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

[Bill Freeman]

If you leave the legislation the way it is today, we're running into huge problems with the interpretation as to what it means. My interpretation is going to be different from yours and someone else's. Who adjudicates those problems? The courts. That's what you're inviting.

We think it will be a major rollback of income for Access Copyright. I think you should recognize Access Copyright as a business that has over $30 million now distributed to writers and publishers. Copibec in Quebec is $14 million. We've been told all of that money is at threat.

[Dean Del Mastro, Conservative, Peterborough, ON]

That's not true. But I would say that your point on litigation is no different from the way it is today. It's no different.

The way copyright laws, the fair dealing laws, apply today will apply once this bill is passed, and there is no difference as to whether an issue would be litigated or not.

[Alain Pineau]

There is fair dealing currently in the act--you are absolutely right--but by introducing elements for research and for comment and that sort of thing, there are a number of exceptions allowed that the tests can apply to. Yes, the three-step test should be included in the act.

My understanding is that by introducing education as part of fair dealing you allow a number of people, like the one who was quoted a minute ago, to say they can push the envelope. It is interesting that nine ministers of education, not ten, are for that particular clause. In Quebec, there is a recognition that there is a system in place, that there is a fair compensation that is due, and that we should maintain the system.

I'm no lawyer, but you have a number of legal opinions on the table, including from the Barreau du Québec, which says this will lead to litigation. I believe there are other witnesses who will be here in the coming days who will support the same point of view.

That brings me back to my original message: it doesn't work for individuals to go and sue in front of the courts when there is so much ambiguity built into the law itself.

[The Chair, Conservative, Gord Brown]

All right. That will be it for this panel in this hour.

My thanks to our witnesses. We'll suspend for a few moments.

[The Chair, Conservative, Gord Brown]

We will call this ninth meeting of the special Legislative Committee on Bill C-32 to order.

We have two witnesses from the same organization, John Barrack and Reynolds Mastin. I believe, Mr. Barrack, you're going to speak. Is that correct?

[John Barrack, Chief Operating Officer and Chief Legal Officer, Canadian Media Production Association]

We'll both be addressing the committee.

[The Chair, Conservative, Gord Brown]

Okay. You have the floor for five minutes in total.

[John Barrack]

Thank you, Mr. Chairman.

Mr. Chairman and members of the committee, thank you for inviting us to meet with you today.

The CMPA represents the interests of almost 400 companies engaged in the production and distribution of English-language television programs, feature films, and interactive media productions in all regions of Canada. In 2009-10, the industry was responsible for over $3.8 billion in production volume and the creation of over 90,000 jobs.

Our members produce Degrassi, Corner Gas, The Rick Mercer Report, and This Hour has 22 Minutes, to name a few. Our entire industry is also on tenterhooks to see whether Barney's Version and Incendies--both independently produced films--take home Oscars later this month at the Academy Awards.

As an association whose members are both owners and users of copyright, we recognize that copyright reform involves an exceptionally delicate balancing act. We will limit our remarks to five key issues that we believe are key to getting the balance right.

First, the CMPA fully supports the TPM provisions of Bill C-32. Protection for TPMs is critical to ensuring choice for both creators and consumers in the digital marketplace. TPMs enable independent producers to experiment with different business and content delivery models. They also provide a vehicle for maximizing the range of content and services available to consumers.

Where TPMs are overused or misused, consumers can and do respond by allocating their entertainment dollars elsewhere. But without them, the digital marketplace risks becoming a digital desert where less and less high-quality, professionally produced Canadian content gets made. This would be a huge loss, not only for Canadians but for consumers and citizens, and also for international audiences who love the content our members produce.

Second, we were very pleased to see that parody and satire would be added as protected activities under the fair dealing exemption. This would bring an end to the current uncertainty regarding parody and satire in Canadian copyright law, which can have a chilling effect on free speech, including political speech.

We're confident that all members of Parliament would support an amendment that would give Rick Mercer an even freer reign than he has already.

Reynolds.

[Reynolds Mastin, Counsel, Canadian Media Production Association]

We know there has also been much comment about the addition of education to the fair dealing exemption. We share the widely held concern that its ambit is too wide if left undefined and would likely lead to considerable and costly litigation. Placing some definitional parameters around the provision is necessary and will provide much needed clarity for all concerned.

Third, we think that Bill C-32's inclusion of an enabling infringement section constitutes a very big step in shutting down the digital black market in Canada. Like other stakeholders, we would propose to slightly amend the section so that it would apply to services that are designed or operated primarily to enable infringement or that induce infringement. We would also recommend that the hosting and caching exceptions in Bill C-32 should explicitly not apply in circumstances where the service provider is enabling infringement.

As currently drafted, the hosting and caching provisions could inadvertently end up shielding massive commercial enablers, which we know is not the intent of the bill.

Fourth, while we fully appreciate the rationale for the user-generated content exception, our members are deeply concerned that it sets the creative bar way too low for what would constitute such content. What none of us want is a provision that might, for example, inadvertently permit a user to upload full seasons of Degrassi or Corner Gas to the Internet. In that scenario, the only thing that's being generated is lost revenue to the people who make Degrassi.

At a minimum, the exception should only allow an individual to create original, transformative, user-generated content for the person's personal, non-commercial use if all of the permitted acts can be considered fair dealings under the existing copyright law test.

Fifth, we would urge the committee to consider whether a notice and notice regime is really a sufficient mechanism for deterring widespread online copyright infringement. The simple fact of the matter is that merely sending letters to serial infringers is unlikely to get them to see the error of their ways. We therefore recommend that a provision be added to the bill that would allow an ISP to benefit from the bill's safe harbour provisions only if the ISP has adopted and implemented a policy to prevent use of its services by repeat infringers.

