Canadian Heritage Committee on Nov. 29th, 2018

[The Chair, Liberal, Julie Dabrusin]

I call the meeting to order.

This marks the beginning of our 134th meeting of the Standing Committee on Canadian Heritage. Today we are continuing our study of remuneration models for artists in creative industries.

We have with us Roanie Levy and Sylvia McNicoll from Access Copyright.

Also with us is Frédérique Couette, from Copibec.

Finally, we have with us Suzanne Aubry and Laurent Dubois, from the Union des écrivaines et des écrivains québécois.

I've spoken to the Access Copyright and Copibec representatives, and they asked that we start with Copibec.

Ms. Couette, you may go ahead.

[Frédérique Couette, Executive Director, Copibec]

Thank you for inviting us here today.

My name is Frédérique Couette, and I am the executive director of Copibec, the collective society established by Quebec authors and publishers.

A not-for-profit organization, Copibec grants licences and remits royalties to authors, freelance journalists, creators and publishers. Each year, we manage millions of traditional and digital uses, which would be too complicated to manage individually. Collective administration is the exercise of copyright and related rights by organizations acting in the interest and on behalf of the rights holders.

The Union des écrivaines et des écrivains québécois will tell you about the economic situation of Quebec writers. Only 10% to 15% of them are able to make a living from their writing. In a market as small as ours, copyright revenue from sources other than book sales is particularly important for both authors and their publishers. Compliance with copyright rules is essential to ensure that authors can continue their creative work and that the publishing industry can survive. The $200 million that Copibec has remitted to authors and publishers during its 20 years of existence has supported the continuity of an innovative cultural sector.

In the review of the Copyright Act that led to the 2012 amendments, we warned MPs and the government about the negative effects of introducing too many exceptions in the act and adding the word “education” to the fair dealing exception. Unfortunately, we can only conclude that our fears were, for the most part, well founded.

Representatives of the education sector stated that it was merely a clarification and that licences would continue to be purchased. Yet, in the month following the enactment of the amendments, Quebec universities asked to renegotiate their licences with Copibec and demanded an 18% reduction in the annual royalty per student. Since then, every renegotiation of agreements with Quebec universities and CEGEPs has resulted in a further decrease in royalties. Consequently, the annual royalty has declined by nearly 50% for each university student—from $25.50 in 2012 to $13.50 in 2017—and by 15% for each CEGEP student.

Outside Quebec, universities, colleges and education departments and ministries terminated their licences with Access Copyright in January 2013 and forced rights holders into a spiral of legal actions. The institutions are appropriating the right to free, systematic, institutionalized reproduction of excerpts of creative works for which they previously paid licence fees to the collective society.

In June 2014, Université Laval followed suit and refused to renew its licence with Copibec, forcing rights holders to launch a class action. Fortunately, Copibec and the university recently came to an amicable agreement that provided a favourable outcome for all parties involved.

Over the last five years, there has been a proliferation of lawsuits and a steady erosion of licence revenue due to pressure from the education sector. For example, since 2012, our authors, creators and publishers have seen a 23% drop in the royalty paid for each page copied by the universities, even though Copibec has kept its administration fees unchanged at 15%.

The impact of this steady decline in collective administration revenue is very significant, as nearly 75% of the licence revenue distributed by Copibec comes from the education sector. Quebec's authors, creators and publishers are most affected by this, since the majority of the 72 million copies reported to us annually are copies of excerpts from Québécois works.

Our authors and creators are feeling the brunt of the decrease in collective administration revenue, as their already precarious situation and their financial capacity to do creative work are being further eroded with each dip in revenue from one of the links in the copyright chain. Our publishing houses are also being compromised, since 80% of the annual reports relate to reproductions from books, and the associated revenue accounts for 18% of their net profits, on average.

Collective administration royalties paid by Copibec make a significant contribution to keeping our cultural journals and publishing houses afloat, so that they can continue to tell our stories and provide educational content that meets the specific requirements of our school system.

