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.

[Aline Côté]

The three-step test is really important because it defines what it's going to be.

That is going to define the main criteria.

I would like to say a couple of things about everything we have heard so far. We are seeing all kinds of practices that show that the impact of Bill C-11 and its predecessor, Bill C-32, is already being felt. For example, 35 universities have opted out of collective management. Two of them have gone back because they realized that rights management is quite a big deal.

There is also a drop in educational material purchases. With tablets, whiteboards, and so on, there is an upward trend toward buying one set of materials for the whole class. We realize that the Supreme Court also meant that fair dealing will be defined by current practices.

Over the past 15 years, digital practices have gone in all directions. We are talking about 15 years without any specific legislation for that. Even thinkers—one of them was here yesterday but maybe he did not talk about this—encourage you to hurry up and interpret fair dealing as widely as possible, as defined by the criteria in the CCH Canadian Limited decision. This way, when there is a dispute, it will be possible to rule in favour of current practices.

People call us fear-mongers, but we are already seeing things. Not only will this make us lose money and reduce our capacity to develop new materials, but the neutrality of the bill allows for format shifting. As a result, anyone can create something in any format, and shift from one platform to another, go from paper to digital or vice versa, and so on. This feature of the legislation results in a huge loss of control. And the loss of control, with everything that will be available, will make things more complicated.

For example, in many classes, they use digital tablets or iPads. That is very appealing, but then you also have access to YouTube. In light of everything that can be reorganized, posted on the Internet and reused in the classroom, we think that this will have an impact on our ability to keep track of the identification of works. Which one is the original work? Is the work I will be using truncated or tampered with?

[Cynthia Andrew]

I think what we're dealing with in the education sector is that practice has outpaced legislative frameworks. Because technology has been changing at such a rapid pace over the past, let's say, 20 years even—because when I was in school they didn't even have photocopiers in schools—educators change with it, and the act does not reflect those technological changes.

What we're looking for mostly out of Bill C-11 and what we believe it does effectively is remain technologically neutral. It doesn't say specific technologies in it, which is good, because then as technology continues to change, we won't need to continually update the act every time.

It brings Canada's copyright laws into a legislative framework that recognizes current practices with respect to digital copying and digital access to resources that did not exist before, and it allows educators and students to use those within obvious certain restrictions in a classroom way, in a learning opportunity way, so that they can benefit from the information and the technology at the same time.

[Cynthia Andrew, Policy Analyst, Ontario Public School Boards Association, Canadian School Boards Association]

Good morning.

My name is Cynthia Andrew. I appear before you this morning as a representative of the Canadian School Boards Association.

The Canadian School Boards Association members are the provincial school board associations that represent over 250 school boards across Canada and serve more than three million elementary and secondary school students.

I am an employee of one of the provincial associations, the Ontario Public School Boards Association. I am the key staff person both in Ontario and within CSBA member boards on matters relating to copyright, and I am pleased to be able to join you this morning to talk about copyright and Canadian school boards.

CSBA submitted a response to the previous copyright reform legislation. It is my understanding that this committee has access to those submissions and does not wish to see ours again. I thank you for saving me that time, and I direct you to that brief that was submitted to the committee in December of 2010. Our recommendations between then and now have not changed.

Copyright directly affects all of Canada's school boards, and it is reflected in policies and practices in school board administrations and in classrooms across the country. Technological advances have made the current Copyright Act all but obsolete. The lack of clarity that arises from this outdated legislation is the reason that Canadian school boards, along with other national education organizations, have been persistently urging the federal government to clarify digital copyright law. Therefore, CSBA is pleased with a great deal of what we see in Bill C-11 and we want to see the legislation passed. We believe Bill C-11 is good for education in Canada, and with minor amendments to certain sections it can be even better.

I wish to highlight for you this morning some matters that are of particular importance to school boards.

