In the Chamber
Click the links below to review past speeches/statements I have given in the Senate.
First World War—Christmas Day 1914
Economic Action Plan 2014 Bill, No. 2—Third Reading
Economic Action Plan 2014 Bill, No. 2—Second Reading
Second reading of Bill C-27, An Act to amend the Public Service Employment Act (enhancing hiring opportunities for certain serving and former members of the Canadian Forces)
Economic Action Plan 2014 Bill, No. 2
Appropriation Bill No. 4, 2014-15—Second Reading
Hon. Joseph A. Day: Honourable senators, the bill we are discussing, Appropriation Bill No. 4, 2014-15, provides for the release of supply for Supplementary Estimates (B), 2014-15, and seeks Parliament's approval to spend a total of $2.9 billion in voted expenditures.
I would like to congratulate my honourable colleague Senator Eaton for her clear presentation on behalf of the government of Bill C-45. I will not duplicate the fine work she has done in explaining the major expenditures that appear in Bill C-45, but perhaps for a few minutes I can put it in context so honourable senators will understand the process. The process is a little different with respect to this kind of estimate and supply bill than is typically the case when we see a bill going through.
This bill is seeking authorization by the executive branch — that's the government, the Prime Minister and his cabinet — to spend $2.9 billion and is part of the estimates for the year. We call this a supply bill because it is part of the supply cycle. It isn't all of the money for the year that the government is looking for, but it is a portion. Before I explain how this portion fits in overall for the year of supply, let me just read to you from the bill itself. You may or may not have the bill in front of you. If you do, I'm looking at the introductory words, which I find to be quite interesting, and it shows the historical aspect of this particular piece of legislation.
MOST GRACIOUS SOVEREIGN,
Whereas it appears by message from His Excellency the Right Honourable David Johnston, Governor General and Commander-in-Chief of Canada, and the Estimates accompanying that message, that the sums mentioned below are required to defray certain expenses of the federal public administration, not otherwise provided for, for the financial year ending March 31, 2015, and for other purposes connected with the federal public administration;
May it therefore please Your Majesty, that it may be enacted, and be it enacted by the Queen's Most Excellent Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, that:
Then it goes on, and there are about four or five paragraphs outlining what the executive is looking for with respect to the administration of the government during the year.
Honourable senators, as I mentioned, this $2.9 billion is only part of what the government is looking for to run the government for the year. Part of the funding for the government comes through these voted appropriations, supply bills, appropriation bills. The other part is in the various statutes that make provision in themselves for funds to flow. The typical split is two thirds-one third, or 60 to 65 per cent in statute and the balance of 35 to 40 per cent in voted appropriations. That is what you are being asked to do, to provide a portion of the voted appropriations for this particular year.
Initially, in March, we looked at interim supply. We got the bill in late March and voted so that as of April 1 of this year we had interim supply. That allowed the government to continue to run its various activities until the end of June. During the latter part of June, we had the opportunity to pass main supply, and at that time we also looked at another supply bill called Supplementary Estimates (A), and the supply bill that flows from that.
This one is Supplementary Estimates (B), and there will be another, traditionally Supplementary Estimates (C). The main supply is what the government knows it's going to need, and we break it down into interim and main so we can look at it, back in the early part of the year. The initiatives that flow from the budget itself and the initiatives implemented because of changes in economic circumstances during the year are reflected in these other supply bills that come along, the supplementary estimates. This is one of those.
This is the second one, Supplementary Estimates (B). Total supply for the year including this but not including Supplementary Estimates (C), which we haven't seen yet, will be approximately $92 billion, if we approve this particular matter. And then we can anticipate a smaller supply in February, just to clean up those new initiatives that weren't caught earlier on. It typically is quite a bit smaller.
That, honourable senators, puts this supply bill, which is the fourth one, as I indicated to you, in context with the others. We refer to what we're voting on now as voted appropriations, contrary to the statutory appropriations.
The importance of this particular matter is that it is fundamental. That's why I read out that first paragraph because it's such an historic request, and it's repeated each time, that same format; it flows from many centuries ago when Parliament finally obtained the authority to control the expenditures of the government. That is what people died for. As parliamentarians — House of Commons, the Senate and the Governor General — that is the most fundamental work that if we didn't do anything else, this is the most important, to approve and oversee expenditures by the executive branch.
I'm so glad that the members on our Finance Committee take their responsibilities in relation to this work very seriously, because it is that.
The Supplementary Estimates (B) report that my honourable colleague Senator Eaton has referred to, we have seen and have debated here, and it has become part of our permanent record. It outlines the major expenditures that Senator Eaton has just gone over, and I need not go over them again. That report reflects our study of the supplementary estimates.
Supplementary estimates are a rather thick document that gives all kinds of detail, and we also get detail on those proposed expenditures from Treasury Board when they come to our committee.
We understand what's in the supplementary estimates. When we receive the bill, like we received this one two days ago, Bill C-45, when we look at the pro forma document — and it is basically that, with two schedules attached to it, which are not in nearly enough detail for us to understand what and why the government wants $2.9 billion — we have done our homework on this by looking at the estimate document, Supplementary Estimates (B).
Having done that, now that we've received this, we understand what's there, and we understand that the two schedules attached are reflective of what's in Supplementary Estimates (B). In fact, the very same schedules are in Supplementary Estimates (B) for that reason.
Honourable senators, we're in a position to deal with this bill based on our report and based on the study, having in mind that this is a matter of confidence. This is fundamental to the government. If we vote down the supply to the government, if it goes back to the House of Commons — we're not a confidence chamber here, but the other chamber is — so it's a more delicate piece of legislation than we would typically see.
That doesn't mean we shouldn't scrutinize it, but it's important to understand that it is very fundamentally important. We will deal with this at second reading now, and it will not need to go to committee. The committee has done its work on this particular matter. Once the second reading of this bill is concluded, we will be in a position to then move it to third reading, unlike other things that we handle in this chamber.
I would ask honourable senators to have in mind the importance of this particular legislation, albeit one of the supplementary estimates as opposed to the Main Estimates for the year, but nonetheless important for the government, and have in mind that we have studied it and reported on it to you, and that report has been adopted by this chamber.
Thank you, honourable senators.
The Hon. the Speaker: Question?
Hon. Jane Cordy: Senator Day, will you take a question? I was listening to you, and I think you are absolutely right — the fundamental job we have in this chamber is — I think your words were — to "approve and oversee expenditures." That's an important point, and our oversight shouldn't be rushed.
I was interested because I had heard, maybe a week ago or a few weeks ago, that $1.1 billion of Veterans Affairs money went back to general revenues from the department because it hadn't been spent by year end. Minister Fantino said at the time not to worry about it; that money was not lost to the department.
Correct me if I am wrong, but it is my understanding that this money is lost to Veterans Affairs. It's gone. It's back in general revenues. It will be used to pay down the deficit so the Conservatives can bring in income splitting for the rich or can buy their ads before the next election on the taxpayers' dollar. My understanding is that money is indeed gone, lost to the veterans of our country. Could you clarify that for me?
