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

[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.

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, indeed that is the whole purpose of Bill C-56. It would give the government, the CBSA and the RCMP the tools that they need to seize and detain counterfeit goods as well as to protect Canadian businesses, innovation and jobs.

I would like to ask the hon. member what the opposition would do to support Canadian lives, health, economy and jobs. Will she support this bill?

[Wai Young, Conservative, Vancouver South, BC]

Mr. Speaker, I rise today to speak to the second reading of Bill C-56, the combating counterfeit products act, and to bring to the attention of the House: first, the risks presented to Canadian consumers by commercial counterfeiting; and second, to the problems this creates for businesses that employ Canadians.

Not that long ago, consumers did not need to worry about the risks and dangers of counterfeit products. The term “counterfeiting” itself was generally associated with making false currency and few people had even heard of intellectual property crime. Then, over time, things began to change. Counterfeit T-shirts or brand name replicas showed up in flea markers. Travellers from abroad returned home with supposedly brand name watches bought at cheap prices from street vendors. Yet, within a few days, the watches stopped working or the bands left coloured stains on their wrists. Supposedly, brand name luggage or footwear was bought at such bargain prices that it seemed too good to be true, and it was. Generally, these products fell apart in very short order.

Today, Canadian consumers are wiser and more wary. Sadly, we are increasingly exposed to counterfeit goods in our domestic market and Canadians and Canadian businesses have been victimized and hurt. Today, the problems imposed by counterfeit products extend far beyond the breakdown of a cheap wristwatch or a pair of shoes. Today, counterfeiting can pose a range of very serious health and safety risks to consumers.

Today, fraudulent reproductions of many trusted trademark or copyrighted products infiltrate the legitimate market. Every day counterfeit products enter Canada, from electronics and electrical components to automotive parts and machinery, from batteries and toys to perfumes and pharmaceuticals. The level of sophistication of counterfeit products has increased, along with the range and diversity of products which are counterfeited. On the one hand, some counterfeit operations may not be sophisticated at all. The RCMP reports instances where counterfeiters simply went through dumpsters at construction sites to recover used and discarded circuit breakers. They repackaged them and sold them as new.

However, other operations are very sophisticated, indeed, where dangerous items are made in large quantities for sale to Canadians who may not know the origin of the materials in the products that they buy. For example, investigators intercepted a package at a Vancouver postal authority. It led them to a warehouse that contained 15,000 counterfeit pills packaged in blister packs. The estimated total value of these seized counterfeit drugs exceeded $1 million. At the same warehouse, the investigators also seized clothing and accessories that had been labelled with counterfeit brands, which threaten the production and work of our own Canadian innovators and workers. The resale value of these counterfeit goods was estimated to be in excess of $5 million.

There is no doubt that counterfeit products have become more sophisticated. In addition, the production and supply chain has also become more sophisticated, as well as the method of importation. Some counterfeiters ship the counterfeit labels separately from the products to avoid detection. Once in Canada, the labels are then affixed to the finished products.

Shockingly, counterfeit labels are not only limited to brand names but to the safety certification labels. These are labels that consumers trust to show that a product meets certain industrial standards, knock-off labels that purport product testing and certification by the underwriters, laboratories or the Canadian Standards Association. These labels are meant to deceive the consumer into believing the product meets Canadian safety standards. In fact, electrical equipment that carries a false CSA label may pose hazards to the unsuspecting consumer through malfunction, fire or electrocution.

The falsification of safety certification labels clearly demonstrates some of the risks that consumers face when they buy a counterfeit product, but there are many more examples.

In the past three years, the number of RCMP investigations involving counterfeit pharmaceuticals has more than doubled. Counterfeit pharmaceuticals have already caused a death in Canada. In 2006, a woman from British Columbia bought medication from an unlicensed pharmaceutical website that purported to be Canadian. The medication was, in fact, manufactured overseas. It had been contaminated with toxic metals during its production and the woman subsequently died.

Last year, the RCMP investigated another case of counterfeit caplets that purported to be bee pollen. They actually contained carcinogenic substances that were banned for sale in Canada.

There are many examples of how counterfeit or pirated products have victimized the people who have purchased them, whether through the health and safety risks that I have outlined, or the inconvenience and monetary loss of buying products that do not live up to the standards of the brand. Counterfeit products make it more difficult for consumers to trust the marketplace.

The bill before us represents a major step forward in protecting consumers from counterfeit products and counterfeit services. It gives the enforcement authorities and rights holders the tools they need to crack down on counterfeiters.

Rights holders can submit a “request for assistance” to the Canada Border Services Agency, CBSA, to provide information to border service officers about their brand and products. With this information, border service officers will be able to contact the rights holders when commercial shipments that are suspected of containing counterfeit products are detained at the border. The rights holders can then launch civil proceedings. In fact, rights holders can seek civil remedies for the manufacturing, distribution and possession with intent to sell counterfeit goods instead of waiting until those goods are put up for sale in the marketplace as is currently the case today.

As well as these civil remedies, there are also new criminal offences in the Trade-marks Act for which law enforcement agencies can lay charges. Selling, distributing, possessing, importing or exporting counterfeit goods for the purposes of trade will be prohibited.

Let me emphasize the phrase “for purposes of trade”. This is important because the bill would not target individual consumers who knowingly or inadvertently bring back a counterfeit product to Canada for personal use. Border services officers would not seize private iPhones suspected of containing pirated copies. Nor would they seize a suspected counterfeit wristwatch or a handbag. In fact, the bill contains a specific exception at the border for goods intended for personal use as part of the traveller's personal baggage. Therefore, Bill C-56 would target counterfeiters who make a business of importing and exporting knock-off products.

Many may ask this. Where is the harm in cheap products? However, Canadians recognize the dangers of purchasing counterfeit items.

Last year, Microsoft Canada commissioned a survey. The survey revealed that 84% of Canadians said that they did not knowingly purchase a counterfeit product, less than half of the consumers surveyed felt they knew how to identify counterfeit and genuine products and 71% of Canadians agreed that counterfeit goods were harmful to the economy.

It is clear from these survey results that the Canadian public agrees with this bill and has a strong interest in and a growing understanding of the problems posed by counterfeiting. Again, 71% of Canadians agree that counterfeit goods are harmful to our economy.

I would now like to draw the attention of members to the problems that large-scale commercial shipments of counterfeit goods create for the businesses that employ Canadians. Indeed, we see significant support for the measures in Bill C-56 from innovative Canadian entrepreneurs and creators who are the most impacted.

In a globalized economy, strong, modern marketplace framework rules protect innovation. In a knowledge-based society, this is particularly true of the laws governing intellectual property, or IP.

Intellectual property covers a broad range of innovation, and I will focus my remarks today on trademarks and copyright, the protection of which are at the heart of Bill C-56.

Over the years, this government has taken important steps to update IP laws to keep them in line with the demands of the 21st century. Hon. members will recall that last year we passed the Copyright Modernization Act. Since then, many of its provisions have come into force as of last November. As a result, I am proud to say that Canada has now implemented a responsive copyright regime that balances the needs of content creators and users.

The bill before us today would update Canada's IP enforcement regime governing trademarks and copyright and would provide new tools to strengthen the protection of these rights. It would give rights holders the tools they need to work with law enforcement authorities to protect their intellectual property at the border and domestically.

Counterfeiting threatens Canadians' health, safety and economic well-being. It is not a victimless crime.

Over these past months, the Standing Committee on Industry, Science and Technology, chaired by the hon. member for Ancaster—Dundas—Flamborough—Westdale, heard from many witnesses as it prepared its report on Canada's intellectual property regime. That report was tabled March 18. I recommend it to anyone who seeks a better understanding of the IP regime in Canada.

During the hearings, the committee learned about the impact that counterfeiting has had on the competitiveness of Canadian businesses and the Canadian economy as a whole. Hon. members can imagine what impact a low-quality, counterfeit product could have on a customer who has paid for what was assumed to be a high-quality and genuine product. One can imagine how difficult customer relations might be when dealing with a consumer who has bought a product in good faith and found it to be not up to the company's standards. Certainly, a counterfeit product would damage the reputation of the brand, as well as the store or the company selling it. This makes both the company, as well as the consumer, a victim of counterfeiting.

