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.

[Kevin Waugh, Conservative, Saskatoon—Grasswood, SK]

All right. Thank you.

You know the Australian model made Rupert Murdoch very, very rich. I see here with Bill C‑18 that very rich will come from Bell Media, from Rogers media.

I want your thoughts. You said you are following the Australian model, or at least Bill C‑18was intended to follow the Australian model, but when I look at broadcasters now, I see they've got their hand into the pot of Bill C‑18, and not only their hand; I would say they've got their whole body into this. They are getting most of the money that could be available through Google and Meta.

With the independent local news fund that you cited, $23 million, how much more do Bell, Rogers and other independent media need to survive in this country? I thought Bill C‑18 was going to be the bill to help local newspapers. It is in fact the exact opposite. We have the multinationals again getting most of the money. They were involved in Bill C‑10, Bill C‑11 and Bill C‑18. I just want your comment on that, because I'm very worried that this bill was designed for newspapers and has turned out to be anything but.

[John Lawford, Executive Director and General Counsel, Public Interest Advocacy Centre]

Thank you, Mr. Chair. Thank you very much for having me, committee members.

The Public Interest Advocacy Centre is a national non-profit organization and registered charity that provides legal and research services on behalf of consumer interests, in particular vulnerable consumer interests, concerning the provision of important public services.

PIAC has been active on copyright, from a consumer perspective, since the mid-2000s. In particular, we were heavily involved in the creation of the balance between creator and public rights achieved in the major overhaul that led to the Copyright Modernization Act.

Our message today is simple. The present Copyright Act has generally helped Canadian consumers to enjoy copyrighted works, as they should, without excessive strictures that do not align with the realities of how consumers watch, listen to or interact with copyrighted works.

Shaw Communications, when they appeared before this committee, said:

Overall, our Copyright Act already strikes an effective balance, subject to a few provisions that would benefit from targeted amendments. Extensive changes are neither necessary nor in the public interest. They would upset Canada's carefully balanced regime, and jeopardize policy objectives of other acts of Parliament that coexist with copyright as part of a broader framework that includes the Broadcasting Act and the Telecommunications Act.

We agree.

However, the FairPlay coalition application recently brought in CRTC, and now brought to this committee by several vertically integrated media and telecommunications companies, substantially misrepresents the context in which this committee's report must be made.

In reality, first, expedient judicial relief is available against intermediaries. Secondly, administrative censorship is not common around the world. Third, little online copyright infringement may actually be occurring. Fourth, online copyright infringement appears to be declining. Fifth, Canada's broadcasting industry is profitable and growing. Sixth, blocking is not very effective at reducing privacy. Seventh, blocking piracy services generates little additional revenue for broadcasters; pirated programming is predominantly not Canadian. Next, increased revenues for broadcasters may not necessarily increase the quantity or quality of content produced and finally the proposed regime will result in the blocking of legal sites.

PIAC believes that the committee should not recommend the implementation of FairPlay-type proposals. The courts are better positioned to enforce copyright, and balance enforcement against the public interest in freedom of expression, innovation and competition, and net neutrality. Secondly, technical protection measures already exist and are available to protect the interest of content owners. Lastly, the blessing of any Internet censorship in this domain will likely spread to other areas of government activity. These considerations, we feel, weigh strongly against implementing the proposed regime.

As noted above, judicial relief is already available against intermediaries under the Copyright Act, and it's actually subsections 27(2.3) and (2.4). They address the enablement of copyright infringement “by means of the Internet or another digital network”.

In other words, the FairPlay coalition members wish to replace the present judicial enforcement regime with an additional administrative regime. What matters about an administrative process, besides its duplicative nature, is that the process would be handled likely by the CRTC, which the FairPlay coalition members apparently hope through its general jurisdiction over telecom would be able to use a blanket blocking order on many alleged infringing sites on all telecommunications service providers, not just providing the right of one ISP to block one website. That is why they are so keen on enshrining this belt-and-suspenders type of remedy.

To move to fair dealing, PIAC believes that fair dealing exemptions in the Copyright Act generally have facilitated fair use by the public that benefit the public interest. We would resist calls to reduce this, whether in the educational field or elsewhere. Ideally, Canadian fair dealing should also encompass transformative uses, such as remixes of songs and other creative endeavours, including documentary filmmaking. However, we recognize that this was not in the previous act revision.

The iPod or smartphone levy has also been proposed by some in this committee, and has been rightly rejected as inappropriate on many occasions, including in the Federal Court. This recycled idea is no better today. It denies the use of such devices' full capabilities, raises prices on a staple of consumerism and makes the person who uses only licensed content pay twice: once for a licensed copy of the content, and again for others who are presumed to violate the act. This unfairness should be obvious and conclusive.

Lastly, PIAC also opposes the idea of an ISP levy or Internet tax. Such an idea does violence to the very concept of common carriage by telecommunications providers and very likely would raise prices for Internet service. This is a bad idea when Canadians, and in particular low-income Canadians, are struggling to afford broadband Internet for economic and social purposes.

PIAC thanks the committee very much. I look forward to your questions.

[Sylvia McNicoll, Author, Canadian Society of Children's Authors, Illustrators and Performers]

Thank you, everybody.

My name is Sylvia McNicoll, as you know. I'm here to represent the Canadian Society of Children's Authors, Illustrators and Performers, better known as CANSCAIP, because writers and illustrators for children are probably the most affected by the fair dealings educational exemption, especially in the K-to-12 sector, although I know my material is taught in colleges as well.