Secondly, as you said, we approve and oversee expenditures. Did we not, in this chamber and in the House of Commons, approve that $1.1 billion and say that this $1.1 billion is to be spent by the Department of Veterans Affairs to make things better for our veterans in Canada?
Senator Day: Thank you, Senator Cordy, for your question. You're absolutely right. We in this chamber and the other chamber voted on an amount of money over a number of years for Veterans Affairs. The administrators of Veterans Affairs, the minister and his team, decided not to spend all that money that we had studied, considered and voted on and gave authority to the minister to spend.
So $1.1 billion over a period of years, a cumulative amount, was not spent and went back into general revenue and therefore is not available to the veterans and Veterans Affairs for which we had voted it. It does become a matter of general revenue which can then be used to reduce the deficit, for example. If that was your primary objective as opposed to looking after veterans, then that's what you would do.
If you felt that you wanted the funds another year, you would have to reapply and go through the same process the second time around. There is no guarantee that that money would be available. It's precisely the same thing that we see happening in DND and the huge amount for Department of National Defence that was approved by Parliament but not spent because the masters and the executive branch decided not to allow that money to be spent for equipment or to provide for pensions for the members of the armed forces. For many other purposes that are crying out for funds, it's the exact same situation. We have seen it in many different departments.
Senator Cordy: Thank you very much for that. That was my understanding, that the money is gone, even though we in this body of Parliament had voted that this $1.1 billion be used for veterans. I know that $1.1 billion would certainly have kept the Veterans Affairs offices open across the country. The minister is ultimately responsible for the department, so the minister, if he wasn't, should have been aware that that money should have been spent by his department.
I have another question, and I've asked you this question before: A few years ago, $3.1 billion was lost and Minister Clement said, "Don't worry about it, it's somewhere; we just don't know where it is." If you are saying that the most fundamental job we have in this chamber is approving and overseeing of expenditures, is Minister Clement or anybody else giving us any indication of where this money is? This was $3.1 billion. Again, Veterans Affairs offices could have been kept open across the country, or maybe the money to help veterans with mental health issues could have been spread over 5 years instead of 50 years, when none of us will be around to see that happening.
I wonder if you have heard anything about the missing $3.1 billion.
Senator Day: I recall, Senator Cordy, answering that question previously and I recall a quotation by the minister that "the money is not lost; it's in some of those boxes in my basement that I haven't gotten around to looking through."
Senator Cordy: I wish it was in my basement.
Senator Day: The point that the minister was making is that the money was spent; we just can't tell you how it was spent. But that's our role. Our role as parliamentarians is to know how it's spent. His role as the executive is to be able to tell us how the money has been spent. That has not been resolved, but again those were funds that were voted by Parliament to allow the minister to run his department and, because of poor bookkeeping, they don't know how the money was spent.
We have public accounts that help us at the end of a year; we look at public accounts, which should outline all of that, and the people who are working within the department should be able to tell us. We also have an Officer of Parliament, the Auditor General, who should be looking into and answering those questions for us and providing a report to Parliament.
I have hopes that the Auditor General is putting some of his money that we vote to run that department — there are over 500 people in the Auditor General's office — into looking into some of these recurring questions: Why was the money not spent? What happened to the money that was spent and not accounted for?
Senator Cordy: Senator Cowan asked some excellent questions during Question Period today about openness, accountability and giving parliamentarians the knowledge that we should have to make informed decisions. I would hope that the government, if indeed this isn't just platitudes to us, would be interested in getting to the bottom of where this $3.1 billion is, because, as you said earlier, we have voted for this money to be spent; now it's gone, supposedly not missing, but we don't know where it is or how it's been spent.
Do you think if a government is to be accountable and open, this would be an issue and that indeed we should know where the money has been spent? We might not agree with it, but at least we should know where it has been spent.
Senator Day: Senator Cordy, I agree wholeheartedly and I think we, as parliamentarians who represent the people of Canada, have a responsibility to know how this money has been spent. We don't need platitudes about accountability. We need to have facts as to where the funds went and we must, in doing our work as parliamentarians, follow up on those issues that are outstanding and that haven't been answered to our satisfaction. We owe that to the people of Canada. [...]
Third reading of Bill C-8, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts
Hon. Joseph A. Day: Honourable senators, I would like to say a few words in relation to this bill. Let me begin by congratulating Senator Black on his fair presentation of Bill C-8 from the government's point of view. In the time I have available, I will try to highlight a few of the points raised. I also intend to go over some of the observations made by the Banking Committee, because it's important that we understand the effect of them.
Honourable senators, I'm generally supportive of the objective of the bill, namely updating our legislation with respect to counterfeit goods and intellectual property matters. However, it's merely a first step. I will leave it to each of us to determine whether or not that step is sufficient to support the bill. Obviously, the Standing Senate Committee on Banking, Trade and Commerce feels that the step is sufficient to support.
Most witnesses who appeared before the committee agreed that the bill is a good first step, but they expressed several concerns, which I will try to highlight.
Honourable senators, the seventh report of the Standing Senate Committee on Banking, Trade and Commerce outlined three observations, which Senator Black mentioned today.
The first one is the viability of the proposed procedure that puts the burden of administrative and legal costs on brand owners rather than the importers of counterfeit goods. This is an important observation. A number of witnesses pointed out that, given the way in which the bill is worded, it likely will discourage follow-through by owners because of the potential costs and lack of clarity in the bill with respect to what those costs might be. As we'll see later in our discussion, the owner would be required to pay the administrative and storage costs, as well as the possible cost of ultimately destroying the counterfeit products, and there are no guidelines to determine what those costs might be.
Couple that with legal costs, which the owner will incur within 10 days of learning that their trade-mark or copyright is being infringed by a counterfeit product, and the potential costs, especially to a smaller business entity, could be more than the entity could bear. For that reason, there should be some clarification with respect to costs.
We're told that the bill is designed to be revenue-neutral for the government and that's why it contains all these provisions. The government doesn't want to have any increased costs as a result of this proposed legislation. Therefore, the onus will be on the owner of the trade-mark to pay those various costs.
The second observation is the exclusion of in-transit counterfeit goods from recourse. In-transit goods are not manufactured here but they find their way into Canada on their way to somewhere else. For example, goods destined for the United States and just passing through Canada won't be part of our legal process. Border services people in the United States will deal with them, if and when the goods arrive there.
There are conflicting recommendations from a number of highly knowledgeable individuals on this issue. Mr. Geist from the University of Ottawa, who did not appear before the Senate committee but appeared before the House of Commons committee, said that the in-transit exception is right and not to put it in our proposed legislation. He provided an explanation, but I won't go into that now.
The third and final observation is the substantial import of counterfeit goods via the Internet and in small mail packages. This point was raised by a goodly number of witnesses, but the one who impressed me was from Canada Goose.
The witness for Canada Goose said that is an exploding area, the importation by mail or by the Internet, for one product or two jackets and a pair of pants, for small quantities. That can result in a tremendous amount of counterfeit product coming into Canada in that particular way. This legislation hasn't directed itself to the cyber aspect of trade, which is rapidly growing. As honourable senators know, Black Friday is now being followed by Cyber Monday for shopping and that is being pushed extensively and has grown again this year.
