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.

[Jill Golick, President, Writers Guild of Canada]

Bill C-32 undermines collective licensing. The introduction of proposed section 29.22 is only one example. Collective licensing, whether legislated or free market, is a very simple solution to so many of the issues facing us. It allows consumers easy access to content and it provides remuneration to the creators of that content. Collective licensing has been working well in many sectors for decades. I know this because I get cheques for secondary uses in other jurisdictions through the Canadian Screenwriters Collection Society. Collective licensing is a working model for consumers' use of content and creator compensation, and it should be the model we embrace in the digital world.

However, even if there is collective licensing for audiovisual works, as a screenwriter I would not be entitled to it, because the author of the audiovisual work is not defined in the Copyright Act or this bill.

Like photographers' rights, the lack of definition has been an anomaly from the beginning. The Writers Guild of Canada and the Directors Guild of Canada agree that the screenwriter and director are co-authors of the audiovisual work. This is the situation in many jurisdictions around the world. By failing to define authorship, the bill fails to offer audiovisual works the same protections as other works. For example, proposed section 41.22 protects rights management information, which allows us to track the use of our work and subsequently earn royalties around the world. Without a definition of authorship, this proposed section's prohibition against removing the author's identity is meaningless for audiovisual works. After 12 years and several rounds of copyright reform, it's time to recognize the screenwriter and the director as co-authors of the audiovisual work.

It has been said that this bill is good for creators because it gives us locks that we can use to protect our works against piracy. For the record, as creators we have no control over whether a lock is added. That's the decision of the copyright owners, and while digital locks may preserve the existing business models for a time, the patterns of distribution are changing. Even owners may not realize the full value of the work. Protection against piracy only addresses part of the problem. There must be compensation for copying.

[Maureen Parker, Executive Director, Writers Guild of Canada]

Good morning, members of the committee. My name is Maureen Parker. I'm the executive director of the Writers Guild of Canada. Also with me today is my president, Jill Golick, a digital creator. Thank you for inviting us.

The Writers Guild is a national association representing more than 2,000 professional screenwriters working in English language film, television, radio, and digital production. Screenwriters in Canada have a vested interest in copyright. Unlike their American counterparts, Canadian screenwriters retain copyright in their work and only license the right to produce. Their ability to make a living from their work is based on upfront fees, participation in profits, and secondary use royalties generated by copyright in other jurisdictions.

We agree that Canada's copyright law needs modernizing and we have been consistent advocates for copyright reform over the years.

Digital technologies have made it easy for people to copy and share creators' works. It's not just about music any more. The average consumer's iPod, computer, and tablet are loaded with film and television programming. Audiences download shows to watch and store for repeat viewing, and screenwriters want that. They want their work to be seen by the widest possible audience, but it's important to remember that copies have value, and screenwriters must be paid that value.

Our biggest concern with Bill C-32 is the introduction of proposed section 29.22, which expands the concept of private copying to all works, but without remuneration. Proposed section 29.22 expands private copying from personal use of the person making the copy to private purposes, which allows an individual to make copies to share with an unspecified number of people. This clearly undermines existing sales of copyrighted works. Why would your friends and family buy a movie or a TV boxed set when you can copy the version you bought and share it with them? Proposed section 29.22 deals a potentially crushing blow to the DVD market. Creators need a modern copyright act that protects, rather than undermines, their revenue streams.

Our preference is the deletion of proposed section 29.22. This would allow markets for the copies to develop. Alternatively, the legislation should limit proposed section 29.22 to music only, so that it balances and works in tandem with the current private copying regime, which is related to music only. This would also require a return to the concept of personal use, the language existing in the current act. Amending the bill in either of these directions would allow collective licensing for private copying of non-music works to develop outside the Copyright Act or in future amendments. We will not be able to do either if these rights are given away for free now.

[Lisa Fitzgibbons, Executive Director, Documentary Organization of Canada]

Mr. Chairman and members of the committee, thank you very much for the opportunity of presenting our views today. My name is Lisa Fitzgibbons. I am the Executive Director of the Documentary Organization of Canada, or DOC, and with me is my colleague Cameron McMaster.

