EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 23, 1996

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[English]

The Chairman: Good evening. We apologize for the delay. As you know, there was a vote in the House. The time will be made up. We're starting 15 minutes late, so we'll carry on 15 minutes longer.

[Translation]

I would like to welcome the

[English]

Canadian Publishers' Council, with Mr. Gary Rodrigues, president; Mr. Fred Wardle, chairperson of the intellectual property committee; Ms Julia Woods, president of the trade publishers' group;Mr. Ron Munro, president of the post-secondary publishers' group; and Mrs. Jacqueline Hushion, executive director.

Mr. Rodrigues.

Mr. Gary Rodrigues (President, Canadian Publishers' Council; Senior Vice-President of Publishing, Carswell Thomson Professional Publishing): Thank you very much, Mr. Lincoln.

It's a pleasure to be here to meet with you and have the opportunity to discuss the amendments to the Copyright Act proposed in Bill C-32.

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The Canadian Publishers' Council is a national trade association of publishers originally founded in 1910. Our members employ more than 2,300 Canadians and account for 70% of all domestic sales of English-language Canadian and imported books.

Last year our members spent $72 million with Canadian-based book manufacturers to produce those books. We published over 1,000 new Canadian titles in four broad categories: general interest fiction and non-fiction, professional and reference works, elementary and secondary school learning resources, and post-secondary textbooks. Our members paid over $20 million in royalties to Canadian authors, so you can understand that we consider our members have a significant stake in the copyright legislation.

Our members are generally pleased with the bill and the public policy intent it articulates. In particular, the parallel importation provisions are welcomed by our members as a means to ensure respect for their copyright agreements with other companies whose work they exclusively represent and distribute in Canada.

The proposed provisions around remedies we also value. The explicit inclusion of statutory remedies will make a positive difference in creators' abilities to achieve redress in cases of proven infringement. While we believe in options other than exceptions, we do acknowledge that some limited ones may be appropriate.

In general our members support and participate in the collective administration of copyright and see the availability of collective licensing as the logical alternative to exceptions. We are pleased with Bill C-32's acknowledgement of the important role of collectives, and we have in our brief addressed those proposed exceptions that we believe go beyond the policy intended by the legislation.

We also agree that the fair dealing provisions need not be broadened to include guidelines. To claim there is a quantifiable right to copy a specific portion of a work is invalid in Canada, and further, internationally many times it has been determined that there is no absolute right to photocopy, even in countries where fair dealing by any other name is more specifically clarified.

My colleagues now will join in and address some of the other issues we've raised in our brief. Mr. Wardle will talk about the specific exceptions included in the legislation.

Mr. Fred Wardle (Chairperson, Intellectual Property Committee, Canadian Publishers' Council; President and Chief Executive Officer, Canadian Almanac & Directory Publishing Co. Ltd.): Thank you, Mr. Chairman and members.

On exceptions in education, council members are concerned about the potential for over-broad interpretation of the term ``assignment''. A limited defence relating to testing and examination may be widened by inclusion of the term ``assignment''. Members are also concerned about the terms ``medium'' and ``quality'' in the definition of appropriateness of the material.

Consideration must be given to what is reasonable. It is important that educational opportunities are available to Canadians in all regions. We're concerned, though, that the proposals could be interpreted to include permission to transmit copyright material electronically to distant sites and that the term ``premises'' might even be interpreted to include, say, residential dwellings.

No clause that addresses fair dealing or exceptions should be interpreted to apply to the making of electronic copies or the storage and transmission of such copies.

We recognize that the shape and environment of education are changing and that educators' needs are changing in tandem. We have noted the reference to the public interest by many groups in the current debate about copyright and reform in technology. We understand that phase three reform will attempt to deal substantively with technology and those issues.

In the interim we are prepared to proactively engage in dialogue with representative groups of users of copyright material about issues in new media technologies, digitization, electronic storage and transmission, and licensing. Our members publish in both print and electronic formats and welcome such dialogue.

Exceptions in libraries and archives is another concern. Council members respect the need to maintain representative and comprehensive collections as long as the methods do not include augmentation of collections as opposed to management of collections.

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Members appreciate and strongly support the role of the library in meeting Canadians' information needs. We have recommended amendments that support that role while ensuring that the creators' work is respected. Members are concerned about the potential eligibility of document delivery services to use these exceptions.

We agree that copying by corporate libraries should not be exempt from Bill C-32's provisions. We are concerned at the absence of a prohibition of systematic or multiple copying. Members are also concerned at the limited liability of public institutions in the event of unlawful copying.

Again, many of these concerns could be addressed through licensing. Licensing sets clear parameters, which should offer comfort to libraries and their users and to creators. We do not wish to obstruct the role of libraries but to ensure that their mandates are carried out lawfully.

I'd like to turn to Ms Hushion now to carry on with parallel importation provisions.

Ms Jacqueline Hushion (Executive Director, Canadian Publishers' Council): AsMr. Rodrigues said in the first part of our opening statement, our members are gratified to see these measures. Our members believe that a few amendments to the proposals will ensure that the policy objectives are more readily achieved.

In our opinion, the proposals around notice are unworkable as stated. Notice should be defined and set out in regulations, since the nature of the industry and our marketplace is changing. Making notice regulatory will allow review and amendment as needed and agreed upon by suppliers and their customers. We believe it is inappropriate to prescribe methodology for constructive notice within the statutes.

We support access by Canadians to used books. One exception, paragraph 45(1)(a), already provides for the importation of books of all types by all individual Canadians. The principle of access to new and used books is entrenched in that exception.

A second exception to the provisions would allow the unrestricted importation of used books and accidentally undermines the overall intent of the provisions and undermines the copyright agreements of exclusive distributors. The language of this second used book exception, paragraph 45(1)(e), provides a loophole for the commercial importation of used books from the U.S. in large quantities to supply colleges and universities.

Our members are not opposed to the sale of used textbooks on Canadian campuses as long as those textbooks were first purchased in Canada. Our members support students in their attempt to purchase textbooks inexpensively. The imported used textbook in most cases competes directly with the equivalent new text being sold by the exclusive Canadian distributor. Canadian post-secondary publishers directly invest revenues from their distribution in the publication of Canadian authored original textbooks. That investment will be lost if paragraph 45(1)(e) is allowed to stand.

Used imported texts are generally priced only 25% to 35% lower than the Canadian bookseller's price for the new copy of the same edition. The bookseller in fact often sells new copies at a price which is 10% to 15% higher than the publisher's suggested list price, in other words marking up the publisher's price. The price of this exception could be the loss of a Canadian publishing sector. Our members need your reconsideration of this exception with a view to its deletion.

Our members are committed to the development of regulations for the parallel importation provisions that will meet the needs of their customers and consumers. If it is demonstrated that the publisher in Canada cannot meet the service criteria agreed to by the industry, the customer then will be free to purchase the titles from another source.

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The first principle of these provisions is that the exclusive Canadian distributor must always have the first opportunity to fill the order. Publishers have already begun to invest in systems to create new efficiencies in book distribution. It is in the publisher's interest - it is good business - to maintain fast delivery systems for customers and ultimately for the Canadian consumer. We believe these provisions will assist in the growth of our industry's infrastructure.

To summarize on parallel importation, the notice provisions should be regulatory; the unnecessary exception that would allow wholesale importation of used textbooks needs your serious attention; and we are absolutely committed to making these provisions viable on behalf of our customers and consumers.

We have focused here exclusively on exceptions and parallel importation provisions. Our brief covers many points we have not addressed but about which we are prepared to entertain your questions.

Thank you.

The Chairman: Thank you very much.

Mr. Leroux.

[Translation]

Mr. Leroux (Richmond - Wolfe): I don't want to look impolite, so I would like to say right now to the next group that I will have to leave for a very important caucus meeting. I have read their brief and I have included my concerns about it in the few questions I am going to ask now.

First of all, let me tell you that we, too, believe it's important that this bill is passed. We share with you the feeling that ratifying and adopting such an important bill is indeed a momentous occasion.

Thank you for your brief. The concerns you raise, regarding exceptions, are shared by others among holders of rights, as well as by people affected by the provisions regarding neighbouring rights.

First, could you tell me what you think about this aspect of a bill which, after all, includes a very broad set of exceptions. Whether it concerns copyright, whether it's in your field or it has to do with neighbouring rights, this bill includes a great many exceptions, as quite a few people have made us aware.

Don't you feel that because in this bill, people's rights are recognized through exceptions, the message is that, in our society, large institutions don't have to be concerned with copyright, because they are going to be exempted by law? Isn't there in this bill a message, particularly to collectives and groups already organized to negotiate, telling them that it's no longer necessary to be represented and to negotiate their rights? Do you feel that this is the kind of message that can be found in this bill?

[English]

Ms Hushion: In fact we have addressed our concerns in our brief and to some extent in our opening statement. We do believe some of the exceptions are overly broad. We are concerned that some of them may be interpreted to give far more latitude than they in fact do.

We also have had many discussions within our association about exceptions. It is in fact 1996. We're moving into the next millennium, and we recognize that times are changing. Certainly it would be inappropriate for us to say that in a classroom a teacher may not copy a line of a poem onto what we in Canada call a ``dry-erase'' board.

Mr. Rodrigues: I would like to say that we enjoyed your comments and certainly agree with what you're saying as a general matter. At the same time, in our response to the legislation we've attempted to take a practical approach to try to refine it, to focus it, to make it less antagonistic to our interest.

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But if you were the sole lawmaker, and if you were expressing those views in the legislation, we certainly would support that, obviously. We're trying to be practical and cooperative, acknowledging what is really out there, being constructive, trying to make it work well.

