses imported from China are thought to be aiding fentanyl production here in Canada.The bill also gives border agents more powers to inspect packages weighing less than 30 grams.
These changes aside, further hindrances to anti-drug activity remain. These include a lack of RCMP resources as well as current Canadian police restrictions which (unlike in the U.S and Australia) limit the ability of Canadian law enforcement to pursue international criminal investigations. The RCMP’s inability to act has led to American concerns about Vancouver acting as hub for U.S bound fentanyl imports, and annoyance with the limitations of Canadian policing. American organizations such as the Drug Enforcement Agency (DEA), have expressed their concerns about these loopholes, and the threat of fentanyl entering the United States from Canada via the postal system. For example, in September 2017, five Canadians and a Chinese national were arrested in North Dakota trying to import fentanyl from Canada for sale in the U.S
“With the fentanyl crisis, and Vancouver being ground zero [for] imports from China paid with Bitcoin from unregulated exchanges, the U.S government is concerned [...] The fact that Vancouver has emerged as a safe haven for proceeds of crime is ever more concerning,” notes Christine Duhaime, Vancouver-based anti-money laundering lawyer. As a result, the U.S has stationed a significant number of drug enforcement officers at the American consulate in Vancouver.
Is China’s new ban on fentanyl a turning point? Yes and no.
Up until now we have been looking at the current patchwork of hindrances, actors and loopholes that are perpetuating Canada’s fentanyl crisis. It is within this context that recent developments must be viewed, specifically the overtures from the Chinese government regarding its anti-drug efforts. China has recently announced that it will ban all forms of fentanyl as a class, rather than individually reviewing each strain, following through on promises made by Chinese leader Xi Jinping to President Donald Trump during the 2018 G20 summit in Argentina. Trump has been a vocal critic of fentanyl entering the United States from China, and has called on the Chinese government to institute the death penalty for fentanyl smugglers.
Prime Minister Justin Trudeau also touched on the topic during the G20 summit, stating that “China has been actively working with Canadian officials and Canadian law enforcement over the past months to take measures on the flow of fentanyl in to Canada. There is obviously, as you say, more to do. We recognize that this is a crisis that is continuing in Canada and indeed getting worse.” In contrast to Trudeau’s assertions, one anonymous official source told Global News that there was “a huge fight with China right now and if you anger the Chinese they won’t work with you. The fentanyl coming into Canada is going to get worse. Nothing will happen because we have to satisfy what they [the Chinese government] want.” The “huge fight” refers to the disagreement between Ottawa and Beijing about allowing China the freedom to pursue alleged corruption suspects and financial fugitives in British Columbia. To accomplish this, Beijing wants to send police liaisons to its Vancouver consulate, something which Ottawa has refused, citing national security concerns.
Coincidently, the aforementioned Global News report was published on December 1st, 2018 - the same day that Meng Wanzhou was arrested in Vancouver. If Canada and China were already at odds when Trudeau spoke at the G20, Meng’s arrest will have only poured oil on the fire, casting doubts on China’s willingness to follow through on its promises to crackdown on fentanyl entering Canada. There exists the possibility that China will delay its efforts to tackle fentanyl entering Canada while relations with Ottawa remain strained. Such a scenario has been broached by Conservative critic for foreign affairs Erin O’Toole:
“We have people dying. And if [China is] slow to crack down on production facilities that are perpetuating this horrible drug [...] the very fact that China may be dragging its feet on investigating and shutting down production in mainland China is deeply concerning. And we should raise it at the highest level [...] There should be no diplomatic quid pro quo. There are lives at stake here.”
In a similar vein, former Ottawa police chief - Senator Vern White - argues that Canada should implement punitive trade actions if China will not stem the flow of fentanyl from state regulated factories into North America.
