On behalf of our 26 post-secondary institutions across Canada, representing over 300,000 students, we'd like to thank you and the members of the committee for inviting CASA here today.
We come before you to bring your attention to the importance of creating education as a new category of fair dealing. The inclusion of education as fair dealing is viewed by our membership as one of the most important changes the Government of Canada can make through Bill .
The importance of an education fair dealing right cannot be understated. Our neighbour universities and colleges in the Unites States are able to capitalize on their fair use education right to drive innovation, but the growing reality for Canadian post-secondary institutions is that they are being financially and legislatively left behind.
If this category is not created, students will be getting double-charged, sometimes triple-charged, for access to materials they've paid for through a variety of fees collected, whether they be through collective licensing, library, or tuition fees.
Licensing collectives, such as Access Copyright, are looking to expand their scope beyond photocopying, to include fees for digital copies of already purchased articles, quotations in PowerPoints, and even to colleagues sharing texts over mail.
Beyond that, the economic argument for a more liberal fair dealing regime is clear. Modern tech-heavy creative industries in the United States rely on fair use to find innovative ways to generate more wealth and income for their country. Studies point to the fact that this fair use economy amounts to 17% of the U.S. GPD, and education forms a significant proportion of that in direct contributions and training for future contributors.
If Canada seriously wants to be a 21st century leader in innovative sectors, the U.S. example shows liberalizing fair dealing must be a cornerstone. Simply, we must allow access for the sake of education or sit by and watch our competitors pass us by.
However, as it is currently drafted, the educational fair dealing right is not enshrined as a true right but as a secondary right that can be overwritten by a digital lock. Creating a balance in the bill is important, and digital locks have their role, but allowing them to override fair dealing undermines the very concept of fair dealing. If a work has a digital lock, a copyright holder can limit any use of it. And fair dealing means there can be no inherent limit of the purpose, if the purpose is just.
This is more restrictive than the copyright regime in the United States and goes beyond Canada's obligation under international treaties. If we are to take fair dealing seriously, it needs to be a true right and it needs to not be trumped by a digital lock.
There are also two further amendments to the bill that CASA is proposing. The first is an amendment requiring libraries to self-destruct articles they lend through interlibrary loans. Students have two options when taking on such an article: either print one copy of it on paper, or let them destruct five days after receipt.
This clause undermines the way modern study operates. The benefits to digital articles are immense. They can be carried everywhere, organized in new ways, volumes can be searched in seconds, and citations can be automated. By requiring students to physically print out these articles, the law would actively bring education research back into the 20th century, at a loss to all Canadians.
The second amendment requires professors and students to destroy their course materials 30 days after the end of the course. This is absurd. In the 21st century, students are taught to be information gatherers and synthesizers who can find the information that exists in the world and bring it together in a way that generates new and original knowledge.
Tests that were once closed-book in the 20th century are now open-book in the 21st. Requiring students to destroy the information they've built their skills on after the course is over is to force them to take an open-book test without the book, to build a house without their hammers, when they enter the workforce. It's needless and it doesn't impact the bottom line of rights holders.
Because students gained access to these lessons in an economically fair manner in the first place, if the cost of an education doesn't carry with it the ability to use that education in the workforce, I ask: what are students paying for?
Thank you, Mr. Chair.
[Translation]
Good afternoon, and thank you for inviting me.
[English]
My name is Danielle Parr, and I'm the executive director of the Entertainment Software Association of Canada. With me today is Jason Kee, ESAC's director of policy and legal affairs.
Our association is the voice of the Canadian video and computer game industry, which employs 14,000 people in creative and cutting-edge jobs that are leading Canada's digital economy.
Video games make up the fastest-growing entertainment medium in the world, with some blockbuster titles rivalling Hollywood movies in sales and excitement. In 2009 Canada's video game industry accounted for more than $2 billion in retail sales of entertainment software and hardware, and contributed over $1.7 billion in direct economic activity to Canada's economy.
In our view, Bill proposes measures that will bring the Copyright Act in line with advances in technology and current international standards of intellectual property protection. Subject to certain technical changes we are very supportive of the bill, and we strongly urge the committee to pass it as soon as possible.
