Industry Committee on Oct. 17th, 2018

[The Chair, Liberal, Dan Ruimy]

Good afternoon, everybody. Welcome to meeting 132 as we continue our statutory five-year review of the Copyright Act.

Today we have with us Mark London, Director at the Art Dealers Association of Canada; April Britski, Executive Director, and Joshua Vettivelu, Director, from the Canadian Artists' Representation; and Debra McLaughlin, General Manager at Radio Markham York Inc.

We're also joined by Moridja Kitenge Banza and Bernard Guérin, the President and Executive Director, respectively, of the Regroupement des artistes en arts visuels du Québec.

Hello, Mr. Kitenge Banza and Mr. Guérin.

Welcome, everybody. You will each have up to seven minutes for your presentation. If you go over, I might have to cut you off, but that's okay.

We're going to get started with the Art Dealers Association of Canada. Mark London, you have seven minutes.

[Mark London, Director, Art Dealers Association of Canada]

Good afternoon, ladies and gentlemen.

With your permission, I'll present in English,

but I'll be happy to answer you in the official language of your choice.

My name is Mark London, and I'm the owner of Galerie Elca London in Montreal, which was founded by my late parents in 1960. My gallery specializes in the sale of Inuit art from the 1950s to the present.

I am here today speaking as a member of the board of directors of the Art Dealers Association of Canada. At present, the association is comprised of 76 commercial art galleries, and collectively we represent several hundred artists from coast to coast.

While many try to paint the relationship between artist and dealer as an adversarial one, the truth is that we're partners. I like to say that when the sun shines, it shines for everyone. However, I'm here to tell you that there are storm clouds on the horizon. Many ministers from across our great country have received pro forma letters from constituents demanding that Canada enact an artist resale royalty.

While this noble concept is indeed law in many countries, it exists more to level the playing field between trading partners than to benefit artists. What is seldom mentioned is that the ARR simply does not benefit those whom it was designed to help. In most cases, the sole beneficiaries of significant ARR monies are the estates of a handful of wealthy artists.

For commercial galleries, the administrative costs of the ARR represent a significant financial burden. Indeed, the greatest beneficiary of the ARR, regardless of country, is the organization tasked with collecting and distributing the funds. One could easily argue that any organization arguing to become the administrator of the ARR is doing so because this represents a lucrative revenue stream.

In 2013, the Honourable Scott Simms introduced private member's Bill C-516, an act to amend the Copyright Act. While Mr. Simms might have put some thought into drafting the bill, it is obvious that he did not consult with anyone who sells art for a living, or for that matter anyone who buys it. Ladies and gentlemen, it would be impossible in the allotted time to detail exactly why this bill, particularly as written, would be a nightmare, but I can give you some highlights.

The first bombshell is advocating an ARR of 5% on any resale greater than $500. Can you imagine the administrative costs to both art gallery and collective agencies to catalogue, research, and disburse a cheque for $25? In the United Kingdom, for example, the threshold for an ARR is any sale over a more reasonable 1,000 euros, which is currently approximately $1,500 Canadian. I should also point out that most countries with an ARR impose a maximum payout, which Bill C-516 does not.

Another bombshell is proposing an ARR on any sale of a work for $500 or more that is subsequent to the first transfer of ownership by the author. This presupposes that all works find their way onto the market in an identical manner. In most cases, an artist brings his or her works to a retail gallery on a consignment basis, and they are paid when and if the work is sold. In theory, the ARR would apply only when, years down the road, a collector decides to sell.

I'm here to inform you that the art world isn't that simple. There are numerous ways in which art works find their way onto the primary market that are in direct conflict with the ARRs proposed. For example, printmakers often work with print publishers, who sell the prints to retail galleries outright. In this scenario, the first sale to an art collector effectively becomes the second resale. When a collector sells what is intended to be the first resale, it's actually the third.

As mentioned, I deal exclusively in Inuit art. When an artist in Cape Dorset brings his or her work into the local co-operative, it is purchased outright. I then purchase the piece from the co-operative. When a collector purchases a piece from my gallery, that would be the first retail sale, but technically the third resale. When the collector decides to part with the piece, that would be the fourth resale, not what would ordinarily be the first.

