CHPC Committee Meeting

    Good morning, everyone. I call to order meeting 18 of the Standing Committee on Canadian Heritage.

    We are continuing our study on the review of the Canadian music industry. We are honoured today in the first hour to have with us from the Société professionnelle des auteurs et des compositeurs du Québec, Pierre-Daniel Rheault, chief executive officer; from the Canadian Federation of Musicians, Mark Tetreault, director of symphonic services; and from Montreal through video conference, from the Guilde des musiciens et musiciennes du Québec, Luc Fortin.

    We will start with Monsieur Rheault, for eight minutes. You have the floor.

    Good afternoon, everybody. I would like to thank the committee for having us here today. If you don't mind I will switch to French, which is my mother tongue, and depending on how I felt when I woke up this morning, it might be a little shaky.

    Songwriters or composers generally have no revenue for their work other than the fees collected for the reproduction and distribution of their works based on the traditional model—be it on disc, radio or television. With the poorly regulated advent of the digital economy, traditional royalties have dropped dramatically over the past few years.

    However, the distribution of artists' work continues to increase. In light of this increased dissemination of works, coupled with a drop in revenue from traditional royalties, government support should definitely be much higher, given the clear lack of will to rectify this problem.

    Excuse me, sir, is it possible for you to slow down just a little bit?

    Yes, but I will exceed my eight minutes.

    We'll be a little flexible for you. It's so that our translators can keep up with you.

    Thank you.

    Last year, MUSICACTION provided $400,000 in direct funding for all of French-speaking Canada. That money was used to compensate 380 songwriters. We can all count, and we understand perfectly well that average support of just over $1,000 a year per songwriter is far from being sufficient.

    Let's imagine that elected members of Parliament had no base salary. Their main income would come from the reproduction of their parliamentarian work, and their reports would be published in a newspaper. A fee, as opposed to a tax, would be charged for their work and would go directly to them. Those fees would also exceptionally apply to any photocopiers used to disseminate private written material.

    Now let's imagine that, one day, newspapers were supplanted by digital media that would quickly, gradually and thoroughly replace traditional newspapers, resulting in a sharp drop in publication revenue. The unthinkable would happen, and printed material would simply disappear.

    Let's consider what would happen next. Those same members would vote to adopt legislation that would not apply the Copyright Act to those digital devices—which would replace photocopiers—thus eliminating the fees imposed on those devices. How many members would we have a few years after that debacle?

    When the Canadian government refused to recognize modern media—smart phones, PDAs, USB keys and all other devices capable of reproducing thousands of works—and it also rejected the collection of fees, as prescribed by the legislation, for those new generation devices, it compromised all the hard-earned progress made over the years in terms of creators' fundamental rights.

    The obvious technological evolution was unfortunately not taken into account. Even worse, it was ignored, and the consequences already are and will continue to be disastrous for creators who are bearing Canada's cultural diversity. If nothing is done soon to remedy the situation, the tremendous damage will be irreversible.

    On a scale from 1 to 10, the government recognition and compensation for creators' work has gone from 6 to -2.

    So here is our answer to the question asked by the committee. Government support for creators is clearly insufficient. When it comes to assistance for entrepreneurs, which is the second group in this first point, we welcome the government's renewed support and its willingness to invest significant amounts of money in the digital economy. This evolution will take over completely when it comes to the reproduction and distribution of works in a few years.

    It should be pointed out that entrepreneurs' traditional income has decreased, despite the alarming increase in the distribution of the works produced. That drop in income is also carrying over to creators. Something must be done to restore significant value to our creators' works. We think a political will to remedy the situation is the first step in that process.

    Regarding support for creators and entrepreneurs, we want to quickly highlight this growing and relatively new reality that is deserving of great vigilance today. That category should receive increased funding as soon as possible. The new generation of creators and entrepreneurs provide raw materials, and develop and invest in their own work. That's what we call an autoproducer.

    Let's talk about the government funding allocation method. I will only make a quick comment on that. Huge amounts of money will be made available to the major industry players. However, entrepreneurs are increasingly demanding that creators not only give up their publishing rights, but also act as autoproducers of their projects. That means those creators—who are often songwriters, composers and singers—invest instead of entrepreneurs or jointly with them while giving up the rights to their works, including neighbouring rights. Based on that new reality, we are certain that government support to entrepreneurs must be accompanied by increased compensation for creators.

    Providing support for companies is a positive thing. We welcome that. However, that support must absolutely be tied to fair compensation for creators.

    Right now, the expression “achieving objectives through support” certainly applies more to entrepreneurs than to creators. When it comes to industry or entrepreneurs, the money governments are providing is still key to achieving results. When I say results, I mean the production of discs and shows. Once again, the money creators end up receiving is shockingly and dramatically insufficient.

    If the objective is for creators to earn from their work an average of $1,000 a year—an amount directly related to government support—we should come back to our example of a member who is working independently and, ironically, we could say that the objective has been achieved. There is some bitterness in my tone here.

    In closing, the government must recognize that stakeholders in the digital economy such as manufacturers or distributors do not all contribute equitably, legally and sustainably to creators' standard of living.

    One of the initiatives the industry should consider without delay in order to counter the devastating effect of illegal music distribution is the production and release of a multimedia information package for children aged 6 to 12 years.

    The new legal models for digital music are far from establishing value that is sufficient and fair in the eyes of creators. Music's value must be recognized and accepted by everyone in support of creators, so that they can be properly compensated for their work. Fees applied to any digital media used for reproduction purposes would constitute considerable progress.

    We need the government to take into account the value added music brings to technology industries. This wealth must be shared more equitably to protect Canada's cultural diversity in the field of song, and the government should significantly increase compensation for creators.

    Thank you for listening.

    Thank you, Mr. Rheault.

     Mr. Tetreault, you have the floor for eight minutes.

    Good morning. My name is Mark Tetreault. I am the director of Symphonic Services for the Canadian Federation of Musicians.

    As well, I've been the principal tuba in the Toronto Symphony Orchestra since 1986.

    Thank you for the opportunity to speak to you today. I had the good fortune of being in Ottawa and performing last night at the National Arts Centre with the Toronto Symphony Orchestra.

    The Canadian Federation of Musicians, the CFM, is the professional association for musicians in Canada. The CFM is recognized under the federal Status of the Artist Act as the sole bargaining representative on behalf of all musicians and musical performers in Canada.

    The CFM is part of a binational association. We are the Canadian division of the American Federation of Musicians of the United States and Canada. The CFM office is located in Toronto and has 25 local chapters coast to coast across Canada and a membership of over 17,000 musicians. Our organization ensures that artists are paid not only for live performances but also for broadcast and digital media. We provide access to an excellent multi-employer pension plan for musicians.

    I'm here today to address some issues of global concern to the CFM and then to discuss my sector of the music industry in particular.

    The CFM fully supports the testimony of the ACTRA Recording Artists' Collecting Society, which asked the standing committee to recommend modernizing the private copying regime, improving broadcast royalty distribution procedures, and reintroducing income averaging for artists under Canadian tax law.

     By strengthening the copyright laws across all media platforms, we will make great strides in ensuring that Canadian artists continue to be fairly paid for the use of their music and can ensure a standard of living for themselves and their families.

    The CFM feels strongly that it can make unique and valuable contributions to the important consultations and discussions around copyright and royalty issues. The CFM asks that members of Parliament urge the government to sign and ratify the World Intellectual Property Organization's Beijing Treaty on Audiovisual Performances. The Beijing treaty outlines global standards recognizing the right of audiovisual performers to be fairly compensated for their creative contributions.

    The recognition of performers' moral rights is equally critical. As performers, our public image is at the heart of who we are. Thanks to the Beijing treaty, performers will finally have the ability to protect their images and performances from being used in ways that they would never choose or agree to.

    Canadian orchestras are a vital and important part of Canadian communities, large and small, in every corner of the country. They are economic drivers, creating jobs. Canadian orchestras spent over $175 million in 2012-13, with over 70% of these expenditures going directly to people in wages and fees. They are the artistic anchors of their communities, creating and enriching opportunities for civic celebration and recognition, from sporting events to Remembrance Day ceremonies. They are valued cultural partners, working with other organizations and institutions, and are an important part of our educational infrastructure. Orchestras are effective Canadian ambassadors to the world.

    Symphony musicians are a unique workforce. The symphony musician is a highly trained skilled professional. The intensity of concentration is extreme, and the expense in training is comparable to educations in law, medicine, or business. Symphony musicians provide and maintain their own very expensive instruments. We are one of the very few industries where the worker is required to provide such expensive tools.

    Symphony musicians are elite endurance athletes who often suffer injuries during their career. We rarely have extended medical benefits as part of our jobs and thus often have the burden of paying for physiotherapy, dental work, and prescription medications.