First, CSBA supports the inclusion of the educational use of Internet amendment. Technology has changed teaching and learning in Canadian schools. From kindergarten to advanced calculus, classrooms are filled with innovative, new learning opportunities. The proposed Internet amendment is important because the current copyright law is not clear about the extent to which teachers and students and other educational users can legally engage in what are now routine classroom activities, such as downloading, saving, sharing text or images or videos that are publicly available on the Internet. Without exception, provinces are investing in technological infrastructure in schools, but without this amendment, Canadian schools may be legally obliged to forego many learning opportunities and curtail Internet use in the school out of concern that they may be breaking the law.

The proposed amendment applies only to publicly available material, that is, material posted on the Internet by the copyright owner without password protection or technological restrictions on access or use. Most of this material is with the intention that it be copied and shared by members of the public. It is publicly available for those who wish to use it.

School boards develop and guide and administer policy and procedures in schools across the country. Legislative clarity ensures that school board policies on copyright appropriately guide teachers and other board employees without restricting access to material that supplements and enhances the typical learning experience. It is important to remember that school boards are also creators of intellectual property. As both creators and users, Canadian school boards believe that this legislation does provide a good balance, the right balance, between the rights of users, creators, and industries that market the work of creators.

Secondly, CSBA supports and is encouraged to see the inclusion of education in the fair dealing provision; however, although welcome, we do suggest that the education and fair dealing amendment needs to be clarified. For this amendment to have its desired effect, the term “education” should be clarified by stating that education includes teachers making copies for students in their classes. This clarification is needed so that teachers may copy short excerpts from copyrighted material for their students.

The wording of our proposed clarification is similar to the United States fair use clause, which has been in place since 1977. Adding education, including multiple copies for class use, to the list of enumerated fair dealing purposes will not mean teachers can copy whatever they want. Simply qualifying as a fair dealing purpose does not automatically deem that all copying for that purpose is fair. Such copying must still meet the standards of fairness that are set forth by the Supreme Court of Canada.

Third, it has been suggested that the education community does not want to pay for education materials. This is incorrect. Education institutions currently pay for content and for copying of these materials. These payments come at both the ministerial level and the school board level, depending on the material in question and the provincial financial structure.

CSBA is not suggesting, nor have we ever proposed, that school boards should not pay for intellectual property. The education sector currently pays hundreds of millions of dollars to purchase and license content, such as printed and digital curriculum in many formats, film, music, and art. With Bill C-11, the education sector will continue to pay hundreds of millions of dollars. Nothing in this proposed legislation alters our current relationship with education publishers, content providers, copyright collectives, or the Copyright Board.

Lastly, CSBA is not in favour of the amendment that requires teachers or students of online courses to destroy their notes upon completion of that course. This amendment is unreasonable and impractical, and it does not reflect current practices in online learning where teachers reuse their course materials each year that they teach the same course. Requiring them to destroy their materials will result in wasted time and limit a teacher's ability to effectively teach that same course multiple times.

In closing, the Canadian School Boards Association has always believed that a modern and balanced copyright framework will protect the public interest and produce many societal benefits. The need has reached a critical state, as schools across the country increasingly rely on the Internet and other digital resources to deliver programs.

CSBA supports the passage of Bill C-11 with the minor amendments we have put forward, so that the necessary legislative framework exists to support Canadian students learning in a digital world.

Thank you.

[Jean Bouchard, Vice-President and General Manager, Groupe Modulo, Association nationale des éditeurs de livres]

Aline is right: publishers represent the research and development of the education departments in the country. If there were a single most important thing one could do to improve this bill, it would be to leave out the word “education” from the fair dealing exception in section 29. Because it gives educational institutions and all other commercial or non-commercial private training businesses the right to use any copyright protected work without permission or compensation, it is the one exception that will have the direst consequences on the book industry. On the one hand, academic publishers will see their textbooks largely reproduced without compensation. And on the other hand, literary publishers will lose the benefits of having one of their works studied in class. Moreover, this right is created even though educational institutions have no problem accessing material thanks to the copyright licensing agencies. We are talking about 0.5% of the total annual budget for education in Canada, which is around $70 billion.

