Canadian Heritage Committee on March 25th, 2014

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you.

My colleague is correct in saying that this is a subject we care deeply about, particularly in my case. I would like to thank all four of you for being here today.

Mr. Faber, I have certainly taken note of your message about income averaging. This is a measure we have always supported. It seems like a very practical approach for dealing with artists' revenues, which are not so much annual as cyclical in nature. Such a measure would certainly ease their circumstances.

The witnesses' perspectives are always quite relevant, for those of us seeking to better understand the various issues with which an industry has to deal, but I must tell you, Mr. Faber, that yours seems particularly so. Your career was marked by major success in 2008 and 2009. You were hit full-force by a changing business model which literally pillaged your sales after that.

You said that your group's members have full-time jobs; that's fantastic. We have among us an artist who is part of our heritage and yet must supplement his income. Given that you are the main author of your own works, you have had access to more revenues, but your musicians have to work full-time.

We discussed all kinds of issues with respect to the recording industry, but someone here is obviously afflicted with the creators' malaise and can no longer survive by creating. This is a clear example and we must discuss it.

Mr. Lauzon, you are a member of the Copyright Board. In fact, you are not a member, but of course you deal with them. My question is for all of you. What recommendations do you feel should go into our report?

[Alain Lauzon]

My colleague talked about the resources of the board, an institution set up by the government, is an excellent platform compared with what we find in other countries. Other countries, for example England, came here to see what the Copyright Board does. The board is an organization which establishes the value of a copyright, when the parties cannot arrive at an agreement, which is an excellent thing because it allows people to pursue things further.

As to the issue of whether decisions take time, the answer is yes. Furthermore, the Copyright Board should be provided with additional resources.

We recommend that the board be obliged to submit its reports within a certain deadline and that it receive additional resources to allow that. In that way, both users and we ourselves will not be in a vacuum when people come to invest in Canadian businesses.

[The Chair, Conservative, Gord Brown]

Thank you.

Mr. Dion, you have seven minutes.

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

Thank you, Mr. Chairman.

I would like to thank all our witnesses for being here today.

I would like to follow up on Mr. Nantel's question and ask you to summarize as briefly as possible the changes you would like us to make to the federal music policy and that you would like to see in this committee's report.

Mr. Faber and Mr. Keenan, I understand you have two requests. Just repeat your two.

[Brad Keenan]

Okay. I'll go first.

What I would like to see this committee recommend on behalf of Canadian performers is to not let the private copying regime in Canada die a slow, natural death, which is what it's doing. Its having decreased from $34.6 million down to less than $10 million in just a span of a year means that friends like me or Dave Faber here have had money removed from our pockets.

What I would like to see this committee do is recommend looking at and paying attention to what our international trading partners are doing for solutions in this area. If the European Union can look for solutions, we should expect our Canadian government—

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

That's the problem, but what are your solutions that you would like us to implement? We understand the problem. Now we're looking for solutions.

[Brad Keenan]

Our solution is to look at our international trading partners' solutions and bring them home here, within Canadian borders, to solve the problem of money leaving the pockets of Canadian performers, of reductions in their income.

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

Mr. Faber, do you want to add something?

[David Faber]

I think the income averaging thing is really good too.

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

We understand.

Madam Shepherd, you came with a list of things you would like to see.

[Victoria Shepherd]

I did, yes. We have three items that we would love to see in recommendations for a review of the music industry.

The first one is to educate the marketplace so that rights holders know how to access funds and music users respect the obligation to pay for music use.

The second one is to provide additional resources to the Copyright Board. Let's help it continue its work as a business development company.

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

Would this be within the Canada Music Fund or outside it?

[Victoria Shepherd]

I mean generally, not necessarily relating strictly to the Canada Music Fund. As an integral part of an overall review of the industry, these are the three pillars we would like to bring in.

The third is a commitment from the government to make sure that any institution it is responsible for licenses music use. It's a great example for everyone else in the country.

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

Mr. Lauzon, do you agree with everything you have just heard? Have you anything else to add?

[Alain Lauzon]

I definitely agree with what was said on private copying and training. However, we also have to look at all the studies that have been done.

In many other countries, studies were done. For example, in England, there was a study conducted with Google on illegal services. Actually, rather than use the word “illegal”, let us say services for which music is being used without rights being granted. Support must be provided through subsidies. Those are the studies that must be reviewed.

The other thing that must also be reviewed is the balance with respect to the value of a creation. In Europe, there is a major discussion going on about forecasting the value of music and intermediaries. Questions are being asked about the role they play and the social role they must play when it comes to creation.

