Thank you very much.
I am happy to be here today to speak to you about the importance of copyright as a policy tool to promote creativity and innovation. In fact, more than ever, copyright and the opportunities for remuneration that it provides creators and creative industries is a central driver of development and prosperity in advanced economies such as Canada's.
Here are a few numbers: the creative sector creates 630,000 jobs in Canada and contributes $54.6 billion per year in economic activity. This includes $7 billion in film and television production; a $561-million sound recording and music publishing industry that provides 11,000 jobs; a $1.15-billion book industry that provides 13,845 jobs; and a video game industry with 472 development studios. Canada is also at the forefront of a rapidly growing virtual and augmented reality sector.
The most recent reform of the Copyright Act dates back to 2012. Parliament passed the Copyright Modernization Act, or CMA, following extensive national consultations. The key objectives of the CMA were to modernize the act in response to changes brought on by the emergence and prevalence of digital technologies; to ensure that the act was forward looking, flexible and adaptable for a constantly evolving technological environment; and to bring it into line with international standards.
To do this, the CMA introduced new rights and protections for creators and rights holders, as well as tools to protect their investments and to support the creation of new online business models. Technological protection measures, or TPMs, are one of the tools that rights holders can use to control or restrict access to their protected works—through passwords, subscriptions, etc.—or to prevent copying, through download or copy blocking, etc.. These measures have positively contributed to online business models for the video game and software industries.
Still in 2012, a number of new provisions were introduced to improve digital access to copyrighted materials, along with clear rules on how to legally use these materials. This included new consumer exceptions, new purposes under fair dealing, notably for education, parody and satire, new and updated exceptions for educational institutions, libraries, museums, and archives, and exceptions to use legitimately acquired materials for the creation of non-commercial, online user-generated content.
The CMA also addressed the liability of new players in the online space, such as Internet Service Providers, or ISPs, digital storage devices, website hosts, or search engines such as Google and Bing, and other digital intermediaries, such as Apple, Amazon, Facebook, and so on. It clarified that these digital intermediaries are not responsible for infringing activity carried out by people using their services or products, as long as they are acting as neutral providers of communication, hosting, caching, and search services or products. At the same time, it offered the ability to take action against those that intentionally enable copyright infringement. One such example is the 2015 injunction obtained by the Motion Picture Association of America against the Canadian programmers of Popcorn Time, a website that allowed for the dissemination of free online content. As part of these changes, ISPs were also mandated to help curb infringement on their networks by participating in a voluntary notice regime.
Since 2015, the Copyright Act has of course continued to evolve in response to regulatory changes and our international obligations.
Mr. Schaan already mentioned two important initiatives: the intellectual property strategy and the reform of the Copyright Board, the impact of which is essential for the economic growth of a number of creative industries, notably the music and education sectors. Budget 2017 also announced a review of the Broadcasting Act and the Telecommunications Act.
In September 2017, the creative Canada policy framework was launched by Minister Mélanie Joly after consulting stakeholders on how to strengthen the creation, discovery and export of Canadian content in a digital world.
Over 30,000 Canadians, including creators and cultural entrepreneurs, took part in the discussion. Creative Canada proposed the government's vision and approach to supporting and growing Canada's creative industries by strengthening existing cultural policy tools, setting a path to renew the ones that require updating, and introducing new initiatives to help creators and creative industries thrive in a global digital marketplace.
The impact of the digital transformation is different from industry to industry. Through the emergence of new distributors, new technologies have not only shifted how money is made but also who benefits and how those benefits flow through to creators and rights holders.
In the music industry, the shift to streaming is a significant change that engages rights in a manner different from when music was consumed via albums or downloading. Relying on complex licensing structures, new services are providing consumers with access to a near infinite catalogue for a set regular fee. Through these services the volume of accessible content has skyrocketed, and increased competition has created a “winner takes all” environment, where although significantly more content is available and consumed, the benefits are concentrated among few. Where value used to be in the creation of an album, it now lies in the individual songs, resulting in an increased focus on acquiring the largest, most valuable catalogue of music. It is interesting to note that from 2010 to 2015, overall revenues from sound recordings in the Canadian music industry remained relatively stable, in large part due to the increase in streaming revenues.
A similar shift toward online streaming, including legal and illegal services, is just one pressure facing the Canadian audiovisual industry. User-generated content has already greatly increased the volume of content that is available to consumers for free.
Of course these issues are not unique to Canada. Digital intermediaries, like on-demand content providers and user-generated content platforms, are increasingly important in the creator-to-consumer value chain for creative content in Canada and abroad. As such, many countries are considering how to address this in terms of liabilities and responsibilities with respect to copyright.
Many are also coming to terms with the fact that copyright legislation is not always the only or the best solution. Issues like the integrity of content metadata, better tracking of copyright activity, simpler licensing practices, and the crucial importance of transparency for all players in the system may indeed not require changes to the legislative framework.
Several stakeholders are already taking advantage of technologies to develop new ways of managing their copyright. Innovations such as application programming interface, blockchain, and smart contracts offer opportunities for more transparency, better rights clearance, and more business potential. Such a technology focus may be the best way to discover common ground among stakeholders.
Going back briefly to the music industry for example, some stakeholders have started using artificial intelligence and cloud-based technologies to capture better data and develop a digital marketplace that improves the ease and accuracy of compensating rights holders. They are also exploring the use of blockchain technologies to streamline licensing and rights management. These are two examples of non-legislative, market- and stakeholder-driven initiatives aimed at simplifying rights management in support of facilitating remuneration.
In short, to fully understand creator remuneration today, one must broaden the scope of investigation and look beyond the law and what the marketplace is doing by itself and consider how to incentivize collaboration among those who benefit and contribute to creator remuneration and nudge innovative thinking.
Before I conclude, I want to reiterate that the work of this committee presents an opportunity to consider the needs and interests of indigenous people, particularly as they relate to traditional knowledge and traditional cultural expressions. Many have argued that the current legal framework is not well suited to addressing some of the key concerns of indigenous communities with respect to the protection of their cultures. Canadian Heritage and its portfolio organizations are active in various processes under way to understand and implement commitments under the United Nations Declaration on the Rights of Indigenous Peoples, which refers specifically to intellectual property.
Canada has also been working actively with international partners under the auspices of the World Intellectual Property Organization, WIPO, to look at the feasibility of developing international norms for the protection of traditional knowledge and traditional cultural expressions. This work is particularly complicated, as the fundamental underpinnings of intellectual property often do not match the particular characteristics of indigenous traditional knowledge and traditional cultural expressions, which are generally intangible and collectively owned.
Thank you for your attention. I hope the information we have provided will be useful to you in your study.
Mr. Schaan and I will be happy to answer your questions.
Thank you.