Industry Committee on Oct. 30th, 2012

[John McDougall]

I think the mandate is broad, but if you look at it, it does talk very much about industrial impact and industrial development.

[Kennedy Stewart, NDP, Burnaby—Douglas, BC]

One half of it does, and the other half talks about encouraging science as well. It's an interpretation, and that's why I've been asking for documentation in terms of your specific directions.

This research and technology organization model is helpful. I'm the critic in this area, so I have to get my head around what you're planning to do.

I do appreciate your coming today, and I thank you very much for your answers.

[John McDougall]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Stewart.

Now on to Mr. Lake, for five minutes.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

I want to ask Mr. Hunter a couple of questions. Mr. Wallace was going down the direction that I was thinking of going down as well, in terms of understanding what counterfeit imports look like and what that process looks like now.

You said they would take a picture of the counterfeit markings and send it to you. I would think, though, there is probably a certain level of sophistication whereby they can make those markings look exactly like your markings. Would that not be the case?

[Terry Hunter]

That's correct, but when we get a photograph of whatever they're inspecting, I look at the model number, UPC codes, and all the different elements of the product, and I verify with our database as to whether it's authentic or counterfeit.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Okay. You verify where it's coming from versus the numbers on it and you can come to some sort of conclusion, in most cases, I would imagine.

[Terry Hunter]

That's correct. They'll tell me on occasion about the manufacturer of origin.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

With regard to this idea of training the border officers, like some of my colleagues here, it sounds to me to be quite an onerous thing. The number of potential things that could be counterfeit would seem to be almost equal to the number of things we bring into this country.

How do you zero in on specific things that you want to target?

[Terry Hunter]

What we do is give them some basic knowledge and awareness that anything can be counterfeited. We share what the trends are right now, what products are being counterfeited. For example, earlier I said that components of other products are being counterfeited. What's happening right now is that they're taking photographs of components of units and sending them to me for verification.

With Canadian Customs, we would share with them the trends, popular items that are being counterfeited, just some general knowledge and awareness.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Could you be specific, if possible, in terms of what you would like to see in legislation to address these issues?

[Terry Hunter]

I'd like to see our border services have the ability to question the product coming in, go to the IP owner and verify that IP—who it belongs to and whether it belongs on that product.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Edwards, do you have anything to add to any of that?

[Wayne Edwards]

I would share Mr. Hunter's comments on that, for sure.

I think what you're driving at is that it is a huge problem. Everything you do almost sounds like a drop in the bucket. But you do need to start somewhere, probably by educating young children. We have another association that we work with, educating school children on safety. That's the safety part of it.

I'll give an example. I worked for a company before, called Philips—with one “l”. We used to say it was one “l” of a company.

We had people knocking off our lamp products. They had the box. It looked exactly like Philips, except it had two “l”s. So they weren't very clever in how they were knocking off those lamps.

I've seen Duracell batteries at stores, and Duracell is spelled wrong, or the product is not in a bilingual pack. We know that in Canada it has to have a bilingual pack. When you point this out to the clerk, they'll tell you, oh yes, it's good stuff. Well, no: this is not for sale in Canada, and I can tell, because you have spelling mistakes in this document. It's counterfeit product.

These are little hints, but as people get more sophisticated, you have to be a couple of jumps ahead and come up with some nanotechnology that can help you in the future have something integrated into a product that is foolproof, if that is possible.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

That's really interesting, actually. As you're talking about nanotechnology, I'm thinking about the Edmonton Research Park. Mr. McDougall is very familiar with some of the work that's going on there at the University of Alberta and other places where we've seen that very technology.

This is the last question, though. I'll come back to you folks. You talk about retailers. It's really interesting, because I think about knock-offs being sold in a back alley somewhere or something else. You're talking about big-name retailers who are being fooled by this stuff.

Maybe you could speak to how that can happen and to what extent that is happening.

[Wayne Edwards]

I would say that in the Canadian community in retail, I don't believe anybody is making deliberate attempts to have inappropriate products on the shelf. I really don't. They have protection in place with the purchasing people. They send inspectors over there themselves. But criminals are smart. You're dealing with some smart people here on the other side of the fence too. They find a lot of deviant ways to get uncertified or unsafe products onto the shelves at retail. It's a continuous process.

[The Chair, Conservative, David Sweet]

That'll have to be the end of it there. We're running short of time.

Mr. Regan, you have five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you, Mr. Chairman.

Mr. Hunter, let's talk some more about the process that would happen with this database you've talked about. A retailer in Canada may know that the products being produced by a company outside Canada were tested last year, five months ago, whenever. But how do they know that the latest shipment is certified, that it's legitimate as opposed to the counterfeit kind of documents you've talked about?

[Terry Hunter]

Our database is quite up to date. They can use the manufacturer's name, or brand name, or model number to search our database.

We had mentioned General Electric or Philips earlier. You can type General Electric into our database, and you'll come up with 300 pages of certified products. Then you type in the model number, and it will hone it down to the model number you want to verify.

[Geoff Regan, Liberal, Halifax West, NS]

There was mention of a lot of this counterfeit product coming from southeast Asia. What's your presence there? How often are you in a factory in one of those countries that produces Christmas lights, for example?

[Terry Hunter]

We have a lot of clients there. We have four offices in China right now, and our inspectors work with the Chinese government to inspect our client factories to ensure they're maintaining their standards while manufacturing products.

The factories are being inspected. There are so many factories over there. You have a whole community that manufactures Christmas lights. They're at the same address. They're all different factories under different ownership. Two of them may be CSA certified, and the others are not.

So we don't have the right to enter those buildings to inspect—

[Geoff Regan, Liberal, Halifax West, NS]

Of course the database would show that, right? The database would show which ones you have certified, clearly.

[Terry Hunter]

That's right.

[Geoff Regan, Liberal, Halifax West, NS]

It wouldn't show, perhaps, the ones you didn't, right?

I guess it really brings me back to the question of the retailer, whether it's negligence if retailers aren't checking every shipment they get against your database.

[Terry Hunter]

The retailers do have a buying process. Some of the retailers are specifically asking for CSA-certified products, so the manufacturers are providing documentation to support their manufacturing. Unfortunately, some manufacturers either forge or counterfeit the CSA documents as well.