HERI Committee Meeting

37th PARLIAMENT, 3rd SESSION

Standing Committee on Canadian Heritage

EVIDENCE

CONTENTS

Thursday, March 11, 2004

¿

0905

The Chair (Ms. Sarmite Bulte (Parkdale—High Park, Lib.))

Mr. Richard Pfohl (General Counsel, Canadian Recording Industry Association)

¿

0910

¿

0915

The Chair

Ms. Christiane Gagnon (Québec, BQ)

Mr. Richard Pfohl

¿

0920

Ms. Christiane Gagnon

Mr. Richard Pfohl

Ms. Christiane Gagnon

Mr. Richard Pfohl

The Chair

Ms. Wendy Lill (Dartmouth, NDP)

¿

0925

Mr. Richard Pfohl

Ms. Wendy Lill

Mr. Richard Pfohl

The Chair

Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.)

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

¿

0930

Mr. Clifford Lincoln

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

The Chair

Hon. John Harvard (Charleswood St. James—Assiniboia, Lib.)

Mr. Richard Pfohl

Hon. John Harvard

¿

0935

Mr. Richard Pfohl

Hon. John Harvard

Mr. Richard Pfohl

Hon. John Harvard

Mr. Richard Pfohl

Hon. John Harvard

Mr. Richard Pfohl

Hon. John Harvard

The Chair

Mr. Richard Pfohl

¿

0940

The Chair

Mr. Gary Schellenberger (Perth—Middlesex, CPC)

Mr. Richard Pfohl

Ms. Christiane Gagnon

The Chair

Ms. Wendy Lill

¿

0945

Mr. Richard Pfohl

The Chair

Mr. Clifford Lincoln

¿

0950

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

¿

0955

The Chair

Ms. Christiane Gagnon

Mr. Richard Pfohl

The Chair

Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.)

À

1000

Mr. Richard Pfohl

The Chair

Mr. Richard Pfohl

The Chair

Mr. Richard Pfohl

The Chair

À

1005

Mr. Richard Pfohl

The Chair

Mr. Clifford Lincoln

Mr. Richard Pfohl

The Chair

Mr. Gary Schellenberger

Mr. Richard Pfohl

The Chair

Hon. Paul Bonwick (Simcoe—Grey, Lib.)

À

1010

Mr. Richard Pfohl

Hon. Paul Bonwick

Mr. Richard Pfohl

Hon. Paul Bonwick

Mr. Richard Pfohl

Ms. Christiane Gagnon

Mr. Richard Pfohl

À

1015

The Chair

Mr. Clifford Lincoln

Mr. Richard Pfohl

Mr. Clifford Lincoln

Mr. Richard Pfohl

Hon. Paul Bonwick

À

1020

Mr. Richard Pfohl

The Chair

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CANADA

Standing Committee on Canadian Heritage

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NUMBER 003

l

3rd SESSION

l

37th PARLIAMENT

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EVIDENCE

Thursday, March 11, 2004

[Recorded by Electronic Apparatus]

¿  (0905)  

[English]

    The Chair (Ms. Sarmite Bulte (Parkdale—High Park, Lib.)): Good morning, ladies and gentlemen.

    This morning we are going to have a briefing session on the WIPO Treaty's implementation proposal.

    We have with us today Mr. Richard Pfohl. Our witness list shows Mr. Brian Robertson, who is the president, but Brian is not here. Instead, we have Mr. Pfohl, who is the general counsel for the Canadian Recording Industry Association.

    Welcome, Mr. Pfohl, and thank you for coming here from Toronto this morning.

    Mr. Richard Pfohl (General Counsel, Canadian Recording Industry Association): Thank you, Madam Chair.

    Madam Chair and members of the committee, I am Richard Pfohl, and I am the general counsel to the Canadian Recording Industry Association. It is a pleasure to appear before this committee, knowing that we share the same common passion for our culture and for the welfare of our artists, producers, and creators.

    On a personal note, I am delighted to address Madam Chair, who is my member of Parliament. At Tuesday's meeting there was a lot of talk about Canadian multiculturalism and the importance of it. I count myself privileged to live in the chair's riding, which I believe is the living embodiment of Canadian multiculturalism at its best.

    I am here today on behalf of the Canadian Recording Industry Association, or CRIA, as we refer to it; however, the remarks I have to make today really speak to the needs of all members of Canada's creative and cultural industries. CRIA is a member of the Copyright Coalition of Creators and Producers. The Copyright Coalition represents 34 national organizations whose members represent the breadth and depth of Canada's cultural industries. I believe you may have our submission to this committee, which includes a list of the members of the Copyright Coalition. It really does represent virtually everyone who is involved in creating in Canada.

    Last month CRIA provided this committee with legislation drafted by the Copyright Coalition to amend the Copyright Act in a fashion that would permit ratification of the WIPO treaties. We submitted this at the request of the past chair, Mr. Lincoln, following our appearance at the November 6 meeting of the committee.

    I would like to focus today on the WIPO treaties and to underscore for you the importance of ratification of these treaties as soon as possible in the digital and online environment that we are increasingly entering. I was able to be present earlier this week when the Minister of Canadian Heritage made her first appearance before the committee. It was gratifying for me to hear her commit to modernizing the Copyright Act. This is an act in serious need of modernization. The Canadian Copyright Act is widely viewed, both nationally and internationally, as still being mired in the analog world. For creators and right holders dealing in a rapidly expanding online environment, this is tantamount to attempting to enter the express lanes of the Trans-Canada Highway in a horse and buggy.

    The minister also referred to the World Intellectual Property Organization treaties of 1996. The part of that name I would like to draw your attention to is the date, 1996, because it was the year that the treaties were concluded, with the Canadian government's full participation. These treaties were then endorsed by Canada in 1997. Since then, 45 countries around the world have ratified the WIPO Copyright Treaty, and a number of European countries have actually implemented the legislation but have not yet ratified it because the European Community expects to ratify simultaneously. Forty-two countries have ratified the WIPO Performances and Phonograms Treaty. There are two treaties, the Copyright Treaty and the Performances and Phonograms Treaty.

    But here we are eight years later, and Canada has still not ratified the treaties and, according to the most optimistic government timetables that we heard on Tuesday, will not do so for another 12 or 18 months, if at all. While government officials apparently slumber, Canada's cultural industries, particularly the recording industry, burn.