China’s blanket ban on fentanyl-related substances is slated to take effect on May 1st, and seeks to plug regulatory gaps in order to stop Chinese manufacturers producing variants that are dangerous but not technically illegal. “We look forward to our continued collaboration with China to reduce the amount of this deadly poison coming into our country,” notes DEA spokesperson, Mary Brandenberger. Similar overtures were made by Canadian officials, with ALERT spokesperson Mike Tucker: “[China’s ban] is an encouraging step in controlling the flow of fentanyl into the country and onto our streets.”
While China’s new ban is a step in the right direction, it does not cover the precursor chemicals - or ingredients - used to make fentanyl; which as mentioned earlier, is quite easy to do. This means that a real risk exists for the rise of fentanyl production in Canada, with drug dealers continuing to purchase the ingredients from China. Then there is the question of the efficacy of Chinese regulatory mechanisms, which as already mentioned suffer from a host of problems. “Do [Chinese authorities] have the capacity?” muses Daniel Ciccarone, a researcher at the University of California, San Francisco, “or will they, like U.S regulatory agencies often do, brag about the ‘one they got’ while whitewashing the ones that got away.”
Nevertheless, Canadian and American officials have welcomed China’s announcement, which is seen as an attempt by Beijing to lower tensions and bring about a swift end to the ongoing Sino-American trade war. It should be noted that the Chinese government has made similar (unfulfilled) promises in the past. Consequently, it remains to be seen whether China will follow through this time. The fentanyl ban may be a move to placate the U.S, since despite announcing the ban China maintains that it is not responsible for America’s opioid crisis, nor is the ban an admission of guilt.
There is some merit in stance; America’s opioid crisis predates the arrival of Chinese fentanyl by decades, and America’s various socio-economic ills are certainly key factors driving people towards drug use. Liu Yuejin, the vice commissioner of China’s National Narcotic Control Commission maintains that American accusations of Chinese complicity lack evidence, blaming weak enforcement and America’s “culture of addiction” - the United States accounts for a whopping eight-five percent of global opioid use, despite only comprising 4.2 percent of the global population.
The overprescription of addictive painkillers in the United States and Canada has also been a significant factor: several class action lawsuits are currently underway against drug companies claiming that firms did not disclose how addictive such medications truly were. The focus on combating Oxycotin abuse has also prevented authorities from seeing the bigger picture, as the crackdown of Oxycotin led doctors to subscribe alternative opioid options, including fentanyl. Canada now ranks second in the world behind the U.S as the biggest consumer of pharmaceutical opioids, with one prescription for every two Canadians in 2016.
The Bottom Line
All these factors play a role and ignoring them does not add anything to the conversation; however, China is still the prime supplier of a suite of drugs that have killed thousands of Canadians. Beijing’s protests to the contrary ring hollow, and statements by Liu and others are particularly ironic given the impact of drugs in modern Chinese history. China suffered two devastating wars (1839-42 & 1856-1860), collectively known as the Opium Wars, during the 19th century, which helped bring about the eventual fall of the Chinese Empire.
These wars were fought because China objected to the massive influx of opium (which can be processed into morphine or heroin, hence the term ‘opioids’ for drugs such as fentanyl) entering the country because of the trade policies of the British Empire. The UK saw a potential gold mine in selling drugs to densely populated China, and fought wars which forced China to allow opium into the country, eventually turning millions of Chinese into drug addicts, destroying social cohesion and families alike.
Both conflicts left deep scars in the Chinese psyche, with 1839 seen as the beginning of China’s ‘Century of Humiliation’ (1839-1949), which saw China at the mercy of foreign colonial powers. The emotional trauma of this period - China went from being the world’s largest economy to being at the mercy of Japan and Europe - underpins many of the Chinese government’s current insecurities in its dealings with other countries. Consequently, China’s denial of responsibility in the fentanyl crisis is hypocritical. Granted the analogy is not perfect - the opium trade was enshrined in British foreign policy, whereas the Chinese government is simply failing to curtail the actions of private individuals and companies - but the comparison still carries moral weight.