Thank you very much, Mr. Chair.
Good afternoon, members of the committee. My name is Eric Baptiste, and I am the chief executive officer of SOCAN. I am joined this morning by Gilles Daigle, SOCAN's general counsel.
SOCAN is a society that administers public performance rights of authors, composers and music publishers. We currently have over 150,000 members across the country, and we also represent the world's repertoire of musical works in Canada.
For many years, SOCAN has been advocating for Canada to establish robust copyright legislation, so that creators would be compensated fairly and equitably. The Copyright Act has always been and always will be the cornerstone of Canada's entire creative sector.
Copyright royalties have always been an essential part of our creators' compensation. That is now the case more than ever, given the technological changes we are going through that continue to emerge.
The contribution of copyright in a rapidly changing digital environment is becoming, more than ever, one of the centrepieces of creators' remuneration. I will now quote Minister Bains at the launch of the intellectual property strategy, where he said:
We know IP is a critical ingredient in helping Canadian businesses reach commercial success. Canada's IP Strategy will make sure Canadians know the value of their intellectual property and how to leverage it to improve, innovate, increase profits and create middle-class jobs.
We hope this principle will guide your thinking as you prepare your report.
This afternoon, SOCAN wishes to focus on three aspects of the Copyright Act that we think should be updated.
The first aspect is the extension of the copyright protection term—which is currently 50 years after the author's death—to 70 years after their death.
With the current term of protection, Canada is one of the laggards at the international level. Our main trading partners, including the United States of America and the 28 members of the European Union, have long had a 70-year term after an author's death. Even Mexico's term is 100 years. Our creators are clearly less well protected here in Canada than abroad. I ask you directly this afternoon, does Canada want to continue to be in the same category as countries like North Korea or Afghanistan?
Some commentators—very few, to our knowledge—will tell you that increased copyright protection would be to the detriment of consumers. There is no evidence that we are aware of that the consumer would be disadvantaged with an extension of copyright protection. Let us look at the reality of many countries that have adopted 70 years after the author's death as a term. Music consumption in these countries, often more important than here in Canada, has continued to flourish over many years, with no measurable impact on users.
A second aspect that the committee should consider is the loophole created by subsection 32.2(3) of the act, which provides an exemption for so-called charitable organizations if their use of music happens in the interest of a charitable enterprise. To be clear, it is not SOCAN's intention to penalize charitable activities when conducted in the true sense of the word, but rather to prevent organizations that circumvent the act and try not to pay their dues.
Let me explain. Currently certain organizations, theatres, and festivals with budgets of sometimes several million dollars adopt the position that they are charitable organizations within the meaning of the Copyright Act because they have obtained this status for tax purposes. To close this loophole, we propose two changes. First, clarify that the exception applies only if the use of music is “without intent to gain”. This is already the case in the exception applicable to agricultural and industrial fairs. Second, clarify that being a charitable organization within the meaning of the Income Tax Act is not in itself sufficient for the exception to apply for copyright.
The third aspect is related to the private copying levy.
The private copying system was created to make up for losses of revenue caused by certain media formats—namely cassettes and, later, blank compact discs.
We feel that the current system should be reviewed, and an element of technological neutrality should be introduced, so that new digital media that are now standard for private copying would be included. We are mainly talking about tablets and smart phones.
We are also advocating, like all music stakeholders, for a transition fund to support that significant use of our creators' musical works.
In addition to our three main points, we agree with the request of other groups who are advocating for doing away with the exemption of the first $1.25 million in revenue for commercial radios in terms of royalties for sound recordings and performers. The same goes for the current definition of “sound recording”. Those are isolated situations that we find outdated and unfounded.
In closing, we must keep in mind that creators are entrepreneurs, and we must give them the necessary protections so they can benefit from their work. There have been huge changes in the way we consume music. Smart phones have become ubiquitous. Downloads and now streaming have surpassed physical product sales. More needs to be done to bring the Copyright Act into the modern era and to ensure balance between the rights of users and creators.
Thank you very much.