House of Commons Hansard #92 of the 40th Parliament, 3rd Session. (The original version is on Parliament's site.) The word of the day was copyright.

Topics

Private Members' Business--Bill C-507
Points of Order
Routine Proceedings

November 2nd, 2010 / 10:10 a.m.

Regina—Lumsden—Lake Centre
Saskatchewan

Conservative

Tom Lukiwski Parliamentary Secretary to the Leader of the Government in the House of Commons

Mr. Speaker, on October 7, 2010, you raised concerns about four private members' bills, which, in your view, appeared to impinge on the financial prerogative of the Crown and you invited members to comment. One of the bills you mentioned was Bill C-507, An Act to amend the Financial Administration Act (federal spending power). I am rising today on a very lengthy point of order regarding that bill.

Bill C-507 would amend section 26 of the Financial Administration Act, which states:

Subject to the Constitution Acts, 1867 to 1982, no payments shall be made out of the Consolidated Revenue Fund without the authority of Parliament.

In other words, section 26 does not provide authority to make payments out of the Consolidated Revenue Fund but establishes that payments out of the fund can only be made with the authority of Parliament.

Clause 2 of Bill C-507 would add a series of subsections to section 26. A new subsection 26.1(1) would provide that no payment from the consolidated revenue fund shall be made for matters listed in section 92 and paragraph 92A(1) of the Constitution Act, 1867, that are under provincial jurisdiction.

A new subsection 26.1(2) would enable payments to be made from the consolidated revenue fund to provinces which have delegated to the government the power to incur expenditures referred to in subsection 26.1(1) or the responsibility to administer programs associated with those expenditures, or both.

A new subsection 26.1(3) would set out the duration and nature of the delegation referred to in subclause 2(2). A new subsection 26.1(4) would enable the federal government to make a payment out of the consolidated revenue fund to a province where the federal government proposes incurring expenditures or administering a program. A new subsection 26.1(5) specifies that such a payment may be made in the form of a transfer of a taxation field.

The provisions of Bill C-507 have two impacts related to the need for a royal recommendation. The first impact is to alter the terms and conditions of original royal recommendations authorizing existing payments out of the consolidated revenue fund for grants or direct payments to provinces and municipalities.

In the case of grants, under existing statutes, federal grants to the provinces can be either conditional or unconditional. Two examples of conditional grants to provinces are the Canadian health transfer, also known as the CHT, and the Canadian social transfer, also known as the CST.

In order to receive the CHT, provinces must meet federal standards and comply with the requirements of the Canada Health Act in sections 7 to 12. In order for the provinces to receive the CST, grants are subject to a prohibition on minimum residency requirements for social assistance. Bill C-507 would change the terms and conditions of these existing grants or transfer of grants to the provinces by making them unconditional, thereby waiving the conditions related to these transfers.

In the case of direct spending, under existing statutes direct spending in the areas of provincial jurisdiction occurs when the federal government allocates money directly to individuals, agencies or municipalities. An example is the transfer of federal gas revenues to municipalities and the universal child care benefit. Bill C-507 would no longer allow these transfers for direct spending to be made to municipalities but, rather, would only allow the federal government to transfer money directly to the provinces.

This would change the manner in which existing direct payments are made since these payments would no longer be made to the currently authorized recipients but to the provinces. Precedents indicate that changes to the terms and conditions of a royal recommendation require a new royal recommendation.

On June 21, 1972, the Speaker ruled in the case of Bill C-220, respecting regional incentives development data:

...it is not only the amount approved or recommended by the royal recommendation that cannot be changed but there is also a prohibition against a redirection of the amount that is approved or recommended to the House in the royal recommendation.

The second impact of Bill C-507 relates to how its provisions would authorize payments out of the consolidated revenue fund to provinces that choose to opt out of federal programs in areas of provincial jurisdiction.

I would note that on April 14, 2010, the member for Saint-Lambert introduced Bill C-507 and stated that the bill would:

...introduce an automatic and unconditional right to opt out with full financial compensation and would establish permanent compensation in the form of the transfer of tax room.

