Canadian Heritage Committee on May 22nd, 2018

[Mark Schaan]

Yes, I would build on that by saying it's really about the fundamental disruption and change in the marketplace that are creating a totally different supply chain than what used to be. If I were a creator in the past, I would show up at my music label and sign a deal. They would own all of the distribution channels. They would own the eyeballs and the ears, and I would have a very linear, straight line.

We're at a time now where there are more channels available to anyone than ever before. There are also more ways of making things than ever before. I can make music in different ways. I can make art in different ways. I can write in different ways. I can access my consumer in totally different ways.

On the one hand, it's a huge opportunity. On the other hand, it's a fundamental shift in the marketplace about what gets valued and how people think about that. Now we're consuming culture and we're consuming copyrighted material at such a rapid pace and in such a different way. When I think of the traditional way I bought my first album, Dire Straits' Brothers in Arms, for my father, I'm now in a totally different realm. I'm encountering cultural content daily and I'm thinking about it differently. I think that's the most fundamental issue happening now.

The only thing I'd add is that there are still challenges for the traditional understanding of copyright. If I think about the issues related to the relationship between indigenous peoples in Canada and the intellectual property system, that's not necessarily about the new way of accessing markets. It's really about a fundamental relationship in dealing with concepts of collectively owned, non-tangible goods in a system that says, “Write it down, tell me who owns it, and here is your time-limited prescription of how long you get to protect it.” These are more fundamental and have nothing to do with the new realm.

[Nathalie Théberge]

I just want to add something.

In 2015, the European Commission, the European Union, that is, published a report on compensation for creators. We would be pleased to send you a copy of that report. Of the issues that the researchers identified as fundamental, transparency was number one.

[Pierre Breton, Liberal, Shefford, QC]

Given that you consider that to be the most significant difficulty, in your opinion, what therefore can we as a government do provide people with more awareness and information? Would that bring more transparence both to artists and consumers, as you have mentioned?

Do you have any suggestions?

Mr. Schaan, I know that you mentioned earlier that solutions are still less clear. However, you have probably given it a lot of thought. Could you perhaps share your knowledge with us?

[Nathalie Théberge]

One of the challenges with transparency is that copyright is part and parcel of the contractual relationship between creators and record or production companies, as governed by the Act respecting contracting by public bodies. Confidentiality issues make it hard for legislators to require a certain degree of transparency, though it can be done.

The transparency issue was raised many times during the reform to the Copyright Board of Canada. It's a way of making sure that creators appearing before the board know, at the very least, the basis on which decisions are made. There are probably better practices elsewhere in the world, but, there is a caveat: Solutions that work elsewhere won't necessarily work in Canada.

I think that transparency, especially for digital platform companies, is already at the forefront of Minister Joly's program. You've heard it many times in the Creative Canada program. The notion of accountability for digital platform companies is included as well. These companies clearly understand that there is a copyright dimension to the support they have to provide to creators.

The declaration signed between Canada and the French government in April specifically mentions a shared responsibility between governments, digital platforms and civil society to value copyright and transparency, specifically the transparency of algorithm models.

[The Chair, Liberal, Julie Dabrusin]

Thank you very much.

We're now starting our five-minute round with Mr. Shields, please.

[Martin Shields, Conservative, Bow River, AB]

Thank you, Madam Chair.

As was mentioned earlier, it's a very complicated issue. I can remember back to a few universities that I went through, and for every professor you had to buy the newest edition of his book, and you couldn't buy the one from your friend who took the course the previous semester because he had changed three pages in it.

I go now to my grandchildren, who are in university. They never buy a text book. They find everything online. They never buy a textbook anymore because they have sources. My grandchildren never buy any music. Now, my son, on the other hand, has come back and raided my 45s because it was “one and done“ in those days: you had one hit song and you were finished. He's now going through my albums because it's the art he's looking for on the album covers. That's what the resale market, I guess, would be. With this younger generation, they go to find anything they can without paying for it. They believe that's their right. When I talk to them, it's very interesting, their mentality, in the sense of searching for what they can find for free. Whether it's a textbook, whether it's music, whether it's a video game, they go searching to find anything for free.

I've been in China a number of times, where you can buy name-brand stuff on the street for one-tenth of what you can here. Copyright in the digital age, you talked about it here as “adaptability built into” . How is that built in to deal with that mentality?

[Mark Schaan]

Maybe I'll make the distinction between technological neutrality and being neutral to changing cultural norms. The law is flexible in a sense because the courts have essentially interpreted the continued licensing value regardless of what means it's being sent on. The law in some ways updates itself, in the sense that we went from vinyl to cassette to CD to streaming without a need, necessarily, for a specific change to the law, although we've had continued thoughts about it.

