Industry Committee on May 8th, 2018

[The Chair, Liberal, Dan Ruimy]

Good afternoon everyone. Welcome to Montreal.

Pursuant to the order of reference adopted on Wednesday, December 13, 2017, and as prescribed in section 92 of the Copyright Act, we are here today to conduct a statutory review.

Today marks our first meeting for the purposes of that review. We are hearing from Richard Prieur, Executive Director of the Association nationale des éditeurs de livres; Guillaume Lecorps, President of the Quebec Student Union; and Benoit Prieur, Executive Director of the Association des distributeurs exclusifs de livres en langue française.

You aren't brothers, are you? No.

Also joining us is Nicolas Sapp, from the University Secretariat at Concordia University. He is a lawyer and partner at ROBIC, LLP.

You will each have five to seven minutes for your presentation. After that, we will move into questions. You can speak in English or French, as we have interpreters on hand.

We will start with the Executive Director of the Association nationale des éditeurs de livres, Richard Prieur.

You may go ahead. You have seven minutes.

[Richard Prieur, Executive Director, Association nationale des éditeurs de livres]

That's reassuring, Mr. Chair. I thought I had just five minutes, so I won't go quite as fast.

Mr. Chair, members of the committee, thank you for inviting us to appear before you today.

I am the executive director of the Association nationale des éditeurs de livres, or ANEL for short. We represent a hundred or so of Canada's French-language publishers, large and small, scattered across four provinces.

Joining me is our President, Nicole Saint-Jean, and Éveline Favretti, a project manager at ANEL.

Canada's francophone publishers publish more than 6,000 titles every year, ranging from novels, how-to manuals, and poetry to essays, school manuals, scientific textbooks, and art books.

ANEL has always called on the federal government to reassert the importance of copyrights and strengthen the country's copyright regime by bringing Canada's legislation in line with global trends, so that creators are supported by a legal framework that provides the stability to innovate in creating, producing, and distributing Canadian books.

In 2012, we proposed a number of amendments to Bill C-11, in our brief to the relevant parliamentary committee. None of those amendments was implemented. We hope that our efforts today will be more fruitful. We hope that, this time around, the government will be more receptive to the concerns of the cultural sector and that the Department of Canadian Heritage will contribute to the review in a robust way.

To that end, since 2012, we have repeatedly called on the department to undertake a comprehensive study of the impacts stemming from the review of the Copyright Act. That study now seems to be materializing. Our only fear is that we will not know the outcome until after this series of consultations is complete.

I have a few points I'd like to discuss with you. First of all, I will share with you the impact of the act internationally, taking into account the merits of cultural diplomacy. Next, I will illustrate what the act has failed to achieve, as well as the damage it has done. I will conclude with what our publishers hope to see as a result of this review.

From an international standpoint, Canada's legislation is to be avoided at all costs. ANEL participates in a variety of international trade fairs and, for more than 30 years, has taken part in the prestigious Frankfurt Book Fair, where Canada will be the guest of honour in 2020.

We engage in cultural diplomacy, but everywhere we go these days, particularly in Europe, our hosts are palpably concerned about the damage Canada's legislation is doing. The critics are unanimous and include France's publishers association—the Syndicat national de l'édition—the Federation of European Publishers, the International Federation of Reproduction Rights Organisations, known as IFRRO, which brings together collective management organizations around the world, and the International Publishers Association, to which we belong and whose vice-president you will be hearing from tomorrow, I believe.

Canada's legislation is the model to avoid. Even worse, it contaminates the sector by encouraging other countries to integrate copyright infringement exceptions in their regimes, such as the fair dealing for education provision.

What the 2012 legislation has failed to do is curb piracy. Not only is piracy proliferating, but the tools deployed to deter violators are ineffective. By placing the burden of proof on owners whose copyright has been infringed, by keeping penalties to a minimum, and by imposing an obligation to notify on Internet service providers through the notice and notice regime, lawmakers have missed the mark. If the government is unable to tighten the rules to combat piracy, the only alternative will be to expand the private copying regime.

Now let's turn to the damage Canada's legislation has done.

First of all, the act has led to the excessive involvement of the courts in copyright matters. Our copyright collectives are dealing with a growing number of cases. Money is being gobbled up in legal fees to defend the rights of copyright owners and publishers. At the same time, universities—who could put the money to better use—are also pouring money into court actions that the Copyright Modernization Act should have sought to prevent.

