This document shows that there is a great demand for illegal drugs in Canada and that sophisticated drug trafficking organizations are making huge profits supplying drugs to meet this demand. Worldwide opium production increased in 1987, providing a substantial supply for the illicit heroin market. Consequently, national trend indicators pointed to an overall increase in heroin abuse, with the vast majority of users concentrated in Vancouver, Montreal, and Toronto. The expansion of the international cocaine trade influenced the growth of cocaine trafficking and abuse, especially where high purity levels, increased availability, and lower prices were observed. The illicit chemical drug trade finds its major sources in clandestine manufacture, diversion from medical supply channels, and, to a lesser extent, illegal importation. Marijuana, hashish, and liquid hashish continued to be the most widely available illicit drugs. The recent passage of legislation to deal with the freezing, seizing, and judicial forfeiture of the proceeds of organized criminal activity provides a significant tool for law enforcement in Canada. 49 figures.