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

[John-Paul Ellson]

For our members, it's directly affecting the production of music in this country, in the sense that why would somebody invest anything in the creation of a cultural product if they knew that there would be very little if any revenue coming from it because of the lack of protection? So we're seeing on a daily basis that people are not recording at the same rate they used to, and that affects the studios, the sound techs, the lighting techs, the performance guys, and everything.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

And it ultimately affects us as Canadian consumers, who want good-quality product out there to listen to, to watch, to read, and all those things.

[Graham Henderson]

It also generates revenue and taxes.

[Maïa Davies]

We're citizens who are proud of our cultural output. I'm giving a speech tomorrow at my old music college. Why would I tell any single one of them to ever follow any of their dreams or any of their art the way I have? If I already had a few-in-a-million chance and they have zero of ever making this a real career, what's the point?

[Graham Henderson]

Our artists are a huge part of what “brand Canada” is. Countries are always looking to differentiate themselves from other countries. There's mass competition. We buy German goods because we know if it's made in Germany it means it's.... When people think about Canada around the world, they think of people like Loreena and Maïa. They're a huge component of brand Canada. I don't think we take enough cognizance of that. I don't think we do enough to protect them. I don't think we care enough.

This legislation, coupled with sensible, reasonable changes will, I think, provide the market framework that will enable people like Maïa and Loreena, and J.P.'s grassroots people with a guitar and a song on the way in the front door.... We talk about “made in Canada” solutions. Well, nothing's going to get made in Canada if we don't fix this up and impose some rules on the marketplace.

We love the new technologies. We love them. But we need to have some rules.

[The Chair, Conservative, Gord Brown]

Thank you very much.

That's going to have to be the last word.

Thank you to our witnesses.

We will briefly suspend.

[The Chair, Conservative, Gord Brown]

We'll call this 15th meeting of the special Legislative Committee on Bill C-32 back to order.

We have four groups: l'Association québécoise de l'industrie du disque, du spectacle et de la vidéo, ADISQ; la Guilde des musiciens et musiciennes du Québec; the Society of Composers, Authors and Music Publishers of Canada; as well as the Songwriters Association of Canada.

Each of those four groups will have five minutes.

We will start with the ADISQ.

Solange Drouin, cinq minutes.

[Solange Drouin, Vice-President and Executive Director, Public Affairs, Association québécoise de l'industrie du disque, du spectacle et de la vidéo (ADISQ)]

Mr. Chairman, members of the committee, on behalf of l'ADISQ, I would like to first thank you for inviting us to appear before you today.

L'ADISQ is a signatory to the joint declaration on Bill C-32 released by more than 80 groups representing the Canadian cultural community. Several of them have already appeared before the committee and made you aware of their many concerns with respect to Bill C-32, which would deprive content creators of revenues of more than $125 million. We share those concerns.

Since five minutes is not enough time to go over them all, we have decided to provide you with an overview which we hope will help you to understand why this bill is of critical importance for the development, sustainability and diversity of our different forms of cultural expression in Canada.

To begin with, I would like to briefly introduce the organization I represent. L'ADISQ is a professional association which represents independent record, performance and video producers in Quebec. An important fact to note is that these producers are responsible for 95% of the albums released by Quebec artists. What that means is that multinational record companies have minimal involvement in our local production in Quebec. Career development for Quebec artists is supported primarily by an independent industry made up of a number of small companies.

Sales for Quebec artists in their own market are remarkable. Year after year, almost 50% of the records sold in Quebec showcase Quebec artists.

In practice, this positive positioning in terms of sales of Quebec artists' work has had the effect of creating an environment which supports the sustainable development of artistic and entrepreneurial talent. What is even more important is that this has allowed the Canadian public to have access to a wealth of talent and a wide variety of music. Furthermore, from this wealth of talent has emerged a significant number of artists who are excellent ambassadors around the world. That is a very positive result which, unfortunately, does not tell the whole story. It does not show that, while Quebec artists' share of overall sales remains high, total sales have been dropping dramatically for several years now. In Quebec, we have gone from 13 million albums sold in 2004 to a little more than 9 million in 2010, a drop of 30% in six years.

