Industry Committee on Sept. 19th, 2018

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chairman.

Thank you to our witnesses for being here today.

There's the European movement that we saw last week, but also yesterday the Music Modernization Act was passed in the United States, a bipartisan agreement that 80 senators signed on to.

There are those who have the theory that there is more collaboration than ever before, because some of the providers like Google, Amazon and Apple are actually moving towards production. There's more of an interest from them in terms of protection of original content because their investments are now kind of going in that direction.

The first question for the panel is on where Canada stands with regard to this. We have the European decision and we have the American decision. How do we fit into this puzzle, especially from the perspective of your organization, with international and North American connections in this? Where do you feel that you fit within the complex changes that are taking place in Europe and the United States? If you're not familiar with the United States' particulars, will that change your perspective here at the table once you actually understand that decision that was made for music copyright yesterday in Washington?

[Jérôme Payette]

I think Canada is lagging behind in many ways. The term of protection is 50 years everywhere. It's 70 years in the OECD countries, the U.S. and Europe. Piracy is the weakest thing. Notice and notice is the weakest we can imagine. We need, at least, notice and take down.

The rate setting for now is a good system but it's not efficient. I think we need to have a proper fix of the Copyright Act.

[Brian Masse, NDP, Windsor West, ON]

Does anybody else want to comment on that?

[Christian Tacit]

Could I comment on the notice and notice versus notice and take down?

[Brian Masse, NDP, Windsor West, ON]

Yes. I'm looking for an international perspective from your organization, because you're not an island into Canada in terms of what's taking place with regard to remuneration decisions about copyright and so forth.

Our European partners and also the American influence coming over here are going to have a direct correlation with your ability to actually do the work here in Canada. I'm looking for any type of input on this. Those are dramatic changes that have just taken place. They were part of our trade agreements and they were discussed privately. Some components right now are with NAFTA and some are with another trade deal.

I'm kind of curious about these moving parts. We're examining it very much in a navel-gazing way here with regard to copyright, through this process and five-year review of our legislation. The reality is that the world has already moved on from where we've had our legislation passed and even where we started the study.

If you have anything, I'm interested in hearing it.

[Christian Tacit]

I want to address a specific comment. The point I made earlier was that ISPs are common carriers. They're supposed to be transmitting data. To start engaging them to fight infringement more proactively means you are now asking ISPs to inject their own economic self-interest of avoiding liability into the mix of carrying traffic. That to me is a very dangerous proposition in a free and democratic society.

Beyond the cost that ISPs bear, even if they could be compensated for that, I just think it's a very slippery slope. That's why we object to all of the types of measures from the coalition on up to notice and take down. It's not just about ISPs' interests. It's about broader democratic values for the country.

[Michael Paris]

I know I said I was only going to talk about one issue, but I can respond to this just a little bit.

MTAC is a member of the FairPlay coalition, and we do support that initiative quite strongly. On the proposal, as I understand it, the comment earlier was that the Copyright Act currently provides an injunctive remedy for those seeking to respond to infringement. It won't surprise any of the lawyers in the room if I say the phrase, “There is no right without a remedy”. Injunctive relief is not a practical remedy. You don't need to look any further than to find out how many injunctions have actually been granted in connection with the Copyright Act to know that. This is why the FairPlay coalition is proposing a separate body to deal with exactly these kinds of requests.

I don't propose to speak on behalf of the ISPs on what the compliance burden might be to deal with orders to restrict access to certain infringing content as identified by that body. That's a little outside my ballpark, but we've been down this road for 20 years talking about how to effectively respond to infringement. I think a review of the act and a serious long look at what the FairPlay coalition is proposing is certainly worth doing.

I'm sorry I can't contextualize that further in terms of the U.S. development yesterday, but I do note that this exact same system exists in the United Kingdom and in other places. That's something this committee should look to.

[Stéphanie Hénault]

You asked how our organization reacted to the directive from the European Parliament. We were delighted. Actually, the whole world is delighted with the directive which was passed by a very large majority in the European Parliament on September 12.

We think this is a sound model that should inspire you because it would support our economy and our culture. Creators' revenues have fallen, even though the use of their works has multiplied and expanded. It is time to find a way for Canadian creators and Canada's cultural industry to recover the money that leaves the country and does not come back.

