Industry Committee on June 5th, 2018

[Maxime Bernier, Conservative, Beauce, QC]

I will now continue with the questions I want to ask the witnesses. I will start with Mr. Lefebvre.

In terms of copyright for musical works, the representatives from Music Canada who appeared before the Standing Committee on Canadian Heritage said that the term of copyright for musical works should be extended by 20 years, for a total of life plus 70 years.

Do you agree with that suggestion?

[Éric Lefebvre]

Yes, absolutely.

[Maxime Bernier, Conservative, Beauce, QC]

What would the impact of this change be on the members of your organization?

[Éric Lefebvre]

The Guilde des musiciens et des musiciennes du Québec represents performers who are not directly affected by this measure. We do not represent songwriters strictly speaking, but these songwriters belong to companies and associations with which we work closely.

That said, we fully agree on the possibility of extending the term of copyright to more than 50 years. This is already the case in a number of countries, such as France and the United States, and it would allow for protection that would facilitate remuneration over a longer period. This would especially benefit songwriters whose musical works are exploited over a long period of time.

[Maxime Bernier, Conservative, Beauce, QC]

Okay.

Earlier, we talked about salaries, the income that performers, musicians and singers receive. We were told that their average income had decreased from $19,794 in 2010 to about $19,042 in 2015.

How do you explain this drop in income for musicians and singers, despite the increase in income for music producers?

We see that they are on the losing end. How can you explain that?

[Éric Lefebvre]

Can you repeat those figures? I misunderstood.

[Maxime Bernier, Conservative, Beauce, QC]

For musicians and singers, the average income decreased from $19,794 in 2010 to $19,042 in 2015. So it's a very low income.

[Éric Lefebvre]

Yes, absolutely.

[Maxime Bernier, Conservative, Beauce, QC]

It's an average income. How do you explain that gap?

[Éric Lefebvre]

It depends on a number of factors.

First, contracts signed between performers, musicians and, let's say, sound recording producers may, in some cases, stabilize the remuneration. What we see every day in our collective agreements is that it is becoming increasingly difficult to get either adequate remuneration for musicians or rights associated with the use of a recorded performance.

Let me give you an example. A television program is produced. A few years ago—my colleague Alan Willaert could also speak to this—the remuneration from the subsequent broadcast of a television program was much higher. Now for example, we have Netflix competing with Canadian broadcasters or television producers. This puts increasing pressure on broadcasters, who are asking producers to provide the service with what is called a “greater package of rights”.

Subsequently, the producer of a television program transfers the burden to the artists, including the musicians. For example, instead of paying $500 for the use of a program over a certain number of years, they pay $100. So there is a downward pressure directly related, basically, to the current digital environment of the music industry.

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Willaert, do you agree with that?

[Alan Willaert]

Yes, I do and I have a couple of things to add.

First, the entire model has changed over the years. Years ago when an artist created a recording or signed a record deal with a label, they would be getting a portion of the sales, and they would go out and tour to support the interest in that particular album, and they'd be making money from the tickets sales, of course, but the whole idea of touring was to sell more CDs or more vinyl. If it was a hit, it would be a lucrative way of earning money.

Now, of course, it's upside down. The artist is not making nearly as much money, and CD sales are in the tank. It's all about streaming, and they're getting a fraction of a penny per million streams, and they're told, “Okay, you have to go out and tour” but the way to make money is to sell some T-shirts and some CDs while you're on the road. It's no longer about paying for the music. It's now about the paraphernalia that goes with it.

Also, to what my colleague was talking about concerning broadcast, one of the things we see as well is, when there is a production of a movie or a television show, and a composer is hired in this country, many times now we see the scoring done overseas. The musicians in Prague will be utilized rather than Canadian musicians. That's unconscionable, but it's another reason the revenue streams for our musicians keep going down, because so much of it is being outsourced overseas.

[Maxime Bernier, Conservative, Beauce, QC]

Do you have a recommendation or something we can do in the work that we're doing right now as a committee, or it's more pre-market—

[Alan Willaert]

This last one is a very simple change in that the Income Tax Act needs to be changed slightly to change the CAVCO qualifications so that when they apply for a tax credit—and they get one point for having a Canadian composer—it should be a Canadian composer and also musicians; otherwise, it doesn't qualify as a point. You'll see much more of the recording done here in this country.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Ms. Sansoucy, you have seven minutes.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

Thank you very much, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Thank you for being here.

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

It's truly a great opportunity for me to be here this afternoon.

Last month, I was contacted by an author from Saint-Hyacinthe, a town in the riding I represent. I realize that the reality of creators and authors is similar to that of musicians. Let me read you an excerpt from his letter, which is eloquent, like the one you read, Mr. Willaert.

The 2012 changes to the Copyright Act, he says, “served as a framework for the legalized stripping of artists and writers.”

He goes on:

Saint-Hyacinthe has a long cultural tradition. The town's CEGEP is a focal point for future authors [and actors], since it is home to one of the best theatre schools in the province. This measure particularly hurts regional writers [it could be the same for musicians] since the opportunities to make their art profitable are often fewer than in larger centres. This income of which they are deprived leaves less money in their pockets, affecting their families, their ability to thrive in our area and their participation in our local economy.

On my behalf and in solidarity with all creators across the country, I invite you to make your voice heard...in the process of reviewing the Act [it is interesting that I have the opportunity to do so this afternoon], by supporting amendments that will make the Copyright Act fair and equitable to Canadian artists and creators who are at the heart of our culture.

