HERI Committee Report
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CHAPTER FOUR: WRITERS AND CREATORS
Most of the great books, those that live, have been totally initiated by authors. This has always been the case; it will always be the case. Great works of art are created by great creative
artists -- not by publishers or committees. Great creative artists are few and far between. A publishing house should hold on to any to that come its way.90
So far, the focus of this report has been on production, distribution, wholesaling and retailing. This chapter shifts its attention to writers -- the creative force of all literary endeavours -- and the lifeblood of Canada's domestic publishing initiatives.
In the Standing Committee's 1999 report, A Sense of Place A Sense of Being, the members stressed that:
We need creators. We need them because it is the creators -- more than anyone -- who shape our cultural identity and give us our sense of who we are and where we belong.91
This sentiment has been echoed repeatedly throughout the course of the Committee's roundtables and meetings. As a member of the Committee observed in a meeting with Canadian Heritage representatives, a lot has been said about the needs of publishers, but "how does this include the creator? ... I think that's an integral part of the chain. And if we don't look at that ... then we're missing a great opportunity."92
This report has already pointed out how the arrival of the superstore has reconfigured every aspect of the business chain, from production to methods of wholesale and retail distribution. Historian Christopher Moore, who also serves as chair of The Writers' Union of Canada, expressed his membership's appreciation of the arrival of the book superstore.
Chapters and its competitors have brought more people into bookstores. They have created a buzz of excitement about browsing and buying books. Many of us find their gift certificates, their on-line services, new and useful innovations.93
At the same time, he also voiced his members' concerns about "the financial squeeze" experienced by publishers and retailers that "is rebounding on authors and writers as well."94
Similarly, Carole David, speaking on behalf of the Union des écrivaines et écrivains québécois said:
We have noticed, for example, that publishers are interested first and foremost in making a profit. Authors expect publishers to promote people who do not write bestsellers as much as they do people who do write them. They expect publishers to be interested in authors who publish in genres that are not necessarily profitable, like poetry, theatre or essays.95
This chapter discusses some of the opportunities and challenges stemming from shifts in the business chain and the potential consequences for creators in three key areas: royalties, public lending rights and copyright.
Writers protect their interests through the contracts they sign and in their uses of copyright legislation. Generally speaking, when an author is contracted to write a book a commission fee is determined. Writers also receive additional fees if their books are sold to a publisher in a different country. Once the book is published and sold in stores, writers receive a royalty fee calculated on the list price of the book and total sales.96
In situations where a book is sold at a discounted price, a lesser royalty fee is generally paid. As more and more books are published in Canada, there appears to be a trend toward selling books off as cheaply and as quickly as possible. This may be a benefit to the consumer, but there are serious implications for authors. As Christopher Moore explained in his presentation to the Committee:
[W]e need to include in [the] public debate the place of payments to authors...It's not acceptable to finance discounts in the retail bookstore trade on the backs of rights holders and authors...97
In some cases, however, the question of royalties has more to do with the business practices of particular publishers, than retail discounts. For example, in a letter submitted to the Committee, children's author Ms. Lise-Anne Pilon-Delorme, explained how she had to take her complaint about unpaid royalties to Small Claims Court.
I won my case in court, but at what a price! In addition, I had been generous to the publisher in agreeing to swallow a loss of royalties amounting to $1,128, so he could stay in business.98
Canada's various writers' organizations, including the Writers' Union, l'Union des écrivaines et écrivains québécois, the Periodical Writers Association of Canada, the Editors' Association of Canada, and The Playwrights Union of Canada, provide their members with advice about contracts and sample contract forms. Authors' contracts are typically prepared by the publishing house and contain provisions which sometimes trigger adjusted royalty payments. Mr. Christopher Moore advised the Committee that the Writers' Union is continuing to discuss these contract matters with its members and with Canadian publishers. But, he stressed: "[I]t seems to us completely unacceptable that authors should be expected to subsidize the discounting that goes on in the big-box retailer."99
Mr. Nigel Berrisford, Senior Vice-President of purchasing at Pegasus Wholesale, reminded the Committee that changes in royalty payments relate largely to retail, rather than wholesale practices.
In some cases, the standard author's contract would say that if a discount was over 50% by a retailer, then the royalty would be reduced. In most cases, the discount we give is not over 50%, so the royalty would not be reduced.100
Berrisford agreed that there are a wide range of ways in which royalty payments are calculated, but these are as much to do with the sales potential of the author, rather than with wholesale or retail practices.
If you're John Grisham, you get 25%. If you're Alice Munro, you get 25%. If you're a first time author, you most probably get 9%. I think those things are ... unchanged. So our being around has had no effect on royalties to authors except in that we have sold more books, and therefore authors' royalties have risen substantially because of volume.101
In order to deal with the concerns raised by witnesses about possible negative impacts on royalties brought about by ongoing changes in the book industry:
The Committee recommends that the Department of Canadian Heritage conduct a study on the current economics of author royalties and report to the Committee on these changes six months after the Government's response to this report and once a year thereafter.
