"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 Canadian organized crime groups have significantly increased their participation in the meth trade over the past few years.