Industry Committee on May 22nd, 2018

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair, and thank you both for coming with detailed information for us. We are trying to get to the bottom of what's fair, not just fair use but fair in terms of legislation.

Mr. Masse mentioned earlier that when it ends up in court, that means we haven't done our job. We've had 21 hearings since the new legislation has come in. What was the relationship before that? Did you have hearings? You're both involved with litigation right now, both of your organizations. It's a class action in one case, and in another case, the litigation is against licences that weren't being paid.

What was it like before this legislation? Was it better or worse?

[Frédérique Couette]

For our part, Copibec has always negotiated its licences. We never went through the Copyright Board of Canada or any litigation. We have always preferred negotiation. That is still our preference today with the other universities, except for Université Laval. In 2014, Université Laval refused any discussion and would not sit down at the table with us. So we had no choice. In our opinion, that is not the best way to negotiate royalties, but since 2012 that is what we have had to deal with in the case of Université Laval.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

[Roanie Levy]

If I may, I've been at Access Copyright for 17 years. I've been there, in a way, through this whole process, and what I'm going to express is my personal view of what has happened through the years. The Copyright Modernization Act took 15 years.

For 15 years the parties came before committees—sometimes legislative committees, sometimes standing committees—to look at another iteration of the Copyright Act. You had the creators, the writers and publishers, and the collectives on one hand, and you had the education sector on the other hand. Creators and publishers wanted stronger copyright, and the users—in our situation, the education sector, the libraries—wanted more exceptions.

We were at odds with each other for 15 years, and in the context of that tug of war around what the Copyright Act is ultimately going to say, big licences came up for negotiation. It became increasingly difficult for us to sit down at a table and negotiate the licence, and that's why we ended up before the Copyright Board. As the process continues, with these five-year reviews and litigation that takes almost decades to conclude, we are stuck in this tug of war. It is not our preferred situation.

[Lloyd Longfield, Liberal, Guelph, ON]

Right. I should have mentioned that I was going to share a minute of my time with Mr. Sheehan, but I'm going to touch on this just a little further, because I think we're on to something when it comes to licences.

The intention at the time was that it would be revenue neutral. Licences would continue to be paid; users would be able to have access for the purposes of study and education; institutes would continue to pay licences on their behalf, knowing that students would have access to the material to copy in terms of their studies and research.

Then, at some point, we came off the rails. The licences with the institutions weren't getting covered off. Is that a fair assessment?

[Frédérique Couette]

I think the Quebec model illustrates a kind of balance. I would not say, of course, that royalties of $13.50 are fair, but at least we are able to sit down around the table. The only reason for this is that the Quebec ministry of culture and communications and the ministry of education and higher education are committed to maintaining a strong publishing industry, which tells stories about Quebec, rather than seeking out what is happening in France, Belgium or elsewhere. If the concept of fair dealing for education is not based on that, if nothing strengthens it to guide the universities and the ministries of education as to interpretation, we would end up with a situation similar to that of Access Copyright. That is ultimately what will happen if nothing is done in Quebec.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

There are 30 seconds for Mr. Sheehan.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Very quickly, on the tour, UBC had shown us a chart where course packs used to be 80% usage and 20% digital. Just recently they did a study, and the number has absolutely flip-flopped on that.

As it relates to digital form and the transactions that are happening, a lot of universities are opting out of Access Copyright, etc. Could there be a situation where Access Copyright would sue a university or a content purchaser for use in your repertoire what they had already and legally received permission to use elsewhere?

[Roanie Levy]

I think that's a hypothetical, and I can't really answer a hypothetical, especially when it involves suing someone.

In answer to the switch from paper to digital, I think it's important to note that both the Access Copyright licence and the Copibec licence covers a reproduction both in paper and digital. The fact that instead of producing paper course packs, they now just PDF it and upload it on a learning management system doesn't change the impact of consumption of works that are protected by copyright and not paid for. The mechanism to pay for it is in the collective licence, to make it simple and easy for professors across the country to make the reproductions they need to instruct their students, and ensuring at the same time that the payment flows back to the creators.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We've going to move to Mr. Lloyd.

