Canadian Heritage Committee on June 7th, 2018

[Pierre Breton, Liberal, Shefford, QC]

I don't have the details.

I thought you had the findings of the study that was commissioned in 2014.

[Greg Johnston]

What I can do is speak generally about how things have changed since 2014.

We have done a study. It was done on illegal file sharing, which at this point has sort of been replaced by streaming. This is the rapid speed that we're trying to deal with in what I like to call “disruptive technologies”.

At one point, there were all these BitTorrents, and people were ripping all of our music off of them and storing them on their devices. Now everyone is streaming their devices and people aren't using the Torrents as much. In a lot of ways, the study that we did on the Torrents is not even that relevant anymore, because everything has changed so incredibly fast.

Again, I'll reiterate that if the Copyright Board were able to move more quickly and make decisions more quickly, then we could have tariffs on these new technologies faster. As it stands now, we wait years and years for tariffs to be ruled upon, and they're ruled upon information that is completely obsolete by the time it gets there. As some of my friends and colleagues here said, our rates are very, very low and not in keeping with international standards.

Copyright Board reform, and supporting and enabling the Copyright Board to work quickly, is definitely a way that we can participate in the technology that consumers want to use but still be remunerated for its use.

[Damhnait Doyle]

As a quick example on the income from streaming, as authors, if you had a 100% copyright on one song 15 years ago, and that album sold a million records, per song, on average, you would get $45,000. Now, with streaming, if that same song is streamed one million times, if you are lucky you will get a check for $35. That is $35 compared to $45,000. We are really getting hammered from all sides.

[Pierre Breton, Liberal, Shefford, QC]

That's very clear.

Ms. Drouin, do you have any other comments?

[Solange Drouin]

I can add an overall figure.

I've been in the music industry since 1992, for 26 years, during the same period as Mr. Nantel. When I started out in it, it was a $40 billion global industry. Today it's a $15 billion global industry. There have been impacts over the entire chain.

I mentioned in my speech that physical album sales had fallen by 72%, which is enormous. The same is true of streaming: revenues have declined by 42% since 2014. So the entire chain is obviously suffering, including artists, songwriters, and producers.

[Pierre Breton, Liberal, Shefford, QC]

Ms. Morin and Ms. Prégent, for our information, could you tell us how the method for remunerating artists works at Artisti? Sometimes I get lost with all the organizations out there. This week, we met representatives of the Society of Composers, Authors and Music Publishers of Canada, or SOCAN. Is Artisti connected with that organization, or are the two organizations different.

[Sophie Prégent]

We represent performing artists, more specifically singers, not songwriters. In other words, they are the people who use their voices, including instrumentalists.

[Pierre Breton, Liberal, Shefford, QC]

Could you briefly explain to us how the remuneration method works?

[Annie Morin]

Artisti represents all copyrights held by performing artists. For example, they will collect fair remuneration from Re:Sound. We heard Ian MacKay talk about that earlier. They'll also collect private copying royalties from the Canadian Private Copying Collective.

We also have our own tariffs for reproductions by commercial radio stations in schools. In addition, we distribute those royalties among performing artists who take part in the songs used on the basis of 80% for the features, or the stars if you prefer, and 20% for accompanying artists, who are back-up singers and accompanying artists.

[Pierre Breton, Liberal, Shefford, QC]

I have other questions for you, but I'm out of time. Perhaps I'll have an opportunity to ask them later.

[The Chair, Liberal, Julie Dabrusin]

Yes, you can do it later, Mr. Breton.

We're going to Mr. Shields, please, for seven minutes.

[Martin Shields, Conservative, Bow River, AB]

Madam Chair, I very much appreciate the witnesses we've had on this particular issue and the passion they bring to it.

One of the common things was the $1.25 million; we've heard it from everybody. On the extension of 50 years to 70 years, we've heard that from everybody.

On my own part, I have a disclaimer. I don't listen to the radio. If I go back to my youth, half the albums I bought were bought because of the art covers on them. They had phenomenal art. My son now raids them regularly.

Checking with my adult children, I found they moved to Sirius radio, and now they have moved away from that. When I check with my grandkids, they don't know what a radio is; they really don't. The younger generation don't listen to radio. They get it from where you say they get it.