    The Canadian music industry is endeavouring to create a legal online retail environment with little or no protection for its online models. Internet piracy in the last five years has devastated our industry with lost retail sales of $425 million, staff layoffs exceeding 20%, and severely reduced opportunities for Canadian artists and music. We need the tools to counter that piracy and to get viable businesses online to deliver Canadian music the way listeners around the world want to receive it.

    Nothing better sums up the urgent need for the WIPO treaty ratification than an Industry Canada press release dated December 17, 1997. This was over six years ago. According to the Industry Canada press release, and I'm quoting:

By committing itself to the treaties, Canada issending a clear signal that it intends to continue itsmodernization of copyright law in order to betteradapt it to the digital environment. ... This is especially important in the digital world giventhe incredible ease and speed at which works canbe reproduced and disseminated around the worldand the fact that business is done electronically.

¿  (0910)  

    That was six and a half years ago. In that period, the departments of Industry and Canadian Heritage have conducted extensive consultations with organizations and individuals, and we participated in those consultations, and they commissioned numerous studies--and as we learned on Tuesday, apparently secret legal opinions--to provide them with input on the treaties they themselves helped write eight years ago.

    Yet here we are today, from our perspective, seemingly caught in a time warp. We were certainly encouraged by the minister's recognition of the need to address the treaties, but we also recognize the value of the knowledge and commitment of this committee to continue to seek answers and move the process forward.

    In order to make digital online delivery of music legally possible in Canada, millions of dollars have to be invested in new business models that rely on secure digital delivery systems. The WIPO treaties were introduced eight years ago to provide that security. They are the benchmark for the way copyright owners exercise their rights in a digital environment.

    Under the current Copyright Act, shockingly, copyright owners have no exclusive right to control the transmission of sound recordings. Ratification of the WIPO treaties will address this.

    Just to give you a couple of examples, first, the treaties confirm protection of traditional copyrighted materials and distribution mechanisms. Second, they clarify how copyright and related rights apply in the digital environment. Third, they protect against the hacking and circumvention of technical protections applied to copyrighted products.

    More than anything else, these treaty provisions protect our culture. Without this protection, Canadian creators and the Canadian companies who are currently making these extraordinary investments I mentioned will be left on the side of the digital highway while the rest of the world speeds by.

    Finally, I want to stress the importance of ratification of the treaties. Again, you heard the minister on Tuesday commit to ratification, but it appears that may be a bifurcated thing; first we'll implement and then we'll ratify. Without ratification, Canadians will be unable to enforce their rights worldwide. So what does that mean? Instead of Canada's culture playing to a worldwide audience of over five billion people, it will play to a domestic audience a tiny fraction of that size.

    While we were encouraged by the minister's commitment to prompt implementation of the WIPO treaties and her affirmation of Canada's standing commitment to ratify the WIPO treaties, we are disturbed that the department appears to contemplate implementation and ratification as two separate steps, and that ratification appears to be tied to a study of the private copying regime. If indeed ratification is being grouped with the so-called medium-term copyright reform measures--the ones set out in the section 92 report as taking place after we finish all the immediate-term measures--such as private copying regime reform, this could put off ratification for years to come.

    The digital highway does not end at Canada's border. The whole purpose of signing international treaties is to be able to enforce those treaties to protect Canadians in the international realm. This is even more urgent with respect to digital rights, which by their nature are global in reach. For Canada to take every step toward implementation of the WIPO treaties but to fail to ratify the treaties cuts Canadian creators and the creative industry off from WIPO treaty protections where they need it the most--in the global digital realm.

    The Copyright Coalition proposal I referred to at the beginning of my remarks was prepared for the then Minister of Heritage, at her request, and sent to the departments of Industry and Canadian Heritage on February 14, 2002. This document is by nature a consensus document. No doubt it does not reflect precisely what any of the particular members of the Copyright Coalition would want--and again there were 34 members representing the entire creative community of Canada. We provided it to the departments of Industry and Canadian Heritage, and we have subsequently provided it to this committee because we believe it provides a good starting point for the Government of Canada to honour its stated commitments and proceed with ratification of the WIPO treaties.

¿  (0915)  

    The Copyright Coalition proposal, which I provided you with, addresses five basic reforms of Canada's Copyright Act that are necessary in order to implement and ratify both WIPO treaties. Specifically, those reforms are protection for photographs, moral rights for performers, protection for communication to the public and making available rights, technical protection measures, and rights management information. The latter three reforms--rights management information, technical protection measures, and making available rights--are most important to CRIA, my organization, because they provide us with the digital toolkit in order to be able to do business online. What we're asking the government for is not a grant or government funding in this regard; we're simply asking the government to give us the tools we need in order to build our businesses in the digital realm.

    I would be pleased to discuss any aspect of the Copyright Coalition proposal of these five proposed reforms that you may wish to raise.

    In addition to the Copyright Coalition proposal, we've also provided the committee with a background document on the WIPO treaties and the need to have them ratified without further delay. I believe that has been distributed to you. I would be happy to respond to any questions you may have regarding this document or generally regarding the need for WIPO ratification.

    Thank you for your time this morning. That concludes my remarks, Madam Chair.

    The Chair: Thank you.

    Are there any questions?

    Ms. Gagnon.

[Translation]

    Ms. Christiane Gagnon (Québec, BQ): Some thirty or forty countries have ratified the WIPO treaties, including the United States, but not France and certain other European nations. I'm curious as to why these countries haven't ratified these treaties yet. Many smaller nations are similar in some ways to Quebec. I'd like to know why it would be in their best interest to ratify these treaties. It's a known fact that when the United States are on board, they tend to want to invade the cultural fields of other countries.

[English]

    Mr. Richard Pfohl: First of all, quite a few of the European countries have implemented the treaties. They have not yet ratified it because the European countries would like to ratify en masse. Of the European countries, France, Germany, Greece, Denmark, Austria, Italy, the Netherlands, and the U.K. have implemented the legislation. They would ratify it, but Europe will be doing that as an entire entity. So you can add most of the leading European nations to those that have passed the legislation to date. In our hemisphere, we're the only North American country that has not yet ratified. You also have powerhouses such as Japan that have ratified.

