Industry Committee on June 14th, 2018

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

With only about 20 seconds left, does the act encompass this? Has it kept up with the distribution systems that are being used? Are there things that the act doesn't cover that we need to consider?

[Eric Baptiste]

I don't believe there's an issue there. We have more of an issue in licensing because of the myriads of exceptions. Distribution is the thing we do. We care deeply about this. Our members, my 150,000 or so writers and publishers, would be mad at me if we didn't try very hard to be as precise, as accurate, and cost-effective as possible. It is our obsession.

[Lloyd Longfield, Liberal, Guelph, ON]

Also, the barriers to entry for the artists are a lot lower now, so there are more artists. I see that 40,000 businesses were licensed to play music in 2008. Now there are 100,000, so the market is growing. It's just that we're not getting the money to the right people. The market needs adjustment for the artists to benefit from the growth in the market opportunities and the low entry barrier to getting into the market.

[Ian MacKay]

Yes, and that growth in the number of businesses, if I'm getting your numbers right, is often in the very small businesses, the little individual users of music. Yes, we're getting more of them licensed and paying, but they're paying tiny amounts versus the radio stations and the TV companies and everything. That would make a huge difference. That's where you're talking millions of dollars in royalties that currently are sheltered and not paid for, as opposed to $20 here, $30 there.

[Eric Baptiste]

If I may say, fees are pretty important. One example at SOCAN is international revenue. We have agreements with a 100 organizations around the world. We received $76 million last year from around the world—from the U.S., Germany, France, and the U.K. Our fee on this is zero. We believe that because our colleagues in other countries have already done most of the work, we should not levy an extra fee on these guys.

We care very much about how much we spend to do what we do, and we don't want to layer fee after fee. We are in a cost-effective business area.

[Lloyd Longfield, Liberal, Guelph, ON]

Terrific. Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. We're going to move to Mr. Masse. You've got two minutes.

[Brian Masse, NDP, Windsor West, ON]

One of the things I've seen in my community is that technology also was behind the times in terms of.... DIRECTV was a good example. I'm not sure if you're familiar with that. Really what it was about, though, was a better product of technology to prohibit some of the copying that took place. There was a big push to crack down on the consumers, but at the end of the day, it became about protective devices and that.

Do you have any comments on the production of technology and devices and the easily accessible copying that can take place via some of our technology? I'm curious to hear if you have any comments on that because vinyl, obviously, was very difficult to copy. We got into tape and CD productions that lend themselves to easily accessible copying, and digital perhaps is even easier in some respects—more frustrating for others.

[Eric Baptiste]

Generally speaking, we welcome more use of music. The more music is being listened to and enjoyed, the better for us, for our members, our creators, our publishers, our record labels.

The only thing we want the committee and Parliament to keep in mind is that the expanded use that should be easy for consumers has value. We just want our creators, the companies that we represent—not us, the collectives are not important—to benefit from that increased value in a way that is commensurate with the enjoyment it is creating for Canadians, and the fact that businesses can be built or expanded based on those technologies that bring more music in a more ubiquitous way to Canadians.

[Brian Masse, NDP, Windsor West, ON]

Do you have any comments about sharing on multiple platforms? What's your position on that? For example, if you purchase a song, what's your position on being able to play it, for example, on a PlayStation, an iPad, or any other device? What's your position with regard to multiple platforms for the same music, or movie, or book, or anything else for that matter?

[Lyette Bouchard]

When it comes to private copying, one thing is clear: we want artists, authors, and music producers to be compensated for additional copies that are made. Of course, when someone buys a song, the levy and any other amount owed to rights holders have been paid. The private copying levy applies to any extra copies that are made on any medium. That's what we want the regime to embrace.

Are you asking about making copies on different devices?

[Brian Masse, NDP, Windsor West, ON]

I'm curious about your position. Say you purchase a song. You purchase a version of O Canada from an artist. Do you agree with the purchaser then being able play it on multiple platforms, or just one platform, with their paying for different platforms?

