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

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Thank you for the question, Mr. Angus, and indeed it is true that copyright, of course, alters over time, evolves over time. Its original purpose 400 or 500 years ago was to limit the right of the creator and owner such that his property right did not extend into perpetuity, because at that time--and I agree with this concept--there was a greater societal interest, at some point, that trumped the owner's right, and I still agree with that concept. That's what copyright is all about.

In terms of the evolution of things in the United States, obviously I've been following that closely. There is some movement on this file, there's no question about it, in the United States. This committee could have regard to that. It's your right to do so. As I say, we tried to erect a balanced piece of legislation. It's like the three legs of the stool. You've got the creators, you've got the consumers, and you've got sometimes the ones who help creators get to market. My only comment is it's your right to propose amendments, of course, but when you propose an amendment, have regard for the fact that we're in a zero-sum world. I'm afraid to say that, but we are. So it might have another impact; it might not.

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

Are we looking at a bill that is fixable or a bill that is carved in stone? That's my concern.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Well, I've never been accused of being Moses, so it's not carved in stone.

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

Minister Moore, I know you have a long list of the artists you say support the bill. Madame Lavallée and I have people who are very concerned. One of the issues that I've heard again and again is that Bill C-32 seems to strike out systematically a number of existing rights of compensation that have existed. The Educational Rights Collective licence is removed. The broadcast mechanical tariff for music is removed. That's $21 million. It goes to musicians. Exemptions override numerous collective licence rights and numerous sections under education. And then of course there's the notorious levy, which you've defined as a “killer tax”, that has provided $200 million to artists since 2000. We've now seen a 60% drop in the last two years because it hasn't been updated.

Now, I believe that in the digital age we're talking about access and remuneration. Yours seems to be that it's going to be for free or you can lock it down. So would you be willing to amend the bill to address the issue of compensation that is being lost directly through provisions in the bill in order to have this bill go through?

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

As you know, we don't address, at all, the issue of the private copying levy, and it's not, frankly, for a lack of sympathy for the stresses that a lot of artists are facing right now in the new digital age. But with regard to this legislation, I think we're trying to stop the theft, stop the piracy, and stop the bleeding that's happening with all of Canada's creative industries.

There seems to be this locked-in focus, not by you, but to be honest, a lot of the media coverage about copyright is as though this is just about music. It's not. We're talking about authors, libraries, and education, as you mentioned. We're talking about the video game industry, the software industry, and television. We're talking about a million jobs in the Canadian economy.

The impact of this is vast in scope. The issue of the private copying levy...while I understand it is important, I would hope that if you look at what is in the bill--and some are critical of what's not in this bill--it is good for everybody.

We purposely left out the idea of modernizing the private copying levy, as did the previous Bill C-61. To be honest, with all the proposals that came forward, none of them seemed practical or workable. We thought none of them struck the right balance between what's in the best interest of consumers and the best interest of creators.

I think when we're transitioning now to streaming audio online, and things like Pandora--

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

Mr. Minister, in all fairness, your party has attempted to use a levy as a political wedge issue. You've misrepresented the fees that were discussed at the Copyright Board. You've misrepresented the extent of Bill C-499 and what it would cover. You've tried to portray it as some kind of socialist plot. Yet levies are the norm in many countries. We've got Belgium, France, Germany, Italy, and Spain that are applying the levy.

I don't know if you've seen the recent Dutch Court of Appeal decision. It said that the right of reproduction must include a compensation plan, which means that the Dutch are likely to extend the levy onto MP3 players as well.

This bill is not technologically neutral; you've targeted out the levy.

You're saying you have an interest in privacy, but I'd like to read a line from the social research council paper that's going to be delivered this December 1 at the WIPO. Paragraph 13 concludes:

We have seen no evidence--and indeed no claims--that enforcement efforts to date have had any impact on the overall supply of pirated goods. Our work suggests, rather, that piracy has grown dramatically by most measures in the past decade, driven by the exogenous factors...[such as] high media prices, low local incomes, technological diffusion, and fast-changing consumer and cultural practices.

Your approach on the locks is a failed approach. We either go to levies or we see that artists are not going to get paid.

Will you continue to use a levy as a political wedge issue, or is this an area where we can find a way to get compensation for artists and get this bill through?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Charlie, this idea of this levy--we call it the iPod tax, or the “i-tax”--is not good for consumers. This is not the solution that's going to work for consumers.

What you're doing is adding a tax to the smartphones, iPods, BlackBerrys--

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

Those are rights that exist. Under the three-step Berne Convention, these are rights that have existed. You can call it a tax, but they are rights. Are you going to erase these rights for artists?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

It's a tax.

Two wrongs don't make a right. The fact of the matter is that to extend it to smartphones is wrong for consumers.

