Industry Committee on May 8th, 2018

[Patrick Curley]

Well, if I can flip the question around, I do have a lot of people I talk to in the United States and they wonder what the situation is in Canada. The ones who understand the details of copyright are surprised at.... I'll give you an example.

The U.S. copyright board just announced what the tariffs are going to be for online streaming for the part that goes to publishers for the compositions for the next five years. Meanwhile, we've just had our decision for 2013.

It's not that the U.S. system is better in every way, but it certainly is in terms of security as a businessman, what you're faced with in terms of predicting what your revenues are going to be on a growing basis. Because we are a Canadian company, we do represent a lot of Canadian and Quebec artists. You're in a much better spot when you know what you're faced with. At the present time we don't know what the rates.... You try to guess, but at a concrete level you don't have any security in knowing what the percentages are.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Mr. Lavallée, we've talked to many witnesses, and you mentioned yourself the term “education” in the context of fair dealing. People have said that this needs to be clarified or that it needs to be restricted. How would you recommend that it be restricted or clarified in a way that respects the original intention of including the word “education”? Or should it just be taken out altogether?

[Martin Lavallée]

It's not that the solution isn't there, it's that I always wonder about the role of the coalition compared to the role of each of the sectors. I would strongly suggest you ask this question to the Copibecs and Access Copyrights of the world. They will be able to give you an answer.

The other element relates to our general comment. We're talking about “fair dealing”. Do you know the test based on six factors? I'm pretty sure you've heard about it. However, if I ask you to apply it, it may be a bit more complicated. The reason I'm talking about it is that the six-factor test is a test that the Supreme Court has proposed to interpret what constitutes fair dealing. This test was brought before the court three times and led to different results each time. The court has agreed to hear cases year after year to try to clarify its position and interpretation.

This is consistent with the comment made earlier that we shouldn't be there at all. We should have legislation that doesn't lead to interpretation every time we ask ourselves the question. So let's ask the question. If fair dealing is about fair dealing for the purpose of education, there will no doubt be 350,000 questions about what education is. Who would it be in relation to? The student, the university or the educational institution?

All these questions lead to situations in which universities, among others—as we see here in Quebec—will say that, from now on, they no longer have to pay and therefore, they no longer pay. It goes back to Mr. Curley's comment and mine, that it takes away our ability to negotiate. The way to deal with that would be to provide clarification.

You asked to compare what is happening in the United States to what is going on in Canada. Do they have a better relationship? However, there is a fundamental difference between fair dealing and fair use. Here in Canada, we have fair dealing and in the United States, it's fair use. The Americans have set very clear rules that are much simpler than the six-factor test and, in a way, respect the Berne Convention on Copyright.

That's where we get back my answer. I know it's not a straightforward answer, but does it hurt the rights holder? Is it limited in some cases?

When it is written in a law that it is “fair dealing for the purpose of education”, I don't believe, and the coalition doesn't believe, that it meets the criteria of the Berne Convention.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

This could be the more controversial one. Madame St-Onge, are you aware of and can you comment on the proposed link tax in the European Union? Are you aware of this proposal to subject to taxation the linking of an article from a newspaper or a news aggregator, so that the publishers would have the right to collect a fee per link from websites that carry their content?

[Pascale St-Onge]

This is somewhat related to what we say in our brief with respect to restricting the tracking tool exception. There is a distinction to be made. Some sites refer us to articles, but don't necessarily provide full access without the user paying an access fee. In addition, there are content aggregation sites, such as Google, that make money and redirect us directly to other sites. There is then no transaction or economic return between the two.

That is why, in order to settle this question, there had been the idea of introducing the right of reproduction and public communication of journalistic works. This could be administered by the Copyright Board of Canada, which could set the appropriate tariffs for this type of digital use. This would encourage a redistribution of revenues, especially advertising revenues, that are in the hands of these content aggregators, without return for those who produce the information.

Perhaps Mr. Tamaro could round out the answer.

[Normand Tamaro, Lawyer, Mannella Gauthier Tamaro, As an Individual]

The idea is private copying. One day, the highest English court said that there was a right to musical works and that no one could reproduce them at home, but that everyone did. Since the police and lawyers could not be sent everywhere, a right was created and the licence was issued. The same principle should be applied in this particular case, that is, to establish this form of licence fee, a form of private copy adapted to the journalistic work.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Are you aware that Spain passed legislation a number of years ago to implement a link tax? It resulted in Google staging a pretty significant exit from the Spanish markets. Do you have any comment on that?

[Pascale St-Onge]

Indeed, internationally, it may be necessary for all countries to move in the same direction, but Google won't withdraw from all markets that see an injustice in the fact that it accumulates unreasonable profits to the detriment of those that provide the content of its site. This injustice will one day be corrected, and it isn't true that Google or any other platform will deprive itself of a market to avoid paying taxes.

We strongly believe that this is a political will and that it must begin in Canada, among other countries, but all countries are faced with this reality. There are international discussions about attempts at concerted action, but we must also take the bull by the horns and make political decisions that are in the interest of the people and that drive the economy here.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Baylis, you have five minutes.

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

Mr. Lavallée, you talked about a plethora of exceptions. This is how we will proceed.

First of all, there is an act in place. If I understand you correctly, there are certain exceptions that hurt creators' negotiating power. As the chair clearly noted, you may submit those exceptions to us formally in writing. It is all well and good to say that the act needs to be rewritten, but that is not how it works. We will review the act and make recommendations.

