Industry Committee on May 8th, 2018

[Patrick Curley]

I'll give you a concrete example.

There was a decision a few years ago with respect to the right of communication, and whether a download involved a public performance. At any rate, there was a Supreme Court decision that meant money that was being held by SOCAN, which is a collective that represents composers and creators in Canada.... $20 million was repaid to Apple. It was money held by SOCAN, which should have been paid to creators. There was a huge delay between these lawsuits being instituted and decisions being taken.

Considering that you're talking about companies that have hundreds of billions of dollars in cash on hand, how are we, as Canadians, sending this money back to Apple? It's really difficult to understand, when you have artists and composers who are having a hard time making ends meet.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Mr. Lavallée, do you have any comments?

[Martin Lavallée]

There are three consequences, in my opinion.

First, an exercise to reform the Copyright Board of Canada is underway in another forum, and some of us here are involved in that. Briefs and specific recommendations have been submitted in that forum.

Further, I can tell you that there are three consequences of the time the Commission takes to issue its decisions.

The first is the retroactive effect. The money cannot be distributed to rights holders because we cannot take a risk since we do not know what the final decision will be. There is always a provisional decision, in any case. In many cases, amounts are paid, and they are often minimal because we do not know the final outcome.

Second, there is the whole administrative aspect of the adjustment. That means that if the rate is a bit lower or a bit higher, we have to review millions and millions of transactions, especially in the digital era, and try to make corrections to see what the final result will be. The longer this takes, the harder it is to get that information. Distributors can say they do not have the information, that they did not keep the necessary information to give us what we need.

Third is the uncertainty. Often a tariff is used for certain period of time, and when that period is up and the decision is not yet known, it is not just the rate that is important, but also the points of law. So we all go back to court and are not really sure which points of law we should be arguing, and if we should be arguing them again. We do not have the benefit of the decision and there has been no ruling yet on certain points of law.

Most importantly, we really need to find a way to speed up the decisions.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

It's my last question. I am being told I'm over the time, but it's not unusual from this chair. I will try to get it in quickly.

Mr. Curley, with regard to the life plus 50 years you referenced in the Copyright Modernization Act, recordings were moved to life plus 70 years. Do you have any comments on the impact that has had? Everything is not life plus 70 years across the board. There's life plus 50 in some aspects, and life plus 70 in some others.

[Patrick Curley]

Keep in mind there's a different copyright in a musical composition, meaning the song itself and the sound recording of the composition. Sound recordings have gone to 70 years. Musical compositions in Canada are still life plus 50. I'll give you a concrete example.

A composer whose name was Bert Berns wrote Twist and Shout. I'm friendly with his heirs, and unfortunately he died of a cardiac situation in 1968 when he was in his early 30s. His compositions are coming into the public domain in Canada. His heirs are just slightly older than I am. Never mind the economic impact that has; it means they can't prevent any kind of use from happening, so they lose control over any kind of advertiser making inappropriate use of his music. This perhaps hasn't been a major concern in Canada.

Coming up in the next few years are some very famous Canadian composers whose terms are going to expire. I think that one you should keep in mind is Glenn Gould, who died in 1982. Considering how long it takes to modify copyright law, it would be a good idea to make sure we take care of this now so that the rights to Glenn Gould's catalogue don't expire in Canada—knowing there's a really strange situation where you have a Canadian composer who's an icon in Canada, in the public domain in Canada, but not in the United States and not in Europe.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Are you suggesting that it be move up to life plus 70 years?

[Patrick Curley]

Yes, absolutely.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you, Mr. Chair.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Ms. Ng, you have five minutes.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you, Mr. Chair.

Madame St-Onge, I know my colleague asked for written submissions or additional information around exceptions. Do you want to touch on that very quickly, because we didn't get a chance last time? What exceptions in your realm should we be focusing on or looking at?

[Pascale St-Onge]

In the brief you submitted, let us talk about the exception for retrieval tools. Those include content aggregators such as Google, which provides access to content. Google does not simply refer people; it actually gives them access to content. Some companies or individuals even pay to be ranked higher on Google. So companies like Google make money in multiple ways from content production, even though they give free access. Since they make money from that free access, they should give back part of that money to those who created the content.

We focused on this tool in particular, but I think Mr. Tamaro has identified other exceptions in the act.

[Normand Tamaro]

I will limit myself to the comments I made about a practical exception. The reality is that the exceptions have become incomprehensible. You have to reread them constantly to be able to tell someone whether an exception means one thing or the opposite.

We could say that, prior to 1997, the act was written in the French style, since it was based on the Berne Convention, which reflected a certain writing style at the time. Now, all of a sudden, the wording has become exceedingly specific. As any lawyer knows, there is a risk in trying to be very specific. In trying to be very specific, one forgets things that were already included and then things become irreconcilable. The current act has more exceptions that rights.

