Bill C-32 (40th Parliament, 3rd Session) Committee on Feb. 15th, 2011

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

Good morning, everyone.

We will call to order this 13th meeting of the special Legislative Committee on Bill C-32.

For the first hour we have witnesses from the Association of Universities and Colleges of Canada, Paul Davidson and Steve Wills. From the Canadian Association of University Teachers, we have James Turk and Paul Jones. From Campus Stores Canada, we have Chris Tabor.

Some of our witnesses are still in the security line, so we will go ahead with those who are here.

Mr. Davidson, you have the floor, five minutes.

[Paul Davidson, President, Association of Universities and Colleges of Canada]

Thank you very much, Mr. Chairman, and thank you for inviting the Association of Universities and Colleges of Canada to take part in this study by the committee on Bill C-32.

My name is Paul Davidson, President and CEO of the association. Steve Wills, our manager of Legal Affairs, is with me today.

The association represents 95 public and private not-for-profit universities and colleges across Canada.

Let me be very clear: AUCC supports Bill C-32 as a fair and reasonable balance between the rights of copyright owners and users of copyright works. We urge this committee to complete its work and report back to the House. As everyone knows, this is the third effort in recent years to modernize the legislation, and it's important that the work be completed in this session.

Universities really appreciate the need for balance. Universities create intellectual property, universities use intellectual property, and universities sell intellectual property. Within universities you have faculty as researchers and teachers, students as learners, librarians, booksellers, and publishers.

Of all the groups that are appearing before you, and the many more that want to appear before you, I think our organization understands keenly the need for balance in the legislation.

Universities in all regions of the country, both large and small, focusing on research or on undergraduate teaching, strongly recommend that the committee make minor amendments to Bill C-32 and then refer it back to the House of Commons so that it can be voted upon as soon as possible.

We believe the bill could be strengthened by reasonable and fair amendments to certain of its provisions, which are detailed in AUCC's submission. Rather than review the written submission we provided, which is with you today—there is also a one-page summary—I want to take a moment to dispel some of the myths that have been propagated by some of the witnesses who have appeared before this committee.

In particular, it has been suggested that the education community does not want to pay for educational materials and that Bill C-32, especially the addition of education as a new fair dealing purpose, will undermine the publishing industry in Canada and decimate the revenues of copyright collectives such as Access Copyright. Another claim says the education community does not wish to compensate creators who produce educational materials. These claims are false and are not supported by the facts.

Canadian university libraries spend more than $300 million annually to buy and license new content for research and learning. In addition, Campus Stores Canada, which represents post-secondary institution-owned bookstores across Canada, estimates that over $400 million is spent every year in university bookstores to buy new textbooks, course packs, and some works in digital format.

It is clear that universities and university students are paying very large amounts annually to purchase and license educational materials. Their spending provides tremendous support to Canadian creators, and nothing in Bill C-32 will cause this spending to decline.

Some have also claimed that Bill C-32 will undermine publishing in Canada and destroy the revenues of copyright collectives. For example, in its testimony before this committee on December 6, Access Copyright claimed that both it and the Quebec reprography collective Copibec will be at risk of losing $40 million in revenue as a result of the amended scope of fair dealing in the education sector, as well as other education-related exemptions provided for in the bill.

This assertion is groundless. Two years ago the Copyright Board of Canada clearly defined fair dealing as it relates to educational copying. Teachers in K-to-12 schools made copies of required readings for each of their students, and the copying in question amounted to an average of only several pages per month per student. The Copyright Board found that the copying by teachers failed to meet the fairness factors laid out by the Supreme Court of Canada. Had Bill C-32 been passed before this decision, the availability of education as a fair dealing purpose would have had no effect on the outcome, because the ruling was based on fairness tests, not on the purpose of the copying.

In other words, the Copyright Board ruling created a strict precedent that severely limits the fair dealing copying for educational purposes. If copying several pages per month for each student in a class is not fair dealing, then surely it is unreasonable to suggest that the legislation would permit the multiple copying under fair dealing of complete journals and journal articles and chapters from books that accounts for most of the licence revenue received by Access Copyright and Copibec from universities and students. Simply put, the proposed amendments to fair dealing would not undermine the sale of books, especially textbooks, or the revenue base of copyright collectives.

Let's take a brief look at our neighbours to the south, who have a fair use exception that is far broader in scope than what is proposed in this bill. The U.S. fair use exception explicitly permits the making of multiple copies for a work of classroom use. Despite this broad fair use provision, the educational publishing industry in the U.S. continues to thrive. Last July the Association of American Publishers noted that higher-education publishing sales increased 6.3% for the month and 21.4% for the year.

Our submission recommends some modest amendments that do not alter the essential balance that has been struck in Bill C-32, and addresses some of the concerns raised by other stakeholders.

I'd like to thank the committee for the opportunity to present these views before you, and I welcome any questions you might have.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll move to the Canadian Association of University Teachers, to Mr. Turk.

[James L. Turk, Executive Director, Canadian Association of University Teachers]

Good morning, Mr. Chair. I'd like to thank you and the committee for the opportunity to appear before you today.

