Industry Committee on Oct. 1st, 2018

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Yes.

[Marie-Christine Beaudry]

I hear my colleague talking about feature films alone, and I understand since he directs feature films. However, we are discussing many other things here such as televised magazines, variety programs or reality television shows. Often, there is no scriptwriter. There may also be other directors who come in at the end of the development of the work. I'm saying that to highlight the fact that there are different types of works, and let's not forget that all of them fall under the “audiovisual work” definition.

Often, the producer starts the development process, whether we're talking about a variety show or a drama program. In that last case, he will work with the author, of course, who will have rights from his script, since this will be a distinct cinematographic work and he will be able to exploit it on the publishing side. Producers do not necessarily have all those rights.

The producer takes part in the development of the work and there are discussions, exchanges. We're talking here about dramas, but think about variety shows or TV magazines; the producer knows what the broadcaster wants, and he is the one who stays in contact with the latter and pilots the development of that work.

The director comes into the process at the production stage. By establishing and negotiating the production budget, we determine the scope of the work and its category: long series, long series of 30 or 60 minutes, filmed outside or not, and so on. All of these decisions will relate to the very content of the work, to its vision.

To say today that we have no impact on the creation of the work would be totally false. In the case of a full-length film, I recognize that the development of the work may be somewhat different. However, that is not the case every time, and we cannot ignore and not mention the involvement of the producer in the creative process.

[David Lametti, Liberal, LaSalle—Émard—Verdun, QC]

Thank you very much.

[Gabriel Pelletier]

May I clarify something?

[The Chair, Liberal, Dan Ruimy]

Perhaps we could get back to it later, because we've gone past the allotted time.

Mr. Chong, you have five minutes.

[Michael Chong, Wellington—Halton Hills, CPC]

Thank you, Mr. Chair.

I have a question for the Société professionnelle des auteurs et des compositeurs du Québec.

The committee analysts did their work. According to Statistics Canada, music publishers' incomes in Canada increased from $148 million to $282 million between 2010 and 2015. That's a lot. During that same period, the average income of those who work full-time in the Canadian music industry increased for all occupations, except for that of Canadian and Quebec musicians and singers, whose average incomes went from $19,800 to $19,000; $800 less per year.

How do you explain that situation in Canada for that five-year period?

[Marie-Josée Dupré]

In the music publishing world, there are big players like Universal, Sony, and Warner-Chappell, and other small and medium ones. These publishers sign contracts with several creators. I'm not talking here about singers, but songwriters.

The contracts songwriters sign force them to transfer ownership of their works to the publishers. It is common practice in Canada—and even elsewhere in the world—for a songwriter to assign ownership of his works, which then no longer belong to him or her, in exchange for remuneration. In Canada, 50% of that remuneration goes to the publisher, and the other half goes to the songwriter. If you are the sole songwriter, you receive all of that 50%, but if there are two or more of you, that figure goes down.

Companies can thus increase their assets and their capital, but in every instance, the songwriter sees 50% of his income go to the publisher. If he's fortunate enough to also be a singer, his record company will also provide remuneration, but once again, that is only a small percentage. Unfortunately, the monies generated are chopped up in this way.

It has been said repeatedly that royalties paid to songwriters for the online plays of their works have never offset the loss of income they used to get from the sale of their compact disks, since those royalties have been completely divided up in the same way. And so their incomes can only stagnate or decline, and they weren't all that great to begin with. If the songwriter is also a singer, he is then in another category and may make more. For the creators, however, that is the situation.

In the days of compact disks, each song brought in 10¢ for the songwriters. Thus, a 10-song album generated a dollar for the creators, and half of that went to the publisher or publishers, and the other half to the songwriter or songwriters. Someone is losing out from this shift, and clearly it is neither the publishers nor the companies, but the music creators who are forced to assign ownership of their rights and be satisfied with the meagre incomes they are given.

[Michael Chong]

In your opinion, what can be done to remedy this? It's a problem: the revenues of the big companies are increasing substantially, but those of the singers and musicians are falling drastically.

[Marie-Josée Dupré]

Indeed.

We are currently looking at different entrepreneurship models. Many songwriters—many of whom are also singers nowadays—are turning to self-production in order to keep part of their rights and also earn as much money as possible.

Rather than transferring all of their rights, they give licences, but that practice is not yet current in the publishing world. As long as the situation does not change, the fate of songwriters will not truly improve.

