Bill C-32 (Historical)

Copyright Modernization Act

An Act to amend the Copyright Act

This enactment amends the Copyright Act to
(a) update the rights and protections of copyright owners to better address the challenges and opportunities of the Internet, so as to be in line with international standards;
(b) clarify Internet service providers’ liability and make the enabling of online copyright infringement itself an infringement of copyright;
(c) permit businesses, educators and libraries to make greater use of copyright material in digital form;
(d) allow educators and students to make greater use of copyright material;
(e) permit certain uses of copyright material by consumers;
(f) give photographers the same rights as other creators;
(g) ensure that it remains technologically neutral; and
(h) mandate its review by Parliament every five years.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Yes, the multinationals. In any case, many of their demands are reflected in Bill C-32. On the other hand, the Canadian Conference of the Arts has established that the artists will be losing $126 million. First of all, there is $30 million for private copying. I'm not going to list all the losses, because you are well aware of them. There are also those associated with ephemeral recordings and the exemption for the education sector. As for user-generated content, I'm sure you know that in France, the SACEM, which is a copyright collective, has succeeded in negotiating royalties with YouTube for user-generated content, something that would be impossible here given the exemption granted under Bill C-32, if it is not changed.

In terms of specific changes—I invite each of you to take as much time as you need, and the others will have an opportunity to answer later on—which amendments are most critical, in your opinion?

Ms. Drouin.

[Greg Johnston, Treasurer, Songwriters Association of Canada]

My name is Greg Johnston. I'm a songwriter and the treasurer of the Songwriters Association of Canada.

I'm a 40-year-old. I have a wife, two kids, a car, and I live in downtown Toronto. I volunteer, shop for groceries, pay taxes, and I vote. I studied music at both Simon Fraser University and Grant MacEwan College. I had student loans and I paid them off. I picked a career, I was educated for it, and I'm really good at what I do.

I've worked with artists such as Olivia Newton-John, Marc Jordan, Ron Sexsmith, Hawksley Workman, and Nick Lachey, to name a few. Unlike my friend and colleague Mr. Vallance, my songs have not sold over 100 million copies, and unless drastic measures are taken, songwriters of my generation will never have the chance. In fact, despite my education, talent, and success, I may have no choice but to leave the profession entirely.

Some may say “That's life”, something I would be willing to accept but for the fact that our songs have never been more popular. They're on your radio when you drive to work. They encourage you on the treadmill. They play at your daughter's wedding. They help to sell shoes, toothpaste, life insurance, and they've even helped the odd political campaign.

The solution to our industry's dilemma lies in the monetization of music file sharing. To reiterate what Jim Vallance said, a mutually beneficial partnership with the ISPs would allow consumers access to our work in the way they are now accustomed to. Rights holders would be remunerated, success would be rewarded, and fair business practice would be restored.

To this end, Bill C-32 has nothing to offer. Bill C-32, as written, opens the doors to years of lawsuits with regard to the definition of fair dealing.

The last decade has been a period of rapid decline for our industry. Forcing music creators to, in essence, sue for their supper only increases our financial hardship. It solves none of the basic problems we face.

Digital locks and lawsuits, as well as other repressive measures, are a well-worn path at this point, and they have proven to largely be a dead end.

We at the SAC support the private copy levy as a part of a comprehensive plan to remunerate music creators for our work. While helpful to creators, the levy in and of itself is not a comprehensive solution, and it should not be seen as such.

With blank CD sales declining annually, and the failure of Bill C-32 to extend the levy to devices like the iPod, this legislation offers little hope for our future.

In conclusion, we at the SAC are grateful for this opportunity to appear before the committee. We sincerely hope our input will be helpful in amending this crucial legislation so that it may foster an enlightened and profitable Canadian music industry.

Thank you.

[Victor Davies, Director, Board of Directors, Society of Composers, Authors and Music Publishers of Canada]

My name is Victor Davies. I'm a music composer and I serve on the SOCAN board of directors.

As Gilles mentioned, SOCAN represents music composers, authors, and publishers. Please note that we do not represent record companies, and they do not represent us.

I would like to discuss two issues: digital locks and exceptions.

First of all, we respect the right of other copyright owners to use digital locks to protect their works if they so desire. However, SOCAN's business model is not based on blocking access with digital locks. Instead, SOCAN's mandate is to provide access to the world's music repertoire and to collect royalties determined by the Copyright Board of Canada for these uses. Therefore, although digital locks may help some copyright owners, they do not directly help SOCAN.

