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.

Copyright Modernization Act

[Anne-Marie Day, NDP, Charlesbourg—Haute-Saint-Charles, QC]

Mr. Speaker, despite the fact that the title of this bill mentions copyright, which is defined as the rights granted to a creator, I do not think that this bill is good for creators. A creator can be a musician, a singer, an actor or a performer. Creators are not service providers, retailers or industry representatives.

Can the hon. member tell the House whether this bill hurts the interests of creators?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, I believe she is talking about the education exemption. As I mentioned in my speech, it is one of the things that we had. There was a lot of input to us about how the education exemption was causing a lot of concern for many of the authors. We listened to them and we realized that there was an argument back and forth as to how much money was involved, whether it was crippling to the university community or crippling to the authors in order to make a living.

This is why I talked about this multi-step process. Some people believe that the six step process is not sufficient. Some people believe that they should use the three step process, which was endorsed under the Berne convention as a way of dealing with it. It set out some really strict guidelines as to how we would deal with fair dealing and what would be considered to be fair dealing. If we have exemptions for a certain group of people, we should subject it to fair dealing. To do that, we have to put in guidelines by which some of the courts can be led through.

We did receive quite a few concerns about this from authors and the artistic community. I hope that discussion continues in the House.

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

Mr. Speaker, I think the hon. member was talking about the education provisions of the act. There are six criteria that must be followed. First, before it even gets to that point, there is a two step process. That is the second step. The first step is to determine whether it is fair dealing in the first place. If the hon. member takes the time to study the legislation, as I know he will, and I look forward to serving on the committee with him, he will see that those criteria are sufficient to enable this important exception to go forward. We heard from witness after witness during the testimony who were in favour of moving forward with this part of the legislation.

While I have the opportunity, his party has moved that we withdraw the legislation completely. That is not what we heard from the witnesses. John Manley, a former prominent Liberal member, has spoken to the urgency of getting the legislation passed as quickly as possible.

How can the hon. member possibly justify, as the member for Timmins—James Bay asked, wiping out the legislation altogether after 12 years of work? The hon. member spoke about the 12 years of “bandying about” to get to this point. How in the world could he justify just wiping out the legislation and starting again?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Because the government did nothing about it, Mr. Speaker. I said in my press conference this morning, and forgive me if I am infringing on copyright here, that there were 167 submission, that the number of changes was zero and that the political lip service was priceless.

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

Mr. Speaker, I am not sure about the answer to the last question. We could sit here and exchange quotes from some individuals who have said positive things about the legislation and members opposite can bring up negative things. We heard 39 hours of testimony before the committee and we had countless consultations prior to the legislation being put forward in the first place.

If we looked comprehensively at all the testimony we heard before our committee, we would note that a balance was struck. Not everybody liked everything they saw. Not everybody did not like everything they saw. However, we heard over and over again that, on balance, it was the best legislation that had come forward.

Even some of the people the opposition quoted very selectively, criticizing certain aspects of the legislation, spoke very favourably of the balance struck and to the importance of getting the legislation passed.

We heard 39 hours of committee testimony and we had all the consultation. We have moved forward with the same bill because we want to continue that discussion around the same legislation. How many more hours do we need before the hon. member will be happy?

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Mr. Speaker, when it actually works and starts to sink in. I do not know why, but for some reason the government assumes to paint this picture that everybody loves this and thinks it is balanced. I received 2,200 emails in 12 hours. If it were that balanced, I would not get any. What would be the point?

I look at elements of this, like WikiLeaks, which put out something that said the former minister told Americans that he would show this to them before he even tabled it. Who actually has the input here?

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, it is my great pleasure to speak to Bill C-11, because I have a special interest in it. I spent nearly 20 years in the recording industry, which has seen some hard times. In our opinion, there can be no objection to reviewing the Copyright Act. Obviously, today, in 2011, we are lagging behind at the international level in terms of modernizing the law. It is high time it was done. The other major western countries have done it and it is our turn. It is really past time.

