MacDonald Laurier Institute
More racism isn’t the solution for racism
From the Macdonald Laurier Institute
By David L. Thomas for Inside Policy
If Canada decided long ago that it is morally wrong to discriminate based on race, why is it suddenly okay now in BC?
Sometimes our solutions to problems have the feature of exacerbating them and making conditions worse for the very people we intended to help.
The latest candidate is the British Columbia government’s proposed Bill 23, the Anti-Racism Act. The Bill arises from the 2022 Anti-Racism Data Act and the follow-up 2023 Anti-Racism Legislation Questionnaire Summary Report (the Report).
The Bill raises two questions: Does systemic racism really exist? If it does, is the Anti-Racism Act the right solution – or will it make matters worse?
On the first question, let’s draw a clear distinction between allegations of “racism” and “systemic racism.” Racism is about an incident that amounts to discrimination based on someone’s race. Systemic racism suggests not merely the presence of particular incidents of racism, but rather, something baked into the “system” that results in the discrimination of a person or group based on their race.
There are, without question, examples of systemic racism in our history, such as laws that were overtly racist in their nature. For example, we once allowed restrictive covenants in BC on land titles that prohibited property ownership by certain races. We look back on those examples today with disgust. Since those days we have implemented long-standing, honourable anti-discrimination laws that state that no one should be judged by their physical or mental characteristics. We all come into the world with certain attributes that will be with us for life. We concluded a long time ago that it is morally wrong to discriminate against a person based on such attributes.
Interestingly, the Report does not provide any examples of systemic racism. In fact, the Report admits that in its public questionnaire, the highest response was denial that systemic racism exists. The Report acknowledges that there was “a consistent theme” of denial of systemic racism and racial trauma across all demographic groups. The fact that all demographic groups question the existence is raised in another section of the Report: “In the analysis of comments, the ways in which respondents expressed denialism were not noticeably different across ethnic groups.”
Not to be dissuaded by responses that systemic racism doesn’t exist, the Report explains away “denialism” as being the result of the respondents’ anti-diversity, overt racism, implied racism, victimhood, and naïveté. The Report even suggests that denialism is a problem to be dealt with: “Denial of systemic racism was found across ethnicities, suggesting the need for a closer look at foundational drivers of culture, how those persist, and what can dismantle it.”
Notwithstanding the uncertain answer to our first question, the first principle in the Anti-Racism Act broadly asserts: “systemic racism, systemic racism specific to Indigenous peoples and racial inequity are harming individuals and communities in British Columbia and require urgent action.” And yet, nowhere in the Anti-Racism Act is there evidence or examples of systemic racism or an indication of where it can be found.
Nevertheless, let’s give the BC government the benefit of the doubt and conclude that systemic racism does exist. Why do they need to create a whole new bureaucracy with endless reports and action plans? Why don’t they go straight to those laws and policies that result in adverse differential treatment of others based on nothing more than their race and repeal them? The NDP has a majority government. What is it waiting for? The solution should be simple.
Unfortunately, the NDP solution is the Anti-Racism Act, which sets out to do something different. Rather ironically, the law in fact establishes adverse differential treatment of people based on their race. It contains several racially discriminatory clauses and mandates. An obvious example is Section 5, which establishes a Provincial Committee on Anti-Racism. However, to be a member of said Committee, one must “racialized” which, we are left to presume, means you cannot be white. Apparently, the BC government has decided to exclude the insights and opinions of an entire group of people based solely on the colour of their skin.
The Anti-Racism Act will require all public bodies to set race-based recruitment and advancement targets to ensure “racialized individuals” are hired and promoted to senior levels. Under this law, such racial discrimination is not only permissible, but also mandated. It will be lawful to racially discriminate against certain people pursuing their career ambitions, even though, like their “racialized” friends, they did not have any choice to be born with certain immutable characteristics.