In other words, the bill would provide for the authorization of payments out of the consolidated revenue fund to provinces for purposes not currently authorized in statute. Page 834 of House of Commons Procedure and Practice, second edition, states:

A royal recommendation not only fixes the allowable charge, but also its objects, purposes, conditions and qualifications. For this reason, a royal recommendation is required not only in the case where money is being appropriated, but also in the case where the authorization to spend for a specific purpose is significantly altered.

Precedents demonstrate that the Crown alone institutes all public expenditure and Parliament may only authorize spending that has been recommended by the Governor General.

On October 13, 1983, the Speaker ruled certain motions in an amendment at report stage that would have directed the government to establish a system of payments to agricultural producers inadmissible because they imposed a charge upon the treasury.

On May 28, 1990, the Speaker ruled motions in amendment at report stage, which would have substituted a different escalator clause for fiscal arrangements, inadmissible because they infringe upon the financial initiative of the Crown.

On June 13, 2005, the Speaker ruled on Bill C-280, An Act to amend the Employment Insurance Act (Employment Insurance Account and premium rate setting) and another Act in consequence that:

...Bill C-280 effects an appropriation by spending or authorizing the spending of public funds by transfer of the funds from the Consolidated Revenue Fund to a separate EI Fund with the result that these monies are no longer available for other appropriations Parliament may make. ... Such a transfer...constitutes an appropriation within the meaning of section 54 of the Constitution Act, 1867 and for this reason a royal recommendation is required....

The precedents have parallels to the impacts of provisions in Bill C-507 for authorizing a new and distinct spending in that Bill C-507 proposes a new scheme for making payments out of the consolidated revenue fund in matters and for purposes not currently authorized by Parliament.

I submit that Bill C-507 would change the authorization for grants and direct payments, as well as payments to provinces that choose to opt out of federal programs in areas of provincial jurisdiction. These changes, in our view, would therefore require a royal recommendation.

Private Members' Business--Bill C-507
Points of Order
Routine Proceedings

10:15 a.m.

Liberal

The Speaker Peter Milliken

I thank the hon. parliamentary secretary for his diligence. It is clear he spends many nights reading private members' bills and all the precedents in connection therewith so he can make these arguments in the House the next day. I appreciate his enthusiasm and diligence for his work.

I look forward to further submissions on the matter and will get back to the House in due course with the ruling in respect of this bill. I note it is up for its first hour of debate this evening, so I assume the urgency in the ruling will not be apparent, and I will have to get to work now and see that a ruling is prepared in the matter.

Copyright Modernization Act
Government Orders

10:20 a.m.

Parry Sound—Muskoka
Ontario

Conservative

Tony Clement Minister of Industry

moved that Bill C-32, An Act to amend the Copyright Act, be read the second time and referred to a committee.

Mr. Speaker, if it were possible I would like to split my time with my hon. colleague, the Minister of Canadian Heritage and Official Languages.

I am pleased to speak today to begin second reading—

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10:20 a.m.

Liberal

The Speaker Peter Milliken

Order, could I interrupt the minister? Is there agreement that the minister be allowed to split his time? I understand this requires consent.

Copyright Modernization Act
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10:20 a.m.

Some hon. members

Agreed.

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10:20 a.m.

Liberal

The Speaker Peter Milliken

Then it will be duly split. The hon. Minister of Industry.

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10:20 a.m.

Conservative

Tony Clement Parry Sound—Muskoka, ON

Mr. Speaker, as I was saying before you rightly interrupted me, I am pleased to speak today to begin second reading of Bill C-32, the Copyright Modernization Act.

This bill is a key pillar in the commitment this government made in the Speech from the Throne to position Canada as a leader in the global digital economy. We promised a bill that would modernize Canada's copyright law for the digital age, protect and create jobs, promote innovation and attract new investment to Canada.

With this bill, we are ensuring that Canada's Copyright Act is focused on the future and is responsive to an environment in which things happen quickly and change is constant.

A primary aim of any copyright reform must be balance. The copyright system must find a balance between interests that can seem to be competing, for example, between consumers who want access to material and artists and innovators who want to be and should be rewarded for their creativity.