This is what the committee said:
As such, we would appreciate that the ministry review, in consultation with stakeholders, and report back to our committee of the effectiveness of our combatting counterfeit goods regime in no more than two years from the adoption of this bill.
The way that it is worded, it's a question of whether that would be an order of this chamber to ask the executive to report back within two years or merely a request.
I believe that it is worthwhile putting in some limitation. One other possible way this could be done would be an amendment requiring a statutory review within two years or, as one of the witnesses said, within three years — in some reasonable period of time during which we can assess the effectiveness of the legislation that we're passing to determine whether there has been an increase in the stopping of counterfeit goods at the border or, if there has not, then why not.
That analysis is another area that hopefully the executive will do. Normally, we wouldn't ask for that type of analysis to be in legislation, but I'm concerned that without it we'll never know just how effective these legislative changes are.
I said that I agree, generally, with the approach. There is existing legislation, as we know, in the Copyright Act and the Trade-marks Act, and there are questions of infringement and how infringement is determined in each of the two pieces of legislation.
Let's talk about trademarks. From a trademark point of view, commercially, what someone tries to do is to come as close as possible to someone else's trademark product, either with a name or the markings on the product — not how the product is manufactured or how it looks, but how it's identified and distinguished. That legislation has been around for a long time and works very well.
What this legislation is doing is saying, okay, that's a commercial activity that somebody's trying to move in close to. If he gets too close, then he'll be found to have infringed, have to stop and pay some damages.
Canada Goose is a typical example of that, where you start seeing other little labels on the shoulder and Canada something else, such as "Canada Geese." Is that a trademark infringement? Is it not? That's up to a judge to assess and it's up to the plaintiff in the case — the owner of the right — to put forward information as to the public being confused and a product being sold as if it were Canada Goose but wasn't. If that test is met, then the existing law applies.
So, we ask ourselves, do we really need this legislation? What the legislation is doing is going further in relation to commercial products and to health and safety. It is saying that somebody is making the identical product, is putting the identical trademark on there, or virtually identical, and that it is a knock-off, which is the term used in the trade quite regularly. That is a counterfeit product. It's identical and it's a suggestion by whoever manufactured, imported and offered this product for sale that this is a legitimate product. This is a legitimate Rolex or Ferrari, for example, even though it isn't.
There is a place for that kind of legislation. There is a place for that in health and safety, where people can rely on a trademarked product or a generic product. You can rely on it by virtue of it having gone through health and safety checks that are established for manufacturers. But someone is making a product and passing it off as if it were subject to all those tests, when it wasn't. So that's counterfeit and that is what this legislation is attempting to get at.
Now, why did we have this particular approach? Senator Black has described the approach that is being taken with respect to giving border security more power. We know that border security, in conjunction with health and safety officials and in conjunction with the RCMP, have been seizing products at the border and saying these are counterfeit and should not come into Canada. We know that's been happening and there's been a significant increase over the past couple of years in terms of what has been seized.
But we also know that there's been a reduction in the number of people working in border services by virtue of austerity and the measures being taken by the government. So we can't assume that there is going to be the same increase under the existing legislation. Will this make it better? Time will tell, but the costs are going to be borne by the holder of the right.
Minister Moore appeared before the committee and he says that this legislation is to bring Canadian legislation in line with the Trans-Pacific Partnership, TPP, legislation; but that hasn't been fully negotiated yet. The TPP is not something where we can say that we will know what wording is ultimately going to be necessary there, and then we'll try to have the same legislation, because we want to be accepted as a member of that trading bloc in the Pacific. Well, we don't know what that is.
There was an international agreement called the Anti-Counterfeiting Trade Agreement, ACTA, which for all intents and purposes is dead because Europe has refused. They all signed it — Canada signed it, Europe signed it and the United States signed it — but, that particular agreement now has virtually died since only one country in the world has confirmed: Japan.
If our legislation was modelled on the Anti-Counterfeiting Trade Agreement, then this legislation and the approach that is being taken is faulty for that reason. There are two international agreements, and that appears to be the reason why the executive is moving ahead with this legislation — to bring us in line with international norms, so they say.
However, I made inquiries. The executive was kind enough to make information available to me with respect to another agreement — the Canada-Korea Free Trade Agreement — and why that particular legislation that we have in Bill C-8 is necessary. There are some provisions in that legislation, and I checked this and, indeed, I thank the Leader of the Government and the Deputy Leader for helping me to facilitate the obtaining of that information.
It is true that there are provisions in the Canada-Korea Free Trade Agreement that need to be reflected in legislation similar to what we have here. Not all that we have in this bill is necessary for that agreement, but there are certain provisions that are, so I accept that. The problem is did we negotiate those terms in there because we thought they were going to be in other agreements like the Anti-Counterfeiting Trade Agreement and like TPP and those other agreements? Why did we agree to those terms in the first place? We will probably never know now because they're in as part of that agreement. That, honourable senators, is probably the best argument that could be made for certain provisions in Bill C-8 being necessary for us in legislation.
Does Canada feel it needs to be a leader in the international anti-counterfeit legislation? I should hope not, although we are a trading nation and we want to do our part. It's an important point that other nations haven't accepted the approach that was in the anti-counterfeit legislation. All 27 nations in the European community have rejected the anti-counterfeit legislation because it's considered to be too much of an invasion of privacy and the private rights of companies and individuals. It was rejected. It hasn't been passed in the United States. As I said earlier, it's probably effectively dead at this stage. If we want to be a leader in this particular area, we shouldn't be reflecting legislation that is clearly not acceptable.
I just want to make the point again that there have been seizures at the border by border security with the RCMP and with health officials under the Customs Act, section 101 and other sections, so that is already in existence at the present time.
This particular legislation creates new criminal offences, and I think that is one of the important advances in this legislation. There was a criminal offence in the Copyright Act, but there was not an equivalent in the Trade-marks Act. This legislation expands the civil remedies but also creates a new offence in the Trade-marks Act. That's an important point for us to keep in mind. Previously, it was a commercial-type approach, but now we're going with a criminal offence, counterfeiting, someone who just says, "To heck with the rules. I'm going to make the same product and put it on the market, make my money and get out as fast as I can."
The legislation intended by the government, then, is in part to update the border regime so that customs officers are better equipped to stop counterfeit products from coming across the border. Then the question will be: Will it be a criminal offence or a civil offence? That will be worked out in conjunction with the owner.
Once counterfeit items enter the market, some products can pose health risks. We know that. We've heard others speak on that. The knowledge of counterfeit goods in the market can also, from a commercial point of view, undermine confidence in the marketplace. Currently, Border Services work with RCMP and Health officials, and I expect that will continue, but there is a provision that Border Services will be able to work with the rights owners as well and provide information that will allow the owner of the trademark or copyright to start a lawsuit. The rights owner, before he gets that information, must sign a request for assistance and an assumption of liability. That's the point I was making earlier on. It's a bit of a concern.
