Evidence of meeting #132 for Canadian Heritage in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was content.
A recording is available from Parliament.
11 a.m.
Liberal
The Chair Liberal Julie Dabrusin
I call this 132nd meeting of the Standing Committee on Canadian Heritage to order. Today we are resuming our study of remuneration models for artists and creative industries.
I'm very pleased that we have several witnesses today. We welcome Eric Enno Tamm and John Degen from the Writers' Union of Canada, Wendy Therrien and Alan Bell from Universities Canada, and David Swail and Kevin Hanson from the Canadian Publishers' Council.
We will begin with the Writers' Union of Canada.
11 a.m.
Eric Enno Tamm Chair, The Writers' Union of Canada
Good morning, and thanks for the invitation to present on behalf of The Writers' Union of Canada.
Our organization represents 2,100 professional authors across the country, and we chair the International Authors Forum, with over 700,000 members globally.
Copyright is core to how we as creators earn a living: Erode copyright, and you erode writers' incomes. It's that simple. Earning a living as a writer is difficult at the best of times. It's been immeasurably more difficult in the past decade, as we've seen sweeping digital disruption across the creative industries. We hear that content is king in the digital age, but the creators of that content are being paid and treated like serfs.
In 2012, Canada's authors and publishers were asked by Parliament to trust and respect a new understanding—a new model—around educational copying and fair dealing. What followed was anything but fair for writers. It's been a disaster, and our members have felt it first-hand. A recent survey of Canadian authors received almost 1,500 responses, and here's what they told us.
Authors have suffered a 27% decline in incomes in the past three years alone.
Compared to 20 years ago, we've seen our real incomes decline by 78%.
The average net income from writing is only $9,400.
Even worse, income from educational copyright royalties has declined on average by 42% in five years as a result of illegal free copying by the education sector.
In 2012, as Parliament was reforming the Copyright Act, writers knew that we faced a difficult road ahead. Not surprisingly, we've been adapting. More of our member authors are self-publishing, and the writers' union has been delivering professional development workshops on self-publishing, book promotion and publicity. Many authors are embracing entrepreneurship, yet writers are now expected to do more for less or, even worse, for nothing.
As our publishing partners can confirm, producing content isn't free. Researching, writing, rewriting, editing, graphic design, layout and distribution all cost money, yet authors are now expected to work for free for the benefit of the education sector. In fact, with recent proposed changes to the Copyright Board of Canada, our serfdom has been confirmed. The reality for Canada's writers is that the copyright board is toothless. We work for it, but it doesn't work for us. We put in the time and effort to get tariffs approved, and when they are approved, the education sector simply ignores them.
We have asked for statutory damages for our tariffs to encourage compliance by the educational institutions, but the government has declined to make that simple change. We are discouraged and disappointed by that decision.
Perhaps we should look to the Europeans on how to balance copyright, privacy and online content in the digital age. The European Parliament recently passed a directive laying out rules for how content is to be protected and paid for by giant tech platforms that have long avoided regulation. The directives require platforms and aggregators online to pay for licences for the use of content snippets.
As well, the directive imposes greater responsibility on the platforms for lawful sharing of content online, a measure that should help in the fight against content piracy and provide a new licensing opportunity to authors for the use of their work online. The Europeans are disrupting the disruptors and telling Silicon Valley that a business model built on others' free labour is unacceptable.
Another disruption from the tech sector itself could also prove valuable to creators. There's increasing talk that a new decentralized technology could allow creators to circumvent centralized platforms and connect directly to readers. The technology, called a distributed ledger or blockchain, has been around for decades and has become famous recently for powering cryptocurrencies like Bitcoin. Blockchain could now disrupt books.
How does the technology work? The platforms of Amazon, Apple, Facebook and Google are essentially gargantuan centralized relational databases. They are intermediaries controlling our relationship to readers and facilitating sales transactions.
