Industry Committee on May 9th, 2018

[The Chair, Liberal, Dan Ruimy]

Good afternoon, everybody. Welcome to meeting 110 of the Standing Committee on Industry, Science and Technology.

We are continuing our five-day, five-city road trip on the Copyright Act. So far, it has been quite interesting to get the diverse opinions that are coming through. As well, the open-mike sessions have been really well received.

We have translators here; everything being said today is being recorded, as well. We'll be able to take it back to the House, and it will be part of the official documentation.

Today we have in our first panel the Canadian Copyright Institute, Mr. William Harnum, chair. We have the International Publishers Association, Mr. Hugo Setzer, vice-president of publishing. From the University of Guelph we have Ms. Rebecca Graham, university librarian, chief librarian's office.

We really wish Lloyd was here for you.

Finally, from the Toronto Public Library we have Ms. Susan Caron, director, collections and membership services.

We're going to start. You have up to seven minutes to make your presentations, and then we'll get into rounds of questions.

Just as a reminder to our audience, once the gavel has been banged there is no picture-taking or recording allowed. That prohibition is part of our official House of Commons protocol.

We will start with the Canadian Copyright Institute.

Mr. Harnum, you have up to seven minutes.

[William Harnum, Chair, Canadian Copyright Institute]

Thank you very much, Mr. Ruimy.

Good afternoon. I'm pleased to appear before you today on behalf of the Canadian Copyright Institute, an association of creators, producers, publishers, and distributors of copyrighted works. Founded in 1965, the institute seeks to encourage a better understanding of the law of copyright.

Members of CCI have made representation to various levels of government on changes to copyright law and the copyright landscape in Canada, and we've participated in international discussions, including the Stockholm revision of the Berne Convention, and more recently, meetings of the World Intellectual Property Organization in Geneva.

In the interest of full disclosure, I should say that I've worked in academic publishing in Canada since 1984. I've been president of the Association of Canadian Publishers twice, and I have also served on the board of Access Copyright. Most of my volunteer work for the last decade has been in the field of copyright.

In our view, some aspects of copyright in Canada have been in a state of flux since the 2012 changes to the law. We supported some of the changes at the time, but our members were very worried about the inclusion of education as a fair-dealing purpose.

Representatives of the educational sector at the time assured parliamentarians, in meetings very much like this, that the inclusion of education as a category of fair dealing would have no effect on revenues to creators, and specifically that they would continue to pay their collective licence through Access Copyright. This, of course, did not happen.

People on both sides of the debate have argued about the extent of the damage to creators, but any reduction of revenues in creative industries, with narrow profit margins and low income for most writers and artists, is significant.

Let me repeat what John Degen, executive director of The Writers’ Union, said on this matter last week. He said that fair dealing should apply when an individual student or other person goes to the library to make a few copies for his or her own use, not when that copying is carried out on an industrial or sector institutional basis.

That is what we believe is happening in educational institutions: wholesale copying, without compensation, of content as a substitution for purchasing books, including textbooks. The promulgation of arbitrary fair-dealing guidelines—10% of a work; an entire poem, play, or essay from a work; the whole chapter of a book; and so on—is not, in our view, fair. The Federal Court decision in the recent York University case upholds this position.

None of this is new. When I was in graduate school in the mid-1970s, accessing copyrighted content was difficult and inconvenient. Some of my professors diligently cleared copyright for excerpts handed out in class; some didn't bother.

With the introduction of Access Copyright agreements around 1991, the need for individual negotiation was eliminated and replaced by a negotiated collective licence. Educators told Access Copyright at the time that they didn't want to keep records of what was actually copied, so sampling and other methods of determining what was copied and whom to pay were devised and agreed upon. It was an easy, efficient, and inexpensive method of accessing content from Canadian and foreign publications.

In all the talk of billions of dollars in spending by universities and libraries on content, it's important to remember that its highest rate, the Access Copyright fee, was set at $27 per full-time student—less, as my son says, than the price of a case of beer.

About 20 years later, educational institutions decided, emboldened by the 2012 amendment extending fair dealing to education, that most of what they were copying should not be paid for at all.

We suggest that education as a category of fair dealing needs parameters either in a copyright act or regulation, or both. The parameters must provide some latitude for copying by individuals but not be so broad as to encourage wholesale copying, unless with a licence from a collective society, or alternatively, a tariff determined by the Copyright Board. That's our position on fair dealing.

Secondly, claims by the education community that tariffs established by the Copyright Board are voluntary are, in our view, absurd. The Federal Court, in the York University case, has determined that tariffs are indeed mandatory. Despite the clear ruling of the Federal Court, however, many in the educational sector are refusing to pay royalties owing under tariffs set by the Copyright Board.

