Bill C-11 Committee on Feb. 28th, 2012

[Charlie Angus, NDP, Timmins—James Bay, ON]

This has been a very interesting discussion. It was making me think of when I was first starting out in music and we had a record. We'd go to the radio station, and if it was going to get played, the record gal down in the library brought the record up and played it. Now when you go into radio, there's a guy sitting behind the desk and everything's on a server. All those other people who used to have to rack your record and bring it up and move it around and keep it filed are all gone.

We're now in a situation where the radio station can press a button and the song gets played. I love what radio does, but when I hear that it's all about snowstorms and telling kids when the school bus is closed, that's great, but nobody phones the heating company and says, hey, give us a break on our heating bill this month because we do a lot of good community work. Nobody says to the telephone company, hey, we don't want to pay our phone bill. But it seems when it comes to musicians, the artists, there's a sense from the Conservatives that paying them is a problem. The win-win is that they get a bit of free publicity.

I'm thinking this whole business model was based on a relationship, and a relationship that is adjudicated at the Copyright Board. These tariffs aren't made up; they're decided.

Mr. MacKay, you're talking about this $1.25 million subsidy that allows radio stations to not even pay, basically, to get the stuff for free. Is there any place else in the world that does that?

[Ian MacKay]

No, there is no place elsewhere in the world that has a subsidy for commercial radio.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm just thinking, because of all the Canadian bands I know, most of them are pretty much hand to mouth, so radio is essential for them, and it's a great relationship. I'm thinking, why is it that a band like Bedouin Soundclash has to work for free, whereas the telephone company doesn't? If it's adjudicated by the Copyright Board, do you think it's right for the government to come along and say that copyright royalties don't have to be paid because they don't like them? Is that fair to maintaining a reasonable business model for musicians?

[Ian MacKay]

The $1.25 million exemption is, as far as we're aware, the only provision in the act that prevents the Copyright Board from doing what they're there to do. When they have looked at it every time in their decisions, they set out separate rates for low-use music stations, for community radio stations, for all-talk radio stations. That's them doing their job. They take into account the size; they do graduated rates according to the size of the radio station. They're the experts on doing that. They listen to all the evidence.

The $1.25 million exemption prevents them from actually doing that. They can't do their job because of that exemption, and it's the only instance where the Copyright Board is not left to do their job.

[Charlie Angus, NDP, Timmins—James Bay, ON]

So you're saying that amounts to about $8 million. We have $8 million there. We have about $20 million in mechanical royalties that will be struck. We have probably another $30 million that the Copyright Board figured was in updating the digital levy. That's a serious amount of money in an industry that has been pretty much reeling it on the ropes.

Do you think we can address some of these shortfalls in the bill to ensure that we maintain a reasonable business model so that the creative community can continue to actually create the music that's driving radio, that's driving Canada as such a world leader? Can we do that with this bill?

[Ian MacKay]

We certainly hope so. In terms of the $1.25 million exemption, as I said before, it's in a part of the act that was called “Special and Transitional Royalty Rates”. It was very much a product of the time and where radio was at, at the time. Those times have changed a lot. It's been 15 years since that legislation was enacted, so yes, I think it's very much time that it was dealt with.

[The Chair, NDP, Glenn Thibeault]

You have 40 seconds.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Could you just explain the orphan rights clause? I think it's a really key element.

[Ian MacKay]

Every other collective licensing regime and even reproduction rights regimes in the act have clear rules that set out that an orphan, when they come forward later, have the right to claim moneys. It also sets out the ability for the Copyright Board to set clear regulations and clear limitation periods for claims and rules as to how claims come forward. In the absence of that, we're left relying on different provincial legislation, different legal opinions as to what our obligations may be to different rights-holders, and that's problematic because it's not clear; it's not transparent. What we're asking for is the clarity so that we know exactly whom we should be paying and how to go about doing it.

[The Chair, NDP, Glenn Thibeault]

Thank you.

Sorry, Mr. Fortier, we're already over time. Maybe you can get that in on one of the next questions.

Thank you, Mr. Angus.

For the next five minutes of questions is Mr. Moore.

[Rob Moore, Conservative, Fundy Royal, NB]

Thank you, Mr. Chair. Thank you to the witnesses for being here.

I've listened to Mr. Angus. I guess he has a little beef with local radio—I don't know why. We do appreciate those messages we get when our kids are going off to school. In a day of satellite radio and so many hundreds of options out there, local content in our communities is certainly valued.

Mr. Conway, on the issue of Canadian broadcasters, local stations, how do you see their role in supporting Canadian content? Mr. Skolnik listed some of the performers in our communities that we value. What do you see as your role in allowing those individuals to make a living, buy a house, raise a family in Canada, make us proud both nationally and also on the international stage as we develop our talent here in Canada? How do you see the role of the local station?

[Don Conway]

I think it's pretty important. Everything that is local—that's why we call it local radio. It doesn't matter whether it's a community group or it's artists. I mentioned in my presentation some of the local groups we've brought in and done live performances with in the studio.

We work with many others. If they're putting on a fundraiser, we're helping to promote their fundraiser. If we can do anything to help local bands, that's what we do. That's part of our mandate—what we feel is our mandate—as local radio. We were lucky enough to be awarded the licence for Peterborough by the CRTC. As part of being in that market, we promised we would spend $175,000 over the next seven years promoting Canadian content.

