Bill C-32 (40th Parliament, 3rd Session) Committee on Nov. 25th, 2010

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

Good morning, everyone.

This is the third meeting of the legislative committee on Bill C-32. Today we have two ministers, Minister James Moore, the Minister of Canadian Heritage and Official Languages, and Minister Tony Clement, Minister of Industry. We're happy to have both ministers here today.

Minister Moore, you have the floor.

[Tony Clement, Conservative, Minister of Industry]

I'll begin, Mr.Chair, if that's all right with you.

Thank you very much, and good day, colleagues. Thank you for allowing both of us the opportunity to speak to the committee about our government's Copyright Modernization Act, Bill C-32.

With this bill, the Harper government is keeping its promise to introduce legislation to modernize Canadian copyright law, protect and create jobs, foster innovation and attract new investments to Canada.

The act strikes a balanced approach. It is both consumer and creator friendly. It is the result of an unprecedented consultation process. We've received submissions from over 8,600 Canadians. There were face-to-face meetings in nearly every major city in Canada, and we took into account the views of artists, performers, shoppers, surfers, business people, and students.

Today I can confidently say to you that this bill represents what we feel is the best compromise for the betterment of both creators and consumers that we could possibly reach. Frankly, for a bill of this scope, balance is our only option.

Mr. Chair, on Monday I delivered an interim report to Canadians on the progress our government has made on developing Canada's digital economy strategy. As a government, we are committed to encouraging further engagement and growth in the emerging digital economy.

Digital media is poised to transform our economy in ways we have not yet imagined. Worldwide the digital media sector is expected to grow to $2.2 trillion over the next five years.

To flourish in a global digital economy, Canada is not only going to need strong technological industries, we're also going to need to equip our labour force with the digital skills necessary to embrace and succeed in an era of new media, services, and commerce.

Bill C-32 is an important brick in the foundation we are building to support the digital economy of tomorrow.

Technology continues to evolve quickly. New devices and products are constantly coming on the market, and it is important that our Copyright Act be adjusted to that evolving digital environment. Our government anticipated this situation.

That's why this legislation has been drafted as technology neutral, to stand the test of time and adapt to the technologies of tomorrow. It removes barriers to the smooth introduction and adaptation of technologies like the network personal video recorder and file computing.

In the classroom, it ensures that online lectures, Smart Boards, tablet computing, and other innovative technologies, and, most importantly, the students they benefit are not going to be disadvantaged under the law.

Our kids can learn in a multitude of ways with the aid of a multitude of technologies. With this legislation we'll be able to better equip them with the tools they need to learn, so that they can grow into the digitally skilled and tech savvy workforce Canada needs to be competitive in, in the digital age.

These amendments are needed not only for the schools, but also for all Canadians who are involved in activities such as home schooling by parents, distance learning or skills acquisition.

The bill ensures that Canada's students will benefit from material that has already been made publicly available online as a powerful learning tool in the classroom wherever that classroom may be.

To sum up, Mr. Chair, this is an important and essential piece of legislation. It is Canada's foundation for the digital economy of tomorrow, and what Canadians need now is the timely passage of this bill. We cannot wait any longer.

I'm sure I don't need to remind anyone in this room that the last time the act was updated we were waiting for Titanic to come out on VHS so we could watch it at home on our VCRs. Times have changed.

Thank you, Mr. Chair.

[The Chair, Conservative, Gord Brown]

Minister Moore.

[James Moore, Conservative, Minister of Canadian Heritage and Official Languages]

I would just like to make a couple of additional comments.

First I'd like to thank members of this committee for agreeing to sit on the legislative committee. I know many of you have parliamentary obligations beyond this committee and sit on other committees. I think your agreement to have the legislative committee, where you have more flexibility to deal with this legislation and to come together and work cooperatively on what is large, complicated, and technical legislation is a very good sign of cooperation for something that I think we all agree is essential for Canada's future, which is a true, proper modernization of Canada's intellectual property rights regime. So I want to thank all members of this committee for agreeing to this process and also for inviting me here today.

The consultations that Minister Clement spoke about are what resulted in this legislation.

Bill C-32 is the result of the extensive efforts made over the last decade to modernize our copyright law. It is flexible, balanced and consistent with international standards. It reflects the exact approach that is needed to create jobs and promote the new technologies of tomorrow. Allow me to explain why it's important.

The contribution of the digital industries that make up a huge part of Canada's economy, frankly, can't be understated. They comprise, in total, 5% of Canada's GDP. That's nearly $50 billion in direct economic impact for Canadian industries, nearly one million jobs across Canada, and growing.

It is absolutely essential that we protect these jobs and these industries that are critical to Canada's economic success.

