Bill C-11 (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.

[David Swail, President and Chief Executive Officer, McGraw-Hill Ryerson Limited, Canadian Publishers' Council]

Thank you, Jackie.

Thank you, Mr. Chairman and committee members, for the opportunity to be here this morning.

My name is David Swail. I'm the president and CEO of McGraw-Hill Ryerson, which is a K to 12 and post-secondary and professional publisher, based in Whitney, Ontario.

I'm going to focus my comments this morning—and this won't surprise any of you, I don't expect—on fair dealing, so I'll be echoing some of the themes you've heard already from my colleagues here.

In our view, the education exception for fair dealing is the most significant new element of Bill C-11 that has the greatest potential for impact on our business. Secondly, and importantly for the committee, it's also the aspect of the bill that we think is most easily and simply amended to satisfy all of the stakeholders I'll be speaking about in the next few minutes.

What I'd like to do, if I may, is to tell my story in three parts.

The first part is about the history of our business. I'm not going to go back to Confederation, but I'd like to talk about the last few decades in our business and focus particularly on the higher education sector. Greg Nordal has spoken very eloquently about the K to 12 space, where we're also very active, but I'm going to focus a little on higher education.

The last several decades in our business have been a fantastic opportunity for publishers in this country in the education sector to develop materials to address the Canadian marketplace specifically. If you look at any of our graphs, you'll see that all of our Canadian content opportunities have been in a wonderful growth mode—and by “wonderful”, I mean this is a mature market, so I'm talking about 3%, 4%, maybe 5% growth, but growth nonetheless—while at the same time, demand for imported products, which principally come from the United States, has been waning.

Where we've found our opportunity, and where our investment has been directed, is in response to the market's demand very specifically for Canadian content. That is equally true in the higher education space, as it is, as Greg mentioned, in the K to 12 space. So it's very, very focused on Canadian resources and meeting customer demands in the education sector, among teachers, instructors, and students, of course, for that kind of material.

What that has meant for us over that period of time is continued investment, not only in resources, but also in some of the numbers that Jackie shared, for instance, employment. There's been significant investment across what we like to think of as a true ecosystem of contributors to our business: from writers to photographers to editors to illustrators to designers to printers to distributors—an entire business built around providing resources to our customer base.

We have come to the point today where we're a significant partner with our customers in education, in all realms—from K all the way through post-secondary, where we're a significant employer. We're a significant investor in the development of Canadian materials.

We like to think that Canada as a country and the students across the country are much better off for the work we have done. That applies equally in K to 12, post-secondary, and also in professional realms. Whether you're a lawyer, a doctor, an accountant, or in any professional realm, significant investment in materials has gone to make your professional lives more meaningful.

That's part one. That's where we have been.

Part two, of course, is where we are today. As it won't surprise you to know, that's really all about digital. We've seen, as I think everyone here knows, a tremendous acceleration in the pace of digital innovation. It's made huge opportunities present themselves to our business. It's placed great demands on our business. But it's also forced us to meet a lot of new customer expectations for information at their fingertips 24/7, supported around the clock, instantly shareable, instantly searchable.

The digital realm we have now embarked upon meeting, and exploiting, if you will, for our marketplace has created tremendous expectations and opportunities for us. It's also meant a very significant reinvestment in the business. At this point in our evolution, we're reinvesting and re-upping the ante very significantly.

As I think Jackie mentioned earlier, print is certainly not going away, by any stretch. But we have an additional opportunity, an additional pressure, put upon us to redirect our investment into new digital resources that are making our print product far more effective. It's more effective in terms of product that can be used to assess how students are performing, more customizable, certainly a brilliant solution from the perspective of distance education for those students who aren't in a bricks and mortar kind of setting, and certainly very adaptable for different learning styles.

The digital revolution has made us far more relevant and created a much bigger opportunity for us. That's really the challenge we're trying to meet in this day and age.

You might ask the question, then, so why not just digital lock, as provided in Bill C-11? Put those on everything you do digitally and life will be good.

I'll harken back to Jackie's point—and Greg made this point as well—that print is still the core of what we do. In the K to 12 sector it's probably 90% of our business, and in higher education it's still probably 80% of our business.

More and more we are providing digital solutions, but they are blended with print. All of you will appreciate that print is a hard habit to break. Even my 14-year-old daughter, who is as tech savvy as anyone, is still very much wedded to her textbooks, so digital locks will not do it for us. In other words, it's not a panacea that will solve everything for us.

Let me come to part 3 and wrap up. Part 3 is really about what we envision Bill C-11 can do for our business in a way that will ultimately protect investment, and you've heard these things from my colleagues this morning also. First, it's about setting a playing field that will continue to encourage us to invest in the creation of these resources, and that means putting the marketplace for the work front and centre and absolute primacy in terms of what constitutes fair dealing.

In our mind, for that reason, the Supreme Court decision around CCH is also not a panacea for the very good reason that it does not place the primacy of the marketplace front and centre. In our estimation, “fair”, intuitively, by anybody's definition, should ultimately mean fair in the sense that it does not impede the commercial prospects for a work, and we find that the CCH decision has very significant shortcomings in that particular respect, so both digital locks and CCH, in our view, are not quite enough to get us there.

We would like to define “education” more specifically. We would like to echo the government backgrounder with respect to what education is and what fair dealing is meant to mean, and a couple of specific issues are, first, fair dealing is not a blank cheque; second, by definition, it does not harm the copyright marketplace. Those are the principles we want to see embedded in a very minor—in our belief—technical amendment to the bill that we think will level the playing field; will continue to create commercial opportunities for businesses like mine, like Greg's, like all the people who compete in our industry; and will ultimately prove to be a better way of delivering better resources for Canadian students.