DOC speaks on behalf of 800 members, who are directors, producers and craftspeople in the documentary community across Canada.

Documentarians create works that receive protection from copyright, but as creators they also frequently need to access and use the works of others. Documentarians routinely use clips, archives, photos, etc. to create their works and tell stories of historical or social significance. Under certain conditions, a documentary filmmaker may claim legal fair dealing in order to access and quote copyrighted material without a requirement for permission or licence payment. Filmmakers do so with great care, because as users and owners of copyrighted material themselves they understand that fair dealing is a two-way street: the works they produce may also be used in a similar fashion by others.

Many stakeholders argue that fair dealing can be abused by copyright users to avoid paying for use of materials. DOC does not condone this practice. Fair dealing is not free dealing. In documentary production, the defence should be applied in legitimate circumstances for the purposes of comment, criticism, and review.

The intersection of fair dealing and documentary production has been at the heart of DOC's advocacy efforts for many years, and this is why we are particularly concerned about the bill's provisions on digital locks. DOC supports digital locks as a form of protecting one's expression from infringement, but the current digital lock provisions proposed in Bill C-32 do not provide exceptions for anti-circumvention measures for the purposes of fair dealing.

Visual materials are the raw matter with which documentary filmmakers work. Having access to various sources, analog and digital, is essential to the craft of the documentary. As technology advances, we encode our history on different media. History is being digitized. The ubiquity of digital media may lead to more digital locks, but how can we have free access to this history if it is unavailable because of a digital lock? Consider the impact this would have on our ability, as Canadians, to tell our own stories.

The introduction of digital locks without the proper exceptions for fair dealing, especially for the purpose of documentary filmmaking, would hinder documentary filmmakers' ability to carry out their trade. If documentary filmmakers are kept from practising their craft because of digital locks, they are being denied their freedom of speech and creative expression. Fair dealing is legal. Criminalizing either the tools or the creation and sale of tools to exercise fair dealing is an inherent contradiction in copyright law.

In other jurisdictions, digital locks have been deemed to hamper creative expression and free speech. Consider that in July 2010, the U.S. Copyright Office reformed the DMCA to allow for documentary filmmakers to break digital locks if the purpose and use is fair. As the Government of Canada updates its copyright legislation, it should start on the right foot by creating exceptions for non-infringing purposes in a meaningful and effective manner.

Now we have just a few words about the educational market. Today we'd like to bring the perspective of the educational video community in regard to Bill C-32—distributors, content producers, and producers who self-distribute their work. Documentarians license their materials to many markets, including theatrical, television, digital, and educational ones. The niche subject matter of documentaries makes them perfect material to be used in the classroom. With documentaries, professors and teachers have an affordable and accessible way of enhancing their teaching.

Students have access to Canadian stories and Canadian history. Up until now, Canadian students, educational institutions, educational video distributors, and documentary producers have enjoyed a fruitful relationship. Documentarians want to challenge, criticize, and, most importantly, educate Canadians about the most topical and pertinent issues of the day. Without proper compensation for the use of their works in the classroom, documentarians will be unable to create content for use in this setting.

Furthermore, the distributors that facilitate access to these materials will disappear. If the distributors disappear, where will the educational institutions turn to find high-quality topical educational video for use in their curricula? Will they have to turn to a larger resource, namely American distributors? If that were to be the case, the result would be little or no Canadian video content in the classrooms.

We fear that the combined effect of the proposed reforms to the educational institutions and the fair dealing sections of Bill C-32 will result in less Canadian video content being available in Canadian classrooms.

Thank you.

[François Côté, President, Association des réalisateurs et réalisatrices du Québec]

Mr. Chair, members of Parliament, allow me to begin by pointing out that Denis Villeneuve, whose name has been frequently mentioned this morning, the director of the film Incendies, who was recently nominated for an Oscar, is an active member of our association, as are Denys Arcand, Xavier Dolan and many others.

So you will no doubt understand our pressing need to defend directors' copyright. You no doubt also understand why we have joined creators across Canada in signing statements denouncing several aspects of Bill C-32.