However as hon. members are well aware, finding that balance can be and has been very difficult. It has eluded the House for over a decade, and balance for one group may be seen as unfair to another.

From July to September of last year, the hon. heritage minister and I held a national consultation on copyright issues. The bill before us was guided by the input of thousands of Canadians, creators, consumers, businesses, educators and intermediaries.

Let me begin with creators. During the consultations, creators told us they needed new rights and protections to succeed in a digital environment, and so the bill before us implements those kinds of rights and protections of the WIPO Internet Treaties and paves the way for a future decision on ratification.

The bill also empowers copyright owners to pursue those who enable copyright infringement, such as illegal peer-to-peer file sharing websites. At the same time, Canadians participating in the consultations told us they did not think it was fair for consumers to face exorbitant penalties for minor copyright infringement, and so the bill before us significantly reduces existing penalties for non-commercial infringement. It introduces the test of proportionality as a factor for the courts to consider when awarding statutory damages.

This brings me to the perspective of consumers and users. During the consultations, Canadians told us they wanted to use the content they had legally acquired. They wanted to time-shift television programs. They wanted to shift format from CDs to iPods. They wanted to post mashups on the web. They wanted to make backup copies.

Canadians will be able to record television, radio and Internet programming to enjoy it at a later time, if the bill is passed, with no restrictions as to the device or medium they wish to use. Just as important, this bill would remove any barriers in the Copyright Act to the introduction of new technologies like the network personal video recorder and cloud computing. The latter is critical to Canada's ability to participate in the digital world as a full partner. As well, for their private use, Canadians will be able to copy any legitimately acquired music, film or any other works on to any device or medium and make a backup copy.

There are some who would argue that consumers should have to pay a levy on iPods, smart phones and Internet services, the iPod tax as it were, to compensate artists. We disagree. We oppose the iPod tax as regressive, unfair and economically destructive. Why should consumers pay more for an iPhone or a BlackBerry even if the device is not used for music? It is unfair. It would make devices costlier, would not prevent piracy and would encourage more black markets.

Let us help artists by cracking down on those who would destroy value, not innocent purchasers of hardware.

Let us return to the provisions of the bill. The bill permits the inclusion of copyrighted material in user-generated content created for non-commercial purposes. The provisions will not interfere with markets for the original work, nor will they disrupt the growth of business models that have developed around the dissemination of user-generated content online.

The bill also includes important new measures for the print-disabled. Recognizing the opportunities that today's technology allows, it permits a person to adapt a copyright work into an accessible format on his or her own behalf.

For computer program innovators, the bill includes measures to enable activities related to reverse engineering for software interoperability, security testing and encryption research. It clarifies that the making of temporary technical and incidental reproductions of copyrighted material as a part of a technological process is acceptable.

What did we hear in our consultations from educators, museums and researchers? They told us that they needed more flexibility to use copyright material in the service of education and learning. The bill proposes new exceptions that would recognize the enormous potential that technology offers students.

The bill before us expands the existing uses allowed as fair dealing. It adds education, parody and satire, reconfirming this government's commitment to structured education and creativity.

We are building on a well-established feature of Canadian copyright law to respond to and meet the needs of educators, be they in the classroom, in a home-school setting or for training in the workplace.

Finally, let me outline how this bill responds to the needs of Internet service providers. The bill clarifies that ISPs and search engines are exempt from liability when they act strictly as intermediaries in communication, caching and hosting activities, but at the same time, ISPs will play a role in helping combat copyright infringement.

Fair, balanced and technologically neutral, this bill accomplishes all of these things, but it also helps our economy by encouraging two of the most powerful forces we have, consumers and creators. They are sometimes the same people. Regardless, they are the force that guarantees that Canadians are innovators and are capable of growing the knowledge economy. But consumers and creators cannot do it alone. They need modern copyright laws, and that is what Bill C-32 is all about.

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Government Orders

10:25 a.m.

Liberal

Scott Simms Bonavista—Gander—Grand Falls—Windsor, NL

Madam Speaker, I want to thank the minister for finally getting to this issue. I do not lay blame on any particular party. This is an issue that we have been dealing with, but under the radar. We have seldom dealt with it in the House, which is what we should be doing, and I congratulate all members for getting involved in this particular debate.

