Bill C-56 (Historical)

Combating Counterfeit Products Act

An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts

This enactment amends the Copyright Act and the Trade-marks Act to add new civil and criminal remedies and new border measures in both Acts, in order to strengthen the enforcement of copyright and trade-mark rights and to curtail commercial activity involving infringing copies and counterfeit trade-marked goods. More specifically, the enactment
(a) creates new civil causes of action with respect to activities that sustain commercial activity in infringing copies and counterfeit trade-marked goods;
(b) creates new criminal offences for trade-mark counterfeiting that are analogous to existing offences in the Copyright Act;
(c) creates new criminal offences prohibiting the possession or export of infringing copies or counterfeit trade-marked goods, packaging or labels;
(d) enacts new border enforcement measures enabling customs officers to detain goods that they suspect infringe copyright or trade-mark rights and allowing them to share information relating to the detained goods with rights owners who have filed a request for assistance, in order to give the rights owners a reasonable opportunity to pursue a remedy in court;
(e) exempts the importation and exportation of copies and goods by an individual for their personal use from the application of the border measures; and
(f) adds the offences set out in the Copyright Act and the Trade-marks Act to the list of offences set out in the Criminal Code for the investigation of which police may seek judicial authorization to use a wiretap.
The enactment also amends the Trade-marks Act to, among other things, expand the scope of what can be registered as a trade-mark, allow the Registrar of Trade-marks to correct errors that appear in the trade-mark register, and streamline and modernize the trade-mark application and opposition process.

Combating Counterfeit Products Act

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, I really appreciated the hon. member's speech. It was very clear.

That said, I would like to provide some more information. In Italy, when counterfeit goods are bought or sold, tourists can be arrested on the spot, even as they come out of a Prada store or any other outfit, and be detained on site. Fortunately that does not happen here.

However, our SMEs and manufacturers have suffered heavy job losses caused by counterfeiting. I am talking about companies particularly in the clothing sector, such as Louis Garneau, Chlorophylle, Canada Goose—in some other areas—and North Face. These companies are big names in Canada. Counterfeiting is simple and easy. Moreover, these goods are not necessarily manufactured here. Huge quantities of them cross our border, coming in by ship, by van and by truck.

The member mentioned whistleblowing and the reporting of information to try to catch fraudsters and those trucking in shipments of counterfeit goods.

However, will this be enough, considering the $143 million cuts to border services? How can that agency do more with less? I am having trouble understanding this approach.

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, I would just like to say that the reason the bill provides a specific exception at the border for individuals exporting counterfeit trademark goods is because the border services officers are not going to be targeting or looking at the individual, personal, perhaps inadvertent purchases of these counterfeit goods.

They are going to be looking specifically at organized crime. Organized crime groups, as we know, use the profits from counterfeit goods to support a litany of other crimes, including drug trafficking and firearms smuggling.

This bill will provide the RCMP with new tools to combat this threat posed by counterfeit goods when there are grounds to believe that they are links to organized crime, not to seek and detain individuals, which is going to be higher impact in terms of the border services officers. They are going to be able to go after organized crime and not individuals.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I thank my colleague for her speech.

I would like to go back to the issue of resources. Although the member answered part of my colleague's question, she did not address the issue of resources.

If the bill passes in its present form, it will give border services officers additional responsibilities.

How can these officers have the resources they need to do their job when $143 million and 549 positions have been cut? Can she answer this question about the current lack of resources, which will be exacerbated by more responsibilities?

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, in fact, I have some friends who are border services officers.

As some of us who have travelled a bit and who have come across the border know, we have increased the limits of what travellers can bring back to Canada. The border services officers are currently not looking for small amounts of goods that people are bringing in, nor are they looking for individual use of baggage or counterfeit items.

This realigns their work. Bills like this have realigned the border services officers' work so that they can in fact focus on crime and on organized crime, including shipments of guns and big shipments of counterfeit goods and harmful products.