Without a precise definition of fair dealing, everything has been said about this exception. The government says it means restricted to “a structured context, including private training but not for the public in general”. The Canadian Association of University Teachers defines fair dealing as “the right, within limits, to reproduce a substantial amount of a copyrighted work without permission from, or payment to, the copyright owner”, while the Conference of Rectors and Principals of Quebec Universities says that the proposed exception “does not mean in any way the end of compensation for creators”.

Let us resolve the issue this morning: it is open ended, free and without permission, as long as it is fair. This one and only restriction to the free use of any given material for educational purposes, fairness, does not protect the book industry in any way.

Establishing what is fair under the new law will drive to litigation and judicial proceedings. The destabilization of legitimate and well-established business models and the costs of litigation will jeopardize middle and long term investments until the courts will have decided on which uses are fair and which are not.

Without a precise definition, The Supreme Court developed a non-exhaustive list of six factors to assist in determining whether a use is fair: purpose, character and amount of the use, alternatives to the dealing, nature of the work and effect of the dealing on the work. However, the court ruled that: “Although the effect of the dealing on the market of the copyright owner is an important factor, it is neither the only factor nor the most important factor that a court must consider in deciding if the dealing is fair”. In other words, a court could conclude that dealing is fair even if it harms the market for a work. In contrast, in the “fair use” regime of the United States, this factor is the “most important, and indeed, central fair use factor”. This gives American publishers the comfort they need to invest in innovative educational resources. If Bill C-11 passes as written, Canadian publishers and foreign investors would not have the same comfort level.

This is why the second and most important thing to do to improve Canada's Copyright Act would be to make sure the “three-step test” of the Berne Convention is incorporated into our legislation so as to become the basis on which courts will rely for the interpretation of fair dealing. This would, among other things, ensure the effect of the use on the work would be prioritized in the determination of what is fair and by the same token ensure our law meets our international obligations.

[Aline Côté, President, Les Éditions Berger, Association nationale des éditeurs de livres]

Good morning. My name is Aline Côté and I am the president of the copyright committee at the Association nationale des éditeurs de livres.

The Association nationale des éditeurs de livres represents a hundred French Canadian book publishing firms across Canada. Over the past few years, and despite all the pieces of legislation in place, we have been asking for more protection, or at least we have been constantly reaffirming the copyright principle in order to protect our capacity and stability in terms of both revenue and investment.

People do not always realize that Canadian publishers are competing with giants. Over the past 40 years, we have had to get back a significant share of the market. In the 1970s, French Canadian publishers were barely claiming 20% of their own market, the rest was being taken up by France or other countries. The situation was pretty much the same for English Canadian publishers. Today we control 51% of the market. It took 40 years to slowly conquer that share of the market, to develop expertise, to increase the professionalism of our employees and to establish an entire book industry.

We have also worked closely with the people from the Canadian Conference for the Arts to bring our proposals to the table and to reach consensus with the other cultural sectors in Canada. That was an unprecedented effort. In my view, the fact that cultural associations from all sectors, working in both languages, have managed to reach a consensus is unprecedented around the world. That takes weeks and weeks of work. We have made a series of proposals, knowing that, if they were accepted, we could really establish and develop sustainable industries in Canada that would prosper in the digital era.

The French Canadian book industry has been successful in adapting to the digital era. Very early on, we developed a business platform and model. We have developed partnerships and we now have a sale and distribution platform that is connected to all francophone digital bookstores in Quebec and in France. Our original model inspired large publishers from France, Italy and the United States to join. There is still a general feeling that the book industry is a bit prehistoric, but we have been really proactive and we have had a great success. We have received support from governments, Canadian Heritage, SODEQ, and our ministries in Quebec. We are now estimating the cost of this collective effort at about $25 million at least. Please note that these numbers are the actual math. They are not based on extrapolations or projections of potential losses, but that is what was really invested.