However, as I said, if the private copy regime had evolved with technology, the millions of copies that are made on tablets and telephones, which have replaced the compact disk and the cassette—which were around when the regime was created—would generate more royalties, which would help the songwriters.

In the current state of affairs, you need millions of views or hits on YouTube or Spotify before you can generate royalties of $150. Where is justice in that for a music creator? Without their creative activity, no one would have had any work to develop. The singer is certainly important, but he or she would have had nothing to sing if the songwriter had not created the work. The producer of sound recordings could not have produced anything had the work not existed.

It seems people want to relegate the concept of creation to the back burner. For a 10-song album, only one dollar will be paid to the creator, despite a total sale price of $15, $16 or $20—albums may only cost between $10 and $15 these days, those that still sell. I'm sure we all agree that that is not enormous.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Longfield, you have five minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair. Thanks to Mr. Chong across the way. We are in neighbouring ridings.

You're on the same question I had, so thank you to the chair for giving us a little bit more time with that answer. I want to build on that a little more with Ms. Dupré.

I was at the Guelph Youth Music Centre yesterday. Sue Smith got an award. She got her name up on the wall of honour. She does a lot of instruction with youth in Guelph. She couldn't pay Pete Townshend's fees to do musicals, so she created musicals herself. She has created over 500 characters in many musicals over the years with the kids.

You touched on the up-and-coming writers and how they have to register their work. Could you expand on how easy or hard that is for them to do, thinking of Sue Smith's work?

[Marie-Josée Dupré]

It is very hard to manage all the aspects of your career. Being a creator usually means that you're not necessarily an entrepreneur. However, you need to understand the meaning of all the contracts and the dealings you will have. You need to understand the impacts of all the dealings you will have with a record label and a music publisher, and they are mostly financial impacts. This is important.

At SPACQ, one of the goals we have is to help manage that aspect so that the young up-and-coming authors and composers can be more comfortable with all these aspects.

[Lloyd Longfield, Liberal, Guelph, ON]

If I could build on that towards.... You made a comment about the Copyright Board. I asked a few meetings back about decisions from the Copyright Board taking a long time. In your opinion, does it have to do with resources, or is it maybe because we're not clear enough with the legislation?

I also wanted to suggest that the composition of the board should include musicians or other performers so that we get their perspectives.

Could you comment a little bit more on the Copyright Board, please?

[Marie-Josée Dupré]

To have a musician or author or composer on the board is a very interesting idea. However, you still need to have someone who is professional and who knows the business almost inside out to make sure they can bring some perspective to the board and the decision.

As for the lengthy decision process, maybe there are some resources that are deficient. Also, I think it's the process itself. Evidence is submitted; then there's a delay, and then the other parties submit evidence. It's about building up cases, and it's taking time.

I used to work at SOCAN in the licensing department. I was not directly involved with the Copyright Board. I remember when the cable tariff was proposed in 1990 and was first approved in 1996. I think the first Internet tariff was proposed in 1996 and the first decision was in 2004.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay.

[Marie-Josée Dupré]

It's really difficult for societies to make sure, and then you have to adjust to all the standards and stuff.

[Lloyd Longfield, Liberal, Guelph, ON]

Right. It's going with the speed of business.

Thank you.

Mr. Pelletier, you made a comment that really piqued my interest. I was speaking with a filmmaker this weekend. He said that part of a film that used to be produced in Canada has now moved over to South Africa because of tax benefits. Then the rest of the film goes to Los Angeles, where some reworking is done, and then the finishing is done in Canada because of the tax benefits we have in Canada.

We're looking at copyright, but there's a bigger picture here of making money in Canada by being competitive and by providing whatever incentives.

Could you comment on the overall ecosystem we have?

[Gabriel Pelletier]

In Canada, the nationality of the copyright lies with the nationality of the producer, but the copyright itself is with the author.

In the situation you're describing, I think it might be an American production, since you say some money is going to Los Angeles.

[Lloyd Longfield, Liberal, Guelph, ON]

That's right.

[Gabriel Pelletier]

Then the copyright must lie with an American company, probably.

[Lloyd Longfield, Liberal, Guelph, ON]

Okay. Thank you.

My five minutes are up.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Lloyd. You have five minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you, Chair.

Thank you for coming today. It's been very interesting, this whole study and having you here.

Mr. Pelletier, you said you're a producer?

[Gabriel Pelletier]

I'm a director.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

You're a director. Okay, there was a little bit of miscommunication. I heard you say producer earlier, and you said you received zero royalties, so I was curious how that worked. Since you're a director—