We are always looking for unintended consequences. What we've got is a piece of legislation, as Senator Black has referred us to, that has new increased powers for Border Services personnel. It has this new scheme of a request for assistance where we received most of the statements. If you go through the various witnesses that came before us, that request for assistance seems to be one of the most troublesome areas. What are the parameters of it? This is an entirely new scheme that is designed to move the cost of this new procedure over to the rights owner. The rights owner pays for a court process in a civil suit now, and we understand that, but this is a criminal suit or a potential criminal suit, and the rights owners will still be required to assume a lot of liability or potential liability.
So what are some of the gaps? What are some of the unintended consequences? How can we improve the legislation? That's sort of the eye of the camera that we should be focusing on here to see where we could go with respect to the legislation. I tried to go through the various witnesses. As I said, one of the areas is this entire scheme of request for assistance, and it's not something that we're going to be able to go to other jurisdictions and see how it works. As was mentioned, this is a made-in-Canada solution, and it could be a made-in-Canada problem as well. Let's hope not, but we'll have to be watching that very, very clearly.
One of the other areas is that there is no provision to handle an abuse of process. Let's suppose that somebody wanted to keep a competitor's product out for a while, so you file a request for assistance and say, "That product coming in by somebody else is a counterfeit product of mine," and then the whole system starts working. The product is seized at the border by Border Services. There is no provision to charge the unethical person who claims that he or she or it has intellectual property rights that should stop that other product from coming in. They may have no rights at all, but they've got a big jump in the marketplace by stopping the competitor from coming in for a period of time. Abuse of process is an oversight here that should be dealt with.
There's also the point that there is no administrative or short process that could be provided and should be provided, and many witnesses mentioned that. Administrative process by the entity that seizes the goods as they come across the border, Border Services, should have the opportunity to let the importer know that there is a process in place. Do they agree that the product was counterfeit? They could say, "Oh my goodness, I got this in Indo-China somewhere and it clearly is." There is no process for that to be handled other than to go to a court process within 10 days, extension of 10 days, and within 20 days get into court and then get the court to rule on this.
It's very important to have court oversight, and I absolutely agree, but there are also times when you can have administrative matters, especially if there's an administrative process, especially if the importer agrees that the product is faulty and shouldn't be brought in. Why go through a court process for that? That is not there. This would keep down the costs. It would keep down the costs to the rights owner, but it would also keep down the costs in court process, especially in those cases where the product might be abandoned. You might not get an admission from an importer, but the importer might just walk away; a corporate entity just disappears. There are many different corporate entities that are created just for one particular transaction.
Honourable senators, those are some of the items that I wanted to point out. There is the issue of a number of changes in the trademarks portion. Let me describe some of these. Don't forget, this is purported to be anti-counterfeit legislation in copyright and trademark. But there is a section 4 that is an amendment to extend the definition of "trademark" and current advertising realities where they talk about "use."
You will recall that it was two years ago, or perhaps less than that, that we saw the use issue with respect to trademarks debated at length, and it was just tucked away in one of the budget implementation bills. That is totally contrary to our concept of use of a trademark in Canada. Now we have some more fine tuning in relation to that here.
If we're going to have legislation with respect to trademarks, why not do the same thing that we did with respect to copyright two years ago when we had the Copyright Modernization Act? Everything in that bill was an attempt to deal with copyright. Here we're attempting to deal with counterfeit, and we find all these other little things tagged on for trademark amendments. A clearer definition of "utilitarian function" will be totally overlooked by everybody. It is very important in trademark legislation and very important in the practice of trademark law, but totally lost when you're dealing with the issue of anti-counterfeit.
Another one the same is "not inherently distinctive" in a change of definition. There's the provision to allow the Registrar of Trademarks to make certain changes. There are provisions to allow the registrar to correct certain aspects of this. There's a new definition of what is or is not a mark, which I touched on at second reading. I will quote from that section again shortly.
In the meantime, honourable senators, there is a provision in this bill to allow the registrar to destroy certain documents after a period of years. Now we're in the process of digitizing everything in the office of the Registrar of Trademarks. Why not finish that job rather than giving authority to destroy some documents that will be lost forever if this provision is passed? If those provisions were in a trademark act that dealt with all of the changes, there would be many more that we could look at.
Let me give you the new term that's tucked away in this legislation — a new term for what a mark is or what can be a mark. The new term of "non-exclusivity" is defined in the act as including a word, a personal name, a design, a letter, a number or numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods — a mode of packaging goods can become a trademark. How you put the product in the box can become a trademark if it's a distinctive way that nobody else does. A sound could become a trademark, a scent, a taste, a texture, a positioning of a sign.
That's the new definition that's tucked away in this legislation that's going to be passed with virtually no discussion whatsoever because everybody is focusing on anti-counterfeit, and that's because that's the name of the legislation. So that's a concern I have, honourable senators, which I think is important for us all to look at.
There were a number of witnesses, and I highly respect the witnesses who came before the Banking Committee. I congratulate the clerk and the steering committee on the selection of witnesses: Food and Consumer Products of Canada; Canadian Intellectual Property Council, which is part of the Canadian Chamber of Commerce; the International Trademark Association, which used to be called the United States Trademark Association; the Intellectual Property Institute of Canada; and the Canadian Bar Association and its intellectual property group.
All of those are excellent, and each was an excellent witness, and those themes keep coming back in each of those witnesses that there is not a clear enough definition of the request-for-assistance process, and too much burden is being placed on the trademark owner and the copyright owner, which will result in this process being unlikely to be followed and not being used. You could see the concerns by reviewing their various submissions. They gave a very good written submission as well.
If Senator Baker were here I could get into an interesting discussion with him that was raised by the Canadian Bar Association in relation to the question of "knowingly," because we're moving into a new domain in trademark law. You need mens rea, knowingly, the mental aspect of what's going on, and they point out that the definition of the offence is so complicated and so precise in all of its aspects that it's not likely that any criminal charge under the Trade-marks Act will happen at all. They give an example of how that could be changed.
It gets quite technical, but they give examples of how this would be plausible escape for any potential importer who is charged under the Trade-marks Act. I never looked at the Trade-marks Act because it's part of the definition of the mental capacity of knowing required that the person knew about the Trade-marks Act and knew that the trademark was registered for certain wares or services. I never looked at sections 19 and 20, which are specifically part of the definition of knowingly infringing the trademark.
That's the aspect we found in a detailed review by the Canadian Bar Association, and I found their examples quite compelling. I referred to Mr. Geist earlier. The IPIC report referred to many of the same potential unintended consequences and made recommendations on how they might be dealt with. They also dealt with the Trans-Pacific Partnership and they point out what I pointed out: It still hasn't been fully negotiated.
Honourable senators, I would urge you to take a look at many of these unintended consequences because we're dealing with something that is completely different from anything that we've dealt with in the past. Not that we shouldn't go there, but we must go there with the intent to clearly outline how the offence would be committed and what the results would be. And we would like for some records to be kept of those processes that do result from this legislation so that we can determine whether the legislation is achieving its intended purpose.