We wish to have the educational exemption stricken totally from the Copyright Act. I've been writing for approximately 30 years, and I've served as CANSCAIP's president and in various other executive positions. My first book was published in 1989, and it was chosen as a novel study for schools in Atlantic Canada. I think, actually, it was just Newfoundland, which meant an instant sale of 2,000 books that bumped it into a Canadian best-seller.

Since then, many of my novels, including that lucky first one, have been published internationally in Scandinavia, England, Australia, and most recently, Korea and Colombia.

My colleagues consider me a successful, hard-working writer. Like most mid-list novelists, I try to cobble a living together through a stew of projects: writing books and articles, teaching, speaking, grants, public lending rights, and Access Copyright payback.

When that early novel-study sale occurred, a classroom set of novels would typically include 30 books. As the years went by, that number dropped down to five because of different philosophies of education, cost-cutting, and then in the latter years, yes, photocopying—that was earlier even—and downloading.

A few years ago, I visited a correctional facility for young adults in northern Ontario where one of my novels was entirely photocopied for the students without my permission. This was ironic because it was the grade 9 students who were incarcerated for breaking the law. This is what well-meaning, hard-working, law-abiding teachers do when the author is present to witness it.

But we did have Access Copyright licences that were respected in those days. I would receive some compensation for minimal copying. Licensing fees tend to act like speed limits on the 401. If the speed limit is 100 kilometres, most people drive at least five to 10 kilometres over, and maybe 20 when they're late.

While the fees were intended to compensate us for a few pages of copying and downloading here and there, mostly for the purposes of research for a project for an individual student, we knew that schools were copying well over the 100-kilometre speed limit.

Enter Bill C-11, educational exemption. In 2012, the fateful year before it took real effect, I earned approximately $46,000. Of that total, $2,578.68 was Access Copyright licensing fees, which paid for two months of mortgage and three weeks of groceries. That's important to a children's writer.

Schools, universities, and colleges decided that because of the educational exemption, 10% of copying now was entirely free. They decided that Access Copyright licensing was unnecessary. They also decided that copyright tariffs were optional, and they opted out. They are still photocopying and downloading well above that speed limit too.

My grandson recently brought home a photocopied story in a Duo-Tang folder. It was a Canadian-authored retelling of an indigenous tale, and it was Canadian illustrated, Canadian published, and Canadian edited. The photocopied story was 100% complete.

Let's be generous and say that it was 10% of an anthology. Who knows? The well-intentioned teacher—and they are; they're hard-working, and they just want to have their curriculum met—uses a photocopy of that folk tale year after year, instead of buying a text.

It is not her fault that her school board thinks a 10% grab of an anthology is fine because of the fair-dealing exemption. This photocopying of course negatively impacts the publishing industry and the cultural workers involved. Our Bachelor of Arts kids lose potential jobs, and they are good jobs.

I've just finished preparing my income tax for 2017. My income is down 90%, to $12,000. My Access Copyright cheque is, coincidentally, also down by about 90%, to less than $400. That's down from two mortgage payments and three weeks of grocery payments to one week of grocery money—groceries have also gone up.

Also, boards of education now are suing for part of my 2012 cheque back. Bill C-11's fair-dealing exemption alone is not responsible for my income decline, but fair dealing is a beacon of disrespect for content. The world watches as Canadian schools download and copy curated content in a government-sanctioned theft of 10%. You have turned the Highway 401 speed limit in reproduction of materials into the autobahn—no speed limit at all.

Last year, I had two Canadian best-selling mysteries for middle-grade kids published, and probably almost three—they straddled the year. I worked even harder in 2012, because of course authors are expected to do more promotion, social media, etc., but I give up: not on writing or presenting to kids—that is my passion, my identity—but I'm trying to make a living. It's impossible. I must tell my students the same. I am drawing my pension and cashing in my registered retirement funds. After that, I will sell my house.

What does that mean for future writers and cultural workers? Your job must become a hobby. You do it on your lunch break.

Can Canadian publishers survive that way? We are already seeing their demise. What we create needs to—must—appear in the schools to represent Canadian values. Make no mistake about that.

What we create provides excellent jobs. What we create deserves respect, and what we create deserves compensation. You need to fix fair dealing by removing the educational exemption. Otherwise, we will have no Canadian culture.

Thank you.

[Richard Prieur, Executive Director, Association nationale des éditeurs de livres]

That's reassuring, Mr. Chair. I thought I had just five minutes, so I won't go quite as fast.

Mr. Chair, members of the committee, thank you for inviting us to appear before you today.

I am the executive director of the Association nationale des éditeurs de livres, or ANEL for short. We represent a hundred or so of Canada's French-language publishers, large and small, scattered across four provinces.

Joining me is our President, Nicole Saint-Jean, and Éveline Favretti, a project manager at ANEL.

Canada's francophone publishers publish more than 6,000 titles every year, ranging from novels, how-to manuals, and poetry to essays, school manuals, scientific textbooks, and art books.

ANEL has always called on the federal government to reassert the importance of copyrights and strengthen the country's copyright regime by bringing Canada's legislation in line with global trends, so that creators are supported by a legal framework that provides the stability to innovate in creating, producing, and distributing Canadian books.

