Canadian Heritage Committee on April 15th, 2010

[Aline Côté]

Is that so? I'm sorry.

[The Chair, Conservative, Gary Schellenberger]

Perhaps you can shorten it up a little bit, please.

[Aline Côté]

Let me tell you about one of the major successes we have had in French-speaking Canada. Three years ago, the publishers reacted to this situation by developing very quickly their own digital platform. We agreed on the principle of a common platform and tried very quickly to set up a French-language digital collection for all of Canada through an aggregator. We decided that this aggregator would be based in Quebec, would come under Canadian law and would have a business model. Everyone talks about new business models and that is exactly what we established. It is an agency system that allows publishers to keep control of the quality of their works and to ensure that the contracts they have signed with their authors are respected and that selling prices are related to the value of the works.

This is now seen as a huge success that is known all over of the world as an important initiative. Several major publishers from France have copied our model and people from other countries have come here to see how we are implementing our model. One of the consequences is that several major publishers have signed an agreement with Apple and that the price of books is reaching a more acceptable level, $14.99. We have earned five dollars by organizing ourselves and developing an effective model. This is also respectful of our readers, given the quantity of our production, as well as of our authors, given our ability to account for their works. This is a success that we absolutely wanted to mention to the committee. The development of this platform is even being considered for a prize.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We'll now go to Mr. Anders, please.

[Jeff Anders, Chief Executive Officer and Co-Founder, The Mark News]

Thank you very much for inviting me to participate here today. It's an honour to be here, and really nice to see all of your faces--so many that you see on the news and in the papers--right here in the flesh. Again, thank you for having me.

My name is Jeff Anders. I am the co-founder and CEO of The Mark News, which is an online publisher of news commentary and analysis written by accomplished Canadian thinkers and doers, people currently working in politics, business, science, and the arts, in Canada and all over the world.

The idea is to give a platform to the global community of Canadian experts and to give the Canadian public a form of public access to the people and the ideas who are on the front lines making the decisions that become news. So we don't hire journalists, we don't hire writers, we don't report facts. This is analysis written by people like you.

I'll give you a quick explanation of my background. I am originally from Montreal and have lived there most of my life. After completing a Bachelor of Commerce at McGill, I worked for five years in management consulting at Mercer Oliver Wyman. Immediately prior to launching The Mark a couple of years ago, I was completing an MBA at MIT and a Masters in Public Administration at Harvard, focused on the question of how the emerging knowledge economy in developing countries was changing business and how countries like Canada could adapt and stay competitive.

I worked in early-stage companies in both India and China and saw the transformation up close, where it was clear that what the thinkers on the subject were saying was true: Canada would need to innovate. Innovation is simply the development and promotion of new ideas.

The Mark, at its core, is an operation, in my mind, that harvests Canadian ideas and brings them to a global market. Here is what we do. We hand-pick Canadian experts and give them a platform where they can publish about whatever they want, whenever they want. They can write articles or sit for video and audio interviews with our editors. Ambitious contributors can even host their own video and audio shows for which they invite guests, conduct the interviews, and publish at themarknews.com.

For example, any one of you, being a leader in our government, could host your own weekly radio show or video show at The Mark News where you would invite guests and essentially communicate whatever message you're trying to communicate to the Canadian public.

The Mark's contributor base now exceeds 700 experts. In the political realm in the last few weeks, we've published articles from Rob Nicholson, Stockwell Day, Lawrence Cannon, Kim Campbell, Michael Ignatieff, Jack Layton, Bob Rae, Alex Himelfarb, and dozens of others.

The community also includes a younger, global activist community of extraordinary people who are the new foreign policy actors. These are the influencers of the future, and we're very proud of them.

The Mark's mission is to foster conversation. Often that conversation starts with the most influential actors. Just before Parliament resumed, we asked political and other leaders to write about a single idea that government should pursue to restore Canadians' faith in government. A few weeks later we published a series of writings by Canadian leaders about their own political role models and the lessons today's leaders can draw from them. We are starting the conversation.

The core of our mission is to engage the Canadian public. A recent article at The Mark addressed the question of women in politics. One of the comments below the article asked, “Where is Martha Hall Findlay in this discussion?” A few hours later Martha Hall Findlay herself was there in the comments string, adding her views on the issue.

The platform can also be used quite formally. We are in early discussions with the federal ministry to explore the possibility of hosting a session at The Mark to engage the public in policy-making. In fact in advance of my appearance here today, I set up an area on The Mark's Facebook page to solicit suggestions for ideas I would communicate to you here today, an example of crowd-sourcing.