Second, we oppose Bill C-32's many exceptions, because they allow users to use our valuable intellectual property but we do not get paid.

[Paul Spurgeon, Vice-President, Legal Services and General Counsel, Society of Composers, Authors and Music Publishers of Canada]

Good afternoon, Mr. Chairman and members of Parliament.

My name is Paul Spurgeon, and I'm SOCAN's general counsel.

I understand you have a copy of SOCAN's 16-page November 19 submission. Also I have left with the clerk a copy of a document, the WIPO study on limitations and exceptions, which I think you will find very interesting, especially if you refer to pages 74 to 80. It might help in your understanding of the issue of exceptions and limitations. I have also left with you a copy of a four-pager on the three-step test, which I am principally going to speak to in my brief remarks.

Turning to the last page of our submission, we propose that clause 41 be amended by adding a simple interpretation provision, as follows:In interpreting any limitations or exceptions to copyright under Part III of the Act, the court shall ensure that such limitations or exceptions are confined to certain special cases, do not conflict with a normal exploitation of the work, and do not unreasonably prejudice the legitimate interests of the author, including the author’s right to equitable remuneration.

I have to point out that this amendment is simply based on the three-step test that Canada has already agreed to in international treaties and has ratified, and intends to ratify, including the Berne convention, to which we have been a signatory for decades, the World Trade Organization treaty, and the WIPO treaties, which you are about to hopefully implement and ratify when Bill C-32 is enacted.

Since Canada has already agreed to this three-step test in these treaties, there is no reason why it should not be included in the Copyright Act.

Thank you.

Victor.

[Gilles Valiquette, Director, Board of Directors, Society of Composers, Authors and Music Publishers of Canada]

Mr. Chairman, ladies and gentlemen members of the committee, good afternoon. My name is Gilles Valiquette and I am an author, composer and performer in Quebec. Today I am representing the Society of Composers, Authors and Music Publishers of Canada, better known as SOCAN. I am a member of the board of directors, a board which I chaired for five years, and with me today is my colleague, Victor Davies, who is also a composer and member of SOCAN's board of directors, as well as Paul Spurgeon, Vice-President, Legal Services and General Counsel for SOCAN.

Mr. Chairman, Bill C-32 is a very important bill as far as we are concerned. To help you understand our perspective, I should just point out that SOCAN is the Canadian collective that administers the performing rights, words and music, of more than 35,000 active Canadian members and all the members of its affiliate organizations around the world. That said, it is important to state that songwriters who spend days and weeks creating a musical work receive no advance payment for their work.

Furthermore, the social convention embedded in the Copyright Act gives artists the right to be remunerated if, and only if, their song is used. In other words, my colleagues and I are entrepreneurs who make songs, as opposed to furniture or cars. We take the risk that our work will be used and we agree not to be paid at that point. That is the agreement we have with our clientele.

It is critical that, in a spirit of national unity, Bill C-32 respect the two legal traditions associated with intellectual property, both copyright and le droit d'auteur or, more specifically, that it ensure that Canadians have access to copyrighted work while at the same time upholding the right of creators to compensation. As currently drafted, Bill C-32 completely disregards the fundamental rights which are the cornerstone of copyright in Canada. Let us not forget that Bill C-32 deals with intellectual property.

Mr. Chairman, ladies and gentlemen members of the committee, I very much appreciate this opportunity to address you directly as both an artist and creator. I am calling on you to make the amendments to the bill that we have suggested in our brief, in order to ensure that creators' rights will be respected and that the music industry will be able to continue to move forward on a daily basis.

Thank you very much. I would like to turn it over now to Mr. Paul Spurgeon.

[Luc Fortin, President, Guilde des musiciens et musiciennes du Québec]

My name is Luc Fortin and I am President of the Guilde des musiciens et musiciennes du Québec. I'm also a professional musician. With me today is Mr. Éric Lefebvre, Secretary-Treasurer of our association. Like l'ADISQ, we, too, signed the joint declaration of Canadian cultural industries on Bill C-32.

The Guilde des musiciens et musiciennes du Québec is a recognized association of artists that represents almost 3,500 professional musicians working all across Quebec. It is affiliated with the Canadian Federation of Musicians and its mission is to defend and promote the economic, social, moral and professional rights of performing musicians.