    With regard to your second remark regarding the U.S., I think the reason you see a lot of smaller countries on this list is that this provides those countries with the tools they need to stand up to the larger countries and to protect their own performers' and creators' rights in the digital realm and make sure they get the protections they need abroad. So they have the protections they need in facing the culture that is coming to them from the U.S. So I think it is to the benefit of the smaller countries in particular.

¿  (0920)  

[Translation]

    Ms. Christiane Gagnon: From September 13 to 15, the Department of Canadian Heritage and Industry Canada held a forum with Canadian and international copyright experts. However, the conclusions and recommendations received from experts have not been disclosed to stakeholders by the departments in question. This fact was brought to light in the submission we received from CRIA. Why has this information not been disclosed?

[English]

    Mr. Richard Pfohl: I don't know. We are in favour of full disclosure of all opinions on this issue. We'd like to have all of the opinions on the table and have a debate about them. That's why we were disappointed to hear on Tuesday that the department is unwilling to provide the opinions that are forming the basis for their decisions on this issue. If they're not going to provide those opinions, we'd at least like to have them provide the reasons and explain to us why they are taking the position they're taking.

[Translation]

    Ms. Christiane Gagnon: This file has been around since 1998, but was not brought to our attention until 2000. It's a new issue and I think we need to amend our own Copyright Act in some way before we ratify the WIPO treaties. On reviewing all of the recommendations that have been made, I have to admit that a number of questions come to mind.

    Earlier, you said that there was a very broad consensus of opinion within the industry and among observers and copyright stakeholders. Is there in fact a consensus on the five reforms, or could they be implemented separately? I really have no idea. What is the scope of the consensus? What are the sticking points for the various artists or performers having moral rights? What is the nature of the support being expressed? Is there support for the reforms in general, or only for specific ones?

[English]

    Mr. Richard Pfohl: Just to clarify my remarks, I'll say that the consensus I described was within the creator community. We thought the document I provided to you would be more useful to this committee, giving you something that reflected a consensus of the creative community instead of simply giving you something that represented our own association's position. That's why I think the document you received is so important; it's the Copyright Coalition's position. So just to clarify, I can say that it reflects a consensus within the creative community.

    Obviously both the departments of Industry and Canadian Heritage have been hearing from all sides on this issue for the past seven years and have held extensive consultations. Some of those opinions are discussed in the proposal I gave you. The proposal attempts to address those issues that have been raised by all stakeholders across the board and to come up with something that will work, drawing upon the experience of other countries. There are quite a few that have gone before us and that have implemented legislation.

    The Chair: Ms. Lill.

    Ms. Wendy Lill (Dartmouth, NDP): I want to thank you for coming here today.

    I have been on the committee since 1997, actually, and it's just astounding to think this just languishes someplace and is not helping the creators in this country. I'm just looking at the fact that what we're talking about here is legislation this country has been instrumental in creating, but we have not ratified it yet. Now eight years later we're talking about implementation, but ratification may be many years down the line in that second stage of copyright reform. I just find it unbelievable; I don't want to pretend it's not. It's a huge crisis in terms of protection of privacy and securing digital delivery systems, and we've just gone south on this. We've literally gone south; we're not doing what we need to do here.

    That's just a statement. I'm very much in favour of ratification of this treaty. I think this committee feels very strongly that this has to happen, and it wants to make it happen. I'm just wondering, to come to a point, what is holding it up? What kinds of things can we do for you right now that will help to move this along?

¿  (0925)  

    Mr. Richard Pfohl: First of all, I would like to take this opportunity to applaud this committee, which I think has really played a key role in jump-starting this process. I think that the minister's remarks on Tuesday were due, in no small part, to the role this committee has taken to try to light a fire under the feet of the department. So we do appreciate that.

    We want to get draft legislation put forward to air these issues, and just go ahead and resolve them. While there may well be reasonable differences on some of them, we need to get the legislation put forward by the government. Then we need to start looking at that and make whatever amendments need to be made.

    We don't know what we're fighting at this point. To have delayed even putting forward a proposal for seven years now is just unacceptable to us.

    Ms. Wendy Lill: Well, as for your idea that you don't know what you're fighting at this point, we have a sense that the department is not willing to provide the information that is informing its decision. These are real problems that we have to address. As parliamentarians, we have to be asking for a transparent process that will allow parliamentary work to go forward. I put that out. I hope we can come to some really clear announcements about our intentions here.

    So I appreciate that.

    Mr. Richard Pfohl: Thanks.

    We would echo the importance of transparency in this process. For this committee to be involved, as the government has clearly indicated it should be, and as the Prime Minister has indicated that Parliament should be taking a more proactive role from the beginning, you need to know why the government is taking the positions it's taking. They're taking some positions, but we have no idea why. Until you know that, you can't have a discussion.

    The Chair: Thank you.

    Mr. Lincoln.

    Mr. Clifford Lincoln (Lac-Saint-Louis, Lib.): Can I get your information so that I'm sure I'm correct on the process of ratification. Right now the two treaties...they are treaties now; enough countries have ratified.

    Mr. Richard Pfohl: That's correct.

    Mr. Clifford Lincoln: So with more than 30 countries, it becomes a treaty.

    Mr. Richard Pfohl: That's correct.

    Mr. Clifford Lincoln: So now they are existing treaties.

    It seems to me that if we are going to make a case in Canada that we have been delaying, the case of the EU in a way doesn't help us, because from what I understand from your own documents, the EU had decided to have its 15 countries ratify by 2002. So they are two years late already.

    Can you tell me which of the EU countries are holding back? As you said, many of them have passed legislation. Of the 15, which ones are holding back?

    Mr. Richard Pfohl: Just to answer your question in general first and then to go to the specific, I actually think that relative to Canada at least, the EU has an excuse. The excuse is this: they need to operate together. They are 15 different countries, so they first had to come up with a copyright directive that everyone would agree upon, and then they had to go from there and implement legislation that accorded with that directive at the national level.

    What I can tell you today is who has ratified it. The other countries I know are working on it. I don't believe that any of them are actively opposing ratification at this point. Again, we do know, as I mentioned earlier to your colleague, that the countries of Austria and Denmark—

    Mr. Clifford Lincoln: I appreciate that, yes.

    Mr. Richard Pfohl: So some of the leading countries have implemented it, though you are correct that some of the other ones have not.