We now know two things. We are increasingly hearing people everywhere say that the added value of culture is a factor in sustainable development. WIPO studies have also revealed that the key to the success of cultural industries is the legal environment of copyright, of intellectual property. The two countries that currently have the best numbers are the United States and Australia and they are the nations with the strongest industries. That is where cultural industries take up the largest share of the market.

Books, physical books, disks, support materials or CDs are not our main asset. Our main asset and our only asset is intellectual property. It is not tangible.

We feel that the significant changes that Bill C-11 will bring will create an artificial disruption. We have been able to develop gradually over the years with the market rules that were in place. We have managed to take up more and more of our markets. We have a Canadian aboriginal industry—if that is the right term—that is successful, dynamic and competitive, but it could be better positioned in the market. Compared to the position of the book or culture industry in other countries, we are still lagging behind and we could do better. We still have room to grow.

We have shown that we were able to do very well with the way the game was played. The shock of the digital revolution did not affect us because we took action very early on, six years ago. We convinced the governments to give their support; we have put in about $25 million in development and private investments. And now that it is all starting to roll and we are on board, we realize that a piece of legislation might jeopardize all those business models that work well. That will create an artificial tidal wave in the current market. It is not a normal evolution; it is something abrupt when we have already developed everything that we wanted to develop.

We are also going to look at our close ties with the national education system and I hope that you will have questions about that. If our education systems had to outsource to produce materials, they would create a book industry. Our close ties with culture are very important. We feel that allowing free use without permission in education is extremely dangerous for our industry.

I will let my colleague continue.

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

Thank you very much, Mr. Chair. Good morning. Thank you very much to all of our witnesses for appearing this morning and for your presentations.

Mr. Conway, I'll start with you. You explained in your presentation that you believe that radio stations shouldn't have to pay for the same digital piece of music multiple times. Could you explain to the committee approximately how many times today a radio station pays for the same piece of music, and then what would be different under Bill C-11 down the road?

[Ian MacKay, President, Re:Sound Music Licensing Company]

Thank you.

Re:Sound is the not-for-profit collective dedicated to obtaining fair compensation for artists and record companies for their performance and communication rights. We represent the royalty rights of more than 12,000 musicians, including featured and session musicians and record companies. The money we collect is split 50-50 between the performers and the labels.

We appreciate that many of you have had your fill of copyright discussions, so I can assure you we would not waste the committee's time if our proposals did not align with the economic and job creation goals behind Bill C-11 and if they were not properly in order.

Re:Sound has tabled three straightforward proposed changes to Bill C-11.

One of these is highly technical, so in the interest of time I invite members to consult the background document and proposed amendment language we've given to the clerk. On this amendment I'd only state that it is a very simple language omission in the Copyright Act related to ministerial statements on reciprocity.

The other two amendments I believe warrant some more discussion at committee as they mean more money for more people. The first amendment would bring needed clarity and would allow Re:Sound to get millions of dollars out of a trust account and into the hands of musicians and businesses.

The second amendment addresses the serious market distortion in the current Copyright Act that dates back to the 1990s. Fixing this would inject millions of dollars a year into Canada's creative sector at no cost to taxpayers or consumers.

The first amendment is what we call the orphan amendment. What are orphans in the copyright context? They're eligible rights-holders, musicians, or labels who have not yet signed up with us at a particular point in time. They may not have signed up because they don't know about their rights or they may not have made a recording or existed as a band at the time a particular tariff was set.

The concept of orphans is not unique to us. They also exist in the context of reproduction rights, retransmission rights, private copying, and others. The difference is that in all of those other cases there are clear and expressed provisions in the Copyright Act that set out clear rules and obligations with respect to orphans. We are alone in not having these kinds of rules and this kind of clarity and can only think this was an oversight at the time of drafting.

