TORONTO - After a dramatic spike in reports of lost and stolen passports over the past two years, Passport Canada is giving additional scrutiny to passport applications across the country and warning travellers to protect their travel documents.

In 2007, 37,650 passports were reported lost or stolen, compared to 24,792 in 2005. The numbers, obtained by The Canadian Press, were recently circulated in a memo warning staff to double-check applications for new passports when the old document is reported missing.

"Lost and stolen passports are extremely valuable to criminal organizations to facilitate and perpetrate illegal/clandestine operations such as human trafficking, smuggling, money laundering and terrorism,'' said the memo.

In February 2008, Passport Canada began cross-checking applicants' names with the Canadian Police Information Centre, which links law enforcement organizations across the country.

"In taking a report of loss or theft, take an extra second to review the form to detect inconsistencies,'' warned the memo.

The rise in thefts and losses coincides with a jump in the number of passports processed annually.

"During 2005-06, Passport Canada processed an unprecedented three million passports,'' said a recent auditor general's report.

"In comparison, it processed about 2.7 million passports in 2004-05 and 1.7 million in 2001-02.''

But security experts warned Wednesday that increased security features and better communication between government departments may not be enough to stay ahead of organized criminal groups, who make big money on stolen passports.

Some countries fare worse than others.

For example, in Spain, reported thefts have doubled since 2003, meaning more Canadian passports go missing in that country than anywhere else in the world, according to Andre Lemay, a spokesman from Passport Canada.

"That's not surprising,'' said Benjamin Perrin, an assistant law professor at the University of British Columbia who specializes in international law and human trafficking.

Spain has been identified as a major entry point for illegal immigration from Africa and South America.

"They need to be able to move and move with impunity,'' he said of many criminals, who often can't cross borders under their own names.

"Plugging the hole in Spain and finding the reasons for it should be a priority for the Canadian government,'' said Perrin.

Perrin added that an auditor general's report in 2005 found it took much too long -- 35 days -- for law enforcement officials to share information about stolen passports, meaning a possible month-long free pass for criminals looking to travel between borders.

Along with drug trafficking, Perrin added that dealing in stolen and faked passports is now a major source of revenue for criminal groups.

Chris Mathers, a security expert and former RCMP agent, agreed.

"People will buy them off you, and Canadian passports are of great value,'' he said, adding that even old or cancelled passports can be resold.

"If you've got a legitimate passport, it's a lot easier task to phoney up one, because you've got the actual materials,'' he said.

"They're still a commodity that criminals will pay quite a bit for.''

While the government has only recently issued warnings about thefts in Spain, the travel industry has long been aware of the problem, said Association of Canadian Travel Agencies president Christiane Theberge.

Theberge said last year, 182,000 Canadians travelled to Spain, making it the 11th most popular destination for Canadian travellers.

Lemay said 496 Canadian passports were stolen in Spain last year, compared to 4,746 stolen worldwide.

Theberge said ACTA often issues reminders to ensure travellers know the threat in Spain and other countries.

"Just be very cautious, be sure your passport is secure,'' she said.