Lest any of you think this would actually be beneficial to artists, it is important to point out that all of these additional costs would have to be passed along to the consumer in the same manner as freight, insurance, framing or any of the other myriad expenses required to bring art works to market. Repeated ARR expenses calculated on goods that have yet to reach the retail market would have a compound effect that would only be detrimental to the artist's ability to sell in a competitive market.

When the Mulroney conservatives enacted the GST in 1991, they assured Canadians that replacing the 13.5% manufacturers' sales tax would lower prices for the consumer. While this might have been the case for microwaves or toaster ovens, it had a devastating effect on the art market. Overnight, prices went up by 9%. Our sales for 1991 were slightly less than one third of our sales for 1990. While artists' groups take great pains to assert that the ARR is not a tax, I can assure you that semantics will matter little to those who will come up against it.

Since we are arguing semantics, I would suggest that the beneficiary of any tax should be the public purse. In other words, all Canadians benefit when taxes are paid. You would know better than I do that the higher the tax rate, the greater the likelihood that people will try to avoid or evade taxation.

Indeed, should an ARR come into effect, there would be an immediate reaction on the part of art collectors. At the very least, in the immediate aftermath of an ARR, sales would tumble, putting at risk the thousands of Canadians whose livelihood depends on the art business. We might conceivably see a future in which most of the major sales of Canadian art would be transacted in a jurisdiction that does not have an ARR. Since most of us live but a short drive from our American neighbours, it's not too hard to guess where these sales would happen.

Additionally, since private sales are generally not subject to ARR, traditional galleries and auction houses will surely be circumvented by sellers and buyers working directly to avoid the ARR.

One also wonders what the detrimental effect to the public purse would be when neither GST nor PST is collected. This is particularly worrisome since, historically, when a government needs to sharpen its pencil and cut some budgets, the axe falls first on arts and culture.

Our position is that the ARR is a utopian concept. The research is clear that ARR does not work as intended and that its benefits are greatly offset by its detrimental effects on the marketplace. The Canadian art market is simply in too precarious a situation to risk something that has proven to be so ineffective.

In case I haven't been clear, we think the ARR is a terrible idea. Given that the Copyright Act is subject to review only every five years, we urge you to treat the ARR as a stand-alone issue rather than a component of a larger copyright act.

In that seemingly no art world professionals were consulted in the drafting of Bill C-516, we look forward to the opportunity to sit down with you and other stakeholders in order to give this matter the serious consideration it deserves.

Thank you very much.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move to the Canadian Artists' Representation.

Ms. April Britski, you have up to seven minutes.

[April Britski, Executive Director, Canadian Artists' Representation]

Good afternoon.

Thank you for the opportunity to speak to you today about copyright.

As mentioned, I'm April Britski, Executive Director of CARFAC, the national association for visual artists, many of whom are watching this presentation today in homes and studios across the country with great interest.

Our brief includes three recommendations. Our colleagues at RAAV will speak to two of them more specifically, and I will focus on one of them, the artist's resale right, which you just heard about.

The artist's resale right entitles visual artists to receive a royalty payment each time their work is resold publicly through an auction house or a commercial gallery. The resale right allows artists to share in the ongoing profits made from their work. We've all heard headlines about an artist's work breaking sales records at an auction, but what most people don't realize is that artists don't get paid anything from those sales, at least not in Canada.

Once this is established in Canada, artists would be paid on sales at home as well as when their work is sold in countries that have the artist resale right. France first legislated this in 1920, and it now exists in at least 93 countries worldwide, including the entire European Union. It has been discussed in trade negotiations with the EU, as well as at the World Intellectual Property Organization, which is advocating for mandatory international implementation.

We have only five minutes to speak today, and our brief is limited to 2,000 words, but CARFAC has a detailed proposal for how we recommend that it could work for Canada. We keep up to date on developments and legislative reviews in other countries and have studied this issue extensively. I'm sure you have many questions, and I hope that I have answers.

