Bill C-11 Committee on Feb. 29th, 2012

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you, Chair.

Thank you to all for your presentations. I'm going to start my questions with Mr. Lawford.

Representing that many consumers—you said thousands of consumers—what would their opinion be, and what's the opinion of your organization, on inputting some sort of levy or tariff on devices that record digitally off the Internet, or digital recorders, a levy used to pay creators of content?

[John Lawford]

We don't think there's a need for levies at all on these devices. It's innovation-braking: the market will grow if you let people use content. They will buy more of it. If it's inconvenient and they have what effectively amounts to a tax on their devices, that will retard the market for it. That's our view.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

We heard on Monday a discussion on TPMs and on things like iTunes. You can download movies; you can choose to rent the movie or you can choose to actually purchase it. If you purchase it, you're talking $20 to $25 usually. To rent it, you're talking between $5 and $7 or somewhere in there. It costs a lot less, but it erases itself after three days. That's a form of TPM.

To me, that sounds fairly reasonable. It allows people to download their content, watch it once—that's all they want to have it for—and it costs them much less. That's a form of TPM.

What is the position of your organization on that type of TPM?

[John Lawford]

Well, that type of TPM I think will come into the market whether you have the consumer rights—which we are asking for in the way that we want them to be expressed—or not. It's in the market now. It's more a factor of whether business sees a business model in Canada. We don't believe that business model will be completely destroyed by having the consumer rights.

Most consumers, as you say, won't bother to try to shift it and back it up. They'll just pay for their three-day download, watch it, and be done with it, as you say. Maybe a small subset will want to keep it or move it to a different time, but I believe that would be a smaller subset. I don't think it destroys the business model.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

How do the exceptions such as format-shifting and time-shifting respond to the changing nature of consumers and their consumption?

[John Lawford]

I think the simplest example is just grabbing your CD and wanting to take it on your iPod.

Content is increasingly, as our friends have pointed out here, being downloaded and being produced digitally. The ways in which it can move from device to device are so seamless now that you're really denying people the benefit of these wonderful new technological advances that make enjoying content easier, anyplace, any time. We're just trying to get people to have a value proposition for what they buy so that they can use it anyplace, any time, on any device.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Great. Thank you.

To Ms. Seline, on the educational exception—my background is in education—is it your opinion that there should be no education exception, or should we try to limit the nature of that? Are we making it too broad? Is that what you're trying to tell us?

[Janice Seline]

I really dislike the fair-dealing exception for education. I think it makes things much too confusing for everyone. It opens it up to institutions that are not educators who can claim to be so.

As I said before, I think the act currently covers education extremely thoroughly. I think we're fine the way it is. Education is well defined in the act already. If you put it into fair dealing, it's anybody's game. And we cannot afford the litigation, quite frankly.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

We heard from the National School Boards Association yesterday. They said that things are not clear, that many teachers are confused, and that this legislation would actually clear up a lot of the confusion out there among their employees. So how do we reconcile that? What you're saying is that there's lots of clarity; they're saying there's rampant lack of clarity.

[Janice Seline]

I think the educators might want to educate themselves, first of all. Have a discussion about copyright in your schools, try to understand it, and clarify it for your people. It's not that difficult. I don't think fair dealing is going to help with that clarity at all, quite frankly. With fair dealing, you've got the six steps for it. It can go either way in the hands of a judge. You get these really strange judgments on fair dealing. The CCH case I still don't understand.

If you put it into litigation, you're going to wait years for a result, and it's going to make things very difficult for the ordinary creator.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Armstrong.

Mr. Cash, you have five minutes.

[Andrew Cash, NDP, Davenport, ON]

Thank you, Mr. Chair.

I'm going to be very quick, and I would ask you to be concise, because I have a few questions.

On this side, we understand the need for technical protection measures, in some cases, to manage digital rights and ensure legal access. But what baffles us about this government's approach is that they appear unwilling to consider simply linking circumvention penalties to actual acts of infringement. Mr. Lawford, to us this is a reasonable compromise, which will on the one hand ensure protection of creative material, and on the other hand ensure that the law recognizes the full complexity and nuance of how Canadians use media in the 21st century. Would you agree that this kind of compromise represents an improvement over the present draft? Would you expand on that for two minutes, please?

[John Lawford]

Yes, that's partly why we supported the Canadian Library Association amendment, but I'll pass the question to Janet.

[Janet Lo, Counsel, Canadian Consumer Initiative]

We fully agree that if you're going to protect TPMs, then the protection should be tied to infringement of copyright. The whole point of the Copyright Act is that if somebody circumvents the TPM, there are other remedies under the contract--for example, the end-user licence agreement. So under the Copyright Act, the circumvention should be tied to infringement.

[Andrew Cash, NDP, Davenport, ON]

Thank you.

Now over to Mr. Johnston for a minute. On this side of the committee, we are committed to supporting small businesses. Musicians and artists are the ultimate small-business persons. I want you to comment on the impact of the loss of the broadcast mechanical tariff. What impact does this have on small businesses in the arts and culture sector?

[Stuart Johnston]

Simply put, that's almost $22 million of revenues that go into the industry at a time, as Bob indicated earlier, when revenues are dramatically shrinking. My members are very adept at stretching a penny into a dollar, but they can only do that so many times. They are literally struggling every day to survive. It amazes me that we do have an industry still intact, one that produces some incredible art, but the fact remains that our revenues are dropping. If we lose the broadcast mechanical, even in part, it is going to have a significant detrimental effect on our industry.

[Andrew Cash, NDP, Davenport, ON]

Do you have a sense of why this was removed from the bill?

[Stuart Johnston]

I don't think I'd want to speculate on that.

[Andrew Cash, NDP, Davenport, ON]

All right. That's okay.

Back to Mr. Lawford for a second, what kinds of immediate issues will consumers face under this digital lock and anti-circumvention regime in Bill C-11?

[John Lawford]

Potentially, the day after this bill passes, every new work will have some sort of lock on it, which will immediately give rights holders the ability to charge whatever they like for different, various uses. As I said, people at the moment are expecting, I think, to be able to take their CDs, as they do now, and put them on their iPod. If there's a technical protection measure on a CD, and that is no longer permitted, and it is protected under the act, you will be violating copyright to do that. You potentially face some action against you. That will create a chill, and it will either raise prices for consumers, because they'll have to pay more if they want to have those rights, or they will face potential lawsuits. Those are our two main concerns.

[Andrew Cash, NDP, Davenport, ON]

Thank you.

It is a little baffling to hear members on the other side say that consumers don't see technical protection measures every day. They see them on DVDs and iTunes every single day, so that's a little odd.

I wanted to get back to one thing that Mr. D'Eith said. Many of your members have benefited from the kind of communal file-sharing that goes on in the music community. I want to respectfully challenge your comment that all the woes of the Canadian music industry can be located around piracy. That's just not true.

[Robert D'Eith]

Well, we believe that yes, there may be some other considerations—

[Andrew Cash, NDP, Davenport, ON]

But that's not what you said.

[Robert D'Eith]

—but the primary consideration is the fact that people are taking music for free and not paying for it, and that has closed down....You have to look at the results: distributors going bankrupt—