Thank you very much, Mr. Chair, and members of the committee, for the opportunity to address you today.
I'm actually here for the Canadian intellectual property council, which is a special council within the Canadian Chamber of Commerce—the national voice of business, representing over 200,000 businesses across Canada.
The CIPC is dedicated to improving the intellectual property rights regime in Canada and has broad-based participation from a variety of industries, including manufacturers, the entertainment industry, information and communications technologies companies, telecommunications and logistics firms, legal professions, retailers, importers and exporters, pharmaceutical and life science companies, and business associations.
The leaders of the CIPC are senior executives from corporations and associations who have a strong understanding of their industries' challenges and recognize the need for the protection of IPR in Canada. The mandate of the council is to promote an improved environment in Canada for businesses interested in innovation and intellectual property, by raising the profile of IPR among key policy-makers in the government and the general public.
I'd like to start by thanking the government for efforts to recognize the link between innovation and intellectual property rights in its intellectual property strategy.
Our counterparts at the Global Innovation Policy Center, GIPC, undertake a systematic evaluation of the strength of the IPR regimes in 45 economies. This year, Canada ranked 18, but the score has improved from previous years. Measures such as digital rights management and the enablement provisions introduced in the last update of the Copyright Act are important tools to help protect the significant investments made by creators in Canada. We would like to see those measures preserved going forward.
I'd also note that we are pleased to see that many of the suggestions put forward by the CIPC regarding changes to the Copyright Board have been reflected in Bill C-86, announced last week.
We believe it's important to have a consistent, timely and predictable board, and one that supports and encourages new and existing businesses operating in Canada's cultural industries, through a more efficient and productive tariff-setting process; through provisions to enact reforms by way of regulation, particularly as it pertains to delays; through the provision to support independently negotiated tariffs; and through the adoption of clear decision-making criteria.
We look forward to seeing these provisions come into force in the spring of 2019.
I'd like to focus the balance of my comments today on two issues: addressing online piracy, and keeping the door open to research and innovation for artificial intelligence.
I'll start with a pervasive problem: the significant threat of online piracy that now includes new forms that were not dominant the last time the Copyright Act was reviewed. This includes the commercial operation of illegal online streaming platforms and set-top boxes preloaded with illegal add-ons that provide users with unauthorized access to entertainment content.
According to the MUSO piracy insight report, Canada is now one of the highest consumers of global web streaming piracy. In fact, this same report finds that Canada has moved up to eighth in the global country rank by piracy visits, totalling 1.88 billion visits to all piracy sites in 2016. That web streaming is now the most popular type of piracy in Canada.
In the Government of Canada's own study on online consumption of copyrighted content that was issued in May 2018, one quarter of all Canadians self-reported as having consumed illegal content online. Sandvine also estimates that 10% of Canadian households use illegal subscription services.
The economic harm caused by online piracy is all too real. According to research by Frontier Economics, the commercial value of digital piracy of film in 2015 alone was estimated at $160 billion worldwide. In Canada, where the film and television industry alone accounted for over 170,000 jobs in 2016 and 2017, and generated $12 billion in GDP for the Canadian economy, the impact of online piracy is significant.
Unfortunately, the current tools available in the Copyright Act are insufficient to deal with these new threats. While there is no single solution to piracy, the Copyright Act should be modernized and leverage tools proven to be effective in helping to reduce online piracy, including those available in Europe.
CIPC encourages the government to enact provisions that expressly allow rights holders to obtain injunctive relief from competent authorities, such as site blocking and de-indexing orders against intermediaries whose services are used to infringe copyright.
Illegal content is accessed through Internet intermediaries, and they are best placed to reduce the harm caused by online piracy. This principle has long been recognized throughout Europe where article 8(3) of the EU copyright directive has provided the foundation for copyright owners to obtain injunctive relief against intermediaries whose services are used by third parties to infringe copyright.
The need for modern and effective tools to help address online piracy has been supported by the broadest range of Canadian stakeholders, including Canada's largest Internet service providers, all of whom have recognized the harm caused by international piracy sites that harm Canada's creative economy.
Even the CRTC has acknowledged the harms caused by piracy in considering the application filed by the FairPlay Canada coalition earlier this year, but ultimately pointed to the current review of the Copyright Act as the appropriate forum to address this pressing issue. Building on precedents that already exist in Canada, the Copyright Act should be amended to expressly allow rights holders to obtain injunctive relief against intermediaries by site blocking and de-indexing orders of infringing sites.
I'll conclude with preserving an opportunity, and I'm going back to data here. Data, and the techniques and technologies employed to collect and analyze it, will allow Canada and the world to solve some of the world's most pressing economic, social and environmental problems. Data is now the engine of economic growth and prosperity. Countries that promote data's availability and use for society's good and economic development will lead the fourth industrial revolution and give their citizens a better quality of life.
Machine-learning frequently necessitates the use of incidental copying of copyrighted works that have been lawfully acquired. Works are used, analyzed for patterns, facts and insights, and those copies are used for data verification. To avoid the risk of blocking this activity, we suggest that any legislation that deals with the applicability of copyright infringement liability rules should examine carefully how these rules apply to all stakeholders in the digital network environment as part of ensuring the overall effectiveness of a copyright protection framework.
Thank you for the opportunity to present to you today.