In 2012, we proposed a number of amendments to Bill C-11, in our brief to the relevant parliamentary committee. None of those amendments was implemented. We hope that our efforts today will be more fruitful. We hope that, this time around, the government will be more receptive to the concerns of the cultural sector and that the Department of Canadian Heritage will contribute to the review in a robust way.

To that end, since 2012, we have repeatedly called on the department to undertake a comprehensive study of the impacts stemming from the review of the Copyright Act. That study now seems to be materializing. Our only fear is that we will not know the outcome until after this series of consultations is complete.

I have a few points I'd like to discuss with you. First of all, I will share with you the impact of the act internationally, taking into account the merits of cultural diplomacy. Next, I will illustrate what the act has failed to achieve, as well as the damage it has done. I will conclude with what our publishers hope to see as a result of this review.

From an international standpoint, Canada's legislation is to be avoided at all costs. ANEL participates in a variety of international trade fairs and, for more than 30 years, has taken part in the prestigious Frankfurt Book Fair, where Canada will be the guest of honour in 2020.

We engage in cultural diplomacy, but everywhere we go these days, particularly in Europe, our hosts are palpably concerned about the damage Canada's legislation is doing. The critics are unanimous and include France's publishers association—the Syndicat national de l'édition—the Federation of European Publishers, the International Federation of Reproduction Rights Organisations, known as IFRRO, which brings together collective management organizations around the world, and the International Publishers Association, to which we belong and whose vice-president you will be hearing from tomorrow, I believe.

Canada's legislation is the model to avoid. Even worse, it contaminates the sector by encouraging other countries to integrate copyright infringement exceptions in their regimes, such as the fair dealing for education provision.

What the 2012 legislation has failed to do is curb piracy. Not only is piracy proliferating, but the tools deployed to deter violators are ineffective. By placing the burden of proof on owners whose copyright has been infringed, by keeping penalties to a minimum, and by imposing an obligation to notify on Internet service providers through the notice and notice regime, lawmakers have missed the mark. If the government is unable to tighten the rules to combat piracy, the only alternative will be to expand the private copying regime.

Now let's turn to the damage Canada's legislation has done.

First of all, the act has led to the excessive involvement of the courts in copyright matters. Our copyright collectives are dealing with a growing number of cases. Money is being gobbled up in legal fees to defend the rights of copyright owners and publishers. At the same time, universities—who could put the money to better use—are also pouring money into court actions that the Copyright Modernization Act should have sought to prevent.

As a result, these court actions are weakening copyright collectives, which are being egregiously depicted as greedy, when their mission is simply to ensure that rights holders are fairly compensated.

Unlike what is happening in the rest of Canada, in Quebec, the copyright collective Copibec is managing to negotiate agreements with the vast majority of Quebec universities and colleges, as well as the education ministry. Even though the compensation set out in the agreements is being scaled back, the fact remains that Quebec has shown a willingness to respect the role of copyright collectives.

Finally, let's discuss the exceptions, specifically, the fair dealing exception for the purpose of education.

On this issue, lawmakers shirked their responsibility to deliver clear legislation. How is education defined? That question remains unanswered. How is it that the reproduction of short passages provided for in the exception has led to such explicit interpretations as that of Université Laval, which set its threshold at 10% of a work or an entire chapter? The door is wide open to the most unreasonable interpretations. Some institutions have even become experts at teaching how to stretch out what constitutes a short passage. What's more, some in the educational community claim that publishers have seen their profits rise since the legislation was passed. Their analysis of the figures, however, bears greater scrutiny.

What do we expect from lawmakers? A few things, at the very least. We expect them to do their job and work towards ending piracy. We expect them to give Canada's legislation some teeth. If lawmakers cannot manage to adopt even potential solutions, we expect them to finally recognize that private copying compensation is not a tax, but a way to support culture. We expect them to review the principle of fair dealing for the purpose of education by setting out a narrow definition for education and restricting the freewheeling interpretations of the educational sector. Lastly, we expect lawmakers to recognize the vital role copyright collectives play on behalf of creators and to accept that mandatory exceptions, such as fair dealing for the purpose of education, must go hand in hand with mandatory compensation.

Thank you.

Combatting Counterfeit Products Act

[Tyrone Benskin, NDP, Jeanne-Le Ber, QC]

Mr. Speaker, I thank my colleague from Timmins—James Bay for his very eloquent understanding of the situation. We did work together on the committee for Bill C-11 to reform copyright.

I would ask the member if he could comment further on these issues. He was speaking about the issues regarding artists and the limitations now placed on the remuneration for artists because of the changes to the mechanical rights regime, the copyright regime and the private copying regime. He spoke about how that differs, for example, from the more tangible counterfeiting of DVDs, Prada bags, or things that can be seized at the border.

Could the member comment a little bit about how he sees it being more difficult, if he does, in finding remuneration for artists under this copyright regime, as opposed to simply seizing goods at the border?

[Gilles Daigle]

We fight very hard for our members, in our case authors, composers, and publishers as well, but it's nothing new. When I say we fight hard, in this case it's on complex legal issues.

Back in the 1990s we had to go to the courts to ensure that our members were paid for the use of their music in specialty television programming, such as on TSN. Things we take for granted today, we had to fight for 25 years ago. We're continuing those fights. We appear before the Copyright Board, where the royalties that ultimately are distributed to our members are set. In order for those royalties to be set, they have to be confirmed as a matter of law that we can legitimately collect them.

