Bill C-11 Committee on March 6th, 2012

[Greg Nordal]

Absolutely, and that's exactly what we're looking for. It's troublesome, it's well-intended, and we get it. We support the need for an exception, but as it's currently written, it's the promise of ongoing litigation and uncertainty for publishers. We employ thousands of Canadian authors. It takes a lot of time and talent to create a textbook like this.

This is strictly Canadian. I notice it's got a picture. I hope I paid permissions on this. I'm looking at it up there, by coincidence

[Voices]

Oh, oh!

[Jacqueline Hushion]

I hope so.

[Greg Nordal]

It's a risk that people will no longer take, and in many cases the amount of margin in a small market, where we have to compete with fellows like Mr. Swail here, who is a fierce competitor.... It's a very small market, and we know if we don't get 50% or 60% of the expected market, then it's a non-viable equation. If some portion of that is syphoned off and reproduced, that is a serious problem.

[The Chair, NDP, Glenn Thibeault]

Thank you, Mr. Nordal.

Merci, Monsieur Nantel.

Up next is Mr. Calandra, for five minutes.

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

Thank you, Mr. Chair.

I just want to ask more of a process question. When you've created a program, you're not selling to each individual school, right? Are you selling to the boards of education or to the ministries of education?

[Greg Nordal]

It will vary by project. In some boards it is the board that will make a decision on a board-wide basis. In many cases it's school by school, and on custom projects, on which we do a lot of work, smaller provinces—for example, Newfoundland or P.E.I. will want a very specific text—will actually commission on a custom, one-time basis. It can be at a province level, it could be at a board level, and it could be at classroom level.

The majority market is a classroom-by-classroom situation.

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

When you're doing classroom by classroom then, when you're being contracted to do this, does that not afford you much greater ability to really put into contracts how your works will be distributed, how many books you'll be creating, or if it's digital...? Just explain to me why you can't protect what you're doing in the contracts you're making, say, with an individual school or even with the school board.

[Greg Nordal]

Sure. For example, Ontario will come up with a curriculum requirement in science. We'll decide whether or not it's a viable business case. Science is very expensive. There are a lot of digital assets, photo images, and so forth. We'll invest x hundreds of thousands of dollars, as will our competition. In the province of Ontario, in most boards it's open, school by school. We will go to those schools, but once it is sold it is literally sold to a principal or a committee within the school or a school teacher.

For what happens afterwards, we have no control. It's not as if we have any interest, ability, or desire to monitor what goes on in the classroom, and very well-meaning educators, if they are in a pinch and don't have enough classroom sets or if they get destroyed or lost, will make copies.

There are licensing opportunities. Roughly up to 10% of any book can be photocopied under licence right now, under current legislation. That's fine. As I mentioned, in 2009, the last year for which I have statistics, there were over 300 million pages alone photocopied for classroom use. Most of that, I assume, is done under licence and so forth, but under the current exemption, the way it's written, I don't believe that licence in the eyes of many would be required any further and that 300 million will be much larger, and I fear there will be zero compensation for that kind of activity—and no, we do not have any control once we sell a textbook into a classroom.

There is not a lot of understanding among classroom teachers of what is appropriate. It's not a simple subject, as we're all discovering as we look at copyright.

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

Can you use technology in how you're doing this? Presumably there is a digital copy of everything you are doing. Can a text not be associated with a digital copy?

[Greg Nordal]

They often are. What is happening more and more is hybrids. What's going on with the amount of digital sales in K to 12, notwithstanding the obvious progress that's being made, is literally minuscule, and based on current funding for schools for hardware, infrastructure, and getting the teachers up to speed, we are many years away from digital being the answer, and even then, I'm not sure the printed book won't have its place. I believe it will for some time.

Digital alone is absolutely not really all that helpful in the medium term.