There is a showplace—a theatre—there is the festival of lights, there is the Kiwanis Music Festival, there's FACTOR, and there is another one I can't recall. There are five things—oh, the high schools, two scholarships each year for journalism students at the high schools. I've met with all of them now, because this is our first year. We just got on air this past summer, and I've now met with all of them so that we can determine how we can meet their needs. Do we just cut a cheque? No, we want to get right in. That's what I told them. I told them that we want to get involved in helping their organization. This is going to be a win-win relationship for at least the next seven years.

[Rob Moore, Conservative, Fundy Royal, NB]

I'll throw this to Mr. MacKay, and also to you, Mr. Conway, for comment.

You mentioned the person-hours, which are possibly labour intensive with some of the changes that are coming on the 30-day rule. We've seen so many technological advancements in the last little while. Do you think technology could play a role in the future as stations are dealing with future issues in lessening that burden?

I'll throw it open to either one of you.

[Ian MacKay]

What we're talking about in terms of performance communication rights...technology does not play a role. It is just the right to perform and communicate the music over the air. Technology has not changed that at all over the years.

[Don Conway]

Mr. Angus has unfortunately gone. I thought what Mr. Angus talked about was that he used to take it in and now they just push a button.

When we bought the bankrupt AM radio station in 1983, there were 12 of us who operated that station for a number of years.

Right now, in the Cobourg office, we have 25 folks. In the new Peterborough station, we have 15—40 staff over three stations. All this technology that he was talking about has not reduced our staff. You can't go below the minimum. You have to have a certain number of people to run a radio station.

[The Chair, NDP, Glenn Thibeault]

You have three seconds left, so if you have a very quick question—

[Rob Moore, Conservative, Fundy Royal, NB]

Is that 30 seconds or three seconds?

[The Chair, NDP, Glenn Thibeault]

That's three.

[Rob Moore, Conservative, Fundy Royal, NB]

Okay. Thank you.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Moore.

Thank you, Mr. Conway and Mr. MacKay.

Now we have Mr. Regan for five minutes.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chair,

Thank you all for coming today as witnesses. You know, this is a little different, having government so involved in making decisions that will affect whether or not industries thrive or individual artists thrive.

There are many industries in this country where it doesn't happen as much. In fact, we're a government far less involved as an arbiter in that way, and in the way the CRTC plays a role, and in the way that Parliament making legislation will play a role in your case. We have to ask ourselves, I guess, in view of the fact that we are involved in this, how do we ensure—and what is the role of government in ensuring—that small radio stations of that industry and all artists thrive?

Do we have to really worry about every single one of them? I don't think any of you would ask that the government ensure that every single station or business of any size makes a profit. In a lot of ways, we don't control the various factors in terms of productivity, and their business models, or that every artist will prosper, because not every artist will survive. I suppose if I were singing, people would say that I shouldn't be doing that, and shouldn't be making a living at it, for example. I'm sure many of my sisters would argue that.

The question is, how do we do that? How do we ensure that both artists and small radio stations, for instance, survive?

Mr. Skolnik.

[Bill Skolnik]

I agree with you about the government intervention. I can tell you it was a shock to me to find out that the government paid my salary when I started writing music. I had no idea. I appeared before, at that time, the Copyright Appeal Board, and I looked at all these people who were getting paid a heck of a lot more than me and realized that there were three people up there who were determining what type of food my kids would eat and what clothes my wife would get. I of course never bought any.

How to ensure it? We've gone a far way. Federally, we've done status of the artist, which permits us to bargain on behalf of musicians. Mr. Conway's station, for example, is susceptible to that. We can go into Peterborough and we can ask the CAPPRT to have him sit down and bargain with us to make sure that those players are compensated properly, or different actions can take place.

We haven't gone around to every small town and done that. We can't. We have relied upon the community to determine that. So, yes, we are dependent on the local radio stations, we are dependent on the local theatres, we are dependent on the local clubs, and we have let the market take its place. That's why the supplemental income that these people need to keep going is so important to us. That's why the licensing to ensure that artists can continue, and continue without having their supplemental income diminished.... If they have a project they can go to a bank and get a loan—that this continue. The only way so far is through the licensing, either of the performance or the performing.

It is federally regulated; it is internationally regulated. When you look at WIPO, it's not something we're going to change, but it is something that we need to look at. We need to make sure that it remains rejuvenated, that it remains there as a level, and that there's an ability for all of our performers, all of our creators, to take part in it, so they can continue to present this country to the rest of us.

[Geoff Regan, Liberal, Halifax West, NS]

I only have seven minutes. One minute is left, but this is so compressed, I need thirty minutes.

Mr. Conway, you talked about the fact that you've always gotten music from the labels and never had to pay for it. You started out with 45s, of course, so you have seen big changes. Of course, so have the artists, as you know, and they've gone from a time when they had lots of revenue from selling records that people like me would buy to a point where they aren't selling nearly as many, and they have a challenge.

What's your answer to this? How do we ensure that artists get revenue and that a small station like yours survives? Should we make a distinction based on the size of radio stations?

[Don Conway]

I don't have any problem paying artists. I've never said I had any problem. I think we should, but it has to be a fair balance.

One of the things we're doing right now, in the last couple of years, is this. We're paying multiple times for the same thing, so we supposedly have multiple copies on hand. Well, we don't need it because it comes to one computer.

That's where you asked the question about government involvement. I'm not sure that I see government being involved in this, because when government gets involved, you get to something like this 30-day thing, which in our case just doesn't make sense. Why put somebody to work and reassign them from doing something else just to re-record something? It just doesn't make sense, I'm sorry. I don't see government being involved in this. If we can grow our revenues, the artist is going to get more revenue—bottom line.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Conway and Mr. Regan.

That ends our first round of five-minute questions. Moving on to the second round, for five minutes each, we'll start with Mr. Armstrong.