The big project we are currently working on is a plan to launch The Mark in French. I can't say too much about it at this point, but imagine a website on which French-speaking and English-speaking Canadians could engage with each other in real time in their langue maternelle. We want The Mark to be the bridge that facilitates large-scale discussion between the two communities.

It's important to note that The Mark is by design not ideologically aligned. We recruit contributors based on their professional credibility and their connection to Canada alone. We do not ask where they live, who they vote for, or what language they speak, and we certainly don't tell them what to say. The result is a variety of points of view on the issues that matter to Canadians worldwide.

The Mark is founded ultimately on the idea that there are thousands of Canadians--in fact millions of Canadians--working all over the world who have expertise about the countries in which they live and work and who are looking for a credible venue where they can share their knowledge with a national audience. The Mark is their platform.

The results of this experiment, which began a little less than a year ago when we secured private funding and launched the beta test site, have been overwhelmingly positive. The audience is growing at a dramatic pace. Web traffic was up 80% in March over what it was in February.

The contributor community is growing by dozens of new people every week. The Mark weekly radio show is now being aired on seven radio stations across the country. Today--in probably about a half an hour--will be the beginning of a partnership with Canada.com, which will publish articles written by The Mark's contributors, giving them further reach and impact.

While the initial vision for this was a news commentary website, we now see ourselves increasingly as a media company that produces original programming for web, print, radio, and television.

My comments from here--I have a few minutes left--will apply exclusively to for-profit entities and those that can one day be financially independent. They do not apply to cultural organizations or projects that have other value.

The Mark itself is a for-profit company. My co-founder, Ali Rahnema, and I believed that a sustainable business model was the most solid foundation on which to build The Mark.

Speaking as one member of a vibrant community of start-up companies across the country, the message from the ground is that it's tough out there. Funding for early-stage companies, especially for media and information companies, is scarce. Venture capital investment is at its lowest point in Canada in more than a decade.

Government funding, while abundant, seems frustratingly out of reach. The Mark, for example, has reviewed at least 70 different grant programs and qualifies for surprisingly few. If we were a not-for-profit organization, or if we needed to make large capital investments in equipment, or if we printed our content on paper, we could have access to a whole slew of grants and loans. But that is not what we are and it is not what we're doing.

There is an incongruity between Canada's objectives--i.e., the urgent investment in all things digital--and the incentives being laid out for innovators and entrepreneurs like The Mark. We don't need equipment. We need operating support, funds to keep us going while we experiment and fail on the way to finding sustainable models. We need support making digital work, not encouragement to look backwards toward paper. We need a shift from protection to encouragement, to propulsion.

The Canada media fund is extraordinarily good news. It will provide the resources that start-up media and cultural organizations need to launch the new projects that would otherwise have stayed on the shelf. We will see a material difference as a result.

That said, I have heard some people in the start-up community lament the sums allocated to supporting the broadcasters in their moves to online. It is already hard enough for small companies to compete with the broadcasters and the vast resources they have at their disposal. These entrepreneurs argue that this funding drives up all industry costs and diverts talent, making it even more difficult for the little guys to compete.

But I disagree. If Canada is to develop the kind of digital strategy we need, support will be required across the board. Innovation will happen in all organizations of all sizes. We need to collaborate. Online competition is global, and Canadian organizations are natural allies in that arena.

I want to thank the committee for its attention to this matter. It is of such critical importance, not only for the perpetuation of Canadian culture but also for the protection of Canadian prosperity in general. I would be happy to contribute to that effort in any way I can, and I look forward to working with all of you in that respect.

Thank you again for inviting me here today.

[The Chair, Conservative, Gary Schellenberger]

Thank you for that.

Our last presenter is Brett Gaylor, please.

[Brett Gaylor, Documentary Filmmaker, EyeSteelFilm Inc.]

Hello. Thank you for this opportunity to appear before the committee.

As someone who has never voted for anyone who was ever elected, it's nice to participate in the democratic process--although, as the Pirate Party, as you know, was recently given status, you guys should all watch your backs.

My name is Brett Gaylor, and I'm a filmmaker and web producer based in Montreal. I split my time between a private film production company called EyeSteelFilm, one of Canada's most successful documentary production companies, and the Mozilla Foundation, the creators of the Firefox web browser.

My most recent film, Rip! A Remix Manifesto, deals with many of the issues this committee struggles with on a day-to-day basis. Despite my reference to my colleagues in the Pirate Party, Rip does not fly the Jolly Roger. It does not advocate the abolition of copyright, nor do I believe in that.