It will keep investment in Canada, and the other important thing to note is that many of the competitors in our marketplace publish in many other marketplaces. My goal in all of this is to try to retain investment in the Canadian business. That's what employs me. It's what employs my employees back in Whitby. It's what makes the virtuous circle that we have created in our business over the last many decades in this country. This is about ensuring that investment has a reasonable prospect of return in the context of copyright in Canada, and for that reason the amendments that we are proposing are simple, elegant, and meet all the points you have heard from individuals—

[Greg Nordal, President and Chief Executive Officer, Nelson Education, Canadian Educational Resources Council]

Thank you, Mr. Chairman and committee members, for this opportunity to address you on behalf of the K to 12 educational publishers sector. My name is Greg Nordal and I'm president and CEO of Nelson Education, Canada's largest publisher in this segment. We have roots in Canada going back to 1914.

There are many positive components of Bill C-11. Our industry is fully supportive of the intent to modernize copyright law in Canada and much of what we see in Bill C-11 achieves its purpose.

However, the educational fair dealing exception clause, as drafted, is problematic in many ways. It would create an environment of uncertainty for Canadian rights holders and authors, it would lead to an unacceptable level of investment risk for publishers and potentially harm the market, and it would have the unintended consequence of undermining the future availability of indigenous materials and learning resources created specifically for Canadian students and educators.

From the point of view of the creative community, the issues are clear. Who could reasonably expect publishers to spend millions of dollars a year investing in new learning resources for Canadian schools if rights holders are not protected and there's no viable expectation of return? What incentive do Canadian authors have to invest their time and talent to create content without viable opportunities for compensation?

This committee has heard some contend that educational fair use exceptions have worked well under U.S. law, so why would Canadian publishers have any concern? However, there is an important distinction to be made here. In the U.S., fair use provisions make it clear that commercial harm to right holders is the primary determinant of fair use in copyright. That's the trump card. In Canada, on the other hand, the much discussed six-step test is to be used to determine what is fair. Commercial harm is but one test of the six under CCH to help assess what is fair. Commercial harm is not deemed as the most important test, and in and of itself commercial harm does not determine what is fair. In the U.S. the effect on the market for the copyright work is determinant, and it is the central fair use factor. This principle gives U.S. publishers the comfort they need to invest in new and innovative solutions for schools, students, and educators. To suggest that the fair dealing exception in Bill C-11 is comparable to fair use protection is extremely misleading. To suggest that the six-step test is adequate protection for Canada's creative community is worrisome indeed.

This committee has also heard from some within the educational community who say that Bill C-11 changes nothing with regard to compensation for educational publishers and authors, that our concerns are unfounded, and that these words are contradicted by real world experience.

I speak from such experience in the K to 12 publishing sector. The Copyright Board issued a decision in 2004 that set out what uses are fair by teachers and are to be considered fair under fair dealing. This decision was appealed by the ministers of education to the Federal Court, which in 2010 affirmed the Copyright Board's decision on fairness. Publishers have accepted both the Copyright Board's and the Federal Court's rulings on what is fair, but not so the educational sector. In fact, the educational sector has contested the fairness determination all the way to the Supreme Court, which heard the issue in December 2011. The decision is pending. Despite multiple rulings on what is fair dealing and fair compensation for the creative community, this issue, 10 years after the original Copyright Board decision, has still not been accepted by the K to 12 market. It's worth noting that the litigation has been lengthy, costly, and has generated much uncertainty in Canadian publishing for authors, publishers, and other stakeholders. The proposed exception will further undermine protection for copyrighted materials in the educational sector. The proposed educational exception will have an adverse impact on our market, based on experience.

To be clear, the amount of classroom copying that is happening today is not trivial. On an individual classroom basis, the amount of copying may seem a trifle to some but in aggregate the amount of copying taking place is immense. In 2009, over 300 million pages were copied in Canadian K to 12 schools. That equates to over $40 million in annual book sales, given the typical size and price of a book at the K to 12 level alone. If you include higher education, colleges and universities, the figure is much higher. It's well over half a billion pages copied on an annual basis, and these are materials copied directly from copyrighted works. We're not talking about what's freely available.

It is possible to amend the fair dealing exception so that it reflects the stated positions of the ministers of education, the Canadian School Boards Association, and others. But this is not about avoiding fair compensation to rights holders. It should not be a problem for the educational community, based on their assurances on this point, to accept the amendments we have tabled for consideration.

On behalf of Canada's K to 12 publishing community and industry, I urge the committee to make the technical amendment we are proposing. This will clarify that fair dealing for educational purposes does not eliminate the need to provide fair compensation for rights holders. Let's make it clear under the law that fair dealing is not free dealing.

Failure to provide a technical amendment that protects copyrighted works will imperil the availability of resources created in direct response to the needs of Canadian school children, as determined by the curriculum. The capacity of the Canadian publishing community to share stories and communicate the values, culture, and history of Canada is at serious risk if the current exception goes unamended. Our market will be harmed.

The potential for devastating unintended consequences is very real. In the long run, it's not just the authors, content creators, and publishers in Canada who will suffer, but also the Canadian students and educators we serve.

Thank you very much.

[Catharine Saxberg]

That's what it looks like. When we started looking at Bill C-11 and its predecessor, Bill C-32, we could see that there was a potential for this loophole, and we raised our concerns at that point. Upon reviewing the broadcasters' submissions, it looks like the broadcasters were—in writing anyway—saying that the 30-day exemption was what they wanted. We kept saying that, despite what they were saying in writing, we thought their true intention was to create a back-door loophole.

I was surprised a couple of weeks ago to see a broadcaster from Edmonton at a town hall meeting—held by a Conservative MP, actually—say that he didn't like this so-called “tax” on the transfer of CDs and that he was glad to see it was being repealed. It was going to be a big nuisance for him to have to make all of these copies. It was the first time that I had seen a broadcaster say out loud that this was what their intention was going to be: they were going to hit “control and delete” every 30 days.

