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.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Of course, some people say that, by attacking peer-to-peer file sharing sites, this bill will be useful in that it will reduce pirating.

Now you're saying that 90% of music that is listened to is music that people haven't paid for.

How far do you think this figure of 90% could fall if Bill C-32... Do you think people will find ways to circumvent the problem?

[Dean Del Mastro, Conservative, Peterborough, ON]

There's an important feature in Bill C-32, which is a technological protection measure, as Mr. Isaac mentioned. If you don't want people to make additional copies of your work, we actually say that we'll let the market work. And that's an important distinction....

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chairman, and my thanks to the witnesses for appearing today.

This is an interesting discussion. It seems to me that the role of copyright is to establish a market. It's to establish a system by which people who create things can be paid for their creations. It recognizes that when a work is created, it should be bought and not stolen.

I want to go back to some of the comments of my colleagues across the way, because it seems they're missing the purpose of the bill. I don't want people to copy your music for nothing; I don't. I want them to pay for it. When I was a kid...it's not that long ago; I guess I'm a few years younger than anybody on the opposition side. I had to buy 45s, I had to buy cassette tapes, and I had to buy CDs. In fact, I bought hundreds of CDs.

It seems we have a defeatist attitude on the other side now and some in the lobby, who say, “You'll never shut down isoHunt, and you'll never shut down these organizations.” It doesn't matter. Mr. Isaac says, close up the loopholes. I want to close the loopholes up. I want to shut them down, and I want you to get paid for every song you sell.

What I don't want to do is put in a system.... I need to understand this better. You said you'd only tax music devices. This phone is a music device. It's a phone, it's a computer, and, by the way, as technology improves, it's going to be even more seamless. The same device you use to open your garage door will be the device you use to change channels on your television--and it might well be your television. All these things are converging. Technology is converging. There will be no such thing--there is virtually no such thing today, as we sit here...if you go to the store shelves, unless you're buying very, very cheap devices, there is no such thing as strictly a music device for sale. The good devices are all converging. They do multiple things.

I have no idea how you would ever create a tax for this, and it is a tax. I also want to deal with this question of whether it's a tax or a levy. A government is only a conduit. In fact, right now government is a really good conduit, because it's paying out more money than it's taking in, some of which we're giving to artists, and I'm proud of that. But there is no difference to the consumer where the money winds up. None of the money ultimately goes to something called “government”; it all goes back to Canadians in different ways. So it is very much a tax.

I would like to understand how you would place it only on a device that only copies music. First of all, there is no such device. Secondly, I don't know how you could set it at $2, $10, or $15 and make up for the fact that what Bill C-32 seeks to do is shut down the BitTorrent sites. You must support this. Is that not the most important thing for artists, that people can't just steal their music?

[Roanie Levy]

Absolutely. I think you're correct to point out that, especially when you're dealing with a situation where remuneration is currently received by creators and by other rights holders, removing the remuneration would conflict with the normal exploitation of a work or would unreasonably prejudice legitimate interests of the rights holders. If you're familiar with our international obligation, you would recognize that these are two of the three-part steps that every exception needs to be met.

In Bill C-32 there is a surprising number of changes that outright eliminate remuneration that is currently being received. There are some in the education sector, there are some in the mechanical reproduction sector, and there are some in others as well.

It also goes to the ability of creators to be able to perceive future revenues. As the use is moved to a digital environment, the elimination of the licensing regimes and the undermining of collective society is going to have a serious impact on the ability of creators and rights holders to be able to actually benefit from the promise of the digital economy, which would otherwise allow them to receive compensation where the consumer is at, where the consumer is actually making uses.

When you think of the digital economy, you think of this seamless web of licences, licences that would be through collective society as well as directly with the rights holders, that would allow the uses to take place in a seamless way to the consumer, but where the creators and the rights holders would receive compensation. The elimination of these revenues today and the dismantling of collective societies generally, which Bill C-32 creates, would seriously undermine the innovation of these types of business models in the digital economy.

[Roanie Levy]

You're asking me a lot of things. I'm going to start by saying that defining the education sector would be helpful. However, that's definitely not the solution. Even defined in a more limited way than it is today, the education sector as such is still an important sector for creators and book publishers. So simply defining the education sector is not enough. It's also important to define certain limits to the concept of fairness.