Mr. Wardle: You mentioned institutions specifically, making life easy for them to ignore copyright. I think that's why in many places in our examination of the bill we've suggested that licensing is a very important concept and that we support this wherever it can be added to those parts of the bill that could be misinterpreted.

[Translation]

Mr. Leroux: I very much appreciate the answer you gave me. It underlines your major concern regarding exceptions, but also shows that you want to be constructive and try to make the bill work well. The ultimate objective here is to pass this bill.

I would like you to touch upon some other aspects. Among other things, regarding exceptions, you mentioned the limited importation of used books and the term ``assignments'' that you would like changed or deleted. You also mentioned electronically stored or transmitted copies, using current and future technology.

Could you expand on this? Practically speaking, how does it work?

I would also like you to comment on a provision, the absence of which you deplore in the bill. I mean a provision to prohibit multiple or systematic copying. You very clearly identify this need. Since nothing is said about that, you suggest that a provision be added to prohibit that kind of copying.

Finally, could you give us some details regarding the much- talked-about notice in writing to stop importation of foreign editions, a provision which you feel would not work or be unworkable.

Did you take any notes? I'll let you answer all these questions. I think we're working together very nicely on this.

[English]

Ms Hushion: Maybe we'll start at the end and work backwards.

In terms of notice, in effect the bill would require each individual publisher who represents agency titles to notify each one of its customers that it was the exclusive distributor on a per-title basis.

Julia Woods can respond to that and tell you what that would mean in terms of a burden on her company.

Ms Julia Woods (President, Trade Publishers' Group, Canadian Publishers' Council): The problem is, the average publisher distributes 3,000 to 4,000 titles. So if in fact it has to be on a title-by-title basis that notification was given, it would be onerous, not only for the publisher but also for the bookseller or the librarian who was receiving the information and trying to manage it.

We have proposed that we work through the tools that are already established: seasonal catalogues mailed to booksellers and librarians every season; sales reps who call on the accounts; CTA, the electronic ordering; and working with Books in Print, whether it's the print version or the digital electronic version. That's what we would propose as opposed to title by title.

For the most part, if a publisher is distributing another publisher in Canada they are distributing that entire line. So it would be on an exception basis where we would say, actually, in this instance, the St. Martin's Press title is not handled by McClelland and Stewart, it's handled by Stoddart.

Ms Hushion: I'd like to ask Ron Munro to deal with the next point you raised, the issue of importation of used books and why that exception in the parallel importation provisions is such a problem.

Mr. Ron Munro (President, Post-Secondary Publishers' Group, Canadian Publishers' Council): It's a problem insofar as it undermines the principles of the distribution right to begin with.

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As we've stated, we don't have a problem with used books per se, as long as the materials are originally purchased in this country. But there are practices going on involving mass importation of used books, primarily from the United States. This undermines our ability to sell those books for which we have the distribution rights. All the revenues and moneys associated with those sales are lost to us, and are therefore not available to reinvest in our publishing business. We use that.

As indicated in the brief, we use the distribution of American and British titles, of course, to support a lot of Canadian publishing, which is marginal in a lot of cases. So it's important that we have the exclusive rights to sell those imported titles, and are not undermined by massive importation of used books.

Ms Hushion: I would like to just add a postscript to that. The foreign-based used book or used textbook exporter does not make any contribution to Canada, to the infrastructure of this industry. It doesn't pay taxes here. It doesn't employ people here. So this is very much an infrastructure issue for us.

Fred, would you deal with systematic copying, please.

Mr. Wardle: Well, again, that concern is that we clearly attempt to license people, wherever possible, so that there is no opportunity for just ignorance of copyright. We feel that the bill has to clearly articulate that this is not permitted by exception.

When you look at things such as machines installed in the educational institutions, copying machines and so on, we feel that we must insist on a licensing agreement with those institutions, rather than a simple notice with no responsibility. That seems to be the wording of the bill at this time.

Ms Hushion: Just to reiterate, the statutes of both the U.S. and the U.K. do carry prohibitions for multiple or systematic copying of that nature.

[Translation]

The Chairman: Do you have any questions, Mr. Leroux?

Mr. Leroux: You want me to ask my question now?

The Chairman: Yes.

Mr. Leroux: In your brief, you mention a potential conflict between long standing policy on registration of copyright - this is something you underline - and new policy on registration for purposes of accessing works or remedies. Could you tell us more about your position on the matter? Can you give us an example? What is this potential conflict you talk about?

[English]

Ms Hushion: I don't think we said that the conflict was between registration and remedies. We said rather that if the publisher, the importer of the work, is deemed to have an interest in copyright, then the publisher's inability to use the statutory remedies to deal with cases of infringement would seem to be in conflict with that publisher having an interest in copyright by virtue of that contractual agreement.

[Translation]

Mr. Leroux: So this is where you think there is a potential conflict?

[English]

Ms Hushion: That's one area, yes.

The Chairman: Ms Phinney.

Ms Phinney (Hamilton Mountain): Thank you, Mr. Chairman.

I'd like to know something for my own curiosity. Let's say a book sold in a bookstore costs $30. How much does the author get out of that $30 on a percentage basis, and how much does the publisher get? Does anybody else get anything - say, the bookseller? I have a guess, but I'm not sure I'm right. I thought it was -

Ms Woods: Yes, pretty sure.

Ms Phinney: Yes, 10% to the author, 30% to the publisher, and 10% to the bookseller?

Ms Woods: I'll go through it. For titles published in Canada, say a $30 book, the author would get between 10% and 15% of the list price. So on a $30 book, they would get between 10% and 15% of that.

The independent bookseller would see a discount of between 40% and 48%, depending on the publisher they are dealing with. They would see that discount off the list price. So on a $30 book they would pay say $17 for the book.

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Ms Phinney: So the bookseller is making between the $17 and the $30?

Ms Woods: Correct.

Ms Phinney: So you make the difference there?

Ms Woods: We are selling to the bookseller at say a 40% discount. We pay the author a royalty, based on the list price -

Ms Phinney: You're making me work too hard.

Ms Woods: - of $30.

Ms Phinney: The author is getting 10% to 15% of the $30?

Ms Woods: Of the list price, as opposed to the net cost to the bookseller.

Ms Phinney: Just tell me how many dollars the publisher makes off it, and how many dollars the seller makes on this $30 book.

Ms Woods: What's 40% off? Unfortunately I'm an English honours graduate, so I'm a little weak on that.

Mr. Wardle: Could I try to handle that another way? I mean, essentially the bookseller is working on a 40% to 46% discount off the list price of the book. That's their margin, so they're working on a 40% to 46% margin.

The publisher could have sold the book to a wholesaler, who in turn sells it to the bookseller, and the wholesaler will take 2%, 3%, or 4% on top of that.

As Julia says, the author will get 10% to 15%, and in some cases 20% of the revenue. If there's an illustrator involved, they'll take a small percentage, maybe 5% of the revenue.

So on a trade book the publisher is generally working on about a 40% margin.

Ms Phinney: Of the $30?

Mr. Wardle: Yes.

Mr. Rodrigues: And we have all the expenses.

Ms Woods: We have the plant costs or the one-time costs, and the paper, print, and binding costs of each book, as well as the indirect expenses of having representatives across the country.

Ms Phinney: It's too complicated. I asked somebody today, and they gave me four figures very quickly. I didn't want it to be that complicated.

Let's go back to the bill then. I just wanted some information for myself.

Let me turn to this notice in writing. What do you feel would be the best way for the distributors to provide notice in writing to the booksellers? You've named some. But then how could the bookseller be held responsible?

If I interpret you correctly, you've said that you don't want to write this letter to them and say we're now publishing this book. If you don't tell them that way, and I phone and ask for a book, they haven't a clue whether anybody in Canada is distributing, unless they happen to go through all these catalogues or these other things.

You suggested they phone the publisher in England or the United States. Why could they be charged for doing something wrong if you haven't told them, except you hope they read the catalogues that somebody sends to them?

Ms Hushion: Ms Phinney, we have suggested that there must be a common database for Canada. We still believe that will be the primary tool

Ms Phinney: There isn't one now?

Ms Hushion: There is one now. Most booksellers, public libraries, and universities do buy either the CD-ROM or the print version of the database. So they know who has what.

The difficulty we've encountered is that some stores wouldn't normally buy those kinds of bibliographic tools - for instance, your local cornerstore, which has a spinner rack of mass-market books but really is primarily there to sell bread and milk. So we have to ensure that everyone in Canada who is selling books has access to that information. We believe it would be onerous for each cornerstore to have to purchase a database for several hundred dollars.

Ms Phinney: But they don't take orders anyway, so nobody is asking them to -

Ms Hushion: Right. So by and large, the common database should be the key tool.

Let me respond to your question about why or how the bookseller or anyone else - not just the bookseller - could be held accountable for doing something wrong. I think it's a responsibility of each of us in this country to know whether what we're doing is a lawful activity.

As long as the tools are there, and are comprehensive and accurate, then it should be the responsibility of the person who wants to import the copyright to ensure that he has the right to do that.

I'd just like to ask Fred first, and then Julia Woods, to comment.

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Ms Phinney: Could I ask something first? You're saying to the booksellers.... You people guarantee without any question that every publisher in Canada is going to put their material on the common database.

Mr. Wardle: Yes.

Ms Phinney: You're going to guarantee that?

Mr. Wardle: Yes.

Ms Hushion: Yes.

Ms Phinney: So then we should put in here that any booksellers must be expected by law to buy this database. If we're going to create a law, we have to make sure that it works on both sides.

Ms Hushion: Absolutely.

Ms Phinney: So it will have to work on both sides.

