Industry Committee on Sept. 26th, 2018

[The Chair, Liberal, Dan Ruimy]

Great.

Mr. Masse, you have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I saw the stuff on piracy that was presented, and it is really important for us to have the discussion here today. One of the reasons I was interested is that we have heard from artists and creators very explicitly that they're concerned about their future. I'm not sure that even resolving that is a silver bullet.

In the area I represent is a place called Sandwich Town. It's the oldest European settlement in Canada west of Montreal. It's where the War of 1812 was fought. It's where the Underground Railroad was. There were rum runners and a whole series of things. Today, though, it's challenged by economic poverty, the closure of schools, and pollution. It has one of the highest rates of poverty.

I tell you all of this because right next to Sandwich Town is the Ambassador Bridge. The Ambassador Bridge has about $1 billion of activity per day. About 35% of Canada's daily trade takes place in my riding. A private American citizen owns the Ambassador Bridge. It's right next to Sandwich Town. In fact, they actually bought up houses. They boarded them up and knocked them down. It's quite lucrative, though. Matty Moroun, who owns it, is in the top 40 billionaires in the United States, and a lot of economic activity takes place right next door.

Now we, on the other side of Sandwich Town, a new border crossing called the Gordie Howe bridge. You might have heard of it. I've spent 20 years of my life trying to get a new public crossing. It's about $4 billion to $6 billion. There is very little activity taking place in Sandwich Town from this. There are supposed to be community benefits, but we don't even know how much. Essentially, right now, it hasn't really done a whole lot for the area. We're still waiting.

In front of Sandwich Town is the Detroit River, and then we have what's called the Windsor Port Authority. The Windsor Port Authority is a multi-million dollar operation that's doing quite well on its own, but it also has this lucrative new border crossing that's going to be coming into place along with other extensive work. If the Ambassador Bridge gets to twin, which the government has provided them a permit to do, we'll receive a major economic benefit from them.

On the other side of Sandwich Town is a railway that goes to a Canadian salt mine and other operations. It's a multi-million dollar operation, but it's smaller than the others. It's not CP. It's not CN, but it's doing okay—the Essex Terminal Railway. In between all of this, what people have gotten from the multiple billions of dollars of activity around them is nothing. They have closed schools, closed businesses, and closed the post office, and they have the highest rates of poverty.

I have to say that this is what concerns me, and I feel the artists that we've heard from are in the same predicament.

Do you have any suggestions whatsoever, in the time remaining, for what you can do, other than just hoping royalties will roll in if you stop piracy, to help improve artists' compensation in Canada? Even if it's not within the jurisdiction of your own company, is there anything you can suggest to this committee?

I fail to see how ending piracy alone.... Is there something new or different? I'm open to suggestions. You may not want to answer—I don't know.

Mr. Chair, we heard about this when we did our travel, and I see that we're still going on about the same thing.

Is there anything that anybody here can offer for those individuals?

[Robert Malcolmson]

I actually used to go to school in Windsor and I lived under the Ambassador Bridge. I took my family there to see where I lived in college and, of course, it was gone. There's not much left there.

In terms of suggestions we would make, as I said at the beginning, cultural industries actually employ 630,000 Canadians and contribute 3% to our GDP. They are playing their role in the employment of Canadians. To the extent that piracy, if you agree with our perspective, is undermining that system, certainly stopping piracy, constraining piracy and limiting it will help the existing ecosystem that employs Canadians and creates jobs. If I'm an artist creating content, if I'm the producer of Letterkenny, I certainly want to know that the government is trying to stop the leakage of my intellectual property outside of Canada and that I'm being fairly remunerated for what I've created.

I think stopping piracy isn't all about trying to help the vertically-integrated companies. That's not it at all. It's about protecting those who create our content and making sure they're paid for it.

[David Watt]

I guess I would just echo a remark you made earlier—that is, that $900 million of Rogers' revenue was directed to Canadian content producers and creators.

[Cynthia Rathwell]

I think that's consistent with the comments of Shaw.