For example, the directive calls on content sharing service providers such as YouTube to conclude fair and appropriate contract licences with rights holders. That is something we should draw inspiration from.

Unfortunately, I am not aware of what you mentioned in the United States, but we will look into it. Perhaps we can provide further information in the brief we will be submitting to you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

I'm sorry, we have to move on.

Mr. Graham, you have seven minutes.

[David Graham, Liberal, Laurentides—Labelle, QC]

Thank you, Mr. Chair.

Mr. Payette and Ms. Hénault, I will start with you.

Are there other examples of goods, products or some other kind of property where the duration of rights extends beyond the owner's life?

I have heard twice that copyright should be extended from life plus 50 to life plus 70 years. Are there other situations in which economic rights are retained after death?

[Jérôme Payette]

Property rights exist for just about everything we own. After death, ownership is transferred to one's children. If I buy a house, it is passed on to my children when I die. So property rights do not end after a certain date. That is my answer to your question.

[David Graham, Liberal, Laurentides—Labelle, QC]

That answers my question. So the asset is transferred to the children or to someone else. It is no longer the person's property 70 years after their death. So why are you making this request?

[Jérôme Payette]

It is the same thing, actually. The duration of protection is usually transferred to the children. I think that, in the Bern Convention, the idea of protection for 70 years, or for two generations of descendants, was to protect the work created. That is the idea behind the 70 years of protection.

[David Graham, Liberal, Laurentides—Labelle, QC]

Extending protection to life plus 70 years would cover roughly four generations. What is the justification for requesting more than life plus 50 years of protection?

[Jérôme Payette]

It also generates revenues for companies. It is not just individuals who can hold copyright. Music publishing companies, for instance, can control copyright.

Property does not have an end date, generally speaking. It seems strange that copyright does.

[David Graham, Liberal, Laurentides—Labelle, QC]

Yes, but a company does not die.

[Stéphanie Hénault]

I would like to clarify something.

Let's say for example that I am a grandmother and I have created something. Seventy years is my grandchild's life expectancy. It is like saying that your house will only belong to you for two generations and, after that, anyone can live there. There is a limit.

From what we know, all countries are extending the duration of protection. The fact that the limit in Canada is 50 years leads to a loss of revenues. When Canadian works are disseminated in other countries that have 70 years of protection, the money collected by copyright collectives stays in those countries. It does not come back here because the law of the country of origin applies.

From our understanding, it is not commercially beneficial to refuse to extend this protection to 70 years.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Payette, you mentioned earlier charging $3 to people who buy devices such as iPhones.

That brings us back to the same debate we had 25 or 30 years ago regarding compact disks. In making this request, are you assuming that all users are pirates?

[Jérôme Payette]

No, we do not assume anything of the sort.

[David Graham, Liberal, Laurentides—Labelle, QC]

Why not include those fees in the purchase price rather than charging them when the device is purchased?

For example, if I have 128 gigabytes on my device but do not listen to music on it, why should I pay for it?

[Jérôme Payette]

We are suggesting that these royalties be charged at the time of purchase. That is the system in Europe and it is very widespread. Here is a list of countries: Germany, Austria, Belgium, Croatia, France, Hungary, Italy, the Netherlands, Portugal and Switzerland have all adopted private copy regimes. There are royalties.

It is the same principle as for CDs, and we want this to continue. I think that was the intent in 1997. Perhaps the act was not drafted to be technologically neutral, but it should have been.

[David Graham, Liberal, Laurentides—Labelle, QC]

We were talking earlier about what is commonly known as the notice and take down system. Can that be justified without an order from a judge or a court?

[Jérôme Payette]

I do not know the details of how the system works. I can tell you though that the current system does not work. Several countries have adopted enhanced content protection measures, whether a notice and take down or a notice and stay down system.

Let me also say in answer to your question that if our copyright system is weaker than that of the countries around us that we compete with, whether in Europe or the United States, that hurts us. It means lower independent revenues for creative industries. It is really a detriment not to operate the same way as the countries around us.

[David Graham, Liberal, Laurentides—Labelle, QC]

Mr. Tacit, you mentioned that you'd like a system of notice and notice to have limits, for example, on how many times you get a notice for the same IP address and the same offence.

How many notices are your members getting for offences? Are they practically DDoSing you on these messages?

[Christian Tacit]

Mr. Copeland is well placed to answer that because he deals with this in our firm.