All of this is permissible under the Charter of Rights and Freedoms even though Section 15(1) guarantees that everyone has the right to equal protection and equal benefit of the law without discrimination. However, Section 15(2) goes on to say it’s okay to ignore the previous section if you make an unequal law for the “amelioration of conditions of disadvantaged individuals or groups including those that are disadvantaged because of race….” etc.
Lawmakers should always ask themselves the question: this may seem like a good idea today, but will it seem like a good idea 50 years from now? I am sure those lawmakers who permitted racist covenants on land titles thought it was a good idea at the time. Is mandating a new form of reverse-racism today really a good idea in the long run? The racial demographics in Canada are rapidly changing. Some academics foresee white people becoming the minority in Canada as early as 2050. Will the Anti-Racism Act endure as a socially just and morally defensible law when the racial structure of Canadian society is fundamentally different than it is today?
The latest data from Statistics Canada shows that people of South Korean, Japanese, and South Asian descent tend to be the top earners in Canada, broadly speaking. While Latin-American and Black people are often among the lowest earners, white people are mostly in the middle of the pack. If the goal of the Anti-Racism Act is to advance racial equity, why does it contravene its second principle – “actions to … advance racial equity … should be informed by data” – by ignoring the data?
If Canada decided long ago that it is morally wrong to discriminate based on race, why is it suddenly okay now in BC? How is this morally justified? And, who decides which groups are advantaged or disadvantaged under the Charter? Will those determinations change over time, or will legal privileges based on race be owned indefinitely?
In my years as a human rights adjudicator and mediator, I often heard the allegation of “systemic racism,” but no one was able to clearly point to it when asked. I was not expected to ask such questions, but to just accept its existence as a given fact. It would be impolite to ask if there could be other reasons for disparate outcomes. Best to leave it to something invisible, that we all just agree is there, without having to point a finger to a person or an identifiable policy that might counter back. And yet, the Statistics Canada data, showing striking income differences within the visible minority cohort, tells us there is something more going on here.
I doubt the Anti-Racism Act will ever resolve the disparate outcomes that it targets. I fear it will make outcomes worse. The Anti-Racism Act contemplates anti-racism training in public bodies and the Report suggests education in our schools, presumably to educate everyone about Canada’s racist nature and unequal outcomes being based on systemic racism. It’s easy to blame something you cannot see for the outcomes you don’t like. The problem with blaming disparate outcomes solely on this invisible “systemic racism” is that it detracts from and negates other obvious causes of disparity. This is not how racial equity will be advanced. It is not how to teach our children to advance themselves or to create a more just society. It is more likely to have the opposite effect because problems never get solved when the cause is wrongly identified.
Anti-racism activists want to fight discrimination with racism. Ironically, it will only beget more racism in the long run. The more we see acceptable and overt racism in the law the more we will see the normalization of racism. It will make life for certain visible minorities and Indigenous peoples worse by further dividing society. People will naturally segregate to protect themselves when the laws make some more equal than others. Is that the outcome we desire?
The BC government seems determined to abandon principles of equality, to ignore uncomfortable data, and to force a racist and society-dividing solution onto a problem that people, of all backgrounds, don’t even agree exists.
David L. Thomas is a lawyer and mediator in British Columbia and a Senior Fellow with the Macdonald-Laurier Institute. From 2014–2021, he served as the Chairperson of the Canadian Human Rights Tribunal in Ottawa.
Crime
Mexican cartels are a direct threat to Canada’s public safety, and the future of North American trade
From the Macdonald Laurier Institute
By Gary J. Hale for Inside Policy
RCMP raided a fentanyl ‘superlab’ in Falkland, BC, with ties to a transnational criminal network that spans from Mexico to China.
On October 31, residents of Falkland, BC, were readying their children for a night of Halloween fun. Little did they know that their “quaint, quiet, and low-key little village” was about to make national headlines for all the wrong reasons.