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

I hear what you're saying. I'm just trying to get a handle on why each printed copy cannot.... Can a digital copy not be created? For instance, if you're selling it, can't it be a digital copy? It's not very expensive to create a digital copy, but every digital copy comes with a printed text so that your work is protected. You're selling the digital copy, but it happens to come with a text.

Just explain that one.

[Greg Nordal]

That happens today all the time. We'll sell an e-book that goes with that printed text. You could somehow prevent just sending out 300 copies through some digital mechanism, but what mechanism is there to prevent photocopying half of this particular book? I am not aware of any mechanism to do that, other than the fact that current law says it is not appropriate, and people respect that.

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

What you're selling is the digital copy, and the digital copy is protected. So if you go to a school with 300 students, they are getting 300 digital copies. This is why I'm not understanding why you can't protect—

[Greg Nordal]

Part of the answer is that we don't actually sell floppy disks or CDs. It's web access, right? That's how it's done now. It's not a suite of copies.

[The Chair, NDP, Glenn Thibeault]

We're well over time already.

Thank you very much, Mr. Nordal and Mr. Calandra.

Now we go to Mr. Benskin for five minutes.

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

Ms. Hemmings, I'm kind of curious about the archival nature of law books, in particular, and how the digital age is affecting you. I had the pleasure of making a presentation at the Supreme Court last week, and in the rooms they were showing me, I was looking at law books from the 1860s.

What's happening in the realm of digitization in terms of archival books? I'm sure that the new ones come in e-format as well as in hard copy. What's happening with those?

[Mary Hemmings]

I touched a little bit on that in my presentation, saying that there are things in the public realm under crown copyright that are outside or past the digital divide, if we want to call it that. There are countries, such as the U.K., that have massive digitization projects. Australia is doing that sort of thing. They are doing past legislation and past parliamentary materials under crown copyright on a huge scale. These are, of course, searchable.

You know as well as anyone who deals with parliamentary materials how important progress in statutory research is, and similarly, how important a treatise is. A commentary on the law from 1840 something can be as valid now as it was in the past.

There are commercial interests that are producing this on grand scales, and libraries pay for them very happily. These are the sorts of materials—a particular portion of a book—that a rich academic law library will lend to a poor member of the CALL association. It could be a law society. It could be a court house. That's how we are now talking to each other. That's the sort of thing that's happening.

In terms of what's happening here in Canada, we're not going fast enough in terms of digitization.

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

Thank you.

I just want to jump over to our two licensees or licensors. A couple of times it's been put out there that it's a doom and gloom scenario, that we're going to disappear...and things of this nature. What I'm understanding is that what you guys are looking for is clarity so that you can do the job you're doing now and do the necessary transition. We heard from Audio Cine and Criterion, which have invested huge sums in the digitization of the work.

For you, clarification of the exception, or fair dealing, with regard to education is what you're looking for, as opposed to anything else. Am I correct?

[Greg Nordal]

Yes, that is correct. Right now it's far too open to interpretation. We literally have customers today, literally today, who are walking away from our existing licence agreements because they believe that Bill C-11 will make these materials free. They are asking why they would sign a licence agreement. That is today.

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

We did hear that from Criterion and Audio Cine as well. They've lost a significant number of licensees because of that.

[Greg Nordal]

We've had over 30 universities and colleges walk away from licensing in higher education right now. There are 30. The two universities that signed recently—U of T and UWO—are being absolutely criticized and assailed in the media, vilified, for doing this. They are being asked if they understand that Bill C-11 will make this much easier and cheaper to access. That's why it offends me to suggest that this isn't going to have an impact on our market. It's happening today.

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

What kind of fix do you think you would be looking for with respect to clarity that would make you comfortable?

[Jacqueline Hushion]

What we need is to....

[Greg Nordal]

Let me help you. We specifically put in a request for an amendment. You have that amending language that specifically says that if it has an adverse impact on the market, it is not fair dealing. That's the confusion.

I'll let Jackie give you the better answer—