[Recorded by Electronic Apparatus]
Tuesday, October 29, 1996
.1113 
[Translation]
The Chairman: I call the meeting to order. We will hear witnesses in our consideration of Bill C-32, An Act to amend the Copyright Act.
[English]
I declare open the session to study Bill C-32, an act to amend the Copyright Act.
[Translation]
I apologize to the witnesses.
[English]
I would like to apologize to the witnesses. As you could have seen, another committee worked until just past 11 o'clock, so by the time we changed over, it took a little while. The 15 minutes will be added, of course, to your presentation.
[Translation]
I would like to welcome the members of the Federation of Law Societies of Canada,
[English]
the Federation of Law Societies of Canada. Appearing for them are Mr. Donald M. Little, Mr. Alain Letourneau, Mr. Scott Jolliffe and Ms Susan Elliott.
The floor is yours. Mr. Little, do you want to start?
Mr. Donald Little (President, Federation of Law Societies of Canada): Thank you very much, Mr. Chairperson, and good morning.
My name is Don Little. Seated with me this morning are Susan Elliott, president of the Law Society of Upper Canada, and Alain Letourneau, the federation director, representing
[Translation]
the Barreau du Québec and the Chambre des notaires.
[English]
He is also the chair of the copyright committee of the federation.
Joining me is Scott Jolliffe, our counsel, who is here to provide technical assistance in the questions the committee might have. As well, we have with us Diane Bourque, executive director of the Federation of Law Societies.
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On behalf of the federation and its 13 provincial and territorial member law societies, I wish to thank this committee for affording us the privilege of an appearance today so we have an opportunity to further emphasize and clarify why we believe this committee must act and act now to codify the fundamental right of citizens of this country to access the laws of the land. We ask this committee to do that simply, reasonably and without myriad definitions and exceptions, all the while reasonably balancing the interests of publishers with the interests of the public.
The change we seek for the most part is no change at all, but only clarification of the status quo, a status quo that we say has heretofore not resulted in any imbalances between the public interest and the private interest of publishers, a status quo that many might think of as trite. Many might be surprised that such an obvious right as this requires clarification at all.
It is not my intention to read our brief. It is enough for me to commend its 12 pages to your reading after our appearance today, and at that time I ask you to ask yourselves three questions.
First, on balance, is the proposal we put forward not the better one for the citizens of this country?
Second, is there any plausible reason for deferring to phase three a statutory amendment that simply enshrines the status quo and the rights of all citizens, particularly given that phase two of copyright reform began in 1989 and is still under way?
Finally, whose interests are best served by such a delay? Is it really the public interest?
What we do wish to deal with today is why we're here as a federation and why we believe the amendments sought are appropriate. I will deal with the former and Mr. Letourneau with the latter.
First of all, why are we here? I would suggest to you it is in the interests of those who oppose these amendments to suggest we are here motivated by self-interest. They would have you believe this is about a special exemption for lawyers as a privileged class. While there may be a knee-jerk appeal to that argument, I submit it's neither factual nor logical.
We are here today with letters and other communications of support, including written submissions to this committee from the Consumers' Association of Canada; the Canadian Civil Liberties Association; LEAF, the Women's Legal Education and Action Fund; the Canadian Association of Law Libraries; the Canadian Council of Law Deans; and the Canadian Courthouse Library Management Group, representing chief librarians of the nation's courthouse and law society libraries.
We are here today in part because most of these organizations do not have the financial resources available to them to take on this issue. Those involved in providing legal information are doing the best they can within their limited and often declining means to buy books to stock their shelves and to provide the services they must provide.
We are not here to promote cost savings for lawyers. Make no mistake; lawyers will not be the ones who bear the brunt of this cost. And when I speak of cost, I mean licensing fees. This cost is going to be shouldered by the Canadian public, whether as direct client consumers of legal fees and legal services or as taxpayers called upon to pay what will inevitably be increased costs to government departments, the judiciary, legal aid and others - a cost we say will be in the millions. And to what end? A windfall for publishers in circumstances where there is no compelling justification.
I submit that on the issue of cost, then, lawyers are mere conduits. The claim of lawyer self-interest I suggest is suspect.
Very simply, we are here to represent law societies and, in a sense, to practise what we preach. As lawyers, our codes of conduct say we should encourage public respect for and try to improve the administration of justice. We are, by training, opportunity and experience, in a position to observe the workings and discover the strengths and weaknesses of laws, legal institutions and public authorities. That's why we're here. In a very real sense, we are here to represent the public interest.
Mr. Letourneau.
[Translation]
Mr. Alain Letourneau (Chair, National Copyright Committee, Federation of Law Societies of Canada; Managing Partner, Pépin Letourneau): Mr. Chairman, ladies and gentlemen, I will not be discussing a technical question, which, as is generally the case with copyright, raises a host of definitions, exceptions and exceptions to exceptions. What we are raising here is a question of fundamental law, a question in which the public interest must take precedence over private interests.
.1120
In a way, what is at stake is the protection of democracy by allowing the judiciary unlimited access through charges, licences and permits to the tools that are necessary for it to carry out its duties.
This is not a theoretical question and in fact is currently under litigation, as we point out on page 4 of our brief. It is therefore necessary to consider the question now, particularly since the proposed amendments may seriously affect the current practices of public and private libraries.
The purpose of our proposal is not to amend the law, but rather to codify it, to clarify a recognized state of affairs, a state of affairs imposed by the courts for their proper administration. It is therefore not a proposal that will add charges, but which, quite on the contrary, will prevent charges. In this, we are complying with current trends. We are seeking, pardon the expression, the best quality-price ratio.
The purpose of our proposal is not to crush private sector publishers. The Federation supports the right of commercial publishers to assemble primary sources of law, to format, editorialize and sell these materials, and to do so for a profit. What we submit is that there must nevertheless be a limit to the scope of the commercial exploitation of the law. It must not give publishers the power to restrict fair dealing in the texts of acts, regulations and judicial decisions.
With all due respect for our courts, and also perhaps for our legislators, all these texts of law and judgments do not really have any literary value. There is no literary market for them. They are tools of interpretation. The day they can no longer serve as tools, they will no longer have a market. As a federation, we therefore do not acknowledge that publishers have the same rights as authors or musicians. Publishers obtain the substance of their publications free of charge or at very little cost. Apart from the indexes that they construct, there is no creation on their part.
We therefore propose two amendments to the bill currently under study: first, a fair dealing exception and, second, an exception for libraries.
The fair dealing exception would provide a very simple clarification. Legal reference documents may be copied for the purposes of research, private study or presentation before a court or other public authority. For as long as I have been practising, and please believe that this has not been a brief period of time - I was born in the same year as your Prime Minister Jean Chrétien - it has been customary to submit excerpts of legal documents to the courts as references. This is a universal practice. It is even a requirement of the courts. One must provide copies not only to the courts by also to the adverse parties.
The exception with respect to fair dealing in legal documents of this kind has not only always been taken for granted where I come from, but is also contained in the statutes of a certain number of countries.
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A short time ago, the representatives of the major private sector law publishers cited an excerpt from an Australian statute in their brief. They invoked this act in order to give you an appropriate definition of the word "library" and submitted to you that it was an exemplary statute. I would say to you that we agree that it is an exemplary statute.
It is interesting to note that sections 43 and 104 of this Australian statute that was cited to you contains precisely the exception that we are suggesting. you. If I followed the recommendations of the private law publishers, I would have to leave it to you to verify what I have just said: use your assistants, send them to the library, take out the books, bring the books back to you and check what the Australian statute says, all at great expense.
At the risk of violating a few copyright statutes, the alternative solution is, I believe, to distribute copies of what has been done. You have before you the text of the Australian statute, which states:
[English]
- A fair dealing with a literary, dramatic, musical or artistic work does not constitute an
infringement of the copyright in the work if it is for the purpose of the giving of professional
advice by a legal practitioner or a patent attorney.
While taking it for granted, since we must assume others are in good faith, that the private law publishers were in good faith when they cited the Australian act and that they forgot to point out to you that this act contained the exception that we are seeking, I cannot take it for granted, being in good faith, that they were unable to do an appropriate search because they had no licence, permit or easy access to the statute and that they therefore were unable to submit an objective and fair brief in which they sought justice. I would say to you, as I was taught at school, quod erat demonstrandum, which was what had to be shown. Thank you.
The Chairman: Thank you Mr. Letourneau.
Are you prepared to ask your questions now?
[English]
Mr. Little: Mr. Chairman, I have a few more remarks.
We are also concerned not only at the current absence of provision in the Copyright Act to protect Canadians' access to law, but also at the prospect that this government could act in other ways.
Governments at all levels, as such large users, may be able to negotiate special licensing deals with publishers because of their size. We submit this would be wrong. There is something wrong about a government creating and promulgating laws and then allowing them to be licensed by anyone other than itself. To then enshrine a methodology whereby it provides laws to private interests at little or no cost and in turn negotiates itself a deal better than its citizens, we submit, is wrong.
Government in such a case would be abdicating its public responsibility, and by negotiating a better deal for itself would have chosen to serve itself not its citizens.
As well, if the government were to grant a licence for the reproduction of crown legal materials, we believe that as a condition of any such licence, there should be an explicit prohibition against the charging of royalties on copies of basic legal materials for research, review, study, or submission to courts or other public authorities.
We maintain it would be a serious error for the government - in fact an abdication of public duty - to essentially turn over to the private sector all control over the use of basic legal materials that are essential to the administration of justice.
Though we are in an age where governments everywhere seem to be turning to the private sector to handle a wide range of functions that were previously the preserve of the state, surely there must be limits to this phenomenon. We believe control over the distribution of basic legal materials is one of those areas.
We are all aware of fiscal pressures facing government. Our justice system has also not been spared. Budgets for courts, legal services of the Crown and government legal departments at all levels - federal, provincial, and municipal - have all felt the pinch.
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The viability of legal aid in this country is also threatened due to lack of financial resources. We believe imposition of further costs, such as royalties, on the use on the use of these legal materials across the board cannot be justified, particularly when this additional cost does nothing to contribute anything towards the administration and quality of the judicial system in Canada.
To sum up, we ask this committee to favourably recommend amendments to codify and permit fair dealing in legal resource materials and to do so now as part of phase two of copyright reform. The publishers have suggested that we should study it, that we should fully consider it, that we should do it as part of phase three. On balance - and after all, that's what copyright is all about - whose interests are best served by delay, by leaving the issue unresolved, or by allowing the publishers to set their own licensing terms?
We ask this committee to favourable consider our submission and we recommend action now. We are open to questions, Mr. Chair.
The Chairman: Thank you, Mr. Little.
[Translation]
Mr. Leroux.
Mr. Leroux (Richmond - Wolfe): First, I would like to thank you for the brief that you filed and for the position that you have established in order to help us understand one area of the act. There are a few fundamental points here. You speak of serving the interests of authors and users, but, at the same time, you question the idea of recognizing publishers' copyright. You really question that.
