Industry Committee on May 8th, 2018

[Guylaine Beaudry]

In concrete terms, we apply the 15% limit. When professors give library employees a list of texts they want to reserve digitally, which is the case for the vast majority of reserved works, we can very easily see whether the excerpt accounts for 15% of the content. We count the number of pages of the work in question and not chapters. We also have a document we can refer to in our discussions with professors.

In order to be able to report to Copibec on a quarterly basis, we make note of all the decisions we make on texts put on reserve or those we have used to make printed textbooks, or all courses. It is clearly an advantage in terms of what we do on a daily basis with library materials.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Baylis, go ahead for two minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, Mr. Chair.

Mr. Prieur, you said that sales have dropped. Could you give us figures for the period from 2004 to now to show that drop? Can you submit them to our analyst or our clerk?

Somethings else needs to be clarified.

You said that parallel importation undermines access to a variety of titles in Canada. Is there a piece of legislation you would like to see kept? What would you like us to do about parallel importation?

[Benoit Prieur]

Regarding parallel importation, I said at the outset that we want the Book Importation Regulations, adopted in 1999, to be kept. That is the only legislative tool that enables us to defend ourselves against importers or people who are engaged in parallel importation.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

That is what you want?

[Benoit Prieur]

Yes, definitely.

[Benoit Prieur]

Since the act is being reviewed, I wanted to point this out.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You just wanted to point out that the regulations should be kept.

[Benoit Prieur]

Yes, as we did five years ago and as we do every year. It is vital for the book importation economy. Concerning figures, I don't have them on hand.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Will you send them to us?

[Benoit Prieur]

Yes, definitely.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you.

Mr. Lecorps, someone gave the example of Australia, where students decided that they wanted to continue to pay their share. A lot has been said about the fee of $13.50—Mr. Prieur could buy himself four beers, perhaps two nowadays, with that money. Are you against that idea? Would students not want to pay those fees?

[Guillaume Lecorps]

Those fees of $13.50 are considered to be a solution that is, frankly, so inexpensive for students. The amount itself is definitely pretty reasonable. On the one hand, people are saying that the amount should be increased, and on the other hand, they are saying that it is currently low. We feel that making a population that is already in a difficult situation, students, pay more to give more money to authors, who really need it, I am sure, is not a solution.

Coming back to my analogy from earlier, playing Robin Hood by taking from people in a vulnerable situation to give to others in the same situation is not a solution we feel is justified.

Some aspects deserve to be examined when the act is overhauled. In our opinion, it is false to claim that fair dealing for educational purposes is a negative aspect. Australia aside, we see that other countries are following the example of Canada's innovative initiative in that regard. It would be counter-productive, in 2018, to make students pay more.

[The Chair, Liberal, Dan Ruimy]

A big thank you to all the witnesses.

I know that some questions are difficult, but we have to ask them anyway to be able to put the right answers in our report.

Today, all your answers are on the record. So it will be easy for us to listen to all the testimony again.

[The Clerk of the Committee, Mr. Michel Marcotte]

The audio recording of testimony will be accessible on the committee's website within a week, and the transcript will be up in two weeks.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We will suspend the meeting for 15 minutes.

[The Chair, Liberal, Dan Ruimy]

Thank you very much, everyone.

Today, we are hearing from: Pascale St-Onge, President of the Fédération nationale des communications; Martin Lavallée, from the Coalition for Culture and Media; and Patrick Curley, President, Business and Legal Affairs, Third Side Music.

Each speaker has seven minutes for their presentation. Afterwards, we will go to questions and comments, and every member will have about seven minutes. We try to keep to the allotted speaking time.

We will start with Ms. St-Onge.

Ms. St-Onge, you have the floor for seven minutes.

[Pascale St-Onge, President, Fédération nationale des communications]

Thank you, Mr. Chair.

Mr. Chair, members of the committee, thank you for giving the Fédération nationale des communications an opportunity to speak to you on the review of the Copyright Act.

The Fédération nationale des communications, or the FNC, represents about 6,000 individuals who work both in media—print media, televison, radio or digital media—and culture—museums, crafts, performing arts or festivals. Today, my main point focuses on the problematic situation for journalism in the digital age and its repercussions on the copyright issue.