    Unfortunately, symphony musicians in Canada are generally low-wage workers. Most are forced out of necessity to be cultural entrepreneurs. Canadian symphony musicians supplement their income by work as music teachers, performers in other classical ensembles, players in the recording industry, performers in other genres, artists in other disciplines, and as workers in other industries—such as union reps.

    Some symphony musicians are forced to collect EI during the off-season. Recent changes to EI payments to seasonal workers have a serious negative impact on these musicians. The CFM would like to see these changes re-examined with respect to symphony musicians.

    The cutbacks to the CBC have had a very negative effect on the symphonic industry. Far fewer of our concerts are recorded or broadcast. Having a strong national broadcaster meant significant income to musicians. It also meant that we could share our talents with all Canadians, no matter how remote their location, as well as across the border into the northern U.S.

    Symphony musicians have been, effectively, frozen out of broadcast royalty payments, because we do not neatly fit the requirements to claim payments. There is a large pool of money, which consists of royalties for broadcasts of our recordings, which we cannot access because of the awkward and complicated system set up by the Copyright Board. We find this quite frustrating.

    Canadian symphony orchestras are active in education. Performances are done for students in our venues and in the schools. One of the most successful new ideas in music education is El Sistema, an orchestral youth training initiative firmly rooted in two core ideas: that music is for everyone regardless of income and background; and that quality music education provides a head start in life and a model of community harmony. Orchestras from New Brunswick to Vancouver have established El Sistema programs, which provide daily after-school coaching and rehearsing, often to disadvantaged youth, leading to exciting performances and a sense of pride and accomplishment.

    The range of outreach and educational activities by Canadian orchestras is quite remarkable. In the materials I am leaving with you, there is an article I wrote for our association's newspaper, the International Musician, that goes into more detail about these activities.

    Canadian orchestras are recognized for their artistic excellence around the world, proudly displaying Canadian cultural achievement. We are ambassadors, showing some of the best of Canadian culture. I, myself, have been privileged to travel to many places around the world with the TSO. Our orchestra has partnered with business leaders looking to expand their markets or bring investment to Canada. These leaders travel with the orchestra and bring prospective clients to our concerts to show off the excellence of Canadian artists and to demonstrate that Canadians care about things that are important to the quality of life.

    As l mentioned earlier, last night l was performing at the National Arts Centre. Being in that building reminds me of the celebrations in 1967 and the enthusiasm Canadians showed towards our arts and culture. In 2017 we will have our 150th anniversary. I believe this would be an excellent time to have cultural events across the country, reinvigorating our well-earned pride in Canadian arts. Orchestras could play an important leadership role in such events.

    Thank you, once again, for this opportunity to speak to you. I look forward to answering your questions.

    Thank you very much.

    Our next witness comes by video conference from Montreal.

    Mr. Fortin, go ahead for eight minutes.

    Good morning.

    I want to thank the committee for having me here today. I also want to say hello to my colleagues from the Canadian Federation of Musicians and the SPACQ.

    I am the President of the Guilde des musiciens et musiciennes du Québec—Quebec musicians guild—which partners with the Canadian Federation of Musicians. We also have the exclusive accreditation to represent musicians in Quebec under the provincial legislation on the status of the artist. Our association has 3,300 regular members and close to 500 members by permission.

    I will basically talk about the modernization or reform of copyright in the digital era, and about funding allocation procedures to better support our musicians.

    The digital boom has revolutionized the music industry. Music is accessible from anywhere on a broad variety of portable devices connected to wireless networks, most often at no charge to users. On YouTube, for instance, people can listen to anything for free, and musicians or right holders don't receive any compensation.

    Unfortunately, music industry frameworks in Canada are not adapted to the rapid evolution of the digital era. The first victims are musicians, artists and creators.

    If producers are complaining about a drop in their revenue following this digital revolution, you can easily imagine the devastating impact of that drop on artists themselves, who often receive only a tiny fraction of phonogram and album sales.

    We at the Quebec musicians guild are regularly faced with our members' unfortunate socio-economic situation. We estimate that one-fifth of our 3,300 members can truly live from their music consistently. We are including education as a source of revenue.

    One of the reasons behind the decline in revenue was Bill C-32. Unfortunately, that legislation prematurely put an end to the private copying levy. Today, private copying is done by more Canadians than ever before. Musical works are being copied to USB keys, the SIM cards of smart phones, iPads, iPods, and so on, without any money going to collectives. This is a gross injustice, and the Canadian government must set things right. A royalty paid to artists is not a tax, and Canadians are fully aware of that.

    In addition, Internet service providers must absolutely contribute because they have a substantial revenue stream from Internet subscriptions and bandwidth sales, which are in part attributed to Canadians' amazing appetite for downloading and streaming musical works. However, the works broadcast on the Internet bring almost nothing to creators.

    It's not normal for songs heard thousands of times, especially on YouTube, to make no money. That platform enables people to listen to pretty much any musical work for free. Internet users often post songs online without consulting the authors or associating the video with them. People make their own montage using images. The Copyright Act should absolutely be modernized, so that everyone can receive their fair share.

    Let's now talk about funding allocation. Producers receive assistance for operations and projects related to their business activities. Musicians do not receive that type of assistance, except in the case of specific short-term creation projects or the setting-up of certain short-term shows. Most of the funding goes to private production companies. Consequently, we have to work several jobs and live very precariously. That often forces musical artists to give up on their career fairly early. We depend on production companies and are often at the end of the compensation chain.

    Many assistance programs are available for production companies, but that unfortunately does not enable our artists live from their art. Musicians are always paid at the end.

    Subsidized companies do have enough money to hire employees, accountants, press agents, communications officers, and so on.

    We think that the government must absolutely take into consideration the fact that artists also have to make enough money to focus on their art. Grant allocation policies should take that into account. I invite you to watch the excellent documentary series called Arrière-scène. The series was produced by Franco-Ontarian television station TFO and directed by Nicolas Boucher, a former guild member turned film producer. The documentary looks at the daily lives of Canadian musicians who tell the camera about the difficulties they have faced in their jobs and their frustration with the inequitable sharing of industry revenue.

    For example, after revenue sharing, an album sold for $10 on iTunes may bring 75¢ to the group of artists and creators involved in its making. You will understands that, with sales splitting, hardly at any revenue can be made through that type of sharing without additional fees being applied to Internet broadcasting.

    As for the funding of company projects, all album projects should ensure regular earnings over the length of the undertaking. The policy whereby an artist starts receiving royalties only once production costs have been covered is unacceptable. Royalties should be paid as soon as the first album has been sold, and the subsidies provided should take that into account. I also don't think that waiting until all production costs have been covered is a good way to pay providers. Therefore, musicians should not be subject to that policy.

    Artists' associations have also established minimum standards of pay, and the collective agreements that are negotiated guarantee a social safety net for artists and protection in case of litigation. Those contracts should absolutely be submitted in company usage reports to the organizations that subsidize them.

    How can it be ensured that artists and musicians have been paid properly if there is no oversight in that area? The best form of oversight is the submission of contracts approved by artists' associations. This is a key point that should absolutely be dealt with.

    Thank you for your attention.

    Thank.

     Ms. Mathyssen, you had a question.

    Yes, thank you, monsieur le président.

    I wonder if it might be possible for the analysts to produce an interim report of the testimony that we've had so far because I've been looking back at some of my notes and it's a massive amount of information. I thought, perhaps, if we could have an interim report before we go away for the two weeks, it might make it more manageable at the end.

    We'll talk to the analysts and we'll get back to you later on.

    Thank you. I appreciate that.

    That's very kind.

    Thank you.

    We will now go to the questions and Mr. Weston will have the floor for seven minutes. As always, when we have some of our panellists by video conference, I ask that you not forget our panellist who is with us through video conference. Thank you.

    Thank you very much, Mr. Chair.

    Mark Tetreault, thank you for being here, as well as Pierre-Daniel, and also Monsieur Fortin.

    Your description of musicians as elite athletes reminded me of a failed romance that I was involved in as a law student. My friend was a renowned cellist, who studied and taught at Juilliard, and I remember her parents grilled me on various concerts, which intimidated me to the point that I realized I was in the wrong area.

    Anyway, thank you all for being with us.

    I have three questions.

    The first has to do with the role of technologies and fees. The second is related to education. As for the third question, I will ask each of you to give us ideas to improve legislation that applies to Canada's creators.

    With regard to the first question, we have heard a great deal about changes in the technology world. Mr. Rheault, you are very passionate when it comes to sharing with creators. It seems to me that most of the issues are not related to fees, but rather to today's technologies. What can we do when it comes to this? We are limited in what we can do as legislators because the technologies are changing.