Specifically regarding the WIPO ratification, could the minister please point out in this bill where we are WIPO compliant particularly? What has compelled him to be WIPO compliant?

As well, this particular government has already put in one copyright bill. That was from some time ago. What has changed in Bill C-32 from the prior bill that he has put in the House? What does he consider the fundamental change?

Finally, he talked about the iPod levy. Could he please point out in the bill where he addresses the iPod levy exactly?

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10:25 a.m.

Conservative

Tony Clement Parry Sound—Muskoka, ON

Madam Speaker, what I can say about the iPod levy is that it is not in the bill because we do not believe in it. If we believed in it, we would put it in the bill of course.

In terms of the main change in this bill compared to previous bills, including a Liberal bill back in the days of the previous Liberal government, I would say that the purpose of this bill is to be as technologically neutral as possible, to not specifically put in clauses dealing with iPods, PVRs or other technology that could change in five years, in two years. Who knows what will happen? Therefore what we tried to do with this bill was to make it principle-based and technologically neutral, so that the principles can be applied not only to the present technology but also the future technology. That is an important principle of the bill, so it can stand the test of time.

Finally, the bill is WIPO compliant. When we look at certain provisions such as the notice provisions, we believe those to be WIPO compliant. Cracking down on those who are destroying wealth by use of the Internet, by flouting copyright laws, that is consistent with WIPO. Basically we have WIPO-tested every provision of the bill and we find it to be WIPO compliant.

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10:30 a.m.

Bloc

Carole Lavallée Saint-Bruno—Saint-Hubert, QC

Madam Speaker, I thank the Minister of Industry for his speech. I will share the Bloc's position later on, but for now, one thing is really bothering me and has been nagging at me deep down.

How can a minister, a sensible and intelligent man, be unable to distinguish between taxes and royalties?

A tax is money that is collected from consumers and given to the government that is running the country. A royalty is money that is collected when a consumer purchases something and forwarded to a collective society, which redistributes this money to the copyright holders.

How can a minister not distinguish between those terms?

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10:30 a.m.

Conservative

Tony Clement Parry Sound—Muskoka, ON

Madam Speaker, I would like to thank my colleague for her question. In my opinion, it is not a good policy for our country to adopt another tax on devices such as iPods or BlackBerrys because it is a direct tax for consumers.

The consumer decided that this device was not for music and other media such as film, for example, but at the same time there is a tax. That is not fair. It is not our policy to create another tax.

I would say that we are trying to be fair to people, and that means being fair to consumers. We have to be fair to artists too, but there are other ways that we can help artists maintain the value of their creation without taxing everyone who decides to buy a smart phone, an iPod or another device of that sort.

Copyright Modernization Act
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10:30 a.m.

Port Moody—Westwood—Port Coquitlam
B.C.

Conservative

James Moore Minister of Canadian Heritage and Official Languages

Madam Speaker, I thank the Minister of Industry for starting off this debate and I am very pleased to be a part of this as well as we take a historic step in this country.

We made a commitment as a government in the last election campaign, and also as part of our throne speech, that we would table new copyright legislation, and so we have. Bill C-32, the copyright modernization act, is our effort to get it right. The last time copyright legislation was dealt with in the House of Commons, there were some concerns raised by Canadians across the country and we have listened to those concerns. We have come forward with legislation that we think should have the support of enough members of Parliament in order to move Canada forward.

Canadians, more than ever before, are active consumers in digital media. We are increasingly purchasing our music online, as well as films and televisions shows. We are connecting with friends and colleagues via Facebook, Twitter and web interfaces in ways that were not imagined just a little over a year ago. As a country we have, by and large, fully embraced the Internet and how it has changed the way we innovate, create and live our lives.

Unfortunately, Canada's copyright regime has not kept up with the pace of change. The last time our copyright laws were updated, people were buying CDs and using pagers, not iPads and Netflix. The reality is that our copyright laws are older than most of the technologies that we enjoy today. That is why on June 2 of this year our government introduced Bill C-32 here in the House of the Commons.

