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.

[Paul Glover]

Yes, certainly that is one measure. That said, Internet use is skyrocketing at the moment. At the time, that was not one of the measures in the plan. So we have since realized that it is possible to improve our action plan in order to better meet all the challenges that tobacco poses.

We are addressing legal tobacco and contraband tobacco.

We realized, with the explosion of the Internet.... That's further supported by some of our national anti-drug strategies, where we have comprehensive approaches, with images in movie theatres and posters, including television ads. We have an Internet site and a Facebook site, where youth are now posting their own stories and starting discussions. We have fans. We have different vehicles available to us than there were 10 years ago.

While we've certainly recognized that we were a leader 10 years ago, we're the first to get to this issue. We wanted to make sure we continued to be a world leader, as we were with Bill C-32, the first country to ban flavours in tobacco. Simply renewing health warning messages, which was world-leading 10 years ago, would not be world-leading today.

But more to the point, our objective is not to be world-leading; our objective is to be successful in helping Canadians quit smoking or stop smoking.

[Georges Azzaria]

I think that you have put your finger on another problem with this bill, which is sort of what we were discussing earlier. The technical protection measures are an obligation for Canada, in any case, because the WIPO treaties state that, one way or another, we have to have these technical protection measures.

So, the question doesn't really arise. Yes, we need technical protection measures. But which ones do we need and to what extent do we need them? That is the question that follows.

Under Bill C-32, we ultimately are dealing with two systems. On the one hand, there will be the authors working with it, and at the same time, there will be other people who won't be working with it. I'm not sure that is really the aim of technical protection measures. Initially, they were an additional barrier. One might even ask whether this is copyright. People will say it is, because the WIPO treaties say so, but it's as though there were two types of authors: the ones that work with technical protection measures and have a somewhat special regime, and the others, who have decided they don't and who work on the basis of another system.

I don't think the Copyright Act should support these two types of measures.

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

The fact is you are in another world—another bubble. Here everyone has noted that this bill is seriously imbalanced. The fact that the Canadian Council of Chief Executives is saying that it is balanced suggests to me that it really is seriously imbalanced.

I'd like to give you some information. What I would like, basically, is for you to go back to your chief executives and tell them that somebody has not given you the complete truth with respect to this bill.

I would like to present a different viewpoint.

In order to drive home the point that his bill was well accepted within the heritage community, the parliamentary secretary to the Minister of Canadian Heritage stated in the House that 38 multinationals, 400 businesses and 150 CEOs agreed with it. That is what he said.

When he was asked whether any artists agreed with it, he was only able to name one. He was so thrilled to have this support that he mentioned it twice in the House. Only one artist agreed with it, but as Dean Del Mastro stated in the House, there are 400 companies and 150 CEOs that do agree with it.

You also talked about laws that protect and reward the fruits of intellectual capital. I will give you some specific examples a little later. But this is anything but a balanced approach.

I also winced when you talked about extensive national consultations. I want you to know, Mr. Manley, that the consultations in Montreal, which is a large cultural capital, not a small one, were held on July 31, when half of the city had shut down and people were out of town. Furthermore, organizations as important as the Union des artistes du Québec had trouble getting invited and were forced to make their presentation in Quebec City. Talk about phony consultations.

Your friend, Mr. Pablo Rodriguez, objected to your saying that you are “aware that some Canadians are of the view that this bill goes too far in protecting the rights of creators”. But no one has ever said that, Mr. Manley; no one. I have never heard anyone say that this bill goes too far in protecting the rights of artists. I wanted you to know that.

According to you, the purpose of the copyright bill “has always been to strike a balance between the interests of creators and those of the general public”. Once again, allow me to correct you.

Historically, since Queen Anne of England back in 1710, copyright legislation has served to balance the rights of creators and disseminators. In the 18th century, this term included printers and publishers. Now it has a much broader meaning.

This bill has major flaws and will take money away from artists. First of all, the non-modernization of the private copying regime will remove an average of $13.8 million all across Canada. The education exemption, that young students were claiming earlier, will remove some $40 million annually. Write this down so that you can repeat it afterwards. This is money that is being taken out of their pockets. These are royalties that they receive as a result of their author's rights, and which they will no longer have. The abolition of ephemeral recordings will remove some $21 million in income. And artists are not the only ones saying this; broadcasters are of the same view. They said it would only cost them $21 million. There is also the YouTube exception, that the Entertainment Software Association talked about earlier, where preset damages are capped at $20,000. A musical work will never be worth more than $20,000. And I could give you other similar examples.