Understandably, technological development has been emphasized. But without content, technological development is nothing. Content is the base. It is the roots of the tree which must blossom. So, certain things must be looked at. We must investigate the value of music and the way it is shared between stakeholders all along the chain of recorded music.

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

Madam Shepherd, you identified three points, but in fact your presentation was more detailed, and I appreciated that a lot.

Is what you are proposing completely new, or is it something you have been beating the drum about for a while? What kind of feedback have you received?

[Victoria Shepherd]

I'll start with the Copyright Board point. Monsieur Lauzon has touched on this as well. If you look at Music Canada's report, “The Next Big Bang”, they also advocate for additional resources at the Copyright Board.

The notion of education of the marketplace is something which Connect Music Licensing as well as every other rights holder collective probably in Canada is continually doing. We have individual efforts, so you'll hear from me, but you may also hear from ACTRA RACS and from SODRAC. If there's one central place you can go that says, “Here's what you need, music users and rights holders”, that would help the whole revenue flow accelerate.

In terms of the government ask regarding licensing of music use in its institutions, that's an offshoot of the kind of work Connect Music Licensing does anyway. In a perfect world, we would have every single music user in Canada paying the creators exactly what they ought to be paid, and every single rights holder in Canada would have access to every single penny of every single revenue stream that's available to them.

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

Thank you.

What will be the cost to the consumers if we do what you are asking for? Somebody will have to pay for it.

[Victoria Shepherd]

Is that question specifically for me, or in general?

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

Yes, take it.

[Victoria Shepherd]

Okay.

Well, I think in terms of educating the marketplace, on the two initial solutions proposed while I was speaking this morning, I don't think they're incredibly costly in terms of making sure there's space on a website: Service Canada, how do I start my business? Here are all the forms you need to fill out, here are the taxes you need to pay, and then here's a section on entertainment in your venue.

Similarly, on the Canada Music Fund, when interested parties are applying for money and they want to have money to create music, let's have a section for them saying that once they've created their music, they can make money from it that's not just from sales and touring, and tell them about all the rights. Again, that's an information piece which I'm certain rights holders and Connect Music Licensing would be delighted to facilitate and work with the government on.

I don't have an answer for funding of additional resources at the Copyright Board, but I strongly feel that if we can enhance its presence as a business development office, then new revenue coming in would possibly create a bucket that would help pay for those resources.

The third piece, the notion of licensing in institutions, that is an offshoot of education and facilitation, and Connect Music Licensing is here for you if you want that assistance.

[The Chair, Conservative, Gord Brown]

Thank you.

Mr. Dykstra, for seven minutes.

[Rick Dykstra, Conservative, St. Catharines, ON]

I want to pursue the education angle a little bit, because I do think it's very enticing.

First off, thanks for being here. I appreciate all of you taking the time to do this. It's a learning experience for a lot of us. We're being educated as we move through this.

One of the specifics around education is getting into classrooms and ensuring that young people understand the amount of work that goes into creating music, creating culture, if you will, and their ability to at least understand that there's a cost to that, or there's an awareness that there needs to be a cost to it and they need to do it properly.

I'm just wondering—as John was asking you and you were corresponding on the education side—how we would implement a strategy like that.

[Victoria Shepherd]

I've been focusing my points today strictly on what Connect Music Licensing does, which is collect money for rights holders and remit it to them.

I don't want to sound like a broken record, but I really do recommend Music Canada's “The Next Big Bang”, because they have specifically looked at education in terms of bringing that into classrooms. I think the knowledge about the marketplace education would be just a curriculum offshoot of that.

I really do recommend the report. It's available on their website. It's updated regularly.

[Rick Dykstra, Conservative, St. Catharines, ON]

Okay, thank you.

David, it was interesting that a lot of folks in the country who are aware of the Ministry of Canadian Heritage at all focus on the Canada Music Fund and how to access that money to get themselves started. I found it fascinating. You didn't take that tack. You actually spoke about being an entrepreneur and being someone who's self-employed and trying to make your business, so to speak, successful to the point that you'd be independent in being able to employ both yourself and obviously the rest of the band, and those who work with you.

It was a very interesting way that you presented it. I want to get a feeling from you about your access to things like the Canada Music Fund. As you were going through the growth of the band and as you were becoming more popular, but you realized it costs money to tour, it costs money to write music, all of those things, was the Ministry of Canadian Heritage or the Canada Music Fund something you thought about on a regular basis, or were you more focused on trying to do this independently without having to access government?