Canadian Heritage Committee on Nov. 22nd, 2018

[William Harnum, Chair, Canadian Copyright Institute]

I appear before you today on behalf of the Canadian Copyright Institute, an association of authors, producers, publishers and distributors of copyright works. Founded in 1965, the institute seeks to encourage a better understanding of copyright.

We strongly support two basic models for the remuneration of authors and publishers. The first is the traditional publisher model, in which the publisher holds and manages the rights of professional authors, whose works they edit, design, produce, market, sell and distribute. The second is the exercise and management of some rights by collective societies representing authors and publishers. Both basic models are important, as they support each other. Collective societies engage in experiments to provide educators with convenient sources of copyrighted material, and publishers continue to experiment with new methods of delivery, including new ways of making works available.

Getting permission to make copies of published copyrighted content was onerous prior to the formation in 1988 of Access Copyright, which at the time was known as CANCOPY. This is a collective society that today represents more than 12,000 Canadian authors and 600 publishers and, through agreements with other collectives, countless authors and publishers worldwide.

When Access Copyright's blanket licences became available in the 1990s, the arduous task of clearing individual permissions from individual rights holders was replaced by negotiated collective licences covering most published copyright material. Collective licensing became the norm for copying at schools and other educational institutions. It was easy, efficient and cheap for educators to access content from both Canadian and foreign publications from Access Copyright and Copibec. Authors and publishers were paid by these collective societies.

Today widespread, large-scale, systematic copying of copyrighted content in educational institutions, without compensation, damages the remuneration models I have described and hurts both authors and publishers. Copying substitutes for purchasing books and other publications from publishers and for obtaining licences, mainly from collective societies, to copy excerpts from publications. Emboldened by the 2012 copyright amendment extending fair dealing to include education as a purpose, educators decided that most of what was being copied should not be paid for at all. They promulgated arbitrary fair dealing guidelines permitting, for example, copying of 10% of a work, a chapter from a book, an article from a periodical or newspaper, or an entire poem or artistic work from a publication containing other works.

These guidelines more or less reflect the guidelines in the licences that educators had negotiated with Access Copyright and complied with for over 20 years. The only difference is these new guidelines provide for no revenue. The market for selling and licensing copyrighted material is now badly damaged, both for publishers and for writers. A reduction of revenues in an industry such as ours with narrow profit margins for publishers and low income for writers and authors is significant.

Before moving to our specific recommendations, let me say that we welcome the amendments in the budget bill, Bill C-86, intended to accelerate Copyright Board proceedings, including case management and new timelines. We generally affirm our support for the role of the Copyright Board in setting tariffs and mediating disputes on licensing terms between users and collective societies.

Our recommendations to you today fall into two categories, both essential for the functioning of the two remuneration models we have described. The first recommendations address what may be licensed by collective societies, and the last recommendations concern enforceability and remedies that will deter infringement and encourage users to negotiate seriously with collective societies on the use of copyright material.

First, we recommend that copying for the purpose of education in educational institutions be clarified by clear parameters, either in regulations or in the Copyright Act itself. There are already a number of specific exceptions designed for educational institutions, but fair dealing for the purpose of education is a wide-open door for large-scale infringement.

Australia provides an example of a statutory licence for educational institutions managed by a collective society designated by the Australian government and subject to guidelines. In the United Kingdom, copying of excerpts from a work for the purpose of instruction for non-commercial purposes without a licence is restricted to not more than 5% of any work in any 12-month period, but only to the extent that licences are not available for that copying.

This is a precise exception, not a category of fair dealing.

Copying for the purpose of education in Canada should require permission either from a collective society or a rights holder. For most educational institutions this permission should be a comprehensive or blanket licence, which is either an agreement negotiated by a collective society and users of its repertoire, subject to the oversight of the Copyright Board, or a tariff administered by a collective society requiring the approval of the Copyright Board, usually following a hearing.

Second, we recommend clarification that tariffs approved by the Copyright Board are mandatory. There should be no uncertainty regarding the enforceability of royalties set by the Copyright Board. The education sector is unlikely to pay voluntary tariffs.