In the tradition of Canadian point of view documentary, Rip is not journalism. It is not fair and balanced. It is my personal, impassioned plea for copyright reform. I set out to make the film eight years ago, because I believed then, as I believe now, that our copyright system is fundamentally broken. It does not make sense for those of us who grew up in the digital age. Not only does our current legal environment make an entire generation feel like criminals for experiencing culture in ways that seem as natural to us as turning on the tap, it criminalizes, and in some cases, when paired with digital rights management technologies, prevents the creative reuse and expression of culture.

I believe that this creative reuse, re-expression, and re-contextualization of culture using digital technology to be an important skill for today's generations of Canadians. It is an expression of a media-literate citizenry that has grown up with a medium that is not top-down, consumer-centric, or one-way, like television or radio. It is a two-way, participatory, interactive medium. Websites like Wikipedia and YouTube, and creative audiovisual works that combine or “mash up” the media landscape, are examples of the kind of democratic discourse we ought to celebrate in today's youth. But our laws criminalize and prevent it. Whether or not you agree with my position on copyright reform, I think all parties should know that there is an economic argument for reform in copyright, and in particular, in fair dealing.

Let me back up a little bit. Rip was created by our private, for-profit company, EyeSteelFilm, in Montreal. In addition to Rip, we have produced several award-winning films that have been broadcast nationally and internationally, have played in theatres, and have sold on DVD. They are films such as Up The Yangtze, Taqwacore, and Last Train Home. Rip was also produced as a co-production with the National Film Board of Canada. Additional funding came from arts councils and private broadcasters, who pre-licensed the film.

Since being released in 2008, my film, Rip, has played at over 25 major international film festivals, has been broadcast on television in at least 20 countries, and has played theatrically across this country as well as in the U.S., the U.K., and Australia and across Europe. It's available at Blockbuster and Rogers stores right across the country, and was recently nominated by the Academy of Canadian Cinema and Television at the Genie Awards.

The film was also released under a Creative Commons licence, meaning that the audience is free to download and remix the film. In fact, using these licences before the film was even made, we solicited remixes and contributions that actually comprised a large part of the material in the film itself. Because of this licence, the film can be found on both commercial television broadcasts and through web portals, such as Hulu in the States, but also through file-sharing networks and aggregators, such as the infamous Pirate Bay.

Due to this approach, we estimate that the film has been seen by some six million people around the world, and the figure could indeed be much higher. It has been a success by any measure, both financially and in terms of having Canadian content reach the broadest possible audience.

I'm proud of the accomplishment, but at the same time, I'm nervous. Here's why. The film is a complete and utter legal nightmare. Rip walks the walk in terms of both style and content. To make the argument that remixing is an age-old process and that culture always builds on what came before, we told the story through remixing. To show that Walt Disney's Snow White was based on a story from the public domain, we showed a clip from the film. To show how Walt created Steamboat Mickey, and thus the Mickey Mouse character, by riffing on Buster Keaton's Steamboat Bill, we showed both films. And we showed countless examples of contributions from our collaborators on a website called opensourcecinema.org, the website we use to facilitate collaboration.

Our problem, however, was that we were Canadian. Unlike our filmmaking colleagues in the United States, who can rely on fair use, which protects this kind of expression and makes exceptions to the copyright law to allow critique, parody, and satire, the landscape is much murkier for those of us working up here. We're left wondering if the current fair-dealing exceptions for studying or newsgathering apply to us. We are, after all, a unique hybrid of art and journalism. And for those of us who want to see our work reach a broad audience, this is a big problem. The reason is that our work must be covered under errors and omissions insurance to play on television, at film festivals, in theatres, or in other commercial venues.

To get errors and omissions insurance, a lawyer must attest that the film does not violate the Copyright Act and open itself to a lawsuit. While we did feel that Rip was fair dealing, particularly in light of the CCH v. Law Society of Upper Canada College decision, many lawyers would say it's not. The case law on the subject is light.

To further complicate matters, while we were editing the film, the government tabled Bill C-61. While the bill was silent on fair dealing, it did impose stiff fines for circumventing digital rights management software, which was a necessary process for me to extract archival materials from DVDs and other formats. By giving the software to do that to my editor, I could have been incarcerated. I don't think anyone in this room would want a Canadian filmmaker in jail rather than at the Genies.

As I said, we did feel that Rip was legal under our interpretations of fair dealing, but as you can see I'm a copyright activist, and thus have had to devote a lot of time to this study. My other Canadian documentary colleagues have enough challenges without becoming experts in copyright law.