We are concerned about the impact Bill C-32 would have on the creation of films and audiovisual content in Canada. The combined effect of many exemptions for royalty payments, unclear criteria and the wholly inadequate means proposed to protect content will be to devalue the work of Canadian creators, including directors, across the production line. We've heard that this morning.

We can hardly be surprised if creators eventually seek alternative ways, or countries, to make a living. In attempting to expand free access to cultural content, this bill in fact threatens consumer access to Canadian works that reflect our identity and culture, quite simply because such works may no longer exist. The figures cited to this committee this morning illustrate that point.

It is tempting to draw a parallel between what could happen if this bill were passed and what happened to our American neighbours during the subprime mortgage crisis, which resulted in a global financial meltdown that continues to affect us today.

Content is to the audiovisual and communications industry what loans are to banks. It's our core business. When mortgage loans lost their value, the entire banking system was in trouble. If we devalue Canadian content, the entire Canadian audiovisual and communications industry will be under threat.

But the comparison ends there, since, while loans are a basic, essential and irreplaceable part of the world banking system, Canadian content is just one product among others, one that broadcasters, access providers and content integrators, particularly if they're not Canadian, can easily forego. There is no shortage of international content these parties can offer in return for subscription fees which they can pocket in full.

After spending billions of tax dollars to support Canadian culture and create a homegrown audiovisual industry, it would be sadly ironic if the federal government were to destroy it all by allowing creators to go hungry. We can only imagine what the rest of the world would think.

To return to Denis Villeneuve for a moment, let me ask you this: how can we be so proud of his remarkable achievement and yet, at the same time, be willing to undermine the ability of Canadian creators to continue producing such works?

The Standing Committee on Canadian Heritage adopted a motion extending congratulations to Denis Villeneuve for the Oscar nomination of Incendies. But did you know that Denis Villeneuve, like Denys Arcand and Xavier Dolan, is not recognized by the Canadian Copyright Act as the author of his film? Even though he's been nominated for an Oscar in the Best Foreign Language Film category. The entire world recognizes Denis Villeneuve as the author of Incendies, but the law of his own country doesn't. That's why we feel it's entirely legitimate, logical and urgent that the Copyright Act be reworded to include and name the director as the author of the audiovisual work, just like the screenwriter.

The Association des réalisateurs et réalisatrices du Québec would like to cooperate fully in updating the Copyright Act, and will do so in the firm belief that individuals create content and that those individuals should reap the economic rewards of their work.

Thank you for your time and attention.

[The Chair, Conservative, Gord Brown]

I'm going to call this 14th meeting of the special Legislative Committee on Bill C-32 back to order.

Mr. McTeague has a point of order.

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

Thank you very much.

One of you said you were 100% in favour of Bill C-32. However, you're asking us to make what seem to me to be significant amendments respecting the responsibility of Internet service providers, but also regarding their accountability. You want to make them accountable for what happens on their Internet sites. You're also talking about the system that enables an offender to receive notice after notice without expecting any further significant consequences and where a rights holder whose rights are violated sends a notice to the Internet service provider, which in turn sends it to the person responsible for the site or to someone who it is believed has violated the act. That's what's called the notice and notice system. There's also the graduated response system, which we've seen in France, England and Australia.

In short, you're telling us that you entirely support Bill C-32, but that we have to make two major amendments. These are not minor amendments. If we don't make them, do you believe that Bill C-32 can achieve its purpose of combating piracy?

[Patrick Roy]

I believe you have to make a clear ruling on this and to know what is acceptable and what isn't. That's not currently the case. However, this also requires subsequent measures so that citizens understand the consequences of their actions if they choose to opt for what is unacceptable, what is illegal.

As we said at the outset, we support the goal pursued by Bill C-32, but this requires changes so that everything is very clear for the public and so that we get decisive results. This has to result in an effective new act that will quickly change matters in Canada.

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

I've only got maybe three minutes left and I've got a couple more questions, not just for yourself but for the others if we can get to them.

Are you satisfied with the statutory damages provision of Bill C-32 specifically? Let me be clear on this: to some, like myself, there are two problems. The statutory damages do not apply, obviously, to actions of the enablers, but the second problem--and I've raised this with other witnesses who have come before us--is that there's a maximum liability of $5,000 for all infringements deemed to be non-commercial.

