Thank you, again, for inviting me to appear.
I've had the pleasure of discussing copyright issues with many of you over the past years, and for those of you with whom I haven't spoken yet, I look forward to hearing your thoughts.
[Translation]
My apologies to those following the written translation of my remarks. I have made some small revisions as a result of some recent submissions.
[English]
I'm the executive director for the Canadian Music Publishers Association. CMPA has been around since 1949. We are based in Toronto, although we represent music publishers and their songwriter partners from across the country.
Music publishers help songwriters make a living from songwriting. If a song gets used in any way that it generates revenue anywhere in the world, the publisher helps track down that money, collects it, and sends it to the songwriter. A publisher also invests in songwriters throughout their career, helping them stay afloat between royalties, and offering support and expertise.
We believe that the skill, talent, and expertise required to write a hit song are precious things, and are best nurtured by protecting the ability to make a living doing it, so it is important to have strong, effective copyright legislation.
CMPA joined over 100 organizations that have signed on to the cultural industry statement, and we continue to endorse all the positions put forward in that document. We believe in the need to modernize Canada's Copyright Act and to be good global partners. Copyright worldwide is only as strong as its weakest link. We also believe that the government has fallen short of its goals on copyright with Bill C-11, but we understand that the government believes that the proposed legislation does meet its policy objectives, so it's time for us to try to contribute to a new discussion.
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It's time for us to try to contribute to a new discussion. That is, can we make technical suggestions that will help to clarify or strengthen the government's stated intentions? We think so. We are proposing four main areas in which we believe the legislation can be strengthened with technical amendments.
The line between technical amendment and policy shift isn't always clear, so what we are trying to do today is add a positive, credible voice to this process, and we try to err on the side of caution and not creep into policy waters. I'm also pleased, if somewhat exhausted, to say that these positions represent many, many hours of debate within our organization.
Our four amendments relate to the broadcast mechanical tariff, ISP liability, secondary liability, and statutory damages.
Our first technical amendment is regarding the ephemeral recordings for radio broadcasters. When a song arrives at a radio station, a copy is made from the originating file to the radio station's hard drive. That copy is made under the right of reproduction for which creators and rights holders are compensated about $21 million annually. Our concern with Bill is that the elimination of subsection 30.9(6) of the act will cost music creators and rights holders millions by the de facto elimination of this revenue source. More than 47,000 individuals and companies receive cheques from this revenue stream annually from CMRRA alone—that's not counting SODRAC or the master owners or performers.
Under Bill , the section that allows for this right would be repealed, thus allowing broadcasters to keep copies of their songs on their server for 30 days without payment, as long as the songs are deleted at the end of that 30-day period. In other words, the government wants to change the law to provide broadcasters with access to the songs for 30 days for free. If the broadcasters want to keep the songs after 30 days, then they would pay the existing tariff.
The problem is that as Bill is currently written, broadcasters believe they will be able to game the system by deleting a song file every 30 days, and then immediately restoring the exact same song file. In essence, broadcasters can easily comply with the 30-day destruction requirement by making those copies of copies.
Although the CAB doesn't say so in its written submission, we know it is the broadcasters' intention to game the system. In fact, recently broadcasters have suggested that it's a nuisance to have to delete and recopy libraries every 30 days, and that they want the tariff removed completely, rather than pay it. This would be a policy shift contrary to the government's intention. In effect, some broadcasters are complaining that the government is making it hard for them to work around the government's proposed law.
The broadcasters have framed the payment for this use as an inappropriate subsidy of the music industry. We see it as a use of our rights, rights protected under widely held principles of private property in a way that allows broadcasters to operate more efficiently. We are happy to contribute to these efficiencies by licensing this valuable right, and we think it's reasonable to be compensated for assisting them in streamlining their operations.
If there's a subsidy in this discussion, it's the other way around. Allowing Bill to stand unfixed would force us to subsidize the broadcasters by involuntarily contributing our right of reproduction for no compensation. Although CMPA would prefer that the government not eliminate subsection 30.9(6), we understand the government would like to confer a 30-day exemption from paying for this right. We reviewed the written submissions by the broadcasters and the government's proposal, and this 30-day exemption seems to be consistent with what the broadcasters have requested in their written submissions.
We can accept this compromise if we can ensure the integrity of the 30-day limitation. If a song is going to be kept as part of a permanent library, it has value for the broadcaster, value for which we should be compensated.
In order to give effect to the government's stated intention and limit the exception to 30 days, we have proposed a technical amendment that would prevent broadcasters from making reproductions, which, while technically retained for only 30 days, would end up being a permanent library of music. In other words, it would stop the broadcasters from getting around the exemption by using delete and restore.
If the government's intention is to eliminate the BMT by leaving the barn door open on this 30-day exemption, Bill would be in violation of the Berne Convention, which says that a government cannot repeal a right that is currently being monetized. There's also some additional amending language in our written submission in regard to temporary reproductions for technological purposes.
Our second technical amendment relates to the role of ISPs in reducing online piracy. The government has stated that one of the goals of this bill is to reduce online piracy, and this is a good goal. However, there's a need to improve the provisions for ISP liability in Bill in order to ensure that they will in fact achieve this goal.
ISPs take an active role in shaping the Internet traffic that flows through their systems. In fact, ISPs are aware of and regularly monitor how much traffic they carry and what transmissions are used for unauthorized transfer of files. The problem that rights holders face is that many of these sites are outside Canadian jurisdiction and therefore cannot be shut down at source. An example of this kind of site would be Pirate Bay. In the U.K., the high court ruled two weeks ago that Pirate Bay is an infringing site and injunctions for ISPs to block access will soon follow.