Our third point today is a recommendation to extend copyright to 70 years after the death of the author, which would have been required by the trans-Pacific partnership agreement, if the U.S. had remained on board.

Countries that now protect copyright for 70 years following death include the United Kingdom and all the other members of the European Union, the United States, and Australia. Canada is out of sync with the norm. If concerns were expressed about difficulty in locating deceased rights holders, we can look to improvements in the copyright owner provision in the Copyright Act, as well as enabling an author to leave a legacy that may benefit grandchildren, as well as children, which is an additional important reason for the extension. It is now more advantageous for a Canadian author to publish first in countries outside Canada because some countries provide the 70 years of protection only on the basis of reciprocity.

We believe that these three changes are important for a thriving copyright environment, for the benefit of both creators and the public.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. We're going to move to the International Publishers Association and Mr. Setzer. You have up to seven minutes.

[Hugo Setzer, Vice-President, Publishing, International Publishers Association]

Good afternoon. Thank you very much for the opportunity to appear before this committee. My name is Hugo Setzer. I am a publisher in Mexico City and currently vice-president of the International Publishers Association or IPA.

IPA is a federation of national, regional, and specialist publishers' associations, with 76 member organizations from 65 countries throughout the world. IPA has three Canadian members. We have the Association of Canadian Publishers, the Canadian Publishers' Council, and l'Association nationale des éditeurs de livres.

IPA has a special interest in educational publishing. Educational publishers are very good at producing and supplying quality textbooks and learning materials, and they develop a wide range of innovative new tools and content in digital, print, and blended formats. Education is a legitimate market for publishers, and the protection of their investment by copyright encourages and promotes investment in quality educational material.

Publishers are not in principle against exceptions. They have their place in a well-balanced ecosystem. For example, we fully support the Marrakesh Treaty. But when there are too many exceptions or when they are too broad, they undermine the very business model that produces high-quality educational content in the first place.

When considering educational exceptions, we think that legislators should consider broader policy objectives, notably to establish a sustainable local publishing ecosystem that supports a knowledge- and information-based economy.

Exceptions for specific, well-defined, and narrow educational purposes are part of the copyright landscape, and publishers accept that. Publishers' experience is that exceptions that are designed for a specific case, as contemplated by the Berne Convention's three-step test, work best, since all parties have a common understanding of how the exception works.

The so-called “fair dealing” exemption introduced into Canadian law in 2012, however, is much too broad. Nowhere in the industrialized world outside Canada is education in the generic sense a permitted purpose for an unremunerated fair dealing exemption, as shown by many studies.

Our concern at IPA is that Canada is now considered internationally an outlier, not only with its fair dealing exemption for education, but with its court-made law that equates fair dealing exemptions with so-called user rights, all of which has resulted in loss of income for Canadian publishers and others. Publishers report reduced or even complete withdrawal of investment in Canada's specific K-to-12 educational content.

In the IPA submission to other national copyright reviews in places all around the world, such as Australia, Ireland, Nigeria, Singapore, and South Africa, we have had to argue that Canada is a bad-case example of governments' interfering with copyright and undermining the local market. It is an unfortunate but direct consequence of the 2012 copyright law changes that Canada now sits with such countries as Venezuela, Kuwait, and China on the priority watch-list of the Special 301 Report of the United States Trade Representative.

Canada has obligations under the Berne Convention and TRIPS whereby its exceptions must pass muster under the three-step test. We are hearing arguments from noted scholars that the fair dealing for education exemption, as subsequently interpreted by the Supreme Court and by a number of educational institutions such as York University, does not need the three-step test.

A well-balanced educational publishing infrastructure includes collective licensing. We all know that copying exists, and finding a mechanism that remunerates creators and publishers fairly for income forgone when teachers and students copy material is unquestionably the best way of dealing with this activity. Students perform best when they have high-quality resources to work with. Collective licensing in the educational field is done at a very low cost per head.

Education is a strategic resource for all countries that want to be part of the knowledge-based economy of the future. Educational publishers and the authors they employ, many of whom are former teachers, are the professionals best placed to translate curricula into quality textbooks and learning materials. It is publishers who are keenly aware of the latest research into teaching and learning. It is publishers who will use all available and appropriate formats, and publishers' materials are specifically designed to stimulate academic success. Please help us to continue to invest in education.

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move right on to the University of Guelph. Ms. Graham, you have up to seven minutes.

[Rebecca Graham, Chief Information Officer and Chief Librarian, Chief Librarian's Office, University of Guelph]

Good afternoon, Mr. Chair and members of the committee. Thank you for the opportunity to speak with you this afternoon.

