Industry Committee on May 22nd, 2018

[The Chair, Liberal, Dan Ruimy]

Welcome to meeting number 116 of the Standing Committee on Industry, Science and Technology. We are continuing our review of the Copyright Act.

Today we have with us, from the Council of Ministers of Education, Canada, the Honourable Zach Churchill, minister, Nova Scotia Department of Education and Early Childhood Development, as well as Wanda Noel, external legal counsel, Copyright Consortium.

We're going to get right into it. Sir, you have up to seven minutes, then we'll proceed with our questions. You have the floor.

[Zach Churchill, Minister, Nova Scotia Department of Education and Early Childhood Development, Council of Ministers of Education, Canada]

Thank you very much, Mr. Chair and committee members.

I do want to recognize Wanda Noel, who has been the counsel for CMEC on the copyright issue for quite some time. I would like to recognize Andrea John and Chris George, in the audience, who are here in a supportive capacity. Selfishly, I would like to inform the committee that my wife and daughter, Katie and Cecilia Churchill, are also in attendance. That's who the baby is.

We very much appreciate the committee's time on a very important issue in this country. There has been substantial conversation around copyright since the 1990s. I think it's important to recognize that we're trying to accomplish two key public policy objectives.

One is to ensure that the rights of authors and creators are protected, that they're fairly compensated for their work, and that that industry can flourish in this country. The other is to ensure that our public education system is able to access the widest range of materials as possible to ensure the long-term success and well-being of our students.

Fundamental to this conversation are two key aspects around copyright. One is fair dealing, and our understanding of fair dealing. A difficult question to understand is what's fair in terms of trying to juggle these two public policy priorities. Luckily for all of us in the room, the courts have done a lot of work for us in that regard, and have worked very hard over the course of 10 to 15 years to establish an understanding of fair dealing in the country, which we, as ministers of education, believe our policies fit well within.

The second question is around the idea of a mandatory tariff to be imposed on the education system. This is something that we do oppose. We support the court's definition of fair dealing. We do oppose a mandatory tariff on education materials.

I think it's important to recognize why that is. We believe that with the scarce public resources in our provincial jurisdictions in this country, we need to ensure that every single dollar that we spend is in the classroom and geared toward student success, achievement, and well-being. A mandatory tariff would take tens of millions of dollars out of our education system, and out of the classrooms of potential future writers and creators in this country.

I think it's important to note that this is not an education sector versus the creative industry issue, although there is some disagreement. We have a vested interest in the success of a vibrant, robust, healthy, successful, innovative, creative sector in this country. In fact, our education system is dependent on that. We recognize that there have been some changes to the economic model of these sectors as a result of technology, the Internet, open source information, and information that's being used in our education systems.

We don't believe a mandatory tariff is the best way to provide support to that industry, because we believe that takes money out of our classrooms where our precious dollars are very much needed.

I do want to discuss two issues that I know have come up in conversations at this committee. One is around the amount of full textbooks that are being copied. I know that's a concern for the industry. That would be a concern for us as well. That would fall outside of the guiding principles of fair dealing and use of copyrighted materials in the country.

Thankfully, we've had the Federal Court of Appeal and the Copyright Board look at this question on two separate occasions, and they've discovered that 98% of copying that does happen in our education system is actually within the context of following the principles of fair dealing. I think that's something that we should take great pride in. Ninety-eight per cent is a passing grade. I don't think we should look at bringing in a mandatory tariff in response to what is a 2% anomaly in our education system.

Also, I know it's been argued that the revenues from the education sector to the publishers and to writers has been impacted by the change in fair dealing and copyright legislation. I think if you look at the Statistics Canada information that we've provided, you'll see that sales have actually gone up for the K-to-12 education sector for books in our country since 2012. That's something that we should also take great pride in. That's happening at a time when technology is changing and the delivery of education in our system is changing.

In closing I do want to state that as ministers of education in this country who are responsible to be stewards of our education system, and who are responsible for delivering high-quality education to our students, we do support the court's definition of fair dealing and I believe our guiding principles are in line with that. We've provided those as well to you, and we are committed to working with yourselves, the federal government, and industry to come up with innovative, creative ways to support that industry to make sure that it's successful and thriving so that we can all benefit from it.

We just don't believe that subsidizing it with money from the classroom is the best way to accomplish that.

I will let the committee know that we're also, as ministers, investing $5 million nationally to further copyright education with our educators to make sure they are very well aware of their roles and responsibilities and also to do further assessments of compliance around copyright. I thought that would be of interest for the committee as well.

Thank you very much for those opening moments, Mr. Chair. I'm very happy to entertain any questions.

