Bill C-11 Committee on March 1st, 2012

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Moore and Mr. Glick.

Now we'll move on to Monsieur Nantel.

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

Thank you, Mr. Chair.

Thank you for being here this morning, everyone.

First, I would like to say that I completely agreed with what Mr. Maavara said at first about the fact that it was high time to do something about the Copyright Act. The concern here is that this is a very problematic bill with gaping holes. I do not know the exact amount of time, but certainly more than an hour has been spent since the beginning of this week on explaining how people who work at a radio station could potentially circumvent the 30-day provision, which I find to be very worrisome. It really is quite something, in this kind of situation, to hear how the spirit of the Copyright Act can be circumvented. It really is extraordinary.

That said, there are the representatives of Culture Équitable, who are people I think you know well. There are 14,000 people who have signed that petition and who are worried. I would like to hear what the people from CAMI say about that.

[Mario Chenart]

Very simply, Culture Équitable has addressed this issue. The petition has been widely circulated in social networks and through many other such avenues. Many rights holders and people who are active generally in the arts, and in particular in the music industry, have simply said to the government: "Do not reduce the scope of copyright".

[Solange Drouin]

I would like to add something. Mr. Glick said he is very proud of the jobs created here in Canada. We too, as representatives of the music industry, from creators to producers and publishers, including all the artists, are very proud of the jobs we create in Canada. What we are saying is that with a bill like this, those jobs will be at risk: the jobs of the people who actually produce the content the radio stations lap up. Even if they do not say so clearly, Internet service providers are also at risk, because without content, why would anyone pay for the Internet? So yes, let us be proud of the jobs we create, including the jobs we create in the cultural industry.

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

You used the expression "lap up". In fact, the perception I have is that people are being short-sighted when they ignore the fact that they may find the tables turned on them as creators of content themselves. For the time being, they are single-mindedly focused on their role as a disseminator. It is like a cheese factory that does not concern itself with the fact that the dairy farm next door is having financial problems. The problem here is that artists and creators are the losers in several respects with this bill.

I would like to hear your thoughts on that, Ms. Drouin. You were going to add something?

[Solange Drouin]

Yes, I would like to add something on the question of reproduction rights. I do not know whether you want me to talk about that, but there are four things I would like to say on the subject of mechanical reproduction. There are half-truths and things being half-said here. We are going to try to tell you the whole truth, and after that you can make up your own mind.

First, when broadcasters have access to content the first time, when they receive a record, they do not pay for it. All the record producers that I know—and I have been involved in ADISQ for 20 years, so I have known many—send records out to radio stations free of charge. So, from the outset, it is incorrect to say that they pay for the content. Second, radio stations do pay for reproduction on a medium. Why has the right of reproduction expanded to this point? Some would say it was the authors and composers, who used to be the rights holders who exercised the right provided in the law. So they went to the Copyright Board and asked for a tariff, which they obtained, and obviously that generated a royalty.

The record producers who have a reproduction right under the Copyright Act, which performers do not have at the moment, exercised that right only four or five years ago, and that ultimately led to a payment. This is not a payment that will double again in three years or eight years. Now, the rights of the authors and the rights of the producers have been exercised, and that comes to a total of $21 million. I think that is very clear. That amount is not going to increase or double again in eight years. That is why there is the impression that it has increased.

I would like to say one final thing. On the question of reciprocity, perhaps if we look at the United States, certainly there is not much of a balance of trade on our side in English. In French, France recognizes these rights. Authors, producers and performers receive royalties under reciprocity. The reason money is sent elsewhere is so that our artists are able to receive money when they work outside Canada. That is called reciprocity. We treat other countries well so the other countries will treat us well. So that has to be considered when we look at the $21 million.

[The Chair, NDP, Glenn Thibeault]

Thanks to Ms. Drouin and Mr. Nantel for their remarks.

Mr. Calandra is up next.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Thank you, Chair.

Madame Drouin and Monsieur Chenart, I'll start with you.

Part of what I have here is the English version, which indicates that one of your recommendations is that Internet service providers be made liable, as they are definitely part of the solution. I'm going to give you an example. It's probably a bad example, but guide me through it.

If the police discover a grow-op in a neighbourhood, is the person who built the house responsible because he built a home where a grow-op could be made? Or are Hydro-Québec or Ontario Hydro liable because they provided the electricity that allowed this criminal to turn the home into a grow-op? Isn't what you're suggesting pretty much the same thing?

[Solange Drouin]

The way we see it is that we don't think that the ISPs are responsible for piracy. I mean, they don't do it, but at some point they authorize it. They provide the public with the means to pirate the CDs. It's not because they are at the source of the piracy, but at the same time, they authorize it. It's on that basis that we think they should at least recognize that they take part in it, and that they should be part of the solution. Part of the solution would be monetary, it could be educational purposes, and it could be other things.

On the international scene, we often discuss the implication of ISPs in the solution of this copyright infringement, not only for the music business, but in film, and so on. In France and the U.S. the ISPs are at the table for discussion. I think it would be wise for the Canadian government to help us talk about that and find solutions together with the ISPs.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

I'm going to follow up on that.

Also in your submission you say that to improve efficiency of the proposed notice-and-notice regime, you recommend forcing Internet service providers to disclose the names and addresses of potential offenders and to provide for the mandatory publication of such notices.