As you've just heard, my name is Rebecca Graham and I'm the university librarian at the University of Guelph. I'm joined here today by Heather Martin, our copyright officer and manager of e-learning and reserve services.

Today I would like to share with you the history of fair dealing practices at the University of Guelph. For almost 35 years we have practised effective management of copyright. In doing so, we facilitate and advocate for responsible and informed uses of copyrighted materials through compliance with the act and compliance with the many licences and contracts we negotiate with digital content publishers and providers, and engagement with Guelph faculty, students, and staff. We provide expertise and guidance on copyright and authors rights issues, as well as fair-dealing practices, so that they understand both their rights and their obligations as creators and consumers of content. We also have a commitment of staff and other resources to support copyright education and compliance.

In 1984, the University of Guelph was among the earliest Canadian institutions to implement an institutional copyright policy, one that included specific guidelines on fair dealing. Guidelines adopted at that time did not differ substantially from the fair-dealing policy in use at universities today. They specified copying from books “may not exceed ten percent of the monograph”, and for periodicals, “one article in five from any one issue”, no more than 10% of the whole issue.

There were dramatic shifts in our collection development strategy from the mid-1990s to 2010 as we moved away from the acquisition of individual books and journals in print to the increasingly larger-scale acquisition of digital content to the benefit of our patrons, made possible through technological advances.

During the period, the university paid for a collective licence with Access Copyright to authorize photocopying of print materials, paid transactional licences to Access Copyright for copying that exceeded what could be copied under the terms of the blanket licence, paid publishers and creators directly for the right to digitize and post course materials online, and continued to use fair dealing to authorize copying works that were excluded from Access Copyright's repertoire.

By 2010, the majority of journal and book content utilized for courses was from our subscriptions to digital publications. Given this rise in an increasingly networked world, which in turn enabled both digital publishing and new learning environments, the collective licence for reproducing print materials no longer had value.

In January 2011, the University of Guelph was one of a number of Canadian universities choosing to opt out of the Access Copyright model and choosing to manage our own copyright practices. Subsequent developments between 2012 and 2017 supported this decision, most notably the Supreme Court decision in Alberta (Education) v. Access Copyright, which affirmed that fair dealing for purposes such as private study and research extended to teachers making copies for their students.

The addition of education as a fair dealing purpose in the 2012 Copyright Modernization Act provided further clarity on the scope of fair dealing in an educational context. In 2012, the university adopted the fair dealing policy for universities developed by Universities Canada based on the Supreme Court decision.

In 2017 through 2018, the recently completed fiscal year, our acquisition budget was $8 million, with which we purchased or subscribed to international scholarly output, including substantial portions of Canadian University Press output, as well as literary works by Canadian authors. We subscribe to e-books from the Association of Canadian University Presses. We provide a digital publishing platform for a number of scholarly journals and we contribute to the national journal publishing efforts, including Érudit.

In that period, we also spent $100,000 on transactional licences to accompany educational materials that fall outside the limits of fair dealing. Currently, 92% of the materials we acquire are digital and the rights we negotiate provide for greater legal opportunities for the use of those materials.

Students at the university access course readings in a variety of ways. They purchase textbooks from the university bookstore. They also access materials placed on reserve in the learning management system including 54% through direct links from licensed materials, 24% open and free Internet content, 6% via transactional licences, with the remaining 16% under fair dealing.

I would like to conclude by stating that we support the retention of fair dealing, as it currently exists in the legislation. I would like to thank you again for this opportunity to speak with you today.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Finally, we're going to move to the Toronto Public Library.

The floor is yours, Ms. Caron.

[Susan Caron, Director, Collections and Membership Services, Toronto Public Library]

Thank you for inviting me to address you this afternoon and for leading the review of the Copyright Act.

I am the director of collections and membership services at the Toronto Public Library, and I'm going to talk about interlibrary loans, technological protection measures, and equitable access to e-books.

Public libraries have long played a role in assisting people to undertake personal research and study. Since it is recognized that no library can be entirely self-sufficient in fulfilling this role, the Toronto Public Library is an active participant in the interlibrary loan process, in which library materials are lent to and obtained from other libraries to fill customer requests. As the largest public library in Canada, and the owner of unique materials, we welcome the opportunity to share our collections and to support the work of researchers outside Toronto. We regularly lend and provide about 4,500 books and copies of documents a year.

These services rely on the current fair dealing framework, primarily the exception for research and private study and the exception for libraries to copy material for customers. This balanced and flexible framework is critical to the future success of resource-sharing between public libraries, which extends access to library collections across Canada. Therefore, the current fair dealing provisions that support this use and exceptions for libraries should be retained unchanged.