Third, we recommend the repeal of a provision inserted into the Copyright Act in 2012 that reduces awards of statutory damages against non-commercial infringers to trivial amounts. Any copyright owner whose work is infringed should be entitled to damages sufficiently high to be a deterrent, whether the infringer had a commercial or non-commercial purpose or whether any other copyright owner has elected to receive damages from the same defendant. Few authors or publishers have the resources to engage in the litigation necessary to prove actual damages. Electing statutory damages avoids the necessity of that much litigation.

Fourth, we recommend harmonizing the statutory damages available to collective societies at a level sufficiently meaningful to ensure better compliance with licences and tariffs approved by the Copyright Board. Currently, performing rights collectives like SOCAN may opt for an award of statutory damages between three and 10 times the amount of the applicable royalties. This remedy should be available to all collectives, including collectives like Access Copyright. Otherwise, the worst-case scenario for a user is retroactive payment of applicable royalties.

There is no reason musicians and songwriters deserve to be paid for the use of their work while authors and visual artists do not. We recommend that all copyright collectives should be eligible to collect statutory damages between three and 10 times the value of the tariff. This system has worked well for performing rights music collectives for 20 years and should be extended to collectives representing other rights holders.

It is our view that changes to the Copyright Act along the lines we recommend will provide fairer remuneration for authors and publishers and better access to creative works for users, will go a long way towards restoring a functioning marketplace for Canadian content and will benefit all Canadians.

Thank you.

[The Chair, Liberal, Julie Dabrusin]

Thank you.

We will now go to the Professional Writers Association of Canada.

I don't know who will be speaking. Will it be Paul Verhaegh?

[Paul Verhaegh, Regional Director for the Prairies and the North, Professional Writers Association of Canada]

Yes, if you don't mind.

Thank you, Madam Chair and members of the committee, for inviting me to this meeting. My name is Paul Verhaegh, and I'm the regional director for the Prairies and the north of the Professional Writers Association of Canada, PWAC, a Canadian association for people who have made writing their profession.

Copyright is a crucial instrument for our members. Without copyright they would not have any ownership in what they produce. In such a situation, writing professionally would be an unpaid hobby instead of a way to make a living.

Two issues are of particular concern to our members. First, there is the fair dealing rule in the Copyright Act for educational institutions. It is our opinion that the fair dealing exception for educational institutions has been abused at the expense of both publishers and authors.

We warn that this exception could not be limited to a fair quotation exception. A fair quotation exception would mean that reproducing parts of an existing work is acceptable to support or illustrate a point made in an educational text, and should not constitute the point of such a text. Copying more than a few pages of an existing work, let alone a whole chapter of a book, should be excluded from the exception and should give rise to payment of compensation. Turning copyright into a “right to copy” undermines the publishing industry and destroys the writing profession.

The second point is whether or not to extend the copyright protection from 50 to 70 years after the death of the creator. In many countries this has been done already, but not in Canada—at least, not yet. PWAC tends to favour the extension.

Some will argue that such an extension only benefits the heirs of the creator and not the creator himself or herself. We don't see why that would be a reason not to extend the copyright protection, since in our society it is the rule and not the exception that heirs benefit from what a deceased person created and produced during his or her lifetime.

Last, I would make a remark in general about copyright legislation. We live in times of rapid technological developments, and the pace at which new technologies appear will not slow down. Laws, including copyright laws, will only last if such laws are functional enough to make room for future developments in technology. Therefore, PWAC says: accept and embrace technological change, but do protect the ownership rights of creators.

Thank you very much.

[The Chair, Liberal, Julie Dabrusin]

Thank you.

Did you have anything to add?

[Doreen Pendgracs, Vice-President, Professional Writers Association of Canada]

Thank you.

My name is Doreen Pendgracs. I'm from Manitoba, and I am the national vice-president of PWAC. We really appreciate the opportunity to participate in the discussion.

I sat in on the hour that preceded us and was happy to see The Writers' Union of Canada participating, because I am also a member of that organization, as I am a hybrid author. I write books and I've been traditionally published and have self-published as well, and I do freelance writing and a number of other things.

