Evidence of meeting #12 for Industry, Science and Technology in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was nrc.
A recording is available from Parliament.
Liberal
The Chair Liberal Dan Ruimy
Good afternoon everybody. Welcome to meeting number 12 of the Standing Committee on Industry, Science and Technology.
Because of timing issues, weren't able to get both panels together, so for the first hour we will have, from the Copyright Board of Canada, Mr. Justice Robert A. Blair, chairman; Claude Majeau, vice-chairman and chief executive officer; and Gilles McDougall, secretary general.
Gentlemen, you have 10 minutes, and we'll eagerly hear what you have to say.
Claude Majeau Vice-Chairman and Chief Executive Officer, Copyright Board of Canada
Thank you.
Mr. Chair, members of Parliament, thank you for giving me this opportunity to make an introductory presentation by taking a brief look at the history, purpose, nature, and challenges of the Copyright Board of Canada.
Let me first start by introducing the people seated next to me: Mr. Justice Robert A. Blair, chairman of the board and a sitting judge at the Court of Appeal for Ontario; and Mr. Gilles McDougall, secretary general of the board.
The Copyright Board of Canada is an independent, quasi-judicial tribunal created under the Copyright Act to establish the royalties to be paid for the use of works and other subject matter protected by copyright when the administration of these rights is entrusted to a collective society. The board also issues licences for the use of works when the copyright owner cannot be located. Its workload is increasingly heavy and complex.
The board is sometimes referred to as a polycentric administrative tribunal, meaning that its mandate and responsibilities involve more than simply resolving a dispute between the individual parties before it. It involves public policy considerations and the weighing of a large number of conflicting and overlapping factors that affect the industry and the public interest as a whole. This has implications for our processes and procedures, and the resources needed to fulfill our mandate, which I will discuss later.
The act establishes the board, which consists of no more than five members. At the present time there are three members: the part-time chairman, the full-time chairman and CEO; and a part-time member who is with us here, Mr. Nelson Landry, whom I salute, all appointed by the Governor in Council.
The board's chairman directs the work of the board and apportions its work among members. The vice-chairman is the deputy head of the board. As such, he has leadership over the work of the board, as well as supervision and direction over board staff. In addition to its members, the board has 16 employees consisting of administrative and support staff, as well as lawyers and economists.
The operating budget of the board is set at $3.5 million per year. The direct value of royalties set by the board's decisions is estimated to surpass $400 million annually. The board's decisions have a contributory impact on a number of industries, on individuals, and on the Canadian economy as a whole.
The legislative framework of the board has changed exponentially over the years. The board was created in 1990 by phase 1 of the modifications to the Copyright Act, as the successor of the Copyright Appeal Board, which had been in existence since 1935. A second major phase of amendments to the Copyright Act was adopted in 1997 as Bill C-32. These amendments significantly expanded the board's mandate and responsibilities. A third major phase of amendments to the Copyright Modernization Act, Bill C-11, came into force in November 2012. By adding new rights and exceptions, this third phase of amendments further expanded the board's mandate and workload.
Ongoing amendments to the act, as well as decisions of the Federal Court of Appeal and of the Supreme Court of Canada, continuously add to the legal and policy issues the board must address and take into consideration. Eight decisions of the Supreme Court, two in 2004, five in 2012, and one in 2015, with all but one triggered by board decisions, have a significant bearing on the board's mandated activities now and for the future.
The board acts as an economic regulator. It must ensure to render fair, equitable, and timely decisions that require dealing with increasingly complex economic and legal issues. Its decisions must be based on solid legal and economic principles, reflect a solid understanding of constantly evolving business models and technologies, and be fair and equitable to both copyright owners and users.
The board has similarities to a trial division of a court for all matters it determines. As such, it is often the first to interpret new legislation or to apply legal principles established by the Supreme Court of Canada. Because of the polycentric nature of the board's decisions, administrative law principles dictate that the Federal Court of Appeal, on judicial review, afford the highest level of deference to the board's analysis of the evidence and findings of fact. As a result, this analysis and these findings must be reliable, understandable, and convincing— drawing heavily on the board's resources and the skill and expertise of its members and staff.
On average, the board issues about 9 decisions every year, which encompass over 70 tariff units, including a significant proportion that have been the subject of public hearings. In spite of this, the board currently faces a huge backlog of uncontested or agreed-upon tariffs to be certified. The increasing volume and complexity of files that the board is required to deal with are all too often ignored and underestimated. Professor Jeremy de Beer, from the University of Ottawa, said that the board's powers or procedures have been central to some of the most important copyright matters of the 21st century: music streaming, peer-to-peer file sharing, Internet service provider liability, iPod or other device levies, the use of educational materials, and much more.
Over time, the board has been subject to criticism, most particularly in respect of the time it takes to render decisions, the cost and burden of participating in its public hearings, and the overall efficiency of the board's processes. In light of this, the board has put in place a working committee to look into the operations, procedures, and processes of the board, to make them more efficient and more productive.
In its first report, the committee was able to produce a number of recommendations in respect of some aspects of the board's procedures. Public consultations were also held regarding these recommendations. It is noteworthy that among the members of the working committee, as well as among the comments received in public consultations, there was no consensus on how to bring about solutions.
The board has yet to issue a decision on these recommendations, but has decided instead to hold it so the board can benefit from parallel initiatives taken by the two departments responsible for the copyright legislation. These initiatives by the two departments flow from one of the recommendations of the House Standing Committee on Canadian Heritage in its report titled “Review of the Canadian Music Industry”, which read:
The Committee recommends that the Government of Canada examine the time it takes for decisions to be rendered by the Copyright Board of Canada ahead of the upcoming review of the Copyright Act so that any changes could be considered by the Copyright Board of Canada as soon as possible.