    Here is my second question, which concerns education. What can we do with today's children and young people who are using the new technologies? Do you have any ideas when it comes to that?

    Mr. Rheault, you can go first. 

    I will talk about an issue I went over quickly in my presentation—education.

    Last weekend, I was told about how young children aged 12 to 15 months behave with an iPad.

    They get the thing. I mean, after five minutes they know what to do. As an extension of that, when they're in front of a real book they try to turn the page by just surfing on the page.

    That's Pavlovian conditioning.

    They really get the point.

    What I want to comment on, too, is that this technology hides the felon, if I can say that.

    The technology hides the violation of rights. It's so impersonal. When something is downloaded, no one sees the victim.

    There is no blood.

    That causes a huge problem. People who know me know that I am very optimistic, but I don't think this problem can be resolved proactively. Legislative provisions will truly have to be adapted to these technologies, as was the case in 1920, when the first Copyright Act was adopted. Obviously, this backed us into a corner because people were seeing

recording as the acétate. They never saw what was coming. It's obvious.

     Sorry to interrupt you, but I want to give Mr. Fortin an opportunity to answer.

    I completely agree with Mr. Rheault.

    Today's young people make up the future audience—12, 13 or 14-year-old music consumers. For them, there are no more CDs or cassettes. All they know is streaming or private copying on portable devices. Streaming is increasingly becoming the only option, with YouTube and iTunes being the main media involved. For these youngsters, music no longer has any value. It's something they can get for free or for a very small amount of money. Since their parents often pay for it, music has even less value for them.

    They buy one song for 99¢. In addition, they don't buy many albums because they cherry pick. They choose one or two songs from the album they like, and the rest may not sell. Even the idea of an album is starting to disappear.

    One of the ways to avoid such an outcome is to rebuild the value of music by bringing artists closer to the general public. In Quebec, we have realized that young people were much more embarrassed to copy the music of a local artist they knew and saw on television regularly than the music of foreign artist, since that makes it more personal.

    I have to interrupt you. I am surprised that the issue has more to do with education than with legislation.

     Monsieur Tetreault, do you have something to add on this?

    I agree that the problem is largely with education in that our youth are not taught the value of intellectual property because of the ease of copying and transferring this material. They seem to have the belief that we create a product and then we're done with it, that we aren't expecting any revenues for royalties. So if somehow the youth were educated as to how artists are paid, the royalty aspects of it, and that the free distribution of intellectual property is taking money out of the pockets and food off the table of artists.

    So if you each had one idea for us, what would it be?

    Mr. Fortin, you can answer. You have 20 seconds.

    I think we absolutely need to go back to the concept of private copying in a broad sense, so that any media that makes it possible to copy a musical work would be subject to a royalty regime. By “royalty”, I mean money that goes to artists. It's not a tax. In addition, Internet service providers should do their part, like radio or television stations.

    Thank you.

    Mr. Tetreault, did you want to add anything?

    I would hope that the government would support educational initiatives that give youth a proper understanding of how artists are compensated through the royalties.

    Hear, hear!

    Mr. Rheault, did you want to add anything?

    As I briefly said earlier, we have to educate young people. They are like sponges. They will accept the model proposed to them without questioning it. We cannot go to high schools and tell the students that what they have been doing for 10 years is wrong.

    They should be accustomed to that approach, just like they accustomed us to recycling. You can no longer put an empty tin can into the garbage without a youngster in the kitchen saying:

“No, no, no Dad, don't do that, put it in the recycling bin.”

    It's a matter of habit.

    Okay. Thank you very much.

    We'll move to Ms. Mathyssen for seven minutes.

    Thank you very much, Mr. Chair.

    Thank you very much for your testimony, it's been very enlightening, and we truly appreciate hearing the situation from the creators, from the musicians' point of view. I have to say that it's very consistent. What you have said this morning is very consistent with what we've been hearing since the beginning of this study, and that's in regard to it being more and more difficult for artists and musicians and producers to earn a living from the incredible music that you create.

    I'm very interested in asking, basically, three questions. I'm going to give them to you all at once, simply because I know that I'm going to run out of time and I want to hear from all of you.

    First and foremost, you talk about the transformation of the distribution of music and how difficult that has been for your members. In terms of our report, what are the most important recommendations that you would have for us to include in this report in that regard. Secondly, Mr. Tetreault, you talked about a number of very important things, the cuts to CBC and the impact that has on the creative process, and there are more coming today. It's going to be very difficult. As difficult as it's been, it's going to be more difficult.

    You referenced the changes to employment insurance, and the fact that you, as representatives of your members as a bargaining unit, you need to be constantly worrying about better wages, medical benefits, the quality of life. You also referenced the Beijing treaty. Should we be pulling elements out of that treaty and including them in our report?

    Finally, today, later on, we're going to be hearing from Live Nation and Ticketmaster and I'm wondering what questions you would like us to ask those two entities on your behalf. What do we need to know, and what are your concerns? What are your questions in that regard?

    I know that I've given you a great deal, but I would truly appreciate as much response and feedback as you can manage.

    If that's okay with you, I will first speak in French.

    I have nothing against talking about Ticketmaster. That company follows a model we would like to refer to. They are not shy about doing things legally. They collect a fee on tickets they issue to us for concerts and plays. There was never a revolution or any riots with regard to that. You can see that the cost of purchasing those tickets online is sometimes fairly high.

    In my opinion, too much thinking is being done for Canadians. They're being taken for simpletons. They are perfectly aware of the distinction between a tax and a tariff applied to a form of usage.

    I am looking forward to hearing and reading what those people will say to you this afternoon.

    What was the second point of your question?

    In regard to Ticketmaster and Live Nation, I just wanted to know what we should be asking them on your behalf.

    I will let Mr. Tetreault speak on my behalf, or Luc, maybe, will have ideas.

    It's interesting. In the symphonic world in Canada, a lot of orchestras are kind of taking the Ticketmaster model and are doing their own ticketing. My orchestra also sells its ticketing services to community arts organizations. So this has actually turned out to be another stream of revenue for orchestras, which is very helpful.

    In regard to the World Intellectual Property Organization, our concern has been that moneys are collected around the world for broadcasts of our performances, and they're not being distributed to the musicians. In our case, it's because of the complications of the process. If you want to be compensated for a recording, you have to be able to list every musician who was on a particular track, and when you have the whole orchestra.... We have two principle oboes, two principle bassoons, etc. Who played on that recording? Were people sick? Were there extras in? It's a nightmare. The record-keeping at the time the recordings were made was not sufficient to meet the requirements to get the money. So it sits there uncollected, and that's very disturbing.

    We also like the fact that the treaty protects our music from being used for nefarious purposes or to represent ideas we don't subscribe to or believe in.

    Would you like to see that included in a report?

    I would like to see the government sign and ratify the WIPO treaty, which is pending.

    Okay, thank you.

    Monsieur Fortin, you said that creators are at the end of the remuneration of the moneys that come from—

    I gave a good example of musicians being paid after the costs have been covered by sales. In other words, artists start getting paid once the production costs have been recovered through sales. Unfortunately, albums are not sold very much today. Major album sales are more rare.

    The Quebec market is special. The francophone market is a bit more restrictive, and it is mainly made up of independent companies. Major companies are not involved in production in Quebec. Local Quebec producers are mainly trying to branch out to all of francophonie, France, and so on. Albums with high sales are fairly rare. They often don't even break even. So artists virtually never receive royalties, and that's totally unacceptable.

    Another point I wanted to stress is that it's absolutely important that, in anything to do with government subsidies for production companies, evidence be provided that artists have been paid according to the standards set by their associations. It currently cannot be shown, beyond a reasonable doubt, that everyone is being paid according to the best practices, the set standards and the collective agreements that provide a social safety net and protection. I think that is a very important issue.

    A creator who applies for a grant must justify all their spending without exception—including plane tickets, music lessons, and taxi and studio costs. I think the same standard should apply to all producers. They should justify all the wages and social benefits provided. They should also submit copies of contracts they have with artists' associations. I think that's very important.

    Thank you.

    Mr. Dion, you have seven minutes.

    Thank you very much, Mr. Chair.

    Mr. Rheault, I think you correctly identified the issue in the beginning. If the government were to double its assistance, the amount would go from $1,000 to $2,000. If it tripled it, the amount would be $3,000. I don't see how the government could be convinced to triple its funding in any area right now. So other mechanisms should be identified. Right?

    Mr. Tetreault, you mentioned the Beijing treaty. How many countries ratified it; how many implemented it; what did it change concretely; and in what way is it different from what we have here in Canada?

     I don't know the answers to how many countries have ratified it. It was a treaty that was put together fairly recently. I believe that much of the ratification process is still in process in the various countries, as it is in Canada.

