This week the Canadian IP Council, the Canadian Chamber of Commerce’s IP lobby arm, issued a release placing Canadian counterfeiting costs at $30 billion per year. That figure is being used to lobby the government to enact new border measure provisions that could lead to the searching of luggage as travellers enter Canada. It is tempting to dismiss the claims on the basis that the policy rationale makes no sense – if counterfeit toothpaste is indeed “coming across the border in droves” as the Chamber claims, searching traveller luggage won’t address that issue. Moreover, it should be noted that even the Anti-Counterfeiting Trade Agreement features an exception for de minimis imports that an individual might carry as it recognizes that addressing counterfeiting concerns does not involve targeting individuals. Yet given the decision to resurrect the bogus $30 billion figure, it is important to again call attention to its origins and how it is simply a fabrication.

[Update: New post with the Chamber’s response and more fake figures]

Several years ago I examined the source of the $30 billion claim, which has been repeated on many occasions over the years. The review started with an Access to Information request with the RCMP for the source of the $30 billion claim, which was found in a 2005 report. The RCMP responded that the figure was based on “open source documents found on the Internet.” What were these documents? The RCMP provided two:

First, a March 2005 CTV news story reported unsubstantiated claims by the International Anti-Counterfeiting Coalition, a global anti-counterfeiting lobby group made up predominantly of brand owners and law firms, that some of its members believe that 20 percent of the Canadian market is “pirate product.”  That 20 percent figure – raised without the support of any evidence whatsoever – appears to have been used by IACC to peg the cost of counterfeiting in Canada at $20 billion per year.

Second, a 2005 powerpoint presentation by Jayson Myers, then the Chief Economist for the Canadian Manufacturing and Exporters, included a single bullet point that “estimated direct losses in Canada between $20 billion and $30 billion annually.” The source for this claim?  According to Mr. Myers, it is simply 3 to 4 percent of the value of Canada’s two-way trade.

In recent years, the RCMP has backed away from the $30 billion claim. In its August 2010 report on IP crime, it declined to set a figure, acknowledging that the numbers “have been subject to debate in recent years.”

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