The Canadian Association of University Teachers represents 65,000 academic staff at more than 120 universities and colleges across the country. Our members include both creators and users of copyright material. We have had to deal with both sides of some of the controversies that have come before your committee. While we realize it is unlikely the committee will be able to satisfy the wishes of all Canadians, we are hopeful that our presentation will help the committee find a proper balance in this difficult area.

We'd like to begin by recognizing the efforts of successive governments to modernize Canada's copyright law. In particular we'd like to acknowledge the generally open and meaningful consultation process leading up to Bill C-32. The consultation, in perhaps the strongest way yet, heard and seriously considered the interests and concerns of all Canadians.

With respect to Bill C-32 itself, it contains some elements that disappoint us, and we have several amendments to suggest. Nonetheless, CAUT supports the overall direction of the legislation and recognizes it as a good-faith attempt to create balance in copyright law. In these brief opening remarks, we will address two particular issues: digital locks and educational fair dealing.

On digital locks, CAUT believes the efforts of balance found elsewhere in Bill C-32 are absent. The bill's overbroad lock-breaking prohibition will not deter digital pirates; it will only inhibit honest Canadians from engaging in otherwise lawful activity to a very great detriment of free expression, research, and education. Bill C-60 got it right when it banned breaking locks to violate copyright but permitted the activity for lawful purposes such as fair dealing. That is the balanced way to proceed, and we urge the committee to recommend that.

With respect to educational fair dealing, Bill C-32 will allow Canadians to take advantage of teaching and learning opportunities more fully. For example, fair dealing for the purpose of education would permit Canadians to fairly incorporate excerpts from works into individual presentations, lessons, lectures, and academic articles and fairly distribute copies of material that meets a spontaneous in-class educational need such as a poem or song lyric in remembrance of a special event, or a news clipping on a world crisis.

Importantly, educational fair dealing will comply with our international obligations under the Berne three-step test. We know this because the Supreme Court's test for fair dealing itself addresses the Berne requirements. We also know this because Canadian educational fair dealing does not exceed the U.S. fair use practices, the gold standard for copyright compliance.

Equally important, because we have heard suggestions that it will cause the sky to fall, we want to emphasize that educational fair dealing will not cause entire books to be copied or distributed, will not replace the need to purchase course packs, will not significantly reduce the millions and millions of taxpayers' dollars the education sector currently spends annually on copyright material. In this particular regard, CAUT agrees that if there are any savings associated with educational fair dealing, they should be used for additional library acquisitions and site licences.

As well, fair dealing will not unleash a flood of litigation. There will be no litigation storm because the Supreme Court's CCH decision has defined fair dealings parameters. These familiar parameters will not change if new purposes such as parody, satire, or education are added and there will be no need endlessly to relitigate them.

Finally, on the issue of educational fair dealing, there has been discussion about whether or not it should be narrowly defined. CAUT believes educational fair dealing must not just encompass formal educational institutions as defined by the Copyright Act. The beauty of fair dealing is that it is a right for all Canadians, not a special exemption for a privileged few. It should be available in a wide range of settings, including public libraries, galleries, and museums. It should also be available to a girl scout troop learning about trees, a Sunday school class studying the geography of the Holy Land, a photographer teaching a photography class, a hockey coach explaining skating techniques, a Kiwanis club presenting a speaker on the emerging economic power of China. Learning occurs inside and outside educational institutions and from youth into old age. The Copyright Act must recognize and respect this.

Thank you, Mr. Chair. My colleague Paul Jones and I will be happy to answer any questions the committee may have.

[The Chair, Conservative, Gord Brown]

Thank you.

We'll move now to Campus Stores Canada, to Mr. Tabor.

[Chris Tabor, Director, Queen's University Bookstore, Campus Stores Canada]

Thank you for the opportunity today.

My name is Chris Tabor. I am the director of the bookstore at Queen's University. I am here today on behalf of Campus Stores Canada, the national trade association of institutionally owned and operated campus stores.

We have almost 100 member stores nationwide and more than 80 vendor and supplier associates. In short, if you know one of the million or so university or college students in Canada, there is a very good chance you know someone served by Campus Stores Canada.

I would like to spend a few moments highlighting our support for adding education as a fair dealing exemption under the act. Fair dealing is an important academic right. It ensures that students and researchers are able to use the materials that they need without worrying about inadvertently violating copyright. This provision offers an important clarification to the academic community.

It is important to underline that fair dealing and other educational gains are undermined with absolute digital lock protections. By allowing circumvention of digital locks for non-infringing reasons, legitimate research and uses are not unduly hindered and creators' protection is maintained. We should not treat legitimate users the same way we would treat criminals.

A number of organizations have raised concerns that this might lead to the copying of full textbooks without compensation. Others argue, and we agree, that these concerns are unfounded based on current fair dealing jurisprudence. I can add, from the perspective of one who creates and commercially distributes course packs and relies heavily on the revenues from the sales of textbooks, that we do not see the addition of a fair dealing exemption as a risk to our business.

