Finance Committee on Nov. 7th, 2018

[Chief Robert Louie]

Correct.

[The Chair, Liberal, Wayne Easter]

Okay. Good. Thank you.

I'm sorry to cut you off.

Next we have Mr. Lynds from the Intellectual Property Institute of Canada.

[Grant Lynds, Past President, Intellectual Property Institute of Canada]

Thank you, Mr. Chair and committee members.

As mentioned, my name is Grant Lynds. I'm the immediate past president of the Intellectual Property Institute of Canada. Thanks very much for inviting IPIC to present to you its initial thoughts on Bill C-86 and to answer any questions.

As you may know, IPIC is the Canadian professional association of patent agents, trademark agents, and lawyers practising in intellectual property law. IPIC represents the views of Canadian IP professionals in making submissions to government and other bodies.

[The Chair, Liberal, Wayne Easter]

Grant, could I slow you down a notch? The folks in the booth here are having a hard time keeping up.

[Grant Lynds]

I guess I was just trying to make up time.

IPIC represents the views of our IP professionals in making submissions to government and other bodies. Our activities include a wide breadth of activities in education, continuing professional development and raising IP awareness in the business community. For the past several years, we've even created a voluntary code of conduct for our members in order to belong to our institute.

In the past few days since Bill C-86 was tabled, we’ve had about 160 of our members looking at the provisions with the proposed changes to the Patent Act, the Trade-marks Act and the Copyright Act. In that brief few days, we’ve been considering the wording, but we will no doubt want to put in a written submission, given the scope of the detailed proposed changes.

There are a few examples that immediately hit our members, and I’d just like to touch on those.

One change in particular is a change in what’s known as file wrapper estoppel in the patent litigation field. This was introduced by the new proposed subsection 53.1(1) in the Patent Act, which is essentially the ability to introduce prosecution histories, the back-and-forth between the applicants for patents and the patent office, into judicial proceedings. This would change many years of our Canadian judicial precedent.

This provision was introduced with little notice or debate and was not mentioned as part of the national IP strategy. More specifically, though, our members felt that there was a lack of an appropriate transition period for this provision, especially with respect to active patent litigation and the fact that existing patents were prosecuted or obtained when this legal doctrine was not part of Canada’s patent laws. Based on this new provision, the doctrine would apply immediately if and when these patents are enforced.

In hearing from our committees that looked at Bill C-86 in the past few days, we can say that most amendments are supported by IPIC in principle, but there are many areas that when used in practice would create, in our view, unintended consequences.

To summarize those, some examples would include prior user rights and patents, a continuing lack of a requirement to show use of a trademark to obtain trademark registrations, and the statutory damages remedy for collective societies in the copyright, which appears to remove the availability of statutory damages in regard to sound recordings.

We’ll provide a detailed submission to the committee as soon as possible identifying these potential issues.

With that said, our priority in the remaining brief time we have is really to focus on some aspects of the bill that create the college of patent and trade-mark agents.

As many of you know, we’re happy to see this enabling legislation in Bill C-86. IPIC has been advocating to have such a governing body for almost 23 years. Looking at the legislation, what I’d like to encapsulate is two items that struck us as issues of concern.

The first issue really relates to two provisions, paragraphs 14(c) and 14(d) of the enabling college legislation. Paragraph 14(d), in effect, prevents IPIC members who have sat on one of our 37 committees in the preceding 12 months from being eligible to sit on the college’s board of directors or other important committees of the future college. It would also exclude those who have been volunteers of other organizations representing our profession in Canada and internationally.

IPIC has a great membership of volunteers. We have more than 400 volunteers sitting on our committees, which is about one-quarter of our membership. These are the profession’s most engaged members and often the most senior and most knowledgeable people of the profession. Taking into account that these would be excluded, our view is that after that exclusion, you’re really left with an extremely small pool of candidates who have the necessary experience and knowledge to sit on the college board.

As an example, we have many committees that deal with professional development. We have members who deal with the Federal Court with regard to changes in Federal Court litigation. We have public awareness committees; one is actively advising on indigenous IP issues. All of these members, based on this provision, would be excluded from the leadership board positions of the college if they had sat on these committees in the preceding twelve months

We believe this provision is unnecessary. It’s also inconsistent with other professions. For example, the Law Society of Ontario does not have such a restriction on its board members, its benchers. In fact, they encourage the members to be actively involved in voluntary associations.