In terms of resources, I would like to respond that many border services officers are very happy with the realignment of their tasks. They are fighting crime as opposed to just being there to process people.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, the hon. member still did not really respond to the issue of resources. The government has actually reduced funding in the area of enforcement. We can put all the legislation we want forward, but if we do not put in the resources, nothing will come of it.

Let us be clear. In 2011, a quarter, 26%, of RCMP seizures of counterfeit products were potentially harmful to consumers. As this amount has been rising, the RCMP has indicated that it does not have the resources. Canada Border Services Agency does not have the resources either, because the government has also cut in those areas.

The RCMP indicated in 2005 that they did not have the proper resources. Could the hon. member please answer the question as to whether the government will fund the RCMP and Canada Border Services Agency to address the issue of enforcement?

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, that member should know that we have an additional 3,000 RCMP and 900 more CBSA officers because of our economic action plan.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I will be sharing my time with my colleague from Sherbrooke this evening.

We have heard about a number of issues that have surfaced. Once again, I will just say that Bill C-56, the combating counterfeit products act, amends both the Copyright Act and the Trade-marks Act. Its purpose is to strengthen the enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copyright or counterfeit trademarked goods. It sounds pretty comprehensive.

A couple of things have surfaced through our party, and I would like to reinforce them. We believe that dealing with counterfeiting and infringement is important for both Canadian businesses and consumers, especially where counterfeit goods may put the health or safety of Canadians at risk. That is a good thing. We need stronger enforcement to make sure that this does not happen.

However, it is difficult to see how a bill like this would be implemented, since the Conservatives slashed $143 million in funding from CBSA last year, which further reduced front-line officers and harmed our ability to monitor our borders. I do not quite understand. We are increasing the task, and it is a good one, for border services officers, but at the same time, there are fewer people to do the job.

I have visited border services officers at our border crossings, and I know that these people work flat out. They have a tough job as it is. If we decrease their staffing, it is inconceivable how this particular legislation could be enforced. That is a question that needs to be discussed early at the committee stage or in further discussions.

Therefore, it is difficult to quantify the problem of counterfeiting and pirating in Canada and its economic impact. On this side of the House, we support the fight against counterfeit goods, especially when they pose a risk to health and safety, as I just mentioned. We need to determine if the Canada Border Services Agency will be able to implement these enforcement measures in light of the 2012 budget cuts.

The United States and industrial groups have been calling for measures to stop counterfeit goods at the border for a long time. It remains important to continue being vigilant in order to ensure that intellectual property laws strike a balance between the interests of rights holders and those of consumers or users. We are trying to strike a fair balance between the two.

The government has long been aware of how difficult it is to measure the magnitude of counterfeit and copied goods in Canada. This challenge was identified in the 1998 OECD report entitled The Economic Impact of Counterfeiting and Piracy and is due to the clandestine nature of counterfeiting. Much of the data consists of estimates based on real seizures, isolated testimony and data from the industries themselves.

In its 2007 report on counterfeiting, the industry committee recommended that the government establish a reporting system for investigations, charges, and seizures of counterfeit goods and pirated copies as a way to collect data. According to the more recent 2013 report, it is difficult to obtain a accurate estimate of the value of counterfeit and pirated goods on the market in Canada.

The NDP believes that it is important to fight counterfeiting for the sake of Canadian businesses and consumers. It is especially important when counterfeit goods put the health and safety of Canadians at risk. All the same, we do not know how the enforcement regime proposed in Bill C-56 will be paid for. This bill gives border services officers new responsibilities at a time of budget cuts.

In their 2012 budget, the Conservatives slashed the CBSA's funding by $143 million, effectively reducing the number of front-line officers and our ability to monitor our borders. According to the CBSA's report on plans and priorities for this year, 549 full-time jobs will be lost by 2015. That is significant. If the agency is losing 549 jobs at the same time it is being given new responsibilities, how is it supposed to implement this bill?