Last week, after hearing testimony that this was in fact a problem, it seems that we've fallen down a rabbit hole. There has been a real shift in the broadcasters' game plan, which is contrary to what they asked for on Bill C-32 and is contrary to the intention of the government.

[Jean-Christian Céré]

So we understand the government's initiative in wanting to accommodate consumers and providing them with the possibility of reproducing protected works for non-commercial purposes, the so-called “YouTube exception”. As it stands, Bill C-11 would make Canada the first country in the world where companies like YouTube would have the right to help themselves to and profit from protected works with no obligation to compensate the creators.

We also think that the exception would adversely affect their moral rights. As a result, we ask you to limit the scope of the exception and to let collective administration take care of issuing licences for that kind of use.

The Canadian government must also show leadership and courage by helping to stop the huge amount of lost income caused by illegal online transactions. As France has done by passing its Hadopi law, Canada must send a strong message that content cannot be illegally traded with complete impunity. Figures from the industry in France are going back up now. The government's action is bearing fruit. The French solution has the virtue of declaring loud and clear that copyright is a cornerstone of culture and that it must be valued and protected.

As to the notice-and-notice regime proposed by Bill C-11, this does nothing to dissuade persistent offenders. They will not put a stop to their illegal activities, knowing that they will incur no sanction from ISPs. The regime puts the responsibility for reporting and tracking down violators onto the shoulders of the rights holders. Rights holders have neither the ability nor the resources to police the Web. But ISPs, who are the main beneficiaries of this shift in values, have very significant resources with which they can combat piracy, educate consumers and compensate the music industry. So the balance that the government is seeking between the rights of artists and the needs of the users is still a long way off. Our brief proposes ways to measure and improve the effectiveness of the proposed regime.

[Victoria Shepherd, Executive Director, AVLA Audio-Video Licensing Agency Inc.]

Thank you for the opportunity to appear before you today.

My name is Victoria Shepherd. I am here on behalf of the AVLA Audio-Video Licensing Agency, which represents over 1,000 members, including major and independent record companies and many independent artists, representing the vast majority of music played on radio stations in Canada.

I would like to express our enthusiastic support for this initiative to modernize Canada's copyright laws.

Creators and copyright owners need a clear legal framework that protects their work in today's digital marketplace. We applaud the government's effort to create new rules that will enable our members to sell and license their creative work.

I am here today to draw your attention to two issues regarding Bill C-11: first, a potential loophole in proposed amendments to the ephemeral recording exception; and second, recent requests by broadcasters for a major policy change on the ephemeral reproduction right.

In both cases, the end result would be contrary to the government's stated intention to provide a 30-day temporary exemption and could effectively annul the copying right.

Let me give you some background. For decades, radio stations played vinyl records and then CDs. Today, using digital technology, music is copied directly to hard drives. Radio stations have gained significant cost savings and higher profits thanks to the automation and operating efficiencies made possible by the right to make reproductions of sound recordings.

The point is that these rights have economic value. This is why broadcasters are required under the Copyright Act to compensate rights holders. It is also the basis for Copyright Board decisions in 2003 and then again in 2010. The board is an impartial, independent agency created by Parliament, which exhaustively considered expert testimony and the arguments of all stakeholders. It determined the fair and appropriate compensation to rights holders for the efficiencies broadcasters gain from utilizing the reproduction right.

No one during those hearings disputed that copies made by broadcasters have value.

The Copyright Board, in its 2003 decision, found that:

Copying music to a hard drive optimizes the use of these new [broadcasting] techniques, thus entitling rights holders to a fair share of the efficiencies arising from this reproduction.

The 2010 decision found that using the reproduction right “allow[s] stations to increase their efficiency and profitability”.

Commercial radio in Canada has grown steadily and significantly more profitable in the past decade, reflecting, in good part, the increasing importance of the reproduction right to broadcasters. Let's keep in mind that we're talking about the key business input used by commercial radio: music.

Music, more than anything else, is what radio business is all about. Over 80% of commercial radio programming is music. The Copyright Board has confirmed that reproduction rights are distinct from other rights associated with broadcasters' use of music, namely, the right to play the music.

These are separate rights that are separately owned by composers, performers, and record labels, and apply to separate and distinct activities. No one has been asked to pay twice, as the broadcasters argue. The foundation of copyright law is that the owner of a right be compensated by those who use the right.

Last week you heard testimony about the so-called layering of rights. The Copyright Board heard this argument and rejected it.

In its 2010 decision, the Copyright Board considered all commercial radio tariffs in a single, consolidated hearing at the broadcasters' request. They determined what broadcasters must pay for different uses of music and the rights connected to those uses. It found that the effective payment for all uses—equal to 5.7% of revenues—is fair, equitable, and well within their means. Within this total amount, the board set the rates under each tariff.

In Bill C-11, the government has proposed a 30-day exemption to the ephemeral recording exception. In short, Bill C-11 says that broadcasters should not have to pay for temporary copies of music. While the proposed 30-day exemption was unwelcome news to our members, we respect the government's right to set the policy.

Last year, at the Bill C-32 committee hearings, the broadcasters supported the 30-day exemption. The representative of the Business Coalition for Balanced Copyright, appearing on behalf of the Canadian Association of Broadcasters said, and I quote:

On the question of the ephemeral exception and the ability of radio stations to make copies, as the provisions now stand, the lifespan of those copies is 30 days. If radio stations want to make persistent copies of music to use as part of their operations, they can't now rely on the exception to do it.... This is simply short-term copying.