Our members were extremely disappointed two years ago to find that well over $20 million that was with SOCAN and awaiting distribution to our members had to be repaid to this little company called Apple iTunes. Ironically, Apple was not among the companies challenging our members' rights to receive royalties for downloads. We're still fighting for our members' rights in that regard as a result of changes to legislation that came through with the adoption of Bill C-11 two years ago.

One way in which we try to ensure that royalties continue to make their way to our members is by representing them in these very significant legal battles that existed 25 years ago and that are simply now been shifted to a new front with the advent of these new technologies. We're going to continue to do that.

[Alain Lauzon]

I think Brad spoke in detail a little bit more about the private copying that we're involved in. Brad and I are both on the Copyright Board as members of the board.

As I mentioned, private copying is one issue that is really being looked at in Europe, not being weakened but being stronger for the Europeans that we work with, and the value of the private copying for the creators, performers, songwriters, and record labels as well, because it brings money directly into the hands of those who have created the works. That part is very important. That's the first thing about Bill C-11.

The second thing is the law has to pass, obviously, the one that came into force in 2012. It's sad that in the last 15 years we had minority governments and all that and it didn't go. I has to pass. Is it 100% good? No. But the problem that we're facing right now with Bill C-11 is the fact that we're facing a lot of cases in front of the court in the next coming years. I'm involved in two or three of the decisions of the Copyright Board. We will have to go in front of the Supreme Court as well because new concepts are coming with Bill C-11, and we will face that obviously.

Some of the exemptions that were brought up in Bill C-11 did not facilitate our work. Especially with the broadcasters, it brought out a situation where the revenues can decrease in the future. This is something we have to face. In the next five years it's supposed to be reviewed. I hope the decision will be there and that the target will be looked at within those next five years. I think we will have to adjust a lot of things. Especially, as I said, we have to put back in the equation the value of the music and have an équilibre with the revenues that are coming from the...in the pockets of the performers and the creators. That's mainly the problem we have right now.

I have 6,000 members who are creators and who are publishers and they have exactly the same thing. The first question I ask them is whether they are living off their music. There aren't that many people living off their music nowadays. Back then they could live because their market was larger. As I explained, the problem is with the development of technology. We can't go in the past. We have to go in the future, except that the revenues that are coming from new services, the business model that is related to creators—and when I say “creators”, it's all of us—even though there will be more income coming from digital in the future with streaming services and all that, the level of revenue that will end up in the pockets of the songwriters or the performers is not high enough in that kind of business model.

[Irene Mathyssen, NDP, London—Fanshawe, ON]

Thank you very much, Mr. Chairman.

I want to say thank you to all of you. I learned something important today and I appreciate the clarity of your presentation.

I wish I could ask a question of all of you, but Monsieur Nantel is very jealous and I must share the time.

I'll start with you, Mr. Lauzon.

When your time ended, you had just begun to talk about Bill C-11. I'd like to give you the opportunity to finish those remarks and talk about the challenges your industry is facing in regard to Bill C-11.

[David Wilks, Conservative, Kootenay—Columbia, BC]

Thank you.

Mr. Lutz, you alluded to Bill C-11, our government's bill that was brought in last year, and you said it was a good first step. You went on to say that SR and ED was imperative. I wonder if you could elaborate on that, please. Then I'll come back to Mr. Moisan and another question.

[Jonathan Lutz, Vice-President and Chief Financial Officer, Electronic Arts (Canada) Inc., Electronic Arts Inc.]

Good afternoon. My name is Jon Lutz and I'm the vice-president and chief financial officer for EA Canada.

I've been with Electronic Arts for sixteen years, and I've spent the last eight years here in Burnaby, British Columbia, where we make world-renowned games such as NHL, FIFA Soccer, as well as the Ultimate Fighting Championship title, which is currently in development.

EA also has a number of other studios across Canada, including studios in Edmonton and Montreal, a location in Kitchener, Ontario, and our Charlottetown, Prince Edward Island studio. They make games such as Dragon Age, Mass Effect, and the widely popular mobile title, The Simpsons: Tapped Out.

Combined, EA employs close to 1,800 employees in Canada.

EA began its presence in Canada way back in 1991 with the acquisition of Distinctive Software in Burnaby. Distinctive Software itself was founded in the 1980s. Since that time, the studio has grown to be one of our largest in the world, and our company has continued to reinvest in Canada by opening, expanding, and acquiring new studios.

In the 1990s, the attractiveness of Canada was the incredible talent that existed in greater Vancouver, but also the proximity to our corporate headquarters in Redwood Shores, California, and the favourable currency exchange rate that existed at that time.

While our headquarters is still in California, many things have changed in our industry.

The macroeconomic environment that existed at the time has changed, with the dollar reaching close to parity and eroding some of the advantage we had when it was lower. Perhaps one of the biggest things that has changed is the size and importance of the Canadian industry as a whole. When we set up EA Canada in 1991, there weren't many video game companies in Vancouver, let alone across the country, but that has changed dramatically.

We've seen Vancouver grow its industry too. Where at a time it was the largest in Canada, we've seen the rise of the Montreal industry, which is now a world leader in our sector, boasting roughly 60% of all video game employees in Canada.

Perhaps the biggest change is that Canada as a country now boasts one of the biggest video game industries in the world.