Is it your view in your work that a number of commercial-scale pirates are motivated by things other than commercial gain? I'm concerned more specifically about the issue of notoriety and whether or not reputation also factors into this as well. I'm wondering if the statutory damages we have provided here are not only silent on this but on the extent to which that kind of behaviour may have unintended consequences. If it's not perceived by this committee, it's clear that it wasn't perceived by the drafters of the bill. That's not a slight on them, just a recognition of something that's far greater than anything we've anticipated.

Ms. Noss, you or Mr. East might comment.

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

Not for long, though.

Chair, thank you, and welcome to our members here today.

I would also like to thank the witnesses. Their remarks are very interesting

and I am very interested in pursuing them.

Mr. Reckziegel, the last comment you made was with respect to BitTorrents. I want to get right into this, because it seems this is an area in which the committee is going to have to drill a lot deeper. I know there are a lot of discussions out there, but perhaps I'd go to Ms. Noss first.

The Pirate Bay, which is the world's largest peer-to-peer file sharing torrent, had 2.5 million--if my resources are correct here--registered users in 2008. It's also made an incredible $4 million just from advertising its site alone. They lost an appeal, as some of you know, on conviction in Sweden. The court described it as follows, and I'm quoting here: “The Pirate Bay has facilitated illegal file sharing in a way that results in criminal liability for those who run the service.”

This service, as you know, is not just exclusive to Sweden or other countries. It's also here in Canada. I believe isoHunt in particular, which operates out of British Columbia, is the third most popular infringing BitTorrent site in the world. It continues to operate with more than 40 million peers and over 6.7 million active torrents. These figures are from their own website just a couple of weeks ago, on January 31, 2011. I just want to be absolutely clear that I'm not picking these numbers out of the sky.

Ms. Noss, in your opinion, how would Bill C-32 be able to prevent, stop, and arrest sites like isoHunt from facilitating the mass distribution of unauthorized copies of works, if at all?

[David Reckziegel, Member, Canadian Association of Film Distributors and Exporters; Co-President, Entertainment One Films]

I think I'll just focus, then, on the key parts of what I was going to talk about, which is reiterating somewhat what Patrick has said already. This year we've distributed films like Barney's Version and Incendies, which are two of the most acclaimed films of this year, and if we don't do something about Bill C-32, those kinds of films will have more and more difficulty in being made. Those films are being affected directly already.

We've also suffered from this plague of piracy and we need some clear rules and a deterrent in order to prevent this from happening.

Last summer a young filmmaker whose new film we are distributing received congratulations from an acquaintance who had just seen her film. This surprised the filmmaker, since her film wasn't scheduled for commercial release for another month. What she discovered was that her film was already available online and that dozens of other people she knew had seen it as well. This is one anecdotal piece of information, but this happens regularly.

Online piracy is out of control and is damaging the Canadian film industry today. Currently, four of the top ten most pirated films on BitTorrent are distributed in Canada by Canadian distributors.

[Patrick Roy, Member, President and Chief Executive Officer of Alliance Vivafilm, Canadian Association of Film Distributors and Exporters]

Mr. Chairman, committee members, Alliance Films is a leading distributor of feature films in Canada. Our company also distributes films in the United Kingdom and Spain. Alliance Films distributes feature films to entertainment theatres, on DVD, online and to television broadcasters.

There may be the belief in some circles that film piracy only affects American studios. However, nothing could be further from the truth. Although I do not have a lawyer's skills to analyze Bill C-32, I am sitting in the front row where I can see the growing impact of piracy on our industry. I'm here today to express the wish that Canada become a leader in the fight against piracy.

According to the Ipsos/Oxford Economics study released today, piracy's impact on the film industry, including cinema owners, distributors, producers and retailers, is an estimated $895 million in sales losses. Government tax losses alone are estimated at $294 million. Online piracy, the most prolific method of piracy, has eaten into the revenues of all the films that Alliance has distributed over the past several years, including such noted Canadian films as De père en flic, Les amours imaginaires, Polytechnique and Bon Cop, Bad Cop.

