Canadian Heritage Committee on March 4th, 2014

[Sophie Couture]

There are a number of ways to be aware of the changes and to see if the industry is generally satisfied with the support it receives and the way the funding is allocated.

We do not conduct official consultations, but part of our work is to gather information. We constantly communicate with the various industry partners who work in music publishing or directly with the artists.

Two third-party administrators work in the two Canadian markets, the English-speaking market and the French-speaking market. As a result, these administrators talk a great deal with the recipients. The information is brought back to the centre, which enables us to talk about it and determine where the demand is and what we should do differently. Each year, we talk with our third-party administrators to see if the various components still meet the needs and whether we can fix some things or—

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Change.

[Sophie Couture]

Or change, exactly. With their respective boards of directors, each third-party administrator presents their recommendations internally.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Can you give me some examples of relevant changes that have been made over the past two or three years?

[Sophie Couture]

FACTOR and MUSICACTION constantly refine their programs by reorganizing the touring or showcasing programs, for instance. The criteria must be reviewed to ensure that they meet the needs of all the recipients eligible for those programs.

You asked whether we had an overhaul. We did not because we were allowed to use the components as they existed for five years. Over the past five years, we have focused a great deal on the international and digital aspects. The goal was to promote more digital projects and, if I may say so, to ensure that a 101 project became a 201 project. It is not so much about quantity as it is about improving the quality.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

In terms of the digital world, on page 13, it says that proportion of Canadian artists has gone up to 26%. Does that percentage exclusively refer to sales of traditional albums that we can buy in stores like Archambault, for example?

[Sophie Couture]

No. It refers to both traditional and digital albums.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Does that also include downloaded albums?

[Sophie Couture]

Yes, even those that are in continuous flux. We calculate the sales of albums by Canadian artists in Canada. We noticed that the market shares were at around 16% when the funding was launched in 2001, and now they are at 26%.

Basically, in a world where we see global sales going down, we see that the market share for Canadian artists in Canada has stayed at 26%.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Is the proportion pretty much the same as for artists funded by the Canada music fund?

[Sophie Couture]

Yes, you are correct. Between 2001 and 2012, the percentage of artists who were funded by the fund once in their careers went from 9% to 15%. So that means that it is holding steady.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

There is a figure that I have seen before, but never ceases to amaze me. The percentage of total industry revenues for Canadian-controlled firms is 29% whereas the percentage is a low 13% for new releases by foreign-controlled firms, although those firms have 75% of the market. My understanding is that the percentage was lower than 29% five years ago. That must be the case, given that we now have up to 26% of the market.

[Sophie Couture]

Those are two different things. The percentage that has gone up from 16% to 26% represents the market shares, the sales generated in Canada.

The other percentage is connected to that, but it is not necessarily measured in the same way. For Canadian-controlled firms, sales of what are commonly referred to as indies in the music world come from Canadian artists in 79% of cases. Those are the people who help Canadian artists develop, but unfortunately they only collect 29% of the revenue in total.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Do I have 30 seconds?

[The Chair, Conservative, Gord Brown]

Your time is up.

[François Lapointe, NDP, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Mr. Chair.

[The Chair, Conservative, Gord Brown]

Mr. Dion, you have the floor for seven minutes.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

Thank you very much, Mr. Chair.

My thanks to all the witnesses for being here with us and for providing us with very specific information. I am going to ask you for further clarification.

In the House, the parliamentary secretary to Minister Glover answered my question about the $8 million. I had also asked a question about the Canada book fund in particular. He said that there was additional funding, meaning that the Canada book fund went from $28 million to $37 million. That is an increase of $9 million.

He also indicated that an additional amount of $9 million was earmarked for the Canada music fund, which is now at $34 million.

That is what the parliamentary secretary to the minister told us. I am assuming he gave us the facts.

[Jean-François Bernier]

Mr. Dion, all I can tell you is that the funding amounts to $24.61 million.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

And it is staying like that? There was a danger of losing $9 million, but that will not happen. Is that it?

[Jean-François Bernier]

That is correct.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

That is not what we were told. In any event, thank you very much. I think we will go with your numbers rather than those provided by our colleagues. However, we are going to check this issue with the music community. They will be very disappointed. That is not what they were told in the House.

I would like to have a better understanding of the following good news. There was an increase in Canadian music content and Canadian artists from 16% to 26%. How is that calculated? First, I just want to make sure that we are in fact comparing apples to apples, meaning that the formula used in 2001 was the same as the one used in 2012. For instance, a band or a group must be Canadian or the music must be created by a Canadian artist, even if it is played by foreign artists. I would like to know what the situation is.

[Sophie Couture]

The music must be Canadian content. There is a way to determine whether the content is Canadian, but I will not get into the details since I don't have the information with me. Once the content is labelled as Canadian, we search the Nielsen SoundScan data. Actually, we always use the same databases. We extract the information and we identify all the sales by Canadian artists from all the sales in Canada. We are then able to calculate and see what the number was previously and what it is now.

[Stéphane Dion, Liberal, Saint-Laurent—Cartierville, QC]

If a group is mostly American, but one artist is Canadian, will the group be counted in the 26%?

[Sophie Couture]

No, it must meet—