Piracy is a massive problem for the video game industry. It represents huge losses of revenues to game developers and publishers that depend on large, upfront sales to recoup the significant costs of game creation. Piracy ultimately leads to studio closures, lost jobs, or worse.
The bill will provide rights holders with the tools they urgently need to go after those who facilitate piracy, either by trafficking and circumvention devices or services, or by operating pirate websites. Further, by establishing clear rules it will provide much-needed certainty in a digital marketplace, permitting market forces to operate properly, and enabling creators and companies to choose for themselves the best way to make their own content available.
This will contribute to job creation; promote innovation; spur investment in the development of new digital products, services, distribution methods, and platforms; and support a diverse range of new and innovative business models that will, in turn, foster legitimate competition, more consumer choices, and lower prices.
Today we'd like to tell you about how copyright is central to the video game industry, and recommend specific technical changes intended to address loopholes and avoid unintended consequences. We've outlined these issues in more detail in our submission to the committee, so I'll just give you a brief overview.
When it comes to TPMs, the video game industry makes extensive use of technological protection measures in all aspects of its business in order to protect its works. We strongly support the provisions in the bill that will protect TPMs. However, we have concerns with some of the exceptions, and recommend narrowing and clarifying them.
TPMs not only help prevent piracy by allowing creators themselves to determine how their work can be used, and to be properly compensated for their work; TPMs also enable a wide variety of business models by enabling value-added features and facilitating new products, services, and distribution methods in a digital environment.
Let me break that down a little. The choice of whether or not a creator, artist, or company can use a TPM to protect a digital work is and should be the purview of creators. Consumers clearly have the right to avoid purchasing products or services that make use of TPMs if they wish, and it's incumbent on creators and companies to respond to consumer demand, or they'll suffer in the market.
Some companies, such as iTunes, have responded to demand for format shifting by offering TPM-free versions, while others have responded by providing a downloadable copy of the work with the packaged version, like many Blu-ray movies. However, there's no equivalent expectation that a video game purchased for a Nintendo Wii should be playable on a Xbox, and there's no consumer demand for format shifting.
The point is that each market is different, with its own specific rules and idiosyncrasies, and it's good public policy to support the widest possible range of markets and business models and let the consumer decide, rather than pick winners and impose a regime that may be beneficial for one sector over all others. Strong legal protection for TPMs accomplishes this by ensuring that the creator's choice to use a TPM is respected.
It's also important to understand that TPMs play an increasingly critical role in new and emerging platforms and distribution channels for content online. From new streaming radio and music services such as Spotify, to film and television services such as Hulu or Netflix, to gaming platforms such as PlayStation Network or Xbox LIVE, all of these services are supported by TPMs. They control access to the services, thus preventing piracy. They provide viable market-based revenue streams for creators, and enable value-added features, such as rental versus purchase. The video game industry also makes extensive use of TPMs to provide additional downloadable content for games to prevent cheating and to implement subscription services.
We're in the midst of a fundamental change in the way we consume content, and creators will increasingly use online platforms and other new innovative distribution models to deliver their content.
Strong anti-circumvention measures such as those contained in this bill are essential, not only to prevent piracy and allow creators to determine how their works will be exploited, but also to ensure the new platforms are secure and to maintain the integrity of the nascent digital marketplace.
However, we are concerned that certain exceptions to circumvention will be exploited by those who enable piracy by trafficking in circumvention devices and services in order to escape liability. Overly broad and vague exceptions will render the provisions virtually unusable. We recommend that those exceptions be narrowed to close this loophole.
Briefly I'd like to mention three other areas that are of concern for our industry.
With regard to enabling infringement, we applaud the new enabling infringement provision but we are concerned that as drafted it might not be effective. We recommend clarifying it to ensure services that are both designed or operated to enable infringement are captured and that rights holders can obtain the full range of legal remedies against enablers including statutory damages.
The second is the exception for user-generated content. Generally the video game industry takes a very permissive approach to UGC. However, the wording of the bill would essentially permit widespread appropriation of existing works. It essentially allows anyone to copy the designs, art assets, even programming code from a game, and release a copycat game, for free, on the Internet. This exception must be narrowed and additional factors added, such as the need for the new work to be transformative, to avoid these clearly unintended consequences.
