Bill C-32 (40th Parliament, 3rd Session) Committee on Feb. 10th, 2011

[Hélène Messier]

Exactly ever since the ruling in the CCH case, I would say that exceptions receive an even broader interpretation in Canada than they do in the United States. Why? Because in the United States, there is not this notion of users' rights; furthermore, in the tests that have been developed—there are some as well in the CCH decision—the emphasis is on the effect on the market, something that you do not find in Canada. The effect on the market is one of a number of factors.

What they're also looking at in the United States are alternatives, as we are in Canada. However, the United States has determined that having a license through a copyright collective is a valid alternative, something the Supreme Court did not do.

So, creators and rights holders are right to be very concerned about the effect of these exceptions, because in Canada's case, these exceptions have an inordinate effect. If you include an exception in the legislation, it will have an effect. There is a principle in law that says that lawmakers say things for a reason. The words they choose will have an effect and will be broadly and liberally interpreted. That's why exceptions are now so dangerous and there is a need to be that much more cautious when considering including one in the Act. You have to be certain of the effect you are seeking with the exception.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

So, in your opinion and as a result of the CCH decision, the addition of an exception for education—basically exempting the educational sector as a whole—would have the effect of exempting it from the obligation to pay copyright.

[Hélène Messier]

No, we will have to look to the courts to determine what effect it will have. That's why we are saying that it jeopardizes the current arrangements. It will necessarily have a broad effect, but we will only know its true effect 10 or 12 years from now, when the Supreme Court has ruled on it.

That is why the Quebec Federation of School Boards, which represents primary and secondary level schools in Quebec—among other groups—has said that it doesn't want this. And teachers do not necessarily want to have to cope with the legal uncertainty for the next 10 years or spend money on legal proceedings, rather than investing that money in the educational system or using it to compensate creators.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

And I presume that no royalties will be paid during the 10 or 12 years that legal proceedings are ongoing.

[Hélène Messier]

Exactly. If users refuse to pay because they believe that their use of the work is fair, there will be no compensation. In the case of Access Copyright, the tariff was imposed by the Board. It was then challenged by the Council of Ministers of Education, with the exception of Quebec, and the money was held in trust. So, there are tens of millions of dollars sitting there that cannot be distributed to rights holders and from which no management fees can be deducted either in order to pay for the legal proceedings, because we are still waiting for a final decision from the court on this.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

How long has the licensing system been in place?

[Hélène Messier]

In Quebec, it has been around for almost 30 years. The first license between what was known at the time as l'Union des écrivains and the Ministry of Education was signed in 1982, and it's a system that works well.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

And what is the situation in Canada? Do you know?

[Hélène Messier]

It came about a little later.

[Alexander Crawley]

Our friends from the Conservatives may remember when Flora MacDonald was our minister. It was she who helped us get that set up, and we've been doing it ever since. I think it was maybe in the early 1980s.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Is it working well at this time?

[Hélène Messier]

It's working very well and, contrary to what Mr. Knopf was saying, a similar system also exists in the United States under the Copyright Clearance Centre. The Americans also have a program to release works used in what are called course packs. The rates are much higher than here in Canada. They can easily be as high as 25¢ a page, whereas the rate applied by Access Copyright is 10¢ per page, and Copibec's rate is on a per student basis. So, it's based, not on an amount per page, but rather per full-time student.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

And how much can an artist to expect to receive in royalties on a yearly basis? Let's take the example of Copibec.

[Hélène Messier]

It's based on use. Under our system, teachers have to report the works that are being used so that rights holders can be as fairly compensated as possible. The more often their work is reproduced, the more remuneration they receive.

We issue a cheque for a minimum of $25, but the maximum can be as high as several thousand dollars, depending on how much the work is used. There is an exception for exams, but when a work is used for a mandatory French exam and 70,000 copies are made in Quebec, an author can expect to receive several thousand dollars for the use of his or her work in that context. That will became an exception under Bill C-32.

[The Chair, Conservative, Gord Brown]

We'll have to wrap up there.

Go ahead, Mr. Angus, for seven minutes.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

Thank you very much for coming this morning.

Mr. Crawley, I ran an independent magazine for 10 years, and we were always beating the crocodiles out of the boat to publish month to month. In that 10 years, we saw terrible winnowing in print media. Print resources had almost gone to nil, and the few magazines that paid good rates got tighter and tighter, yet now the industry is becoming one of the success stories in our digital age. The Canada magazine fund has been working. Online publications are starting to come out. There's the whole movement towards a value-added approach in maintaining independent Canadian production.