The kinds of amendments we are proposing are similar to what's being used against Pirate Bay in the U.K. Provisions like this are proving effective in other territories also.
The CMPA again has proposed amending language that would create a positive obligation for service providers to prevent the use of their services to infringe copyright by offshore sites. Should that wording not be acceptable to the committee, we have proposed a more limited version of the amending language, which would permit injunctions only for the purpose of requiring service providers to block access to the services that are primarily intended or ordinarily used for enabling acts of copyright infringement.
There also has been much talk lately, both in Canada and in the U.S., about American SOPA and PIPA legislation. If I were you, I would be asking me how these proposals compare to the controversial American proposals. I have an answer that has been submitted as part of an addendum that addresses this question. To summarize, our legal review assures us that the amendments we are proposing are far narrower than SOPA and PIPA and that they are in keeping with Canadian due process, more so than the American proposals.
Our third proposed technical amendment is for secondary liability for copyright infringement. Bill proposes eliminating liability for most Internet intermediaries by balancing provisions that would target so-called online enablers. Unfortunately, these provisions are drafted narrowly and ambiguously. For example, the provision is limited to services that are designed primarily for infringement, creating a loophole for those services that may have been intended for innocuous purposes but are now primarily intended or ordinarily used for copyright infringement.
Furthermore, it's unclear if computer software that enables acts of copyright infringement is equivalent to providing a service. Many of the factors proposed to distinguish between legitimate and illegitimate service providers are very unclear and may need to be litigated extensively before their scope is clearly understood. Again we are proposing amending language to rectify this situation: we would like to see “designed primarily” changed to “primarily intended or ordinarily used”.
Our fourth and last proposed technical amendment relates to statutory damages. In an attempt to achieve proportionality in statutory damages in Bill , the government has created significant obstacles to copyright enforcement. In proposed subsection 38.1(1), the government has created two ranges for awarding statutory damages. Commercial purposes damages, for example, range from $500 to $20,000.
The simple reality is that copyright owners would be deprived of any effective response to non-commercial infringement, as the cost of collecting damages would so exceed the maximum recovery that no rights holders would be able to afford to enforce their rights. In addition, the meaning of “non-commercial” is unclear, with three different phrases being used to describe acts that are seen as worthy of reduced penalities or exemption from liability. The terms “own private use”, “private purposes”, and “non-commercial use” are similar in many instances and overlap in others, which is sure to lead to confusion and, consequently, to costly and unnecessary litigation.
In conclusion, as promised, the focus of my submission today has been on technical amendments that we believe will strengthen the bill within the confines of the government's policy choices. My members feel strongly, however, that I should go on record to say that our viewpoints on user-generated content, fair dealing, and private copying differ from the government's. They recognize, however, that these constitute policy differences and are therefore of lesser interest to the committee.
I shall do my best to answer any questions you might have.
Thank you.
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Thank you for the opportunity to appear before you today.
My name is Victoria Shepherd. I am here on behalf of the AVLA Audio-Video Licensing Agency, which represents over 1,000 members, including major and independent record companies and many independent artists, representing the vast majority of music played on radio stations in Canada.
I would like to express our enthusiastic support for this initiative to modernize Canada's copyright laws.
Creators and copyright owners need a clear legal framework that protects their work in today's digital marketplace. We applaud the government's effort to create new rules that will enable our members to sell and license their creative work.
I am here today to draw your attention to two issues regarding Bill C-11: first, a potential loophole in proposed amendments to the ephemeral recording exception; and second, recent requests by broadcasters for a major policy change on the ephemeral reproduction right.
In both cases, the end result would be contrary to the government's stated intention to provide a 30-day temporary exemption and could effectively annul the copying right.
Let me give you some background. For decades, radio stations played vinyl records and then CDs. Today, using digital technology, music is copied directly to hard drives. Radio stations have gained significant cost savings and higher profits thanks to the automation and operating efficiencies made possible by the right to make reproductions of sound recordings.
The point is that these rights have economic value. This is why broadcasters are required under the Copyright Act to compensate rights holders. It is also the basis for Copyright Board decisions in 2003 and then again in 2010. The board is an impartial, independent agency created by Parliament, which exhaustively considered expert testimony and the arguments of all stakeholders. It determined the fair and appropriate compensation to rights holders for the efficiencies broadcasters gain from utilizing the reproduction right.
No one during those hearings disputed that copies made by broadcasters have value.
The Copyright Board, in its 2003 decision, found that:
Copying music to a hard drive optimizes the use of these new [broadcasting] techniques, thus entitling rights holders to a fair share of the efficiencies arising from this reproduction.
The 2010 decision found that using the reproduction right “allow[s] stations to increase their efficiency and profitability”.
Commercial radio in Canada has grown steadily and significantly more profitable in the past decade, reflecting, in good part, the increasing importance of the reproduction right to broadcasters. Let's keep in mind that we're talking about the key business input used by commercial radio: music.
Music, more than anything else, is what radio business is all about. Over 80% of commercial radio programming is music. The Copyright Board has confirmed that reproduction rights are distinct from other rights associated with broadcasters' use of music, namely, the right to play the music.
These are separate rights that are separately owned by composers, performers, and record labels, and apply to separate and distinct activities. No one has been asked to pay twice, as the broadcasters argue. The foundation of copyright law is that the owner of a right be compensated by those who use the right.
Last week you heard testimony about the so-called layering of rights. The Copyright Board heard this argument and rejected it.