In contrast, distributed ledger technology has no centralized authority controlling a database. Instead, transactions are stored on immutable ledgers, which are replicated on many computers across a peer-to-peer network. Since the ledger actually exists in many places, it's really hard to hack.
Transactions can be bundled into what they call digital blocks on a chain, which gives the technology its name of blockchain. For a book, these transaction blocks could be for the authorship, publishing, distribution and ultimately, the reader's purchase. The technology could have several applications for authors. It could guarantee attribution of a digital work to an author or rights holder. Through smart contracts, it could distribute and authenticate copyrighted material to readers, and via a digital wallet, it could automatically distribute royalties, directly and immediately, back to authors.
A number of tech start-ups are already using the technology to distribute content and reward creators, including blockchain publisher Publica.io, Smoogs.io, Po.et, and authorship.com. Access Copyright launched its own start-up, Prescient Innovations Lab, to build and test blockchain technology that is focused on the creator. The Writers' Union supports Access Copyright in this pioneering work.
The Writers' Union of Canada is committed to innovation and to empowering our members to adopt new technology, new skills and new business models to survive. Given the sorry state of our earnings, we have little to lose and a lot to gain.
There is possibly something promising in the new technology on the horizon to help us develop new, innovative remuneration models. However, stronger copyright is key. Fair dealing needs to be fair, not free, for educators, and we need a Copyright Board that's more than a paper tiger. Significant statutory damages will give the Copyright Board some teeth in dealing with those who refuse to pay their tariffs.
If we value culture, then we must value the work of those who produce it. The Writers' Union will submit a brief detailing the ideas I've discussed, and we're happy to take questions.
Thank you.
11:10 a.m.
Liberal
The Chair Liberal Julie Dabrusin
We will now go to Universities Canada with Wendy Therrien and Allan Bell, please.
11:10 a.m.
Wendy Therrien Director, External Relations and Research, Universities Canada
Thank you to the chair and committee members for the invitation to appear on behalf of Universities Canada.
We represent Canada's 96 universities, whose teaching, research and learning mission is key to providing Canadian students with the skills they need for the knowledge economy.
Thank you to each one of you for the vital role that you are playing in the statutory review of Canada's Copyright Act, particularly looking at remuneration models for artists, including writers and creative industries.
Universities across this country play a vital role in supporting Canada's creative communities. From the beautiful new campus at the Emily Carr School of Art and Design to the Purdy Crawford Centre for the Arts on Mount Allison's campus, universities are hubs for Canadian creators.
It is for this reason and based on the importance of a balanced approach to copyright that Universities Canada and its member institutions have been actively engaged in the INDU committee's review of the act, as well as contributing to the Government of Canada's 2016 review of Canadian cultural policy.
I am very pleased to be joined today by Allan Bell, who is the associate librarian for digital programs and services at the University of British Columbia. Like universities across this country, UBC has implemented extensive measures to ensure compliance with copyright law. Mr. Bell would be happy to take any questions that you might have about how copyright compliance works on campuses.
Universities are producers, owners and and users of protected documents, and advocate for a balanced approach to copyright.
Universities stimulate the creativity of millions of students, allow researchers to give free reign to their intellectual curiosity, and strengthen communities.
Our sector respects copyright and helps artists and emerging and established creative industries to succeed.
We are fully aware of the real financial difficulties experienced by many Canadian artists like musicians and authors. However, we also know that fair use by educational institutions is not the reason for those difficulties.
The reason, rather, lies with the disruption caused by digital technologies, which change the way content is consumed the world over. That is the main problem that needs to be overcome by copyright holders.
When they testified before your committee last November 22, federal officials spoke at length about the impact of the digital disruption on Canadian creative industries. They also recognized that changing the Copyright Act was not the most effective strategy to improve creators' remuneration.
This is also what we observe on campuses across the country.
