Thank you very much, Mr. Chair and honourable members.
I appreciate the opportunity to address you today on this very serious problem. I'll try to be brief.
CSA is a standards-writing and certification agency, the largest and oldest in Canada. We do not manufacture products. We test and certify products to ensure they comply with Canadian safety requirements.
The key issue for us in this fight against counterfeiting is that if the products that my colleagues are talking about are counterfeit, so are the marks. As Brian Savaria said earlier, they counterfeit the marks. They make money by reducing in the product some of the safety requirements that are necessary.
While I'm talking I will pass around an extension cord, as an example. Copper is a major commodity in manufacturing, but we find as we travel throughout China and other developing countries where they're cutting corners and placing their products in the marketplace that they save money by not putting so much copper in. The result is that the wire will burn up, posing a potential fire hazard.
In the black insulated wire you'll see 16 gauge wire. That's the type of copper wire that should be in there. What we're finding is 26 gauge wire, comparable to telephone wire. Because there is so little copper inside, the cords tend to overheat and cause a fire hazard. In addition to that, the insulation can melt, and if people were to grab the cord, they could become electrocuted. So we have a potential health hazard, shock hazard, and fire hazard.
Another example of the types of things I'd like to highlight.... The counterfeiters are not as clever as they think they are and they will make mistakes. This is a power bar, and essentially there are three conductors. The third conductor is what we call a ground. It's for safety. What they put inside, again to save on the copper, is only a two-conductor cord.
What you're finding is that counterfeiters will cosmetically focus on making things look the same. Where they save money is on the safety for the public. Therein lies the concern that we have with those products.
The problem with counterfeiting is growing. It's an underground economy so it's hard to get numbers, but different agencies--Interpol--have talked about counterfeiting representing 5% to 7% of global trade. That equates to almost $500 billion a year.
Canada and developing countries are looking for a GDP growth rate of anywhere from 2% to 3% and are happy with that, just with inflation, but what we're finding in the counterfeiting area is that it's growing at 20% to 25%.
Our issues are safety related. There are commercial issues as well, but we have spent an inordinate amount of time and built up a great safety network in Canada that relies on manufacturers and distributors working within the requirements with bona fide equipment, meeting the certification and standard requirements that the public requires to ensure a safe system and enforcement.
This new area of counterfeiting is something that is really taxing our systems. We don't believe that the current system and structure we have in place is viable for capturing it or containing it.
I urge you to take the steps we have discussed with several groups on fixes for this problem.
I appreciate the time you've given me to display those examples. I will be glad, as I'm sure all my colleagues are, to take any questions you have.
Thank you very much for your time.