The world of information is going through an unprecedented economic crisis that is threatening its survival and, by extension, the foundations of our democratic society. The problem is not that the information is no longer bringing in revenue, but that the money is no longer in the hands of those who produced the information. It is said that, this year, over 80% of advertising revenues will go to Facebook and Google, while they are investing practically nothing in information content. A large portion of the traffic on their platforms stems directly from the sharing of journalistic works produced at a high cost by our traditional media.

In its current form, the Copyright Act does not address that new reality. We now have an opportunity to implement solutions to help journalists and publishers get new revenues for their journalistic works. In Europe, a number of initiatives have promoted the concept of neighbouring rights, which intervene when revenue collection stemming from copyright application is impractical, even impossible. Those new rights aim to obtain from web giants part of the revenues they get from journalistic works that are being shared without the authorization of rights holders.

The FNC's first recommendation is to amend the act to provide for, as in the case of remuneration rights already recognized under section 15 and subsequent sections of the act, the creation of a right to remuneration in exchange for the reproduction and public communication of journalistic works on the web. To that end, and to highlight the substantial contribution of journalistic work to democracy, the act should also provide for journalistic works a definition that would in part be inspired by the definition already found in the Journalistic Sources Protection Act. The definition could read as follows:

journalistic work: a work resulting from the work of a journalist and consisting in the collection, editing and production of information to be distributed through media, and produced in accordance with recognized ethical standards.

Since the key, when a new right is introduced, rests in the ability of rights holders to have the right applied, and since negotiations between journalists or publishers and web giants is nearly impossible and potential legal proceedings would lead to unaffordable costs, the FNC proposes a second recommendation, whereby the government would support the creation of one or several collectives for managing journalistic works that would bring together journalists and publishers. The 10 collectives could ask the Copyright Board of Canada to set the fees for the reproduction and public communication of journalistic works on the web.

Since the propagation of expert evidences is bogging down the board, and that leads to significant spending, the FNC submits to Parliament a third recommendation, to follow the lead of the Quebec legislator, which imposed limits in terms of expertise in the new Code of Civil Procedure. That way, the board could limit expert evidence by recognizing either expertise produced for the board or common expertise that would be under the board's authority, with each party covering its portion of the costs proportionally.

The combined effect of the above-mentioned measures would simplify the mechanism for the remuneration of rights holders. Although rights holders would lose part of their individual control over their works, since they would have to join a collective to collect fees, they could also more easily obtain compensation for their works being shared on the Internet. As for the web giants, they would benefit from the fact that the amounts they would have to pay rights holders on a daily basis would be balanced and they would not have to negotiate with each and every one of them. That way, social, economic and legal peace would be ensured.

Fourth, the FNC recommends to tighten up the definition of “information location tools”. Since 2012, providers of information location tools have had an advantage over other users.

In fact, the legislator wanted injunction to be the only remedy against a provider of information location tools in case of copyright violation.

There is concern that this exception is an open door to copyright violations, which is the case when an information location tool, in addition to providing website addresses, gives direct access to journalistic works.

As long as a provider is receiving advertising revenue to the exclusion of the owners of websites on which journalistic works are originally published, we are talking about an untenable exception in 2018.

In a context where media revenues are declining, thus compromising the right of the public to quality information, Canadian society cannot afford to wait dozens of years that would be required to give the courts an opportunity to understand, on a case-by-case basis, if not haphazardly, those new provisions of the act. The legislator must take action now and restrict the exception related to information location tools. The survival of properly practised journalism depends on it.

This is why the FNC recommends to tighten up the definition of information location tools to say the following:

41.27(5) In this section, information location tool means any tool that makes it possible to only locate information that is available through the Internet or another digital network without approving or encouraging access to the content covered by copyright.

Thank you for listening. We would be pleased to answer your questions.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Lavallée, from the Coalition for culture and media, you have the floor for seven minutes.

[Martin Lavallée, Lawyer, Coalition for Culture and Media]

Thank you very much.

I am here on behalf of the Coalition for Culture and Media, which is a group of organizations involved in the cultural and media environment, representing hundreds of thousands of creators, publishers and producers in Canada.

Those organizations have identified, among other things, urgent amendments to be made to the Copyright Act, as the Canadian cultural community is experiencing the negative repercussions of the most recent changes to the act. Those changes introduced new exceptions that are harmful to Canada's economy, as they affect the normal use of works. You have received the brief that resulted from our reflections.

