Bill C-32 (40th Parliament, 3rd Session) Committee on Dec. 8th, 2010

[Voices]

Oh, oh!

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Access Copyright, as you probably know, does not actually set the tariff rate. It's set by the Copyright Board. I think you've left the impression here that it's the other way around.

We know that it takes all the evidence and all the concerns from various parties into consideration, and of course it balances those interests. I'm wondering, from your perspective, whether CASA, in its deliberations over the past several months, has been able to present its concerns and make more formal complaints directly to the Copyright Board on the educational tariff rate. If so, when? What did you say? And can we have a copy of it?

[Spencer Keys]

That is ongoing right now. Certainly, if you want to get a lot of details about that, please go to Howard Knop's Excess Copyright blog. We are, in fact, intervenors in that proceeding right now. There's a decision being made about whether or not the existing tariff should be temporarily extended as we go into the exploration of this new tariff.

Yes, we can definitely send a copy of our statement of objection and any further—

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

You made a presentation to the Copyright Board?

[Spencer Keys]

We haven't made a presentation, we've made a submission. We are intervenors

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Right.

I'm running out of time here.

You mentioned earlier, Mr. Keys—I believe it was Mr. Keys, it might have been Mr. Dayler as well—the destruction after 30 days. This has been brought or introduced, from what I understand of my reading of the legislation, for the first time in Bill C-32. I think you suggested that it was somehow the position as a result of pressure or involvement by the publishers. I don't think that's the case.

Do you in fact want to clarify that comment?

[Spencer Keys]

I don't believe we suggested that. I think we just suggested that we thought it was something that impeded learning and that your course materials were a component of your course, and you should be able to build upon that into the future.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I have time for one more question. I'm begin signalled by the chair.

Maybe I could go back to the ESA. There is a section here; in fact, it's on your very last page of recommendations, where it says:

Apply the damage award on a per infringement basis and not apply to all infringements in order to avoid the perverse incentives created by the system.

Do you want to expand on that, Mr. Kee?

[Jason Kee]

Certainly.

Essentially, the challenge with this new kind of two-tiered system of statutory damages is that for the non-commercial tier it sets a new range between $100 and $5,000, but unlike the current regime, it actually is not on a per infringement basis. It will apply to all infringements that people have ever engaged in from the entire history of their life from the day the legal proceedings are filed. Over and above that, it also says, “all other rights holders, after the first one, will be barred from collecting statutory damages and will not be able to obtain that”.

The perverse incentives this creates means that you have a maximum capital of $5,000 for infringement, which creates a perverse incentive to maximize the value of that cap and actually download as much as you can once you start--

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

Mr. Kee, do you have examples of where that $5,000 would be a disincentive, that I can infringe ad infinitum and make several millions of dollars? How wouldn't that $5,000 actually be an enticement?

[Jason Kee]

Absolutely. In fact, there was one gentleman at the copyright consultation who we called Mr. “Six-Terabyte” because he was basically professing that he had a six-terabyte server offering up Canadian content and making Canadian content known the world over even if no one was getting paid for it. He literally wrote in a blog post that he was thanking the government for this because he could do all he wanted for $5,000, while he was clearly creating many, many, many, times more than that in terms of economic harm.

[The Chair, Conservative, Gord Brown]

Thank you.

Mr. Cardin, you have five minutes.

[Serge Cardin, Bloc, Sherbrooke, QC]

Thank you, Mr. Chairman.

Ladies and gentlemen, welcome to the committee.

I would like to come back to education and the royalties that are paid through collectives. If this bill passes, the potential loss for copyright holders is estimated to be approximately $40 million; that is $40 million in relation to a total budget of $72 billion for education in Canada.

As far as I am concerned, the contribution made to copyright by the educational and university communities is not out of line. I don't intend to talk about ancient history, at the time I was in university, but we paid for every book that we used. We paid the full cost. Sometimes I even wondered whether the amount we were paying for books, which obviously included copyright fees, was not actually higher than our tuition.

If we're talking about the copyright legislation, I think it's important to think about protection for copyright, rather than proposing changes to the legislation that will impoverish authors or perhaps even take away their desire and motivation to write for the education community.