    I would like Canada to have ratified this treaty before Europe, so that we're not coming in last in the gate after Europe, all of North America, and Japan. All of the other leading countries of the G7 plus one have ratified it. We should not be coming into the gate late, as we're really handicapping ourselves. It's really hurting industries such as ours.

¿  (0930)  

    Mr. Clifford Lincoln: I join your hope, but what I'm saying is that it's chicken and egg, because the people who are against it here say even Europe hasn't ratified it. We pass the ball back and forth.

    What I wanted to know is whether it is, in your own frank opinion, another form of creators versus commercial interests. In your view, is it a reflection through our own departments of the same polarization that's stopping works, that of creators versus commercial interests and Heritage versus Industry? Is it the same thing that's happening here again?

    Mr. Richard Pfohl: It shouldn't be, because the creators and the commercial interests are really synonymous. If you take a look at the copyright collective proposal that I gave you, the list of members appended at the end represents any number of different creators, but the fact is that creators need to make a living. There are organizations that protect creators' rights, make sure they can make a living, and make sure they do get the economic remuneration they need. I don't see that there is a conflict there.

    Mr. Clifford Lincoln: Yet, when Mr. Bonwick put out his resolution that we should have a graph by February 2004, which you supported very strongly, a lot of groups came and cried blue murder, saying that we were pushing this thing too fast and there hadn't been enough information, etc.

    Certainly, it's not quite clear that it's a one-way street. There's a lot of opposition. I was wondering what the opposition is really like and what it is.

    Mr. Richard Pfohl: The only answer I can give you is, every time we try to amend the Copyright Act, it seems that it is an incredibly tortuous process. It takes far longer than it should, because everyone is afraid that any change to the act is somehow going to disadvantage them. They know what the status quo means, but they don't know what the change means and what the future means. Everyone is deathly afraid to move. We're stuck with this paralysis, this fear of any sort of change.

    The problem is that the world is moving on. We're in this digital world now. We've been in it for more than a decade. Canada has been a leader in terms of Internet penetration, in terms of Internet broadband penetration, and yet our creators are unable to take advantage of that. We're being left by the wayside while the rest of the world moves on. It really is doing a disservice to Canada.

    The Chair: Thank you.

    Mr. Harvard.

    Hon. John Harvard (Charleswood St. James—Assiniboia, Lib.): I want to follow up on what Ms. Lill and Mr. Lincoln pursued, because it seems that we're dealing with some unknowns here.

    I would assume, Mr. Pfohl, that you certainly know more about the situation than I do. I guess what I'm wanting to ask you is whether you would speculate publicly as to what's going on here behind the scenes and, if you're prepared to speculate, to what end. If you are prepared to speculate, maybe it's a range from the best possible spin to the worst possible spin. Are you prepared to speculate on why we are guilty of foot dragging?

    Mr. Richard Pfohl: Mr. Harvard, I think the only speculation I can give you is what I gave to Mr. Lincoln. I think that it is fear of change. People are afraid that for any sort of change to the Copyright Act, who knows what that's going to mean, but I can't point to any particular constituency that seems to be holding things up.

    Hon. John Harvard: Do they prefer the devil they know? Is that it?

¿  (0935)  

    Mr. Richard Pfohl: I think that's an eloquent way of putting it.

    Hon. John Harvard: They can't live with this familiar devil forever. Sooner or later, they're going to have to embrace some devil that they don't know.

    Mr. Richard Pfohl: That's correct. As the world moves on, we need to be able to deal with it.

    This was the whole reason why the WIPO treaties were thought to be important when they first started negotiating them back in the early 1990s. People realized that we were moving into this digital realm. We have to make sure the existing rights that apply in the analog world apply in the digital world; otherwise, we're trying to retrofit the existing rights, and they don't necessarily fit.

    That was the whole point, to make sure we had the tools we need in the digital world. I think the fear is, if we make this change apply to the digital world, what if the digital world changes again, or something like that.

    Hon. John Harvard: One would assume that the fear will be as strong 12 months from now, or 18 months from now, as it is right now, so there's no point in continuing the paralysis. I guess the government must screw up its courage and face it, because it's not going to be avoided.

    Mr. Richard Pfohl: I agree. I also hear people saying, well, maybe we should see how things play out. We've been doing that now for--

    Hon. John Harvard: For 10 years.

    Mr. Richard Pfohl: Yes, for 10 years. You can do that, but the world's going to pass you by and you're not going to be part of the new world. That's unfortunately where Canada is positioning itself now.

    Hon. John Harvard: Thank you.

    The Chair: Very quickly before I start, during her presentation the minister--I don't have her speech in front of me--seemed to talk about the private copying scheme. That's what I understood, that there was a legal opinion. Does this have anything to do with this paralysis we have?

    Mr. Richard Pfohl: We think it might, but no one will tell us. Our understanding is that a legal opinion has been provided to one or both departments. That legal opinion, we believe...and this is sort of a specific answer. I apologize that I may be speculating here, but no one will tell us exactly. We believe that legal opinion leads the departments to believe that in order to implement the treaties, they would need to change our existing private copying regime.

    This fear has been floating around for a while now. In the section 92 report that the departments put forward, they asked this question of whether the private copying regime would need to be changed.

    Just to delve into it in a little more detail than you probably care to know right now, the issue is whether we would need to extend national treatment with respect to private copying rights of performers and sound-recording makers. Currently we collect a levy. It goes to performers and sound-recording makers, who are all Canadians. The question is whether a bulk of that money needs to go abroad if WIPO is implemented. We don't believe it does. In fact, we're part of the Canadian Private Copying Collective, which represents all of the organizations, the performers, authors, composers, and sound-recording makers who collect part of the levy.

    In order to answer this question, which the government, as I mentioned, raised in its section 92 report, we actually commissioned a study by one of the experts on the WIPO treaties, Dr. Silke von Lewinski. She was a member of the European delegation to the WIPO treaties and, in fact, she literally wrote the book. This is the authoritative treatise on the WIPO treaties that Dr. von Lewinski is a co-author of. We commissioned her to tell us whether or not Canada would need to amend its private copying regime in order to ratify the WIPO treaties. What she told us was, authoritatively, no, they did not.

    That opinion actually has been submitted to this committee. It was attached to the submission of the CPCC--again, that's the Private Copying Collective--regarding the section 92 report back in September 2003.

