Bill C-32 (40th Parliament, 3rd Session) Committee on March 1st, 2011

[A voice]

The multinationals.

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

Yes, the multinationals. In any case, many of their demands are reflected in Bill C-32. On the other hand, the Canadian Conference of the Arts has established that the artists will be losing $126 million. First of all, there is $30 million for private copying. I'm not going to list all the losses, because you are well aware of them. There are also those associated with ephemeral recordings and the exemption for the education sector. As for user-generated content, I'm sure you know that in France, the SACEM, which is a copyright collective, has succeeded in negotiating royalties with YouTube for user-generated content, something that would be impossible here given the exemption granted under Bill C-32, if it is not changed.

In terms of specific changes—I invite each of you to take as much time as you need, and the others will have an opportunity to answer later on—which amendments are most critical, in your opinion?

Ms. Drouin.

[Solange Drouin]

I believe I already partly answered that in my response to Mr. Rodriguez. Furthermore, I would just like to point out that between us and the music industry, whose representatives you heard from earlier, there are far more things we agree on than the reverse. There is no doubt that, in terms of the way the bill is currently drafted, we don't consider it to be adequate or appropriate, but we're not saying we don't want it at all.

If you're asking if it should be passed in its current form, our answer is no. However, if you're asking whether the Copyright Act should be amended, our answer is yes, but not necessarily in the way that is proposed in this bill.

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

What amendments do you see as most critical?

[Solange Drouin]

In our opinion, the important amendments to the Act flow from the WIPO treaty that Canada has ratified. That means creating an exclusive right to make works available to the public—an exclusive right for producers to authorize or refuse to make their sound recording available to the public in digital format.

Our position is that it's very important that this right be recognized. That way, as Gilles Valiquette was saying, we could do business in the digital universe; however, we want this bill to provide us with the necessary economic tools. We don't want it to take tools away from us. We want to be given the tools that will allow us to negotiate business arrangements with the iTunes and YouTubes of this world. So, we feel it is very important that we have the exclusive right to authorize or refuse to make our work available. And that is completely in keeping with the WIPO treaty that Canada signed in 1996, but never ratified.

Mr. Lefebvre.

[Éric Lefebvre, Secretary-Treasurer, Guilde des musiciens et musiciennes du Québec]

The option of applying a private copying levy to all formats is absolutely critical.

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

To all formats?

[Éric Lefebvre]

Yes, because formats have evolved. Cassettes and CDs still exist. However, we now have MP3 digital players. One day, there may be another new format out there. So, the private copying levy must apply to all formats; it has to be technologically neutral.

Furthermore, in 1997, when another Bill C-32 was under consideration and passed some years ago, I noted that there is a very fragile balance, in terms of exceptions, between the rights of users and those of copyright holders. That fragile balance is clearly destroyed by the new exceptions being introduced in the bill. The status quo has to be maintained with respect to the exceptions currently in place. They have allowed copyright collectives to apply and negotiate certain tariffs or agreements with users. Right now, the number of exceptions in the bill means that the fragile balance achieved in 1997 has been completely destroyed.

[The Chair, Conservative, Gord Brown]

Merci.

Mr. Angus, you have five minutes.

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

Thank you, Mr. Chair.

Thank you for coming today.

At the outset, I have to say that I'm a little lost. We just had a panel primarily led by CRIA, which represents Warner, Sony, Universal, and EMI--the four largest entertainment industries in the world. We had Maple, which is with Universal. They told us that they represented music and musicians across Canada, and they were speaking with one voice.

I see the Songwriters, I see SOCAN, I see ADISQ, I see the Guilde des musiciens. So who do you speak for?

[Luc Fortin]

We all represent the music industry at different levels. For l'ADISQ, it's music production. We are musicians, performers and composers. So, we definitely represent the Canadian music community.

[Solange Drouin]

Perhaps you misunderstood what I said at the outset. There are very few multinationals operating in the Quebec market. We represent independent producers in Quebec, who are responsible for 95% of the albums released by Quebec artists, who represent 50% of the market. The Canadian Recording Industry Association can say it represents the Canadian music industry if it wants, but in Quebec, multinationals carry little weight. They are happy to distribute foreign content, and that's their job.