[The Chair, Conservative, Gord Brown]

Minister, we're going to have to wrap up this round.

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

He mentioned a political wedge.

I think you're doing a good job of doing a political wedge right now, Charlie.

We're not the ones holding rallies on Parliament Hill condemning our political opponents for not agreeing with us on an issue that's frankly quite complicated.

[The Chair, Conservative, Gord Brown]

Minister, we're going to have to move to the Conservative Party for seven minutes.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you very much, Mr. Chairman.

I want to come back briefly to this issue. I've talked, many times, about how Madam Lavallée has mentioned she has had opportunities in the after-hour sessions in Parliament to raise questions about digital copying levies.

I have talked about the connection between a cassette tape and copying audio music, which was very clear, but it was a little less clear with CDs. To put a tax on a smartphone, a laptop computer, or that type of media, is frankly a loose connection, at best.

Maybe you can address that, because that's really what we're talking about. We're talking about a tax on technology, and that's been the position of the party. Maybe you'd like to expand on where you're going with it.

I'll give both ministers an opportunity to address this.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

The thing that bothers me about this i-tax idea is that you're adding costs for the Canadian consumer, who is presumably wishing to buy his or her smartphone product domestically. That person may not be consuming.... I have an iPod, and I'm fortunate enough to own a BlackBerry. I use my iPod for my music, not my BlackBerry, but you're going to be taxing both of them, even though one device is not being used for music or entertainment at all. Consumers will see this as unjust. Some, not all, will find ways around it. That isn't the right business model.

This legislation is about going after the bad guys and creating some rules that are reasonable for the consumer--we allow time shifting and format shifting--but also providing ways to get at the people who are really destroying value. Those are the BitTorrent sites and other people who are destroying the value. That's what this legislation is about.

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

Ideas came forward in the consultations, but none of them are practical or workable in the transition that is happening right now in streaming digital media—video games, television shows, movies, and so on. We haven't seen a proposal that we think is workable or practical in the new era.

As Minister Clement said, this is an unnecessary attack on consumers. I don't think it serves our cultural communities to make it more expensive for consumers to consume Canadian culture. As Minister of Heritage, I can tell you that we spend in our department hundreds of millions of dollars every year to help Canadians to create Canadian music, to support theatre, to support television, movies, books, and so on. I don't think it makes it more expensive. I don't think it serves anybody to make it more expensive for Canadians to buy a Kindle or to read a Canadian author. I don't think that serves Canadian authors or consumers. It doesn't serve anybody. So I don't think it works. And I don't see any workable proposals. Even the proposal that Charlie has put forward has massive loopholes in it that would impose a massive tax on a number of items. Anything that has a hard drive would be subject to this proposal. That includes automobiles and devices that aren't used for listening to music.

Automobiles have hard drives, Charlie. I don't know what wagon you go to and from home in. Automobiles have hard drives to which you rip music. By the way, that happened many years ago, and this would be subject to the tax. Your proposal, your legislation, says that anything with a hard drive would be subject to this massive new tax. This would include pretty much every electronic device out there—memory sticks, automobiles, cellphones, laptops, computers, desktops, and everything in between. You're using a scattered approach to address a focused problem. We think the focused problem is that creative communities are being gutted because we don't have a strong intellectual property regime. With Bill C-32, we're trying to stop the stealing.

[Dean Del Mastro, Conservative, Peterborough, ON]

Both of you spoke of the broad consultations we undertook. In fact, I believe the government undertook the broadest consultation in history in putting this bill together. We received thousands of submissions, electronically and otherwise. What we heard time and time again were artists asking for protection from this piracy. They were saying that their work has value and needs protection so that it can't be stolen on the Internet. The bill seeks to do that.

We also heard from chambers of commerce saying to construct a business model. I'm not going to adopt a common defeatist attitude, namely, that illegal copying is going to go on no matter what, so we need a levy. Perhaps you could both speak to what the chambers of commerce, the recording industry, our international partners say about where the bill is going, the intent of the bill, and what they believe the effect of it will be.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

We have some specific quotes. Let me give you one story that I remember very well. As part of our consultations, I was speaking to the large movie studios that produce all those Hollywood works we know and love. I was going through a bit of an esoteric description on the history of copyright over the last 400 years, and about how copyright was created so that things were protected for a period of time, 20 years or 30 years. One of the producers looked at me and said, “Tony, we're not trying to protect something for 20 years. We're trying to protect something for 20 seconds.”

And that's the nature of the threat right now for creators and those who distribute creative works. They're trying to protect them for 20 seconds so that they can get some value to the artists and to all the other trades involved in producing a movie or an album, whatever it is. That's the challenge, and that's what this bill seeks to address.

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

You mentioned chambers of commerce.

