House of Commons Hansard #268 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was goods.

Topics

Combating Counterfeit Products ActGovernment Orders

9:05 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, as I was saying earlier, the clock is ticking, and while this government is unravelling, mired in scandal, we have before us a bill introduced by the Minister of Industry. It is a great honour for me to speak this evening as the official opposition industry critic.

The Conservatives boast about being good economic managers and supporters of industry and economic growth, but they dragged their feet on the only bill in recent memory that affects industry and seeks to tackle problems related to counterfeiting.

Now they want to rush the bill through. What is the urgency? What do they have to hide? What are the real reasons behind this sudden interest in Bill C-56? Are they trying to change the channel, divert attention from this government's mismanagement, or did pressure from trade partners finally get to the Minister of Industry?

Canadians and the people of LaSalle—Émard have lost all confidence in this government. They do not believe that this government is fit to govern.

More and more Canadians mistrust the government. They feel it has something to hide. They feel that the Conservatives are not fit to govern.

As the industry critic for the official opposition and the representative of the people of LaSalle—Émard, I rise in the House today to speak to Bill C-56, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, which is also known as the Combating Counterfeit Products Act.

As soon as this bill was introduced on March 1, 2013, the NDP got to work. We met with many stakeholders. All of them recognized the importance of effectively combatting counterfeiting, and they all said that Canada has to have the tools to do it. They also raised a number of questions about the enforcement of the bill and expressed doubts as to whether the government was really willing to wage an effective war on counterfeiting.

Once again, the Conservatives used this bill in a misleading way. The wording of the bill is not misleading; rather, the government's actions are inconsistent with an effective fight against counterfeiting.

That is the first point I wanted to make. In order to combat counterfeiting at our borders and in Canadian ports, we need human and financial resources. We therefore find it difficult to understand how we will be able to enforce this ambitious bill when the Canada Border Services Agency is facing $143 million in cuts, not only to front-line services but also to intelligence services that are crucial to fighting illegal activities such as counterfeiting.

What is more, 549 full-time jobs will be lost between now and 2015. We have also learned that the Minister of Canadian Heritage wants to interfere in customs officers' legitimate collective bargaining process, once again, without understanding how that undermines labour relations.

The RCMP's budget and resources have also melted away like snow on a warm day. The government needs to put its money where its mouth is, as we say. The Conservatives rarely do that.

The NDP recognizes the importance of combatting counterfeit products, particularly those that could jeopardize the health and safety of Canadians.

Despite the lack of conclusive data, we recognize that this is having an impact on Canadian industries.

We condemn the cuts to the Canada Border Services Agency and the RCMP, which are our front-line defence against counterfeiting, as I mentioned.

The second point I want to talk about is the government's lack of action. Once again the Conservatives have dragged their feet. The cuts we condemn show that they are not serious about combatting counterfeiting.

The problem of counterfeiting has come up many times in recent decades. A report was tabled in 1998. The issue of counterfeiting has come up over the years, and we must acknowledge the impact this issue has had on Canadian industries and consumers.

I want to talk about what has been happening in recent years. In 2007, a report by the Standing Committee on Industry, Science and Technology entitled “Counterfeiting and Piracy are Theft” described the impact counterfeiting has on the Canadian economy. The report made 16 recommendations. In its supplementary opinion, the NDP made two recommendations. A number of these recommendations were ignored, even though industry stakeholders, trading partners and even Canadian consumers continued to raise the issue.

Furthermore, during the Standing Committee on Industry, Science and Technology's study of intellectual property, which concluded in 2012-13, a number of stakeholders criticized the government's inaction.

Here is what Martin Lavoie, the director of policy for Canadian Manufacturers and Exporters, said in committee:

We have been advocating since 2006 for more resources for customs agents to stop the transit of counterfeit products...

The Minister of Industry introduced this bill in the House on March 1, 2013, after which we heard absolutely nothing. Now here he is as we are on the verge of adjourning for the summer. I am sorry. On May 30, 2013, at 12:26 a.m., we had a rather pathetic speech from the Parliamentary Secretary to the Minister of Human Resources and Skills Development. She kept breaking into fits of laughter, which shows how seriously the government takes counterfeiting.

The third point I want to talk about is the lack of conclusive data regarding counterfeiting in Canada. I cannot help but denounce the cuts made to Statistics Canada, which continue to have an adverse effect. I am not the only one who feels that way. The stakeholders we heard from at the Standing Committee on Industry, Science and Technology did as well.

Canadian industries, exporters, manufacturers and small and medium-sized businesses need these statistics, which are snapshots of our economy. They are not the only ones who need them. We, as parliamentarians, use them to make informed decisions. If we do not have hard data that show the trends in recent decades, we cannot predict future trends. These data give us an accurate picture of Canada's economic situation, employment, prosperity, innovation and so on.

Conclusive data allow parliamentarians, legislators and public servants to establish policies that are not based on anecdotal evidence, but on solid data and recognized scientific methods. That is what is happening here with counterfeiting. We know that there is problem, that goods have been seized and that the issue has been raised everywhere in the world. However, unfortunately, it is very difficult to grasp the magnitude of the problem and the best way to address it.

A lot of data have been provided but, as I said earlier, it is difficult to evaluate the methods used to gather those data. In addition, data are not always collected using scientific methods that would help us understand the magnitude of the problem.

The data provided have been of more of an anecdotal nature, and they do not give us an idea of how widespread the problem is internationally. That is why it is important that Canada and the rest of the world have access to these data. This has been brought up many times.

I have some data here that I can share with those who are watching. In Canada, much of the information comes from statistics on actual seizures. For example, Industry Canada reports that:

The retail value of counterfeit goods seized by the RCMP increased from $7.6 million in 2005 to $38 million in 2012.