On that day, RCMP announced that it had raided a fentanyl “superlab” of scary proportions near Falkland – one that police called the “largest and most sophisticated” drug operation in Canada. Officers seized nearly half-a-billion-dollars’ worth of illicit materials, including 54 kilograms of finished fentanyl, 390 kilograms of methamphetamine, 35 kilograms of cocaine, 15 kilograms of MDMA, and six kilograms of cannabis” as well as AR-15-style guns, silencers, small explosive devices, body armour, and vast amounts of ammunition.
They also found massive quantities of “precursor chemicals” used to make the drugs. This strongly suggests that the superlab was tied into a transnational criminal network that spans from Mexico to China – one that uses North America’s transportation supply chains to spread its poisonous cargo across Canada and the United States.
The Canada-US-Mexico relationship is comprised of many interests, but the economic benefits of trade between the nations is one of the driving forces that keep these neighbours profitably engaged. The CUSMA trade agreement is the successor to NAFTA and is the strongest example globally of a successful economic co-operation treaty. It benefits all three signatories. This level of interdependence under CUSMA requires all parties to recognize their respective vulnerabilities and attempt to mitigate any threats, risks, or dangers to trade and to the overall relationship. What happens to one affects all the others.
The supply chain, and the transport infrastructure that supports it, affects the balance books of all three. While the supply chain is robust and currently experiences only occasional delays, the different types of transport that make up the supply chain – such as trucks, trains, and sea-going vessels – are extremely vulnerable to disruption or stoppages because of the unchecked violence and crime attributed to the activities of Mexican Transnational Criminal Organizations (TCOs). These cartels operate throughout Mexico, from the Pacific ports to the northern plains at the US-Mexico border.
The sophistication of the Falkland superlab strongly suggests connectivity to multi-national production, transportation, and distribution networks that likely include China (supply of raw products) and Mexico (clandestine laboratory expertise).
For most Canadians, Mexican cartels call to mind the stereotypical villains of TV and movie police dramas. But their power and influence is very real – as is the threat they pose to all three CUSMA nations.
Mexico’s cartels: a deadly and growing threat
Mexican cartels started as drug trafficking organizations (DTOs) in the 1960s. By the late 1990s they had evolved to become transnational enterprises as they expanded their business beyond locally produced drugs (originally marijuana and heroin) to include primarily Colombian cocaine that they transported through Mexico en route to the US and Canada.
Marijuana and the opium poppy are cultivated in Mexico and, in the case of weed, taken to market in raw form. While the cartels required some chemicals sourced from outside Mexico to extract opium from the poppy and convert it into heroin, the large-scale, multi-ton production of synthetic drugs like Methamphetamine and today Fentanyl expanded the demand for sources of precursor chemicals (where the chemical is slightly altered at the molecular level to become the drug) and essential chemicals (chemicals used to extract, process, or clean the drugs.)
The need to acquire cocaine and chemicals internationalized the cartels. Mexican TCO’s now operate on every continent. That presence involves all the critical stages of the criminal business cycle: production, transportation, distribution, and re-capitalization. Some of the money from drug proceeds flow south from Canada and the US back to Mexico to be retained as profits, while other funds are used to keep the enterprise well-funded and operational.
In Mexico, the scope of their activities is economy-wide; they now operate many lines of criminal business. Some directly affect Mexico’s economic security, such as petroleum theft, intellectual property theft (mainly pirated DVDs and CDs), adulterating drinking alcohol, and exploiting public utilities. Others are in “traditional” criminal markets, such as prostitution, extortion, kidnapping, weapons smuggling, migrant smuggling and human trafficking. Organized auto theft has also become another revenue stream.
Criminal Actors
The Cartel de Sinaloa (CDS or Sinaloa Cartel) and the Cartel Jalisco Nueva Generacion (CJNG) are the two principal TCO’s vying for territorial control of Mexico’s air, land, and maritime ports, as well as illegal crossing points. These points on the cartel map are known as “plazas,” and are often between formal ports of entry into the US. By controlling territories crucial for the inbound and outbound movement of drugs, precursors, people, and illegal proceeds, the cartels secretly transport illicit goods and people through commercial supply chains, thus subjecting the transportation segment of legitimate North American trade to the most risk.
