Bill C-11 Committee on Feb. 28th, 2012

[Ian MacKay]

As I said before, we're talking about millions of dollars. From year to year this applies to about 5% of rights-holders who may join up with us; after a tariff has been certified it may be longer. So if you're looking at 5% of our revenues being subject to this orphan provision on an ongoing basis, that's just going to add up year over year over year. Our overall gross revenues are about $30 million a year, so 5% of that each year...this just grows and grows and grows.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. MacKay and Mr. Del Mastro. We were well over the five minutes there.

We will now go to Mr. Benskin for five minutes.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Thank you.

I have two things to cover, and I guess they will be mostly to the Canadian Federation of Musicians.

First off, on the moral rights issue, I liken it to how you build a house, and somebody moves in and decides they're going to paint it orange and green and put a windmill outside, and you're supposed to be okay with that. If you own that property, it stands to reason that you should have some control as to how that property is used, whether it's for commercial use or not.

I'm assuming this is something that is truly important to musicians or to artists and rights-holders.

[Bill Skolnik]

Yes, it's vital, absolutely, for the examples I gave—not that these things will occur, but we're talking about mashups and unauthorized use.

Moral rights are our right in Canada, and we're grateful for that and we're entitled to that. We just think they need to be strengthened under this act, and it's not being looked after as well as it could be.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Thank you.

I'd just like to get on to the funds distribution. You brought up that basically mechanical rights and airplay rights are paid to the rights-holders, which are the writer and the publisher, right?

[Bill Skolnik]

Mechanical? Yes.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Yes. Now the private copy levy money that comes in, that is collected and it goes to all the people involved. I think that's a very important distinction, because that's where the danger lies.

When the session musicians and the background singers are not participating in the revenue that is coming in and being generated by this song, they themselves cannot then make a living. Not to use the rather histrionic “the sky is falling” and “the industry is going to collapse” terminology, but this is something that has helped individual musicians, session players, participate in the money being generated by songs being played or becoming popular. Would you expand on that?

[Bill Skolnik]

Yes, exactly. A session player, for anybody who's wondering, or a side player, is someone who accompanies the featured artist. So when you see a band, you think that band remains intact. Most of the time they don't. Those are individuals who are hired by what's called the musical contractor or the musical leader to play for that particular artist, particularly in a concert situation and in recording. So the band that you see live is not the band, necessarily, that you will find in the studio. Those players who participate—and they bring rights through Re:Sound and through the other collectives. That comes to, yes, $2,000 to $3,000 a year, depending upon the airplay, you're absolutely right. What's important is it's a source of income that they've come to depend on.

Nobody's arguing with the principle, by the way. Nobody here at this entire committee says it's not correct that they get that. What we're arguing about is the means of delivering that, and how it's stored and how copies are made.

We believe—and that's what we're asking the government to consider—we need to keep that principle in front and say, yes, okay, the technology doesn't work anymore, it doesn't make sense, but we need to find a mechanism that still upholds the principle, still gets this cash back to the players who have depended on it. It's a small amount, but it does pay for studio time, it does pay for instrument maintenance and a number of different things, and it's been there for 20 years.

We're just asking for maintenance. We're not asking for something new. We're asking to keep something that's been there for a long time.

[The Chair, NDP, Glenn Thibeault]

Mr. Benskin, you have one minute.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

That hasn't been around for a very long time. It's taken a while for musicians to get to that point where mechanisms were in place to make a living doing what they do. My fear is that things are being pushed back to, “Here, we'll give you 50 bucks, shut up and go away, and we're going to make money on it.”

[Bill Skolnik]

Absolutely.

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Would you expand on that?

[Bill Skolnik]

It's a lot tougher now to make a living as a musician than it used to be, there is no question. We thought it was hard then. The 1980s I think were the apex. I think that was the best time. Since then, because of digital distribution, because of a number of pressures, it's become more and more difficult. Successful musicians who get airplay have become more dependent on this type of supplemental income.

The music industry is not going to collapse and people are going to be creative, no matter what. It seems to me that in this country we should at the very least maintain the standards we've established for them and encourage them. We've encouraged them by keeping these standards, and now we're looking at diminishing those standards. I don't think it's deliberate. I don't think anybody means to do it.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Skolnik and Mr. Benskin.

For the last five minutes we will go to Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair, and thanks to the witnesses for coming.

I just want to clarify. Mr. MacKay, you made a comment in your presentation when you were talking about the $1.25 million that you want to see changed. You talked about an opportunity to bring in millions of dollars at no cost to taxpayers and consumers—I think that was the wording you used when you referred to that. Am I correct in understanding that if the rules were to change, it would result in a cost to a radio station of about $60,000? Is that about accurate in terms of the royalties they would pay more for?

[Ian MacKay]

The royalties that radio stations would pay more of would depend upon the size of the radio station. A radio station that was right at the $1.25 million mark would pay about $18,000.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

This is based on what calculation, if you don't mind?

[Ian MacKay]

That's based on the rate the Copyright Board sets even with the existence of this subsidy. The Copyright Board sets tiered rates. They set different rates for different types of radio stations and different sizes. They have always set a lower rate for stations under $1.25 million, and then they have said they cannot apply it in our case because of this legislative position.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

So how would that impact a station bringing in $2 million in revenue?

[Ian MacKay]

A station with $2 million in revenue at the moment pays nothing on that first $1.25 million.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

How would it impact if there were changes made?

[Ian MacKay]

They would pay in addition to what they're paying now; they would pay the $18,000 for the first $1.25 million.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

So $18,000 in the same month.

Mr. Conway, in terms of running your station, you say you employ I think 25 in one area and 15 in another. If you were to incur a cost to your business of $18,000 more, how would that impact your ability to hire people to do the things you need to do? Would there be an impact on one or more of your employees perhaps? Is that possible?

[Don Conway]

Actually, that's what I said in the presentation and in a response before, that any further payment of tariffs is going to impact the hiring of someone else. Whatever we would pay for a particular...and it's a graded salary grid. I'm not sure how, but the $18,000 certainly would have an impact on us hiring folks.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

So it's fair to say that the idea that there would be no cost to any taxpayer or consumer would be incorrect. Obviously there would be an impact: the person who doesn't get a job or is let go because of the change in the rules. Right?