Canadian Heritage Committee on Oct. 16th, 2018

[David Sparrow]

It's always surprising to me that there are monies collected by foreign countries that those countries should flow to Canadians, but they won't do it until our own country recognizes us in the Copyright Act. Frankly, they owe the money and they should make it flow.

Perhaps Laurie can speak to your question.

[Laurie McAllister]

Reciprocity forms the basis of those international exchanges. Because we are lacking that in our Copyright Act, we're not able to access the money that's collected in foreign territories for Canadian audiovisual productions, featuring Canadian performers, that are shown overseas. For our membership, that is probably one of the key things we're looking to resolve with this review.

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

Ms. Dinsmore, you can see what a logical mind my colleague Mr. Shields has when he asked you how you could suggest that someone else forego some of their profits while your company is unwilling to do so. You know how much I respect you for your expertise and professionalism, but I think some of our witnesses are getting lost at times.

This is an era with less money in the system, or rather the ecosystem, as the Honourable Mélanie Joly, Minister Rodriguez's predecessor, said. She was right. Things have not been going that well for about 10 years, but before that we worked together very well. For 50 years, creators developed the content that you broadcast, which gave you an audience, and money flowed back to the creators. The formula worked well. Now, on the other hand, you agree that publishers and record companies are perhaps taking a bit too much. For their part, artists are complaining that radio stations are raking in huge profits and want them to forego the exemption from paying royalties on the first $1.25 million in advertising revenues. We are now fighting amongst ourselves.

I will speak in English to make sure that we understand each other.

We're having a family discussion here and we're blaming everyone: “You shouldn't do that” and “I did this for you 20 years ago” and “Why do you still do that?” and “You keep all the money and the creators are dying.”

All that is nice. It's a family supper and we can discuss it, but the reality is that the money is leaving the country. The reality is that we are not in charge, not in control anymore. It is good business for telecoms, although not for the media side.

I understand when you say that you buy productions. You're talking about Bell Media probably losing money, and I'm sorry for Sandie Rinaldo. I'm sorry for everyone in the news business, but you guys, you wireless guys, you Internet mobile appliance suppliers, you are contributing to the invasion. You are the passers of all this new system coming out.

I see here both of your presentations, and I appreciate the fact that they're translated. The one that was submitted to the CRTC was all in English, I remember. It was 11 pages on such a broad topic. That was not very generous from BCE.

You are saying now that Bell would like to help protect the economic component that supports our cultural industries.

In 1995, the Canadian Radio-television and Telecommunications Commission, the CRTC, created the Cable Production Fund, a funding initiative designed to facilitate the production and broadcast of high-quality Canadian television programs in under-represented categories in peak viewing periods.

Wasn't the idea behind the Canada Media Fund—a perfect example—and of quotas to ensure that cable distributors help fund the creation of Canadian content to be broadcast on our screens? It seems you are abandoning that principle now. Is that true?

[Robert Malcolmson]

I'll try to break down what I think your question is.

You're right that today we find ourselves in a regulated ecosystem that is much different from the unregulated ecosystem with which we compete. I guess our perspective on it is not necessarily to look to the ISPs to contribute to culture per se, but perhaps to that parallel ecosystem—the Netflixes of the world and the Amazon channels, and all of the over-the-top, non-Canadian services that are coming here, filling a market need and serving Canadians, but also taking revenue out of Canada while making no contribution to Canadian culture.

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

It means good broadband business for for you. People need a lot of broadband.

[Robert Malcolmson]

Certainly any traffic that travels on the broadband pipe is good for business, but the other perspective is all of that traffic on the broadband pipe requires continuous investment in building out that network in order to be able to serve the appetites of viewers—

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

I'm sure a gas station is an investment.

[The Chair, Liberal, Julie Dabrusin]

We will now be going to MP Anju Dhillon, please.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Thank you, Madam Chair.

My first two questions will be for ACTRA.

We've had other artists testify before the committee that recorded music isn't considered a sound recording when it's included in a soundtrack. Can you please comment on this?