Digital technologies are fuelling the Canadian economy and enabling job creation. For example, the entertainment software industry represents $1.7 billion a year for Canada's economy. More than 250 gaming development companies employ more than 14,000 people across the country.

Canada's film and television industry has over 160,000 jobs from coast to coast, a $5.2 billion industry for this country. These are important jobs that we as parliamentarians must be committed to ensuring stay in Canada and are protected well into the future.

Before we take any questions, there's one central part of this bill that I think has been underreported and I think underappreciated in terms of Canada's intellectual property rights regime, and that is that this legislation, as many of you know, has a provision within it that mandates Parliament to review Canada's intellectual property regime and our copyright laws every five years. By law, Parliament will be forced to keep our copyright legislation up to date going forward.

This week marks the 10-year anniversary since the last time Canadians elected a majority Parliament. Because of successive minority Parliaments, it's become politically very difficult, I think, for this legislation to be addressed and updated, in spite of many efforts in the past by John Manley, by Jim Prentice, and now by Minister Clement and I to get this right.

I think what's important is that the political pressures of Parliament and the possibility of an election campaign cannot arrest our responsibility as a country to maintain our intellectual property rights regime. So while we think that Bill C-32 strikes the appropriate balance in terms of what's in the best interest of all Canadians, we also recognize that in the future there will be new technologies, new pressures, new dynamics that come forward, and in spite of any political dynamic, Parliament must be forced to make sure that Canada's intellectual property rights regime stays up to date, in line with international obligations, and, most importantly, in line with what's in the best interests of Canada's future.

So I think that element of the bill, the five-year mandatory renewal of this legislation, is the big win of this legislation for all Canadians. It will force Parliament to have to deal with this legislation on an ongoing basis to make sure that this massive engine of Canada's economic growth, which is the creative economy, will forever be well served by Canada's intellectual property rights regime.

Again, I want to thank all of you for being involved in this process. This is a large legislative effort. It's a sincere effort on our part to get this right in the best interest of all Canadians. We look forward to working with you in the weeks ahead.

[The Chair, Conservative, Gord Brown]

Thank you very much to both ministers.

We'll go to questions now. For the first round, from the Liberal Party, for seven minutes, Mr. Garneau.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Mr. Chair.

I would like to say at the outset that I welcome your opening remarks. We in the Liberal Party also definitely want to proceed with haste on Bill C-32. It has been a long time coming. It is with some regret that we realize that our undertakings on WIPO go back to the previous century, if I can say that. So we definitely need to get on with this.

I also welcome your comments on achieving a balanced project here. We must try to achieve that, and hopefully we will demonstrate the wisdom of Solomon in coming up with a balance that will address not only the needs of our consumers, but also the needs of our artists and creators.

As you know from speaking to this in debate, we believe that a number of issues will need to be looked at in greater depth. I would like to start with one that deals with the question of digital locks.

At the moment, for products that do not have digital locks, the bill allows for the consumer to do some format shifting or time shifting, and this is welcomed. However, it is also clear that if there is a digital lock and a person infringes on that, they are breaking the law.

Minister Moore, I would like to ask you about a comment you made on Power & Politics on November 17. You said:

When I buy a movie, I've paid for the movie. To ask me to pay for it a second time through another device--and to assume that I'm doing illegal copying, to assume that I'm being a pirate, to assume that I'm thieving from people because I happen to own an MP3 player or a Blu-ray player or a laptop, I think treats consumers unfairly.

How do you reconcile that with the fact that you have also said that if you buy a product that is equipped with a digital lock, it would be against the law for you to infringe on that and put it on some other device for personal use?

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I was answering a question in that context about the idea of having a new fee or levy put on devices that you would consume. I was speaking specifically about Blu-ray players in that answer to Evan Solomon. That was the context.

But this is a question about balance, and as far as my personal digital media consumption habits, I personally choose to buy products that don't have digital locks. It's my right as a consumer to be able to do that. As we're seeing increasingly with technology, certainly the music industry, the television industry, and the film industry are creating products where people have the right to shift things from one format to another.

An important element of this bill, as you know, is format shifting and time shifting, because it's modernization and recognition of people's consumer habits. We want to make sure consumers know that the government understands these are changing dynamics, and we want to modernize these things. So when I was talking about paying for things multiple times, it was with regard to a levy.

On where I think you and I disagree on the issue of being able to break a digital lock for personal or commercial reasons--and I understand that the Liberal Party is considering an amendment in that regard. When Napster was created by Shawn Fanning, it wasn't for commercial purposes; it was for fun. For fun, they cratered huge parts of the recording industry and took away a business model that was successful for a lot of people. Over time, things have modernized, changed, and evolved in different ways that have seen some real benefits for consumers.