Another issue of major concern is with regard to the statutory damage provisions. The new multi-tiered approach is clearly intended to limit damages payable by private individuals who infringe copyright for personal purposes, but it could create perverse incentives and have the unintended consequence of giving a free pass to large-scale pirates. We recommend that this unworkable distinction be eliminated and that instead the factors the courts must consider when determining the award be emphasized.
Thank you, and we look forward to your questions. Merci.
:
Thank you very much. I would like to begin with a comment addressed to our witnesses from the Canadian Alliance of Student Associations. After that, I will have questions for our witnesses from the Entertainment Software Association of Canada.
As I see it, the exemption you are requesting for education is not a good thing. Allow me to explain. First of all, it's a very bad principle to be teaching our young people and our children. They should be taught to respect copyright and intellectual property, and the fact that intellectual property and copyright should be remunerated. Students, first and foremost, should be learning this principle and applying it. Allowing you to be relieved of the obligation to pay copyright would not serve you well at all. If you feel that your fees are too high, the school should be asking for lower prices from other suppliers—for example, for pencils, blackboards and chairs. We should not be reducing copyright remuneration pay to creators, because they are the people who earn the least. On average, they earn less than $25,000 a year in Canada.
It's a little like asking to be exempted from homework or other school work for a week. It would be pleasant at the time, but afterwards, when you had to take the ministry exams, you would see that you didn't have all the tools or all the knowledge you need to pass your exams. In fact, you are punishing yourselves. Tomorrow, you will be these same creators and scientists publishing your work. Unfortunately, you will not be entitled to copyright.
Now I have some questions for our witnesses from the Entertainment Software Association of Canada. I read your brief very carefully. From what I understood, you are basically asking for five amendments.
The first amendment has to do with circumvention, and everyone supports you on that. This is an unintended mistake on the part of the people who drafted this bill. Everyone wants to curb piracy and ensure that it is wiped out. In that respect, this isn't a serious problem.
Your second amendment deals with enabling infringement. This is another huge problem. Under the current act, this applies to any service which is “designed primarily to enable” on-line piracy. Your amendment suggests removing the word “primarily” and replacing it with the term “operated”, in order to clarify things.
Your third amendment deals with the exception for user-generated content, known as the YouTube exemption. This does create a problem because it basically gives anyone the right to use works without authorization and without remuneration for non-commercial purposes. As you stated in your brief, in the software gaming industry, as is the case with other artistic genres, people are more interested in the glory than in the money. You are recommending that this clause be amended so as to restrict it substantially. Why don't you simply ask to have it removed, since it is an exception that is found nowhere else in the world and that Canada seems to have just pulled out of a Cracker Jack box.
:
Ms. Parr, I would like to come back to what you said earlier about this bill being a compromise. I have to say that, unfortunately, it is not a compromise. This bill is heavily weighted in favour of an industry such as yours, entertainment software. I'm happy for you, because your industry is important. However, this bill is seriously imbalanced.
You are proposing five amendments. If these amendments do not pass, would you still be prepared to support Bill ? I guess you would be in favour of Bill , even though the artistic and creative community is sharply critical, has denounced it and would never want it to pass.
One proof of that imbalance is the damages regime. You refer to that in the fifth amendment you are suggesting. The damages you refer to relate more to musical works.
This is about circumventing a tool which is extremely valuable for you, namely digital locks. Clause 48 talks about criminal sanctions amounting to $1 million.
A musical work is worth $20,000 in terms of damages, whereas circumvention of a digital lock, which is extremely valuable for the gaming software industry, costs $1 million and exposes someone guilty of such an offence to a five-year prison term. There are pre-set amounts for damages. That is a good thing, but they are capped at $20,000, which results in an imbalance.
So, that brings me to damages. I would like you to tell me whether I have this right. Does the $20,000 fine also apply to software that is copied?
Thank you, both groups, for very interesting presentations.
