Thank you, Mr. Chairman and members of Parliament.
Thank you for giving me an opportunity to speak before your committee. I greatly appreciate being invited to give my viewpoint on the issue of counterfeiting and piracy.
In addition to being a founding member of the Canadian Anti-Counterfeiting Network, I have been a lawyer in private practice for 26 years. My entire practice is spent dealing with several hundred counterfeiting cases per year across Canada for over 75 different brands and manufacturers. In these dealings, it is rare that I am not able to find counterfeit products in a particular area.
I'm here to explain that on a constant and continual basis I have found—and am still finding—counterfeit products at virtually every major shopping mall or shopping centre across Canada. We find counterfeits in numerous, and I mean hundreds, of retail locations per year across Canada.
I have been personally involved in raids of manufacturing facilities in Canada caught manufacturing clothing, cellular batteries, and accessories.
I have raided a distribution facility in Canada that imported hundreds of thousands of dollars of ink-jet cartridges separate from counterfeit packaging and assembled the units together for sale in the Canadian marketplace.
We recently seized large quantities of cellular headsets from an importer of counterfeit Bluetooth headsets who imported the packaging separate from the units themselves. These were destined for delivery over the Internet, into Canada and into Canadian businesses. Since the end of November of last year, I have personally opened over 50 new cases of counterfeit cellular headsets. They are not approved and not made with the proper materials.
A large number of counterfeiters or pirates are dealing only in cash. We deal with them on a regular basis, and I have every confidence that they are not reporting their income to the Canada Revenue Agency.
A few brief examples of what we've encountered include the following.
I've attended the Richmond Night Market in Richmond, B.C. with our anti-counterfeiting enforcement teams and the RCMP and Health Canada on more than one occasion in each of the past few years. Each time we've identified over 60 businesses, of the several hundred there, that had counterfeit products, ranging from—the list that was mentioned before—batteries to apparel, ink-jet cartridges, electrical products, jewellery, and sunglasses. We have only ever been able to catch, notwithstanding that we've had as many as 15 people there, 10% to 15% of those businesses, because they leave as soon as they see us.
It is a requirement of that market that every vendor also have a retail location in Richmond, so they have another opportunity to sell these goods. Dozens of businesses have been identified in Richmond and Burnaby, B.C., selling large quantities of luxury goods in the back of regular stores. You have to know someone to get in there.
On many occasions per year, I am personally contacted by members of the RCMP and CBSA, and they've informed me that they've just let a shipment of counterfeit products come into Canada without stopping it, even though they knew the goods were counterfeit. On many occasions per year, I've been advised by police or crowns that even though they have identified counterfeit products being imported into Canada, either because the goods were protected by trademark and not copyright, or more often because they don't have the resources, they've just decided not to proceed with the charges.
In many cases, I've been involved where brand owners are not formally advised of who the importers or exporters are, and therefore they have no ability, if the government doesn't seize the goods, to follow them into the marketplace. Very often I've been involved in shipments that come into Canada, are broken down, and shipped back into the United States.
Until there is an investigation, how is the brand owner supposed to know who is involved in organized crime? We don't have access to the database that keeps track of who the criminals are. The police do, and if they don't share that information, we have no way of knowing. However, I can tell you that I have been involved in numerous cases—I will put it into dozens—where I have personally been advised by the police that the case I'm working on involves members of organized crime.
I conduct training sessions and conferences on anti-counterfeiting, and I'm in my 12th year of doing so. Representatives of Canada Revenue Agency regularly attend, and when they do, they're happy having these cases referred to them. Conspicuous by their absence are many crown prosecutors and members of Canada customs.
I have recently observed, at a location called the Pacific Mall, over 50 businesses selling counterfeit products of various kinds. Every time we conduct a raid and we walk into the first location, they all close. I've tried to make purchases with my Interac card or my credit card, and they say no, they will only deal in cash. One informant told me that one business at one of the flea markets in the Toronto area—I think it was St. Jacobs—takes in $5,000 to $7,000 cash per week.
When people ask me where to find counterfeits in Canada, I have a one-word answer: everywhere. When people ask me how big the problem is, I say it's bigger than everyone thinks. When they ask me what we're doing about it, I say not enough.
Thank you very much for the opportunity to speak with you.