Good afternoon, Mr. Chairman, honourable members of the committee.
My name is Lee Webster, and I'm chair of the Canadian Chamber of Commerce intellectual property committee. I'm also a partner at the law firm of Osler, Hoskin & Harcourt in Toronto and have practised in the area of international property law for over 25 years.
I'm here to tell you that Canada is losing the war on counterfeit goods. While counterfeiting used to consist mainly of knock-off t-shirts, watches, and other luxury items, the low risk and high profit margin have encouraged criminals, including organized crime, to become very active, counterfeiting everything from drugs, brake pads, and other car parts to electrical products and personal care products. No industry is immune to this illegal activity.
Counterfeiting also may pose a serious health and safety risk due to poor and inconsistent quality and the potential hazardous nature of counterfeit products. Counterfeiters do not care if counterfeit products are unsafe for consumers; they only care about turning a profit, money alone. Some counterfeit batteries imported into Canada have been found to contain mercury, and pose a threat of explosion. Counterfeit shampoo contaminated with bacteria has been found in Canada, and has been imported from the U.S. into Canada. I'm sure you've heard of the unfortunate woman in British Columbia who purchased drugs over the Internet that poisoned her. She succumbed from the poisoning. These drugs were found to be laced with filler, including, believe it or not, lead and uranium.
The prevention of the distribution of counterfeit goods is not simply a matter of protecting the legitimate rights of designers of high-end watches and handbags. Aside from safety, we cannot lose sight of the fact that there is an issue of lost jobs and tax revenue. Counterfeiting and piracy are relatively unchecked in Canada and continue to grow at an exponential rate. It is estimated that the value of counterfeited goods in Canada is worth billions annually, and growing. The economic impact of this problem on Canadian companies and the lost tax revenue for the government are significant. This has a negative impact on Canadian business and the chamber's members.
The Canadian Chamber has the view that with the rapidly changing global economy, protecting intellectual property is critical to ensuring a competitive Canada.
Intellectual property is an essential element in a knowledge-based economy for promoting investment in research and innovation, international trade and investment, consumer protection, and overall economic growth. Some may argue that this is all about the entertainment industry trying to protect their intellectual property from illegal downloading. Although this is a very real concern, the issue is much larger. The entertainment industry's problems are simply one aspect of the broader problem of intellectual property theft. Stealing the intellectual property of another not only robs the rights holder of the economic benefits of those rights, long recognized under our traditional civil laws, such as our patent, trademark, and copyright legislation; it also lowers our country's reputation abroad, deceives the consumer, and may be putting the consumer's health and safety at risk.
This issue has not escaped the notice of our principal trading partners. Just last week, the United States trademarks representative again placed Canada on the special 301 watch list, an annual review of countries deemed lacking in the protection of intellectual property, for our 13th consecutive year.
The Canadian government must begin to take vigorous and meaningful action on this issue immediately. The Canadian Chamber has been pressing for action, and we are very encouraged that this committee and the public safety committee are giving careful study to the problem of counterfeiting in Canada. It is time that the government took this issue seriously and acted.
The Canadian Anti-Counterfeiting Network has released a comprehensive report on counterfeiting and piracy in Canada, entitled A Road Map for Change. The Canadian Chamber strongly endorses this report and its recommendations. This committee has already begun to tackle the issue by including a section on counterfeiting in its recent report on the manufacturing sector. The public safety committee will soon be releasing a report on the health and safety implications of counterfeit goods.
While my colleagues on the panel today will delve further into the specific recommendations for change for IP, I want to highlight some of the facts.
One, law enforcement agencies and prosecutors need better tools to provide them with the ability to effectively combat the importation, manufacture, distribution, and sale of counterfeit goods in this country.
Two, among other matters, customs officials need to have new powers and the associated additional resources to search and to seize suspected counterfeit goods at the border.
Much else needs to be done. Our current IP laws are not up to the task of providing an efficient—and I emphasize “efficient”—and effective relief against counterfeit goods.
To close, a thorough review of all of our IP-related statutes, such as the Copyright Act, the Trade-marks Act, and the Patent Act, as well as the IP-related provisions of other statutes such as the Criminal Code, is urgently needed so that rights holders and the authorities have the tools they need to efficiently and effectively stop the flow of counterfeit goods in this country. Counterfeiters must be stopped. Canada's IP environment must be brought up to the standard of our international trading partners.
We thank you for the opportunity to present the Canadian Chamber's views. I'd be happy to take any questions you might have at the end of our presentations.