Mr. Wardle: If I could just add to that, I think there are some standard reference devices for booksellers and publishers. There are two Canadian publishers directories that list the agencies Canadian publishers and distributors handle in Canada. Most independent booksellers use those all the time, and they know, for example, the agencies that McGraw-Hill or Stoddart might be handling in Canada.

There are also standard bibliographic devices, and these are Whitaker's Books in Print for the U.K. and American Books in Print, published by Bowker in the U.S.

Ms Phinney: Why would anybody need those if they're using the common database, which you're saying is going to have every single thing on it?

Mr. Wardle: I was just going to get to that. The Canadian Books in Print, which was published by the University of Toronto Press for many years, and then became too onerous a task, was digitized. Both Whitaker's in the U.K. and the Americans came together with the Canadian data to try to create a standard English-language database for publishing. That is working in many respects now, but the Canadian data is rather weak. That is expected to be improved, and is being improved all the time now. So in fact there is a standard database -

Ms Phinney: But you're saying it's not up to scratch.

Mr. Wardle: Well, it's -

Ms Phinney: It's not perfect.

Mr. Wardle: It's not perfect, but it's getting very close to being a practical standard for -

Ms Phinney: When can you have that ready?

Mr. Wardle: Well -

Ms Hushion: The industry's estimate is that the glitches will all be out of the tele-book agency database within six months. But most booksellers are using that kind of data now, and are well aware of it.

The Chairman: One last question.

Ms Phinney: How long do you think it will take to develop adequate service standards within the book industry?

Ms Woods: That's a good question. That's something where, again, cooperatively working with the CBA, the ACP and the other groups.... We have to work through those, and develop them, but we are well on our way at this point.

Ms Phinney: Does that mean five years, two years?

Ms Woods: No.

Ms Hushion: Through the course of the past 18 months there has been a round table. It's called the task force on voluntary industry guidelines. All the publishing groups, the retail booksellers, wholesalers, the Canadian Library Association and someone representing the educational community participated in it.

The purpose of that task force was to come up with a set of regulatory criteria to which the industry could agree, something that everyone agreed, as a bare minimum, everyone would adhere to. We did successfully do that. In January 1996 all the groups at the table approved those voluntary guidelines. We believe those voluntary guidelines are not a moot point today, but in fact provide the basis for the regulations that will govern the statutes, which will -

Ms Phinney: So how long do you think before there's an adequate standard?

Ms Hushion: That group is going back to the table on November 19, and their objective is to have their work done before the bill receives royal assent.

Ms Phinney: What do you think that timeframe is? It's important for us to know whether it's six months or two months.

Ms Hushion: I would say six to eight months.

Ms Phinney: Oh, I sure hope we're working faster than that. Anyway -

Mr. Wardle: If I might interject, I would like to state that the majority of Canadian publishers and distributors provide very efficient service now. There are a number who, for various reasons, can't get up to the standard we are demanding of them, but that's why we're working together to get there.

I don't see that this is a critical issue, because, again, the publishers who are publishing the Canadian authors and putting the teams in the field are providing good service to back it up.

Ms Phinney: As somebody who buys about sixteen books every two or three weeks, I can tell you that I have problems.

Mr. Wardle: Well, we're all aware of problems with some particular sources right now, and those are being corrected rapidly.

Ms Phinney: Okay, good. Thank you.

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Mr. Bélanger (Ottawa - Vanier): On the notice provisions, I want to be clear that I understand your position. You have no objections to the concept or the principle of a notice required?

Ms Hushion: None whatsoever.

Mr. Bélanger: And you'd have no objections to that concept - its application - being in the act?

Ms Hushion: Absolutely.

Mr. Bélanger: Fair enough.

Last night we met with a group, the Canadian Booksellers Association, who proposed that the individual's right - or exemption - to import, to buy books on an individual basis, be transferable. In other words, under the bill, as it's presented, individuals have the right to buy a book, notwithstanding the parallel import restrictions. They were suggesting a clause be added that would allow an individual to transfer that right, or the right of exemption, whichever you want to call it.

Ms Hushion: A proxy.

Mr. Bélanger: A proxy. I was wondering how you feel about that.

Ms Hushion: That's a tough one. On the one hand, I suppose, as an individual, I might be able to subscribe to that. But the problem comes, as you know, Mr. Bélanger, when you look at the aggregate.

If booksellers order one copy of every title we represent, where would we be? Canadian publishers stock best-sellers and stock a lot of books, and pay money to maintain inventory of books that aren't best-sellers. I'm afraid that would very much undermine the agency business.

I hear what they're saying. What they're saying, I believe, is that because the library community is granted a single-copy exemption in the bill, they would like to have, in effect, that single-copy exemption. We believe the difference is that the -

Mr. Bélanger: No, they were talking about individuals -

Ms Hushion: Okay.

Mr. Bélanger: - not the libraries. I asked. Not the schools, strictly for individuals, and not a blanket proxy. You'd have to request it for each particular book you're ordering.

Ms Hushion: Each time?

Mr. Bélanger: Each title, yes.

Their argument was that their ability to do business rests a great deal on the servicing of their clients in particular ways, that being perhaps one of the main ways they service their clients, to get them a book. In that case, they were wondering if we could allow myself, for instance, wishing to buy a book, to sign a proxy or a paper, I suppose, giving them my authority to import a book.

Ms Woods: There are exactly two points I'd like to bring up. The first is that if the regulations are agreed upon in terms of the service levels - and that would include turnaround - and if in fact the Canadian publisher, copyright holder, did not in fact meet those hurdles, then they would have the option of going to the U.S. to source the book.

I do have an example actually from the Canadian Booksellers Association meeting held in Vancouver earlier this year. We saw copies of the U.S. edition of Carol Shields' The Stone Diaries, published by Penguin in the U.S., on the shelves, instead of the Canadian edition, published by Viking. The problem there is that the benefit of all the work Viking Canada did, and the resources they invested -

Mr. Bélanger: We're not talking about that; we're talking about one individual here. This bill would restrict parallel importing.

Ms Woods: Right, but the problem is that if each bookstore has a proxy for one individual, and there are 1,250 bookstores across Canada, it can become a major issue.

Mr. Bélanger: All right. Okay.

Mr. Wardle: But my understanding of that is that the bookseller could say here, sign this list, to every customer who comes into the store. Then they have 50 people, and they'll order 50 copies from a U.S. wholesaler. I mean, that's ludicrous!

Mr. Bélanger: Fair enough. Do you have any comments on...? I'm quite -

Tell me when I'm running out of time, Mr. Chairman, so I can -

The Chairman: Well, this is the last question, because I have to defer to Mr. Abbott.

Mr. Bélanger: Well, then I'll skip the vendor-of-record concept, and maybe someone else can deal with that.

I want to touch on the used book situation, if I may. Why aren't there any Canadian distributors of used books? If it's a profitable business - and it must be, because somebody's doing it - why aren't there any in Canada?

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Mr. Munro: Well, I guess it's a situation similar to why there aren't any large wholesalers. It's a very challenging market geographically. In Ontario, in particular, there is a concentration in the Toronto region, and there are some used-book dealers in used-book stores, but they're trying to transport the stuff back and forth across the country. It just eats into the margins that are available.

Ms Hushion: Mr. Bélanger, I'd like to jump in here for a second.

A few years ago our association commissioned Ernst & Young to do a feasibility study on the establishment of a Canadian used-textbook operation like those that exist in the United States. Ernst & Young said the size of the Canadian market was too small at that time to justify that investment.

We were anticipating your question when we did that study, because we wanted to see whether it was possible - and publishers were willing to form a consortium for precisely that purpose - to buy back those used books and redistribute them across the country.

The Ernst & Young study - which we'd be very happy to share with you - basically said that it really couldn't be run as a profitable business. The volume of used textbooks that are coming in over the border are nevertheless, in quantitative terms, enough to undermine the Canadian publishers' business.

I guess it's the chicken and the egg. By the time we get to the point that we're able to set up the business, there won't be any business left.

I'll send you that.

Mr. Munro: The other aspect to that is that there have been moves by a couple of major used-book companies from the United States to set up a distribution system basically in Canada, but they haven't done it exclusively with used books. They've gone in and leased the operations from a number of colleges. So they're running the whole store, and it's more than just used books, which is creating a whole other series of problems.

Mr. Bélanger: Thank you, Mr. Chairman.

The Chairman: Mr. Abbott, I understand you've no questions right now.

Mr. Abbott (Kootenay East): Well, in fairness, I didn't hear the presentation, so -

The Chairman: Thank you. Mr. Flis.

Mr. Flis (Parkdale - High Park): Thank you very much. I'll be very brief.

My question concerns the exceptions you addressed for the benefit of educational institutions, where you recommend that the word ``assignment'' be deleted from the exception permitting reproduction of a work protected by copyright for the purpose relating to giving assignments, tests, etc.

In my previous incarnation I used to teach teachers, teach students, etc. Teachers are forever duplicating things to give assignments. That connects also to where I think you recommend that the duplication is okay if it's done in the institution where you're teaching, or the photocopying is in the institution. Many instructors prepare their lessons in one building and teach in another building, or photocopy at home and teach elsewhere.

I wonder if you could spend some time on your objection to assignments, tests, examinations - I see very little difference - and the other concern you have about photocopying in the institution.

Mr. Wardle: Well, in terms of assignments, we're concerned that this term could be used in an assignment for a student in a distance-learning situation, where a lot of material - say chapters from a novel, or whatever - is transmitted as part of the assignment for that student at home, or in a distance-learning situation. So we think the term is inappropriate for its use in that regard.

.1900

Ms Hushion: I also think that ``assignment'' could be interpreted to cover basically the entire spectrum of the education experience. So that would include photocopying given to the student to take home, to complete homework to bring back the following day, etc.