I'm going to suggest something else that you might consider. The amendments in 1997 made it possible to introduce a very innovative mechanism in Canada. It's a mechanism that grants access to a work and payment for that work at the same time. Access is guaranteed, and payment as well.

Unfortunately, Bill C-32 disregards that mechanism, which is provided for under the current Copyright Act. Even worse, it is eliminated in a number of instances. If we once again followed the principle that, when the market is able to meet the rights holders' needs as well as those of the user, we no longer need to apply the rules of exemption, we would succeed in achieving the twofold objective of access and compensation.

[Roanie Levy]

Based on our study, we believe that about $60 million is at risk as a result of the scope of fair dealing in the education sector, as well as other education-related exemptions provided for in Bill C-32. This is revenue that COPIBEC and Access Copyright collects today for the copying of a chapter here, a page there, for the distribution of works in class, for the use of works in exams. It also includes the royalties that certain film distributors collect from the education sector.

So we're talking about a minimum of $60 million at risk, but you also have to consider that, when a use or reproduction becomes free of charge, an increase in that type of reproduction follows. There will also be a revenue shortfall that will be more difficult to quantify as a result of a decline in sales of texts intended for schools.

[Brian Isaac, Chair, Canadian Anti-Counterfeiting Network]

Thank you.

Good afternoon. I'm Brian Isaac. I'm the chair of the Canadian Anti-Counterfeiting Network, which we refer to as the CACN. I'm also a partner with Smart and Biggar, Canada's largest firm practising exclusively in intellectual property.

Thank you for the opportunity to present today. Due in part to the short time between our receipt of the invitation to participate and our participation, we have not yet submitted our written submissions, but plan to do so in the coming weeks.

The Canadian Anti-Counterfeiting Network is a national coalition of individuals, companies, firms, and associations, that have united in the fight against product counterfeiting and copyright piracy in Canada. We're going against IP crime. The members of CACN include Canadian organizations, companies, and practitioners who have hands-on experience enforcing against IP crime, including copyright piracy in Canada.

The issue of IP crime legislation has been studied for years in Canada. In 2007, the Standing Committee on Industry recognized that Canada's IP crime laws needed to be amended, and recommendations included ratifying the World Intellectual Property Organization Internet treaties that Canada signed in 1997.

While Bill C-32 does not address all the issues that need to be addressed relating to the problem of counterfeiting and piracy in Canada, and that includes addressing some other acts, such as the Trade-marks Act and customs legislation, it does address the Internet treaties and is an important step in addressing commercial-scale piracy in Canada.

Our submission is that passing Bill C-32 into law is a matter of urgency. Canada needs to take legislative action that is already way too long overdue, and while we're recommending some specific changes to address loopholes and practical enforcement issues, we do fully support passing of the bill as soon as possible.

Turning to substantive comments, first regarding the ISP safe harbours provisions, we remain concerned that the notice and notice system proposed in the bill will not be sufficient to effectively address the Internet trade in pirated products. In any event, a notice and notice system requires strong provisions directed against enablers of Internet piracy. The bill's proposed enabling infringement provision only applies if a service is “designed primarily” to enable infringement. With experience, I can say it's often going to be very difficult to prove a service was designed primarily for infringement, even when it would be possible to prove that a service provider is knowingly enabling and encouraging infringement as a primary use of the service.

Accordingly, our submission is that the enabling provision should be amended to catch services “designed or operated primarily” to enable acts of infringement. In addition, the provision should make it clear that the full range of legal remedies, including statutory damages, are available against enablers.

Second, we submit that the provisions providing protection for technological protective measures are crucial to fill a gaping hole in Canada's copyright laws. The prohibition on trafficking circumvention tools or services will permit rights holders and law enforcement to go after entities that are enabling widespread piracy. The nature of circumvention activities is such, however, that the act of enabling circumvention and the act of copyright infringement are normally distinct acts that are performed by different people. Accordingly, limiting the prohibition to circumvention for the purpose of infringement, in our submission, is not feasible as it's going to create a loophole for traffickers that will be exploited.

