Canada has become a significant producer and exporter of fentanyl, with more than 350 organized crime groups involved in its illegal production and distribution, according to a confidential federal memo. Blacklock's Reporter says the document, prepared for Prime Minister Justin Trudeau ahead of a January meeting with British Columbia Premier David Eby, highlights the alarming growth of domestic fentanyl production using precursor chemicals primarily sourced from China.“Synthetic drugs are increasingly being produced in Canada using precursor chemicals largely sourced from China,” stated the Memorandum For The Prime Minister. Officials noted that Canada is now exporting fentanyl to markets in the United States and Australia, with production exceeding domestic demand.A June memo from the Department of Foreign Affairs corroborated the findings, indicating, “Seizures of Canada-sourced fentanyl in places like the United States and Australia suggest domestic production is likely exceeding domestic demand and that Canada is now a source and transit country for fentanyl to some markets.”The revelations come amid heightened scrutiny of drug policies in British Columbia, where an experimental decriminalization of small amounts of narcotics was recently suspended. Overdose deaths in the province rose 16.5% during the 15-month trial period, from 2,843 to 3,313.The memo also detailed how Chinese-sourced precursor chemicals fuel Canada’s illegal fentanyl market. “Since 2015 China has been the largest source country for illegal fentanyl and chemical precursors exported to Canada,” it said. However, it noted a shift in strategy by the Chinese Communist Party, which now focuses on exporting raw materials rather than finished fentanyl products.“China has a vast chemical manufacturing and pharmaceutical sector that produces large quantities of compounds which are sold globally and intended for legitimate purposes in medicine and industrial processes,” analysts wrote. The Canada Border Services Agency has reported a growing number of seizures of fentanyl precursor chemicals at Canadian borders.Despite mounting concerns, federal officials have defended decriminalization initiatives, attributing drug-related deaths to the illegal toxic supply rather than policy changes. “Decriminalization is not the cause of the overdose deaths we are seeing,” said Addictions Minister Ya’ara Saks in May. “It is the illegal toxic drug supply that is killing people.”British Columbia's pilot decriminalization policy, which allowed public possession of up to 2.5 grams of narcotics, was initially set to last until 2026 but was terminated after 15 months amid worsening public health outcomes. The government continues to emphasize that addressing the illicit supply chain remains central to combating the opioid crisis.