    The CPCC actually included two different papers that Dr. von Lewinski wrote that said, under any possible reading of the WIPO treaties, Canada would not need to amend its private copying regime. In fact, of all of the countries to date that have passed the WIPO treaties and that have a private copying regime--and there are any number of them--none has indeed felt they needed to amend their private copying regime.

    So both in theory and in practice, Canada wouldn't have to do anything. We think that's clear. There's an international consensus on this. All the international experts agree. We believe that the opinion to the departments states the opposite: that Canada may need to amend its private copying regime, which, as you know, is a touchy subject. So we believe that may be contributing to the paralysis.

    Mr. Lincoln, that may be a more specific answer to your question.

    What I would like to propose is that we have representatives of the CPCC, the Canadian Private Copying Collective, come before this committee and tell you why they don't think this needs to be done, and that at the same time, this committee invite representatives of the departments to appear. If they won't share the opinions they've been given because they believe they're privileged, or for some reason, then they should at least tell us what their opinion is.

    Let's put the issues out on the table and debate them. That's what we tried to do, as part of the CPCC, when we put Dr. von Lewinski's opinion before this committee. In fact, at great expense to ourselves, we flew her over and had her meet with the departments. We've been trying to get these issues out and aired and to come to some sort of resolution. But for us to say, you know what, we're going to put off ratification until we get to the medium-term section 92 requirements because we think there might be some uncertainty about this, is simply an invitation to another decade of inaction on this issue, and we're putting off dealing with really urgent issues that need to be addressed.

¿  (0940)  

    Our recommendation is, in this new atmosphere of participatory democracy and transparency, let's put the issues on the table, debate them, and resolve them; then let's move on.

    The Chair: Are there any other questions?

    Mr. Schellenberger.

    Mr. Gary Schellenberger (Perth—Middlesex, CPC): Thank you. I apologize for being late this morning. I'm very pleased that you were able to come here today and I'm sorry I missed the biggest part of your presentation.

    I'm new on this committee and I really appreciate the questions my learned colleagues are putting forward. I hope I can help speed up the implementation of WIPO. I think when we enter into one of these agreements and it goes on and on as long as I see it has gone on here, there has to be an end and a solution. I hope I can be part of that solution.

    I will relinquish my time to some of my more learned colleagues, but thanks for coming this morning. I've appreciated everything you've said so far.

    Mr. Richard Pfohl: I appreciate your remarks. Thank you.

[Translation]

    Ms. Christiane Gagnon: I'll wait until later. I thought he was going to be speaking a little longer and that I would have time to prepare another question.

[English]

    The Chair: Are there any other questions?

    Ms. Lill.

    Ms. Wendy Lill: I think we're certainly getting somewhere in terms of what needs to happen now. You've put forward a plan, which is that we get people here together to talk about what the issues are and have an informed debate, that we have a transcript of it and move forward.

    We're right now facing an amazing dilemma in that this committee said very strongly in a report we worked on for two years that we believe the foreign owner restrictions should remain at the level they're at now. Now we hear work is being done behind the scenes—more studying is being done that we're not privy to—and we're being told that decisions are being made. It makes us quite nervous and quite outraged, because this is supposed to be where many of the decisions we've been tasked to take are to be made.

    Jean-Paul Sartre has said that to choose not to choose is a very profound choice. We're going to have a very profound impact on the technological life of this country if we don't make some choices soon.

    I just want to ask you one question. I heard you mention the issue of concern around national treatment regarding private copying rights. I'm wondering if this is with regard to NAFTA. Could you elaborate on what this is meaning?

¿  (0945)  

    Mr. Richard Pfohl: Yes. The argument as I understand it—and we're not privy to secret opinions—is there are two possible ways in which it could be thought that perhaps Canada needs to extend national treatment. National treatment, just to take a step back, means that Canada would be required to extend to any other country that is a party to the treaties the same treatment Canada extends to its own nationals. If we give a portion of the private copying levy to Canadian creators and performers, we'd need to provide it also to foreign creators and performers. The problem with that is, of course, that the deluge of culture coming from south of the border would mean a large portion of the money would be going south from the Canadian creators and performers who are currently getting it, so they would be cut out of it. That's what raises the issue.

    The argument that's put forward is that there are some provisions in the treaty that say you need to extend protection of exclusive rights, that they have to be given national treatment. They're exclusive rights, which means you have control over your copyright. Then there are rights to remuneration, which means you can get paid for it. Private copying is a right to remuneration. You don't control it. We can't control someone who is making a private copy, but we get a little bit of money from it.

    So I think that's a baseless interpretation of the treaty. My understanding is that it's one argument that's been put forward as to why Canada, if it ratified, would need to amend its private copying regime.

    There's another one I won't go into—it's more complex—but I hope we will get the experts before this committee to testify in detail on it.

    The Chair: Mr. Lincoln.

    Mr. Clifford Lincoln: I was trying to refresh my mind. I didn't have my files with me, and this whole subject is so polarized. I was trying to remember, so I asked our research experts here about it, and they were reminding me that the people who were opposing early ratification of WIPO were the library users and educational groups. They brought in the argument that the U.S. was having second thoughts about early ratification because problems had arisen because it ratified quickly.

    These groups that appeared had suggested that we couldn't ratify without bringing in exceptions to some of the WIPO rights that would wipe away their own rights. One of the them was a copyright consortium of the Canadian Council of Ministers of Education. I recall now, because our researcher just refreshed my mind, that Wanda Noel was one of them. As you know, she was one of our consultants on Bill C-32, so she's certainly an informed copyright person.

    I was wondering if you could tell us.... For example, the Europeans have been doing extensive work on this through the Council of Europe, the European Parliament, the various nations themselves, the 15 nations. They must be facing the same issues as we face. How do they deal with objections, which are obviously genuine, from people like the library users and the educational sector? How do we get around those objections so that eventually we get to a consensus and can move the file along?

    You suggested we bring them forward to have a debate. We did. I remember how strong their objections were. It seems like it's black and white. The two camps don't seem to meet anywhere. How do you suggest we can give them examples that would bring you and the others together?

¿  (0950)  

    Mr. Richard Pfohl: It's a good question, Mr. Lincoln. The primary objection I've seen raised is with respect to the technical protection measures. Basically what the treaty says is that you have the right to protect your work using technology to make sure people don't steal it. What the libraries, the educators, and others have said is, well, what if we need access to a work and you put a protection on it; how do we get access to that work? That is a legitimate concern.