The point that I'd really like to make is that most writers nowadays have to do a number of other things to create a significant income on which to live because, as you heard in the last hour's testimony, the average annual income of a freelance author is $9,400, and I'm sure that's below the poverty level by a considerable amount. This means most writers do have other jobs that they take on to be able to exist and pay their bills.

For me, I earn more money from speaking about the kind of writing that I do than from the actual writing, and that includes sales of books, writing freelance articles and doing other kinds of writing.

Writing has eroded very much since digitization became common. I started freelancing in 1993, and in the 1990s and even into the early 2000s, I could make a very comfortable income from my writing, but when the digital world opened up, it took the rates way down. Now we have a very large segment of the writing community who will write for free, just to get their names out there, because they're told that will give them the exposure they need in order to get published in a more fair-paying market, but that's not true, because once you get yourself in the ghetto of writing for publications and markets that pay very poorly, it's very difficult to make your way up.

As a result, most of us have had to find other ways to create incomes, because we are being driven out. The writers who were making good money and writing for a dollar a word or two dollars a word are now having to settle for 50 cents a word in many cases, because many publications have lowered their rates. Some are paying nothing at all for content and just saying that it's good exposure.

I'm a travel writer, so I enjoy the opportunity to take trips in accordance with a lot of the writing that I do, but there's a big bubble in the population—new retirees—who are doing that kind of writing for free, because they don't care if they get paid. They just want to take a trip.

As professional writers, we're finding we're combatting so many different groups that don't care if they get paid. The biggest ones, I guess, are the content mills that come out of India and Pakistan. Those people will write for nothing or for five dollars for an entire article, because that's what their markets pay.

I was very encouraged by the commentary in the last hour about the fact that some of the members of the committee here understand the importance of Access Copyright and what it has tried to do to protect the rights of writers. I sat on the Access Copyright board for six years as a member of the creative community, and I really valued what we were doing.

Now, unfortunately, Access Copyright is a mere shadow of what it used to be. The incomes have dropped so much there that they've had to get smaller offices and reduce their staff, and they're not able to provide the same kind of service to their members. Plus, as you heard in the commentary earlier, they now have three times as many members as they did before, so people are gravitating there thinking it's going to help them, but in the end, it's really not.

There are so many things that are preventing writers from making a fair living. Somebody said something in the previous hour that I wanted to rebut: the idea that the Canadian Council for the Arts has a public lending rights program that helps authors get income. Those programs do not pay royalties for non-fiction books, such as travel guides or self-help books, and unfortunately for me, my books have never qualified under those programs because they are mostly travel guides. I wrote a book on volunteerism, and they said it was a self-help book and disqualified it.

Those programs do exist, but they mainly help literary writers, and it's the same with the Canada Council grants. As a result, there is a group of us writers out there who are trying to make a living, but it's getting harder and harder.

[The Chair, Liberal, Julie Dabrusin]

We will now hear from the representatives of the Association nationale des éditeurs de livres.

[Arnaud Foulon, President, Association nationale des éditeurs de livres]

Madam Chair and members of the committee, thank you for the invitation to testify before you today.

I am Arnaud Foulon, vice-president of the HMH Group and president of the Association nationale des éditeurs de livres, or ANEL. I am joined by Johanne Guay, vice-chair of publishing at Groupe Librex and chair of the Copyright Committee and Members' Rights. Our director general, Richard Prieur, is also with us.

ANEL brings together about one hundred Canadian French-language publishing houses of all sizes, in four provinces. These enterprises publish approximately 5,000 titles every year, which range from novels to how-to guides, and include scientific works, school books, art books, poetry and plays.

Historically, ANEL has always advocated for the reaffirmation and strengthening of copyright. In 2009, we presented a brief to Canadian Heritage and Industry Canada on the reform of copyright in the digital age. In 2012 we submitted several amendments in the brief we tabled with the legislative committee studying Bill C-11. None of the amendments we submitted were taken up.

