Mr. Speaker, I rise in support of the amendments by the member from the Liberal Party who just spoke.
Our critic will elaborate a little more extensively on the one difference I would like to make which is that the exemption should be more than just 60 days. If radio is as important as the member has said, if radio does as much as it does in that riding of hers and allows the finance minister to spread his words of wisdom and myth in that community, then certainly the hon. member would want more than a 60 day exemption and the member would appreciate a six month exemption which our critic has recommended. I think that is about the only difference on this particular amendment that we would have.
There are a couple of other things I would like to say on this whole issue of broadcasting and radio. What the member failed to say in her speech is that radio is already paying rights to play the music, the rights to record and to delay broadcast and so on and it pays a hefty fee. I have had representations from radio stations in Calgary but obviously SOCAN is charging the music composers and now it wants to extend this and pay royalties to the performers and the record producers. I have a problem with this.
What the radio stations really do is in the process of paying for their right to play the music and to play the artist's production they are promoting the very artists who then are trying to increase, like a tax on the radio stations which makes it very difficult for radio stations to survive. It is not that lucrative, as some may think, and to raise their prices and to raise their costs to promote the very artists who now want more money from them is a problem.
The problem is if we look at performers, they get paid, they get money. The good ones go on to make big money. Record producers charge a hefty fee to get into that studio, to get into an area where they can put an artist on a CD, on a single or on an album. These people get paid for their services and they get paid handsomely for their services. Yet it is the radio stations that promote these artists and now these artists thank them very much by saying "we want to tax you more". This government is going to comply and go along with that. I do not think that is right. It is unacceptable.
The other thing this brings up is the possible conflict with our neighbour the United States. As we all know, Canadian radio stations do not just play Canadian artists. Canadian radio stations also play U.S artists. By making radio stations pay extra for the Canadian talent is going to put them at a disadvantage to their American counterparts who will not have this extra fee imposed on them. They have an association similar to Canada, similar to SOCAN, and they are not doing that.
It is also possible that we might be contravening some of the agreements and rules within the North American Free Trade Agreement with respect to the use of these extra funds by groups like SOCAN and where does that money go and are we then giving a special advantage or favour to the Canadian artists.
SOCAN, the collective which is apparently in charge of collecting the 3.2 per cent royalties from Canadian broadcasters, has an overhead of $19 million annually. This poses a reasonable question. How much of this additional levy imposed on Canadian broadcasters is going to end up in the hands of Canadians artists? The projected annual revenue of neighbouring rights is in the $12 million to $14 million range.
Another reasonable question is where is this additional levy imposed on Canadian broadcasters going to go. The artists tabled a report showing an administrative cost of collecting the neighbouring rights of $1.6 million to $1.8 million annually. This is not credible given the overhead of SOCAN performing a comparable function.
When this legislation was introduced in the spring of 1996 following consultations between the government and the industry a compromise had been reached whereby all radio stations with revenues under $1.25 million would be assessed an annual fee of $100. The neighbouring rights percentage would be applied per station on all revenues in excess of $1.2 million. These were to be phased in over a five year period.
The committee recommendations were that the bill required that a $100 basic royalty be applied to those stations with ad revenues under $1.25 million. Full royalty tariffs would apply to stations with ad revenues above that threshold. However, those stations above $1.25 million ad revenues originally were going to be granted a five year phase in.
These amendments have reduced that phase in period to three years. Sixty-five per cent of the radio stations come under $1.25 million ad revenue.
This reduction from five years to three years is in direct response to demands by artists and pressure from the Bloc Quebecois during committee hearings. Again, we feel the Liberals and the Bloc have worked to the advantage of a small group of Quebec artists at the expense of the users.
The heritage minister did not include ephemeral exemptions in the original legislation and now she is forced to further jeopardize
the industry's compromise in an attempt to get the co-operation of artists, composers and performers.
With respect to the aspects of this amendment, which we are supporting, I want to point out that in all cases what this bill is doing is trying to ensure that certain people get paid for their creativity.
The system we have now has been designed in such a way that the industry itself is supposed to take care of those people who create the product.
The industry itself should be ensuring, through the collection of the SOCAN fees on radio, on television, in entertainment theatres, et cetera, every place where their product is being played, that money gets to the artists.
The artists have, in conjunction with complaining all along, said that they do not get enough of the action from an album, that they do not get enough fees when they perform somewhere, that their agent takes away too much commission, that record producers charge too much, that the money is not distributed fairly, that there are too many layers of administrative red tape just like government. Then what have they done?
What we have to be careful of in this House is that we do not give in to their representations totally and willy-nilly without recognizing that the industry has a responsibility to these artists as well, not just government, not just the Copyright Act.
If these artists come to parliamentarians like us and say they are not getting enough money, and record producers and performers say they are not getting enough money, it is not the Copyright Act that is supposed to ensure that they get enough money. The Copyright Act already guarantees them that they get something for the creative product they have produced.
It is the industry itself that has a responsibility. Members should look into what publishing companies charge for their piece of the action when somebody composes a piece of music.
What do agents get when they represent certain entertainers, certain performers and certain Canadian artists? I know some Canadian artists. I used to book Canadian artists. I know what these people charge. I know what record producers charge to go in and cut an album in their studios.
They are getting paid. If these artists are being taken advantage of, it is not by the government and it is not by the laws of this country. The law in place is good enough to ensure they get paid.
It is the industry itself that should take a look at itself. The artists should be complaining to the industry and the whole layer of bureaucracy on how to get the money to them.
Alanis Morissette apparently has sold 20 million CDs around the world. At $20 each, that represents potentially $400 million. What do members think she gets out of that $400 million? Do the politicians here think she gets 10 per cent? Do politicians here think she has now made $40 million, that she has receivables of $40 million? No. She gets a lot less. She has generated that music. She has generated and made her value worth $400 million on CDs alone.
I will continue. We have some other amendments to continue and debate.