Still, more details would be useful. In 2009, the OECD estimated that international trade in counterfeit goods and pirated copies could be worth as much as $250 billion. In the same study, the OECD renewed calls for better access to information, saying once again that there are not enough data.

Moreover, anecdotal evidence suggests that counterfeit goods can threaten consumer health and safety. Counterfeit electrical components—I believe someone mentioned this already—and toxic stuffing in a goose-down jacket are two examples of that. I can confirm that because a Canada Goose company representative testified before the committee and I had the opportunity to see the jacket and the material inside it.

Again, the NDP will support Bill C-56 because counterfeit goods can threaten Canadians' health and safety and tarnish the name and reputation of Canadian companies like Canada Goose. A company with a name like that could not be more Canadian. We recognize how important it is to fight counterfeiting effectively.

In its 2007 report, the Standing Committee on Industry, Science and Technology called on the Government of Canada to establish an annual reporting system to provide statistics on the efficacy of the Canadian intellectual property enforcement system. The committee went on to list what it wanted to see in the report: the number of investigations, the number of charges laid against counterfeiters and pirates, the number of criminal sentences obtained, the number of counterfeit and pirated shipments seized by the Canada Border Services Agency and the country of origin and approximate value.

My question for my colleague is this: did the government act on that recommendation? That would give us some data to work with.

The lack of conclusive data makes things harder for everyone—the investigators, officers and legislators studying the issue—when the time comes to find ways to fight counterfeiting effectively. We believe that having good data and an accurate picture of what is going on would enable us to implement effective measures.

Bill C-56, the combating counterfeit products act, would amend both the Copyright Act and the Trademark Act. Its purpose is to strengthen enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copies of counterfeit trademarked goods. This bill would add two new criminal offences under the Copyright Act for possession and exportation of infringing copies and would create offences for selling or offering counterfeit goods on a commercial scale. I want to stress that because it is an important point in the bill. It would create a prohibition against importing or exporting infringing copies and counterfeit goods, and would introduce some balance to that prohibition by creating two exceptions.

The first exception would be for personal use. If someone crosses the border with something in his or her possession or baggage, which the person bought and did not know was counterfeit, that would be for personal use. However, we want to ensure that we study that closely at committee to ensure the exception would be solid.

The second exception, and it is an important one, would be for items in transit control. That would be items that would be transiting in Canada but not passing the border. They are not necessarily in Canada, but in transit control.

Another point is that it would grant new ex officio powers to border officials to detain infringing copies or counterfeit goods. That would be a significant policy shift. Until now, border officials required the private rights holders to obtain a court order before seizing infringing copies or goods. Therefore, that would be an important change. It would grant new ex officio powers to the Minister of Public Safety and border officials to share information on detained goods with rights holders. Also, it would widen the scope of what can be trademarked to the features found in the broad definition of “sign”, including colour, shape, scent, taste, et cetera.

While the granting of ex officio powers to customs officials has been a recommendation of the counterfeit report of 2007 and reiterated by stakeholders, two main issues were raised with this provision in Bill C-56. First, the Canadian Anti-Counterfeiting Network's first recommendation in one of its reports stated, “provide the RCMP and the Department of Justice [or border official]”, which it did not mention, but I think is what it meant, “with adequate financial and human resources to effectively address counterfeiting”. These were industry representatives who were stating that.

On the other hand, Dr. Michael Geist, from University of Ottawa, raised the issue of the complexity, and my colleagues from heritage and ethics, who studied Bill C-11 extensively, can attest to that. He discussed the complexity of detecting copyright infringement and also raised the question of changes in court oversight. Dr. Geist said, “While officials are not intellectual property experts, the assessment includes consideration of whether any of the Copyright Act's exceptions may be applied. These determinations are complex--courts often struggle with this issue...”, and so on.

While meeting with them in consultation with my NDP colleagues, Dr. Geist, industry, and stakeholders, raised a lot of issues regarding this bill.

In closing, I would like to reiterate that the NDP recognizes the importance of controlling counterfeit goods, especially those that could pose a risk to the health and safety of Canadians.

We recognize that counterfeiting hurts Canadian industries. We condemn the cuts that affect front-line workers who fight counterfeiting.

I sincerely hope that the government will appreciate the importance of studying this significant bill in committee and the resulting recommendations.

Combating Counterfeit Products ActGovernment Orders

9:25 p.m.

Green

Elizabeth May Green Saanich—Gulf Islands, BC

Mr. Speaker, I want to thank my hon. friend for a very important presentation. I was particularly interested in the reference she made to the concerns of Michael Geist, a renowned expert in these areas with respect to copyright. I wonder if she could expand on that and suggest what changes she would want to see to the bill.

Combating Counterfeit Products ActGovernment Orders

9:25 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, I will answer the question. I thank the member for Saanich—Gulf Islands for her question because it allows me to talk more about the points she made.

In fact, he said that the human resources, the front-line workers, must be able to detect counterfeit goods. However, there are exceptions that people must be able to recognize. The issue is how they will be able to do that.

I would also like to address another point. If the resources are not in place and we make fighting counterfeiting a priority, and then if resources are allocated to fighting counterfeiting, what do we do about other problems that have to be tackled by customs officers? That is why I am saying that it is important to walk the talk.

Combating Counterfeit Products ActGovernment Orders

9:25 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, I want to thank my colleague for her speech.

It is interesting that the government is now saying that this bill is important and is part of its agenda. To me, this is not an agenda. It is panic.

After all this time, it is obvious that there is a problem at our borders, particularly when it comes to supporting the people who work there and fight against such products. There is also a problem when it comes to innovation because there is not enough money and there are a lot of these types of products.