I mean, one could interpret the word ``assignment'' to begin with the beginning of the education experience, and to end with the end of the education experience, and we just think it's overly broad. We're not saying that we don't want teachers to have some flexibility; we are just very concerned that the term ``assignment'' is overly broad.

Mr. Wardle: I think we're just suggesting the deletion of that one word. Then, it seems to us, the intent of the paragraph is more reasonable.

Mr. Flis: You would leave ``tests'' and ``examinations'' -

Ms Hushion: Yes.

Mr. Wardle: Yes.

Mr. Flis: - and omit ``assignments''?

Ms Hushion: Yes, we would.

Mr. Flis: I would disagree with you. I don't think you know much about teaching and learning then, if that's the case.

And there are other concerns you have, where I feel you sort of discriminate against students who learn by correspondence. The teacher does have to duplicate, send things out, and not necessarily a book. What about the instructor who duplicates 100 sheets, gives them out to the teachers taking a course, and then those teachers duplicate that for their students?

Ms Hushion: That is systematic copying, and that's precisely what we were referring to earlier.

Mr. Wardle: But again that's why we have CANCOPY, the Canadian licensing agency, and many schools are signing on with that agency. That's the kind of thing we think is necessary to protect copyright, to make teachers aware that there is a licence requirement. In most cases, there may not be a charge of any sort, but there is a licence that exists, and copyright subsists in that material.

Mr. Flis: But I'm pleased to hear that overall your council is supportive of this legislation.

Let's say that you don't get your changes, because the committee hears other testimony from other witnesses. Would you still agree that this legislation be passed as quickly as possible in its present format?

Mr. Rodrigues: Well, that's a loaded question.

Mr. Flis: No, that's not loaded. We're here to.... The whole process is to improve legislation -

Mr. Rodrigues: Well, certainly -

Mr. Flis: - and we appreciate you taking your time to come and share with us.

Mr. Rodrigues: We think that the parts we support and favour should be passed with expedition, and I think that's where we'd like to leave it.

Could I make one additional addendum? We didn't deal with the exceptions relating to the legal publishing community in this particular presentation, because tomorrow the committee of major legal publishers is appearing before this committee. So I just want to endorse that presentation in advance, because that is really where we have left that issue to be addressed.

Ms Hushion: Mr. Flis, to go back for a minute to your question, it isn't that we don't want the educational system to have access. What we want to see is better management of copyright in that access. So please rest assured that we are not trying to keep our own creators' works out of the hands of educators and students. That would certainly not be in anyone's interest.

The Chairman: Ms Phinney, you have a brief question?

Ms Phinney: Going back to service standards, I just wondered what you think a reasonable standard is for time required to deliver books to the bookseller. What do you think is a reasonable time for you people, the publishers, to deliver the book to the booksellers?

The reason I ask this is that yesterday we were told - and I know this from my own experience - that you can get a book from the United States in two days. If it's special delivery, you can get it up here in two days. What do you think is a reasonable time? Just give me a short answer. Is it two weeks, five days...?

Ms Hushion: We said that this should vary, depending on whether the book is available in Canada or whether we have to bring it in specially. And there is a schedule -

Ms Phinney: ``Available in Canada'' would be you people already having it in stock? Is that what it is?

Ms Hushion: That's right.

Ms Phinney: All right. So if you have it in stock, they can usually get it in a day, half a day, or whatever. You can drive to the publishing company, and get it.

Ms Hushion: A bookseller in British Columbia will not get a book from Toronto in one or two days.

Ms Phinney: Okay, you can special-deliver it in 24 hours, if they want it?

Ms Hushion: Yes, if we had to.

Ms Phinney: Courier?

Ms Hushion: Absolutely.

Ms Phinney: Okay. So what is a reasonable time then for outside of Canada?

Ms Hushion: The guidelines produced by the task force I spoke about earlier had a range of days, depending upon the type of book and the type of customer - it's different for institutions from what it is for retail booksellers - of anywhere from five to eleven days.

.1905

But the larger issue, as I'm sure you were told last night, is that what the booksellers want most is confirmation: confirm within 24 hours that you have my order, you have the book in stock, and I'm going to be getting it. That's what they've told us consistently is the key issue: confirmation. Once they know you have it, and you're sending it to me, they're happy. It's when they get the box, open the box, and - surprise - the book's not there - that's when the problems arise.

Ms Phinney: We've talking about two groups of people, but there's also the consumer.

Ms Hushion: Absolutely.

Ms Phinney: And the consumer may not want to wait eleven days, but you're saying that's too bad, you can't have the book.

Ms Hushion: No.

Ms Phinney: If you can't wait eleven days, you can't have it?

Ms Hushion: No, we're saying that if it's necessary, sure, we can get a book from Toronto to British Columbia in 24 hours, but -

Mr. Wardle: I think the more important question here underlying all of this is that if we can have parallel importation as it is in the bill now, we will spawn a new industry in Canada. We will spawn a wholesaling industry that we don't have now. We have regional wholesalers in British Columbia, the Toronto area and Montreal, but we don't have national wholesalers of the scale they have in the United States.

Again, the Ernst & Young report would show that the economy in this country hasn't been strong enough to support that, one of the reasons being the buying-around issues. I think if that can be covered off, then we will see the growth of wholesalers. We know for a fact that a Toronto wholesaler is quite prepared to go ahead and start building a national wholesaling organization, if that happens. That will in large measure solve the problems the small independent booksellers face.

Ms Hushion: I guess the very last point in the answer is that we've agreed that if a publisher falls over the edge, cannot meet the service standards, then, absolutely, the bookstore, the university, whoever, has the right to go south, east, west to buy.

Mr. Wardle: And that can be embodied in the regulations.

Ms Hushion: We just want the first opportunity. It's our industry, it's our country, and we really believe we can make it work.

Ms Woods: I have just one other point on the establishment of the EDI. The publishers are 100% behind that. Once that is in place, it will really improve the turnaround. It will immediately address the confirmation issue, but it will also improve the turnaround.

The Chairman: We are running out of time, but I have just one question on a subject that hasn't been covered tonight. Last night we had the booksellers here, and they made the point.... I was kind of struck by your remarks that welcoming the parallel importation provision of the act.... They made a point that is exactly the reverse of yours. They said that it might be a disguised way for the huge chains to get distribution rights whereby foreign books are going to flood into Canada. So instead of being protection, it will be a sort of Trojan horse.

It took us aback, because we never thought of it that way. I was wondering if you would comment on it, on whether you've seen their brief, whether you would like to see a copy of it, so that you can take notice of it, and what you think about it.

Ms Hushion: We have seen their brief; this is my copy. I imagine several of us will want to speak to this point.

I have to say that if in fact big superstores or mass merchandisers wanted to ensure that the distribution arrangements were non-exclusive, and to carve out a bargain for themselves, they could have done that ten years ago, five years ago, two years ago, last year, last week.

The reality is that there is a value added to the agency business. It's not just a matter of moving books up and down over the border on that north-south access. The agency business is more than that, and the people who are in it have enough respect for it that they want to maintain it.

I'd like Julia to talk a bit about value added.

The Chairman: Briefly, because we have finished our time. But I wanted to know whether you agreed with this viewpoint, or whether you disagreed. From what I see, you don't share that viewpoint at all.

.1910

Ms Woods: We disagree. The chain represents about 40% of the book market in Canada. That is a large chunk, but is not as large as 100%. So in terms of setting up that deal, someone would be willing to walk away from a large chunk of the Canadian market.

The second point is that the Canadian distributor-publisher does add a great deal of value in terms of sales marketing. They create the demand for the book. I think publishers are fully aware of that in the United States and the U.K., and it is why they haven't chosen this option of going solely through Chapters in this instance. It would limit their distribution.

Mr. Wardle: Mr. Chairman, the provisions of this bill don't change the commercial environment whatsoever, in my view. I've been publishing for 34 years. I have bought books from abroad and then found that Coles bookstores had bought a similar edition and I couldn't sell mine to them. These are commercial realities that we all face in our book selling and publishing lives. I don't see that parallel importation measures are going to change this kind of relationship at all. The publishers and distributors here have a major commitment to the economy in this country. They're not about to allow a large book chain to buy around them or to make separate deals with their principals in other countries. It just won't happen.

The Chairman: Thank you very much for your presentation. You've gathered from the interest in the questions and the sustained questions that we are very appreciative of your presence here. Thank you.

Mr. Wardle: Thank you.

Ms Woods: Thank you.

The Chairman: We are pleased to welcome the Association of Canadian Publishers: Mr. Jack Stoddart, the president; Mr. Paul Davidson, the executive director; Mr. Roy MacSkimming, the policy director; Mr. Ron B. Thomson, chair of the ACP copyright committee. I think we had the pleasure of listening to your very learned comments before. Mr. Stoddart, the floor is yours.

Mr. Jack Stoddart (President, Association of Canadian Publishers): Thank you,Mr. Chairman and members.

The Chairman: Excuse me, Mr. Stoddart. I don't know if you heard our colleague from the official opposition had a caucus to attend and that is why he is not here at the moment. He asked me to apologize.

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Mr. Stoddart: Thank you very much. The last time the ACP made a presentation was on the question of the Borders entry into Canada, and I notice some of the members of the committee we talked with at that time. Thank you for the invitation to make the presentation today.

The committee I think was very helpful in that regard, and the decisions that finally came out of it have meant that a lot of Canadians have taken up the bit and we have a lot of new and exciting Canadian bookstores across this country. I think it was a very important decision the government made, and this committee was involved in that decision.

