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Canadians should be on guard this holiday season against an influx of counterfeit and uncertified products that pose a risk of serious injury or illness, officials with several federal agencies warned Thursday.
No longer limited to fake Rolexes and imitation designer handbags, counterfeiters produce nearly every type of consumer product, from automobile brake pads made with sawdust to chemical-laden toothpaste and fake prescription drugs, says a recent Commons committee report.
“It's substantial and it is a global problem,” said Doug Geralde, director of audits and investigations with the Canadian Standards Association and chair of the Canadian Anti-Counterfeiting Network.
“It's an underground economy (worth) billions and billions of dollars.”
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Mr. Geralde joined officials from Health Canada, the RCMP and the Association of Canadian Fire Chiefs in Toronto Thursday to press for greater consumer vigilance against counterfeiting. They planned to use heavy construction equipment to destroy a large pile of recently seized fake or recalled goods.
Among the items were animated lamps, work boots, hockey helmets and Christmas lights, Mr. Geralde said.
Ken Hansen, director of the RCMP's federal enforcement branch, said shoppers should consider the three ‘Ps': place, price and packaging.
“Consumers should be careful where they buy the product from and should watch for indicators such as an abnormally low price, spelling mistakes or signs of shoddy construction or performance,” he said in a release.
Ottawa is under increasing pressure to tighten federal regulations on product safety, counterfeiting and piracy amid several high profile cases, including this summer's tainted dog food scandal, a toothpaste recall and the discovery of high levels of lead in paint used on some Chinese-made toys.
That followed a coroner's report released in July which established the first clear-cut case of a death stemming from counterfeit drugs bought on the Internet. The case involved a 58-year-old Vancouver Island woman who died in December 2006 after taking pills she purchased from a bogus online pharmacy.
Health Minister Tony Clement has ordered a sweeping review of product safety standards, with a report expected within weeks. Up for consideration is an anti-counterfeit strategy for health products, “product of Canada” labelling and increased co-operation with the U.S. and Mexico.
On Tuesday, the government unveiled a one-stop website for recall advisories involving food and children's products.
But some critics warn Ottawa is creating policy based on too broad a definition of counterfeiting, using the “umbrella” term to link disparate issues of labelling, certification, trademark, intellectual property, and public health and safety concerns.
“Part of the problem here is that certain groups have been very glad to have that very broad umbrella,” said Michael Geist, Canada research chair of Internet and e-commerce law at the University of Ottawa.
“Before we launch in to all sorts of new policy making and new laws ... I think we've got to get a better handle on the scope of the problem. I think we also have to better understand the difference between the public health and safety issues and the rest.”
The scope of Canada's counterfeiting problem is difficult to gauge. The Manufacturers and Exporters of Canada estimate the economic impact of counterfeiting to be between $20- and $30-billion a year; the RCMP will no longer commit to a specific figure, but insists it is in the billions and that much of the trade is run by organized crime.
Mr. Geist said there are no hard data yet to support those figures or what kind of impact counterfeiting has had on the health and safety of Canadians.
“We have poor definitions, poor data, (and it's) leading to some very bad policy,” he said.
The standing committee on public safety and national security, which tabled its report in June, concedes Canada has no comprehensive independent study on the impact of counterfeiting and piracy, due in large part to its clandestine nature, the report states.
The RCMP said it was involved in 1,800 counterfeiting investigations from 2001 to 2004, laying more than 2,200 charges against individuals and another 100 charges against companies. That's on top of intellectual property crime investigations by local police forces.
Apart from potential threats to health and safety, Mr. Geralde said counterfeiting costs Canada jobs, tax revenue and consumer confidence.
The committee made 14 recommendations for the government to consider, including new criminal provisions in the Trade-marks Act, increased search and seizure powers for Canada Border Services and tougher penalties for importers of pirated and counterfeit items.
The committee stressed that most counterfeit products are made overseas.
The World Trade Organization opened a formal investigation last month into allegations China is providing a safe haven for product piracy and counterfeiting.
The U.S. complaint over China's enforcement of intellectual property rights is the culmination of years of agitation in Washington and elsewhere over one of the world's biggest sources of illegally copied goods, ranging from DVDs, CDs and designer clothes to sporting goods and medications. The WTO panel's scope will be limited to whether Beijing has taken sufficient action to protect intellectual property rights, but it could ultimately authorize U.S. trade sanctions against China worth billions of dollars annually.
– With a file by AP