I would like to now focus on a provision of the Copyright Act that encourages the artificial inflation of book prices. It may interest this committee to know that in the years 2008 and 2009, the U.S. federal government and approximately 23 states considered legislation affecting access to and the affordability of course materials for U.S. students. I am very happy to be here today to talk about how, with the stroke of a pen, a change in regulation can save Canadian students tens of millions of dollars each year without any cost to the public purse.

The Copyright Act allows publishers to establish import monopolies on books from authors from around the world and, in turn, outlines what these import monopolies may charge for the cost of books. Specifically, the import regulations stipulate that an importer can charge a bookseller the price of a book in the country of origin plus the difference in exchange rates between the two countries plus an additional 10% or 15% depending on the country of origin.

Campus Stores Canada considers this to be a private tax established by a public policy. It is a tax paid from the wallets of Canadian students and their families and it is collected primarily by foreign private interests. It allows publishers to receive an additional 10% or 15% of pure profit from their products before risking losing a sale to parallel importers. Importantly, this returns no appreciable benefit to the artists or authors who have created the works in question.

These unnecessary costs are not insignificant. The trade in imported books by campus booksellers is worth about $262 million, representing roughly half the books sold at these stores. Removing this tariff would save students about $30 million annually, with savings beginning virtually overnight.

The tax is designed as an artifact of publishing, commercial distribution, and policy paradigms that have changed radically since these regulations were promulgated in 1999, most notably through the development of Internet-based commerce.

Unlike booksellers, individual consumers are not bound by these regulations and are able to freely and legally purchase books from the lowest-cost provider, regardless of location, and they do.

Through Internet retailers, Canadian consumers are often able to buy books more cheaply than Canadian resellers can. It confounds market logic that an individual Canadian student is able to import individual books more economically than a multinational corporation importing commercial volumes of products, but this is the direct result of the tariff's artificial inflation of domestic book prices.

Therefore, to get best value on learning materials, students are effectively forced by this tax to turn to Internet retailers based in other countries, an extra step that is as absurd as it is inconvenient. We believe a substantial reduction in textbook prices can be achieved by removing this book import tax. Doing so will see students spend millions of dollars less but without the need for any expenditure on the part of the government.

Legislatively, it can be achieved by removing section 27.1 of the act. While such changes were not included in the Bill C-32 update, legislative changes are not necessarily needed to remove this tax, as the relevant regulations can be altered with the stroke of a pen.

In an era when fiscal prudence is king, government must be sure to take advantage of opportunities where it can decrease costs to individual Canadians without increasing costs to government. This is one of those areas. This is one of those opportunities.

I thank you for your time. I would be happy to answer any questions that you may have.

[The Chair, Conservative, Gord Brown]

Thank you very much.

Before we get started, I would like to welcome the Honourable Michael Chong to the committee.

We will now go to the first round of questions.

We'll start with the Liberal Party, with Mr. Rodriguez, for seven minutes.

[An hon. member]

The Honourable Pablo Rodriguez.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you.

You're very popular, Mr. Chong.

[The Chair, Conservative, Gord Brown]

Welcome to you too.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you very much.

Good morning and welcome. Thank you for being here.

First, I'm going to ask a general question. With the inclusion of the term "education" in fair dealing, will the university system, the education world, be saving money?

[Paul Davidson]

Just to start off the discussion on this, I think that the challenge of coming to a definition of education could take another millennium to come to an agreement with, and that another approach to address the concern would be to amend the legislation to—

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

But I'm asking, are you going to save money?

[Paul Davidson]

Is who going to save money?

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

The universities and colleges; by including education there, are you going to save money by not paying some things that you would have paid before?

[Paul Davidson]

Well, the universities are paying over $300 million a year in digital licensing now. This legislation clarifies the rules. It's not a question of whether we're paying more or less. It's a question of whether there is a balance between users and creators. We feel this legislation provides an appropriate balance.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Okay. So you don't know if you'll pay less.

[Paul Davidson]

I think the way of the world is that everyone is paying more for everything, and that there will continue to be increases in the costs of educational materials.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Yes, but you'll be paying for fewer things. The $300 million you pay corresponds to what percentage of your overall budget?

[Paul Davidson]

I don't have a precise number in terms of the percentage of our total operations, but I can say that it's a significant cost to the education enterprise in Canada, both in the K-to-12 area and for universities.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

You don't have an idea, without any specific figures?

[Paul Davidson]

Mr. Rodriguez, I would simply say that the universities are in a unique position, recognizing that we use intellectual property, we create intellectual property, and we sell intellectual property. We have to have balance in the legislation and we have to move forward with the legislation.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I understand. My parents were both university professors. I grew up in a university environment. A lot of people are concerned about the inclusion of the term "education". Personally, I am one of them.

My question is for the three of you. Would you agree that a copy that is made could not be considered as fair dealing, first, if that has an impact on the market and, second, if a licence is granted by a collective?

[James L. Turk]

I'd like to first respond to your initial question.

As I indicated in my brief opening remarks, we don't expect that there will be a significant cost savings as a result of the inclusion of education under fair dealing. We expect any difference would be minimal. It could go up; it could go down. Our own position is that if there are any savings, those savings should be used for further library acquisitions in some places.

In regard to your second question, I'd like to ask my colleague Paul Jones to respond.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you.