Further, the wording of the exceptions has to be closely scrutinized to try to ensure there are no unintended loopholes that may be used by persons trafficking in circumvention products and services. For instance, if you have purveyors of circumvention tools or services adapted for allowing the loading and using pirated content onto devices that are technologically protected, the fact that it may allow for the loading of legitimate content should not create a loophole when the economic viability of the tool or the service is solely based on enabling piracy.

Generally, we strongly urge against any watering down of the TPM provisions, as they may easily be rendered practicably unusable.

Third, and last, we're very concerned that the two-tier system for statutory damages will be abused and may create perverse incentives for rights holders and infringers. The new non-commercial tier provides a range between $100 and $5,000 that applies to all infringements ever done by the infringer, and that's going to give an incentive for them to copy as much as they can, because they'll only get one capped damage.

Also, the first rights holder to file an action can benefit from the ability to claim statutory damages. This could provide incentives for the rights holders to sue quickly so they're the first to the gate.

Moreover, many individuals and organizations that facilitate widespread piracy, such as “warez” or release groups, do so to build a reputation on the Internet. They don't do it for dollars. One of our concerns is that the two-tier system will benefit those people who are purposely going out to gain their reputations, and it would limit the liability of those individuals.

We recommend you eliminate the multi-tiered system and instead focus on the factors that courts must consider when determining the amounts of the awards, to ensure that individuals copying pirated content for private use are protected from inappropriate damage awards.

We urgently need to equip rights holders, law enforcement officials, and prosecutors with robust legal tools to shut down those who enable or facilitate piracy. We applaud the significant step the bill represents. We urge the committee to implement the amendments necessary to fully realize the principles of the bill and to rapidly pass and implement it.

I will gladly answer any questions.

Thank you.

[Roanie Levy, General Counsel and Director, Policy and External Affairs, Access Copyright]

Thank you, Mr. Chair, mesdames et messieurs, members of the committee.

I'll begin by explaining what Access Copyright does. In order to do so, I invite you to reflect for a second on just one image.

Here I have a copy of a page from a story by children's author, Alan Cumyn. All it is is words on paper: words and paper. In what does the value reside? Of course, the value resides in the organization of the thoughts and ideas on the page; that is, in the words. So when we photocopy, when we reproduce, when we display, or when we post it for others to use, we are reproducing the words, not the page or medium that merely conveys the words.

Access Copyright captures the value of these reproductions and redistributes it to creators and publishers who have invested their creativity, sweat, and capital to produce words on paper.

Reforms to the Copyright Act in 1988 and 1997 brought in collective societies like ours to manage parts of Canada's copyright regime. We have counterparts in every developed and many developing countries around the world.

Every year, Canada's education sector alone reproduces more than half a billion pages of text for use in classrooms. That's equivalent to three million books, books unsold, but whose words are valued enough to be copied. This is not about the child who copies a poem to memorize. This is about mass, industrial-scale copying of texts as educational resources. Mass copying that occurs one page at a time, one chapter at a time.

Across Canada, the education sector, and others, negotiate licences with Access Copyright for these very purposes. This ensures that rights owners are compensated when their works are copied instead of being purchased.

For centuries, this has been the purpose copyright has served: protect the value invested in the words and images that convey the ideas that drive our culture and civilization forward.

Perhaps it was unintended, but Bill C-32 turns this principle on its head. It does so with the introduction of a raft of new exceptions, exceptions that say users will continue to pay for the paper, the iPod, the iPad, but the words shall be theirs for free.

Today I'm going to walk you through provisions that demonstrate the true consequences of Bill C-32, that is, the stripping of revenues from Canada's creative industries and redistribution of them as subsidies to the education sector. That is done in the name of fairness. The word “fair”, like a fig leaf, appears to hide an embarrassing reality.

I have wrestled to understand the public policy rationale behind these changes.

I have wrestled to understand the public policy rationale in Bill C-32 for cutting off existing compensation from the education sector to creators and publishers for the use of copyright protected works in tests and exams, uses that are covered today under collective licences.

I have wrestled to understand the public policy rationale for cutting off existing compensation for the display in the classroom of copyright protected works, once again, uses that are covered today under collective licences. These are licences that generate a return on investment that keeps Canada's creators and publishers thriving as partners in the development of Canadian resources for Canadian students.