First, you may ask yourself, why do we need a law? Can't the market just regulate itself? Why do we need a new tax?

Let me be clear. A copyright royalty is not a tax. It is not collected by government or spent by government. It is not administered by governments, and we wouldn't ask you to intervene in the administration of it. It also doesn't require any government funding. It is, in fact, a taxable copyright royalty, something that artists would have to report on their taxes.

We need a legal mechanism, because if people aren't required to pay, they won't—the previous presenter won't, as you can see.

We just need a legal framework. After that, there are ways to allow the market to administer it efficiently, and we have good models. We have 93 models to look at, actually, for ways to administer it, and many of the questions you may have about the mechanics have been considered by these other countries, and certainly by us.

With respect, what we're asking for is 5% on ongoing profits of eligible works of art. It wouldn't apply to all sales—for sure it won't—and I don't think that's unreasonable. Artists are the primary producers of culture in this country, and yet they are paid less than anyone else in our sector. None of us at this table would have a job without them, quite frankly, and they deserve better.

I'll let my colleague Josh speak a little more.

[Joshua Vettivelu, Director, Canadian Artists' Representation]

Hi, everyone. Thank you so much for your time today. My name is Joshua Vettivelu. I'm an artist and an educator.

When I was going through art school, there was a saying that I heard often. It was that if you choose to be an artist, you'll only see money from your work when you're dead. Even though that's a bit of a jokey saying, I believe there's some truth to it, and today I'm here to extrapolate some of the gravity of that joke, especially as it applies to senior and Inuit artists.

First nations, Métis, and Inuit artists, specifically those from the north, have the most to lose from the absence of the artist's resale right. It is important to note that indigenous and Inuit artists make up a large portion of our art market. The population of Nunavut alone is made up of 33% artists. In 2015, the Inuit visual arts and crafts economy of Canada contributed over $64 million to the Canadian GDP, and it accounts for more than 2,100 full-time-equivalent jobs.

Why are indigenous and Inuit artists poised to lose the most? The first point is that indigenous artists, specifically those in the north, suffer from a lack of access to the primary market, and if they do have access, it is often exploitative. What does that mean? The structural conditions of colonialism, which are very real, often force indigenous artists to sell their work for lower price points to make ends meet and to provide for their families and communities.

An example of this is Kenojuak Ashevak's The Enchanted Owl. It originally sold for $24. It was later resold at a public auction for $58,000. With the artist's resale right of 5%, she would have made approximately $3,000. This summer, the Art Gallery of Ontario had a giant retrospective of Kenojuak's work, and the city was plastered in reproductions of The Enchanted Owl. The question I have for all of you is, what does it mean for Canada to compensate an indigenous artist who is a Governor General's award-winning artist only $24 for her most well-known creation? It is just a straight fact that this is what she received for that work.

Point number two is that an indigenous artist is more than a singular person. I have a quote here from Goo Pootoogook, who is Annie Pootoogook's brother:

”She had a lot of cousins and friends who didn't have much money, and she would sell her artwork and take care of them,” he said. People began following her on her weekly trips to the co-op, he said, because they knew she was about to be paid. “She would say, 'It's only money,'” he said.

What this shows us is that artists in the north are also economic pillars of their community. When you are an artist whose community and family are not doing well, you put that money back into your community.

That also tells me that we cannot dismiss the importance of a $50 royalty to a community's mental and physical health. It is confusing to me that we would dispute these amounts, which ADAC has deemed negligible for artists but debilitating for its own businesses.

Point number three is that there's an argument that the artist is constantly participating in the market throughout their career, but an increase in an artist's profile doesn't equal more sales. Increasing the cost of the artist's next body of work isn't always a real solution, as most people want to purchase the work that made the artist famous in the first place. We know this in the case of Mary Pratt, who was one of Canada and the east coast's most well-known painters.

To conclude, I guess what I'm really advocating for is some harm reduction in the ways that we view artists' labour. I do not think it is a utopian fix. I think it is a Band-Aid, but as we know, Band-Aids are in every first aid kit.

