WASHINGTON - The United Nations' drug czar is urging Canada to take action on a UN report that identifies Canadian gangs as the leading suppliers of ecstasy in North America and increasingly proficient producers of methamphetamine for markets around the world.

"Canada has emerged an important hub for ecstasy and amphetamines," Antonio Maria Costa told a news conference Wednesday in the U.S. capital as he released the agency's 2009 World Drug Report.

Costa said the lucrative underground industry of manufacturing amphetamines has migrated north to Canada since both the U.S. and Mexico banned the chemical precursors used to make the drugs.

"These important measures taken by countries inevitably tend to create a problem somewhere else unless similar measures are undertaken," he said.

"So I am inviting Canada to be equally proactive in taking the measures which are preventive strikes to avoid the proliferation of manufacturing of amphetamines in that country."

An anti-gang bill currently before Parliament is being held up by the Liberal majority in the Senate, said Rob Nicholson, Canada's justice minister.

"Under the new legislation, these people are looking at two-year prison terms as a minimum," said Nicholson, who blamed the holdup on Liberal Leader Michael Ignatieff.

"I am asking him to do something, call people, get this bill moving through the system. I am hoping this increases the pressure on him to make this a priority and get this bill passed."

Gil Kerlikowske, U.S. President Barack Obama's drug watchdog, said the UN report isn't likely to lead to any further border security tensions between the U.S. and Canada.

"For quite a while we've exchanged guns going into Canada for drugs coming back," said Kerlikowske, director of the Office of National Drug Control Policy and a one-time chief of police in the border cities of Seattle and Buffalo.

Law enforcement agencies on both sides of the border are "absolutely committed to working together, to sharing information, and I know the United States is committed to working hard on those border checkpoints."

The UN report found that since 2003-2004, "Canada has emerged as the primary source of ecstasy-group substances for North American markets, and increasingly for other regions."

Before 2003, Europe was the leading producer of U.S.-bound ecstasy, or methylenedioxymethamphetamine (MDMA) -- a synthetic, psychoactive drug that produces feelings of increased energy, euphoria and emotional warmth.

But the trade was effectively dismantled, the UN report says, and "Canadian intelligence reports indicate that Canada-based drug trafficking organizations are attempting to fill the supply void, and have drastically increased their ecstasy production and trafficking."

Asian organized crime groups primarily control ecstasy labs in Canada, using chemicals smuggled into the country in sea containers from China.

In 2007, half the ecstasy produced in Canada was destined for markets outside Canada, most of it bound for the U.S., Australia and Japan, the report found.

Japan has identified Canada as the single biggest source for seized ecstasy tablets, followed by the Netherlands, Germany and Belgium.

The report also found that Canadian organized crime groups have significantly increased their participation in the meth trade over the past few years.

"By 2006, law enforcement intelligence noted that Asian organized crime and traditional outlaw motorcycle gangs operating in Canada had increased the amount of methamphetamine they manufactured and exported, primarily into the USA, but also to Oceania and east and southeast Asia," the report found.

Australia says Canada accounts for 83 per cent of total seized meth imports by weight; in Japan, the figure is 62 per cent.

"Although only five per cent of domestically manufactured methamphetamine was exported in 2006, by 2007 that figure was 20 per cent," the report said.

The report also found that while global markets for cocaine, opiates and marijuana are holding steady or in decline, some 28 million people are heavy drug users who are likely to be physically or psychologically dependent on drugs.

Opium cultivation in Afghanistan, where 93 per cent of the world's opium is grown, dropped by 19 per cent last year, and there was a 28 per cent decline -- the report called it staggering -- in production of cocaine in Colombia, which produces half the world's cocaine.

Marijuana, or cannabis, remained the most widely used and cultivated drug in the world and it is more harmful than commonly believed, with more users reporting dependency problems, the report said. Roughly 167 million people use marijuana at least occasionally.

Canada is also a leading producer of hydroponic marijuana, Costa said. There are high rates of domestic consumption as well as exportation south of the border.

"I believe there is a lot of work that needs to be done on these two problems in Canada and elsewhere," he said.

The report , however, found that production and demand for most illegal drugs is declining, except for a rise in amphetamines. Illegal drug seizures were up in 2007, and all drug seizure totals were at all-time highs or close to all-time highs. There are also declining rates of drug addiction, Costa said.

"The drug control regime has contained drug abuse in terms of percentages of the population to a fraction compared to tobacco addiction," he said. "Basically we have not seen an increase; we have seen flat and now decreasing rates."

Costa credits improved prevention and awareness about drug use. "We now know how to deal with it in terms of treatment and in terms of prevention."

The UN report advises against decriminalizing illegal drugs, but Costa said drug addicts must not be treated as criminals.

"We are very strongly in favour of decriminalizing drug abuse," Costa said. "We deal with addicts ... they need to be put in hospital, not in prison."

But that doesn't mean the manufacture and distribution of illicit drugs should be decriminalized, he said, despite suggestions that legalization could help eliminate organized crime and contribute to cash-strapped government coffers if drugs like marijuana were taxed.

"Why should we should unleash a public health problem in potential drug abuse in order to deal with a subject matter than can be dealt with, namely public security issues and organized crime?" he said.

"I don't believe there's a tradeoff ... we should deal with both the public security and the public health problem without surrendering one of the two."

Kerlikowske also shut down any talk of decriminalization during the news conference.

"In regards to legalization, it's not in the president's vocabulary and it's not in mine."