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

Thank you for that.

I don't want to create any false breaks between the multinational labels and the independents and songwriters, but I was very struck, because they were very clear that this idea of the levy was absurd. The house was burning down. I mean, there was so much smoke coming up from the table; we had to pass this bill immediately.

Mr. Dexter said that we have a $400-million industry at stake. I was doing the math...and I'm kind of slow at math. I got 52 in grade 10. You can put that in my next attack ad.

At any rate, I did the math, and I thought, well, if we have a $400-million industry, and I'm asking about money that's being taken off the table.... The mechanical royalties are more than $8 million; the digital levy, according to the Copyright Board, is more than $35 million. So I'm looking at people who are saying that their industry is in such dire straits that they're willing to give up 12%, to 13%, to 15% of their annual income just to get this bill passed.

Mr. Fortin, you and I were in Washington together at the Future of Music Coalition. We met with musicians from across North America. What we've heard from the record industry--my Conservative colleagues love this--is that if we increase the statutory damages and we put digital locks, we'll be in the promised land. But I didn't see, in the United States, musicians feeling that their situation was any better than ours. Yet we have a situation here where there's compensation for artists, direct compensation, and that is being taken off the table in this bill.

Why do you think this bill should be allowed to go ahead if the compensation for artists that has been guaranteed under copyright is one of the things that will be stripped?

[Luc Fortin]

As we all have been saying here today, and as this document signed by almost 80 cultural associations in Canada makes clear, no one can claim that a bill will improve protection for authors if it reflects a refusal to adapt to new technologies like the iPod, iPad, and so on. That is completely incomprehensible.

It is falsely claimed that this is a tax, when everyone knows full well that it is a royalty. And Canadians know the difference between a royalty and a tax. You, Mr. Angus, have taken part in discussions on the radio and phone-in shows, and when you explain that the money is going to artists, people clearly understand that it is not a tax. A tax is money that goes to the government, although we don't know exactly where it goes or what it will be used for; with a royalty, however, we know exactly where the money is going, what it will be used for and why.

[Solange Drouin]

Unlike what you seem to be saying, Mr. Angus, that is not what I take from the position expressed by our friends from the Canadian Recording Industry Association. They are not our enemies—far from it. They said they wanted to set aside certain irritants to ensure that the most important elements would be included in the bill, such as the making available right… We fully support that position as expressed by the Canadian Recording Industry Association. They said we should set aside the question of the levy and simply pass the bill, not in the sense of saying that we'll sell it cheaply. They just meant we can put it to one side now and discuss it later on.

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

Sorry, but to be correct--my time is running out--according to the access to information, he stated clearly...Mr. Henderson stated that he opposed the creator groups.

[The Chair, Conservative, Gord Brown]

Mr. Angus, you have to wrap up. You're well over.

We're moving to Mr. Del Mastro for five minutes.

[Dean Del Mastro, Conservative, Peterborough, ON]

Mr. Chair, I think I'm going to have enough time to share some of it with Mr. Bernier.

I'd like to start with a bit of a statement. It seems to me that artists, record producers, people right across the country are split into two groups on this. This I think goes back to Mr. Angus's point. There are groups that believe that by re-establishing a marketplace, you will drive income opportunity and investment into the record industry and you will save the record industry. That's what we heard from the first panel. Then there are those who say that you can't rebuild an industry, that there will never be an industry and the only way we can do it is to slap fees and levies on things.

By the way, a tax or a levy, they are the same thing. It's a fee placed on consumers. They are exactly the same thing. Ultimately, if you pay a tax, it goes to health care. People know where taxes go. They go to health care, to education. People understand that. But people do reject paying higher taxes even though they know that they are going to end up in health care, education, defence spending, foreign affairs and all sorts of things. People know that's where their tax dollars go. They just object to paying more when it has an impact on their household.