We deplore the fact that the bill is a little like Swiss cheese: there are a lot of bubbles, a lot of holes, in terms of protecting rights holders and creators. We are talking about this bill in theoretical terms but, in concrete terms, as my colleague was saying, the way we consume cultural products today is different. Before, we bought a record for $15 or $20, we took it home and we listened to it. While the recording industry has kept up its production rate and budgets have declined slightly—since with technological progress we can now record music more cheaply—it is still a cultural industry. Investors, industrialists and consultants who support a creator invest large amounts of money to make a product that will sell.

We are not talking about a minstrel strumming a lute on the church steps. These are people who have created songs, and other people who saw a business opportunity there and said that everyone is going to want that song or that album and will be prepared to pay a price to buy it and listen to it. What the recording industry has experienced is unparalleled in terms of plummeting revenues.

I will give you a brief overview. The complete operation of producing an album, which includes recording, promotion, video clips, launches and so on, calls for a budget of about $100,000. That is a very ordinary budget in an ordinary recording industry. We are not talking about a huge operation like a Michael Jackson album made before his death, that might have cost $1.5 million to produce. We are talking about an album that would have cost $20,000 or $30,000 or $40,000 and all the associated expenses.

To recover that investment, the companies, the recording industry—and that means jobs for people who work in this field, as I was lucky enough to do—would sell the record for between $15 and $20. Today, with modernization, the Internet, digitization of music and the incredible capacity to create master quality copies, this is no longer the same generation as when we were young. Then, we copied music onto cassettes and there was often more background noise than music. That is no longer the case today, and that is the issue.

If a digital version of a song exists, thousands of copies can be made in a few hours and the rights holder will have been deprived of his due. When people today buy music on the Internet, they sometimes buy the complete album but usually they buy the CD in a store. Those who buy their CDs and their music on the Internet very often take a piecemeal approach, by downloading one, two or three songs at a time. The retail price is $1 or $1.49. That means that the recording industry, as it attempts to recoup its production and marketing costs of approximately $100,000, did so based on a price of $15 to $20 per CD. Nowadays it has to make do with $2 or $3.

I sincerely believe that no other industry has experienced such a drop in revenue in such a short time. We are talking about huge percentages, from $15 or $20 to $3. This is unprecedented. The industry is already on its knees. We must enact legislation now on behalf of the rights holders, so that the situation can be corrected.

Copyright is essential. Allow me to quote the Minister of Canadian Heritage and Official Languages who, referring to Canada, stated that the cultural sector contributes twice as much as the forestry industry to our GDP.

The arts and culture sector generates spinoffs of over $46 billion and provides work for over 600,000 people. This is an industry, a sector of the economy, that is extremely important.

There are problems with Bill C-11 in relation to YouTube, the education system and other related areas. The biggest problem, however, has to do with the collective copyright collection system, commonly called private copying.

Earlier, I gave an overview of how we used to consume music. We all know that a decade or so ago, the CD-R hit the marketplace. Using an ordinary home computer, it was possible to copy a disc—ideally, one that had been purchased—and immediately make a copy of it that would be identical from a quality standpoint, with only the graphics missing. This craze led to creators, the rights holders, feeling like they were missing out, and they successfully went about putting in place a compensation system. Compensation is the right word here. The private copying system is a form of compensation for losses incurred as a result of the development of a new technology.

This system, which initially applied to audio cassettes, CD-Rs and DVD-Rs, generated significant amounts of money. In 2008, for instance, the figure was $27.6 million. The following year, the amount raised through this private copying compensation system dropped to $10.8 million and it continues to decline. Why? Certainly there are those among you who have purchased CD-Rs at one time or another, and very few people buy them these days. As far as music consumption is concerned—I am talking about legal consumption in a suitable format—people now copy their music onto a portable digital player, an iPod or an MP3. The format the royalty was based on, in other words the CD-R, has become completely obsolete by the current changes.

That is why the copyright owner lobbies have asked that this private copying compensation system be extended to include portable digital players or iPods. As the hon. member was saying earlier, the members opposite reacted by wearing t-shirts that said No iPod tax. This is great. It is a very good response to the creators who were feeling forgotten, cheated and abandoned.

What can we offer those creators today when Bill C-11 does not address the problem of the private copying system? This is certainly the most important aspect of all. We could talk about exemptions for the likes of YouTube, which is increasingly becoming a competitive alternative to the way music has traditionally been distributed. I keep talking about music because it is an area I am familiar with and also because music was the first victim of this digitization and this new accessibility. In a few years we will have the technology to download feature films very quickly. Some may say that is already possible, but it is still not very common.