All across Canada, the situation is equally alarming, if not more so. And it is unfortunately no different around the world. At the international level, according to IFPI, one of the consequences has been that, of the top 50 bestsellers, 77% fewer were first albums between 2003 and 2010. So, developing artists are the first victims of this dramatic downward trend, and the public is the big loser.

Surprisingly, at the same time, music has never been more a part of people's lives. Ways of securing it either legally or illegally are legion in the digital universe, and companies develop business models based on music with no significant return, and often, with no return whatsoever for content providers.

Why should I be telling you this today, when we're here to discuss copyright? Well, the Copyright Act is economic legislation. It sets the rules whereby rights holders will be remunerated when their creative works are used. Through your choices and decisions, you have the power to worsen the music industry's already dire situation or turn it around. In order to generate revenues that allow an adequate critical mass of artists to provide the Canadian public with access to a diversity of Canadian music, we must retain those tools now found in the legislation which are effective, and introduce similarly effective tools for the digital universe, as we did for the physical universe. With Bill C-32, we are completely missing the target.

The challenge is considerable. However, it is surmountable if the political will is there. France is an excellent example of that political will. This is only one example among many: France recently revised the royalties for private copying for USB keys, memory cards and hard disks, and it is seeking to establish a royalty for iPads. I would just remind you that here we are talking about ways of preventing royalties from being charged for MP3 players. Why are we so out of the step with what is being done elsewhere?

Furthermore, I would like to understand why the Conservative government, which often defends small business, is not supporting small cultural companies. It's important to remember that our culture is developed by these small companies.

[The Chair, Conservative, Gord Brown]

Thank you.

We will now hear from the Guilde des musiciens et musiciennes du Québec. You have five minutes.

[Luc Fortin, President, Guilde des musiciens et musiciennes du Québec]

My name is Luc Fortin and I am President of the Guilde des musiciens et musiciennes du Québec. I'm also a professional musician. With me today is Mr. Éric Lefebvre, Secretary-Treasurer of our association. Like l'ADISQ, we, too, signed the joint declaration of Canadian cultural industries on Bill C-32.

The Guilde des musiciens et musiciennes du Québec is a recognized association of artists that represents almost 3,500 professional musicians working all across Quebec. It is affiliated with the Canadian Federation of Musicians and its mission is to defend and promote the economic, social, moral and professional rights of performing musicians.

To begin with, we feel it's important to clearly state our position on Bill C-32. Unless there are major amendments to the bill, it should not be passed under any circumstances. It is true that the government is establishing some new rights for performing artists, such as the moral right and exclusive rights provided for under the WIPO Performances and Phonograms Treaty which, theoretically, place them on an equal footing with certain recognized authors' rights.

Yet what the framers of the bill are giving with the right hand, they are taking away with the left. What is the point of an exclusive “making available” right if the bill only confirms the lack of accountability for Internet service providers? How can anyone assert a reproduction right over a sound recording when broadcasting entities and educational institutions can reproduce works without prior authorization from the author, performer or producer, and without any applicable royalties for this kind of reproduction? The incalculable number of exceptions granted users essentially invalidates several exclusive rights currently held by rights holders. Some examples include the broadening of the “fair use” concept for purposes of education and parody, the exception for television recording timeshifting, the abolition of certain legal licences in the education sector, and the list goes on.

The Berne Convention provides that an exception should only be permitted “in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.” That is article 9. Bill C-32 does not abide by the Berne Convention in that it grants several exceptions which will in fact deprive creators and performers of remuneration, thereby violating their rights.

As regards Internet service providers, the government is indeed proposing a series of technical protection measures. However, the large record producers, known as “the majors”, who are actually the ones able to take such measures, have long since given up developing these costly measures, due to their extreme unpopularity. It is worth mentioning, for example, that the iTunes site removed all protection measures from its on-line catalogue two years ago.