Our coalition is proposing three areas of focus to provide an economic and legal environment that would guarantee rights holders the conditions they need to innovate and give us with a rich and diversified national culture.

The first area of focus is to recognize the primacy of copyright.

After all, it is shocking to realize that, in the 21st century, we have to reiterate that the primary purpose of the act is to protect creators' intellectual property and allow them to be compensated for the use of their creative work.

The principle put forward is very simple: partial or total use of another person's intellectual property is prohibited, unless the rights holder gives their consent, either for a fee or free of charge. Every time this right is violated, the very structure that protects creators and all rights holders is weakened. We cannot ignore the growing number of players who are giving access to cultural products, for free or not, and are using them to attract, like Internet access providers, without sharing with the creators of those contents the value added to their company.

In a balanced copyright system, there must be true sharing of revenues and a true recognition of the contribution of cultural products and creators' work. Since 2012, we have rather seen a progressive decline in the participation of creators in the economic life of their works. So Parliament should use the five-year review of the application of the act to become a true standard-bearer for the defence and promotion of Canadian rights holders.

The second area of focus concerns the fact that a plethora of exceptions is in conflict with the above-mentioned principle.

In 2012, the legislator introduced a slew of exceptions to the act, under the pretext of modernization. However, the Berne Convention for the Protection of Literary and Artistic Works, the Agreement on Trade-Related Aspects of Intellectual Property Rights and the treaties of the World Intellectual Property Organization, or WIPO, to which Canada is party, provide that any limitation or exception to the rights of creators must pass what is referred to as the three-party test. So the exceptions must be limited to special cases, they mustn't affect the normal use of the work and cannot cause unjustified prejudice to creators' legitimate interests. A number of exceptions introduced in the 2012 legislation simply do not pass that test.

The parliamentary revision exercise you are engaged in must become an opportunity to improve the economic situation of creators by reducing the number of non-remunerated or poorly remunerated exceptions contained in the act.

The last area of focus is the urgency of re-establishing the balance and equality in our digital world.

Copyright is not an obstacle to technological innovation and effectiveness. Our areas of focus have nothing to do with the so-called fight to preserve an analog economy by resisting the digital economy. Economy as a whole is being digitized and we are perfectly aware of that. We are often in front-row seats to recognize it and be witness to it.

The act should apply completely neutrally, without favouring or disadvantaging a specific form of technology. The introduction of the principle of users' rights in the act weakens the protection of the economic and moral rights of rights holders. Not only are we being told to now interpret the exceptions in the act broadly and liberally, but even authors' reproduction and communication rights—basic rights—are contested by those same users, who have been challenging the legitimacy of those rights since 2012 and are wondering whether they should not be further reduced.

Those attacks on copyright must stop, and Parliament must reverse the interpretation principles harmful to creators that the courts could set out.

At the end of its review, your committee must propose to Parliament amendments to the act, taking into account the three main areas of focus presented to you today.

It is necessary to reduce and tighten up the number of exceptions in the act such as the exception of fair dealing; regulate economic actions intended for Canadians, even if they come from online services abroad; adapt legislative provisions to the technological realities of the market, for example, by including digital audio recorders in the private copying regime; and finally, force Internet access providers to play a bigger role in the remuneration of rights holders.

Those are just the most urgent amendments to be made to the act. I invite you to listen carefully to the individual coalition members who will appear before you over the next few months. They will propose more specific and concrete solutions to implement in each of their sectors.

Thank you for listening. I will gladly answer your questions.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Curley, from Third Side Music Inc., the floor is yours.

[Patrick Curley, President, Business and Legal Affairs, Third Side Music Inc.]

Good afternoon.

Mr. Chair, committee members, thank you for giving me the opportunity to address you.

I'm going to tell you a bit about what is happening in the field, from the experience of a music publisher.

I was born in Jonquière, in Saguenay—Lac-Saint-Jean. I'm an entertainment lawyer. I studied law at McGill University. I'm also a musician and composer, which led me to found a music publishing company in 2005 called Third Side Music. It became a world leader in music publishing.

We represent a few hundred creators, maybe more, of 50,000 individual songs, including titles by DJ Champion, Florence K, Zachary Richard, the Dead Obies, Lisa LeBlanc, Toronto's BadBadNotGood, Bedouin Soundclash, Tanya Tagaq, Galt MacDermot and many more.