Let's not kid ourselves: what's at stake here is the dissemination of our culture and our conception of our cultural heritage.

Rights holders have modified their collective society to bring it into line with the new needs of the consumers of creative works. In response to the advent of digital reproduction media, they asked Copibec to manage additional rights for uses such as classroom projection, digitization and instructional platforms.

We also offer users the ability to make copyright payments online and have accelerated the processing of data we receive and payments to rights holders.

In partnership with publishers, we have developed the DONA service, which allows institutions to acquire a work on a digital platform designed to meet the needs of students with perceptual disabilities.

In 2014, Copibec and its partners also created SAMUEL to provide schools and CEGEPs in Quebec as well as francophone communities outside Quebec with access to a wide variety of high-quality French-language content through a digitized content platform.

We continue innovating to promote local culture, make art more accessible, and increase availability and remuneration.

With regard to rights holder remuneration models, collective administration is an integral part of the revenue sources of authors and publishers. It is an efficient, versatile, internationally recognized model that assures cultural diversity and availability. It is part of a drive toward modernity and the future of a society that invests in its culture in the digital era.

In this regard, Quebec's collective administration experience, despite the regrettable decline in royalties, provides an effective model that has evolved in response to users' needs without ever losing sight of the importance of combining availability of works with remuneration for their use. In this model, annual royalties paid for the use of works have always been very affordable. For university students in Quebec, they make up, on average, less than 0.5% of their total annual tuition fees. For universities, they are less than 0.1% of the annual operating budget. Paying royalties for reproducing excerpts of creative works has never jeopardized the Canadian education system or resulted in excessive debt loads for students.

Although reform of the Copyright Board does not fall directly within this committee's purview, I would express our deep disappointment with the fact that the proposed reforms for modernizing the Copyright Board do not deal with the harmonization of damages awarded to collective societies.

The review of the Copyright Act, in which you are participating, will be a lengthy process, and during that time, Quebec's authors and creators are not receiving the royalties to which they are entitled for the extensive use of their works by educational institutions outside Quebec. This situation persists even though tariffs have been certified by the Copyright Board and the Federal Court has handed down a decision clearly establishing that those institutions' copying policies are unfair.

This crucial issue must be resolved with an amendment to the act. In the meantime, we urge the federal government to act now to encourage the restoration of healthy, lasting and necessary relationships between the authors of literary works, through their collective societies, and the education sector.

I conclude my presentation by quoting the following passage from the 2017 Creative Canada Policy Framework concerning the Copyright Act: “A well-functioning copyright regime should empower creators to leverage the value of their creative work, while users continue to enjoy access to a wide range of diverse cultural content.” Collective administration is perfectly consistent with these objectives and strikes the difficult balance between access and remuneration.

Thank you.

[The Chair, Liberal, Julie Dabrusin]

Thank you.

We will now hear from Roanie Levy and Sylvia McNicoll from Access Copyright.

[Roanie Levy, President and Chief Executive Officer, Access Copyright]

Thank you.

Thank you for the invitation to appear today. My name is Roanie Levy and I am president and CEO of Access Copyright, a not-for-profit copyright collective. I will be sharing my time today with professional writer Sylvia McNicoll. She will provide you with a creator's account of the current copyright challenges.

For 30 years, Canadian creators and publishers of trade books, textbooks, journals, newspapers and magazines have licensed the copying of parts of their works through Access Copyright. We manage these rights at Access Copyright in the same way that Copibec does, as just explained by Frédérique.

As explained by Frédérique, collective licensing is a practical and efficient model to administer rights. For a reasonable fee, educators and students have legal access to content, with the assurance that creators and publishers are paid for its use. For over 20 years this model has worked. Access Copyright distributed almost $450 million to writers, visual artists and publishers.

Unfortunately, changes to the Copyright Act in 2012 have had devastating consequences. The education sector made a unilateral decision to interpret fair dealing as free copying when they decided to stop paying for the use of over 600 million pages a year and instead rely on so-called fair dealing guidelines. That's 600 million pages that creators and publishers are no longer receiving compensation for.

