As drug overdoses claim tens of thousands of lives in the U.S. each year, Canadian banks and crime groups are facing growing scrutiny for their alleged role in fueling the deadly trade. Criminal networks based in Canada — including Chinese triads and Mexican cartels — are accused of coordinating fentanyl and meth trafficking across the border, laundering profits through Canadian financial institutions and contributing to a massive public health and security crisis.
David Asher, a former State Department official closely tied to President Donald Trump’s national security team, warned that this system poses serious threats to both countries. He said Chinese-led money laundering operations based in Canada are essential to cartel activity across North America and argued that banks helping move cartel profits, even unintentionally, could soon be treated as participants in terrorism financing.
One of Canada’s largest lenders, TD Bank, has already been fined over $3 billion in the U.S. after admitting to major anti-money laundering violations. Prosecutors revealed that TD failed to flag suspicious transactions, including repeated seven-figure cash deposits and cooperation with known drug groups. Five bank employees were implicated in a scheme to move tens of millions using ATM cards and bribes.
Canada’s legal system has also drawn fire. A disclosure rule from a 1991 court case known as Stinchcombe forces police to share investigation details early, including targets of surveillance. Asher described this as a major problem, saying it allowed suspects to change tactics and avoid prosecution. He said this barrier weakens efforts to track Chinese and Mexican crime rings operating out of Canadian cities.
In response to these growing concerns, President Donald Trump has pointed to Canada’s failure to control its border and criminal networks as part of the reason for new tariffs set to begin April 2. While the official policy covers multiple trade issues, Trump has cited Canada’s inaction in stopping cross-border drug and human trafficking as a national security issue.
Marijuana grown in Canada and laced with fentanyl is reportedly being smuggled into states like New York and Washington. Funds from these sales are then laundered through Canadian institutions, including banks located in Toronto, according to Asher.
Reports have estimated that over $1 trillion in Canadian real estate may be tied to underground banking and mortgage fraud since 2010, with British Columbia and Ontario being key hotspots.