Universities value copyrighted material and are committed to copyright compliance. Canadian university library expenditures are increasing annually, exceeding $1 billion over the past three years combined; however, to meet the evolving needs of their communities, libraries are changing what they buy.
Students today are demanding access 24 hours a day across multiple platforms. For example, at the University of British Columbia, the library's digital resources grew from 21% in 2002 to 82% in 2017. That's a 60% shift in just 15 years. Over that same period, the circulation of the library's print collection steadily declined. Nearly 70% of the library's print collection has not been taken off the shelf, let alone signed out, since 2004. That's 70%.
There has also been a sharp increase in the use of e-reserve systems instead of printed course packs. In other words, new platforms for accessing course materials are enhancing educational opportunities offered to students and are making university studies more affordable and accessible.
Unlike printed books, digital content accessed by university libraries generally includes reproduction rights. Contracts control how this content is used and whether fair dealing applies. In most cases, content is shared though links by protected digital locks rather than copied, so that reliance on fair dealing is actually decreasing on campuses across the country. As a result, limiting fair dealing through changes to the Copyright Act would not be an effective tool for subsidizing an industry that, as we have just heard, is trying to adapt to the changing values and consumer patterns of its customer base.
The Supreme Court of Canada has identified fair dealing as a right and has repeatedly recognized the importance of balancing copyright interests. Five landmark decisions made by the court in 2012 transformed the way copyright is being managed, and they were a genesis for a shift in the way the education system is approaching copyright. However, the legal context for fair dealing is continuing to evolve. Several active court cases are still pending. Parliament should allow the courts to continue their work before further legislative intervention.
While limiting fair dealing for education is not the solution, the government can indeed mitigate the impacts of digital disruption on the creative community. We encourage committee members to consider policies and programs that can directly assist individual creators and support industries that help get creators' works to market. For example, federal funding programs and organizations that provide direct support to current creators could increase. This might include organizations like the Canadian Council for the Arts, which manages a program called the public lending right, which provides financial compensation to eligible authors for lost royalties due to public access to their books in Canadian libraries.
On support for industry, such programs as the Canada Book Fund or Creative Export Canada, both managed by the Department of Canadian Heritage, assist publishers and other organizations, including not-for-profits and indigenous governments, in helping Canadian creative content reach local and global markets.
Finally, an expanded investment in work-integrated learning and entrepreneurship for students across all disciplines, including the full scope of fine arts and arts disciplines, will help prepare Canadian graduates for the changing global creative economy. Canada's future prosperity and the success of our creative industries depend on an exchange of ideas and knowledge. Changes to fair dealing would stem this vital flow, hampering the education, research, innovation and creation that are essential to a vibrant and thriving cultural economy.
Thank you for the opportunity to come and speak with you today. We welcome any questions you might have. That includes Mr. Bell, who will provide further details on how copyright materials are accessed and managed at the institutional level.
Thank you very much.
11:15 a.m.
Liberal
The Chair Liberal Julie Dabrusin
We'll now go to David Swail and Kevin Hanson, please, from the Canadian Publishers' Council.
11:15 a.m.
David Swail President, Canadian Publishers' Council
Thank you very much, and good morning, everyone.
We want to first of all thank all of you for the opportunity to appear before the committee, and we certainly appreciate being asked for our perspective on the critical question of creator compensation and copyright in Canada.
My name is David Swail. I am the president of the Canadian Publishers' Council. With me is Kevin Hanson, president of Simon & Schuster Canada and vice-chair of the Canadian Publishers' Council.
This morning I will briefly outline our principal concerns with the state of creator compensation in Canada, and I will also introduce to the committee our solutions, including some legislative amendments and the co-creation of a digital commons for Canadian educators.
First, if you'll allow me, I'll provide you with a little bit of background on the Canadian Publishers' Council and our membership.
Our organization represents 16 of Canada's largest publishers, operating across all segments of our industry, including trade publishing, higher education, K-to-12 and professional.