What we are most concerned about today is that the broadcasters appear to have much more in mind than a 30-day exemption. Last week you heard testimony that pointed to a potential loophole. Broadcasters apparently believe that Bill C-11, as drafted, allows radio stations to circumvent the proposed 30-day exemption by copying their music catalogue from one server to another every 30 days. Temporary copies will become permanent.

The original intent of the amendment is summarized on the Industry Canada website, and I quote:

With the adoption of new technologies, broadcasters today make temporary copies of the music they play on the air.... Recognizing the temporary and specific nature of these copies, the Bill removes the requirement to pay for any copies retained for less than 30 days.

Now some broadcasters are going even further. They want to change the original intent so that the legislation removes the requirement to pay for any copies at all. The government has specifically stated that only technical changes will be made at this stage. Broadcasters are asking for a full-scale policy change that is a complete departure from the government's stated intent.

Temporary does not mean permanent. This applies equally to broadcasters' latest request for a policy change and to the potential loophole in the bill as currently worded. Both could have the same result—making the temporary permanent.

All stakeholders should be concerned that, as drafted, this bill will create legal uncertainty. To avoid this outcome, and to support the government's stated policy intention of a temporary exemption, the potential loophole must be closed. To that end, we propose a straightforward technical amendment that will align the provision with the government's intent. We will submit our proposal to the clerk. We must get this right. Please ensure that 30 days means 30 days and that temporary does not mean permanent.

We think the Government of Canada got its priorities right when it said in the very first line of Bill C-11:

the Copyright Act is an important marketplace framework law and cultural policy instrument that, through clear, predictable and fair rules, supports creativity and innovation

We understand that this is a complex issue. We support the government in its effort to modernize the regulatory framework. We applaud the government's objectives to provide “clear, predictable and fair rules”. We believe our proposed amendment strengthens the legislation's ability to meet Bill C-11's stated objectives.

Thank you.

[Catharine Saxberg]

It's time for us to try to contribute to a new discussion. That is, can we make technical suggestions that will help to clarify or strengthen the government's stated intentions? We think so. We are proposing four main areas in which we believe the legislation can be strengthened with technical amendments.

The line between technical amendment and policy shift isn't always clear, so what we are trying to do today is add a positive, credible voice to this process, and we try to err on the side of caution and not creep into policy waters. I'm also pleased, if somewhat exhausted, to say that these positions represent many, many hours of debate within our organization.

Our four amendments relate to the broadcast mechanical tariff, ISP liability, secondary liability, and statutory damages.

Our first technical amendment is regarding the ephemeral recordings for radio broadcasters. When a song arrives at a radio station, a copy is made from the originating file to the radio station's hard drive. That copy is made under the right of reproduction for which creators and rights holders are compensated about $21 million annually. Our concern with Bill C-11 is that the elimination of subsection 30.9(6) of the act will cost music creators and rights holders millions by the de facto elimination of this revenue source. More than 47,000 individuals and companies receive cheques from this revenue stream annually from CMRRA alone—that's not counting SODRAC or the master owners or performers.

Under Bill C-11, the section that allows for this right would be repealed, thus allowing broadcasters to keep copies of their songs on their server for 30 days without payment, as long as the songs are deleted at the end of that 30-day period. In other words, the government wants to change the law to provide broadcasters with access to the songs for 30 days for free. If the broadcasters want to keep the songs after 30 days, then they would pay the existing tariff.

The problem is that as Bill C-11 is currently written, broadcasters believe they will be able to game the system by deleting a song file every 30 days, and then immediately restoring the exact same song file. In essence, broadcasters can easily comply with the 30-day destruction requirement by making those copies of copies.

Although the CAB doesn't say so in its written submission, we know it is the broadcasters' intention to game the system. In fact, recently broadcasters have suggested that it's a nuisance to have to delete and recopy libraries every 30 days, and that they want the tariff removed completely, rather than pay it. This would be a policy shift contrary to the government's intention. In effect, some broadcasters are complaining that the government is making it hard for them to work around the government's proposed law.

The broadcasters have framed the payment for this use as an inappropriate subsidy of the music industry. We see it as a use of our rights, rights protected under widely held principles of private property in a way that allows broadcasters to operate more efficiently. We are happy to contribute to these efficiencies by licensing this valuable right, and we think it's reasonable to be compensated for assisting them in streamlining their operations.

If there's a subsidy in this discussion, it's the other way around. Allowing Bill C-11 to stand unfixed would force us to subsidize the broadcasters by involuntarily contributing our right of reproduction for no compensation. Although CMPA would prefer that the government not eliminate subsection 30.9(6), we understand the government would like to confer a 30-day exemption from paying for this right. We reviewed the written submissions by the broadcasters and the government's proposal, and this 30-day exemption seems to be consistent with what the broadcasters have requested in their written submissions.

We can accept this compromise if we can ensure the integrity of the 30-day limitation. If a song is going to be kept as part of a permanent library, it has value for the broadcaster, value for which we should be compensated.

In order to give effect to the government's stated intention and limit the exception to 30 days, we have proposed a technical amendment that would prevent broadcasters from making reproductions, which, while technically retained for only 30 days, would end up being a permanent library of music. In other words, it would stop the broadcasters from getting around the exemption by using delete and restore.

If the government's intention is to eliminate the BMT by leaving the barn door open on this 30-day exemption, Bill C-11 would be in violation of the Berne Convention, which says that a government cannot repeal a right that is currently being monetized. There's also some additional amending language in our written submission in regard to temporary reproductions for technological purposes.

Our second technical amendment relates to the role of ISPs in reducing online piracy. The government has stated that one of the goals of this bill is to reduce online piracy, and this is a good goal. However, there's a need to improve the provisions for ISP liability in Bill C-11 in order to ensure that they will in fact achieve this goal.