I think just speaking at a very high level, there are myriad commercial relationships between artists and the different enterprises for whom they are producing content. At one level, it appears very simple to advocate the introduction of a new right to add to artists' income. We had some discussions about the sound recording right, and soundtracks, and it seemed like a simple fix. It's not really a simple fix. It would unsettle the broadcast industry in Canada and it would have impacts on the broadcasting system to do that in terms of cost. There are also direct relationships between the artist, in that case, and the producers of the recordings they're making.

So at a high level, it seems as though there may be simple fixes in copyright by creating new rights, but when you drill down on it, as David said and as we said, there's a very complex framework at both the public policy level and the commercial level.

From our perspective as a regulated broadcast distributor, we believe we make incredibly important contributions to the broadcasting system. As a telecom provider, we believe we meet public policy objectives. All of this comes together to help Canadian artists. Unfortunately, copyright isn't a terrific mechanism, from a national perspective, in terms of executing domestic cultural policy.

[Jay Kerr-Wilson]

Mr. Masse, I can actually give you a concrete proposal that tomorrow would put money into the hands of artists. Right now under the Copyright Act, when radio stations play sound recordings or the recordings are played in stores and restaurants, royalties are paid. Parliament has deemed that under the Copyright Act, the money is split fifty-fifty between the record company and the performer. Give 75% to the performer and 25% to the record company and you've immediately improved the lot of every performer.

[Brian Masse, NDP, Windsor West, ON]

Thank you very much for your testimony.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We'll move to Mr. Longfield for five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you for the time.

Thanks to all the presenters today. You're giving us very concrete suggestions for our study.

We haven't talked too much about the EU's recent copyright legislation, particularly around article 13. It was a controversy at the time and a controversy through the summer. It looks at the question of how we grab content on the way up onto your platforms—content from legal suppliers like YouTube and others—to make sure that copyright is being paid.

Have you reviewed that part of article 13? Is that something we need to be looking at in terms of our legislative review? We are competing against the EU.

[Cynthia Rathwell]

I'm not an expert on international copyright developments, but I think Jay has a lot of experience in this area. I'll defer to him.

[Jay Kerr-Wilson]

I'm not an expert on international copyright developments, but as I understand it, article 13 has not yet been implemented. There are still some negotiations that have to take place within the European structure. We don't know what the final version will look like. Basically, it puts the onus on platforms that have user-generated content uploaded to them—i.e., YouTube and Facebook. It's not on the ISP level. It's on the platform level. It says you need to have a system in place to try to prevent unauthorized uploads of content. YouTube already has a very robust system of content match.

Now, YouTube's problem, they say, is that right now, if they find unauthorized content, they let the rights holder either take it down or monetize it. They can say, “You can keep the money or we'll take it down.” Their complaint about EU's article 13 is that it looks as though it forces them to take it down, and it takes the monetization away.

Canada doesn't have the same framework. If YouTube is engaged in communication of public copyright-protected content for a commercial purpose, copyright in Canada applies. Royalties have to be paid or, if it's unauthorized, it has to be taken down.

It's not getting at the problem. This isn't going to put money in anyone else's hands. This is just a way of reducing the amount of unauthorized content available on the YouTube platform. YouTube already does that. So it's a bit of a solution in search of a problem, and it doesn't really translate to what we're—

[Lloyd Longfield, Liberal, Guelph, ON]

If I may, my thinking on this is that the previous review, five years ago, tried to make this technology agnostic, and technology has changed. What hasn't changed is the flow of information. How it flows is.... You know, there will be different technology five years from now. But it seems to me that trying to capture the value stream and get the revenue out of that value stream is what article 13 does.

I'm not a lawyer, but some of you are. I know that you all have an interest in this. It would be going into your platforms, so it could affect your business model.

[Andy Kaplan-Myrth]

I'm not sure of the way the European model, as proposed right now, would go into an ISP's business model. It's targeted at platforms, not at hosting. We don't take the uploads and then host them somewhere in a way that we could take them down. Instead we're just kind of moving the bits from one place to another.

