Canadian Heritage Committee on May 29th, 2018

[Lyette Bouchard]

As I have already explained, no royalties are applied to devices such as smartphones or tablets, even though a huge number of copies are made on those devices. At the moment, royalties apply only to blank CD-ROMs, but almost none are sold anymore. People no longer make copies on blank CD-ROMs. Instead, they copy the music onto tablets and smartphones. Hundreds of millions of copies are being made.

The private copying scheme seeks to compensate and remunerate the artists. Again, I emphasize that this is not a tax; it is a royalty paid by manufacturers to those who hold the rights. The money does not go to the government, it goes to the creators. The aim is to provide some compensation for the additional copies made on the devices that, in Canada, are sold every day in their thousands.

[The Chair, Liberal, Julie Dabrusin]

Thank you very much.

We now go to Mr. Shields, please, for seven minutes.

[Martin Shields, Conservative, Bow River, AB]

Thank you, Madam Chair.

I'm very much enjoying the conversation. I'm learning a lot this morning.

I have an acknowledgement to begin with; I never listen to the radio. I'm a live music performance person. I find live music or I go to look for live music, but whatever happens on a radio is a different world to me. The radio has never been turned on in my car, nor cassettes nor CDs played in it. I live in a different world; I understand that.

Do I have a playlist on a device? Absolutely, but it's usually classical music.

When you talk about the future and devices, any technology since my 12-year-old granddaughter was born is now dated. If you're looking to the future, how do you devise legislation that is going to be much more forward-thinking than what you've already said? You're trying to define legislation, but 10 years from now, everything we know now is going to be outdated.

[Lisa Freeman]

It's an excellent question and, in fact, the private copying regime as it's currently drafted comes very close to achieving that. It was the intention, but there was always also an understanding that it would be required that the government review it every five years, which is exactly the opportunity we're faced with here, to make sure that's the case.

Now, the Copyright Board of Canada shared the view of the Canadian Private Copying Collective in the early 2000s that the regime was technologically neutral enough to accommodate levies on devices—at the time, it was MP3 players. However, the courts have taken a much more restrictive view, a more restrictive and extremely conservative interpretation of the drafting of the act.

I'll take a moment to point out as well that it's much more clear in the French version of the act. In the English version there was enough room for doubt that the court said that this is a problem that Parliament needs to solve to just make sure that the regime is technologically neutral and can therefore remain flexible to accommodate whatever devices or media, any super audio, that might be imagined in the future. We believe it only requires a very small correction to the language to make that the case so that it can continue into the future.

[Martin Shields, Conservative, Bow River, AB]

Will the courts interfere with that?

[Lisa Freeman]

We did go to the Federal Court of Appeal; that's where the Copyright Board's decision allowing the levy on MP3 players was quashed. The Supreme Court chose not to hear the case. Our understanding is that, in large part, that was because the government was about to open up the act for review, and the Federal Court's decision was quite clear that it was a problem for Parliament to fix.

[Martin Shields, Conservative, Bow River, AB]

Okay, good.

Going to Acadian music, I guess in the history of the musicians who I know, probably all the vast majority of them have ever known is a part-time job, playing music in the evenings and playing a couple of gigs every weekend. In your experience, is that any different from the past? You're referring to that income now. Playing music in the Maritimes is great. I really enjoy the music in the Maritimes, but I've known very few full-time musicians.

[Benoit Henry]

A lot of artists have to earn a living elsewhere because they often have no fair and equitable remuneration. However, in the life of an artist, things do not exactly work out that way. There are creative periods during which there is generally no income for some time. Then there are periods when products are put on the market and seem to have some value. At least, that was how the former model worked. The value is clearly determined by radio stations, but also in concerts. Today, a major part of the income comes from concerts.

Music comes to Canada from the entire world. Canadians all across the country have their own music, but they are also interested in discovering music from around the world. To succeed in that, a basic minimum income is required. Artists' activities must be sufficiently marketable for them to be able to surround themselves with professionals in management and publishing. That then lets them get into national and international markets. They have to do that because basic Canadian markets are small. It is our obligation to focus on the Canadian market as a whole, but also on the international market.

Clearly, all packets of income are important, particularly those that come specifically from creating. That is what it is all about. I think you that you have certainly understood that, over the years, we have witnessed a decrease in revenue from creation. In that respect, Canada does not compare very well to a number of other countries.

[The Chair, Liberal, Julie Dabrusin]

Martin, you have one minute.

[Martin Shields, Conservative, Bow River, AB]

Just to follow it up, for the creative bands that start out and play in various community halls within 60 kilometres, is there an opportunity for them to access the international market? You hear of some YouTube performer playing, and he gets a million views, and all of sudden he's somebody else. Is that opportunity there now because of social media, which didn't exist 10 or 20 years ago?

[The Chair, Liberal, Julie Dabrusin]

Could I ask you to answer the question in less than a minute, please?

[Benoit Henry]

There are certainly favourable opportunities.

Canadian society has access to all kinds of markets for music. There are international music markets where buyers—and therefore sellers, the artists—meet. The beauty of the thing is that, because of the technology we have available today, it is possible.

For example, 15 or 20 years ago, in order to produce a high-quality sound recording, you had to have some major infrastructure that was very expensive and not readily available. Today, you just have to have minimal equipment and you are able to put a value on your creativity. So today, artists in the francophone and Acadian communities are able to compete, in terms of creativity, with any other artist in Canada or internationally. However, they have to be given the means to do so. Which came first, the chicken or the egg? If they do not have the means, they cannot get there, but, if they are given a basic income, it becomes an investment in their own careers, and that lets them go further.