To begin with, we feel it's important to clearly state our position on Bill C-32. Unless there are major amendments to the bill, it should not be passed under any circumstances. It is true that the government is establishing some new rights for performing artists, such as the moral right and exclusive rights provided for under the WIPO Performances and Phonograms Treaty which, theoretically, place them on an equal footing with certain recognized authors' rights.

Yet what the framers of the bill are giving with the right hand, they are taking away with the left. What is the point of an exclusive “making available” right if the bill only confirms the lack of accountability for Internet service providers? How can anyone assert a reproduction right over a sound recording when broadcasting entities and educational institutions can reproduce works without prior authorization from the author, performer or producer, and without any applicable royalties for this kind of reproduction? The incalculable number of exceptions granted users essentially invalidates several exclusive rights currently held by rights holders. Some examples include the broadening of the “fair use” concept for purposes of education and parody, the exception for television recording timeshifting, the abolition of certain legal licences in the education sector, and the list goes on.

The Berne Convention provides that an exception should only be permitted “in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.” That is article 9. Bill C-32 does not abide by the Berne Convention in that it grants several exceptions which will in fact deprive creators and performers of remuneration, thereby violating their rights.

As regards Internet service providers, the government is indeed proposing a series of technical protection measures. However, the large record producers, known as “the majors”, who are actually the ones able to take such measures, have long since given up developing these costly measures, due to their extreme unpopularity. It is worth mentioning, for example, that the iTunes site removed all protection measures from its on-line catalogue two years ago.

Furthermore, the private copying regime, which enables authors, artists and producers to be compensated for violations of their reproduction rights, is on its way out. Nowadays, who actually continues to reproduce musical works on cassettes? As for CDs, they will soon be joining cassettes and diskettes on museum shelves, having been replaced by USB keys and digital audio players. Music is reproduced daily on millions of iPods and other similar digital players; however, the royalties are, unfortunately, collected for other formats, all of which are gradually disappearing.

Relying on propaganda, some are currently attempting to convince Canadians that the royalty for private copying is a tax, when it is actually compensation for actions that previously were deemed to be illegal.

Finally, we note that the legislation still has not granted rights to performing artists for audiovisual productions. Yet an artist's performance is of crucial importance, in terms of both commercializing a sound recording and marketing a film or television program. It is time that lawmakers responded to that demand, one that has already been recognized in several countries.

In conclusion, the passage of Bill C-32 would turn Canada into one of the countries that affords the least protection for creations and innovations involving intellectual property.

[Solange Drouin, Vice-President and Executive Director, Public Affairs, Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ)]

Mr. Chairman, members of the committee, on behalf of l'ADISQ, I would like to first thank you for inviting us to appear before you today.

L'ADISQ is a signatory to the joint declaration on Bill C-32 released by more than 80 groups representing the Canadian cultural community. Several of them have already appeared before the committee and made you aware of their many concerns with respect to Bill C-32, which would deprive content creators of revenues of more than $125 million. We share those concerns.

Since five minutes is not enough time to go over them all, we have decided to provide you with an overview which we hope will help you to understand why this bill is of critical importance for the development, sustainability and diversity of our different forms of cultural expression in Canada.

To begin with, I would like to briefly introduce the organization I represent. L'ADISQ is a professional association which represents independent record, performance and video producers in Quebec. An important fact to note is that these producers are responsible for 95% of the albums released by Quebec artists. What that means is that multinational record companies have minimal involvement in our local production in Quebec. Career development for Quebec artists is supported primarily by an independent industry made up of a number of small companies.

Sales for Quebec artists in their own market are remarkable. Year after year, almost 50% of the records sold in Quebec showcase Quebec artists.

In practice, this positive positioning in terms of sales of Quebec artists' work has had the effect of creating an environment which supports the sustainable development of artistic and entrepreneurial talent. What is even more important is that this has allowed the Canadian public to have access to a wealth of talent and a wide variety of music. Furthermore, from this wealth of talent has emerged a significant number of artists who are excellent ambassadors around the world. That is a very positive result which, unfortunately, does not tell the whole story. It does not show that, while Quebec artists' share of overall sales remains high, total sales have been dropping dramatically for several years now. In Quebec, we have gone from 13 million albums sold in 2004 to a little more than 9 million in 2010, a drop of 30% in six years.