This hasn't happened overnight, but it has happened rapidly due to a number of very strong economic policies, such as provincially administered targeted tax incentives that have helped our industry grow and stay competitive in an ever more globally competitive industry. But it remains the quality of employee we can find in Canada that keeps us here and compels us to reinvest.

As our industry grows, it has become harder and harder to find the intermediate and senior talent to fill all of the positions we have available. In order to produce the best products we can and stay ahead of the evolution of technology, we need access to a global labour pool.

Talent is the natural resource that we thrive on, and while we do everything we can to find that talent in Canada, sometimes for a number of reasons we need to look globally. Being able to take advantage of programs through ESDC and CIC that are efficient and reliable, and to prioritize highly skilled employees are vital to the continued growth of our company.

Recent changes have caused delays in this process; however, after hearing recent comments by Minister Kenney and talking to our trade association, which has been working hard on this issue, I'm now optimistic that the message is getting through.

We pride ourselves on being an innovative company that is on the cutting edge of our industry. We invest in R and D in Canada and take advantage of the SR and ED tax credit program to help offset some of the cost of this investment.

While the program is very valuable, it denies multinational enterprises the same benefit that is given to wholly-owned Canadian firms, even though very important and innovative R and D is being conducted here in Canada by companies such as ours.

Providing global companies with the same percentage tax credit in a refundable manner would make Canada much more competitive for investors to serve their increased R and D expenditure.

EA is a company that designs and produces intellectual property that is sold all over the world. As the economy moves from a brick and mortar model to a digital economy, the protection of intellectual property has become even more important than in the past.

Countries with the strongest intellectual property protection laws will be the ones that thrive in a digital economy. Canada's Bill C-11 on copyright reform was a strong first step toward improving Canada's protection of intellectual property.

I encourage you to continue to work to ensure that rights holders in Canada are protected and have the confidence to continue to produce innovative products here.

We believe that Canada has a number of key advantages that allow it to continue to be a world leader in the production and development of video games. We've shown our commitment to Canada by expanding from being a small acquisition 23 years ago to having multiple locations spanning from Vancouver to Charlottetown.

We employ a broad range of experience levels, from the recently graduated junior employee to the senior producer responsible for the overall product management of our games.

We invest in our employees, and EA works with local universities to help ensure the curriculum is up to date and reflective of what our industry needs from new employees.

We provide internships to help advance the skills of students while they're still in school. We ensure our employees continue to have access to the education they need to advance their careers and become more valuable within the company.

Initiatives like EA university, which puts employees through rigorous courses that enhance their skills in programming, art, and production, are huge investments by EA, which we believe benefit the employee and the company in the long term.

We hire Canadians whenever we can. It is much more expensive for us to recruit prospective employees living abroad and then relocate them and their families to Canada, but in some situations when we cannot find these people in Canada, we have no choice.

If I can leave you with one final thought today, it is that we exist in a global industry, within a global economy that is in competition for the best people to produce the most innovative entertainment experiences.

Without support like SR and ED to invest in those experiences and without efficient access to the best talent, our industry will not continue to be the Canadian success story that it is today. We can work together to ensure that this industry goes nowhere but up.

I appreciate the opportunity to speak with you today, and I am open to answering any questions you may have about Electronic Arts.

Thank you.

[Steve Anderson, Founder and Executive Director, OpenMedia.ca]

Thank you for this opportunity to present before the committee regarding the Trans-Pacific Partnership agreement. I'm Steve Anderson, the executive director of OpenMedia.ca.

Founded in 2008, OpenMedia.ca is a community-based, award-winning civic engagement organization working to safeguard the open Internet. We work to bring citizens' and innovators' voices into the digital policy-making process.

OpenMedia is probably best known for our stop the meter campaign that engaged over half a million Canadians to stop meter billing in Canada focused on telecommunications prices. It was the largest online campaign in Canadian history.

In addition to our civic engagement work, we also regularly participate in policy processes and produce public policy reports and recommendations. Many of our recommendations, in particular regarding telecommunications, have now thankfully been adopted as official government policy.

One of our top concerns at the moment is the IP chapter in the Trans-Pacific Partnership agreement, specifically copyright within the IP chapter.

We're working with hundreds of thousands of people in our own trans-Pacific network of public interest groups and web businesses to push for and encourage a balanced copyright provision in the TPP. We are working, as I said, in our own crowdsource process to develop copyright rules that we feel are more befitting of the 21st century.

Our concern with the TPP is focused on the intellectual property chapter, as I mentioned, and its potential limitations on free expression online, commerce, and access to knowledge.

Over 135,000 people have signed on to a campaign that we've run reflecting these same concerns. These concerns are echoed by Canadians and I have, in a sense, crowdsourced this presentation for you today. I asked Canadians online over the last week to let me know what they think I should say, and I did my best to incorporate their input into this presentation. Throughout the presentation, I'll mention a few direct comments that people sent in to me.

The Canadians I heard from were broadly critical of the TPP and their concerns fell roughly into three main categories: the restriction and even censorship of expression in commerce; concerns about the TPP's implications for personal privacy; and thirdly, what many deem as the secretive, closed, and undemocratic TPP negotiating process.

Starting with the first concern—the implications on expression in commerce—Canada took 10 years, as I'm sure many of you know, to pass our copyright policies in Bill C-11. When I attended a TPP negotiating round in Auckland, I asked our own TPP chief negotiator if she would commit to uploading our copyright law and not overriding it through the TPP process. She refused to make that commitment.