With those warnings, honourable senators, I bring you back to the issue at hand. Do we accept this legislation as a step in the right direction, having in mind that certain aspects of it have been negotiated into the Canada-Korea Free Trade Agreement? Or do we ask the government to rethink some of these issues and make this legislation much more likely to succeed?
On balance, the Banking Committee felt this is worth getting started, but let's bring it back within two years because there are a lot of issues that still haven't been dealt with.
Hon. Jane Cordy: Would the Honourable Senator Day accept a question?
Senator Day: Yes.
Senator Cordy: As a trademark lawyer, you probably have more knowledge of this legislation than most of us in the chamber, and I know every year you have a reception and educate people on the Hill about the dangers of counterfeit products. I thank you very much for that.
I wanted a little clarification. Did you say that Canada can be a transient country? In other words, counterfeit products can leave Europe, arrive in Halifax or Saint John and not be touched, even though we know they will be going along the Eastern Seaboard to American cities?
Senator Day: Thank you for the question and for recognizing my annual reception with the Intellectual Property Institute. I was pleased they were one of the witnesses, and they gave us a very good brief on some of the unintended consequences of the legislation as currently drafted.
This is a new area for me. We're moving into a criminal law aspect with this legislation. Expanded civil, I understand; other civil remedies, party to party. But criminal, the state against individuals, is new. The problem here is introducing what was previously legislation in the copyright and trademark domain dealing with commercial activities and health and safety and moving that into the criminal domain. I'm not saying we shouldn't, but it is going in that direction. I am saying the same thing that many of the witnesses said, that I'm not sure we've filled out enough of the process to clearly understand what might happen or see that it will work.
In-transit is one of the exceptions. There are two fundamental exceptions in this legislation, to expand into criminal, except for in-transit product. If the product is not manufactured here — it has been manufactured somewhere else, found its way here, and is not going to be consumed or purchased by Canadians — it is going out somewhere else and we are absolving ourselves of anything to do with that.
The other exception, just so you understand it, is if an individual goes on a trip and comes back, that individual won't be stopped if you happen to have six Rolex watches on your sleeve — well, one would be okay. Six you might be getting into implied marketing, but individuals are exempted as well.
Senator Cordy: I find that really unusual, because I attended a NATO meeting and heard somebody from Interpol say that the biggest challenge with the drug trade in Asia is that so many countries allow the drugs to go through Asia. If, in fact, we're trying to stop counterfeit products, we're doing what Interpol said North Americans are totally against. If they want to stop the drug trade, then we want to stop the trade through the transient countries. The product is not destined for there, but they are putting blinders on and allowing the product to go through.
Basically what you're saying is that Canada is going to put blinders on so that if a container comes to Halifax and we know it contains counterfeit products destined for the Eastern Seaboard in the United States, we are going to pretend we don't see it. If we're going to be tough on crime, I find that to be a little unusual. Do you not agree?
Senator Day: I do agree. I can tell you that a number of witnesses commented on this, but not all feel that at this stage we should be dealing with the in-transit. It would be another huge burden on our system, and who will they charge? Right now they are moving the costs over to the copyright owner; so if you think of it from a revenue neutral point of view, this would not be revenue neutral if we introduced that, and that seems to be one of the important motivators of the government in this instance.
I did have an opportunity to review the free trade agreement between Korea and Canada, and the in-transit provision could go either way. It said that nations can have legislation in relation to in-transit products or not, and we obviously opted for "or not" in this agreement.
Senator Cordy: Maybe if border security was given more resources and more person-hours then we would be able to look more closely at it, because you can't have it both ways.
Did you say that small amounts ordered online wouldn't be subject to this bill?
Senator Day: Yes.
Senator Cordy: I have a question about that. Our Social Affairs Committee, when we were looking at pharmaceuticals, had asked Health Canada and the Border Services Agency, who were witnesses, why it is that so many counterfeit pharmaceuticals are coming to Canada. People are ordering online. It wouldn't take you long to look online and find counterfeit products.
We know that at best they're not going to be helpful; at worst, they could cause serious problems in the health of the individual. If I ordered a counterfeit drug online, a small package, that wouldn't be subject to this legislation?
Senator Day: I hope you are not saying you would order a counterfeit product.
That was one of the points that were made, and a Canada Goose representative made that very forcefully for us. You can see it is the third observation by the committee, that the market is growing exponentially with respect to small, individual Internet orders, and this legislation doesn't contemplate dealing with that. It would take some other wording and other issues, because the end user is getting this product in that particular case, as opposed to an importer who is then going to offer it for sale and sell the product.
I don't want to call it an oversight, but it is an area that will need some attention very quickly.
Hon. Pierrette Ringuette: Senator Day, would you answer a few questions for me?
Senator Day: I will do my very best.
Senator Ringuette: I want to clarify the issue of destroying the counterfeit merchandise. It seems to me that the Border Services Agency is not authorized to destroy merchandize, and the only way it could be destroyed is through the court process and the judge ordering the destruction of the merchandise. Am I right?
Senator Day: You are quite right, yes.
Senator Ringuette: We're not destroying criminally-counterfeit products.
May I have an additional five minutes?
The Hon. the Speaker pro tempore: Given that your time is up, Senator Day, do you request five more minutes?
Senator Day: Yes.
The Hon. the Speaker pro tempore: Is the chamber giving five minutes to Senator Day?
Hon. Senators: Agreed.
Senator Ringuette: Two issues puzzle me. First, regarding the trademark of products, the expertise around this issue is a very small community. That very small community was not consulted at all to put this bill together. It is very intriguing. It boggles the mind that, for a few years now, the Government of Canada has been doing somersaults to try to be one of the partners in a trans-Pacific trade agreement. Why would the Government of Canada want to put aside all this issue of in transit and not destroying the counterfeit merchandise when we are trying very hard as a government to have a strong relationship with the U.S., which will be a key partner in this new trans-Pacific agreement? It boggles my mind, and it's completely contrary to one of the major partners in this negotiation process.
Can you, Senator Day, supply me with a reasonable answer as to why one would take this approach?
Senator Day: You're asking me to try to give you a reasonable answer, Senator Ringuette, on what the government has proposed in this particular legislation. Let me go back to your other question.
With respect to the request for assistance — and this is destroying the product — if the owner of the trademarked product does not file a request for assistance, then what can happen? This goes exactly to your second question. The only thing that can happen is for the product to then be allowed to be released back from whence it came or to some other country, because there is no court process that can take place unless a request for assistance is filed, and then there is a relationship between border services.
Canada is not one of the front-line negotiators in TPP. We should have been, but we didn't think it was important at the front end, but then we scrambled at the back end. So we don't really get to do the front-line negotiating on what is or isn't going to be in this agreement. What we have to do basically is try to influence the negotiators indirectly.
As Minister Moore said when he came before the committee, the TPP was one of the motivators here. We will be doing whatever we have to do, and we may be back with respect to this particular legislation sooner than the two years that the committee felt was reasonable.