For the average person, it is certainly incomprehensible. I would like to add something about the final exceptions.

Children at school can use works on the Internet, as they are and without notice. Freedom is great, but we are not teaching our children what copyright means. People do not know how artists actually make a living. Copyright does not mean anything to them. It is not like a paycheque that an employee gets at the end of week's work.

Let me be clear. I am not saying that I want children to pay to consult those works. The simple fact that they can freely use content at school means they will never recognize how a creator earns a living. Since they will not be aware, it will be hard for them to respect the right, even if they are in good faith, because they will not even know that the right exists.

[Mary Ng, Liberal, Markham—Thornhill, ON]

Thank you.

Madame St-Onge, you talked about the government supporting a collective or a management group for journalists and editors. Can you expand on that a little bit by way of a recommendation or a solution? Can you help us understand that better?

[Pascale St-Onge]

If reproduction and public communication rights were recognized in the Copyright Act and were applied, that would mean that digital platforms would have to pay royalties for copyrighted material. That does not necessarily mean exorbitant tariffs.

The idea of creating a fund for the long-term survival of the news is not at all part of the recommendations on the Copyright Act that we made following the last federal budget.

What we want to see is a way of providing financial support for the news media that create content. Supporting newsrooms is extremely expensive. Journalists who conduct investigations for weeks and months, sometimes without producing an article, run up costs, with very little in the way of advertising revenues thereafter, especially in the digital age.

There are a number of ways to create a sustainability fund for the future of news. We could require royalties from GAFA companies or tax online ads on Google or Facebook, for instance. Such a tax of 5%, let's say, could be paid to the consolidated fund for the future of news or artistic content.

There are ways of making those who profit from Quebec and Canadian content contribute their share. There are also the Internet service providers.

I talked about the creation of the Canada media fund from royalties on cable subscriptions. People are increasingly dropping cable and using content provided by Internet service providers. Why not require those Internet service providers to pay royalties? In many cases, they are the same companies. Why are there no royalties on Internet subscriptions?

These are the kinds of questions we need to ask. There are a number of possible approaches. Now we simply have to take the bull by the horns, muster the political will, and defend our creators and content producers here.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Masse, you have the last question.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I'm still obsessed with spectrum auctions, because in 10 days from now the government will receive another cheque for 4G allocation from 10 bids coming in, and there will be an upcoming 5G allocation that will probably bring it to over $1.5 billion, which is what's expected.

Do you think there would be support in the creative community to do something I've advocated for, which is, when we're auctioning off the spectrum, to have assets from that spectrum go to the creative community? For example, we are continuing to see the evolution of the spectrum, which in my opinion is a public resource and asset, and hence we are the landlord of this resource. We own it and we are renting it out. If we set the terms and conditions for that to be done, would it be something that the creative community would be open to as a policy, a robust policy, on how they could be included? If this were done, when spectrum is introduced, especially now as we go to 5G, you might have changes and shifts in the artistic community's whole lifestyle, because it's going to change the use of it as well. Wouldn't it actually open the door to have a robust policy on this? I just open this up. Would there be an openness among the community to sit down and do that?

[Pascale St-Onge]

That is certainly one way of going about it. It depends on the approach that governments take. Right now, there is not really any tax on the sale of the spectrum, and everything goes directly to the treasury. So it would be entirely possible to establish a new approach and to use all or at least a good part of those fund to support the creation of artistic and journalistic content. The government could take that approach. There are similar approaches elsewhere in the world. In the United Kingdom, for instance, when people buy a television, they pay a tax that goes directly to the BBC.

Why should everything always go to the treasury? We know full way that certain sectors are being penalized right now because our legislative and fiscal framework is not tailored to the digital environment, that we are decades behind as regards the Internet, and that our creators and companies here are suffering as a result. This is a possibility that the government definitely has to consider.

[Annie Morin]

I completely agree with what Ms. St-Onge said.

On the other hand, the current exercise is a review of the Copyright Act.

You are talking about allocating some of the money generated from the spectrum auction. That is a very interesting idea considering that the airwaves, which are a public asset, are used in particular to disseminate works and other content subject to copyright. At the same time, however, we should not focus solely on the possibility of a subsidy fund. Funds are certainly needed, but they should also be used to pay royalties to content creators, and not solely in the form of subsidies.

[Brian Masse, NDP, Windsor West, ON]

I don't disagree. The problem we're facing is that this is just a review, and in the meantime there will be hundreds of millions of dollars that will pass through the grasp of the creative community as they are impacted by the use of the spectrum they own.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

That wraps us our testimony for today.

I want to thank you for your many good questions and answers. They will help us a great deal as we draft our report.

We will now adjourn. We will reconvene at 7:00 p.m. for the town hall meeting. Thank you everyone.

The committee adjourned.