North America has a long history of devaluing the humanity and labour of indigenous people. I thank you for your help in ensuring that artists, specifically artists who have been abused by our country, are compensated for all the wealth that is made in their name.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Radio Markham York Inc.

Debra McLaughlin, you have up to seven minutes.

[Debra McLaughlin, General Manager, Radio Markham York Inc.]

My name is Debra McLaughlin. I'm the co-owner and general manager of CFMS, a radio station operating in York region, Ontario. My business partner and I are independent broadcasters—a disappearing entity in Canada. More than that, we come from two of the most under-represented groups in media ownership: women and immigrants. As such, we have a slightly different take on many issues.

I'm here today to address three key points: Collection of copyright should not cost more than the payments themselves; all radio stations are not equal, and even a scale based on commercial revenue does not reflect the economic disparities in the system; music plays a diminishing role in generating revenues for many radio stations.

CFMS broadcasts in markets that live in the shadow of the largest city in Canada, Toronto. Serving the cities of Markham and Vaughan and the towns of Richmond Hill and Whitchurch-Stouffville, the station delivers important local information to close to 700,000 residents. Despite being inundated with radio stations from surrounding markets, these areas had no voices until we launched in 2013. Research from Ekos showed that a remarkable 52% of residents who lived in these municipalities could not name their mayor, but they could name the city of Toronto's mayor. These same respondents scored available radio as “poor” on providing relevant surveillance information, such as traffic, weather and local news headlines.

The areas for which we are licensed come together with five other distinct communities to form the regional municipality of York, the seventh-largest market in Canada, with a population of 1.1 million. Although they are clearly unique in terms of government, demographic composition and economic infrastructure, the industry's audience rating service, Numeris, absorbs these markets into the larger Toronto CMA definition for the purposes of reporting ratings. This obliterates their distinctiveness and any possibility that media planners and buyers might analyze York region as a market on its own.

As the provider of the currency valuation for broadcast advertising revenues in Canada, the decision by Numeris not to distinguish or measure smaller markets reduces or eliminates access to significant revenues. Stations licensed to areas such as Scarborough, Mississauga, Milton, Orangeville and many other small places in the GTA are treated similarly, reducing their ability to compete for advertising dollars.

Like every other radio station, we are competing with new technologies and new platforms, adjusting to a changing environment. Our focus is local reflection. It is the only way we can distinguish our brand. We tell the stories of the characters and life in markets where residents do not define themselves as being part of Toronto.

In restricting our focus to these markets and providing a narrative of the experience of their residents, we are fulfilling the requirements of the Broadcast Act. We also broadcast in third languages on our single frequency. We deliver programming in English 18 hours a day Monday through Friday, and 16 hours on Saturday and Sunday. The remainder of our schedule is third-language Canadian programming, giving a voice to residents with a non-English, non-French mother tongue.

Our particular licence is unique in this system. It might even be perceived by the CRTC as an experiment. However, with growing multicultural communities, especially in tight spectrum markets, it may also be a model of stations and service requirements to come.

In order to report on the nine third languages and the English programming to which we have committed, we work with six different producers and a full-time music director. To meet SOCAN reporting requirements, it takes on average the equivalent of 24 hours per month, or close to $9,000 per year, to research and translate the information provided. This investment of resources results in a payment to the collectives of less than half that amount on a yearly basis. If we look at it over four full years of operation, we have paid over $32,000 to deliver just $13,000 in copyright payments.

Given our challenges in generating revenues, this seems particularly onerous, and the rationale for doing this is weakening. With the multiple platforms on which music can be enjoyed—streaming, audio services and satellite radio—and the proliferation of broadcast signals both within and outside market borders, the value of music as a driver to the listenership of many radio stations has diminished.

With the deregulation of formats by the CRTC, listeners have not only experienced duplication of music and artists across stations, but also the collapse of traditional formats across eras and genres. It is not unusual to have high duplication of music across stations that are targeting different populations and even distinct demographics.

A case in point is an artist like Taylor Swift. As an example, her current hit song can be heard on 10 of 26 stations licensed in the GTA. The audiences of these stations range in age. They could be from 18 to 34 or 35 to 64. They're heavily skewed female in some cases, and balanced male-female in others.