To the best of your knowledge, under legislation elsewhere, in other countries where exceptions have been made, among other things for legislative, judicial and parliamentary proceedings, are royalties paid to licensing bodies in those countries for photocopies or legal documents for academic or other purposes? That is my first question.
I'm going to ask you my three questions. I would like you to tell me whether publishers are entitled under the present act to collect royalties on these documents. I would also like you to tell me whether there are, or have been in the past, publishers that have prevented the reproduction of statutes or other materials which you describe in your brief. I would like to go over these three questions with you.
[English]
Mr. Scott Jolliffe (Federation of Law Societies of Canada): Thank you very much. I will try to answer your question. It embraces the laws of all countries in the world and I don't feel adequate to comment on all countries, but the bulk of my career has been in the intellectual property practice and I have had some exposure. So subject to my inadequacy, let me attempt to answer your question.
First, all countries that I am aware of recognize the doctrine of fair use. Fair use is, as an exception to infringement, the ability to copy a publication for the purpose of research, private study, or review. It is that exception that most Canadians, or at least those involved in the administration of justice, have believed has served to permit the practice that has gone on heretofore. So point number one is that all countries that I am aware of have a fair use doctrine for this type of copying.
Secondly, you have asked whether I am aware of any country that does not recognize this type of exception for legal materials. We've handed out the provision from the Australian Copyright Act, which specifically in the legislation recognizes this as being a fair dealing.
.1135
I am not aware of it being set out specifically in any other foreign legislation, but I am aware of the practice of a number of other countries where, to take the U.S. as an example, royalties are not charged for copying of legal materials in a fair use context. So I think you can probably look at the situation in the United States as being much the way it is in Canada at the moment.
I am not aware of any case, of any judicial decision, that has found that the copying of a judicial decision or a statute published by a publisher, in the context in which we are discussing it, amounts to copyright infringement. In other words, when a member of the public or a librarian, or a lawyer, for that matter, makes a copy for use in connection with legal research or submission to a court, as far as I'm aware there has never been a court to determine that this constitutes copyright infringement.
There is one only jurisdiction that I'm aware of where royalties are collected from lawyers for their copying, and that is the United Kingdom. They have recently embarked on the type of regime where a flat fee, as I understand it, has been negotiated for the purposes of permitting this type of use.
My understanding, though, is that where the use is for fair dealing or for submission to court, then it is not necessary that any royalty be paid. I have been told, although I am not aware of the specifics, that a declaration needs to be signed before one can obtain a copy from a library. On the other hand, I have heard - and again, it's only hearsay - that when a barrister requests a copy, the librarians simply assume that the purpose is for use in court.
Does that answer your question?
[Translation]
Mr. Leroux: Yes. And for the second?
[English]
Mr. Little: You asked two other specific questions.
[Translation]
Mr. Leroux: Just before that, I would like to return to the following point: with regard to the United Kingdom, in the fact you cited, perhaps the publisher was not an author. Perhaps it was not he who held copyright. Is the publisher identified in the United Kingdom, and in what capacity? Is what is collected as a royalty returned to him or to an author? Is the judge who renders the judgment the author or is it the publisher? How do we sort out all that?
[English]
Mr. Jolliffe: I can't answer that. I don't think the legislation has dealt with that specifically. But the fundamental U.K. law as to ownership rights is not dissimilar from Canadian law, as far as I am aware. Under Canadian law, as you know, the author, the person who puts pen to paper, is presumed to be the first owner of the copyright unless that individual is in the employ of someone else.
So a government employee who puts pen to paper to draft legislation might be the author but would not be the owner. The government would obtain the ownership by virtue of the deeming provisions of the act.
A judge is in a different situation. Judge-made law is very important in the issue we are discussing. Judges are the authors of their own decisions. Whether they remain the owner of the copyright is a matter of some debate. Most judges would not take very kindly to any description of them as being a servant of the Crown or the government. In fact, their independence is paramount, and fundamental to their responsibility.
Mr. Little: Mr. Leroux asked two other questions.
First, do we know if publishers are entitled to collect fees? As our brief indicates, the matter is currently subject to litigation. We don't have an ironclad answer, but we do have an opinion. The opinion is no, they're not, but they obviously take a contrary view or it wouldn't be before the courts.
Second, are there publishers who, to our knowledge, have prevented access? I know the major publishers' brief indicated that they don't take objection to the making of copies for submission to courts. The major publishers are not all of the legal publishers. Just because at the moment they don't take objection to that doesn't mean at some future point they won't take objection to that. They maintain that this is their licence to give, change or alter, as they wish.
.1140
Second, I do happen to have in front of me a copy of a document on copyright limitations. It comes from a judicial case report. I don't accept the copyright limitations, but I'll honour them today and not give you a copy of them, just read them to you. They say:
Copies may be made for persons working on the subscriber's premises.
Copying for profit or commercial purposes is prohibited.
I take this to mean that I could not give a copy to a client for them to review themselves.
Second, it says:
Copying by subscribers for persons who work outside the subscriber's premises is prohibited.
I take this to mean I can't give it to a judge, because last time I checked, I had no judges working in my office.
I hope that answers the question.
Mr. Leroux: Merci.
The Chairman: Mr. Abbott.
Mr. Abbott (Kootenay East): Thank you, Mr. Chairman.
This is a very unique presentation among those that have been made to us to this point. In almost all cases we're talking about the rights of the authors or the rights of the performers of a particular work, whereas to a great extent, if I'm correct, this material is basically material that has been assembled by people, put into a format and then used. I understand that's the way it is.
It seems to me that in an ideal world legislation should be based on principle. I have to say that at the outset, the Canadian Civil Liberties Association, which says in part that the copyright legislation should not impede the access of citizens to the laws that govern them...and LEAF, a public interest intervener, litigates on an extremely limited budget and believes this action would drive up the costs. All those kinds of interventions, I have to tell you, I'm somewhat lacking in sympathy toward. We should be talking here, I think, about whether there is a right, and if there is a right, then how that right is protected.
With that as a preface, you state in your brief:
- Commercial law publishers receive their primary legal materials, including judicial decisions
and legislation, from courts and governments at no charge. The editorial additions made to
these `public' materials do not justify royalty payments for their use.
Mr. Jolliffe: Yes, members of the public can obtain decisions from the court at no charge. It would probably mean the cost of obtaining the photocopy, so it would be whatever cost that is. Essentially, however, there's no charge.
To qualify that, a current decision can be obtained only as long as the administration office or registry maintains that particular court file. After that it becomes increasingly more difficult as the file is shipped off the premises. So to obtain a copy of a decision that is a year or two old may not be possible.
Mr. Abbott: How long would it be maintained currently? I know that's very elastic, but approximately.
Mr. Jolliffe: In the registry office, perhaps for a year or two. For off-site storage, I can't answer that.
Mr. Abbott: Okay.
Can law societies, as large users of judicial decisions in legislation, avoid paying royalties also by getting the material from the government at no charge?
Mr. Jolliffe: On the same basis I just mentioned.
Mr. Abbott: I guess what I'm concerned about is, for current works, how would you respond to this? If you take your reasoning to its logical conclusion, there should be no copyright in judicial decisions in legislation; in other words, unless it's compiled from, say, two years post. If this was the case, why would the publishers continue to invest their time?
According to the scenario we uncovered a second ago, would the publishers not be wiser to compile this information into a data bank as some way for you and other people who want to access the information that's, say, two years old and older? What is the incentive for the publishers, if there is no copyright protection, to be gathering the information post-haste?
.1145
Mr. Jolliffe: The incentive is that which has operated for the past 40 years. When they publish this material they package it and sell it at a substantial price, and it is purchased on that basis.
Mr. Abbott: But if they don't have any copyright - in other words, you could theoretically have 10 or 15 copies made of their work.
Mr. Letourneau: Basically, they are creating a tool. That tool is the interpretation of the law, and the law changes every now and then and at a faster pace over the years. As a result, very little old jurisprudence is still around. I won't say there is none. A bunch of it is still applicable, but jurisprudence evolved almost as fast as law, but with a delay. It's always a few years behind. The result is that they're providing us with a tool because there is a request for that tool.
Basically, they're providing the tool at the full price it cost them to see profit on a yearly basis. That I can vouch for in Quebec, because I am the one dealing with the publishers in Quebec, and we have their balance sheet. They are charging what it costs them on a yearly basis. They are not forecasting a profit in the future. They charge what they spend, plus a profit. The following year, part of that jurisprudence is already of no use.
Mr. Abbott: To go back to my original premise of principle, what we've uncovered is that although the basis of the material is relatively free of charge, they are actually providing a service. In other words, they are actually performing a function in the same way an author, composer or performer in sound recordings is actually doing something. This is something that has been created that is of value to the law society. It's not just public information that has been assembled in one place. Is that right?
Mr. Letourneau: It's a service.
Mr. Jolliffe: One for which they charge, on which they make a profit, and which has served Canadian business and society well for many years. But that's not what we're talking about. We're talking about charging more money on the use of that material, additional royalties over and above the cost of selling the original package. We're saying this additional cost will cost this country millions and millions of dollars, and without any justification.
Mr. Abbott: Thank you.
The Chairman: Mr. Bélanger.
[Translation]
Mr. Bélanger (Ottawa - Vanier): If I can restate your remarks, Mr. Letourneau, I believe you essentially said: "As a federation, we do not recognize publishers as having the same copyright as artists and so on." If I understood you correctly, these people do not create literary works. Did I understand correctly?
[English]
In that case you'll have to find another section of the Australian law. This one says the copyright in the literary, dramatic, musical or artistic work is not infringed upon and so forth. How do you reconcile those two?
[Translation]
Mr. Letourneau: Simply by saying that the two are by law mutually exclusive: either they have copyright or they do not. If they do not belong to the group of people who have copyright, then I do not have to concern myself with copyright and they do not have the right to require me to pay. However, if they fall into this class, and this is what they claim, then I am saying that we should have what the Australian statute provides for, that is to say that, before a court of justice, when I use the material, whatever it may be, to assert...
Mr. Bélanger: Literary, dramatic, musical or artistic work: that is what is said here.
Mr. Letourneau: Yes, because, in general, these are texts that are cited.
Mr. Bélanger: I see an inherent contradiction in what we are being told.
The Chairman: One question at a time, please. It's getting confusing. Mr. Bélanger, have you finished?
Mr. Bélanger: Oh, no! I'm just beginning.
[English]
Mr. Little: Mr. Chairperson, I'm always out of order. I can't help it.
What we are looking for at the moment is section 104. You've been provided with a copy, I believe, of section 43. It was our intention to copy section 104, which Mr. -
Mr. Bélanger: I don't have section 104. As far as section 43 is concerned, it doesn't work for me. I want to make that clear.
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Mr. Little: Perhaps what we could do is read section 104.
Mr. Bélanger: That's fine. The one that was referred to was section 43, and that's what I've rebutted.
Mr. Little: Okay. We apologize.