The approach the government is taking right now is another problem. At the last minute, it says this is a priority. At the end of the session, after almost eight years in government, the Conservatives panic and this is suddenly a priority.

After three hours of debate, without amendment, without anything else, the government says that this bill is perfect as is.

Is there any proof that the Conservative government has a plan for our industry, for innovation, for technology and everything else? That is what this debate is about.

What is the government going to do to help our industry move forward and become very competitive in this world?

This is not a plan. It is panic.

Combating Counterfeit Products ActGovernment Orders

9:30 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, my colleague raises a very good point.

Industry stakeholders that I meet with need predictability. They need to know what is going to happen because they have a long-term vision. This does not end in 2015 for them; it goes well past that.

This bill has been in the House since March. It is a priority for me because I have heard people talk about the problems caused by counterfeiting. I have been ready for a long time. We prepared for this bill a long time ago. The government has no respect for Canadian industries and innovators who want to protect their intellectual property so that it cannot be copied.

The government springs this bill on us and wants it passed quickly, as if it were no big deal. However, we have questions and the bill must be studied in committee.

Combating Counterfeit Products ActGovernment Orders

9:30 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I want to thank my colleague for her hard work.

She just said that she has been working on this for months because she thought that Bill C-56 was a priority for the government. It is clear that this bill was at the bottom of its list of priorities. The parliamentary session is winding down and this might be one of the last bills that the Conservatives intend to have passed. So much for priorities, since the government is introducing this at the last minute.

I wanted to come back to the matter of the additional resources that Canada Border Services Agency will have. Earlier, we saw the Minister of Immigration working his mathematical magic with the cuts. He would have us believe that nothing happened and that there will be more money.

He said that in 2005, the agency had a little over $1 billion; in 2012, it had $1.8 billion, and with the cuts, it would have $1.3 billion. According to the minister's logic, since the numbers are higher than they were in 2005, the government did not reduce the budget. Most ministers use that same logic. They say that if the amount in 2013 is higher than when they came to power in 2006, then there were no cuts. However, the agency we are talking about here today is being forced to do more with less, like many other departments that experienced cuts.

Can my colleague talk about the fact that the agency will have more responsibility and fewer resources if Bill C-56 passes?

Combating Counterfeit Products ActGovernment Orders

9:30 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, that is a very good point, and it gives me the opportunity to mention one of the recommendations that the NDP made during the study of intellectual property.

The NDP is arguing that customs officers should have the power they need to do their jobs, while respecting civil liberties and following standard procedure. We need to strike a balance. What is more, the Canada Border Services Agency must be given sufficient funding to combat counterfeiting without compromising the other important responsibilities it has in protecting Canadians and defending our border. That is the point we are trying to make.

Canadian industries and Canada's trade partners raised the importance of effectively combatting counterfeiting, but we are wondering whether the Conservatives support that course of action.

We mentioned that Canadian industries need to be innovative. Intellectual property is a direct result of innovation. It involves patenting an idea or an innovation. This protection is important for industries so that they can promote their great ideas and innovate. We know that they are capable of doing so. Yet, our government is not being innovative. Instead, it is adopting a laissez-faire attitude and failing to plan properly. It is improvising rather than innovating.

Combating Counterfeit Products ActGovernment Orders

9:35 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, I rise today to speak to the second reading of Bill C-56, the combating counterfeit products act, and to bring to the attention of the House: first, the risks presented to Canadian consumers by commercial counterfeiting; and second, to the problems this creates for businesses that employ Canadians.

Not that long ago, consumers did not need to worry about the risks and dangers of counterfeit products. The term “counterfeiting” itself was generally associated with making false currency and few people had even heard of intellectual property crime. Then, over time, things began to change. Counterfeit T-shirts or brand name replicas showed up in flea markers. Travellers from abroad returned home with supposedly brand name watches bought at cheap prices from street vendors. Yet, within a few days, the watches stopped working or the bands left coloured stains on their wrists. Supposedly, brand name luggage or footwear was bought at such bargain prices that it seemed too good to be true, and it was. Generally, these products fell apart in very short order.

Today, Canadian consumers are wiser and more wary. Sadly, we are increasingly exposed to counterfeit goods in our domestic market and Canadians and Canadian businesses have been victimized and hurt. Today, the problems imposed by counterfeit products extend far beyond the breakdown of a cheap wristwatch or a pair of shoes. Today, counterfeiting can pose a range of very serious health and safety risks to consumers.

Today, fraudulent reproductions of many trusted trademark or copyrighted products infiltrate the legitimate market. Every day counterfeit products enter Canada, from electronics and electrical components to automotive parts and machinery, from batteries and toys to perfumes and pharmaceuticals. The level of sophistication of counterfeit products has increased, along with the range and diversity of products which are counterfeited. On the one hand, some counterfeit operations may not be sophisticated at all. The RCMP reports instances where counterfeiters simply went through dumpsters at construction sites to recover used and discarded circuit breakers. They repackaged them and sold them as new.

However, other operations are very sophisticated, indeed, where dangerous items are made in large quantities for sale to Canadians who may not know the origin of the materials in the products that they buy. For example, investigators intercepted a package at a Vancouver postal authority. It led them to a warehouse that contained 15,000 counterfeit pills packaged in blister packs. The estimated total value of these seized counterfeit drugs exceeded $1 million. At the same warehouse, the investigators also seized clothing and accessories that had been labelled with counterfeit brands, which threaten the production and work of our own Canadian innovators and workers. The resale value of these counterfeit goods was estimated to be in excess of $5 million.

There is no doubt that counterfeit products have become more sophisticated. In addition, the production and supply chain has also become more sophisticated, as well as the method of importation. Some counterfeiters ship the counterfeit labels separately from the products to avoid detection. Once in Canada, the labels are then affixed to the finished products.