Generally, I don't think Bill C-11 is exactly how I would have written it, but I think it's a reasonable compromise. But if we get into some of the specifics of the TPP that have been unfortunately revealed through leaked documents, I think we can start with digital locks or technological protection mechanisms.

The U.S. proposal in the TPP would increase the penalties for circumvention and restrict the ability for Canada to create new digital lock exceptions.

On the issue of digital locks, a woman online, named Monica, wrote into our process, and I want to convey this to you today. She said that as part of the special needs community, she wants to be able to continue sharing resources with others without fear of sanctions. As a community, they are often isolated, and without the Internet, they would be even more so. So the TPP threatens to limit the flexibility and exceptions on copyright that those with disabilities depend upon in their use of technology.

According to leaked documents, the TPP would also remove our relatively fair, I would say, notice system for dealing with those accused of copyright infringement. Instead, they would create new, costly liabilities for online service providers and ISPs. This increased cost for Internet service providers will result in Canadian consumers paying more for telecom services. As I'm sure you're aware, we pay some of the highest prices in the industrialized world for telecom services, and increasing fees is the last thing Canadians need right now.

The new business costs could knock independent Internet service providers—the smaller players—out of business and remove choice from the telecom marketplace. The liability costs could also add a barrier to entry for online entrepreneurs that are increasingly critical to our economy.

In short, if this U.S.-backed TPP-ISP liability proposal is adopted, it would mark a major step back for the government's commitment to lower telecom prices and improve choices.

Just to make this a little more concrete, on a daily basis countless photographs and other content are shared through new innovative services that are fundamental to our thriving economy. These services are also threatened by these new liabilities and regulations proposed in the TPP. One example of one online service provider is Vancouver-based HootSuite, which in August raised over $165 million from investors, marking the largest private placement for a privately held tech company in Canada. Another example is Ontario-based e-commerce platform Shopify, which passed the $1 billion evaluation mark this December; and then let's not forget Toronto-based Tucows Inc., which is the world's largest publicly traded domain name registrar.

These companies are threatened by this new liability that will be in the TPP, if it goes through as the U.S. is hoping it will. Do we really want to threaten to burden these budding businesses with new costs and regulations? Do we want to create a new cost that prevents the next HootSuite or Shopify from starting in the first place? Furthermore, as everything from our cars to our fridges are connected to the Internet, these proposed liabilities and costs fundamentally threaten to create red tape for a dizzying array of services. The new liabilities could be particularly damaging to the emerging Internet-fuelled sharing economy that is currently driving value across a range of sectors.

According to the Information Technology Association of Canada, the national Internet economy accounted for 3% of Canada's gross domestic product in 2010, compared to an average of 4.7% in the United States. It's estimated that ratio will become more out of balance if we don't take action to invest in our digital economy. We simply cannot afford to add new red tape and costly regulations to online businesses and commerce, while increasing telecom costs for Canadians.

Increasing ISP liabilities is also a threat to individual expression online. According to IP experts the TPP proposals could result in ISPs taking down and even blocking content based on accusations. In short, the TPP represents a regime that could amount to widespread Internet censorship. One commentator online had this to say on the topic:

Censorship of any kind is undemocratic. It has no business in our society and we should actively DISTANCE ourselves from such heavy-handed policies.

Here is the fundamental point. There's no way that increasing online liabilities as proposed in the TPP is in the national interest of Canada. Old media conglomerates in Hollywood have no problem pushing for policies that will hold back the Canadian economy or free expression, but legislators surely should.

Beyond new service liabilities, there's also concern about the TPP criminalizing common activities that involve small-scale and often accidental copyright infringement, such as sharing a recipe online. According to intellectual property experts and Professor Sean Flynn, the U.S. TPP proposal would severely increase penalties for copyright infringement even when done without commercial intent. He notes that we could even be looking at controversial copyright cases in the U.S. where teenagers and their mothers have been required to pay big record companies hundreds of thousands of dollars for copying music for personal use.

Canadian copyright law now includes an important distinction with respect to statutory damages as it features a cap of $5,000 for non-commercial infringement.

As it stands, we already have copyright trolls trying to use copyright litigation as a business model. Under the TPP, damages could skyrocket. We could see many more of those court cases and we could see Canadians much more timid and fearful online.

Report Stage

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

Mr. Speaker, the member mentioned something about only a very small portion of the amendments dealing with the name change. In our case actually that represented less than 20% of the amendments that we put forward.

One of the amendments that I thought was a reasonable one was that a review process would be set up, similar to what was proposed in Bill C-11, the Copyright Act. I said every three years, but would have been open to five years. By doing that, we would get to review the mandates of each of the museums, not just this one. This was a golden opportunity to open up all these national museums, because we are now getting into an area where we are looking at these national museums, this one in particular, sharing their resources with the rest of the country.

I thought this was a good way to review how this process would be being played out for the sake of the institutions across the country that want to share in this. How does he feel about this review process?

Combating Counterfeit Products Act

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, as I was saying earlier, the clock is ticking, and while this government is unravelling, mired in scandal, we have before us a bill introduced by the Minister of Industry. It is a great honour for me to speak this evening as the official opposition industry critic.

The Conservatives boast about being good economic managers and supporters of industry and economic growth, but they dragged their feet on the only bill in recent memory that affects industry and seeks to tackle problems related to counterfeiting.