Without any rules in the Copyright Act to clear up what obligations we have to these orphans, we may need to hold some funds indefinitely. To correct this problem, we simply seek an amendment—it's two lines long—that would give us the same clarity regarding obligations to orphans that all these other collectives have.

In short, this amendment would provide clarity on the entitlement of orphans to be paid, empower the Copyright Board of Canada to establish clear rules around limitation periods, and, crucially, it would allow Re:Sound to pay out millions of dollars in royalties that we've been forced to hold indefinitely due to the lack of clear rules under the Copyright Act.

Our job at Re:Sound is to collect and distribute money, not to collect and hold money in a trust fund. We're a flow-through organization and we need clear, transparent rules in order to do our job. If you can make this technical change to the act, we'll get money—that's money that's already been collected—out the door and into the hands of the rights-holders.

The other amendment I will talk about today is the elimination of the $1.25 million exemption for commercial radio in section 68 of the Copyright Act. The last time the Copyright Act was reviewed in the mid-1990s, Canada was in the middle of a deep recession and the future of commercial radio was uncertain. In 1995, for example, the entire Canadian radio industry—that's the entire industry—posted a total profit of only $3.6 million. So the government of the day enacted a “Special and transitional royalty rates” section of the act. Under this section, performance royalties to musicians and labels were phased in over time and each commercial radio station was only required to pay $100 on their first $1.25 million in advertisement revenues. This was and remains the only such subsidy in the Copyright Act and the only subsidy of its kind in the world.

Fast forward to the last few years and radio has been thriving and posting record profits in every market, in every language, and in every region of the country. In fact, between 2006 and 2010, the Canadian radio market experienced the second-largest absolute increase in revenue in the world behind only China. It grew by $330 million. This growth story is great news, and I want to be clear that we want to see the continued success for commercial radio in Canada.

However, because the Copyright Act has not been reviewed since 1997, neither has the $1.25 million subsidy been reviewed to reflect the huge and growing profits of the Canadian radio industry. All the while, musicians and labels, including hundreds of Canadian independent labels and musicians, are not receiving fair market compensation for the content they provide. This subsidy reduces the royalties earned by musicians and labels by about one-third, or $8 million a year. The bulk of this subsidy goes to a handful of large radio groups—not small radio groups but the large radio groups. This is a serious market distortion that benefits a very profitable industry at the expense of those who create the content that drives that industry.

Once again, I would state that we love radio and we recognize the tremendous work that many stations do in their communities, but please remember, commercial radio is a for-profit venture. That's why it's called commercial radio, and the business model is simple. Stations play music because music draws listeners. Listeners attract advertisers. In fact, 13% of all advertising dollars spent in Canada are spent on commercial radio. That's the highest proportion in the world.

Simply put, music drives commercial radio. It helps with the station branding and it helps target and retain certain demographics. Our proposed amendment allows the musicians and businesses who invest in and create the products that radio puts on the air to get properly compensated.

Remember, this is a legislated subsidy, so radio stations do not have any option but to be subsidized. To their credit, broadcasters acknowledge the importance of paying for music. In fact, the chair of the Canadian Association of Broadcasters stated to the precursor of this very committee that, and I quote, “We want to emphasize that broadcasters are not opposed to paying for the communication right.” That is, they are not opposed to the paying of royalties to musicians and labels that Re:Sound collects.

As far back as 2005, the Copyright Board weighed in on this subsidy and stated, and again I'm quoting here:

Even the smallest of stations would be able to pay the tariff. Allowing large, profitable broadcasters to escape payment of the full Re:Sound tariff on any part of their revenues constitutes at best a thinly veiled subsidy and is seemingly based on no financial or economic rationale.

So radio acknowledges that they think it's important to pay for the communication right, and even the Copyright Board, the expert regulatory body that is tasked with reviewing all economic data before it sets fair rates, has stated that every station can afford to pay the full royalty rate.