Hon. Lillian Eva Dyck: I have a supplementary question: I noticed that last time, when you did second reading, you were talking about patenting scents, taste and sound. That kind of piqued my interest, because I'm wondering how you would develop regulations to do that. If you take something like a taste, of course, that's biologically determined and is a response to the chemicals within a particular food or drink or whatever you're ingesting. During the regulations, then, would there be provisions to analyze all the components of certain tastes that people are trying to patent or copyright?
Senator Day: Thank you, Senator Dyck, for the question. You are absolutely right that I did mention that last time. I just happen to have it in front of me again, and I will read to you the change:
. . . includes a word, a personal name, a design, a letter, a numeral, a colour, a figurative element, a three-dimensional shape, a hologram, a moving image, a mode of packaging goods, a sound, a scent, a taste, a texture and the positioning of a sign.
They are all possible trademarks under the new legislation, this legislation. It's an add-on to the anti-counterfeiting. It has nothing to do with anti-counterfeiting, but it's just very typical of what we have been seeing over the past few years of little things being tucked in here and there, and they come back to haunt us.
There are no regulations that explain how you describe a scent. There are no regulations with respect to any of that. There has been no discussion, as Senator Ringuette pointed out, with any of the practitioners in the field as to how you would handle all of this. How do you define a texture, a scent, a taste, a smell? That is going to be very interesting. We each have our own ways of defining certain of those items, but from a trademark point of view it has to be something that you could describe that that person is infringing with respect to my right. Everyone has to be able to understand what it is, and there is nothing that helps us in that regard.
(On motion of Senator Fraser, debate adjourned.)
Supplementary Estimates (B)—Thirteenth Report of National Finance Committee Adopted, 2014-15
The Senate proceeded to consideration of the thirteenth report of the Standing Senate Committee on National Finance (Supplementary Estimates (B) 2014-2015), tabled in the Senate on November 27, 2014.
Hon. Joseph A. Day moved the adoption of the report.
He said: Honourable senators, this is the report of the Finance Committee in relation to the supplementary estimates. It is the thirteenth report of the Finance Committee and it is the product of the work that was done by the Finance Committee in reviewing the Supplementary Estimates (B).
What are the Supplementary Estimates (B) that we are studying? Supplementary estimates, honourable senators should be aware, are part of the financial cycle for the year of the government. The government needs money to function and it gets that money through estimates and the supply process, or through a statute that has been passed which makes provision for funds to perform a certain activity right in the statute. That's called statutory. We have statutory funding and we have estimates or supply. It's usually split about 60/40, with 60 per cent statutory and 40 per cent estimates each year. That varies a bit. That's what the supply cycle is all about.
In the first part of April or late March, we get main supply for the coming year. The first of April, the beginning of a new fiscal year, we are asked to provide interim supply, and then we do final or main supply at the end of June before our summer break. We then take a look at those items that the government and the various departments weren't able to put together and get approved before those main supply items came forward.
That is what we are dealing with here, and they are called supplementary estimates. There are three of them, typically. We looked after Supplementary Estimates (A) in June, Supplementary Estimates (B) is now, and Supplementary Estimates (C) will clean up all of those new initiatives that the government wished to implement but didn't get into main supply and were not supported by statute. That will be Supplementary Estimates (C).
We are at Supplementary Estimates (B). They came out a few weeks ago and we deal with these a bit differently from the normal bills because we have not seen the supply bill that goes with this yet. I anticipate that we may receive it in the next day or two, but we haven't as of yet.
We do study the estimates before receiving the bill, which is very similar to what we do with the budget implementation bill. We do a pre-study of that, but it takes a specific agreement here in the chamber to do the budget implementation pre-study. That is not so with respect to supply and the supplementary estimates.
We did the study and we've reported on it. This forms the basis of our understanding — and your understanding — of what will be in the supply bill for Supplementary Estimates (B) when it arrives. I'm sure my honourable colleague and deputy chair, Senator Smith, will be speaking on the supply bill when it arrives as well.
Initially, on behalf of Senator Smith and myself, I would like to thank all the members of our committee for the hard work they have been doing dealing not only with Supplementary Estimates (B), but also the budget implementation bill. All of those come to us at the same time. It was the same in June and it will be the same again in March. We will be seeing quite a few different supply items and finance items come forward. We'd like to thank all members of the committee for the extra work they have done, and all the members of other committees for what they have done to help out.
In particular, we would all like to make mention of the Library of Parliament personnel who work very hard on short notice to go from the hearings that we have on these supplementary estimates and other documents. They go from the hearings we have to then helping us to produce a report. The Library of Parliament personnel have been with us for a number of years and they are very knowledgeable and helpful. The two that help us in our committee are Sylvain Fleury and Raphaëlle Deraspe. The two of them are excellent in helping us reflect the work that we did.
Now, in the time I have, let me tell you a little bit about what you could find when you read the report. There is a lot of very interesting information in the supplementary estimates. We can't deal with all of it in the short time before this report, but we can continue to deal with the estimates throughout the year. That's the main work of the Finance Committee.
There are many aspects of the 140 government departments and agencies that exist in Canada. We have access to all of their activities and can bring them in before our committee to talk about their plans and aspirations and, at the end of the year, follow up on how well they have performed based on those plans and priorities.
For this particular Supplementary Estimates (B), we brought in a number of departments. Treasury Board almost always comes in because they form the overview for us. There was also Public Works and Government Services, Department of National Defence, Transport Canada, Aboriginal Affairs and Northern Development Canada, and Fisheries and Oceans Canada. I will give you some highlights of what we learned, and some of my colleagues might give you some of the other highlights.
What we're dealing with here is almost $2.9 billion dollars that you will be asked to approve when we receive the supply bill. Added to what we've already approved thus far, that amounts to $92 billion in supply estimates. Then, there will be, as I mentioned earlier, Supplementary Estimates (C). Last year, the total was $93.9 billion, and we are at $92 billion now without having seen Supplementary Estimates (C).
There is also information with respect to statutory spending, but we don't vote on that. It's here for information purposes. It is included in our report for your information purposes as well. It is quite interesting that the total of voted and statutory thus far this year is up to $242 billion.
What did we learn from some of these departments that we brought in? There were some undertakings given that we haven't seen answers to, and we will keep after those. I might be able to provide that information to honourable senators when the supply bill arrives and we go through second and third reading on that.
There is a new administrative tribunal being created. It's called the administrative tribunals support services of Canada. We will be seeing that particular tribunal given funds from here on out at each of the fiscal cycles. Its purpose is to look after and provide administrative support for 11 different tribunals.
I don't disagree with the initiative. There has been an attempt by the government to consolidate and save funds by having duplication of administrative services reduced. In the past, a lot of these administrative tribunals, such as the Public Service Disclosure Protection Tribunal and a number of others, were almost in a conflict of interest situation because they got funding from the department that might be under review by them. To create a separate funding for administration is a logical step, in my view.
There are 11 now going into this umbrella, and my guess is that if this works out, others will follow. One of those is the Social Security Tribunal. Honourable senators will recall two years ago the Social Security Tribunal was created out of about five or six other tribunals and appeal tribunals. That is now being supported administratively by this new body.