In its 2010 decision, the Copyright Board considered all commercial radio tariffs in a single, consolidated hearing at the broadcasters' request. They determined what broadcasters must pay for different uses of music and the rights connected to those uses. It found that the effective payment for all uses—equal to 5.7% of revenues—is fair, equitable, and well within their means. Within this total amount, the board set the rates under each tariff.
In Bill C-11, the government has proposed a 30-day exemption to the ephemeral recording exception. In short, Bill C-11 says that broadcasters should not have to pay for temporary copies of music. While the proposed 30-day exemption was unwelcome news to our members, we respect the government's right to set the policy.
Last year, at the Bill committee hearings, the broadcasters supported the 30-day exemption. The representative of the Business Coalition for Balanced Copyright, appearing on behalf of the Canadian Association of Broadcasters said, and I quote:
On the question of the ephemeral exception and the ability of radio stations to make copies, as the provisions now stand, the lifespan of those copies is 30 days. If radio stations want to make persistent copies of music to use as part of their operations, they can't now rely on the exception to do it.... This is simply short-term copying.
What we are most concerned about today is that the broadcasters appear to have much more in mind than a 30-day exemption. Last week you heard testimony that pointed to a potential loophole. Broadcasters apparently believe that Bill C-11, as drafted, allows radio stations to circumvent the proposed 30-day exemption by copying their music catalogue from one server to another every 30 days. Temporary copies will become permanent.
The original intent of the amendment is summarized on the Industry Canada website, and I quote:
With the adoption of new technologies, broadcasters today make temporary copies of the music they play on the air.... Recognizing the temporary and specific nature of these copies, the Bill removes the requirement to pay for any copies retained for less than 30 days.
Now some broadcasters are going even further. They want to change the original intent so that the legislation removes the requirement to pay for any copies at all. The government has specifically stated that only technical changes will be made at this stage. Broadcasters are asking for a full-scale policy change that is a complete departure from the government's stated intent.
Temporary does not mean permanent. This applies equally to broadcasters' latest request for a policy change and to the potential loophole in the bill as currently worded. Both could have the same result—making the temporary permanent.
All stakeholders should be concerned that, as drafted, this bill will create legal uncertainty. To avoid this outcome, and to support the government's stated policy intention of a temporary exemption, the potential loophole must be closed. To that end, we propose a straightforward technical amendment that will align the provision with the government's intent. We will submit our proposal to the clerk. We must get this right. Please ensure that 30 days means 30 days and that temporary does not mean permanent.
We think the Government of Canada got its priorities right when it said in the very first line of Bill :
the Copyright Act is an important marketplace framework law and cultural policy instrument that, through clear, predictable and fair rules, supports creativity and innovation
We understand that this is a complex issue. We support the government in its effort to modernize the regulatory framework. We applaud the government's objectives to provide “clear, predictable and fair rules”. We believe our proposed amendment strengthens the legislation's ability to meet Bill 's stated objectives.
Thank you.
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We share the objective that you have set for yourselves, that of modernizing the Copyright Act. Though our humble submission certainly comes from the heart, it also comes from sober consideration.
Royalty payments are a source of independent income for creative artists. Like the values that the government espouses, we see them as a right, based on respect for private property and the simple principle of user pay, whether the user is an individual consumer, a business or an institution.
In addition, if the government wishes to stimulate the creation of wealth, why would it want to whittle away the sources of independent income for a sector that is going through a difficult time? For a flame to stay alight, you need a little air. Royalties are the oxygen our medium needs. Let us not make the mistake of taking our creative people for granted. Times being as they are, their concerns are critical. I myself have been a songwriter for almost 30 years. Since I started, our reality has changed considerably. With creative works becoming more and more virtual and online transactions becoming more and more frequent, the music and audiovisual industry is being shaken to its core. Amid all that shaking, songwriters are having to accumulate many many micro-royalties in order to make a living.
In that situation…
[English]
every penny counts.
[Translation]
So the law is silent about the revenues associated with private copying, with ephemeral recordings, with education, the revenues associated with the use of our music on the Internet, and that must be properly valued—as was done with peer-to-peer exchanges. All those revenues are our daily bread.
Clearly, people have never consumed so much music. It is consumed in cloud form, on iPods, on phones, on the radio, on television. It is everywhere. Consumers are ready to pay to receive it in the way they want.
Why not uphold and strengthen collective administration in this new ecosystem? Why abandon the private copy regime that allows people to copy their music while providing those who created it with compensation?
Since 1997, the regime has resulted in $30 million in revenue for rights holders. In a context where the business model is eroding, that amount makes a considerable difference. Though the ways in which our music is accessed and consumed may change, the principles remain and the challenge of applying them in the digital world rests on our shoulders.
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The bill also include exceptions for education. That makes it impossible for me to refrain from asking the question: what favour are we doing for our educational institutions by removing the value from intellectual property? Do we ask a plumber or a computer expert to work for free when they are working for a school? So why do we ask an artist to do so?
International treaties to which Canada is a signatory stipulate that, if exceptions to exclusive rights are allowed, they must be “special cases which do not conflict with a normal exploitation of the work and do not prejudice the interests of the rights holder”. In order to comply with that condition, the exceptions are generally accompanied by fair compensation. That is the case everywhere, but it will not be the case in Canada. So why the exceptions when agreements between management companies and educational institutions already exist? Those agreements were negotiated in good faith and they work, as Quebec's minister of culture, communications and the status of women recently indicated. So SPACQ supports SODRAC's proposed amendments. They clearly restrict the application of exceptions in the same way as they are addressed in the international treaties.