ISPs take an active role in shaping the Internet traffic that flows through their systems. In fact, ISPs are aware of and regularly monitor how much traffic they carry and what transmissions are used for unauthorized transfer of files. The problem that rights holders face is that many of these sites are outside Canadian jurisdiction and therefore cannot be shut down at source. An example of this kind of site would be Pirate Bay. In the U.K., the high court ruled two weeks ago that Pirate Bay is an infringing site and injunctions for ISPs to block access will soon follow.

The kinds of amendments we are proposing are similar to what's being used against Pirate Bay in the U.K. Provisions like this are proving effective in other territories also.

The CMPA again has proposed amending language that would create a positive obligation for service providers to prevent the use of their services to infringe copyright by offshore sites. Should that wording not be acceptable to the committee, we have proposed a more limited version of the amending language, which would permit injunctions only for the purpose of requiring service providers to block access to the services that are primarily intended or ordinarily used for enabling acts of copyright infringement.

There also has been much talk lately, both in Canada and in the U.S., about American SOPA and PIPA legislation. If I were you, I would be asking me how these proposals compare to the controversial American proposals. I have an answer that has been submitted as part of an addendum that addresses this question. To summarize, our legal review assures us that the amendments we are proposing are far narrower than SOPA and PIPA and that they are in keeping with Canadian due process, more so than the American proposals.

Our third proposed technical amendment is for secondary liability for copyright infringement. Bill C-11 proposes eliminating liability for most Internet intermediaries by balancing provisions that would target so-called online enablers. Unfortunately, these provisions are drafted narrowly and ambiguously. For example, the provision is limited to services that are designed primarily for infringement, creating a loophole for those services that may have been intended for innocuous purposes but are now primarily intended or ordinarily used for copyright infringement.

Furthermore, it's unclear if computer software that enables acts of copyright infringement is equivalent to providing a service. Many of the factors proposed to distinguish between legitimate and illegitimate service providers are very unclear and may need to be litigated extensively before their scope is clearly understood. Again we are proposing amending language to rectify this situation: we would like to see “designed primarily” changed to “primarily intended or ordinarily used”.

Our fourth and last proposed technical amendment relates to statutory damages. In an attempt to achieve proportionality in statutory damages in Bill C-11, the government has created significant obstacles to copyright enforcement. In proposed subsection 38.1(1), the government has created two ranges for awarding statutory damages. Commercial purposes damages, for example, range from $500 to $20,000.

The simple reality is that copyright owners would be deprived of any effective response to non-commercial infringement, as the cost of collecting damages would so exceed the maximum recovery that no rights holders would be able to afford to enforce their rights. In addition, the meaning of “non-commercial” is unclear, with three different phrases being used to describe acts that are seen as worthy of reduced penalities or exemption from liability. The terms “own private use”, “private purposes”, and “non-commercial use” are similar in many instances and overlap in others, which is sure to lead to confusion and, consequently, to costly and unnecessary litigation.

In conclusion, as promised, the focus of my submission today has been on technical amendments that we believe will strengthen the bill within the confines of the government's policy choices. My members feel strongly, however, that I should go on record to say that our viewpoints on user-generated content, fair dealing, and private copying differ from the government's. They recognize, however, that these constitute policy differences and are therefore of lesser interest to the committee.

I shall do my best to answer any questions you might have.

Thank you.

[Marian Hebb]

The fair dealing provision as it's now presented in Bill C-11 is going to open the door so broadly that we are extremely worried about the position of writers.

We're also very worried about the user-generated content provision that has been talked about, because that, as worded, would actually allow course packs such as my colleague has here. The wording is very, very broad.

A number of amendments really do worry us. We don't think they're intended to do what we think they in fact will do, and what they will do is completely unpredictable, so we are very keen on getting something in about the harm to the market.

[Gerry Barr]

Well, both moral rights and economic rights are helped by directors, certainly. Typically, what happens is that in the remuneration package directors in Canada sign, they waive the moral rights and sell the use of copyright, if I can put it that way, for purposes of rebroadcast.

Any moral rights have to do with how you allow your work to be portrayed and the way it can be rebroadcast. It aims at ensuring that the integrity of the work is maintained, and that's referred to, of course, in the legislation.

The problem we have with the legislation, as I pointed out earlier, is that it applies only to authors. If Bill C-11 doesn't identify the directors and screenwriters of audiovisual works as authors, then in that respect, the waters are muddied with respect to their moral right.

It's not that they don't have the right. This would not be an amendment that creates any right—

[Gerry Barr]

What brings us here and drives the presentation we're giving today is that when it comes to audiovisual works, there is a gap in Bill C-11 that's easily corrected—a very narrow set of words that doesn't encroach on any of the other issues that dog this package of amendments, so I think you're in and out very quickly and simply.

However, I think it's very important to notice that the industry has taken account of the kind of clarity around authorship that we're seeking. In our standard agreement with Canada's independent producers there's a plain acknowledgement of the authorial rights of directors. Those rights and the ability of producers to repeat broadcasts is sold as a part of the compensation for directors. Screenwriters also have a similar contract arrangement with producers. The industry currently takes account of these rights.

[Greg Hollingshead, Chair, Writers' Union of Canada]

Members of the committee, hello, bonjour. I'm Greg Hollingshead, chair of the Writers' Union of Canada, which represents approximately 2,000 Canadian book authors. I'm a writer myself, and for 30 years, until I retired, I was an English professor at the University of Alberta. With me today is Marian Hebb, our legal counsel.

Thank you for inviting me to talk to you. I know you've been hearing a lot about the expansion of fair dealing to include education and I know you're tired of the subject, but I hope that as a teacher, writer, consumer, and creator I can cast some light on how and why this broad exception is likely to launch an unintended assault on the intellectual property of Canadian writers.