However, I don't think there has to be a commercial purpose in order for it to be destructive to those who are doing the creating. The idea that we would allow people to circumvent digital locks, as long as it's not for commercial purposes, misses the point. If I digitally unlock someone's creation when I put it on BitTorrent or the Web, or circulate it with some friends on a university campus, whether I'm doing it for commercial purposes, corporate sabotage purposes, or altruistic, anarchistic reasons because I think everybody should have everything for free, the effect is the same.

That is why virtually without exception in creative communities, if you look at all the submissions we have received--we're talking about music, television, video, video games, the software industry--everybody believes that if they've invested money, labour, and effort to create products and decide to protect those products by whatever mechanisms they choose to digitally, they should be allowed to do that. And consumers are free to purchase or not purchase those devices.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Thank you, Minister. I only have seven minutes here.

I can't let you off the hook quite that easily, because the context in which you made this statement was that it was for personal use, and it should not be a problem, if you legally bought it and it was not for commercial purposes, to simply transfer it from one device to another for your viewing or listening pleasure.

It is difficult for me to understand that this comment you made should be interpreted differently because it's being taken in a different context. You very clearly said, “When I buy a movie, I've paid for the movie”, and to prevent you from transferring it to another device, you said you think it “treats consumers unfairly”.

This is for personal use; we're not talking about commercial use. You've made some good points about commercial use. We're talking about personal use here.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

That is why, as I said, in our legislation we allow for format shifting, time shifting, and other elements. However, you have to counterbalance that with the right of creators to protect their property from those who would do them harm. As I said, for personal use, if something does not have a digital lock on it, the creator has decided to put their product on the market in that format. Format shifting is legal under this legislation, and I respect the rights of those creators. That's what I was referring to.

I have never--and no one should--hacked software or movies and format shifted them without the consent of the creator.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

But you did not qualify this comment by saying “if it doesn't have a digital lock”.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I think the comment is missing the context, which includes the question itself. The question itself was on imposing a new tax. I said I don't think you should have to pay twice for a product. If I purchase a Blu-ray or a DVD once, I don't think I should have to pay for it a second time through a second tax or a fee on a device in order to watch that product. That is the point I was making.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

We all agree on that.

[The Chair, Conservative, Gord Brown]

Thank you, Mr. Garneau.

We'll move to the Bloc Québécois.

Ms. Lavallée, you have seven minutes.

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

Thank you very much.

I have seven minutes, but I would have preferred the two ministers to be with us for two hours. It seems to me that would have been the normal procedure.

There is a great deal to be said about Bill C-32. First and foremost, the point must be made that there is no balance in this bill. I am happy that you are both here today, side by side. I want to emphasize the fact that this bill has been designed for big business, the seven major U.S. companies, major broadcasters, gameware and software companies. This bill is based on use of the digital lock, which in no way meets the needs of the music industry or musicians. According to the Union des consommateurs, it reflects “a punitive approach that has proven ineffectual elsewhere in the world”. It is also a bill that relies on prosecution. And the fact is that large corporations have far greater means to take on legal battles than rights holders and creators of artistic content.

In fact, in defence of this bill, your Parliamentary Secretary, Dean Del Mastro, stated in the House on Friday morning that everyone supports you: 400 film, television and interactive media companies, 150 corporate CEOs, who are making $4.5 billion thanks to artists, 38 software multinationals and 300 chambers of commerce. That is what he said. But he did not name a single organization that defends the rights of artists, nor did he mention a single artist, musician, performer or author. And that is how the parliamentary secretary to the Minister of Canadian Heritage defends a bill that is supposed to defend the rights of artists.

In Quebec, the number of opponents of the bill is huge. I could give you a full report, but let's just say that since the day before yesterday, the Quebec National Assembly is at the top of that list, and it's unanimous. Sovereignists are not the only ones represented in the National Assembly, Ministers.

As I said, this is a bill designed for the industry. A digital lock may work for gaming software and possibly even the film industry, but it certainly doesn't work for the music industry. Let me give you another example. A musical work will never be worth more than $20,000, since your bill has preset damages at no more than $20,000. On the other hand, circumventing a digital lock—and it is clear that this is aimed at big business—will result in a $1 million fine and a five-year term of imprisonment. It is obvious that there is a double standard here.

One does not have the sense that the Minister of Canadian Heritage has really defended this bill. The Minister of Industry has vigourously defended it, though. The Minister of Canadian Heritage has been totally absent from the debate. The non-modernization of private copying will cost artists $13 million. The elimination of transitory copying will cost $21 million. The education exemption will cost $16 million. Overall, we are talking about $50 million.

Minister Moore, you have done nothing to defend the rights of artists. You wrongly state that consumers support you. You know that is not true. The Canadian Consumer Initiative has told you that and the Union des consommateurs has repeated it over and over. Under this bill, not only are artists' incomes reduced, but no new support is offered them either. No one is defending the rights of artists in this government where we have, not one, but two Ministers of Industry.