Now they want to rush the bill through. What is the urgency? What do they have to hide? What are the real reasons behind this sudden interest in Bill C-56? Are they trying to change the channel, divert attention from this government's mismanagement, or did pressure from trade partners finally get to the Minister of Industry?

Canadians and the people of LaSalle—Émard have lost all confidence in this government. They do not believe that this government is fit to govern.

More and more Canadians mistrust the government. They feel it has something to hide. They feel that the Conservatives are not fit to govern.

As the industry critic for the official opposition and the representative of the people of LaSalle—Émard, I rise in the House today to speak to Bill C-56, An Act to amend the Copyright Act and the Trade-marks Act and to make consequential amendments to other Acts, which is also known as the Combating Counterfeit Products Act.

As soon as this bill was introduced on March 1, 2013, the NDP got to work. We met with many stakeholders. All of them recognized the importance of effectively combatting counterfeiting, and they all said that Canada has to have the tools to do it. They also raised a number of questions about the enforcement of the bill and expressed doubts as to whether the government was really willing to wage an effective war on counterfeiting.

Once again, the Conservatives used this bill in a misleading way. The wording of the bill is not misleading; rather, the government's actions are inconsistent with an effective fight against counterfeiting.

That is the first point I wanted to make. In order to combat counterfeiting at our borders and in Canadian ports, we need human and financial resources. We therefore find it difficult to understand how we will be able to enforce this ambitious bill when the Canada Border Services Agency is facing $143 million in cuts, not only to front-line services but also to intelligence services that are crucial to fighting illegal activities such as counterfeiting.

What is more, 549 full-time jobs will be lost between now and 2015. We have also learned that the Minister of Canadian Heritage wants to interfere in customs officers' legitimate collective bargaining process, once again, without understanding how that undermines labour relations.

The RCMP's budget and resources have also melted away like snow on a warm day. The government needs to put its money where its mouth is, as we say. The Conservatives rarely do that.

The NDP recognizes the importance of combatting counterfeit products, particularly those that could jeopardize the health and safety of Canadians.

Despite the lack of conclusive data, we recognize that this is having an impact on Canadian industries.

We condemn the cuts to the Canada Border Services Agency and the RCMP, which are our front-line defence against counterfeiting, as I mentioned.

The second point I want to talk about is the government's lack of action. Once again the Conservatives have dragged their feet. The cuts we condemn show that they are not serious about combatting counterfeiting.

The problem of counterfeiting has come up many times in recent decades. A report was tabled in 1998. The issue of counterfeiting has come up over the years, and we must acknowledge the impact this issue has had on Canadian industries and consumers.

I want to talk about what has been happening in recent years. In 2007, a report by the Standing Committee on Industry, Science and Technology entitled “Counterfeiting and Piracy are Theft” described the impact counterfeiting has on the Canadian economy. The report made 16 recommendations. In its supplementary opinion, the NDP made two recommendations. A number of these recommendations were ignored, even though industry stakeholders, trading partners and even Canadian consumers continued to raise the issue.

Furthermore, during the Standing Committee on Industry, Science and Technology's study of intellectual property, which concluded in 2012-13, a number of stakeholders criticized the government's inaction.

Here is what Martin Lavoie, the director of policy for Canadian Manufacturers and Exporters, said in committee:

We have been advocating since 2006 for more resources for customs agents to stop the transit of counterfeit products...

The Minister of Industry introduced this bill in the House on March 1, 2013, after which we heard absolutely nothing. Now here he is as we are on the verge of adjourning for the summer. I am sorry. On May 30, 2013, at 12:26 a.m., we had a rather pathetic speech from the Parliamentary Secretary to the Minister of Human Resources and Skills Development. She kept breaking into fits of laughter, which shows how seriously the government takes counterfeiting.

The third point I want to talk about is the lack of conclusive data regarding counterfeiting in Canada. I cannot help but denounce the cuts made to Statistics Canada, which continue to have an adverse effect. I am not the only one who feels that way. The stakeholders we heard from at the Standing Committee on Industry, Science and Technology did as well.

Canadian industries, exporters, manufacturers and small and medium-sized businesses need these statistics, which are snapshots of our economy. They are not the only ones who need them. We, as parliamentarians, use them to make informed decisions. If we do not have hard data that show the trends in recent decades, we cannot predict future trends. These data give us an accurate picture of Canada's economic situation, employment, prosperity, innovation and so on.

Conclusive data allow parliamentarians, legislators and public servants to establish policies that are not based on anecdotal evidence, but on solid data and recognized scientific methods. That is what is happening here with counterfeiting. We know that there is problem, that goods have been seized and that the issue has been raised everywhere in the world. However, unfortunately, it is very difficult to grasp the magnitude of the problem and the best way to address it.

A lot of data have been provided but, as I said earlier, it is difficult to evaluate the methods used to gather those data. In addition, data are not always collected using scientific methods that would help us understand the magnitude of the problem.

The data provided have been of more of an anecdotal nature, and they do not give us an idea of how widespread the problem is internationally. That is why it is important that Canada and the rest of the world have access to these data. This has been brought up many times.

I have some data here that I can share with those who are watching. In Canada, much of the information comes from statistics on actual seizures. For example, Industry Canada reports that:

The retail value of counterfeit goods seized by the RCMP increased from $7.6 million in 2005 to $38 million in 2012.