All across Canada, the situation is equally alarming, if not more so. And it is unfortunately no different around the world. At the international level, according to IFPI, one of the consequences has been that, of the top 50 bestsellers, 77% fewer were first albums between 2003 and 2010. So, developing artists are the first victims of this dramatic downward trend, and the public is the big loser.

Surprisingly, at the same time, music has never been more a part of people's lives. Ways of securing it either legally or illegally are legion in the digital universe, and companies develop business models based on music with no significant return, and often, with no return whatsoever for content providers.

Why should I be telling you this today, when we're here to discuss copyright? Well, the Copyright Act is economic legislation. It sets the rules whereby rights holders will be remunerated when their creative works are used. Through your choices and decisions, you have the power to worsen the music industry's already dire situation or turn it around. In order to generate revenues that allow an adequate critical mass of artists to provide the Canadian public with access to a diversity of Canadian music, we must retain those tools now found in the legislation which are effective, and introduce similarly effective tools for the digital universe, as we did for the physical universe. With Bill C-32, we are completely missing the target.

The challenge is considerable. However, it is surmountable if the political will is there. France is an excellent example of that political will. This is only one example among many: France recently revised the royalties for private copying for USB keys, memory cards and hard disks, and it is seeking to establish a royalty for iPads. I would just remind you that here we are talking about ways of preventing royalties from being charged for MP3 players. Why are we so out of the step with what is being done elsewhere?

Furthermore, I would like to understand why the Conservative government, which often defends small business, is not supporting small cultural companies. It's important to remember that our culture is developed by these small companies.

[The Chair, Conservative, Gord Brown]

We'll call this 15th meeting of the special Legislative Committee on Bill C-32 back to order.

We have four groups: l'Association québécoise de l'industrie du disque, du spectacle et de la vidéo, ADISQ; la Guilde des musiciens et musiciennes du Québec; the Society of Composers, Authors and Music Publishers of Canada; as well as the Songwriters Association of Canada.

Each of those four groups will have five minutes.

We will start with the ADISQ.

Solange Drouin, cinq minutes.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Do you all take the same position as Mr. Dexter with respect to amendments to Bill C-32? Mr. Henderson, Ms. Davies and Mr. Ellson, have you seen this document? Since you seem to be saying you have not seen it, you don't know whether you agree.

Perhaps Mr. Dexter could address it with us, since he is well acquainted with the amendments he is suggesting. Are these amendments supported by everyone who is here today? Are these the amendments suggested by Balanced Copyright?

[Graham Henderson]

I would echo Mr. Dexter's point. Having listened to this committee now for a couple of months, my sense is that there is an evolving consensus out there. I hear it from...either there's been very specific changes that you've sought, many of which are in Mr. Dexter's document, and I keep hearing from this side that they're prepared to make amendments.

In its current form, exactly as it is, no, we wouldn't want Bill C-32 looking like it does now. But a form such as what Mr. Dexter has proposed--that's a form that I think works for everybody.

I've heard nothing from this side, necessarily, that I think would stop this committee from amending the document in such a way to take into account the concerns that have been raised by your party, as well as the Liberal document that was published before Christmas.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

It's the document entitled “C-32 Amendments”, and it is signed by you.

You feel that C-32 requires some 14 amendments. Some of them are anything but minor. For one thing, you are suggesting doing away with the provision on user-generated content. You also suggest removing the exception for ephemeral recordings. You say as well that statutory damages should not be capped. In other words, there are a number of them here, and I don't intend to name all of them.

Do you believe that if Bill C-32 were to pass, it would effectively put an end to illegal downloading?

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Witnesses, thank you for being here and for your very helpful commentary at a very critical juncture. The timing, I suspect, could not be better.

I have open-ended questions for all of you here, so whoever should want to answer should just come forward.

Bill C-32 would place a cap of $5,000 on statutory damages for all claims of rights holders where the infringement is deemed to be for non-commercial purposes. In your opinion, what effect would this change have on the actions of members of the public? Some of you have opined on this. Do you think this section actually needs amendment? If so, do you want to specify that?

Mr. Ellson.

[Grant Dexter, President, MapleMusic]

Thank you for giving me the opportunity to address the committee today.