The integrity of our economy is threatened when consumers are exposed to counterfeit items and as a result lose confidence in the marketplace. It leads to reduced revenue for the rights holders and therefore, reduced growth, reduced incentive to invest and hire, and reduced incentive for the creation of innovation. Commercial counterfeiting carried out by criminal organizations is not a victimless crime.

A company like Canada Goose Inc. makes a concerted effort to combat counterfeiting. Its website gives tools to help potential customers determine whether the product they are buying is genuine. However, as the committee report outlines, some companies prefer not to draw attention when counterfeiters knock off their products. The chair of the Canadian Anti-Counterfeiting Network told the committee that having a name associated with a counterfeit product may damage the market for some products, so some companies do not want to tarnish the image of their own brand.

Although some businesses can be reluctant to sound the alarm about their products, there has been a marked rise in the number of counterfeiting cases that the Royal Canadian Mounted Police has documented. It estimates that between 2005 and 2012, the value of counterfeit and pirated goods seized has increased fivefold from $7.6 million to $38 million. Last year, for example, there were 726 occurrences of intellectual property crimes reported by the RCMP. Some 45% of those cases involved apparel and footwear. Another 20% involved piracy of audiovisual and copyrighted works. Nine per cent involved consumer electronics and a further 9% involved personal care products, like toothpaste, shampoo and soap that Canadian families rely on to be safe and healthy.

The bill before us would give the RCMP, the Canada Border Services Agency and the rights holders the tools that they need to combat and curtail counterfeiting.

Under the current system, a court order is required before border services officers can seize commercial shipments of counterfeit products. The Entertainment Software Association of Canada pointed out that this in effect requires a rights holder to know beforehand that goods are about to be smuggled across the border. As one can imagine, this would be difficult.

Under Bill C-56, however, if rights holders suspect that shipments of counterfeit goods may be crossing the border, they would need only send the CBSA a request for assistance, with information to help identify their brand. The border services officers would have access to information needed to identify, detain and refer suspected shipments to rights holders. The rights holders could then pursue the matter civilly with the courts.

The bill also provides a new criminal offence for the commercial possession, manufacture or trafficking of trademark counterfeit goods. The rights holders community has welcomed this bill. For example, Canada Goose Inc. has said, “The strengthened border measures will play a vital role in protecting jobs for Canadian manufacturers, as well as unsuspecting consumers looking for bargains from those that would do them harm.”

The Entertainment Software Association of Canada stated:

Equipping border service agents with the necessary tools to seize counterfeit products...will help take a bite out of this ongoing problem. Protecting IP is critical to the Canadian economy, especially for content industries like ours, which depends on talent, imagination and creativity to generate returns.

The Canadian Anti-Counterfeiting Network stated:

...counterfeiting has grown into a criminal activity that supports everything from organized crime to terrorism.... [That is mainly because] in the current landscape the risk of getting caught is low while the profit margin is extremely high. With this new legislation the risk assessment will begin to change.

These are just some examples of the support that has come from businesses and business organizations.

Finally, I would like to quote from the Canadian Chamber of Commerce. The collective businesses state, “We urge all political parties to support the bill and to ensure the speedy passage of this important legislation.”

I could not agree more. Canadian employers and law enforcement are working to prevent the damage caused by commercial counterfeiting to Canadian lives, our economy and Canadian jobs. Let us do our part in this House. I urge all hon. members to join me in supporting the swift passage of this bill.

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

Mr. Speaker, I want to thank my colleague for her hard work.

She just said that she has been working on this for months because she thought that Bill C-56 was a priority for the government. It is clear that this bill was at the bottom of its list of priorities. The parliamentary session is winding down and this might be one of the last bills that the Conservatives intend to have passed. So much for priorities, since the government is introducing this at the last minute.

I wanted to come back to the matter of the additional resources that Canada Border Services Agency will have. Earlier, we saw the Minister of Immigration working his mathematical magic with the cuts. He would have us believe that nothing happened and that there will be more money.

He said that in 2005, the agency had a little over $1 billion; in 2012, it had $1.8 billion, and with the cuts, it would have $1.3 billion. According to the minister's logic, since the numbers are higher than they were in 2005, the government did not reduce the budget. Most ministers use that same logic. They say that if the amount in 2013 is higher than when they came to power in 2006, then there were no cuts. However, the agency we are talking about here today is being forced to do more with less, like many other departments that experienced cuts.

Can my colleague talk about the fact that the agency will have more responsibility and fewer resources if Bill C-56 passes?

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

Mr. Speaker, as I was saying earlier, the clock is ticking, and while this government is unravelling, mired in scandal, we have before us a bill introduced by the Minister of Industry. It is a great honour for me to speak this evening as the official opposition industry critic.

The Conservatives boast about being good economic managers and supporters of industry and economic growth, but they dragged their feet on the only bill in recent memory that affects industry and seeks to tackle problems related to counterfeiting.

Now they want to rush the bill through. What is the urgency? What do they have to hide? What are the real reasons behind this sudden interest in Bill C-56? Are they trying to change the channel, divert attention from this government's mismanagement, or did pressure from trade partners finally get to the Minister of Industry?

Canadians and the people of LaSalle—Émard have lost all confidence in this government. They do not believe that this government is fit to govern.

More and more Canadians mistrust the government. They feel it has something to hide. They feel that the Conservatives are not fit to govern.

As the industry critic for the official opposition and the representative of the people of LaSalle—Émard, I rise in the House today to speak to Bill C-56, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, which is also known as the Combating Counterfeit Products Act.

As soon as this bill was introduced on March 1, 2013, the NDP got to work. We met with many stakeholders. All of them recognized the importance of effectively combatting counterfeiting, and they all said that Canada has to have the tools to do it. They also raised a number of questions about the enforcement of the bill and expressed doubts as to whether the government was really willing to wage an effective war on counterfeiting.

Once again, the Conservatives used this bill in a misleading way. The wording of the bill is not misleading; rather, the government's actions are inconsistent with an effective fight against counterfeiting.

That is the first point I wanted to make. In order to combat counterfeiting at our borders and in Canadian ports, we need human and financial resources. We therefore find it difficult to understand how we will be able to enforce this ambitious bill when the Canada Border Services Agency is facing $143 million in cuts, not only to front-line services but also to intelligence services that are crucial to fighting illegal activities such as counterfeiting.

What is more, 549 full-time jobs will be lost between now and 2015. We have also learned that the Minister of Canadian Heritage wants to interfere in customs officers' legitimate collective bargaining process, once again, without understanding how that undermines labour relations.

The RCMP's budget and resources have also melted away like snow on a warm day. The government needs to put its money where its mouth is, as we say. The Conservatives rarely do that.

The NDP recognizes the importance of combatting counterfeit products, particularly those that could jeopardize the health and safety of Canadians.

Despite the lack of conclusive data, we recognize that this is having an impact on Canadian industries.

We condemn the cuts to the Canada Border Services Agency and the RCMP, which are our front-line defence against counterfeiting, as I mentioned.

The second point I want to talk about is the government's lack of action. Once again the Conservatives have dragged their feet. The cuts we condemn show that they are not serious about combatting counterfeiting.

The problem of counterfeiting has come up many times in recent decades. A report was tabled in 1998. The issue of counterfeiting has come up over the years, and we must acknowledge the impact this issue has had on Canadian industries and consumers.

I want to talk about what has been happening in recent years. In 2007, a report by the Standing Committee on Industry, Science and Technology entitled “Counterfeiting and Piracy are Theft” described the impact counterfeiting has on the Canadian economy. The report made 16 recommendations. In its supplementary opinion, the NDP made two recommendations. A number of these recommendations were ignored, even though industry stakeholders, trading partners and even Canadian consumers continued to raise the issue.

Furthermore, during the Standing Committee on Industry, Science and Technology's study of intellectual property, which concluded in 2012-13, a number of stakeholders criticized the government's inaction.

Here is what Martin Lavoie, the director of policy for Canadian Manufacturers and Exporters, said in committee:

We have been advocating since 2006 for more resources for customs agents to stop the transit of counterfeit products...

The Minister of Industry introduced this bill in the House on March 1, 2013, after which we heard absolutely nothing. Now here he is as we are on the verge of adjourning for the summer. I am sorry. On May 30, 2013, at 12:26 a.m., we had a rather pathetic speech from the Parliamentary Secretary to the Minister of Human Resources and Skills Development. She kept breaking into fits of laughter, which shows how seriously the government takes counterfeiting.