As you said yourself, the lack of accountability for Internet service providers makes no sense. They must be held to account. There are no royalties for artists and a notice system that is probably ineffective since there are no fines. This bill is focussed on digital locks, which works perfectly for the software and gaming software industry, but is very poorly adapted to the music industry. And, again, there are no residual rights for visual artists.

In a letter dated October 14, your colleagues, representatives of the Barreau who are sitting right next to you, said this about the bill: “These are piecemeal amendments lacking in vision and overall consistency, and rehashing parts of foreign models that are already known to be out of date.” The three intellectuals seated to the left of you wrote that. That is so true that the Quebec National Assembly unanimously passed a motion against Bill C-32, asking for substantial amendments.

With that, I will give our witnesses from the Barreau du Québec a chance to speak. Of course, you will have an opportunity to respond to my comments.

[Georges Azzaria]

Well, there may be challenges. Last Monday, Ysolde Gendreau testified before the committee, and I believe that she explained at some length that the bill, as currently worded, would have trouble meeting the standard if it were subject to the three-tiered test, in particular. That means there would be challenges to trade organizations, either the WTO or another organization.

It is pretty clear to me that there is a cloud over Bill C-32.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

You didn't even receive an acknowledgement. Fine, thank you.

Briefly, as you see it, the content of Bill C-32 is not sufficient for us to be in a position to ratify international treaties. Did I get that right?

[John Manley, President and Chief Executive Officer, Canadian Council of Chief Executives]

Thank you very much, Mr. Chairman. It's nice to be back.

I will read a brief statement and then I will go into the questions.

The Canadian Council of Chief Executives, which I lead, has a long history of support for measures to strengthen Canada's economy and to promote innovation. A strong regime of intellectual property protection and copyright is fundamental to that overall mission. Laws that protect and reward the fruits of intellectual capital and artistic creativity are critical to maintaining a dynamic, innovative, and open economy.

By the same token, the society has an interest in ensuring that consumers and other users enjoy fair and reasonable access to copyrighted material. This can only be achieved through a balanced approach to copyright protection. For that reason, we are supportive of Bill C-32.

This legislation is, as you know, the product of extensive national consultations, round tables, town halls and submissions from thousands of individuals and organizations across Canada.

Throughout this process, care has been taken to respect the concerns, needs and legitimate rights of everyone who creates, markets, distributes or in any way makes use of copyrighted material.

I'm aware that some Canadians are of the view that this bill goes too far in protecting the rights of creators and copyright holders.

Similarly, there are people who feel this bill gives too much freedom to consumers and other users.

This divergence of views is inevitable. The challenge in copyright law has always been to strike a balance between the interests of creators and those of the general public.

To my mind, there are four key elements of Bill C-32. First, it brings Canada's copyright rules into the 21st century by legitimizing some activities that consumers in fact do every day. This includes recording television programs for later viewing, transferring digital content from one format to another, and making backup copies, provided the original material was acquired legally and the copying is for consumers' personal use.

Second, the bill gives creators and copyright owners stronger legal tools to control how their works are made available and to guard against copyright violation. As other witnesses have pointed out, these provisions are needed to ensure that Canada does not become a haven for international music, movie, and software piracy.

Third, the bill will improve the learning experience for Canadian students by providing educational institutions, as well as libraries and museums, with enhanced access to copyrighted material. It does this in part by expanding the concept of “fair dealing” in a way that recognizes the significant societal benefits of education.

This is consistent with the recommendations of the Competition Policy Review Panel, which in its 2008 report identified the use of the Internet for research and education as a cornerstone of Canada's ability to innovate and compete in a knowledge economy.

Fourth, Bill C-32 encourages the growth of Internet services in Canada by providing legal clarity for network service providers, web-hosting services and search engines.

Under the new rules, ISPs will be exempt from liability when they act strictly as intermediaries in the communication of copyrighted material.

At the same time, the bill includes new provisions targeting those who knowingly enable copyright violations.

On behalf of the Canadian Council of Chief Executives, I strongly endorse the overall thrust of this legislation.

Having said that, I think the committee may wish to consider certain technical changes to the bill so as to avoid unintended consequences. For example, important concerns have been raised with respect to the impact on Canada's software industry of the provisions dealing with encryption research, network security, reverse engineering, and copying for interoperability purposes.

In addition, some of the language dealing with user-generated content and copying for private purposes may be too broad, but I'll leave it to others to propose amendments that would address specific concerns while staying true to the spirit of the legislation.

