Industry Committee on Oct. 30th, 2012

[Voices]

Oh, oh!

[Geoff Regan, Liberal, Halifax West, NS]

That's where I often will get my Christmas lights.

If I'm getting Christmas lights there, I'm going to assume, well, it's a Canadian company, it says it's CSA-approved, so I'm all set. But you're telling us that it isn't that simple.

[Terry Hunter]

It's not that simple. Right now, it's buyer beware.

[Geoff Regan, Liberal, Halifax West, NS]

First of all, how does it happen that a national retailer acquires something like that without being sure of its source and being sure that it has in fact the proper rating from CSA, for example, that's required?

[Terry Hunter]

Right now, most major retailers have their own supply chain security and verification systems in place. On occasion, what happens, for example, is this. On the Christmas lights that I mentioned earlier, their supplier in Asia sourced it from a manufacturer that provided counterfeit CSA documents and counterfeit testing documents, so these things do slip through the supply chain. We work with retailers right now because we still see the retailers as victims of counterfeit as well. They do the best they can to prevent them from coming into the country, but I spend a lot of time working with our retailers as well to help them identify and ensure that their products are certified.

[Geoff Regan, Liberal, Halifax West, NS]

So should they, when they receive a shipment, be checking with you? What you're telling us is that those retailers in Canada received not only the labels that say CSA , but even documentation that supports that, supposedly indicating that CSA has done its studies and examined and tested these products and they're fine, and they're not. They're counterfeit.

What's the answer to this? Clearly, this has to be a major consumer concern, or it ought to be.

[The Chair, Conservative, David Sweet]

Sorry, your time has run out.

[Geoff Regan, Liberal, Halifax West, NS]

I hope to get another chance later.

[The Chair, Conservative, David Sweet]

Mr. Hunter, go ahead and answer that question as briefly as you can.

[Terry Hunter]

Right.

We are working with the retailers. We have a public database where they can verify that the products they are sourcing are certified by CSA, and likewise with other certification bodies, such as UL or ETL.

It's really up to them right now. We don't have anything in place on our borders to prevent or check the products coming in, so there's no real screening process for counterfeit products coming into the country.

[The Chair, Conservative, David Sweet]

I'm sorry, Mr. Hunter, I just want to make sure I heard you: there is a database that a retailer can access?

[Terry Hunter]

That's right.

[The Chair, Conservative, David Sweet]

And they can conclusively determine whether the product they have is legitimately certified?

[Terry Hunter]

That's correct. We have a public database. It is open to the public and industry if they want to check their product and it has a file number related to it.

[The Chair, Conservative, David Sweet]

Thank you very much. It was a good question and good answer.

Now we'll move on to our five-minute round.

Madam Gallant, you have five minutes.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you, Mr. Chairman, and through you to our witnesses.

Mr. McDougall, my question is going to pertain to the NRC's crown jewel. The National Research Universal, the NRU reactor, is situated at Chalk River Laboratories, which the natural resources committee visited back in 2010.

I believe, Mr. Regan, you were there.

The National Research Council of Canada designed and built the NRU, which replaced the NRX as the world's largest source of neutrons, and has been host to a significant scientific community, as well as industry, for materials analysis.

In fact, NASA sent a piece of the ill-fated space shuttle Challenger's O-ring, and through the use of neutron beam scattering, which provides a unique non-destructive means of determining the atomic and/or magnetic structure of material, to determine whether the O-ring was indeed a potential cause of that tragedy.

While the NRU is currently most widely known as the world's greatest supplier of medical isotopes, it also supports the CANDU fleet of clean, economical, sustainable nuclear power generators. It has even played a key role in the non-proliferation of nuclear weapons through its fuel research, which has rendered the nuclear warhead more valuable as a source of clean energy than as a weapon of mass destruction.

The NRU continues to fill a key role in terms of national security and generally making the world a safer place to live. But Chalk River Laboratories is also the proven model for taking a scientific concept from the board to the bench through development and application across the valley of death and on to commercial manufacturing.

One example is the passive autocatalytic recombiner, which, had it been installed in Fukushima's reactor building, would have prevented the hydrogen explosions during that situation.