The third point I want to talk about is the lack of conclusive data regarding counterfeiting in Canada. I cannot help but denounce the cuts made to Statistics Canada, which continue to have an adverse effect. I am not the only one who feels that way. The stakeholders we heard from at the Standing Committee on Industry, Science and Technology did as well.

Canadian industries, exporters, manufacturers and small and medium-sized businesses need these statistics, which are snapshots of our economy. They are not the only ones who need them. We, as parliamentarians, use them to make informed decisions. If we do not have hard data that show the trends in recent decades, we cannot predict future trends. These data give us an accurate picture of Canada's economic situation, employment, prosperity, innovation and so on.

Conclusive data allow parliamentarians, legislators and public servants to establish policies that are not based on anecdotal evidence, but on solid data and recognized scientific methods. That is what is happening here with counterfeiting. We know that there is problem, that goods have been seized and that the issue has been raised everywhere in the world. However, unfortunately, it is very difficult to grasp the magnitude of the problem and the best way to address it.

A lot of data have been provided but, as I said earlier, it is difficult to evaluate the methods used to gather those data. In addition, data are not always collected using scientific methods that would help us understand the magnitude of the problem.

The data provided have been of more of an anecdotal nature, and they do not give us an idea of how widespread the problem is internationally. That is why it is important that Canada and the rest of the world have access to these data. This has been brought up many times.

I have some data here that I can share with those who are watching. In Canada, much of the information comes from statistics on actual seizures. For example, Industry Canada reports that:

The retail value of counterfeit goods seized by the RCMP increased from $7.6 million in 2005 to $38 million in 2012.

Still, more details would be useful. In 2009, the OECD estimated that international trade in counterfeit goods and pirated copies could be worth as much as $250 billion. In the same study, the OECD renewed calls for better access to information, saying once again that there are not enough data.

Moreover, anecdotal evidence suggests that counterfeit goods can threaten consumer health and safety. Counterfeit electrical components—I believe someone mentioned this already—and toxic stuffing in a goose-down jacket are two examples of that. I can confirm that because a Canada Goose company representative testified before the committee and I had the opportunity to see the jacket and the material inside it.

Again, the NDP will support Bill C-56 because counterfeit goods can threaten Canadians' health and safety and tarnish the name and reputation of Canadian companies like Canada Goose. A company with a name like that could not be more Canadian. We recognize how important it is to fight counterfeiting effectively.

In its 2007 report, the Standing Committee on Industry, Science and Technology called on the Government of Canada to establish an annual reporting system to provide statistics on the efficacy of the Canadian intellectual property enforcement system. The committee went on to list what it wanted to see in the report: the number of investigations, the number of charges laid against counterfeiters and pirates, the number of criminal sentences obtained, the number of counterfeit and pirated shipments seized by the Canada Border Services Agency and the country of origin and approximate value.

My question for my colleague is this: did the government act on that recommendation? That would give us some data to work with.

The lack of conclusive data makes things harder for everyone—the investigators, officers and legislators studying the issue—when the time comes to find ways to fight counterfeiting effectively. We believe that having good data and an accurate picture of what is going on would enable us to implement effective measures.

Bill C-56, the combating counterfeit products act, would amend both the Copyright Act and the Trademark Act. Its purpose is to strengthen enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copies of counterfeit trademarked goods. This bill would add two new criminal offences under the Copyright Act for possession and exportation of infringing copies and would create offences for selling or offering counterfeit goods on a commercial scale. I want to stress that because it is an important point in the bill. It would create a prohibition against importing or exporting infringing copies and counterfeit goods, and would introduce some balance to that prohibition by creating two exceptions.

The first exception would be for personal use. If someone crosses the border with something in his or her possession or baggage, which the person bought and did not know was counterfeit, that would be for personal use. However, we want to ensure that we study that closely at committee to ensure the exception would be solid.

The second exception, and it is an important one, would be for items in transit control. That would be items that would be transiting in Canada but not passing the border. They are not necessarily in Canada, but in transit control.

Another point is that it would grant new ex officio powers to border officials to detain infringing copies or counterfeit goods. That would be a significant policy shift. Until now, border officials required the private rights holders to obtain a court order before seizing infringing copies or goods. Therefore, that would be an important change. It would grant new ex officio powers to the Minister of Public Safety and border officials to share information on detained goods with rights holders. Also, it would widen the scope of what can be trademarked to the features found in the broad definition of “sign”, including colour, shape, scent, taste, et cetera.

While the granting of ex officio powers to customs officials has been a recommendation of the counterfeit report of 2007 and reiterated by stakeholders, two main issues were raised with this provision in Bill C-56. First, the Canadian Anti-Counterfeiting Network's first recommendation in one of its reports stated, “provide the RCMP and the Department of Justice [or border official]”, which it did not mention, but I think is what it meant, “with adequate financial and human resources to effectively address counterfeiting”. These were industry representatives who were stating that.

On the other hand, Dr. Michael Geist, from University of Ottawa, raised the issue of the complexity, and my colleagues from heritage and ethics, who studied Bill C-11 extensively, can attest to that. He discussed the complexity of detecting copyright infringement and also raised the question of changes in court oversight. Dr. Geist said, “While officials are not intellectual property experts, the assessment includes consideration of whether any of the Copyright Act's exceptions may be applied. These determinations are complex--courts often struggle with this issue...”, and so on.

While meeting with them in consultation with my NDP colleagues, Dr. Geist, industry, and stakeholders, raised a lot of issues regarding this bill.

In closing, I would like to reiterate that the NDP recognizes the importance of controlling counterfeit goods, especially those that could pose a risk to the health and safety of Canadians.

We recognize that counterfeiting hurts Canadian industries. We condemn the cuts that affect front-line workers who fight counterfeiting.

I sincerely hope that the government will appreciate the importance of studying this significant bill in committee and the resulting recommendations.

The House resumed consideration of the motion that Bill C-56, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I would like to ask my hon. friend about the way in which he thinks Bill C-56 is working in relation to what are known as parallel imports. We are not talking about materials that were illegal where made but where copyright has been accessed. There has been a Supreme Court decision on this matter. The way in which the bill has been drafted leads experts in this area to be concerned that parallel imports may fall under the ambit of the act and be treated as criminal activity when, in fact, they are not. I wonder if my hon. colleague has any comments.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, my friend hit the nail on the head. I mentioned this during the course of my speech. Counterfeit goods are not about buying a pair of counterfeit Hilfiger jeans or about buying a knock-off watch. We find these goods in our automobiles. We find them in prescription drugs we buy through the Internet. Not only are they dangerous to our seniors, to our children and to people who drive automobiles, but they take away jobs. I know that the NDP members do not care a whole lot about job creation. They also do not believe in paying their taxes, so they do not really care when the government is losing out on tax revenue, because they do not pay taxes anyway.

The NDP members have to get their heads out of the sand. I see the House leader over there shaking his head. I can hear it all the way over here.

Job creation on this side of the House is important to our government, and that is why we have created over one million net new jobs since July 2009. We believe in protecting Canadian manufacturing and the Canadian economy, and that is why Bill C-56 needs swift passage.

[Mark Adler, Conservative, York Centre, ON]

Mr. Speaker, I am delighted to rise today. It is a privilege to speak in support of Bill C-56, combating counterfeit products act.

One of our government's top priorities has been to help build safer communities for all Canadians. Now, more than ever, safe communities and economic prosperity go hand in hand. That is why our government has a robust agenda in place to disrupt fraud and to ensure that those who engage in these illegal activities face severe penalties. That is why, for example, we passed Bill C-59, so that criminals convicted of white-colour crimes can no longer be released from prison after serving only one-sixth of their sentence.

Similarly, counterfeit crimes are becoming more prevalent. They are a tangible threat to our economy that undermines innovation and the integrity of Canadian brands. It is not so simple as when one's aunt or cousin goes to China or Taiwan and buys a knock-off watch or purse, or when one buys something similar out of the trunk of a car in Toronto. That is only the tip of the iceberg. Counterfeiting threatens economic growth and job creation, as well as the health and safety of all Canadians. With this legislation, we are standing up for Canadian businesses and consumers to ensure they do not become victims of counterfeit crime by vast criminal organizations.