Like independent films from around the world, Canadian films are financed from a variety of sources. One of the critical components in a film's financing are presales to film distributors. The amount the distributor will put up as an advance for an individual film is determined by expected revenue. This makes it more difficult for the producer to get the film made.

New digital distribution models are emerging and being embraced by consumers both in Canada and around the world. Netflix, Apple iTunes and Cineplex's recently launched digital service are examples.

Like most industry executives, I believe that digital distribution of feature films will replace DVDs in the next few years. Other innovative digital distribution models will provide consumers with a much greater range of choice than currently exists.

However, if piracy continues to flourish, these endeavours will be undermined. This will mean fewer films will get made, a weakening of Canada's production and distribution companies and significant reduction in jobs for the creative and support industries that make these films happen.

Thank you.

[Ted East, President, Canadian Association of Film Distributors and Exporters]

Mr. Chairman and members of the committee, thank you for inviting us to meet with you today.

My name is Ted East. I am president of the Canadian Association of Film Distributors and Exporters, or CAFDE for short.

CAFDE is a non-profit trade association that represents the interests of Canadian-owned and Canadian-controlled feature film distributors and exporters. CAFDE members distribute over 90% of the non-studio and Canadian films released theatrically in Canada each year. CAFDE members distribute films in Canada from all over the world and in the widest ranges of genres and budgets.

With me are two senior executives from CAFDE member companies: Patrick Roy, president and CEO of Alliance Vivafilm, and David Reckziegel, co-president of Entertainment One Films.

Copyright reform is long overdue in this country. The Ipsos study released today emphasizes how urgently Canada needs to modernize its copyright law to stop massive online piracy and encourage the development and delivery of a variety of innovative new business models. Piracy hurts Canadian film distributors because it seriously erodes both the domestic and international markets for Canadian movies, makes it more difficult to finance new productions, jeopardizes the jobs of everyone involved in the creative process, and ultimately affects consumers as lost investment means fewer movies being made for audiences around the world.

We applaud the government's introduction of Bill C-32 and fully support its stated goals and intentions. However, we do not believe the bill as currently drafted achieves those goals.

Changes need to be made in the following areas: the enabling provision must be redrafted to ensure that anyone who enables copyright infringement, including hosting services, is stopped; the current ISP safe harbour provisions are too broad and could actually legalize the operations of illicit Internet sites; the UGC--user-generated content--exception is so vague that it legitimizes copyright infringements and violates Canada's international treaty obligations; and the statutory damages provisions should apply to enablers and should provide an effective deterrent to large-scale illegal file sharing.

CAFDE also opposes the educational exemptions mentioned in clause 29 and asks that changes be made to protect the legitimate business rights of producers and distributors within the Canadian educational sector.

Copyright

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Speaker, today in the special legislative committee dedicated to Bill C-32, we heard from groups representing students from colleges and universities. We also heard from the Canadian Museums Association.

The message we heard very clearly was that Bill C-32 was indeed balanced. We also heard that the Bill C-32 opened up opportunities for the future for Canada's economy, for our students, for our places of higher learning and for industry.

My question for opposition members is very simple. Why are they obstructing and delaying Bill C-32 at committee? Why are we not getting the additional meetings we need for the consideration of the bill so we can return it to the House and open up opportunities for Canada? Why are they holding up protections for creators? Why are they holding back Canada's digital economy?

[Ernie Ingles]

Absolutely we do have opinions on other parts of the bill. I can deal with those summarily, if you wish.

The reason we focused on the education is because that is where we think the nuts and bolts are of what we think is good about this particular iteration of Bill C-32. So that's the part we want you to remember and to continue.

But there are other things that are important. For example, the question of the digital locks; this isn't necessarily our issue. In reality, quite often, to do the kind of work that my members do, we negotiate licences that permit us to do certain things with regard to some of that information.

We are concerned...and I was delighted to hear the comment from the student group about the preservation issue. As I indicated in our submission, preservation is very important to what we do and who we are, and we wouldn't want the lock to get in the way of some of those kinds of activities.

