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.
4:10 p.m.
Executive Director, Canadian Private Copying Collective
Those pots are separate. They're allocated directly. Within that, the rights holders, the members of CPCC, have developed over time a methodology for distribution of those royalties.
There's a full explanation of it on our website. I'd be happy to share more details.
4:10 p.m.
Liberal
4:10 p.m.
Executive Director, Canadian Private Copying Collective
We try to distribute it based on data as to—
4:10 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Maybe you could submit that process, just so we have it formally.
4:10 p.m.
Liberal
Frank Baylis Liberal Pierrefonds—Dollard, QC
Thank you for that.
Mr. Baptiste, you talked about the use of your music by non-profit organizations. You said you weren't opposed to it but noted that the exemption was being abused in some cases. I'd like you to elaborate on that a bit, to help me better understand what you mean.
4:10 p.m.
Chief Executive Officer, Society of Composers, Authors and Music Publishers of Canada
Clearly, we support charitable causes. Our members—Canada's creators and music publishers—are the first to provide free licences for benefit concerts in cases such as the Calgary floods or the Lac-Mégantic tragedy.
However, the charitable objective of certain organizations is less than obvious. Music festivals and performance venues come to mind. For tax purposes, they have obtained charitable status from the Canadian Revenue Agency and, so, are able to take advantage of the regime. A long-standing exemption in the Copyright Act allows them to avoid paying royalties to creators and artists for the performance of their music in a festival or venue. In SOCAN's view, this type of abusive use is not in line with what Canadian lawmakers intended. We therefore feel the exemption needs to be limited.
SOCAN would happily continue to provide licences to organizations with a genuine charitable objective free of charge.
Mr. Daigle could speak to that in greater detail, since he is more of an expert than I am.
4:10 p.m.
Liberal
4:10 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Thank you, everyone, for coming today. I appreciate your testimony. It's an area that I'm learning more and more about every time we have different witnesses here.
My first question will be for Ms. Freeman or Ms. Bouchard.
We've hard a lot about levying charges on blank cassettes, blank CDs, and then the proposals from several witnesses to put charges on devices. Are there any other alternatives—and they don't have to be better alternatives—to levying charges on devices to recoup the funds that have been lost over years of technological change?
4:10 p.m.
Chair, Canadian Private Copying Collective
I don't think there's any permanent solution. As I understand it, the levy is the only solution. It's a simple way of doing this, and Lisa just explained how it can be introduced. For us, it's the only solution. On the interim fund, my emphasis is on the word “interim”, as it would not be a permanent solution.
4:10 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
I just worry that somebody who has an iPad, an iPhone, or any other device could be doing no private copying on it; yet, they pay a tax that would essentially amount to consumers subsidizing creators and artists for something they wouldn't personally use.
4:10 p.m.
Chair, Canadian Private Copying Collective
In Europe, many studies show that the introduction or the withdrawal of any levy didn't change a thing on the price of the tablet or the smart phone.
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
So who took the hit on that? Every tax results in a dead-weight loss.
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
In economics, it would be considered an extra fee on the market price of the good. Who is taking the hit? Is it the producers? Is it the consumers?
4:15 p.m.
Chair, Canadian Private Copying Collective
As I said, many studies in Europe show that it doesn't change anything. The tablets or the iPhones were sold at the same price with or without this levy, which is, as we say, worth a cup of coffee. It's such a small amount that it didn't change anything in the price of it.
To answer the first part of your question, when the Copyright Board decides on a levy, it takes into account many, many factors. The numbers of people who copy and the numbers of copies made are taken into account. The levy is then higher if there are a lot of people copying, or lower if there are not as many. We believe there are a lot, because our study shows right now that there are still hundreds of millions.
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Your studies have shown that introducing a levy will have a minimal economic impact on sales of phones, consumer behaviour on the phones, but it will raise about $40 million.
4:15 p.m.
Chair, Canadian Private Copying Collective
Absolutely.
There's an example in some countries in Europe where there was a levy in one country and not in another country. People will not even go to the country where there is no levy applied, because it doesn't change anything on the amount of the....
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Thank you for that answer.
My next question is for Mr. MacKay.
We've been provided with information from Stats Canada that the revenues of the music publishing industry in Canada have almost doubled. From 2010 to 2015, they doubled—I don't know what they are currently—and during that time, the income of people in the industry also rose, to the exclusion of musicians and singers. We've been given some evidence here about the exclusion of musicians from works like music videos, for example, or television shows.
Would you say that is directly correlated to that, or are there other examples of why musicians and singers have been left out of the rise in income that the other members of the music industry have not?
4:15 p.m.
President, Re:Sound Music Licensing Company
Certainly the two exceptions that I talked about, the $1.25-million exemption and the definition of sound recording, contribute to that, because the use of music in audiovisual media is increasing. People are consuming music through YouTube, and increasingly through audiovisual means, rather than audio only.
If we are not able to collect royalties on that on behalf of musicians, whereas my friends over at SOCAN are able to do that on behalf of composers and publishers, then they will continue to see the increased collection of royalties on those uses, whereas we will not be able to.
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Would you say that, as it is, the current regime is quite lucrative to certain groups of people in the industry, but for the musicians it seems to be very negative. It's not providing them the growth.
4:15 p.m.
President, Re:Sound Music Licensing Company
It's exempting them from being paid on it entirely, and they're the only group that are being exempted from being paid on these uses. Or, in the case of radio, they're taking a reduced rate on these uses. As I mentioned before, given that the money that we collect is distributed at source, 50% to the artist and 50% to the sound recording owners, this is money that is going directly to the musicians.
It would make a very direct difference.
4:15 p.m.
Conservative
Dane Lloyd Conservative Sturgeon River—Parkland, AB
Are you saying that the radio exemption disproportionately harms the musicians as creators, as opposed to the sound creators, or that they're both affected at the same rate by the exemption for radio?