There are various items that we could bring to your attention, and I'll run out of time before I touch on all of them, but it's important that we look at the horizontal items because they deal with a lot of different departments. They give us a global number for the horizontal activity of that group of departments. That's something that we had asked for because we kept seeing government advertising in this department and that department and this agency, and we would like to see horizontally all of the money that's spent on that subject or other subjects. Quite a few are listed here, and that's very helpful to us in terms of understanding just what activities are going on. The government advertising program for this supplementary estimate horizontally is $21.4 million that is being asked for.
Nine organizations are involved with respect to environmental cleanup and environmental liabilities of contaminated sites. It is estimated that there is a contingent liability of the people of Canada with respect to environmentally-contaminated sites across Canada in the amount of approximately $11 billion. The government is asking in this supplementary estimate for $80 million to continue working on that not insurmountable but huge contingent liability.
An amount of $115 million is being requested to establish a Canadian securities regulation regime. We have seen other funds put into this Canadian securities regulation regime in the past and only certain provinces are involved in that thus far, as honourable senators will know. That's some of the information that we learned from Treasury Board.
Public Works and Government Services Canada is a huge department that does a lot of work, and we learned that its total budget is $6 billion, but there is a fee for service. If Government Services does a service for another department, it gets fees in. It gets $3.14 billion returned, so 52 per cent of its total budget is generated from revenue that it receives from other departments. When other departments are less active, it may have collected more based on historical numbers and has to pay back an amount, and we have found that in this particular year.
The Receiver General of Canada is within Government Services and the Receiver General of Canada deals with a cash flow each year of $2.3 trillion. That's huge money coming and going, and the Receiver General of Canada is under that particular department.
There are 140 different federal departments that are looked after by Public Works and Government Services.
The Department of National Defence is proceeding on a number of different fronts. We can't go into all of them, but there is $40 million for a memorandum of understanding —
Hon. Leo Housakos (Acting Speaker): Senator Day, your time is up. Would you like to ask for five more minutes?
Senator Day: Would honourable senators agree to five more minutes to finish this?
The Hon. the Acting Speaker: Are honourable senators willing to give an extra five minutes to Senator Day?
Hon. Senators: Agreed.
Senator Day: Thank you.
This $40 million is a periodic payment to keep Canada in the consortium with respect to the F-35 fighter jet. For $40 million, we are still in there. All this does is leave us at the table. This is not to buy, and it's not a commitment to buy, but it does put us in a position to make the decision to buy if we wish to and to get some of the technology that is developed.
I talked about federal contaminated sites as a horizontal item of about $90 million for this supplementary estimate, and 55 of that is the Department of National Defence.
For Transport Canada, honourable senators, I wanted to highlight that there is a government-owned, private-sector-operated initiative with respect to the Wood Islands Ferry from Prince Edward Island to Caribou, Nova Scotia. All the facilities are owned by the government, but the ferry operation is private. There is a contract in that regard. This is the direction that the government is going in a number of areas. We saw with AECL, Atomic Energy of Canada Limited, that movement toward the federal government owning the asset but the private sector running the business, whatever it might be.
There is the Cap-aux-Meules, Îles-de-la-Madeleine/Souris, Prince Edward Island ferry in that same category, and likewise Saint John, New Brunswick to Digby, Nova Scotia. All the docking facilities and the boat, et cetera, are all owned by the federal government. With respect to that last ferry service, there is a new ferry being purchased, which will then be operated by a private sector operator, Bay Ferries.
Honourable senators, those are a number of the items that we learned from Transport Canada.
Indian residential schools: This is under Indian Affairs and Northern Development Canada, which has promised to change its name but hasn't gotten there yet. There are a number of payments going to Aboriginal participation in West Coast energy development, Indian residential schools and implementation of comprehensive land claim agreements.
We've seen a lot of these in the past, and they just keep coming forward with other requests for funds.
Fisheries and Oceans Canada is another important area. I was pleased to see a renewal of the Pacific and Atlantic Integrated Commercial Fisheries Initiatives, which involve our Native people. Small craft harbours will continue. Renewal of the Canadian Coast Guard fleet involves giving some money to the dry dock in Vancouver because all of the noncombat ships, under the ship renewal program, will be built in Vancouver, and the combat ships will be built in Halifax. The Government of Canada is giving a significant amount of money to each of those shipyards to upgrade their equipment so that they will be more efficient in performing the contracts that they have already signed and already been granted the right to proceed on as soon as the government gives funds to them to proceed. They will be the yards that will be doing the work, but none of them are proceeding, at this stage, beyond the design phase.
Those things, honourable senators, and much more are in our report, and the supplementary estimates are there for your review. Again, on behalf of the Standing Senate Committee on National Finance, we thank you for your continued confidence in us in performing this work.
Second reading of Bill C-8, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts
On the Order:
Resuming debate on the motion of the Honourable Senator Tkachuk, seconded by the Honourable Senator Seidman, for the second reading of Bill C-8, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts.
Hon. Joseph A. Day: Honourable senators, permit me to say a few words with respect to Bill C-8. First, I thank Senator Tkachuk for giving us not one but two second reading speeches on this particular bill, which I've had an opportunity to review, and that's all I'll say about that.
Honourable senators should be aware that this particular piece of legislation is an act to amend the Copyright Act and the Trade- marks Act and to make consequential amendments to other Acts, but the short title is more important, I think, and more informative, and that is that it is an act to control counterfeit products. That's really what this particular piece of legislation is about. The precise wording of the short title, honourable senators, is "Combatting Counterfeit Products Act," and that is what this bill is primarily intended to deal with.
Why do we need this legislation when we already have legislation such as the Copyright Act and the Trade-marks Act? There are infringement provisions in both of those pieces of legislation that have been around for a long, long time. If someone misappropriates any rights under either one of those pieces of legislation, then there are procedures available in the legislation as it exists in order to deal with the inappropriate use or infringement.
Honourable senators, this bill is at second reading and we're trying to understand the principle or the purpose for the legislation. The government stated that counterfeit goods made of inferior material without quality control may cause problems such as health or safety risks and they undermine consumer confidence in the marketplace. That by itself might not be enough to convince you that we need more legislation because the legislation, as I said, already exists.
The government also asserts that these goods disrupt Canadian markets, lead to lost tax revenues for the government and increase costs for legitimate Canadian businesses. It also contends that resulting lost revenue for rights holders leads to delays in creating new products and innovative services. All the policy arguments are there, honourable senators, but it's generally believed that this legislation is, at least in part, an attempt to meet some international obligations that the government may feel it has in relation to an anti-counterfeit trade agreement.
The problem, honourable senators, is with respect to the Anti- Counterfeiting Trade Agreement, which, after several years of negotiation, was signed by Canada initially in 2011. Since that time, it has been rejected by the European Economic Community. It's been rejected by Australia. It has not been ratified by the United States. In fact, the only country with a free market economy that has agreed to this particular international convention is Japan, as I'm sure Senator Tkachuk is fully aware. Does Canada feel it needs to be a leader with respect to this particular international convention when we enter into free trade agreements with many countries around the world, none of which have ratified this particular scheme of legislation?