In addition:
The Committee recommends that the Department of Canadian Heritage, in conjunction with the Canada Council for the Arts and Canada's major writing organizations, arrange a series of regionally-based professional development workshops for writers and publishers on contract preparation.
Finally, a number of witnesses pointed to the importance of authors' tours as a valuable contribution to Canada's book culture. In the Committee's view, existing support for artists' tours is insufficient. The Canada Council for the Arts will contribute up to $1,300 for a tour; in addition, some publishers support book tours. Since a cross-country tour typically costs ten times the maximum amount provided by the Canada Council:
The Committee recommends that the Department of Canadian Heritage and / or the Canada Council for the Arts develop a strategy to increase support for authors' book tours.
B. PUBLIC LENDING RIGHT AND REPROGRAPHIC COLLECTIVES
Public Lending Right Payments and photocopy collective payments are other sources of income for writers. Writers who sign up with a reprographic collective such as Cancopy or Copibec, for example, receive an annual payment for the photocopying of their work. These payments are based on licence fees paid to the copyright collective by libraries and other institutions. Although Cancopy payments do not relate directly to book publishing, selling or distributing, they do reflect the extent to which the copyright collective has entered into the previously untapped photocopying market on behalf of Canadian writers and creators. Cancopy makes annual payments to its "Member/Creators" (writers who join the organization). Payments to writers who are not members of Cancopy are made directly to their publisher. Payments to foreign rights holders (which includes both creators and publishers) are made through the reproduction rights organization in that particular country. In 1999, Cancopy paid $2 million to some 3,450 member/creators.102
In 1986, Canada established the Public Lending Right Commission to pay authors for the presence of their works in public libraries. Payments are determined from a sample of the holdings of a representative number of libraries. The more often an eligible work appears in a library collection, the greater the payment an author receives, up to a set maximum which is determined each year, according to the number of writers, translators, illustrators, titles and libraries involved.
Table 4.1 shows that, in 1999-2000, the maximum payment was $3,445 and the average payment was $663. A total of $8 million was paid out to 12,148 writers, translators and illustrators. As Vicki Whitmell of the Canadian Library Association told the Committee, the importance of these payments is that they recognize the continued use of a book long after its initial launch.
When libraries maintain books long past their commercial lifespans, writers are served by both the continued availability of their work and the ongoing flow of public lending right payments, which in may instances will exceed royalty payments over time.103
Although The Writers' Union expressed a concern that payments in 1999 to authors had actually declined 15% over the previous year, the figures provided above do not substantiate this claim.
The Writers' Union also observed that the Standing Committee could recommend that the Government of Canada "enshrine the Public Lending Right in legislation and increase funding to the PLR Commission do that it can adequately compensate writers for the public use of their works."104 The Union's concern is that Public Lending Right exists because of a cabinet minute rather than a piece of legislation.
The Committee recommends that the Department of Canadian Heritage initiate an evaluation of the Public Lending Right Commission with a view to improving this important source of income for Canadian authors, translators and illustrators.
Chapter Three reviewed copyright issues as they relate to competition and ownership. This section looks at copyright law and its implications for creators.
Wanda Noel, a barrister and solicitor, presented the Committee with an overview of current copyright legislation, more specifically in the way it places a focus on territorial markets and geographical control. Most telling was her example of the American publisher who delayed the release of the second volume of the popular Harry Potter book series from Britain, only to find that young consumers in the U.S. were ordering it directly from Amazon's U.K. division. As a result, the U.S. publisher was forced to reconsider its scheduled release dates for its Harry Potter titles. As Ms. Noel explained, geographical control:
... is a thing of the past. I think of this almost as the genie having been let out of the bottle, because book buyers have ... been empowered by the Internet. They're out of the publishers' bottle of territorial markets, and it's going to be very hard to try to contain that book-buying practice by individual book buyers, even if Parliament or this committee decided it was a desirable thing to do so ...105
The Association of Canadian Publishers, representing 145 Canadian-owned publishing companies from every province expressed similar concerns: "The World Wide Web and growing access to online information require new measures of copyright protection for producers of Canadian content."106 Similarly, The Canadian Publishers' Council, which primarily represents foreign owned publishers operating in Canada, described the Internet as "a new place for copyright infringement."107
Both of these publishers' organizations believe that the federal government can play a key role in international copyright legislation. "We ...require: leadership in international copyright ownership policy, particularly as it pertains to digital delivery of intellectual property."108 Moreover, "Canada must ratify WIPO treaties immediately if any of our commercial aspirations in the digital age is to be realised."109
In written comments to the Committee, copyright lawyer Lesley Ellen Harris suggested that the emerging online world of publishing has potential benefits for Canadian booksellers and authors. At the same time, however, she pointed out that Canada has some catching-up to do.
U.S. legislation has already been enacted to protect copyright works and against copyright information being removed from electronic works. This gives U.S. book publishers and distributors [and by implication authors] an advantage over their Canadian counterparts with respect to electronic books. The U.S. changed their laws to conform with new international standards set out in two new copyright treaties that deal with digital copyright issues. Canada supports these treaties but has not yet changed ... legislation ... to adhere to these treaties.110
It should be stressed that The Writers' Union does not see electronic publishing as a threat to its members, as long as the appropriate copyright issues are resolved.
