Mr. Chairman and honourable members, thank you for this opportunity to appear before you today.
My name is Brian Savaria. I'm a professional engineer employed by Eaton Electrical in our Canadian operations in Burlington, Ontario. We manufacture electrical equipment and systems that range from 120 volts to 46 kV. My company employs about 1,000 Canadians in several manufacturing and sales facilities across the country.
The electrical industry in Canada and all across North America faces grave challenges from reconditioners who place counterfeit labels on used electrical products, and from product counterfeiters, both domestic and foreign. While this unlawful activity impacts our business, there is far more serious impact and danger to our citizens here in Canada. Unsafe and dangerous electrical products that can not only cause significant property damage but also have life-threatening effects are being installed in facilities. Electrical shocks and fire hazards can result when an electrical product does not perform as a consumer expects from reading the label on the product. This consumer can be a trained electrician relying on information on the product labels. Consequently, counterfeit labels and/or products with false labelling can lead innocent users to believe, albeit incorrectly, that they are dealing with safe products.
I'm here today to tell you about my experience and involvement in our attempts to keep these fakes and counterfeits out of the Canadian market. My involvement includes working with my American and British industry colleagues, as well as with the RCMP, Canadian and American customs officers, and the electrical regulating authorities here in Canada.
The worst problems in this area occur with the electrical safety device known as a circuit breaker. These products are designed to prevent electrical wires and wiring devices from overheating and short-circuiting. As you know, the electrical wires in your homes and businesses are located behind walls; you cannot see a wire that's burning due to an overheating condition.
Imagine a light support system in a hospital that suddenly shuts down because of a false trip, or a machine that should shut down because of a short circuit and does not. All of these conditions have the makings for a catastrophe, not only in property damage but potentially in human lives.
The CBC television program Marketplace had an excellent program in November of 2006 on counterfeit electrical products that I recommend all of you watch.
Our industry, represented by Electro-Federation Canada, EFC, recognizes the serious and grave issues with domestic relabelling, which is outright counterfeiting, and with international product counterfeits. Let me explain.
Ten years ago, we found an electrical product reconditioner selling unauthorized circuit breakers. Using private investigators, we purchased these breakers, and our subsequent laboratory analysis concluded that our investigators purchased used circuit breakers that were being passed off as new. These breakers were likely salvaged from demolition sites in questionable circumstances, tampered with, and relabelled to change the electrical ratings of the breaker, an extremely serious and dangerous situation. The new labels contained the trademarks of certification organizations such as CSA and UL, along with the original manufacturer's labels.
Subsequent litigation in the Federal Court of Canada with one such counterfeiter has had little impact on this activity in Canada. Over the past 10 years, we have found examples of these dangerous electrical devices in the intensive care unit of a hospital, a grocery store, and even in schools.
This problem, like cancer, is appearing to grow and spread, threatening the electrical safety and integrity of this country. I have been involved with our industry's attempt to stop this for seven years. It still continues, and we need your help.
Five years ago, the RCMP agreed to act on a formal complaint that I lodged. That complaint was based upon discovery of a counterfeit-labelled moulded-case circuit breaker in a Quebec City hospital. Other investigations and seizures found similar cases of counterfeit and tampered-with circuit breakers in hospitals. These investigations culminated in search and seizure operations against three suspected businesses, with charges laid in two instances. The charges brought were forgery and passing off under the Criminal Code. In the cases in which charges were laid, the perpetrators pleaded guilty. In the first case, the defendant was fined $76,000; in the second, $40,000 was assessed, with an unconditional discharge. The first fellow got a criminal record. The third case was not prosecuted because the Crown did not believe there was sufficient evidence to bring charges.
I was present during the third RCMP search warrant execution on that guy. What I saw there brought shivers to my spine. I saw thousands of used circuit breakers stored in an unheated barn. Many bore counterfeit labels, the basis of RCMP seizures. Loose product certification labels were in filing cabinet drawers. The evidence was the basis for my victim impact statement, in which I emphasized how the activities threatened the safety of Canadians. This problem continues.
Are you sure your electrical system will function as it was intended? As long as Canada has electrical retailers selling suspect reconditioned breakers from unauthorized sources, how do we know that they have not been tampered with? We cannot possibly check all of them. Obviously, we check the ones that look suspicious. But with better copying technology, there should be serious concerns about this issue.
The Canadian electrical safety community has been on guard and for several years has been alerted to the potential hazards these products can cause. The fact that we have not encountered the foreign counterfeits in Canada is not cause for complacency. One of the seizures from a reconditioner who was relabelling circuit breakers included a sheet of breaker toggle amperage markings--1,740 of them on that black sheet in your information package. What do you think that sheet was being used for?
Also in your information package is a photograph of what happens when an electrical circuit breaker fails. The result is catastrophic. In this case, it shows a U.S. customs-seized Chinese residential breaker failing the UL standard test. The spectre of substandard, defective counterfeit circuit breakers and domestically relabelled circuit breakers with false information and settings entering Canadian homes, stores, public buildings, schools, and hospitals poses a serious threat to a safe electrical infrastructure. It is truly frightening and it must be addressed.
May I have your questions?