Report on the Illicit Drug Situation in Canada - 2008
Money laundering is the process whereby money and assets obtained through criminal activity are disguised to obscure their origin. The goal of laundering money is to convert illicit proceeds of crime into what appear to be legitimate funds or assets. Prior to laundering proceeds of crime, there must be a predicate offence,45 such as drug trafficking, from which the dirty money is derived. The movement of this dirty money is a precursor to money laundering. Money, obtained as the result of a crime such as a drug sale, moved domestically serves to distance it from the individual, and by extension the individual from the crime. Cash smuggling is an example of this same money being moved internationally, prior to it being laundered. Money laundering occurs in three stages; placement, layering, and integration. Placement involves introducing the dirty money into the financial system. Layering involves a series of transactions to disguise the origin of the funds. This could involve transactions such as false invoices, loan-back schemes, or wire transfers. Integration involves reintroducing the funds into the financial system with a legitimate appearance. The funds may be used to purchase assets such as real estate and legitimate businesses.
In 2008, the potential proceeds from drug seizures amounted to over $2.4 billion CDN. Table 2 illustrates the quantity of drugs seized by Canadian law enforcement agencies in 2008, as well as the potential street level value of the drugs. The lowest reported street prices were used for these calculations.
|Drug Type||Units||Price/Unit (CDN$)||Proceeds|
|Cannabis Plant||1,828,861 plt||$1000||$1,828,861,000|
|Cannabis Herb||37,169,000 g||$10||$371,690,000|
|Hashish Oil||761,000 g||$10||$7,610,000|
|MDMA (Ecstasy)||273,000 g||$200||$54,600,000|
|MDMA (Ecstasy) - tablets||1,494,769 tablets||$5||$7,473,845|
|Methamphetamine - tablets||52,142 tablets||$5||$260,710|
|Khat (Catha edulis)||22,710,000 g||$0.50||$11,355,000|
Cannabis derivatives, which include the plant, herb, hash and hash oil, represented just over 90 percent of the total potential street value of drug seizures in 2008. From 2006 to 2008, cannabis derivatives have consistently represented upwards of 90 percent of the value of drug seizures in Canada. Seizures of the cannabis plant comprised the majority of seizures in this category, with over 1.8 million plants seized at an approximate value of $1,000 CDN per plant.
The number of opium seizures has remained stable for the past three years; however, the lowest price of opium appears to have increased from $30 to $50 per gram. As a result, the seizure value has increased, and represents approximately $5.4 million CDN for 2008.
For the last few years, the amount of heroin seized appears to be consistent. Although the value of heroin seizures represented less than one percent of the value of all drugs seized in 2008, it still represents a large amount at over $16 million CDN.
Just over 2,200 kilograms of cocaine were seized in 2008, representing over $110 million CDN in potential street value at a price of $50 per gram. Approximately four percent of the value of drugs seized in Canada was from cocaine.
The amount of MDMA seized in 2008 by tablet and weight amounts to a value of over $62 million CDN. MDMA was calculated at $200 per gram and $5 per tablet. The cost per unit increases depending on the area in which it is sold.
The street price per gram of methamphetamine is largely dependent on the area in which it is sold, and can vary from $50-$150 CDN. In 2008, 109,000 grams and 52,142 tablets were seized, amounting to an estimated street value of $5,710,710 CDN.
Across Canada the street cost of khat is $0.50 per gram, with the exception of Newfoundland and Labrador where it is $25-$30 per gram. In 2008, approximately 23 tonnes were seized, translating to potential proceeds of $11,355,000 CDN.
Table 3 demonstrates the potential street value of drugs seized in Canada from 2006-2008. Heroin seizures have been gradually increasing; however, because the street price has decreased in some areas, the potential proceeds of crime have decreased.
|Hashish (includes oil)||$287,905,770||$3,420,000||$16,600,000|
Despite some changes with specific drugs, the overall potential proceeds from drug seizures remained consistent from 2006 to 2008. Based on available seizure data and street level drug prices, law enforcement was able to prevent the equivalent of more than $7.3 billion CDN in drugs from reaching the streets from 2006 to 2008. These drug seizures have a direct financial impact to organized crime resulting in lost revenue and profit.
|Cocaine||2,676 kg||2,630 kg||2,263 kg|
|Hashish||27,730 kg||227 kg||899 kg|
|Hashish Oil||1,060 kg||115 kg||761 kg|
|Heroin||93 kg||112 kg||102 kg|
|Khat||13,917 kg||28,270 kg||22,710 kg|
|Marihuana||1,749,057 plt /
|MDMA (Ecstasy)||3,000,347 units||1,374,592 units||1,494,769 units|
|Methamphetamine||58.506 kg||170,500 g /
|109 kg /
|Opium||124 kg||148 kg||108 kg|
* The seizure data provided in the 2007 report is based on information collected from a variety of sources, including RCMP databases, Canada Border Services Agency (CBSA) information, and Health Canada’s Controlled Drugs and Substances Database (CDSD). Any significant increases or decreases in quantities seized in 2007 do not necessarily reflect changes in either production or law enforcement efforts.
i European Monitoring Centre for Drugs and Drug Addition, “Brief glossary of chemical and biochemical terms”, online: EMCDDA | Glossary <http://www.emcdda.europa.eu/publications/drug-profiles/glossary>.