This amendment would have no impact on any other part of the Copyright Act and would ensure that $8 million a year is injected into the Canadian creative sector at absolutely no cost to taxpayers or consumers.

Re:Sound is very supportive of the goals behind Bill C-11, particularly to generate economic activity and jobs in the creative sectors. We believe the two amendments we have detailed today align very closely with those goals, and we would be happy to take any questions.

Thank you.

[Bill Skolnik, Chief Executive Officer, Canadian Federation of Musicians]

Thanks very much, and thank you for having the Canadian Federation of Musicians.

I am Bill Skolnik, and I am a musician. I've worked in theatre, television, and radio in different studios for a long time. I did a lot of writing for Sesame Street, so I may have affected some of you sitting here. I am now the chief executive officer of the Canadian Federation of Musicians.

Joining me today is Warren Sheffer, who is our counsel and a lawyer with Hebb & Sheffer.

CFM has represented musicians in Canada for more than 100 years, and many of our 17,000 members are international stars and household names, but the majority are not. I got elected to serve the 17,000 folks in the organization, but there are also a number of non-members, according to the Canadian Artists and Producers Professional Relations Tribunal, CAPPRT, which I speak for on federal matters. So I'm not just speaking on behalf of the folks who pay my salary; I'm speaking on behalf of anybody who picks up an instrument and gets paid for it.

Musicians are self-employed business owners and often earn less than $20,000 a year. While they make some of their wages from performing and hitting the road, a significant portion of their income comes from recordings and the rights to past performances and work. You may not realize it, but when you go to the Sanderson Centre for the Performing Arts, the National Arts Centre, or Centre In The Square, those players you see accompanying featured performers are not with those featured performers from city to city. They are hired by a music director, and they operate as independent business people.

Some of you may know these folks. I know most of them, and I'm going to give you names of some from smaller places so you can acquaint yourselves with them. From Sudbury, we have Christian Robertson, Victor Sawa, and Yoko Hirota. The three Gray boys, John, Charlie, and Phil, are originally from Truro and now live in Toronto. I think John lives in Vancouver. He wrote Billy Bishop Goes to War. They're from a small town in Nova Scotia. From Kitchener, there is Frank Leahy, a well-known player, and Wendell Ferguson, one of the funniest guys in Canada. I also want to mention Doug Perry and Paul Mitchell. From Peterborough, we have the Cherney brothers, who don't live in Peterborough anymore, but their father was a well-known appliance dealer, Washboard Hank. If anybody has ever seen Washboard Hank play, you know who I mean. These are our members. These are the people I'm talking about.

The Leahy family is well known, from Lakefield. Frank DeFelice, Garry Munn, and Rusty James are from Brantford. You may know these folks. From Sackville, there is Ray Legere. I'm just giving you these names because these are people who bought houses, raised their children. They don't necessarily live in the big cities—some of them do—but most are from the small towns. This is who I'm talking about. These are the small business people I'm referring to.

Musicians can only make a living if there are robust copyright laws that allow them to negotiate and exploit their rights in the marketplace through collective bargaining and collective licensing. Diminished rights mean diminished income.

We support the government's effort to modernize the Copyright Act by implementing provisions of the WIPO Internet Treaties. In particular, we welcome the establishment of moral rights for performers. That's really vital to us.

We acknowledge the government's desire to address the fact that people are enjoying music in a digital format anywhere and anytime; however, just because digital technology has made it easy for works to be reproduced, it doesn't mean that it should be free. Technological advancements cannot be a rationale for depriving creators and performers of their right to be rewarded for the reproduction and use of their work.

Music has value. This work is the product of creative labour and it still has value. Unfortunately, in too many places this bill removes the value.

The Canadian Conference of the Arts has put together a package of 20 technical amendments to Bill C-11. CFM is one of the 68 cultural organizations that helped put those together, and we fully endorse each of those amendments. I want to stress how remarkable an achievement it is to get these diverse organizations to agree on this package.

Today I want to speak specifically to four amendments that would go a long way towards protecting the intellectual property and income of musicians.