To put this in context, when rights are negotiated in television, there is an exclusivity for a period of time, and a tiering of costs. Rights for first runs are more expensive than syndicated, and rights for cable distribution are less than for broadly received networks. This is not the case for music.

Studies done over the years in multiple markets by different reputable research companies indicate that the number one reason listeners turn to radio is local news and information. The finding is almost uniform across age groups and genders. Music is second or third.

To be clear, I am not suggesting that the contribution music creators make to the radio landscape is insignificant. It is, however, diminishing. By opening up distribution platforms and promotional streams, musicians and their representatives have unintentionally, perhaps unwittingly, but nonetheless certainly diminished the significance of their contribution to the hours tuned to radio.

Any changes to the Copyright Act should therefore consider the impact of new delivery means, the revenue they generate based on their use of copyrighted material for the companies that operate them, and the absence of their contribution to incenting the creation of new material. I believe the Copyright Act must anticipate new ways of recovering value from these benefactors of Canadian music, and recognize that radio no longer benefits in the way it once did.

Not all radio is equal, either. Vertically integrated companies may lose revenue to radio, but they more than make up for it through increased sale of bandwidth that consumers use to stream music. Judging by their annual reports, these companies actually come out ahead in the exchange of services. The value of music creation is therefore much more valuable for these companies than it is for smaller stations doing just as important a job in bringing news, information and entertainment to Canadians located outside of major centres.

When the cost of reporting on the use of music outweighs the revenues it generates for artists by almost three to one, it is clear that something has been lost in the application.

As you heard from CAB earlier in this process, radio provides more than just royalty. It is reported by more than 70% of the Canadian population as their primary source for new music. This is a role we value. But in the ecosystem of music, we plant the seeds and increasingly other entities harvest the crops. We pay considerably for them to do so.

Thank you for your time. As one of Canada's smallest broadcasters, we appreciate the opportunity to have a voice in this process.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

Mr. Guérin from the Regroupement des artistes en arts visuels du Québec, you have seven minutes.

[Bernard Guérin, Executive Director, Regroupement des artistes en arts visuels du Québec]

Thank you, Mr. Chair.

I'm the Executive Director of the Regroupement des artistes en arts visuels du Québec, or the RAAV. I'm joined by Moridja Kitenge Banza, the President of the RAAV and a visual artist.

Our presentation will focus on three topics. These topics are the discriminatory nature of paragraph 3(1)(g) concerning exhibition rights; the abuses of fair dealing and of the exception for the purpose of education; and the action that must be taken regarding resale rights. I'll speak very briefly about resale rights, since this issue has already been thoroughly covered by my colleague from CARFAC.

Since the recognition of exhibition rights in the Copyright Act, in 1988, many visual artists have benefited from a significant increase in income. It has gradually become standard practice to pay the artists royalties to exhibit their works in contexts other than sales or rentals. The amounts paid are increasing each year, even though they're still insufficient. Unfortunately, the June 8, 1988, deadline indicated in the act ensures that all works produced before that date aren't covered by the exhibition right. In our view, this is absurd.

As a result, older artists and the heirs of deceased artists don't receive royalties. The deadline establishes what we call indirect discrimination on the ground of age. As you know, the works produced before June 8, 1988, are the works of older artists. The section doesn't say that artists of a certain age are excluded. However, in practice, older artists are the ones who face unfair discrimination. The discrimination is unintentional.

In a way, there's also a second type of discrimination based on the category of works, since the restriction doesn't apply to other categories of works. In our view, this limitation based on the date of creation may violate section 15 of the Canadian Charter of Rights and Freedoms.

As I just said, this limitation isn't intentionally or directly discriminatory on the ground of age. However, in our view, it constitutes indirect discrimination. The provision, which appears to be neutral, has a disproportionate adverse effect on a specific group of visual artists as a result of their age, a ground of discrimination prohibited under the law. Over time, the date has become increasingly arbitrary and has further isolated older artists.

