Mr. Speaker, it is great to have the opportunity to speak to Bill C-56. I want to thank my colleagues from Durham, Vancouver South, York Centre, Kitchener—Waterloo and Don Valley West who also commented on the bill.
I will agree with my colleagues from the NDP that this has been a very good debate tonight. It is an interesting debate on an interesting bill. Even though I do not serve on the industry committee, it has been—
An hon. member: You want to now.
Mr. Mike Allen: Yes, I might want to go to the industry committee now.
However, it is really an interesting bill. Before I get into some of the details of the bill, when I was in my consulting realm, I always talked about the change imperative for companies and the reasons for bills and why they were so important.
We have had a bit of discussion about counterfeit products and foods. We have discussed a number of things in the House tonight. We have talked about the level of problems with counterfeit worldwide. Some have estimated it at $250 billion and some at $400 billion to $600 billion. A significant percentage, or at least a good percentage of that, is tied to organized crime, which has to be a concern to the House as well as to the citizens of Canada.
I represent one of the largest potato-growing areas in Canada, with two large McCain french fry plants. There is a significant amount of intellectual property that goes into the development of new potato breeds and those types of things. As well, there is a lot of research into foods. McCain Foods does a tremendous amount on its french fries worldwide. All of this is very important intellectual property for these industries.
Innovation is alive and well in many of our industries. Many of those who represent forestry and agricultural ridings know it is the same for them as well.
The proposed combating counterfeit products act is the latest in our government's ongoing efforts to strengthen and modernize Canada's intellectual property laws. It will help confront the realities and challenges presented by large-scale commercial shipments of counterfeit goods. It will also respond to concerns raised by Canadian consumers and job-creating innovators and will provide a made-in-Canada approach to fighting counterfeiting that is compatible with the approaches of our allies.
Counterfeit goods are more pervasive now than ever before. Seizures of counterfeit goods by the RCMP increased fivefold between 2005 and 2012. Not only is counterfeiting increasingly pervasive, it is increasingly dangerous to Canadian consumers and costly to our economy.
Anything can be the target of counterfeiters, from everyday consumer goods to car parts. We have heard about brake parts and hockey jerseys. Earlier today we heard about Canada Goose, face wash, shampoo, batteries for cars, golf clubs and even wine.
This disturbing trend affecting Canadians' health and safety needs to be addressed right away. Over 30% of counterfeiting now involves harmful products, compared to 11% in 2005. Without these robust measures, these products will make their way into our homes and our children's playgrounds.
As was said earlier tonight, a lot of these products are getting harder and harder to identify. Being an avid golfer, I can speak to the fact that somewhere in the area of two million counterfeit golf clubs enter the market every year, as well as wine. It gets harder and harder to pursue these types of things because it is hard to tell the difference between what is counterfeit and what is real.
The government takes counterfeiting very seriously, and this bill would give Canadian rights holders and law enforcement the tools they need to combat this growing problem that exists at the border and domestically and to target those who profit from the commercial trade of counterfeit goods.
Specifically, the bill would give the authority to the border services officers to detain suspected shipments. Border services officers would have the authority to detain suspected counterfeit goods that were imported into Canada or that were exported from Canada on their own initiative.
When I was talking before about some of the golf clubs and wine and how hard it was to even trace some of these things, I looked at the website of a company that now provided the scanning tools to try to identify some of these types of things. It is interesting that it was talking about the wine industry and how it was taking counterfeit product and putting it into original-type bottles to be sold. There were 17,000 bottles which were deemed to be counterfeit. It was estimated that it would take 7,000 hours and $1 million for this to all be assessed.
I know there are many people in the House of Commons who would love to be in on that project and on the committee responsible for assessing these 17,000 bottles of wine. I can think of all kinds of things at midnight that would be interesting to see.
When we talk about the golf club industry, counterfeiting is so pervasive that the industry is actually investing to help the border services officers in the U.S. get the training to identify counterfeit golf clubs. This is because they have a different regime from the one we have in terms of responsibility.