Mr. Bélanger: Next, you've claimed an exception not to pay royalties, copyright, when the material is used for research, private study and presentation in front of whatever official body. What's left?
Mr. Jolliffe: Do you mean what other uses could be made of the materials?
Mr. Bélanger: Yes.
Mr. Jolliffe: They could be published and sold to other lawyers, and a profit made on them. There could be some commercial purpose.
Mr. Bélanger: So selling to other lawyers?
Mr. Jolliffe: Yes, precisely.
Mr. Bélanger: That's what these people are doing.
Mr. Jolliffe: Precisely, and to the extent that copyright exists, it should be respected, because that would not be a fair dealing with -
Mr. Bélanger: You're telling me that the only other use might be selling for a commercial benefit, which is what you want to prohibit them from having in the first place.
Mr. Little: No. For example, one publisher could reproduce another publisher's text and sell it commercially, and if they can do it faster, cheaper or better, they would be able to cut out the work the other publisher did.
Mr. Bélanger: Thank you.
This is a question that was suggested to me, but it's a good question and I'd like an answer. When I pay my lawyer's bills - I had a transaction not long ago and I had to pay for photocopies, much more per copy than the actual cost of making the copy. Was a portion of that going back to the people who created the work copied in the first place?
Mr. Little: No, and you're going to pay more.
Mr. Peric (Cambridge): Why?
Mr. Bélanger: Wait your turn.
Another comment that was made, and I think I understood it properly, was that what these people do does nothing to further the progress of justice in Canada. I heard a comment to that effect. We can go back to the transcript later. If they do nothing to further the value or the promulgation of justice, why would you ask for exceptions when they're asking for royalties? If they do nothing of value, why would you want exceptions?
Mr. Little: With respect, that's not our point. They do provide something of value, and our point is that they are well paid for providing that right now. When they sell me a text or a court report for $120 or $140, they're well paid for that, but what they are now seeking to do in addition to charging $140 for my copy of the text is to multiply across the board, across the nation and across every lawyer's desk, every justice official's desk, every government department's desk, multiple copies of -
Mr. Bélanger: Through a licensing agreement.
Mr. Little: That's right.
Mr. Bélanger: Last question, Mr. Chairman.
You've essentially said that the government, public authority, is lacking in the exercise of its responsibilities by allowing licensing agreements in doing things themselves. Would you suggest that also applies in self-regulating professions, that the federal government is lacking in its responsibility by not regulating professional associations such as the law societies?
Mr. Little: I'm afraid I don't understand the question.
Mr. Bélanger: Others did. Thank you.
The Chairman: Mr. Arseneault.
Mr. Arseneault (Restigouche - Chaleur): Along the lines of what was mentioned with regard to books and using them, do you as lawyers purchase books from professors of law on judgments and whatever? Do you photocopy those books and hand them out to other members of your society without paying royalties?
Mr. Jolliffe: Not to my knowledge. If I could help you with that, learned texts and treatises are written on the law, and those books are read and studied. An excerpt may be copied for the purposes of research or private study, or perhaps for the purposes of submitting it to a judge in court to advance an understanding of what the law is. Those are the circumstances in which copies could be made. If copies are made outside of those circumstances, in my submission that would be improper and would be an infringement of the copyright owned by the author of that text.
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Mr. Arseneault: But if you took an excerpt out of a book without permission and presented it in a court of law, would that be an infringement?
Mr. Jolliffe: No, I think that would be a fair use of that excerpt.
Mr. Arseneault: So even an ordinary book that's copyrighted by a professor, maybe at the University of Ottawa.... Maybe Dr. Mendes publishes a book and you want to quote from it. Maybe you lift a chapter out of that and present it to the judge.
Mr. Jolliffe: Fair dealing depends on the circumstances. If a very large portion of that book is taken, that goes over the line, but if a smaller excerpt is taken for the purpose of submitting a point to a court of law, in my submission that is not an infringement, and I think that requires an understanding of the meaning of our ``fair dealing'' section in the Copyright Act.
Mr. Arseneault: When the law society makes copies, or when people make copies at the law society library or whatever - I'm not a lawyer so I don't know exactly how it works - there's a cost there. Is there also an additional fee, so that you people make a little profit from that?
Mr. Jolliffe: No, the fee is a cost-recovery fee and in fact doesn't account for all of the costs in providing that service.
Mr. Arseneault: Courthouses are a little different. According to the witnesses we had the other day, $600,000 was made on photocopying at the courthouse in Vancouver, and they quoted the Law Society of Upper Canada as making somewhere around 105,000 pages of photocopies.
Mr. Jolliffe: That's correct. I think that information is a little inaccurate, but it's around 100,000 pages that the great library at the Law Society of Upper Canada copies on an annual basis. But let's not confuse dollars and dollars of revenue versus profit. I think it may be misreading those figures to assume that any of that relates to profit.
The one situation I do know about is that of the Law Society of Upper Canada, and that's 100,000 pages. It is not making a profit; there is a cost to that service. I can't answer your question as to British Columbia, but I suspect the $600,000 figure you have is the revenue, not the profit. It must be remembered that there's a substantial cost in providing -
Mr. Arseneault: It is revenue, yes?
Mr. Jolliffe: Right.
Mr. Arseneault: But there must be a profit? They don't do things for nothing. You're saying they're just doing it at cost?
Mr. Jolliffe: Precisely, or even at a loss because it is seen to be an obligation of the law society.
Mr. Arseneault: With regard to your explanation of fair dealing - the promotion of democracy, the promotion of the law, and the benefit of society and consumers - I would think lawyers should be offering their services for free from the way you're requesting services from the legal publishers. The last legal work I had done required in fairly thick documentation. The documentation was accompanied by a bill and each photocopied page was charged for. It was a very expensive charge for one page of photocopying - I think I had 30 or 40 - to back up the opinion of the lawyer. He copied this material and charged me quite a fee per page, and there's no way I could.... I suppose I could have gone to the courthouse library and photocopied that and gotten away with paying 10¢ or 20¢ a page, but it was nowhere near that. How do you explain that? You're requesting free ability to copy articles in books, yet your colleagues are charging high fees whenever they render that service to a client.
Mr. Jolliffe: I beg to differ. I don't think you were charged a royalty for the copying of the judicial decision or the legislation that your lawyer may have used.
Mr Arseneault: I was charged for photocopies.
Mr. Jolliffe: You were charged a cost for the photocopies, yes.
Mr. Arseneault: How many pages?
Mr. Jolliffe: The cost should should be the out-of-pocket cost as opposed to something else.
.1200
Mr. Arseneault: I was also charged for the lawyer to travel to the courthouse and back.
[Translation]
The Chairman: One final, brief question, Mr. Leroux.
Mr. Leroux: In response to the question that my colleague Mr. Bélanger put to you earlier, you said that, in order to discharge its primary responsibility, the government had to see to the public interest. You assumed that the publisher is not necessarily a copyright player and that it would be in the public interest to exempt all that and to let you go into it.
If publishers must be recognized in the act as having a right in respect of the work that they do and for photocopying, don't you think that the role of government is more to send the parties the message that they should get along and negotiate rather than exempt a party from a negotiation that should normally be carried out on the terms you used a moment ago? It must play a public interest role.
We entirely agree on the fundamental principle: the interests of the author and the interests of the user. We all agree that every work should be accessible. If both parties exist, why should the government exempt one from recognition that should be granted to all parties, that is to say why shouldn't it ask the parties to negotiate reasonably?
[English]
Mr. Jolliffe: I suppose that would be one way to ensure the cost of access to the law is maintained at a rate with which the Canadian public, through its representatives, is satisfied; in other words, to force the parties to negotiate something under a government review or control as an assurance that the rate is reasonable.
That is of course premised on the assumption that what is being done in making a copy of an excerpt is an infringement of copyright as opposed to fair dealing. If that's your assumption and if this committee and the government decide this is something that should attract a royalty, I would agree with you that it's better than the situation we have now whereby publishers independently are claiming to charge a royalty of 20¢ a page, $1.50 for a headnote, and those kinds of things. There is no restriction or limit. Once you recognize they have a monopoly and it is being infringed...then what is the cost of law? There would be no limit to it. It would be what they want to charge.
The Chairman: I'll recognize one last brief question from Mr. Abbott and then from Mr. O'Brien. We have to close.
Mr. Abbott: Coming back to the principle, I think we have agreed that there is value added to whatever the raw material is, that this is a service being brought forward. I find myself rejecting the argument that because some of the fees are going to be coming out of the public purse or the people taking advantage of the lawyer's services would have to pay....
Help me to understand why the people performing this service should not be receiving this value. I'm sorry, but I'm missing your point.
Mr. Jolliffe: I'm sorry I haven't made it clearer. At the moment they are receiving the reward for that value in the purchase price for the books. That's the way they have been rewarded, and the publishers are doing very well. I saw some of the questions this committee had for publishers about the financial impact, and it is interesting that they were unable to identify any adverse financial impact.
My short answer is that the system is working very well. They are being rewarded. There is no threat to industry or trade in the publishing industry under the system we have now. What we're talking about is whether an additional royalty should be charged, and to that we say no.
Mr. Abbott: Thank you.
The Chairman: One final question, Mr. O'Brien.
Mr. O'Brien (London - Middlesex): Mr. Chairman, I am wondering whether we can get some specificity around the cost. You talk about an enormous cost to the public, etc., if royalties are paid. Do you have some scope of these costs to share with us?
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Mr. Jolliffe: I can only give you excerpts about what has been demanded over the past couple of years since the litigation started. They're asking for 20¢ a page for every page copied. The bulk of this work is legislation or a judge's decision, and the publisher's added value might be a headnote or page numbering, but the royalty of 20¢ a page would apply throughout the whole copy of the case.
The other figure that has been put forward is $1.50 for the headnote only. That is the short summary at the beginning of the judicial decision.
Those are the two figures that have been requested.
Mr. O'Brien: Have you done the math to anticipate what it would mean for the Canadian public, or is it something that can be estimated?
[Translation]
Mr. Letourneau: With your permission,
[English]
in Quebec I have dealt with that, because I've been involved with it. First, let me give you a few statistics. In Quebec we have slightly in excess of 16,000 lawyers, and the basic firm has 2.1 lawyers. I don't know where the 0.1 fits, but it's the statistic. It's not this year's statistic; it is a statistic from a few years ago. We have very large firms, so if the average is that, it means an awful lot of lawyers are practising by themselves in a corner. Therefore, most lawyers represent the little guy. Large firms represent large outfits.
When you go to court for a divorce, as for a large case you bring jurisprudence for the judge to support every single point you want to make. This is the way it is done. The judge won't believe me just because I say so. He will ask ``Who said that?'' You produce hundreds of pages in a simple case, and you can produce thousands of pages in very large cases. Just multiply that by 20¢, and that goes to the small guy.
You say that we lawyers charge a lot. We don't charge that much to the little guy. Pro bono still exists. A lot of lawyers are working for not much for the little guy. Maybe certain firms are charging very much for photocopies. Most lawyers charge the minimum. It still represents an awful lot of money.