We are testifying today as Canadians, but also as citizens of the world. The companies that collectively administer our rights do so in reciprocity with sister companies around the world. The international treaties are the instruments by which our foreign partners are assured that their repertoires will be as well represented here as ours are there.
If it is true that works of art are the soul of a nation, our Leonard Cohens, Joni Mitchells, Gilles Vigneaults and Arcade Fires are spreading the Canadian soul to shine around the world in their work. They were recently to be found at the Grammy Awards, at the Oscars, at the Césars and at Cannes, as our composers also write music for the cinema. Those nominations underline the excellence of our artists and our expertise. Their work is universal and resonates all around the world. Work that travels like that is not a truck that drives the economy by burning our oil to carry its load of plastic. It is the soul of a people, its thoughts and its vision travelling through time to meet the world.
We do not lack the means here to make sure that our artists have the air that is vital for keeping the flame alight, healthy and bright. But do we have the will? What will it cost us? A little courage, a little vision? The creators are pinning their hopes on you. Show business and everything associated with it employs a lot of people, from creation to production, in the studios and in manufacturing, distribution, transportation, in retail or online sales, on radio and television. It is a huge machine set up to send the soul of Canada to the greatest possible number of people. Or is it just a pretext to print plastic, to put trucks on the road, to stack warehouses or to sell high-speed subscriptions? Is that what is driving all this upheaval?
We are at a crossroads. The decisions we make today will determine the fate of creative people for several years, for many years, if the frequency with which the legislation is reviewed is anything to go by. Distinguished committee members, we are counting on you to do what is necessary with this bill so that it respects the creators, serves the needs of the public and complies exactly with our international treaties. Putting the Berne Convention's three-step test right in the text of the bill itself would be a simple way to achieve that goal.
Thank you for your excellent presentation.
It's been really interesting watching these hearings unfold, because we really see the Conservative game plan, which is to intervene and expropriate the rights of artists by creating this loophole.
We just saw my colleague complaining that the value of the mechanical royalties has gone up, when he hasn't put up any historical profile. In 1996, radio was in it tough, with a 1% profit rate. They were looking for help. They were looking for subsidies. The government decided to subsidize them on the backs of artists. But the industry was okay then.
And then, in the following 15 years, digital was great for radio. They got to get rid of all the staff who used to rack the records, all the people who used to have the CDs. So now their profits are massive. Year by year, their profits are going up.
This gets adjudicated at the Copyright Board, so the Copyright Board decides what's the value. We see this interventionist government here; they decide they're going to step into the breach. They're going to blame the artists, who.... You know, the industry has been bleeding for years. They're going to stop a payment that has already been adjudicated. But they legally can't do it.
Ms. Saxberg, we talked about the Berne Convention. You can't repeal a right internationally that's been monetized. Isn't that similar to expropriating a right that a business person has?
Thanks to all of you for being here and to some of you for being here again.
I wanted to get back to this confusion on the government's side around the idea of paying twice for something. Let's say a radio station leases or rents space, an office space, to do business. They rent it. Does that mean they shouldn't be paying for the heat, the hydro, and the telephone connection? No. Of course they're going to pay for those things, too. But what the government is saying is that they should pay for those things, but they shouldn't pay for the right of reproduction. Either the government is very confused about the business that we're in here—in the music business, in radio—or they are intentionally obscuring and confusing the issue.
The issue here is that radio stations are not paying twice. They're paying for very different uses. It's similar to saying that I buy a car and therefore I shouldn't have to pay for parking because I've already bought the car. I've paid for it once already, so what the heck?
For anyone who's ever worked in the music business or in any creative industry, the argument is absurd.
Ms. Saxberg, I want you to just help the government side understand the realities of life as an artist. We're talking about fairness here, right?
We're talking about fairness. We know that the music industry has taken a hit over the years. We know that. We know that artists have struggled. We know that labels have struggled. At the same time, we also know that broadcasters have had a field day.
So where is the fairness? Can you please help these guys understand the realities of the business?
If I might say at the outset, I just want to thank Mr. Cash for clearing that up for us on the issue. I'd just like to expand a little bit on the clarification, if I could.
There's a very important relationship between radio broadcasters and the music industry, a critical one, I would actually argue. Their industry relies on music to gain listeners, and the music industry depends on the radio broadcasters to disseminate the content. We could argue about whether that's less important today than it was 20 years ago, or what have you, but the bottom line is that they could also make the argument that their focus and part of how they reinvented themselves was to really nail down and focus on local markets, because ultimately every radio station in this country can be replaced. There's no need to go to a radio station on the dial; there's no need for a radio station in Peterborough. If you just want to listen to music, you can buy a satellite subscription and listen to music. The value is in the other things that radio stations are doing. The local content really matters, and it's why radio is popular.
I think in the argument we're hearing here today, both sides have set aside the fact that they're in a necessary relationship. It's a marriage, and it may not be a perfect marriage—and I think that's what we're hearing today—but it's a very important marriage.
What I heard from the broadcasters, and what I continue to hear from them on this—and this, Ms. Shepherd, is what I would like to get an answer on—is they are indicating very clearly that they do pay rights for music, so they're not getting anything free. They pay performance royalties in excess of $60 million, and they also pay in excess of $30 million through a CRTC fund that nobody acknowledges at the committee, but they do pay it, and that goes into FACTOR, a very significant fund for the Canada Music Fund, and then we have the broadcast mechanical. What they're arguing on the mechanical or ephemeral rights is that they don't want to make copies; they'd like to buy the music in the format they use in the first place, but nobody will sell it to them in the format they use.
Mr. Cash used the example of a car. If Mr. Cash wants to buy a car, we don't make him buy a city bus first and then tell him that if he would now like a car we'll sell him one. He can go out a buy a car.
