Bill C-32 (40th Parliament, 3rd Session) Committee on Feb. 8th, 2011

[The Chair (Mr. Gordon Brown (Leeds—Grenville, CPC)), Conservative, Gord Brown]

Good morning, everyone. We'll call this 11th meeting of the special Legislative Committee on Bill C-32 to order.

We have with us today, from the Alliance of Canadian Cinema, Television and Radio Artists, Ferne Downey and Stephen Waddell. From the International Alliance of Theatrical and Stage Employees, we have John Lewis and Paul Taylor.

For five minutes, we'll hear from the folks from the Alliance of Canadian Cinema, Television and Radio Artists, also known as ACTRA. Ferne Downey, you have the floor.

[Ferne Downey, National President, Alliance of Canadian Cinema, Television and Radio Artists]

Thank you so much. Thank you, Mr. Chair and committee members.

My name is, as reported, Ferne Downey. I'm a professional actor and the president of ACTRA. With me today is Stephen Waddell, ACTRA's national executive director. We support the goal of this bill to make it easier for Canadians to use technology to access contents any time, anywhere.

We also applaud the efforts this bill takes to adopt international standards to fight content theft. However, a good bill must do more than fight off those who feel entitled to something for nothing. It must also protect the rights of creators to be compensated for the legitimate use of their work.

Unlike many Canadians, creators don't get a pay cheque from a single employer. We might earn one pay cheque here and another small one over there. It's only when you add them together that we are able to make our mortgage payment and put food on the table. Bill C-32 threatens to wipe out many of these small but crucial revenue streams. It is nothing less than a full-scale attack on collective licensing by introducing a multitude of exceptions that weaken copyright.

As you heard from the Canadian Conference of the Arts last week, the bill puts at risk $126 million in annual revenues that creators and rights holders currently earn under collective licences. And this is on top of what is already lost to content theft. Killing collective licensing, in our view, is neither modern nor balanced. In a digital world, rights-holder-run societies are the only realistic way to provide practical access to users and reasonable compensation to creators. In short, this bill moves us backwards.

We have identified six specific areas where the bill must be amended.

Number one is user-generated content. It is peculiar that the government would in one part of the bill give performers long-needed moral rights, in keeping with international standards, and then on the next page take them all away with a poorly conceived mashup provision that lets users take an artist's content and do whatever they want with it. No other country in the world has a law like this. So why is Canada trying to be a world leader in stripping creators of their rights? This clause must be significantly amended or removed from the bill entirely.

Stephen.

[Stephen Waddell, National Executive Director, Alliance of Canadian Cinema, Television and Radio Artists]

Number two is the expansion of fair dealing and new exceptions. This sweeping exception will take millions out of creators' pockets and could devastate our educational publishing industry. Most puzzling is that this destructive provision proposes to fix a problem that doesn't exist. Educators have access to the materials they need for a nominal fee through collective licensing.

Bill C-32 must be amended to meet the internationally accepted method of determining what exceptions in copyright law are fair, the Berne three-step test. It prescribes that exceptions are confined to certain special cases that do not conflict with a normal exploitation of a work and do not unreasonably prejudice the legitimate interests of the author or performer.

Number three is statutory damages. Why does Bill C-32 give illegal file-sharing sites that help people around the world share stolen music and movies a free ride by exempting them from statutory damages? This loophole must be closed. Statutory damages must be proportionate, but there is no need to make a distinction between commercial and non-commercial infringement. Non-commercial infringement damages right holders too.

Number four is ISP liability. If you really want to stop content theft, then you need to give Internet service providers the tools they need to deal with people who continually break the law. We need to discourage repeated acts of infringement with escalating consequences.

Number five is the elimination of the broadcast mechanical licence. This is yet another attack on collective licensing. By removing this provision you take money directly out of the pockets of artists and creators and put it back into the already overflowing wallets of private broadcasters.

Ferne.

[Ferne Downey]

Number six is reproduction for private purposes.

Compensation must be attached to format shifting and reproduction for private purposes so that income can continue to flow to artists, regardless of how media develop. The existing private copying levy must be modernized so that it applies to digital devices developed, manufactured, and marketed to copy music. If it is not updated, it will take millions of dollars of royalties from artists' pockets.

Let's be frank. The private copying levy is not new. It is not going to apply to cars. It is not $75. And it is not a tax. The only tax on iPods is the HST. We ask you to put rhetoric aside and do the right thing. Everyone in this room knows that updating the levy instead of letting it die a natural death is the right thing to do.