    We actually address that concern in the Copyright Coalition proposal. I won't go into the details of it, but basically what we do is allow for the types of uses libraries can make of works while still allowing the makers of those works to protect them from being stolen.

    But one thing I think it's useful to think about in this context is that it's always good to analogize back to the real world. In the real world a library can have certain access to a book, for example, but it doesn't have the right to go into, say, a Chapters, an Indigo, or an independent bookstore and just take the books. It still needs to purchase the books in the first place. Similarly, technical protection measures mean that you need to purchase the product before you can use it, and they protect those products from people just taking them. Now, it does mean that libraries would not be able to go online and simply take written works or recorded works or anything, but they don't have that right in the real world either.

    You're correct that the European Community has been dealing with this, and I think they've come up with good language. We can also take a look at the U.S. example. I think these same concerns were actually raised down in the U.S. back in 1998, when they passed legislation, and I don't think the major concerns have really been borne out. When I go to academic conferences and people talk about the technical protection measures and suggest they'll be problematic, the examples I hear quoted most are a couple of cases that have come up regarding garage door openers. Someone was trying to protect garage door openers using the language. But you don't hear about the academics coming up.

    The U.S. Library of Congress has done reporting on the effect the DMCA--the Digital Millennium Copyright Act, which implements the WIPO treaties in the U.S.--has had on educational users and other groups that have a right to access under certain conditions, and those reports have generally been favourable.

    There are some technical issues that need to be addressed, but that's the reason we tackled them when we put together the Copyright Coalition proposal back in 2002. I think the best way to address these issues is, again, to put draft legislation on the table. Let everyone take a look at it and criticize it, and we'll see whether it stands up or not, see whether it really presents problems. But it shouldn't be an excuse for inaction.

    Mr. Clifford Lincoln: I just have one last question. Okay, you have this draft legislation now, and obviously it seems that the government is postponing it and delaying and pussyfooting because they have the pretext or the fact of the two camps not getting together. Now you have this draft legislation. Can you tell me if your coalition, which is a huge coalition, has tried to get together with these other people to say, okay, there's a draft; what's wrong with it? How can we get together on it?

    There's a European model; they've managed to find a solution. Don't you think that if we bring the two groups here, their minds will meet and the same thing will happen? It's a vicious circle, and then the government uses it as an excuse not to do anything.

    Is there any way you can get together with people like Wanda Noel or whoever, smart and reputable people, to say, well, okay, there's draft legislation, and how can we get together on it? Then the government is put with its back to the wall. It can't do anything else but ratify.

    Mr. Richard Pfohl: I think, Mr. Lincoln, that's a good suggestion. I believe the groups that are more directly impacted by this are groups such as Access Copyright, which protects creators of written works, because really that's more important for the libraries. Certainly sound recordings are important to them as well, but that's more what their fundamental purpose is. I believe they have been speaking with the educational groups and trying to move the process forward. We would certainly welcome the opportunity to do so.

    I think that in consultations over the last eight years or so the government has received opinions from all sides. Our proposal has been public; it's been out there and provided to both departments for two years now, so certainly the proposals are on the table. We would welcome a forum to get together with those groups. As I mentioned, I believe some of the members of the Copyright Coalition have actually been reaching out to them and trying to come up with consensus legislation, consensus with all sides.

¿  (0955)  

    The Chair: Madame Gagnon.

[Translation]

    Ms. Christiane Gagnon: My thinking on this was somewhat similar. The session could quite possibly be cut short because of an election call. How will committee members be able to discuss draft legislation? Do you think that's feasible? There are only a few weeks left and this is important work. Do you honestly believe that three or four meetings will give us enough time to decide on all of the legislative amendments that need to be made to the Copyright Act? Even if you try to convince the parties that have some reservations, do you think this timetable is realistic?

[English]

    Mr. Richard Pfohl: On your first question about what should be done in the short term, I think my answer to the chair is probably the first step. We have to air this issue of private copying and whether or not the government thinks it's really a hindrance to ratification, because I think that's holding up the whole train. We can't have a debate when we don't know what the problems are, so let's identify the problems as a first step. Once we've identified the problems we can address them.

    The minister mentioned on Tuesday that she's going to be providing guidance to the committee within a week or ten days. I look forward to seeing that guidance. Hopefully the next step will be for the government to put forward legislation, or at least some proposals or ideas, that we can look at. Then we can start to flesh out these issues so we can actually have a meaningful dialogue about them.

    Our dialogue is taking place right now in a vacuum. It's much better to have something concrete before us that we can discuss, and talk about whether it really affects educators or users, instead of saying hypothetically that if we were to propose legislation like this it might, in some instances, affect users.

    Those sorts of hypotheticals don't help our members. They don't help the creative community, and they don't help people on any side of the issue, because they just kind of waste our time. We should be dealing with the concrete issues here. Canada should be moving forward into the digital environment.

    The Chair: Mr. Castonguay

[Translation]

    Mr. Jeannot Castonguay (Madawaska—Restigouche, Lib.): Thank you, Madam Chair.

    I'm also new to this committee and I'm trying to get a grasp of a number of issues, further to some of the intelligent questions put by my illustrious colleagues.

    We have here a letter bearing your signature and dated February 20 to which is attached a document referring to a proposal. The document notes that in the spring of 2001, Canadian Heritage and Industry Canada issued a consultation paper. It goes on to say this:

Six hundred and twenty-six submissions were received and posted. Five hundred and fifty-one were from individuals, many apparently at the behest of the Electronic Frontier Foundation, an American grassroots organization that opposes copyright rules for the Internet.

    Can you give me a little more information about the Electronic Frontier Foundation which, from what I read here, is a large group opposed to action in this area. Does this organization wield much influence with departments other than Canadian Heritage? Can you shed some light on this for me?

À  (1000)  

[English]

    Mr. Richard Pfohl: The Electronic Frontier Foundation is a grassroots organization that represents user interests. This is one of the groups Mr. Lincoln was referring to. I think you're probably all familiar with the writing campaigns where you get 500 or 1,000 letters from constituents that look suspiciously similar. I believe they undertook a similar campaign. Users are one of the stakeholders at the table, and that's simply one of the interests that have been represented. They chose to put their ideas forward by having people individually write letters or send e-mails, instead of the general approach that was taken by the other organizations, which was to come up with a proposal on behalf of the members.