Why haven't they? That is the important point. Why haven't nations accepted the legislation that flows from this international agreement on counterfeiting? The main reason is that there aren't safeguards for individuals. It's too much of an intrusion into individual rights. That seems to be the main argument that's being made.
I will try to touch on some of those points, honourable senators, as I go through my presentation today so you can understand more about what changes should be made to this legislation. Having looked at the legislation at second reading, I'm not convinced that we should reject this legislation outright. In fact, it's probably a step in the right direction, as has been said by a number of witnesses. However, there are a lot of improvements that could and should be made to the legislation, and I'm hopeful that we will deal with those proposed changes with witnesses at committee stage.
There is some pressure on us to deal with this quickly, honourable senators. Honourable senators will know that I normally at this time would be at a meeting of National Finance on another matter that is of some urgency to the government and the government side. What is the urgency with respect to this legislation? I think it is important for all of us to question that.
Let me give you the history of this bill. It's gone through many, many steps along the way. It's gone through a prorogation and then was reintroduced. This particular legislation was introduced at first reading in the House of Commons on October 28, 2013. It took until October 2, 2014, for it to pass through the various steps in the House of Commons. They sent it to us, we've had it for about a week, and we're getting requests to act on this expeditiously.
Senator Downe: Shameful.
Senator Day: This measure was in the House of Commons for over a year. They sent it to us and said, "Please deal with it quickly." In other words, "Please rubber stamp another piece of legislation without looking at the legislation like you were intended to do."
Senator Downe: We will not do that.
Senator Day: And we will not do that and we should not do that.
Senator Downe: That's right.
Senator Day: I appreciate my honourable colleague agreeing with me on that particular point.
Let's talk briefly about what this legislation proposes to do, and then I'll touch on two or three areas where it doesn't do what it should do.
This bill creates new civil causes of action. There are rights for border crossing officers, customs officers, being given here. There are new civil remedies that are being given. There are new criminal remedies that are created. We looked at the Copyright Act two years ago. An extensive amendment of that Copyright Act has provisions with respect to criminal responsibility, which is normally a commercial type of legislation. That concept is being repeated here. The Trade-marks Act will now have criminal provisions in it as well. It creates the new criminal offence of prohibiting the possession of export of copies or copyright trademark goods, packaging or labels.
Understand that a trademark is and has traditionally been something that you place on a product or a service that distinguishes that product or service from anybody else's so it's distinguishable and it's unique, like a Coke bottle, for example, and Coca-Cola. Even though there are other cola drinks, Coca- Cola is a trademark, so it's a commercial right under this general heading that we call intellectual property.
Another area is copyright. Copyright is the original expression of a work or a piece of art. It could be music. It could be the floor plans for your house. If somebody copies the design of your house, they're not infringing copyright because the copyright is in the floor plans, but if they take your floor plans and have them copied and then take them to their own builder, they are infringing your copyright. That's the area of rights that we're dealing with here, and now they're expanding the sanctions from civil remedies, which have always existed, to also include criminal remedies. It exempts the importation of individuals. I think that exemption is important because if you happen to be travelling in China and you buy a watch and it happens to be what we would describe as a "knock-off," then that, in effect, is an infringement of trademark and possibly copyright, depending on what the product is. If you bring that back to Canada, you would be infringing our laws here. You would be infringing on these new laws, which are counterfeit laws, unless an exemption was placed, and that exemption is here. I think that is appropriate.
So the issue is importing for the purpose of resale and importing for the purpose of running a business with the product or goods that you're bringing in. It adds the offences set out in the Copyright Act and the Trade-marks Act to the list of offences set out in the Criminal Code for the investigation of which police may seek judicial authorization to use a wiretap. So these are new areas that I'm sure Senator Baker will be very interested in considering from the point of view of a commercial activity now falling into the criminal activity area. That's where this legislation is intending to go.
I hope Senator Tkachuk and I will be able to agree on having some witnesses come and talk to us about these particular areas. One issue in this legislation is that an individual or a company can request assistance from the border guards in Canada to determine when a certain product comes across whether it is an infringement of copyright. It's a counterfeit product; please seize it.
Now, you can think immediately of how that could be abused. If somebody wanted to keep a competitor's product out for a while, just wanted to slow down the market for a little while, then that's exactly what he or she would do; they would use the border crossing guards to seize the product and hold it for a period of time. There's no sanction and there's no oversight for the border guards to act as the police in this particular case. That is an area that I think we need to work on.
There is also no reporting on how many seizures take place during a year and how many times these particular provisions will have been exercised. It would be an easy thing to do, to have a report as public disclosure of what's going on. That's another area that I think should help to avoid abuse of process, which is very possible in this particular case.
There's the area of fundamental change to the Trade-marks Act that has nothing to do with counterfeiting, and when I read through that, it reminded me so much of the omnibus legislation that we have before us; you've got a fundamental document on one thing and then you sneak a few other little items in on it.
The changes with respect to the trademarks aspects of this are they expand what can be used to distinguish. It used to be a name or stripes, such as for Adidas running shoes. It was some mark that you could see, but now it's being expanded to include smell. When you file an application for a trademark, how do you describe the smell of the product such that you could say someone else is using the same smell to infringe my trademark?
Senator Robichaud: We need to have registered noses.
Senator Day: We'll have to do a lot of thinking about this; perhaps little bottles of different types of smells or scents to help distinguish the particular one.
This needs more analysis. These measures won't get the attention that they should get because they are tucked in here with this other legislation.
Smell, taste, texture, signs and the whole concept of use of these particular things that expand the concept of trademarks are areas of concern. The texture of something is my trademark. That is very difficult to prove and establish when you register. It's not necessary to introduce a piece of legislation that is intended to relate to counterfeiting and the manufacture of a product to ship out of Canada or a product manufactured somewhere else in the world and brought in to Canada, which is an infringement or a counterfeit of the original owner's product and that is what this legislation is intended to.
That part of the legislation I can support as an expansion of the legislation that should be in place for an international trading nation, but let's not say we're doing this because of international obligations. I asked that question of Senator Tkachuk when he gave his first speech because I had read that this was about international obligations. That is what has been said by several government representatives, that this is really to help Canada meet its international obligations under international treaties, and that's not the case, but that doesn't mean it's not an improvement in the law. It just means that we should be watching this very carefully and creating what is right for Canada and Canada's role as a trading nation in the world.
Honourable senators, those are my preliminary comments with respect to this particular legislation, which I look forward to studying in committee to delve into some of these issues more thoroughly and come forward with a report and a proposal at third reading.
The Hon. the Speaker pro tempore: Are senators ready for the question?
Hon. Senators: Question.
The Hon. the Speaker pro tempore: Is it your pleasure, honourable senators, to adopt the motion?
Senator Day: On division.
Some Hon. Senators: On division.
(Motion agreed to and bill read second time, on division.)
Referred to Committee
The Hon. the Speaker pro tempore: Honourable senators, when shall this bill be read the third time?
(On motion of Senator Tkachuk, bill referred to the Standing Senate Committee on Banking, Trade and Commerce.)