Still, more details would be useful. In 2009, the OECD estimated that international trade in counterfeit goods and pirated copies could be worth as much as $250 billion. In the same study, the OECD renewed calls for better access to information, saying once again that there are not enough data.

Moreover, anecdotal evidence suggests that counterfeit goods can threaten consumer health and safety. Counterfeit electrical components—I believe someone mentioned this already—and toxic stuffing in a goose-down jacket are two examples of that. I can confirm that because a Canada Goose company representative testified before the committee and I had the opportunity to see the jacket and the material inside it.

Again, the NDP will support Bill C-56 because counterfeit goods can threaten Canadians' health and safety and tarnish the name and reputation of Canadian companies like Canada Goose. A company with a name like that could not be more Canadian. We recognize how important it is to fight counterfeiting effectively.

In its 2007 report, the Standing Committee on Industry, Science and Technology called on the Government of Canada to establish an annual reporting system to provide statistics on the efficacy of the Canadian intellectual property enforcement system. The committee went on to list what it wanted to see in the report: the number of investigations, the number of charges laid against counterfeiters and pirates, the number of criminal sentences obtained, the number of counterfeit and pirated shipments seized by the Canada Border Services Agency and the country of origin and approximate value.

My question for my colleague is this: did the government act on that recommendation? That would give us some data to work with.

The lack of conclusive data makes things harder for everyone—the investigators, officers and legislators studying the issue—when the time comes to find ways to fight counterfeiting effectively. We believe that having good data and an accurate picture of what is going on would enable us to implement effective measures.

Bill C-56, the combating counterfeit products act, would amend both the Copyright Act and the Trademark Act. Its purpose is to strengthen enforcement of copyright and trademark rights and to curtail commercial activity involving infringing copies of counterfeit trademarked goods. This bill would add two new criminal offences under the Copyright Act for possession and exportation of infringing copies and would create offences for selling or offering counterfeit goods on a commercial scale. I want to stress that because it is an important point in the bill. It would create a prohibition against importing or exporting infringing copies and counterfeit goods, and would introduce some balance to that prohibition by creating two exceptions.

The first exception would be for personal use. If someone crosses the border with something in his or her possession or baggage, which the person bought and did not know was counterfeit, that would be for personal use. However, we want to ensure that we study that closely at committee to ensure the exception would be solid.

The second exception, and it is an important one, would be for items in transit control. That would be items that would be transiting in Canada but not passing the border. They are not necessarily in Canada, but in transit control.

Another point is that it would grant new ex officio powers to border officials to detain infringing copies or counterfeit goods. That would be a significant policy shift. Until now, border officials required the private rights holders to obtain a court order before seizing infringing copies or goods. Therefore, that would be an important change. It would grant new ex officio powers to the Minister of Public Safety and border officials to share information on detained goods with rights holders. Also, it would widen the scope of what can be trademarked to the features found in the broad definition of “sign”, including colour, shape, scent, taste, et cetera.

While the granting of ex officio powers to customs officials has been a recommendation of the counterfeit report of 2007 and reiterated by stakeholders, two main issues were raised with this provision in Bill C-56. First, the Canadian Anti-Counterfeiting Network's first recommendation in one of its reports stated, “provide the RCMP and the Department of Justice [or border official]”, which it did not mention, but I think is what it meant, “with adequate financial and human resources to effectively address counterfeiting”. These were industry representatives who were stating that.

On the other hand, Dr. Michael Geist, from University of Ottawa, raised the issue of the complexity, and my colleagues from heritage and ethics, who studied Bill C-11 extensively, can attest to that. He discussed the complexity of detecting copyright infringement and also raised the question of changes in court oversight. Dr. Geist said, “While officials are not intellectual property experts, the assessment includes consideration of whether any of the Copyright Act's exceptions may be applied. These determinations are complex--courts often struggle with this issue...”, and so on.

While meeting with them in consultation with my NDP colleagues, Dr. Geist, industry, and stakeholders, raised a lot of issues regarding this bill.

In closing, I would like to reiterate that the NDP recognizes the importance of controlling counterfeit goods, especially those that could pose a risk to the health and safety of Canadians.

We recognize that counterfeiting hurts Canadian industries. We condemn the cuts that affect front-line workers who fight counterfeiting.

I sincerely hope that the government will appreciate the importance of studying this significant bill in committee and the resulting recommendations.

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

This is one of the first amendments I wanted to bring here. The inspiration came from Bill C-11, which was to set up a study every five years of Bill C-11. This one proposes every three years. I'd be open to five years, but what have you, I think three years is a pretty good period of time.

We are talking about curatorial independence. We're talking about the fact that these people are truly experts at what they do and they want to be independent. Sometimes we don't get it. For instance, we just voted to tell these people not to destroy things. Why didn't I vote against it? How can you say on the one hand that you want curatorial independence and then you're going to vote to tell them not to destroy something?

So here we are in a situation where I think this is the type of thing that this bill needs, a three-year review by a committee of the House so you don't have to go out and spend lots of money just to have an independent study of some sort. You can do a House study—it could be the Senate or a special committee to talk about our museums. You could even expand it to not just this museum, but the other museums including the Canadian War Museum as well.

I think this is a bold step, but it's one that could be used here in the Canadian Museum of History as a model to show that other museums can do this as well, to allow our committees to study for—and I didn't put curatorial independence by the way. I put “independent functioning of the Canadian Museum of History”.

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

But in other cases, you have put a review board in, such as for Bill C-11.