In our view, the emphasis should be to repeal paragraphs 14(d) and 14(c). Paragraph 14(c) would actually make a member ineligible for the board based on membership alone. Our view is that the legislation should not prevent the college from having the best chance possible to succeed. The college should have the most qualified pool of candidates available for its leadership.

The second and final issue I'll highlight in our remaining time pertains to subclause 33(1) of the college legislation. It requires the inclusion of a code of conduct in the regulations. The code of conduct should be a living, breathing document. There's a rapid pace of change in both business and the IP profession, and we believe it is very problematic for the code to be part of a regulation. The code is often written into the bylaws or it's referenced by regulations, but it should live outside the regulations.

We recognize that the code may be deemed to be a regulation under the Statutory Instruments Act, but allowing it to exist as a bylaw or in some form outside the regulations would give the college the flexibility to amend the code efficiently and react as a one-stop organization and a guardian of the public interest. To give an example, in the case of the Law Society of Ontario, the code of conduct for them is called the Rules of Professional Conduct, which are not embodied in the regulations under the Law Society Act. The board of directors, known as benchers, oversees and approves the Rules of Professional Conduct, but the rules are not actual regulations under the act. The authority to make the rules and bylaws comes from the Law Society Act by way of legislative delegation.

In our view—

[The Chair, Liberal, Wayne Easter]

Grant, you're starting to pick up speed again, I'm told, and you are going to have to finish up.

Go ahead.

[Grant Lynds]

Thank you, Mr. Chair.

I'm just going to wrap up and say that in many cases the code is created through bylaws and there are already several provisions in the legislation that provide for strong oversight by the minister, such as the majority of public seats on the college's board being appointed by the minister, the ability to remove a director for any reason, and even the requirement for the board to do anything the minister feels is necessary.

In our view, the best place for the code is not as part of the regulations. Keeping the code separate would give the college the ability to react, the authority to act as a safeguard of the public interest, and the flexibility to revise the code and treat it as a living document for all of the members and the public.

[The Chair, Liberal, Wayne Easter]

Thank you, Mr. Lynds.

Turning to NVision Insight Group Incorporated, we have Ms. McKay, secretary-treasurer, Nisga'a Nation, and Mr. Mehaffey, senior policy adviser, Carcross/Tagish First Nation.

Welcome, both of you.

[Corinne McKay, Secretary-Treasurer, Nisga'a Nation, NVision Insight Group Inc.]

[Witness speaks in Nisga'a]

The English translation of my Nisga'a name means “pearly fin”, and I've said good evening to you all. It's good to see you all.

As Mr. Chairman has stated, my name is Corinne McKay. I am the elected secretary-treasurer of the Nisga'a Nation. We thank you for the opportunity to present to the Standing Committee on Finance.

I would like to start by noting that the Nisga'a Nation was the first indigenous nation in British Columbia to enter into a modern-day treaty, and I have a copy with me.

The Nisga'a treaty was also the first modern treaty to be constitutionally entrenched as self-government. I note, among the contents of Bill C-86, amendments to the Income Tax Act and the Excise Tax Act, the introduction of the pay equity act, changes to the First Nations Land Management Act, and many other changes.

It's always positive to see budget implementation bills that acknowledge and seek to address the needs of indigenous peoples. This builds on the budget 2018 announcement about specific funding for self-governing indigenous governments. This was the first time that the needs of Canada's modern treaty partners were explicitly acknowledged in a federal budget document.

Future budget processes, including budget implementation, should continue to build on these positive developments in two ways.

First, the needs of self-governing indigenous governments should always be taken into account and be specifically addressed in the budget. For example, there should continue to be specific allocations to self-governing indigenous governments of any infrastructure or housing or gap-closing funds, and I note that there was a discussion on housing just prior to our presentation. Housing is a very real need in our communities, and the status of housing in our communities still leaves much to be desired to improve the housing conditions of our people.

The second is that future fiscal policies related to self-governing indigenous governments should be developed collaboratively. The Government of Canada acknowledged the failings of its pre-existing fiscal policies and invited self-governing indigenous governments to participate in the collaborative fiscal policy development process. It is important to note that this process is separate and apart from the government's engagement with the AFN, the Assembly of First Nations. It is engagement directly with self-governing indigenous governments.