Those issues aside, the bill generally strikes an appropriate balance among various stakeholder interests.

I note that Bill C-32 includes a mandated review of the Copyright Act by Parliament every five years. While it may not be possible to satisfy every demand of every group, this provision ensures that parliamentarians will have the tools to address unforeseen problems on the basis of experience. In that light, I urge you to move this bill forward as expeditiously as possible.

As others have noted, the Copyright Act was last revised when the Internet was in its infancy, and it badly needs updating to reflect the impact of new technologies on business practices and daily life.

Bill C-60, tabled in June 2005, and Bill C-61, tabled in June 2008, both died on the order paper after the dissolution of Parliament. If these hearings continue at the current pace, there just might be a danger that this bill, too, will die. That would not be in the interests of Canadian creators and it would not be in the interests of consumers.

Nor I suspect, would parliamentarians welcome the prospect of going back to the drawing board, with yet another round of consultations and hearings. Finally, I want to commend the committee for the work you are doing. I bear the scars of the last time Canada's copyright law was amended, and I am the first to admit that mediating among so many competing interests requires a great deal of care and effort.

I still bear some of the scars from that process.

Thank you very much, Mr. Chairman.

I'd be pleased to respond to questions.

[Georges Azzaria, Professor, Laval University, Barreau du Québec]

Mr. Chairman, my comments will deal mainly with the complexity of the legislation, and I'm available to answer your questions in that regard.

Our hope was that Bill C-32 would clarify the underlying principle of the act, and yet we are left with a far more complex piece of legislation that includes an increasing number of exceptions, as well as exceptions to exceptions, to the point where it becomes very difficult to make sense of anything under the circumstances. Everyone knows that a law that becomes obscure and increasingly convoluted may not be obeyed, in some cases, because people will not know exactly what the principle involved is.

Let me quickly give you a couple of examples. You can make a private copy of a work, but not if there is a lock. In some cases, you have to destroy the copy and, in other cases, the author will be compensated, but not always. This is something that the average person will have difficulty understanding. So, I think there is significant concern associated with that.

Let me quickly give you two further examples. What is the distinction in the legislation between educational purposes, and so on? We don't know. Also, what is meant by “non-commercial purposes” or “private purposes”, considering that there is already a reference to private study and private use?

So, it is all of that, and the courts will probably end up wondering what it all means, which implies that there will be litigation in order to clarify matters. The Supreme Court will be able to explain all of this 10 years from now. But I'm not sure that is a good thing for litigants.

[Marc Sauvé, Director, Research Services and Legislation, Barreau du Québec]

Mr. Chairman, ladies and gentlemen members of the committee, my name is Marc Sauvé and I am the director of Research Services and Legislation with the Barreau du Québec. For the Barreau's appearance before this noble assembly, I am accompanied by Mr. Georges Azzaria, a professor at Laval University, and Mr. Pierre-Emmanuel Moyse, who teaches at McGill University. They are experts in the field and you will be able to ask them any questions you may have.

The Barreau's position on Bill C-32 was expressed in a letter from the president of the Barreau du Quebec addressed to Ministers Tony Clement and James Moore on October

The Barreau is of the view that the debate should focus on the principles that should apply to all legislation. However, the Barreau cannot claim that there is a consensus in the legal community regarding its position on Bill C-32, for two reasons. The first of these is the wide diversity of interests at stake, as well as the lack of a common, shared vision of what a copyright act should be.

If I may, I would like to focus on two points: the excessive complexity of the legislation, which encourages referral to the courts, and the bill's inconsistency with international law.

To address the first point, I would like to turn it over to Professor Moyse.

[Carolyn Wood, Executive Director, Association of Canadian Publishers]

Thank you for this opportunity to speak today on behalf of the ACP. It represents 127 independent publishers from across the country. We have members in all provinces. They publish books in all genres: literary books, cookbooks, children's books, general interest books, scholarly works, and textbooks. They represent, by and large, small- to medium-sized companies, and I would have to say their emphasis is more on the small-sized than the medium-sized companies.

Though a few are affiliated with universities and other not-for-profit organizations, most are owner-operated businesses—independent, English language, and Canadian owned. The multinational publishers located in the greater Toronto area represent to our members the chief competition in the marketplace. We have no foreign-owned companies in our association, but we share some common ground with them on copyright, and particularly on Bill C-32.

For all publishers, copyright is the ground that we stand on or the roof over our head—you can pick your metaphor. It's the sole source of our revenue. Authors give us the right to make copies. We produce copies and sell them, and we sell the rights to other publishers to produce and make copies in other languages, other territories, and other formats. That's it. That's our business. We have no concert revenue. We have no spinoff merchandise. We carry no advertising in our pages.

