Evidence of meeting #56 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was problem.
A recording is available from Parliament.
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay.
I guess I should have said it was number one, along with smuggling and counterfeit; I suppose that would have been more correct.
Mr. Sloan, I'm going to go to you now, as you brought it up.
5:05 p.m.
Director, Investigations Division, Enforcement Branch, Canada Border Services Agency
Oh, me and my big mouth!
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
No, it's to do with something else.
I heard once—I think I saw it on 20/20—that there were criminal elements at the ports causing people who were supposed to check this stuff to look the other way. Do you want to comment on that? That's a scary thought, too, that if we're catching 5%—I think this was a problem in the States, but—
April 25th, 2007 / 5:05 p.m.
Director, Investigations Division, Enforcement Branch, Canada Border Services Agency
Well, no organization is immune from certain of its employees being compromised. That's certainly a rare occurrence.
I'm not sure if you're referring to CBSA staff.
5:05 p.m.
John Sloan
We have had instances of internal conspiracies involving transport companies, airline companies, particularly in the drug area. As I said, no organization is immune from that. But I certainly wouldn't see it as a significant problem.
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Well, I wasn't laying a charge specifically at your office.
Are there other people involved in the process of checking goods that come through, besides the border guards? Do these goods have to reach the border guards? Can they be diverted? And is this something you have investigated?
5:05 p.m.
Director, Investigations Division, Enforcement Branch, Canada Border Services Agency
For the most part, the examination process is handled by CBSA.
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
Okay. I don't want to dwell on this too long.
That's good. I needed to know that, too.
I guess I have a question for Mr. George. When we went to China—McTeague, Mr. Masse, and I—we were informed that if one wanted to set up a company in China, it's a 50-50 deal.
Do you want to comment on that? Is that happening? Are there Canadian companies setting up and producing counterfeit goods? Are you aware of any of them?
5:05 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
I'm personally not aware of Canadian companies setting up counterfeiting networks in China. What we are aware of is that sometimes it's a partner, or an ex-partner, in a company who has acquired the know-how to produce the identical product, but one that is not licensed and therefore is counterfeit.
We have specific advice to give companies on protecting their IP and various steps they can take. Sometimes it's as simple as them having rushed into something without taking the necessary steps to protect their intellectual property.
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
I don't know if you want to comment on this, but is there any suspicion that—
5:05 p.m.
Conservative
Dave Van Kesteren Conservative Chatham-Kent—Essex, ON
—countries are involved in this, too? And let's not pick on China.
5:05 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
We've got some pretty hard stats on certain countries having predominantly more counterfeiting and piracy than others.
5:05 p.m.
Conservative
5:05 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
Direct involvement of the country? I wouldn't want to speculate on that without specific information.
5:05 p.m.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
One of the groups we heard testimony from in this committee on our manufacturing study was the tool-and-die and mould-making industry, and I've seen some of the moulds they had. They were claiming some of their partners were taking prototypes and then bringing them to China and the automotive industry and having them shopped around there. Have you run into any of this in your discussions so far, and is anything being done on that front?
5:10 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
I can answer just based on a discussion with industry, both Canadian and international.
There is a great deal of concern over counterfeiting and piracy. They have specific recommendations on protecting your plans, your drawings, whatever, and being careful whom you share information with. One of the recommendations is that you have multiple suppliers supplying different pieces so that no one supplier has all the knowledge of the product.
On specific questions of tool and die, I haven't had anything specific.
5:10 p.m.
NDP
Brian Masse NDP Windsor West, ON
Maybe what I'll do is get them in touch with you. I think they hope to make a submission as well. They're getting squeezed because they're being told to go to third-market countries for part of their procurement, so that's an issue in itself.
This OECD report notes that 60% of the seizures originated from five countries: China, Thailand, Hong Kong, Korea, and Malaysia. Is that North or South Korea, or is it both?
5:10 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
I'd have to look at the report.
5:10 p.m.
NDP
Brian Masse NDP Windsor West, ON
I wouldn't be surprised if it were North Korea, but I'm wondering if there's a problem in South Korea as well. A lot of trade also goes back and forth between the two countries.
5:10 p.m.
Director, Intellectual Property, Information and Technology Trade Policy Division, Department of Foreign Affairs and International Trade
In our discussions with South Korea, I think they have equal concerns over counterfeiting and piracy of their goods. We've been talking to them about cooperation. They're in an area where nearby countries are the sources of counterfeits of their products because they're getting more patents, more trademarks, more copyright. They are becoming producers of intellectual property, as is China, as is India, which makes them tend to think it's more important to protect their own intellectual property.
Certain Chinese firms have taken U.S. companies in Texas to court over violation of Chinese intellectual property.
5:10 p.m.
NDP
Brian Masse NDP Windsor West, ON
You're getting into my next question, which is good. Mr. Van Kesteren mentioned we were in China, and one of the things they identified to us was that they're now getting concerned. It's a myth that they're just producing cheap junk, so to speak. Higher-end manufacturing is happening over there now. They seem to be indicating an interest, but I'm not sure.
For example, these reports say, whether it be DVDs or a whole series of things, they gut them, the whole thing, they shred them and all that kind of stuff. I don't want to put you on the spot, but at the same time, have relationships in terms of that changed? I'm somewhat skeptical that they're at the point where they really want to crack down on this stuff to another level. Has there been an improved relationship in this to the degree that you think is...?