However, as electronic materials make up more of our collections, our ability to lend those materials is often restricted by the contract provisions in our licences. This means that we cannot lend digital material to other libraries that cannot afford expensive digital resources. Contract language is complex and difficult to interpret, so librarians err on the side of caution and do not lend or copy digital material for other libraries. To be able to provide equitable service, regardless of format, we recommend amending the act to explicitly state that contract provisions cannot override fair dealing and library exceptions. This would allow us to provide interlibrary loan services in the digital age.

Second, technical protection measures, or TPMs, on materials such as e-books can prevent the library from non-infringing sharing that would otherwise be recognized as a fair dealing exception. For example, if a library customer wants to make a copy of a small portion of an e-book for private study or research, the TPM prevents this, even though it is allowed under fair dealing. Publishers see TPM as the way to protect digital books against copyright infringement and piracy. However, many researchers dispute this.

According to a 2017 study by Britain's Intellectual Property Office, 17% of e-books read by U.K. customers are illegally downloaded, and there is no reason to believe that Canadians are any different. For example, as Mr. Setzer alluded to, in its 2017 report, the International Intellectual Property Alliance kept Canada on its watch-list, stating that online infringement remains widespread in Canada.

Briefly, TPM appears to have little effect on e-book piracy. It's fairly easy to crack e-book encryption, and there are thousands of illegal sites to choose from. Publishers are spending a great deal of money on TPMs, and in the meantime, are blocking users from legitimate sharing of content. Many see TPM-free e-books as the obvious solution, and this is gaining ground in the academic world. However, we simply recommend that the act be amended to allow for non-infringing circumvention of TPMs to allow libraries to lend and customers to copy within existing exceptions, regardless of format or TPM applied.

Last, I want to speak about the challenges libraries are facing in building e-book and e-audio book collections. In 2016, Toronto and Ottawa city councils, at the request of their library boards, adopted a resolution to, “request the Department of Canadian Heritage and Industry Canada to investigate current e-book pricing practices of multinational publishers as part of any upcoming statutory review of the Copyright Act”. This was also endorsed by the Federation of Canadian Municipalities.

In the last five years, the use of digital formats by Toronto Public Library customers has risen by 200%, to over 4.5 million uses in 2017. This is great news, but we, like public libraries across Canada and around the world, are dealing with multinational publishers that may charge us four to five times what consumers pay for a licence that allows customers to access one copy of an e-book. Furthermore, three out of the five multinationals require that we repurchase these licences after a set time or number of uses. This is an unsustainable licensing model, and despite repeated efforts over six years to discuss a reasonable model with publishers, there has been little movement.

Canadian libraries have also been unable to access the same titles as American libraries, although we share the same vendors. We have been told that this is because Canadian rights have not been negotiated, and some of these titles are Canadian.

We submit that the book importation regulations may offer a model to address the lack of availability and the excessive pricing faced by libraries in the digital era.

Thank you for the opportunity to speak.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to jump right into our questions.

Mr. Jowhari, you have seven minutes, please.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I welcome all the presenters. Thank you for taking the time to be here and for sharing your input with us.

I'm going to start with Ms. Graham, from the University of Guelph.

You've indicated that your university spent about $8 million in 2017 on the purchase of content. Can you give me a sense of what kind of percentage increase there has been for that expenditure from 2012 to 2017 ?

[Rebecca Graham]

I can tell you that from 2007-08, actually, when we spent $6 million, to the most recent year we just completed, when we spent $8 million. It's been a $2-million increase.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Sorry. Over what period...?

[Rebecca Graham]

Over 10 years, it's $2 million.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. Thank you.

You indicated that 92% of the expenditure in 2017 was on digital. Can you also give me a sense of the percentage change on digital during the same time period, roughly?

[Rebecca Graham]

It's a different time frame.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. Over the last five years?

[Rebecca Graham]

What I can tell you is that we had 64% digital expenditures in 2002-03—Guelph was very early in making that move—to the 92% in 2017-18.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Out of the 92%, what percentage is specifically Canadian content?

[Rebecca Graham]

That's a hard number to get at, because we have many large package deals. There's Canadian content with all of those. We have a number of e-book deals and Canadian content within many of those as well. We don't have a drill-down number.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Can you quickly break down the $8 million? How much of it is going to the purchase of content? How much of it is going into building any type of digital platform that you might be investing in? How much of it is going into the administrative...? This is just purely—

[Rebecca Graham]

It's purely content.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. Can you give me a breakdown, plus or minus, whatever per cent is reasonable, of where that money is going? Is it going directly to the content creators, or to the publishers, or...?

[Rebecca Graham]

It's going to the publishers, primarily.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. Can you give me—

[Rebecca Graham]

Excuse me: I'm looking at my expert. Yes, it's going to the publishers.