Bill C-56 deals with counterfeit goods and the ability of our border services and law-enforcement officials to take on this steadily rising problem. By counterfeit, we mean fake replicas of an original product. More specifically, it is an unauthorized reproduction of goods that are protected by a trademark. By registering these rights, the trademark owner is protected against the unauthorized use of the intellectual property. That means that any reproduction of the intellectual property owner's trademark is protected by Canadian law. Copies produced without the consent of a copyright holder are commonly known as pirated goods.

Let me be crystal clear: counterfeit goods are illegal. However, until now, rights holders have not had strong recourse to do anything about the theft of their intellectual property. The ability to enforce intellectual property rights and apply penalties on those manufacturing and profiting from intellectual property infringement has not been as comprehensive as is required in today's globalized world. Bill C-56 intends to rectify this. Commercial large-scale counterfeiting and related crimes pose a very serious threat to the health and safety of Canadians. They involve a vast array of products, ranging from clothes to medications to toys, cosmetics, batteries, electronics, books and multimedia.

Counterfeiting is on the rise in Canada, as it is in the rest of the world. These activities used to be localized, centred on high-end luxury designer goods. They were knock-offs closely resembling legitimate goods. However, this has developed into a worldwide industry that is much more dangerous than before. This is due to the technological process and the increase in global trade. Another reason is the perception by some that counterfeiting and piracy are victimless crimes. I assure members that they are not.

Canadians are often the innocent victims, purchasing goods they believe to be legitimate and safe. However, Canadians need to be confident that the products they buy are genuine and safe and will not cause harm to themselves or their families. The harm associated with the trade in counterfeit goods is significant. It not only includes health and safety risks posed by goods of inferior quality, but decreased consumer confidence in the marketplace, lost tax revenue for the government, and lost profits for intellectual property owners who suffer as a result of such infringement.

Bill C-56 would target the manufacturers and distributors of counterfeit and pirated products, those who profit from this crime. We are going after large-scale operations that victimize Canadian consumers.

Our government knows that the most effective way to stop the proliferation of counterfeit goods is by targeting those who create and sell the goods. Bill C-56 is designed to ensure that federal agencies and rights holders focus their efforts on those criminal operations that seek financial gain from the sale of these goods and not the individuals who purchase these goods for personal use.

For several years, Canadian businesses and industry associations have been relentlessly recommending changes to Canada's intellectual property legislation to better address the modern practices involved in counterfeiting. Our government consulted, and we listened. In 2012, the recommendations were discussed during hearings of the Standing Committee on Industry, Science and Technology, and we are making strides in addressing these needs.

We highlight the importance of protecting intellectual property to foster an environment that encourages economic prosperity, innovation and competition. In the rapidly changing global economy, protecting intellectual property is essential for international trade and overall economic growth. It is critical to ensuring that Canada remains competitive. The RCMP calculated that more than 4,500 cases of intellectual property crimes were investigated in Canada between 2005 and 2012. The retail value of counterfeit and pirated goods seized by the RCMP increased from $7.6 million, in 2005, to a staggering $38 million in 2012, a fivefold increase.

Other countries are also reporting an upward trend in both counterfeiting cases and total retail values. This is important. The Canadian Chamber of Commerce is convinced that organized crime groups are involved in counterfeiting in Canada, especially as these crimes see high profit margins and low risks of being caught. Organized crime groups typically use the Internet to acquire and sell counterfeit goods and are mostly involved in distribution operations, which are usually routed from the United States and Asia.

The exponential growth in the use of technology such as the Internet has increased the often unsuspecting consumer's accessibility to products which may be counterfeit. Counterfeiting is an issue of safety for Canadian consumers, as well as an issue of ensuring economic prosperity for Canadian businesses. We know that there is great profit to be found in counterfeit goods. Sophisticated organized crime groups involved in the lucrative sale of illegally produced counterfeit products may subsequently reinvest their products into other illegal activities, such as drugs and firearms, which threaten the safety and security of our communities.

The legislation before us today would go a long way to enhancing our efforts to combat this serious crime. The best way to stop illegal counterfeiting is to curtail the commercial distribution and sale of counterfeit and pirated goods in Canada. This bill would increase the capacity of the Canada Border Services Agency to deal with these crimes at the point of entry into Canada. It would allow border service officers and law enforcement officials to disrupt the availability of counterfeit and pirated goods in our markets.

The Canada Border Services Agency will now have the authority to detain these goods and alert the companies that invested in research and development to seek remedy in the courts. This would result in diminishing the financial incentive of organized crime groups seeking high profits with low risk. The bill would also help reduce trade in counterfeit goods by providing new enforcement tools to strengthen Canada's existing intellectual property rights enforcement regime both at our borders and within Canada, as well as bolster our existing protections against commercial counterfeiting activities. At the same time, it would ensure robust protection for Canadians who own or travel with items for personal use.

In the last couple of years we have taken concrete action to protect intellectual property, including passing the Copyright Modernization Act. However, more needs to be done, which is why this bill is imperative. Currently, a number of Canadian laws protect intellectual property rights.

As I mentioned earlier, an intellectual property right generally gives the holder protection against unauthorized use of their product. The Trade-marks Act and the Copyright Act allow intellectual property owners, be they individuals or companies, to institute civil proceedings when their rights have been infringed upon. However, these civil proceedings are so difficult, long and costly that the majority of victims feel that it is pointless to undertake them.

Bill C-56 intends to change that. It would provide rights holders with new tools to protect their intellectual property rights and take effective civil action against infringers. It creates new offences for trademark counterfeiting similar to those already in place for copyright piracy. As well, it would provide new criminal offences for the commercial possession, manufacture or trafficking of trademark counterfeit goods and copyright-infringement copies.

With this bill, rights holders would be able to file what is called a “request for assistance” with Canada Border Services Agency, which in turn would enable border service officers to share information with rights holders regarding suspect shipments. Border service officers would also have the authority to detain suspected shipments and share information with the rights holders. The bill would also strengthen the Trade-marks Act to support enforcement activities and better align Canada's intellectual property regime with international standards.

Counterfeiting is a very serious intellectual property violation that hurts us and like-minded countries. Canada has pledged to provide effective legal protection in accordance with the international agreements with our allies, such as the North American Free Trade Agreement.

National security and economic prosperity go hand in hand, and protection of our intellectual property is integral to this. Once passed, Bill C-56 would provide new tools to border service and law enforcement officers to enhance the security of Canada. It would reduce the presence of counterfeit goods in Canada, thereby protecting the integrity of our economy, supporting Canadian growth and job creation and helping to protect Canadians from the health and safety risks posed by harmful counterfeit goods.

In summary, this new legislation would protect Canadian consumers. It would protect Canadian manufacturers and Canadian retailers. It would protect the Canadian economy from the health and economic threats presented by counterfeit and pirated goods coming into our country.

Our government focuses on what matters most to Canadians, and our government will continue to stand up for Canadian consumers and businesses, ensuring that they do not fall victim to trademark counterfeiting. We will continue to create strong, modern rules to protect our economy and the health and safety of Canadians.

The bill before us today is just one more way we are moving forward with our plan for safe streets and communities, which is one of our key priorities on behalf of all Canadians. This plan focuses on strengthening legislation, tackling crime, supporting victims' rights and ensuring fair and efficient justice.

Today, with this legislation, we are covering off all the bases of the plan. We are strengthening current legislation by introducing new tools for rights holders to protect their intellectual property rights and take civil action against infringers. We are tackling serious and organized crime and are closing off one more avenue of financial profit for those who undertake illegal activity. We are supporting the rights of victims, not only those innocent Canadians who buy the counterfeit products but those rights holders whose trademark rights are illegally infringed. We are ensuring fair justice by giving rights holders the ability to pursue civil action.

Now is the time to implement legislation that will definitively address this issue. I therefore urge all members of the House to support the bill before us today and to work toward its expeditious passage.

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

Mr. Speaker, I am pleased to ask my colleague a question. He works very hard on the committee I chair.