Mr. O'Brien: Thank you.
The Chairman: Mr. Little, Mr. Letourneau, Mr. Jolliffe, and Ms Elliott, thank you very, very much for appearing before us and making your point of view known and clear to us. Thank you.
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[Translation]
We are going to hear the next group of witnesses,
[English]
the American Federation of Musicians of the U.S. and Canada.
[Translation]
They are Mr. Ray Petch, Vice-President from Canada,
[English]
Ms Jill Tonus, counsel,
[Translation]
and Mr. Marc LaFrance, Chairman of the Special Committee on Neighbouring Rights
[English]
and for the Vancouver Musicians Association, AFM Local 145.
Mr. Petch, the floor is yours.
Mr. Ray Petch (Vice-President from Canada, American Federation of Musicians of the United States and Canada): Thank you, Mr. Chairman.
I'm the vice-president from Canada of the American Federation of Musicians of the United States and Canada. We represent 17,000 Canadian professional musicians. I'm accompanied this afternoon by Jill Tonus, AFM Canadian copyright counsel, who will spearhead our presentation today. I'm also accompanied by Mr. Marc LaFrance, who is a studio musician and a member of Local 145 Vancouver.
As you have stated, Marc is the chairman of the special committee formed to consider the bill, the special committee on neighbouring rights, Local 145 Vancouver. They have submitted their own position paper on Bill C-32, but Marc is here today helping us to represent Canadian freelance studio musicians, those musicians who provide musical performances that accompany Canadian recording stars. He will tell you of his first-hand knowledge of the practicalities of the Canadian recording industry from a studio musician's point of view.
We congratulate the government on its recognition of the rights of Canada's performing musicians and their right to compensation. We have some suggestions. We have some recommendations that we suggest will both clarify and enhance the proposed bill.
You have our brief and that of our constituent Local 145 Vancouver, which we the AFM support. Local 145 also supports our brief. We will paint with broad strokes today, because you have the details of our opinions in our briefs. Our presentation will be short so that there will be lots of time for you to ask us questions, which we'll be glad to answer.
I'll now turn it over to Ms Tonus.
Ms Jill Tonus (Counsel, American Federation of Musicians of the United States and Canada): Good morning, Mr. Chairman, and committee members. As mentioned by Mr. Petch, I am legal counsel for the AFM in respect of its copyright matters in Canada. In the brief time we have this morning, I will touch very quickly on the key recommendations in the AFM's brief.
As stated, the AFM is pleased and gratified that the government has taken the initiative to finally recognize in our copyright law the economic needs and, more importantly, the entitlement of performers to share in revenues generated through the use of their performances on recordings.
A performer's contribution to a recording is a cornerstone to its success, along with the talent of the composer of the musical piece and the ability of the producer to capture that performance in a superb recorded format. These three elements - the musical piece, the performer, and the recording media - are essential to create the end product that the user enjoys and is enriched by.
Yet in our copyright law only the performer has not been recognized or compensated for his or her contribution to a recording. As you will hear from Mr. LaFrance, this lack of recognition has contributed to a market reality where recording artists often see little or no gain from the recording's exploitation. Also, because Canada has no performance rights for the performer in its statute, Canadian musicians cannot claim the benefit of foreign royalties generated from the use of their recordings in Rome Convention countries.
Therefore, many musicians in Canada simply do not enjoy a decent standard of living, despite their contribution to a highly marketable and sought-after product. For this reason, the AFM believes that the effective introduction of performers' rights into Canada's Copyright Act is vital to bettering the Canadian musician's standard of living, as well as being long overdue, given that performing rights regimes exist in at least 51 other countries.
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That is also the reason the AFM in its brief has centred on three points: (a) protection under the legislation for the performer's share of any remuneration paid in respect of recordings; (b) the deletion of certain sections of the bill that would diminish the Copyright Board's role in setting appropriate payments for public performance rights in proposed section 19 of the bill and the blank audiotape levy in part VIII; and (c) the use of a common collective to effectively, fairly, and cost efficiently administer these rights. AFM also raised a number of other points, which I may touch on if time permits.
Turning first to protecting the performer's share of revenues, AFM has recommended that because of the industry norms between performers and record producers - and this will be elaborated on by Mr. LaFrance - certain minimum revenues be set out in the bill, which, regardless of any assignment of rights, will be paid directly to performers. Proposed section 19 already touches on this idea by mandating that performers ``shall receive'' 50% of the public performance right royalties set by the Copyright Board. AFM suggests that this 50% be a minimum.
AFM also proposes that performers be granted a similar statutory minimum of one-third of the revenues generated from the blank tape levy, which is shared by performers, producers, and composers, in respect of the copying of recordings for private use.
To shore up these minimums, AFM also believes proposed section 25 or proposed section 13 should be amended to state that regardless of the fact that performers' economic rights are assignable, any such assignment should be restricted by a provision that the performer retains an inalienable, non-waivable right to receive equitable remuneration from any exercise of his or her economic rights. Such a retained right would ensure that the performer can effectively control and receive a decent return from the exploitation of all of his or her rights, including those that are not subject to compulsory licensing through the Copyright Board, such as the rental rights for recordings.
AFM also believes the new legislation should expressly permit a performer or a collective, on his or her behalf, to request that the Copyright Board set the amount of remuneration in the event that a performer and another party cannot agree on such an amount.
The above approach, we believe, would encourage and permit collective licensing of performers' rights and also protect the performer's share from wholesale assignment to producers. It would also minimize the disruption these new rights will cause and lower transaction costs for all parties. For this reason, AFM supports and has participated in, and will continue to participate in, discussions with the major recording industry representatives about setting up one collective, which would be jointly administered and would fairly distribute the proceeds of the new performer's and producer's royalty. AFM is optimistic that an arrangement can be successfully negotiated, and it hopes it will assist in AFM's goal of maximizing returns on the rights while still making recordings readily available to users.
However, if such an arrangement is not attainable or if the performer is not provided with the above-noted legislative protections, AFM would endorse a position that the performer's rights be inalienable and non-waivable although descendible to the performer's heirs and perhaps, as ACTRA suggested in its submission, the only assignment could be to an appropriate rights collective.
I turn now to AFM's second major point, which is ensuring that proposed section 19 and part VIII royalties are set at a sufficiently high level by the Copyright Board to result in significant and not just nominal payments. As the committee is aware, the AFM in its brief has proposed that several proposed sections of the bill, which establish relevant criteria for determining the public performance royalty or the blank tape levy or set a preferential rate for small broadcasters or provide for a five-year phase-in for broadcasters, be deleted.
As time is short this morning, we will not specifically review the proposed sections, but generally speaking, it is AFM's view that the appropriateness of any of these exemptions or restrictions be decided by the Copyright Board after its review of current evidence presented by all affected parties at hearings. As stated in our brief, this was the approach largely adopted when the new retransmission right was introduced into Canadian law, and in our respectful view, it is just as appropriate for the new rights set out for performers in Bill C-32.
The Copyright Board, being an experienced arbitrator of copyright rights, which is mandated to spend its time examining many of these complex issues in detail, is the entity best able to set fair rates. Accordingly, it should not be unduly fettered by legislation before it conducts its own review of what may be relevant criteria and exceptions based on economic evidence before it.
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For example, it can be seen by submissions for a brief filed by the Canadian Association of Broadcasters and by the Canadian Recording Industry Association that the projected impact on the broadcasting industry of these proposed section 19 rights can vary greatly depending on the economic model used. Only if such varying evidence is presented and tested before the Copyright Board, which will have the advantage of hearing witnesses who are subject to cross-examination, can a true level of equitable remuneration be determined that fairly balances the rights of performers, producers, and broadcasters.
Certainly in AFM's view, as Bill C-32 presently stands the $100 flat fee for small broadcasters with revenues of $1.25 million or less will not generate more than de minimis amounts, meaning that the cost of establishing a performers collective may very well outweigh the return for many years.
Furthermore, if the bill generates only nominal amounts, other Rome Convention countries will not be motivated to collect their own higher levels for Canadians when Canadian recordings are used abroad.
Therefore, for the average working musician the broadcasting royalties as presently structured in the bill won't improve their lot much.
In closing, I will just reiterate briefly a few other points AFM has raised.
First, the creation of these new rights must lead to the payment of new royalties and not result in other rights holders, such as composers, losing any share of their long-established revenues to fund these new rights. That being said, however, the AFM does not endorse any view that performers' rights, whether expressed as a full copyright or as a remunerative right, are secondary or subordinate to those of traditional authors under the act. Therefore, the non-derogation clause in proposed section 90 should be reviewed to ensure that no such meaning can be construed from its language.
Second, AFM believes the bill must be just a stepping-stone to further reform bills; therefore, it endorses the inclusion of the mandatory review provision within five years. This should in fact be a maximum timeframe, since continued review and revision of the act should be an immediate and ongoing process in order that the effects of new technologies and shifting global markets on creators and performers can be addressed promptly.
It appears trite now to saw that information-based industries are going to continue to play a significant and growing role in the world's economy in the next century. Canada cannot afford to fall behind in providing, through its intellectual property laws, a strong and malleable base on which these industries and the artists who contribute significantly to them can depend.
For example, the value of a levy on a blank audiotape may diminish rapidly if, as anticipated, there is a shift to newer technologies by which recordings can be copied for private use. The bill must be responsive to these rapid changes in the marketplace here and abroad by ensuring that performers receive appropriate compensation from use of their performances by such new technologies.
Finally, for the sake of clarity of interpretation, AFM recommends that the definition of sound recording be more refined as to what recordings are excluded and that a flexible and all-encompassing definition of a performer be added.
Thank you for your time and attention this morning. I'll now refer you to Mr. LaFrance for his comments.
Mr. Marc LaFrance (American Federation of Musicians of the United States and Canada): I'm from Vancouver. I'm a singer, songwriter, musician. I'm also on the Vancouver Musicians' Association executive board; as mentioned, I'm part of the special committee dealing with Bill C-32. I'm also a director with the Pacific Music Industry Association.
I guess I'm here as the guy in the trenches, so I'd like to point out that I've recorded with a multitude of artists, many of them Canadian bands such as Krokus, the Payola$, Loverboy, Glass Tiger, Alfie Zappacosta, Shari Ulrich, and Chilliwack.
I've also recorded with many international artists such at Motley Crew, Bon Jovi, Cher, Carley Simon, the Cult, and the Scorpions. I'm sure you're all familiar with those acts. In any case, I'm familiar with many different acts. I have probably performed on more than 50 records, and probably the sales numbers would be somewhere in the neighbourhood of 30 million records - records with my name on them - but unfortunately I don't get a percentage and I don't get a performance royalty when they're played on radio.
I feel that people like me will benefit from the bill being passed. I know a lot of people have been pointing to performers such as Bryan Adams and Céline Dion - you know, our big artists. We all know they're making a lot of money now and they probably will make more money, but people like me, who also perform on these records, will finally be able to have a little bit more money to pay our mortgages as well.
