Industry Committee on May 22nd, 2018

[Wanda Noel]

If I may, the answer to that question is found in the contracts that are entered into between publishers and authors. They divide up the pot, and that would vary on how prominent and important the author is. The prices are set and the education system doesn't have any control over that. The publisher and author divide up the pie.

[Lloyd Longfield, Liberal, Guelph, ON]

Understood, but you can see that what I'm getting at is—and you may not be able to answer this because it's maybe for the publishers to say—the dollar volume really doesn't get to the root of the question that we're trying to answer. That's something that we've been a little frustrated with as a committee, trying to get into the supply chain to see exactly where the leakages are. When we talk about 2% leakage on legitimate copying versus non-legitimate copying, what's the dollar on 2% of the whole? We're not talking about 100 pages here, we're talking about millions of pages that the school boards would be copying, and 2% of that figure could actually be a pretty substantial number. Would we know what 2% leakage costs?

[Zach Churchill]

We actually have done the math, and if you're looking at it per student, that would be two copies per student per school year. So two illegal copies per student per year, looking at that 2%.

[Lloyd Longfield, Liberal, Guelph, ON]

We certainly had contrasting opinions from other witnesses on how many copies

[Zach Churchill]

If we accept the 600-million-copy figure that's been presented, if you look at 2% of that—I wasn't a math major by the way—

[Lloyd Longfield, Liberal, Guelph, ON]

That's okay; I was.

[Zach Churchill]

—what we've come up with is fewer than two copies per student per school year.

[Lloyd Longfield, Liberal, Guelph, ON]

Yes. What about the cost of administering the current program? You're mentioning $5 million in advertising costs. There are posters being printed that are being put above photocopiers. I'm guessing, the way people are, that they'll see the poster and they may or may not read it. The second time, they won't even see the poster. There are costs that are being put toward trying to administer the existing program. Those costs could be taken away if a standard licensing fee was charged that would be equivalent in dollar value to what the hidden costs are in terms of reimbursing authors. On the cost of the existing program, do we have any idea of how many person-hours go into administering programs, teaching people about copyright requirements, policing the services, the auditor costs that you're using? Do you know how much it costs to administer the existing program?

[Zach Churchill]

As ministers, we do have an obligation to inform our educators of the law and ensure there's compliance. That's not just the cost associated with copyright, that's a cost associated with the variety of roles they have to function under.

In terms of our quantifying how much money we're going to spend in resources to educate and to further assess compliance, we have that number at $5 million, which is drastically lower than the $50 million-plus—

[Lloyd Longfield, Liberal, Guelph, ON]

Is that a Nova Scotia number or is that a national number?

[Zach Churchill]

That's a national number.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay.

I'm yet to be convinced, but I'll hand it back over to you, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Before I move on, I would just like to have a point of clarification.

You had mentioned two copies. Is that two pages, or it two copies of works?

[Zach Churchill]

It's pages.

[The Chair, Liberal, Dan Ruimy]

It's two pages. Okay, thank you.

We're going to move to Mr. Jeneroux. You have five minutes.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Thank you both for being here today.

Throughout the education testimony back in 2011, many representatives of the education sector explicitly stated that institutions would not stop paying licensing fees to licensing collectives, like Access Copyright and Copibec, if education was included under fair dealing. On December 5, 2012, a new act came into force. Access Copyright was served with a letter from you, Ms. Noel, on behalf of CMEC and the Ontario school boards saying that they would no longer be complying with the tariff regime.

Can you explain this discrepancy between the testimony in 2011 and the 2012 letter to Access Copyright?

[Wanda Noel]

I certainly can.

Your colleague beside you asked the same question. The decision to no longer rely on the Access Copyright tariff but other sources of copyright clearance has nothing to do with the adding of education to the list of purposes for which fair dealing can be engaged in. That decision to not pay the tariff is based on the Supreme Court of Canada decision only. If the Supreme Court of Canada had issued a decision that was different from the one it did, there would have been no opting out of the tariff system.

Prior to that decision, it was not clear whether teachers could make a copy of a short excerpt—“a little bit” was the term being used—for each of the students in their class. It's called “multiple copies for classroom use”. You have a classroom with 30 students in it. You want a copy of a newspaper article. Can the teacher make a copy for each student in the class? It was thought, up until that Supreme Court decision, that you could only make one copy, that making multiple copies for a class of students was not allowed. That decision made a profound change on the law on fair dealing, but had nothing to do with adding education as a fair dealing purpose. The Supreme Court decision happened in July, and the opt-out was the following January 1.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Okay. We go back to specific things that were said by Universities Canada—and I have the quote in front of me, but due to time, I won't bother reading it into the record—that said that absolutely under no circumstances would they be opting out of this. This was said in front of committee, and then you issue this letter to CMEC. I'm trying to—

[Wanda Noel]

You're trying to understand.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I'm trying to understand what happened from that moment to this moment, to now essentially putting us where we're at today.

[Wanda Noel]

Okay. I'll try.

Education was added as a fair dealing purpose in 2012. That was in the spring and summer. In parliament, the question to Minister Jennex was, “Will adding education to the fair dealing provision as a new purpose have any impact on you paying the rights holders?” Her answer was no, it would not, nor did it.

Then, fast-forward to a Supreme Court decision that interpreted fair dealing far more broadly than anyone ever anticipated. The decision was that copying for student instruction is fair dealing as long as the excerpt is short. That was a much broader interpretation of fair dealing, and that in turn, six months later, led to the decision not to take up the Access tariff any longer because it wasn't providing value for money. There were millions and millions of dollars being spent for a licence that didn't have any value anymore because of the Supreme Court decision, not because of adding education as a fair dealing purpose.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

I have one minute left. We'll have Access Copyright in front of us later, hopefully to clarify some of that.

I do want to get this from you, Honourable Minister Churchill. On average, in proportion to their total annual budget, how much money do Canadian schools and school boards spend each year to acquire copyrighted works?

[Zach Churchill]

We don't have that number for you, but we'll see if staff can provide that to the committee.

[Matt Jeneroux, Conservative, Edmonton Riverbend, AB]

Okay. Thanks.

[The Chair, Liberal, Dan Ruimy]

We're going to move to you, Mr. Jowhari. You have five minutes.