Shockingly, counterfeit labels are not only limited to brand names but to the safety certification labels. These are labels that consumers trust to show that a product meets certain industrial standards, knock-off labels that purport product testing and certification by the underwriters, laboratories or the Canadian Standards Association. These labels are meant to deceive the consumer into believing the product meets Canadian safety standards. In fact, electrical equipment that carries a false CSA label may pose hazards to the unsuspecting consumer through malfunction, fire or electrocution.

The falsification of safety certification labels clearly demonstrates some of the risks that consumers face when they buy a counterfeit product, but there are many more examples.

In the past three years, the number of RCMP investigations involving counterfeit pharmaceuticals has more than doubled. Counterfeit pharmaceuticals have already caused a death in Canada. In 2006, a woman from British Columbia bought medication from an unlicensed pharmaceutical website that purported to be Canadian. The medication was, in fact, manufactured overseas. It had been contaminated with toxic metals during its production and the woman subsequently died.

Last year, the RCMP investigated another case of counterfeit caplets that purported to be bee pollen. They actually contained carcinogenic substances that were banned for sale in Canada.

There are many examples of how counterfeit or pirated products have victimized the people who have purchased them, whether through the health and safety risks that I have outlined, or the inconvenience and monetary loss of buying products that do not live up to the standards of the brand. Counterfeit products make it more difficult for consumers to trust the marketplace.

The bill before us represents a major step forward in protecting consumers from counterfeit products and counterfeit services. It gives the enforcement authorities and rights holders the tools they need to crack down on counterfeiters.

Rights holders can submit a “request for assistance” to the Canada Border Services Agency, CBSA, to provide information to border service officers about their brand and products. With this information, border service officers will be able to contact the rights holders when commercial shipments that are suspected of containing counterfeit products are detained at the border. The rights holders can then launch civil proceedings. In fact, rights holders can seek civil remedies for the manufacturing, distribution and possession with intent to sell counterfeit goods instead of waiting until those goods are put up for sale in the marketplace as is currently the case today.

As well as these civil remedies, there are also new criminal offences in the Trade-marks Act for which law enforcement agencies can lay charges. Selling, distributing, possessing, importing or exporting counterfeit goods for the purposes of trade will be prohibited.

Let me emphasize the phrase “for purposes of trade”. This is important because the bill would not target individual consumers who knowingly or inadvertently bring back a counterfeit product to Canada for personal use. Border services officers would not seize private iPhones suspected of containing pirated copies. Nor would they seize a suspected counterfeit wristwatch or a handbag. In fact, the bill contains a specific exception at the border for goods intended for personal use as part of the traveller's personal baggage. Therefore, Bill C-56 would target counterfeiters who make a business of importing and exporting knock-off products.

Many may ask this. Where is the harm in cheap products? However, Canadians recognize the dangers of purchasing counterfeit items.

Last year, Microsoft Canada commissioned a survey. The survey revealed that 84% of Canadians said that they did not knowingly purchase a counterfeit product, less than half of the consumers surveyed felt they knew how to identify counterfeit and genuine products and 71% of Canadians agreed that counterfeit goods were harmful to the economy.

It is clear from these survey results that the Canadian public agrees with this bill and has a strong interest in and a growing understanding of the problems posed by counterfeiting. Again, 71% of Canadians agree that counterfeit goods are harmful to our economy.

I would now like to draw the attention of members to the problems that large-scale commercial shipments of counterfeit goods create for the businesses that employ Canadians. Indeed, we see significant support for the measures in Bill C-56 from innovative Canadian entrepreneurs and creators who are the most impacted.

In a globalized economy, strong, modern marketplace framework rules protect innovation. In a knowledge-based society, this is particularly true of the laws governing intellectual property, or IP.

Intellectual property covers a broad range of innovation, and I will focus my remarks today on trademarks and copyright, the protection of which are at the heart of Bill C-56.

Over the years, this government has taken important steps to update IP laws to keep them in line with the demands of the 21st century. Hon. members will recall that last year we passed the Copyright Modernization Act. Since then, many of its provisions have come into force as of last November. As a result, I am proud to say that Canada has now implemented a responsive copyright regime that balances the needs of content creators and users.

The bill before us today would update Canada's IP enforcement regime governing trademarks and copyright and would provide new tools to strengthen the protection of these rights. It would give rights holders the tools they need to work with law enforcement authorities to protect their intellectual property at the border and domestically.

Counterfeiting threatens Canadians' health, safety and economic well-being. It is not a victimless crime.

Over these past months, the Standing Committee on Industry, Science and Technology, chaired by the hon. member for Ancaster—Dundas—Flamborough—Westdale, heard from many witnesses as it prepared its report on Canada's intellectual property regime. That report was tabled March 18. I recommend it to anyone who seeks a better understanding of the IP regime in Canada.

During the hearings, the committee learned about the impact that counterfeiting has had on the competitiveness of Canadian businesses and the Canadian economy as a whole. Hon. members can imagine what impact a low-quality, counterfeit product could have on a customer who has paid for what was assumed to be a high-quality and genuine product. One can imagine how difficult customer relations might be when dealing with a consumer who has bought a product in good faith and found it to be not up to the company's standards. Certainly, a counterfeit product would damage the reputation of the brand, as well as the store or the company selling it. This makes both the company, as well as the consumer, a victim of counterfeiting.

The integrity of our economy is threatened when consumers are exposed to counterfeit items and as a result lose confidence in the marketplace. It leads to reduced revenue for the rights holders and therefore, reduced growth, reduced incentive to invest and hire, and reduced incentive for the creation of innovation. Commercial counterfeiting carried out by criminal organizations is not a victimless crime.