[David Molenhuis, National Chairperson, Canadian Federation of Students]

Thank you very much, Mr. Chair and members of the committee.

My name is David Molenhuis. I am here today on behalf of the Canadian Federation of Students, Canada's largest national students organization. I am accompanied by my colleague Noah Stewart, who will answer any questions that members of the committee may have. Our more than 600,000 members are students at universities and colleges, both undergraduate and graduate.

Students are users and creators. We need both ready access to the works of others and the ability to protect our work from unfair use and appropriation. I would like to begin by addressing Bill C-32's proposal to add education to the enumerated categories of fair dealing. While this falls short of the flexible definition of fair dealing that students have called for, it is a reasonable step forward. Listing education explicitly will only be a modest change to the act, which already allows fair dealing for the purposes of research, private study, and criticism—categories that include the vast majority of educational uses—so long as the use is, of course, fair.

Fair dealing involves a two-part test. While Bill C-32 proposes adding education to the list of permissible dealings, it does not propose to alter the second part of the test, which is the fairness analysis. It will not permit the wholesale copying of textbooks, as some have falsely claimed, nor will it permit teachers to replace the use of textbooks and novels with photocopied excerpts.

In Bill C-32, fairness remains the cornerstone of the law. If a dealing isn't fair, it infringes on copyright no matter how educational it might be. What the proposed expansion will do is promote innovative uses of copyrighted works--for example, a teacher showing a clip from a film to their class, or a student distributing a magazine clipping to accompany a presentation, or even a homework assignment in which students build a website dedicated, for example, to the work of a modern Canadian artist.

Post-secondary institutions have often proven reluctant to rely on fair dealing out of fear of litigious rights holders. The inclusion of education will reassure students, teachers, and other members of the educational community that their uses can qualify as fair dealing, provided they are in fact fair.

While some individuals have claimed that educational fair dealing is unclear and will lead to excessive litigation, this is far from true. The proposed expansion will bring greater clarity to the act, filling in the grey zone between research and private study. Moreover, the bounds of fair dealing have been well established by successive decisions of the Supreme Court, the Federal Court of Appeal, and the Copyright Board. The education community is a major contributor to Canada's creative industry. College and university students spend over $1.3 billion on education materials each year. Moreover, this is one area in which spending on copyrighted works is actually increasing, having grown more than 35% in the last decade.

Expanding fair dealing will not diminish these expenditures. Rather, it will encourage students and teachers to make even greater use of copyrighted works, extending the reach of authors and creators and further supporting Canada's creative sector.

The broad language currently used in the bill supports fair dealing as a right for all, not a special exception for a privileged minority. It ensures that educational fair dealing is available to everyone from a church group, for example, to a music teacher, or even to a university student. Educational fair dealing embodies the very best of Canadian values. It recognizes that a commitment to supporting creators can and must be fairly balanced against a commitment to education.

Although by and large Bill C-32 reflects the balance sought by Canadians, one glaring omission is in the approach taken on digital locks. These provisions would stop, for example, a student from using a graph or picture from an e-textbook in their essay; a teacher from using a clip from a video in a class presentation; and a musician from using pieces of recorded music to create an entirely new song. This approach is especially of concern for members of the education community who are increasingly turning to the use of electronic course packs, e-textbooks, electronic reserves, and other digital materials.

Although the bill includes explicit protections for digital locks, it fails to provide any mechanisms to assist users who wish to access locked materials for lawful purposes. Criminalizing the legal use of these materials strips away any and all user rights and gives copyright owners absolute control over how their works are used. The proposal should be amended to modify the definition of circumvention to apply only to infringing uses. This would address many of these problems.

One last area of concern is the special exception for delivery of lessons by telecommunication found in proposed section 30.01. This section is unnecessarily complex and will hamper digital learning. The requirement that lessons be destroyed after the end of a course will force already overworked teachers to rebuild their courses from scratch each term, and students to delete their learning materials at the end of each semester.

Providing for the digital delivery of course materials could be better achieved by simply modifying the definition of “premises” of an educational institution to include any place from which persons are authorized by the institution--that is, including staff, teachers, and students--to access it.

That said, I'll thank the chair and welcome any questions that committee members might have.