You have a very quick five minutes.

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

Thank you for coming today. I appreciated your testimony.

I'm going to reference the document here that was provided by the CMEC Copyright Consortium in which they talk about book sales in Canada, book sales in Ontario, Canadian publishing industry profit margin, and Canadian publisher sales of their own titles to 12 institutions.

I am looking for some clarity from you. You don't actually sell books. You are a reproduction company and primarily derive your income from educational institutions.

Do you think that these statistics have any value for us as a committee?

[Roanie Levy]

Those statistics don't refer to the reuse rights, the reproduction; that's for sales.

Unfortunately, I'm not in a position to comment about the source of that data and how it marries with our own experience.

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

Let's assume, because it is Stats Canada data, that it is probably very accurate.

Would you say that it's not really pertinent for this committee to review book sales when we're talking about copyright? Are they two totally different issues?

[Roanie Levy]

One thing to keep in mind is that what gets sold and what gets copied are sometimes different works. A group of works that are not being bought can be copied, so you may see sales revenues go up for this group of creators, but it's another group of creators who get reproduced and not paid for.

The example that we heard here over and over is university libraries spending hundreds of millions, more than ever, on science and technical medical journals, and not paying the reuse rights for the copying of chapters, short stories, and plays that they upload on their learning management systems and share with their students.

There are two different groups of rights holders. One is primary sale, and the other is secondary revenues; one they pay for and one they don't pay for. The impact is not felt the same way. The fact that they pay for one does not give them a free pass to copying the other group of books.

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

We're looking at book sales like it's been put in previous testimony: you can't compare the average author to a J.K. Rowling, for example, who is selling millions of books around the world. These book sales are reflecting all books from all authors, including bestsellers. The percentage that is educational books is probably a very small margin as part of the overall book sales market in Canada.

[Roanie Levy]

Again, I don't know the source of that data, so I can't really comment about that data per se, but—

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

I'll move along to another area.

[Roanie Levy]

—generally speaking, I think your comments are accurate.

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

Some witnesses have claimed that the increased use of digital content in our age of the Internet has led to a decreasing relevance for Access Copyright as a collective society and, by extension, for copyright. Would you say it's true that Access Copyright is not really involved in the digital era?

[Roanie Levy]

Absolutely not. That is not correct.

I think what you need to do is look at the York University case. It was the time—the opportunity—we had to actually see the content that gets used in course packs and on learning management systems at York University. In the context of that litigation, a study was done.

Individual titles were looked at. The titles had to be determined as to whether they were in Access Copyright's repertoire, whether York had licences, and whether they were available on open access. The outcome was that 360 pages per student per year in Access Copyright's repertoire were not being paid for and were not available under open access. That's an average: 360 pages per student per year. That is a huge amount of copying.

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

I have a final question. In my conversation with the previous witnesses who came in today, they were talking about competing evidence coming in before the Copyright Board. I was referencing PwC's report, which was commissioned by Access Copyright. You have spoken about the Copyright Board's decision, but they referenced it and said there was another piece of evidence in there, probably from Deloitte.

[Roanie Levy]

Yes.

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

Can you elaborate on the differences and the contrasts between those reports?

[Roanie Levy]

I think one thing that's important to note and got very confused in the earlier panel is which courts or tribunals have looked at the copying guidelines. The Copyright Board did not look at the copying guidelines. It has not said anything about the fairness of the copying guidelines. Only the Federal Court in the York decision has had to examine the copying guidelines—the 10%, the chapter—and determine whether it's fair. It's in that context that there were duelling experts. In fact, there were two on each side. The court concluded unequivocally that the fair dealing guidelines are arbitrary, they are unfair, and they lead to economic harm.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Jowhari, you have a very quick four minutes.