Industry Committee on Oct. 17th, 2018

[Debra McLaughlin]

We get a reduced rate, but we don't get protections. What is particularly onerous is that, because of the market we sit in, we're actually in a census level, so we are reporting to SOCAN 24-7, 52 weeks a year, on what is well below that level. It's simply where we reside.

[Lloyd Longfield, Liberal, Guelph, ON]

You have the combination of a large market and a small station, which isn't working for you.

[Debra McLaughlin]

That's correct.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Albas. You have seven minutes.

[Dan Albas, Central Okanagan—Similkameen—Nicola, CPC]

Thank you, Mr. Chair.

I want to thank all of our witnesses for their testimony today and for their expertise in helping us do a proper job of reviewing the Copyright Act.

I'm going to start with CARFAC. I know you had some very firm views on the artist's resale end of things. We have data from analysts showing that over the past number of years, the money generated by the visual and applied arts has increased, while the median income of painters, sculptors and other visual artists has decreased.

How would you explain that data? Is it simply that there are so many more artists that the increase in money being generated is just being split by more people?

[April Britski]

There are any number of reasons why that could happen. I missed the beginning of what you had to say. Did you say that there are more people making money, but it's not coming back to artists?

[Dan Albas]

There is more money being generated, but the median income of the artists themselves—particularly painters, sculptors and other visual artists—has decreased. What do you put that down to?

[Joshua Vettivelu]

It's from not valuing artists' labour, very simply. There are a lot of expectations for me, as a young artist, to produce, self-advocate and participate in markets. There is a lot of exploitation, because the attitude is, “If you love what you do, we don't have to pay you as much because you're going to do it anyway, right?”

[Dan Albas]

To be fair, there are new venues for people that enable them to get their works out. I appreciate that it may be one element. I'm sure many others could be pointed out.

I'd like to go over to the Art Dealers Association. In your briefing note, you point out specifically that visual artists “are already well protected for matters of copyright under the existing Act”. I'm not going to read the whole thing. You also say, “For example, while a musician is paid a royalty for each performance or broadcast, an architect is not remunerated on the resale of a home. The resale of a unique artwork is not a transfer of copyright, but a transfer of ownership.”

What are you saying here? Are you saying this is not a copyright issue?

[Mark London]

It's not inherently, no. In other words, part of the value in a work of art is its perceived rarity and also the fact that someone owns it free of any and all encumbrances. The second you attach all sorts of other things to it, it becomes a less attractive thing. Again, the analogy would be why used books and CDs aren't subject to kickbacks every time they're sold.

It's going to be very hard for me to explain, but as I said, for matters of intellectual property and copyright, there are protections in place. In my opinion, the ARR is a lovely concept, but it's very dangerous in real life with respect to the effect it has on the marketplace.

[Dan Albas]

I'll go back to CARFAC. Last Monday, we had a witness here talking about the ARR. I can agree that some might question the idea, and I asked some questions about practicalities. Being able to authenticate that someone's artwork is their own—that it hasn't been purchased by another person and hasn't been stolen—is very important. Could you explain how authentication would be dealt with under a regime like this?

[April Britski]

That's an interesting question. I watched the presentation at home. I thought, oh, that hasn't actually come up in any of the research we have done before. It hasn't shown up as an issue in any of the legislative studies of resale in other countries or other governments. Of course, that doesn't mean it isn't a problem.

I looked into it a bit further. I contacted the collective that managed the resale right in the U.K. They say their approach is to treat a fake the same way they would treat a cancelled sale. If it were determined that an artwork was in fact forged, they would return it to the seller or the art market professional. If the money had already been paid to the artist, they would either inform the artist and their estate that they should take it back or, if they regularly received payments, they would just deduct it from a future payment. That's how they would deal with it.

I thought, well, how big of a problem is this potentially for Canada? We obviously don't have as big a market or likely as many forgeries as they do in other countries.

I came across an article in the National Post. One of the artists who crossed my mind was Norval Morrisseau. It is known that there are quite a number of forgeries of his work out there. As such, while he was alive he set up the Norval Morrisseau Heritage Society. They maintain a database that has works that are known to be his, and in fact in many cases works that are known not to be his.

There are things like that you can check it against. Aside from that, it doesn't mean that things can't come up. The article said that in 2003, $15,500 worth of fake Morrisseau paintings were purchased. This was described as one of Canada's largest art frauds, and it was just $15,500.

[Dan Albas]

I appreciate that intervention. We should be looking to see what the practice of others is.

In the Canadian context, you spoke earlier of exploitation of artists. We know that in certain industries, such as diamonds internationally, there are a lot of concerns about exploitation, in that case so-called blood diamonds, etc. The Canadian experience is that when we take diamonds, we actually authenticate them and enshrine in them that they are authentic. That's to make sure that people are not being exploited, that people know that when they're buying something it's a valid part. It's important to have.

Going back to the art dealers, first of all, if I were to a purchase a piece of art and sell it for quite a large amount, there would be a capital gain on that. I'd already be looking at it with tax planning in mind. However, I also know that some people will try to exploit that.

They've said their proposal would be done through public galleries or auction houses. Would that not push people to try other means, such as selling privately, taking something out of the country altogether or even posting it on international forums where they may make a sale?

[Mark London]

Of course. That's our greatest fear. All they have to do is post it on Kijiji. In other words, they would easily be able to circumvent the traditional dealer or auction house network. In a private sale, no HST, GST or PST is collected. Capital gains may or may not be reported, etc.