My question, Mr. McDougall, refers to the NRC's neutron beam centre that arose from Nobel Prize winner Bertram Brockhouse's research. What role do you see the Canadian Neutron Beam Centre having with respect to Canadian innovation?

[John McDougall]

First of all, I will say just as a preamble that the comment about Atomic Energy of Canada Limited being an example of the kind of thing we have to do in Canada is probably not a bad example. It was very mission-oriented. It led to exactly what you were talking about, from an idea to the commercial marketplace. We need to do more of that in Canada. I think it's very important.

As you know, the reactor and Atomic Energy of Canada now report through the Natural Resources Canada file, not me, obviously. The neutron scattering activity is a relatively small component that they were going to abandon some years ago, but through a cobbling together of various funding sources it was retained.

More recently, NSERC, which is the predominant funder of that activity, gave notice that it would be pulling back from continuing to do so, which makes it somewhat, shall we say, at risk. The largest amount of funding was coming through them to academic researchers, who are the predominant users.

There are instances where there have been exceptional outside users, but they're very few in number. When they do occur, they're very significant. The challenge that AECL and Chalk River labs are dealing with right now is whether or not that's a capacity they should be trying to maintain.

[The Chair, Conservative, David Sweet]

Thank you, Mr. McDougall.

That's all the time we have for Madam Gallant.

Now to Mr. Harris, for five minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you very much.

Thank you to the witnesses. There certainly won't be enough time to deal with everything I want to deal with.

Mr. McDougall, you made a comment about NSERC pulling back. Is that because of financial challenges that they're facing, that they're able to fund less programs, or is there a different reason?

[John McDougall]

I won't pretend to be an expert on their funding, so I can't honestly answer that. I assume they're doing it for some reason that in their mind makes sense, but I don't know what it is.

[Dan Harris, NDP, Scarborough Southwest, ON]

That will be a question to perhaps ask someone else down the road.

Today we have heard a fair bit about counterfeiting and some of the problems that different sectors face. I'm going to draw folks' attention back to a study that the industry committee did in 2007 on counterfeiting, and just list off a few recommendations.

Recommendation 2: That the Government of Canada enact legislation that clearly defines trademark counterfeiting as a specific criminal offence under the Trade-marks Act.

Recommendation 3:That the Government of Canada create a criminal offence for manufacturing, reproducing, importing, distributing and selling counterfeit goods.

Recommendation 4:That the Government of Canada make the manufacture, sale, and distribution of fake labels of authenticity an offence in the Criminal Code.

Moving on to recommendation 11, and I'll just paraphrase this one, that the government provide CBSA and law enforcement officials with “the express authority to target, detain, seize, and destroy counterfeit and pirated goods on their own initiative”, and that continues on.

Recommendation 12: That the Government of Canada formalize intelligence sharing between the Canada Border Services Agency and the RCMP.

Recommendation 15: That the Government of Canada provide Health Canada officials with sufficient resources to investigate counterfeit food and drug complaints.

This was a fairly exhaustive study that came out with a number of recommendations that, not just today but throughout this IP study, we've been hearing time and time again. This study was done five years ago. It would seem that the government hasn't moved forward yet on many of these good recommendations.

Is this something you would like to see included in this study and see the government take action on?

Maybe I'll start with Mr. Edwards and work my way down.

[Wayne Edwards]

Thank you, Mr. Harris, for the question. I don't think you've been given a copy of our notes, but at least four of those points you made were salient points we did want to make, and we have. So yes, we agree that would take us a long way to helping the situation.

As we look back, nothing really has changed in the five, six years that have gone by. Nothing has happened. That was one of the points we tried to make as well.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you.

[Vladimir Gagachev]

Absolutely: that's why we're here. We realize counterfeiting might be on the outskirts of the scope of this particular study, but we were hoping it would draw attention back again to that issue. I don't think another study is necessary; we'd just refer back to this one.

[Terry Hunter]

Thank you.

I believe the strain on industry for protecting their own IP is quite heavy. If we can get any of these changes made to government, it would be amazing. We would be behind that, for sure.