When Bill C-11 was introduced, the Honourable James Moore, Minister of Canadian Heritage, stated that when laws are clear, consumers know what the boundaries are. He also said that it is wrong to not allow people to protect what they have invested in. He was talking about digital locks, but he inadvertently put his finger on exactly what the Writers' Union believes this new education exception fails to do: give students and teachers sufficient guidance concerning what is lawful and what is not when it comes to copyright. By so failing, it fails to respect the property of creators.

A few years ago a short of story of mine appeared in a print anthology for colleges and universities. For the rights to my story I had been paid for its appearance in successive editions, but in recent years fewer instructors have been using print textbooks in courses. Instead, the instructor creates a course pack—like this one from my own university, for consultation later if anyone's interested—which is a compilation of photocopied texts for distribution to students taking a particular course. This one provides sections or chapters of books, plus one essay from a journal.

In 2010 Canadian universities and colleges copied over 100 million pages from close to 120,000 unique titles for paper course packs alone; however, increasingly these days, instead of offering a course pack, an instructor will post in digital form the text she wants to teach and discuss on a website devoted to the course, a website accessible only to those teaching or taking the course.

This same short story of mine is now available through a licensing agency representing authors and publishers for any teacher in the world who chooses to include it on a course site. For this digital use my publisher and I are paid a fee, just as I was paid a fee for the use of my work in a traditionally published text, and just as I was paid by our national licensing agency, Access Copyright, which issued a licence to the university or college so that its instructors could make use of my work in a course pack or for distribution of multiple copies in the classroom.

This is all good. Whether in a course pack, for distribution of multiple copies to the class, or on a dedicated website, texts for a particular course are now provided much more efficiently and at a lower cost to the student. The student gets easy and cheaper access to professional Canadian texts. The writer and publisher get paid for their work, for their product. The institution doesn't need to do the work of securing the rights to individual works or worry about its staff or students violating copyright. The problem arises because Bill C-11 fails to make clear what sort of reproduction for educational use constitutes fair dealing and what sort does not.

As an educator myself, I know that teachers are not the enemies of creators. The working teacher believes that creators should be compensated for their work. She understands that this means schools paying for a blanket licence to copy.

Teachers want to pay, and they have said as much to this committee and to the Bill C-32 committee. The question is what they need to pay for, and that is what Bill C-11 does not as yet define. The Writers' Union of Canada believes that it needs to do so and that it is for Parliament, not the courts, to decide what the education sector needs to pay for.

The larger context here is that we're all living in a culture of free digital information and entertainment. In this digital climate, human behaviour can't be counted on any more than digital locks can be counted on in the realm of books, when you can buy a printer with a scanner for under $100.

I can assure you from first-hand experience that if Bill C-11 passes unamended in this respect, the result will be a perfect storm of unauthorized copying in the schools. It's no secret that the noisiest opposition to Bill C-11 has been from people who have come to assume that free access to everything digital is their right. It's no secret that students today have grown up in a culture that has encouraged them to expect free use of everything they can download.

It's also no secret that over 50 colleges and universities, by refusing to pay collective licensing fees, have been doing another kind of downloading: downloading onto the working teacher the responsibility, the time, the extra labour, and the liability for clearing the rights to the works she teaches.

However, how many teachers are going to the trouble to clear those rights when the institution they work for has rejected collective licensing, when the website for any particular course is next to impossible to police, and when, to all appearances and by all reports, Bill C-11 is on the way to loosening up restrictions around copyright in education in ways that nobody can perfectly predict?

Just last week this committee was addressed by educators who talked about the copying, for classroom use, of a few pages here and a few there as a trivial matter that should be considered fair dealing, but you have to look at the aggregate. Multiply this practice by the number of classrooms in this country, where nearly 250 million pages of books are copied annually in Canadian schools, and there alone you have lost revenues to writers and publishers in the tens of millions of dollars annually.

A few pages here and a few pages there is not about ease of access to materials; it's about payment for copying. The educators are asking you to excuse them from paying for what they are already licensed to do.

In its CCH ruling, the Supreme Court named damage to the market as only one of six or more factors to be considered when deciding if a dealing is fair, and not as necessarily the most important factor. A dealing may be considered fair that does damage to the market, and a few pages here and a few there in the classroom would be dealing that would do major damage to the market. The potential for damage to the market and the uncertainty of continuing investment in Canadian publishing that will result from unclear legislation are too great for Parliament to leave to the courts.

We ask you, the members of this committee, to clarify the legislation to make it evident that uses being paid for today will continue to be paid for tomorrow. Otherwise, the money the schools will save will come directly from the pockets of those who can least afford it—in this case, Canadian writers, who earn, on average, less than $20,000 a year from their writing.

The Writers' Union of Canada has taken an active role in the creation of and, along with 67 other Canadian arts organizations, is a signatory to a document sent to you in January, which has been referred to by other members of this panel. It contains proposed amendments that address our concerns.

The Writers' Union has also submitted to you a brief today to address this and other issues in Bill C-11, including user-generated content and digital delivery by libraries.

[Gerry Barr]

One of the important examples in legal precedent would be in Films Rachel Inc. v. Druker & Associés Inc. et al, in the Superior Court of Quebec. In a dispute between the creator and the producer, the holding was that the writer and director of the film under consideration was the author, and therefore the first holder of copyright.

The federal Status of the Artist Act equates directors responsible for the overall direction of audiovisual works with authors of artistic, dramatic, literary, or musical works, all of whom are authors under the current act. An amendment to recognize writers and directors as authors will bring the Copyright Act into line with other federal legislation that also recognizes the authorial nature of the director's role, so there is some judicial and also legislative recognition of this core idea of authorship for directors and writers in film.