Furthermore, the private copying regime, which enables authors, artists and producers to be compensated for violations of their reproduction rights, is on its way out. Nowadays, who actually continues to reproduce musical works on cassettes? As for CDs, they will soon be joining cassettes and diskettes on museum shelves, having been replaced by USB keys and digital audio players. Music is reproduced daily on millions of iPods and other similar digital players; however, the royalties are, unfortunately, collected for other formats, all of which are gradually disappearing.

Relying on propaganda, some are currently attempting to convince Canadians that the royalty for private copying is a tax, when it is actually compensation for actions that previously were deemed to be illegal.

Finally, we note that the legislation still has not granted rights to performing artists for audiovisual productions. Yet an artist's performance is of crucial importance, in terms of both commercializing a sound recording and marketing a film or television program. It is time that lawmakers responded to that demand, one that has already been recognized in several countries.

In conclusion, the passage of Bill C-32 would turn Canada into one of the countries that affords the least protection for creations and innovations involving intellectual property.

[The Chair, Conservative, Gord Brown]

Thank you.

We'll now move to the Society of Composers, Authors and Music Publishers of Canada. We have three representatives: Mr. Spurgeon, Mr. Davies, and Mr. Valiquette.

For a total of five minutes, you have the floor.

[Gilles Valiquette, Director, Board of Directors, Society of Composers, Authors and Music Publishers of Canada]

Mr. Chairman, ladies and gentlemen members of the committee, good afternoon. My name is Gilles Valiquette and I am an author, composer and performer in Quebec. Today I am representing the Society of Composers, Authors and Music Publishers of Canada, better known as SOCAN. I am a member of the board of directors, a board which I chaired for five years, and with me today is my colleague, Victor Davies, who is also a composer and member of SOCAN's board of directors, as well as Paul Spurgeon, Vice-President, Legal Services and General Counsel for SOCAN.

Mr. Chairman, Bill C-32 is a very important bill as far as we are concerned. To help you understand our perspective, I should just point out that SOCAN is the Canadian collective that administers the performing rights, words and music, of more than 35,000 active Canadian members and all the members of its affiliate organizations around the world. That said, it is important to state that songwriters who spend days and weeks creating a musical work receive no advance payment for their work.

Furthermore, the social convention embedded in the Copyright Act gives artists the right to be remunerated if, and only if, their song is used. In other words, my colleagues and I are entrepreneurs who make songs, as opposed to furniture or cars. We take the risk that our work will be used and we agree not to be paid at that point. That is the agreement we have with our clientele.

It is critical that, in a spirit of national unity, Bill C-32 respect the two legal traditions associated with intellectual property, both copyright and le droit d'auteur or, more specifically, that it ensure that Canadians have access to copyrighted work while at the same time upholding the right of creators to compensation. As currently drafted, Bill C-32 completely disregards the fundamental rights which are the cornerstone of copyright in Canada. Let us not forget that Bill C-32 deals with intellectual property.

Mr. Chairman, ladies and gentlemen members of the committee, I very much appreciate this opportunity to address you directly as both an artist and creator. I am calling on you to make the amendments to the bill that we have suggested in our brief, in order to ensure that creators' rights will be respected and that the music industry will be able to continue to move forward on a daily basis.

Thank you very much. I would like to turn it over now to Mr. Paul Spurgeon.

[Paul Spurgeon, Vice-President, Legal Services and General Counsel, Society of Composers, Authors and Music Publishers of Canada]

Good afternoon, Mr. Chairman and members of Parliament.

My name is Paul Spurgeon, and I'm SOCAN's general counsel.

I understand you have a copy of SOCAN's 16-page November 19 submission. Also I have left with the clerk a copy of a document, the WIPO study on limitations and exceptions, which I think you will find very interesting, especially if you refer to pages 74 to 80. It might help in your understanding of the issue of exceptions and limitations. I have also left with you a copy of a four-pager on the three-step test, which I am principally going to speak to in my brief remarks.

Turning to the last page of our submission, we propose that clause 41 be amended by adding a simple interpretation provision, as follows:In interpreting any limitations or exceptions to copyright under Part III of the Act, the court shall ensure that such limitations or exceptions are confined to certain special cases, do not conflict with a normal exploitation of the work, and do not unreasonably prejudice the legitimate interests of the author, including the author’s right to equitable remuneration.