It is noteworthy that, in the course of this committee's work, most witnesses acknowledged the crucial role the Copyright Board plays, while also stressing the inefficiency of its financial resources. This was also echoed by the complementary report of the Honourable Stéphane Dion, on behalf of the Liberal Party of Canada, in which he recommended:
the Government of Canada undertake as soon as possible a consultation with the Copyright Board in order to analyze the delays in rendering decisions, notably in the digital context, and to establish, with the Commission, a level of funding that is adequate for the timely delivery of its mandate.
The board is in full agreement with this recommendation. The problem with the time it takes for the board to render its decisions could be fixed relatively easily by providing the board with the necessary resources to adequately deliver its mandate. That being said, the complexity and importance of the issues imply that no matter how much staff we have, the board will always have to take the time required to fully assimilate and analyze the complex evidence, and to write a decision accordingly. Providing the adequate resources for the board would contribute to reducing the decision time dramatically.
For your information, some of these issues will probably be addressed as part of the five-year mandatory review of the act, which will be done by a parliamentary committee in 2017.
Thank you all for giving us the opportunity to provide you with the board's state of the union. We will be pleased to answer any questions the committee members might have.
Liberal
The Chair Liberal Dan Ruimy
Because we want to leave a little time at the end of our session for the motion we have on the table, we're going to dial back some of the minutes. We have agreement on this side.
Liberal
The Chair Liberal Dan Ruimy
Oh, sorry. We have a motion to address that wasn't included at the end of this session. It's Mr. Dreeshen's motion.
Liberal
The Chair Liberal Dan Ruimy
We didn't allow time at the end of this session for our normal 15 minutes, so I'm just adjusting the time so that we can address the motion.
NDP
Brian Masse NDP Windsor West, ON
That's fine. I just wanted to clarify what exactly it was.
Thank you.
Liberal
Lloyd Longfield Liberal Guelph, ON
Copyright, of course, is a very important part of our value chain in Canada, when we are looking at getting paid for value when value is created.
I sat on the board of directors of the Ontario Chamber of Commerce, and we discussed this at length as the industries were changing, trying to keep up with keeping value within our country, something the Canadian Chamber of Commerce is also concerned with.
The board said that you were conducting an internal review, looking at procedures and processes. They've had some comments from industry saying that there needs to be more of a macroanalysis of the industry, given all the changes we're going through with the digital economy and the knowledge-based economy. The review started in 2012, I believe. I'm just trying to see where we are on the global picture of reviewing. Is it something that would be started in 2017?
Vice-Chairman and Chief Executive Officer, Copyright Board of Canada
First, it wasn't 2012 but 2014.
Vice-Chairman and Chief Executive Officer, Copyright Board of Canada
Regardless of that, the overview that might most reasonably be justified should be done through the parliamentary review that will take place in 2017. You have to understand that the board's role is not as a policy-maker. The board is a tribunal that establishes royalties to be paid. We would not really be in a position to address what you're talking about, the global economy of the act, if you like.
If we're asked to participate in such a study, we'd be pleased to do it, but it's certainly not our primary role.
Liberal
Lloyd Longfield Liberal Guelph, ON
I'm going to translate that to its possibly being something this committee might want to pick up and then involve you in. Is that what...?
Vice-Chairman and Chief Executive Officer, Copyright Board of Canada
Certainly we could be involved. We could be asked as witnesses again. We could also have sessions prior to formal hearings of this committee.
What I also would recommend is that the two departments involve us—which has not always been the case in the past, by the way. There have been modifications to the act when, frankly, they did not realize what they would mean. If we had been contacted, we would have said, “Here are the facts.” It has not always been done.
I think it would be a good thing if this time around, right from the beginning, we were involved one way or another, either through a working group of the two departments along with the board or in any other way. It would be a big mistake to avoid the board and not have it involved because it is a tribunal and they want to stay at arm's length from the board. I think we have a contribution to make, and we'd be pleased to participate in any such review.
Liberal
Lloyd Longfield Liberal Guelph, ON
There's possibly some disconnect, then, that you're struggling with, because you could have been involved earlier in the process.
Vice-Chairman and Chief Executive Officer, Copyright Board of Canada
Yes, sometimes with respect to some technicalities of the collective administration of copyright, it was obvious that there were some shortcomings in their analysis, I'm sorry to say.
Liberal
Lloyd Longfield Liberal Guelph, ON
The book publishing industry and the music industry are, I guess, two of the main industries for you. Is that fair to say?
Gilles McDougall Secretary General, Copyright Board of Canada
Yes, it is fair to say that these industries are being affected by some of the tariffs that we certify.
Liberal
Lloyd Longfield Liberal Guelph, ON
My riding is Guelph, and we have several publishers in Guelph who publish textbooks for Canadian schools and universities. They've said to me that under the current policies they're losing market to the United States, which could end up in our only having American textbooks available. They're concerned about the overall life expectancy of the Canadian publishing industry as it relates to textbooks for schools.
Is that something we could work on together, or is that a fair assessment? I have one side of the story.
Justice Robert A. Blair Chairman, Copyright Board of Canada
Mr. Longfield, we appreciate that concern, but as you may or may not know, we've just completed a hearing where that subject matter was very much upfront in our deliberations. It's under reserve, so I don't think it would be appropriate for us to get into a discussion about that.
We certainly appreciate that concern.