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I'd like to take this opportunity to tell you about another reality in the recording industry. I'm sure you've heard by now most performers have already assigned all their rights and their recorded performances to record companies. For them, the financial benefits of Bill C-32 are in no way guaranteed. For them, its passage could be a very hollow victory indeed.
There is growing support for the idea that this unfortunate situation can be and should be fixed by the music industry itself. This is the solution proposed by the Vancouver Musicians Association in its position paper on Bill C-32. This is also the position taken by a group of Canadian recording artists, session musicians and studio singers, called the Artists' Rights Coalition, also named ARC.
ARC is demanding that the collective society, which we feel is the key to this whole process, deal with the new rights and royalties and must follow the following principles, five of which I have here. One, remuneration rights of artists and record companies must be assigned to a collective society. Two, the artist's aggregate share of the royalty can be no less than 50%. Three, both artist and record company share equally in the administration costs. Four, artists' royalties are distributed by cheques issued directly to the artist and to no other party or parties. Five, the board of directors and executive committee contain equal numbers of artists and record companies' representatives.
These principles will ensure that the performers' royalties will not be absorbed by record companies. These principles will ensure the new rights will be administered in a way that guarantees the equal sharing of royalties. These principles will make sure that Bill C-32 translates into cheques in the performers' pockets.
ARC is pressing for Canada's music industry groups to reach an agreement on these principles. At this time, I can inform you that the following positive steps have been taken towards this end.
A meeting has taken place involving representatives of Canada's major performers' associations and record company organizations to discuss industry-wide acceptance of the five principles and both CRIA and CIRPA, who have made presentations here, have written to ARC and to the AFM outlining their support of the five principles.
For further discussion of this problem and proposed solutions, you can refer to the Vancouver Musicians Association paper, pages 23 to 29.
Thank you very much. I tried to be brief.
The Chairman: Thank you. Mr. Petch.
Mr. Petch: Just to sum up, Mr. Chairman, I think, as you can see, our emphasis in the AFM is that compensation to performers must be equitable, must be significant, and must be unsignable.
We believe performers, producers and their respective associations are in basic harmony in their proposals to you. We hope that you will take our collective suggestions and recommendations very seriously when considering amendments to Bill C-32 so that the bill can serve the public, the broadcasters and the producers and performers who need this legislation very badly to protect their professional futures.
Thank you.
The Chairman: Thank you, Mr. Petch.
[Translation]
Mr. Leroux.
Mr. Leroux: The positions seem to us quite clear: we are pleased and think the bill represents one step forward with regard to neighbouring rights. That much is clear. That is clear in your presentation, Mr. LaFrance.
I would like to speak more concretely with you about the bill, using very specific examples. We spoke of clause 19. You refer to the breakdown of royalties on blank cassettes. You raised points concerning clause 82 or clause 83. Do you have the bill with you?
[English]
Ms Tonus: Yes, I do.
[Translation]
Mr. Leroux: So could you indicate to us in a concrete way whether, in your opinion, this clause should be repealed or amended? I would also like us to be able to conduct this exercise with clause 90 because you say that the question of copyright and neighbouring rights should be clarified with respect to this clause.
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I would like you to tell us what kind of wording, in your opinion, would help provide that clarification. But first, I have an initial question regarding your objection to the $1.25 million exemption on small radios stations.
The witnesses that have appeared to date, including ADISQ, have said that we should be thinking in terms of exemptions because there is a potential problem regarding the payment of royalties by radio stations and small radio stations. They would agree to an exemption for a certain number of small radio stations.
They even filed a kind of scale with the committee. Have you examined ADISQ's proposal?
Ms Tonus: No.
Mr. Leroux: It appears that virtually everyone wants to move toward that kind of recognition.
[English]
Ms Tonus: No, I'm sorry, I'm not aware of them.
Mr. Leroux: No. Okay.
Mr. Petch: We're not, sir.
Mr. Leroux: Okay.
[Translation]
They seem to acknowledge, even ADISQ, that some radio stations should have a neighbouring rights exemption, and that seems to be symbolic.
I would like to know whether you have assessed the bill's potential impact on small radio stations that already have financial difficulties. It would have been interesting for you to read the proposal by ADISQ, which recognizes this problem.
Since a number of persons seem to acknowledge that there should be a certain degree of protection, I would like to hear your position on this point.
[English]
Mr. LaFrance: I heard something of l'ADISQ's presentation, but I haven't reviewed it yet. I have heard they made an interesting proposal, but we haven't had a chance to look at it. They presented it last week. Is that correct?
[Translation]
Mr. Leroux: Yes, absolutely.
[English]
Mr. Petch: I have some comments on that area. I have no basic disagreement with different levels depending on the financial ability or the size of the station, but we think that should go before the Copyright Board, because we think the $100 total royalty is ridiculously low. One hundred dollars a year translates to 1.1¢ per hour in royalties for five to ten cuts of music per hour. That's probably 50 to 100 musical units. When you start dividing that, sir, you end up with a musician who, if he had his record played on half of the small stations in the country once a day for the whole year, which is an extraordinary play.... In the first year that musician would get a royalty somewhere in the neighbourhood of $1.25. That wouldn't help; it wouldn't pay the expenses for putting together a rights organization even if payable, in total. It would not change his standard of living at all.
We don't think that's what the bill envisioned. We just suggest that the level is extremely low, and 1.1¢ per hour when there are seven to ten commercials on a radio station during that hour seems like a very small amount to us. We suggest it should go before the Copyright Board so that all sides can be presented.
Mr. LaFrance: Could I also add something? As pointed out by Jill, if Canada's rates are not equitable with other countries, we will be unable to get, let's say, France to be interested in collecting royalties for our performers in their country, because if the rate is so small in Canada, they'll say there's no sense in worrying about collecting royalties in Canada because they don't pay enough money. So we will not be able to collect our royalties in other countries, which is really where the money is going to come from, I believe.
There are 51 other countries. I know just from the records I performed on, which have been played in every country in the world, it would add up to a fair amount of income, I'm sure, for people like me. There are many studio musicians like me in this country making a living playing music. It would help us obviously to develop our lot as well.
[Translation]
Mr. Leroux: Yes, but there are already collectives here that collect copyright royalties for France. This exists in the European countries and here.
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[English]
The Chairman: Ms Tonus, before you answer the question, I noted that in your brief there were something like 13 clauses touched on, 13 recommendations. I hope you won't give us details on the 13 clauses. Please give us just an overview.
Ms Tonus: No, Mr. Chairman. I'd be happy to answer questions on specifics, but I wanted to add the comment that I think the main point was that AFM does not refuse to recognize that small broadcasters may need to be considered, as small cable companies needed to be reconsidered. But it was more that, as in the case of the small cable companies, the rate was not set until the Copyright Board heard from all affected parties, and fairly detailed evidence and cross-examination occurred over several months. AFM's position would be that if there is a need for a preferential rate, or what it should be set at, it should not be enshrined in the legislation at this point and should be subject to change over time by the board.
[Translation]
The Chairman: Mr. Leroux, we'll come back to you later.
[English]
Mr. Abbott.
Mr. Abbott: Ms Tonus, I want to see if I understood the presentation you made a couple of minutes ago. Were you suggesting in your presentation, in regard to retained rights, that the artist would not have the option of releasing the rights; in other words, that the retained rights would for forever and a day be with the artist? Is that what you were suggesting?
Ms Tonus: We were suggesting something along the lines that the right to get an equitable remuneration would be an unwaivable right. It would be retained in the statute so that although ownership could be shifted to a collective or to a producer, the actual payments, there would always be a right to get an equitable amount.
Mr. Abbott: I'm a little confused about something. You are a lawyer.
Ms Tonus: Yes.
Mr. Abbott: I'm not, and so therefore you'll have to help me with some law here. It strikes me, as a non-lawyer, that this interferes with contract law. If I create something and I choose to irrevocably turn over whatever it is to someone else for financial consideration, and the other person says I'll give you $100 for it, but I'll give you $1,000 if you give me the full rights to this, if I understand your proposal you're saying I can't take the $1,000. This would be an interference with my right to freedom to contract with somebody else.
Ms Tonus: It does represent somewhat of a derogation. I think there are other models where this has been used. I think I mentioned in my brief that in regard to the rental right, the European Economic Community in its directive had indicated as a principle that even if the rental right goes to a producer, the performer will retain this equitable right to fair remuneration.
I think AFM's point is that by giving that sort of support in the statute to performers it will help to negotiate and regulate their position in the marketplace, which, as Mr. LaFrance indicated, seems to be that they are often in a situation with recording contracts - and, Mr. LaFrance, you can jump in if I'm overstating it - whereby they have been asked basically to give an across-the-board assignment up front of current rights and future rights and they end up not seeing an appropriate amount of compensation from them.
Mr. Abbott: But if I may suggest, I think that's a problem with enforcement of a contract and I'm really concerned. Because it strikes me that we're having a pretty significant difference of opinion here, we should go on to something else.
We've had people who have been involved in your industry, and I'm thinking of the recording association in particular, who indicated to us that with the number of plays of what are called ``golden oldies'' on AM radio.... In fact, from what I understood from their presentation, it struck me that under neighbouring rights the amount of money that would be realized by current artists would basically be realized on the play of Perry Como and Elvis Presley, not on the play of the repertoire that Mr. LaFrance has talked about.
Does it seem right to you? Do you understand what I'm driving at here?
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Mr. LaFrance: These other people like Perry Como aren't going to get that right.
Mr. Abbott: Well, I'm just wondering if in fact the play of the records.... In other words, I fully recognize the fundamental principle of property rights. Let me state that up front. But it just strikes me that if the radio stations are in fact realizing their revenue by the play of Perry and Elvis as opposed to the play of current artists, are the current artists not therefore simply getting something by neighbouring rights that they may not be entitled to because it isn't their music being played anyway? I'm making the argument on the basis of the information that was given to me by the recording industry.
Mr. LaFrance: I don't quite understand what you're saying. Maybe you could try explaining it to me.
The Chairman: Please explain briefly and concisely, Mr. Abbott, if you can.
Mr. Abbott: Okay, I'll try to be as concise as I can be.
It seems to me that when an artist performs, he or she should be receiving compensation for that performance. However, if the performances are not being played on the radio to a great extent and the radio is in fact being dominated by the golden oldies, why do the current artists have a right to performance?
Mr. LaFrance: I don't know whether that is the case. I guess it depends on what radio station you listen to. I listen to a number of different radio stations and I certainly hear a lot of Alanis Morissette, a lot of Bryan Adams, and a lot of current artists on stations like CFOX and CFMI, which are the major stations in Vancouver. There certainly are golden oldies stations, and maybe Perry Como should be getting a neighbouring right, but we won't get into that right now. I do think a lot of current music is being played in Canada, though - at least the last time I heard anyway.