Once the suspected goods are detained, border services officers will have the authority to communicate with the copyright owner or the registered trademark owner to inform them that a suspected shipment has been encountered. This bill would also allow for the creation of a new process, called the “request for assistance”. It would allow the rights holders to seek assistance from border services officers by supplying information about their copyright and registered trademarks. The request for assistance would also facilitate communications between border services officers and rights holders.
The bill would provide rights holders with new tools to protect against counterfeiting and to take civil action against infringers. The new civil causes of action would target manufacturing, distribution and possession with the intent to sell counterfeit goods. Currently, counterfeit goods must be sold or offered for sale before a rights holder can initiate a civil action. With the combatting counterfeit products act, rights holders would be able to initiate a civil trial earlier in the supply chain, before these goods reached the market where they could deceive and harm Canadians' and steal Canadians jobs.
The bill would add new criminal offences to help combat counterfeiting for the purposes of trade. These target the sale of counterfeit goods, as well as manufacturing, importing, exporting and processing counterfeit goods, if they are intended to be sold or distributed on a commercial scale. The bill would also add new offences for exporting and possessing pirated copyright goods. These offences are meant to complement the existing criminal offences in the Copyright Act, such as the sale, rental and importation for sale or rental of copyright-infringing copies.
I really appreciated the comment that was made by my colleague from Durham with respect to his background and experience in this field. He gave us some real context for the House on this debate tonight.
The bill would recognize newer practices, such as applying counterfeit labels just before sale. Sophisticated counterfeiters want to ship goods separately from labels so as to avoid being caught. To deal with this, new offences would target the sale of counterfeit labels or the manufacture, importation, exportation or possession of counterfeit labels for the purposes of trade.
In addition, the bill would introduce minor amendments to the Trade-marks Act, which has not been modified since the 1950s. For example, the bill would remove unnecessary paperwork requirements for businesses during the trademark application process, would modernize the language found in the act and explicitly would allow the registration of non-traditional trademarks, including sounds, scents and holograms. Overall, the bill would improve the Trade-marks Act by aligning the legislation with modern business practices.
The problem of counterfeiting is not just a Canadian problem. It is a global problem in which Canada is one destination among the many for counterfeit goods. As I indicated earlier, there are estimates that the counterfeit market could be $250 billion, but that does not count some of the DVDs and similar items that are pirated as well. That could take it to well over $500 billion.
This bill would provide a domestic response to a global problem. It is a made-in-Canada solution that would ensure our intellectual property enforcement regime would be compatible with global standards. It is a domestic approach that draws on the best practices of peer countries.
Let us take a moment to look at border regimes in some of the other countries, because that is important.
In the EU model, customs authorities have ex officio authority to temporarily detain suspected infringing goods. They cannot take ownership and seize or destroy the goods.
In the EU, rights holders may apply to customs authorities for enforcement of their IP rights at the border. In these cases, it is the rights holders who assume all the costs of the border enforcement process, possible ensuing civil action and the storage and disposal of suspected IPR infringing goods. In return, they will be informed of any resulting border detention.
However, in the EU, when the action of IP rights infringement results in the violation of public laws—for example, criminal fraud or a threat to public safety—the state can also commence criminal investigations and prosecutions, the cost of which is assumed by the government.
In the U.S. model, it is the federal government that is primarily responsible for enforcing IP rights at the border. In particular, the U.S. customs and border protection is responsible for detecting, seizing and disposing of counterfeit and pirated goods found at the U.S. border. If an importer takes issue with the seizure, it is customs and border protection and not the courts that decide the issue, making administrative determinations on the existence and validity of IP rights. Customs and border protection has the authority to impose administrative fines for violations. It also absorbs all the costs of the IP rights enforcement process, ensuing litigation, storage and disposal of goods.
In terms of the overall approach to IPR enforcement, Bill C-56 proposes a made-in-Canada approach, an approach that is appropriate and well-suited to Canada's needs. The bill reflects the fact that the enforcement of intellectual property rights is primary the rights holders responsibility, while acknowledging some role for federal agencies.
For example, to temporarily detain suspected counterfeit goods and inform rights holders and in the area of criminal enforcement, which will be worked out between them and the RCMP, the determination of whether goods are counterfeit is ultimately left to the courts.
