Industry Committee on June 4th, 2007

[John Furlong]

Thank you, Mr. Chair, and good afternoon, everybody.

I must say, it's quite a privilege to be here to have a chance to speak with you this afternoon with my colleagues, Bill and Anita.

My goal, after having sat at the back of the room, is to try to make you more comfortable with where we are on this bill. We're in the happy position, I think, to be here and to be able to say that we've enjoyed fantastic support here in Ottawa from all of the parties in the House of Commons for a long, long time, and that feels very good to us.

My job is to lead the organizing committee and to make sure that our project is delivered on time and on budget. A preoccupation of mine is to maintain the reputation of VANOC both here in Canada and around the world and to look after our good health as best we can.

The vision we have at Vancouver 2010 is a vision of a stronger Canada because of our passion for sport, for culture, and for sustainability. Our goal, really, is to try not to just deliver spectacular Olympic and Paralympic Games in Vancouver, but to be relevant in every home in the country, to share this experience with all Canadians, to count in all parts of Canada so that this event will be one that touches the soul of the whole country and leaves profoundly positive, lasting legacies that we will enjoy well into the future.

So I thank you again for the opportunity to be here. We're working extremely hard in Vancouver to deliver excellent games that you will all be proud of and will all feel that they were really worth the effort that we're putting in.

In less than three years, the Olympic flame will arrive in Canada and three billion people will watch this project unfold on television around the world. We will have the largest television audience in Olympic history. So now, of course, we're putting that story together so that we have something profoundly important to say. We want to make the country proud, and these are Canada's games. These are your games. They're about all of us and not just about a few of us on the west coast. For us, our inspiration is about trying to do something great for the country and about shaping our international reputation.

Our private sector partners have made unprecedented financial commitments to the games, some of the biggest in Olympic history in any country in the world, including the United States and China. The situation we're in today is that we have this extraordinary partnership between government and the private sector in that our government partners have taken on responsibility for providing us with funding to deliver spectacular Olympic and Paralympic venues and they're also looking after securing the games. The private sector is responsible for generating the revenues necessary to stage the operations of the games. That's the area of concentration for us today, the sort of $1.65-billion operating budget, which relies entirely on private sector funding.

It's quite the partnership. Half of that budget, half of that $1.65 billion, or so, comes from Canadian companies, big and small, through sponsorship, licensing, and merchandising programs, from companies like the one Anita Chandan is from. Anita is with Hunter Canada in Montreal. She's here with us today and she is one of the proud licensees of Olympic merchandise.

So we have to raise enough money to deliver the games, and our goal is, because this is a one-time opportunity, to leave a positive financial legacy that will benefit young people in sport so that we can maintain this important Olympic legacy that's developing on the west coast. It's important for us to do this so that we are never put in a position of having to come and ask anybody to help us out. We want to deliver it this way. This is the partnership we have, and we fully intend to deliver on that. We never want to come back and have to ask for help because we haven't been able to meet our obligations.

This is about protecting everybody's investment, yours and that of our partners, so quite a bit is expected of us in that regard. This bill, from our perspective, is essential to protecting the Olympic brand in Canada and the integrity, particularly of the Vancouver 2010 Olympic and Paralympic Games, to protect the investment of these small and large companies that are proudly supporting this project, some of them at levels we have never seen before in Canadian history. It's really important for us to protect those companies that have made this commitment on the basis of our commitment to them.

As you know, it was stated earlier that we gave a promise in 1993 in Prague that this protection would be there, and we've given that promise as a result of that commitment. These companies and our partners have relied heavily on it, and hence we have these extraordinary commitments today, which I spoke about earlier.

The other thing about this is that if we can maintain that, we have a very good chance of attracting more support from other companies who are looking at the Olympic Games as a great opportunity to invest, not just in this project, but in the country itself.

So it is about keeping our word and about protecting these marks, because we said we would. I remember the words we used in Prague—that a promise made in Canada is a promise kept. It is about protecting small businesses. You'll hear from Anita in a few minutes about her company and their particular story and what led to their decision to invest in the games. It applies only in connection with a business or commercial association. That's the only thing we're concerned about. It's business or commercial association with the games. It's not about people who wish to parody, protest, or write about the games. That's not our goal.