Mr. Petch: The fact is that the pendulum swings in radio, and it's continually swinging. What is hot today is cold tomorrow. Contemporary rock radio or contemporary country radio is not as prevalent as it was ten years ago, but that will probably swing back. The fact is that this has to start somewhere and with someone, because what you are hearing today will be nostalgia to someone sitting in your chair twenty years from now.
Mr. Abbott: And I won't be able to hear it.
Voices: Oh, oh!
The Chairman: Ms Phinney.
Ms Phinney (Hamilton Mountain): Thank you, Mr. Chairman. I just have one question.
Could the rewording of provisions dealing with the right to remuneration and the division of royalties interfere with the negotiations you were talking about that are going on now between the performers and the recording association, Mr. LaFrance?
Mr. LaFrance: I don't know. You would probably have to ask Jill that question, because I'm not a lawyer.
Obviously, I think the best solution is for the industry to work a deal out within itself, which we are in the process of doing. We just received another letter yesterday, actually, reaffirming CRIA's and CIRPA's position on coming to an agreement. They agree with the way in which the collective should be set up. So I'm definitely in favour of the industry working out an agreement, but that might be Marc LaFrance speaking more than -
Ms Phinney: Maybe Madame Tonus could explain whether even just leaving it as it is would interfere with it or if any changes would interfere with it.
Ms Tonus: In terms of the split, my understanding is that the record industry and the musicians have no problem with the 50-50 split in principle. We're taking the position that, per performance, it should be a minimum, that you can go one way but not the other. So I don't think it would interfere with the way the negotiations have gone to date. Again, though, I don't hold that I've studied every jurisdiction, but my survey has indicated that this 50-50 split is not unusual in European countries.
So to answer your question, I don't believe it would impede it significantly, but I think we felt the other deletions and exceptions were premature.
Ms Phinney: So the way the bill stands now is not going to affect your negotiations, but if we made some changes it might.
Mr. LaFrance: No, I don't think it would affect our position.
Ms Phinney: Okay.
Mr. Petch: The AFM point of view on that is that if it's a reasonable and lawful thing to do, put it in the bill and there will be no need to wait to see what negotiations produce.
Ms Phinney: Thank you.
.1245
[Translation]
The Chairman: Mr. Leroux.
Mr. Leroux: I would like to remind my colleagues that Perry Como will probably have no neighbouring rights. If I understood correctly, so many countries signed the Rome Convention and that is why there are neighbouring rights. I did not understand why Mr. Como was involved, but he's a good singer.
I would like to come to clause 90 because, on page 23 of your brief, you mention the lack of clarify of this clause. You say on pages 23 and 24 of your brief that it should be clarified. You close by saying that, at the very least, section 90 should be clarified to ensure that it is not interpreted in this way because of the inclusion of words such as "prejudiced". I would like to know whether you have any wording to propose for clause 90 or whether you have simply drawn our attention to this matter. Have you thought of something that could make it clearer?
[English]
Ms Tonus: I can't really give you any express language, but I think the concern of the AFM is that it says, ``shall be construed as prejudicing any rights conferred by Part I'', which are the traditional copyright rights given to authors, whether it's some limitation or rewording to indicate that it means it's not going to prejudice the current economic rights that they have under the statute, but not necessarily in any way to be construed more broadly as sort of a two-tiered régime.
[Translation]
Mr. Leroux: This concern was expressed by a number of groups with regard to neighbouring rights, copyright, clarification of fields, and so on. But you don't have any clearer wording to propose to us?
[English]
Ms Tonus: Not today, but I would be happy to pass it on to you.
[Translation]
Mr. Leroux: Perhaps you could propose some.
[English]
Ms Tonus: Right now?
[Translation]
Mr. Leroux: Not now, but you could send the committee wording that clearly states your position.
[English]
Ms Tonus: Sure.
[Translation]
Mr. Leroux: I would invite you to do so.
[English]
Ms Tonus: Absolutely, as soon as possible.
[Translation]
Mr. Leroux: Before Christmas.
[English]
The Chairman: Ms Tonus, could you send it to the clerk of the committee, please?
Ms Tonus: Yes, Mr. Chairman.
[Translation]
The Chairman: Mr. Bélanger.
[English]
Mr. Bélanger: I have a very brief question that follows up on Mr. Abbott's point in a sense. If the right of remuneration cannot be waived, by the same token would you accept that there would be no succession rights or neighbouring rights as well? If they can't be waived to a record company, perhaps they can't be waived to your heirs either.
Ms Tonus: I'm not quite sure I follow your question. I think there is a distinction between their being descendible as part of your estate, which we would support. The heirs should be benefiting from them because that is your legacy that you leave as a performer - your economic rights. That's something quite different from being in a position of assigning them or waiving them in favour of another arm's length organization.
Mr. Bélanger: But he was right in saying that you would favour not recognizing an artist's or a performer's ability to assign that right to a third party while he or she is alive.
Ms Tonus: I think the position was that the assignment can occur preferably to a collective, but that is subject to you as a performer getting an equitable remuneration, as Mr. LaFrance has said. Through things like cross-categorization, the rights are basically nullified.
Mr. Bélanger: I have a great deal of sympathy when you say that we shouldn't, in the law, give criteria to the board in determining these things. Yet here you are putting in a restriction. You're at odds with yourself on that in a way. You're asking for no restrictions on one side, yet you would want the restriction on the other side.
Mr. LaFrance: Could I make a point? I think that if the collective society is set up in the way I have set out - and I'll leave you a copy of our principles - then hopefully we wouldn't have to worry about changing any laws, because a deal would be struck. Jill, however, would be better at answering that on the legal side, because I'm not a lawyer. I don't know, but I just look at it -
Mr. Bélanger: That's a positive in some people's minds.
Voices: Oh, oh!
An hon. member: Don't take that personally, Jill.
.1250
Mr. Petch: It must be understood, Mr. Bélanger, that the reason for this is the paranoia of musicians, generally, who have watched their composer and lyricist friends lose their royalties because the pressure was put on them at the time they recorded, especially when they were young. They went with their band into the studio and somebody said, we'd love to record you if you'll give up this right, this right and this right.
Then 20 years later, those players are sitting in their little cottages somewhere and those songs are still playing on nostalgia radio, and they're not getting a cent. They are saying to us, for gosh's sake, when neighbouring rights come along, make sure the musicians get it and aren't forced into assigning it away.
I'm not criticizing; it's just business.
Mr. Bélanger: I understand.
Mr. Petch: Everyone does what they have to do in business. We just hope the law will support us.
Mr. Bélanger: Paranoia is something politicians understand very well.
Some hon. members: Oh, oh!
Mr. Petch: I understand too.
The Chairman: Mr. Peric.
Mr. Peric: Mr. Chairman, I have a very short one for Mr. LaFrance.
You mentioned before that the cheques should be issued directly to the performers. Could you be a little bit more specific?
Mr. LaFrance: What would happen is you'd have the collective set up similar to the way SOCAN is set up.
Hopefully before the bill is passed there will be an agreement on how the collective will be set up, because that is of very key importance here.
The collective should be set up so you have half record company executives and half artists and musicians. When the royalties are collected from the broadcasters by the new collective, the money would go directly to the collective. The money would not funnel through the record companies.
The cheque would not go directly to the record company and then the record company pay the artist. We want to make sure the cheque is paid to the collective and then the artist's share, which is a minimum of 50%, is written in the name of the artist and sent directly to the artist.
What's happened in many instances is if it goes through the record companies, there could be the possibility of what's called cross-collateralization. A record company spends a bunch of money producing an artist and the royalties start coming in. I don't know if you realize it, but if it costs $500,000 to produce a record, the artist will only get a certain percentage, let's say 6%, and maybe 90% of the retail price.
The artist pays all the bills out of his royalty before he sees a penny. That's why an act in Canada can sell a million records and not make one penny. That's why we would like to see this performance royalty. The money would go to the collective and the cheque would be issued to the record company. Their share would go to the record company name, but the other cheque would go directly to the artist so it can't go through the coffers of the record companies.
Mr. Peric: Do you mean if the record company spends $100,000 for promotion, they collect $100,000 before the artist gets any royalty?
Mr. LaFrance: Exactly. This is why it's of the utmost importance that the collective is set up so the artist gets his share directly from the collective.
Mr. Peric: Thank you.
Mr. Petch: I'd like to add to that, if I may.
I'm sure you watch video television. Most of the videos you see on video television, through cross-collateralization, have been paid for by the musicians who did them.
Mr. LaFrance: It's a unique situation, because the artist in fact ends up paying for everything but owning nothing. But if you become rich and successful like Bryan Adams, it doesn't matter, because everything works out. But that's only 1%, I might add. I'm part of the other 99%.
The Chairman: Before we close, with a name like Marc LaFrance, we would have thought you would have been performing in New France.
[Translation]
Mr. LaFrance: I am a Franco-Manitoban, but I have a little difficulty speaking French because I live in Vancouver. I'll speak French next time.
.1255
[English]
The Chairman: What instrument do you play?
Mr. LaFrance: I sing and I play la batterie and I play a little guitar, but mostly singing - un chanteur.
The Chairman: Well, you will find that Mr. Peric loves singers. He really was lured away by a singer the other day.
Anyway, thank you very much, the three of you, for a very, very clear message. Thank you.
Mr. Petch: Thank you, Mr. Chairman.
.1256
.1259
The Chairman: I call the meeting to order.
[Translation]
We are back in session.
[English]
We are going to hear from the Periodical Writers Association of Canada: Ruth Biderman, executive director; Sandra Bernstein, copyright committee member; and Marian Hebb, the legal counsel. Who wants to lead off? Ms Biderman.
Ms Ruth Biderman (Executive Director, Periodical Writers Association of Canada): Good afternoon. My name is Ruth Biderman and I am the executive director of the Periodical Writers Association of Canada. I'd like to thank you for the opportunity to appear before you today.
The Periodical Writers Association of Canada, or PWAC, was established more than 20 years ago to represent the interests of professional freelance writers in English Canada. We now have about 400 members in 16 chapters from coast to coast. Today we are also speaking with the support of more than 1,300 members of the Writers' Union of Canada, which represents book writers, and the League of Canadian Poets. A letter expressing their support was faxed, I believe, to the committee members yesterday.
.1300
The members of PWAC are self-employed writers who work for Canadian magazines and newspapers, but they are, as we said, freelance self-employed, so they own the copyright to their work and they license the rights to use that work to publishers.
In looking at the impact this legislation will have on Canadian periodical writers, I'd like to address the current context for writers and the vital role that writers play both in our culture and in our economy.
Canadian writers reflect the diversity of our society, telling Canadian stories to Canadians. They play a key role in helping all Canadians to consider and reconsider our national identity. Our government is currently defending Canadian periodicals at the World Trade Organization, recognizing how important it is for Canadian readers to have access to the Canadian points of view that can only be provided by Canadian writers.
Periodical writers are also Canada's ``content providers'' as we enter the global information age. We've discovered this the hard way. Our members' work is being used on the information highway and it has been for some years.