My question this evening concerns Bill C-56. I asked one of my colleagues this question earlier on and he answered it quite well. Nevertheless, I would like the hon. member for Timmins—James Bay to say more about the potential dangers of counterfeit products. For example, my Liberal colleague talked about counterfeit airbags and other assorted auto parts.

What are the dangers associated with counterfeiting, and particularly, what are the risks to the safety of Canadians who think they are using products that meet Canadian standards, when they are really using fakes?

[John Carmichael, Conservative, Don Valley West, ON]

Mr. Speaker, I am pleased to rise today to speak to the second reading of Bill C-56, the combating counterfeit products act.

Counterfeit goods hurt our economy. They undermine innovation and the integrity of Canadian brands. They threaten economic growth and they threaten job creation. Moreover, they threaten the health and safety of Canadians.

The bill before us takes important steps to modernize Canada's intellectual property legislation to address counterfeiting. I would like to speak to the impact this bill will have on those who have created a copyrighted work or have invested in a registered trademark. I would then like to demonstrate how our measures will protect Canadian consumers and families while targeting commercial counterfeiting.

Bill C-56 introduces changes in four key areas: border enforcement, greater civil tools to enforce intellectual property rights, reduced red tape burdens on rights holders and improved criminal offences. These are all worthy objectives and deserve our support, which it seems we are achieving tonight. They will help protect legitimate businesses from unfair competition by those who minimize costs and maximize profits through counterfeiting.

It is difficult to obtain a precise estimate of how big a problem counterfeiting truly represents in Canada. The rights holders are often reluctant to report that their products are being counterfeited. They are concerned that their brand image will suffer as a result.

The RCMP calculates that between 2005 and 2012, over 4,500 cases of IP crime were investigated in Canada. During that period, the retail value of counterfeit goods seized by the RCMP increased fivefold, from $7.6 million to $38 million.

Sales of counterfeit items represent lost income for a legitimate rights owner for a genuine product. Given that many incidents of counterfeiting are not reported, we can assume that the actual cost in lost sales to rights holders is much more.

Counterfeiting costs the legitimate rights holders in other ways. It costs in terms of the effort to maintain customer relations with consumers, who may be dissatisfied with the quality of a product, not realizing that it was not produced by the legitimate rights holder. It also has a cooling effect in terms of innovation. It makes rights holders more reluctant to invest in the development of new, innovative products if they know that their research will only serve to enrich others who will knock off cheap counterfeit versions of their products. The counterfeiters have no R and D costs. They have no advertising costs. They are piggybacking on the investments made by the legitimate rights holders.

It costs in terms of giving serious and organized crime a foothold in the marketplace. According to Interpol, the profits are so high in counterfeiting that it serves as a magnet to those who seek ways to finance other criminal activity, including drug trafficking, human smuggling and robbery. Some people may believe that counterfeiting is a victimless crime. This is clearly untrue.

Over the years, many hon. members have devoted their time and knowledge to studying the challenge of counterfeiting. I would remind the House that both the Standing Committee on Industry, Science and Technology and the Standing Committee on Public Safety and National Security studied the problem in 2007. Again, last year, the industry committee called witnesses to testify about the impact of counterfeiting and other intellectual property issues.

I am sure that hon. members were attentive to the tabling of our committee's report in March on Canada's IP regime. It makes several recommendations regarding counterfeiting and piracy of trademarks and copyrights.The committee recommends, for example, that legislation should introduce both civil and criminal remedies for trademark counterfeiting. The bill before us would create such a regime for both civil and criminal remedies. It would provide rights holders with expanded civil causes of action. Holders of registered trademarks would be able to stop counterfeit goods earlier in the supply chain, before they reached the market. Under the current system, rights holders can pursue civil action only if the offender has sold or distributed a counterfeit product. In other words, the manufacture or possession of counterfeit products is not against the law.

Under clause 21 of the bill before us, “A person shall not manufacture, cause to be manufactured, possess, import, export or attempt to export any goods”. Clause 21 also addresses the increasing phenomenon of counterfeiters shipping the knock-off products separately from the counterfeit labels. The practice is to attach the labels at the last minute so as to avoid detection. Under the bill before us, rights holders can pursue civil remedies against those who manufacture or ship labels intended to be later attached to those counterfeit goods.

The committee report calls for a combination of civil and criminal remedies. On the criminal side, the bill would ensure that selling, distributing, possessing, importing or exporting counterfeit goods for the purpose of trade would be prohibited and subject to fines and possible jail time. In addition, new criminal offences for possessing and exporting pirated goods for commercial purposes would be added to the Copyright Act.

In its report on Canada's intellectual property regime, the standing committee recommended that Customs officials be allowed to share information with rights holders regarding suspected goods. The bill would grant border service officers the authority to search for and detain suspected counterfeit goods and to inform trademark owners of the detention.

Under the current regime, a rights holder must obtain a court order to stop a suspected shipment. Under the current system, rights holders must know, among other things, that counterfeit goods are coming from a particular location in an approximate time period, and they must also provide enough information to identify the goods, as required by the court.

There are many ways in which this system is inadequate for the rights holder. Perhaps the rights holder knows that goods are coming from a particular factory but cannot identify when or how. Perhaps the trademark holder does not gather enough evidence to convince a court to act. Perhaps the Canada Border Services Agency encounters suspected counterfeit goods, but under the Customs Act, does not have the authority to take action or notify a trademark or copyright owner in the absence of a court order. Perhaps the rights holder does not know that a shipment is coming, and under the current regime, the trademark holder remains in ignorance. In each of these cases, enforcement at the border is not an option.

This bill before us would remedy that situation by granting border services officers the authority to detain suspected counterfeit goods on their own initiative. It would also facilitate detention through the request-for-assistance system. Through this system, rights holders would be able to provide Canada Border Services Agency with information about their copyright or registered trademark as well as contact information. The border services officer would use this information to help identify and detain suspected counterfeit goods and would have the authority under the Trade-marks Act or the Copyright Act to detain them. Through the consequential amendments to the Customs Act contained in this bill, the border services officer would then have the authority to contact the rights holders to share relevant information regarding these goods to determine whether the goods were indeed counterfeit, and that the rights holder would have the option of pursuing civil action.

In other words, the CBSA would be able to provide the rights holders with limited, necessary information that would help in a civil case.

The bill before us would give the rights holder, the CBSA and law enforcement the tools required to crack down on counterfeiting. As a result, we would reduce the damage that counterfeiting inflicts on the Canadian economy, including reduced sales for legitimate businesses and lost tax revenue for governments.

I would also like to draw the attention of the House to the impact of the bill on consumers and the protection it would afford to individual Canadians.

The legitimate businesses whose products have been copied illegally are not the only victims of counterfeiting. Because counterfeit products forgo safety regulations, certifications and quality controls, the consumer who purchases them has also been victimized.

For example, purchasers of counterfeit pharmaceuticals have no way of knowing whether the active ingredient is the required dosage for their prescription. Purchasers of counterfeit batteries do not know that the product may be prone to exploding or leaking. Purchasers of counterfeit children's toys may be putting children in danger of choking hazards or toxic paints. Purchasers of counterfeit electronic items may be buying products that could ignite or explode.

Consumers have become the victims of counterfeit products in many different ways, but today I would like to remind the House that it is in no way the intention of this bill to victimize them any further by confiscating products they have purchased for their own personal use.

Let me remind the House of where the laws governing counterfeiting are made stronger and clearer.

Under the current law, there are many gaps in the ability to go after counterfeiters in either the criminal or civil courts. There is no action that can be taken for goods that have not yet reached the marketplace. An individual is not violating a trademark owner's rights by manufacturing or importing counterfeit goods that will be sold.

It is possible to import counterfeit goods to sell in Canada, it is possible to have a warehouse full of trademark-infringing goods to be sold in the future and it is also possible to make counterfeit goods to sell in Canada or counterfeit labels that will be put on those goods.

Presently it is unlawful to sell counterfeit goods on the street or in a store. It is also unlawful to sell goods with a mark that might be confused with a registered trademark. This bill would close any loopholes by giving trademark owners the ability to stop counterfeit goods at all stages of the distribution chain, from manufacturing to retail sale. It would also create a civil action for selling or offering for sale labels or packaging that is to be applied to counterfeit merchandise.