That's the reality, Mr. Moore. There is a complete imbalance. Mr. Moore, you have failed in your duty to defend artists. I challenge you to tell me how this bill can possibly benefit artists and creators of artistic content.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

Thank you.

To be frank, you are completely wrong. I have a long list of quotes from artists and organizations that promote the interest of artists in Quebec and the rest of Canada and who are fully supportive of Bill C-32.

For example, I have quotes from the Canadian Entertainment Software Association.

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

The Canadian Entertainment Software Association is a large multinational company.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

I allowed you to speak, so please extend me the same courtesy.

I also have quotes from the Canadian Independent Music Association and from Quebec artists. For example, the artist Loreena McKennitt says that the changes to the Copyright Act proposed in this bill are fair and reasonable

I also have quotes from the Canadian Alliance of Students Associations, private broadcasters in Canada, including some in Quebec. The International Alliance of Theatrical Stage Employees is commending the government for protecting our creative industries “as well as the men and women who work in film and television production in Canada”, including Quebec.

Since we're talking about music, I also have a quote from the Canadian Council of Music Industry Associations, which believes it is absolutely critical that we have recognized in this bill the value of products created by this country's creative industries.

From one end of the country to the next, Canadian artists were affected by Internet piracy. That is why we are enthusiastically supporting Bill C-32 and the Conservative government's efforts to reform copyright law.

Artists have made their views known and we have listened. We are proposing a balanced, responsible bill which reflects the interests of Canada as a whole, both creators and consumers.

I am pleased that we have secured the support of the provinces of Canada. Ministers of Education and governments in Canada, be they Conservative, Liberal or New Democrat, have voiced their support for our bill, which is responsible, balanced and in the interests of all Canadians, including artists who are strongly in favour of the bill. The provisions of this key piece of legislation aim to protect their ability to continue to develop creative content all across Canada, including in Quebec.

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

Your comments are a little strange, considering that the Quebec National Assembly voted unanimously in favour of substantial amendments to Bill C-32. Everyone wants--

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

If someone--

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

Let me finish please. Everyone wants a bill that will modernize copyright law, but everyone has to work towards that end. There is still a great deal of work to be done on this bill, because it does not protect artists. In fact, you said as much yourself:

“no right to an income, only a right to have their works not stolen”.

Obviously, it's in the medium term, and that is also the view of the Union des consommateurs with respect to this bill. The fact is you will be cutting off oxygen to creators. You will be preventing them from receiving the income they need to continue to create. In the medium term, you will effectively kill the cultural industry in Quebec and Canada.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

We are interested in ideas. That is why we held consultations. The Liberal Party is seriously considering this bill. It has pledged to study it and consider the amendments. We are prepared to listen to what the Liberals have to day. Mr. Charlie Angus himself has tabled a private member's bill on this subject. So, we are waiting for your suggestions, Ms. Lavallée. If you have the interests of artists at heart, we are inviting you to put something on the table, instead of just speechifying. If you have amendments to propose, we are prepared to look at them. You received the bill five months ago but have made no suggestions. The others are serious about this bill, and we are also prepared to hear what you have to say.

[The Chair, Conservative, Gord Brown]

Thank you, Minister.

We have to move on to Mr. Angus for seven minutes.

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

Thank you, Mr. Chair. I want to say at the outset, Mr. Chair, now that we're on national television, what an excellent chair you are.

[Some hon. members]

Oh, oh!

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

Welcome, Ministers.

I don't want to be brusque at the beginning. I was hoping we were going to have two hours. We only have an hour; as the lone New Democrat, I have seven minutes of questions, so I'm going to move you along quickly through the questions, because there are a number of issues.

The issue of copyright is a fairly straightforward concept. It's the right to copy and decide who gets to copy and who gets to be remunerated. My concern with Bill C-32 is that it seems to put copyright a little bit on its head.

Minister Moore, you're claiming that the public now has numerous new rights for making copies to back up, to time shift, to extract sections, all without any compensation to artists, yet these rights only exist if a technological protection measure is not interfering with them.

Now, in July I wrote to you asking to get a legal opinion from WIPO about whether or not the exemptions that would exist in the analog world can be applied to the digital realm and we would remain WIPO-consistent. I haven't seen that legal opinion, but since July, the United States court, for example, has ruled that even under the DMCA, the fair dealing provisions that exist within rights are not to be trumped by a digital lock.

We're now in a situation where Canadian citizens would face even more restrictive limits on rights that they're being guaranteed than under the notorious DMCA. So my question is, are you willing to amend the bill, which brings us into line with many of our WIPO-compliant partners, or is this going to be fixed in stone and we're going to have fewer rights than our U.S. neighbours, who are governed by the DMCA?