Canadian Heritage Committee on May 22nd, 2018

[The Chair, Liberal, Julie Dabrusin]

Thank you very much.

We will now go to Mr. Van Loan.

[Peter Van Loan, Conservative, York—Simcoe, ON]

Could you talk to us about how the Copyright Board works and how rights holders interact with it? How often does it get involved in arbitrating issues?

[Mark Schaan]

The Copyright Board is embedded in the act and has, arguably, four sets of tariffs that it sets through a tariff-setting process to set a value for copyrighted material.

There are those who are forced by obligation of the law to participate in a tariff-setting process. Those are Re:Sound and SOCAN.

There is an optional regime for other collectives, particularly those collectives that form around the distribution of a wide catalogue of copyrighted material. These are Copibec and Access Copyright in the educational spaces, as well as others.

There's a mechanical right, and then there's the private copying regime, which is for blank CDs.

The Copyright Board has a set of processes that are established in the act that essentially has people set out what they believe to be a tariff. People can then oppose that tariff. Then the Copyright Board goes to consolidate that process and determines whether a hearing is required. Over time, it hears witnesses and ultimately issues a decision.

There has been long-standing consensus among stakeholders and Parliament that the Copyright Board requires priority consideration. As a function of that, the government held technical consultations last August and September, with the intention of implementing reform in a timely manner.

Right now, we're in the midst of finalizing the review of the 60 submissions we received, to look at ways to expedite and create efficiency across the Copyright Board's tariff-setting process, in part because, right now, it can take as much as six to seven years to set a tariff. In the case of rapidly changing technologies.... For instance, the one that always gets raised is the Internet streaming case. It was a very long time, and the tariff started with some players in existence in Canada and ended with some of those players no longer here.

The goal of the Copyright Board reform is really to look at that process and try to ensure we get back to efficiency.

I don't know if you want to add to that.

[Nathalie Théberge]

Thank you, Mark.

To build on what Mark just said, it's one of the very few copyright issues where there's almost unanimity. It is a cornerstone of our entire framework. Many of our stakeholders in the creative industries have to go to the board. It takes a long time, and the board is aware of that. We're not sure exactly the type of analysis that is being done to come up with tariffs. The board is aware of that as well.

Retroactive application is always an issue with respect to making sure that our creators and users can operate in an environment where there's minimal legal certainty. The board is aware of that. It's looking at tariffs on technologies that no longer exist. One of the other examples is that it's still looking at ring tones.

Everybody seems to recognize that it's a fundamental piece of the framework and needs to work. It needs to work more quickly and in a more transparent fashion. That's the type of analysis that we're doing right now at the request of the Minister of Industry and the Minister of Canadian Heritage in anticipation of the parliamentary review.

[Peter Van Loan, Conservative, York—Simcoe, ON]

From the perspective of an ordinary creator, the copyright gives you these rights. How do you go about enforcing them and getting money for them?

[Nathalie Théberge]

Well, it depends on which industry you are from. In some industries, including music, for instance, the way they go about enforcing the rights is by organizing themselves through collectives. It's a better and more efficient way for the individual creators to be able to enforce certain rights. SOCAN, for instance, is an organization that collectively manages certain rights associated with the music sector.

[Peter Van Loan, Conservative, York—Simcoe, ON]

Is everybody in music automatically in a collective whether they choose to do something about it or not?

[Nathalie Théberge]

I'll turn to my music industry expert.

[Ian Dahlman, Manager, Creative Marketplace and Innovation , Department of Canadian Heritage]

Generally, no. They have to register with the collective to be a part of it.

[Peter Van Loan, Conservative, York—Simcoe, ON]

If you haven't registered, what do you have to do to exercise your rights?

[Ian Dahlman]

I guess it would depend. In some cases, you can enforce your rights directly through the courts. There are certain rights where there are limitations on enforcement, for example, the performance rights for musical works, and usually to enforce those—

[Peter Van Loan, Conservative, York—Simcoe, ON]

Sorry, the rights for what?

[Ian Dahlman]

SOCAN rights. They're the rights for the performance of musical works. In that situation, usually you use SOCAN to enforce rights, at least more effectively. You are not limited, but there are certain structures in the act that make it more efficient to do so.

