China won’t stop flood of fentanyl into Canada, sources say

The opioid crisis and record-setting death counts caused by fentanyl flooding into Canada could get worse because of a growing diplomatic dispute with China, sources have informed Global News.

Canadian law enforcement agencies have found that fentanyl and its chemical precursors are mostly produced in southern China factories and sent to North America via shipping containers, and in the mail.

WATCH ABOVE: A Global News investigation has uncovered new details about how Canada’s fentanyl crisis has evolved

2:17 Sources: China won’t stop flood of fentanyl into Canada

In public, Canada’s federal government claims there is co-operation with China in the fight against fentanyl. It isn’t politically feasible for Ottawa to openly criticize Beijing on the opioid crisis, especially as the two governments pursue deeper trade ties.

But behind the scenes, sources say frustration is growing over China’s inaction.

“This is a very hot issue diplomatically right now,” a source with knowledge of international policing said.

3:04 High-roller and luxury compound for VIP gamblers targeted in police probe of alleged fentanyl traffickers

• High-roller and luxury compound for VIP gamblers targeted in police probe of alleged fentanyl traffickers
• The B.C. compound police believe may be connected to “transnational drug trafficking” and the fentanyl trade
• The suspected kingpins of fentanyl in Canada
• Where is the political will to stop the fentanyl crisis?
• How organized crime groups launder suspected drug money in B.C. real estate
• How fentanyl gets into Canada

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The situation has gone from bad to worse, after Canada recently turned down China’s request to insert a new police liaison officer in China’s Vancouver consulate.

“It’s a huge fight with China right now, and if you anger the Chinese they won’t work with you,” said a source, who could not be identified. “The fentanyl coming into Canada is going to get worse. Nothing will happen because we have to satisfy what they (the Chinese government) want.”

Responding to questions from Global News following the G20 summit on Saturday, Prime Minister Justin Trudeau maintained that China is cooperating with Canada on the fentanyl crisis.

“China has been actually working with Canadian officials and Canadian law enforcement over the past months, to take measures on the flow of fentanyl into 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,” Trudeau said.

What China wants, is freedom in B.C. to pursue alleged corruption suspects and financial fugitives, including a suspect accused of absconding with about $1 billion from a Beijing company. The suspect is laundering the money in Vancouver real estate, a source said, and using Vancouver as a hub to launder dirty money around the world.

China’s request to send a police liaison to Vancouver was rejected by Canada’s department of Global Affairs because of national security concerns, according to a source.

The concern is the police liaison could have worked for China’s Ministry of State Security, which is the non-military agency responsible for China’s counter-intelligence, foreign intelligence and political security operations.

“There are cases where people come to Canada working for the Ministry of State Security,” a source said.

It is not known what triggered Canada’s suspicion in this case, but reportedly, the so-called Five Eyes intelligence countries, including Canada, Australia, and the U.S., have recently increased information sharing on China’s alleged foreign influence, investment and spying campaigns.

Global News requested interviews with Global Affairs officials regarding the diplomatic dispute but the requests were declined.

A brief prepared statement did not address or refute the alleged case.

“Canadian and Chinese authorities continue to work together on law enforcement and legal-judicial issues, including fentanyl and opioids,” Global Affairs spokesman Guillaume Bérubé wrote.

19:53 Mothers losing children to fentanyl overdoses speak out on small community in crisis

Global News repeatedly contacted officials in China’s embassies in Ottawa and Vancouver to ask questions for this story, but was unable to obtain responses.

In an interview, Conservative critic for foreign affairs Erin O’Toole said “We have people dying. And if they are slow to crack down on production facilities that are perpetuating this horrible drug … the very fact that China might be dragging its feet on investigating and shutting down production facilities in Mainland China, is deeply concerning. And we should raise it at the highest level.”

And regarding the allegation that China is seeking diplomatic concessions from Canada in order to crack down on fentanyl exports, O’Toole said: “There should be no diplomatic quid pro quo. There are lives at stake here.”

Meanwhile, Senator Vern White, a former Ottawa police chief, said Canada should take punitive trade actions if China will not act to stem fentanyl arriving in North America from state-regulated factories in China.

“China has shown no willingness to stop this,” White said in an interview. White said his colleagues in the United States tell him they are concerned about fentanyl from China flowing south through B.C.

“Imagine if we were producing fentanyl in factories and sending it into the U.S.,” White said.

Tweet This Click to share quote on Twitter: "China has shown no willingness to stop this," White said in an interview. White said his colleagues in the United States tell him they are concerned about fentanyl from China flowing south through B.C.</p><p>"Imagine if we were producing fentanyl in factories and sending it into the U.S.," White said.

It is not just China’s lack of action on fentanyl imports that is hindering Canadian efforts to crack down on illicit opioid supply. Police experts interviewed by Global News say that Canada doesn’t have the human resources or aggressive policing strategies needed to mount complicated transnational organized crime investigations.

Veterans in drug-trafficking investigations say that Canadian privacy and court procedure time limits also tend to severely limit pursuit of international criminals in Canada, in comparison to investigations by United States and Australian federal police.

Sources have said that Canadian police must file hundreds of pages of evidence in order to get phone intercepts for suspected drug kingpins approved by judges. But in the U.S., they say, such processes require much less paperwork and a more practical standard of evidence.

Australia and United States federal forces also have anti-drug trafficking policing operations in China that the RCMP lacks, sources said.

As a result of these weaknesses, U.S. investigators and officials are expressing frustration with the limits of Canadian law enforcement, and concern about the growing reach of Chinese organized crime in B.C., an official confirmed to Global News. And the U.S. has established a significant number of federal law and drug enforcement officers in the U.S.’s Vancouver consulate, multiple sources confirmed.

WATCH: Growing calls for public inquiry into deadly fentanyl

2:01 Growing calls for public inquiry into deadly fentanyl

Christine Duhaime, an anti-money laundering lawyer in Vancouver, said she recognizes the United States government is increasingly watching Chinese criminal networks in B.C.

“With the fentanyl crisis, and Vancouver being ground zero with imports from China paid with Bitcoin from unregulated exchanges, the U.S. government is concerned about Vancouver,” Duhaime said. “The fact that Vancouver has emerged as a safe haven for proceeds of crime is even more concerning.”

Tension between China and Canada over police agents is not a new phenomenon.

In the most famous case, agents claiming to be Chinese businessmen falsely obtained visas to enter B.C., and conducted covert operations in Richmond in pursuit of China’s most-wanted criminal, Lai Changxing. Lai was a billionaire smuggler and organized crime associate with ties to drug-trafficking and police and military officials in southern China, court records and sources say.

When a bribery and corruption case escalated in China, Lai fled to Hong Kong, and gained entry to Canada under immigrant investor status. He was a prolific VIP gambler in Richmond, associated to notorious loan sharks, and Big Circle Boys associates in British Columbia and Ontario, court records allege.

After a 12-year legal and diplomatic battle over China’s efforts to extradite Lai, a deal was struck in which China promised that Lai would not be executed if he was returned to face prosecution. He was sent to China in 2011 and imprisoned.

There are conflicting reports in China about Lai’s current condition.

“In accordance with the legal terms/parameters of Mr. Lai’s return to China, as outlined in the Federal Court Decision of 2011, as well as diplomatic assurances received at the time, Canadian officials have been monitoring Mr. Lai’s situation, pursuant to the assurances provided and in cooperation with Chinese officials,” Global Affairs stated, in response to questions about Lai’s health.