In other words, there are many ways to circumvent this without having to go across the border. It's our contention that everyone benefits from a healthy, public.... When auction records are established—in other words, once you raise the ceiling—everyone else is able to stretch out a little more. However, if everything goes under the table, there's a lack of transparency that hurts everyone.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Masse. You have seven minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you for being here today.

I'm going to continue with exploring the exploitation element a bit. We can measure other exploitation, like the Canada pension board, for example, investing in what I would say are questionable ethical practices to gain returns. There are also campaigns I've led before, for example when our census was outsourced to Lockheed Martin, an arms manufacturing firm that was basically doing our census for a couple of years. It required intervention to stop that.

How do you go about finding the exploitation? Is it basically through media reports? Second of all, if it's not, have there been any international agreements, perhaps even with organizations? I'm not familiar with any of our trade policies that even broach the subject, let alone have enforcement policies.

I'll throw that open in terms of how you actually measure the damage that's being caused.

[Mark London]

It's funny. I personally take umbrage when I hear about exploitation of Inuit art. First, when I buy, I buy outright, so there's no consignment. I buy everything from the Inuit-owned co-operative. In other words, when an artist sells his or her work to the co-op, the co-op of which they are a shareholder sells it to me. They make money off the primary sale to the co-op, and as shareholders, they have a return as well.

Just to come back to Kenojuak's The Enchanted Owl, forgetting the fact that these figures are from the West Baffin Eskimo Co-operative, of which Kenojuak was a member, her earnings in 2016 from royalties for The Enchanted Owl were $28,050. The previous year they were only $13,000. What is also not mentioned is that about 10 years ago the co-op found a proof copy of The Enchanted Owl, which was sold in Toronto at Waddington's for $60,000, and the entire proceeds of the sale were given to Kenojuak.

This is perhaps the worst example of an artist being taken advantage of that I've ever seen. She didn't get $24 for The Enchanted Owl. Over the years it provided a lifetime of revenue, and $60,000 for a resale.

All this is to say that the artists are members of the co-operative. I buy from the co-op. When I'm buying it and reselling it at the gallery, it's at a percentage no different from that for an artist who brings in his or her work off the street and consigns it to me. There isn't any great exploitation that I can see.

[Brian Masse, NDP, Windsor West, ON]

Does anybody else have any comments with regard to this?

[April Britski]

That's not what we're hearing. You hear things in the news all the time, but additionally we have members who tell us that.... I can't tell you how many times I've been to Nunavut and seen artists go from table to table at restaurants saying, “Will you buy my sculpture for cash for $100?” Then they see it in a gallery later on for $5,000—and more and more and more.

Some things don't always get such big prices, for sure. Actually, looking at Kenojuak's auction records, you see that more than half of her works are selling at auction for between $1,000 and $2,000, but there are many of them.

Maybe that isn't the only example, but there are so many more that we hear about on a constant basis—people who are having their work purchased for very little, and then the markup at each level is substantial. It upsets them.

[Brian Masse, NDP, Windsor West, ON]

There's no doubt that if you're part of a co-operative, an organization that also has rules, regulations, and so forth, it's like employment. If you're a person who is relying on an employment agency or a temporary agency, you're far more diminished in your capabilities to exercise your rights as an employee, rather than to walk out the door and not follow what's being requested, as compared with the case of regular workplace safety standards, which we know in Ontario and other parts of Canada still are significant problems. People die on the job every single year in this country and in this province because many of them feel that they don't even have the right to say no, because they have no choice or limited choices in that matter. It's a power relationship issue that we really need to come forward with.

We're running out of time at this committee with regard to the parliamentary process, in my opinion. There has been really good work done, but by the time we get a report tabled to the House of Commons on this and the minister responds to the report—and then, if there are going to be some changes suggested to the legislation, it would require tabling of that legislation—then a process that would lead to the Senate and then royal assent, all before another election, the window is constricting itself at the moment.

What things would you see as recommendations for perhaps even regulatory change that could be done rather quickly, or other alternatives in terms of individual legislation that might advance the interests of what you're here today about?

[April Britski]

It was mentioned earlier that the resale right was discussed the last time the act was reviewed and that the committee was generally supportive of it—including Minister Rodriguez, actually. In the end, it didn't make it into the act, but they recommended to us that we should pursue a private member's bill. We did. Then we had a bill, and it didn't pass before the election. Ever since then, they've been telling us to wait until the review of the act, to wait until then. Well, now we're here.

In the meantime, we've presented to the finance committee, and they recommended that the Copyright Act include the resale rights. It has also been discussed in the Senate. I guess we're just waiting for the moment when this is actually going to be tabled.

[Brian Masse, NDP, Windsor West, ON]

Does anybody else have a comment?

[Bernard Guérin]

Yes, let me add to that, if I may.

If we're talking about very simple modifications that could be done to the law, one is to cancel the limit date for exhibition rights of June 8, 1988, to open up the exhibition rights. It's very simple; it's just to strike out that date limit in paragraph 3(1)(g) of the Copyright Act. That's very simple and straightforward.

The other thing that could be done is to better define the fair dealing provision. It's very simple and straightforward to have those criteria included in the law and to have a mechanism that an obligatory licence should be obtained. When there is education, it's the education exception that is involved. That will give access to the works, but the obligatory licence could be obtained. That is very simple and straightforward legislation, like what is in place in Australia, for example.

[Brian Masse, NDP, Windsor West, ON]

Mr. Chair, this is to our researchers, really quickly.

When we compile this report, it would be helpful for us to perhaps have a table of those items that are being suggested to go into the regulatory box, and then a second one that would go into the legislative box for us.

[The Chair, Liberal, Dan Ruimy]

We'll have boxes.