Industry Committee on Nov. 18th, 2013

[The Chair, Conservative, David Sweet]

Mr. Toone, for five minutes, please.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

I want to thank the witnesses. This is a really interesting debate.

The bill we are studying today will affect imports from the United States. Mr. Stewart mentioned that he went shopping in the U.S. and bought a can of Coke, which was produced there of course. Even if a retailer had the right to import some into Canada, the cans produced in the United States would not necessarily have the French information required by Canadian law. Does this bill go far enough to protect the rights of francophones in Canada? Mr. Stewart gave a good example.

According to what I have seen of this bill, I think that it will be prejudicial to francophones. Could someone comment that aspect?

[Prof. Jeremy de Beer]

Please forgive me for responding in English.

I think that's an excellent point. A parallel importer would not be absolved of any responsibilities whatsoever to ensure they comply with all applicable laws, including the labelling of packaging in both official languages.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

In that case, would it not be advisable to amend the bill?

[Prof. Jeremy de Beer]

I believe it would, to clarify the consensus that this should not apply to parallel imports.

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

Thank you.

I want to go back to another point that was raised. Treasury Board had announced cuts, and the result is that there are now 500 fewer border agents than there were last year. There were 14,710 agents last year, and this year there are 14,218. This bill is asking them to do more. I have been told that we should not worry, because they are going to be trained. There were also some deep cuts to the budget. Since there are going to be fewer agents and less money, the remaining ones are going to have to do more.

Mr. Lipkus, you said that we need not worry, and that all the agents will have to do will be to work over their noon hour to go and get the training that is already available on websites. Is this a good way to protect our border, to ask these agents to work harder with fewer resources? Moreover, they are going to have to do their work in a state of exhaustion, after having worked during their breaks. They will not be able to stop, they are going to have to work harder. Is this any way to protect the Canadian border?

[David Lipkus]

I apologize again that I have to answer in English, but perhaps my comments were misinterpreted.

Just to be clear, I advised that the rights holders offer the web training program to RCMP officers, customs officials, and any other local police at times that are convenient to them. It's not necessarily that they're losing their lunch break. It might have been during the lunch hour.

I believe every day I'm asked to do more for less on a regular basis and, unfortunately, with today's economy, that is what is expected of our society, given how things are going.

Having said that, I think that everybody at this committee and certainly the drafters of this legislation have now realized that counterfeiting is a serious issue that is harming our Canadian economy. We were involved in a raid a couple of weeks ago and when we walked into the store the first thing we saw was a huge sign that said “Cash only”. When we observed some of the business records we were able to identify business that was being done by one small counterfeit retailer in Ontario, with over $700,000 of revenue.

Do you think this retailer was paying taxes?

[Philip Toone, NDP, Gaspésie—Îles-de-la-Madeleine, QC]

I understand, thank you.

The agents are going to have to work harder with fewer resources. You are telling us that you are also being asked to work harder with fewer resources. I congratulate you for working as hard as you do today. Keep up the good work.

However, you said that there were dangerous products, for instance glasses, or products that can explode. Should we be depending on people who must work harder with fewer resources to ensure the public's safety? From what I can see, we are heading in the wrong direction.

[The Chair, Conservative, David Sweet]

I'm sorry, we'll have to leave that as a statement rather than a question. We're way over time there.

Now we'll move on to Mr. Jean for five minutes.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Thank you, Mr. Chair. And thank you to all the witnesses who appeared today.

I have two questions, and then I'm going to open it to the floor to add anything that you feel is important to the committee and may have been missed.

The first is in relation to the European Union and their model. It was suggested that it's an exemplary model, and I'm wondering if that's just has to do with the seizure sections or other sections particular to that model, which Canada doesn't have.

Was it Mr. de Beer who actually mentioned it? Or was it Mr. Lipkus? I'm not sure who mentioned it.

[Dale Ptycia]

I'll start by saying that from our perspective the detainment and seizure and destruction of the goods exemplified in that model seem to work for us as a brand owner. I think it effectively puts the right amount of resources, whether it's invested by us in conjunction with the CBSA agents and the communication components, into action and actually takes the product off the street.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Are there any other points to the EU model that you think are exemplary?

[David Lipkus]

I'm satisfied. The review that I did was with respect to the administrative regime. I believe that's the section that's missing from our bill and would help alleviate the demand on CBSA and the rights holder, making it possible to destroy the goods on an expedited basis.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

My question in relation to this generally is this. My understanding is that the border guards see these goods already. They see them. They don't have the power necessarily to deal with them, but my understanding is that under the plain view doctrine of general criminal law, if you see something that is illegal—bear with me—you could pull it out. Now is this the regime or the doctrine that you're suggesting be put into the CBSA's powers so that they would have the ability under the plain view doctrine to then deter and possibly destroy those goods?

[David Lipkus]

No. It's my understanding that right now if the CBSA observes counterfeits, they open the shipment and will then contact the RCMP or other local law enforcement in order to detain the goods pursuant to their legislation. Often, given the resources you have, the other RCMP or local police might not be able to participate, or might be able to assist the rights holder in seizing that counterfeit merchandise. The legislation as drafted will provide customs with the authority to seize and detain that counterfeit—

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

So in essence we're actually taking a step out right now that they have to do. So there might actually be less work involved, because they don't have to coordinate with the RCMP and the other stakeholders. They can actually do what's necessary themselves at that time. So in essence it might alleviate some of the administrative burden on them currently.

[David Lipkus]

It certainly would on other law enforcement, absolutely, and we're hoping that if an administrative regime is included, it would then take even more resources because they don't have to worry about bonded storage warehousing of the items and the court actions, which end up costing taxpayers significant resources.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Exactly. In fact it seems like it might be a cost savings generally to taxpayers and the CBSA.

[David Lipkus]

I can't....

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

I'm not asking you to crystal ball it, but from my perspective, they're already doing most of the work. The truth is—and I see Mr. de Beers agreeing with me—they seem to be doing most of the work already. They just don't have the tools necessary to skip those other steps that seem to take so much time. I appreciate that.

The thing I like about lawyers is that if you ask 10 lawyers for an opinion, they'll give you 30 opinions. I'm also a lawyer, so I can suggest that.

[Voices]

Oh, oh!

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

Now my question is that if you took the other side, the importers' position, how would you argue the case for them? What do you see as the downfalls to this particular piece of legislation? The idea of destruction of goods, for instance, from my perspective, is quite permanent and can lead to more legislation.

Mr. de Beers, could you comment on that?

[Prof. Jeremy de Beer]

Well, the risk is if you make a mistake. So in cases where the importer doesn't respond, or the importer either expressly or implicitly acknowledges liability, I don't have a problem with the destruction of the goods. In fact, I think it's great to get them out of the chain of commerce. But we just heard this anecdotal figure of 30% where there is a response—not the cases where there's no response. What happens then? I think we need to preserve the measures for due process in those circumstances and allow the parties to fight their legitimate disputes on an even balance. And I'm not talking here about counterfeiters or pirates, but about parties with legitimate receipts.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

And that's what you're talking about, proper balance. You suggested at the start of your submission that Bill C-8 does find the proper balance.

[Prof. Jeremy de Beer]

And I believe it's a workable solution. If we had infinite resources, administratively and financially, maybe we could do something different.