We are here before you again in 2018 to discuss remuneration models for artists, at a time when technology is disrupting traditional models. Let's be clear; we are discussing the value placed today on a work as it compares to the work involved in creating, producing, and disseminating it, and ultimately, to the price the user is willing to pay to have access to it.

We wish to discuss the way in which digital and related technologies continue to change our profession, and also the changes in readers' habits and the use that is made of literary works. To that end, we will briefly touch on a few points. First, we will give you our interpretation of the impact of this law on Canadian publishers and citizens. We will then give an example of what the act did not do. Finally, we will reflect on the trade of publishing in the digital age, and we will conclude with our expectations following this exercise.

We hope that the book sector, and, more broadly, the Canadian cultural sector, will get a better hearing this time, and that your work will again give creators a legal framework that will provide them with the stability needed to innovate in the creation, production and dissemination of Canadian books. Copyright has always been and remains an economic right for the specific purpose of remunerating the work of creators and regulating the market for these products of the mind.

Since its modernization in 2012, The Canadian Copyright Act, much criticized internationally, has become the example of what not to do. This bad reputation is mostly due to the addition of several exceptions, such as the one for education. In addition to not respecting the three-step test of the Berne Convention, of which Canada is a signatory, on the production of literary and artistic works, the act has had and continues to have a significant economic impact on Canadian publishing and its authors.

Over the past five years, Access Copyright royalty distributions have dropped by 80%. In Quebec, Copibec, the collective reproduction rights management organization, has seen the university rights per student decline by 50%, and the amount collected by a rights holder per reproduced page dropped by 23%. The result is that the royalties paid to authors and publishers are in free fall, even though, paradoxically, the student population is increasing.

I will not spend too much time on the loss of income of the management companies, but I do want to mention the opposition to the book sector shown by educational institutions and student associations. That opposition, we need to point out, derives mostly from two Supreme Court decisions from 2004 and 2012. The creation of user rights, confirmed in the broad fair use exceptions in the 2012 act, particularly in education, stifled reflection on the place occupied by creators in the development of culture in our societies. Worse yet, copyright was viewed as a perverse principle that limits access to intellectual works, which is of course completely false. On the contrary, for close to fifty years, the education and publishing worlds collaborated to provide pupils and students with access to school books and a diverse, rich and high-quality national literature.

[Johanne Guay, Chair, Copyright Committee and Members' Rights, Association nationale des éditeurs de livres]

I am going to discuss what the 2012 act did not accomplish.

As ANEL mentioned recently in its testimony before the Standing committee on Industry, Science and Technology, that law did not manage to curtail piracy. Not only is it proliferating, but the tools put in place to frighten the offenders are not effective. By leaving the burden of proof with the violated rights holder, by minimizing sanctions and by imposing a simple notification regime, and a requirement of notification for Internet service providers, the legislator did not fulfil its mandate, as shown by the increase in publishers' legal expenses to defend their authors. The government has to tighten the rules to fight piracy, or at the very least, broaden the private copy regime to reading and content-sharing devices.

The legislator must ensure that Canadians are made aware of the need to respect copyright, and of the use they can make of works, especially when they are in digital form. Systematically the terms “accessibility” and “free of charge” are confused. However, even though accessibility is a false problem, the lack of fees is completely illusory: the user purchases an increasing number of electronic devices and software programs, whose short shelf life forces periodic reinvestment, and the user also has to subscribe to an increasing number of online services.

Priorities are shifting from the content to the containers, and the value of goods is moving from the content to the technologies to access that content, and this contributes to the devaluation of cultural goods, and to the loss of income of the rights holders. While the cost of subscribing to these technological services is increasing, the sale of books is decreasing.

The Canada Book Fund data show a decrease in the net sales of Canadian works of more than $63 million between 2010 and 2017, with an important drop between 2011 and 2013 of more than $41 million. For the francophone publishing sector alone, there was a decrease of $30 million. In Quebec, data from the Observatoire de la culture et des communications du Québec indicate a drop of more than $119 million in the total sale of new books between 2010 and 2017.

I will now address the digital shift in the publishing world.

Today, we publish both paper format and digital works, and we are increasingly exploring the production and commercialization of audio and multimedia books. These new formats require both internal adaptation in our publishing houses, and a financial investment, and this is also the case for the other actors in the book publishing sector.