The ACP represents over 125 Canadian-owned book publishers with members in all provinces and territories and members from the literary, general trade, scholarly and educational sectors. Over 80% of the new Canadian-authored books, that's 80%, are published by the Canadian-owned sector.

Our members have helped to create a national literature of which we're all quite proud, which introduces Canadians to each other and more and more throughout the world. Having just returned from the world book fair in Frankfurt, I think Canadians are very much authors as opposed to publishers. We've very much at the centre of attention with Margaret Atwood, Rohinton Mistry, and many others, who are world class, although I hate to use that term. Let's put it this way: when you look at the front page on the major newspaper in Frankfurt and see Margaret Atwood looking out at you, and Rohinton Mistry in other places, you have to be proud of the accomplishments of our writers and perhaps our publishers in that developmental process.

The ACP is very pleased that Bill C-32 has been introduced. Overall, the bill does present a balanced set of measures that modernize the legislation, act on longstanding commitments, and strengthen the book trade in Canada. After eight years of consultation and review, it is time for the legislation to be passed and implemented.

We do have some specific concerns, which we will bring forward now. I'll ask Paul Davidson to bring those specifically for you and then I'll come back and briefly make some comments perhaps at the end.

Mr. Paul Davidson (Executive Director, Association of Canadian Publishers): Thank you, Jack.

There are two central areas of the bill that are of interest to book publishers. These are the measures addressing parallel importation and the exceptions regarding the reprography.

With regard to parallel importation, the bill goes a long way in addressing the problem of buying around. As you know, buying around occurs when the libraries, bookstores, or other institutional buyers circumvent the exclusive Canadian publisher-distributor of a book in favour of another source of supply. That's the problem, and the bill goes a long way in addressing the problem.

The key accomplishment of the measures in the bill is that they enable publishers to enforce distribution agreements that have been freely entered into. Some people have characterized the measures as protectionist, and we like to make to point that the legislation rather ensures that the contracts are observed and enforced. This in fact is the very basis of free-market economics.

Having said that the bill goes a long way in addressing the problems of buying around, there are some primary concerns with regard to the measures. The first is the notice provisions, which the previous presentation addressed. We concur that the term ``written notice'' is subject to wide interpretation. We would prefer to see the notice provisions be defined in the regulation and that all parties will be better served by clearly defined requirements for notice and that those be developed in the regulation.

The other key concern with regard to parallel importation is that the exceptions are too broad. The ACP argues that these exceptions should be more limited. For example, the government is given an unlimited right to import foreign additions, and this seems at cross-purposes with the bill's goals. Similarly, libraries, museums, archives, and educational institutions are given wide exceptions for purchasing non-Canadian editions, even though Canadian tax dollars are used to support their collections.

The previous presentation also mentioned the issue of used textbooks. We believe the bill inadvertently permits wide-scale importation of used textbooks and that this undermines the infrastructure of the industry and should be addressed.

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With regard to the exception provided to individuals, the exception does not address the growing place of commercial book clubs in the marketplace. This is a point our presentation makes in the full submission. These U.S.-owned enterprises make direct appeals to Canadian consumers and supply Canadians with U.S. editions of Canadian books and books for which there are exclusive Canadian distributors. This deprives Canadian authors of some of their royalties, Canadian publishers of the income from those sales, and Canada's retailers from competing on a level playing field.

This exception should be amended to reflect the goal of permitting individual access to books, but prevent commercial book clubs from supplying the market with U.S. editions. In our submission there are detailed recommendations about how to resolve these issues.

With regard to the second broad concern of the bill, the exceptions dealing with reprography, the ACP wishes to reassert that the fundamental issue on which copyright turns is fair compensation for the work of the creator. In this context any exceptions undermine the principle. The investment made by authors and publishers must be compensated by consumers. As one person has observed, we believe that work should be freely accessible, but not accessible for free. Again, our submission details several recommended changes. I want to underline some of the most important.

In making a copy for instructional purposes, it's important not to permit storing that copy electronically or to permit transmission of that copy to distant sites. As you have heard, distance education is one of the fastest-growing education markets in Canada, and the bill should explicitly prohibit this form of copying. We believe the exception is too broad.

Similarly, the ACP recognizes the need for an exception dealing with tests and exams, but including the word ``assignment'' makes the exception again too broad. You heard some discussion of that earlier. While tests and exams are part of the evaluation process, assignments are part of the learning process and should not be exempted. For this reason we recommend that the term ``assignment'' be deleted but ``test'' and ``exam'' remain there, and that the English and French versions of the text be made similar.

With regard to exceptions provided to libraries, the ACP wishes to ensure that permitted copying enables the maintenance of a collection but not its augmentation. The ACP also asserts that libraries that operate within professional societies and libraries that operate for other than incidental profit should be ineligible for the defences available to libraries operated for non-profit lending and reference.

In the same vein, the bill must explicitly state that multiple and systemic copying is not permitted by exception. Such a statement would be similar to the provisions in the American and British statutes.

The ACP is also very concerned about the blanket exception provided to libraries, educational institutions, archives and museums that absolves them of responsibility for the photocopying conducted on machines they provide to the public. In this connection, I'd like to draw members' attention to a newsletter provided by the Metropolitan Toronto Reference Library, the summer 1996 edition, announcing the installation of 25 new photocopiers at the library that are ``30% faster and designed specifically for photocopying from books''. The ACP recommends that this proposed section of the bill be deleted.

In each of the areas I've commented on, the ACP makes specific recommendations. The ACP also makes recommendations regarding the role of the Copyright Board and ways to strengthen collective societies and other technical considerations.

I think it's important to remember that copyright is the economic foundation for our emerging information economy. The work of this committee is very important in ensuring that Canada's copyright holders can protect their economic and moral rights.

Over the last several days and weeks, I'm sure you've heard many presentations like this, but I'd like to ask Jack Stoddart to conclude about the fundamental importance of the bill for Canadian publishers.

Mr. Stoddart: It seems to us that most of the discussion is probably on technical details and issues like that. The question of protection of copyright is an economic one, but it's also a matter of whether this country is going to have a publishing industry. We won't have publishers in this country, whether they be branch plants or Canadian owned, if we don't have protection for the work we have paid for - in many cases dearly - or for which we have taken on the responsibility for distribution, sales and publishing in Canada.

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I believe that the major problem the Canadian Booksellers Association has with parallel importation, for instance, has to do with time of service. Time of service is interesting because they have recognized our company for the last two out of three years for the service that we give to this industry. We can supply 80% of all the retail customers in this country in less than five days, and most of them in three to four days.

We distribute 50 Canadian publishers and at least 50 foreign publishers. University of Toronto Press does the same thing, a little bit longer, but within a week across this country. We put a major warehousing installation into Vancouver, so we do the western part of Canada from the western part of Canada, not from Toronto.

I think changes have to take place in this industry, but if the we don't have the protection as an industry, as a publishing industry, to deal with the needs of the booksellers, the needs of the consumer of resupply on a very fast basis, we will never have an industry. We will have a supply system that's based on wholesalers supplying Canadians across the border. We will force the business north-south instead of east-west.

As much as we talk about technical details and many issues here, the bottom line in this discussion is: are we going to have a publishing industry left? Do we value the work that industry does in bringing forward our writers and the thoughts of this country to each other? Sure, we use the works of countries from all around the world; we distribute books from all around the world across this country. We're not trying to exclude books in any way. I don't know of a publisher who would say no, we don't want this. But what we do believe is the same as you would find in the United States.

Our proposal is a lot weaker than the U.S. one - or in Britain or in France or in Belgium or in Germany - that the publishing community that has the right for the distribution has an absolute right in that country. We have opted in the negotiations for a weakened right. We have said we will undergo criteria of performance and time of delivery to the book community, and on pricing commitments that we will not exceed. Why Canadian companies should have to guarantee that we won't gouge the public when any other country in the world can do whatever they want is beyond me. But as an industry all publishers in this country, whether it be ANEL of the French-language publishers, the CPC, or the ACP, we've all endorsed the concept that we will live within reasonable guidelines.

The question is really one of whether this industry is going to survive. Regarding the point that was made, I understand, last night by the booksellers - that it was in fact something the agency business would be threatened by for publishers - well, the largest part of my company is in fact in the agency business. We do $20 million a year in the agency business, and I can tell you I am a firm believer that if we do not have the proper copyright protection and parallel importation without exceptions of any sizeable magnitude, our future is really quite bleak.

When you raise a question, as the copyright revision does, in the end whatever is decided, everybody will look at it and try to make the most of it. Having raised the question now, if the exceptions are left in place that are too large and perhaps inappropriate from our point of view, I think we will see a flooding of this market.

There's an example going on right now where Barnes & and Noble and Follett and others are making proposals to take over the McGill University bookstore. They're making certain guarantees. Under our heritage laws - department laws or cultural laws - to do business in this country in the book business you are supposed to fit ownership and certain undertakings, etc. They found a loophole: that as an educational institution they're exempt from some of our copyright laws. The only way you can distribute books as a U.S. retailer in this country through McGill or through the University of Ottawa, which is already working with Follett's, I believe, is by using the educational exception. Otherwise the materials they're bringing in from the U.S.... The only way they can operate effectively and profitably is by using that exception.

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So we have to be very careful, because at this point in time 95% of all the retailers - the bookstores, not all retailers, I guess, but the bookstores - including chain stores, etc., in this country are Canadian-owned, Canadian-buying and probably, I think they would have told you last night, buy 95% to 98% of their books in Canada anyway. We don't want to lose that as an industry.

So the provisions on copyright, oddly enough, through the university community, are starting to affect that business, because if you open an American bookstore in McGill University in downtown Montreal, under American control, you can be sure that right across the street.... Is there any reason why Borders should not be back into this country? There are questions that come out from what seems like a technical copyright question that we want to address.