And I have wrestled to understand the public policy rationale for adding education to the so-called fair dealing exemption. Make no mistake, this is a misnomer: when dealing or use is considered fair dealing, it is not paid for. Fair dealing is free dealing.

Am I wrong or is this an unintended consequence of Bill C-32? Are the education exemptions a subsidy? Half a billion pages are paid for today. How many millions will be free tomorrow?

The government's background paper says this provision will “reduce administrative and financial costs”. As written, the exception is a hole through which many trucks will pass: everything will become education.

The Canadian Federation of Students understands that. They are cheering. The Council of Ministers of Education understands that. They, with the notable exception of the Quebec ministry of education, hope to bring us to the Supreme Court, because they believe that “most, if not all, photocopying in schools is fair dealing”.

“Fair” does not ensure that creators and publishers will be treated fairly. To me it looks like a fig leaf for expropriation without compensation.

You may have seen this. Four hundred of Canada's world-celebrated writers have signed this letter of protest, which was published a couple of days ago in The Globe and Mail.

If these consequences are unintended, please make it clear in the legislation. Fix it now and spare us decades in the courts.

I will be pleased to take your questions.

Thank you.

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

Good afternoon, everyone.

We're going to call this sixth meeting of the Legislative Committee on Bill C-32 to order.

Today we have, from Access Copyright, Roanie Levy, general counsel and director of policy and external affairs; from the Canadian Anti-Counterfeiting Network, Brian Isaac, the chair; and from the Canadian Private Copying Collective, Annie Morin, chair of the board, and Sophie Milman.

Could we hear from Ms. Levy from Access Copyright for five minutes?

Telecommunications

[James Moore, Conservative, Minister of Canadian Heritage and Official Languages]

Mr. Speaker, the very thing the member is asking this government to do is in our copyright bill, Bill C-32. Unfortunately, his party is voting against Bill C-32.

Therefore, if he is asking our government to take an action in favour of the policy he has asked for, why does he not actually join us in doing what he says he should be doing?

Copyright

[James Moore, Conservative, Minister of Canadian Heritage and Official Languages]

Mr. Speaker, our responsibility is to respect creators throughout Canada. The first thing we must do as a parliament is ensure that piracy is illegal in Canada. That is the first thing we must do.

Our Bill C-32 on copyright makes piracy illegal in Canada and also imposes international Internet treaties. That is key. It is the beginning of a real dialogue for our artists. It is a key component of our bill C-32 and, for that reason, we have strong support from artists, creators and everyone across Canada for an effective and responsible bill, one that does not slap a new tax on consumers.

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

Mr. Speaker, the minister did not answer my question. Does he agree with these three points? We all agree that piracy should be illegal. It is all in how you do it. Artists must be compensated.

The education sector currently pays $40 million a year to authors. Bill C-32 is cutting off this compensation. Royalties paid to artists are not gifts; they are their income, their pay.

Does the minister agree with the Quebec minister of culture that the education sector should set an example for our children by teaching them to respect our creators and their works and pay them?

[James Moore, Conservative, Minister of Canadian Heritage and Official Languages]

Mr. Speaker, we are always talking with the other governments. I had a meeting with Ms. St-Pierre this week to discuss the bill. She supports the key elements of our bill. For example, our Bill C-32 will make piracy illegal in Canada and protect artists across Canada from what is destroying their ability to earn a good living with their creations. That is very important and a key part of Bill C-32.

Why is the Bloc Québécois opposed to a bill that makes piracy illegal in Canada? That is the real question.

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

Mr. Speaker, the Minister of Canadian Heritage says that he is working with Quebec minister Christine St-Pierre on improving Bill C-32 on copyright. Ms. St-Pierre believes that the education sector must pay copyright fees, private copying must be modernized, and Internet service providers must be made accountable. Passing Bill C-32 without these substantial amendments would result in enormous losses for Quebec creators.

Did the Minister of Canadian Heritage respond favourably to the minister's three concerns when he met with her?

[Prof. Giuseppina D'Agostino]

We do need to create a vital market framework, and with it we need the provisions to sing loud. We need clarity and understanding for all Canadians. Currently there needs to be some tweaking of the provisions outlined in Bill C-32 as it's configured, but we need to move forward.