At some point, whenever it is, you will all be fighting for your jobs. And you are all aware that there are nearly one million creators working together, with great passion, to get this bill fixed. Our reach extends to every single riding in this country. We are particularly counting on the three opposition parties to work together to fix this bill. Together you hold the majority on this committee and in this House. We need you to deliver a bill that recognizes the central role creators and rights holders have in our digital economy and assures them that their intellectual property rights will be respected.

Anything less and Canada will continue to be an international embarrassment, to our collective shame.

Thank you.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll move on to John Lewis.

[John Lewis, Vice-President, Director, Canadian Affairs, International Alliance of Theatrical Stage Employees]

Good morning, and thank you for this opportunity to come before the committee to speak on Bill C-32. I'm joined by my colleague, Paul Taylor, who will also be speaking to the committee.

The IATSE was founded in 1893—1898 in Canada—and now has nearly 120,000 members, 16,000 of whom reside in Canada, making it one of the largest trade unions in the entertainment industry. The IATSE represents workers in a number of crafts, with the majority employed in motion picture and television production. Our members are integral to the production, distribution, and exhibition of motion pictures and television.

The number of individuals employed in the production of a given motion picture may be anywhere from 100 to 1,000 employees. They are not in front of the camera, but they supply the absolutely necessary labour to make the movies. Our members include men and women who work on big-budget foreign service productions from the United States, such as The Twilight Saga: New Moon in Vancouver and Mummy: Tomb of the Dragon Emperor in Montreal, as well as on domestic television and motion picture productions, such as Republic of Doyle in St. John's and Heartland in Calgary.

How this government deals with digital theft will have a direct impact on our membership. For our members, there is no job security. They depend on a healthy industry to find enough employment to make ends meet. When the industry suffers because of digital theft, that is, when movies do not get made because of digital theft, our members suffer because they find themselves out of work.

The IATSE supports the strongly worded objectives of Bill C-32. Hundreds of our members wrote to their MPs before the introduction of the bill urging them to support strong copyright reform and, following the introduction of the bill, to support the bill's objectives. In particular, we welcomed the government's promise, made at the time of the bill's introduction, that the bill will provide a framework that is forward-looking and flexible, which will help protect and create jobs, stimulate our economy, and attract new investment to Canada.

However, we have serious concerns that the bill, as drafted, will fall short of meeting these objectives. We have prepared written submissions, which I understand have been circulated, but I would briefly summarize our position as follows.

I'll turn to my colleague, Mr. Taylor.

[Paul Taylor, International Representative, International Alliance of Theatrical Stage Employees]

On technical protection measures, we support the bill's strong protection for TPMs, both access control and copy control, without which new business models like Netflix would not be possible in Canada. Allowing TPMs to be broken for private purposes or other non-infringing uses would totally undermine these business models.

Enabling infringement. The bill needs to be fixed to clarify that the enabling provisions apply to services that are designed or operated to enable or induce acts of infringement, including specific reference to hosting and caching service providers. These changes are necessary to address the reality that sites that host and stream or permit downloading of illegitimate content are becoming the most significant source of illegal distribution of film and television content online.

The user-generated content exception. This exception should either be scrapped or amended to ensure that it does not prejudice copyright owners. If the exception is maintained, it should be limited to only permit the creation of original, transformative, user-generated content for the individual's personal use if all of the permitted acts can be considered fair dealing under the existing copyright law test and the permitted acts do not have any adverse effect on the market for the original.

With regard to Internet service providers, we believe the bill's ISP safe harbour provisions need to be fixed to ensure that illicit sites such as those that encourage storage of infringement files, host, distribute, or make available illegitimate copies of protected content are not inadvertently immunized from liability. Moreover, to ensure consistency with international standards, ISPs should be required to, one, have an effective policy to curb copyright infringement on their networks, particularly in the case of repeat offenders, and two, take action to remove or disable access to infringing works where they have actual or constructive knowledge of infringing activity, in keeping with the Supreme Court of Canada's comments in the Tariff 22 decision. This would be in order to qualify for their safe harbour.

Finally, the bill should provide copyright holders with injunctive relief against ISPs whose service is being used by a third party to infringe copyright, i.e., to block access to illegal sites.

Our final technical submission is regarding statutory damages. We submit that the bill should be amended to provide for effective statutory damages, which will provide a real deterrent--as opposed to a licence to steal--to illegal file sharing and give copyright owners the ability to stop large-scale enablers of online theft.

If the government wishes to maintain a cap on statutory damages for individuals, it should apply to infringement for private purposes rather than non-commercial purposes. It should be on a per infringement basis, as opposed to encompassing all infringements. Lastly, it should be available to all copyright owners, rather than to only the first rights holder having the ability to sue.