Royalties collected by Access Copyright from the education sector have declined by 89% since 2012. Historically, these royalties represented 20% of the creators' writing income and 16% of publishers' profits. This is an estimated loss of $30 million a year in licensing royalties to creators and publishers, and notably this amount does not include the loss in primary sales due to the substitution effect of free content copied under the education sector's copying policies.

When we reference the 600 million pages that are copied for free, it's important for the committee to understand what we are referring to. These pages are not, as the education sector would have you believe, licensed scholarly journals. They are not open-access content or material written only by salaried academics. The 600 million copies in question are items like short stories, novels, poems, essays, children's stories and Canadian textbooks, all items that were previously paid for under Access Copyright licences and that continue to be copied today.

In 2017 the Federal Court unequivocally concluded that York University's guidelines and practices are not fair. They are not fair, as the court says, in either their terms or their application. In other words, the words on the page and the way they are used are not fair. York's guidelines are virtually identical to the copying guidelines and practices adopted by educational institutions across Canada outside of Quebec. The court found clear evidence of the substitutive impact of copying and the corresponding direct and adverse effect on creators and publishers.

I must emphasize that this is a matter of public interest. If you believe Canadian culture is important, you must ensure that creators and publishers are fairly compensated when their works are used. Fair compensation does not limit access as the education sector argues. Rather, it ensures that creators can continue to do what they do best: writing, researching, designing and publishing the Canadian stories and texts that are essential to Canadian students at all levels.

Despite these challenges, I remain optimistic, because there are two things that the federal government can do to remedy the situation.

First, clarify that fair dealing does not apply to educational institutions when the work is commercially available. This will ensure creators are justly compensated for the use of their works and reduce costly litigation, the expense of which is largely borne by creators.

Second, harmonize statutory damages. We were disappointed to see the recent reforms to modernizing the Copyright Board did not extend statutory damages to all collectives. Ensuring that all collectives have access to statutory damages through harmonization of the provisions that are already in the act will make the Copyright Board's certified tariffs meaningful and ensure that writers and visual artists are paid when their works are copied.

There is no rationale that justifies why musicians and songwriters should have the means to ensure that they are paid for the use of their works while authors and visual artists do not.

Ultimately we all share the same goal for all creators: to enable creators to get paid properly and on time.

Thank you.

[Sylvia McNicoll, Author, Access Copyright]

Thank you, Roanie.

Thank you all for listening.

I've been writing for over 30 years, which coincides with Access Copyright, I guess. I have more than 35 books published, some internationally. I may not be the most famous writer, but I have one of the longest publishing careers in my genre, which is writing for children and young adults.

Funded by a Canada Council arts abroad grant, in October I visited Colombia because grade 7 students study my historical fiction set in Hamilton, Ontario, called Revenge on the Fly. I visited 17 different schools, and every one of those children held my book in their hands and cheered. It was wonderful to share our culture with these children.

However, as I told emerging Colombian writers in a Bogotá library talk, the secret of the longevity of my career is, sadly, my ability to accept less money.

Back in 2012, my income was $45,000. I edited a magazine, worked as an artist in residence, spoke at libraries and schools, and wrote articles for adults as well as novels for kids. Secondary rights, such as public lending rights and copyright licensing, were and are still a crucial part of the writer's earnings, as is selling foreign rights. It's static income. I don't have to work all night to earn it.

This year, with two novels out, school visits, and teaching, and including Canada Council travel expense money, which is considered taxable income, I will earn $17,000. Writers have always had to struggle to cobble together a livelihood, but never like this.

In 2012, our Canadian government unintentionally granted the education sector free content with the fair dealings clause in their Copyright Modernization Act. The educators believe you said that they could have 10% of my work for free. They don't need a licence at all.

My 2012 Access Copyright payment of $3,000 dropped to $300 in 2018. Schools have not paid a licensing fee since 2013 and they're suing Access Copyright for alleged overpayment.

