Evidence of meeting #123 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 levy.
A video is available from Parliament.
4:05 p.m.
Chair, Canadian Private Copying Collective
Initially, a levy was imposed on certain types of media, in other words, blank cassettes and CDs. As you said, the act is supposed to be technologically neutral. The Copyright Board of Canada began allowing levies to be imposed based on the memory capacity of devices like MP3 players. When that levy was introduced, people who objected to it launched court challenges.
Since the language used in the English version of the Copyright Act is not as clear on the issue as the French version is, the Federal Court of Appeal ruled that a levy could not be imposed on the basis of the memory capacity of these devices. It involved technicalities, and the result was that we were no longer entitled to collect levies on MP3 players and other such devices.
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
You lost that revenue because of technicalities and the difference between the English and French wording. Is that correct?
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
It's one of the reasons why the levy no longer had to be collected?
4:05 p.m.
Chair, Canadian Private Copying Collective
Precisely.
The levy was then limited to blank CDs. There is no longer a levy on cassette tapes. Since they don't exist anymore, the Copyright Board of Canada eliminated the levy. Today, it applies only to blank CDs, whose use is declining. In fact, hardly any are sold anymore, and revenues from the private copying levy have gone from $38 million to $2 million.
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
You said that other countries had the levy in place. Can you name a few?
4:05 p.m.
Chair, Canadian Private Copying Collective
France, Italy, Germany, Portugal, Switzerland—the entire European Union, in fact.
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
You referred to a three-dollar levy per device. Is that something you will be asking for? Where does that number come from?
4:05 p.m.
Chair, Canadian Private Copying Collective
It comes from a very simple study. We looked at what E.U. countries were doing in terms of levies on devices such as tablets and smart phones. That's standard practice for all E.U. countries. The private copying levy sits at around three dollars, and that average strikes us as entirely appropriate.
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
I understand completely. Thank you.
Ms. Freeman, you mentioned that you would follow the proper processes to have that three dollars go through the Copyright Board. Is that right? Did I understand that correctly?
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
You don't want us to change any process. You would like it to be three dollars. You think that's a reasonable amount, given what other jurisdictions do. But you would apply as you normally do. Could you explain that?
4:05 p.m.
Executive Director, Canadian Private Copying Collective
In the good old days when we had revenue, the CPCC engaged in quite extensive and high-calibre research to understand which media and devices were in use by Canadians for copying. We worked to develop valuation methodologies, which we would present to the Copyright Board and which would be challenged by objectors in a public proceeding. The Copyright Board, based on the evidence in front of it, would establish the rate.
The same process would remain. We are simply asking for minor—
4:05 p.m.
Liberal
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
There was a law that was supposed to be technologically neutral. For whatever reason, that part of technological neutrality got taken away for MP3 players. You'd like the government to reset it, to say it is technologically neutral and it does apply to tablets, telephones, and whatever else—
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
—and that's it. Then you would go through the proper process of doing your studies and then going to the Copyright Board.
4:05 p.m.
Executive Director, Canadian Private Copying Collective
That's right. If the evidence shows that there should be a levy on something, we have the opportunity to make that case in front of the Copyright Board.
4:05 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Right now there is that exemption that stops you from going there, and that exemption, you're saying, was not actually foreseen by Parliament. It was not in the law.
4:05 p.m.
Executive Director, Canadian Private Copying Collective
That's right.
Our understanding is that, when this legislation was drafted, it was intended to be technologically neutral. The Copyright Board agreed with the CPCC's interpretation that it could, in fact, in its current form, accommodate levies on devices, supports including devices, not just audio recording media.
4:10 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
For my own interest, I have a question.
How do you divvy up the pie on these things for artists? I understand how it could be on a radio station log, as Mr. MacKay said, but if you had this three dollars, or whatever, how would you decide which artists receive that?
4:10 p.m.
Executive Director, Canadian Private Copying Collective
I can tell you the current approach. There are two stages at which that happens.
The first is established by the Copyright Board. According to the Copyright Act, the board is charged with allocating the proportion of the levies collected that should go to each class of rights holders—how much to the performers, how much to the makers, and how much to the authors and publishers. This has been established in the past based on evidence that the board requested and that has been shared.
4:10 p.m.
Liberal