The revenue that derives from copyright is the sole revenue for our members, so it's not unreasonable that we are pretty interested in this bill. We are really glad to see it come down the pike. We've waited a long time for it and we're glad to see a bill get to this point. We've watched others fall off the tracks over the years.

We do have a few concerns, and there are four in particular I want to talk to you about today.

The first step for us is the education exemption. It is, as written, so broad and so undefined as to create enormous uncertainty for our industry with respect to its markets and future prospects. I was interested to hear the students say that any uncertainties can be resolved in the courts. I don't think anybody thinks that this would generally be the best outcome.

For our members--small businesses--legal solutions to this kind of problem are the last thing we want to see and can afford. We can't afford expensive litigation, and we can't afford to lose the market share that is at risk while all this plays out. We are interested in seeing clear definitions of “education”, and of the context in which this exception would be applied.

We are also concerned about the reduced role for collective licensing we see in this bill. The model represented by Access Copyright and Copibec has worked effectively for a long time to produce, as a result of much trial and error and many arbitrated decisions, broad access to a huge range of copyright-protected materials in a convenient and affordable form. If you want to negotiate the price, that's a market decision. If public representatives choose to do away with a lawful business model, that's a political decision. And if that model has a long history of working well for many institutions and individuals, that's a counterproductive political decision.

Our third point was addressed in the previous session on the limits to statutory damages for non-commercial use. We too are struck by the difference between copying by individuals for private purposes and the much broader and much less well-defined term of “non-commercial use”.

Finally, the extension of provisions on interlibrary loans to digital works—those provisions that applied previously only to print—causes serious market problems particularly for university presses in Canada, which publish the majority of Canadian scholarly journals. A change like this will severely undermine that market and perhaps eradicate it.

The total of all this—one of many—is a disincentive toward the production of intellectual property. While I was interested to hear the students talk about how access to intellectual property is one of the cornerstones of an innovative economy, if there is no incentive to produce those materials, then an innovative economy is the last thing we're going to have.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Very good.

Do you believe that Bill C-32 strikes the right balance between the interests of students and the interests of creators?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay, interesting.

Bringing this now to Bill C-32, what elements of Bill C-32 help to advance this agenda?

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

Thank you to our presenters for being here this afternoon.

I'd like to start with a couple of questions for the Canadian Alliance of Student Associations.

Setting aside a discussion about BillC-32 specifically, in the context of a general discussion about copyright, how would you summarize or encapsulate the interests of students in a general discussion about copyright?

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

Right.

I'm running out of time here.

You mentioned earlier, Mr. Keys—I believe it was Mr. Keys, it might have been Mr. Dayler as well—the destruction after 30 days. This has been brought or introduced, from what I understand of my reading of the legislation, for the first time in Bill C-32. I think you suggested that it was somehow the position as a result of pressure or involvement by the publishers. I don't think that's the case.

Do you in fact want to clarify that comment?

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I"d almost like to let this go for the next 20 minutes and just let the two of you debate.

I do have a couple of things. I would like a clarification on where Mr. Garneau was going earlier regarding Access Copyright. It's my understanding that Canadian schools pay in excess of $20 million per year to Access Copyright, and Bill C-32 does not change that--I don't believe.

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

Ms. Parr, I would like to come back to what you said earlier about this bill being a compromise. I have to say that, unfortunately, it is not a compromise. This bill is heavily weighted in favour of an industry such as yours, entertainment software. I'm happy for you, because your industry is important. However, this bill is seriously imbalanced.

You are proposing five amendments. If these amendments do not pass, would you still be prepared to support Bill C-32? I guess you would be in favour of Bill C-32, even though the artistic and creative community is sharply critical, has denounced it and would never want it to pass.

One proof of that imbalance is the damages regime. You refer to that in the fifth amendment you are suggesting. The damages you refer to relate more to musical works.

This is about circumventing a tool which is extremely valuable for you, namely digital locks. Clause 48 talks about criminal sanctions amounting to $1 million.

A musical work is worth $20,000 in terms of damages, whereas circumvention of a digital lock, which is extremely valuable for the gaming software industry, costs $1 million and exposes someone guilty of such an offence to a five-year prison term. There are pre-set amounts for damages. That is a good thing, but they are capped at $20,000, which results in an imbalance.

So, that brings me to damages. I would like you to tell me whether I have this right. Does the $20,000 fine also apply to software that is copied?