We understand that, at the time, the application of the right for works created before the date minimized the financial impact on museums and galleries. However, 30 years later, this argument is no longer valid. It must become standard practice to pay exhibition royalties, regardless of the date of creation of the works and, indirectly, the age of the artists who created them.

Here are some facts. Visual artists are fairly old in comparison with the general public. We conducted a brief study of our members. We established that the average age of our members is 59, and that over one third of them were born before 1965 and likely created works before June 1988. As a result, a significant percentage of visual artists are deprived of royalties for their older works, whereas younger artists who created their works before this date can claim exhibition royalties.

Older artists can still try to negotiate exhibition royalties for their works. However, more often than not, they won't be successful, given the lack of a legal basis. It should be noted that some promoters pay the royalties voluntarily.

You can easily imagine the inherently unfair situation where, in the same exhibition, some artists would receive exhibition royalties and others wouldn't receive them. In reality, only the older artists would be part of the unpaid group. It's nonsense and simply unacceptable.

Recently, Karl Beveridge a well-known artist based in Toronto, told me that one of his exhibitions, Photography in Canada: 1960-2000, was displayed in various museums. Some museums paid him exhibition royalties and others did not, since his works were created before 1988. It's nonsense.

The second topic is the issue of fair dealing. The Copyright Act, as written before 2012, already gave access to all artistic, literary and musical works in schools and universities, often through collective licences established with collective societies representing artistic creators.

Educational organizations and institutions were therefore already able to provide simple and affordable access to copyrighted works. The concept is very vague, but its scope is extremely broad. The exception for education under section 29 of the Copyright Act has led to serious consequences since 2012. Various users have applied a very liberal interpretation of the exception to avoid paying copyright royalties.

In short, this exception has had two main effects. First, certain users haven't renewed their licences with collectives societies. In addition, the payment of royalties under the agreements has dropped significantly, since the balance of power is now altered and strongly favours users.

A number of educational institutions responded quite radically to the exception by quickly implementing their own guidelines on fair dealing following the adoption of the 2012 amendments.

For example, Université Laval has not renewed its collective licences with collective societies and has drafted its own policy on the use of the works of others. The university defined the concept of fair dealing by allowing up to 10% of a protected work to be reproduced without the need to seek permission from the owner. This has altered the balance of power and upset the balance between other educational institutions and copyright collective societies, which have been forced to negotiate lower copyright royalties.

As you know, it wasn't until Copibec filed a class action that Université Laval agreed to suspend its policy and sign a licence retroactive to the date of the class action's institution. In our view, this situation and the various cases involving Access Copyright and different users such as York University and the departments of education in several Canadian provinces clearly show the need to review and better frame the concept of fair dealing, particularly in an educational context.

Here are some facts. During the previous review of the act in 2012, some people, including the representative of the Council of Ministers of Education of Canada, stated that adding the education component to the exception would not affect the income of copyright holders. On the contrary, what we feared has come true. The copyright royalties received by creators are plummeting and the commercial uses adopted by users are worrying, to say the least.

As mentioned earlier, this exception for educational use has been a source of legal dispute between collective societies on one side and governments and universities on the other side. For example, in 2016, the Federal Court heard the case involving Access Copyright and York University. The university had filed a counterclaim seeking a declaration stating that its use of reproductions of works was fair under section 29 of the act.

However, according to the Federal Court decision written by Justice Phelan, York University's own guidelines on fair dealing were unfair, whether it—

[The Chair, Liberal, Dan Ruimy]

It's a bit too long.

[Bernard Guérin]

At this time, I'll simply refer you to the various criteria indicated in the Australian legislation, in the CCH Canadian Ltd. case, for a better definition of the concept of fair dealing.

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to start our questions.

Mr. Longfield, you have seven minutes.

[Lloyd Longfield, Liberal, Guelph, ON]

Thanks, Mr. Chair.

We've gotten some conflicting testimony that I want to dive into a bit because we're trying to inform ourselves on the best route forward.

I want to start with Mr. London.

When we were talking about the artist's resale right, you were saying that it's really a utopian thing, yet it is used in France, the U.K. and Australia. I'm not sure how long it's been in place there. Do you have a history, or do you know how it works in some countries? Why wouldn't it work in Canada? What's the difference between Canada and the other countries?