I would like to find out what your underlying motivation is. The fees are not that high, considering all the other things that you have to pay. Sometimes parking a car at university costs a lot more than copyright. What is the relative importance of the potential savings you will realize, to the detriment of copyright royalties?

[Spencer Keys]

I think we should be really clear that our concern is less about the past costs of academic materials than about protecting us from exorbitant future costs. Mr. McTeague's point about access and copyright--you can go before the Copyright Board--is certainly taken, but that isn't the only point we have where we can project into the future what creators will be asking for.

They want to be paid for printing a digital copy of something you already have in your possession. They want to be paid for sending a digital copy to a colleague via e-mail for any reason whatsoever--it doesn't matter if it's an infringing use. They want to be paid for storing a digital copy on a hard drive, which actually happens any time you ever open anything on a computer.

They want to be paid for posting a digital copy of a copyrighted work to a secure network, which is often personal use in this age of cloud computing. They want to be paid for projecting an image on a wall during a presentation. They want to be paid for showing another person a digital copy on your own computer; and they want to be paid for posting links to digital copies, regardless of whether they're freely available on the Internet.

Those are the concerns we have. What is the future of this? We think these education exemptions protect us from this highly unreasonable future.

[Serge Cardin, Bloc, Sherbrooke, QC]

To what extent can that be considered unreasonable? At some point, it seems appropriate to assume that copyright or intellectual property… A product is created by someone and everyone has the right to be paid for what he or she does. If that remuneration does not come in the form of royalties, how will it be paid? And, is it unreasonable? This is something that could be negotiated. Copyright royalties have to be paid.

With respect to entertainment software, I understand your position. You work in the software industry. Everything is going digital and, technically, everything goes through you. Your role is to innovate. We know that there is ongoing innovation in that industry. You are well positioned to control the intellectual property associated with your own products and to protect it. You are also well positioned to apply it to other products, and it could be done. Would it be possible to simply impose a tax, as the Conservatives call it? We call it royalties. Taxes scare everyone. Taxes are collected by the government to meet the needs of the population; in this case, we're talking about royalties.

In terms of innovation and technical advancement, it is possible to control just about everything. Would it be possible to control the use of all digital audio players? If not, should a direct royalty be applied?

[Danielle Parr]

On that issue, our industry would prefer a market-based solution where we can monetize our own products. In our view, a levy on devices is actually harmful and creates a perverse incentive for piracy. It's certainly not something we as an industry would support.

[The Chair, Conservative, Gord Brown]

Thank you.

Mr. Braid, you have the floor.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chair.

Thank you to our presenters for being here this afternoon.

I'd like to start with a couple of questions for the Canadian Alliance of Student Associations.

Setting aside a discussion about BillC-32 specifically, in the context of a general discussion about copyright, how would you summarize or encapsulate the interests of students in a general discussion about copyright?

[Zachary Dayler]

I think the major thing is making sure that students have access to everything they need to create innovative solutions, programs, and works of art. It comes down to making sure students have the ability in a safe space, being a university, to try new ideas and put them out there for public consideration. We get new ideas and businesses and keep people here in this country through encouraging them to be innovative, and access to academic materials does that.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

So you're drawing a link to innovation and entrepreneurship here.

[Zachary Dayler]

Absolutely.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay, interesting.

Bringing this now to Bill C-32, what elements of Bill C-32 help to advance this agenda?

[Zachary Dayler]

Obviously the major point that we are trumpeting or bringing to you today is the inclusion of fair dealing as an educational provision: making sure that students aren't penalized for using, testing, and trying out new materials in the classroom.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

The model in the U.S. and their copyright legislation, is that something for us to consider and look at with respect to fair dealing?

[Spencer Keys]

Certainly we've seen in recent court decisions in the United States that they've decided that circumvention for fair use, as they call it, circumvention of, say, a digital lock, is appropriate and that generally these fair use provisions—fair dealing here—are incredibly important to protecting users and creators because essentially creators in a lot of situations.... I mean, there are very few of us who come up with 100% original work. I would like to meet that person, it would be wonderful. But we think it's an important component to the innovation system.

That question of transformative change is definitely an interesting one to consider. But it's all wrapped up in innovation, certainly.