In this collaborative process, indigenous government representatives and federal government representatives work closely to develop a shared understanding of the interests of both Canada and the indigenous governments. They build a new fiscal policy from the ground up. This has never been attempted before. It is important to recognize that the collaborative process for developing policy has resulted in a package of fiscal policy documents that, combined with the commitments Canada has made in modern treaties, are more respectful of the circumstances and needs of the indigenous governments than any previous federal fiscal policy.

This work is to be praised and to be emulated. All future fiscal policies should be developed collaboratively.

We thank you for taking the time to hear the support that we have for the collaborative process. We find it's respectful and it builds on the work that has been done, and we see that this is the start of a new dialogue that will improve the lives of our people, and as Canadians, improve the lives of Canadians.

Thank you.

[The Chair, Liberal, Wayne Easter]

Thank you very much, Ms. McKay.

I'll probably date myself here, but I remember well the night—more than a night, 37 hours it was—of voting on the legislation to advance the Nisga'a Nation. I'm probably the only one who's still here from that time.

Now we go to the Public Service Alliance of Canada. We have Ms. Picard, national executive vice-president, and Ms. Berry, legal officer.

The floor is yours. Welcome.

[Magali Picard, National Executive Vice-President, Public Service Alliance of Canada]

Good evening.

Thank you for the opportunity to appear before you today on behalf of the Public Service Alliance of Canada (PSAC).

My presentation will be about the new pay equity legislation in division 14 of part 4 of Bill C-86.

Overall, PSAC is pleased with the proposed act. For decades, our union has been at the forefront of fighting for women’s right to equal pay for work of equal value.

While we have had successes, the time it took to get results through a complaint-based process often meant that the women who should have received the pay died before they saw a penny.

PSAC believes this act is a good step towards redressing existing pay inequities while at the same time creating a culture where pay equity can flourish and become the norm.

We are also pleased to see the provisions on appointing a pay equity commissioner. However, we caution that she must have sufficient resources to be able to fully implement the act.

But PSAC has two very important concerns to point out.

Let's start with section 2, according to which the purpose of the act is “to achieve pay equity through proactive means by redressing the systemic gender-based discrimination” in compensation. However, this laudable language is undermined by the following phrase: “while taking into account the diverse needs of employers”.

PSAC is concerned that the inclusion of this statement, may give employers significant legal weight to be able to challenge decisions of the commissioner.

They can argue that the needs of the employer are equal to the advancement of pay equity as they are both articulated in the purpose of the act.

Legal scholars and the Supreme Court of Canada have weighed in on the legal significance of the purpose clause in legislation.

We do not believe it was the government's intention to undermine the objectives of the new, proactive law. For this reason, PSAC recommends that the committee delete the following: “while taking into account the diverse needs of employers” from the purpose of the act.

While we recognize that responsibility to achieve pay equity resides with the employer, there are multiple provisions in the act allowing an employer to request flexibility, extensions and exemptions that will support the employer's diverse needs.

Our second concern has to do with section 20, which deals with decision-making on joint employer-employee pay equity committees. This provision requires all employee representatives on a committee to come to a unanimous decision or forfeit the employee-side vote, allowing the employer's decision to prevail.

In practice, this would give non-unionized employees a veto over the preferences of unionized employees, and vice-versa, while also giving bargaining agents vetoes over each other's proposals.

It is conceivable that this system would most significantly disadvantage representatives of female-predominant classes over those who may not have the same interest in having a robust pay equity plan.

Again, PSAC does not believe that this was the intention of the government in an act that is trying to redress systemic gender wage discrimination. PSAC asks the committee to amend section 20 by removing:

A decision of a group counts as a vote only if it is unanimous.

And replacing it with:

A decision of a group counts as a vote if a majority of the group agrees.

The following sentence will also need to be removed from the section:

If the members who represent employees cannot, as a group, reach a unanimous decision on a matter, that group forfeits its right to vote and the vote of the group of members who represents the employer prevails.

We believe these two amendments are essential to the effective implementation of the new law and we urge the committee to amend the bill accordingly.

PSAC looks forward to working with the government on the development of the regulations and assisting in any way we can with the expertise many of our staff and union members have in pay equity in the federal sector.

