Niagara Regional Police said cheese and other foods were purchased in the U.S. and smuggled into Canada without declaring the items or paying duty.
The items were then prepared for distribution to restaurants in southern Ontario for an estimated profit of more than $168,000.
According to the Canadian Border Services Agency, only $20 worth of dairy products can be brought into Canada duty free.
Niagara police Constable Scott Heron, 39, faces charges including conspiracy to commit an indictable offence, smuggling and other violations of customs law. Heron was suspended from the police force in June.
Casey Langelaan, 48, a former member of the police force, and Bernie Pollino, 44, a resident of Fort Erie, Ontario, face the same charges. Niagara Regional Police spokesman Derek Watson said Langelaan resigned from office before being charged.
Bob Abumeeiz, who owns Arcata Pizzeria, in Windsor, Ontario, said he has been approached four times by someone selling contraband cheese from the U.S., including once six months ago. He said he spends 60 percent of his restaurant's income on cheese from an Ontario producer, but he declined the offer for black market cheese.
"I get it, there's absolutely a market for it. Cheese is expensive, it's considered 'white gold' in this industry. With the price of cheese rising every year, these guys selling know that there's a market for the product and they know who to target," he said.
Canadian cheese prices are higher because of restrictions by the country's dairy board, as well as tight controls on imports from the U.S.
The Organization for Economic Cooperation and Development estimates dairy prices in Canada are more than double the world market.
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