That is giving the cartels the power to impair – and even control – the movement of Mexico’s legitimate trade. While largely kept out of the public domain, incidents of forced payment of criminal taxation fees, called “cuotas,” and other similar threats to international business operations are already occurring. For instance, cuotas are being imposed on the transnational business of exporting used cars from the US to Mexico. They’re also being forced on Mexican avocado and lime exporters before the cartels will allow their products to cross the border to the US and international markets. This has crippled that particular trade. Unfortunately, the Mexican government has been slow to react, and the extortion persists throughout Mexico. It is worth repeating – these entirely legitimate goods reach the market only after cartel conditions are met and bribes paid.
The free trade and soft border policies of the US of recent years have allowed cartel operatives to enter that country and work the drug trade with limited consequence. In May, the U.S. Drug Enforcement Administration (DEA) published the National Drug Threat Assessment 2024, where it reported that the Jalisco and Sinaloa cartels operate in all 50 US states and are engaged in armed violence in American cities as they fight for market shares of the sales of Methamphetamine, Fentanyl, and other drugs sourced from Mexico.
The DEA’s findings should sound alarms in Canada. Canada and the US have similar trade and immigration policies, which allow the Mexican cartels to easily enter and control the wholesale component of the drug trade. The long-term effects of the drug trade are the billions of dollars gained that allow for the corruption of government officials. Canada should be on guard: Mexican drug cartels in Canada could begin to not only kill ordinary Canadians by knowingly selling them deadly drugs like Fentanyl – their operatives can also embed themselves in Canadian society, as they have in the US, leading to ordinary citizens on Canadian streets being victimized by the armed violence cartels regularly use to assert their position and power.
Organized crime and Mexican governance
Canada faces these threats directly, but the indirect ones that the cartels present to Mexican governance are no less consequential to Canada in the long term – and likely sooner. Illicit agreements between corrupt Mexican government officials and the cartels assure that the crime organizations retain control of territory and have freedom to operate.
That threat is becoming increasingly existential. Cartel fighters are well disciplined, well equipped and strong enough to challenge Mexico’s military, currently the government’s main tool to fight them. Should the TCOs come to dominate Mexican society or gain decisive influence over government policy, Mexico’s government risks being declared a narco-democracy and the US may come to see the cartels as a threat to national security. That in turn could lead to a US military intervention in Mexico – not an outcome desired by either side.
While that scenario may be considered extreme, it is not as far from reality as many may think. While in many respects the US-Mexico trading relationship remains unchanged, the overall political context has become testy – and could be a real flashpoint for the incoming Trump administration.
Political developments in Mexico have played a role. After his election in 2018, former Mexican President Andrés Manuel López Obrador (commonly referred to his initials, AMLO) demonstrated a disdain for all things North American. This included frequent complaints of US interference or violation of Mexican sovereignty – complaints that were more about keeping Mexican government domestic actions out of the public eye. To retain a shroud of secrecy over government corruption, Mexico under Amlo started in 2022 to limit the activities and numbers of US federal law enforcement agencies operating there, particularly the FBI, DEA, ATF and ICE. These agencies formerly enjoyed a close relationship with the Mexican Federal Police – a force AMLO disbanded and replaced with the National Guard. The AMLO administration reduced the number of US assets and agents in Mexico, particularly singling out the DEA for the most punitive restrictions.
During his administration, AMLO placed the army and navy in charge of all ports of entry and gave them responsibility for all domestic public safety and security by subordinating the Guardia Nacional (GN), or National Guard, to the army. The GN, the only federal law enforcement agency, has been taken over by military officials who are sometimes corrupt and in league with the cartels.