This bill honours Canadian athletes, because it helps to ensure that the necessary funding to have our athletes on top of the podium in 2010 is in place. As you know, we are partners with the Government of Canada in making sure that we have enough money to have the best team in the world on the field of play in Vancouver in 2010. The Government of Canada has committed $55 million, and VANOC, working with our partners, has committed the other $55 million. Many of these companies are out there raising that money today and are relying heavily on this protection to do that.

It also, I think, enhances the prospect of legacy funding after the games. If we do a good job and we can provide the protection, and we find new partners, then there's a good chance we will leave a very great financial legacy such as the one that was left by Calgary after the 1988 games.

I want to tell you that we will work to ensure that any concerns from athletes respecting their ability to use their status as Olympians and Paralympians will be addressed. We will work with you to ensure that this is not an issue. Of course, as you've heard also, the legislation is time-limited, as it applies to VANOC and the 2010 games, to December 31, 2010. However, it will continue to provide the COC and the CPC with the ability they need to protect the Olympic and Paralympic brand after the 2010 games are over. As was mentioned earlier, should Canada decide to bid for the Olympic games in the future, then this piece of legislation will be an important legacy for them, because this was a considerable piece of work for the organizing committee back in 2002-03. There was quite a lot of work that had to go into getting these assurances in place.

One of the questions asked—and I'll cover it here—is about the guidelines and education. Once the legislation—and maybe I'm assuming something here—is passed, we would immediately then produce the guidelines and the education program, put those on our website, make them public, communicate them across the country. The effect those guidelines will have should be to give everyone the assurance that there will be no freelancing from VANOC. VANOC's interest is to be fair-minded, to be honest and thoughtful and upfront in how we deal with this. So our goal would be to have those guidelines everywhere so we could prevent this from happening and not have to deal with it after the fact. So we would move quickly to make those public so people would know how we're holding ourselves to account and what we're asking the community to do as well.

I think, really, we need to use common sense to apply this, and we will. You have my word on it. We are committed to applying the legislation in a disciplined, sensitive, fair, and transparent manner. We have to do this so it will benefit everybody. We trust that all of the parties will come together around the games and that this is something we will all support. This legislation is important to us. It will help us to do a good job. It really speaks only to the future and not to the past.

Our primary objective, Mr. Chair, is to work our way through these things as they come up. It's not to walk to court; it's not to seek those remedies. It's to sit down and work through with people what we need to do to achieve a good outcome. That's the best, I think, for everyone. If we can do that well and we work well together, we believe we can deliver a project in Canada that is unprecedented worldwide. Our goal, as I said, is just simply to do our job the best way we can.

What I think I'd do now is ask Anita to make a few comments for her company, if that works for you.

[The Chair, Conservative, James Rajotte]

Well, we're at about ten minutes, Ms. Chandan, so could you be very brief? We do have a number of members who want to ask questions.

[Anita Chandan, Vice-President, Hunter Licensed Sports Distribution Corporation, Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games]

Sure.

First of all, thank you very much, Mr. Chair, for the opportunity to speak.

I'd like to speak on the part of small business. There are many different partners in the Olympic movement. There are large companies like Bell Canada who have invested in this movement, but there are also very small companies like our own.

Hunter Canada is a small company established in Montreal. We have an office in Montreal and another one in Toronto, which is now the address for our new licence. We also have a distribution and sales centre in Vancouver.

We were very pleased recently to be chosen by the Vancouver Olympic Committee to produce novelty items and souvenir items using the Olympic marks. We are perhaps, then, your official T-shirt company that you were talking about.

While the eyes are going to be on Canada during the Olympic Games, our mandate is to give every Canadian and every visitor to the games the opportunity to take home a souvenir, a souvenir representing the quality of what Canadian companies can represent.

We are firmly based in Canada. We do over 80% of our production in Canada. We're a Canadian company, offering Canadian products, believing in the Canadian movement.

I have to say that our Olympic licence represents a significant strategic investment on behalf of a company of our size. We're a small company, doing approximately $5 million in sales.

In undertaking this venture we had to make a commitment to pay the guarantees in the sales, guarantees of over actually a half million dollars, which is not a small amount for a company of our size. However, this is dwarfed, really, in comparison with the funds that we're going to invest in this program over the course of the next three years.