What the broadcasters are saying is that they would like to buy the music in the format they use it in. They don't want to make copies, they don't want to have to re-record things every 30 days, they just want to buy the music in the format they use it in, but the industry isn't providing it to them in that format. Can you tell me why that is the case?
Frankly, if that were the case, the Copyright Board would simply look at the entire issue, ephemeral and performance royalties, and suggest the value of that single payment. It would then be adjudicated as to the fact that they used to have 60 plus 21, and we now have a situation where they're buying strictly in the format they use, and the value is X. I think that's just a simpler system for everyone.
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Thank you, Mr. Chairman.
Thank you to all of you for being here. I would like to specify that it is indeed the work of the Copyright Board to regulate all of this and that in this bill, the 30-day exemption is unfortunately a loophole that allows for a constant renewal of those 30 days. Therein lies the problem.
If we could at least limit the number of repetitions of that copy, this loophole that is cheerfully proposed to broadcasters so that they can avoid the Copyright Board would be abolished.
We have to stop going around in circles. This is an issue that falls under the purview of the Copyright Board, end of story. If we want to avoid any problem, we have only to ensure that there will be no renewal of this grace period of 30 days. It isn't complicated.
A little earlier, I heard people talking about ephemeral copies, mechanical rights, of course, but also about levies. I also heard the words ''format shifting''. In reading your document, I can see that there is a serious problem related to backup copies and personal copies in sections 29.2 and 29.4 of the act.
Don't you find it unfortunate that the words ''format shifting'' do not appear in the act? Would the use of those words not be preferable to the prevailing vagueness that allows people to make copies for themselves, for some use or other?
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Thank you, Mr. Chairman and committee members, for this opportunity to address you on behalf of the K to 12 educational publishers sector. My name is Greg Nordal and I'm president and CEO of Nelson Education, Canada's largest publisher in this segment. We have roots in Canada going back to 1914.
There are many positive components of Bill . Our industry is fully supportive of the intent to modernize copyright law in Canada and much of what we see in Bill C-11 achieves its purpose.
However, the educational fair dealing exception clause, as drafted, is problematic in many ways. It would create an environment of uncertainty for Canadian rights holders and authors, it would lead to an unacceptable level of investment risk for publishers and potentially harm the market, and it would have the unintended consequence of undermining the future availability of indigenous materials and learning resources created specifically for Canadian students and educators.
From the point of view of the creative community, the issues are clear. Who could reasonably expect publishers to spend millions of dollars a year investing in new learning resources for Canadian schools if rights holders are not protected and there's no viable expectation of return? What incentive do Canadian authors have to invest their time and talent to create content without viable opportunities for compensation?
This committee has heard some contend that educational fair use exceptions have worked well under U.S. law, so why would Canadian publishers have any concern? However, there is an important distinction to be made here. In the U.S., fair use provisions make it clear that commercial harm to right holders is the primary determinant of fair use in copyright. That's the trump card. In Canada, on the other hand, the much discussed six-step test is to be used to determine what is fair. Commercial harm is but one test of the six under CCH to help assess what is fair. Commercial harm is not deemed as the most important test, and in and of itself commercial harm does not determine what is fair. In the U.S. the effect on the market for the copyright work is determinant, and it is the central fair use factor. This principle gives U.S. publishers the comfort they need to invest in new and innovative solutions for schools, students, and educators. To suggest that the fair dealing exception in Bill is comparable to fair use protection is extremely misleading. To suggest that the six-step test is adequate protection for Canada's creative community is worrisome indeed.
This committee has also heard from some within the educational community who say that Bill changes nothing with regard to compensation for educational publishers and authors, that our concerns are unfounded, and that these words are contradicted by real world experience.
I speak from such experience in the K to 12 publishing sector. The Copyright Board issued a decision in 2004 that set out what uses are fair by teachers and are to be considered fair under fair dealing. This decision was appealed by the ministers of education to the Federal Court, which in 2010 affirmed the Copyright Board's decision on fairness. Publishers have accepted both the Copyright Board's and the Federal Court's rulings on what is fair, but not so the educational sector. In fact, the educational sector has contested the fairness determination all the way to the Supreme Court, which heard the issue in December 2011. The decision is pending. Despite multiple rulings on what is fair dealing and fair compensation for the creative community, this issue, 10 years after the original Copyright Board decision, has still not been accepted by the K to 12 market. It's worth noting that the litigation has been lengthy, costly, and has generated much uncertainty in Canadian publishing for authors, publishers, and other stakeholders. The proposed exception will further undermine protection for copyrighted materials in the educational sector. The proposed educational exception will have an adverse impact on our market, based on experience.
To be clear, the amount of classroom copying that is happening today is not trivial. On an individual classroom basis, the amount of copying may seem a trifle to some but in aggregate the amount of copying taking place is immense. In 2009, over 300 million pages were copied in Canadian K to 12 schools. That equates to over $40 million in annual book sales, given the typical size and price of a book at the K to 12 level alone. If you include higher education, colleges and universities, the figure is much higher. It's well over half a billion pages copied on an annual basis, and these are materials copied directly from copyrighted works. We're not talking about what's freely available.
It is possible to amend the fair dealing exception so that it reflects the stated positions of the ministers of education, the Canadian School Boards Association, and others. But this is not about avoiding fair compensation to rights holders. It should not be a problem for the educational community, based on their assurances on this point, to accept the amendments we have tabled for consideration.
