Thank you, Mr. Chairman and committee members, for this opportunity to address you on behalf of the K to 12 educational publishers sector. My name is Greg Nordal and I'm president and CEO of Nelson Education, Canada's largest publisher in this segment. We have roots in Canada going back to 1914.
There are many positive components of Bill C-11. Our industry is fully supportive of the intent to modernize copyright law in Canada and much of what we see in Bill C-11 achieves its purpose.
However, the educational fair dealing exception clause, as drafted, is problematic in many ways. It would create an environment of uncertainty for Canadian rights holders and authors, it would lead to an unacceptable level of investment risk for publishers and potentially harm the market, and it would have the unintended consequence of undermining the future availability of indigenous materials and learning resources created specifically for Canadian students and educators.
From the point of view of the creative community, the issues are clear. Who could reasonably expect publishers to spend millions of dollars a year investing in new learning resources for Canadian schools if rights holders are not protected and there's no viable expectation of return? What incentive do Canadian authors have to invest their time and talent to create content without viable opportunities for compensation?
This committee has heard some contend that educational fair use exceptions have worked well under U.S. law, so why would Canadian publishers have any concern? However, there is an important distinction to be made here. In the U.S., fair use provisions make it clear that commercial harm to right holders is the primary determinant of fair use in copyright. That's the trump card. In Canada, on the other hand, the much discussed six-step test is to be used to determine what is fair. Commercial harm is but one test of the six under CCH to help assess what is fair. Commercial harm is not deemed as the most important test, and in and of itself commercial harm does not determine what is fair. In the U.S. the effect on the market for the copyright work is determinant, and it is the central fair use factor. This principle gives U.S. publishers the comfort they need to invest in new and innovative solutions for schools, students, and educators. To suggest that the fair dealing exception in Bill C-11 is comparable to fair use protection is extremely misleading. To suggest that the six-step test is adequate protection for Canada's creative community is worrisome indeed.
This committee has also heard from some within the educational community who say that Bill C-11 changes nothing with regard to compensation for educational publishers and authors, that our concerns are unfounded, and that these words are contradicted by real world experience.
I speak from such experience in the K to 12 publishing sector. The Copyright Board issued a decision in 2004 that set out what uses are fair by teachers and are to be considered fair under fair dealing. This decision was appealed by the ministers of education to the Federal Court, which in 2010 affirmed the Copyright Board's decision on fairness. Publishers have accepted both the Copyright Board's and the Federal Court's rulings on what is fair, but not so the educational sector. In fact, the educational sector has contested the fairness determination all the way to the Supreme Court, which heard the issue in December 2011. The decision is pending. Despite multiple rulings on what is fair dealing and fair compensation for the creative community, this issue, 10 years after the original Copyright Board decision, has still not been accepted by the K to 12 market. It's worth noting that the litigation has been lengthy, costly, and has generated much uncertainty in Canadian publishing for authors, publishers, and other stakeholders. The proposed exception will further undermine protection for copyrighted materials in the educational sector. The proposed educational exception will have an adverse impact on our market, based on experience.
To be clear, the amount of classroom copying that is happening today is not trivial. On an individual classroom basis, the amount of copying may seem a trifle to some but in aggregate the amount of copying taking place is immense. In 2009, over 300 million pages were copied in Canadian K to 12 schools. That equates to over $40 million in annual book sales, given the typical size and price of a book at the K to 12 level alone. If you include higher education, colleges and universities, the figure is much higher. It's well over half a billion pages copied on an annual basis, and these are materials copied directly from copyrighted works. We're not talking about what's freely available.
It is possible to amend the fair dealing exception so that it reflects the stated positions of the ministers of education, the Canadian School Boards Association, and others. But this is not about avoiding fair compensation to rights holders. It should not be a problem for the educational community, based on their assurances on this point, to accept the amendments we have tabled for consideration.
On behalf of Canada's K to 12 publishing community and industry, I urge the committee to make the technical amendment we are proposing. This will clarify that fair dealing for educational purposes does not eliminate the need to provide fair compensation for rights holders. Let's make it clear under the law that fair dealing is not free dealing.
Failure to provide a technical amendment that protects copyrighted works will imperil the availability of resources created in direct response to the needs of Canadian school children, as determined by the curriculum. The capacity of the Canadian publishing community to share stories and communicate the values, culture, and history of Canada is at serious risk if the current exception goes unamended. Our market will be harmed.
The potential for devastating unintended consequences is very real. In the long run, it's not just the authors, content creators, and publishers in Canada who will suffer, but also the Canadian students and educators we serve.
Thank you very much.