A company like Canada Goose Inc. makes a concerted effort to combat counterfeiting. Its website gives tools to help potential customers determine whether the product they are buying is genuine. However, as the committee report outlines, some companies prefer not to draw attention when counterfeiters knock off their products. The chair of the Canadian Anti-Counterfeiting Network told the committee that having a name associated with a counterfeit product may damage the market for some products, so some companies do not want to tarnish the image of their own brand.

Although some businesses can be reluctant to sound the alarm about their products, there has been a marked rise in the number of counterfeiting cases that the Royal Canadian Mounted Police has documented. It estimates that between 2005 and 2012, the value of counterfeit and pirated goods seized has increased fivefold from $7.6 million to $38 million. Last year, for example, there were 726 occurrences of intellectual property crimes reported by the RCMP. Some 45% of those cases involved apparel and footwear. Another 20% involved piracy of audiovisual and copyrighted works. Nine per cent involved consumer electronics and a further 9% involved personal care products, like toothpaste, shampoo and soap that Canadian families rely on to be safe and healthy.

The bill before us would give the RCMP, the Canada Border Services Agency and the rights holders the tools that they need to combat and curtail counterfeiting.

Under the current system, a court order is required before border services officers can seize commercial shipments of counterfeit products. The Entertainment Software Association of Canada pointed out that this in effect requires a rights holder to know beforehand that goods are about to be smuggled across the border. As one can imagine, this would be difficult.

Under Bill C-56, however, if rights holders suspect that shipments of counterfeit goods may be crossing the border, they would need only send the CBSA a request for assistance, with information to help identify their brand. The border services officers would have access to information needed to identify, detain and refer suspected shipments to rights holders. The rights holders could then pursue the matter civilly with the courts.

The bill also provides a new criminal offence for the commercial possession, manufacture or trafficking of trademark counterfeit goods. The rights holders community has welcomed this bill. For example, Canada Goose Inc. has said, “The strengthened border measures will play a vital role in protecting jobs for Canadian manufacturers, as well as unsuspecting consumers looking for bargains from those that would do them harm.”

The Entertainment Software Association of Canada stated:

Equipping border service agents with the necessary tools to seize counterfeit products...will help take a bite out of this ongoing problem. Protecting IP is critical to the Canadian economy, especially for content industries like ours, which depends on talent, imagination and creativity to generate returns.

The Canadian Anti-Counterfeiting Network stated:

...counterfeiting has grown into a criminal activity that supports everything from organized crime to terrorism.... [That is mainly because] in the current landscape the risk of getting caught is low while the profit margin is extremely high. With this new legislation the risk assessment will begin to change.

These are just some examples of the support that has come from businesses and business organizations.

Finally, I would like to quote from the Canadian Chamber of Commerce. The collective businesses state, “We urge all political parties to support the bill and to ensure the speedy passage of this important legislation.”

I could not agree more. Canadian employers and law enforcement are working to prevent the damage caused by commercial counterfeiting to Canadian lives, our economy and Canadian jobs. Let us do our part in this House. I urge all hon. members to join me in supporting the swift passage of this bill.

Combating Counterfeit Products ActGovernment Orders

9:50 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, I would like to thank the hon. member for Vancouver South for her speech. I think she did a great job of presenting the effects that counterfeiting is having on Canadian industries, jobs and prosperity.

I would like to know what the government is going to do. The hon. member mentioned the importance of the role of border services officers, particularly the new role that this bill proposes giving them.

What measures does she expect the government to take to ensure that words translate into action when it comes to this new role?

What tools will the government give the Canada Border Services Agency to help it combat counterfeiting as well as fulfill the other roles it plays?

Combating Counterfeit Products ActGovernment Orders

9:50 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, indeed that is the whole purpose of Bill C-56. It would give the government, the CBSA and the RCMP the tools that they need to seize and detain counterfeit goods as well as to protect Canadian businesses, innovation and jobs.

I would like to ask the hon. member what the opposition would do to support Canadian lives, health, economy and jobs. Will she support this bill?

Combating Counterfeit Products ActGovernment Orders

9:55 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Mr. Speaker, one of the statistics that we have been talking about is the value of this globally. I have sometimes seen a figure of $250 billion for counterfeit goods. I have also seen estimates of somewhere between $300 billion to $400 billion a year of counterfeit goods and of that 10% to 20% relates to organized crime.

Could the member comment on how a bill like this helps us identify issues like that and get at some of the organized crime elements behind counterfeit goods?

Combating Counterfeit Products ActGovernment Orders

9:55 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, specifically, the bill would give border officers the authority to detain suspected shipments and contact the rights holders. It would allow Canadian businesses to file a request for assistance with the Canada Border Services Agency, in turn enabling border officers to share information with rights holders regarding suspected shipments.

In addition, it would provide new criminal offences for the commercial possession, manufacture or trafficking of trademark counterfeit goods.

The CBSA has reported that the RCMP has noticed a fivefold increase in seized products, which had an impact of $38 million in 2012.

Combating Counterfeit Products ActGovernment Orders

9:55 p.m.

NDP

Anne-Marie Day NDP Charlesbourg—Haute-Saint-Charles, QC

Mr. Speaker, I really appreciated the hon. member's speech. It was very clear.

That said, I would like to provide some more information. In Italy, when counterfeit goods are bought or sold, tourists can be arrested on the spot, even as they come out of a Prada store or any other outfit, and be detained on site. Fortunately that does not happen here.

However, our SMEs and manufacturers have suffered heavy job losses caused by counterfeiting. I am talking about companies particularly in the clothing sector, such as Louis Garneau, Chlorophylle, Canada Goose—in some other areas—and North Face. These companies are big names in Canada. Counterfeiting is simple and easy. Moreover, these goods are not necessarily manufactured here. Huge quantities of them cross our border, coming in by ship, by van and by truck.