As a result, these court actions are weakening copyright collectives, which are being egregiously depicted as greedy, when their mission is simply to ensure that rights holders are fairly compensated.

Unlike what is happening in the rest of Canada, in Quebec, the copyright collective Copibec is managing to negotiate agreements with the vast majority of Quebec universities and colleges, as well as the education ministry. Even though the compensation set out in the agreements is being scaled back, the fact remains that Quebec has shown a willingness to respect the role of copyright collectives.

Finally, let's discuss the exceptions, specifically, the fair dealing exception for the purpose of education.

On this issue, lawmakers shirked their responsibility to deliver clear legislation. How is education defined? That question remains unanswered. How is it that the reproduction of short passages provided for in the exception has led to such explicit interpretations as that of Université Laval, which set its threshold at 10% of a work or an entire chapter? The door is wide open to the most unreasonable interpretations. Some institutions have even become experts at teaching how to stretch out what constitutes a short passage. What's more, some in the educational community claim that publishers have seen their profits rise since the legislation was passed. Their analysis of the figures, however, bears greater scrutiny.

What do we expect from lawmakers? A few things, at the very least. We expect them to do their job and work towards ending piracy. We expect them to give Canada's legislation some teeth. If lawmakers cannot manage to adopt even potential solutions, we expect them to finally recognize that private copying compensation is not a tax, but a way to support culture. We expect them to review the principle of fair dealing for the purpose of education by setting out a narrow definition for education and restricting the freewheeling interpretations of the educational sector. Lastly, we expect lawmakers to recognize the vital role copyright collectives play on behalf of creators and to accept that mandatory exceptions, such as fair dealing for the purpose of education, must go hand in hand with mandatory compensation.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Next we will hear from Guillaume Lecorps, from the Quebec Student Union. You have seven minutes.

[Guillaume Lecorps, President, Union étudiante du Québec]

Good afternoon, Mr. Chair and members of the committee.

Thank you for having me today and for giving our union the opportunity to share the views of Quebec students on a very important issue, further to your review of the Copyright Act.

My name is Guillaume Lecorps, and I am the President of the Quebec Student Union. Established in 2016, our organization represents 80,000 students across the province of Quebec, from Rouyn-Noranda, Sherbrooke, and Gatineau to Montreal and Quebec City. Not only do we work with associations representing more than 200,000 of the province's university students through our committees, but we also work with a number of federal partners on issues of national importance that affect our members, including copyright.

The current review deals with numerous provisions, but my remarks will focus on a crucial concern to the student community: the principle of fair dealing for the purpose of education.

I'm going to use this opportunity today to discuss the important role of fair dealing from the student standpoint, the benefits of the fair dealing principle, and the various ways of managing copyright.

In a very important 2004 decision, the Supreme Court reiterated the need for the act to take into account two main pillars: the rights of copyright owners, so content creators, and the rights of users. Every single day, Quebec's students balance both of those elements in their dual role as creators and users of content. In fact, they were the ones who, through their campus associations, made it clear to us that they were interested in this statutory review.

Further to our consultations with those associations, Quebec's student community took a clear stand in favour of keeping the principle of fair dealing for the purpose of education as is. In particular, students felt that the principle had led to meaningful improvements in education quality, source availability, and the range of perspectives in universities.

Beyond the financial implications, which are nevertheless significant, Quebec students feel strongly about this issue because they want to make sure knowledge is as accessible as possible.

It is true that Canada's post-secondary students had access to a certain amount of information and knowledge prior to the introduction of the fair dealing provision for the purpose of education. It seems clear, however, that the provision has had a positive impact on both the quality and quantity of available sources in universities.

Keep in mind that this enhanced access to knowledge is the result of a tiny fraction of copyrighted works being distributed and that fair dealing should never be likened to property theft or piracy. The principle of fair dealing can be defined and controlled so as to allow for the fair compensation of copyright owners—compensation that is certainly important in an ever-changing knowledge-based economy.

The establishment of copyright coordination offices by post-secondary institutions such as Université Laval can be an effective way to ensure that the regime is implemented optimally. This approach is in no way intended to disregard the fair share of revenue copyright owners are entitled to for their content; rather, it is an effort to keep that revenue from hindering access to knowledge.

Furthermore, at a time when the Canadian government claims to want to increase the country's participation in the knowledge-based economy, it seems fitting to create a regime that encourages innovation and helps students reach their full learning potential.

The development of open education resources is another effective way of bringing copyright owners and content users together, while promoting content creation and fair distribution.