John.

[John Barrack]

Finally, I have a brief word about something that is not in the bill.

Over the past several rounds of copyright reform, we have requested of successive governments that producers be recognized as the first owners and authors of copyright in a cinematographic work. Currently, the Copyright Act is silent on this critically important issue. This omission has created needless additional uncertainty and costs for independent producers, for reasons that we would be happy to get into during the question and answer session.

Our thanks again to the committee for inviting us here this afternoon. We would be happy to answer any questions you may have.

[The Chair, Conservative, Gord Brown]

All right. Thank you.

We'll start the questioning with a seven-minute round.

From the Liberal Party we have Mr. McTeague.

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

Thank you, Mr. Brown.

My thanks to the witnesses for being here. You'll probably have heard during your testimony that we had one of your gaffers here. Thank you for that help. The House of Commons can use all the help it can get these days.

You've raised a number of critical and important questions. One that has great interest for me is the extent to which the anti-piracy provisions of the act are sufficient. Is it your contention, Mr. Mastin and Mr. Barrack, that the current legislation would be able to discourage flagrant acts of piracy? We've had a number of examples of the $5,000 fine, but we have companies like The Pirate Bay that might be able to take a hit of $5,000 while they're making tens of thousands of dollars.

Do you have any comment on that?

[John Barrack]

I'll make an initial comment and then I'll pass it over to Reynolds, if that's all right.

Going back to this whole question of balance, I think any specific penalty provisions have to be mindful of where the violation or the infringement might be taking place and what is of real concern. The real concern is commercial infringement. We are not a culture—and I don't believe we're about to become a culture—where we're going to be attacking individuals with respect to copyright infringement. I think our real concern, long and short, is the commercialization of infringement. There need to be real deterrents. What we don't want to see is a penalty provision becoming a default licence fee that enables pirates to say that it is just the cost of doing business. That's our real concern.

Reynolds, do you want to add to that?

[Reynolds Mastin]

The only thing I would add is that while the $5,000 statutory damage award might be sufficient to deter people who are not in the infringement business, it is not going to be a deterrent for those who are. That's what we're primarily concerned about.

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

You had a comment about notice being insufficient. What model would you prefer to see? How would you see this committee if it were to make amendments in that area? I'm not asking you for the actual wording, but are you talking about a hybrid form of penalty that would distinguish between commercial infringers while making sure the penalties themselves are graduated in such a way as to deter?

What are you specifically asking for?

[John Barrack]

I think we're looking for something more along the lines of a notice and takedown type of regime, which we think would be more effective.

Do you want to comment further on that, Reynolds?

[Reynolds Mastin]

Contrary to what is often said about that regime, it does provide a balance and an opportunity for those who receive a notice claiming infringement to dispute that notice on a good faith basis. We think it's important that there be an equitable process, but we also believe that a notice and notice regime does not provide the deterrent that we need for serial infringers.

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

Okay. I think we've heard some witnesses who support that.

Let me go back to user-generated content. You had recommendations in that field as well. Do you want to expand on them?

[Reynolds Mastin]

One of the key questions facing the committee, given what you've heard from witnesses today and what you'll be hearing in the next few months, is whether it makes sense to take the provision out altogether, or, if a decision is made, to find a way to mould the provision in a way that ensures compliance with our international obligations. It ought not to allow people to do through the back door, so to speak, what they can't do through the front door. Then we need to look at carefully tailoring and amending that provision so that it achieves its intended purpose without leading to unintended consequences.

[John Barrack]

I think the practical problem is that it's difficult to define. We heard it from previous questioning of the prior witnesses who were up here. I don't think anyone in this room wants to see endless litigation on these issues, because uncertainty really is the devil's playground. It's going to make a lot of lawyers rich and not be a real service to anyone, including consumers. The more certainty we can create, the better. The difficulty in this context is how to define that certainty.

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

I had a concern about comments you made earlier about TPMs. There, you would have us do what as a committee, in terms of your own perspective.

Obviously, there is a serious balancing act that needs to occur between creators and those of course who buy something with the intention of using it for personal use. I know there are examples of where, if you buy a video, you might have three shots. You can use it to download onto your Blu-ray. You can do whatever you wish with it to a certain extent.

How do you, in your industry...? Can you cite examples of where there has been real damage done to representatives of your industry as a result of a lack of laws, if you will, or a lack of precision in law with evolving technology?

[John Barrack]

The difficulty here is that we are in an emerging marketplace and TPMs are extremely important in terms of allowing producers of content to really fully exploit the business models. The Government of Canada has invested in it heavily as well as the producer. So if we all want to see a return on our investment, of course there has to be a recognition of the consumer and consumer rights in that context, but there needs to be a real balancing that takes place.

In terms of the specifics, it's very hard to cite for you in terms of studies to say where is the quantum loss, because you can't measure your potential loss if you don't know what sales you've missed, if I can put it in those terms. That's the difficulty in quantifying value of piracy.

Our members keep coming back to these popular examples. DVD sales of popular Canadian television shows are a big business. The moneys derived from those sales go back into those companies, which then produce more great Canadian content. If you don't have those measures in place, you are eroding that business model. You can't necessarily differentiate if that money is being lost because there's a change in consumer behaviour or if it is being lost due to piracy.

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

Go ahead, Mr. Mastin.

[Reynolds Mastin]

Actually, you have covered it off pretty well with John.

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

I'm out of time apparently.