The question was raised earlier by Ms Phinney about the costing. If you would like, I'd be happy to give you basically the cost on how the industry works. If you'd like I could do that very, very quickly.

Take a $10 book, because I can do the math on a $10 book; I couldn't on a $30 book without a calculator. In Canada the bookstore gets, on average, about a 45% discount to the retail market, so $4.50 stays with the bookseller; $5.50 comes to the publisher. Of that, a royalty of 10% of the list price is $1, so the net now is $4.50. The manufacturing cost is $2. The general pricing policy is five times the manufacturing costs, so five times two is ten. So basically the cost of the book is $2, so that the cost is now down to $2.50. The non-recurring cost, which is the plates, the editorial work and things that have to do with putting it together for the printer, is about 10% of net received, or 55¢. So the publisher's net received on that $10 book is about $1.95.

That, on the surface, would probably be fine; we could live within that. That's not a lot of margin, frankly, but it's something we could live within. But in this community, through most of the world, publishers supply their books on a fully returnable basis to the bookstore. If the bookstore doesn't sell it, they return everything, and they get full credit. Sometimes they have to pay the freight back and they complain about that, but that's the only cost, outside of the warehousing cost in the store, etc.

What happens to our costing? Well, if we take back 10% of the books that we shipped out in this scenario, our original price of the manufacturing cost goes up by 10%, so we now have a $2.20 price. The average returns from the retail this year are in the 20% to 30% range. You can imagine what that has done to the bottom lines of publishing companies. But that's the basic economic fact of the publishing and retail community in this country - other than educational, which has a different set of numbers and conditions.

Thank you.

The Chairman: Mr. Stoddart, are you ready for questions now?

Mr. Stoddart: Yes, thank you.

Mr. Abbott: I found your presentation to be very informative, and I thank you for that.

I'd like to start off by setting a premise that doesn't necessarily state where I or my party are coming from. I want to make that clear for my friends opposite. As I understand it, the agency work for foreign publishers that Canadian book publishers do represents a significant portion of their income. The difficulty the industry is faced with at the retail level with Borders and Barnes & Noble, and for that matter even with Chapters, is this concentration, which is threatening particularly the income source of the agency aspect of your business. Would that be a fair way to encapsulate?

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Mr. Stoddart: I'm on public record as saying I think the developments in the retail business right now in Canada are going to increase the market that we have for books by at least 25% over the next two years.

Yes, I think Chapters is a significant player, but since their announcement that they're going to open superstores, which they've done half a dozen of now, a new superstore by an independent bookseller has opened in Victoria, Vancouver, Calgary, Regina and Winnipeg. There have not been any in Ontario yet. We've had the announcement from Now Industries that they're opening five new stores. They were the original partners of Borders, and it will be all-Canadian and very much active in the Canadian scene.

I haven't seen a time, frankly, in my time in this industry when there was more hope for the future of publishing and retailing of books and consequently the authors than there is now. I think we will have with the new stores far greater space devoted to books. I think if anybody walks downtown to the Chapters store and sees that store, there will be 25 such stores - not necessarily Chapters, but various-owned retailers - across this country in the next year that look like that. If that isn't bringing books in a great advancement to Canadians, I don't know what is.

Mr. Abbott: That's the positive side, but as I've understood other representations from yourselves and people in your industry, the concern is that if this retail growth you just described is also contributed to by particularly the U.S. superstores, the inclusion of the U.S. superstores is a threat. Is that correct?

Mr. Stoddart: It would have been, yes. I think that the decision on Borders - they withdrew their application to come to Canada - has stopped the development of foreign-owned superstores. All this development is now Canadian, so I don't see where that's creating a problem today or in the future.

Mr. Abbott: It's not, but what we're talking about is outside of Canadian Heritage; now we're talking about the Department of Industry, which is talking about the ownership of those major stores.

Let's imagine a scenario where Borders finds somebody in Canada who wants to do a deal that enables them to take advantage of their large warehousing and merchandising facilities in the States, and who manages to comply with Industry Canada. That then still is a threat, isn't it?

Mr. Stoddart: My understanding of the Borders issue was that it wasn't the ownership provisions that were turned down; it was the fact that Borders were going to be buying their books in the U.S. and shipping them to Canada, around the Canadian system of distribution. They couldn't overcome that in their system, so they withdrew. It had nothing to do with ownership and had less to do with control. Rather it was that it would have structurally stopped the sale of books across the country and made it north-south. That's the only way their system could work.

Mr. Abbott: If we want to have a freedom of contract and association and whatever else in Canada, in your judgment, would Bill C-32, as it presently stands, fundamentally close the door to this threat? As the chairman indicated to the prior witnesses, I think we were all kind of taken aback last night when it was suggested that in fact it would have the potential of doing the opposite, because what people would do because they wanted to have freedom to contract however they want.... A publisher of a popular title in the U.S. may contract with you, but perhaps on a non-exclusive basis, knowing that they can get 40% of the market anyway.

Mr. Stoddart: It's my belief that as long as the laws of the country are as they are today as far as the ownership and control of the book industry are in place, this bill will substantially reduce that threat, beyond anything other than a very restrictive piece of legislation. I disagree with what the CBA has suggested in that I don't think they're correct in their assumptions.

Mr. Abbott: But you're marrying - if I understood your answer correctly, and I'm not a lawyer so I'm not trying to play with words here -

Mr. Stoddart: I'm not either.

Mr. Abbott: I want to come to a really clear understanding. With your answer, what you're saying is that this bill, along with the ownership provisions, will do it, but that this bill alone will not do it. Is that what you're saying?

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Mr. Stoddart: I'm saying this bill in fact does it under the laws of Canada. Clearly, if the laws of Canada change, the game changes with it. I think you've got to take the bill within the context of the law today.

Mr. Davidson: First of all, the ACP fundamentally rejects the CBA's notion that the bill will weaken the agency system. It's our view, this bill goes a long way to strengthen the book industry in Canada.

Our submission also makes the point that we want to make sure people don't see this bill as a panacea or a cure-all for the fundamental issues facing the publishing industry in Canada. Around the time of the discussion about the future of American superstores in Canada, some people suggested all you needed were these measures around parallel importation and everything would be fine. That's not the ACP's position. The position is that these measures help provide publishers with the ability to enforce the contracts that have been freely entered into. It helps strengthen the industry. But the issue of foreign ownership and those issues are separate to the discussion.

Mr. Ron B. Thomson (Chair of the Copyright Committee, Association of Canadian Publishers): There's a point here that I think is slightly confusing. Your scenario is to be based on a non-exclusive distribution of material, and that's not covered by the act. We're only talking about an exclusive; if a U.S. publisher wants to write a number of distribution agreements with various agents in Canada, none of which is exclusive, then the act doesn't come into place.

Mr. Abbott: But you see that's the basis of my question. If this bill were brought into effect at some point in the future, maybe one or two years from now - I'm not talking fifteen years - and if there were a sufficient volume potential from one massive seller, Chapters or whoever you want, because this legislation is in place, would there not be a temptation on the part of the U.S. book publisher to want to write a non-exclusive agreement with you? In other words, would this not actually push the U.S. publisher in that direction?

Mr. Thomson: I doubt it, because, as mentioned, the marketing that an exclusive distributor would do is of more value than the quick sales on the other.

The point here also, in terms of service, is that if questioned, I could get a book in 24 hours or two days from the United States, but on a $30 book I would pay a $60 delivery charge. I can get anything in 24 hours if I'm willing to pay horrendous delivery charges. The service standard from the United States in fact is far worse. I don't know of any book I as an individual buy from the United States that gets to me any faster than a month.

The Chairman: Mr. Abbott, your last brief question.

Mr. Abbott: The last brief question and one quick preface. In asking this question I'm not trying to argue; I'm still trying to canvass this thing.

If you had a major retailer or retail way of marketing books in Canada that could capture 40% of the market, would this bill not drive the U.S. publisher in the direction of saying, ``Well, because this bill is in place, I just can't turn my back on that 40%, because there are these major stores that move volumes and volumes of books''.

Mr. Stoddart: I don't think today that situation is in place. What we can't protect today, even when we do have the right, is somebody who wants to import the book. If two years from now that situation you raise takes place, the same as today, that can happen. That publisher can say to its Canadian agent, or anybody else in Canada, we want you as a partial agent or a full agent or whatever.

Whatever those contractual obligations are, this doesn't change it. But it does change the fundamental way the protection of rights can be handled in the future. But contracts always override that because that's the fundamental part of the law.

Mr. Abbott: Thank you.

The Chairman: Ms Phinney, followed by Mr. Bélanger and Mr. Peric.

Ms Phinney: I was first the last time tonight. Can I offer Mr. Bélanger first place this time?

.1945

The Chairman: Maybe you should start with him then.

Mr. Bélanger: I'll be short.

The Chairman: We'll start with him. Give him a chance.

Mr. Bélanger: Have I ever argued with you?

The Chairman: Never. Give him a chance.

Mr. Peric (Cambridge): Short and sweet, same as last night.

The Chairman: Last night, Mr. Peric -

An hon. member: You're taking my time.

The Chairman: Yes, I'm taking his time. But you know there was a very famous singer from Quebec. Mr. Peric got bowled over by the singer and ended up having his picture taken with her. So I'm going to get into the record as well.

Mr. Peric: Mr. Stoddart, you mentioned before that returns are over 20%.

Mr. Stoddart: Between 20% and 30% from the retail, yes.

Mr. Peric: That's a high percentage.

Mr. Stoddart: It's terrible.

Mr. Peric: What do you do with that?

Mr. Stoddart: What do we do with the books?