The member mentioned whistleblowing and the reporting of information to try to catch fraudsters and those trucking in shipments of counterfeit goods.

However, will this be enough, considering the $143 million cuts to border services? How can that agency do more with less? I am having trouble understanding this approach.

Combating Counterfeit Products ActGovernment Orders

9:55 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, I would just like to say that the reason the bill provides a specific exception at the border for individuals exporting counterfeit trademark goods is because the border services officers are not going to be targeting or looking at the individual, personal, perhaps inadvertent purchases of these counterfeit goods.

They are going to be looking specifically at organized crime. Organized crime groups, as we know, use the profits from counterfeit goods to support a litany of other crimes, including drug trafficking and firearms smuggling.

This bill will provide the RCMP with new tools to combat this threat posed by counterfeit goods when there are grounds to believe that they are links to organized crime, not to seek and detain individuals, which is going to be higher impact in terms of the border services officers. They are going to be able to go after organized crime and not individuals.

Combating Counterfeit Products ActGovernment Orders

9:55 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I thank my colleague for her speech.

I would like to go back to the issue of resources. Although the member answered part of my colleague's question, she did not address the issue of resources.

If the bill passes in its present form, it will give border services officers additional responsibilities.

How can these officers have the resources they need to do their job when $143 million and 549 positions have been cut? Can she answer this question about the current lack of resources, which will be exacerbated by more responsibilities?

Combating Counterfeit Products ActGovernment Orders

10 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, in fact, I have some friends who are border services officers.

As some of us who have travelled a bit and who have come across the border know, we have increased the limits of what travellers can bring back to Canada. The border services officers are currently not looking for small amounts of goods that people are bringing in, nor are they looking for individual use of baggage or counterfeit items.

This realigns their work. Bills like this have realigned the border services officers' work so that they can in fact focus on crime and on organized crime, including shipments of guns and big shipments of counterfeit goods and harmful products.

In terms of resources, I would like to respond that many border services officers are very happy with the realignment of their tasks. They are fighting crime as opposed to just being there to process people.

Combating Counterfeit Products ActGovernment Orders

10 p.m.

NDP

Carol Hughes NDP Algoma—Manitoulin—Kapuskasing, ON

Mr. Speaker, the hon. member still did not really respond to the issue of resources. The government has actually reduced funding in the area of enforcement. We can put all the legislation we want forward, but if we do not put in the resources, nothing will come of it.

Let us be clear. In 2011, a quarter, 26%, of RCMP seizures of counterfeit products were potentially harmful to consumers. As this amount has been rising, the RCMP has indicated that it does not have the resources. Canada Border Services Agency does not have the resources either, because the government has also cut in those areas.

The RCMP indicated in 2005 that they did not have the proper resources. Could the hon. member please answer the question as to whether the government will fund the RCMP and Canada Border Services Agency to address the issue of enforcement?

Combating Counterfeit Products ActGovernment Orders

10 p.m.

Conservative

Wai Young Conservative Vancouver South, BC

Mr. Speaker, that member should know that we have an additional 3,000 RCMP and 900 more CBSA officers because of our economic action plan.

Combating Counterfeit Products ActGovernment Orders

10 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, I will be sharing my time with my colleague from Sherbrooke this evening.

We have heard about a number of issues that have surfaced. Once again, I will just say that Bill C-56, the combating counterfeit products act, amends both the Copyright Act and the Trade-marks Act. Its purpose is to strengthen the enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copyright or counterfeit trademarked goods. It sounds pretty comprehensive.

A couple of things have surfaced through our party, and I would like to reinforce them. We believe that dealing with counterfeiting and infringement is important for both Canadian businesses and consumers, especially where counterfeit goods may put the health or safety of Canadians at risk. That is a good thing. We need stronger enforcement to make sure that this does not happen.

However, it is difficult to see how a bill like this would be implemented, since the Conservatives slashed $143 million in funding from CBSA last year, which further reduced front-line officers and harmed our ability to monitor our borders. I do not quite understand. We are increasing the task, and it is a good one, for border services officers, but at the same time, there are fewer people to do the job.

I have visited border services officers at our border crossings, and I know that these people work flat out. They have a tough job as it is. If we decrease their staffing, it is inconceivable how this particular legislation could be enforced. That is a question that needs to be discussed early at the committee stage or in further discussions.

Therefore, it is difficult to quantify the problem of counterfeiting and pirating in Canada and its economic impact. On this side of the House, we support the fight against counterfeit goods, especially when they pose a risk to health and safety, as I just mentioned. We need to determine if the Canada Border Services Agency will be able to implement these enforcement measures in light of the 2012 budget cuts.

The United States and industrial groups have been calling for measures to stop counterfeit goods at the border for a long time. It remains important to continue being vigilant in order to ensure that intellectual property laws strike a balance between the interests of rights holders and those of consumers or users. We are trying to strike a fair balance between the two.

The government has long been aware of how difficult it is to measure the magnitude of counterfeit and copied goods in Canada. This challenge was identified in the 1998 OECD report entitled The Economic Impact of Counterfeiting and Piracy and is due to the clandestine nature of counterfeiting. Much of the data consists of estimates based on real seizures, isolated testimony and data from the industries themselves.

In its 2007 report on counterfeiting, the industry committee recommended that the government establish a reporting system for investigations, charges, and seizures of counterfeit goods and pirated copies as a way to collect data. According to the more recent 2013 report, it is difficult to obtain a accurate estimate of the value of counterfeit and pirated goods on the market in Canada.