Publishers note that the digital shift requires reinvestment that is not at all offset by an increase in revenue. Many feel that the part of the value chain that returns to them does not correspond to the amount of work they do. That reinvestment is not only required by the creation of digital books and the development of new skills, but is also due to the new marketing practices for the paper book in the digital world.

You must understand that the financial risk taken by the publisher is assumed by the publisher; the publisher is the one who pays. For a digital production, the average salaries in the cultural sector are a far cry from those in the technological sector. The book industry should not be defined by a format, but judged on the value of its contents and on its capacity to create them; that is our trade.

On that point, I would like to add a word on the will of departments of Education to make schools and other educational institutions increasingly digital.

[The Chair, Liberal, Julie Dabrusin]

I just want to inform you that you are now at the eight-minute mark.

[Johanne Guay]

I will jump to our conclusions.

[The Chair, Liberal, Julie Dabrusin]

You could complete your presentation in the answers you give to our questions.

[Johanne Guay]

Perfect.

[Arnaud Foulon]

No problem.

In conclusion, I would simply say that it is urgent that the government call on all of those who benefit from the work of Canadian creators, otherwise we run the risk of having classes that will have the latest in interactive white boards, but without quality content to justify their use for educational purposes.

What do we expect from the legislator? We want him to fulfil the mission to stop counterfeiting, we want the law to have more teeth, and if the legislator cannot put in place even preliminary solutions, that he finally be convinced that private copying is not a tax, but a way to support culture.

We expect the legislator to review the fair use principle for educational purposes by bringing in a narrow definition of education and restricting the broad interpretations of what constitutes a teaching environment.

We expect the legislator to bring in effective promotion of copyright, and encourage users to respect it, particularly in the field of education.

Finally, the legislator needs to make Internet providers accountable by demanding that they inform their subscribers about copyright, and cooperate in withdrawing access from non-compliers, when the need arises.

On behalf of the vibrant world of Canadian French-language publishing, we thank you for your attention.

[The Chair, Liberal, Julie Dabrusin]

Thank you for your testimony.

We will now have our question and answer period.

Mr. Breton, you have seven minutes.

[Pierre Breton, Liberal, Shefford, QC]

Thank you very much, Madam Chair.

I thank each of the experts for joining us today.

All testimony is important, and I know, Ms. Guay, that you did not have the opportunity to finish your statement. So I will allow you to complete what you had to tell us for the purposes of our report.

[Johanne Guay]

In fact, I was almost done.

[Pierre Breton, Liberal, Shefford, QC]

Go ahead.

[Johanne Guay]

I was talking about digital models.

Publishers adapt their commercial models to respond to demand from clients, which is increasingly diversified. That said, let's not kid ourselves: if the future is tending toward more digital works being produced at all levels, we will have to recognize that publishers have professional digital experience. They are content developers. We must make sure that they have funding for that. If that is not done, national school book publishing, notably, which has been experiencing extremely large financial losses since 2012, will have to yield its place to foreign school book publishers.

[Pierre Breton, Liberal, Shefford, QC]

Personally, I like to read. One can read for information, to relax, or for many other reasons. That said, I don't know how the cost of a book is broken down.

Ms. Guay and Mr. Foulon, could you tell us what part of the cost of a book is given to the author, the publisher and the bookstore representative, respectively? There must be data on that.

[Johanne Guay]

I'll give you the general basic average. The author receives 10%; the bookstore receives 40%, and the distributor receives between 17% and 20%. As for the remaining 33%, if my calculations are correct, it goes to manufacturing, marketing and employees.

[Pierre Breton, Liberal, Shefford, QC]

Who gets the last 33%?

[Johanne Guay]

It goes to production, so to publishing and also marketing. The publisher pays for all that, including printing costs. When the books come back, someone has to pay the bill.

[Pierre Breton, Liberal, Shefford, QC]

The author gets 10%.

[Johanne Guay]

Yes.

[Pierre Breton, Liberal, Shefford, QC]

Have things worked this way for long?