[Mark London]

It's interesting. Canada is often compared to Australia because of our population size and also the large number of indigenous artists, etc. In Australia, I think the ARR was enacted in 2010. This is just off the top of my head, but in 2007, the national figures for indigenous art at auction were $28 million Australian. It was enacted in 2010, and in 2010, the figures for indigenous art at auction fell to $10 million. A year or so later, they were down to $8 million. That's the effect that it had on the market. I think there were something like 6,801 ARR payments, 6,500 of which were under $500.

In other words, the lion's share of the money went to a very small group—200 to 300 payments. Everything else—6,500 payments—averaged $500 or less.

Coming back to the costs of administration versus the net benefit to individual artists, it seems to be very heavily skewed towards administration and not that much to actual benefit.

[Lloyd Longfield, Liberal, Guelph, ON]

It seems to me that this is a business challenge, how to reduce that—and I'll get to the radio in a minute. There are ways of reducing administration through automation or through processing or the way things are handled, such as by electronic payments. It seems like a business challenge to reduce administration in order to shift the revenue to the artists, where it should be sitting.

[Mark London]

That's right, although in most of the countries with an ARR, the people who are actually in charge.... In other words, if someone brings a piece into my gallery to sell on a consignment basis, such as someone who has a copy of Kenojuak's The Enchanted Owl, I would get a relatively small commission, because they have something very important, so they're going to be in a position to negotiate a very small selling commission, but I would get nothing to administer the ARR on my end.

In other words, the gallery gets nothing to administer the costs of giving an ARR payment over to a collective. The collective gets to charge a fee, not the gallery.

[Lloyd Longfield, Liberal, Guelph, ON]

That's another piece, then: the lack of power that an artist has in negotiation. Unless they're very successful, they're in a very weak position. I'm thinking of The Enchanted Owl. I'm thinking how unfair that is.

[Mark London]

The problem with The Enchanted Owl is that it's a great sound bite. The fact is.... Well, actually, because—

[Lloyd Longfield, Liberal, Guelph, ON]

I'm sorry I'm interrupting, but I want to flip over, because I'm more than halfway through my time. I'm watching the chair.

On The Enchanted Owl, if I could pivot over to Joshua, I have it on a postage stamp. It's a very famous work of art in Canada. How could the negotiating of commissions or royalties have been done differently?

[Joshua Vettivelu]

Just to be super clear about what we're specifically talking about as the artist's resale right, it is something that applies to artwork that is publicly sold on the secondary market, and it would only be applied for a minimum sale price of $1,000.

Your question is how that could happen. When I was talking about the city being plastered and seeing images of The Enchanted Owl, that was dealing with a different issue involving artist reproductions. What we're essentially dealing with is a system that will knowingly charge $24 for an artist's work with the understanding that they have the system to magically make that into more money. But there's no system for that to come back to the artist, and this has an intense effect for communities that don't have money.

[Lloyd Longfield, Liberal, Guelph, ON]

If we're not getting all the testimony out, you can always submit it to us, but I want to get back to radio. I've been in the Guelph radio station. They have upgraded their soundboards now, or their play boards, so that they have the digital tracing of anything that's played on the radio.

Is that something you're also using? Is it widely used in administering payments to musicians?

[Debra McLaughlin]

Yes, it is for English. The challenge becomes having local, relevant, third-language programming. We can easily buy it from overseas and we can get a sense of the artists who are being played, but we actually have people creating music in Canada in third languages, and they're not registered with anyone. We get a list from our Chinese producers that is in Chinese script. We get the same from our Arabic producers. We then have to translate. English is not their strength.

[Lloyd Longfield, Liberal, Guelph, ON]

It's a high cost. I can see that.

[Debra McLaughlin]

It's a high cost.

[Lloyd Longfield, Liberal, Guelph, ON]

What about the radio royalty exemption we talked about in previous testimony? Small radio stations get protection on the first $1.25 million. Do you fall within that category? Do you get protections, or is that not applicable?