Industry Committee on June 12th, 2018

[Jean-François Cormier]

Yes.

As a company, we have definitely lost revenue. As I said earlier, we lost 30% to 35% of our revenues as soon as the act came into force. Many producers of educational films, which depended on the education sector, lost up to 90% of their revenues. Those producers were in fact selling copies. Yet one aspect of copyright is that a copy, once purchased, can be reproduced at will without a digital lock. So there have been a lot of losses in these sectors.

As I said earlier, there are a number of grey areas and vague terms regarding presentation for educational purposes and the context thereof. In the case of films presented in classrooms as part of the curriculum, there is no ambiguity. There are, however, abuses on both sides in the case of presentations for purely recreational purposes. That has an impact on us and is harmful to the entire production.

Our company is a bit different because we are a distributor and a representative, but not a product creator. I can tell you, however, that various parties that produced films in Canada and especially in Quebec are having a lot of problems as a result of these changes to the act.

It does not encourage film production. American productions are naturally bigger and more resilient. They can therefore enter Canada and displace Canadian products, especially those in English.

[Maxime Bernier, Conservative, Beauce, QC]

So there is a direct effect owing to the competition from Netflix and similar companies. What impact has the arrival of these big players had on your industry?

[Jean-François Cormier]

I have to admit that it is quite recent.

We are facing unfair competition in a sense from Netflix, iTunes, Google Play and all those companies. Technically, the films we can rent on Netflix are for personal use. There are, however, many situations in which these films are shown publicly, such as at bars, schools or restaurants. Someone who has a Netflix account can use it to show a film publicly for commercial purposes. Some bars and restaurants do that to attract customers. So that is direct infringement in respect of various parties in the industry, including cable companies, documentary producers, and us, among others.

There are no rules that apply to the Netflixes of the world in terms of public rights. A disclaimer appears in fine print on page eight of the site, but no one reads it. Overall, there is a lot of abuse.

In a number of cities, films have been shown publicly as a recreational activity by using the personal Netflix account of a municipal employee. This is unacceptable. In many cases, however, the people do not know that they do not have the right to do that. Netflix does not necessarily inform them of the rules, or does so in a roundabout way and very briefly.

[Maxime Bernier, Conservative, Beauce, QC]

In your recommendations, you said that the reproduction exemption should be limited to educational purposes. Can you make a more specific legislative suggestion as to the framework that we should create?

[Jean-François Cormier]

Yes, we could certainly submit something to you.

Essentially, we are definitely opposed to the reproduction exemption for educational purposes because it infringes on our activities, but we are especially concerned about its ambiguity. This vagueness creates a lot of grey areas and room for abuse and it is difficult to defend ourselves legally since there are arguments on all sides.

This also applies to sectors such as jointly owned properties and public areas. There are all kinds of grey areas in copyright. It is hard for small companies like ours to fight the school board, governments or ministries of education, for instance. It is impossible for us.

[Maxime Bernier, Conservative, Beauce, QC]

Very good. I really appreciate what you have said.

If you could submit some specific suggestions to the committee as to the framework for this exemption, that would be very helpful.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Baylis, you have five minutes.

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

Mr. Cormier, Mr. Bernier asked all the questions I had for you, so I thank him for that.

I'm going to talk then about private copying. I think, Ms. McAllister and Mr. Henderson, you brought that up. When we used cassettes, discs, and blank CDs, there was a levy put on them. That doesn't exist, I believe you said, due to a court case. It didn't exist, let's say, when iPods came out, or my phone that has music.

Do I understand that you'd like to see it applied to these mediums, and in what amounts? Do you have any amounts that you're thinking of? How would you see that being distributed among the artists? I'll ask both of you to elaborate on that.

[Graham Henderson]

What's being asked by the community, and I think we've all aligned on this, is not to impose a levy on consumers, but to seek a fund, a temporary four-year fund. The number that has come up is about $40 million per year. That is therefore not a levy. It becomes something that comes out of treasury. It's a decision that the Government of Canada will have to make as to whether it feels it's important enough to remunerate artists and others for private copying, which, by the way, is what happens elsewhere in the world, often through levies. However, that's not our proposal.

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

Go ahead.

[Laurie McAllister]

To add with respect to your question about how it would be distributed, there's already an effective system in place. The CPCC collects the money and distributes it. There is a very efficient system in place already, and that's the system—

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

It's not used as much. You said there was a radical drop in the amount.

[Laurie McAllister]

There was a radical drop because of the way the court interpreted the—

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

Let's say we changed the laws. I understand that Mr. Henderson says we should make a fund. Let's say we didn't do that. Let's say that the courts had interpreted it the other way. Would that have been helpful, then, that there would have been this levy on these electronic devices?

[Laurie McAllister]

Absolutely. If the levy applied to the devices, I don't think we'd be here right now asking for this.

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

Fair enough.

Why would you rather see a fund created than just putting a levy on these electronic devices?

[Laurie McAllister]

The levy is the long-term solution, and that's the copyright reform that we're seeking, but it will take time to enact that.

In the interim, the CPCC will be providing a detailed proposal, and I think they're appearing in front of you on Thursday. They can give more details about how that fund would work. It's based on the urgency.

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

Oh, it's a stopgap for—

[Laurie McAllister]

It is, yes.

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

That's what you said: for four years, can you give us $40 million—

[Graham Henderson]

While we sort this out.

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

—while we sort this out?

The end game is that you would like to see these electronic copying devices captured as—

[Graham Henderson]

When these private copies are made.

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

Private copies.

[Graham Henderson]

Correct me if I'm wrong, but I thought that was the Liberal Party platform.