Thank you, Mr. Chair, mesdames et messieurs, members of the committee.
My name is Wendy Noss. I'm the executive director of the Canadian Motion Picture Distributors Association. We represent the six largest international producers and distributors of film, television, and home entertainment programming in Canada.
In the very short time I have, I want to provide you with an understanding of how the film and television industry benefits our economy, and as a result why copyright laws that support the continued health of this industry are so vital. Film and television production last year in Canada was more than $4.9 billion, generating more than 117,000 full-time equivalent jobs. The production studios associated with the CMPDA are major contributors to the foreign production component, which is valued at more than $1.5 billion annually. Production provides jobs for local performers, crews, suppliers, and vendors, as well as tax revenues, and of course the benefits go well beyond production alone. Let me give you some specific examples.
In TV, the Vancouver area has hosted Smallville for more than 10 years. The television series spends over $39 million locally each season, more than half of which is spent on local crew.
In film, the latest installment of The Mummy was shot in Montreal. It spent approximately $50 million, including $22 million on labour and fringe, with cast, crew, and extras totalling more than 1,000 people, and $4 million was spent on renting local facilities in the Montreal area alone.
Unfortunately, these numbers don't tell the whole story. We can no longer ignore the estimated one-quarter of Internet traffic that now involves the unauthorized distribution of copyrighted material. Illicit sites that traffic in pirated film and television content threaten jobs and the ability of the industry to remain an economic engine.
What does this mean for Canada? I've heard many of you ask that of other witnesses. A joint study being released today by Ipsos and Oxford Economics examined the harm caused by movie piracy to the Canadian economy in 2010. Further details have been provided to you, but consider that the study estimates that movie piracy resulted in a loss equivalent to $965 million in GDP across the Canadian economy last year; in terms of jobs, if it weren't for movie theft, we would have had the equivalent of another 12,600 jobs last year alone.
What the Ipsos research tells us is that movie theft has a destructive impact not only on the film industry but throughout our entire economy, threatening all types of jobs and businesses. We desperately need a framework in line with international best practices, establishing clear rules to make online piracy illegal. We know these are the government's objectives; those objectives have been echoed by committee members around this room, and we, of course, support them.
In some critical respects, however, the drafting does not meet these objectives. Technical fixes are needed to ensure unintended consequences do not undermine the very legal framework the government has stated is needed.
Again, mindful of the short time, I'll just briefly mention overarching concerns with key provisions of the bill affecting the illicit distribution of content online. Fundamentally, we appreciate the government's objective to stop those who enable online piracy. The drafting of the enabling section is so restrictive, however, that the very sites the government is targeting will not be stopped unless the bill is amended to clarify the points that follow.
First, the prohibition must apply not just to services primarily designed to enable infringement but to services that operate in a way that enable or induce infringement.
Second, the prohibition must also apply to those who enable or induce infringement by hosting infringing content. This is not clear in the bill, but is absolutely critical, as download hubs--sometimes called cyberlockers--have a business model built on the mass distribution of infringing content at levels as high as 90% and more, and are the most significant growing source of illicit distribution online.
Third, the full range of legal remedies, including statutory damages, must apply to those who enable piracy online.
In addition, unless the drafting of the bill is tightened to match the government's goal, the safe harbours that are intended to only shelter those who act as true neutral intermediaries will provide loopholes that illegitimate operators will exploit to continue their operations in Canada, and will do nothing to stem infringement online. For example, the legislation must provide that online service providers who wish to qualify for the safe harbour be required to adopt and implement an effective policy to prevent use of their services by repeat infringers. A system whereby an infringer simply receives notice after notice after notice, without a belief that there will be meaningful consequences, is not an adequate mechanism for deterring illegal activity. The current drafting of the safe harbour is so overly broad that it will do nothing to stop operators of topsites, large-capacity servers filled with many terabytes of illegitimate content, or content-hosting hubs with many hundreds of thousands of infringing files, from operating with impunity in Canada--