Industry Committee on May 5th, 2014

[Christopher Johnstone]

The only other thing I can point to is the CRTC's wireless code, which places a cap on the amount a carrier can charge in any given month before the customer needs to provide an agreement that they can go through that cap. This was imposed in the wireless code in December 2013.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Johnstone and Monsieur Côté.

Now we go to our final questioner, Mr. Warawa, for five minutes.

[Mark Warawa, Conservative, Langley, BC]

Thank you, Chair.

As a government, we've taken a number of steps to increase competition in the wireless sector. We know now that we've actually reduced those costs by over 20%, and we are continuing to take steps to lower costs to Canadian consumers.

As Ms. Quach pointed out, the major investments into the broadband coverage for rural and northern communities are over $300 million, and we are very proud of that. We've invested more than $11 billion in resources since 2006 to support science and technology innovation to help companies open new frontiers for Canadians.

Now, making sure that wireless is as affordable as possible, we expect an auction, along with the other step that was announced in the budget.

With all of this good news, I would fully expect the opposition members to support the budget. How could anybody vote against this?

My question has to do with the competition. This will obviously provide additional competition and additional lowering of prices for Canadians. I was shocked to hear that, formerly, up to 10 times the cost of the service was being charged to the customers. Of course, that would have to be passed on with additional roaming charges.

I just renewed a contract for a phone, which of course is not just a phone now; it's a mini computer that does so many different things. The new contract that I have has free roaming in Canada because they're fully expecting this to be passed. We aren't going to have the roaming charges. The wholesale prices are going to be capped at what the cost is for that service.

That definitely will be passed on to consumers. We're seeing that already in contracts, just like the one I just signed a couple of days ago. Also, there is the 14-day cooling-off period, so you can return the phone if you find it's not what you expected. There are so many good things for Canadian consumers.

How long was the consultation and what were you hearing? Could you elaborate on the consultation phase?

[Pamela Miller]

In terms of the actions to date, Industry Canada has consulted on roaming extensively in the past. There have been a number of consultations on that in terms of mandating roaming, and the improvements that we also made in 2013.

As I mentioned previously, the CRTC will be continuing an even more in-depth examination concerning the review of wholesale mobile wireless services, as well as superseding unjust discrimination, undue preference. In general, there has been a lot of consultation that has occurred on this subject.

[Mark Warawa, Conservative, Langley, BC]

The organizations are providers that were charging extremely high rates. You gave the example of 10 times the rate for that service normally. Are they agreeing that things have to improve, that the charges have to be realistic, and putting a cap on that? Are they agreeing with that? I would imagine Canadians support that. How about the service providers that were previously charging these extremely high rates?

[Christopher Johnstone]

In terms of our previous consultations, in general, larger carriers have opposed any sort of caps on wholesale roaming rates. With respect to the particular legislation, I don't believe we've received public statements with respect to their position on the cap per se.

[Mark Warawa, Conservative, Langley, BC]

Do you feel that this will provide increased competition within the industry?

[Christopher Johnstone]

Would that change wholesale domestic roaming rates? Again, that 10 times factor, this will have a major impact on wholesale roaming rates. That will allow new entrants into the market to access much lower rates and that will support competition.

[Mark Warawa, Conservative, Langley, BC]

Clearly, this is good news for Canadians.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Warawa.

Thank you very much, Ms. Miller and Mr. Johnstone, for your testimony.

We're going to suspend for four or five minutes while our witnesses leave and we get a new panel.

[The Chair, Conservative, David Sweet]

Ladies and gentlemen, chers collègues, we're back now.

Before us now, from the Department of Industry, we have Darlene Carreau, the chairperson of the Trade-marks Opposition Board, and Paul Halucha, who's been here quite a number of times, and who is the director general of the marketplace framework policy branch.

Welcome to both of you.

Do you both have opening remarks? There's just one.

Mr. Halucha, go ahead, please.

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

Thank you very much.

In January, the government tabled in Parliament five international treaties that were developed by the World Intellectual Property Office: the Madrid Protocol, the Singapore Treaty, the Nice Agreement, the Hague Agreement, and the Patent Law Treaty. The changes to the Trade-marks Act that are proposed in division 25 of part 6 of Bill C-31 will allow Canada to implement the Madrid Protocol, the Singapore Treaty, and the Nice Agreement.

By joining these treaties, Canadian businesses will have access to a trademark regime that is aligned with best practices, that reduces costs and red tape, and that attracts foreign investment to Canada.

Let me briefly describe each of the treaties.

The Madrid Protocol aims to simplify the international filing of trademarks.

Ninety-one countries have joined the Madrid Protocol.

The Singapore Treaty simplifies and standardizes formalities and administrative procedures of government trademark offices.

Thirty-five countries are parties to the Singapore Treaty.

The Nice Agreement governs a standardized classification system for trademarks that is used by 150 IP offices to categorize goods and services to make it easier to search and compare trademarks.

The government decided to implement these treaties for several reasons. The changes are a part of a series of changes to modernize Canada's international IP, intellectual property, regime in order to adapt to the reality of globalization and keep a competitive environment for Canadians. These treaties will benefit both businesses and consumers. They will help Canadian companies compete globally and protect their valuable intellectual property in Canada and abroad, and they will reduce the cost and complexity of IP administration.

For example, the International Trademark Association calculated 62% savings in total fees for a business wishing to register a trademark in the U.S. and 10 other countries, through the Madrid Protocol, when compared to costs for filing in each country individually. Maintaining and renewing an international portfolio of trademarks will also be much simpler and more cost-effective for businesses, as it will be done at the same time through a single application.