The NDP believes that it is important to fight counterfeiting for the sake of Canadian businesses and consumers. It is especially important when counterfeit goods put the health and safety of Canadians at risk. All the same, we do not know how the enforcement regime proposed in Bill C-56 will be paid for. This bill gives border services officers new responsibilities at a time of budget cuts.

In their 2012 budget, the Conservatives slashed the CBSA's funding by $143 million, effectively reducing the number of front-line officers and our ability to monitor our borders. According to the CBSA's report on plans and priorities for this year, 549 full-time jobs will be lost by 2015. That is significant. If the agency is losing 549 jobs at the same time it is being given new responsibilities, how is it supposed to implement this bill?

This bill will require customs officers to carry out very complicated assessments to determine whether goods entering or leaving the country infringe copyright or trademark. That is not easy. It is not like looking for something and finding it. It is more complicated than that and takes more time. When assessing whether copies are pirated, officers have to determine whether any of the exceptions in the Copyright Act apply. Even the courts have trouble figuring that out sometimes. The NDP wants to make sure that the CBSA has adequate financial resources to implement this bill.

This is a point we have been trying to make. If one has new responsibilities that are even more complicated, with new technology, then instead of cutting back resources, there should be additional resources of trained personnel added to the border services to deal specifically with this rising problem.

The industry committee recently conducted a study on intellectual property that, in part, examined these issues. Witnesses testified in favour of increasing border measures to tackle counterfeit and infringing goods. In its 2013 report, “Intellectual Property Regime in Canada”, the committee recommended border measures, including providing appropriate ex officio powers to customs officials, introducing civil and criminal remedies for trademark counterfeiting and allowing customs officials to share information with rights holders regarding suspect goods.

Combating Counterfeit Products ActGovernment Orders

10:10 p.m.

NDP

Nathan Cullen NDP Skeena—Bulkley Valley, BC

Mr. Speaker, my friend mentioned resources, because we have seen a $145-million budget cut in the 2012 budget for those same officers the government is counting on, those border officials who are meant to catch all these contraband goods. One cannot impose more responsibilities and more work on fewer people and expect better results, particularly when it comes to something like border security. This applies not just to contraband goods but to all the illegal weapons that come into Canada.

As someone who often deals with border issues to the south in the interior of British Columbia, how important is it that we actually staff, train and resource those border outposts, particularly some of the smaller posts that have lower traffic? These are often the places where illegal contraband makes its way and illegal weapons make their way into Canada, particularly if the smugglers know that the government is cutting back on resources. It is cutting nearly $150 million from the budget this year.

The Conservatives can invent their own numbers, but the CBSA's own planning documents say that there is a net loss of 450 full-time-equivalent positions from its services this year. That is not the NDP talking; that is the CBSA. They can invent all the numbers they want on the Conservative side. Resources are being depleted through last year's budget cuts and this year's.

Particularly for those smaller outposts that face significant challenges, what do further cuts, a further depletion of resources, mean in terms of the effectiveness of legislation like this?

Combating Counterfeit Products ActGovernment Orders

10:10 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, I am glad our House leader called me his friend. He is my friend too.

I will answer in general, first of all. Many of us have noticed that there is a sometimes overt and sometimes not so noticeable attack on our civil service, on our public servants, who are trying to do the very best they can with limited resources. Instead of increasing resources, we are cutting back. Often, as is the case here, we are losing positions. We have seen the results of some of this in the food industry with the scandal at XL Foods.

I visited one of the border crossings in my riding. A border agent explained what they do when a transport truck comes in and what they look for to look for smuggled items. They do a thorough search. They look at the mirrors. They look where there could be a false tank. It is really quite sophisticated and quite thorough. What would happen at that border crossing if one of those agents was dropped and they had one less person but still had to do that work and at the same time they had other responsibilities that were more technical and sophisticated in nature? It does not add up.

Combating Counterfeit Products ActGovernment Orders

10:15 p.m.

Calgary Southeast Alberta

Conservative

Jason Kenney ConservativeMinister of Citizenship

Mr. Speaker, I would like to introduce some facts rather than fiction to this question of resources for the Border Services Agency. It is an important question.

I agree with the premise of the last question from the member for Skeena—Bulkley Valley, which was that resources are necessary to enforce the law. That is precisely why, since taking office, the current government has increased the budgetary allocation to the CBSA by 27%, an increase of $387 million, and has increased by 26% the number of full-time equivalent personnel at the agency.

It is true that this huge increase would be offset by a relatively modest decrease, but when all of those changes are implemented in 2015, the net effect will be a significant increase. My estimate is that there will be about 15% more Border Service agents then than there were a few years ago, and significantly more resources, both in real and absolute terms.

When the estimates, the public accounts, the CBSA planning and priorities and all of these public documents indicate higher resources, would the member explain to me why the NDP maintains that there have actually been cuts? I just do not understand why those members are making that up.

Combating Counterfeit Products ActGovernment Orders

10:15 p.m.

NDP

Alex Atamanenko NDP British Columbia Southern Interior, BC

Mr. Speaker, we have heard the same types of comments in agriculture. We have been told that more resources are being allocated in agriculture to research and to other areas. At the same time, when we talked to people on the ground who represent the workers, we found that there actually are cuts. We have been told specifically what cuts there are in certain areas.

I suspect the same thing might be happening here. On the one hand, we have figures being presented by the government, but on the other hand, we have other numbers that do not coincide.

When this is discussed at committee, perhaps what really needs to happen is to determine exactly what the figures are by talking to people on the ground.

Combating Counterfeit Products ActGovernment Orders

10:15 p.m.

NDP

Pierre-Luc Dusseault NDP Sherbrooke, QC

Mr. Speaker, I am pleased to rise today to speak to Bill C-56, on behalf of my riding of Sherbrooke.