[Peter Van Loan, Conservative, York—Simcoe, ON]

If you're not in an industry where the statute puts you into a collective as your only option, if you're not one who normally gets dealt with through a collective, how do you go about enforcing your rights?

[Mark Schaan]

The approaches that creators are taking, again, depend enormously on sector and on medium, but there are novel ways that creators are looking to be able to pursue: licensing, smart contracts, agents and other people who act as brokers on behalf of the creator's rights.

In the world of publishing, it's still very much going to find someone who will publish your work and then sell it to someone. You're directly engaged in the process by which you're enforcing your rights because your rights are essentially a transaction between you and the ultimate user. Increasingly, there are novel ways that people are using—digital watermarks and other things—to be able to understand who is using it and then be able to ping people back for the transaction.

[Nathalie Théberge]

I think this brings to the forefront the importance of copyright literacy. As you can all appreciate, copyright is complicated. It's complicated for experts. If you're a music producer down in your basement in Timmins and you are trying to enforce your own rights, there is some not only basic, but actually quite extensive, knowledge of copyright that is required for you to be able to do that: where to go, how to enforce your own rights, and how to be able to read the contracts that a music label may be put in front of you for your signature.

In the work that we've been doing over the last few years, the importance of equipping creators with sufficient knowledge of copyright has come up as something particularly important. We often speak about digital literacy. I think digital literacy should also include a component related to copyright.

[The Chair, Liberal, Julie Dabrusin]

Thank you very much.

We will now move on to Mr. Nantel.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

Thank you, Madam Chair.

Thanks to everyone for their presentations.

By way of introduction, let me give you a quick editorial on the review of the Copyright Act by the Standing Committee on Canadian Heritage.

Our basic objective is, as a minimum, to take a favourable approach to copyright. As a result, our job is not to offer a bargain to consumers, but to ensure that Canadian, Quebec and aboriginal cultures continue to flourish.

We must remember that our primary objective is to safeguard copyright. Let me share an anecdote with you. You probably saw the value of the transaction between EMI and Sony—it was reported in the news this morning. This should be mentioned. The composer Pharrell Williams had a huge hit with his song, Happy. That song is in the catalogue that Sony just bought from EMI. Copyright and dissemination rights for this song on streaming services have earned Pharrell Williams $200,000. It is a huge international hit and it has earned him 100 times what Elton John earned for his song, Goodbye Yellow Brick Road.

What I am getting at is that creators now earn micro-pennies on streaming services. We have a great responsibility as a committee. To be honest, let me say right away that, politically speaking, this issue is like a glass full of gravel, a mouthful of sand. It is very dry and very complex. The public does not understand much about these issues. Moreover, there are not a lot of political gains to be had.

This is the right thing to do.

But doing it will be difficult.

In that context, can you illustrate the hot issues you told us about earlier? You said that the only hot issue that everyone agrees on is the Copyright Board of Canada.

I will start there, but, if possible, could you send us, ideally in writing, a list of the hot issues? Personally, I have been interested in this issue for a long time and I am familiar with it. But even I find it a hornet's nest. A series of issues is involved and they seem very theoretical to us. That is why I wanted to tell you the Pharrell Williams story because it gives you an idea of the extent to which things have changed.

Through you, Madam Chair, I would like to ask Ms. Théberge to send us a list of hot issues.

[Nathalie Théberge]

Thank you.

It depends on the way in which you define hot issues. The definition will clearly change depending on the point of view of the person involved in them.

When I mentioned the Copyright Board of Canada, I said that it seemed to be one of the rare issues where views seem to converge at a macro level. But the moment we get into detail on the way in which we should make the Board more effective and transparent, opinions diverge. It truly is a lawyers' world, and extremely technical one.

In terms of the effect of the digital world—which is quite a macro-level issue in itself—there is certainly a convergence, but the perception of the digital effect varies. A particularly interesting feature, one that is sometimes a difficult challenge to overcome, is that categories become confused. Previously, copyright was understood in a relatively binary fashion. There were two teams: creators on one side and users/consumers on the other. In the digital world, it no longer works like that, because creators are also users at the same time.

As soon as music creators began to do sampling, they themselves became users, consumers and re-creators of content. Perception of the copyright ecosystem became a much more complex; at that point, and devising simple solutions is hard to contemplate.