Schools at all levels continue to buy fewer books and copy without licences. Yesterday I visited a Canadian school, grades 3 to 6 in a gym. There were 200 kids. Not one of those children held my book in their hands. None of my novels were on display, nor were they in the library.

Every page I create requires research, writing and rewriting, as well as editing and design. Not one of these pages is free to produce. I love my role of cultural ambassador. I'm proud to do this work, even if I can't live on it, but with the current compensation models for writers and artists, our culture is not sustainable.

I urge you to stand up for it. Support strong copyright laws. As Roanie said, rescind the educational exemption when our work is commercially available and address those statutory damages.

This will not only benefit me and writers—

[The Chair, Liberal, Julie Dabrusin]

Ms. McNicoll, I'm sorry, but it's just because you guys are sharing time. You've already actually gone over time.

[Sylvia McNicoll]

May I just finish my last sentence?

[The Chair, Liberal, Julie Dabrusin]

Perfect.

[Sylvia McNicoll]

It would also show the world that culture counts in Canada. Our future depends on it.

Thank you for indulging me in the extra five seconds.

[The Chair, Liberal, Julie Dabrusin]

It was a few minutes.

[Sylvia McNicoll]

Oh, then the few minutes, Julie. Thank you.

[The Chair, Liberal, Julie Dabrusin]

That's fine.

I will now turn the floor over to Suzanne Aubry and Laurent Dubois from the Union des écrivaines et des écrivains québécois.

[Laurent Dubois, General Manager, Union des écrivaines et des écrivains québécois]

Madam Chair, members of the committee, thank you for the opportunity, this morning, to share with you the reality faced by the 1,600 Quebec writers we represent.

My name is Laurent Dubois, and I am the general manager of the Union des écrivaines et des écrivains québécois, or UNEQ. Joining me today is Suzanne Aubry, a writer and the president of our professional association.

Today, we will demonstrate to the committee just how dire the situation is for professional writers in Quebec and Canada alike. We will also discuss the many risks that come with digital technology in the absence of strong legislation to protect creators and their works.

[Suzanne Aubry, President, Union des écrivaines et des écrivains québécois]

Are professional writers an endangered species?

In 1998, a Canadian writer earned an average income of $12,879 from writing. Twenty years later, a survey, conducted by UNEQ in Quebec and The Writers' Union of Canada in the other provinces, reveals that the average income derived from writing now sits at around $9,000—$9,169 in Quebec and $9,380 in the rest of the country—according to 2017 earnings reported by writers. That represents more than a 30% drop in earnings, without adjusting for inflation.

The survey also reveals that nearly 30% of writers report doing more now to earn a living than they did in 2014, and I'm a living example of that.

How does a Canadian writer actually earn their living?

Their primary source of income is still book sales, in other words, royalties from publishers—10% of the list price of the book. Those royalties make up 40% to 45% of the income earned from writing.

The public lending right program and royalties paid by copyright collectives like Copibec account for between 20% and 25% of writers' income.

Public readings, workshops, talks and other such activities represent roughly 20% of their income.

Finally, some writers engage in freelance work or publish in literary magazines. Others are able to obtain grants and prizes, but not many.

A patchwork of sources make up a writer's income. By piecing together different sources of income, an author may have a shot at earning a decent living.

Let's not forget, writers are self-employed workers with precarious jobs who do not enjoy the same minimum labour standards as salaried workers. Nor do writers benefit from the protections afforded by a framework or collective agreement.

[Laurent Dubois]

Now let's discuss the threats posed by the digital world.

Nowadays, anyone can appropriate a work online without too much trouble. Every single day, we see people breaking copyright rules, whether for commercial or educational use. Here are some examples.

Day in and day out, teachers and educational institutions across Canada take advantage of the fair dealing exception for the purposes of education or training, set out in the 2012 Copyright Act, to avoid paying royalties for using and copying works. Creators earn that much less.

Worldwide Facebook groups facilitate the sharing of digital books, similar to a member-based service. Creators earn that much less.

