Mr. Speaker, as the member of Parliament for Kitchener—Waterloo and as a member of the industry, science and technology committee, I am pleased to have the opportunity to rise this evening to speak to Bill C-56, the combating counterfeit products act, at second reading.
The flow of counterfeit and pirated goods crossing our border is of mounting concern. Knock-off goods undermine the integrity of legitimate Canadian businesses and raise their costs. They deceive consumers and often put their health at risk. They siphon off tax revenue and fuel the growth of organized crime. For all of these reasons, I support Bill C-56, the combating counterfeit products act, which is one more step in our government's march toward a modern and strong intellectual property regime.
For my part today, I would like to look at how the proposed act would promote public safety by fighting serious and organized crime.
First, however, let me reflect on the nature of counterfeit and pirated products, why they are so hard to detect and why they have become such a pressing issue.
Modern counterfeiters operate in more subtle ways than they did in the past. They often remain out of sight, and their clandestine goods reach our borders unannounced and too often undetected. What is worse, their wares often make it all too easily onto the open market to be sold to often unsuspecting customers and consumers.
Counterfeit goods can take the form of consumer products such as clothes, appliances and toiletries—household items that we need to be safe—and even health products like medications that Canadians rely on for their families. Frankly, they can be anything that can be produced and distributed for profit.
Modern-day counterfeiters have an utter contempt for copyright and trademark laws, for the health and safety risks posed by unsafe or inferior products, for the lost tax revenue for our infrastructure and essential services, for the lost profits for intellectual property owners and for lost consumer confidence in the marketplace.
It is disturbing to note this criminal activity is also becoming more common. Between 2005 and 2012, the RCMP estimates that it investigated more than 4,500 cases of intellectual property crime in Canada. During that same period, the value of counterfeit products seized by the RCMP skyrocketed from $7.6 million to $38 million.
As high as these numbers are, they are only a drop in the ocean. Remember that $38 million represents the value of the seized products. How many other products manage to cross the border? How many more millions of dollars were lost? How many more consumers were put at risk?
One fact is clear: counterfeiting is on the rise not just in Canada, but around the world.
At least two House of Commons committees have published detailed reports confirming the growing threat posed by these goods, not only to the Canadian economy but also to health and to safety.
Many of our trading partners have already taken steps to strengthen their intellectual property enforcement regimes. We cannot afford for Canada to be at a disadvantage compared to our peers. We need a made-in-Canada solution that takes account of the key international developments in the fight against commercial counterfeiting.
For several years industry associations have been pushing for changes to Canada's intellectual property legislation. I am proud to say that Bill C-56 responds to demands for a modern approach to combat counterfeiting and piracy.
Once passed, the bill will help reduce the availability of counterfeit and pirated goods in Canada. In so doing, it would protect the integrity of our economy, support Canadian growth and jobs, and help protect Canadians from the health and safety risks posed by harmful counterfeit goods.
From a public safety perspective, a successful attack on counterfeit goods also means taking a lucrative source of revenue away from serious and organized crime. To that end, the bill would introduce new enforcement tools to strengthen Canada's existing intellectual property regime, both within Canada and at our borders. It would also bolster existing protections against commercial counterfeiting activities.
In this way we would be better equipped to prevent large shipments of counterfeit goods from entering Canada. By disrupting the distribution of illegitimate goods, we would make it more difficult for organized crime to make a profit.
Let us make no mistake: the collection and distribution of significant quantities of counterfeit products is not the random work of a few isolated individuals. The scope of the problem and the profit involved would suggest that organized crime is involved.
What is the attraction? Organized crime can take the profits from counterfeit goods to support any number of nefarious activities, from trafficking drugs to smuggling firearms. In other words, the profits from all these fake products are buying real drugs and real guns and threatening the safety of our streets and communities.
Our government stands firm in the fight against organized crime. The bill would give the RCMP new tools to combat the threat posed by counterfeit and pirated goods when serious and organized crime is believed to be involved.
At the same time, it would not be used at the border to search individual travellers who happen to possess counterfeit or pirated goods for their personal use. I will have more to say about the role of consumers in a few minutes, but first let me provide a more detailed overview of the proposed legislation.
It often takes years of hard work and significant investment to develop intellectual property, not to mention the huge effort to turn that property into a brand that consumers identify and trust. Counterfeit goods, then, do not simply result in lost sales for trademark and copyright owners: they also undermine hard-earned reputations and can put the very existence of businesses at risk.