Being an old guy, I remember the British back here. There was a news story recently about a pirate radio station off the coast of Britain finally closing up, because when you bring in regulations, they find a different way to get it. That's what happened in England in the sixties. They established a pirate radio station offshore so the youth could listen to what they wanted, and not what the government told them they could listen to. You have to be careful when you get too regulatory, because the youth.... I remember the radical youth I was involved with. We went around the rules and government in any way that we could.

That puts us in the place of this: as technology has exploded, what existed 10 years ago is out of date. How do we write legislation for the future? That's what you're asking for: how to be flexible. You're saying that we need to do it, and I'm asking, how? What are you telling us that we need to write? How can you write regulations that are not regulations? How do you write flexible, general regulations that can be applicable in any case, and non-device oriented? How do you do that?

[Solange Drouin]

On the radio issue, the CRTC, as you probably noticed, issued a very important report last week. On the radio issue it's saying—and it's what we've been saying for many, many years—that the radio industry is still the most resilient medium so far. If you read it, you will notice it's clear that radio stations have not had big increases, but at least they didn't fall at all. It means that if they still make as much money as they do, it's because people are listening.

I totally agree with you that the way of listening to music is changing. At the same time, we've done some surveys at l'ADISQ in Quebec and in francophone Canada, and that's not what we've collected. People, even young people, have diversified their ways of listening to music. They listen to music from radio: 30% of them say that they listen to the radio at least every day, but at the same time, they use streaming, they used iPods, they use other things. I totally agree with you that they've diversified, but at the same time, there's a problem here and you can fix it, so fix it.

At the same time, there's another problem. What we have been asking you is to have, as much as possible, an act that is technologically neutral. It's possible. You know, you have very expert writers of legislation and they will show you how to do so. It's possible to do so. At the same time, it's not because the world will be changing again that it's not important to fix the problem. You can fix it today. That's why this $1.25 million exemption has been a problem since the beginning, I would say.

I was there in 1997 and 1998 when this exemption was put in place, and when we had the neighbouring rights regime put in place—hopefully. At that time it made sense because the radio industry was in a bad position. In 1995-1996, that was true. Let's at least be truthful. We had to have that bill pass, and it was a deal with the radio industry. Let's say that, “We will give you an exemption”, but now this exemption is no longer important and we have to get rid of it. If you can do it, do it.

For the future, we'll tell you how to write the act to be technologically neutral. It's totally feasible to do so.

[Martin Shields, Conservative, Bow River, AB]

Thank you.

[Ian MacKay]

If I can add to that, just in terms of radio, I would totally agree with Solange that radio has proved to be much more resilient than people thought it would be. In 1997, at the time that neighbouring rights were brought in, they said that radio was in trouble, radio was on the way out. The total industry profits for radio in 1997 were $3.6 million. In 2016, the total industry profits were $440 million, so it's actually an industry that's getting a lot more profitable. There's been a lot of consolidation: 82% of radio is now in the hands of 10 radio groups; in 1997, only 50% was in the hands of 10 radio groups. Radio does continue to be remarkably resilient in the face of other forms, so I think it is something we still need to address.

In terms of technological neutrality, I think you've heard from me and other people in terms of changing the definition of “sound recording”. That's about neutrality. As people consume more and more recorded music through audio-visual media—and I think Artisti explained that very well, that you have a digital image, but you're listening to the music—they should be compensated for that if that's the way people are listening to it in the future. We need to fix that definition to make the consumption of music technologically neutral.

On private copying, it's the same thing. Private copying is now tied to old devices and should be applied whenever everybody is copying, today and in the future.

[The Chair, Liberal, Julie Dabrusin]

That brings you, actually, to the end of your time, Mr. Shields.

[Martin Shields, Conservative, Bow River, AB]

Thank you, Madam Chair.

[The Chair, Liberal, Julie Dabrusin]

Mr. Nantel, you have the floor for seven minutes.

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

Thank you, Madam Chair.

Thanks to all the witnesses. Their testimony was very eloquent.

I think the most eloquent of all, and the most crucially important for every one of us, was that of Ms. Doyle, which I found very moving.

This is a situation to which I have devoted nearly seven years of my political life. Ms. Doyle is an artist who has come to tell us she can no longer earn a living from her work. Everyone of us—and I have no doubts about everyone's good faith—everyone must let that sink in. That's why we're here. We are the Standing Committee on Canadian Heritage. We are here to ensure that our heritage stays alive for future generations.