We invested because we're confident that this investment will be sound and that our business will grow, and it will give a positive legacy to our firm.

My journey to Vancouver began in Lillehammer in 1992 as a licensee of the Canadian Olympic movement, and we were thrilled when VANOC decided to choose us to be a part of this amazing event. However exciting the opportunity was, we really had to think, as a small company, what this investment would do to us. If we managed it properly internally, and if we were given the protection that we needed from our licensor, this could be an opportunity to raise our company to the next level, doubling our sales staff, doubling our sales in general. However, if it wasn't managed properly internally and if we didn't have protection and were faced with other companies that didn't make these kinds of investments, then it could ruin us as a company, following the games. This is the type of investment that is make or break for companies of our size.

We are concerned about the losses that we could incur should adequate legal protection not exist to effectively address the sale of cheap counterfeit Olympic goods. We've already begun production on merchandise based on forecasted sales, and this will result in a large amount of inventory that we're going to carry leading up to the 2010 games. If passed, Bill C-47 will offer our business the assurance that our exclusive rights to produce officially licensed merchandise will be protected and that the value of its significant investment will not compromised by the saturation of counterfeit products in the marketplace.

As a Canadian company, Hunter is proud of our association with the 2010 games. We feel that our licence is just one important legacy that the games will deliver to Canadians and Canadian businesses.

We do feel, I'd like to say, that VANOC has made it a point to make this Canada's games—not just Vancouver's and not just B.C.'s. The group of licensees ranges from Montreal to Quebec City to Toronto to London to Winnipeg—all across the country—with the same goal in mind: to be part of this program.

We intend to increase our jobs in Canada—increase our marketing team, our sales team, warehouse team, as well as production staff. Our company is a reflection of Canada, with the ethnic and cultural diversity within our own company.

Whether a small company like ours or Bell Canada, I think that we all have the same aim in mind: to be a part of this program and to make a commitment to the Olympic movement, as well as to athletes. The royalties that we pay to VANOC go to athletes, so companies like retailers or consumers buying from outside the licensee base don't have to pay the royalties, which again, goes back to the Olympic movement.

So on behalf of Hunter Canada and other official licensees, I would ask the committee to support the smooth passage of this bill.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll go now to Ms. Fry, for six minutes, the opening round.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Thanks very much.

I want to congratulate John for having so far done a great job on the games. I know that VANOC has worked very hard to meet a whole lot of needs to protect people, including things like social housing, etc. So when I ask these questions, I want to make it very clear that this is about some of the confusion with regard to existing intellectual property law that is there and how this may or may not infringe, albeit for a short time, on some of that legislation.

One of the concerns we have is about some of the vagueness in some of the language here that is often referred to as “VANOC will make sure that”. Therefore, with all due respect to VANOC and the good work it has done, it means that you have a group of people making decisions with regard to seizing property, etc., and making applications to the court without that legal recourse people used to have in the past, which was to be able to have an injunction that said that it was irreparable harm. The irreparable harm piece I think is one that most people who deal in intellectual property law are concerned about, because they feel that this suddenly has changed the legislation for one group only, and that is VANOC during the Olympic Games. They have changed legislation because irreparable harm was an important piece of this legislation.

Having asked that question on the irreparable harm piece, which I think is of concern to most people, I know that VANOC has said they would come up with some guidelines about how they would interpret harm, etc., and how they would be fair. Do you know when those guidelines will come about? And why do you feel it's absolutely necessary to remove that need to show irreparable harm, as is normal for most intellectual property law?

[John Furlong]

Thank you for the question. Let me deal with the second part first and come back to the harm.

On the guidelines, they'll come out as soon as this passes, because we haven't seen the final document yet. We'll make those guidelines public quickly and we will move to distribute them in every way we can, through small business associations, on our website, everywhere we can. We think in and of themselves they will provide a balance as to how we act in respect to Bill C-47. The more the public knows, the better chance we have of having no problems. Frankly, I think we've tried to take the position that most organizations don't really want to take advantage. In many cases, it's inadvertence or simply a mistake.

On the harm, as I think it was answered earlier—and I'll have my colleague speak to it a little—I think the concern we have is the time. It's being in a situation where we have no other way to remedy. The games are coming quickly; we're in a very narrow window, and we have no way. This is why it's designed this way. I think other countries have had that experience, where time is not your friend sometimes. I think if we were here for 20 or 30 years, it would be different, but we aren't. We need to be able to take action quickly.