You may guide us by pointing out the exceptions that hurt your negotiating power. Tell us how they hurt you and then propose changes. If you can submit that formally to the clerk, we can look at it. Even if we do not agree, it will be in our report. I understand you very well, so I would ask you to do that. Mr. Curley, you may also do that.

Mr. Curley, you talked about the Copyright Board of Canada and that the response times are much too long. Why is that the case? How could the government answer the questions more quickly?

[Patrick Curley]

First of all, I think it lacks the resources, so the budgets have to be reviewed. Next, the rules could be amended to require decisions to be made more quickly. Certain collectives have to conclude an agreement, even when they are negotiating directly with a stakeholder, and in certain cases, especially as to the right to communication, they have to go back and have the agreement approved by the Copyright Board, which causes a further delay.

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

Is the delay caused by a lack of resources? Is that normal? Do other countries have the same delay?

[Patrick Curley]

I cannot say because that is not my specialty, but I am sure there are experts who could tell you. What I can say is that it makes no sense.

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

Would you like to say something, Mr. Normand?

[Normand Tamaro]

I would like to comment on what the first person said about the concept of exceptions and the list. It is very hard to create a list, but I can give you a practical example, the exception for educational institutions. Those same exceptions had always been in the legislation. In 2012, the Supreme Court ruled that we had to interpret rights narrowly in order to promote users' rights. These are no longer exceptions, but rights. At the same time, the government created the education exception.

Strangely, the result is that there are many education exceptions for educational institutions and a global exception for education. As a lawyer, I can tell you that, in actual fact, public users have more rights owing to the exceptions, and the education exception is invoked constantly by the users of works. The rights of educational institutions, however, are now more limited than the global exception. In actual fact, it is clear that the education exception is invoked constantly. I see it at the office every day. There are a lot of exceptions.

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

How can we provide a better framework for this exception?

[Normand Tamaro]

We talked earlier about how the act is interpreted. It is true that, oddly enough, the Supreme Court introduced an interpretation in 2004 that let to concrete changes in 2012 and 2015. In 2004, the Supreme Court of Canada distanced itself from the U.S. Supreme Court. At that time, the Mickey Mouse case was before the U.S. Supreme Court. It stated the principle that, under U.S. copyright law, Webster had produced his grammar and supported his family and also provided us with a great dictionary.

Here, the Supreme Court told us that rights have to be limited. People have to earn a living, we know, and someone who does not earn a living does not create. So this concept existed before. Even if someone told me, as an author of books about copyright, that the education exception must be interpreted in the previous framework, I know it has become much more strict now as a result of the very broad education exception, which is not managed for the general public, and as a result of an interpretation that favours users.

In this case, as a lawyer, I think my colleagues opposite would always say that their client does not have to pay, even if they are using a work on the Internet, and clearly for commercial purposes.

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

I have a quick question for you, Mr. Curley. You said that Canadian copyright fees are lower than those in the United States. Is that correct?

[Patrick Curley]

Definitely.

I think that is well known. Mr. Lavallée is perhaps in a better position to comment on this.

The tariffs paid to composers for the use of their songs are much lower, proportionally speaking. I think they are 50% higher in the United States than what is paid here for the same usage. I am not referring to market size, but strictly the percentage. It is much lower in Canada than in other countries.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Jeneroux, you have five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

This has been a good panel and a lot of information has been provided here, so thank you so far. I'm just going to do a bit of a mash-up on my own, if you will, and hit on three quick topics.

Madame St-Onge, you spoke about the recent $50 million for local news organizations—I don't know if it was in your presentation or one subsequent to it—being distributed through a third party of the government's choosing.

What are your thoughts on the commitments, but also does the latter concern you in terms of compromising the independence of the press?

[Pascale St-Onge]

As to the $50 million, the Department of Canadian Heritage will certainly be facing some major challenges in terms of finding an independent organization to administer those funds, since that is not identified in the budget. Even that is a challenge, so I think Canadian Heritage will have to look at this.

As to journalistic independence from the government, I have a few answers. First, the CBC/Radio-Canada has been subsidized by the government since it was created, and I think everyone will agree that it is a model and benchmark for journalistic quality and independence.

In order to avoid the appearance of government interference in the operation of newsrooms, the manipulation of journalistic information or political influence over the news media, we need universal programs that apply to everyone who meets the criteria that define the news media today. This prevents cherry-picking and the appearance of favouritism towards one group or another. That should be the first criterion that is considered when public funds are involved. Of course, the more independent from government that the organization administering those funds is, the better.

In journalism today, people have no more illusions about the future, whether you are talking about print newspaper owners or others. Unfortunately, until there is a new business model that suddenly brings in more revenue to those who are producing news content, we will have to find a way to publicly support the production of news content, while at the same time recovering money from those who are currently making huge profits from our members' work.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

With regard to the Copyright Board, Mr. Lavallée and Mr. Curley, you spoke about the significant delays. Mr. Curley, I believe you said there were delays of five years. Can you elaborate on what the impact of five years, or so, means to some of the creators, the artists?

[Patrick Curley]

Well, as a business owner you need to know. In order to make projections, if you're running a business, it's fundamental that you know what the value of your product is. It's unbelievable to me that it takes so long to get these decisions made. If anything, it should be flipped on its head, and you should know, for the next five years, that the rates are going to be x, and you could, at that point, make projections of what that's going to mean for your business.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Can you provide a concrete example of somebody you know who has experienced this, so that we can have that on the record?