I'm just going to make a comment and then I'm going to pass this over to Mr. Bernier. Let us say there is a retail bakery and it sells bread. People go into the bakery and rather than pay for the bread, they just take it off the shelf and walk out the door. We have a law against that. It's called shoplifting. We say that people may not do that. People who take the bread without paying are charged.

It seems there is a contrary approach for intellectual property, which is a property just like anything else. We believe we can re-establish a marketplace.

Nine hundred and seventy one million dollars have been wiped out of the film industry. Three quarters of a billion dollars have been wiped out of the recording industry. For the film industry and the recording industry, almost $2 billion has been wiped out. That's got to be close to 20,000 jobs in Canada that don't exist.

What we're saying is that if somebody comes in and takes something, we're going to wipe out the enablers. The top five pirate sites in the world are operating in Canada. We're going to shut them down. That's the intent of this bill, so that people go back to the marketplace and buy things.

We don't go to the bakery and say, now, we're just going to let people keep on taking bread, and we're just going to charge a levy somewhere else to reimburse you for the bread that people are just taking. Secondly, we certainly wouldn't say to them, oh, by the way, I notice that you made a sandwich with that bread; we're going to need an extra 15¢, because you've just shifted the format.

I'll pass the rest of my time to Mr. Bernier.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you very much.

I have a question for Mr. Lefebvre. I would like you to give me some additional details. You referred earlier to a fragile balance between the rights of users and the rights of copyright holders in reference to legislation going back several years now. You said that in this bill, that balance has been destroyed.

Could you say a little bit more about that?

[Éric Lefebvre]

Well, one example would be that when you allow timeshifting of television programs, you are clearly allowing a form of reproduction. It basically is a kind of private copying, only without the royalties that are generally payable to rights holders.

For example, educational institutions used to have to pay for a license in order to use television or radio programming recorded for educational purposes. That license was payable to copyright collectives. However, it has been abolished. Those are a few examples that show that, as currently worded, given the exceptions it creates, this bill will mean that most copyright collectives will be losing a great deal of money in royalty payments that are distributed to copyright holders. At the time, those royalties were payable for certain types of use. They are not just there to keep the collectives in business; a large part of that money is redistributed to the people who make the music. So, we are really talking about wages for performing artists, authors and producers—wages that will disappear with these exceptions.

[Solange Drouin]

Perhaps I could take up Mr. Del Mastro's analogy again. People say it's an industry like any other. However, in the breadmaking industry, for example, you are not telling bakers that they will be paid for brown bread, but not for white bread. The government doesn't make an exception with respect to the payment to be made by the consumer. Under this bill, however, we are telling consumers that, in particular circumstances, they will make use of someone else's work—buy a loaf of bread—but won't have to pay for it. That's exactly what you're doing by adding these exceptions. We already have exceptions in the current Act, but now you are increasing the number of times when Canadian consumers will not have to pay for their loaf of bread.

[Maxime Bernier, Conservative, Beauce, QC]

In terms of the exceptions, are you against the one provided to the education system, universities and so forth?

[Solange Drouin]

Generally speaking, I do not understand why, when people have been acknowledged to hold certain rights, those rights should be taken away at certain times for certain uses. That shows a lack of trust in copyright holders; it's telling them that they are not being reasonable about certain uses of their works—in the education sector, for example—in terms of arriving at a solution that satisfies both parties. It shows a lack of confidence that the two parties will succeed in negotiating a commercial agreement—a business arrangement that both consider satisfactory.

For example, the Quebec Ministry of Education pays royalties for the use of protected works by the schools for school and extracurricular work. We were able to arrive at an agreement. The Ministry of Education did not go bankrupt as a result. On the contrary, it enhanced young peoples' education, as they understand that when they use a protected work, they have to pay in order to be entitled to use it.

Generally speaking, I do not support the principle of granting exceptions. I think we are all adult enough to be able to negotiate agreements that satisfy both parties.

[The Chair, Conservative, Gord Brown]

Okay. Merci.

Thank you to our witnesses.

The meeting is now adjourned.