The Canadian film industry also operates on the basic working assumption that directors and screenwriters have authors' rights. The DGC negotiates collective agreements that provides payment for directors for uses made of their works. The transfer of exploitation rights to producers through these contracts recognizes that directors are the first owners of copyright—in other words, the authors of the work. Screenwriters' contracts also recognize their copyright ownership of audiovisual work, including profit-sharing provisions allowing for the collection of residual payments.

A technical amendment for Bill C-11 on this question creates no new rights, but it brings important clarity to the question of authorship. The amendment we're suggesting would end up in subclause 2(2), with a definitional reference that defines “author” as follows:

“author”, in the case of a cinematographic work in which the arrangement or acting form or any combination of incidents represented give the work a dramatic character, means the writer and director of such cinematographic work.

As we noted earlier, such an amendment is necessary to give full effect to some of the changes in the government's proposals in Bill C-11. For example, the bill aims to clarify what constitutes an infringement of moral rights, but moral rights attach only to authors and performers, and without a definition of “author” for audiovisual works, directors and screenwriters are unable to assert moral rights for their work.

Bill C-11 introduces a number of provisions regarding digital rights management information. DRM information is akin to a kind of digital watermark, providing information about the work and an ability to track it, and one of the important pieces of information is the author of the work. The provisions in Bill C-11 that prohibit the removal or altering of rights management information are of value to directors and writers who wish to protect their rights and royalties collected in other jurisdictions, so we need to be identified in the act as authors.

Audiovisual creators should be dealt into all of these protections that authors of other works enjoy under the act. It's particularly important in a digital age, in which content can be sent around the world with new-found ease and at a time when piracy and worldwide distribution are but a mouse-click away. Clarity on the issue of authorship is vital to protect Canadian creators, including directors and screenwriters.

Thank you, Mr. Chairman. I hope there will be some questions on this general area.

[Tim Southam, Chair, National Directors Division, Directors Guild of Canada]

Thanks, Gerry.

If anyone is looking for House, it's House M.D. and it was last Monday. The series continues until its season—and, in fact, series—finale sometime in April. It is not a homegrown series, but we do have Flashpoint and Rookie Blue and, of course, Degrassi, which is the great pioneer in Canadian-made homegrown TV series that have completely won over the world in the last decade and a half.

Today we'd like to discuss an issue that is not covered by the CCA submission, yet is of huge importance to the DGC. This committee review creates the opportunity to provide clarity with respect to issues of authorship of audiovisual works. For most works in which copyright subsists under the act, the author is self-evident. For example, the writer of a novel, the sculptor of a sculpture, the painter of a painting, or the composer of a musical score is, in each case, clearly the author of that work.

We haven't the same clarity with audiovisual works. The rights of the works' creators are not acknowledged under the Copyright Act with the same clarity. It's time that this gap in the act was closed. The DGC believes the technical amendment very narrowly framed to define the authors of an audiovisual work as the work's credited director and writer will do just that.

The director and screenwriter, of course, create the audiovisual work. The writer begins with a blank page, and characters, dialogue, and story elements emerge. The director imparts a three-dimensional vision to the work. Casting, selecting location, staging, editing, sound design, scoring, visual effects, colour correction—all aspects of committing the work to the screen—fall to the director.

Defining the authors of the audiovisual work is key to giving full effect to some of the amendments included in Bill C-11 regarding the recognition of moral rights and the use of digital rights management systems. It's important also to say that statutory recognition of authorship brings codification and clarity to the already existing rights of directors and writers as recognized in legal precedent and industry practice.

[Gerry Barr, National Executive Director and Chief Executive Officer, Directors Guild of Canada]

Thank you.

Members of the committee, my name is Gerry Barr. I'm the national executive director and CEO of the Directors Guild of Canada. With me today is Tim Southam, a director of both television and feature film on both sides of the border and chair of the Directors Guild national directors division. To anchor him for you, for those of you who watch House, his most recent work was in evidence in last week's episode, so if you're a fan of that show and want any backstory, he's the guy to go to.

This is, of course, a series that has more than 50 million viewers around the world, and it's a classic example of what the Canadian audiovisual industry can do in terms of both level of quality and dramatic series.

DGC is a member of Mr. Stohn's “day in, day out” crowd. As a national membership-based labour organization, it represents over 3,400 key creative and logistical personnel in the film and television and digital media industry, and we're pleased that after more than a decade and numerous attempts, copyright legislation in Canada will be updated with the passage of this bill.

Bill C-11 brings our copyright regime into compliance with WIPO treaties. It takes steps to protect creators from content theft, it rightly classes parody and satire as new categories for fair dealing, and it attempts to modernize Canadian copyright laws for a new digital age. All of this is very welcome.

The preamble to the bill sets out the importance of “clear, predictable and fair rules” to support creativity and innovation as well as the importance of legislation that “provides rights holders with recognition, remuneration and the ability to assert their rights”.

Naturally, we strongly support those principles, but we're here to say that Bill C-11 still needs some help to live up to those important goals.

As an organization with members who both create and use copyrighted works, we know that copyright reform is a balancing act, and we're here today to ask for technical change to ensure that Bill C-11 contains the clear rules that are called for in that preamble.

Clarity is at the heart of effective copyright legislation. Creators and copyright holders need to know where they stand and what limitations are in place to benefit users' access to the works they create. The absence of clarity leads inevitably to having courts decide these matters. Costly time-consuming litigation benefits no one—not creators, not users, not others in the production chain—and should never be seen as preferable to clear and predictable legislative rules.

Technical amendments can protect rights holders' revenues and their ability to control how and where their work is disseminated, as well as protect users from unintentionally infringing on those rights. To that end, the DGC is one of 68 arts groups supporting the package of amendments submitted to this committee by the Canadian Conference of the Arts.