He is an author, but we also have many artists from the music industry and incredible venues in a small community such as ours.

I am thinking of the Zaricot, for example. The Zaricot in Saint-Hyacinthe is a small venue that you may know and that animates our cultural life with diverse programming, both with emerging local artists and with those with a wider audience, who are probably members of your organization.

This small venue stands out because it is still going. Recently, several venues like that—I am thinking of Montreal's Divan Orange—have closed their doors. For us, animating the cultural life of our small communities is important. These venues must remain open, and artists must be able to live from performing in those venues. For 15 years now, the Zaricot has been truly creative and active in bringing music to life in Saint-Hyacinthe.

We often think of the large-scale shows in major centres, such as the Bell Centre, but the reality of our Quebec artists—as you rightly said—is long tours, with a lot of mileage, travelling around Quebec and performing in small venues in the regions, such as the Zaricot. If they are lucky, the artists go to the Centre des arts Juliette-Lassonde, a medium-sized venue in our area. For those artists who struggle to sell their music because of distribution platforms, such as Spotify, shows and merchandise sold locally are now essentially their only source of revenue, as you said.

So I agree with the author who wrote to me: we need a copyright law that is fair and equitable to artists. To do so, it is important to tax giants such as Spotify. Royalties must be collected. Everyone in our cultural ecosystem, from cable companies to technicians' unions, artists and writers, is also calling for this measure. You have demonstrated that well.

Online broadcasters, unlike our broadcasters such as MusiquePlus, have no obligation to showcase domestic content, and I'm concerned about that. Our culture is experiencing unfair competition from those web giants in all aspects, web, music, authors, and so on.

Mr. Lefebvre, you mentioned the various recommendations you are proposing. As you said yourself, the act has become complex. I would like to hear more from you about each of those different recommendations, in order to enlighten us on how we can support what I just mentioned, namely the development of culture in a rural riding such as mine.

[Éric Lefebvre]

In fact, the Copyright Act is an act...

Musicians who produce shows are often songwriters, but when they are performers, the remuneration comes directly from a fee paid by the producer. If the musicians make records, do we still call them records, I don't know—

[Brigitte Sansoucy, NDP, Saint-Hyacinthe—Bagot, QC]

That's what I call them at least.

[Éric Lefebvre]

If they produce a sound recording of a musical work, that sound recording could theoretically generate royalties that will allow the performer or musician to continue their career. This income is essential so that the musician can continue to perform in small venues.

Right now, sound recording generates some royalties under the equitable remuneration regime, but it practically no longer generates any under the private copying regime.

The private copying regime applies to compact discs, and the good old audio cassette, but it no longer generates royalties, because a regulation has been added to the Copyright Act. That regulation means that the definition of “audio recording medium” in the act excludes Micro SD memory cards, among others. This means that new media that could generate royalties for performers are no longer applicable.

Private copying in itself favours three categories of rights holders: authors, performers and producers. So the whole music industry is covered by this regime. The private copying regime applies only to blank CDs, which are now unusable. When I say “unusable”, I mean that they are no longer used for reproduction.

Limiting the audio recording media on which a levy could be applied reduces a large portion of revenue. I can give you a number. I'm not sure whether representatives from the Canadian Private Copying Collective appeared before the committee, but I can say that they have seen their revenues drop by 89%, which is a huge percentage. That was a sum of money that the collectives paid to performers. This meant that, at the end of the year, after putting on concerts, selling t-shirts, producing albums, and recording television shows to boost the sale of the albums, among other things, so when the whole ecosystem was operational, the performer generated enough money to live on.

Right now, I can compare the Copyright Act to Gruyère cheese. It is only one of the intellectual property laws currently in force in Canada. There is the Trade-marks Act, the Patent Act and the Industrial Design Act. All those acts mean that Canada should, in principle, be fertile ground for innovation.

Today, the Copyright Act is like the poor cousin or ugly duckling. The Trade-marks Act is relatively robust. If tomorrow morning a university decided to open a hamburger restaurant called McDonald's, there would be a good chance that McDonald's would intervene, because that would be a violation of its trademark.

So why is it possible for a university, under the fair dealing exception for educational purposes under the Copyright Act, to reproduce literary works or musical works? It's because the legislation contains exceptions, and that's why I'm talking about the Copyright Act as a coherent whole. Right now, it is approximately 160 pages long, while the one on trade-marks is 80 pages long. This piece of legislation is complex and cumbersome, containing a number of exceptions. If Canada really wants to be a breeding ground for innovation, it must ensure that all intellectual property laws are effective for all creators, not only for companies like McDonald's, which can benefit from the Trade-marks Act—

[The Chair, Liberal, Dan Ruimy]

I'm sorry to interrupt, but your time is up.

Thank you very much.

Mr. Baylis, you have seven minutes.

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

Thank you, Chair.

Mr. Willaert, you talk about the broadcast stations that have a $1.25-million exemption. I'd like to explore that a bit. This was put in to help—as you said—the mom-and-pops. Would you like to see it removed, or would you like to see it stay for the mom-and-pops and just not apply...? How would you like us to deal with that exemption?

[Alan Willaert]

The $1.25 million on stations that don't have that kind of revenue is fine. That's not the issue. It's the larger stations, of course, that have much more revenue than that, and they're getting away with this $1.25 million. Taking that away would not hurt these large stations at all. That would not be an issue.