The work of first-rate professional writers will be the key to Canada's ability to compete in the global information industry and will determine whether Canada will increasingly become a net importer or a net exporter of information in the 21st century. In the age of global information technologies, the Canadian economy needs Canadian writers.
Yet this critical sector of our labour force is highly vulnerable. The average member of our association is 45 years old, holds two post-secondary degrees, and has 10 years' experience in the industry. Yet she earns a surprising 17% less than industrial workers and 23% less than the average Canadian with a bachelor's degree and only two years of work experience.
Back in 1979, the revised edition of our handbook for freelance writers, called Words for Sale suggested that a good freelance writer could reasonably expect to earn $500 per week, or $26,000 per year. In 1995, without adjusting for 16 years of inflation, our members earned an almost identical average annual income of $26,500. The earnings of full-time freelancers actually declined 4% from 1993 to 1995. In our recent survey, an overwhelming 90% of our members said that they could not make an adequate living writing only for periodicals. Many are leaving the profession altogether.
In looking for reasons why writers' incomes are stagnant or declining, we may point to the increased concentration of ownership and consolidation in the publishing industry and to the rising use of unpaid ``volunteer'' writers such as consultants who view their writing as promotion.
Another significant factor, though, is that major publishers are making it difficult for freelancers to resell work, because they are demanding the prerogatives of copyright ownership without paying for them. Back in 1979 writers were able to reach that $26,000 a year target only through aggressively reselling their stories to different publications. For example, a freelance writer would sell a story to a local newspaper in Vancouver, and then resell that same story to newspapers in Halifax, Montreal and Toronto. The papers in Halifax, Montreal and Toronto would each pay that writer 50% or even more of the original fee paid by the Vancouver paper. So it was only through reselling stories again and again that a writer could make a decent living.
Clearly, the key to making a living as a freelance writer is copyright. It's the writer's right to control and be paid for each and every use of his or her work. That was true in 1979 and it is more true today.
With the advent of new technologies and the 500-channel universe, the publishing industry and the way we get our information is changing radically. As we advance into the information age, fewer of us will read the daily newspaper that a publisher has assembled for us, and more and more of us will use technology to help us pinpoint exactly the information we're looking for, whether it originates from a source or a publisher down the street, or a source across the country or around the world.
With this development, the right to reuse or republish a work again and again will become more valuable, and will eventually become even more valuable than the right to publish a work for the first time. This will be true in the case of electronic media, in the case of fax-on-demand services, and in the case of conventional photocopying.
I'd now like to turn the floor over to Sandra Bernstein. Sandra is a member of our copyright defence committee and she's also the author of our brief.
Ms Sandra Bernstein (Copyright Committee Member, Periodical Writers Association of Canada): Thank you, Ruth.
PWAC thanks the government for proposing the new statutory damages and a summary procedure, which will make copyright infringement proceedings faster and cheaper. We heartily endorse these new provisions and believe they could be extremely useful tools for our members, who have historically had great difficulties enforcing their copyright. We do, however, have a few technical suggestions, which Ms Hebb will outline in a few minutes.
.1305
On the other hand, PWAC strenuously opposes the single-copy exception for non-fiction works. Our members are extremely upset that they have been singled out among all Canadian creators to have their copyright neutered by the bill. A recent survey by CANCOPY shows that almost 80% of all photocopying of published material in Canadian public libraries is of non-fiction books, newspapers, and magazines, and 55% of the total is likely attributable to freelancers. Using CANCOPY figures, we estimate that after deducting material owned by newspaper publishers, the proposed legislation would deprive Canadian freelancers of royalties from more than 2.3 million photocopies made annually in libraries alone.
The exceptions proposed in this bill would kneecap our ability to collect photocopy licence fees. Because of the market difficulties outlined by Ms Biderman, the typical PWAC member earns just $500 per year from secondary licences, but photocopy licences comprise a fast-growing segment of that income. For the more than 25% of our members who earn less than $12,000 per year, this money makes a difference.
We would like to emphasize that this debate is not about ``balance'', or about access to information. It is about money. There is no question that Canadians will have access to the work of periodical writers. There is also no question that they will have to pay for this access, as they're doing already. The only question is, will the money the users pay be shared between libraries and writers, or will the libraries keep it all?
We have come a long way from the situation where individual users visit their local library and pay a few cents to photocopy an article. With on-line searching of indexes and inter-library loan, the copying - or in effect, republishing - of periodical articles is a substantial business. For example, fax on demand has become a profit centre for many libraries in Canada and elsewhere, with a typical fee of about $20 per article.
Our members recognize the essential role of libraries in our communities. Writers are heavy users of libraries. We deeply regret that the public support for libraries has been reduced and that they must struggle to make up lost revenue. But we do not accept that where the taxpayers as a whole have withdrawn support from libraries, our small and vulnerable sector of writers must step in and shoulder that burden on its own.
If writers cannot receive a fair share of the profits from use of their work so that they can afford to continue writing, what will the libraries be storing in their collections 50 years from now?
On the issue of limited liability to institutions regarding copy machines, we strongly urge the government not to grant limited liability unless those institutions are covered by a CANCOPY licence in good standing. PWAC volunteers worked for ten years to establish CANCOPY, so that Canadians could enjoy affordable, easily administered access to Canadian writing, while creators could build a modest degree of income stability. Losing that extra income now could mean real hardship for our most vulnerable members.
As was mentioned previously, we applaud the government for proposing statutory damages, and heartily endorse them. However, it is crucial that statutory damages be as effective for works that are administered by collective societies as works that are not. Enforcement has been a terrible problem for us in the past, and we see a pressing need for one or more collective societies to administer rights in the new electronic media.
As was the case with photocopying, there are some media where individual enforcement is virtually out of the question. We are therefore concerned that remedies provided by the Copyright Act, including new ones contained in Bill C-32, will apparently not apply to a collective representing our members.
I would now like to turn the floor over to Marian Hebb, our legal counsel.
Ms Marian Hebb (Legal Counsel, Periodical Writers Association of Canada): Proposed subsection 36(1) of the bill says that it is ``the owner of any copyright...or persons deriving any right, title or interest'' under the owner ``by assignment or grant in writing'' who are entitled to remedies provided by the Copyright Act. The obvious conclusion is that people who hold their rights as a non-exclusive licensee are not entitled to exercise those remedies on their own.
Like other rights holders who belong to CANCOPY, PWAC members keep their copyright and grant non-exclusive licences to CANCOPY to exercise their reprography rights. A non-exclusive licence is not considered to be an interest in the copyright as required by proposed subsection 36(1). At the same time as PWAC members give this non-exclusive licence to CANCOPY, they also authorize CANCOPY to exercise their remedies, and expect CANCOPY to be able to sue on their behalf, in appropriate instances.
.1310
One such section from which we, as periodical writers, are probably excluded because we'll only grant non-exclusive licences to a collective is proposed subsection 38.1(4). This is a remedy that is designed specifically for collectives in an instance where the tariff has been fixed by the Copyright Board. Yet it seems likely that CANCOPY, exercising the rights of periodical writers, could not take the benefit of that section.
As Sandra Bernstein has mentioned, the statutory damages are very much welcomed by periodical writers. Again, proposed subsection 38.1(1), the way it is worded, may mean that it is difficult for a collective representing writers to use this provision, again because of the way CANCOPY holds its mandate by way of non-exclusive licence.
A third section that presents a problem, again a section that seems tailor-made for collectives but is unlikely to benefit a collective representing periodical writers, other writers, all writers, is the wide injunction in proposed section 39.1, where a plaintiff collective may be unable to get an injunction covering its whole repertoire because its mandate from its members and from PWAC members and from other rights holders is in the form of a non-exclusive licence.
I think of a situation involving, for instance, a commercial copy shop, which is the habitual copyright infringer. The individual infringements, when you're looking at photocopying, are fairly minor. Not very much money is involved, a few cents. It certainly isn't worth while a collective undertaking the legal costs to take action against that collective.
So while the individual infringements don't involve a great deal of money and on some occasions it isn't worth suing, it would be of enormous benefit to a collective in the long run if it could obtain an injunction that would restrain the copy shop from future infringements covering works past, present and future representative of the collective.
If the remedies available to collective societies specified under proposed subsection 38.1(4) amount to only a few pennies, this will greatly impede the effectiveness of new collectives. The section, if it applies to us at all, provides that ten times the tariff is the maximum amount of damages you could receive. If the cost of the photocopy is 3¢, 4¢, 5¢ or 6¢, this isn't very much and it's likely to be viewed by users as simply a cost of doing business. We're very much concerned by this cap on damages and suggest the courts should be able to adjust such damages upward in appropriate instances.
There's another section in there where there seems to be some concern that the damages received by rights holders could be too high. The court has the jurisdiction to lower that amount. We're suggesting that there similarly should be a discretion in the court to raise the amount of damages receivable by a collective.
I'd like to speak for a moment about Canada's international obligations. Canada recently adhered to the World Trade Organization agreement and, as of January of this past year, has been obliged to adhere to the Berne Convention at a higher level than previously.
Section 9 of the Berne Convention, to which we now have an obligation to adhere, although we haven't yet signed on, reads like this:
(1) Authors of literary and artistic works protected by this Convention shall have the exclusive right of authorizing the reproduction of these works in any manner or form.
Subparagraph (2) of that section goes on and says:
(2) It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.
We submit to you that the existence of collective management of copyright has changed the environment. The proposed library exceptions you are considering, particularly as they affect periodical writers, do conflict with a normal exploitation of the work of rights holders and the authors' legitimate interests are prejudiced.
.1315
There is no question today that rights holders are able to license their work effectively for the uses that are envisaged both by proposed subsection 30.2(2), which deals with the single copy in the library of non-fiction periodical articles, and by proposed subsection 30.2(5), which deals with inter-library loans. These uses can be administered very easily by a collective.
In the current environment, I would say this surely falls within the ambit of normal exploitation. At the same time, the failure of proposed subsection 30.2(5) - that's the inter-library loan one - does not clearly limit the inter-library loan exception to non-electronic transmission of printed matter.
As you are considering these proposed subsections, the government is telling us at the same time that information highway issues need further consideration and are not being dealt with by phase three of copyright reform. We would submit to you that this is surely unreasonably prejudicing the legitimate interests of writers.
The Chairman: Thank you, Ms Hebb. I take it you're ready for questions now? All right.
Mr. Leroux.
[Translation]
Mr. Leroux: Thank you for reminding us that the purpose of the bill is to recognize rights holders to recognize and strengthen copyright, which we have had so much difficulty having recognized and enforced over the years.
There was one revision phase. We are in the second phase, and this confirms for us that the bill, as worded, in our view, sends an extremely negative message regarding this very broad exceptions approach, particularly in the fields of education, libraries, archives, etc. To all intents and purposes, copyright and rights holders are being expelled from these major areas. This isn't important or necessary. So this is a major step backwards at this point.