I want to be very clear that these provisions are designed to target the commercial operations of counterfeiters. They provide federal agencies and rights holders with the tools to confront criminals who gain commercially from the sale of these goods. We believe that the best way to stop illegal counterfeiting is to crack down on commercial counterfeiting at its very roots.

The measures apply only to those who knowingly possess counterfeit goods for commercial purposes. They are not targeted at the private, non-commercial activities of individuals. They are not designed to prosecute individuals who have purchased counterfeit or pirated products. We are not going after individuals who may own a pirated DVD or a counterfeit watch bought from a sidewalk vendor. Counterfeit items found in an individual's luggage for personal use will not be seized by Border Service officers.

In fact, the bill provides a specific exception at the border for individuals who happen to have counterfeit or pirated goods that are intended for personal use as part of their personal baggage. This exception is in no way intended to encourage the personal use of counterfeit goods, but it protects Canadians and enables Border Services officers to focus their attention on the root cause, which is the commercial abuse of trademarks and copyright, a growing problem in Canada and around the world.

I expect that the new civil and criminal measures included in the bill will give rights holders and law enforcement the tools they need to bring commercial counterfeiting cases before the courts. This will raise the profile of the problems that counterfeiting has created in Canada's economy and the health and safety risks they pose to consumers. The measures in the bill are designed to help federal agencies and rights holders target their efforts to confronting criminals who gain commercially from the sale of these goods.

Many Canadians regard buying counterfeit goods as unethical, as our industry committee was told in meetings throughout the past quarter, although some see it as a victimless crime. However, awareness is growing, and I believe there will be significant public support for reducing the damage done to Canadian jobs and the health and safety risks to consumers that are caused by these counterfeit goods.

I would remind the House that the bill before us responds to many of the recommendations made by the committee. It would enable Border Services officers to detain counterfeit items and to share limited information with rights holders. It would introduce new civil and criminal remedies for trademark counterfeiting and copyright piracy. It would grant an exception to consumers who bring across the border counterfeited or pirated goods for their personal use. It would provide additional criminal offences and tools to strengthen Canada's enforcement laws.

The bill represents an important step in the government's ongoing efforts to create the marketplace framework laws, including intellectual property laws, that foster innovation, jobs and economic growth in Canada. I would ask hon. members to join me in protecting Canadian consumers' health and safety and in protecting the work of innovative Canadian entrepreneurs and the jobs they create.

I hope all hon. members will join me in supporting swift passage of Bill C-56.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, I am pleased to rise to speak to Bill C-56, which is important even though it has some problems and should be improved. We need to debate this today.

Government members need to recognize certain issues. I hope that they will do so in committee, and that they will agree to adopt some important amendments.

For example, there is the fact, as I mentioned to my hon. friend from Scarborough Southwest, that this bill does not cover goods in transit. I am sure that our American neighbours would not be impressed if, for example, a counterfeit shipment travelling from Asia to Vancouver and then on to Los Angeles was not seized here. We are saying that it is their problem and we are not going to take any responsibility for it. That is not what we would ask of them in return. That is something that needs to be fixed.

Additionally, as legislators, we should not simply be ramming through flawed legislation just because the government has a majority. What we see here is a bill that has sat on the order paper for three months now, since it was introduced. The government has not moved it an inch since then. It has not brought the bill forward until today, near the end of the session, when the government is bringing forward its 45th or 46th time allocation.

The government is trying to rush through a whole series of bills, having the House sit until midnight for the last four weeks of the session, and not really giving any of these bills the kind of consideration that they deserve. The government is not allowing for the possibility that any of them might really be improved in committee. As my hon. colleague said, when was the last time that we saw the government side actually accept an amendment from the opposition? That is worrisome.

There are also questions about who would bear the cost of seizure, storage and destruction, particularly when it comes to small businesses. They are concerned about products coming into the country that are counterfeits of what they produce or that affect their copyright. I hope that we will get some clarity on these issues and the legislation that is under consideration in the brief period we are going to have.

I have also heard concerns about the increased powers that would be given to border officers, without any oversight from the courts. We have to keep in mind, as my friend said, that last year the government cut $143 million from the Canada Border Services Agency. Therefore, there is less ability there to do those kinds of jobs, but the government is giving them more to do. They are trying to do the jobs they have and the government is giving them much greater responsibility, and a very complicated responsibility, in assessing which goods coming in may be counterfeit or in breach of copyright and which ones are not.

We need to make sure that this legislation does not result in illegal or illegitimate seizures and violations of the Charter of Rights and Freedoms. We also have to ensure that border officials receive the proper training to deal with these very complicated matters. Sometimes, it is a question of what is copyrighted and what is not. We know from the discussion we had on the copyright bill last year that it can sometimes be complex, even for the courts. To ask our border officials to do this without much training and without giving them decent resources to provide that training is unreasonable. How is it going to work effectively if we add to their workload on the one hand, while reducing their resources on the other? These officials do a tremendously important job and we need to give them the tools they need to be able to do that job.

People like Professor Michael Geist, who is an expert on these issues and the chair of Internet and e-commerce law at the University of Ottawa, are raising copyright issues around this bill. Some voices—not a lot, I will admit, but some—even argue that this legislation may be a backdoor way of bringing back ACTA. I do not think that it is. There is very little in this bill that relates to it, but I appreciate those concerns and respect them. We should examine those concerns and hear from witnesses on topics like that at a thorough examination of this bill in committee.

It is clear that there are many issues, which we, as members of Parliament, have a duty to carefully examine in relation to this bill. That is why it will require the thorough assessment that I just spoke of when it goes to committee.

I hope the government does not simply employ its usual bullying tactics of ramming through another bill because it can. That is wrong and the government knows it.

I also hope we take the time to hear from many voices who support this so-called combating counterfeit products bill. Of course, we have to wait and see. The proof is in the pudding. When it actually gets into effect, we will see how well it does that. I think it will have some positive effect, but it will work better if we can improve it at committee.

Recently I met with members of the Mechanical Contractors Association of Canada and the Canadian Institute of Plumbing and Heating, who want to discuss Bill C-56 as part of their Parliamentary Awareness Day. They made some very coherent arguments in favour of this legislation. I think most, if not all, members of this House would agree with them.

Bill C-56 amends the Copyright Act and the Trade-marks Act to add new civil and criminal remedies. It would add new border measures in both acts in order to strengthen enforcement of copyright and trademark rights, and to curtail commercial activity involving infringing copies and counterfeit trademark goods.

Whether it is hockey sweaters, radio parts, or the jackets my friend talked about, all kinds of things come in and look like the real thing, but they are not. That is why it is important to be aware of and to deal with this. It has an impact on our economy and our jobs in Canada. We ought be mindful of it.

This would also amend the Trade-marks Act to, among other things, expand the scope of what can be registered as a trademark, allow the Registrar of Trade-marks to correct errors that appear in the Trade-mark register, and to streamline and modernize the trade-mark application and opposition process, all of which is positive.

As an aside, I wish we could see similar kinds of measures to examine the question of official marks, which are very problematic. One can have a group within a province, an association of some type of profession, for example, an association of massage therapists. They were given an official mark for Canada. The idea of these marks is that they can apply all across the country. There could be two groups of massage therapists in Nova Scotia. If one of them gets approved by the people in Ontario and the other one does not, then only one of them gets to use certain phrases that go along with the official mark. That makes no sense at all when the first group was limited to one province. There is a need to examine and amend the official marks legislation as well.

Our caucus recognizes the health and safety risks to Canadians, as well as the detrimental effects to the economy posed by counterfeit goods entering Canada. We believe this bill needs to be amended, but with a little co-operation from the government we believe that can be achieved at committee. The Liberal Party recognizes the need to provide new enforcement tools to help strengthen Canada's existing enforcement regime for counterfeit goods.

My colleagues on the industry committee will recall seeing the counterfeit Canada Goose jackets we heard about a few minutes ago, and hearing about the horrible stuff that can be in these fake jackets. It certainly is not the kind of thing that is going to keep people warm in the deep-freeze of Canadian winters. We have all heard stories of counterfeit circuit breakers being installed in government buildings, or of faulty Christmas tree lights causing house fires. These are counterfeit products that are dangerous for Canadians.