[The Chair, Liberal, Dan Ruimy]

Thank you very much. We're going to jump right into questions.

Mr. Baylis, you have six minutes.

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

Thank you, Mr. Churchill. You say you're interested in supporting a vibrant, Canadian creative industry. How would you do that? I want to talk how about money, because, ultimately, people need to be paid, so I would like to see how you would do that financially.

[Zach Churchill]

I think there are various incentives that are in place across the country. There are tax incentives. There are grants for creative industries, and there are competitions. I think we need to look at best practices from one jurisdiction to the next. This is something that as ministers we can work with the federal government on to identify the best way to incentivize growth in that sector and ensure it is, in fact, successful.

What we don't think is necessarily forward looking is to look at a mandatory tariff on the education systems across the provinces as being the best way to do that. Because, again, that will take tens of millions out of our classrooms where those monies are desperately needed. Instead, I think we need to look at more general opportunities.

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

That tens of millions of dollars, is that what you figure you've been saving since the fair dealing, that part of the act, has applied to education? You said it would take it out, so let's assume that that's about the savings you've seen across the country, tens of millions?

[Zach Churchill]

I don't know if I would characterize it as savings. It's dollars that we have not been spending in tariffs that we have been directing into—

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

Yes, you're not spending it, but if the law hadn't changed, you would be spending it, so therefore you're not paying the creators the tens of millions. Do you how much that tens of millions is?

[Zach Churchill]

The tens of millions we based on the $13.31 per textbook tariff that is currently being asked by Access Copyright. That's in response to that particular ask and obviously, as I mentioned, we don't believe that—

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

I believe Access Copyright says they've lost tens of millions since it's come in and we'll ask them when they come up after you. You're saying you would save tens of millions, or you are saving that?

[Zach Churchill]

If we were to have the mandatory tariff forced on the education systems across the provinces, there would be tens of millions of dollars that would come out of our education system.

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

Fair enough, and you did mention that you think the creators should be fairly compensated for their work. We've had a number of creators come before us, and to be honest with you, I was shocked when they started talking about the drop in income, they said 70% to 90%. But, fair enough, those are statistics. The overall amount that shocked me was they were talking about how they used to get $2,000 and now they're paid $300. I didn't meet anybody who was getting particularly rich off these tariffs.

In fact, I even asked my sister, who happens to be a publisher, and she said, yes, she gets a cheque from Access Copyright. I can't remember what it was, it was a few hundred dollars. It was insignificant to her. She couldn't be bothered to look it up.

What would be fair compensation for someone who writes a book? Maybe they spend a year writing a book, so what would be fair compensation?

[Zach Churchill]

That's a difficult question for me to answer as a minister of education.

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

Give me a ballpark.

[Zach Churchill]

I'm not going to try to provide information that wouldn't be accurate and speak outside of my expertise, and, Member, I hope you can appreciate that.

What I can point to is we recognize there's a whole host of factors that are impacting publishing in particular. The textbook isn't the primary source, or is becoming less of a primary source of information, in our classrooms. The Internet is changing the face of the publishing industry. Technology is forcing that industry to evolve and it's creating challenges. We recognize that.

But when you look at the actual revenues from the K- to-12 system, those revenues to the publishing sector have actually increased, and again I'll reference the statistics—

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

When you say they're growing, how much of those are going to Canadian content providers as opposed to international?

[Zach Churchill]

Wanda will help me answer that for you.

[Wanda Noel, External Legal Counsel, Copyright Consortium, Council of Ministers of Education, Canada]

If you look at the handout, you will see that Canadian publishers' sales of their own titles in K-to-12 educational institutions have gone up in 2012 and 2016, in that graph.

Presumably Canadian publishers' own titles are Canadian content, so they're increasing.

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

On publishers' sales of their own titles, you're saying that Canadian publishers last year went from $300,000 to $400,000. Is that correct?

[Wanda Noel]

It's actually in millions.

[Zach Churchill]

Three hundred million dollars.

[Wanda Noel]

Yes, the graph contains Statistics Canada data. They study the publishing industry nationally, and this was extracted from studies that were done of the publishing industry in Canada, in 2012, 2014, and 2016.

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

Fair enough. In 2012, though, you would have been contributing before the law; and in 2016 you would not have been contributing. Is that fair to say?

[Wanda Noel]

No, I don't think that's fair to say.

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

What did you change, then, when the law changed? Why are you trying to defend your fair dealing if it doesn't have an impact for you? I need to understand that. If it doesn't have a financial impact, why do you need to defend it?

Why are so many people coming here to defend it and at the same time saying it has no financial impact? There's a reason that you want to defend it. You just said tens of millions. Can you make that link?