Industry Committee on Nov. 4th, 2013

[The Chair, Conservative, David Sweet]

My apologies, Minister, but we're quite a ways over. I was waiting for you to finish. We have to go on.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Sure, go ahead.

[The Chair, Conservative, David Sweet]

I'm sorry about that.

We'll now go on to Madam Sgro for seven minutes.

[Judy Sgro, Liberal, York West, ON]

Thank you very much.

Welcome, Minister Moore. It sounds like it's going to be a very interesting time for both of us here. I look forward to working with you on this.

I have a couple of questions.

Run us through the border issue. I've visited and had tours in previous positions that I've had here. I have viewed your ability to X-ray trucks and various things so that you know what the contents are, but you can only do that when a particular signal gives you an idea that something might be coming through.

That happens when we're talking about drugs and smuggling people, but when you're talking about many of the goods that the minister referenced, and other things, it just seems to me that it's going to be an amazingly difficult job without an awful lot more resources. We know the reality of where we are with that issue.

What else are you getting in Bill C-8 that is going to help you to be able to decrease from this $38 million? If it's $38 million now, it'll probably be up to $60 million in another year. What tools do you have now with Bill C-8, if Bill C-8 is passed, that you didn't have before?

[Martin Bolduc]

We will rely on intelligence and targeting. In regard to trying to intercept a shipment of illegal drugs, there are a lot of similarities between that and a shipment of counterfeit goods. We will rely on indicators, try to leverage that information, which we do day in, day out on many hundreds of thousands of shipments that we clear at land borders every year....

This bill gives us the power to detain those goods, and to contact trademark and copyright owners, so that they can take their case to the courts.

We already have a system in place that makes it possible to target and intercept those shipments. You are entirely correct. If we X-ray a shipment of shirts, we cannot necessarily see whether the shirts are genuine or counterfeit, but we can target and intercept those shipments by using all the indicators.

[Judy Sgro, Liberal, York West, ON]

It clearly sounds like you have quite a significant job ahead of you in order to be able to do what we're talking about here today.

I'll just throw this out. For a lot of the items, when we go into the dollar store—and no disrespect meant to the dollar store, as it's a place that I'm sure we all go to—I'm always very leery of what I buy there. When you look at electric extension cords and so on, they'll have the CCA, but how do we protect consumers from buying fraudulent items like that? What's in Bill C-8? Is there anything in Bill C-8 that's going to do that?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Certainly there are powers, there are penalties. Those whose products are counterfeit and are improperly represented can now be prosecuted. We empower the victims. Penalties are imposed.

This is the regime that was asked for, frankly, by those organizations that represent those firms that are being ripped off. We spoke with them, met with them, and based on the consultations, they came back and said those were the kinds of powers they thought would make the most sense to protect us. Those are the powers that are enumerated in Bill C-8.

[Judy Sgro, Liberal, York West, ON]

Clearly you think that broadening the civil causes of action is going to act as a deterrent on counterfeiting activities?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Certainly, over time you'd have to have some case law to point to and clear examples, but it begins with the imposition of legislation that creates the power that can be exercised.

[Judy Sgro, Liberal, York West, ON]

To go in a different area for a minute, in Bill C-8, some of the issues that I believe have been raised to you, as a minister—and I'm sure to all of us—are with regard to the generic pharmaceutical companies. The word that is in the bill with respect to “distinctiveness” could undermine or eliminate existing case law to the detriment of pharmacists, patients, and generic pharmaceutical attendants. It has to do with the trademark.

I understand that the industry has been in touch with the minister. I wonder if you have any suggestions that could remedy some of those problems before Bill C-8 is finalized.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

The technical explanation from my department is that the new language of the definition aligns with the agreements on Trade-Related Aspects of Intellectual Property Rights, TRIPS, as well as with the case law of the Trade-marks Opposition Board decisions.

The change in the language is to modernize and to bring us in line with other legal expectations.

[Judy Sgro, Liberal, York West, ON]

But do you share the concerns that the generic industry has raised?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

We weren't concerned at the point of drafting.

I'm not sure if you want to make more comments about this, John.

[John Knubley]

In this regard, building on what the minister has said, again, this change was done in the context of trying to modernize the bill overall.

Specifically with respect to the word “distinctiveness”, really this involves a change from “wares” to “goods”, and trying to ensure that the definition means “inherently capable of distinguishing”, which I gather from a technical perspective is not the case now.

Paul can help me out, but in terms of the industry's concern, we have heard from only one stakeholder, so we're taking that into account.

[Paul Halucha, Director General, Marketplace Framework Policy Branch, Department of Industry]

Just to echo both the deputy and the minister, there is no intention to change the definition of “distinctiveness”. It was purely a modernization of the language. “Inherently capable of distinguishing” is viewed as a modern synonym for what the act says now is “distinctive”, which is that “a good is adapted so as to distinguish”.

We looked at jurisprudence and in a number of cases we found over 40 court decisions where the courts had used the new language, “inherently capable of distinguishing” as a way of explaining to modern audiences what the old language meant.

Just to be 100% clear, there was never any intention to change the policy. We've heard from the generic industries what the concerns are, but it is not a change in the policy intent of that language, it's a synonym.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Halucha and Madam Sgro.

That concludes our seven-minute round. We'll go to our five-minute round now.

We will go to Madam Gallant for five minutes.

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

Thank you, Mr. Chairman.

My first question is on proposed subsection 44.08 under the subject No Liability. It reads:

Neither Her Majesty nor a customs officer is liable for any loss or damage suffered in relation to the enforcement or application of sections 44.01 to 44.04 and 44.06 because of (a) the detention of copies of a work or other subject-matter...

That is followed by paragraphs (b) and (c).

First, would you explain to me what that means, and then why it's there?

[Paul Halucha]

The section basically says that the crown does not have liability if it fails to retain copies of works that are passing through the border. This is a discretionary authority that the government has at the border to stop infringing goods. They say that if they don't stop infringing goods and they move across the border, then there's no crown liability.

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

So this is not the goods that are seized. It's not the suspicious goods that they aren't responsible for; it's the goods that make it past the border officials.

Secondly, does the enforcement of this bill begin and end at the borders? If counterfeit goods are found on store shelves, are investigations into the origins of these knock-offs permitted under this legislation?

[Supt Eric Slinn]

From an enforcement standpoint, any complaint we receive we would assess on a priority basis as to whether there's further investigation required.

I guess the short answer is that any investigation has potential. If we know there are counterfeit goods out there, we'll take the complaint and assess the level of enforcement that we'll take.

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

So it's not just at the border.

Going back to my colleague's question about electrical parts, are the Canada Border Services agents looking for CSA stickers? What are they looking for on electrical components? How would the average consumer, or an electrician for that matter, know if they had an inauthentic part?

[Martin Bolduc]

What we will do between the time this bill gets royal assent and coming into force is to work with the industry to try to develop that training guide to help our officers detect and interdict these goods.

The industry has the ability, the expertise, and we will leverage that into what will essentially become the training package for our front line vis-à-vis those new responsibilities. This will need to be built over time.

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

Part of this is about consumer awareness. Is it the role of your organization to increase awareness on the part of the general public as to what is or is not a knock-off or counterfeited article?

[Martin Bolduc]

It's not the role of the CBSA, but I think working in partnership with colleagues from the RCMP and Industry we can use what we see at the border to feed into—

[John Knubley]

I think specifically the Canadian Intellectual Property Office, which is part of the Department of Industry, would be undertaking an education initiative around this act.