Mr. Peric: Yes.

Mr. Stoddart: The books come back. In some cases we can recycle them, what we call doing a strip and bind. We take the hard cover off it, put a trade paperback on and sell it at half the price as a trade paperback. Then it becomes good value for the consumer at that point.

If the book no longer seems to have a market, then we sell it to a variety of retailers in this country for 5¢ and 10¢ on the dollar, the lowest price, and they sell it to you as remainders at $3.95 and $4.95.

Mr. Peric: Okay. You mentioned the writers get royalties of 10%.

Mr. Stoddart: The normal royalty is between 10% and 15%. Basically, on 5,000 copies and up you have a 12% to 15% royalty.

Mr. Peric: On what?

Mr. Stoddart: Of the list price of the book.

Mr. Peric: On what amount, on the sold books or published?

Mr. Stoddart: On the sold books. Yes, on the net sold books.

However, in the industry we advance moneys against possible sales. In most cases the advance is as large as the actual earned-out amount. Many times it is much more and sometimes we have to pay the further royalties. But in most cases.... Let's say we would advance $15,000 to an author; if the book earns out $7,500, then we're out the $2,500. If it earns out $15,000, then we pay them the extra $5,000 over the contract period.

Mr. Peric: When do you pay the author - in what, three months, four months, six months?

Mr. Stoddart: Normally, the industry standard is that every six months there's a reporting of all the sales and then it's countered against the advance that was done in advance of the publication. The sales are deducted from it and whatever is due the author is paid at the end of the first six months. If it hasn't been earned out, then the next six months, and then every six months until the book is put out of print the publisher reports to the author what the sales are and what royalties are due to the author and obviously pays the cheque along with it.

Mr. Peric: Thank you.

The Chairman: So are you going to be writing a book?

Mr. Bélanger.

Mr. Bélanger: Mr. Chairman, I want to congratulate our clerk for the timing of the appearance of these people, because Mr. Stoddart killed two birds with one stone today. I had the good fortune to meet him at the première of Laurier LaPierre's new book on Sir Wilfrid Laurier, just so my learned colleague from the other side understands where we're coming from.

Some hon. members: Oh, oh.

The Chairman: So you got a free copy, Mr. Bélanger.

Mr. Bélanger: No, I bought two - and I have proof of payment. One will be a gift to somebody and one I will cherish. Thank you.

I have a couple of questions. You are actually asking us to tell Mordecai Richler he can no longer sell us books through the Book of the Month Club.

Mr. Stoddart: No.

Mr. Bélanger: You're not doing that.

Mr. Stoddart: No.

Mr. Bélanger: So it's only the U.S. version of the Book of the Month Club.

Mr. Stoddart: No. With book clubs, there is no Canadian book club to start with, unfortunately. There used to be, but there is not now. There's Book of the Month Club and Literary Guild, two competing companies. Both operate out of the U.S.

The Canadian rights for the book clubs, if that author is selected by a book club, are sold to that U.S. company and it comes through as a book club sale. Royalties are paid under contract. That is a legitimate and proper business.

.1950

I believe last night a comment was made that the publisher sold a tremendous number of books directly to the public. If I'm incorrect in that, please correct me. As well, book clubs were mentioned.

Books clubs are a business unto themselves. They're retailers like any other. If Canada had a book club it would be a different issue, but today there isn't a Canadian book club. We go to New York, or they come to us and we sell them the rights for books, and those books come in properly done. It may be the U.S. edition or it may be the Canadian edition. It depends on the arrangement made.

Mr. Bélanger: Your brief recommends that we amend the proposed section that basically allows an individual the right to buy two books through the non-holder of the exclusive rights of distribution. You're saying, first of all, that we reduce this from two to one.

Mr. Stoddart: That's right.

Mr. Bélanger: That exclusion does not apply to the sales to individuals by commercial book clubs, retailers, or similar commercial operations.

Mr. Davidson: I believe the concern in the submission is in regard to the book club supplying the market with books that have not gone through the arrangement Jack has referred to - parallel editions of the book coming to Canada. That was the concern raised.

Mr. Stoddart: Honestly, it is not a problem today. In fact, the book clubs, because they're essentially a monopoly unto themselves, with just two of them in the market, act very responsibly. We are suggesting that it be in there just to cover any future development that may not be quite so upright.

Mr. Bélanger: So you wouldn't be too surprised if it didn't end up in there.

Mr. Stoddart: We would prefer to have a copyright bill that took forever to revise to cover all eventualities.

Mr. Bélanger: I've gone through the brief. One other thing struck me - although this might be a misunderstanding on my part. Your last suggestion reads:

The ACP therefore recommends that the definition of collective society in Section 1(5) be amended by adding the words `incorporated in Canada' after the word `corporation'.

Can you elaborate? I thought this was generic in that if we dealt with collective societies in other parts of the world they'd be defined and so on. Why the insistence here?

Mr. Thomson: Because a collective society that is in fact incorporated in another jurisdiction could claim the right to operate in Canada. They could do that and not be subject to, say, the Copyright Board.

There is a collective society that is working in a certain area of print material - music material - that is in fact operating in Canada, the United States, Australia, and New Zealand. The Copyright Board has absolutely no control over this collective society, which specializes basically in music for religious purposes. It's a huge business.

There are other ways in which a foreign RRO, or reprographic right organization, could operate in Canada if it wanted to. They don't want to yet, but we're simply saying this is something that needs tidying up.

You probably will see it first in film or broadcasting before you see it in, say, print issues. You would have very real problems there.

Mr. Bélanger: I don't remember seeing that in any of the briefs. Thanks for flagging that. We'll raise it with the officials to see if it there was an oversight.

Finally, I just can't resist quoting one paragraph here. These are words we have to hear more often:

Canada's book publishing industry is an unparalleled success. Canadian books introduce Canadians to each other and Canada to the world. Our exports have tripled in the last five years. Our non-fiction writers dominate the best seller lists, and our fiction writers are internationally acclaimed.

We're doing well here. Thank you.

Mr. Thomson: I have experience with the Dutch market. Dutch is protected as a language, and it's a market about half the size of ours. We do a far better job for our size of market competing against British and American than the Dutch do with a language-captured market. Canadian writers and small Canadian publishers survive here in a way that is not done in say the Netherlands. We are very successful. We don't recognize that we are very successful in that, but it's a fight every day to do it.

.1955

The Chairman: Ms Phinney.

Ms Phinney: You suggest in your brief that non-profit libraries operate document delivery services. I don't understand that. We haven't talked about that. Nobody else brought that up, did they? If so, I don't want to repeat it. Can you quickly explain this, and how these services will affect your membership?

Mr. Thomson: A commercial firm phones up the local public library and says, please fax me five pages in this area of economic study. They take a copyright book, stick it on a machine, photocopy the five or ten pages and charge them $50 for it. I literally mean $50, at $10 a page.

Ms Phinney: That's what you call document delivery service?

Mr. Thomson: Yes. Usually it's whole articles. They don't want to buy the latest copy of Forbes magazine, or Canadian Business, or something like that.

Ms Phinney: So that $50 is for them.

Mr. Thomson: The library just takes it and deducts their 25¢ copying charges.

Ms Phinney: Are you suggesting here that non-profit libraries do this?

Mr. Thomson: Yes.

Ms Phinney: What do you mean by non-profit libraries?

Mr. Thomson: The library at the University of Calgary.

Ms Phinney: What if Chapters moves in and becomes the University of Calgary's library? Do you still want them to do it?

Mr. Thomson: There are document delivery services licensed by reprographic organizations that collect a content fee that is charged to the receiver and distributed back to the copyright owner. But the university is saying this is fair dealing; we can make $50 at $10 a page, but the author is not allowed to have 3¢ a page from that.

Ms Phinney: Okay.

Somebody mentioned libraries earlier. Exactly what do you want libraries to be able to do or not to do? How do you want them restricted, and how would you like that put in the bill?

Mr. Thomson: The recommendations are, first of all, to make it clear that it's collection maintenance. A damaged book can be replaced. It's not to add a similar-type thing, because that's what they're specializing in.

Second, we recognize that they should probably have the right to deliver a fair-dealing copy for a patron, although that's mostly done themselves. We want them to be repositories of knowledge, not publishers of knowledge. We don't want them to go out there and make copies of material that normally we would either sell or would collect the content on via a collective.

Ms Phinney: Do you have any suggestions on how we could word that in the bill?

Mr. Thomson: We've suggested that, in many cases where there's already a limit on what they can do because it is commercially available, we make it clear that ``commercially available'' includes ``or via a licence from a collective society'' by adding those words. In many cases some of us are not reprinting material but are going to take that content reimbursement for our earlier work and share it with the author through a reprographic collective society. We aren't going to keep 500 extra copies on the shelf, hoping to sell another 30 of them.

So we think ``commercially available'' is also through a collective society, and we would like the bill to explicitly say that. I think the wording to that is in a number of briefs.

Ms Phinney: I just want to be totally clear on the book clubs. You don't mind the two American clubs that are there now. You're worried that another group might come in and not be paying, not be doing what they should be doing. You're not worried about the other two.

Mr. Thomson: There is room here for abuse. The other thing is, we're not saying Mordecai Richler can't sell his book to the American book clubs, but remember, Mordecai Richler is getting a lot less from the sale of that book back into Canada than he would if somebody bought it here in Canada. The royalty rate is not 10% of list. First of all, list is very low, and second, it's 3% or 4%. So other than your putting their name up front, you aren't doing them a favour by putting them through a book club.

Ms Phinney: Are you suggesting we leave that out altogether?

Mr. Thomson: Yes.

Ms Phinney: We just say that you cannot have U.S.-based enterprises, that the only way we could have book clubs would be if they were Canadian-based.