On behalf of Canada's K to 12 publishing community and industry, I urge the committee to make the technical amendment we are proposing. This will clarify that fair dealing for educational purposes does not eliminate the need to provide fair compensation for rights holders. Let's make it clear under the law that fair dealing is not free dealing.
Failure to provide a technical amendment that protects copyrighted works will imperil the availability of resources created in direct response to the needs of Canadian school children, as determined by the curriculum. The capacity of the Canadian publishing community to share stories and communicate the values, culture, and history of Canada is at serious risk if the current exception goes unamended. Our market will be harmed.
The potential for devastating unintended consequences is very real. In the long run, it's not just the authors, content creators, and publishers in Canada who will suffer, but also the Canadian students and educators we serve.
Thank you very much.
My name is Jacqueline Hushion, and I am the executive director of the Canadian Publishers' Council. We represent the interests of companies that publish books and digital and other electronic media for college and university students and faculty, for elementary and secondary schools, students, and teachers, and for the professional and reference markets in law, medicine, and accounting, as well as the general interest non-fiction and fiction for children and adults found in Canada's retail marketplace and in all types of libraries.
Together, the members of the Educational Resources Council and our association employ more than 4,500 Canadians. If you factor that up to include other associations in Canada, and ANEL, which was before you the other day, that comes to 9,700 jobs. Some of you have probably seen this document I have here. It has been making its way around lately. In the overall sector to which we belong, those 9,700 jobs factor up to 85,000 jobs at the end of the day.
Our own members invested $75 million in production and manufacture of print. Make no mistake about it, print is still the lion's share of the demand from the marketplace, and our members have to respond to what the marketplace wants. As well, in 2011, our members published 8,000 titles in print and made more than 18,000 Canadian titles available in electronic format—18,000. Our members invested $35 million in the marketing of Canadian print and digital works and paid $50 million in publishing advances and royalties to Canada's authors.
That's what's potentially at stake. Sound copyright that protects the marketplace for copyright works is the spine of the publishing industry's body of work in every country in the world.
Thank you.
Go ahead, David.
Thank you, Mr. Chairman and committee members, for the opportunity to be here this morning.
My name is David Swail. I'm the president and CEO of McGraw-Hill Ryerson, which is a K to 12 and post-secondary and professional publisher, based in Whitney, Ontario.
I'm going to focus my comments this morning—and this won't surprise any of you, I don't expect—on fair dealing, so I'll be echoing some of the themes you've heard already from my colleagues here.
In our view, the education exception for fair dealing is the most significant new element of Bill that has the greatest potential for impact on our business. Secondly, and importantly for the committee, it's also the aspect of the bill that we think is most easily and simply amended to satisfy all of the stakeholders I'll be speaking about in the next few minutes.
What I'd like to do, if I may, is to tell my story in three parts.
The first part is about the history of our business. I'm not going to go back to Confederation, but I'd like to talk about the last few decades in our business and focus particularly on the higher education sector. Greg Nordal has spoken very eloquently about the K to 12 space, where we're also very active, but I'm going to focus a little on higher education.
The last several decades in our business have been a fantastic opportunity for publishers in this country in the education sector to develop materials to address the Canadian marketplace specifically. If you look at any of our graphs, you'll see that all of our Canadian content opportunities have been in a wonderful growth mode—and by “wonderful”, I mean this is a mature market, so I'm talking about 3%, 4%, maybe 5% growth, but growth nonetheless—while at the same time, demand for imported products, which principally come from the United States, has been waning.
Where we've found our opportunity, and where our investment has been directed, is in response to the market's demand very specifically for Canadian content. That is equally true in the higher education space, as it is, as Greg mentioned, in the K to 12 space. So it's very, very focused on Canadian resources and meeting customer demands in the education sector, among teachers, instructors, and students, of course, for that kind of material.
What that has meant for us over that period of time is continued investment, not only in resources, but also in some of the numbers that Jackie shared, for instance, employment. There's been significant investment across what we like to think of as a true ecosystem of contributors to our business: from writers to photographers to editors to illustrators to designers to printers to distributors—an entire business built around providing resources to our customer base.
We have come to the point today where we're a significant partner with our customers in education, in all realms—from K all the way through post-secondary, where we're a significant employer. We're a significant investor in the development of Canadian materials.
We like to think that Canada as a country and the students across the country are much better off for the work we have done. That applies equally in K to 12, post-secondary, and also in professional realms. Whether you're a lawyer, a doctor, an accountant, or in any professional realm, significant investment in materials has gone to make your professional lives more meaningful.
That's part one. That's where we have been.
Part two, of course, is where we are today. As it won't surprise you to know, that's really all about digital. We've seen, as I think everyone here knows, a tremendous acceleration in the pace of digital innovation. It's made huge opportunities present themselves to our business. It's placed great demands on our business. But it's also forced us to meet a lot of new customer expectations for information at their fingertips 24/7, supported around the clock, instantly shareable, instantly searchable.
The digital realm we have now embarked upon meeting, and exploiting, if you will, for our marketplace has created tremendous expectations and opportunities for us. It's also meant a very significant reinvestment in the business. At this point in our evolution, we're reinvesting and re-upping the ante very significantly.
As I think Jackie mentioned earlier, print is certainly not going away, by any stretch. But we have an additional opportunity, an additional pressure, put upon us to redirect our investment into new digital resources that are making our print product far more effective. It's more effective in terms of product that can be used to assess how students are performing, more customizable, certainly a brilliant solution from the perspective of distance education for those students who aren't in a bricks and mortar kind of setting, and certainly very adaptable for different learning styles.
The digital revolution has made us far more relevant and created a much bigger opportunity for us. That's really the challenge we're trying to meet in this day and age.
