I don't know about the smuggling part, but I will tell you that these U.S. officials are roughly correct about drug law enforcement in Canada generally.

You can be as dumb as you want with small quantities of drugs and the cops won't do shit. You can smoke crack or shoot opiates on a residential sidewalk; as long as the neighborhood isn't the richest of the rich (like McMansion/gated community-tier shit) the cops won't care and the residents won't call them. People walk down residential streets hitting crack pipes all the time as a result.

What I have described is not just in big cities. Canadian cities with as little as 100k people have "open air crack den" neighborhoods.

How does this compare to the US situation?

(https://autoadmit.com/thread.php?thread_id=5899916&forum_id=2#50110747)