[John Lewis]

In summing up, this is about jobs. This bill is about jobs. It's about my members' jobs. It is not a victimless crime. My members are suffering because of this. It's taking money away from the industry and it's reducing the amount of work that is getting done. So I encourage this committee to continue its good work and to bring forward a bill that will ensure that this industry has healthy years to come.

[The Chair, Conservative, Gord Brown]

Thank you very much to our witnesses.

We'll go to the first round of questioning. For seven minutes, from the Liberal Party, we have Mr. Garneau.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

Thank you for being here this morning. Thank you for your testimony.

I'd like to start off with the issue of ISP liability. You have both said things about that. Without getting more specific about it, I think you've suggested that the notice and notice approach that is being proposed by the current bill is insufficient. I'd like to hear from both of you, both groups, what you think is necessary. At the same time, I'd like to hear why you don't think notice and notice would be enough.

[Stephen Waddell]

Thank you, Mr. Garneau and Mr. Chair.

Notice and notice means just sending notices ad infinitum to infringers. That won't do anything except create a pile of paperwork. No one's going to take notice of all of those notices. It is a system that only works if there's some form of escalating action or reaction as a result of the infringement.

We're looking to this bill to provide some sort of graduated response that would end with the requirement that the infringer take down the offending material. There are various mechanisms that could work, but simply notice and notice is not sufficient. There has to be some form of escalating response that ultimately compels the infringer to take down the offending material.

[Paul Taylor]

We're essentially in agreement with that approach. We recognize that notice and notice just isn't a sufficient solution to address the problem we now have in society. People really don't seem to be aware, or they seem to justify what they're doing, and they don't really regard it as theft.

We take the strong position that it is theft. It is hurting our members on a daily basis. It is affecting their ability to get work. We think the ISPs are in the unique position that they're able to do more than just send these notices. They ought to be required to do something more. So we're looking for a graduated response type of system that would require them to have an effective policy.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Let me take it a little bit further. There are those who say that notice and notice will work for the great majority of people. In other words, if somebody does something and they receive a notice, they'll say, “Oh, my God, I'm being watched here” and won't do it again. But there are people who will realize that it's just a notice and doesn't have any consequences.

Do you have any statistics that support your contention that notice and notice is not going to be effective--both groups?

[Paul Taylor]

I don't believe we have any statistics.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Is it just your gut feeling, if I can put it that way?

[Paul Taylor]

No. I'd say it's based on the actual experience of talking to Canadians, particularly in the younger age group. They have a completely different attitude than we do as industry insiders who have seen the actual effects of the theft that's going on. The people I see outside the industry need to understand that it is theft. We need to see an attitude change through education and having effective laws that make it clear that this is a crime. Notice and notice doesn't send that message.

[Stephen Waddell]

What I don't understand about this whole debate on notice and notice is that if I don't pay my gas bill or my hydro bill, I get cut off. How is that infringing on anyone's rights? The fact is, as my colleagues have said, it is true that this is theft and it should be treated as that. Those who are facilitating access, as ISPs do, should be required to shut down people who are stealing.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you.

Let me go on to statutory damages against you. You've both talked about it. I got the feeling you were saying that the current wording is not sufficient; it's not commensurate with the gravity of the offence.

Stephen, you specifically mentioned the situation on file-sharing sites. I'd like to hear a little more about your views on what you think should be the wording in this proposed bill on statutory damages.

[Stephen Waddell]

The problem is that the ability to provide substantial statutory damages against major infringers has been removed. That means you have to go to court and prove damages. It's a lengthy and challenging process, when the fact is you want to shut down sites like isoHunt. The only way they understand it is through substantial statutory damages. We're looking for this bill to reinstate them.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

What is substantial? Are we talking about orders of magnitude more than $5,000?

[Stephen Waddell]

Definitely.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Okay.

Thank you.

[John Lewis]

In our submissions we made three proposals. I know this committee has heard this phrase, but we don't want statutory damages simply to be the cost of doing business and a licence to steal.

We have submitted that the statutory damages would apply to infringement for private purposes specifically, rather than for non-commercial purposes; that they be on a per infringement basis, as opposed to encompassing all infringements; and lastly, that they be available to all copyright owners and not only the first rights holder that sues.

Again, it's a deterrent. This is theft. This is stealing jobs.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Very quickly, yes or no, would you prefer to see mashups or user-generated content removed from this bill, or would you accept some serious changes?

[Paul Taylor]

We would have to see what those changes were before commenting on them. But in our submission, you either take it out completely or curtail it in such a way that you ensure that it's not going to be abused.

Our submission on that is to have a number of points to really ensure it is curtailed--that the work is transformative and original, in and of itself, so that somebody doesn't take an entire copyrighted piece and simply add a comment at the end of it. It has to be transformative. Then you have to look at the other aspects we dealt with in our submission.