Industry Committee on May 22nd, 2018

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair. I'm going to split my time with Mr. Baylis.

Thank you, Minister, for being here.

Minister, CMEC published its own fair dealing guidelines. Can you help me understand the process that CMEC went through to develop those guidelines? Who did you consult with?

[Zach Churchill]

Ms. Noel was there for that process, so I'll let her answer very specifically.

[Wanda Noel]

When the Supreme Court of Canada decision came down in 2012 interpreting fair dealing broadly to say that copying short excerpts for student instruction was permitted or was fair, we were faced—“we” being legal counsel for colleges, universities, and the Council of Ministers of Education—with a situation where we had to put some meaning around what is a short excerpt. The Supreme Court said that you can copy short excerpts for students in a class, but it didn't say anything about what short excerpts were.

There were a number of sources that guided us in developing the limits that are in the fair dealing guidelines.

On the same day that the Supreme Court decided how fair dealing should be interpreted in an education context, they issued another decision, which interpreted fair dealing for the online sale of music. In that case, they did put some numbers around the amount that could be copied under fair dealing, and in that case, it was previews. When you buy music online, you can preview it. You can listen to a piece of it. It was 30 to 90 seconds of a four-minute song. At 30 seconds out of four minutes, that's 12.5% of the musical work. That was one source.

We also were looking at case law in the United States, where, as there is here in Canada, a dispute is going on between publishers and a university about how much could be copied for the use of students. In those decisions, which have now gone up to the federal appeals court, back down on reconsideration, and back up again, with no decision yet, the threshold of 10%, or a chapter, was used many times in the court's decision, finding that this threshold was fair.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Let me ask a very specific—

[Wanda Noel]

I just want to make one other point, because the fair dealing guidelines are a conservative interpretation of “short excerpt”. As for why they're conservative, around the world, if you want to go outside of Canada, in Israel there was a dispute between the higher education community and publishers. There, the threshold is 20% of a work.

[Majid Jowhari, Liberal, Richmond Hill, ON]

As part of your review and the development of the guidelines, did you talk to content creators to get their input of what fair dealing means?

[Wanda Noel]

We were in years of litigation with them. No, we did not, because there was no possibility of ever coming to an agreement.

There still isn't today. That's what's before this committee. No.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay. Thank you.

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

I want to delve in quickly on your statistics. They are very interesting, but I'm concerned they might be a little misleading.

When you did this, you used Statistics Canada. Did you get it in what we call average dollars? Did you put it back in the same dollars?

[Wanda Noel]

Do you mean constant dollars? Yes.

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

This is a constant dollar charge that you applied—

[Wanda Noel]

I believe so. I asked the same question.

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

Did you apply the inflation rate against it?

[Wanda Noel]

Constant dollars was the answer I was given to that question.

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

It doesn't tell us what dollar then.

I can see there's a mistake here too. That's why I've started wondering about it. It says that 66% of all Canadian sales are book sales. That's a bracket there. I have done the math quickly. I can't find any one at 66%. This led me to question some of your math.

Are you absolutely certain it's in constant dollars?

[Wanda Noel]

There are statisticians who work at the Council of Ministers. I'm not one. They produce the list.

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

I know there are. I'm just asking. They made a mistake on one point here, so I'm asking if you can confirm to us that it's in constant dollars.

[Wanda Noel]

I asked the question. That was the answer. Yes, it is in constant dollars.

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

Can you provide—they also have a consumer price index, specifically for education—how these numbers reflect the changes with respect to education?

[Wanda Noel]

If StatsCan has data on that, we could do it.

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

StatsCan does have data on the consumer price index, specifically for recreation and education. Could you compare that to that index, how these are changing with respect to that index? You said they are in constant dollars. Perhaps you could tell us which one.

[Wanda Noel]

How changing with the CPI was one, and what dollar is the constant dollar?

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

Yes. Constant dollars. You said here—maybe I misunderstood it—66% of all sales. Maybe that's correct too. I couldn't do that math. Could you have that clarified for us as well?

[Wanda Noel]

What would the clarification be? Would it be on the 66%?

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

It says here these are book sales in Canada, these are book sales in Ontario, and in brackets this accounts for 66% of all Canadian sales. I just did the math. I multiplied this number by that number, and it doesn't add up.