This bill will require customs officers to carry out very complicated assessments to determine whether goods entering or leaving the country infringe copyright or trademark. That is not easy. It is not like looking for something and finding it. It is more complicated than that and takes more time. When assessing whether copies are pirated, officers have to determine whether any of the exceptions in the Copyright Act apply. Even the courts have trouble figuring that out sometimes. The NDP wants to make sure that the CBSA has adequate financial resources to implement this bill.

This is a point we have been trying to make. If one has new responsibilities that are even more complicated, with new technology, then instead of cutting back resources, there should be additional resources of trained personnel added to the border services to deal specifically with this rising problem.

The industry committee recently conducted a study on intellectual property that, in part, examined these issues. Witnesses testified in favour of increasing border measures to tackle counterfeit and infringing goods. In its 2013 report, “Intellectual Property Regime in Canada”, the committee recommended border measures, including providing appropriate ex officio powers to customs officials, introducing civil and criminal remedies for trademark counterfeiting and allowing customs officials to share information with rights holders regarding suspect goods.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, my friend mentioned resources, because we have seen a $145-million budget cut in the 2012 budget for those same officers the government is counting on, those border officials who are meant to catch all these contraband goods. One cannot impose more responsibilities and more work on fewer people and expect better results, particularly when it comes to something like border security. This applies not just to contraband goods but to all the illegal weapons that come into Canada.

As someone who often deals with border issues to the south in the interior of British Columbia, how important is it that we actually staff, train and resource those border outposts, particularly some of the smaller posts that have lower traffic? These are often the places where illegal contraband makes its way and illegal weapons make their way into Canada, particularly if the smugglers know that the government is cutting back on resources. It is cutting nearly $150 million from the budget this year.

The Conservatives can invent their own numbers, but the CBSA's own planning documents say that there is a net loss of 450 full-time-equivalent positions from its services this year. That is not the NDP talking; that is the CBSA. They can invent all the numbers they want on the Conservative side. Resources are being depleted through last year's budget cuts and this year's.

Particularly for those smaller outposts that face significant challenges, what do further cuts, a further depletion of resources, mean in terms of the effectiveness of legislation like this?

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, I am glad our House leader called me his friend. He is my friend too.

I will answer in general, first of all. Many of us have noticed that there is a sometimes overt and sometimes not so noticeable attack on our civil service, on our public servants, who are trying to do the very best they can with limited resources. Instead of increasing resources, we are cutting back. Often, as is the case here, we are losing positions. We have seen the results of some of this in the food industry with the scandal at XL Foods.

I visited one of the border crossings in my riding. A border agent explained what they do when a transport truck comes in and what they look for to look for smuggled items. They do a thorough search. They look at the mirrors. They look where there could be a false tank. It is really quite sophisticated and quite thorough. What would happen at that border crossing if one of those agents was dropped and they had one less person but still had to do that work and at the same time they had other responsibilities that were more technical and sophisticated in nature? It does not add up.

[Jason Kenney, Conservative, Minister of Citizenship]

Mr. Speaker, I would like to introduce some facts rather than fiction to this question of resources for the Border Services Agency. It is an important question.

I agree with the premise of the last question from the member for Skeena—Bulkley Valley, which was that resources are necessary to enforce the law. That is precisely why, since taking office, the current government has increased the budgetary allocation to the CBSA by 27%, an increase of $387 million, and has increased by 26% the number of full-time equivalent personnel at the agency.

It is true that this huge increase would be offset by a relatively modest decrease, but when all of those changes are implemented in 2015, the net effect will be a significant increase. My estimate is that there will be about 15% more Border Service agents then than there were a few years ago, and significantly more resources, both in real and absolute terms.

When the estimates, the public accounts, the CBSA planning and priorities and all of these public documents indicate higher resources, would the member explain to me why the NDP maintains that there have actually been cuts? I just do not understand why those members are making that up.