Ms Bernstein, in your view, will the bill really invalidate the agreement binding the federal government to CANCOPY and UNEQ with respect to press copies and photocopying? Will it cancel the recognition of author collectives?
[English]
Ms Bernstein: As to invalidating, I would turn that question over to Ms Hebb.
The main problem with this bill is it removes all incentives for any institution covered by these exceptions to ever affiliate with CANCOPY, because there's no penalty for not doing so. Even though the libraries themselves, in most cases, wouldn't have to pay the cost of the licence fees, because the users will pay them through slightly increased charges for the photocopying, why should they bother?
Many libraries in fact are not affiliated with CANCOPY. The metro central reference library in Toronto, which I visit very often, has more photocopy machines than just about any photocopy company in the city of Toronto, but there is no affiliation agreement with CANCOPY. I believe there should be.
The problem is it takes away any incentive, because there's just no penalty if you infringe or if you allow anyone to infringe. In fact, it puts the libraries in competition with legitimate photocopy shops in the city, which have signed an agreement. They have an unfair price advantage in what has become, it's sad to say, a profit centre in many libraries.
As to the effect on existing contracts, that's something of a technical question that Marian might answer. It seems to me if you've already signed a contract, you're stuck with it, but I don't know.
Ms Hebb: The federal government does have a licence with CANCOPY and it won't be affected by this. It will continue. The government will pay for government copying. There are no exceptions for government that would make that licence unnecessary.
It may be more of a question of whether or not all libraries think a licence with CANCOPY is necessary, because this does give them most of what they want.
.1320
[Translation]
Mr. Leroux: That's the first time we have heard that view. According to SODRAC and other management collectives, the agreements already on the table are invalid. What are you going to do to renew the agreements if the bill provides for so many exceptions? What are you going to do to open sound and serious negotiations?
[English]
Ms Hebb: Were they perhaps referring to the educational licence -
[Translation]
Mr. Leroux: Let's take the very concrete example of the press kits and photocopying that you already have with the federal government. If the bill is passed as it stands, with the exceptions, what are you going to do to renegotiate another contract when the agreement expires?
[English]
Ms Hebb: You're talking about the school licences, for instance.
[Translation]
Mr. Leroux: The bill provides for a great many exceptions respecting reprography or photocopying. There has been one major problem for a number of years. You describe it fairly clearly.
[English]
Ms Hebb: There are some exceptions that are going to eat into the licences, probably. In the school, for instance, in the licence that would be negotiated CANCOPY has licences with the Province of Ontario, for instance. The wording of one of the school exceptions that refers to assignments could mean that in schools, because everything a teacher does is an assignment, no more licences are possible. We are relying on your good judgment, perhaps, to amend that clause.
That's dealt with in our full brief. It was not one of the items we focused on today.
Ms Bernstein: In educational institutions, the licences have tried to eliminate a problem of copying course kits where, instead of buying books and magazines or whatever, they would make bundles and distribute them to the kids. This is not excepted under a single-copy exception, but by saying that the kids all have to go and make their own single copy instead of the school doing it for them, with the single-copy exemption just about everything could go through the net.
The existing agreements would remain in force but they'd be neutered, because so many things would no longer be subject to charge. It might mean a bit more sampling efforts would be required to sort out what's this and what's that, but definitely, if it's no longer an infringement, I would think there's no more copyright, essentially.
The Chairman: I'm sorry to interrupt, but I think an important point has been raised by Mr. Leroux. Two organizations came here and said that because the existing legislation and the proposed legislation are so very different - one carries a lot of exceptions - in effect all these existing contracts would automatically be null and void and would have to be renegotiated. The new ones would have to take into account the exceptions.
Ms Hebb: That is correct.
The Chairman: That was the point. I think that was the question Mr. Leroux was putting to you.
Ms Hebb: I agree that the existence of these exceptions will cut down on what CANCOPY can license, and the licences might become more valuable to the extent that you carve out of them things that are currently licensed.
The Chairman: But they seem to say that the existing agreements would have to be renegotiated, and because of the new provisions of the law would almost be null and void from the point of the passage of the new law.
Ms Hebb: The licences are fairly short, so I don't know that this is an enormous point. It would mean you would have the problem at the time the licences expired.
There are some clauses in some of the CANCOPY licences at the post-secondary institutions, I think, that say if in fact the law does change, we agreed in good faith to go back and renegotiate. Certainly many of the people we're licensing are looking for large concessions from you people.
It is our view that these exceptions are not necessary at all. If the works are contained in the repertoire of a collective, there is easy access to it. Exceptions are only causing more administrative costs and detailed keeping of records and so on, which will make it very expensive to administer these collective licences.
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So I don't think I disagree with what was said.
[Translation]
Mr. Leroux: You said a moment ago that that would considerably weaken the existing agreements.
[English]
Ms Hebb: I agree with that statement. It would weaken them.
[Translation]
Mr. Leroux: There's nevertheless a series of agreements with the university associations, the associations of Cegeps or colleges and the school boards. In my view, one of the two parties seated at the table will be quite uncomfortable when the other tells it that it has been exempted here and there. The negotiations won't go on very long.
[English]
Ms Hebb: I share that disease.
Ms Bernstein: That's why we're here.
Some hon. members: Oh, oh!
[Translation]
Mr. Leroux: That's why I was asking you whether that's where we're headed with this bill. It's a surprise package that will ultimately make the negotiations impossible as a result of the large number of exceptions.
I would like to come back more particularly to the authors' conditions respecting reviews and periodicals. You said in your brief that there is a freelance contract that seems to be tough. Periodical publishers seem to have introduced a kind of contractual agreement which they control with respect to article writers. I would like you to tell us about the authors' conditions with respect to periodicals and the use of data bases containing your members' works, which seem to benefit everyone except you, and which you moreover characterize as illegal.
[English]
Ms Bernstein: This is indeed a very serious problem. Through the 1980s, photocopying was our main concern. We put a lot of energy into CANCOPY. At that time the database industry was really in its infancy, but since about 1977, with the advent of InfoGlobe, Canadian newspapers have started to put their full text into commercial databases. Initially, possibly, these were mainly for archival purposes and for internal use, but then they started to sell them.
Ruth has some charts of the growth of the database industry. It's grown exponentially. It is an extremely lucrative business. These newspapers have put the full text, including freelance work, into the databases. They haven't made any distinction. In fact, there's a value to them in having the full text available, because they can then market it in such a way that if you search their service, you will have the whole thing, especially with a newspaper of record like The Globe and Mail. They have never obtained licences for this material and they've certainly never compensated us for it.
As the industry grows and freelancers become more aware of these problems, lately publishers, almost without exception - and there are fewer and fewer of them in this country to deal with - have been introducing Draconian contracts asking in effect for all the benefits of copyright, without compensation, in perpetuity, and rights in all electronic media now existing and heretofore invented. If we don't sign, we don't work for them. In fact, people have lost columns they have written for years in newspapers from coast to coast. It's a very serious issue.
The well-known writer Heather Robertson - and I believe she was an early president of PWAC, although it was before my time - has launched a class action against InfoGlobe, the Globe and Mail service, for $100 million. That figure may be low if, as we hope, you pass the statutory damages.
It is a terrible problem in terms of controlling our copyright. As Ruth mentioned earlier, in the future the electronic rights will be the main right and the print right will be the secondary right. Things are changing very quickly.
I think we had a few figures on the value of these rights, what the markets are worth.
Ms Biderman: SIMBA Information Inc., an American research company, calculates that annual revenue for on-line databases in the U.S. was $11.1 billion in 1995.
[Translation]
Mr. Leroux: You don't have the site number.
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[English]
The Chairman: Ms Phinney.
Ms Phinney: I want to turn briefly to the photocopies in the libraries. If they don't make some arrangements to join CANCOPY, for example, you feel that a percentage of the money they collect should go to you people. What percentage do you think that should be, and how much would an individual writer get out of that? How would they be paid?
Ms Bernstein: It would be pursuant to a collective licence, and most of these licences call for a degree of sampling. So the payments are made to levels like other collective agreements. People whose names actually turn up will get a fixed amount, and some of our members have received payments of a few hundred dollars for.... Marian probably has better details on this than I do.
A certain amount isn't attributable or can't be pinned to a particular Canadian author, and that amount tends to be divvied up. A recent distribution was made - I haven't received mine yet.
Ms Phinney: Can I just clarify something? The copying machines at the University of Toronto, we picked on them a little bit - the public library in Toronto, I mean. They have a pot at the end of the day, $500 or something. How is that distributed now? There's no collective looking after that money right now. They're putting it in their pockets as profit.
Ms Bernstein: We get none.
Ms Phinney: Okay, you're talking about how it's distributed, as if there's some way. There isn't a way right now. Right now there's a choice. I don't know, CANCOPY gets in there or they mail directly to you. Who are you suggesting should do this?
Ms Bernstein: CANCOPY is the only alternative. You can't police photocopies.
Ms Phinney: So your suggestion to us is that we somehow force the libraries to use CANCOPY.
Ms Hebb: Can I add to that? CANCOPY tried to negotiate with the libraries a couple of years ago, but there was a problem. The libraries felt that certain things were going to happen in phase two of copyright but phase two didn't happen for a long time, so there was some uncertainty and it made negotiations very difficult.
CANCOPY has just restarted negotiations with the libraries, and there has been a survey in the libraries and there is some idea of what is being copied. I am hopeful that there will be a blanket licence covering libraries. There will be different tariffs depending on whether the library is a small library, a middle-sized library or a big library, and there's some data as to what copying goes on in libraries of those sorts.
When you go to the library and you pay.... I don't know what you pay when you go into a public library now, but if it were 25¢ or 20¢, a few cents of that would go to the copyright owner through CANCOPY. It might be 5¢ or it might be lower.
Ms Phinney: If this bill passed through the House in March, as it is now, would that agreement be ready by then?
Ms Hebb: The content of that agreement will depend on what is in this bill. If you read our brief, the amount of money collected in the libraries will depend...or the number of copies that are covered by that licence, because the price is negotiable, and if the price isn't agreed on by CANCOPY and the libraries, then the Copyright Board will decide what that price will be. I don't think there's a danger about the price being exorbitant because of that.
Ms Bernstein: This doesn't leave much for a licence. If this bill passes, I don't think there will be a licence. It will hardly be worth administering, because almost everything done in the public libraries will be accepted in this bill. It will be subject to no copyright fee whatsoever under this bill.
Mr. Hebb: Under these two exceptions there is an enormous carve-out of what would otherwise be licensed.
Ms Biderman: According to a CANCOPY study of copying in public libraries done a few months ago, we calculated the percentage of copying that's of non-fiction periodical work, and it appears - I think Sandra mentioned this earlier - there are 2.3 million copies a year in libraries that periodical writers would get paid for, and if this exception is passed they won't get paid for them.
Ms Phinney: Thank you.
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The Chairman: Thank for appearing today and for making your position known to us. We appreciate it. We welcome your participation here.
The meeting is adjourned.