I'd like to start off, Mr. Kee and Madam Parr, on the issue of user-generated content. I find interesting the suggestion from the Bloc that we'll just erase the provision and then all of the user-generated content will magically go away. But we know it doesn't. User-generated content is all over the Internet.
I must confess myself guilty; I do lots of user-generated content with my little iMovie. I think some of it's not bad.
I'll leave that to my colleagues to go and check out, though.
An hon. member: [Inaudible--Editor]...debate.
Voices: Oh, oh!
Mr. Charlie Angus: What I'd like have clarified, though, is how do we continue to deal with the fact that people are actively involved in creating and remixing, and how do we separate those?
I had asked one of the previous witnesses whether or not the language should be clarified in proposed section 29.21 by putting in the Berne three-step provision. I say this because, clearly, user-generated content should not unreasonably prejudice a work. It should not interfere with the normal exploitation of the work. I wonder whether or not that language is clear enough or whether your suggestion, based on the idea of a previous witness, Ms. D'Agostino, about “transformative uses”, would be.
Do you think the word “transformative” covers that, or should we be more specific?
I want to follow up on the issue of technological protection measures, because clearly that's an issue of some debate. At the outset I will say that I recognize the incredible importance of the gaming industry in Canada, the gaming software. We are a world leader, and we want to make sure we protect that. We don't want to take the bottom out, and technological protection measures certainly play a role.
On the other hand, we have issues. For example, I was talking to documentary filmmakers. If there's a technological protection measure on the DVD, they might have the right of access for parody or satire, even for commentary, but if they break it, they're going to be in a bit of a dicey situation.
I was speaking with television journalists who were saying they didn't know if they were now going to be able to make use of commentary showing footage, because if there are technological protection measures in place, that would impede their ability to do journalism.
Can we find language that is going to ensure that the rights being guaranteed on excerpting for parody or satire, for example, are not arbitrarily erased? But meanwhile we maintain strong provisions so someone is not going to copy a bunch of games for private purposes and give them out to all their relatives at Christmas.
:
Thank you, Mr. Chairman.
Ladies and gentlemen, welcome to the committee.
I would like to come back to education and the royalties that are paid through collectives. If this bill passes, the potential loss for copyright holders is estimated to be approximately $40 million; that is $40 million in relation to a total budget of $72 billion for education in Canada.
As far as I am concerned, the contribution made to copyright by the educational and university communities is not out of line. I don't intend to talk about ancient history, at the time I was in university, but we paid for every book that we used. We paid the full cost. Sometimes I even wondered whether the amount we were paying for books, which obviously included copyright fees, was not actually higher than our tuition.
If we're talking about the copyright legislation, I think it's important to think about protection for copyright, rather than proposing changes to the legislation that will impoverish authors or perhaps even take away their desire and motivation to write for the education community.
I would like to find out what your underlying motivation is. The fees are not that high, considering all the other things that you have to pay. Sometimes parking a car at university costs a lot more than copyright. What is the relative importance of the potential savings you will realize, to the detriment of copyright royalties?
:
Thank you for this opportunity to speak today on behalf of the ACP. It represents 127 independent publishers from across the country. We have members in all provinces. They publish books in all genres: literary books, cookbooks, children's books, general interest books, scholarly works, and textbooks. They represent, by and large, small- to medium-sized companies, and I would have to say their emphasis is more on the small-sized than the medium-sized companies.
Though a few are affiliated with universities and other not-for-profit organizations, most are owner-operated businesses—independent, English language, and Canadian owned. The multinational publishers located in the greater Toronto area represent to our members the chief competition in the marketplace. We have no foreign-owned companies in our association, but we share some common ground with them on copyright, and particularly on Bill .
For all publishers, copyright is the ground that we stand on or the roof over our head—you can pick your metaphor. It's the sole source of our revenue. Authors give us the right to make copies. We produce copies and sell them, and we sell the rights to other publishers to produce and make copies in other languages, other territories, and other formats. That's it. That's our business. We have no concert revenue. We have no spinoff merchandise. We carry no advertising in our pages.
The revenue that derives from copyright is the sole revenue for our members, so it's not unreasonable that we are pretty interested in this bill. We are really glad to see it come down the pike. We've waited a long time for it and we're glad to see a bill get to this point. We've watched others fall off the tracks over the years.