I appreciate the good faith of my colleague Mr. Shields, who asks questions about radio. Incidentally, I invite him to check La Presse+, which we're discussing a lot, to learn about the not-for-profit structure model organized with the federal government by the officers of that media player so they can find a way to survive, since the government's doing nothing.

There's an article that claims the radio industry is doing very well. I think we can take it for granted that this exemption should be lowered to zero. It's a temporary measure, and I don't think the people at Bell, in Toronto, who wear clothes worth $8,000 need any help. I think it's Ms. Doyle who needs help in paying her early childhood centre, or ECC, and for education services for her children, as do all Canadians who have a job, who love that job, and who contribute to society.

I think the document you've submitted as a group, as a coalition, demonstrates its own value since everyone has signed it and everyone agrees on the major points.

Do you think every one of these recommendations stands a chance of being well received and interpreted by a committee such as ours? I'm sorry the committee isn't an ad hoc committee struck specifically to study the issue. The Standing Committee on Canadian Heritage and the Standing Committee on Industry, Science and Technology have been assigned that task. I think that's troubling.

Let me ask you this: don't you think it would be interesting—I know I'm completely ignoring the committee's rules here—to prepare an interim report. We've started a process that will take several months. We'll be leaving for the summer, we'll take a break, and we'll lie out on the sand instead of drinking the glasses of sand that the copyright review represents. The fact is that, for everyone here, even for me—Ms. Drouin was explaining to me how well acquainted I am with these issues, which leaves me very emotional—this is very dry and very complex. Everyone here is wondering who does what. What are SOCAN and Re:Sound? Everyone of us thinks this is a very complicated issue. It's complicated, but it's extremely important. I think Ms. Doyle's testimony is distressing.

I'm going to take a break and let someone else speak, but, before doing that, I would like to raise a point. Would you have liked the Conservatives from Quebec to ask you a question? Here we have representatives from the Union des artistes du Québec and the Association québécoise de l'industrie du disque, du spectacle et de la vidéo.

It would be good to hear the Conservatives talk about culture. Would you have liked Mr. Bernier ask you a question?

[Maxime Bernier, Conservative, Beauce, QC]

Give me some speaking time and I can ask one.

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

Perfect, I'll give it to you right away.

[The Chair, Liberal, Julie Dabrusin]

You have three minutes, Mr. Nantel.

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

I'll give them to him.

[Maxime Bernier, Conservative, Beauce, QC]

I'd like to direct my question to Ms. Morin.

You said that the rules in place clearly don't meet the requirements of the three-step test imposed by the international treaties and that Artisti is asking the legislator to correct that situation and reintroduce the subsection in question into the act.

That's subsection 30.9(6) of the act.

Can you describe that three-step test rule to me in detail so we can be sure the subsection is well drafted in accordance with what you're seeking?

[Annie Morin]

Yes. I'll even use this document as a reference. It's the test that states the following three principles. First, where exceptions are introduced into the act, they must be limited to certain special cases. In 2012, a range of exceptions were introduced into the act. So that couldn't be limited to special cases. There is a limit. If 40 exceptions are introduced, there are definitely not 40 special situations.

Second, a reproduction must not conflict with a normal exploitation of the work or of any other object of copyright.

Lastly, it must not unreasonably prejudice the creator's legitimate interests. Here's a specific example. In 2012, since the private copying system applied to blank CDs, it was felt that would give people the option of reproducing music on any other device. However, no provision was made for financial compensation for the creators, although that necessarily caused unreasonable prejudice to their interests. All these copies have a value. If that were not the case, people wouldn't make them. It would be fair for creators to benefit from that value.

All these aspects of the three-step test were recently scrutinized in a study by Mr. Mihály Ficsor, a world-renowned copyright expert. Mr. Ficsor examined the Canadian exceptions, particularly those that had been introduced into the act and that were related to education or to anything pertaining to literary works, and concluded that they did not meet the test requirements. Furthermore, as a result of the massive introduction of exceptions into the Copyright Act, the international community has recently raised many questions about Canada.

In May 2017, the Association littéraire et artistique internationale, or ALAI, which was founded by none other than Victor Hugo in 1878 and whose membership includes numerous legal experts, professors, and authorities in the copyright field, expressed a wish to the Canadian government. Having noted the many exceptions in the Copyright Act, it said it hoped that the number of free exceptions would decline when the act was revised. There may be exceptions, but they must provide for compensation for creators.

For those who are interested, I have here some English and French copies of the text expressing ALAI's wish. I could submit a copy to you if you wish.