The allure of brands like Prada or Gucci is enough to pluck whole paycheques from some consumers. But the itch for luxury sprawls beyond the grasp of legitimate business and into the hands of a multi-billion dollar black market for fakes.
But why should Canadians care that a wealthy brand can’t charge steep sums for goods? Lawyer Michael Manson explains that Canadians just aren’t educated about the highly organized nature of counterfeiting.
“This isn’t a mom and pop industry which some people seem to think, you know, some merchant (is) making a few bucks on a cheap product. This is organized back to major factories throughout China, which is the biggest exporter of counterfeit goods in the world.”
Michael adds that the criminal nature of counterfeiting undermines the economy and can have other human costs.
“They’re not paying taxes, they’re bringing it in illegally… and then you go back to the countries where this is done, and what you find is there’s child labour being used. There’s almost inhuman work conditions being imposed on these people to make these products.”
Lorne Lipkus has seen the black market close up. He’s an anti-counterfeiting lawyer based in Toronto.
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“Counterfeit is everywhere in Canada. Small towns, cities, it’s there. And there’s more of it today than there was last year,” Lorne explains. “I’ve been to the finest malls in Canada and found counterfeit on a consistent basis over the years. Nobody is immune to the counterfeiting problem.”
Lorne estimates at least 5 to 7% of the global economy could be comprised of forged goods, but he admits no one has ever quantified just how big the market truly is.
What we do know is how counterfeit comes to Canada. The first port of call for fakes is Vancouver, which handles two million shipping containers a year. Almost none of these containers are ever inspected to see what’s inside. Experts estimate between one and two per cent of containers are scanned at the border. Michael Manson deals with the aftermath of a leaky border by fighting intellectual property cases. He believes Canada falls short of how other countries control their borders.
“They don’t have resources, they don’t have time to commit to it. And so they basically say to the brand owners; get your lawyers, deal with it civilly, we can’t deal with it.”
Even if the border service agents do find fake goods, Canadian laws don’t give them authority to seize the shipment. The best they can do is call police to let them know a container of counterfeits is in town. We asked the Canada Border Services Agency to explain why they don’t have the power they need to choke the flow of fake goods right at the point of entry into the country. They declined our request for an interview.
In 2011, a one-time operation between the RCMP and the Canada Border Services Agency helped intercept 78.5 million dollars in fake goods within Toronto’s Chinatown area. The seized trailers were the culmination of six months surveillance partially overseen by RCMP Inspector Todd Gilmore.
For Gilmore, the solution to slowing counterfeit in Canada is no secret.
“We’ve had a great partnership and we always have a great partnership with the Canada Border Services Agency. That great partnership is why we are sitting in a trailer full of counterfeit goods, because they have agreed to help us to work together, to choke off the flow if it can happen. However, they need to have those powers. They don’t have the powers to look for counterfeit goods, and you know, that is a problem.”
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