We do have a few concerns, and there are four in particular I want to talk to you about today.
The first step for us is the education exemption. It is, as written, so broad and so undefined as to create enormous uncertainty for our industry with respect to its markets and future prospects. I was interested to hear the students say that any uncertainties can be resolved in the courts. I don't think anybody thinks that this would generally be the best outcome.
For our members--small businesses--legal solutions to this kind of problem are the last thing we want to see and can afford. We can't afford expensive litigation, and we can't afford to lose the market share that is at risk while all this plays out. We are interested in seeing clear definitions of “education”, and of the context in which this exception would be applied.
We are also concerned about the reduced role for collective licensing we see in this bill. The model represented by Access Copyright and Copibec has worked effectively for a long time to produce, as a result of much trial and error and many arbitrated decisions, broad access to a huge range of copyright-protected materials in a convenient and affordable form. If you want to negotiate the price, that's a market decision. If public representatives choose to do away with a lawful business model, that's a political decision. And if that model has a long history of working well for many institutions and individuals, that's a counterproductive political decision.
Our third point was addressed in the previous session on the limits to statutory damages for non-commercial use. We too are struck by the difference between copying by individuals for private purposes and the much broader and much less well-defined term of “non-commercial use”.
Finally, the extension of provisions on interlibrary loans to digital works—those provisions that applied previously only to print—causes serious market problems particularly for university presses in Canada, which publish the majority of Canadian scholarly journals. A change like this will severely undermine that market and perhaps eradicate it.
The total of all this—one of many—is a disincentive toward the production of intellectual property. While I was interested to hear the students talk about how access to intellectual property is one of the cornerstones of an innovative economy, if there is no incentive to produce those materials, then an innovative economy is the last thing we're going to have.
:
Mr. Chairman, ladies and gentlemen members of the committee, thank you for inviting us to appear today.
My name is Pierre-Emmanuel Moyse and I am a professor at McGill University and member of the Intellectual Property Policy Centre at that same institution. My comments will be limited to a fairly theoretical point which is at the heart of international trade concerns—namely, exhaustion and, primarily, international exhaustion.
Very briefly, copyright has to do with reproduction and communication, but not only that. In some provisions, copyright also makes it possible to control the circulation of the copies themselves as tangible objects.
That copyright control over tangible objects runs the risk of creating a form of interference with the circulation of goods, and it is in this context that the concept of exhaustion was first developed. Exhaustion can be either national or international.
At the national level, the principle is exceedingly simple. Once the author has produced a work and, with the author's authorization, that work is on the market, the buyer or owner of the good is free to dispose of it as he sees fit. In other words, there is no longer any copyright control over the destination or the ultimate use that is made of the copy, which explains the fact that books can be sold on the used book market or that someone can buy a poster and change the format, as demonstrated in the famous case of Théberge v. Galerie d’Art du Petit Champlain inc.
This point is not particularly problematic. What is of more concern is international exhaustion of rights. That has been the Achilles' heel and focus of all the policy discussions on harmonizing rights in Europe. It has also been the focus of discussions on amendments and reforms to copyright in Australia, a country which imports value-added products.
Copyright does come into play and can make it possible to control the circulation of works, particularly through import rights. In that regard, there are two relatively dangerous or worrisome trends. The first relates to the use of that import appeal process in areas that may give us pause. The best example is the Euro-Excellence Inc. v. Kraft Canada Inc., et al. case where copyright was recently used to prohibit the importation of chocolate bars, or at least to hinder such imports.
The second point relates to an anomaly in the bill. On the one hand, it provides for international exhaustion. Under the new paragraph 3(1)(j) which would be added to the current legislation, as soon as the object of the copyright is put into circulation abroad, the right is exhausted. Furthermore, it includes import provisions which restore control over the circulation of these tangible objects to the author. In other words, international exhaustion, as provided under paragraph 3(1)(j), and the import provisions could be contradictory and cause trade policy issues.
Thank you.
:
Mr. Chairman, my comments will deal mainly with the complexity of the legislation, and I'm available to answer your questions in that regard.