Ms. Berry and I would be happy to answer any questions you may have.

Thank you.

[The Chair, Liberal, Wayne Easter]

That's part four, division 14, section 20, right?

[Magali Picard]

Yes, exactly.

[The Chair, Liberal, Wayne Easter]

We'll turn now to Mr. Geist, as an individual.

Welcome, Michael.

[Dr. Michael Geist]

Good evening. My name is Michael Geist. I am a law professor at the University of Ottawa, where I hold the Canada research chair in Internet and e-commerce law, and I am a member of the Centre for Law, Technology and Society. I appear today in a personal capacity, representing only my own views.

I'm pleased to have the opportunity to discuss the intellectual property provisions found in Bill C-86. As you know, budget 2018 prioritized a national IP strategy, and while aspects of that strategy involve investment in issues such as IP education, there were several legal and policy commitments that required legislative reform.

Many aspects of Bill C-86's IP provisions, I would argue, are both long overdue and welcome. Since abusive intellectual property rights may inhibit companies from innovating or discourage Canadians from taking advantage of the digital market, crafting rules that address misuse can be as important as providing effective IP protection.

There are several examples of how the bill addresses the issue of IP misuse. For example, misuse of Canada's copyright notice and notice system, which was formalized in 2012 to allow rights holders to forward allegations of copyright infringement to Internet users through their internet service provider, has been an ongoing source of concern. The bill amends the Copyright Act to ensure that settlement demands are excluded from the notice and notice process, thereby restoring the original intent of the system.

Patent changes to address patent trolling provide another important reform, I would argue. The bill seeks to combat patent trolls by creating new minimum requirements for patent demand letters, which should discourage the sending of deceptive letters. The rules also include the right for a recipient of one of those letters to pursue damages or injunctions at the Federal Court.

The bill also includes provisions that expand prior use rights, address standard essential patents and create safeguards for research, with a rule that deals with acts committed for the purpose of experimentation not being an infringement of the patent. In doing so, I think the bill restores a better balance to support innovation within the patent system.

Bill C-86 also includes notable reforms to the Copyright Board, including an important reference to considering the public interest in the decision-making process. That's something that the board would say that it would do. Making it explicit in the legislation, I think, is the right thing to do.

It also rightly does not include an expansion of statutory damages among the extensive reforms. Arguments in favour of expansion were unconvincing and would have usurped the role of the industry committee, which is currently engaged in a detailed review of copyright. I think that issue will still be hotly debated as part of the copyright review, but that committee is the appropriate place for discussion of statutory damages, not within a package of largely administrative and governance reforms to the board.

While this represents the positives in the bill, I think there is still some room for improvement. I want to quickly touch on three recommendations.

First, the implementation of some of the reforms, including the patent reforms that I've just described, is likely to be delayed for years, since they are structured to require regulations to define issues such as the requirements to be contained in a patent demand letter. Officials on a call just last week indicated they already know what they'd like to see included. The long delays undermine the likely success of the government's IP policy and innovation strategy. I see little reason not to include those requirements within this bill, as I don't see any reason for the issue to be left to the regulation-making process.

Second, the notice and notice copyright fix is good, but we can still do better. There should be penalties for sending abusive notices. We know that many Canadians, thousands of Canadians, have unknowingly paid hundreds or even thousands of dollars in these cases, and we need penalties for those who abuse the law in this way. There should be common standards established to make it easier for Internet providers to identify compliant notices.

Third, budget 2018 includes several references to artificial intelligence, AI, one of Canada's most important innovative sectors, yet despite the prioritization of both AI and the IP strategy, it leaves a major AI copyright barrier untouched. Several of the world's leading AI companies, including Canada's Element AI, Microsoft and members of the Business Software Alliance, have pointed to the need for an exception for text and data mining or informational analysis. Without such an exception, Canada trails badly behind competitor jurisdictions such as the United States, Europe and Japan, which have already addressed this issue by allowing for data mining without the risk of copyright liability.

Canada should not wait years to address this commercialization barrier. Given the budget's inclusion of both AI and intellectual property as priority areas, Bill C-86 is an obvious place to fix the problem.

I look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you to all of you for your presentations.

We will go to five-minute rounds, beginning with Mr. McLeod.