The proposed legislation would help Canadian businesses protect their brands and works. Currently, if counterfeit trademark or copyright goods are sold in the marketplace, for example, the rightful owners could take legal action through civil courts. Specifically, they could ask for civil remedies for the manufacture, distribution and possession with intent to sell counterfeit goods, but how do the rightful owners stop these goods from entering the market in the first place?
Under current legislation, rights holders must first get a court order to have authorities detain suspicious goods at the border. The amount of specific information needed to obtain a court order can lead to delays that work to the advantage of criminals.
Bill C-56 would streamline this system, allowing trademark and copyright owners to submit a so-called request for assistance to the CBSA and provide information to help identify suspicious goods, thus assisting rights holders to seek civil remedies.
These officers in turn would share information about the detained goods with rights holders. Armed with this evidence, rights holders could then pursue the matter in the courts, as I mentioned a few minutes ago. This collaborative approach would help take the wind out of the sails of organized crime.
Of course, the bill supports the Canadian judiciary system for determining who has copyright and trademark rights, thereby protecting against abuse or misuse of these new border measures.
Rights holders would pay the costs associated with the detention of goods, and the proposed legislation would also contain safeguards for information sharing. Importers would also be notified if their shipments were detained and would have the right to inspect them.
Finally, if the system was being abused, the Canada Border Services Agency could remove a rights holder from that request for assistance process, so there are safeguards.
While the new act would introduce civil remedies, it would also strengthen our criminal law.
Currently the Criminal Code has limited offences relating to trademark fraud. The laws primarily target conduct related to forgery of a trademark; possessing instruments for forging a trademark; defacing, concealing or removing a trademark; and passing off wares or services as genuine, with intent to deceive.
These offences, however, do not go far enough. That is why the bill would make it an offence to sell, distribute, possess, import and export counterfeit goods for the purpose of trade. Offenders would be subject to fines and face possible jail time.
In addition, new criminal offences for possessing and exporting pirated goods for the purposes of trade would be added to the Copyright Act. That would allow the RCMP to seize counterfeit and pirated goods. These provisions were not proposed lightly, but considering that profits from such goods can end up in the hands of organized crime, we need to pursue and prosecute offenders more diligently. That is why the proposed legislation would provide new powers to investigate commercial counterfeiting.
Mr. Speaker, you will note now that I said “commercial counterfeiting”. The proposed legislation will not result in searches of travellers at the border who may possess counterfeit and pirated goods for their personal use—we know that consumers do not always know the origin of a product they acquire in good faith for personal use—nor will the government be pounding on the door of law-abiding citizens who may own knock-off DVDs.
The proposed new authorities to seize goods and prosecute are intended to be used against those who knowingly bring in counterfeit goods with the intent to sell, rent or distribute them in the marketplace. That said, I believe consumers play a role in the fight against counterfeit goods. Canadians are increasingly aware that commercial counterfeiting is not a victimless crime and that knock-off goods do hurt. They hurt intellectual property owners who lose hard-earned income. They hurt law-abiding Canadian taxpayers, as commercial counterfeiters do not pay their share. They hurt the entrepreneurial drive that stimulates innovation and fosters new economic growth. Most insidiously, they hurt innocent people through defective products that maim, injure and sometimes even kill.
In the end, Canadians pay a truly high price for the fake products commercial counterfeiters sell. By being smart consumers, all Canadians can help us combat the scourge of counterfeiting and piracy. In so doing, we can all do our part in the fight against serious and organized crime.
I would like to close by putting Bill C-56 into a larger legislative and policy context. This new act is part of this government's ongoing commitment, a commitment I have been very proud to be involved in, to strengthen protection for intellectual property and to ensure our communities are safe.
The bill would complement the Copyright Modernization Act that recently came into force. Together these two pieces of legislation would create a comprehensive approach to the protection of intellectual property rights. I want to reassure the House that Canada is committed to the efficient flow of legitimate goods across our border. We will work with all of our trading partners to ensure that our actions to enforce intellectual property rights do not themselves become barriers to legitimate trade. Our country so depends on the flow of trade.
Canada has always been a trading nation, and no more so than now, but for all the benefits brought by the global economy, there are associated risks. Faced with an escalating threat of counterfeit and pirated goods and in response to the calls for action from industry, the government has tabled this bill before the House. I believe Bill C-56 is fair and balanced legislation that helps us tackle the scourge of counterfeit and pirated products while protecting the rights and the interests of individual consumers, travellers and legitimate business.
By passing this bill, we not only protect industry, consumers and government revenue, but we can also make progress against serious and organized crime. For all these reasons, I urge all members of the House to join me in swift passage of the bill.