Our hope was that Bill would clarify the underlying principle of the act, and yet we are left with a far more complex piece of legislation that includes an increasing number of exceptions, as well as exceptions to exceptions, to the point where it becomes very difficult to make sense of anything under the circumstances. Everyone knows that a law that becomes obscure and increasingly convoluted may not be obeyed, in some cases, because people will not know exactly what the principle involved is.
Let me quickly give you a couple of examples. You can make a private copy of a work, but not if there is a lock. In some cases, you have to destroy the copy and, in other cases, the author will be compensated, but not always. This is something that the average person will have difficulty understanding. So, I think there is significant concern associated with that.
Let me quickly give you two further examples. What is the distinction in the legislation between educational purposes, and so on? We don't know. Also, what is meant by “non-commercial purposes” or “private purposes”, considering that there is already a reference to private study and private use?
So, it is all of that, and the courts will probably end up wondering what it all means, which implies that there will be litigation in order to clarify matters. The Supreme Court will be able to explain all of this 10 years from now. But I'm not sure that is a good thing for litigants.
:
Thank you very much, Mr. Chairman. It's nice to be back.
I will read a brief statement and then I will go into the questions.
The Canadian Council of Chief Executives, which I lead, has a long history of support for measures to strengthen Canada's economy and to promote innovation. A strong regime of intellectual property protection and copyright is fundamental to that overall mission. Laws that protect and reward the fruits of intellectual capital and artistic creativity are critical to maintaining a dynamic, innovative, and open economy.
By the same token, the society has an interest in ensuring that consumers and other users enjoy fair and reasonable access to copyrighted material. This can only be achieved through a balanced approach to copyright protection. For that reason, we are supportive of Bill .
[Translation]
This legislation is, as you know, the product of extensive national consultations, round tables, town halls and submissions from thousands of individuals and organizations across Canada.
Throughout this process, care has been taken to respect the concerns, needs and legitimate rights of everyone who creates, markets, distributes or in any way makes use of copyrighted material.
I'm aware that some Canadians are of the view that this bill goes too far in protecting the rights of creators and copyright holders.
Similarly, there are people who feel this bill gives too much freedom to consumers and other users.
This divergence of views is inevitable. The challenge in copyright law has always been to strike a balance between the interests of creators and those of the general public.
[English]
To my mind, there are four key elements of Bill . First, it brings Canada's copyright rules into the 21st century by legitimizing some activities that consumers in fact do every day. This includes recording television programs for later viewing, transferring digital content from one format to another, and making backup copies, provided the original material was acquired legally and the copying is for consumers' personal use.
Second, the bill gives creators and copyright owners stronger legal tools to control how their works are made available and to guard against copyright violation. As other witnesses have pointed out, these provisions are needed to ensure that Canada does not become a haven for international music, movie, and software piracy.
[Translation]
Third, the bill will improve the learning experience for Canadian students by providing educational institutions, as well as libraries and museums, with enhanced access to copyrighted material. It does this in part by expanding the concept of “fair dealing” in a way that recognizes the significant societal benefits of education.
This is consistent with the recommendations of the Competition Policy Review Panel, which in its 2008 report identified the use of the Internet for research and education as a cornerstone of Canada's ability to innovate and compete in a knowledge economy.
Fourth, Bill encourages the growth of Internet services in Canada by providing legal clarity for network service providers, web-hosting services and search engines.
Under the new rules, ISPs will be exempt from liability when they act strictly as intermediaries in the communication of copyrighted material.
At the same time, the bill includes new provisions targeting those who knowingly enable copyright violations.
On behalf of the Canadian Council of Chief Executives, I strongly endorse the overall thrust of this legislation.
[English]
Having said that, I think the committee may wish to consider certain technical changes to the bill so as to avoid unintended consequences. For example, important concerns have been raised with respect to the impact on Canada's software industry of the provisions dealing with encryption research, network security, reverse engineering, and copying for interoperability purposes.
In addition, some of the language dealing with user-generated content and copying for private purposes may be too broad, but I'll leave it to others to propose amendments that would address specific concerns while staying true to the spirit of the legislation.