    Okay, but if it was implemented, what would it change concretely? What would we do differently? What would that mean for the policies of this government?

    I think it would give an ability to make sure that the royalties are distributed and not held by the various organizations. It would help—I don't know that the government plays an active role in distributing these things, but it would provide a framework so that we would be able to monitor distribution and have a dispute resolution format that currently doesn't exist.

    Do you know if the government is planning to ratify it or not?

    I do not know.

    You did not ask.

    My expertise is in the symphony orchestra. I was given this to present.

    Maybe Mr. Dykstra will give us the answer later.

    Mr. Fortin talked about levies. Mr. Tetreault and Mr. Rheault, do you agree with this idea of levies?

    Absolutely.

    I definitely agree with royalties on broadcast and recordings.

    Perhaps I could ask Mr. Fortin to tell us exactly how that would work.

    Mr. Fortin, did you hear me?

    Yes.

    Do you want to discuss the private copying levy for Internet broadcasting?

    Tell us what exactly you have in mind.

    The Beijing treaty talks about levies and fees for audiovisual recordings. That's an important aspect for which we are currently not getting paid.

    Where would the money come from? How would that work, in more concrete terms? What kind of mechanisms would help distribute the money?

    As Mr. Tetreault was saying, this treaty is one or two years old. Once all the countries sign the treaty, the copyright collectives that claim royalties will be able to distribute them. Those are very complex international processes. A number of collectives around the world have concluded partnerships in order to distribute that money.

    It's important that as many countries as possible sign that treaty. Our country could set the example and even lobby other countries to sign the treaty, as well.

    As for royalties on albums sold, a lot of money in the compensation chain is spent before getting to the artist, who end up with ridiculous amounts. We are talking about very small percentages. When a group of four musicians receives 75¢ per album sold....

    I understand what the problem is. I would now like you to explain to me, in concrete terms, how the solution will work. That's what the committee needs to understand. You say that another source of revenue would come from royalties. How would that work? How would the money go from A to B, from buyers to sellers?

    Mr. Rheault, who specializes in collectives, could tell you more about this than me.

    If private copying were to apply to all media, fees would be collected on the sale of those media. The fees would be redistributed to right holders through collectives. That's a well-known mechanism that has been working for a long time.

    Today, private copying is practically dead because it applies only to CDs and cassettes. We all agree that cassettes have become completely obsolete. The relevant legislation should be modernized.

    Mr. Tetreault or Mr. Rheault, you would perhaps like to participate in the discussion. Who would those fees be collected from?

    Let's talk clearly about the beast.

    Mr. Harper created some trauma about seven or eight years ago when the study on Bill C-32 began. He said he would never impose a new tax on Canadians. We told him that this was not a tax, but a tariff, which was much smaller than the amounts discussed earlier. It's clear that quadrupling the funding the government gives to the industry will not be possible.

    Let's take the example of Internet subscriptions. The Songwriters Association of Canada, which has no representative here today, suggested a way to impose what is called a monthly retainer. You may find this illogical, but I am comparing that retainer to the 411 telephone service. Every month, we receive a bill that includes the 411 and 911 services, or anything else ending in 11. The amount charged is peanuts.

    My mother always told me that peanuts add up to a bag of peanuts, and when you have a big bag, you can sell it. That's how copyright works. We never thought outrageous fees over $1 should be imposed. At some point, the conversation was about $5 because the Songwriters Association of Canada wanted to have

a blanket licence for the Internet.

    That will be difficult to manage, but I'm convinced that, given the complexity of the processes that have been implemented, there will be some space between A and B to insert an A⁺ or a B^-. We suggesting applying the user-pay principle and a tariff that would not make the user feel trapped.

    It's as simple as that. Users could contribute. Studies were carried out two or three years ago on this topic, and the vast majority of the people surveyed were in favour of a tariff, and not a tax, being imposed.

    Thank you.

    Mr. Boughen, you have seven minutes.

    Thank you, Mr. Chair.

    Let me welcome our panel. Thank you for appearing before us and sharing your expertise. It's very helpful as we look at the study.

    I have a couple of questions that I want to pose to you. I've heard you talk about copyright, and I've heard some discussion around educational programming. In terms of copyright, what are your suggestions as to how that should be introduced so that the person who's the performing artist is adequately rewarded and recognized for his work? What notions do you have on that?

    Maybe we could start with Mark.

    We have in place in Canada, the Musicians' Rights Organization of Canada. This organization collects money from broadcasters that they pay when they broadcast, and their goal is to distribute this money to the performers. There are organizations like this in countries across the world. They are supposed to share the money and share the resources and make sure that the artists are paid. There has been a reluctance, mainly of European countries, to even give the money to Canada. They just hold onto the money, making technical claims that we don't have proper distribution methods. That's been a problem, but our methods are improving.

    MROC collects data from broadcasters so they know all the music that has been broadcast. Unfortunately, it's up to the musicians to actually ask for the payment. There isn't an automatic mechanism that says, “When we play this music, the money goes to these particular musicians.” It's up to the musicians to actually go to MROC and make the claim. They have to list every single recording, every single track they were on, as well as all the musicians who were on all those other tracks. That's a daunting experience for many musicians. If you have a small, compact band, it's easy to do, but that's very rarely the case.

    So we have those challenges of getting the money that's owed to us from other countries. That's where the WIPO Beijing treaty would play a big role. It would put a lot of pressure on those countries that are holding money to release our money to us.

    Pierre, how do you view that? What can you see happening to increase the probability that musicians are recognized by copyright payment?

     Copyright goes along with education. Copyright is a very abstract concept to somebody who was never involved in the art or in the show business environment. I am the only one to do that in my family and after 35 years with the same woman, none of my brothers-in-law understand my business. So it's not a miracle that we ended up where we are right now. It's so abstract. In fact, that's one of the arguments we have to face: the music is there so why do we have to pay?

    I'm old enough to remember when we had 33 rpms in our hands. On the label, there was a line printed, “Reproduction, utilization”, etc. “forbidden unless you have the proper licence”. No one in the real world ever understood the meaning of that line. When I was talking to my brothers-in-law, they said, “Yes, but I paid for the CD”. I said, “You paid for the medium, you did not buy the tune. The tune belongs to the creator.” They need some kind of medication to understand.

    I know it's a big problem. At one time, kings were paying for it and it was not a problem, but they all went into bankruptcy anyway.

    I think we have to have confidence in the public that they would agree to pay a few cents per use, because this is what we're talking about.

    Right.

    Luc, what do you say? Mr. Fortin?

    I completely agree with you, Mr. Rheault. It's true that this is a matter of education, which could even start as early as elementary school and high school. People have to understand that music works do not fall from a tree. They are the product of labour that involves many people, such as the composer, songwriter and the musicians who perform the song. There is a complex production chain, and that means something. Music is not free.

    I know that production is less expensive today than it was years ago, when people had to record in studios with 24 or 48-track devices that had to be rented for $250 or $300 an hour. That time has passed, as people have access to much simpler and less expensive technologies. However, this doesn't mean lower production costs take away music's value as such. A musical work has value, both for its creators and its performers. I think that people are prepared to pay at least something for that.

    As I was saying earlier, in Quebec, we have noticed that consumers were much more reluctant to copy without permission a work of a Quebec musician they are familiar with, appreciate and hear on the radio, than the works from other countries or from another era, as they feel a connection with their reality. I think music should be introduced into people's daily reality, and they should be made to understand that, when they copy something, they affect someone else and take something away from them. I am talking about copying a work without permission.

    When people pay for their subscription to an Internet service provider, why wouldn't a very small monthly amount go to a fund to support artist creation and compensation? As I was saying, private copying should apply to all media used to copy those works, and not only CDs and cassettes, which no longer exist today.

    Thank you for that.

    We're all done. Thank you very much. You're out of time.

    I'd like to thank our witnesses for joining us today. Thank you for your contribution to our study. If you have any further contributions, you can send those to us in writing.

    We will briefly suspend.

    We will call this 18th meeting of the Standing Committee on Canadian Heritage back to order.

    For the second hour, our panellists are: from North by Northeast, Mike Tanner, who is the director of operations; from Live Nation Canada, Riley O'Connor, chairman, and Ken Craig, promoter; and from Dallas, Texas, through video conference, from Ticketmaster Canada, Patti-Anne Tarlton.

    We will start with Mr. Tanner, who has the floor for eight minutes.

    Thank you very much.

    I'm very gratified to see that there's interest and engagement from the committee here. I've been quite active in speaking to other elements in the industry at the provincial and municipal levels. It's very nice to see that at the highest level of government you're interested in hearing from and working with the industry.