I have to point out that this amendment is simply based on the three-step test that Canada has already agreed to in international treaties and has ratified, and intends to ratify, including the Berne convention, to which we have been a signatory for decades, the World Trade Organization treaty, and the WIPO treaties, which you are about to hopefully implement and ratify when Bill C-32 is enacted.

Since Canada has already agreed to this three-step test in these treaties, there is no reason why it should not be included in the Copyright Act.

Thank you.

Victor.

[Victor Davies, Director, Board of Directors, Society of Composers, Authors and Music Publishers of Canada]

My name is Victor Davies. I'm a music composer and I serve on the SOCAN board of directors.

As Gilles mentioned, SOCAN represents music composers, authors, and publishers. Please note that we do not represent record companies, and they do not represent us.

I would like to discuss two issues: digital locks and exceptions.

First of all, we respect the right of other copyright owners to use digital locks to protect their works if they so desire. However, SOCAN's business model is not based on blocking access with digital locks. Instead, SOCAN's mandate is to provide access to the world's music repertoire and to collect royalties determined by the Copyright Board of Canada for these uses. Therefore, although digital locks may help some copyright owners, they do not directly help SOCAN.

Second, we oppose Bill C-32's many exceptions, because they allow users to use our valuable intellectual property but we do not get paid.

[The Chair, Conservative, Gord Brown]

I'm sorry, I'm going to have to cut you off there; you're well over. You'll get an opportunity to answer questions.

We'll move to the Songwriters Association of Canada, to Jim Vallance and Greg Johnston, for five minutes.

[Jim Vallance, Vice-President, Songwriters Association of Canada]

Thank you for this opportunity.

These are challenging times for creators and rights holders. We appreciate the work you've done, and continue to do, on the bill.

My name is Jim Vallance, and I'm vice-president of the Songwriters Association of Canada. I'm a multiple Juno award winner and a member of the Order of Canada. I've composed music for hundreds of performers, including Anne Murray, Paul Anka, Tina Turner, Bryan Adams, and Ozzy Osbourne. My songs have sold more than 100 million copies worldwide.

This was possible because my career largely occurred in the 1970s, 1980s, and 1990s—the decades before Napster.

Given the state of the industry in 2011, it's unlikely the next generation of Canadian songwriters will have the same opportunities I had. In fact much of our industry could disappear, as music creators are forced to seek other employment to make ends meet. The loss to Canadian culture could be incalculable: no more Shania Twains, no more Luc Plamondons.

Let me digress for a moment. For the better part of 100 years, British Columbia had a prosperous commercial fishing industry. Suddenly, a few years ago, the salmon failed to materialize. The consequences were devastating. Jobs were lost. Fishermen were bankrupted. Boats were sold. The scientists at the Department of Fisheries were baffled, unable to explain the anomaly. Quite simply, the fish were gone, and no one knew why or where.

The music industry is experiencing a similarly devastating crisis, each year being worse than the last. But unlike the fishing industry, we don't need to consult scientists: we know where our songs are. Every minute of every day, millions of our songs are being shared online.

Never in history has music been so popular or so accessible. It should be a golden era for the music industry. Sadly, the opposite is true, as 95% of the time our music is shared without compensation for creators or rights holders. Meanwhile, ISPs reap significant profits, providing access to our music over their networks.

During the past decade, consumers have demonstrated an overwhelming preference for accessing music online. Attempts by governments worldwide to stop or alter this behaviour have proven futile and ineffective. We must accept this fact because only then can we move forward.

As gatekeepers to the world's repertoire of music, ISPs must share revenues with those of us who create and own the content they deliver to their customers. Creators, rights holders, and the ISPs must work together as partners rather than adversaries.

Songwriters are not arts groups. We are self-employed entrepreneurs and proud professionals. We don't want government funding. We want a fair and legal marketplace for our music.

