CANADA TO PRESS AHEAD WITH POT DECRIMINALIZATION

OTTAWA (Reuters) - Canadian Prime Minister Jean Chretien, setting the stage
for another clash with the United States, said on Tuesday he would soon
introduce legislation to decriminalize the possession and cultivation of
small amounts of marijuana.

The announcement was the strongest indication yet Ottawa would follow
through on a promise it made last year to relax laws so that people found
guilty of possessing small amounts of marijuana would not get a criminal
record.

Chretien told a fund-raising dinner for the ruling Liberal Party that he
did not intend to legalize marijuana and said he would press ahead with
strategies designed to crack down on drug traffickers.

"We are not afraid to take on controversial issues. It is the right thing
to do. For example, we will soon introduce legislation to decriminalize
possession of small amounts of marijuana," he said to applause from the
audience.

Justice Minister Martin Cauchon, who was also at the dinner, told Reuters
the new draft law would be introduced "as soon as possible" and definitely
before Parliament broke for its summer recess in mid-June.

The announcement was unlikely to win Chretien any new friends in
Washington, which is still angry at Ottawa's decision not to send troops to
Iraq (news - web sites) and has repeatedly expressed concern about the
increasing amount of potent Canadian marijuana flowing south across the
long border.

Cauchon is looking into a proposed system whereby people possessing and
cultivating marijuana in amounts less than 1.1 ounces (30 grams) would
receive a ticket -- similar to that for a traffic violation -- and a fine.

About 20,000 Canadians a year are convicted for the use of marijuana.
Advocates for change say that is unfair and represents an enormous waste of
police resources that could be better spent fighting organized crime.

"Some people, because of it (the existing law), might have a criminal
record that will be a shadow over (them) ... for the rest of their lives,"
Chretien said.

"At the same time, we will have a drug strategy to discourage young people
from using drugs and which will target drug traffickers."

U.S. CONCERNS

Last year, U.S. drug czar John Walters described relaxing marijuana laws as
a dangerous and outdated idea and said if Ottawa went ahead, the United
States might have to increase border security to clamp down on trafficking.

That could deal a big blow to the Canadian economy, since more than 85
percent of its exports go to the United States.

U.S. police say Canada, with an estimated illegal drug market of C$14
billion ($9.7 billion), has surpassed Mexico as a source of illegal drugs
for the United States.

Chretien joked with his audience it should not try to take advantage of the
new law until it had been passed.

"Don't start to smoke right away. We're not legalizing it, we're
decriminalizing it. So you will have another ticket, not a traffic (ticket)
but (one for) losing your senses, something like that."