    I am the director of operations at North by Northeast, NXNE. We're a large annual music festival in Toronto. I have been with NXNE since 2007. I've seen its metamorphosis from a local festival with local bands and local audiences into one of the premier music festivals in North America. I've also seen how, partly with the support of the Ontario provincial government through the Ministry of Tourism, we've grown our impact on the city and on the province and had a great impact on the tourism industry overall, with economic impact in a number of different areas.

    I'd like to tell you a little bit about that, about festivals in general and about how live music, supported in the right ways, and left alone in the right ways as well, can generate tremendous growth in tourism across the country.

    What do we talk about when we talk about tourism? In Canada we often focus the discussion on the natural environment. That's understandable. I'm a former professional musician, and I've driven back and forth across the country. As I'm sure you have seen as well on the Trans-Canada Highway, our national identity is reflected even in the licence plates that we see on vehicles: Beautiful British Columbia; Wild Rose Country in Alberta; Land of Living Skies in Saskatchewan; and Canada's Ocean Playground in the Maritimes. We have the ocean, we have the sky, we have wild roses, and in B.C. the whole province is beautiful, of course.

    I came to Ontario from B.C. 25 years ago, but my migration had nothing to do with nature. Remember, it's Toronto I went to. It was all about the music scene. It was about the tremendous cluster of artists and venues, and the buzz that existed in districts like Queen Street West, College Street, the Annex, Kensington Market. I believe that same music cluster, that same scene, can be used to drive tourism internationally.

    We all love the outdoors, but I would urge the committee to recognize that in Canada I think we've underplayed our unique strengths in the cultural industries, especially in live music. We're still talking about wheat fields and whales. We haven't kept up with the rest of the world in selling the urban experience. I understand we've dropped from seventh to eighteenth in the list of the world's most visited destinations in the last 10 years. The statistics tell us that tourism employs 600,000 people, which is more than the oil patch employs. The stats show us that tourism generates $85 billion in economic activity, which is more than agriculture, fisheries, and forestry combined.

    I can tell you from first-hand experience that live music is already a great driver and the reason that thousands and thousands of people cross the border and fly over to our country. We have world-famous festivals across the country. We have folk festivals in Vancouver, in Edmonton, in Regina, and in Winnipeg. We have Ottawa Bluesfest right here. In Quebec there's the Montreal Jazz Festival, there's POP Montreal, there's M for Montreal, there's Osheaga. In the Maritimes they have Halifax Pop Explosion. I have only eight minutes, so I can't tell you about all the events we have in Toronto.

    What I would like to state is that each one of these events has built its business largely on its own. Each festival markets to a far-ranging consumer base, mostly using social media. Each one is sustainable. Each one is growing in impact. But this avenue is ripe for expansion with just a little bit of support at the national level.

    Imagine a marketing campaign, a public-private partnership by which the federal government joined forces with key festivals across the country to reach out to music tourists in the United States, for example, to bring them here to Canada and keep them here for longer than just a couple of nights by helping them put together a plan that gets them going from Osheaga in Montreal to the Regina Folk Festival and on to Edmonton, travelling by train, perhaps, in less than 10 days. This would be a wonderful thing.

    It's possible, and we can help you do it.

    The music industry isn't looking for old-school handouts, for the blank cheques written because we all know how noble it is to support the arts.

     I would encourage the committee to recognize that support of events like this and support of the industry is an investment with very high ROI. My own event, North by Northeast, taps into a program called Celebrate Ontario delivered through the Ministry of Tourism. They give us between $300,000 and $400,000 annually which we leverage to partner with corporate partners. We put together free public shows at Yonge-Dundas Square. We close the street and we bring in a lot of people. We can turn that into a multi-million dollar return on investment at Yonge-Dundas Square alone with massive benefits for the local economy. Supporting live music helps the economy, it helps the country, and it certainly helps the musicians by giving them larger audiences to play for, more shows, and more exposure to vital industry that they look for and value so much.

    Therefore, I recommend that the Government of Canada first identify and then support festivals and events, venues, promoters, and other industry directly involved with putting musicians on stages across the country. If you stage it, if you book it, the audiences will come. It's all about the programming. We see that with my festival. If we put a big free outdoor concert together with the right kind of headliner, we'll get 50,000 people in a day. We know about the audience. We know that probably 30% of them will come from outside the Toronto area and 20% will be from outside the country. We know that most of them are probably age 19 to 34 because we're dealing with that kind of audience and that kind of music. Many of them won't have full-time jobs yet. Lots won't own cars or houses yet. Some of them will probably be couch-surfing when they're at the festival but all of them will be spending money in bars, in restaurants, in taxis, in retail. They will all leave the festival with a T-shirt and with a fantastic memory of our country. And they'll be back.

    I believe the traditional tourist marketing campaigns are not engaging these young music tourists, who are engaging with our kind of entertainment, who are travelling for commercial music versus the high culture represented by the symphony, the opera, the ballet. I see wheat fields and whales, wineries, and water parks, but I don't see Queen Street on a Saturday night.

    I've visited Austin many times and I've seen first-hand how its brand, the Live Music Capital of the World, has animated not just the city but the State of Texas itself. I've seen 57,000 hotel room nights booked during South by Southwest alone. I've seen how the city has used its music sector to drive tremendous investment in tourism and other benefits as well. There's a lot more information on Austin in this wonderful report put together by Music Canada called “The Next Big Bang”. Suffice to say for now that we don't need to sit back here in Canada and look with awe and envy on what Austin has done, because in Canada we already have one of the world's most diverse, dynamic, and unique live music scenes with tremendously talented artists, iconic venues, historic club districts, and passionate, articulate fans. We even have the support of the media.

    With all that, what we need is for the federal government to encourage further growth of this already vibrant sector. We, the industry ourselves, are finally starting to talk with a more cohesive voice. There's talk of a national association in the works. The live music industry can help the government undertake studies to shape priorities, to create programs to help service those priorities, and to ensure that the support reaches those who can do the most with it to generate tourism, jobs, and economic productivity, while helping the musicians and the music we all care so deeply about.

    I'd ask the committee to recommend that live music is a key facet of the music industry and to engage the industry to learn more about it as it exists in 2014, to work with us to create a strategic plan to develop and leverage existing assets and to tap into this largely untapped cultural juggernaut.

    Thanks for listening. I look forward to telling you more.

    Thank you very much, Mr. Tanner.

    I apologize. I know you wanted to go second.

    We'll now go to Mr. O'Connor and Mr. Craig from Live Nation Canada.

    You have eight minutes between you.

    Thank you.

    I'm chairman of Live Nation Canada. I've been in the business in Canada as a promoter since 1977. I started in Vancouver, worked my way up from being a stagehand at the Montreal Forum, and I'm an electrician by trade.

    What I really want to emphasize today.... I had short notice about coming to this committee, but, to echo what Mike has been talking about, I j want to give a broader aspect of what the larger impact is of the commercial music sector and what it really means to the economy of Canada.

    So thank you, Mr. Chairman and fellow committee members. I welcome this opportunity today to provide an overview of the live music sector.

    Artists who create music are a gift to the well-being of our society. They nourish our sense of community and provide a gateway to inspire us all—tradespeople, professionals, entrepreneurs, and even our politicians. The live music that artists create is also a resource and an economic driver across the economy, from labour, to goods and services, to tourism.

    Recently there was a business breakfast sponsored by the Edmonton Chamber of Commerce, to which an Icelandic trade mission group was invited as guests. I was struck by a quote from the director of culture and tourism for the City of Reykjavik, Ms. Konradsdottir. When she was asked what the most important thing is that her city does as a business centre, she responded that they promote their artists and they promote their culture. She said it is what they are and everything they do. It is also something we do every day at Live Nation. It is something the Canadian government should be actively promoting.

    Live music is an economic success story in Canada. We punch well above our weight globally on the international stage. We entertain the world with our musicians, entrepreneurs, and technicians. Additionally, Canada is a mecca as a country for touring national and international artists. The live music sector is the economic lifeblood for our musicians.

    Our company, Live Nation, manages and produces more than 1,200 concerts a year from coast to coast. We are active in more than 40 communities annually. In 2013, 3.6 million people attended our concerts. We generated over $285 million in sales. We produced seven major festivals in Canada, attended by more than 200,000 people. We spent over $14 million in Canadian media alone. Last year we produced 360 arena concerts, employing more than 145,000 people.

    The numbers do not represent the entire Canadian live music market. What is clear is that musicians and their unique talent are a major economic benefit that provides real jobs in many fields to many Canadians.

    Music touches everyone. Music is a motivation for people to gather together. We could do much more in celebrating our live musical heritage in music tourism. Music is an educational tool that enhances cognitive skills and encourages students to develop broader learning skills. Music and our musicians should be considered a national resource, not some sidebar group pigeonholed as a special interest group. Artists who create music should be given every opportunity to become successful, like any other economic platform that enhances economic growth.