Mexican President Claudia Sheinbaum, who took office in 2024, has continued AMLO’s organizational moves. Sheinbaum comes from the same political party and has so far extended carte blanche to the military, whose administration is opaque and now operates with impunity, under the guise of “national security” and “sovereignty” concerns.
It is expected that Sheinbaum will continue to shield American eyes from Mexico law enforcement and judicial affairs. The fear in the US law enforcement and national security community is that Sheinbaum may even declare DEA non grata, much as then Venezuelan President Hugo Chavez in 2005 and Bolivian President Evo Morales in 2008 did in their countries. Both were anti-American leftists of the same mindset as AMLO and Sheinbaum, who feared detection of their connections to the illegal drug trade.
Sheinbaum has publicly demonstrated disinterest in the consistent application of the rule of law against the TCOs by stating that she will continue the “hugs not bullets” (“abrazos, no balazos”) non-confrontational, non-interventional posture towards organized crime. Agreements with corrupt government officials will allow the cartels to expand their business and to operate with impunity. Through intimidation, bribery, and murder, the cartels affect decision making at the municipal, state, and federal levels of Mexican government. That leverage, while performed outside the public eye, has the potential to negatively affect supply and demand among the three countries at the very least, and at worst, to signal that cartels in Mexico are directly or indirectly involved in the formulation of government security, immigration, drug, and trade policy.
AMLO enacted constitutional changes that will provide Sheinbaum with the powers of a dictator, giving her administration unchecked control of the executive, legislative, and judicial branches of government. As a result, the judiciary in Mexico is in crisis mode with 8 of 11 Supreme Court Justices resigning in October 2024 to protest the unconstitutional disregard for due process that started with AMLO and continues with Sheinbaum thanks to a “voting for judges” law that she and AMLO have rammed into operation without debate. This development portends even more corruption.
Without the existence of an independent judicial system, these institutional changes could give pause to US and Canadian negotiators when it comes time to renew CUSMA in 2026.
Beyond 2025: Mexican organized crime as a threat to the US and Canada, and Greater North American implications
Most worrying, the cartels will be in a yet stronger position to affect and even dictate the pace and volume of legitimate trade between the US and Mexico under Sheinbaum. This makes Mexico the weakest link among the three CUSMA members.
The US and Canada should therefore be concerned about the strength and power of the cartels because the current trajectory could provide them a greater role in Mexico’s performance as a trade partner. Should this trend continue, the US would likely begin to see Mexico through the lens of a threat to critical components of its national security: 1) the public safety of US citizens being killed in epidemic proportions by the drugs produced by citizens of Mexico; 2) the negative impact or increased cost of commerce that supplies goods to the American market; and 3) the CUSMA relationship that sustains the economic strength of all three participating countries.
This worrisome evolution requires proactivity by Canada and the US to insist that Sheinbaum reverse the gains that the cartels have made to influence policy and erode the government’s monopoly on territorial control and the use of violence, and reverse Mexico’s limits on drug enforcement co-operation with what should be its partners to the north. Pressure should also be applied to demand a return to a drug policy model that includes international law enforcement co-operation and a continuation towards the transformation of the Mexican judicial system from a mixed inquisitorial or accusatorial system to an adversarial system that employs the use of juries, witness testimony, oral hearings and trials, and cross-examination of witnesses, as opposed to a system where cartel-influenced elections could dictate judicial outcomes.
The implications of the further development of a Mexico narco-democracy for US-Mexico-Canada relations would be devastating. Co-operation on public safety and security would cease completely, allowing the cartels to take full control of commercial supply lines, significantly reducing trade between the three nations – likely causing the CUSMA trade deal to fracture until governance returned to duly elected civilian officials.
Continental security and Canada’s contribution
The continued success of CUSMA lies with Mexico more than any other country. Should Mexico continue on its path to autocracy, it could upset the trade deal, crucial to the prosperity of all three countries. Canada is not immune from what on the surface may appear to be mostly bilateral, US-Mexico issues, because, regardless of the commodity – whether it’s consumables or manufactured items – the cartels are positioned and empowered to affect imports, exports, trade, and migration throughout North America.