The Quebec Student Union's 80,000 members are well aware of the impact this legislation will have on them. That is also true for Quebec's university student population at large, which is keeping a very close eye on the issue.

They made it very clear to us that the federal government should prioritize fair dealing in order to make higher learning as accessible as possible, both quality-wise, in terms of education quality, and financially, as regards education affordability.

What's more, as both content creators and users, university students understand how important it is to ensure copyright owners are better compensated for the content they produce. Students, however, feel that the way to achieve sound public policy is to promote access to knowledge and fair compensation for copyright owners, without further straining a segment of the population that is already struggling financially, students.

The Quebec Student Union and its membership are of the view that the principle of fair dealing, as currently set out in the act, should be maintained further to the review being undertaken by the committee.

Thank you.

I would be happy to answer any questions you have.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

It is now over to Benoit Prieur, from the Association des distributeurs exclusifs de livres en langue française.

You have seven minutes, Mr. Prieur. You may go ahead.

[Benoit Prieur, Director General, Association des distributeurs exclusifs de livres en langue française]

Thank you, Mr. Chair.

Honourable members of the committee, thank you for having me.

I am here on behalf of the members of the Association des distributeurs exclusifs de livres en langue française, known as ADELF. We are a membership organization representing Canadian businesses that distribute French-language books in Canada.

Our membership generates $450 million in sales annually and is responsible for more than 700 jobs in Canada, mainly in the Montreal area.

ADELF's board of directors asked me to pass on one key recommendation: that the government keep the Book Importation Regulations, passed in 1999, intact.

I'd like to start by telling you a bit about book distribution and the members of our association.

Distributors are the main business partners of book publishers. Distributors bring publishers' books to the retail marketplace, in other words, booksellers, bookstore chains, school co-operatives, hardware stores, drug stores, big box stores, and websites. Amazon.ca is a client of all of our members.

Our members have distribution agreements with French-language book publishers not just in Quebec and other Canadian provinces, but also in every country of the Francophonie, including France, Belgium, and Switzerland.

ADELF's members bring nearly 42,000 new titles to market each year, and those are only French-language publications.

Our members' catalogues contain more than 703,000 French-language titles, which are available to every Canadian reader in every province. Those titles include bestsellers with tens of thousands of copies sold, but the reality is that bestsellers are the exception, accounting for less than 1% of titles. The majority of titles are sold in very small quantities. In fact, for nearly 90% of books sold in Canada, fewer than 500 copies each are put on the market.

Now, I'll say a few words about the relationship between book publishers and distributors.

In Canada, virtually all Canadian and foreign publishers sign an exclusive distribution agreement with their Canadian distributor. That means the publisher is giving the distributor the exclusive right to represent them in Canada. In other words, the bookseller or any other client retailer must source books from the distributor designated by the publisher in question.

Exclusive distribution has a number of key benefits. First, it helps foster strong distribution networks throughout the country, but, above all, it ensures access to a wide variety of titles across the country. With the assurance that they will reap the benefits of their investment, exclusive distributors can commit to providing greater support for difficult titles that are not guaranteed bestsellers, seeking out more remote and less accessible clients, and so forth.

Since 1999, the Government of Canada has protected the exclusive rights of book importers. The Book Importation Regulations and the Copyright Act help to protect against parallel importation. What is parallel importation? It is a practice whereby an institutional buyer or retailer sources copies through an unlicensed supplier, one who is not the exclusive distributor. Parallel importation undermines Canada's book distribution infrastructure, hindering access to a wide array of titles in Canada.

In order to receive protection under the Book Importation Regulations, distributors must adhere to certain criteria or standards, including specified retailer shipping time frames and Canadian pricing that takes into account the book's list price in the exporting country.

Canada is not the only country with rules protecting the exclusive rights of importers. Quite the contrary. Nearly every OECD country has such rules in place. It is standard practice.

In conclusion, I want to say that the members of the Association des distributeurs exclusifs de livres en langue française do not receive any funding from the Quebec or Canadian government, including the Department of Canadian Heritage and the Canada Council for the Arts. Conversely, we our counting on the federal government to establish a legislative framework that protects the exclusive rights of businesses, while encouraging innovation, creation, and risk-taking.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

I will now turn the floor over to Nicolas Sapp, from Concordia University.

You have seven minutes.

[Nicolas Sapp, Lawyer, Partner, ROBIC, University Secretariat, Concordia University]

Thank you.