I'll start by stating that we absolutely need this bill. I come here as a constituent of the independent music community, speaking on behalf of Canadian-owned companies involved in every aspect of music, sound recording, and music-related industries. I can tell you that without a doubt we have been severely impacted by piracy. That is why copyright reform is crucial.

However, Bill C-32 is not without its weaknesses. As you have heard from many witnesses, the technical drafting does not, in some cases, meet what it sets out to do. As an example, Minister Clement has said time and time again that Bill C-32 targets the “wealth destroyers”. But the way it's written, the isoHunts of this world will not be effectively brought to justice.

In many cases, the language of the bill is simply too broad to effectively meet its objectives. For instance, the enabling provisions--the single most important aspect of the bill to target the wealth destroyers--are written in a way that will surely allow isoHunt off the hook. I cannot imagine that is what the minister intended.

You have a one-page summary of our key recommendations, but I'd like to highlight a few.

Bill C-32 needs to separate the bad guys from the good guys, providing the good guys with safe harbour but not giving the bad guys refuge. The definition of these enablers must be tightened up so we can catch them, and the penalties must be high enough to deter them.

The Liberals have stated that the statutory damages need to be commensurate with the severity of the infringement. Currently they provide little or no deterrent to theft.

The “making available right” contains a fatal flaw that would require rights holders to file a tariff or get permission from the minister to exercise their rights. This cannot have been the intention. An earlier version of the copyright reform did not contain this flaw; therefore, it is easily fixed.

The user-generated content provision is written so broadly that individuals could post the entire MapleMusic catalogue of music and have a simple top and tail to qualify: MapleMusic is the best...all of our content...isn't this great? This law would allow them to do that.

The private copying exception is also very broad. While we do not object to consumers making copies of legally purchased music to their hard drive or iPods, the minister cannot have intended the iPod to become a filling station for the neighbourhood. This must be limited to reproduction of legal copies within their own households.

Finally, the same limit to legally purchased copies in the confines of the household can be said for time shifting.

The best outcome we could hope for is the restoration of a legitimate marketplace for creative products. With minor changes to avoid unintended consequences, Bill C-32 provides the copyright reform that is so desperately needed by the independent music sector in Canada.

Thank you.

[The Chair (Mr. Gordon Brown (Leeds—Grenville, CPC)), Conservative, Gord Brown]

Good morning, everyone. We're going to call to order this fifteenth meeting of the special Legislative Committee on Bill C-32.

Because of the votes today, we have a little bit of a change in plan. In terms of our first panel here, they understand that they're going to have a total of 15 minutes. We will then follow that up with one round of seven minutes each. In the second one, there will be five minutes for each of the groups, plus one seven-minute round.

We'll do our best to try to get this done by one o'clock. That said, I understand the room is available. With unanimous consent we might have a few minutes extra.

Mr. Del Mastro.

[Ed Fast, Conservative, Abbotsford, BC]

Okay. Let's talk about both, meaning those who are going to access the information they need.

Of course, not everyone in Canada is honest. There are going to be those who say that it's legal to buy this now, so I'm going to use these technological inventions to circumvent these digital locks. Because I'm not honest, I'm going to actually cheat, and now I'm breaking locks for a purpose not permitted under the act. Eventually you have this group within our society who are actually causing a problem for those who create the content and hold the copyright, which means it's much more expensive for them to enforce their rights.

I assume you've read Bill C-32, so you're aware that under clause 47, proposed item 41.21(2)(a)(iii) gives the minister a broad discretion to make regulations to ease up on some of those anti-circumvention provisions. I'd like to read at least that item for you, just for the record.

Proposed subsection 41.21(2) says:

The Governor in Council may make regulations

(a) prescribing additional circumstances in which paragraph 41.1(1)(a) does not apply, having regard to the following factors:

(iii) whether not being permitted to circumvent a technological protection measure that is subject to that paragraph could adversely affect criticism, review, news reporting, commentary, parody, satire, teaching, scholarship or research that could be made or done in respect of the work, the performer’s performance fixed in a sound recording or the sound recording,

That's what the bill says. Essentially what it says is that we understand that at this time you're not allowed to break digital locks, but the minister has the right to make the regulations; he doesn't have to go back to Parliament for a legislative change. As the industries develop, as we gain more experience with this new legislation, the minister has the flexibility to adapt and to pass regulations that allow industries such as yours to benefit from some of the content that you'd like to access and that digital locks prevent.

So you're aware of that legislation?