Our members are a mix of both Canadian-owned firms and Canadian subsidiaries of global publishers, such as Penguin Random House, HarperCollins, Simon & Schuster, Pearson and Scholastic, among many others.
Our members' aggregate revenue in 2017 was $853 million. Collectively, we directly employ more than 3,000 very highly skilled, knowledge-based workers in this country and many thousands more in freelance and contract capacities as writers, editors, subject matter experts, designers, illustrators, and researchers, and the list goes on. We are all for-profit companies among our members, and most of our members receive no government grants for their undertakings.
We are very proud to be part of a very vibrant and successful industry. I think that point gets lost often in our discussions about the state of the sector.
Canadians are among the most highly literate and supportive reading public in the world, and our authors are celebrated as never before, both in Canada and globally. Our educational publishers are widely recognized for their expertise and are key contributors to global initiatives within their firms across the world. We want to continue building on that success and developing both Canadian writers and Canadian publishers and bringing more Canadian authors to global audiences.
Our members are very heavily involved in creator compensation, as you would expect. In fact, our business very much depends on it. At last count, our members had more than 9,000 Canadian authors in print in Canada. We compensate many thousands of Canadian creators in myriad ways, and I'll just outline them quickly.
First is direct employment. We employ editors, writers and designers directly. We spend about $226 million every year, and related costs include benefits, pensions, employment insurance, etc. We are big employers; in fact, we are the biggest group of direct employers in the sector.
Contract and freelance is an area where we engage creators on a contract basis, working with artists, photographers, illustrators and subject matter experts across a very wide spectrum of publishing endeavours. In aggregate, our freelance and contractor expenses are in the order of $15 million annually.
Author royalties and advances are a very important part of what we do. We advance pre-publication royalties to authors and other creators in an amount of approximately $36 million every year. As you probably all know, much of that total is never really earned out by subsequent book sales. In other words, we essentially subsidize the creation of Canadian creative work and culture by many, many millions of dollars every year as for-profit enterprises. In that process we keep creators employed and engaged along the way.
How has the creator compensation model been affected, in our experience, by copyright modernization, and particularly the fair dealing exception for education?
The first and most obvious way that we have all heard about is in the breakdown of collective licensing in the education sector, outside of Quebec. It's well documented that the near-total collapse of that licensing is costing creators some $30 million annually, with licensing royalties down about 90% since 2012.
For writers, whose annual compensation, as the Writers' Union has recently publicized, is estimated at about $9,400 a year, that is a significant hit to their incomes.
There is a major spillover effect as well for our members. Our publishers are finding it increasingly difficult to engage creators in educational publishing projects in particular, as they turn to other, more reliable means of making a living while they see royalty payments shrinking.
A further corollary effect, and perhaps more concerning in the medium and long term, is that investment in Canadian learning resources is dropping. We have had several significant K-to-12 publishers discontinue or exit their publishing program, causing significant job losses, and as I mentioned, these are well-paying, knowledge-based jobs that we believe are critical to the future of this country and this economy. Oxford University Press, McGraw-Hill and Emond Montgomery have all left the K-to-12 sector in the past few years in response to an environment they feel is no longer commercially viable.
Statistics Canada indicates that the book industry has lost about 3,800 jobs since 2012, and that's a 27% decline. Investment loss has also, as you would expect, reduced the quality and the quantity of Canadian learning resources for K-to-12 students in particular, and this is not just about print textbooks.
Canadian publishers among our members and also among the Canadian firms at the ACP have been world leaders in the development of learning technologies. We've built Canadian solutions and adapted global platforms for Canadian students, and have been embarked on that endeavour for many years with great success. The efforts led to a major redirection of publishing investment, away from print and towards technology that is adaptive to student needs and therefore more efficient, more current and often ultimately less expensive for education customers. That investment and the improvement to learning outcomes that comes with it for students is inherently at risk when the market for compensated content is diluted or eroded. We're also at risk of reducing the Canadian stories and voices that are used in our classrooms as creators and publishers reduce their time and investment in the sector.
