Since only limited statistical data are available on illegal drug activities, this study relies on intelligence gained from investigations, foreign and domestic production and consumption estimates, and known crime statistics. Statistical methods which may yield only approximate estimates are often used. Sources, volume, and smuggling routes are examined for heroin, cocaine, and marijuana. Information is also provided on chemical drugs such as LSD, PCP, and MDA, which are manufactured in clandestine laboratories in Canada. Trafficking and use patterns are examined for these chemical drugs. An examination of the drug money flow in Canada considers efforts to attack drug traffickers' profits through the Anti-Drug Profiteering Program, the national drug strategy, legislation bearing upon crime proceeds, international money laundering centers, and laws and enforcement measures at the international level. Information is provided on major Canadian-related 1986 drug seizures. 50 figures.