Number one, put a fence around the widespread exceptions to copyrights and neighbouring rights introduced in the bill by including explicit language from the Berne three-step test.

The Berne three-step test, as found in the Agreement on Trade Related Aspects of Intellectual Property Rights, TRIPS, to which Canada adheres, provides that:

Members shall confine limitations and exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the rights-holder.

We want users to be able to access and enjoy our members' work, whether for personal enjoyment or education, but not at the expense of the musicians who seek to make a living from the use of their works and performances. Make this provision explicitly in the act and it will get the government and the courts on the same page.

Second is user-generated content. This is an example of where the three-step test would be helpful by putting fences around exemptions. The UGC or mashup provision is a remarkable departure from the objective of the Copyright Act to confer exclusive rights on creators and performers. We understand what the intent is here: to allow families to post videos of their kids dancing to pop music without breaking the law. That's reasonable, but the wording in the bill goes too far for us. It would remove the ability of creators to license or have any say in what happens to their work. YouTube is the big winner here, at the expense of creators.

We recommend the exception be removed altogether, or at a minimum amend it so that moral rights are properly protected. We need to leave the door open for collectors to enter into agreements with businesses like YouTube so that performers can get paid, as is the case in other countries.

I can tell you from my perspective that a lot of our members are as much concerned about control of what their works are as they are about the payment. Both are important, but control is a big aspect with respect to moral rights. They need to have some teeth behind those.

Third is statutory damages. Bill C-11 proposes to drastically reduce statutory damages for infringement, that is for non-commercial purposes, to between $100 and $5,000. This is not an adequate deterrent. We also see no need to make a new distinction between commercial and non-commercial infringement. Such a distinction conveys the wrong message that so-called non-commercial infringement is not at all harmful to creators and performers. For example, I can take a CD, make 100 copies of it, and give it to everyone I know for Christmas. I'm not making money off it, but that's potentially 100 copies of the CD the artists aren't going to sell.

It only makes it harder and less worthwhile for small business people with limited resources to pursue damages for infringement. We understand what the government intends with this change, but it's not necessary. We have seen no cases in Canada where individuals have been forced to pay exorbitant awards for copyright infringement.

Even more puzzling is the bill's proposal to exempt those who enable acts of copyright infringement on the Internet from statutory damages. Statutory damage awards must be a proportionate deterrent and must be applicable to mass infringers like peer-to-peer sites that makes tons of money off the backs of hard-working artists.

Fourth, and finally, is private copying. CFM members earned more than $4 million from private copying in the past 10 years. Unfortunately, Bill C-11 will allow that critical source of income to dry up by not extending the private copying regime to new technologies. The revenue stream needs to be replaced—and I emphasize replaced—to recognize that long-standing principle that copies have value, and that exclusive rights-holders are to be compensated when copies are made.

The first choice is to make the bill technology neutral by extending the current private copying regime to digital audio recorders that are designed, manufactured, and advertised for the purpose of copying music. But if the government chooses not to take that route, part 8 of the Copyright Act should be supplemented by another restitutive mechanism. What I'm saying here is that there is a principle involved that's already been established: that copies have value and that people seem to have a right to make some money from that.

We're not intending to say extend the technology if that's not palatable. We believe there are other methods. We have examples of other methods of getting remuneration to artists for the extended use of their copies, the storage, and the duplication. So it's the principle that we're arguing and the ability to keep that principle going and keep money going. You know, a musician would get statements. As I say, they're business people, and they can't go into the bank and say, “Well, I have six, seven months of contracts coming up, I've got tours coming up.” They say, “What if you get hit by a car? What if that happens?”

But they can go with those statements that they get from Re:Sound and Canadian Private Copying and they can go with other things that show their income and regardless of what happens to them get money. And they don't need much. The average guy maybe gets $2,000 or $3,000 from private copying in a year, but that can get him studio time, it can get him sidemen to play with. This is an important aspect of their income. It's been there for—what?—20 years, and it's now being removed. It's being removed because of technology, not because anybody here believes they shouldn't get it.