    We have a vast network of performing arts centres and community arenas in Canada that are all overlooked as they become aged and lacking by not having state-of-the-art services. We have an opportunity to be on the global stage in attracting artists to work in facilities that complement their work in similar ways to those we have developed in the film industry. All these services are a benefit to our own artists' community, through work, collaborative projects, and honing of their own skills. Facilities that are modern also attract patrons domestically as well as in international tourism. There should be a national touring strategy for Canadian artists beyond the developmental stage. The greater success a Canadian artist achieves, the greater the net benefit will be to business sectors in supporting our touring artists.

    I came here today to offer my help in creating a national touring strategy in the live sector.

    Thank you.

    All right. Thank you very much.

    We'll now move to Dallas, Texas, and hear from Patti-Anne Tarlton, the chief operating officer of Ticketmaster Canada.

    Welcome.

    Thank you, Mr. Chairman and committee members, for inviting a dialogue with the live music industry.

    I'm honoured to represent this wildly diverse and vibrant industry and to have participated nationally in the industry throughout my career. I was born in Montreal, grew up in Vancouver, and have lived, worked, and toured from coast to coast. I've revelled in the risks and rewards of concert production. I've witnessed first-hand the infrastructure investment, and how it was a catalyst for new economic growth, in my years at Air Canada Centre. I now oversee Canada for Ticketmaster, servicing attractions large and small across the country.

    I understand the purpose of this committee is to review and analyze the way music is viewed and supported by government. In industry we must continually do the same. For example, the role of the ticketing company in the live music business today is to connect artists with their fans. At Ticketmaster we've been investing upwards of $100 million annually in product development to keep pace with the speed of change, technological advancements, and the expectations of fans and their brands and the artists alike.

    Music discovery, engagement at live events, and the stories that continue to be shared via the digital media sources we have today to relive those experiences are at the palm of people's hands today. In an environment where fans want always available tickets, despite the variance of supply and demand, our goal is to make that link between the artist and the fan, who has an emotional connection to that artist, as frictionless as possible.

    With the unprecedented speed of change in the methods of distribution of music, government strategy with the live music sector needs to shift to be current with our 21st century reality. Historically, governments focused largely on financial assistance to the independent music creators, their marketing, and guaranteeing their coverage on radio, for example. Government also focused on cultural infrastructure investments, such as performing arts centres for the symphony, the ballet, and the opera, but it hasn't followed the growth of the commercial music industry.

    Music Canada's document, which Mike mentioned as well, “The Next Big Bang”, very successfully outlines how the world of music has changed in this country. I would argue that government's views should also keep pace with the shift of this tide we're all sailing through, and we can do it together. Policy-makers need to follow the industry with this present-day understanding, and I believe this committee is a great step in this direction. Imagine how we could grow exponentially if we collaborated at all levels of government and within this industry to make this sector a priority. Witness what the film industry did decades ago.

    Research will also demonstrate that benefits from music education and a vibrant urban music sector deliver a very important competitive advantage worldwide. We know we have a large, diverse music scene here in Canada, but this asset is really not fully harnessed. It is crucial for us as Canadians that we seek to maintain our global position, and our music industry can be a catalyst for this.

    All levels of government must be encouraged to make this investment. Policy measures that encourage and support both music education and the sustainable music scene across the country are a critical component to Canada's digital advantage.

    From a technology perspective, technology professionals who have been trained in music when they are young become more creative. We find they are better problem-solvers, are more collaborative, and possess the soft skills that are crucial in today's digital economy. Government and organizations like ours which support rich cultural environments are better positioned to attract employers and employees. The high-tech sector provides high-paying skilled jobs for citizens of Canada.

    Early education begins a life of engagement in live music. Students continue their participation in music as adults, and this encourages them in their professional careers, not only in a music career. You teach musicians how to be better businessmen and businessmen how to enjoy and to perform music, and we all win. Cities that have vibrant music scenes, both for the listener and the performer, will encourage and retain great employees and great community-minded people.

    Recommendations large and small should all be centred around breaking down the roadblocks impacting economic growth of the live music industry in Canada, I believe. The film industry is proving simply that making it a priority decades ago initiated a frictionless environment at that very first industry meets government conversation.

    With the guiding principles of making Canada an easier place to play live music, the goal is to consistently make Canada friendlier for the fan, for the musician, and for business alike.

     From a musician's perspective, the environment should be friendly to learn, to play, and to grow. Policies that promote music education and access to facilities would go a long way in this regard.

    For fans, the access for both residents and tourists alike also goes a long way.

    The policies around work visas or tourist visas and, from our perspective, ticket resale laws, for example, would also help encourage a more vibrant live entertainment scene.

    From a business perspective, both resident and non-resident, we could look at policies around job creation. Infrastructure has been funded largely by private enterprise, so now how do we prevent barriers to its growth, such as taxes and permits? Cultural tourism and the marketing thereof, which Mike mentioned earlier, play a big part in this as well.

    As an industry, we are starting to collaborate. We've already begun this, and we're thinking big. From education all the way to the live event touring business, musicians rely on the live event more today than they ever have in the past.

     We are talking about the full life cycle of music, starting with the importance of music education. We also see that there is a federal connection there, too. We had a round table with Minister Glover regarding the Junos just a few weeks ago.

    There was a reference made at that point to a music ParticipAction program. That was something we saw years ago in terms of a fitness program. We could think in that regard as well for music.

    Music, let's all understand, has a transformative power. It opens minds. It enhances our collaborative skills and changes lives, not only of the musician but of those who listen and engage in the music itself. Music education is not just about producing new Juno award winners. The skills that are learned can be absolutely transferrable to other sectors.

    We can grow music fans who will consume. Those consumers buy tickets. They fill the venues that employ people throughout the country. Rabid music fans make for multiple shows. A more vibrant music market would make people say that instead of just doing one show, they'd risk bringing in two shows. When we bring in two shows, it saves a little bit of money, which is more helpful for the concert promoters that Riley spoke about earlier.

    Really, it's us building sustainable audiences with some tweaking of policy and through collaborating on a strategy.

    In closing, I would like to applaud the government for commissioning the study. Success will come with the collaboration, I believe, in all levels of government, and industry leaders such as ourselves are really willing to partner in this journey.

    Thank you very much. We will now move to the questions.

    Mr. Dykstra, you have seven minutes.

    Patti, the Chair keeps reminding us to make sure we ask questions of the people who are coming to us via video, so I'm going to start with you.

    I don't mean for this to take up a ton of time, but I'm really interested. I know that when we were young people growing up, one thing that was impressed upon us was to find out when we purchased an album, an LP or a CD, how much revenue actually went to the artist who created the piece of music.

    Some folks do complain once in a while about the additional fees that Ticketmaster puts on when they purchase a ticket for a concert. That got me thinking a little about this whole shift to live music and the way artists are going to be able to make a living both now and in the future, through the promotion and the sustainability of live music.

    I wonder if you could give us a bit of a breakdown. I meant to ask you this on Saturday when we did the round table at the Junos, but could you give us a breakdown of how the revenue is disbursed through Ticketmaster and what it looks like for the artist at the end of the day?

    I think what we want to make clear is that a ticket, or a ticket price, is driven by the artist. We are all servicing the artist and trying to build their economic impact for their own career, and then in turn we can see the ripple effects of that throughout the industry.

    When we talk about ticket pricing, we often debate about high ticket prices, but if you compared days gone by to today, the production elements, for example, that come with these shows are so much superior to what they were before. With regard to the specific question about a service charge on the ticket, it's really one component of the entire opportunity. Over time what you'll see is that we're collaborating to generate revenue on behalf of that artist. Whether it's shared inside the ticket price or as a service charge, or if it's in the catering bill, etc., these are all expenses that go against generating income for the artist.

     For any given event, the artist will take the lion's share. Let's say north of 90% of what's generated on a show is going towards the artist.

    Thank you.

    One of the other pieces that you spoke about was music education. It's become a general theme throughout all of our presenters that music education is something that we need to pursue in a lot stronger fashion. The difficulty, of course, is that the delivery of that service, at least on an education side, is considered to be that of the provincial governments.

    What is the role of the federal government here in terms of education? Perhaps we can very quickly move this around the panel.

    It's to build consistency. You'll see a common thread in our conversations. We are doing a lot of this already. It's really just the ongoing encouragement. The charity MusiCounts through the Junos that we spoke of earlier is already a program that's in place because the actual formal programs in schools have been diminished over time. This is not necessarily even asking the government to fund a national music program, but to encourage it, not discourage it, as part of the curriculum. I was really interested by the concept of ParticipAction. I think if we did some ideation around that, we could show something consistent across Canada, and then we could promote that internationally, too, that here in Canada we have this as our cornerstone.