[Alex Atamanenko, NDP, British Columbia Southern Interior, BC]

Mr. Speaker, we have heard the same types of comments in agriculture. We have been told that more resources are being allocated in agriculture to research and to other areas. At the same time, when we talked to people on the ground who represent the workers, we found that there actually are cuts. We have been told specifically what cuts there are in certain areas.

I suspect the same thing might be happening here. On the one hand, we have figures being presented by the government, but on the other hand, we have other numbers that do not coincide.

When this is discussed at committee, perhaps what really needs to happen is to determine exactly what the figures are by talking to people on the ground.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I am pleased to rise today to speak to Bill C-56, on behalf of my riding of Sherbrooke.

I have a vested interest in this issue because the Sherbrooke area in the Eastern Townships is very close to the border. This is therefore very important to me and concerns me deeply. I am sure that my colleague from Compton—Stanstead, who is now listening and probably thinking along the same lines, shares my interest and concerns. Indeed, the Minister of Immigration recently visited Stanstead, as a result of reports of the porous border. This happened against a backdrop of recent revelations and surprises about illegal immigrants.

However, it is also true, with regard to counterfeit goods, that the easier it is for dishonest people or criminals to cross our borders, the more our country suffers.

As the member for Sherbrooke, I am understandably very interested in our borders, given their proximity. Indeed, my riding is less than 30 minutes away from the U.S.

By the way, I would like to thank the member for LaSalle—Émard, who has worked on this file and continues to do so every day. She is passionate about this issue and about her work. I am convinced she will represent our views when the time comes, when the bill is being studied in more detail in committee.

We hope that that will happen soon because the government is addressing this at the last minute, as was mentioned earlier. It seems to be at the bottom of their list of priorities at the tail end of this parliamentary session. It is hard to believe the government when it says that this is a priority. We have been waiting for this bill for a long time. It was introduced on March 1, 2013. Today, the government is saying that it is a priority, just as the session is coming to a close. So much for good intentions and good faith.

We will be supporting the bill at second reading. It is common knowledge that this bill has been anticipated and talked about for years now. I think the discussions go back to 2007. There have also been talks with the United States, which is an important player in the fight against counterfeit goods. The United States is essential to our country because it is our major trading partner.

It is important for Canadian businesses and consumers that we fight counterfeiting, particularly when counterfeit goods can put Canadians' health and safety at risk. It is a rather important point that I also mentioned earlier when I asked the member for Halifax West a question.

The member mentioned that auto parts could sometimes be counterfeit. That clearly endangers the lives of some Canadians who go to the local garage to have their car fixed. They might wind up with counterfeit parts that are not up to Canadian standards. The brakes or airbags might not be up to Canadian standards.

This is a very important issue in the sense that it could endanger the safety and lives of Canadians when they think they are using a product that complies with current standards. However, they might eventually realize they are using a counterfeit product, meaning that some malicious person tried to copy an existing product. Those are not necessarily the safest of products.

There is also the matter of resources. I talked about that this evening during this debate on Bill C-56. I also mentioned it in my questions to my colleagues. I talked about the lack of resources at the Canada Border Services Agency.

The minister and most of the members who have spoken try to play with the numbers and say that since 2005, the total budget has increased, that it will decrease relative to 2012, but that in fact, since 2005, it has increased. They are playing with the numbers. However, the truth is that less money will be available for the agency in 2013. That is a number that is easy to come up with.

The Minister of Citizenship, Immigration and Multiculturalism keeps saying that the budget has increased relative to 2005, but the reality is that the agency will have less money than it did last year. That is a budget cut. There are no two ways about it.

The government often likes to compare its spending to that of the Liberal government in 2005. It says this is an increase. However, the increase in funding allocated to the departments in question is below the level of inflation since 2005. Any administrator knows that if costs increase and the budget does not keep pace with the increase in costs, then this can be considered a budget cut. It is a simple calculation that seems to escape the government when it talks about increases from the time the Liberals were in power to now.