[Michael McLeod, Liberal, Northwest Territories, NT]

Thank you, Mr. Chair, and thank you to all for coming here to present.

The majority of the people in my riding are indigenous, and it makes me feel really good to see that we have two delegations here from indigenous communities and indigenous nations. Thank you for coming.

It's the first time I've seen anybody at a committee from the land claims coalition and self-governing nations, I believe. I might be wrong, but welcome to everybody.

I've said it many times, but I want to say again that as we move forward, reconciliation and self-government require a new fiscal relationship. We need to hear more about it.

My question goes to NVision. I want to ask you to explain to us how the First Nations Fiscal Management Act works for self-governing nations.

Maybe you also could talk about how it intersects with the collaborative fiscal process.

[Matt Mehaffey, Senior Policy Advisor, Carcross/Tagish First Nation, NVision Insight Group Inc.]

The issue with the first nations finance act is that, like many of the institutions Canada has set up for indigenous people, it leaves out self-governing nations. It deals with Indian bands on Indian reserves and it doesn't provide for access to the bonds for self-governing nations. The amendments that have been developed, again, deal only with Indian bands. All the changes exclude self-governing nations.

This has been a challenge that indigenous governments with self-governing agreements and comprehensive land claims have faced since the very first modern treaty. While Canada is entering into these agreements, it's not changing any policies or processes. The government is not looking at the institutions it's developing and ensuring that this is done in a way that addresses the commitments and changes that have been brought about by these new agreements. Self-governing nations are falling through the cracks when Canada is developing solutions.

The First Nations Finance Authority and the processes that are set up there are important. It's an important tool for indigenous governments, but the way it's been established and the way these amendments have been developed again eliminates access for self-governing nations. This means those nations either have to borrow funds at a much higher rate or save the money before they can spend it.

The challenge there is that when you save that money, it has been used as a challenge in negotiations with Canada. You've saved that money and you have a big surplus in the bank, but it's because you don't have access to financing, so that's the only way you can accumulate the capital you need to develop infrastructure in your communities.

The only way programs and services designed to eliminate the gaps between indigenous Canadians and non-indigenous Canadians are going to be successful is if we have the kind of infrastructure necessary to ensure there's clean water, safe housing and a community that's equal to what other Canadians take for granted.

We need the federal government to work with us. This is a topic we're dealing with in the collaborative fiscal process, which consists of all but one of the self-governing nations in Canada working collectively in an effort to develop a comprehensive fiscal arrangement with Canada. That is what we need.

One of the challenges is that everything to date has been done in silos and in isolation, so it limits the benefits of each of those things. We need it to be done in a comprehensive way, so that we can access the resources we need, but we also need it to be done in conjunction with a fiscal relationship that ensures that indigenous governments get the appropriate share of the wealth that's generated from their territory and are able to then use that to provide services to their communities.

We can't be expected to borrow our way out of poverty, but we need access to financing in order to deal with large expenditures that will then be amortized over many years. We need all of these pieces to come together, and we need the federal government to ensure that when it's developing laws and policies, comprehensive land claims and modern treaty nations are not left behind.

[The Chair, Liberal, Wayne Easter]

Thank you. We'll have to end it there, but that was a very thorough answer.

Mr. Kmiec is next.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you, Mr. Chair.

Mr. Lynds, I want to focus on and ask you a bunch of questions about the college. You've said that your institute—I looked up your institute online—has been calling for the creation of a college for a long time now.

Maybe you can explain this to me. Is it a serious issue in that a lot of people are misrepresenting themselves as trademark agents? Typically, that's why professional colleges are created.

That's my first question, but before I let you answer, I have a second. You mentioned that you had amendments to the BIA that you wanted to propose. When were you thinking of getting those to the committee?

[Grant Lynds]

As soon as you need them, which is probably yesterday, I'm guessing.

[Voices]

Oh, oh!

[Grant Lynds]

Tomorrow, basically.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Yes. There's a programming motion passed by the opposite side over our objections that basically forces us to be done by November 20. We have to put in our amendments by....

This is for everybody here, just so you know. If you have amendments that you'd like to see proposed—either side—you'd need to have them in to us as quickly as absolutely possible, because we have to submit them by I think 5 p.m. tomorrow. The clerk can correct me if I'm....

[The Chair, Liberal, Wayne Easter]

It's November 15.