I would echo what Jay said. I don't think the Canadian framework needs an approach like that. Copyright applies to the content on those services that are doing business in Canada already.

[Lloyd Longfield, Liberal, Guelph, ON]

I'll turn it over to Terry.

Thank you.

[Terry Sheehan, Liberal, Sault Ste. Marie, ON]

Thank you very much. We've covered a lot today, and I thank you for that testimony on a variety of subjects.

There's a subject we haven't touched on, but we've heard it in different parts of the country when we travelled, and we've heard different testimony on it. It goes to what Robert said about pirating, which is that some people just don't think that what they're doing is wrong. They're not educated. There are a bunch of institutions and different groups that are educating people about the infringement of copyright through piracy.

Is your group, are your companies, able to do or doing educational programming about large companies with access to a lot of people.

Don't spam them. We went through a whole bunch of testimony on that. Seriously, you do have different ways of communicating to the people. The government has a role to play in that, but it's just like anything, whether it's seat belts, drinking and driving, or texting. A a certain amount of education needs to happen with the people.

I'll start with Robert.

[Robert Malcolmson]

I think you're right that education is a key component of making sure consumers understand the implications to the cultural industries of consuming illegal content. Certainly, I think we could collectively do a better job of educating Canadian consumers. I suggested that if in the notice and notice regime there were a copyright infringement notice sent to a Canadian who is consuming—perhaps unwittingly—copyright infringing content, a notice that made that Canadian citizen aware that there was another legal source to get that content that supports our domestic ecosystem, perhaps that could be a very personal and effective way of educating that particular consumer. That is one way it could be done.

[The Chair, Liberal, Dan Ruimy]

We're way over time.

Mr. Albas, you have five minutes.

[Dan Albas]

Thank you.

I actually would like to follow up on what Mr. Sheehan was asking, just in regard to the education side. I'd actually like to focus on whether or not your companies, respectively, on some of these new box technologies that are coming out, are spending time with the RCMP so that they understand what is illegal and what to look for, so that there can be national bulletins. Are you're working with different associations for police, so that they're advised that this is an issue?

[Kristina Milbourn]

Yes. We actually met early on with the RCMP and the CBSA. We've gone back to the RCMP. Where I think they do have a role to play is where we see the unlawful decryption of satellite signals, because there's a very clear prohibition in the Radiocommunication Act that says you cannot decrypt a satellite signal. To the extent that this type of activity is occurring to help fund and fuel this unlawful industry, yes, I think there's a role to play.

We also note that this is not the only means by which this content is being acquired. I think, in part, what you see before you in our submissions is that we're asking for modern provisions that address what is actually occurring. We heard a little bit about this sort of set-top box organized element, which is the large-scale redistribution of content, none of which is authorized.

That, I would submit, is not an area where the RCMP can be helpful, because there's no clear prohibition that we can point to in either the Criminal Code or the Copyright Act that would allow them to take jurisdiction to open an investigation, even if they wanted to.

[Dan Albas]

Okay.

[Kristina Milbourn]

I don't know if Mark or Rob has anything to add. We have met with the police, and we're still here.

[Dan Albas]

I think that's very helpful, because earlier Mr. Watt mentioned that the Criminal Code needing to be updated, so I want some specifics.

Mr. Malcolmson, do you want to jump in?

[Robert Malcolmson]

You asked what we've been doing in terms of educating enforcement agencies.

We've worked for the last year and a half with the CBSA to help them understand how many set-top boxes are being imported into Canada every day, because most of them are made outside of the country and are brought in over the border. We've pointed out to them that these imports are happening and that they might want to look at them and take enforcement action. It's an ongoing battle for us to get their attention, but hopefully we will.

[Dan Albas]

Okay.

[Robert Malcolmson]

We've talked to ISED about the boxes coming into the country and not being certified under the Radiocommunication Act, because there are spectrum issues around these boxes. We pointed out that they're not compliant with the Radiocommunication Act.

Again, we're continuing to fight that fight and to educate enforcement agencies that have the ability to do something.