[The Chair, Liberal, Julie Dabrusin]

Okay. Thank you.

[Martin Shields, Conservative, Bow River, AB]

Thank you for getting me where I wanted to go.

[The Chair, Liberal, Julie Dabrusin]

We now move to Mr. Nantel.

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

Thank you, Madam Chair.

Thank you all for your presentations.

Of course, the Internet does provide opportunities for visibility. As you said, an unknown becomes

somebody else, but he remains poor. He remains poor unless he has a world market access.

Dollarama stores are full of products sold at cost, but they make a small profit because the things are sold on an international scale.

There is a problem with artists whose customer base is normally made up of the people around them, the people in their communities, say, in Quebec or Acadia, because they can never be big enough to achieve a critical mass and then to become a consumer product at an international scale. It may not be the ultimate goal of every artist to conquer the planet, but we do want to earn a living from what we create. I am talking as if I were an artist, but I am not one at all. I have no artistic talent.

Ms. Bouchard, I notice that your concern with the private copy scheme is also a concern of a number of others, including the Coalition pour la culture et les médias. I do not know if we are going to have their representatives here, but they have sent us a brief that they prepared specifically for us. Actually, they sent it to the Standing Committee on Industry, Science and Technology when it was studying copyright. It talks about the importance of adapting the private copying scheme to new technologies.

I would like to ask you about that. Everyone in my generation remembers making cassettes on which we put the songs that we liked. Then the CD-R appeared. That was wonderful because all our songs fit on it. Today, that seems to have been replaced by streaming services that we have access to. However, some people still steal music. The general impression is that music does not cost a lot. It should cost more, because the artists are poorly compensated because of the agreements to which Mr. Willaert alluded. Since it is our impression that music no longer costs a lot, we wonder who is still stealing it.

Do you subscribe to the view that, with music worth less and with plenty of it legally available, this means that even people who know the subject wonder why the private copying scheme still exists?

Ms. Freeman or Ms. Bouchard, could you tell us precisely how much more it would be for an iPad costing about $700, for example. The House of Commons paid for mine, so the amount is approximate. How much would the private copying scheme add to that in order to compensate the creators for their losses?

[Lyette Bouchard]

Thank you for the question.

As I was saying, surveys show that, in 2015-2016, more than two billion copies were made, and some people are still making copies on their devices. They will do stream ripping, for example, which is illegal, and make additional copies. It is those additional copies that we are talking about.

We are not interested in access to the original copy, but to the additional copies. It is important to understand that. In the English version of the act, the word used is “copy”, but the French version uses “exemplaire” or “copie”. There is an important distinction between access to the first copy and to additional copies. That is what the private copying scheme is after. Hundreds of millions of copies are made for personal use.

What we are asking is to be able to use just the average of what is done with devices. For example, a device costing $700 would provide a royalty of about $3. This is not a problem in Europe, I feel, because the royalty is included in the price of the iPad, iPhone, tablet or smartphone. So the consumer does not see the $3.

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

Once again, it would be bringing us in line with international standards. Is that right?

[Lyette Bouchard]

Exactly.

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

Mr. Willaert, you talked a lot about the fact that our legislation is a little lame compared to international standards. Could we talk a little about the idea of fair dealing in the world of copyright? We are always talking about fair dealing in the use of a work.

As you see it, is there legislation that deals with fair dealing in electricity, in wood or in anything that we do not pay for? Is it not always the creators who find themselves providing the reductions and subsidizing other activities?

[Alan Willaert]

I barely heard the question.

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

That is why I speak in English all the time.

It is a problem with the electronics. I am sure that our interpreters are doing a fantastic job.

I'll simply say, is there any fair use of electricity that people shall not pay for because it's for education, but we do that to creators, right?

[Alan Willaert]

Absolutely. Within the Copyright Act now, there is the ability to copy things for personal purpose. That is sufficient, I believe, for most people. If they own the product or have purchased it, they can make copies for their own personal use. It's the sharing aspect that creates difficulties.

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

Thank you very much.

I have a question for the people from the Alliance nationale de l'industrie musicale.

As I see it, your movement deserves to be better known. You are making a very daring choice in withdrawing your material from platforms because you see the compensation to be appalling. You are right. We certainly agree. Just now, Mr. Henderson said that the Spotify system was better than Google's in terms of royalties, but even those from Spotify are a real disgrace. We have to call things for what they are. It is true that the royalties you receive are appalling, and it only becomes potentially worthwhile on the international market.

Sometimes, I agree with the Minister of Canadian Heritage. I really agreed with her when we went to Paris. We went together because I felt that it was really important to go and renew Canada's commitment to cultural diversity. Today, here we are at the point of having to put some teeth in the principle in order to defend cultural diversity. Defending cultural diversity means making sure that our government sets standards so that we can invest in order to support our artists. One day, the minister also brought up the idea of geolocation criteria in the metadata of streaming services.

In your opinion, would it be worthwhile for the first product that streaming services should offer people in Acadia to be something local? At the moment, that would not be possible because you are not on them. However, I understand you.

What can we do to support you? Otherwise, your artists' music will only be copied onto CDs and cassettes.

[The Chair, Liberal, Julie Dabrusin]

You have maybe 30 seconds left.