Industry Committee on June 7th, 2018

[Tim Southam]

I would say that this is something that actually does apply to our position with respect to the CRTC's recommendation, which is that in terms of creating content, in terms of creational content, virtually nothing about the digital universe makes our challenge any different; that is to say, origination is origination, and the Internet is essentially a platform or a pipe organized in a very different and very compelling way. Nonetheless, with respect to origination, we're talking about copyright. We're talking about identifying the creator in the chain in terms of rights ownership.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks for letting me stretch my time.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Bernier, you have seven minutes.

[Maxime Bernier, Conservative, Beauce, QC]

Seven and a half minutes?

[The Chair, Liberal, Dan Ruimy]

Okay, you have seven and a half minutes.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you, Mr. Chair.

My question is for the representatives from Artisti.

This morning, your presentation before the Standing Committee on Canadian Heritage was compelling. Members here have not had the opportunity to participate in the exchanges we had.

Earlier, you talked about the many exceptions in Canadian law and said that they may not be aligned with the Berne Convention. Can you elaborate on that?

[Annie Morin]

Yes.

The Berne Convention sets out the three-step test that I mentioned earlier, but there is also the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the World Intellectual Property Organization treaties that were put in place in 1996. I am referring to the WCT, or the WIPO Copyright Treaty, as well as the WPTT, or the WIPO Performances and Phonograms Treaty. Those treaties provide for a three-step test that applies when one of the contracting parties would like to implement an exception to copyright in the laws of a country.

It is stated that exceptions must meet three criteria: they must be limited to certain special cases; they must not conflict with the normal exploitation of the work or other subject-matter; and they must not unreasonably prejudice the legitimate interests of the creator. As soon as a piece of legislation introduces an exception without any compensation measures, we are undeniably causing harm to creators.

[Maxime Bernier, Conservative, Beauce, QC]

Do you think the fair dealing exception has been used too much?

[Annie Morin]

I mentioned it this morning because I was quoting from a study by Mihály Ficsor. He has recently published a study analyzing the exceptions that apply to literary works. He said that, in his opinion, the Canadian exceptions do not meet the three-step test I just mentioned. However, there may be other exceptions.

[Maxime Bernier, Conservative, Beauce, QC]

You represent the performers. Do you have any statistics on the decline in their incomes in recent years?

[Annie Morin]

I don't have any statistics per se, but consultations were held from city to city, across Canada. You may have heard about the testimony given on that occasion by Pierre Lapointe, a well-known artist in Quebec. He said that, for 1 million plays for streaming music, he received a ridiculously small amount. David Bussières, who is part of the well-known Quebec duo Alfa Rococo, also testified to that effect. The amounts are small.

All we have to do is look at the royalties collected for non-interactive and semi-interactive webcasting. As we were saying earlier, the tariff set by the Copyright Board of Canada is 11 times lower than the one in the United States for the same period. By my calculation, to be able to buy a pint of milk, or a litre of milk, if you will—

[Maxime Bernier, Conservative, Beauce, QC]

Don't talk to me about milk. A glass of wine perhaps.

[Annie Morin]

Okay, but anyway, you needed thousands of plays to be able to afford it. However, a number of artists are often involved in a single sound recording. This is the case with symphony orchestras, for example. It then takes a multitude of streaming plays to generate even small amounts of money.

As for the specific statistics on the drop in incomes, I should be able to tell you exactly what the situation is. I can only talk about private copying. As I mentioned earlier, private copying accounted for over 50% of the Canadian levies we pay to artists, but that percentage has gone down to 7% in a few years.

[Maxime Bernier, Conservative, Beauce, QC]

Earlier, when you explained your recommendations, you talked about the Copyright Board of Canada. Do you have any suggestions for reforming that board? You interact with the board. In your opinion, is there room for improvement, whether in terms of its role, the act or other aspects?

[Annie Morin]

Yes, there are recommendations. In fact, we have made a number of them. A committee examined the issue, and Artisti prepared a brief on that occasion. If you are interested and think it's useful, I can send it to you.

[Maxime Bernier, Conservative, Beauce, QC]

You could forward it to the committee

[Annie Morin]

Of course. I'd be happy to do so.

It was in response to questions we had been asked. This is also one of our major concerns. We're still a small collective. Although we distribute $43 million to our 4,500 members, we do not have the same means as SOCAN, for example. For small collective societies, appearing before the Copyright Board of Canada is extremely costly. We are talking about tens of thousands of dollars. That's a real shame. Companies of Artisti's size feel that there may be a way to collect royalties and suggest tariffs for the artists they represent. However, we do not know exactly how much those royalties might be. We see that the tariffs are quite low. In many cases, this makes the exercise completely futile.

[Maxime Bernier, Conservative, Beauce, QC]

In your recommendations, you talked about the exception that was established a number of years ago in relation to the decrease in royalties for the first $1.25 million of advertising revenue.

Is it a regulation or is it in the act?

[Annie Morin]

It's right in the act. It is section 68.1. The heading describing the content of the section refers to “transitional” measures. Since it says so, it was supposed to be transitional. That was in 1997. How long is it transitional?

[Maxime Bernier, Conservative, Beauce, QC]

If the government were acting in good faith, it could pass an order to abolish the transitional measure. I think my Liberal friends would all agree on that; that is a good thing.

[Annie Morin]

Yes, and that would be $8 million more a year to split between performers and producers of sound recordings. That's significant.

Earlier, Ms. Prégent proposed an amendment to the definition of the term “sound recording”. If this definition were changed and we could collect equitable remuneration royalties for music integrated into movies and TV shows, it would be possible to distribute $55 million equally to performers and producers of sound recordings. That is what Ian MacKay from Re:Sound, a company that collects equitable remuneration, said this morning. Those are significant amounts for us.

[Maxime Bernier, Conservative, Beauce, QC]

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

You had 50 seconds extra there.

Mr. Stetski, you have seven minutes.

[Wayne Stetski, NDP, Kootenay—Columbia, BC]

Thank you.

Thank you for being here today.

I'm sitting in for Brian Masse, who's the usual member, so I apologize to the committee members if other witnesses have already answered these questions.

I'm quite interested in several aspects. Let's start with music. How does the average Canadian know, when they go on YouTube, for example, and they click on a music video they want to watch, whether or not the artist is actually receiving some kind of compensation?

[Annie Morin]

In Canada, first, if you are clicking on a video, a specific video, you are doing it “on demand”.

When it's done on demand, in principle, it should be covered by the contract between the artist and the producer.

That said, often, if you request a video, and then stop asking for videos, YouTube suggests videos to you and suggests other songs by the same artist, or another song by a different artist. At that point it's no longer what is known as on-demand service, but rather semi-interactive or non-interactive webcasting, depending on the term you use. You haven't asked for anything, but a content is suggested to you. Personally, I can't tell you whether there is compensation every time, in those cases.