Industry Committee on Nov. 28th, 2018

[Mark Hayes]

The first one is the charitable exemption. You had some submissions by, I believe, SOCAN and perhaps some others regarding limitations to be put onto the charitable exemption. The charitable exemption has been in our act for almost a hundred years. The only major litigation about it was in the 1940s involving Casa Loma and concerts they put on and this kind of thing.

I represent a number of charities that operate under the charitable exemption. The reason they do is not because their charity is registered under the Income Tax Act, but because their charitable charter specifically says they put on musical presentations. That's what they do. The charitable exemption is specifically intended to deal with their activities, yet SOCAN has continued to argue that, no, it doesn't, because of these restrictions, which now they claim are implied and they're asking you to put in.

In my submission, there are all sorts of things: musical programs, symphonies, church and school groups. They're all going to be very seriously hindered if that change is made.

My friend, Bob Tarantino, came before you and talked about reversion of copyright and suggested taking out the reversion provision. I know Bob well—

[Majid Jowhari, Liberal, Richmond Hill, ON]

Quickly go through the other two, because you've only got about—

[Mark Hayes]

He just says you should take reversion of copyright out. I don't see any reason. The only reason he really gives is the uncertainty. The uncertainty comes about because of the life of the author. The life of the author is uncertainty about term. It also makes the uncertainty about reversion rights. You're not going to get away from that.

I think it's a widows and orphans provision. It's for those authors and artists who didn't get the money they deserved, mainly because of bad contracts, or they weren't recognized in time. After they die there's a chance for their widows and children to be able to take the copyright back after a period of time. If there's still value, they can earn it. I don't think anybody has pointed out any real reason why that shouldn't happen.

By the way, there is a tiny proportion of copyright works that actually have any value by the time the reversion right comes up. It's actually done in a tiny number of situations.

The last one is about the definition of sound recording. I'm not really going to get into it. I went to the Supreme Court on it. We won at every single level. It's clear what the statute was intended to do. There's a business reason for it. I invite you to go back and look what the Supreme Court of Canada and everybody else said about it. There's absolutely no reason to change the provision except for the fact that the sound recording owners—in other words, the record companies—would like to get some more money.

[Majid Jowhari, Liberal, Richmond Hill, ON]

I'll turn it over to Mr. Lametti.

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

Thank you.

Mr. Hayes, we've heard a number of different ideas on machine learning or data mining exception, ranging from...to your point on incidental reproductions.

Do you think that your idea catches the use of a particular pool of data in order to draw out the numbers and do some sort of analysis?

[Mark Hayes]

Yes, I think it does. You have to remember that what is being asked for is not the right to be able to use every piece of copyright information or data or whatever. I think all of the submissions have made it clear. They're only talking about legally acquired copyright material. They've gone and bought or licensed a copy of the books, the magazines, the movies or whatever.

You're trying to get away from the copyright owner saying that the machine reading the book, listening to the movie, watching the television show, looking at the photographs—which they have to do by making an incidental reproduction because there's no other way for a machine to learn those things—is a copyright event, and that they should be paid more, in addition to the original purchase price or license price for the copyright work.

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

My concern is in the use and the transformation in running the data through. That there might be a claim that the use of it, not necessarily the copy of it, would fall under the ambit of the rights holder.

[Mark Hayes]

It doesn't seem to. Remember that copyright is a bundle of rights. In order for there to be a copyright event, you have to have done one of the rights. My reading a book is not a copyright event. Absent the reproduction part, there should be no reason why a machine reading a book is a copyright event as well.

[The Chair, Liberal, Dan Ruimy]

The time is up.

Mr. Albas, you have five minutes.

[Dan Albas]

Mr. Hayes, I'm going back to the charitable exemption.

Say you have a major festival that's charging big dollars for people to come in to hear a musician who may be using someone else's work. That's then surrounded with an exemption that it's for charitable purposes. I don't know about you, but at least where I come from, charitable purposes are about feeding people—either their minds or their stomachs. When people are utilizing large amounts of money, in some cases.... Some of these festivals might be paying someone $100,000 to come in and put on these productions.