We consulted Canadians before doing this. This bill reflects the diversity of opinions expressed during consultations held last summer. These consultations took the form of an interactive website, public meetings, round tables and written submissions from average Canadians. And because each region was included in these consultations, we received opinions from across Canada. Numerous Canadians spoke to the government, and it listened to them.

Copyright holders told us that their 21st-century business model depends on strong technological protection measures. And we listened: Bill C-32 contains protection measures such as digital locks to protect against piracy and to allow creators to choose how they wish to protect their works.

Artists and creators also told us that they deserve to be fairly compensated for their works, and we listened.

Likewise, consumers asked specifically for legislation that would reflect how content is delivered and stored in a myriad of devices. We listened, which is why this legislation, as the minister said, is technology neutral and clarifies for consumers the fact that they can now legally format shift and time shift the products they have purchased. Bill C-32 is forward-looking and flexible. It implements the WIPO treaties and brings Canada in line with international standards.

During our consultations last summer, Canadians were also clear with us on the issue of fair dealing. They wanted to see it expanded and improved. This bill accommodates that desire by adding education, parody and satire to the existing uses of what is called “fair dealing”. It recognizes legitimate rights of Canadian families, schools and libraries to make use of copyrighted materials for their purposes.

Canadians were also very clear that they do not want to pay unnecessary taxes or new levies on iPods, iPhones, laptops or computers, or even on automobile hard drives that CDs can be ripped directly into. We do not believe this is necessary. We do not think it is right. We think that is an old solution for an old problem and it does not embrace the fact of new media. Our government has been clear that we oppose any new tax or levy, which is why the levy issue has been left out of this legislation.

The government made a commitment to protect businesses, which are absolutely essential to Canada's economic success, and this commitment is at the centre of our copyright modernization bill.

I just want to let the House know about some of the support that this legislation has received. It has been broad based and quite substantial in terms of the number of people who have come on board to support this legislation.

The Entertainment Software Association of Canada, which represents Canada's video gaming industry, supports this legislation. It accounts for over 14,000 jobs across this country. In Montreal, Burnaby, Toronto and Charlottetown, P.E.I., in places all across this country, I met with video game and software developers who support this legislation. Here is what ESAC had to say. It believes this bill is “critical to the success of Canada’s digital economy”; it is good public policy and is essential to our economy. It said:

We applaud the government for showing leadership on this complex issue

The film and television industry also supports this legislation. Over 150,000 jobs are involved in this sector from coast to coast, representing $5.2 billion in the Canadian economy. The Canadian Film and Television Production Association said it applauds the government's copyright reform. The government is playing an important role “in ensuring that those jobs are maintained and that new jobs are added over time”.

Canada's recording industry is a multi-million dollar industry and producer of world-class musical acts in this country. It told us that it wants strong protection for artists to compete with the world's best. We agree and we listened. Let us hear what it has to say about our legislation. The CRIA applauds the government's copyright bill and says, “We thank the government for taking this step to protect the right of artists and other rights holders to earn a living from their work”. These changes are long overdue and welcomed by artists.

The artists themselves are supporting this legislation. Randy Bachman of BTO said the entertainment industry's ability to remain healthy is dependent upon a strong copyright framework. Bill C-32 is moving Canada into the digital and Internet age.

Juno Award winning artist Loreena McKennitt, who has sold over 13 million albums worldwide, said the changes proposed in the bill are “fair and reasonable”.

Independent recording artist Michelle McKibbon thanked the government for introducing Bill C-32, legislation “supporting...artists like myself”.

The Canadian Chambers of Commerce, representing approximately 300 of Canada's business associations and boards of trade, support the bill. They said they believe Bill C-32 “lays the foundation for future economic growth and job creation”.

The president of la Fédération des chambres de commerce du Québec, Françoise Bertrand, believes that Bill C-32 is critical to ensuring a competitive and stable business environment in Canada.