[The Chair, NDP, Glenn Thibeault]

Good morning, ladies and gentlemen and members of the committee.

Welcome, witnesses, to the fourth meeting of the legislative committee on Bill C-11. We'll get right to introductions.

From the Canadian Federation of Musicians, we have Bill Skolnik and Warren Sheffer. Welcome.

From Pineridge Broadcasting, we have Don Conway.

From Re:Sound Music Licensing Company, we have Ian MacKay and Matthew Fortier, director of communications.

Welcome, gentlemen.

Each of you has been informed that you have 10 minutes maximum for opening presentations. That's the total for each organization. After 10 minutes I will unfortunately have to cut you off. Hopefully, we can get that done within 10 minutes.

With that, I'll hand it over to Mr. Skolnik.

[Marc Workman]

Yes. I think there are a couple of places where the bill does some good things, like sending things outside of Canada. We needed that in the bill so that we could join this international agreement. The exemption for circumventing TPMs, I don't think that's a bad exemption. I just think it's not going to be one we can exercise very easily without some other things in place.

The other three, though, are all aimed at the existing Copyright Act, and they're all aimed at trying to improve that. Where I see silence in BillC-11 is on those three issues of large print, cinematographic works, and for-profit production.

[Marc Workman]

I'm suggesting we now have an opportunity to amend copyright, which we don't get all that often. At least, it hasn't been passed all that often.

What I'm suggesting is that we can fix some of the problems in the current Copyright Act, and we can enhance the things we're introducing. Sending the formats outside of Canada is something being introduced in Bill C-11, and I want to anticipate some of the limitations and try to get them out of the way. So I'm not sure if it's a sense of being more excluded, as much as it's a sense of having an opportunity to increase our inclusion into Canadian society and not taking that opportunity.

[André Cornellier]

We have the sense that there's not just one response to that. It's not one, or 10, or 20, or 30; it's a case-by-case scenario. We cannot put in the law that you are allowed 10 copies and after that you stop. Sometimes a photograph copied one time would be a problem. Sometimes a person could make a reproduction of 50, and it wouldn't be a problem. Each case has to be defined by itself.

That's why the wording might not seem very clear, but it is for us. First of all, that wording comes from Bill C-11, from another part of Bill C-11, where they tried to define “non-commercial” for purposes other than photography. Somebody has thought about that and defined the term “non-commercial”. We found out that it applies very much to us. In the example we gave earlier, if somebody asked me to do a photograph of a landscape and he gave it to everybody in the village, it's not commercial for him—he doesn't make any money—but for me it removes all possibility of sending it out.

Napster was exactly like that. Napster was a place that was non-commercial. There was no money there. You would put your stuff on the web and somebody else would pick it up. It was an exchange, but there was no exchange of money. Nobody was making money out of it, but they were removing the possibility for any singer to make money. The same example applies to us. The bill was made for people to access their photograph, put it on the web, put it on the social network, and email it. We have no problem with that, but at some point such a practice could damage my business. Let's give an example. You ask me to do a photo for you, and I do your portrait. You give it to your mother, and she puts it in the dining room, or whatever.

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

We talked a lot today about the aspects of Bill C-11 that contribute to business models. Could you elaborate on how this would contribute to the business model for a photographer, for a small business owner?

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

Thank you.

Mr. Boyle and Mr. Cornellier, you have stated this afternoon that Bill C-11 provides for the photographer to be the original owner of the copyright. This is a very significant development. It sounds like photographers have been waiting for it for decades in this country.

[Marc Workman]

Yes. Bill C-11 would allow us to remove the DRM.

The issue that I raise is that I suspect it will be difficult to find access to those tools. It's not clear that the tools will be accessible, so I believe it will be a right that can't easily be exercised by the average blind Canadian.