What would you say is the state of the nation now with regard to magazines and the ability of freelancers to participate in that area?

[Alexander Crawley]

I have great hopes for it. Of course, the magazine industry in Canada depends on freelancers to a huge extent. The smaller ones can't afford staff writers, and the larger ones have been through some difficulties. They have been letting go of staff and using more freelancers.

We are always working with them to try to improve the rates. We don't think they're overly generous, but we're quite happy to do that. We're not asking for the copyright law to change that relationship.

Actually, magazines have the greatest penetration of any Canadian cultural product, compared to films or even television, in terms of viewers. I think the most recent figures are that 50% of magazine reading, or more, is of Canadian magazines, and that's all good for us.

We're facing some difficulties, but we think this shift into digital is going to make for better partnerships. The costs of distribution will be less. We hope that our partners in Magazines Canada will continue to invest in quality and pay us for that quality, and that people will actually seek compelling works.

We're actually quite hopeful, all things being equal, that if we get a good copyright bill, it will help us to build those new business models.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you.

The largest class action copyright infringement suit in Canadian history was in the neighbourhood of $6 billion for 300,000 illegally distributed works.

It wasn't against isoHunt; it was against CRIA, because CRIA was taking the works of musicians and not bothering to pay them. It was known as the Chet Baker case. Poor Chet used to get paid in cash to play phenomenal works, and it was his estate that asked about all the records they'd been putting out in his name for decades. I don't think they settled anywhere near the $6 billion figure, but it does show the incredible power that the few large players have over the individual artists. They don't seem to mind ripping off artists whenever it suits them.

I'm interesting in having you update us on the Heather Robertson case and the issue of the rights of freelancers.

[Alexander Crawley]

As Mr. Knopf mentioned in the last panel, the courts don't always get it right, but I think in this case at least they moved towards an appropriate decision. The second half of that class action case is about to be settled, we hope, for about $5 million.

I did give the clerk some copies of the judgment in the first case, which was Robertson v. Thomson. That was about $11 million, and it did take a dozen years to do.

Ms. Robertson and PWAC and other organizations that were supporting that suit identified the fact that publishers were using electronic rights without permission, so of course the contracts now try to take our rights in perpetuity, for all purposes, for anything that has ever been invented. It's obviously up to us to stiffen our spines as the small business people that we are.

There's an imbalance in the negotiating power. We work on that in various ways. We'll form a union if we have to, but we'd rather come to terms with our partners in the industry on reasonable terms. It's an ongoing issue; I don't think anything you can do here will change that appreciably, but certainly we need to have that fundamental recognition for digital or electronic copies of our works. We need to have our rights in those works recognized, and some aspects of this bill obviously put that at threat.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I remember when we paid freelancers, and our understanding was that we had first right to print. Whatever they did with it afterwards was their business. If they resold it to a magazine and got paid three times, that was fine. I'm not going to say who some of the large players were who were not passing on those rights, but did being part of a collective make it possible to defend the rights? I ask because an average writer or musician can't take on a very large corporate interest and still pay the bills. What's the role--

[Alexander Crawley]

The interesting thing with the collectives is that we sit around the table with publishers and Access Copyright. We're equally represented, creators and publishers, and it's in our joint interests, because it's about the secondary uses: it's about the copying of the works. It's not about the original terms of however we're engaged and provide our rights, or whatever contractual agreements we have; that's not the purview of this committee.

Actually we work together, and that has helped. When people come together and talk about all the issues that are affecting them, there's obviously a greater understanding on our side of the challenges that publishers are facing, and vice versa, so we're hoping that we're working toward a better partnership with publishers if we have the appropriate recognition of our joint rights as the creators and as the owners, as they're called.

I don't know if I answered your question.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I think it was clear that you organize yourselves in order to defend your terms of trade with the publishers. You work with the publishers to ensure a healthy market and you look for law to ensure that this market is not unfairly impacted by changes in how the distribution of your works is done. Those are the steps I'm trying to establish.

I want to get on to the issue of fair dealing and user-generated content, because we have heard time again and again that we should strike it from the bill, but our problem is that it's been defined by the Supreme Court. We've defined user rights. We've defined fair dealing. I think it is incumbent upon us as a committee to try to find how to address this aspect so that we have clarification.

I want to put two questions to both of you on this--

[The Chair, Conservative, Gord Brown]

Mr. Angus, you have about 15 seconds.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I have 15 seconds.

Does the Berne three-step test help us move towards a definition on fair dealing?

[Hélène Messier]

Yes, it does.