Evidence of meeting #38 for Canadian Heritage in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was copyright.
A recording is available from Parliament.
5:05 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
Do you have a similar concern, as many of the witnesses have, with the significant concentration and vertical integration in the telecom industry?
5:05 p.m.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
Is the member referring to the convergence of telecommunications and broadcasting?
5:05 p.m.
Liberal
5:05 p.m.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
Well, the whole issue of vertical integration is the subject of an upcoming CRTC hearing, which makes it difficult for me to comment in terms of any concerns we might have.
5:05 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
How about this one: are you concerned about the independent broadcasters and what vertical integration will do to access for them to product, and to their cost structure?
5:05 p.m.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
I could speak to the Canada Media Fund, because that's where those things tend to come together and that's where we have some evidence. The Canada Media Fund, in fact, does provide support to independent producers. It now also allows for broadcasters to do in-house production at about 15%, but most broadcasters have not reached that limit. Most of the money is still going to the independent production sector.
5:05 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
Will the fund meet the needs of the industry as it's growing? How are the funds allocated between convergence and the experimental stream?
5:05 p.m.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
First of all, in terms of meeting the needs, it's one piece of the puzzle in terms of the funding for the creation of content. It is a fund that typically grows every year. The CMF board for 2010-2011 has decided that about $322 million will go into the convergence stream and about $27 million will go to the experimental stream.
5:05 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
On a slightly different subject, we had a meeting with the music industry. They've watched their industry contract and sales decline. We know that soon people will probably cease to buy CDs and tapes entirely.
What recommendations can you provide to the music industry as they continue to see their revenue decline? How should they change their business model?
5:05 p.m.
Director General, Broadcasting and Digital Communications Branch, Department of Canadian Heritage
Sales are definitely going down. There's no evidence yet that the increase in sales of digital is making up for the decrease in sales in physical format.
The dominant business model is not clear. In terms of replacing the revenue from CD sales, what's going to emerge is not clear, but music streaming is popular. We're seeing in other jurisdictions and other countries that it is on the rise. It is based on revenue from advertising and subscriptions, so it may be a viable alternative to unpaid downloading via peer-to-peer sharing.
5:10 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
We have seen an extreme reaction to both sides of the industry over the broadcast mechanical in Bill C-32. Is this provision fair, in light of what's happening in the industry?
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Is that the ephemeral broadcasting exception?
5:10 p.m.
Director General, Copyright Policy, Department of Canadian Heritage
I can start off.
Just to be very clear, the broadcasters pay a tariff to copyright owners for the right to broadcast music. Currently they also pay a tariff for making the temporary technical reproductions that are merely incidental to that broadcasting process.
Bill C-32 removes the requirement for broadcasters to pay the tariff for these reproductions, while retaining the requirement to pay for the right to broadcast itself.
Twenty years ago, with the technology at that time, these payments didn't exist. Radio stations would play music directly from CDs with no reproductions, but technology has changed, and radio stations now broadcast via computers in a process that requires digital copies of songs to be made. Under current law, broadcasters are required to pay for these incidental copies. Removing this payment requirement will promote the adoption of new technologies in broadcasting and make the rules governing broadcasting technologically neutral.
Radio stations and record labels determine their business arrangements with broadcasters in the delivery of song tracks to radio stations for broadcasting. Copyright law, as marketplace framework law, is supposed to allow for and promote these kinds of market solutions. As technology evolves, the removal of the ephemeral recording exception makes this treatment of broadcasters technologically neutral.
5:10 p.m.
Conservative
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
No, that's fine, thank you.
5:10 p.m.
Conservative
5:10 p.m.
Liberal
Bonnie Crombie Liberal Mississauga—Streetsville, ON
Perhaps I can get some clarification on digital locks and enforcement. What is the enforcement provision for violations? Who will pay for R and D? Who enforces the financial penalties? Who will collect the fines? As well, do you have an example of any previous convictions?
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Your question is just about the....
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Is that enforcement of the TPM provisions, or just the overall enforcement of rights under the Copyright Act generally?
5:10 p.m.
Director General, Marketplace Framework Policy Branch, Department of Industry
Yes. I can start with the broad scheme, which is the Copyright Act.
It's mainly left up to rights holders to enforce their rights. It is similar to other property rights in that it tends to be left to the property owner to enforce those rights. There are some criminal provisions in the Criminal Code as well, which are enforced by the RCMP, but the main action is taken by the rights holders under the Copyright Act. It is similar to the TPM provisions that are in the bill as well.
5:10 p.m.
Director General, Copyright Policy, Department of Canadian Heritage
Bill C-32 would make the circumvention of a technological protection measure a copyright infringement, so what Ms. Downie mentioned as being the administration would come into play for this as a violation of copyright.
5:10 p.m.
Conservative
The Chair Conservative Michael Chong
Thank you, Mrs. Motzney.
I will let Mrs. Lavallée wrap it up.
We have to discuss the report in camera for 10 minutes, so that we can instruct our analysts on the recommendations.