That is another debate we could have in the wake of the Conservatives' budget cuts. This bill puts additional responsibilities on border services officers. They are being asked to take on more responsibility and be on the lookout for counterfeiting, but they are not being given the resources they need. That point has been raised by a number of people since Bill C-56 was introduced.

The bill creates two new criminal offences under the Copyright Act. These offences have to do with the possession or export of infringing copies. The bill also creates offences for selling or offering for sale any counterfeit goods on a commercial scale. The bill also prohibits the importation or exportation of infringing copies or counterfeit goods and balances out this ban with two exceptions.

These two exceptions are important. The first has to do with personal use, so copies that are in an individual's possession or baggage. The second has to do with copies that are in transit control. If I have the time, I will discuss the notion of transit control later on.

The bill is truly focused on fighting crime. It is often criminal groups that choose to use counterfeit goods in order to make money. Organized crime groups are often the ones that are trading in counterfeit goods. This bill will does not directly target average people who may inadvertently be in possession of or have purchased counterfeit goods.

The bill also gives border officials new powers that authorize them to detain infringing copies or counterfeit goods. That is an important policy change, since up until now, border officials required copyright holders to first get a court order before they would seize infringing copies or counterfeit goods. This request to grant these powers to officers has been discussed since 2007, I believe.

In conclusion, I want to say that it is unfortunate that this bill assigns new responsibilities but does not provide any resources to carry them out. We are asking the officers to do more with less. The NDP thinks that is unacceptable. If you ask someone to take on added responsibilities, you have to give them the resources to do so.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Mr. Speaker, I thank my colleague for his speech. He brought out some very good points on the bill.

The Minister of Citizenship, Immigration and Multiculturalism recently commented that there has been a net increase in the border guards since 2006, and I have seen that. I have nine stations in my riding on the Maine border of New Brunswick, and I know the challenges. There has been a lot of hiring in the past number of years.

Would the member acknowledge that part of the existing role that these border officers have is to seize and hold goods? They do that from a commercial standpoint on most days as well.

Also, could he reflect on the new systems, like eManifest and others? With technology, we can use our resources more efficiently. However, just because this might be a new role, it does not necessarily translate that we would need new resources.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Mr. Speaker, I would like to thank my colleague for his question, which reminds me about how I said at the beginning of my speech that, most of the time, the government is playing with the numbers when it makes comparisons between 2006 and 2013.

The hon. member just mentioned that, since 2006, there has been a net increase in border guards. However, the facts show that there will be fewer employees in 2013 than there were in 2012. If we compare those figures to the ones for 2006—seven years ago—of course there could have been a net increase. The fact remains that there has been a net decrease in the number of employees from 2012 to 2013. It is all well and good for the government to play around with the numbers, but the facts are clear: there will be fewer resources in 2013.

Maybe there is a more effective way of doing things, and indeed I hope the government is trying to be effective. When it comes to taxpayers' money, the most important thing is to use it as effectively as possible so that as little as possible is wasted. However, we should not play around with the numbers too much, as the Conservatives tend to do when comparing themselves to the Liberals.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I would like to thank my colleague from Sherbrooke for his speech.

He comes from an area where innovation is the watchword. The Université de Sherbrooke is innovative in its own way. I am certain that just like those in LaSalle—Émard, many companies in his area are innovating. They are reaping the benefits of their ideas and want to protect their intellectual property.

The World Customs Organization published a report about this. It contains recommendations about the important points to be included in model legislation to protect intellectual property. This was linked to innovation in the study by the Standing Committee on Industry, Science and Technology, because a patented idea is part of the innovation chain, even though it is not the only link in the chain.

In its report, the World Customs Organization called for the effective enforcement of intellectual property rights at the border without undue restriction of the flow of trade in legitimate goods. Enforcement is shaped by the resources available. The extent and effectiveness of customs interventions are dependent upon the resources available for customs administration. My colleague spoke about that.

I would like my colleague to elaborate on the good points raised by the World Customs Organization.