To maintain Canada's considerable achievements in education, therefore, we must encourage rather than penalize investment and innovation in Canadian educational resources. It's critical to Canadian student outcomes and their ability to compete in an increasingly global job market.
To summarize, in addition to direct compensation for creators, the areas that are hurt most by what we consider to be very ill-defined legislation in copyright are jobs, investment and innovation. I can't think of any government in the world that would want that track record. Add to that list a diminishment in Canadian culture and a loss of Canadian stories and voices in our classroom and you get a full picture of what ambiguous legislation has brought about for us since 2012.
Let me turn now to solutions, which we're far more interested in talking about.
Alongside the adoption of technology in education, the use of—
11:25 a.m.
Liberal
The Chair Liberal Julie Dabrusin
Excuse me. I'll just give you a flag, though, as you launch into that. You're towards the end, so you have about a minute and a bit.
11:25 a.m.
President, Canadian Publishers' Council
I'll go quickly. Thank you.
The use of excerpts will continue to be a solution in classrooms, as shown by the many millions of pages that are copied in classrooms every year. To facilitate access to that content, we propose developing an online portal, which we're naming “the digital commons”, that can serve educators and students in a far more efficient manner than the current largely paper-based approach that predominates.
With the Association of Canadian Publishers, we have been conducting initial research into this concept, and we looked to Quebec for a model called “SAMUEL”, which we think is a very good starting point. We think it's an important step, this project towards normalizing the commercial use of educational content that has been eroded by lack of clarity in the current legislation.
However, a digital commons alone will not help without change to the legislative language. Many of us in the creative sector have proposed very specific solutions to that language, including as a first step the harmonization of statutory damages, which we've heard about. We would encourage the government to consider looking at those solutions, and we would also be happy to come back to this group with the legislative language we have proposed over the past several months.
In closing, we would ask this committee for a very specific recommendation in your report that compels the Government of Canada to support the publishing industry's call for a solution to our challenges by considering funding for the digital commons initiative and a resolution to the legislative situation that restores the commercial marketplace for educational resources.
Thank you. I'm very happy to take questions when the time comes.
11:25 a.m.
Liberal
11:25 a.m.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Thank you very much to each of you for your diverse perspectives and opinions.
As I was listening, I was wondering, Mr. Tamm, how you would respond to the submissions made by the other two groups this morning.
11:25 a.m.
Chair, The Writers' Union of Canada
It goes without saying that I think the publishers are our partners in the writing and publishing industry. We also see eye to eye on the educational front.
In terms of the digital commons idea, I think that increasingly writers and publishers are looking for new platforms and ways to distribute their content. It's not something isolated just to the publishing world; we're seeing a lot more direct-to-consumer applications in all sorts of industries broadly.
With regard to some feedback on the educational presentation, I'm going to pass it over to John Degen, our executive director. He's been handling that file for the union.
11:25 a.m.
John Degen Executive Director, The Writers' Union of Canada
Sure. Thanks.
Yes, clearly we disagree on the issue of fair dealing. To hit a couple of the points I heard, it's true that lots of factors go into the decline in income for authors and it's true that digital disruption is a large part of that, but we have now tracked a 27% decrease in the last three years alone, and we don't feel it's a coincidence that in those three years we have not received our copyright royalties from the educational sector. We see a direct link there.
There was mention of a movement away from photocopying and towards e-reserves and online course material delivery. To us, e-reserves and online course delivery are just course packs in digital clothing. It is the same thing. If those uses are increasing, then we're talking about an increasing amount of copying. Really, we're losing even more money in that instance.
11:25 a.m.
Liberal
11:30 a.m.
Allan Bell Associate University Librarian, University of British Columbia, Universities Canada
Universities in Canada are in a competitive business, but we're not competing with print publishers or the collective rights administrators over royalties. We're competing on an international level to produce the best research and create the best teaching environments. To do that, the best tools....