From a global perspective, the vast majority of Canada's trading partners have already joined Madrid and Singapore. The world is moving towards these treaties, and in general, harmonizing around best practices. For our trademark system, this means eliminating administrative activities that are unique to Canada, especially those that increase red tape for Canadian businesses but not for foreign businesses applying in Canada.

Over the past 10 years, the Canadian Intellectual Property Office has held three consultations regarding Singapore and Madrid. Two formal consultations took place in 2005 and 2010, and in the fall of 2013, targeted consultations were undertaken with Canadian IP experts. The results of these consultations were mixed. While the vast majority supported Canada's accession to Madrid and Singapore, views differed in the legal IP community with regard to the various options for implementation.

Canada's trademark system has stayed relatively unchanged since the 1950s. In this context, we appreciate that the proposed changes in Bill C-31 will require adjustments in the current practices of the legal IP community. Some have expressed concerns with regard to these changes.

Industry Canada and the Canadian Intellectual Property Office are committed to working with all stakeholders to ensure an effective implementation of these treaties and the best possible outcome for the Canadian economy.

In addition, division 26 of part 6 amends the Trade-marks Act in order to do away with the power to appoint a Registrar of Trade-marks. The proposed changes mean that the Governor in Council would appoint the same person to serve as both the Commissioner of Patents and the Registrar of Trade-marks. Since 1967, these two positions have, for the most part, been filled by the same person. These changes will not affect activities or costs.

I will end my remarks here.

Madame Carreau and I would welcome questions from the honourable members of the committee.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Halucha.

We'll continue on with the same rotation we had last time.

Now to Ms. Bateman for five minutes.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Thank you, Mr. Halucha, for your comments.

I want to find out about stakeholders, because stakeholders matter. I want to find out how the stakeholders have received this. I've seen some opposition from the legal community in Canada, so I want to find out first and foremost what the stakeholders are saying.

My understanding is that our intention as a government is to ensure businesses are more competitive globally, and we want to reduce their cost of IP administration. Those are two key things. You're running a business: bring your costs down and be more competitive.

I'm very curious what kind of feedback you have received from stakeholders in the community.

[Paul Halucha]

Thank you very much for the question.

I would agree that the two objectives you outlined, making sure Canadian companies were more competitive and ensuring costs were brought down, were the two policy objectives of the decision the government took to move forward with these treaties.

Stakeholders have been supportive of parts of the provisions. The committee will note that elements of this bill are also contained in Bill C-8, the anti-counterfeiting bill that was debated extensively here in the fall.

For example, they're supportive of elements like the expansion of trademark registration to more modern forms of trademarks. These non-traditional marks that were discussed at the time have received support.

There are procedures like allowing applicants to split their applications. For example, if they are in a process and they have a portion of the application that is controversial that may be the subject of opposition, but another component that isn't, they can split them off and proceed with the one where there is no controversy so they can acquire and protect that IP as quickly as possible. That also has received support.

I think it's fair to say that in general, everyone is supportive of the accession to the Madrid Protocol and the Singapore Treaty. There has been some discussion on whether or not the benefits will accrue equally. There's clear observation that internationally, multinational companies have a preponderance of the types of marks, and therefore they will benefit more than potentially small businesses that don't need the Canadian market or are present in only a small number of countries.

It depends a bit on whom you are talking about in terms of who will benefit.

One issue that has come up, which has been raised certainly with us in a number of pieces of correspondence, is the issue of use. That has been a decision that was taken in terms of how to administer this protocol to the benefit of Canadians. A form in particular has been eliminated, or the proposal is to eliminate it as part of this. There's a compliance cost to businesses to filling out this form, and it doesn't exist in other jurisdictions outside of Canada that are party to the protocol, with the exception, I believe, of the Philippines.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

This is all so good from what you're saying. Why is the legal community opposing this?

[Paul Halucha]

It's a complicated question.

I would say that there are two reasons.

I think many of them have grown accustomed to a certain way of doing business, and the declaration of use form was a cornerstone of their interactions with their clients both in Canada and internationally. As I noted in my remarks at the beginning, there hasn't been a lot of change in the trademark system for a very long time, so this represents a significant change.

The second component of that is, if you're reducing compliance costs on business, then at the same time those compliance costs are the revenues of certain segments of the trademark community. There's a clear reality that they are losing a portion of their business.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

They are losing some billable revenue as a result of this change, which is good news for our businesses. That's wonderful to hear actually. It's very nice to hear that.

I think I interrupted you when you were going through the various stakeholders' comments. If you could continue that, why are the stakeholders supportive of this bill? Or were you finished?

[Paul Halucha]

I think I had gone to the end. I was going to recapitulate the points you raised at the beginning. We need a lot in our business dealing with intellectual property with companies. Across the board I have never had a company say it's not complicated enough or they don't feel like there's enough paperwork in their administration process. Their main focus is on getting their products to market and having their IP protected in whatever jurisdictions they want.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Halucha, That's where we have to end.

[Paul Halucha]

Okay, sorry.

[The Chair, Conservative, David Sweet]

Five minutes goes by very fast.

Now onto Ms. Nash, for five minutes.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you to the witnesses for being here today.

Mr. Halucha, you said that this change represents a significant change in trademark law and the practice of trademarks in Canada.

I want to reiterate that this is a part of an omnibus budget implementation act which is actually before the finance committee. We are getting a very quick rapid run-through of this section of the budget implementation act, and of course, the members of the industry committee don't have the ability to amend or to vote on any potential changes to this act.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Mr. Chair, I have a point of order.

I restrained myself the last time the honourable member said she didn't have the right to vote, but this is the second time we've heard that she doesn't have the right to vote. She is a member of Parliament. She has the right to vote on this.

[The Chair, Conservative, David Sweet]

Thank you, Ms. Bateman.

It's not a point of order, but your point is taken.