The thing about music is that the video for the song being copied takes much longer to download. The problem that music is currently experiencing will very quickly spread to the other cultural media we find on the Internet.

I will stop there for now.

[The Acting Speaker, Conservative, Bruce Stanton]

The hon. member for Longueuil—Pierre-Boucher will have 10 minutes to finish his speech and 10 minutes for questions and comments when the House resumes debate on the motion.

The House resumed consideration of the motion that Bill C-11, An Act to amend the Copyright Act, be read the second time and referred to a committee, and of the amendment.

[Andrew Scheer, Conservative, Speaker of the House of Commons]

The hon. member for Longueuil—Pierre-Boucher has 10 minutes to finish his speech.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, unfortunately, it is clear that this bill is really like an 18-wheeler that arrives at the homes of songwriters and copyright owners only for them to find that it is empty. In reality, there is nothing to compensate for losses related to the private copying system.

We will remember how it happened and it is not just theoretical; it is very real. In the past, music was purchased in a different way. Today, we have music on our computers, our BlackBerrys and our iPods, and it should have been purchased. There is no problem at all if it was purchased through businesses such as iTunes, Amazon or Archambault.ca. However, we know very well that such is not always the case and that the recording industry is suffering great financial losses because material is available online, despite the fact that it may be coming from places where it is illegal to download material.

This shortcoming shows how completely out of touch this government—a government that claims to want to protect Canadians' jobs and recognize this value—really is. In reality, where will copyright owners' money come from if they cannot sell their material or if it is being stolen or literally plundered from the Internet? Clearly, this bill cannot be passed as is. We will have to work very hard to add something, particularly with regard to the private copying system.

I fully understand rights holders when they say that it does not make sense, that with the right to copy that the telecommunications and broadcasting media are being offered, that the steak, if you will, is being taken off the rights holders' plates, and that the potatoes and carrots may vanish as well. Let us look at the basics: when songwriters, CD companies, producers, and rights holders produce music, they expect to have it aired by broadcasters. To do this, the broadcaster makes an initial copy and inserts it into the broadcasting system. Everyone is glad the broadcaster is giving the song airtime, but nevertheless a mechanical reproduction right has until now been enshrined as part of the copyright. Now songwriters and rights holders are being told that the broadcasters will not be bound by this obligation. They will be permitted to make their working copy without fear of retribution. This is not the major issue affecting rights holders when it comes to Bill C-11, but it is just one more consideration. It adds insult to injury.

To my mind, the major problem remains the private copying system, which applies almost entirely to outdated platforms. The private copying system provides a form of royalty earned from each CD-R. But we all know that consumption of CD-Rs has fallen to infinitesimally low levels, because portable digital players such as iPods, MP3 players and other such devices have completely replaced the equipment and song transfer system used with CD-Rs.

The levy system is dying, and Bill C-11 is turning a blind eye. Nevertheless, this problem must be addressed. It is the biggest problem currently facing the rights-holder community. Not only is the initial mechanical reproduction right being taken away in broadcasting, copies may be made free of charge in educational and learning environments. One can understand how rights holders might be sympathetic to this situation, but royalties should still be paid all the same, although they could potentially be waived in writing. Rights holders may receive a request from a teacher and make exemptions in writing, or exempt someone from paying a fee in a particular context. Once again, the bill would stand in the way of this and seeks to abolish private copying, abolish the broadcasters' copy, and also remove the tiny amount of money that would otherwise have come from the education sector. What are artists and rights holders left with when it comes to copyright? This really must be addressed.

One possible solution could be to look at who benefits from this situation. As members know, when we look for music on the Internet, there is a place to buy music. But some people might also look for music elsewhere. That increases information trafficking on the Internet.

There are people selling high-speed connections with varying upload and download bandwidth limits. Could the government at least show an interest in exploring other avenues to compensate for this loss to the private copying regime? That is the essence of it. In the case of transfers over the Internet, that would be the least we could do for all of the subscribers we represent. The Internet has replaced traditional in-store CD sales. If we cannot apply the private copying system to devices like MP3 players or iPods, what is left for copyright owners? These people are left out in the cold with a new bill that should be providing some relief, since our copyright legislation is way behind—stuck in the times of Séraphin Poudrier—compared to the rest of the world. It is time for us to revamp copyright legislation. And with copyright collectives in particular, we have a long way to go.