[Mark Hayes]

That can happen, but it's relatively rare. In most cases, for these kinds of charitable things, a lot of the performers are contributing their services as well. Yes, it's true that there are costs.

[Dan Albas]

What's the proportionality, though, where there should be some sort of formal test? Someone just can't say they're doing this for charitable purposes.

[Mark Hayes]

There is a formal test.

[Dan Albas]

When there's no one other than the people who are attending that pay for the tickets...?

[Mark Hayes]

That's what I'm saying. There is a formal test. The test came out of the Supreme Court of Canada case dealing the Kiwanis Club and the Casa Loma. The Kiwanis Club lost and had to pay royalties because their charitable charter said nothing about putting on concerts.

[Dan Albas]

Yes.

[Mark Hayes]

That wasn't what they were talking about.

[Dan Albas]

Isn't it our job, though, to look and see what kinds of behaviours are appropriate and what are not and then to set the law? The court may have at least captured it within the context of that particular case, but I do just want to push back and say that not all charitable purposes are equal. Not all festivals are equal. There's a large difference.

I would hope you would agree with that.

[Mark Hayes]

I think this is a hard thing to capture. Look at some of the charitable organizations like the Royal Conservatory of Music. If you look at what they do, between the educational aspect and the presentation aspects and so on, it is absolutely impossible that they aren't serving, not only a charitable purpose but an important purpose in society and in the community.

That should be supported. I can tell you that if they were paying the same amounts as commercial producers, they would not be able to provide all that they do.

[Dan Albas]

If someone is running something similar to a commercial enterprise, there should be some questioning of whether or not it has a charitable purpose.

I thank you for your comments on it.

Professor de Beer, going back to a problem with contracts versus a problem with copyright, you've clearly said that a lot of this is on the contracts. As you said, every time there's this five-year review, everyone says we have a problem here because we don't like the common denominator or the contracts we've signed. What can we do to address this problem, or do we simply say if people make a bad contract, they have to live within those contracts?

[Prof. Jeremy de Beer]

The law of contracts provides one outlet if contracts are unconscionable. We can do more on a policy level to support artists and authors in their negotiations with record labels and publishers, but that's not through copyright. That's activities the Department of Canadian Heritage can do outside the copyright regime. We don't need legislative reform to do that. One of the best things we can do—and I've written about this—is to create a certification scheme. Someone's picked up on this idea and created fair trade music so consumers can make informed decisions. Where artists are fairly compensated, consumers can patronize those businesses that are certified to be compensating authors and creators fairly.

There are lots of examples of what we can do, but it's not a copyright problem.

[Dan Albas]

That's fair enough.

Again, we're discussing Crown copyright. I don't see this as being as big an issue, whether it be the Parliament of Canada or the Government of Canada. From what I've seen from some of the briefs we've had is that it seems to be certain courts—not all are the same—and their reporting functions, and some provinces. For example, if a company is trying to set up chatbots, whether federal or provincial, to talk about what labour law obligations someone might have, where you might talk to an AI, you insert the problem and receive an answer.... There are so many regulations now. If someone tries to draw in provincial law or provincial court cases and either can't obtain that information or is sued by the Crown, and it's a reserve power of the Crown, that would be an issue.

How do we get past this? Many different entities may take a different approach.

[Prof. Jeremy de Beer]

I would like to see us abolish Crown copyright. In light of what I said earlier about not giving everybody their ask and giving everybody what they want, I'm not asking you to do that.

I would note that a Supreme Court of Canada case is coming up. I got news the hearing has just been moved to February; it was supposed to be in January. I'm acting for the University of Ottawa Canadian Internet Policy and Public Interest Clinic, CIPPIC. We're filing our written submissions in that case next month. Some time in the next three to nine months the Supreme Court of Canada will issue a ruling on the interpretation of Crown copyright, and depending on what they say, it could either solve the problem or exacerbate it. I have to reserve judgment on the Crown copyright issue until we see what the Supreme Court says.

[Dan Albas]

In your opinion, should we continue to consider this, or should we wait for the court case?

[Prof. Jeremy de Beer]

You could abolish it or wait.