A website in France provides access to book summaries for those who don't have time to read the book. The site does not pay a single royalty to the author of the actual book, claiming that its service encourages readers to discover new writers. Creators earn that much less.

YouTube tutorials on how to download books for free in 2018 show viewers the process step by step. Creators earn that much less.

We also want to tell you about a phenomenon called controlled digital lending.

California company Internet Archive, which manages the website openlibrary.org, is trying to show public libraries and Canadian university libraries that they can legally engage in the widespread public lending of works without having to pay a single royalty. The practice is known as controlled digital lending.

On May 31, at the ABC Copyright Conference, held in Vancouver and organized by a number of British Columbia colleges and universities and sponsored by the University of Alberta and the Canadian Association of University Teachers, Internet Archive representatives and universities promoted the practice of controlled digital lending. Under the guise of a digital library, these platforms provide universal access to books, whether or not they are in the public domain, without regard for the basic principles of moral rights or fair compensation for the use of works.

Ariel Katz, associate professor in the faculty of law at the University of Toronto, gave a presentation shockingly titled “Make Canadian Libraries Great Again”. In it, he maintained that the fair dealing exception in the Copyright Act was vague enough to allow controlled digital lending. He reassured the audience that the exceptions in the act opened the door to numerous possibilities without any legal risk:

We can do anything we want with regards to works unless the Copyright Act says otherwise…. Copyright owners always have the choice to speak to Parliament, who will listen and make amendments as appropriate…. Until then, [controlled digital lending] is permissible.

Will the government allow these kinds of abusive practices to take hold in defiance of copyright? Will the government tolerate Canadian universities partnering with commercial organizations to take maximum advantage of the exceptions set out in the act? Will the government stand idly by as companies impoverish creators by depriving them of the income they are owed?

This situation illustrates the bad faith of some in the educational sector and their desire to trample upon creators' rights in the name of open access. We find that shameful. It's hard to believe not only that private companies are basing their business models on the weaknesses in Canada's Copyright Act, but also that they have found a receptive audience in our very own universities.

[Suzanne Aubry]

At the international level, it's interesting to note that some countries are making real progress in protecting rights holders from digital dangers and lawless, ruthless multinational companies.

This summer the European Union, with some difficulty, passed a directive whose general political orientation deserves to be examined. The principle of this reform is to incite platforms like YouTube, that belong to Google, to provide better compensation to the artists and creators who contribute content, and see to it that these platforms not allow copyright-protected content to be downloaded.

The European MPs had to face a barrage of lobbyists advocating free-of-charge access in the name of innovation and freedom of expression, the very essence of the Web, according to them. Despite that, the members from 28 European countries held firm and finally passed that directive, which represents an unprecedented step forward in the protection of copyright in the digital age.

In the Netherlands, an agreement has just been concluded between the government and the public libraries to regulate the lending of digital material by establishing fair compensation to be divided 50-50 between the authors and publishers, based on the “one copy, one user” model. Under that model, a digital book can only be lent to one reader at a time. An embargo concept was also added, so that there will be a period of 6 to 12 months between the publication of a book and the possibility of borrowing a digital version of that book. The point being that when a book has just been published, it is important for the author that he or she be able to sell some. If the book can be borrowed in digital form immediately, he will lose revenue.

These are our recommendations.

We ask that you review the notion of fair use in the copyright act, and that the term “education” be better defined in section 29.

We recommend that the other exceptions be defined and circumscribed according to the principle that any exception should only exist when access to the works is impossible otherwise. An exception must remain exceptional.

A model of fair remuneration for offers must be put in place and be made mandatory as regards digital loans in educational field libraries by imposing the “one copy one user” model.

Furthermore, we must give management companies the means to collect on fees that are due without having to go down the legal path.

Finally, we must oblige digital platforms to put in place—as some of them already have—a detection system to prevent copyrighted content from being placed online as is done in the European model.

On behalf of Quebec authors, we thank you for your attention.