You might ask the question, then, so why not just digital lock, as provided in Bill ? Put those on everything you do digitally and life will be good.
I'll harken back to Jackie's point—and Greg made this point as well—that print is still the core of what we do. In the K to 12 sector it's probably 90% of our business, and in higher education it's still probably 80% of our business.
More and more we are providing digital solutions, but they are blended with print. All of you will appreciate that print is a hard habit to break. Even my 14-year-old daughter, who is as tech savvy as anyone, is still very much wedded to her textbooks, so digital locks will not do it for us. In other words, it's not a panacea that will solve everything for us.
Let me come to part 3 and wrap up. Part 3 is really about what we envision Bill can do for our business in a way that will ultimately protect investment, and you've heard these things from my colleagues this morning also. First, it's about setting a playing field that will continue to encourage us to invest in the creation of these resources, and that means putting the marketplace for the work front and centre and absolute primacy in terms of what constitutes fair dealing.
In our mind, for that reason, the Supreme Court decision around CCH is also not a panacea for the very good reason that it does not place the primacy of the marketplace front and centre. In our estimation, “fair”, intuitively, by anybody's definition, should ultimately mean fair in the sense that it does not impede the commercial prospects for a work, and we find that the CCH decision has very significant shortcomings in that particular respect, so both digital locks and CCH, in our view, are not quite enough to get us there.
We would like to define “education” more specifically. We would like to echo the government backgrounder with respect to what education is and what fair dealing is meant to mean, and a couple of specific issues are, first, fair dealing is not a blank cheque; second, by definition, it does not harm the copyright marketplace. Those are the principles we want to see embedded in a very minor—in our belief—technical amendment to the bill that we think will level the playing field; will continue to create commercial opportunities for businesses like mine, like Greg's, like all the people who compete in our industry; and will ultimately prove to be a better way of delivering better resources for Canadian students.
It will keep investment in Canada, and the other important thing to note is that many of the competitors in our marketplace publish in many other marketplaces. My goal in all of this is to try to retain investment in the Canadian business. That's what employs me. It's what employs my employees back in Whitby. It's what makes the virtuous circle that we have created in our business over the last many decades in this country. This is about ensuring that investment has a reasonable prospect of return in the context of copyright in Canada, and for that reason the amendments that we are proposing are simple, elegant, and meet all the points you have heard from individuals—
:
Thank you for inviting the Canadian Association of Law Libraries, L'Association canadienne des bibliothèques de droit, to present its position to this committee. My name is Mary Hemmings. I am chair of the copyright committee for CALL, or ACBD. I am adjunct professor and chief law librarian at Canada's newest law faculty, at Thompson Rivers University. I'm in a unique position for a law librarian. Not only am I teaching legal research at a time of digital change, but I am also starting a new law library when the landscape of the printed word has tilted on its axis. I still buy books. In fact, I buy a lot of books. But I also buy digital collections from many different sources, national and international.
CALL represents approximately 500 academic, private, corporate, court, law society, and government legal professionals working across Canada. We buy legislative documents, case reports, and materials that comment on the law. We provide access to these materials to such people as lawyers, judges, students, faculty, parliamentarians, and the public. And of course we help people find what they want, whether or not we have it in print or locked in a database.
CALL members support these efforts to modernize copyright legislation. We view these changes as necessary to preserving the balance of rights to copyright owners, to libraries, and to the users of legal information in a digital environment.
Today I would like to discuss three areas of concern to the law libraries: fair dealing, crown copyright, and TPMs, also known as digital locks.
Respect for fair dealing is essential to CALL's submission to this committee. Fair dealing and user rights have been discussed by other individuals and associations appearing before this committee, and CALL supports the positions taken by such advocacy groups as libraries, museums, and archives. As law librarians, CALL members are particularly concerned about the fair dealing provisions proposed by Bill .
On the issue of fair dealing, I would like to draw your attention to the 2004 Supreme Court decision in CCH. The library of the Law Society of Upper Canada, whose professionals are members of CALL, is only one of a network of courthouse and law society libraries across Canada, and they were involved in that particular case. It goes without saying that our members support that decision, particularly in its six-step approach to determining fair dealing. We regard fair dealing not as an exception to copyright, but rather as a balanced means of recognizing that limited and fair reproduction is a tool in scholarly discourse. Just as I would lend a book or copy of an article to a friend working on a similar project, the process of sharing information in research and education is not a criminal activity. It is the way that ideas are communicated. We therefore commend the recognition of this principle in Bill .
Having said that, there are other sections of Bill that appear to contradict the spirit of fair dealing, and in particular the role of libraries. Libraries lend materials to other libraries. This is a fundamental point in our business of meeting the information needs of our users and does not require legislative restrictions on the practice of inter-library lending. Once material has been given to a patron, I am not sure how a lending institution can reasonably comply with the proposal that it must “take measures to prevent” the user from actually making a copy, lending it to a friend, or even dropping it in a bathtub.
Bill focuses on the use of digital copies. Technically speaking, a digital copy of a book, an article, legislation, or a reported case can be made anytime, anywhere, by anyone. Libraries, archives, or museums should not be held accountable for behaviour that is not similarly policed in book stores or on the Internet.
The Copyright Act should integrate the concept of fair dealing as a user right rather than as an exception to copyright. It should be made explicit that fair dealing needs to be given a broad and liberal interpretation and that knowledge institutions such as libraries, archives, and museums serve a wide variety of institutions.
The CCH decision did not distinguish between a non-profit and a for-profit library. In fact, the CCH decision ruled in favour of the Law Society library, which directly serves the needs of the bar association. Whether or not lawyers make a profit, profit was explicitly considered immaterial in that decision.