I have a vested interest in this issue because the Sherbrooke area in the Eastern Townships is very close to the border. This is therefore very important to me and concerns me deeply. I am sure that my colleague from Compton—Stanstead, who is now listening and probably thinking along the same lines, shares my interest and concerns. Indeed, the Minister of Immigration recently visited Stanstead, as a result of reports of the porous border. This happened against a backdrop of recent revelations and surprises about illegal immigrants.

However, it is also true, with regard to counterfeit goods, that the easier it is for dishonest people or criminals to cross our borders, the more our country suffers.

As the member for Sherbrooke, I am understandably very interested in our borders, given their proximity. Indeed, my riding is less than 30 minutes away from the U.S.

By the way, I would like to thank the member for LaSalle—Émard, who has worked on this file and continues to do so every day. She is passionate about this issue and about her work. I am convinced she will represent our views when the time comes, when the bill is being studied in more detail in committee.

We hope that that will happen soon because the government is addressing this at the last minute, as was mentioned earlier. It seems to be at the bottom of their list of priorities at the tail end of this parliamentary session. It is hard to believe the government when it says that this is a priority. We have been waiting for this bill for a long time. It was introduced on March 1, 2013. Today, the government is saying that it is a priority, just as the session is coming to a close. So much for good intentions and good faith.

We will be supporting the bill at second reading. It is common knowledge that this bill has been anticipated and talked about for years now. I think the discussions go back to 2007. There have also been talks with the United States, which is an important player in the fight against counterfeit goods. The United States is essential to our country because it is our major trading partner.

It is important for Canadian businesses and consumers that we fight counterfeiting, particularly when counterfeit goods can put Canadians' health and safety at risk. It is a rather important point that I also mentioned earlier when I asked the member for Halifax West a question.

The member mentioned that auto parts could sometimes be counterfeit. That clearly endangers the lives of some Canadians who go to the local garage to have their car fixed. They might wind up with counterfeit parts that are not up to Canadian standards. The brakes or airbags might not be up to Canadian standards.

This is a very important issue in the sense that it could endanger the safety and lives of Canadians when they think they are using a product that complies with current standards. However, they might eventually realize they are using a counterfeit product, meaning that some malicious person tried to copy an existing product. Those are not necessarily the safest of products.

There is also the matter of resources. I talked about that this evening during this debate on Bill C-56. I also mentioned it in my questions to my colleagues. I talked about the lack of resources at the Canada Border Services Agency.

The minister and most of the members who have spoken try to play with the numbers and say that since 2005, the total budget has increased, that it will decrease relative to 2012, but that in fact, since 2005, it has increased. They are playing with the numbers. However, the truth is that less money will be available for the agency in 2013. That is a number that is easy to come up with.

The Minister of Citizenship, Immigration and Multiculturalism keeps saying that the budget has increased relative to 2005, but the reality is that the agency will have less money than it did last year. That is a budget cut. There are no two ways about it.

The government often likes to compare its spending to that of the Liberal government in 2005. It says this is an increase. However, the increase in funding allocated to the departments in question is below the level of inflation since 2005. Any administrator knows that if costs increase and the budget does not keep pace with the increase in costs, then this can be considered a budget cut. It is a simple calculation that seems to escape the government when it talks about increases from the time the Liberals were in power to now.

That is another debate we could have in the wake of the Conservatives' budget cuts. This bill puts additional responsibilities on border services officers. They are being asked to take on more responsibility and be on the lookout for counterfeiting, but they are not being given the resources they need. That point has been raised by a number of people since Bill C-56 was introduced.

The bill creates two new criminal offences under the Copyright Act. These offences have to do with the possession or export of infringing copies. The bill also creates offences for selling or offering for sale any counterfeit goods on a commercial scale. The bill also prohibits the importation or exportation of infringing copies or counterfeit goods and balances out this ban with two exceptions.

These two exceptions are important. The first has to do with personal use, so copies that are in an individual's possession or baggage. The second has to do with copies that are in transit control. If I have the time, I will discuss the notion of transit control later on.

The bill is truly focused on fighting crime. It is often criminal groups that choose to use counterfeit goods in order to make money. Organized crime groups are often the ones that are trading in counterfeit goods. This bill will does not directly target average people who may inadvertently be in possession of or have purchased counterfeit goods.

The bill also gives border officials new powers that authorize them to detain infringing copies or counterfeit goods. That is an important policy change, since up until now, border officials required copyright holders to first get a court order before they would seize infringing copies or counterfeit goods. This request to grant these powers to officers has been discussed since 2007, I believe.

In conclusion, I want to say that it is unfortunate that this bill assigns new responsibilities but does not provide any resources to carry them out. We are asking the officers to do more with less. The NDP thinks that is unacceptable. If you ask someone to take on added responsibilities, you have to give them the resources to do so.

Combating Counterfeit Products ActGovernment Orders

June 12th, 2013 / 10:25 p.m.

Conservative

Mike Allen Conservative Tobique—Mactaquac, NB

Mr. Speaker, I thank my colleague for his speech. He brought out some very good points on the bill.

The Minister of Citizenship, Immigration and Multiculturalism recently commented that there has been a net increase in the border guards since 2006, and I have seen that. I have nine stations in my riding on the Maine border of New Brunswick, and I know the challenges. There has been a lot of hiring in the past number of years.

Would the member acknowledge that part of the existing role that these border officers have is to seize and hold goods? They do that from a commercial standpoint on most days as well.

Also, could he reflect on the new systems, like eManifest and others? With technology, we can use our resources more efficiently. However, just because this might be a new role, it does not necessarily translate that we would need new resources.