Good morning, Madam Chair and members of the committee.
First of all, I would like to thank you for inviting me to appear before you today.
The Copyright Act is a major source of revenue for the Canadian cultural sector. Right now, many stakeholders benefit from the value generated by culture, but artists and creators benefit too little. I believe that this review of the Copyright Act is an opportunity to correct the situation.
I will first tell you a little about the Association des professionnels de l'édition musicale (APEM) and what our publishers do, before highlighting a few important points related to the Copyright Act that are of fundamental importance for the remuneration of artists and creators.
The Association des professionnels de l'édition musicale represents Quebec and francophone music publishers in Canada. Our members are in charge of 830 publishing houses with approximately 400,000 musical works. Music publishers are partners with songwriters and help create, promote and manage works. As professionals in copyright management and creators' career development, publishers are more or less agents for songwriters and their works. Typically, a publishing house works with several songwriters to create new works and presents catalogues of existing musical works.
I will move on to the various points about the Copyright Act.
I would first like to point out that the APEM is a member of the Canadian Music Policy Coalition, which has produced a 34-page document detailing amendments to the Copyright Act. Basically, the entire music industry has signed the document. I'm sure you have a copy; if not, I'd be happy to provide you with one. I think it's extraordinary that the entire music industry supports the same document for the revision of the Copyright Act. The APEM has nevertheless zeroed in on few points to discuss with you this morning.
First, the provisions on network services must be amended in order to make Internet service providers accountable and to obtain royalty payments. Internet service providers derive significant profits from the use of copyrighted content. Bandwidth is used to access content, which gives them significant profits, while telecommunications companies made earnings before interest, taxes, depreciation and amortization (EBITDA), of 39.8% in 2015, which is a lot. According to the CRTC, those companies do not pay royalties under the exception set out in section 31.1 of the Copyright Act. This exception should be amended to require Internet service providers to obtain licences from rights holders. In addition, Internet intermediaries must not be considered as mere channels of transmission, but should, under certain circumstances, be liable for copyright infringements.
Second, the private copying regime needs to become technologically neutral. A private copying levy is now collected on blank CDs in order to compensate rights holders for music copies made for the personal use of Canadians. Of course, blank CDs are becoming increasingly obsolete, but the act is preventing the private copying regime from evolving with technology. Current revenues from the private copying levy given to music creators have decreased by 89%, from $38 million in 2004 to $3 million in 2016. That's a steep drop.
It is important to take advantage of the current review of the Copyright Act to make the private copying regime technologically neutral, thereby making levies payable on audio recording media. Many countries, including Germany, Austria, Belgium, Croatia, France, Hungary, Italy, Portugal, Switzerland and the Netherlands, have adopted private copying regimes that apply levies on a wide variety of audio recording media and devices, including tablets and smartphones. It would be up to the Copyright Board of Canada to set the value of those tariffs. For example, in Europe, the private copying levy on smartphones averages $2.80.
This levy would be payable by the manufacturers and importers of the devices. There is every indication that those costs would not be passed on to the consumer, first, because more and more Canadians are not purchasing their devices but renting them on a monthly basis, and second, because device prices are set according to marketing criteria. It would be quite surprising to see the price of the iPhone X go up from $1,350 to $1,353 if a $3 private copying levy is introduced. Furthermore, European research comparing the prices of devices on an international scale has revealed that they do not depend on private copying levies. Clearly, music benefits the companies selling those devices tremendously, and they have the means to pay a royalty to the rights holders who contribute to their enrichment.
Third, the term of copyright protection must be extended to 70 years after the author's death. The term of copyright protection in Canada is the life of the author plus 50 years, whereas in the vast majority of OECD countries, it is plus 70 years.
In 1993, a European Union directive recommending that terms of protection be extended underlined the fact that the minimum length of protection provided for in the Berne Convention on Literary and Artistic Works aimed at offering protection to creators and to the first two generations after them. As it is, the average life expectancy in the European Union has increased to the point where the length of protection does not suffice to cover two generations. I believe that it is also the case in Canada in 2018.
As far as exports are concerned, Canadian rights-holders are at a disadvantage since their works are subject to a lesser international protection because of our Copyright Act. Canadian legislation should not hinder the promotion of our creators' works internationally. For music publishers, extending the length of protection to 70 years after the author's death means an increase in revenue, which would be reinvested in the career development of Canadian songwriters and composers, for instance.
Fourth, we must specify and eliminate exceptions. The number and nature of exceptions in the Copyright Act deprive rights-holders of substantial revenue that they should normally receive. Since I don't have time to address every single exception this morning, I'd invite you to refer to the document of the coalition for a Canadian music policy, which covers each of these exceptions in details.
Fifth, a functional Copyright Board would be crucial. I know very well that a review of the Board is underway, but I would simply like to underline the importance of its reform. The Copyright Board plays an essential role in the enforcement of the law. The time it presently takes to render decisions is not in keeping with today's environment. Uncertainty surrounding the value of copyright can be detrimental to publishers, to writers-composers, and to the music industry as a whole. For instance, we must allow collectives to agree directly with music users. In order to encourage remuneration for artists and creators, I would ask you to please move along quickly with the Copyright Board's reform. It's essential.
Sixth, we must work to improve system-wide coherence. In Canada, cultural industries have managed to develop with the help of an array of financial, legislative, and regulatory measures. The philosophy underlying these measures that promote our culture must not be threatened by technological changes. Today, the CRTC will publish a long-awaited report. Granted, it does not concern the Copyright Act directly, but it certainly touches upon remuneration for artists and creators. The CRTC exemption order targeting new media must end without delay. We need not wait until the review of the Broadcasting Act and of the Telecommunications Act, which can be done in parallel. The governor-in-council has the authority to issue a direction order to ask the CRTC to lift the exemption targeting new media. It's high time that these companies also took part in the continued growth of our culture.
Thank you. I'm ready to answer your questions.