To give an idea of how widespread this problem is, let us consider the fact that 1,800 cases of counterfeit electronic parts, apparently made in China, have been discovered in U.S. cargo planes, helicopters and other military aircraft. Yes, I said military aircraft. Imagine what that is like and how scary it would be for those operating one of them, particularly in a place of conflict or danger.

This is a very big issue for government, businesses and consumers. With regard to consumers, counterfeit pharmaceutical drugs can be an issue. The drugs are improper, and it could be that the doses are too low or it is the wrong material entirely. That is pretty scary as well.

In April, the RCMP, provincial and local police conducted an operation at a flea market in Hamilton, and they seized about $100,000 in counterfeit goods. That included designer purses, jeans, sunglasses and DVDs. We do not think of these as endangering public safety or health, but they certainly have an impact on jobs in Canada.

Overall, the retail value of counterfeit products seized by the RCMP has increased over fivefold from 2005 to 2012, from $7.6 million to $38 million. This is just the estimate, of course.

The Liberal Party believes that Canadian businesses must be protected to ensure the well-being of the domestic enterprises and the health and safety of Canadians. It is also important, of course, to protect the jobs of Canadians and the integrity of the Canadian economy as a whole.

We would like to see a robust public education program regarding the possession, production and distribution of counterfeit goods. We would like to investigate and further study the challenges that the Internet and e-commerce pose as a loophole to the seizure and reduction in the presence of counterfeit products. We are talking about seizing shipments at the borders. When things are coming in one at a time by mail, by UPS, or whatever, it is a much more difficult for our border services to deal with.

With the current government's ongoing deficits, we question how the Conservatives would fund this new prevention and investigative system, particularly with the $142 million cut to CBSA last year. Border officers are by no means copyright experts. They would be given new and increased powers that are not overseen by the courts, which may lead to illegitimate seizures and violations of the Charter of Rights. That is certainly a problem. We also believe that small businesses should be exempted from the costs that would be imposed by the bill.

Several areas of concerns, other than those I have mentioned, have been raised. With the increased number of seizures due to increased powers being given to border officers and the RCMP, how would the government fund such extensive investigative legal operations, particularly in view of the cuts I talked about? Should genuine or non-counterfeit products be seized and destroyed, how would the government compensate companies and individuals? How would the government determine whether importers of counterfeit products are aware that these products are counterfeit? Why are there no provisions for counterfeit goods being transshipped through Canada?

Bill C-56 does strive to reduce the presence of counterfeit trademark goods being sold and distributed in Canada by providing new enforcement tools. The bill would bolster Canada's enforcement regime at the border, and domestically, and would address negative impacts of counterfeit goods by giving border officers the authority to detain suspected commercial shipments and contact rights holders. It would allow Canadian businesses to file a request for assistance with the CBSA, in turn enabling border officers to share information with rights holders regarding suspect shipments. Those are valuable and worthwhile things, especially if people have the resources to do it.

The bill would provide new criminal offences for commercial possession, manufacturing or trafficking of counterfeit trademark goods. It would provide legitimate owners with new tools to protect their rights and take civil action against infringers. It would create new offences for a trademark counterfeiter. It would provide better tools to investigate commercial counterfeiting.

We support the intent of the legislation, and we will support it at second reading to have it sent to committee. We support where it wants to go. However, we think it needs to be improved, and I hope my hon. colleagues would be open to amending and improving the bill at committee.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, here we are again, debating another bill that was put under time allocation, which is 44 or 45 times now.

The irony in this instance is that the government could have had an agreement with the opposition to speed the debate of this bill so that we would be using less time in the House than it took to bring in the time allocation motion, vote on it and then provide a full day of debate, because we in the NDP do want to see this bill go back to committee, where it can be approved. Therefore, we will be supporting it at second reading.

Again, we had time allocation brought in before the Minister of Industry, the person presenting the bill, had even spoken to it. We did not have one full speech in this House. There was a speech by the member for Simcoe—Grey, who spent half of her speech laughing at jokes being told to her by other caucus members. We did not have one full speech before time allocation was brought in.

I would say humbly that this is not democracy. This is not how Parliament is supposed to work. We are supposed to have the opportunity to have full debates in the House on the various issues that are brought forward.

Bill C-56, an act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, which is now otherwise titled the “combating counterfeit products act”, is an important issue. It is my honour to rise today to present the lead-off speech on Bill C-56 for the NDP and the official opposition.

Normally our industry critic, the member for LaSalle—Émard, would be leading off on second reading comments on this bill. Our critic had planned to give her remarks on Friday when this bill was supposed to come up for debate; however, because of time allocation and the government playing games, we are here Wednesday evening instead, again preventing certain members of Parliament from participating in this debate in the way that they would like to.

In their rush to introduce yet more record-breaking time allocation motions—as I said, we are at 46 now—the Conservatives rescheduled all the House business this week.

As the NDP's deputy industry critic, it is indeed my privilege to address this bill on behalf of the official opposition. This is a bill the NDP takes very seriously, as opposed to the Conservative government, it would appear, because this bill was presented originally in March. It did not come up for debate until the end of May. Recommendations for this bill were made in a committee report in 2007, again in 2009, and then there were more recommendations from the industry committee in an intellectual property study that was done earlier this year. It has taken the government a very long time to start bringing these forward for implementation.

We have yet to have a whole speech by the Minister of Industry on this bill. Even then, if it was not going to be the minister, we would have thought that maybe it would be the parliamentary secretary, the member for Edmonton—Mill Woods—Beaumont, but that was not the case.

When the government presents a bill, it is supposed to justify why it is bringing that bill forward. It has yet to do that and has already implemented time allocation.

Instead of a full presentation by the government, what we had was the parliamentary secretary for human resources and skills development getting up and presenting a very short speech on this bill. In her speech she spent a lot of the time laughing and did not seem to be taking the bill seriously. It was so bad that the Speaker had to interrupt and ask if she was able to continue.

I mention all this because it seems to speak to the Conservative government's contempt for Parliament and to its continual practice of introducing legislation that can never be properly implemented because its budget cuts make it impossible.

There are many clichés we would use, but the Conservatives keep putting forth pieces of legislation that are either empty shells or just cherry-picked from among the many recommendations that we need to implement to have solid pieces of legislation. They put forth rules and regulations that perhaps cannot be enforced, because those budget cuts mean that no one will be there to enforce them.

Recent examples include Bill C-51, the safer witnesses act, which the Conservatives put forward without the funding in place to make many of its provisions actually meaningful. Another one, Bill C-54 would make changes to how we would deal with people deemed not criminally responsible, however, it would download the responsibility for mental health care onto the very provinces, which are having their health care budgets slashed again by the Conservative government.

Bill C-56 is another example of the Conservatives playing the shell game they so like to play. It is legislation that on one hand imposes some good rules and on the other hand, through the budget, cuts the jobs of those who are supposed to be enforcing these new rules. I will come back to that point later in my remarks.

Let me say upfront, again, that the NDP will support the bill at second reading so it can be sent back to committee and, we hope, fixed to maximum its impact. However, it would indeed be a first at our committee, if we actually saw recommendations and amendments that we brought forward voted on and passed by the Conservatives on the committee. That would be groundbreaking.

The bill dealing with counterfeiting and copyright infringement is important for both Canadian businesses and consumers, especially where counterfeit goods may put the health and safety of Canadians at risk. We will support the bill so it can go back to committee for further study and we want to ensure we maintain the necessary balance on copyright and trademarks.

For instance, the bill would give ex officio powers to our border officers, which the NDP has been calling for since 2007. However, it is very difficult to see how this will be implemented when, last year, the Conservatives slashed $143 million in funding to CBSA, which further reduced front-line officers and harmed our ability to monitor our borders.

CBSA expects to lose several hundred front-line officers by 2015. It is also important to note that in the past the government repeatedly has refused to take a balanced approach to copyright. The NDP believes that intellectual property requires an approach that strikes a balance between the interests of rights holders and the interest of users and consumers.

I will now take a few minutes to explain some of the details of the bill.

Bill C-56, the combating counterfeit products act, would amend both the Copyright Act and the Trademark Act. Its purpose is to strengthen enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copies or counterfeit trademarks.