In conclusion, I would like to make sure that we have a chance to look at other avenues to compensate for losing the private copying system.

[Sadia Groguhé, NDP, Saint-Lambert, QC]

Mr. Speaker, I want to thank the hon. member for his comments. He talked about compensation for piracy. What type of compensation was he thinking of and what form could it take?

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Mr. Speaker, that is a good question, and fitting, since I have talked both before and after question period. We are essentially talking about compensation methods because it is very difficult to track every little transaction made by a user at home who sits in front of a computer searching for a song, ideally on a legal site. Unfortunately, we all know that people are more likely to search for music on illegal peer-to-peer sharing sites. It has been mentioned many times that most artists do not want to be in a position where they have to sue the people who like their music. It is also very difficult to track all this with any accuracy.

That is why the principle of compensation was proposed. At the time, the compensation was easy to apply. It was applied to blank recording media, to which a work could be copied. Today, copies are made on portable digital players. When people tried to extend the private copying compensation system from blank CDs to the portable digital player, they wore t-shirts that read, “No iPod Tax”. They refused to add another tax. This compensation measure will have to be applied. The reality is that we have gone from copying on a CD-R to a portable player with virtual songs that, theoretically, do not exist anywhere, and to which we cannot apply royalties. Who would get the royalties when we are not always able to get an accurate record of these millions of transactions per year that can be made on the Internet?

[Jinny Sims, NDP, Newton—North Delta, BC]

Mr. Speaker, there is absolutely no doubt that, with all the advances we have seen in technology in my lifetime, there is a need for us to address the copyright rules we have.

I have come a long way from my beginnings as a student and then my teaching career. Now we are seeing the kind of technological change that absolutely amazes all of us. When I was home for the break last week, over Thanksgiving dinner my grandson, who is in grade seven, showed me a YouTube video of himself playing in a rock band that is making the rounds and getting loads of hits. There we can see the creativity of 11-year-olds as they get into using this new media in a way that we cannot.

However, we can also see, as we are beginning to see the new creative ways of using the new technologies, as well as the old ones, like good old printed books, that there is a need for us to look at copyright in a very balanced way, in a way that we protect the rights of the creators, as well as those who then purchase the content and become the sellers, so to speak, and control that. If we move toward an unbalanced approach where the content owners actually have more power than those who are the creative agents behind that content, I feel we will see a loss in creativity and, in the long run, a loss in revenues for us.

Just to review for those of us who are here and those listening, ACTRA, the Alliance of Canadian Cinema, Television and Radio Artists, estimates that the industry contributes $85 billion per year to our economy. These industries and the jobs that depend on them can only thrive in an environment where intellectual property is protected. That is the dilemma for us as we look at the new technologies where somebody can create a piece, hit a button and, before we know it, it goes around the world.

The ACTRA industry and all it supports is 1.1 million jobs. We are not talking about a few jobs here. We are talking about 1.1 million jobs and a lot of these jobs happen because we have creators who produce wonderful ideas and content that other people then pick up on and produce. So we need to ensure that those artists and their right to earn a living is protected.

Despite these significant contributions made by the artists to our economy, some would be surprised to know that the average earning of an artist in Canada is $12,900 a year. When I read that figure and had that research presented to me, I was taken aback because, if that is what they are earning now, it is my belief that, with the changes that are being made to the Copyright Act, those earnings will diminish and many of these artists will be forced to look somewhere else and their creativity and all the wealth it introduces will be lost to us.

In 2008, the Conference Board of Canada reported that in 2007 the cultural sector generated $25 billion in taxes for all levels of government. That is three times higher than the $7.9 billion that were spent on culture by all levels of government. When we look at our level of returns there, it is absolutely stunning.

When we look at the federal government's investments in art and culture, we see that it invested $3.7 billion in 2007-08 and yet typical households in that same timeframe spent $1.4 billion on cultural outreach and participating in the performing arts.

That tells us that the bill the government has introduced must be paid due diligence. We need to examine that bill and make amendments to ensure we have balance not only for the creators who inspire the content owners eventually to make the kind of profits they do, and the content owners eventually, but also for consumers.