The new request for assistance process will allow border services officers to use information provided by rights holders in their request for assistance document in order to determine whether there are reasonable grounds to suspect that the shipments contain counterfeit goods. If there is a suspicion, the border service officer can detain the shipment and notify the rights holder of a suspected shipment. The rights holder is then given a period of time to decide whether he or she will pursue the matter in civil court.
The RCMP and Health Canada will be given the chance to decide whether the shipment at issue may be a criminal or a health and safety matter respectively.
The detention of suspected goods allows the RCMP or Health Canada to pursue the matter criminally and the rights holder to pursue the matter civilly.
The border services officer does not make a final determination on whether the detained goods are counterfeit. Only a judge in a court has the power to do that. That is a departure from some of the questions that have been asked tonight, because that is the court process. I know I will get some questions on this with respect to the financial aspect of CBSA. That is important for us to know.
Since the tabling of the bill in March, many stakeholders have been in support of the bill. These include the Canadian Intellectual Property Council, the Canadian Anti-Counterfeiting Network, Canadian Manufacturers & Exporters, Electro-Federation Canada, the Entertainment Software Association of Canada and Food & Consumer Products of Canada.
While the bill is supported by a majority of stakeholders, some misconceptions have been heard. I will take the opportunity to address these concerns.
Some have suggested that the bill grants border services officers more power without judicial oversight, in a sense expecting these officers to be copyright and trademark experts. This is simply not true. As I mentioned before, they would have the authority to detain goods based on a reasonable suspicion that the goods were counterfeit. The ultimate authority to determine whether goods are counterfeit can only come from a judge in a court.
Some members may have heard the misconception that the bill was the result of international pressures to change our laws. In fact, the bill was developed in response to repeated calls by Canadian stakeholders, including innovative businesses, which we have talked about tonight, that employ Canadians.
As early as 2006, the Canadian Anti-Counterfeiting Network released a position paper on the need for legal reform in Canada to address intellectual property crime. In 2007, it released another report on counterfeiting and piracy in Canada. It was also in 2007 that two parliamentary committees, the Standing Committee on Industry, Science and Technology and the Standing Committee on Public Safety and National Security, both heard several stakeholders on this issue.
Since 2009, the Canadian Intellectual Property Council has also released reports asking for legislative changes in the area. More recently, in 2012, the standing committee that this will be referred to also heard from many witnesses about the issue of counterfeiting. Many others have met with or written to government officials with their concerns. Canadian stakeholders have been clear about the economic and health and safety issues associated with counterfeiting. This bill shows that we have listened.
There should be no concerns that Canadians will have luggage and their personal music devices searched for counterfeit goods and pirated copies. I am glad we have consensus on that. With everybody who spoke to that, it is very clear in the bill that this is not an attack on individuals personally for bringing things across the border.
Personal baggage will not be searched for counterfeit or pirated goods upon entering Canada, nor will personal music devices be searched. In fact, Bill C-56 clearly identifies such goods for personal use to be outside the scope of the legislation. The bill would provide the tools to pursue those who aim to profit from commercial counterfeiting activities: those who manufacture, possess, import, export or attempt to export for the purpose of sale and distribution, as well as those who sell or distribute counterfeit on a commercial scale. We are going after the core of the problem, the criminals, often highly organized and sophisticated, who prey upon unsuspecting Canadian customers.
Intellectual property legislation is always about creating a balance between owners and users. Bill C-56 provides a carefully balanced approach to protecting Canadians against the effects of counterfeiters. A strong intellectual property rights regime is central for any knowledge-based economy such as Canada's in order to foster an environment that promotes innovation, attracts new investment and stimulates economic growth.
As the committee moves forward with the bill, our government remains committed to working with Canadian rights holders as well as our international partners in fighting against counterfeiting. The bill will send a clear message to those who aim to profit from counterfeit goods that what they are doing is against Canadian law.
In conclusion, counterfeiting hurts jobs, threatens growth, and it exposes Canadians to health and safety risks. With this bill, our government continues to stand up for the economy, the rights holders and for all Canadian consumers. I thank all my colleagues in the House and all my colleagues from the opposition parties for their willingness to support this at second reading to send it to committee.