    So I don't think the numbers should scare you. But certainly users are an important constituency, and we need to make sure they're treated fairly in the digital realm, just as they are in the analog realm. That's why the Copyright Coalition proposal we put forward aims to do that and to address concerns that have been raised.

    This proposal, I should add, was drafted after taking a look at all of the submissions that have been received by the government. The government has engaged in a number of processes. We took a look at all of those processes. We took a look at legislation from the U.S., Europe, and other countries around the world that has been passed. So in Canada we have had the benefit of a lot of input on what people want and a lot of study of what has been adopted around the world. I think it's now time for us to act.

    The Chair: You said we need to air the issue of private copying. You talked about the fact that there is some concern that we'd have to give national treatment of private copying. When we use words such as “national treatment”, there are also reservations or exceptions on the other side. If that's not a concern, why not take a reservation or an exception?

    Mr. Richard Pfohl: The treaties don't allow for a reservation. When you sign on, you need to sign on to all of the requirements of the treaties.

    The question is, what are the requirements of the treaties? As I mentioned, all of the leading international experts have said that in theory there is not a requirement to extend national treatment with regard to a private copying regime. In practice, all the countries that have ratified or implemented to date have not believed they need to extend national treatment. I'll use an example, and this is using perhaps Mr. Lincoln's approach of building upon what the Europeans have done and looking at how they've addressed issues.

    The following countries have actually implemented legislation. They've passed legislation. They have private copying regimes, and they have not amended their private copying regimes to provide for national treatment. Those countries are Austria, Denmark, France, Germany, Greece, the Netherlands, and Italy. All those countries in one way or another have a private copying regime, and they haven't felt the need to amend it. So in theory and in practice, I don't think there's a problem for Canada.

    The Chair: In your document you refer to article 9, the duration of the protection of photographic works, where it says, “In respect of photographic works, the Contracting Parties shall not apply the provisions of Article 7(4) of the Berne Convention”. Isn't that in a sense an exception? I think that's why I'm confused.

    Mr. Richard Pfohl: Can you point me to that, Madam Chair?

    The Chair: It's on page 2 of the WIPO treaty implementation proposal.

À  (1005)  

    Mr. Richard Pfohl: The WIPO Copyright Treaty actually says we're going to amend the Berne treaty. So the language you're reading is actually the language from the WIPO treaty itself that says this provision of the Berne Convention will no longer apply. So it's an amendment by the WIPO treaties to the Berne Convention.

    The Chair: Thank you.

    Mr. Lincoln.

    Mr. Clifford Lincoln: I would like to go back to the Internet and the reservations that some of the groups that came to see me over the time had when they said it's impossible to control the Internet. So the creators say no, we have to have our copyright apply. So they say, we don't want to ratify the WIPO treaties until this is sorted out.

    In your view, does the fact that the CRTC has taken a position that the Internet shouldn't be regulated--I know they're reviewing it--weaken the case of those who would want copyright to apply to the Internet?

    Mr. Richard Pfohl: I don't think so. What the CRTC was saying was that the existing broadcasting rights, which they're used to enforcing, don't necessarily apply on the Internet, or that we have to write specific rules for the Internet, and we've done that with respect to the retransmission right. That's what the WIPO treaties are about. So the CRTC's position actually reinforces our position.

    I'm glad you raised the issue, because this notion that the Internet is the wild, wild west and no rules apply is devastating our industry. People think they have the right to go on the Internet and just steal our music and distribute it to millions of strangers, and it's had a devastating impact. We've seen our sales drop $425 million since 1999, or 30%, and it's really hurting the cultural industries of Canada. In our industry we've had layoffs of about 20%, so there are hundreds, if not thousands, of Canadians who are out of work today because people don't believe the law applies to the Internet.

    What we need to do is make sure the law applies properly to the Internet. The WIPO treaties were crafted after years of input from countries around the world, including Canada, to try to make sure we had the right balance in terms of our laws on the Internet that protected both the creators and also the users of creative material in the digital realm.

    The Chair: Are there any other questions?

    Mr. Schellenberger.

    Mr. Gary Schellenberger: There is one thing Mr. Lincoln said before that seems to make sense. If you have two differing people, what I would do.... This is a lovely room here, and I think it would be great to bring the two in at the same time and lock them in a room until they come up with a deal. I've seen this happen before. We have you today and we have another opinion another time. In the real world that I come from, those things can happen. That would be my suggestion.

    Maybe we are in a short session. I think it'd be great to have the two, and whether the committee is there to oversee or not.... We'd put one party on one side and one party on the other and go to it, have a full day, with two or three sessions. I think we could come up with a consensus and we could come up with a document that could go forward. That's what I would like to see.

    Again, I've told you I'm new here, but that's the way I'd handle it.

    Thank you.

    Mr. Richard Pfohl: Mr. Schellenberger, we'd welcome the opportunity to sit down and hammer out these issues. I do think that to facilitate this it would make sense to have a starting proposal on the table. We've obviously put one forward before this committee; we could start from that, or it might make even more sense to start.... I understand the two departments have been working hard on trying to come up with documents, so perhaps it would make sense to start with their documents. But we certainly would welcome the opportunity.

    The Chair: Mr. Bonwick.

    Hon. Paul Bonwick (Simcoe—Grey, Lib.): Thank you, Madam Chair.

    My apologies for running late. I just left the minister at HRSD; he was presenting there. So if any of my questions happen to have already been asked, you'll give me a little grace, please.

    There has been a tremendous amount of conflict. I admire Mr. Schellenberger's approach that perhaps we could work in a cooperative fashion rather than a reactive fashion. But there's been a tremendous amount of hype around specific issues within the framework of the ratification of the WIPO treaty. One of the issues that's been identified over the course of the last few days is this private copy regime and whether it impacts negatively the ratification process. We've asked as late as Tuesday for the Minister of Canadian Heritage, and certainly, for the record, we put that out to the Minister of Industry as well, but we want to see their legal opinion as to how it applies to the WIPO ratification process. We want that if we're going to be engaged in the topic.

    I'm asking you, seeing as we haven't been able to ferret that out of Industry or Heritage at this point in time, do you have an opinion on how that applies?

À  (1010)  

    Mr. Richard Pfohl: Yes, and I actually did address that earlier.