To go back to your first question, we could certainly send you a list of issues that we see as figuring most prominently in our consultations. Some are obvious. Can we call them hot issues? That will depend on how you define it.

[Pierre Nantel, NDP, Longueuil—Saint-Hubert, QC]

I do not know how ambitiously we would jump into that study. But if we asked you to identify 25 issues of your choice, we would choose the priority issue, or you could do it yourselves. But our mandate is to examine the matter from the creative angle in all cases, that is for sure. Creation is not just about someone making pottery on a wheel.

My next question goes to Mr. Schaan.

I was part of the Copyright Act review in 2012, sitting on an ad hoc committee created for the purpose.

I really appreciate the way in which Minister Bains is running his department. I feel the dynamism; I feel that the department wants to work to find solutions to problems at the source. The same goes for technology. We can see it in certain areas, such as the support for technical colleges and electrifying transportation, for example.

So I appreciate your being here. I feel that, for years, the industry department has been missing in action from all the technological challenges that must be faced by the sectors of industry that form part of our Canadian heritage.

Perhaps Canadian Heritage could provide us with this information: from that list, could you help us to determine those issues? Could you point out to us solutions that have been recognized in other countries? After seven years in politics, if I have learned one thing, it is that, when we have to deal with a problem—be it public transit, the environment, or flesh-eating bacteria—we have to try and find out what other countries do when they face similar problems.

We have no monopoly on knowledge; plenty of people are ready to give us solutions.

I want to specifically ask people from the Department of Industry whether, as we look at copyright, we can look at patent protection as well. Is there a link between the two? I feel that, with modern technology, there is indeed a link in terms of intellectual property.

For example, could pharmaceutical companies decide to do less research and development on new products, because copyright and intellectual property rights might be less protected? Is that a parallel we can draw?

[The Chair, Liberal, Julie Dabrusin]

We are actually out of time, so maybe I could just ask this. He has asked for a list and for international solutions that have been acquired to deal with these hot issues or les enjeux on this list. Is that something you would be able to provide to us?

[Mark Schaan]

I think the list is no problem. I think the solutions may be more challenging because of the unique nature of the Canadian system.

One has to look at your last point, and I will be very brief. That is to say that one needs to put this in its much broader context: we have a unique country with a unique set of cultural expressions, a unique copyright industry, so the ability to just take some solution that's been created somewhere else and be able to plot it in is difficult. I think the list of issues is probably quite easy. I think in terms of the realm of other things that other people are doing in copyright, we may have to take a another look.

[The Chair, Liberal, Julie Dabrusin]

Okay, thank you.

Mr. Breton, you have the floor.

[Pierre Breton, Liberal, Shefford, QC]

Thank you, Madam Chair.

I would like to pursue the matter my colleague Mr. Nantel has just talked about, since we are here, among other reasons, to examine the difficulties and the possibilities that come from the new access points for creative content.

Ms. Théberge, Mr. Schaan, in your opinion, which are the most significant difficulties artists have to face these days? We have asked for a list of issues, but I would like to hear them in your own words. There have to be two or three main difficulties and I feel that we are here today to hear about them. So let's continue this important discussion.

[Nathalie Théberge]

I will answer first and then I will hand over to my colleague, Mr. Schaan.

I would say that one of the major challenges is transparency. I have already talked about copyright literacy, the basic knowledge that allows creators and authors to understand what they have to demand when they are signing a contract with a record company, for example. That aspect is absolutely fundamental and goes across all creative sectors.

We could probably make the same observation about consumers and users, that they have to have some knowledge, some angst, and some understanding about the fact that, when they consume a cultural product, they are knocking on the door of copyright. So they have a number of responsibilities in terms of consuming cultural products.

The issue of transparency is also horizontal. The transparency problem is clearly accentuated by the digital world. One of the main challenges, certainly, is the many intermediaries and platforms that take cultural content and launch it back into the sphere of consumption, sometimes transparently, sometimes less so. That is why we must be in a position to have a discussion with those intermediaries and content providers so that creators know, for example, how their content is consumed and monetized, and so that, basically, they are able to make the digital world a tool that works to their advantage more than to their detriment. That is fundamental, especially in music, but also in audiovisual. It is perhaps a little less the case in the world of education.

I would say that those two are particularly critical.

I don't know, Mark, whether you want to add something.