We propose a “made in Canada” solution where individuals who wish to share music online pay a reasonable monthly licence fee for the private non-commercial sharing of music. We seek a viable business model for the digital age where consumers, our fans, can continue accessing music online while creators and rights holders are fairly compensated.

[Greg Johnston, Treasurer, Songwriters Association of Canada]

My name is Greg Johnston. I'm a songwriter and the treasurer of the Songwriters Association of Canada.

I'm a 40-year-old. I have a wife, two kids, a car, and I live in downtown Toronto. I volunteer, shop for groceries, pay taxes, and I vote. I studied music at both Simon Fraser University and Grant MacEwan College. I had student loans and I paid them off. I picked a career, I was educated for it, and I'm really good at what I do.

I've worked with artists such as Olivia Newton-John, Marc Jordan, Ron Sexsmith, Hawksley Workman, and Nick Lachey, to name a few. Unlike my friend and colleague Mr. Vallance, my songs have not sold over 100 million copies, and unless drastic measures are taken, songwriters of my generation will never have the chance. In fact, despite my education, talent, and success, I may have no choice but to leave the profession entirely.

Some may say “That's life”, something I would be willing to accept but for the fact that our songs have never been more popular. They're on your radio when you drive to work. They encourage you on the treadmill. They play at your daughter's wedding. They help to sell shoes, toothpaste, life insurance, and they've even helped the odd political campaign.

The solution to our industry's dilemma lies in the monetization of music file sharing. To reiterate what Jim Vallance said, a mutually beneficial partnership with the ISPs would allow consumers access to our work in the way they are now accustomed to. Rights holders would be remunerated, success would be rewarded, and fair business practice would be restored.

To this end, Bill C-32 has nothing to offer. Bill C-32, as written, opens the doors to years of lawsuits with regard to the definition of fair dealing.

The last decade has been a period of rapid decline for our industry. Forcing music creators to, in essence, sue for their supper only increases our financial hardship. It solves none of the basic problems we face.

Digital locks and lawsuits, as well as other repressive measures, are a well-worn path at this point, and they have proven to largely be a dead end.

We at the SAC support the private copy levy as a part of a comprehensive plan to remunerate music creators for our work. While helpful to creators, the levy in and of itself is not a comprehensive solution, and it should not be seen as such.

With blank CD sales declining annually, and the failure of Bill C-32 to extend the levy to devices like the iPod, this legislation offers little hope for our future.

In conclusion, we at the SAC are grateful for this opportunity to appear before the committee. We sincerely hope our input will be helpful in amending this crucial legislation so that it may foster an enlightened and profitable Canadian music industry.

Thank you.

[The Chair, Conservative, Gord Brown]

Thank you very much.

We'll now move to questioning. We have 21 minutes remaining, and with the consent of the committee we'll have five-minute rounds.

Is there consent?

[Some hon. members]

Agreed.

[An hon. member]

Do we have a choice?

[The Chair, Conservative, Gord Brown]

Mr. Rodriguez, you have five minutes.

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

Thank you, Chair.

Thank you for being here.

Good afternoon.

Earlier, I heard my government member colleagues saying that the bill may not be perfect, but that we could pass it as is and make changes subsequently.

That greatly concerns me because, in my opinion, what we need are not minor changes, but major changes. Indeed, in my opinion, one shared by many of my committee colleagues, the bill is imbalanced and full of gaps, to the detriment of creators. It will result in the loss of acquired rights and revenues. Furthermore, the bill does not necessarily meet its objective.

By way of answer to my question, I would like each of you to comment briefly. If the bill is not amended, and if we have a choice between passing it as it is or defeating it, should it pass or not?

[Solange Drouin]

Definitely, in terms of our analysis.

we're better without that kind of bill than with it.

There is no doubt about that, as I see it. Certainly, the situation in the music industry is disastrous, but it would be even worse if this bill were to pass without amendment.

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

It would be worse. Thank you.

Mr. Fortin.

[Luc Fortin]

We also believe that the status quo is preferable to passing the bill in its current form. It would not be an improvement; it would actually be a loss for the entire music industry, for creators and performers.