How important an enforcement tool is forcing Internet service providers to provide the names and addresses of criminals, in your opinion?

[Solange Drouin]

First of all, I'm not comfortable with the word “criminal”, okay? We've never said that people who pirate are criminals. They infringe—

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Okay, I'll withdraw that. A person who is potentially contravening—

[Solange Drouin]

Yes, okay. They infringe copyright, but we've never said they are criminals. It's too strong language.

Sorry, what was the question?

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

You want to provide names and addresses. The question is, how important an enforcement tool is that?

[Solange Drouin]

It's important to us because we have to keep track of that notice to notice. We have to have some information, and on top of that, what would be important, after a certain period of time, is to ask if it works, and after how many notices. If someone received many notices, did they stop pirating?

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

The only reason I bring that up—and of course it's not a question—is we have another bill in front of Parliament that would ask the Internet service providers to provide names and addresses of pedophiles or things like that. The opposition is desperately opposed to it, and they say it's a massive invasion of privacy. So I suspect you're going to have a very difficult time convincing people that your suggestion is a good one.

Just quickly, to Corus, I just want to thank you. I have two daughters, a five-year-old and a three-year-old, and without your channels I don't know what I would have done on many nights.

Mr. Glick, you've provided an example of a very successful Haligonian. Are there any other examples of people you might be able to name from my riding?

[Voices]

Oh, oh!

[Jacob Glick]

Well, you know, two of the biggest successes on YouTube today are Torontonians. If you are a fan of viral videos, the “Stuff Girls Say” video—the word “stuff” is actually the word s-h-i-t, which I wouldn't say at a parliamentary committee—is one of the most popular channels on YouTube right now. It's been viewed 25 million times, has spawned thousands of takeoffs all around the world, including “Stuff Edmontonians Say”, which has been viewed 300,000 times.

And Corey Vidal, who is a YouTube creator based in Toronto, got his start doing non-commercial user-generated content. He transitioned into being a commercial success because of the monetization tools available to him on YouTube to monetize his works directly, and to benefit solely, without the need of traditional intermediaries or other traditional firms to help him. Corey now—

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Glick. We're well, well over.

[Jacob Glick]

I'll just tell you he employs 13 people now.

[The Chair, NDP, Glenn Thibeault]

Awesome. Thank you, Mr. Glick.

I will also mention that we could probably all sing Treehouse songs here, as a father of two young daughters as well.

We're moving on now to Monsieur Dionne Labelle.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Thank you, Mr. Chair.

I would like to congratulate Ms. Drouin on her clear presentation. From the outset, I think it sets the record straight on a number of questions.

In fact, I was surprised at the rapid increase in mechanical royalties in recent years. You have said this was an adjustment. In general, that adjustment did not prevent the broadcasting industry from being a goldmine in Canada.

I have examined the rise in both total revenue and net pre-tax profits. Earlier, the representative of Corus Entertainment said there had been a 63 per cent increase in costs associated with various licences in the last five years. At the same time, however, radio stations' profits rose by 64 per cent. That is a corresponding parallel increase. As well, if we look only at pre-tax profit margin, last year it increased by 3.2 per cent, representing a return of 22.9¢ on the dollar before tax. My RRSPs do not provide that kind of return. You are part of an industry that is genuinely dynamic and efficient. As well, we are talking about a levy of 1.4 per cent of your revenue that is used for mechanical rights. What is that money used for?

I would like to ask Mr. Chenart a question. I think that money is used to produce Canadian content, which is then disseminated by the broadcasters. This is a cohesive industry that is doing very well. There is a radio industry that is extremely prosperous, with high rates of return. There is a small amount that is part of the total envelope and helps to produce Canadian content. Am I mistaken?

[Mario Chenart]

That is entirely correct.

We can add to that information the fact that not all those increases are due to the same rights. In 1997, Canada recognized rights that did not exist here but had existed in 40 countries since 1961: neighbouring rights. That right exists and has a value. We have tried to manage. The bill was not paid during that period, and now it is recognized. Why is it recognized? Wealth creation does not involve just technological tools. When you buy an iPod, there are 70 patents to pay for. You pay royalties, you pay for all the applications, but at present you do not pay for content. That is something to think about. As a society, what do we want? What wealth do we want to produce? Is it just with technological tools, or is it with our content? All those rights call for us to consider what we want as a society. Are we going to set aside money so we have a little nursery where we will be able to plant seedlings and make sure we have a cultural garden to cultivate for years to come? That was the effect of adopting neighbouring rights.

I did my sociology studies here at the University of Ottawa. I left because I was sick of statistics. You can say different things with numbers, depending on the angle you analyze them from. When you are earning three cents and at a certain point somebody tells you that you are going to earn five cents, do you know that is a 60 per cent increase? You are not much richer with that increase, but in terms of percentages, it is enormous. But we really have to put the numbers we are using, and how we are using them, in perspective.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Earlier, it was said that this money did not primarily benefit Canadian artists. I would like to hear your thoughts on that subject. Does it benefit Canadian artists and rights holders in general, or not?

[Solange Drouin]

In terms of the money that is collected in relation to reproduction, to receive royalties, there has to be a right recognized in the law. Then, the right is exercised. The Copyright Act gives authors and producers a right of reproduction. So it is producers and authors who receive the money. That is also true for performers. There are performers who are also authors, and authors who are not performers but are producers. For example, Mario Chenart is an author.