The proposed bill will add two new criminal offences under the Copyright Act for possession and exportation of infringing copies and creates offences for selling or offering counterfeit goods on a commercial scale. It creates a prohibition against importing or exporting infringing copies and counterfeit goods and introduces some balance to that prohibition by creating two exceptions: first, for personal use, items that are in one's possession or baggage; or second, items in transit. It also, as I said, grants new ex officio powers to border officials to detain infringing copies or counterfeit goods, a significant policy shift. Until now, border officials required a warrant before seizing infringing copies or goods at the border.

It also grants new ex officio powers to the Minister of Public Safety and border officials to share information on detained goods with the right holders so they can actually see what is being brought in and take measures themselves to combat that counterfeit and trademark infringement.

That is important, because the businesses do a great job of trying to protect their own products. Seeing what is coming into the country illegally and what products are counterfeited can give them ideas about how to combat that counterfeiting better for themselves.

The proposed bill widens the scope of what can be trademarked to the features found in the broad definition of sign, including colour, shapes, scents and tastes. Measuring the problem in counterfeit goods and copies in Canada and its corresponding impact on the economy is difficult.

The New Democrats, nevertheless, support dealing with counterfeiting, especially where health and safety concerns are at stake. As I have mentioned, it remains unclear to me and many others how the CBSA could implement these enforcement measures in the face of the cuts from budget 2012.

The United States and many industry groups have long called for border measures on counterfeiting. It remains important to continue to be vigilant to ensure that intellectual property laws balance the rights and interests of rights holders with those of consumers and users.

The government has long been aware of the difficulties in measuring the scale of counterfeiting for copies and goods in Canada, a challenge that was identified in a 1998 OECD report on “The Economic Impact of Counterfeiting”. One of the difficulties results from the clandestine nature of counterfeiting. Much of the data is estimated and based on actual seizures, which is anecdotal or comes from industry itself, in which case the collection methods may vary or be unavailable to assess.

In 2007, the industry committee report on counterfeiting recommended that the government establish a reporting system that would track investigations, charges and seizures for infringing copies and counterfeit goods as a means of collecting data.

A recent Industry Canada report published this year notes that, “It is difficult to obtain a precise estimate of the market for counterfeit or pirated products in Canada”. Why? Because, again, the government has delayed bringing this legislation forward. Even now that it has, the Conservatives have not put provisions into the bill to implement those measures I just spoke of so we can start collecting more robust data to more accurately determine the economic impacts of counterfeit and trademark infringement in Canada.

As I said, much of the information in Canada comes from statistics about actual seizures. Industry Canada notes that the retail value of counterfeit goods seized by the RCMP increased from $7.6 million in 2005 to $38 million in 2012.

In 2009, the OECD estimated that the international trade in counterfeit goods and infringing copies could be valued at up to $250 billion U.S. It is a mind-boggling number that there would be that many counterfeit and trademark infringed goods travelling around the world. Law-abiding companies are losing out on much of that revenue.

The same study also reiterated previous calls for better information. We know anecdotally that counterfeit products can pose risks to the health and safety of consumers, whether we are talking about counterfeit electrical components or unsanitary stuffing in goose-down jackets.

I mention unsanitary stuffing in goose-down jackets because when we were at committee, many different Canadian businesses and organizations presented before the committee. One such company was Canada Goose, which is certainly a Canadian success story. However, representatives of Canada Goose brought with them some counterfeit Canada Goose jackets they had collected. The things contained within those counterfeit jackets would make one's toes curl. There were things like feces in the lining, feathers that were not properly treated and sanitized before being stuffed in the jackets. Certainly they were not goose down or coyote fur. Many different animals were being used.

Unfortunately, it was very difficult, on the surface, to detect these jackets as being counterfeit. When we put a real Canada Goose jacket next to a counterfeit jacket, they looked identical. It was not until we took a microscope to it or started to pull the jacket apart that we started to see that one of the jackets was indeed counterfeit.

Other representatives that came before the committee were from Hockey Canada. They talked about the last Olympics we had in Canada and about professional sports jerseys. They found, through studies they conducted and at the Olympics, that sometimes in professional sporting events, up to 70% to 75% of the jerseys being worn at the games were counterfeit. Consumers are unwittingly buying illegal and counterfeit products when they try to support their sports teams. At the Olympics in Vancouver, many stops and arrests were made of individuals selling counterfeit Olympic paraphernalia and products.

It is a growing problem because there is a financial incentive there. There is money to be made in counterfeit goods. We certainly have a responsibility to try to stop as much of it at the border as we can. As for the stuff that gets across the border, we have to deal with it here and hold the appropriate people responsible.

In many cases, as I have said, it is very difficult for consumers to detect whether they are buying legitimate products. However, vigilance is also important and people who have any concerns about products they are buying should go to the manufacturers' websites and contact people in law enforcement if they think they have bought something illegal. There are many things people can do to prevent these crimes and, indeed, to ensure the products they are buying are legitimate.

Dealing with counterfeiting is important to both Canadian businesses and consumers. It is especially important where counterfeit goods put the health and safety of Canadians at risk. Yet again it remains unclear how the enforcement regime being proposed by Bill C-56 will be resourced. This bill would add significant new responsibilities to the duties of border officials during a time of significant budget reductions.

In budget 2012, the Conservatives imposed $143 million in cuts to CBSA, reducing front-line officers and further reducing our ability to monitor the borders. This is interesting. This year's CBSA report on plans and priorities alone indicates a loss of 549 full-time employees between now and 2015. At a time when there is more trade, goods and people crossing the border, we will be cutting front-line officers? It makes absolutely no sense.

Under Bill C-56, customs officers would be asked to make highly complicated assessments on whether goods entering or exiting the country infringed on any copyright or trademark rights. Such an assessment for infringing copyright would include, for example, consideration of whether any of the exceptions under the Copyright Act would apply, something with which the courts often struggle. The New Democrats want the CBSA to be adequately funded to implement this bill without compromising the other responsibilities of protecting Canadians and our borders from things like drugs, guns and other threats.

The United States has lobbied for stronger enforcement measures in Canada for counterfeit and pirated goods for many years. In the 2012 special 301 watch report, the office of the U.S. trade representative stated that the U.S. “continues to urge Canada to strengthen its border enforcement efforts, including by providing customs officials with ex officio authority to take action against the importation, exportation, and transshipment of pirated or counterfeit goods”.

In its June 2012 report on counterfeiting in the Canadian market, the Canadian Intellectual Property Council, a sub-group of the Canadian Chamber of Commerce, identified counterfeiting as a barrier to competitiveness and specifically recommended that customs officials have ex officio powers, that Canadian law be amended to bring criminal and civil sanctions for counterfeiting and piracy and that enforcement officials be encouraged to seek strong remedies for infringements.

It bears saying that many of the requests the United States made are, indeed, in this bill. Providing ex officio powers to the CBSA in order to track, monitor and confiscate copyright and trademark infringed goods are terribly important to our long-term safety.

In its recently tabled report, “Intellectual Property Regime in Canada”, the committee recommended border measures that we supported, including providing appropriate ex officio powers to customs officials, civil and criminal remedies for trademark infringement and counterfeiting, allowing customs officials to share information with rights holders regarding suspected goods. All members of the committee agreed that consumers acting non-wilfully should not be subject to excessive fines.

The New Democrats on the committee, of which I am one, filed a dissenting opinion that called on the government to also consult with consumer groups, as well as industry groups, in an effort to combat counterfeiting and piracy, that border officials receive appropriate authority to do their work while respecting civil liberties and due process and that the CBSA be adequately funded to combat counterfeiting without compromising its other important responsibilities to protect Canadians and defend our borders.

The House resumed from May 30 consideration of the motion that Bill C-56, an act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, be read the second time and referred to a committee.

Bill C-56—Time Allocation Motion

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, like many on this side of the House, I am appalled at once again having to go through time allocation and having our time limited on such an important subject. I do agree with the minister that Bill C-56 is an important bill that we need to address.

In 2009, recommendations were made by the industry committee to do exactly what the minister talked about. Why is it taking so long for the government to act when we can protect consumers and Canadians a lot sooner?

At the industry committee, we heard from businesses that said cuts to the CBSA would impact and harm Canadian consumers.

Here we are again, having an opportunity to debate a bill, but time is being cut. We can bring forward good amendments to make the bill stronger, to protect Canadians, but we cannot do it when the Conservatives keep pulling the rug from underneath us.