Those issues aside, the bill generally strikes an appropriate balance among various stakeholder interests.
I note that Bill includes a mandated review of the Copyright Act by Parliament every five years. While it may not be possible to satisfy every demand of every group, this provision ensures that parliamentarians will have the tools to address unforeseen problems on the basis of experience. In that light, I urge you to move this bill forward as expeditiously as possible.
As others have noted, the Copyright Act was last revised when the Internet was in its infancy, and it badly needs updating to reflect the impact of new technologies on business practices and daily life.
Bill , tabled in June 2005, and Bill , tabled in June 2008, both died on the order paper after the dissolution of Parliament. If these hearings continue at the current pace, there just might be a danger that this bill, too, will die. That would not be in the interests of Canadian creators and it would not be in the interests of consumers.
[Translation]
Nor I suspect, would parliamentarians welcome the prospect of going back to the drawing board, with yet another round of consultations and hearings. Finally, I want to commend the committee for the work you are doing. I bear the scars of the last time Canada's copyright law was amended, and I am the first to admit that mediating among so many competing interests requires a great deal of care and effort.
[English]
I still bear some of the scars from that process.
Thank you very much, Mr. Chairman.
I'd be pleased to respond to questions.
:
Good afternoon, Mr. Manley. It's a pleasure to have you with us today.
Mr. Sauvé, Mr. Azzaria, Mr. Moyse, and Ms. Wood, welcome. I have questions for each of you.
I would like to begin with you, Mr. Manley, since you just completed your presentation.
I have two brief comments to make with respect to your presentation. You say that “this legislation is […] the product of extensive national consultations across Canada”. But you know as well as I do you can arrange for consultations to say whatever you like. I have gone all across Canada and held roundtables in the ten provinces. Yet I may not necessarily have heard the same thing that the government heard when it held those consultations.
I also want to reassure you. You say that you are “aware that some Canadians are of the view that this bill goes too far in protecting the rights of creators and copyright holders”; but let me reassure you: I don't think there are many people who believe that. I think the bill lacks balance. Some aspects of it are positive, but there is an imbalance which, unfortunately, works against rights holders and creators. There are obvious losses of income and royalties. Those have been noted. The government is also aware of that—for example, as regards the levy, private copying, ephemeral rights and the loss of potential income in education.
Is this not a concern for you? Shouldn't the government be looking at this to find ways of providing compensation, since it is clear there will be income losses for these people?
:
The fact is you are in another world—another bubble. Here everyone has noted that this bill is seriously imbalanced. The fact that the Canadian Council of Chief Executives is saying that it is balanced suggests to me that it really is seriously imbalanced.
I'd like to give you some information. What I would like, basically, is for you to go back to your chief executives and tell them that somebody has not given you the complete truth with respect to this bill.
I would like to present a different viewpoint.
In order to drive home the point that his bill was well accepted within the heritage community, the stated in the House that 38 multinationals, 400 businesses and 150 CEOs agreed with it. That is what he said.
When he was asked whether any artists agreed with it, he was only able to name one. He was so thrilled to have this support that he mentioned it twice in the House. Only one artist agreed with it, but as stated in the House, there are 400 companies and 150 CEOs that do agree with it.
You also talked about laws that protect and reward the fruits of intellectual capital. I will give you some specific examples a little later. But this is anything but a balanced approach.
I also winced when you talked about extensive national consultations. I want you to know, Mr. Manley, that the consultations in Montreal, which is a large cultural capital, not a small one, were held on July 31, when half of the city had shut down and people were out of town. Furthermore, organizations as important as the Union des artistes du Québec had trouble getting invited and were forced to make their presentation in Quebec City. Talk about phony consultations.
Your friend, Mr. Pablo Rodriguez, objected to your saying that you are “aware that some Canadians are of the view that this bill goes too far in protecting the rights of creators”. But no one has ever said that, Mr. Manley; no one. I have never heard anyone say that this bill goes too far in protecting the rights of artists. I wanted you to know that.
According to you, the purpose of the copyright bill “has always been to strike a balance between the interests of creators and those of the general public”. Once again, allow me to correct you.