    I'm almost out of time and I have another question, but I want to have your quick input into this.

    I just want to jump in on that for a second, as well.

    I think I agree with what Patti is saying. Sometimes it's not down to actual dollars flowing from government X to institution Y, but perhaps in terms of creating a cultural shift and a national identity built around music and music education. We see the same thing happening in sports. We consider ourselves a hockey country. That's promoted and promulgated at all different levels of government all across the country, and so you don't have a shortage of kids, boys and girls, signing up for hockey no matter where you look. Partly that's because of who we think of ourselves as. We can do the same thing with music.

    I want to add to that.

    To echo everybody's sentiment here, and also just in terms of the last witnesses from the previous session, education, in terms of music, also brings respect. With that respect would come less downloading music for free, because if you're part of an integrated process, just like your math courses.... One of the first things that seems to be going away from schools is a music program, but you wouldn't think of ever dropping math. It's about respect. It's about learning the process at every stage of the game. I think that just will come as a natural thing.

    I know it's a provincial issue, but maybe there can be some direction from the federal government in terms of trying to get a better consensus across the provinces.

    Thank you.

    Excellent. I appreciate that.

    I'll try to get this question in quickly and get all of you again to respond.

    Mike, in particular, you talked about the promotion of music tourism in Canada, and how we do that. I guess the question is how do we do that to the rest of the world? How would the federal government engage itself in that process?

    As an example, a lot of you and I have heard lots about Austin, Texas, and the success there, and what has just transpired in this huge event that generates millions of dollars for both Austin and the State of Texas itself. I wondered if you could talk a little bit about that in terms of the message to the rest of the world, and how the federal government could play a role in this process.

    Sure. That's a good question, and it's not an easy and quick answer.

    I think the process starts with—

    Perhaps the chair will give you some more time.

    The process starts with exactly what we're doing here.

    In Toronto, and Ontario, we have been able to move the needle a little bit through initiating dialogue with elected representatives and bureaucrats at the city level, and it's the same thing at the provincial level, particularly with the tourism ministry. The whole process has begun in both situations with exactly what we are doing here. We have an information exchange, a gathering of data, a sharing of perspectives, and an expression of a willingness to work together to shape priorities, to shape messaging, and to create programs and initiatives that make sense to the industry and to the constituents who all of you represent.

    I am not really suggesting that the federal government go out and spend millions and millions of dollars necessarily on advertising campaigns that would play in Europe, in Asia, and across the world, in promoting the country as a live music destination. But if we have that in our minds collectively, which is something that can be promoted by the federal government because of the ubiquity of the influence you have, I believe that those things will come out naturally in a lot of the things that private enterprise does. What a government can do sometimes is just create a pathway, a railway or a pipeline, for private industry stakeholders to then populate and animate.

    Let me give you a quick example. In Toronto we just signed a music city alliance with Austin. A lot of people are asking what this means. It's just two mayors putting their signatures on a piece of paper. I see it as a pipeline. Now that those official things have been established, the relationship and the alliance have been established between city hall and city hall, it's up to private business to take advantage of that, to share best practices, to ferry artists back and forth, and to have the industry talking to each other. All of that is more possible.

    Mr. Tanner, I'm sorry, but we're going to have to move to Mr. Stewart, but maybe he'll want to hear more.

    Mr. Stewart, you have the floor.

    Thanks to all the witnesses for coming today.

    Gee, this has taken me back 20 years. Mike and I were just speaking about how we had a bandmate in common back in the 1990s. We were both very active in the Vancouver music scene. I remember that one of the first shows I played at the Commodore was with Barney Bentall. When I saw Ticketmaster on the stub, I thought, “I've made it.”

    Voices: Oh, oh!

    Mr. Kennedy Stewart: Boy, why did I become a politician? I don't know. I should have stayed in music. And I think maybe my colleagues on the other side are saying that they agree.

    A voice: You can always go back.

    Voices: Oh, oh!

    Mr. Kennedy Stewart: It's a great pleasure to be here today. It does take me back to how we used to think of making money back in the 1990s. As a young band, you were lucky to get a CD. It was very expensive. We had some FACTOR grants, which were very helpful.

     It does seem that the model is very much changed, because last year my brother played South by Southwest and now is touring in Europe. His way of making money is so much different from how we conceived it. My brother tells me—pointing to what you're doing—that it's mostly the live music venue. They've kind of given up on trying to capture money off recordings. Now the industry is looking for more help, and I'm glad you're here today to talk about this.

    I'd like to know more about festivals and tours and this whole idea of perhaps changing how we see ourselves. I was struck by what was said by a witness we had here last week or earlier this week, who was talking about moving everything down to Nashville, because Nashville is seen to be the place to go. Perhaps you can elaborate a bit more on how we can make Canada more of a music mecca in terms of live music, and how that translates into emerging artists perhaps being able to support themselves.

    I would ask you to be specific. We have to write stuff on paper here and pass it in Parliament, you know, so if you have some specific ideas on how we might do that, it would be very helpful.

    At North by Northeast, speaking specifically, we have about 1,000 artists playing each year over the course of about a week. Some of those will be the international headliners that you see on our poster, but most of them will be emerging artists. Emerging artists are at a more incipient stage in their career. They're looking for the exposure. They're looking for the networking. There's an attendant conference that happens. Because we're a large event, and because Sled Island and Osheaga and some of the other festivals that I mentioned are large events, there's a lot of media around it as well.

    You're right in that the paradigm has changed tremendously. It used to be that the tour was a loss leader to support the product that you're selling, the record or the CD. Now it's all flipped around. Nobody's moving lots of units of recorded music anymore. You can't be Steely Dan anymore and stay in the studio and just sell records.

    The emerging artists who play our festival benefit from a payout directly, from exposure to the industry and the media, and from getting on a bill with larger and better known artists. You probably remember from your days that it was a good thing to get a support slot, perhaps be taken on tour as well, and get all the attention and the buzz that comes from animating more festivals, events, promoters and iconic venues.

    You talk about Nashville, but consider Massey Hall in Toronto. There's no reason that shouldn't be as well known internationally as the Ryman Auditorium. It has every bit as long a history and a story to pass.

     We create a culture where the world will come to us looking for live music and looking for that kind of animation, energy, and unforgettable experiences.

    Thanks.

    Do any of the other witnesses have comments on what we could do to actually build Canada as an international music mecca?

    Well, we're already a mecca. I mean, Toronto is number three in the North American concert market. Canada is one of the largest touring countries for its size of a 35 million population. I think what some of the focus, though, in terms of even going back to the tourism question is that I think we can change the focus.

    I'm also a board member of Tourism Toronto. It's over the last three years that we've introduced music as part of the platform when we go out on international trade exhibits to encourage conventions that come to Toronto to know that there is more activity going on in that city than just walking around and going to a restaurant. I think that you can change the focus on how you show yourself internationally as well.

    On touring, I think it's time that we started thinking about multi-use facilities. I mean, our hockey arenas aren't just hockey arenas. They are also the centre of communities, the centre of concert activity and conventions. Every city in this country has seen an economic growth every time they build a new facility. In London you have the John Labatt Centre, and in Kelowna you have Prospera Place. These have now become the centre of those communities because they are multicultural in terms of their activities besides just sports.

     I'll add to that. We're very comfortable saying we're a hockey country, but every time we say we are hockey we could also say that we have a vibrant music industry. It could be part of every trade mission that Riley talked about, to bring an attraction with us, an artist with us. That's where the success is that we've seen in the other examples in America and in Europe. They really are bringing the musician or the industry into the fold.

    Okay, thanks.

    How do we do this besides just perhaps changing the content of our ads? Are there things like tax credits or new grants or things that would help? I know one of the biggest problems is keeping venues alive. When I was playing they were all over the place, and now there are just a few small ones. I'm sure that's essential to any festival, to have venues. Do you have any thoughts about how that might be encouraged, or do we just let the market take its course there?

    Well, as Riley said, the market is generally pretty good at taking its course. We're not talking here about completely reinventing the wheel, but of shifting the focus, as we've all said.

    There used to be some programs administered by the federal government that are no longer available. There was the fleeting shooting star of MTEP, the marquee tourism events program.It had a two-year horizon and then it ended. There was something called trade routes program administered by Canadian Heritage. PromArt I think was a DFAIT program, and there was Culture.ca. All of those things have gone away. FACTOR still exists, and a lot of our artists avail themselves of FACTOR through the new talent demo awards and videoFACT as well.

    We believe that those programs that disappeared for one reason or another didn't animate the industry as I'm speaking about here, which is really to put the funding and support in the hands of the promoters, the venues, or the industry that can provide the stages for the artist to perform upon. I think that is the easiest and the most streamlined way for the federal government to be involved at that level to reinstate some of this dialogue that might lead to creation of appropriate programs and the flowing of support into the right quarters.