For the foreseeable future, Mexico is not going to voluntarily change its security posture. This enables the cartels to remain persistent threats, especially to trade. Canada and the US need to continue to jointly insist that Mexico take a stronger stance against organized crime and that it take steps to strengthen the judiciary and the rule of law in that country.
Gary J. Hale served 31 years in the Drug Enforcement Administration (DEA), retiring as an executive-level intelligence analyst. In 2010, he was appointed as Drug Policy fellow and Mexico Studies Scholar at the James A. Baker III Institute for Public Policy at Rice University in Houston, Texas.
Business
Canada’s struggle against transnational crime & money laundering
From the Macdonald-Laurier Institute
By Alex Dalziel and Jamie Ferrill
In this episode of the Macdonald-Laurier Institute’s Inside Policy Talks podcast, Senior Fellow and National Security Project Lead Alex Dalziel explores the underreported issue of trade-based money laundering (TBML) with Dr. Jamie Ferrill, the head of financial crime studies at Charles Sturt University in Canberra, Australia and a former Canada Border Services Agency officer.
The discussion focuses on how organized crime groups use global trade transactions to disguise illicit proceeds and the threat this presents to the Canada’s trade relationship with the US and beyond.
Definition of TBML: Trade-based money laundering disguises criminal proceeds by moving value through trade transactions instead of transferring physical cash. Criminals (usually) exploit international trade by manipulating trade documents, engaging in phantom shipping, and altering invoices to disguise illicit funds as legitimate commerce, bypassing conventional financial scrutiny. As Dr. Ferrill explains, “we have dirty money that’s been generated through things like drug trafficking, human trafficking, arms trafficking, sex trafficking, and that money needs to be cleaned in one way or another. Trade is one of the ways that that’s done.”
A Pervasive Problem: TBML is challenging to detect due to the vast scale and complexity of global trade, making it an attractive channel for organized crime groups. Although global estimates are imprecise, the Financial Action Task Force and The United Nations Office on Drugs and Crime (UNODC) suggests 2-5% of GDP could be tied to money laundering, representing trillions of dollars annually. In Canada, this could mean over $70 billion in potentially laundered funds each year. Despite the scope of TBML, Canada has seen no successful prosecutions for criminal money laundering through trade, highlighting significant gaps in identifying, investigating and prosecuting these complex cases.
Canada’s Vulnerabilities: Along with the sheer volume and complexity of global trade, Canada’s vulnerabilities stem from gaps in anti-money laundering regulation, particularly in high-risk sectors like real estate, luxury goods, and legal services, where criminals exploit weak oversight. Global trade exemplifies the vulnerabilities in oversight, where gaps and limited controls create substantial opportunities for money laundering. A lack of comprehensive export controls also limits Canada’s ability to monitor goods leaving the country effectively. Dr. Ferrill notes that “If we’re seen as this weak link in the process, that’s going to have significant implications on trade partnerships,” underscoring the potential political risks to bilateral trade if Canada fails to address these issues.
International and Private Sector Cooperation: Combating TBML effectively requires strong international cooperation, particularly between Canada and key trade partners like the U.S. The private sector—including freight forwarders, customs brokers, and financial institutions—plays a crucial role in spotting suspicious activities along the supply chain. As Dr. Ferrill emphasizes, “Canada and the U.S. can definitely work together more efficiently and effectively to share and then come up with some better strategies,” pointing to the need for increased collaboration to strengthen oversight and disrupt these transnational crime networks.
Looking to further understand the threat of transnational organized crime to Canada’s borders?
Check out Inside Policy Talks recent podcasts with Christian Leuprecht, Todd Hataley and Alan Bersin.
To learn more about Dr. Ferrill’s research on TBML, check out her chapter in Dirty Money: Financial Crime in Canada.
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