Historically, since Queen Anne of England back in 1710, copyright legislation has served to balance the rights of creators and disseminators. In the 18th century, this term included printers and publishers. Now it has a much broader meaning.
This bill has major flaws and will take money away from artists. First of all, the non-modernization of the private copying regime will remove an average of $13.8 million all across Canada. The education exemption, that young students were claiming earlier, will remove some $40 million annually. Write this down so that you can repeat it afterwards. This is money that is being taken out of their pockets. These are royalties that they receive as a result of their author's rights, and which they will no longer have. The abolition of ephemeral recordings will remove some $21 million in income. And artists are not the only ones saying this; broadcasters are of the same view. They said it would only cost them $21 million. There is also the YouTube exception, that the Entertainment Software Association talked about earlier, where preset damages are capped at $20,000. A musical work will never be worth more than $20,000. And I could give you other similar examples.
As you said yourself, the lack of accountability for Internet service providers makes no sense. They must be held to account. There are no royalties for artists and a notice system that is probably ineffective since there are no fines. This bill is focussed on digital locks, which works perfectly for the software and gaming software industry, but is very poorly adapted to the music industry. And, again, there are no residual rights for visual artists.
In a letter dated October 14, your colleagues, representatives of the Barreau who are sitting right next to you, said this about the bill: “These are piecemeal amendments lacking in vision and overall consistency, and rehashing parts of foreign models that are already known to be out of date.” The three intellectuals seated to the left of you wrote that. That is so true that the Quebec National Assembly unanimously passed a motion against Bill , asking for substantial amendments.
With that, I will give our witnesses from the Barreau du Québec a chance to speak. Of course, you will have an opportunity to respond to my comments.
A voice: You have 15 seconds left.
Thank you, everyone, for coming today. This has been a very interesting discussion.
Mr. Manley, I wanted to start off with you for a moment, because I was interested in your comments on the issue of a balanced approach.
I think one of the issues we see with copyright--or I certainly have, since my election--is that some industries come to me only when they are very concerned. Sometimes they're concerned because they're under threat, and sometimes they're concerned because there is new competition. So the balance is how do we allow new entrants and how do we make sure that it's not unfair? Yesterday's pirates are today's demand for copyright.
Hollywood existed not because the weather was nice out there but because they were trying to escape the copyright of the Thomas Edison corporation. Sony was the king pirate of the 1970s. I think Jack Valenti called it the Boston Strangler of the movie industry. Now Sony, of course, is one of the biggest defenders of TPMs. So what we have to do is find the balance.
I was struck, though, that you pointed out that you thought we should tighten up the TPM provisions on reverse engineering and interoperability, because I've heard from many people that it's key for start-up businesses, for research, for innovation to actually bring new entrants into the market. So why is it that we should apply the TPM provisions on reverse engineering and interoperability?
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Thank you, Mr. Chairman.
Thank you to the witnesses.
Mr. Manley, I know what you were doing on December 18, 1997: you were putting out a release, which I am holding here. It's a release from you and the Honourable Sheila Copps where you announced that you were committed to signing two new international treaties dealing with copyright, specifically the World Intellectual Property Organization, or WIPO.
I just want to quote you here:
The treaties support the federal government's goal of making Canada a leading-edge supplier of content for the information highway and multimedia, and reflects the federal government's role in creating the right conditions for electronic commerce.
The release also says that that commitment followed a recommendation made by the information highway advisory council that Canada should respond quickly to the World Intellectual Property Organization's 1996 copyright and performance treaties.
I think that's important: I think you were right then and I think you're right today.
There are two aspects that I'd like to get your opinion on. One, you correctly pointed out here that if we want to take advantage of all the economic opportunities that exist in the digital age and all of the opportunities that exist going forward, we have to establish the rules.
But in this release, you also point out the fact that Canada is part of a global economy. In your position, you must hear a lot from our global partners with respect to copyright laws in Canada. What are you hearing from them with respect to this bill, and with respect to Canada needing to catch up on its copyright legislation?
So there are two aspects: first, how important is this to the economy, and second, what are our trading partners saying to you?