Frankly, print-based materials are being replaced with enhanced digital content, content that is more than just words on a page, content that is available to our students 24/7, and content that is directly licensed. There is no reprographic need with digital content that we've licensed directly. In our particular case with our e-reserve system, fully 54% of what we provide by our e-reserve system is already licensed by the library. Another 10% is available through open access content. Only 19% is done through the fair dealing analysis. Then we get transactional licences for the rest of them.
That's a fairly common breakdown for most of the universities out there. Really, it is not based on the fair dealing in the Copyright Modernization Act; it's based on the landmark decision in July 2012 wherein the Supreme Court of Canada recognized that teachers are “there to facilitate the students’ research and private study”. Teachers cannot “be characterized as having the completely separate purpose of 'instruction'”. As well, “the teacher’s purpose in providing copies [to students] is to enable the students to have the material they need for the purpose of studying”. The Supreme Court of Canada characterized teachers as sharing “a symbiotic purpose with the student/user” who is engaged in research and private study.
On this basis, the Supreme Court of Canada has decided that the fair dealing exception allows teachers to make copies of copyrighted works and distribute them to students as part of classroom instruction without a prior request from the student, subject to appropriate conditions, and we have created those appropriate conditions in our e-reserve system. More and more of our faculty are availing themselves of our e-reserve system based on this particular Supreme Court decision.
It's not fair dealing that is actually the problem here. The problem—and I have great sympathy for the authors in this as well—is that because of the digital disruption, we've shifted most of our purchasing into digital licences. For fiscal 2016-17, we spent $14 million on digital licences. Those digital licences, again, are not subject to an Access Copyright or reprographic licence after the fact.
We had print expenditures of $1.5 million in book monographs in 2016-17 and $1.2 million in serials. There are certain areas, such as design, where we still do print, but for most of the journals we get and for many, many of the books we get, we directly license them.
November 22nd, 2018 / 11:30 a.m.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
Mr. Bell, can I ask you to back away a little bit from the university perspective? Perhaps you can look at it from the broader perspective that we're trying to deal with. I'm wondering what principles you would see in a society, in a country, in an organization that wants to be equitable—and fair, despite the terminology you have referred to in terms of fair dealing. What principles should we be looking at as we evaluate and make judgments and recommendations with respect to this?
11:30 a.m.
Associate University Librarian, University of British Columbia, Universities Canada
The big principle, I would say, is to recognize really that it is the digital disruption. I worked for a—
11:30 a.m.
Liberal
Gordie Hogg Liberal South Surrey—White Rock, BC
I saw Mr. Tamm and Mr. Degen discussing as you were going on. Could you help me with principles and comment on that?
11:30 a.m.
Chair, The Writers' Union of Canada
The one thing I would say is that writers are facing death by a thousand paper cuts, basically. Right now, according to our survey, about 45% of our income comes from traditional royalties, so while the education sector—
11:30 a.m.
Chair, The Writers' Union of Canada
The principle is that it's content that has been created—it costs money, and authors and publishers are investing in that—and it's being used by universities in ways that go well beyond fair dealing. The Federal Court has established that and the Copyright Board has established that. The universities are clearly breaking the rules, according to what the courts and the copyright boards have said—
11:30 a.m.
Liberal
The Chair Liberal Julie Dabrusin
I'm going to have to end it there.
We will be going to Mr. Shields for seven minutes, please.
11:30 a.m.
Conservative
Martin Shields Conservative Bow River, AB
Thank you.
I'll be sharing my time with my colleagues.
I have just one quick question for Mr. Tamm.
When you were talking about legislation and you were referring to the relationship, were you referring to the most recent legislation that's been proposed a few weeks ago? Is that what you were referring to?
11:35 a.m.
Executive Director, The Writers' Union of Canada
Are you talking about the Copyright Board?