I'd like to turn to Mr. Southam for a few words.

[Stephen Stohn, President, Executive Producer, Degrassi: The Next Generation, Epitome Pictures Inc.]

Thank you very much.

Epitome Pictures Inc. is a small business. We're a mom-and-pop shop: I'm the president, and my wife is the CEO. She's more important than I am, as it should be.

We have been in business for nearly a third of a century. We're a television production company. The one that you would know the most is the Degrassi series that we produce.

I'm also the chair of Orange Lounge Recordings, which is a record company that does the things that a record company does on the Internet, including using all the facilities available—the Topspins and the iTunes and every conceivable form of exploitation of digital rights.

We also do an innovative co-venture with Sympatico in which we produce video concerts of artists who come into Toronto. We bring them into the studio and do live sessions with them, which are then broadcast on the Internet. They're called Live at the Orange Lounge. Dozens of Canadian acts have done this. Some are well known, like Nelly Furtado and Avril Lavigne, while others are not as well known. There are many famous international acts, and I include Katy Perry, Amy Winehouse, the Pussycat Dolls, and OneRepublic. That's just to say I'm immersed in the digital world.

Coming back to the television production side, our Liberty Street series, which started in 1995, was the first series in the world to launch simultaneously on air and with a website. Our Riverdale series, which we started in 1997 and which starred some very famous and talented Canadians—including, most notably, Tyrone Benskin—was the first series in the world to launch a companion web video series. It was a weekly series and, in effect, a behind-the-scenes soap opera. The new version of Degrassi, starting in 2001, launched a groundbreaking website, at a cost of more than $1.5 million, to enroll fans in the Degrassi school and engage them in interactions with our fictional characters. In effect, it was a proprietary Myspace long before Myspace was ever invented.

Degrassi was the first series in the world to produce video webisodes presenting ongoing stories that featured our main sets, main cast, and main writers, and being shot with our main crew. Degrassi was also the first series to make full episodes legally available in Canada both for download and streaming. We've experimented with various alternatives since then, including making episodes available on the Internet prior to broadcast. Then we tried a week prior. We tried 24 hours prior; we tried 24 hours after; now we simply go simultaneous on iTunes and on the web. An entire season of Degrassi, which is now 45 episodes, is available in Canada on the MuchMusic website for free. There's advertising, but an entire season is available for the fans.

If you search “Degrassi” on Google, you'll get over 11 million hits. We have over three million “likes” fans on Facebook. Interestingly, if you search “Degrassi mashup” on Google, you'll get more than a million hits.

The list goes on. We have very active Twitter accounts where our writers provide Twitter feeds for our characters. We do vlogs and blogs. We have a Degrassi game already in the iTunes App Store. We have another co-viewing app coming out this summer. We're doing everything digital we can think of.

I'll note that our new series, The L.A. Complex, which launches next month in the United States, will launch simultaneously on The CW, which is an over-the-air network, and on iTunes, Amazon, all the download services, and also on Hulu, which is a Netflix type of service.

I mention all of this not to pat ourselves on the back, but rather to make it clear that while we are grateful for the legacy modes of distribution—we love our television broadcasters, and they are a linchpin—that is not where we are fixated at all. We are and intend to always be on the absolute forefront of the new media. I am not a university professor who has well-intentioned but perhaps ultimately misguided theories about what might or might not work on the Internet; I am part of a passionate, active, and engaged team that is immersed day in and day out in the practicalities of the digital world.

I have two key take-away messages that I would like to put to you today.

First, we producers are devastated by the torrents and the cyberlockers who take the shows that take us so much time and effort to produce, make money from them, and return nothing to us. More and more every day we rely on return of our investment from digital rights—from legal, authorized streaming from broadcaster websites, from Netflix- or Hulu-type services, from legal, authorized downloads from iTunes or Amazon-type services, and from dozens of other legally authorized digital services that make Degrassi available today; therefore, the first key take-away from us is to please pass Bill C-11 as a matter of extreme urgency.

The second key message is also a plea: please make all the technical changes necessary for the intent of Bill C-11 to actually be carried into effect.

I am not here today to discuss commas here and reasonables there. I leave that to the experts, such as my brilliant friend Barry Sookman, and to our CMPA producers' organization, and to others such as Music Canada and the Motion Picture Association - Canada. It is my understanding that if implemented today as currently drafted, Bill C-11 would have the perverse effect of inadvertently sheltering the very websites, services, and illicit activities that the government was intending to eliminate, so please give us absolute clarity that the BitTorrent sites like isoHunt and the cyberlockers like Megavideo will be put out of business in Canada.

Finally, I'd like to discuss mashups. We love mashups. As noted before, there are myriad Degrassi mashups available throughout the web; to us, they are a confirmation of our fans' loyalty and engagement, and that is something we embrace and applaud vigorously.

What we don't love is drafting in Bill C-11 that we are told may permit all, or substantially all, of an episode to be downloaded or streamed under a wraparound loophole in the mashup language. We also don't love anyone making money from these mashups, including through placing advertising around or adjacent to the mashups, without our being mandated to share in that revenue. We need revenues from our digital endeavours to continue producing our shows. We can't compete with material that is free and we don't want others making money from our hard work and investment without being allowed to share in the return.

In summary, our plea is to pass Bill C-11 urgently, but to please include the technical amendments necessary to clearly eliminate torrents and cyberlockers and to ensure that the mashup exception truly applies only to what the government and all of us really mean by a mashup, not to wraparounds and other loopholes.

Thank you very much for your invitation to make these comments.

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

Many have come before the committee and have said that we are doing that. They've said that's exactly what Bill C-11 does. It actually creates value for creators because it takes away the ability for people to pirate creative works and creates an environment whereby creators can be paid for what they create, so a better quality of product will be compensated for more.