Mr. Chair, honourable committee members, and members of the public, good afternoon. My name is Nicolas Sapp, and I am an attorney and a partner with the law firm ROBIC. I am not from the University Secretariat of Concordia University. I am here today speaking on behalf of Concordia University, Université de Montréal, and Université de Sherbrooke, which, combined, have approximately 150,000 registered students. These institutions are among Quebec's largest universities.

I thank you for inviting us to share our observations and recommendations.

As you know, the fundamental mission of universities is teaching and research. In this context, documentary resources are key elements that are vital to the whole university community. Quebec universities seek to provide accessible quality education to their students. Accessibility and quality are also two key elements as far as documentary resources are concerned.

Quebec universities are home to users, as well as to creators, authors, and publishers, who all own copyrights. Many of these members of the university community wear both hats. In this context, Quebec universities are extremely sensitive to copyright matters. They acknowledge and respect the rights of copyright owners, but they have an equally important interest in and for the rights of users.

The unique position of universities in copyright matters requires a contextual approach for the following reasons. Because of their roles and functions, Quebec university faculty members publish a large portion of the teaching material protected by copyright for the benefit of students. Faculty, researchers, and students throughout the world use research results to create new knowledge. The dissemination of research results enables students and researchers worldwide to have access to high-quality content, thereby allowing for the sharing of knowledge and the development of an innovative economy. Publications by researchers contribute to supporting the publishing industry.

Now let's turn to scientific publishing.

Scientific publishing is controlled by five major international publishers, which corner the market, having all of the attributes of an oligopoly. Depending upon the discipline, researchers are often required to publish with these publishers to obtain tenure and research grants. The publications of these publishing houses consume a significant portion of university library acquisition budgets and account for a large portion of texts that are put on e-reserve.

In certain cases, in addition to being obliged to relinquish their copyright, some authors have to pay to be published. Accordingly, universities repurchase the research results of these authors at a high cost after having paid their salaries, not to mention the fact that these researchers have been awarded research grants by the government. Researchers produce virtually all of the content found in university libraries.

Next, let's discuss the legislative amendments enacted in 2012.

Quebec universities welcomed the Copyright Modernization Act, which amended section 29 of the Copyright Act, adding, as you know, education to the fair dealing exception.

Quebec universities wish to highlight the goal sought by the legislator, which is basically set forth in paragraphs (c) and (d) of the summary of the act. The paragraphs read as follows:

(c) permit businesses, educators and libraries to make greater use of copyright material in digital form;

(d) allow educators and students to make greater use of copyright material.

Now let's look at Supreme Court of Canada case law.

Quebec universities support the principles applicable to the field of education, which were set forth by the Supreme Court of Canada, namely that the purpose of the Copyright Act is to maintain a balance between the rights of users and the owners of copyright.

The fair dealing exception is a right for users and must not be restrictively interpreted. Schools use materials for teaching purposes. When using publications for students, professors seek to provide them with the educational material that is required for their learning. Professors and students pursue a symbiotic quest with the same goal.

Quebec universities support the publishing industry. They have not reduced their purchases of new materials for their libraries. Expenditures made by all Quebec universities for the acquisition of documentation have grown from approximately $60 million in 2009-10 to $77 million in 2016-17. This represents a nearly 28% increase. The acquisition of digital collections by Quebec universities represents between 85% and 95% of their acquisition budget for the year 2017-18.

Quebec universities consider that respect of copyright is of the upmost importance. They deploy significant and serious measures.

By way of example, Concordia University has taken the following measures: adoption of a policy, guide, and procedures regarding respect for copyright compliance and a policy regarding intellectual property; staff training for librarians, technicians, and clerks to ensure compliance with procedures and processes; implementation of e-reserves of documents using Ares software; and development and implementation of a workflow and follow-up procedure for all texts put on e-reserves, as well as for course packs.

Now I'd like to share the following observations and recommendations.

The purpose sought by the legislator in 2012 is still relevant in 2018. Maintaining this exception is in no way incompatible with the balance sought between creator-researchers, who own copyright, and users, as is evidenced by the harmonious coexistence of these groups in the unique university setting we have described.

Restricting the scope of the fair dealing exception would have significant adverse consequences on the cost of education for students, as well as on the quality of teaching and the content of teaching material.

Finally, educational institutions must have the right to fairly use works in the form of teaching materials for the benefit of students, without fear of litigation. We must stop considering fair dealing as a measure that opposes copyright owners and users, particularly in a university context. Going backwards would be counterproductive and would be a disservice to all. Education in the 21st century requires means that are adapted to a rapidly evolving world.