    Hon. Paul Bonwick: My apologies, but could you give it to me now? I likely wouldn't have understood it the first time anyway, so maybe you can give me a little grace.

    Mr. Richard Pfohl: I'll give you the Coles Notes.

    In our view, any sort of concern that Canada would need to amend its private copying regime in order to ratify the treaties is misplaced, and we believe that's the international consensus of all the experts. A number of different reasons have been put forward as to why Canada would ostensibly need to do so, and we simply don't believe that any of those really stand up to scrutiny.

    Hon. Paul Bonwick: Again specifically relating to that theme, the other point I would ask you to comment on is this. Let's say for a moment that you're wrong and the international community is all wrong. In that sense, if we were wrong and somebody wanted to challenge us, where would they take it or who would they challenge it with? I don't think you can go to the ITT, and I don't think you can go to the WTO. So I'm curious, what world court would deal with this issue if in fact we decided not to support our creators?

    Mr. Richard Pfohl: You raise a good point, because there is no real world court that you'd be able to take this to. So in fact, as a practical matter, no one is going to hold Canada accountable and force it to change its laws should Canada become a signatory to this treaty.

    I think that might explain in part why none of the countries to date who have private copying regimes—and there are numerous ones—and who have ratified the WIPO treaty have felt that they need to amend their existing private copying regimes in order to extend national treatment. The short answer is that there wouldn't be any dire consequences for Canada.

[Translation]

    Ms. Christiane Gagnon: Earlier, you said that we were lagging behind other countries that had ratified the treaties. Some are holding consultations in an effort to get everyone on board. How far behind are we in terms of the efforts being made by other countries? Why are we lagging so far behind European countries that are examining ways of ratifying the treaties through the European Community? How are we faring compared to other stakeholders? We may be lagging behind, but other countries are holding consultations as well. I think amendments to our Copyright Act are warranted, but you're saying that legislative amendments are not a prerequisite to ratification of these treaties.

[English]

    Mr. Richard Pfohl: Those are good questions. Again, as we were discussing earlier with Mr. Lincoln, I think the real reason is fear of change. Empirically, if you look back, any time we do amend our Copyright Act, it is a long, tortuous process. So when we look, for example, at the section 92 report talking about short-term, medium-term, and long-term solutions, we look at the short-term ones as ones that maybe we'll get in the next decade, the medium-term ones as maybe or maybe not being out of the realm of possibility, and the long-term ones as being just off the map. That's the way it generally seems to work.

    In terms of where Canada stands relative to other countries, it's disturbing because we've created a lot of this technology and we've adapted it faster than most countries have. On a per capita basis, we are a leader in terms of the amount of Internet usage, in terms of the amount of Internet penetration and the amount of line that's been laid. Even though we're a vast country and we've got the tools in place to use the Internet, when it comes time for our creators to put their products on the Internet, they are unprotected. So in terms of where we rank relative to other countries, you have to look at where Canada should rank. It ought to be a leader; it should not be a follower.

À  (1015)  

    The Chair: Mr. Lincoln is next.

    Mr. Clifford Lincoln: Mr. Pfohl, we had a resolution from Mr. Bonwick to ask the department to present a draft by February 16, but because of prorogation and so forth that fell through. But I imagine the department, which has been listening closely to what we have been doing, probably has been working on a draft anyway.

    There's your draft. In practical terms, as an expert lawyer in this field, how do you see a draft of this nature meshing with what the departments have already done, and in practical and realistic terms, how fast do you think a draft could be agreed to if everybody puts their heads together—the committee, your coalition, and the departments—bringing the opponents into the fold so that we eventually get somewhere? How do you see it? Is it so far advanced now that we can realistically see some daylight within six months or a year? What's your estimate?

    Mr. Richard Pfohl: Mr. Lincoln, I need to qualify something first. I think if I call myself an expert, the Law Society will be on my case. Let's just say I'm an interested lawyer.

    Mr. Clifford Lincoln: We'll call you an expert. Forget about the Law Society.

    Mr. Richard Pfohl: With regard to how soon we could see the legislation, the departments have both had our proposal for two years now. Hopefully those ideas have been digested and put into whatever draft they're working on.

    In terms of estimating how soon we could see draft legislation, it's difficult for me. It's like approaching the horizon: as soon as you get close to it, it seems to recede, and this seems to be the practice. We keep on hearing six months—but that six months we keep on hearing.

    I don't know how soon we could see the legislation. I would hope it's ready.... It may be that the departments put it forward and say, “Here are some things we haven't resolved yet. We have three different options. Here are the options. What should we do?” That's a role I think the committee could work together with the departments on, to try to resolve those issues.

    But we need to put forth the options and start to tackle them instead of dealing with this in the hypothetical realm, as we have been doing since 1997.

    Hon. Paul Bonwick: I think there's a consensus within the committee. This is one of the rare issues we deal with in Parliament where all parties are supportive, where all members on the committee want to move forward, where we've publicly identified what the committee expects, where all those stakeholders who are impacted by it are speaking in positive terms, or at the very least are saying, make sure you incorporate this or that when you're reflecting or reviewing this.

    The committee recognizes that creators within Canada have distinct challenges that other regions don't. Certainly the size of our market is a factor as well. We recognize that Canadian creators are losing hundreds of millions of dollars every year and we recognize the fact that we can change the rules and right that very quickly.

    Mr. Lincoln's question would be better put to this committee, rather than his asking you how quickly you think we can do this. I would say the question really lies out there in the centre of us: how quickly are we going to demand that this issue be dealt with by the committee?

    I think the level of cooperation—the extension of the olive branch, so to speak—is drying up quickly, and that it is time this committee took a very progressive and hard line with the departments and said, “We want the information, we want it now, and we want to get on with dealing with this”.

    I throw that out for the committee's purposes, and not necessarily for comment from you. But if you are interested, you are welcome to comment.

À  (1020)  

    Mr. Richard Pfohl: Probably one of the things you missed before you came to the meeting was my praising the committee for actually lighting a fire under the feet of the departments and getting them to start moving on this. I know you were a primary instigator there, so I want to thank you for taking a lead on this issue.

    The Chair: Thank you, Mr. Pfohl. I know you have a very busy day ahead of you. Thank you for coming to Ottawa from Toronto this morning.

    The meeting is adjourned.