This problem has become a major focus for DOC, the Documentary Organization of Canada. In an internal survey, which you can find on their website, 85% of respondents said copyright is more harmful to them than beneficial. The survey was done in 2005, and at that time cost of copyrighted clearance for music and archival music consumed up to 25% of the budget of many documentaries. Eighty-two percent of respondents said that Canada's copyright laws discourage the production of documentaries. Not one person said they encourage it. This is of course because documentary filmmakers need access to historical documents to build the arguments of their film, reflect on issues in contemporary society, and interpret the media landscape we now live in.

The survey also found that in 2005, nine films of the National Film Board of Canada were removed from circulation because the cost of renewing the copyright on the material was prohibitive. I know anecdotally that renewing copyright on material prevents many films from being streamed on the NFB's extremely popular website.

In response, and again in light of the CCH decision that called on user communities to define their own best practices, DOC has done just that, and prepared a best practices and fair dealing document that gives guidelines for filmmakers who wish to exercise fair dealing in their films. The document has been produced in collaboration with the University of Ottawa, and was created with broad consultation within the film industry, not just from documentary filmmakers but all sectors.

Unfortunately, I only received a copy of it this morning; otherwise, we would have submitted it to be translated. I would be happy to send that document to any committee members who wish.

Using this document, we hope to see many documentary filmmakers push the boundaries of fair dealing. Indeed, in addition to Rip, we have seen another popular film, Reel Injun, make use of fair dealing and indeed secure errors and omissions insurance for the film. It is the type of film that would be impossible without building on copyrighted material. It is a critique of the portrayal of aboriginal people in Hollywood films. I ask you, how could this filmmaker make the film without showing the films he is critiquing? Like me, the director, Neil Diamond, had to go to great expense and put himself, his colleagues, and his financial supporters at risk to tell that story.

In terms of what you can do as parliamentarians to support our efforts, I'm here begging you for a change in the landscape of fair dealing: to create language that is illustrative of the types of exceptions that the law would allow rather than exhaustive. This would leave room for the types of innovations that documentary filmmakers need in order to continue their tradition of excellence.

The documentary film industry is extremely efficient. With minimal public support, we create green, entrepreneurial, and far-reaching work. We employ a broad spectrum of Canadians, and our work creates a dialogue and interest in issues of the day. I urge you to read our best practices in fair dealing and to support reasonable reforms to fair dealing to allow us to do our work.

Thank you very much.

[The Chair, Conservative, Gary Schellenberger]

Thank you for those comments.

First question: Mr. Simms, please.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Thank you, Chair.

Thank you to our guests for coming. Thank you for your thoughts.

I'll jump right into the questions, because we won't have a lot of time and you do have a lot to say.

I guess the purpose in the beginning for doing this is that, as a committee concerned with Canadian culture and heritage, we have to come up with ways to protect what is distinctly Canadian. The world in which you live flies by at an incredible speed, one that legislation has a hard time keeping up with. So therefore the old days of regulation seem to be falling away to allow another type of regime--I mean not just business models but government legislation as well--to promote what is Canadian. So the international landscape is becoming much smaller.

You mentioned the Pirate Party. Is that right, the Pirate Party?

[Brett Gaylor]

Yes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

They exist in Europe too. I'm a member of the Council of Europe, and I've been over there. They're much more popular over there--no offence.

But hey, I used to be a Rhino, so there you go. We all come from the fringe.

On that question, isolate it down for me in a short answer. That is to say, help us help the industry by it becoming distinctly Canadian: what do you think we should do as legislators? I know that the CRTC is hands-off to the Internet, but what can we do in relation to things such as subsidies, perhaps, or investments to help you out? You mentioned you're not paper and therefore can't get subsidies. I think it's an incredibly valid point.

This is a question for you, Ms. Côté. I've been lobbied in the past five years quite a bit by provincial education ministers about the accessibility of certain works for students, post-secondary. I'd like to get your thoughts on that as well. It's a big concern of many post-secondary institutions, and now the provincial governments have brought it to our attention.

I hope that's clear enough.

[The Chair, Conservative, Gary Schellenberger]

There are five minutes for questions and answers, so please keep your answers relatively short for Mr. Simms.

Please go ahead, whoever would like to lead off.

[Aline Côté]

Education exceptions have been requested by the education ministers of all the provinces except Quebec. We believe that this would be an undue extension that would allow all possible forms of distribution. We already have intranets everywhere, as well as a photocopying. We are convinced that this would seriously weaken French-Canadian production.