If we can develop an electronic system that produces a diversity of Canadian writing and delivers it in a way that the creators are paid and the readers have easy access to it, I think that's a wonderful prospect, rather than a threat. Again, we need to worry about market dominance and about who is going to control and whether the rights are going to be paid on them.111
In Connecting to the Canadian Experience, the Government's response to A Sense of Place, A Sense of Being, it was noted that consultations are ongoing between Industry Canada and the Department of Canadian Heritage "to assess what specific amendments to Canada's Copyright Act will be needed to implement the [WIPO] treaties."112 The response also contains a commitment to "work to keep the Copyright Act up to date, and to take into consideration the necessary balance between the rights of creators and the rights of access of Canadians."113
Accordingly, in the area of copyright legislation, the Committee observes that the principal issue is not only that of timing, but speed. As many publishers and Ms. Noel emphasized, the 'digital clock' is ticking.
I don't think we have a long time. The copyright issues dealing with digital exploitation of material are important tools that are given to the cultural industries to enable them to maximize their ability to earn royalties in an on-line environment. So I think it's important and we should move with dispatch, but when I look to the rest of the world, I wouldn't say we're behind. We could fall behind if we do nothing. I would very much like to see a copyright bill tables on these issues soon -- within the next year or so.114
Michael Wernick, Assistant Deputy Minister, Cultural Development, with the Department of Canadian Heritage concurred. He observed that:
There's a whole tangled mess of ... issues from Bill C-32 and the new technology issues. The treaties are a very important part of that. The government has made a commitment to implement them. ... We're trying very hard to find with Industry Canada some sequencing that will make sense. So rather than talking about phase three, where every issue will be on the table and it'll take you three years to get through the bill, maybe we can agree to a continuous process ... where we take on this issue, then this issue, then an issue, then this issue.115
The Committee recognises both the complexity of the issue and the efforts of the Department on this matter. Nevertheless, it remains the case that little progress has been made on copyright legislation over the last year. For this reason, the Committee repeats -- in this instance with timelines -- the recommendations made in its 1999 cultural policy report, A Sense of Place, A Sense of Being.116
The Committee recommends that by no later than the year 2002, Legislation implementing the two World Intellectual Property Organization (WIPO) Treaties be introduced by the government and enacted by Parliament.
The Committee recommends that by no later than the year 2002, the Government of Canada take appropriate measures to ensure that amendments to the Copyright Act keep pace with technological change.
90 James King: Jack A Life With Writers -- The Story of Jack McClelland, Toronto: Alfred A. Knopf, 1999, p. 107.
91 A Sense of Place -- A Sense of Being, p. 11
92 Meeting of the Standing Committee on Canadian Heritage, May 9, 2000, Unedited Copy.
93 Brief submitted by Christopher Moore, Chair, The Writers' Union of Canada, 21 March 2000.
94 Mr. Christopher Moore, Chair, The Writers' Union of Canada, 21 March 2000.
95 Ms. Carole David, writer and professor, Union des écrivaines et écrivains québécois, 21 March 2000.
96 The Canada Council for the Arts tracks the sales of funded books over two-year periods (see Chapter Two and Appendix C for recent Canada Council data).
97 Mr. Christopher Moore, Chair, The Writers' Union of Canada, 21 March 2000.
98 Ms. Lise-Ann Pilon-Delorme, author, letter to Committee (undated).
99 Mr. Christopher Moore, Chair, The Writers' Union of Canada, 21 March 2000.
100 Mr. Nigel Berrisford, Senior Vice-President of purchasing at Pegasus Wholesale, 24 February 2000.
101 Ibid.
102 Statistics provided by Wendy Noss, Corporate Counsel, Cancopy.
103 Ms. Vicki Whitmell, Executive Director, Canadian Library Association, 21 March 2000.
104 Brief submitted by The Writers' Union of Canada, 21 March 2000, p. 4.
105 Ms. Wanda Noel, Barrister and Solicitor, 28 March 2000.
106 Brief submitted by the Association of Canadian Publishers, 2 March 2000, p. 2.
107 Ibid.
108 Brief submitted by the Association of Canadian Publishers, 2 March 2000, p. 5.
109 Brief submitted by the Canadian Publishers' Council, 2 March 2000, p. 3.
110 Ms. Lesley Ellen Harris, Copyright Lawyer, submission read to the Standing Committee on Canadian Heritage by Ms. Wanda Noel, 28 March 2000.
111 Mr. Christopher Moore, Chair, The Writers' Union of Canada, 21 March 2000.
112 Connecting to the Canadian Experience: Diversity, Creativity and Choice, The Government of Canada's Response to A Sense of Place, A Sense of Being, November 1999, p. 20.
113 Ibid.
114 Ms. Wanda Noel, Barrister and Solicitor, 28 March 2000.
115 Mr. Michael Wernick, Assistant Deputy Minister, Department of Canadian Heritage, 9 May 2000. Unedited copy.
116 Recommendation 4 and 5, A Sense of Place, A Sense of Being, June 1999, p. 21