[Laurie McAllister]

That was one of our two asks, and we echo those musicians who have come and asked that the definition of sound recording in section 2 of the Copyright Act be amended. This would mean that sound recordings included in a soundtrack in an audiovisual work would be considered sound recordings, and that the performers and the makers would be remunerated for them.

I don't think I spoke to this issue, but the authors and publishers receive remuneration for that, while the performers and makers are currently excluded.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Perfect.

Recently, in light of our new NAFTA—or the USMCA, as it's called now—Canadian cultural rights were advocated for and protected under the new deal. Can you please tell us how this deal has positively affected your industry?

[David Sparrow]

The broad cultural exemption is a wonderful thing. As Canadians, we punch way above our weight in our productions like Murdoch Mysteries and Frankie Drake Mysteries and other great productions that are seen in hundreds of countries around the world. It projects Canada's culture to the world.

The exemption means that as a sovereign nation we are allowed to invest in our own culture and the voices of our own people. It's great that it was protected and it will continue to hopefully protect the processes we have in place in terms of enabling the Canada Media Fund and other funding bodies to be able to invest in Canadian culture and bring Canadian works to our screens and screens all around the world.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Perfect.

Would the other witnesses like to speak to this point?

[Pam Dinsmore]

We were very involved with that part of the negotiations. We were kept up to speed on a regular basis with what was going on. We too are very pleased that the cultural exemption has been maintained. It's very important for our industry, businesses and Canadians to see themselves reflected on their screens, so yes, we are very supportive of the cultural exemption and the fact that it was protected.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Would you like to add something?

[Robert Malcolmson]

I would echo the comments that have been made.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

My following two questions will be for Rogers and BCE.

I'd like to talk about ISP copyright liability. What do you think you can do to protect more copyrighted material? Could you speak about the notice and notice regime at the same time, please?

[Pam Dinsmore]

I'm happy to address the notice and notice regime. It's important to understand that it only relates to downloads. It's not a useful mechanism for streaming, which is the issue we've come before you with today, looking for some other solutions.

Sure, the notice and notice regime has been around for many years. It was codified five years ago in the act. ISPs are exempt from liability for the content that travels on their pipes, but in exchange, they must participate in the notice and notice regime. If they, for some reason, don't, then they can be sued for damages, but there is no copyright liability consequence of not being part of the notice and notice regime.

We actually send about 2,400,000 notices a year. It's an automatic process. If we can't deliver notice, we have to loop back to the rights holder and let them know that we couldn't deliver the notice. We've spoken to the INDU committee about the fact that we would like to have formalized notices baked right into the act so that they would all look the same. They would be standardized, so there would be fewer notices that are not actually making it to the final destination. We're very much supportive of that regime.

Again, let me just stress that it only is useful with respect to illegal downloading, not illegal streaming.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Once these notices are emitted, is there a change in the behaviour of the people you've sent them to, or does nothing change?

[Pam Dinsmore]

It's interesting that you ask that question. I had to address this five years ago. In fact, it turned out that there were impacts, as the same household—not necessarily the same user—received one, two, three, four notices. There was a corresponding impact on, effectively, recidivism. It was deemed at that stage to be useful enough that this Parliament decided to codify it in the last iteration of the act, and that's the iteration that we see today.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Perfect.

BCE, would you like to add to that?

[Robert Malcolmson]

I would just add to your last point that while the notice and notice regime is an imperfect remedy in the sense that it doesn't address streaming—it addresses downloads, as Pam said—it does, I think, play an important role in educating the consumers who receive those notices that they may be unwittingly consuming copyright-infringing content. The provision of those notices to people who are using copyright-infringing material is a good educational tool.

At the same time, as we said in our presentation, the content piracy nevertheless continues to grow at a very disturbing rate, and it's undermining the entire ecosystem.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

You work with other countries that also see copyright infringement. Do they send you notice across this whole industry, or are you more Canadian-focused?

[Robert Malcolmson]

Well, we get requests to send notices to infringers from content owners, both inside and outside of Canada, if that's your question.

[Anju Dhillon, Liberal, Dorval—Lachine—LaSalle, QC]

Do you have to comply with them? Are there penalties for you if you don't?