[Lisa Freeman]

If I may add to what Lyette said, our members at CPCC—again, we're an umbrella collective—are very clear that their preference is to license use as much as possible. Typically, if you are consuming music through a legal service, you are also acquiring the right to make various copies of those works. The private copying regime is for those copies that can't be licensed.

[Eric Baptiste]

I believe it's a market issue. If I understand your question correctly, it's about portability. It's about interpretability. We believe that the marketplace is better suited to resolving this issue. As somebody who is of a certain age now, I have bought some songs in vinyl form, and then on CD, and then the download, and now I'm enjoying the same songs by streaming services.

Consumers are able to decide whether there's value for them if they have to repurchase or—

[Brian Masse, NDP, Windsor West, ON]

That's what I'm trying to get at. Do you believe in the portability of a purchase versus actually having to make a separate purchase per type of media. So if you bought it on vinyl, and then if you want to listen to it in digital format, then you should buy it again. Is that your position?

[Eric Baptiste]

I did. We all did buy them again, and we were happy to have what we felt at the time was the ease of use and the sound quality of the CD. Then better vinyls were issued, and some people—not me—bought other vinyls more recently that are better quality than the ones manufactured in the seventies or eighties.

It's not a SOCAN issue. We deal with performing rights, so this is not directly related, but my personal opinion would be that it's a market issue and that we should let the marketplace resolve it.

[Solange Drouin]

I would like to add something. I have read many witnesses' briefs. We don't want to restrict the usage of music. I guess it's clear from what Eric said that the more we use music, the better. It's just that we want to be compensated for it. We want to enter into an agreement. We don't want to restrict music. We want the music to be all over the place, but at the same time, we want to have the tools to go and get the money where the money is. There's a lot of money in the music industry, but it's not in the hands of the music creators; it's in the hands of the Internet service providers, the music services.

There's a lot of money in the music industry, but it's not in our pockets. We should get our fair share from all of these businesses that make money off our products.

[Lyette Bouchard]

This is why we need to fix the Copyright Act, which is now, as Solange said, like Gruyere.

We have to fix those holes, make sure to be compensated, and leave aside those exemptions that hurt the creators.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We have time for seven minutes here and seven minutes there. I gave you your extra time.

[Brian Masse, NDP, Windsor West, ON]

Yes, you did. You have been fair, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Mr. Baylis, you have seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Mr. Chair, I will share some of my time with Mr. Longfield.

First of all, could I ask all four of you to provide us with some data? I don't need it right now. I would like to know how much your revenues have changed over the last 20 years. If that's feasible, could you go back 20 years and show us, “This is what we got, and this is over the years”, so we can see the progression and see how it has changed over a 20-year period?

Could you also include your expenses? I would imagine your expenses would have changed as well. If you can imagine two charts you could provide to the clerk, that would be very helpful.

We're going to finish our example, and then I'm going to pass it over. If I understood, Mr. Daigle, the Festival internationale de Jazz de Montréal is a big festival. They use music, and they compensate the artists when the music is used. Another festival in another city might call itself, say, the XYZ festival of X town, or X festival, and they say, “No, we are a charity, and we don't want to pay.”

How do you propose to fix that?

[Gilles Daigle]

There are two ways.

First of all, there is this notion of activities that are made with, say, a “motive of gain”. Without getting into the details, it's an expression that has been used by the Supreme Court of Canada in analyzing and determining exactly what constitutes a charitable activity. We think that will clarify what is intended by that exemption in the act.

The second, and more important way—because this seems to be the biggest part of the problem relating to that exemption—is making it clear that merely acquiring charitable status, either for income tax or other purposes, or under statute, does not automatically make you eligible for this exemption.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

For example, someone could say, “I run this festival and I pay myself $500,000 or $1 million a year, but it's to charity, so I rake off all the 'non-existent' profits.”

[Gilles Daigle]

Exactly or, quite frankly, even more simply than that, they'll just waive the charitable registration they've obtained from CRA and say, “That's the end of the matter. I qualify.”