As I indicated in my previous answer, in terms of this changing cultural norm, this notion of what the value of cultural goods is, I think it's very interesting. On the one hand, we're seeing a record-high consumption, so huge amounts of consumption of creative and copyrighted goods, and a changing nature of value. You'd have to go sector by sector. Some sectors have had peaks, and then troughs, and then plateaus, and they've come to a new normal, as it were. Others are still in a massive stage of disruption.

There is one interesting question this committee will have to explore as it continues its work. Is there more that needs to be done or are we at the right state of understanding what value goes into creative industries and the creation of new materials versus what people are willing to pay for them? I think that is a fundamental question of remuneration, which is the work of this committee. Is what's being offered being paid for at a reasonable rate? I do think it's an interesting question/shift, and the data is somewhere in between.

As my remarks indicated, our most recent opinion research shows huge value being placed by lots of consumers, and there is quite a bit of money going through the system, but that's not necessarily consistent all the time with what we're hearing anecdotally. Some people feel like material is available for them regardless of ability to pay, or willingness to pay.

[Martin Shields, Conservative, Bow River, AB]

That's also in the sense of people trying to get into the game. Whether it's music, whether it's digital games, they will go that route to build the reputation, so they're going also into the dark side, right?

[Mark Schaan]

There's certainly a significant use of new tools from creators. Your point is a good one. I think we can look at a number of the most recent Canadian success stories in the performer category of people who got their start using new mechanisms for promotion, including social media and other places. There are whole cultural communities that just live online, both in literature and in art.

[Martin Shields, Conservative, Bow River, AB]

Yes.

Go ahead.

[Nathalie Théberge]

The question the committee may want to ask itself is whether tweaks to the act will change that in a positive or in a negative way. In my opening remarks I did insist on the importance, in our view, of considering remuneration of the creators, which this committee has been tasked to look at, in a much broader context. In just looking at the act itself and what it does, I'm not sure you will get the depth that is required to have a significant positive impact on the broad marketplace. That's the reason why, since 2012, both departments have been looking at non-legislative solutions, engaging with stakeholders to get a sense of what they could do and what we could do. SOCAN is a good example. SOCAN has been doing a lot of very interesting work with respect to blockchain.

That's what we're trying to do.

[Martin Shields, Conservative, Bow River, AB]

Thank you.

[The Chair, Liberal, Julie Dabrusin]

Mr. Hébert, the floor is yours for five minutes.

[Richard Hébert, Liberal, Lac-Saint-Jean, QC]

Thank you, Madam Chair.

We live in a global village, where information is transferred within milliseconds. I'm no expert in computer science, but, like Mr. Shields, I've noticed that the young people I see don't buy music anymore. They get it on the Internet.

Given that the global village is a reality, are there countries, groups, commercial organizations or other entities that are looking into this issue? Would solving this problem once and for all be plausible, or conceivable? I have a hard time seeing how we can prohibit people from gathering information and reproducing it for their own purposes.

You talked about sampling earlier. We can recall the first artists who sampled music. In Quebec, Marc Déry, among others, was very innovative in sampling music in one of his albums.

How can we solve this problem? I know how broad this question is, but do you have any hope at all that we can help artists safeguard their rights?

[Nathalie Théberge]

The Copyright Act already provides mechanisms that allow creators who feel aggrieved to assert their copyrights. It also includes a notice and notice regime that allows Internet service providers to notify individuals when they violate the Copyright Act.

Some countries have taken other approaches. In the United States, they have a notice and take down regime; in Europe, they have a three-strikes rule. The legislation already provides various mechanisms that allow creators to assert their rights.

The way creators are paid nowadays, especially in the music industry, is completely different than it was ten years ago. Live performances, concerts and merchandise, such as t-shirts, change, but do not necessarily replace, revenue generated strictly by copyright royalties.

We are still in a period of change, transformation and transition. Stakeholders often have very strong views on whether the digital shift has had a positive or negative impact. Some of them, especially the younger generations, see a great opportunity for marketing in the digital world. Their choice to share their content on digital platforms is less about collecting royalties, and more about having their work discovered in other markets that they couldn't access 15 years ago, because they didn't have the technology. On the other hand, other artists from older generations do not necessarily see the digital world as an essential marketing environment.

There is no ready-made solution. That is why it is beneficial to have two parliamentary committees studying the Copyright Act.

[Mark Schaan]

In my opinion, it's not all bad.

There are some bright lights and some interesting things that are happening at the same time. We are absolutely in this phase of significant disruption, but there are some novel, new things happening. We talked about blockchain and some of the data that is now available. One of the collectives that sells neighbouring rights licences to restaurants has done fascinating research that shows that if you slowly turn up the volume over the course of a dinner, people will buy more expensive wine, and if you play faster music, people will chew faster and you can turn over tables more often.

Being able to highlight the value of created content to those who ultimately have to pay for it is one piece that I see shifting.