Mr. Thomson: To be honest with you, we were stumped on how to write the wording to do this. We took several cracks at trying to get the words right. We failed in getting words that would not at the same time disrupt some other legitimate policy point. We were hoping perhaps the drafters of the legislation -

If that were a policy decision, we might actually leave it to them, whereas in other cases we've done their work for them by actually suggesting specific points.

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It is a complex issue on how to close this door and not prevent a person who passes through another country from bringing back a copy of a book they bought in a bookstore or writing away for something difficult.

Mr. Roy MacSkimming (Policy Director, Association of Canadian Publishers): Just to add to the point about book clubs, our real concern here is not with the presence of U.S.-based book clubs selling books to Canadians, because they do provide a very real need for many Canadians who may not have easy access to bookstores. Our real concern here is that the U.S. clubs should be selling the Canadian edition of the books they sell or obtaining the titles from the Canadian distributor. In other words, they should be acting as good corporate citizens.

The Chairman: Mr. Flis.

Mr. Flis: I was pleased that Mr. Davidson shared with us a quote from the Metropolitan Toronto Reference Library, because it highlights the dilemma here very clearly. It's interesting, when I opened up the headlines in the centre it read ``Crime in the Library - Having a Criminally Good Time''. I noticed the pictures of some well-known dignitaries in the photos.

The document says that students pay 20¢ cash for a copy, or 15¢ a leaf by a vend-a-card, but if they want to make colour laser copies it's $2.55. Does any of that money go to the author or publisher?

Mr. Thomson: Now it does not. In fact there's at least a 30% profit in there for the library. CANCOPY is in the process right now, even with the bill in its present form, of designing a photocopy licence in four libraries, in cooperation with the libraries across this country. It was based on a survey forwarded to you a week or so ago. I don't know if it has actually been distributed yet through your system.

Because the libraries are recognizing that, they're making a lot of money out of this. They do have a responsibility to pass this on. So they're quite willing now to enter into a deal with this.

This has been the thrust of one particular person in what's known as CALUPL, which is basically the 26 large urban library systems across the country. This licence will be designed within the next month or so, and we'll start to sign up next year. Some of this money will finally get passed on to the creators of the works that are being copied in huge volumes across the country.

Mr. Flis: Because this is happening now, is there any need, then, to put anything into this legislation to ensure that some of that money -

Mr. Thomson: Yes, that's why we think free-standing machines should at least insist upon having a reprographic right licence. That's simply putting on a notice - do not infringe copyright, it's a bad thing. It is not a sufficiently responsible role for libraries, whether they're public libraries or university libraries.

Mr. Flis: In most libraries most of the copying that's done is from the reference books, which are not allowed to leave the libraries.

Mr. Thomson: And they're also in the copyright.

Mr. Flis: Students are forced to make copies. At the same time, I think the author and the publisher should be getting a piece of the action here. So I'm pleased that Mr. Davidson raised that.

Another term I did not quite understand as a neophyte to this committee, Mr. Chairman, was where you wanted the exceptions tightened up. You said that permission to copy for instructional purposes should be modified to read ``making a transitory copy''. Can you define what you mean by ``transitory copy''?

Mr. Thomson: It's used to reinforce writing on the blackboard, writing on a flip chart, or writing on an overhead. It is something that when you turn the machine off, or erase the blackboard, it's gone. It's not something that goes into a computer memory that people can constantly access again and again at will. We think teachers have this right now, but teachers always complain that they're afraid the copyright police will walk in the door as they have several lines of Margaret Atwood on the board.

.2005

That exception in the bill reinforces everybody's agreed position. We simply want to make sure in this age, when that type of material can be permanently stored, that this exception really applies to a transitory delivery system.

Mr. Flis: Mr. Chairman, I will end with the same question I asked the previous witnesses.

You are supportive of this legislation. You would like to see amendments, etc., and hopefully some of these amendments will be incorporated. But if for reasons beyond the control of this committee, because of other testimony...would you still support speedy passage of the bill as is?

Mr. Stoddart: The legislation, as it is, is very important and we support it in that context. If nothing got changed, it would be a step forward for Canada.

You were asking about libraries, so I will take some licence to comment because I think it's part of the answer to this specific question.

Canadian libraries - public libraries, not school - have very poor, small Canadian collections. Why? Why do they prefer to buy Danielle Steel over Margaret Atwood? When you go back to the surveys on all the work, part of it is that where they source, where they find the information about what they want to buy, is almost exclusively American reviews, magazines, etc., except for the Canadian books, of course, which they have to do in Canada. More importantly, so much of their source of supply is through U.S. wholesalers. It's easier that way. They have one invoice for $100,000 in a month for American books. They don't have to deal with ten companies at $10,000 each.

In a sense that's the crux of the problem. Institutions such as public libraries - which are taxpayers' money; we all contribute to them, and some are trustees, etc. - for economic reasons and for simplicity of order choose to deal with the only place they can, which is the wholesale market. There is no Canadian wholesaler equipped to deal in today's technology with the needs of that public library system. If we do not have wholesalers in this country, we will always have that situation. Either that or the public libraries will have to become more inefficient and start dealing with everybody all over the place.

If the exemption for library purchasing.... Regardless of the terms, the problem is that if you have fifty branches and one library and you do an order for fifty, one for each branch, is that the exception? If we don't have the institutions of this country buying first in this country - not to the exclusion of others if books aren't available in a timely manner or whatever - we will never have a wholesale community. We will weaken our retail community and we will certainly damage the publishing community.

I suggest that if we had a proper wholesale component in this country, we would have a better collection of work in the libraries. It would become part of their normal purchasing procedure instead of dealing with Baker and Taylor out of New York or Ingram or Brodart, the U.S. wholesalers, as their main contact and source of supply.

That's why to me the exception to institutions makes no sense. If we're going to have an industry in this nation, we can't have part of it and not the rest. We either find a way...not to treat the institutions unjustly.... If books cannot be properly and quickly acquired, I'm not arguing. But we need to give Canadians a chance for at least two to three years to build the infrastructure in this industry.

The only part missing is the wholesaler. We have good retailers, good publishers and good writers, but we don't have good wholesalers. And we have very good libraries. We're missing that one little thing. That's why the exceptions for the institutions, whether it's a university library, school library, or public library, really bother me. The wholesale component is so important to them. I would far rather see a joint venture going on in this country by which Canadians work here and are part of that wholesale community, supplying our Canadian needs. Then the reference materials that our library systems use will be Canadian and not American, British, or French.

.2010

To get back to the original question, yes, this is a very important step forward, but I believe the step will be hugely different to all parts of the book industry, which includes the writers, if there are no exceptions. There are some technical ones that have nothing to do with the philosophy of what we're talking about.

I believe this country is capable of having an efficient and properly run wholesale industry, just as it has the other parts of the puzzle. That change alone, changing the exception for institutions, would be the key thing to repatriating tremendous amounts of business to this country, in letting Canadians work and participate in the income of the sale of those books.

Mr. Flis: Thank you very much.

Mr. Davidson: May I just echo those comments by saying that the ACP has confidence in the public hearing process. The fairness members have shown tonight and the questions you've asked have shown that you are taking the matter seriously.

As someone who is somewhat newer to the copyright issues than others, it's clear to me that public servants have developed the full range of policy options that are available for you to consider.

Our point in stressing the urgency is that we really do believe it is the appropriate time for the political leadership to make the decisions where differences remain. We thank you very much for the opportunity to present tonight, because copyright is the foundation of the information economy. The decisions ahead of you are very important.

The Chairman: Mr. Stoddart and colleagues, as you have found out from the questions, we have a tremendous interest in your industry. I wouldn't exaggerate by saying that the overwhelming, if not unanimous, feeling of parliamentarians is that the Canadian book industry is of intrinsic value to Canadian heritage and identity and that we want to solidify it and enhance it in any way we can.

I think I reflect the view of all of my colleagues in saying this. Whatever we can do together to make sure that the publishing industry, authors, and booksellers stay in place and find a better place in the sun I think is good for all of us.

I was struck, Mr. Stoddart, when you said tonight that McGill, which in many ways may be our most prestigious university in Canada - it happens to be in the city where I live and four of my kids went there - may be buying from an American source. It is extremely important not only as a symbolic issue but as a real issue. I hope we can find ways to work together to make sure it doesn't happen, because if it happens at McGill, then it will be at the University of Toronto, the University of British Columbia, and all over the place. It will be another breach in the dike.

We thank you for coming tonight. We thank your predecessors as well. I think we've learned a lot tonight about your industry from the questions of all my colleagues from all sides of the House. Thank you very much for being here.

Mr. Stoddart: Thank you for the opportunity. If any further details or questions arise in the future, we will of course be happy to add to it further. Thank you very much.

The Chairman: Members, we have quite a bit of business. We'll suspend for five minutes, please.

.2014

.2026

The Chairman: I just want to let you know we have a briefing session provided for tonight. We have no quorum, so I would suggest that we close the meeting and do the briefing session informally. That's the only way; we don't have a quorum, so we can't have an official meeting.

An hon. member: Are we doing exceptions?

The Chairman: No, we're not dealing with exceptions.

An hon. member: We've been doing exceptions all along.

An hon. member: Who's on tomorrow?

The Clerk of the Committee: There are two groups, the Committee of Major Legal Publishers and SARDeC. They're under exceptions.

Ms Monique Hébert (Committee Researcher): Yes, there are exemptions.

The Chairman: It doesn't have to take all night; we can do it as succinctly as Madame Noel can.

In any event, we don't have quorum, so I'll close the meeting officially so we can let the translators go home. The meeting is adjourned.

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