    Thank you very much.

    Mr. Dion, go ahead for seven minutes.

    Thank you, Mr. Chair.

    Mr. Tanner, Mr. O'Connor, Mr. Craig and Madam Tarlton, I don't want you to repeat your diagnostic, but I would like each of you to identify the one or two, or maximum three, very concrete measures that we could include in our report as recommendations for the government.

    Maybe you could start, Mr. Tanner.

    I would like to recommend that in a report the government undertake a study working with the industry to explore key elements of the industry, the existing stakeholders with a view to identifying needs and opportunities for collaboration, for creating programs which speak to those needs, and for delivering those programs in a way that is relevant and appropriate, and frankly, easy without a lot of barriers for those who need it most to access it.

    Do you have any idea today of what programs you might have in mind?

    I don't but I could sit down with you after and draw up a little worksheet.

    Mr. O'Connor or Mr. Craig.

    I think there are three elements. I'd echo what Mike was just saying. I'd like to see that as Music Canada...the live presenters in this country are just starting to be vocal and get together and collaborate and wave the flag of what we really believe is a major story on the economic scene of Canada. I think some collaborative effort between having that dialogue at a government level and with the Music Canada organization would be a big plus.

    The second thing is I'm a great believer in our infrastructure on our facilities in Canada. They are our cathedrals of the live music scene and they shouldn't be ignored. I know infrastructure is a big issue when it comes to federal money spending, but it's something that I think should be looked at. They shouldn't be left to deteriorate and be an eyesore in any community.

     By infrastructure, what do you mean?

    I'm referring to performing arts centres of arenas because those are the major places that drive the economic standard.

    The other thing is education. It's one way of changing how everybody thinks about music and knowing the importance of what it really means. Canadians are inherently already pioneers in these areas.

    Thank you.

    Madam Tarlton.

    I would suggest that we take the example of the film industry and there was a momentum decades ago to call that a priority sector. If we could have multiple levels of government agree that the benefits of live music are so important to the fabric that we would declare them a priority that way the other elements that we are advocating for become easier conversations to have because there's a wall that has been broken down so we can have a dialogue.

    I do believe a lot of this is among multiple layers of government and also ministries. For example when we talk about making it easier for a musician, that's about getting a work visa to come to Canada. When we talk about a cultural tourist who is coming from an international market, it may take them two or three months to get a visitor's permit to come. If we could make access to music for those that want to either play in Canada or enjoy it in Canada that would be light years ahead of where we feel like we are today.

    You feel that it's not a priority today?

    We feel that we have had success, but if we were to focus on it in a strategic way, that success could show returns at five times or ten times what we have today.

    You'll hear us say as private enterprise that we're doing pretty well, but imagine how well we could do if we actually had a complete frictionless environment and we really promoted the concept that music is in the fabric of us as Canada.

    Thank you very much.

    It does start with education and goes from there.

    Mr. O'Connor, you mentioned your idea to have a national touring strategy. Can you expand a bit on what you have in mind?

     It's kind of broad based. I've been sort of mulling this over for a while. I'd like to see some recognition of Canadian acts that tour Canada. It's very expensive for these acts. For a lot of the acts, their only real income is the Canadian live music scene, and really what they should be doing when they tour Canada is not spending all their money on touring but figuring out how they can build up their capital assets so that they can go out and perform abroad and go to a larger market.

    I think it's through education. There are plenty of entrepreneurial type places in Canada that are trying to teach musicians the entrepreneurial skill set to be able to figure out what they need financially to succeed in Canada. I also think, in terms of maybe tax incentives for those acts that do tour a large broad base of cities in Canada, that they should get some sort of incentive for going out on the road, not paying the freight like everybody else. I think it would be encouraging.

    There was a time, for example, in Ontario when Canadian musicians were given tax benefits on their live performances. That has been taken away since the restructuring of the HST. It would be encouraging to see some form of touring strategy on that basis. I think it also echoes where they like to play, the performing arts centres. If there is a way to encourage the technology of these places, I think you'd attract international artists to come here and do recordings, films, and things like this. Then we'd become a mecca to attract people on an international scale.

    That's kind of where I'm going on that touring strategy idea.

    Thank you very much.

    Thank you.

    We will now move to Mr. Falk, for seven minutes.

    Thank you, panel, for presenting here this afternoon. I appreciate that.

    By vocation, I'm in the gravel and aggregate business. What I need is a resource. I need to source that resource. I need to secure it. I need to protect it. I need to develop it. You guys are in business. Your resource is the artist and musician. One of the things we've been hearing through the course of our study is that your resource says there's no money. How would you respond to that?

    I can take a stab at that.

    When we are negotiating, putting on a festival, putting together the lineup and all of that, we're flowing the money that we get through ticketing revenue—Patti has spoken to that—through corporate partnerships, and through government support directly to the artists. The artists are being paid for playing our shows. They're additionally getting concomitant benefits for being on our stages in a large forum, a large venue.

    We speak to the artists. We speak to them all the time very directly. The more gigs there are, the more shows there are, the easier it is to plan a tour around that. You can't come out from B.C. to Toronto for one show. You have to put together a network. You can't come up from the United States and play just one gig and go back to the United States. Animating an entire ecosystem across the country is very important for the elevation of any one component and for the artists who play there. In addition, as we've all said, it animates so many other things in the industry as well.

    Go ahead, Mr. O'Connor or Mr. Craig.

    I wasn't really clear on the question. Were you saying there was no money for artists?

    That's one of the themes that has been recurring here throughout the study, that they say there's not a whole lot. We've heard from some artists who have number one songs on the charts and are living in their mother-in-law's basement with their four kids, just because the revenue isn't there in the industry to provide a decent living.

    I'd like to sort of split where that discrepancy could be, because on the live side, if you're going out and performing, you're being paid. There's no artist who works with me who isn't being paid; I can guarantee you that. That may be somebody who writes the music and isn't going out and performing that music. They may be just on the publishing side, and there are probably issues there.

    There is money there. The artists who are going through any of our organizations, playing at festivals or playing on a touring circuit across Canada, and that's from clubs to stadiums, are all being paid. What you need to do is broaden that network and encourage more of it instead of just picking and choosing based on the cost.

    There is a pie out there, and I think you ought to separate the artist who is strictly writing music as opposed to going out and playing live. There are two different worlds.

     Mr. Dion asked you some very pointed questions about recommendations, and you provided some. I appreciate that and I thank you.

    The other question I would have for all of you is about we as a government providing an accelerant to the industry. Are we providing it at the right time and at the right place, in your opinion?

    This is the first time I've ever been in front of a government committee. We've been active over the last couple of years on some provincial levels, so this is new.

    The live sector does not wave the flag or look for a handout. I've been in business since 1977 and never asked for a dollar from any government source, so that is not really what I'm looking for. I'm just trying to get the dialogue out there.

    I'll echo everything that Patti-Anne has talked about, and I mentioned in the brief statement I made, the model that the film industry created in this country has been incredibly successful. It has resulted in real work for real jobs with studios, contract work, encouraging even artists at an artistic level from technicians to real technological change in terms of what's happening on the technological side of the business from special effects and everything else. The same thing can happen in music. That's what I'd like to open up the doors to, so that we can create that platform.

    The times are changing, and the live music industry is no different from other industries in the 80-20 rule: the 20% at the top make 80% of the revenue. But historically, with the revenue that went to the other 80%, they could make a good living; musicians with that 20% could live a good, middle class call it, family life. Again, they were using a lot of their recording revenues in that regard.

    Today, how do we sustain the 80% of the musicians who are making 20% of the money? How do we make them vibrant so that they take the risk to stay in music, because a lot of them have decided they'll take a day job and they'll do music in their free time because they just can't make a living at it.

    Right, and did you have a solution for that?

     I think that's what we talk about. Where we could focus on is how we keep those artists on the road. So we talk about building an ecosystem that's friendly and frictionless so that they can tour from Vancouver to Newfoundland, or Vancouver Island to Newfoundland, so that these people actually have sustainable careers. Again, if there are more environments for them to play in, they sell more tickets, there's more revenue, and they stay on the road.

    To clarify, at the present time, there really isn't a problem with getting artists and musicians to fill your venues.

    I do 1,200 shows a year.

    We do 1,000 bands in a week.

    Okay, good.

     Thank you, Mr. Chair.

    Thank you very much, and thank you to our panellists for being with us today, and for your contributions to our study. It is much appreciated. If you have any further contributions, please send them to us in writing.

    We will briefly adjourn. We're going to go in camera for just a few minutes to do some committee business.

    [Proceedings continue in camera]