Thank you for the opportunity to make these remarks. I remain available to answer your questions.

[The Chair, Liberal, Dan Ruimy]

I'd like to thank all the witnesses for their terrific presentations.

We will begin with Mr. Baylis.

Mr. Baylis, you may go ahead for seven minutes.

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

Thank you, Mr. Chair.

My question is for Richard Prieur.

You said that the fair dealing exception for educational institutions was out of step with the global trend.

What is your take on the global trend? I thought what we had here was similar to what was happening in Europe right now.

[Richard Prieur]

On the contrary, it is not out of step with the global trend. The trend around the world right now is to copy what Canada is doing, but Canada is setting a bad example internationally, and publishers object to its approach.

I listened to Mr. Sapp's and Mr. Lecorps's presentations. I completely agree with the fair dealing principle, except that the numbers don't add up. It's well and good to say that universities and bookstores buy a lot of books, but it's important to really look at the sales figures in Quebec. In 2012, the Observatoire de la culture et des communications du Québec, or OCCQ, pegged new book sales at $780 million, if I'm not mistaken. Benoit Prieur can correct me if I'm wrong, since he's better with numbers than I am, but that same market is valued at $600 million today, so about a 25% drop.

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

Does that decrease apply to print books or electronic books?

[Richard Prieur]

It applies to print books, the ones people purchase from retailers, university co-ops, bookstores, places like Walmart and Costco, and so forth. It corresponds to book sales. I can't wrap my head around the claim that book sales are on the rise and that people are buying more books on the whole. The reality is book sales are down.

Internationally, a country that is setting a good example is Australia, where students clearly objected to the fair dealing principle. They understood that they were the creators of tomorrow and recognized the importance of being fairly compensated for their work.

Universities maintain that they buy a lot of books, but they could afford to buy many more, if they didn't become embroiled in lawsuits against the Access Copyrights and Copibec of the world. Their logic is flawed, as I see it.

The impact on students was brought up, but do you know how much students have to shell out for Copibec? Tuition in Quebec is about $3,000, and I believe the portion students are required to pay Copibec for copyrighted material is around $13.50. Nowadays, that's about the cost of two beers. Back when I was a student, it would've bought four beers. Regardless, what students are paying is $13.50 each. We can talk numbers all day long, but when students are paying $3,000 in tuition and $13.50 of that is going to Copibec for the reproduction of copyrighted material, it's really quite little.

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

First, it is in our interest to protect publishers and creators in Quebec and Canada.

[Richard Prieur]

Yes.

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

Does Copibec represent only them?

[Richard Prieur]

Copibec collectively manages the rights of all publishers around the world whose works are photocopied or used by colleges, universities, elementary schools, and high schools in Quebec.

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

What percentage of those works are Quebec or Canadian products?

[Richard Prieur]

I don't have that number. You'd have to ask Copibec. Frédérique Couette is here, so she could answer that.

I wouldn't want to give you any wrong information, but I would say that Copibec deals primarily with Canadian content and French-language Quebec works, in particular, since French is the predominant language of instruction in Quebec's education system.

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

I'd like to briefly pick up on my first question about the global trend. You mentioned Australia, where students have a different view from Mr. Lecorps's.

Are other countries moving in the same direction as Canada? Talk a bit about that, if you would.

[Richard Prieur]

Indeed, there are other countries that are favouring the use of fair dealing for the purpose of education, but we may be to blame because we weren't diligent enough in 2012. Stakeholders in those countries are being more mindful than we were by calling on their governments to better control and define fair dealing for the purpose of education.

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

Would you like to see stricter control? Are you completely opposed to fair dealing for the purpose of education, or would you like to see it subject to tighter control?

[Richard Prieur]

We aren't completely opposed to fair dealing. It's a principle we've always supported, and, in fact, we've done that for clients who have reading difficulties. Publishers are the ones who do that, in other words, they adapt works to the needs of those clients. We aren't against the principle of fair dealing as long as it is controlled in a meaningful way. We agree on that. What I would really like to see, though, is how education is defined.

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

I see.

Mr. Sapp, I gathered from your presentation that you do not want any changes made to the fair dealing provision. You want to keep it exactly as is. You don't want tighter control. Is that correct?

[Nicolas Sapp]

Yes. We want the fair dealing provision to stay as is. That is our position.