We have very experienced collective management companies. They have signed agreements with the education ministries and they grant the required licences. Therefore, there is no interdiction or obstacle to utilization. There are very broad agreements under which sums are paid yearly and redistributed to rights holders. Therefore, there is no real problem with access. Financial agreements exist and the management companies are extremely effective.

What is being suggested would represent a departure from a system that has been very effective for 20 years and which allows us to grant licences very quickly to schools and to pay our authors.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Sorry for interrupting, but time is of the essence.

You would not agree, then, with the current rationale they're putting forward. Is that correct? Yes or no.

[Aline Côté]

Not at all, and it is precisely for reasons related to cultural protection.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

All right.

To my guests Mr. Anders and Mr. Gaylor, on the Canadian content issue I spoke of earlier, how can we do that as a committee? We're supposed to be the last bastions of protecting what is Canadian culture. How do we promote it, in your world?

[Jeff Anders]

Just to reiterate--I won't take any more time than I already have on this--revise whatever subsidies are already in place, because it's probably a lot easier to do that than to create new things; allow more a expansive interpretation of a content producer and a content distributor to include online; and revise subsidies to shift from capital costs to operating costs.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

That's a tough one.

[Jeff Anders]

Take a look at for-profit companies and try to help them, either through the companies themselves or through the investors who are making intelligent investment decisions in the right kinds of platforms and entities.

Finally, you guys need a multi-pronged approach and strategy, and certainly protecting what is there right now is critical. But those people are not fuelling the innovation--that is, figuring out where things are going and how Canadian culture will be perpetuated in the next century. If anything, they're just holding the fort. It's the very small organizations, the ones that are really high risk, that are figuring things out. Helping those companies and organizations is really the place where we need to focus our efforts.

[The Chair, Conservative, Gary Schellenberger]

Go ahead, Mr. Gaylor, but could you keep it short, please?

[Brett Gaylor]

I'll be brief.

I agree with Mr. Anders that the Canadian media fund is a great step in the right direction, but it still heavily favours the incumbency of the broadcasters. I'm not sure if you're familiar with it, but there's also an experimental stream, and I know a lot of my colleagues are putting their eggs into those baskets. In the Canadian funding landscape, in terms of broadcasters...as far as documentary filmmakers, we hardly have anyone to bring our projects to anymore. The entire system is contingent on those broadcasters agreeing to fund our work.

We have hundreds and hundreds of documentary filmmakers across the country literally asking the same three people, “Please support my film.” That's the only way they can trigger those broadcast envelopes to get their work done. So I think that needs a second look.

[The Chair, Conservative, Gary Schellenberger]

Thank you.

We move on now to Madam Lavallée, please.

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

After having heard your various statements, which are very different because you operate in very different fields, I am a bit surprised to see that you have received no support from the Canadian government, either financial or technological, or as expertise or even as moral support, through a public statement. So, I want to put a question to Mrs. Côté in particular.

Before doing that, however, I want to make a comment to Mr. Anders who referred to the Media Fund. We, members of the Bloc québécois, support the digital revolution. We believe that we are laggards as far as helping Canadians and Quebecers, including consumers, to enter the digital era. I believe that there is some urgency about this.

Furthermore, we do not think it is a good idea to beggar the Media Fund in order to support digitization. We believe there should be a specific fund to support the move to the digital era, instead of taking money from the creators and producers. At the end of the day, what will happen is that there will be fewer Canadian and Quebec productions and creations because money will have been diverted to the digital media. We do not think this is a good idea. We believe that digital companies should have their own program or that a specific fund should be set up to help them, instead of giving them just a little bit more while taking even more from creators and producers.

I see that you are all facing significant problems. The one I am most aware of is the intrusion of Goggle in the book industry. It is a major attack. Ms. Côté, I believe that you will be better able than me to explain that to our colleagues. It is really a major offensive under which, if I understand correctly, Goggle has decided to digitize all the books and has told you that, if you have any complaints, you can just sue them. Is that what has happened?

[Aline Côté]

Exactly. They have come out with their own interpretation of the American fair dealing rule and have decided to go full-speed ahead. They had an enormous digitization capacity but no content. That was a way for them to find content.

You have to understand that their business model is to make money by placing ads next to digitized content, and they do this at the expense of creators from all over the world, including Canadian creators. I did a small experiment. With Goggle, I searched Les Belles-soeurs, by Michel Tremblay. On six different pages, there was an ad for Tide.

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

The dishwashing liquid?