The Canadian Council of Chief Executives, which represents over 150 executives across the country and companies representing $4.5 trillion in assets, supports this legislation. This is what the former Liberal deputy prime minister had to say about this bill. He said Bill C-32 “will provide badly needed protection to Canadians who create music, films, games and other digital works.” Business leaders say it will protect creators and consumers. The government has struck an appropriate balance with its legislation.

The Council of Ministers of Education, CMEC, which represents all of Canada's 13 provinces and territories and their ministers of education, supports this legislation. The chair of CMEC, the minister of education in Nova Scotia, a New Democrat, Marilyn More says:

This legislation provides the clarity we have been looking for.... It is excellent that the bill allows students and educators to use Internet materials in their learning and teaching activities without fear of copyright infringement.

Ministers of education across Canada have responded positively to this new copyright legislation.

We consulted Canadians and we listened to them. We took this course of action because our government and the members on this side of the House know that the contribution made to Canada's economy by Canadian digital industries cannot be downplayed.

Other people have come forward as well to support this legislation. We get the sense that support for this legislation is broad based and substantive, if we look at the folks who are supporting this bill: the television and film industry, the music industry, digital new media folks, the business community and individual artists.

The Canadian Association of Research Libraries said it applauds the government, which has responded to the copyright reform concerns expressed by the library and education community. It stated:

The government has clearly listened to what the library and education communities said

The Globe and Mail said the government's new copyright legislation should be passed.

The newspaper is right. We think this legislation should be passed.

I do not want to go much further into the substance of the legislation beyond what the Minister of Industry had to say, because I have limited time. However, there is one thing that he did not mention that is a critical element of this bill. I hope all members in the House who are interested in this legislation recognize this important element.

The bill mandates that Parliament, every five years, will be forced to revisit and continually modernize Canada's copyright regime. So whether people have concerns about specific elements of this bill and think we should do a little bit more here and a little less there, the reality is that this legislation is an tectonic shift in Canada's regime with regard to copyright reform. We are forcing Parliament, from now forward, to forever make sure that Canada's copyright regime stays up to date.

Canada has not elected a majority Parliament since November 2000. It has been 10 years. As a result of the realities of minority Parliaments, often it is politically challenging for governments to be willing to step forward and to engage in the copyright issue. This legislation forces Parliament, regardless of political pressures, to make sure that Canada's copyright regime stays on the cutting edge so that Canada can continue to create jobs, so that we maintain the reputation that we have around the world as being not only an innovator and a leader in new technology, but also one of those countries that protects the rights of creators to have their works protected by law.

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10:40 a.m.

NDP

Linda Duncan Edmonton—Strathcona, AB

Madam Speaker, I have been contacted in the last couple of weeks by Alberta small book publishers, including those who publish educational materials. They are very concerned about the implications of Bill C-32, which they consider provides broad access and use free of charge by educators that impacts the revenues of these small Canadian publishers and their continued existence.

I wonder how extensively the government consulted with small Canadian publishers. Did it meet with the Alberta small publishers association to review their concerns about the impacts on collective licensing?

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10:40 a.m.

Conservative

James Moore Port Moody—Westwood—Port Coquitlam, BC

Madam Speaker, we really wanted to leave no stone unturned when it comes to the consultation. We not only stayed in Ottawa and put up a website but went around the country and spoke to communities all across Canada.

If memory serves, there was in fact a round table that took place in Edmonton and we invited stakeholders to come in. If people could not participate in the round table there, they were invited to participate in our online forums. They were invited to participate in writing as well. One of the reasons that with this legislation we are going forward with a stand-alone legislative committee is because that committee can decide its own workload, its own hours, and can bring in whatever witnesses it chooses. People will be allowed, I am sure, to submit their views in writing, or if they have the capacity to come, to visit in person.

This legislation is, as I said, striving to get the right balance. There are those in the education sector who think we should have further restricted our fair dealing component. There are those who think we should have expanded it. We think this is the right balance and those who have concerns will be more than free and willing to share their views.

If people have constructive criticism about how we can make this bill right, obviously we are prepared to listen to those views, but we will not listen to those who want to--

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10:40 a.m.

NDP

The Acting Speaker Denise Savoie

Questions and comments, the hon. member for Yukon.