To Nat's point, I think there are also some new opportunities, for instance seeing a virtual reality performance of Björk at a museum where you can then buy the album and the T-shirt highlights that there are actually new ways in which people are engaging with their creators. That, to me, is hopeful in a time when potentially value is shifting.

[The Chair, Liberal, Julie Dabrusin]

Mr. Eglinski, please, for five minutes.

[Jim Eglinski, Conservative, Yellowhead, AB]

You both talked about the responsibilities of your two departments. Are there any enforcement actions that you can take to assist creators out there at the current time? Could you explain to me what you would do if someone has a complaint? How would you handle that?

[Mark Schaan]

There are a number of mechanisms that are built in. Intellectual property rights, by their nature, are private rights. They are held by the owner of the right and are litigated on their behalf. But there are a number of mechanisms that we put in place to try to make that as efficient as possible. The biggest one, which we've talked about a little bit already, is the efficiency of the Copyright Board process, which is a huge expediter of individual market transactions in some ways. If you imagine all of the people who come before the Copyright Board, it's a huge catalogue of works with a huge catalogue of users and they essentially match that up in a kind of consolidated process. The efficiency of that process is really crucial. That's why both of our departments are so fundamentally committed to its reform. That was matched in budget 2018 with an additional $5 million to the Copyright Board as a function of making that process more efficient.

When it comes to things like online infringement or physical goods counterfeiting, there are a number of systems that we've also put in place to try to assist creators. Our notice and notice system, which essentially requires Internet service providers to be able to pass along notices from rights holders to informed consumers about their infringement, is a system we put in place to assist creators. Then the Combating Counterfeit Products Act, which is the physical goods version of that, allows copyright holders and trademark holders to register at the border and then have their goods, potentially, searched and held.

There are other pieces we did, such as the enabling provision in 2012, which is a critical assistance to creators to be able to not just go after those who are potentially infringing their content but all those who are enabling that.

I think we've tried a number of mechanisms to try to get at this issue of, recognizing it's a private right, what systems we can put in place for efficiency, the Copyright Board and notice and notice being two good ones.

[Nathalie Théberge]

I would like to spend a few seconds on the enabling provision. To my knowledge, and I will look at my colleague, Canada is the only one and the first one that has introduced such a mechanism in its act. The purpose was to target those whose business model is to facilitate copyright infringement. That's a very concrete tool that was introduced in 2012 to support creators in affirming their rights.

[Jim Eglinski, Conservative, Yellowhead, AB]

I have a question, and I may come back to you after the session is over. I have an indigenous friend who was the subject of a documentary 30 years ago in which he sang and made comments. He now learns that there's a documentary out there but he never gave permission to use or say what is being said in the documentary. I have looked at documentation that he produced and it is obvious that a sign-off is false. It's not his signature. A school student would be able to tell that the signature is wrong. The producer forged a document giving him the right. Is that a copyright infringement?

[The Chair, Liberal, Julie Dabrusin]

Let me jump in. If we can speak in general terms without bringing it to a specific case, it might be easier for the departments to speak to.

I don't know whether there's a way to bring generality to that question, and if there isn't, then I'm not sure that you can answer a specific question on the legality of a situation.

[Nathalie Théberge]

Okay. I'll try.

The whole issue of traditional knowledge and traditional cultural expression is one of particular interest and challenge, for many reasons that I alluded to in my opening remarks, because some of the fundamental characteristics associated with TK, traditional knowledge, and TCEs do not match with the way intellectual property laws function.

For something to be copyrightable, it needs to be fixed and it needs to relate to one author that you can theoretically identify. In the case of the traditional knowledge or traditional cultural expressions of indigenous people or other types of communities, most often you're dealing with things that are not fixed, such as a song, a story, a know-how. That's the first hurdle.

The second hurdle is that it's usually collectively owned: a song belongs to the Abenaki people, assuming you can identify some sort of property around this song, but it doesn't relate to one individual in the Abenaki community.

From the get-go then you have a major challenge when you're trying to use copyright for that purpose.

That being said, there are other tools in the intellectual property tool kit that are still at the disposal of indigenous people, such as patents and trademarks. Often the example that is put forward is the misappropriation of the inukshuk or of the dream catcher.

The protection of traditional cultural expressions was already highlighted in 1992 by Parliament as one issue that would be worthy of consideration by Parliament. In 2012 the government made a decision to focus its work around making the act technologically neutral and more adaptable to new technologies. It doesn't make the issue around misappropriation and traditional cultural appropriation go away; it's something we still often hear about, including in international negotiations.

Thank you very much.

[Jim Eglinski, Conservative, Yellowhead, AB]

Thank you. I think I've run out of time, haven't I?

[The Chair, Liberal, Julie Dabrusin]

Yes, you have.

Ms. Dhillon, you have the floor for five minutes.