We are strictly independent. Our company is independently financed and is controlled by its Canadian and Quebec shareholders. Our offices now employ 18 people and are primarily located in Montreal. There is a satellite office in Los Angeles.

A music publisher is like an agent for songs. Our role is to generate revenue for songs and their creators by administering rights worldwide. We have gained special expertise that is called “synchronization”, which is the placement of music in films, TV shows, video games and commercials.

Let me give you a few examples. People who watch hockey have surely seen the commercial for the iPhone Red. This ad is currently shown during every commercial break. It uses a song that we represent called That's it, I'm crazy by Sofi Tucker, a duo from New York.

We recently placed a song by Tanya Tagaq, a singer from Iqaluit, in a commercial for the Apple watch.

The song Ma rose by Florence K was placed in a Ralph Lauren commercial.

I'll also give the example of Toronto's BadBadNotGood, who have worked with Kendrick Lamar, Drake and Rihanna. These are big names in pop music and urban music.

The message I want to convey is that we are real business people. It's a real business. We generate substantial revenue that helps our clients, artists, earn a living. We invest in Canadian culture. We promote Canadian culture around the world. We aren't asking for grants, but we are simply asking for a copyright law that protects the creators' right to compensation in an efficient and predictable way.

My first recommendation concerns the Copyright Board of Canada. On August 25, 2017, the board rendered its decision on the tariff for online music services for the period of 2011 to 2013. So the delay is five years, which is completely unacceptable. It's hard to do business when you have no idea what the tariff will be for a period of five years after use. It should be the opposite, meaning that there should be a decision for the next five years.

The board must have the resources to do its job. It must be required to make decisions regarding a reasonable rate. To speed up the process, I recommend that collectives such as SOCAN and Re:Sound have the ability to enter into agreements directly with music users, without having to have the Copyright Board license the tariffs, which imposes an added delay.

With respect to the decisions made by the Copyright Board, we must clarify the basis on which the board works to make its decisions. It should have to be based on the true value of music rights in an open and competitive market. Rates are currently much lower than abroad, particularly in the United States. They are far too low to support the Quebec and Canadian music ecosystem.

In my opinion, this is tantamount to asking Canadian and Quebec artists and creators to subsidize the business models of giants such as Apple, Spotify, Google, Amazon and others.

I also recommend modernizing the Copyright Act to ensure, as Mr. Lavallée mentioned, that Internet service providers have a business model that is largely based on the dissemination of content by Canadian artists, and should pay royalties for that use. Exemptions should be limited and clarified, but they are far too numerous. The private copying regime should also be made technologically neutral.

In Europe, royalties are required on media such as iPads and iPhones. When someone pays $1,000 for an iPhone, it's not a few dollars paid to creators that will prevent the transaction from taking place. Moreover, in all other countries of the world, copyright is maintained for life and for 70 years after death. In Canada, it's 50 years after death.

I don't think it's normal that the heirs of Canadian and Quebec heritage creators such as Glenn Gould and Félix Leclerc are currently better protected in the United States and Europe than they are in Canada. It isn't just a question of the catalogue's value; it's a question of being able to prevent use of the heritage without the authorization of the heirs. I think that is an important point.

In conclusion, I believe that Canada must adopt modern copyright legislation to enable entrepreneurs in the cultural industries, and especially Canadian creators, to continue to promote Canadian culture in the world.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you to all the witnesses for their excellent presentations.

Mr. Baylis, you have seven minutes.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Thank you, Mr. Chair.

I'll start with a question about the Internet giants. We talked about Facebook and Google, which are huge companies that make billions of dollars. You all talked about the fact that they aren't paying their fair share. Have I understood that correctly? If so, what would you like the government to do to help Canadian and Quebec creators?

Ms. St-Onge, could you answer my question?

[Pascale St-Onge]

Yes. Indeed, Web giants aren't paying their fair share, and they benefit abundantly from content produced, particularly by Quebec and Canadian creators, whether the content is artistic or journalistic.

Our position on copyright is somewhat inspired by the neighbouring rights proposed in Europe. This means, in fact, introducing this new right for the recognition of the public use of journalistic works that report advertising revenues to Web giants.

This is one avenue, but we don't claim it will necessarily make up for all the loss of revenue that the news media are currently experiencing. However, it is certainly a step in the right direction. For us, the other avenues are based on establishing a fund intended for the continuity of information, and it could be established in various ways, such as by collecting royalties.