We have given our word to many organizations. We're concerned that someone who has not acquired these rights or been given these rights, and they've been given to someone else, and that someone else is protected—that we live up to our commitment to them. We need to be able to do that.

Do you want to comment further on that?

[Bill Cooper, Director, Commercial Rights Management, Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games]

Yes. I would emphasize the immediacy of the damage done by ambush. Ambush is about an immediate impact and therefore the remedies required are immediate. I would also emphasize that if we are not in a position to be able to address the damage being caused during an ambush scenario, that affects the staging of spectacular games, but it also affects the legacy we leave for amateur sport in Canada. If our sponsors do not have a positive experience, the likelihood of them renewing and staying committed to the Olympic and Paralympic movements in Canada is much reduced.

[Hedy Fry, Liberal, Vancouver Centre, BC]

Is there any international reach to this? In other words, can somebody in the United States start producing T-shirts that people who come to the games from the U.S. can buy there and wear if they want? Does this only pertain to Canadians in Canada, or does it apply to any place in the world? Can you confiscate a T-shirt from somebody's suitcase, if they come and start wearing it and it doesn't come out of this particular company?

[Bill Cooper]

Our jurisdiction is domestic only, but we work very closely with all the national Olympic committees and we do work closely with the USOC when it's relevant. In the instance that you cite, a person could travel into Canada with an infringing T-shirt, assuming they made it into Canada. If it's not shipping in goods, then that's one case.

One thing to be aware of is that, like most sporting events, spectators are subject to the terms and conditions on the backs of their tickets. If there were an instance when thousands were wearing certain marks and therefore creating an ambush platform, that could be addressed through spectator services.

[Hedy Fry, Liberal, Vancouver Centre, BC]

You've used combinations of words that I think have been disconcerting to many people, like “tourism 2010”, “where next”, “Whistler sliding centre”, and “see you in Whistler”. These are terms people use all the time about just Whistler and may coincidentally use over the next three years.

The ambiguity of these combinations of words is causing a problem. It's something that could easily be remedied if you amended it to have just the basic Olympic and Paralympic trademarking combinations.

[The Chair, Conservative, James Rajotte]

Mr. Furlong.

[John Furlong]

The words in and of themselves are not the worry; it's when they're used to create an association with the Olympic Games to take advantage of them for commercial purposes. That's where we're concerned. They're only used in that manner where they're going to get the attention of Vancouver 2010.

[The Chair, Conservative, James Rajotte]

Thank you.

Thank you, Ms. Fry.

We'll go to Monsieur Malo.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you, Mr. Chairman.

I would like to thank our witnesses for coming.

My first question is for you, Ms. Chandan. I imagine that the current Trade-marks Act works quite well for your company at present. How should this legislation be improved? Why is Bill C-47 so important for your company if you are currently able to do a certain amount of business under the current Trade-marks Act?

[Anita Chandan]

I will answer in English.

When VANOC puts together their education campaign and guidelines, this bill will deter companies from even taking the step of making the counterfeit merchandise or misusing the trademarks.

We are protected to some extent through our association with VANOC and our contracts; however, this is going to deter a lot of the people who would perhaps infringe on the laws.

[Luc Malo, Bloc, Verchères—Les Patriotes, QC]

Thank you.

Mr. Furlong, the first time I heard that a bill protecting Olympic trade-marks was to be tabled in the House, was in February. It was tabled in March, and this is now June.

Since the process began, we have known that the Vancouver Organizing Committee for the 2010 Olympic and Paralympic Winter Games, or VANOC, will be tabling its guidelines. However, we have not received them so far. We have had the bill for quite a few months, and you certainly contributed to preparing it. Many business people are telling us that they do not know how the bill will be interpreted by VANOC.

Do you not think that it would have been useful to see those guidelines before parliamentarians support this bill in the House, so as to clarify things for all the parliamentarians, business people and citizens who want to know how this bill will affect their daily lives?

[John Furlong]

Thank you for the question.