[The Chair, Liberal, Julie Dabrusin]

Now we will begin our question-and-answer period. We will begin with Mr. Long for seven minutes, please.

[Wayne Long, Saint John—Rothesay, Lib.]

Thank you, Madam Chair.

Good morning to everybody. Thank you to our witnesses this morning.

My first questions will be for you, Ms. Levy, Access Copyright.

At the last meeting we had Michael Geist in. He had some opinions on obviously many things. I'm going to read some of his quotes. I'm looking for a response. It reads:

Access Copyright’s response to the Copyright Board that the legislative change merely codifies the Supreme Court’s jurisprudence is surely wrong given that the legislation received royal assent on June 29, 2012, two weeks before the Supreme Court of Canada’s Alberta v. Access Copyright ruling. Moreover, since those decisions were based on the research and private study purposes, the addition of education must have meant something more than what was already found in the law. The inclusion of education as a fair dealing purpose was better viewed evolutionary rather than revolutionary, representing a compromise between those calling for a full fair use provision and those seeking to further restrain fair dealing.

Can you give me a response to his comment?

[Roanie Levy]

Sure. I think the most important thing to assess, whether the purposes have been expanded as a result of education being added to the Copyright Act or something that the Supreme Court has done, is whether the end use that is being done by the education sector is fair. Ultimately, that's what's important.

The Federal Court, in its 2017 decision examining York University's fair dealing guidelines, concluded unequivocally that the interpretation of the guidelines being made by the education sector is simply not fair. It's having a detrimental impact on writers and publishers.

Importantly, in the 2012 changes there were changes to fair dealing, but there were also changes made to statutory damages under the general regime. Statutory damages are an important remedy that is available when people infringe copyright. The changes to the statutory damages have led to a situation of educational institutions having very little risk for what I'll call pushing the envelope. We have seen that even after we get a court decision concluding that the guidelines are not fair in their terms or their application, not a single university has actually adjusted or come back to the table to negotiate a licence.

[Wayne Long]

Okay. Thank you for that.

I'm going to give you another one, and I'm quoting Professor Geist. He wrote:

Given Access Copyright's position before the Copyright Board, the claims that current fair dealing practices are the result of the 2012 reforms are misleading. Canadian fair dealing practices over the past five years have involved increased licensing and copying practices that are largely the result of technological change, new digital licensing alternatives, and court rulings, not the 2012 reforms, as Access Copyright and its supporters now claim in an effort to convince the committee to backtrack on the earlier amendments.

Do you have a comment?

[Roanie Levy]

Again, I think the only survey that was done of copying, and the only determination of whether it is licensed or unlicensed, is the survey that was done in the York case. The claim that York University was already licensing the content or that it was digital disruption that was having an impact on writers and publishers was presented by York University as well, in very similar terms and using the same arguments that you've just quoted from Professor Geist.

The court spent four weeks examining that testimony and that evidence, and again concluded unequivocally that the copying was by and large not licensed, and that it was done. We're not talking about some other things that they may also be doing in a digital world. They are copying and they are not paying. It was mass and systematic, so the volume is significant, and it's having an adverse impact on creators and publishers.

[Wayne Long]

Thank you very much.

My next question will be for the whole panel. Professor Geist asserts that tax incentives are a more effective means than regulation or cross-subsidization to support Canadian journalists. Do you share this view?

[Suzanne Aubry]

No.

We don't cover journalists. Although certain writers may also be journalists, we only cover the literary activities of writers. It might be preferable that Copibec provide an answer.

[Wayne Long]

Ms. Couette, would you comment?

[Frédérique Couette]

We do not share that point of view. We don't consider that allocating government subsidies or funds is the best source of income for authors or publishers. It is always difficult, random and complicated for an author whether a journalist or a writer, to obtain those subsidies.

There is a system collective management which functions very well and is recognized and used worldwide. Canada, however, is not following what the rest of the world is doing on this point. We receive fees for the reproduction of works outside of Canada. However, we receive nothing for the reproduction of Quebec works by Canadian users outside Quebec and that is not normal.