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The illicit firearms market in Canada supplies established organized crime groups, street gangs and individual criminals with weapons. In Canada, criminals adopt illegal strategies to acquire these weapons due to the strict regulation and control procedures that cover all types of firearms in this country. These procedures assist law enforcement in preventing criminals or individuals considered a threat to themselves or others from possessing firearms. The illegal market also supplies a small number of individuals who wish to possess firearms but are determined to avoid the requirements of the firearms registration program.

One illicit firearm can pose an ongoing threat to the public and law enforcement until the weapon is seized by law enforcement or disposed of by the criminal. These firearms are used by criminals for their protection, enhancement of their status, and the commission of crimes including intimidation, assaults and homicides. All organized crime groups are involved in varying illicit firearm activities and gang members often possess numerous firearms of various types. Across Canada, the problem of illicit firearms and violence is particularly concentrated within urban centres that have a significant organized crime or street gang presence. In these centres, gangs increasingly possess illicit firearms, particularly handguns, that are used in acts of intimation and violence.

There is no known methodology to accurately estimate the overall illicit firearms market in Canada: either the current number of illicit domestic firearms or the number of illicit firearms that will enter the market annually from all sources. However, intelligence and investigations confirm that the illicit firearms market in Canada is supplied predominately from two sources: firearms smuggled from the U.S. and firearms stolen from either private residences or commercial venues in Canada. Legal collectors have sometimes been the victims of either random or deliberately targeted robberies for their firearms. As collectors often possess numerous types of firearms and/or firearms parts, robberies often can net the thieves substantive quantities of weapons either for their possession or to be sold on the illegal market to other criminals.

The U.S. has less stringent firearm regulations than Canada with many states having no licensing requirements. The firearms market in the U.S. is large, with an estimated 222 million firearms in legal circulation. The U.S. retail industry has been exploited as legally acquired firearms are being illegally diverted to Canadian traffickers and smuggled across the border. As well, secondary U.S. firearm markets, such as gun shows and flea markets, are significant sources of Canadian-destined illicit firearms. In many states, these secondary markets operate without any regulatory procedures to monitor and document firearm sales and/or exchanges.

There are a variety of other less significant sources that also supply the illicit firearms market in Canada. These include: firearms diverted from the legitimate commercial firearms market, firearms parts acquired legally or illegally which are reassembled into functioning firearms, firearms that have been declared deactivated, but are easily reactivated and firearms that have been wrongly declared deactivated but remain fully functional.

Firearms continue to be smuggled into Canada through a variety of methods, including: concealed within vehicles that cross designated land entry points and individuals smuggling firearms across unmanned border areas using vehicles, vessels or back packs. These smuggling attempts usually involve small numbers of firearms; however, in 2003 there were several instances in British Columbia in which individuals crossing the unmanned border were intercepted smuggling multiple handguns.

Law enforcement agencies across Canada are increasingly engaged in combating the illegal firearms market. CISC co-manages the National Firearms Tracing Unit in conjunction with the National Weapons Enforcement Support Team (NWEST). NWEST, administered under the National Police Services, provides firearms enforcement support across Canada. The Provincial Weapons Enforcement Unit, (PWEU), an Ontario joint-forces initiative, has been active since the mid-1990s in spearheading firearms-based investigations in that province.

The RCMP and Canada Border Services Agency are the main Canadian federal agencies responsible for countering the illicit cross-border movement of firearms. Their efforts are complemented by joint Canada/U.S. Integrated Border Enforcement Teams (IBETs) that are situated strategically along the length of the Canada/U.S. border.