I think it's just a choice we made to wait until we were through. It's a lengthy process and there is quite a bit to it, so we chose to wait until the end to see how the legislation unfolded. We will be going to some expense to put out publications, put this on our website, and deliver a broad education program across the country.

As you heard from Anita, this is not just a Vancouver situation. Most of our sponsors are not from B.C. They're from Ontario, Quebec, and central Canada.

So it was just our choice to do that. The guidelines will be as you would expect. They will be open and clear about what we think the rules are. You might, for example, see a suggestion in the guidelines for organizations that are thinking of doing something to call us. We need to see what the final legislation looks like before we complete it, but we're obviously working on it.

I'll have you make a few comments about what we're doing now.

[Bill Cooper]

I want to emphasize that if and when Bill C-47 is passed, we will not be starting from scratch with the guidelines. I want to put you at ease there. There's been an enormous body of work done already on the guidelines—as much as we thought was reasonable and sensible, given how much impact this committee process must have on the law. Ultimately, that law will dictate to a large extent how those guidelines look.

What I can tell you is that we've done a lot of work. We've worked with the IOC and the COC and the CPC already. We've worked with the athlete groups and worked with the national sport organization groups to make sure that the core, the heart and soul of the guidelines we have, the architecture, already adequately reflects their concerns.

I can also tell you that as it pertains to education, we are already in the marketplace, to the extent that we can be in the absence of Bill C-47, educating the public as best we can. As to mechanisms, we are basically using industry segments, working with our partners, who might know their own industry segment well, and in addition working with their respective agencies and suppliers to make sure we can penetrate relevant sectors.

For instance, we're getting in front of agencies, communications and PR companies, to make sure that before they plan the communications platforms of their respective clients—in the pre-Beijing phase, as an example—they're informed of what allowable thresholds are with respect to aligning with the Olympic and Paralympic brands.

We're obviously quite well equipped already to launch our website. We have some material there already and we're quite keen, with this process coming to a close, on being able to make it more robust and to have more material available. We will also engage in above-the-line advertising, wherein we will actively communicate to the consumer what's real and what's not and why it's important to buy real and thereby fund athletes and not take money from athletes. In that sense, consumer awareness is a growing concern for us and a growing priority on our website as well.

Finally, I just want to emphasize that in our meetings thus far with athlete groups and sponsors with significant international experience, such as VISA and all the NSOs, we've had very positive feedback on our personality and our mechanisms for interpreting thresholds thus far.

[John Furlong]

One of the things I think I'm detecting is that you're worried that there may be something that shows up in the guidelines that is a bit of a shocker. Let me just cover it this way. For us, the number one asset that Vancouver 2010 has, and the only thing we're really selling today, is the reputation we have. It's the promise we've made.

When we're in the public arena arguing about this, it does no good for the Olympic Games and it does no good for our project. We, I think, have to be prudent. We have to be fair-minded and honest. Our goal is to make sure that the guidelines are clear and easy for people to use, because there is just no advantage for VANOC to be having arguments with anybody. When this is done, we will articulate them as clearly as we can.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Monsieur Arthur.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

Thank you, Mr. Chair.

Good afternoon, sir.

The introduction of Bill C-47 before the House is a promise made to the IOC. Could you explain to us what was asked of you by the IOC? What was promised by you to the IOC? What exactly is the deal we are trying to honour here by adopting Bill C-47?

[John Furlong]

In a nutshell, Mr. Chair, the IOC asked us in 2002-2003 to commit to legislation that would give full protection to the Olympic brand and Olympic marks in Canada. I think it was the view at the time and it was agreed at the time that what existed was not enough. We gave an agreement that such legislation would be passed; the government gave that commitment. We gave it as a commitment in Vancouver when we were evaluated and again in Prague when we actually submitted our file.

So the expectation is that the legislation would be passed to provide the kind of protection this bill now speaks to. It is what's expected; what's in the bill today is what the IOC has expected us to do. It's comparable to what they've asked Australia, England, and others to do.

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

I understand that the IOC asked you to ask the Canadian government to ask the Canadian Parliament to protect their trademarks—not yours, not the ones from Vancouver, but the international committee's. Isn't that so?

[John Furlong]

No, the legislation—

[André Arthur, Independent, Portneuf—Jacques-Cartier, QC]

They didn't ask you to protect Salt Lake City's or Beijing's.