Evidence of meeting #122 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 music.
A recording is available from Parliament.
4:20 p.m.
President, Audio Cine Films Inc.
From our perspective, it's educational institutions. We feel that the exceptions are too broad and undefined.
4:20 p.m.
NDP
Brian Masse NDP Windsor West, ON
Okay. That opens up that gap, and you gave some good examples.
Mr. Schiller, I know that you're missing a treaty.
4:20 p.m.
First Director, Public Interests Research and Communications Inc., Border Broadcasters, Inc.
I think it's important to appreciate that Canada's policies have consistently allowed our broadcasting distribution undertakings and our satellite relay distributions undertakings to benefit, in that they're allowed to appropriate or take U.S. digital signals, package them without the consent of the U.S. station owners, and then sell those channels to Canadians. It's pure profit for our broadcasting distribution undertakings.
If you look at the history of our industry, you'll see that it has effectively been based on taking the Windsor TV package and selling that across the country. That's been done without the consent of the owners of these stations. In this case, it's clearly our vertically integrated distribution industry that is benefiting from our very permissive policies right now.
4:20 p.m.
Director, Public Policy and Communications, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
You specifically said you wanted the most straightforward answer possible, and it never is that.
4:20 p.m.
Director, Public Policy and Communications, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
Ultimately, this does come down to fact that the new players disrupting the market are the FANG companies. We're talking about Facebook, Amazon, Netflix, and Google. These players are emerging. The are increasingly becoming dominant. They are long past the stage where they are scrappy start-ups. They are now absolutely huge multinationals that are in a position increasingly—and I certainly see this on the film and television side, but we also clearly see this on the music side, and I think Graham will probably be able to echo that in a few seconds. They have reached levels that are almost as if you would go back to the 1920s.... I read a piece recently that was talking about this in terms of the trust-busting era. We're almost at that size. We've obviously seen this play out in a number of different venues. The impact of Facebook in politics is a huge one, for example.
What's important for us...and this is what we will be talking about in terms of the Broadcasting Act and Telecommunications Act, but also particularly in terms of the Copyright Act, is to.... In an environment where you are going to see increasing consolidation and fewer players who are able to use these new disruptive technologies they've used, which have a lot of hugely positive impacts but also disrupt traditional ways in which artists have done business, we need to find ways to level the playing field to ensure that the people who create the work are able to profit even just in an equitable way, as opposed to the people who are now finding new ways to exploit the work and are increasingly able to dictate terms unilaterally.
4:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
We've reached the tipping point where there's probably such a power relationship in the negotiations that it's extremely difficult. Some would argue that's the free market figuring itself out. Others would call it exploitation. It really depends on your interpretive view of things. Has the balance of trying to get into this medium now made it difficult to extract some type of a reasonable rate of return?
4:25 p.m.
President and Chief Executive Officer, Music Canada
In part, that's because policy-makers around the world—governments—decided to give the technology companies an advantage in the negotiations. It's very difficult to negotiate with somebody when they can stand behind a safe harbour. It's very difficult to negotiate and get.... We can't get market rates. The reason YouTube returns so little value as compared to Spotify is that in the case of Spotify, we were able to negotiate with them. There were no safe harbours. In the case of YouTube, hiding behind a safe harbour, the per-stream return is one-twentieth.
Part of what we're asking is for governments around the world to level this playing field, to remove all of these advantages that were afforded to these gigantic technological enterprises or broadcasting enterprises, and to return some semblance of balance to the market. That's what our members want. Our members—performers and my people—want a functioning marketplace.
4:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
Would it be fair to say that Mr. Schiller's issue—and I know it's a personal issue, but it's what he's presenting here—is almost the canary in the coal mine in the sense that you almost need some international agreements, to some degree, to deal with some of the jurisdictional issues over taxation policies? Should that be part of what needs to happen?
4:25 p.m.
President and Chief Executive Officer, Music Canada
I think every country has to make its contribution. The EU is fully charged with this issue right now and is probably on the verge of doing something about it. There are discussions going on in the United States, in Australia, and around the world, and we're having them here. What we do here can make a difference for your neighbours.
4:25 p.m.
NDP
Brian Masse NDP Windsor West, ON
But my question is about needing international agreements. I'll have Mr. Schiller respond, but you're still suggesting that it's one country one-offs.
4:25 p.m.
President and Chief Executive Officer, Music Canada
What we're asking for are changes to our copyright law.
4:25 p.m.
First Director, Public Interests Research and Communications Inc., Border Broadcasters, Inc.
I just think it's important for committee members to understand and appreciate that it was accommodating U.S. border stations that led to the copyright regime as we know it now, and Canadians benefited from that accommodation of U.S. border services. Unfortunately, it didn't go far enough, and we now find ourselves in a position where large distribution companies in Canada are benefiting.
I would also just like to highlight for committee members that it's a uniquely Canadian phenomenon we're experiencing now. People talk about the digital divide. We have the traditional media, and then we have new digital industry. Television broadcasting is part of the digital divide, and it's really important in Canada. Because we have a vertically integrated industry that owns the channels of distribution as well as the broadcasters, our local stations hemorrhage money, whereas in the U.S. they're independent and they're profitable. They're profitable because they have the ability to negotiate with their cable and satellite industries; they have the ability to leverage fees beyond advertising, and they have the ability to work with other stakeholders.
And it's only going to become more intense. As we complete the switch to digital broadcasting and next-generation TV comes online, we're seeing the ability to directly broadcast to mobile phones without data plans, and this is free television. Currently in the U.S. there is multicasting. Your local station will also provide you a movie channel, or a news channel, or something specific. It's only going to grow exponentially. However, in Canada, our consumers aren't receiving any of that benefit right now because we're letting the traditional cornerstone of our whole system wither on the vine. We think that by addressing.... The canary in the coal mine really is the right analogy, because the key to dealing with this is really dealing with broadcasters fairly. Sorry.