On the issue of crown copyright, over a long period of time there have been calls for revisions of section 12 of the Copyright Act. This section relates to crown copyright, and it needs to be explicitly addressed in Bill . The Reproduction of Federal Law Order allows citizens to reproduce federal legislation for personal, non-commercial uses. This is precisely the initiative law libraries want to see in this legislative language. The government has a duty to disseminate the information it produces.
CALL recognizes that producing current government information is expensive, but not as expensive as it once was. At one time, producing and distributing print legislation and parliamentary documents needed editing, typesetting, copy checking, and elaborate distribution methods to satisfy the public demand for access to legislation. Now, digital production ensures accuracy in content, speed in delivery, and a proactive approach to getting government information out to Canadians.
Missing in this equation are the historical legislative documents that are so necessary for legislators and the legal profession if they are to understand how current laws came to be. Retrospective digitization of crown documents is expensive, yet Canadians should also enjoy unrestricted access to documents that inform the present day.
We agree that Canada needs an updated copyright regime that protects creators and rights holders. However, we strongly urge the government not to restrict the public's right to access what should be in the public domain.
Legal writers have urged that crown copyright reform is long overdue, not only in light of the CCH decision, but also in recognition of today's responsive federal government practice. However, crown copyright has been overlooked by all proposed amendments, long before 2005. Our position is that these materials be maintained as free resources and that the government consider funding a program of retrospective digitization.
This finally leads me to digital locks. They have been characterized as a digital threat to fair use, primarily because TPMs cannot distinguish between lawful uses and users. I wanted to draw your attention to the nature of the relationships we have with publishers and library users. At the forefront is not the issue of what our patrons choose to do with the materials they borrow, but rather the ability of commercial or government providers to capriciously lock down legitimately purchased materials. Libraries are now dependent on digital materials. Database providers or digital publishers often have exclusive rights to sell particular content, and libraries have a mandate to meet all of the research and educational needs of their users. It's rarely possible for us to purchase the same content from a competing vendor.
Our users want to be able to transfer content to portable devices for use in courtrooms, classrooms, and in the home, and users of legal information who are not affiliated with a library, such as self-represented litigants, members of the public, and some students—including lifelong learners—are being deprived of access to the law because of licensing restrictions. Such information, previously provided in book form on an open library shelf, now lies on the other side of a digital divide.
In conclusion, we just want to say that fair dealing is a user right, crown copyright is lost in the 19th century, as we see it now, and digital locks are both evil and good.
Thank you.
:
Actually, I sat for five years on the federal council on access for the visually impaired, and our association has been very involved in pilots. We're doing one right now in the province of Ontario—six universities, two community colleges, and five publishers—and hopefully that will be exploded out to all publishers and all institutions within Ontario.
We're doing everything we can to facilitate, in print and in digital, rapid access to content for the student. The complaint has always been that the available intermediaries didn't get the information to the student before the course had begun, and in some cases they were at exam time. We're working on this, and so far we appear to be having some luck. Those students seem to be quite pleased.
You should know that the World Intellectual Property Organization is really hoping to push forward with an international treaty that will address this very issue. I'm involved with that as well. If Canada ratified that treaty, it would obviously move things along.
The last thing is that there's a new project now, called the TIGAR project, and Canada will be involved in it. The purpose of the project is to move files across borders. Transborder data flow is a big issue when you're talking about intellectual property, because people don't want their property just “out there”, so to speak. It's a very big issue. There are worries about infringement and piracy, etc. But as long as the files are already converted, to be used for students as opposed to the general public, and students know how to use those files, there is some safety there.
So with the security measures built in, it'll be fine. The Americans are in the TIGAR project, we're in it, the U.K. is in it, and so are South Africa, France, Belgium. I mean, we've really just begun, but there is a tremendous amount of work being done.
It's unfortunate that there appear to be a lot of initiatives under a lot of umbrellas, and there's not yet any evidence that all of this will coalesce. That's what we really need. The TIGAR project may do that.
:
For many stakeholders, the fair use of a work for educational purposes seems to be an irritant, and some feel that there is a lack of precision with regard to what is fair in that situation. Several observers expressed concerns with regard to the application of this clause.
I tried to imagine its potential repercussions, which are not known to us now. In fact, there are several consequences linked to that provision which are not known at the present time.
So let's imagine that I am a professor of film at a university and that I have a digitized book in my possession which I purchased from this lady, which analyzes the disastrous repercussions of the exceptions to copyright introduced by the Conservatives. I decide to communicate with my students through a website, and on my website, I put three chapters of this book. I go and rent the movie Good Cop, Bad Cop because I also want to evaluate, in my course, the importance of Quebec culture in Canadian identity. I download this material on my website for educational purposes only, of course. Then I order a digital book from the library and I add it to my website. Now my students have access to all of this material and it seems to me that I have done nothing wrong.
However, in the first two cases, I have done something that is prejudicial to the commercial rights of these works. Do you think that these situations could be possible? You can imagine the losses that would be incurred if all professors started to use digital technologies. To my mind, this bill, with regard to the exemption, is not sufficiently clear: we don't know what is allowed by the law and what is not.
Everything I would do in that case would be digital and would be allowed thanks to the exemption we are discussing, and this would be prejudicial to you financially, is that correct?
Moreover, I would have to destroy my notes after 30 days. Since I borrowed the material from the library, after the 30-day period, I would not only have to destroy my notes, but my students would have to do so as well. What an incredible scenario, and yet it is possible!
What do you think, madam?