Mr. Speaker, this bill touches on relatively complex issues such as copyright, intellectual property, trademark rights and the ethical and legal challenges related to Internet regulations. There are many types of counterfeit products, and depending on the case, Canadians can suffer very different consequences. As with the Criminal Code, some infractions could endanger peoples' lives or safety, while others have economic consequences. When it comes right down to it, counterfeiting is a form of fraud and, like all fraud, sooner or later it will affect Canadians' quality of life.

The International Chamber of Commerce “puts the cost of lost tax revenue and additional welfare spending due to counterfeit goods up to USD 125 billion in developed countries alone. And 2.5 million jobs have been lost as a result of fake products.”

Globalization makes it easier for countries to engage in trade, thus considerably increasing the opportunities for this type of activity. The counterfeit products intercepted in Canada in 2012 and seized by the RCMP were worth nearly $40 million a year. That number has increased more than fivefold in the past 10 years, from $7.6 million in 2005 to $38 million in 2012.

By 2015, the International Chamber of Commerce expects the value of counterfeit goods globally to exceed $1.7 billion U.S. That is over 2% of the world's total current economic output.

The government introduced this bill on March 1, 2013, as Bill C-56. Interestingly, that very same day, the U.S. International Trade Administration published a report asking Canada to adopt specific measures in line with the Anti-Counterfeiting Trade Agreement to combat counterfeiting in Canada. Specifically, it recommended that customs officers be given the necessary authority to intercept suspicious goods.

The problem is that Canada has not yet ratified the Anti-Counterfeiting Trade Agreement despite the fact that it signed the agreement on October 1, 2011. For its part, the European Parliament rejected the agreement, which means that neither the European Union nor any of its member states will be able to ratify the Anti-Counterfeiting Trade Agreement. Stuck between a rock and a hard place, the United States and Europe, Canada seems to want to have its cake and eat it too by taking a vague position on the importance of combating this phenomenon without talking about the agreement specifically.

The American authorities can certainly suggest that the Canadian government improve its customs services and give them the authority they need to seize or at least intercept products that they suspect are counterfeit, but nothing can force the government to allocate the necessary resources. Without adequate training for officers and additional resources for inspection services, especially the Canadian Food Inspection Agency and customs, they can write whatever they want.

Not only do officers have to know all of the laws in addition to the Customs Act and details about trade agreements that have a bearing on these issues, they also have to have the expertise to recognize problematic situations and counterfeit goods. However, the government is cutting jobs and the agency's budget the same way it is cutting other departments and organizations.

We always get the same answer: the cuts are not affecting services. However, we must not kid ourselves. Border officers did not have these responsibilities before this bill was implemented, and with the staff cutbacks, there are fewer people doing the same amount of work. The agency was asked to cut back by at least 10%, as were all departments and agencies, which has resulted in a shortfall of over $140 million since 2012. The border officers' union said that some 1,000 jobs would be lost over the next few years as a result of those budget cuts.

In fact, that was one of the main criticisms of the members of the Canadian Anti-Counterfeiting Network, a not-for-profit group made up of individuals, businesses and associations that have joined forces to combat fraud, counterfeiting and copyright violations. In a letter to the Minister of Industry prior to the parliamentary committee's study of Bill C-8, which we are currently debating, the Canadian Anti-Counterfeiting Network outlined five contentious issues in the bill, including the lack of resources.

The letter states, and I quote:

While the Bill empowers Canadian customs officers more than before, we are concerned that insufficient resources may be allocated to allow for effective enforcement by CBSA.

We fully agree that more powers need to be given to border services officers. However, they must know what their rights and responsibilities are, since they will have no legal supervision. The agency must also have the resources needed to train them and properly enforce this legislation.

The Canadian Anti-Counterfeiting Network is currently fulfilling its mandate by helping to train customs officers and members of various police forces to recognize fraud and counterfeit products. In committee, the group's representative expressed his frustration with staff turnover and layoffs. He said:

I'm continually frustrated by the fact that it's like a drop in the bucket. If we go to the Niagara Falls border and train 50 border guards, as we did last year, and then come back in three months, 50% of them have gone on to other jobs, and we start over again. It's very difficult to maintain a level of understanding of what products look like.

They need some help on their side, and we're willing to help them, but we don't have funding either.

Let us be clear: strengthening the rules and legislation on counterfeiting is a good idea, but we have to put words into action.

According to a number of witnesses, the financial burden that comes with penalties and the administrative costs of a seizure falls to the rights owners, who are already stung by the counterfeiting.They therefore become financially responsible for the legislation put in place to protect their rights. The Standing Committee on Industry, Science and Technology heard from several witnesses about that, including Michael Geist, Wayne Edwards and Martin Lavoie.

At the very least, I would like to cite part of the testimony by Michael Geist, who is well known in the field of digital law and copyright:

Further, detention of goods can be used to harm small Canadian businesses that could find the goods they are seeking to import detained, oftentimes by competitors. The absence of a misuse provision in this bill is particularly notable in this regard.

Those remarks were echoed by Martin Lavoie of the Canadian Manufacturers and Exporters Association:

...I would like to raise a number of concerns that we and our members have with the bill in its current form.

One of them is about the responsibility of the right holder—or in other words, the victim of counterfeiting—to pay the fees associated with the detention and destruction of goods. We do not understand the rationale for this.

We believe that the importers should be responsible for these costs, since they are the ones introducing these goods into our country in the first place. They should not be given a free ride. Where is the disincentive [for importers of counterfeit products] in that? Moreover, these costs, which will largely be incurred in court proceedings, are likely to be onerous and difficult to support for smaller companies that are the victims of counterfeiting. I know that you've heard this from other witnesses. We share this concern.

That is a concern that we on this side of the House also share. We are going to support this bill at third reading, but it is important to recognize that the bill still has shortcomings that were not corrected by the committee.

The NDP proposed nine amendments, which were all rejected. The only amendments that were accepted were technical amendments. This happens regularly in every committee when the Conservatives see certain flaws in their bills.

Like all opposition parties, our role as the official opposition is not only to oppose—which will not be the case with Bill C-8 since we are going to support it—but also to point out any significant flaws in the text and any negative effects that the government did not take into account when drafting and examining the bill. We therefore strongly criticize the government for failing to listen to the arguments made by the opposition.

We are going to support this bill, since it is a step in the right direction on the important issue of counterfeiting. Given that trade with our major trade partner, the United States, is fairly free, this is a way to coordinate our efforts in the fight against counterfeiting, a practice for which there is no justification. As I mentioned earlier, counterfeiting is a type of fraud that must be dealt with.

Will the government now put words into action? Will it provide the resources necessary to implement this bill and ensure that border and other officials responsible for identifying and seizing counterfeit goods can do their work effectively?

With regard to funding for these agencies, whether it be border services, food inspection or customs as a whole, the government still has a long way to go to ensure that Bill C-8 becomes law and that authorities have the strength and power to enforce it.

Guy Caron

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