Françoise Bertrand, President of the Fédération des chambres de commerce du Québec has stated that Bill C-32 is “critical to maintaining a competitive and stable business environment in Canada” and in Quebec for the benefit of artists and the cultural communities.

As Minister of Canadian Heritage, I don't want arts and culture in this country to become a hobby. I want people to derive an income from it, and I want them to be able to engage in the marketplace. Being able to engage in the marketplace means being able to protect what you're creating, with digital protection measures. It also means that the government has an obligation. The government has an obligation to take whatever legislative steps are reasonable and necessary to protect people who are being stolen from.

That's our obligation as members of Parliament and that's what this legislation seeks to do—to stop theft from people who are creating software, video games, televisions shows, and the new 3D technology. We're talking about patent protection for the creative community. That's what this is. We're allowing them to protect what they're creating and to engage in the marketplace. That's what this legislation does, and it takes us a great distance. People can be critical of what may not be in the legislation. But what is in this legislation—the ratification of WIPO, the fair-dealing policy, the digital protection measures—is a huge victory for all Canadians.

[The Chair, Conservative, Gord Brown]

Thank you, Minister.

We're now going to move to the second round of questioning.

For the Liberal Party, for five minutes, Mr. Rodriguez.

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

Thank you, Mr. Chairman.

Good morning, Ministers.

We agree on the fact that the copyright regime needs to be modernized. That requires balanced legislation, as we said. It also means that the committee has to be able to operate in a collegial and effective manner. I hope we can avoid rhetoric.

I would like to briefly discuss levies, without dwelling on it. I would just like people to stick to the facts. You are talking about a tax. For me, a tax is when the government raises money and uses it to meet its own requirements. In the case of a levy, the government doesn't receive a penny. It is not the one spending that money; the money is only redistributed by the copyright collective.

So, I would just like everyone to stick to the facts. I don't think it will be helpful for people to use excessive language or use words or situations for political purposes that do not reflect reality.

We talked about the need for a balanced bill. In my opinion, this one is not. Some aspects of it are positive but it also involves a loss of acquired rights that will result in income losses, primarily for creators.

I have visited the ten provinces, and I hope to be able to travel to the territories soon. I met with a number of groups in different communities who took part in roundtable discussions. It's always the same category of people telling me that there is something wrong. These people are losing their rights, either through the elimination of a levy, through an education exemption which represents a potential loss of fees, or through transitory recordings.

Have you analyzed these income losses? Have you determined how much the loss of these fees will cost creators or the industry?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

There is an analysis that was prepared following our consultations, obviously. I'd like to say something about rights.

Let me just take one item that you've mentioned, Mr. Rodriguez.

I want to give some comfort to this committee on education, because that's another issue that's going to come up, the fact that we've added education to the fair dealing concept. Again, I'm conscious that I'm at a copyright hearing, so I will attribute my remarks to Professor Geist, who educated me that fair dealing is not free dealing, and there's a big difference between the two.

Fair dealing means that the work must be for a non-commercial purpose, that the original material was lawfully acquired, and that the use of that original material must not harm the market for that material. That's a very different concept from just saying, because we've added education to fair dealing, all the rules are gone. That's not true: the rules are still in place and they seek to create that balance. Again, I want to give you that assurance.

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

We can come back to education.

In this case, I presume you are open to the idea of our presenting certain amendments to specify what will be included in fair dealing as regards works used for educational purposes. You say you're open to the idea of better definitions and a more precise framing of these provisions.

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

I repeat that it is important to achieve balance in this bill.

With respect to education, this is not just a situation

no holds barred.

According to the way the right is interpreted, there are situations where it is possible for there to be another educational system used for the benefit of students, without that being a violation of the act.

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

Minister, you are going to have to demonstrate some openness on this. We have concrete proposals that are put forward in good faith. We want this to work, but not at any price, and not just any way. Some amendments are important to us, and we hope you will consider them and be open to the idea of discussing them. In my opinion, they're absolutely critical for our creators.

I have a final question for you. In your opinion, do Internet service providers have certain responsibilities? When I talked to them, they always say that they are just the “tube” carrying the information, when in my opinion, they are much more than that. They play a fundamental role and they have certain responsibilities.

In your opinion, at what point do their responsibilities come into play?

[Tony Clement, Conservative, Parry Sound—Muskoka, ON]

Again, we have to make sure that what we do does not have some unintended consequences. As I say, things are finally balanced, so if you add more duties and responsibilities for Internet service providers, you run the risk of their not providing as robust a service to consumers as consumers want in this country.

So yes, we want to help artists, we want to help creators, but we also want to help consumers, and I would encourage you, when you put forward your amendments, to consider what the impact will be down the line for other aspects of our society. That's all I'm asking.