We can see that we have a lot of work to do. The bill is very similar to the one that was in the House previously. The NDP indicated then, and our position is the same today, that we do believe modernization is long overdue but that the bill has too many glaring problems. As a matter of fact, it seems to create problems where none exist right now. Therefore, we look forward to and will be making amendments that will examine some of these issues.

When we consider the legislation that is before us, we notice that it seems to be driven less by the needs of Canadians, the artists, the content owners and Canadian consumers, and it seems to be more an attempt at satisfying the demands of the large content owners in the U.S.

What we need to know is when Canadians will have copyright legislation that works for Canadians, whether they be the creators, the content owners or the consumers. We cannot, over and over again, pass legislation here that will actually damage our own industry to the benefit of those in the U.S. who would benefit from these kinds of changes.

The NDP is not the only one making these statements. Michael Geist, a renowned technology commentator, put it very succinctly when he wrote:

The foundational principle of the new bill remains that anytime a digital lock is used - whether on books, movies, music, or electronic devices - the lock trumps virtually all other rights.

When we actually listen to that and really understand what that means, all the rights the legislation would give in relaxation in some of the areas for educators, et cetera, and for satire, are then trumped as soon as this digital lock device is used. Therefore, in the long run, it would effectively take away the rights that the bill pretends to give in one part and then, through this lock, actually takes them all away.

There was also a comment made by the cultural industries. They say that the bill may be toxic to Canada's digital economy. During this very sensitive time, when the world economies seem to be teeter-tottering and we, in Canada, know we will suffer some of the echo effect of that, Canadians cannot afford to add toxicity to any one of our industries. That is a very strong signal being sent to us as the cultural group claims that the bill fails to ensure fair compensation for Canadian content.

That creates a great deal of concern for us, as Canadians. We value our Canadian culture, we value our Canadian artists and we celebrate when Canadians do well on the international stage. We have two Canadian book writers who are in London waiting to hear if they will get prestigious awards.

We celebrate when a Canadian makes it in the film industry. We celebrate when some of our theatre makes it out onto the world stage because we are proud to be Canadian. It is imperative for our children and our grandchildren that we safeguard and nurture Canadian content. Therefore, any message that we receive and any warning that we are creating an environment of toxicity for Canadian creativity should give every one of us in the House grave concern because, after all, we are members of Parliament for Canada and we value our Canadian heritage and our Canadian art, both domestically and internationally.

The Writers Guild of Canada also writes that it has a great deal of concern that the digital locks, at their best, will simply freeze current revenue streams for creators. What happens when we freeze revenue streams for creators? The creativity actually withers away because they then have to look for jobs that will put bread and butter on their tables. I urge the House to look at the bill and for the government to look at amendments that will not starve our artists away from their passion.

CIPPIC, also on the digital locks, says that wherever this has been tried it has proven to be a problem. It is urging the government to look for a fair balance between users, copyright owners and the needs of the creators.

Overall, there is not one group out there, except maybe some U.S. groups, that are saying that the system we have of the locks is good. I find that interesting in itself because usually when we put a lock on something we are closing the door. This actually does create a great deal of concern.

Geist also writes that this bill remains basically unchanged from a previous iteration of it and that it is the most inflexible, restrictive digital lock provision in the world. Why would we want to go down this road to kind of stranglehold the creativity among the artists across Canada?

It then leads one to beg the question as to why we are doing this. What is it that is driving us to do this? Once again, we know there has been a lot of pressure from the U.S. in a number of ways. We have Canadian organizations speaking against this but the government is sticking to this digital lock rule. Why? The answer, according to Geist, and I am beginning to agree with him, is that it seems to be that the digital lock rules are primarily about satisfying U.S. pressure, not Canadian public opinion. The U.S. pressure on Canada is not a secret, with the criticism of past bills and regular demands for action on copyright in return for progress on other board and trade issues. Surely we are not going to trade off our own creativity, our own heritage, in order to maybe have some talks on trade. Surely those talks should be had by two equal partners at a table looking for ways to improve trade and provisions.

When I look at some of the internal memos that have been brought to light, we see that Prime Minister Harper personally promised--

[Some hon. members]

Oh, oh!