Thank you.
4:25 p.m.
Liberal
The Chair Liberal Dan Ruimy
All right. We're a little over time on that one.
I don't like to cut people off, but I look for a break in their sentences.
We're going to Mr. Sheehan.
You have seven minutes.
4:25 p.m.
Liberal
Terry Sheehan Liberal Sault Ste. Marie, ON
Thank you very much for the presentation.
I don't know if anybody has thought of this or if they have data, but I want to pose a question for you. Sometimes this committee will try to figure out how something we are studying or undertaking will affect rural Canada.
I am from Sault Ste. Marie, in northern Ontario. We have a creative economy there. Like many regions in rural and semi-rural Canada, we are trying to attract television, film, music, etc., and we've done a great job, and ACTRA has been good, maybe bending the rules sometimes. We have a number of actors and apprentices there.
Do you have any thoughts on how changes to the copyright law could affect the people you represent or that particular creative community in what I'll call rural Canada, the non-urban centres where a lot of it goes?
4:30 p.m.
President and Chief Executive Officer, Music Canada
I'll recommend that the committee read the testimony of Andrew Morrison. He testified with me at heritage a couple of weeks ago. He is a member of The Jerry Cans. He is from Iqaluit. They were on the Junos. Actually, the night before he testified they had been at the National Arts Centre. They're a fantastic band.
He testified at length, extemporaneously, without notes—unlike me—unrehearsed—unlike me—and delivered this brilliant explanation of how it was affecting him, and how it was changing his life and his band's life not to be able to receive proper remuneration when his music is experienced other than live.
Now, if your income is restricted to live performance, around the world some of the most impacted performers are those who live in remote and rural locations. They have extra travel time. They have extra costs. If you're on Vancouver Island, you have a ferry fee. If you're in Belfast and you want to go to England, you have ferry fees, and in some cases you're in fly-in communities. Every time you circumscribe the amount of money that is in the marketplace, some of the hardest hit people are the people you're talking about.
Rory is a chamber of commerce friend of mine. I've spent a lot of time up in the Soo and it has a great music scene. I think this is a question of doing everything we can. This is not just about major players.
Andrew's point was that it's niches that are being hurt. Some people used to think that the only people who were going to be hurt were the big guys and that they were just going to disappear and that the niche people would.... That's not what's happening.
4:30 p.m.
Director, Public Policy and Communications, National, Alliance of Canadian Cinema, Television and Radio Artists (ACTRA)
I would just say that the importance of what we've been talking about today is that we need to find ways to create sustainable incomes for artists. The pull of the major urban centres is a constant factor, but we're increasingly seeing that there's a lot of film and television production going on in northern Ontario right now. A lot of that has to do with local incentives, but it also has to do with the fact that you can set up a production in the Soo or in Sudbury and you can find the talent there. The talented performers—and it's not just performers. I know that last week you heard from our friends at the Directors Guild and IATSE. The reason they're able to maintain a living, to work and live there and not get sucked into Toronto or Vancouver or south of the border, which used to happen a lot more, is that they are able to piece together income from various sources. Some of that, as was noted, is the work that's done on the day. You get paid in terms of the work you do on session. The other part, which is a huge part of a working actor's income, is being able to rely on these residual payments. A huge factor for us, in terms of the amendments to the Copyright Act to include Beijing, is that we are going to be able to ensure that those residual payments happen. That will allow people to continue to work in their communities. As noted, these are independent business people. They're scraping together work where they can and income where they can and different revenue streams. For a lot of our members, this is not the only work they do. The more you can secure incomes, the more likely you are to have people avoid that sound.
I would just mention finally that I do know there was recently a PricewaterhouseCoopers study in Nova Scotia that talked about the drain. Northern Ontario and the Maritimes see this a lot. Building these industries and keeping them sustainable and ensuring that people can make ends meet is a great way to keep people, and particularly young people, because we often see a drain of youth. Building these industries and ensuring that people can make a decent living at them is a good way to keep people home, so to speak, and, frankly, to bring people in.
4:35 p.m.
First Director, Public Interests Research and Communications Inc., Border Broadcasters, Inc.
I think something that impacts rural Canadians is the cost of their cable or television package. I think right now our copyright system encourages the oversupply of duplicate programming in the way that they price the distant signals that they are packaging. I like to say that American television channels are the MSG of our Canadian cable package, because at every stage in development, they've used U.S. services and demands for U.S. services to grow the channel package. It was four plus one and then it was two sets of the four plus one. Then it was the superstations. Then if you live on a border, you could easily end up with 15 to 20 U.S. services that the station owners are receiving nothing for but that as a consumer you pay for.
Whether you watch all that duplicate programming or not, it's in your cable bill. We think that by looking at the cable and copyright remuneration and how they're charging for distant signals, you could actually reduce cable bills by eliminating that incentive to oversupply duplicate programming. At the end of the day, you could end up freeing up shelf space for more Canadian programming on people's cable services if that is the intent. But there's a direct correlation between the subsidy to our broadcasting distribution industry and the oversupply of U.S. services that inflate cable bills for consumers.
4:35 p.m.
Conservative
Maxime Bernier Conservative Beauce, QC
My question is for you, Mr. Cormier.
You talked about the exemptions for educational institutions. Under these exemptions, they can show films publicly on their premises.
Do you have any more details about how this impacts your creators and the loss of revenue? Do you have any figures on that?