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CHPC Committee Report

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The Honourable Gordon Brown, P.C., M.P.
Standing Committee on Canadian Heritage
House of Commons
Ottawa, Ontario
K1A 0A6

Dear Mr. Brown:

On behalf of the Government of Canada, I am pleased to respond to the Standing Committee on Canadian Heritage’s report entitled Review of the Canadian Music Industry. I commend the Committee for undertaking this important study and thank all of those who appeared to share their views.

The Committee carried out an extensive study and heard from a vast array of stakeholders who conveyed their overall appreciation for Canada’s music support mechanisms and provided valuable insight on the many facets of the music industry. The breadth of recommendations included in the report reflects all of this, be it about funding programs, copyright regulation and awareness, music tourism and education or Canadian Radio-television and Telecommunications Commission (CRTC) regulations.

The Government is committed to supporting Canadian music artists, who are among Canada’s best cultural ambassadors abroad. Our Government has already undertaken many initiatives to ensure that Canadian music continues to shine both at home and on the world scene. Please rest assured that we will give due consideration to the Committee’s recommendations as we continue to update policies and programs in support of Canadian music to ensure they are well adapted to a digital economy.

The Committee report clearly highlights the many challenges and opportunities that digital platforms have presented for Canadian music artists and entrepreneurs. Today’s fast moving environment and shifting consumer habits are affecting the music business, requiring all players to innovate constantly to keep pace. This is not unique to Canada, but is occurring all over the world.

In fact, our Government recognized the need for Canadian music artists and entrepreneurs to have the means to stand out in a digital and global marketplace when we committed in Budget 2014 to renew supplemental funds of $8.8 million to the Canada Music Fund (CMF) on a permanent basis. I am confident that with a total ongoing envelope of $24.6 million, the Fund would provide the long-term stability the Canadian music sector needs to innovate and remain competitive in today’s challenging environment.

This is one example of our Government’s commitment toward the Canadian music industry. I will now address the specific recommendations put forward by the Committee.

Funding programs: Recommendations no. 5 to 9

We acknowledge the Committee’s recommendations to examine means by which the Government provides support to the Canadian music industry, including the structure of the CMF and other possible funding tools such as tax credits. In order to develop and promote Canadian music, particularly in a rapidly changing environment, access to upfront capital and financial flexibility of public programs are key concerns of the Canadian independent music sector. This is the type of funding that the CMF provides and that is most needed at this time to support the creation of, and access to, diverse Canadian music. Our Government therefore remains committed to the CMF as its primary financial tool to support the Canadian music industry.

In proposing permanent funding for the CMF, we recognized the key role this program has played in making Canadian music the success that it is now. Since its creation, the CMF has continuously adapted to industry realities. In 2009, the Government took steps to address important shifts facing the Canadian music industry. The CMF was streamlined to reduce administrative burden on applicants and changes were made to re-assign resources toward digital and international market development initiatives, two key priorities highlighted in the Committee’s report. As recommended by the Committee, we will continue to monitor the evolution of the environment through research and analysis of industry data and adapt the CMF accordingly. We will also take into consideration the Committee’s recommendation with regard to the administration of the Music Entrepreneur component of the CMF as we continue to refine the program and look into the most efficient means to achieve its objectives.

I am pleased to report to the Committee and to the taxpayers who are primary funders of Canadian music through the Government of Canada, that in 2014 my Department started to work on the acknowledgement of funds received by program recipients by updating the Guide on the Public Acknowledgement of Canadian Heritage Financial Assistance. The requirements highlighted in the Guide apply to all CMF program recipients, including third-party administrators FACTOR and Musicaction. We now account for new ways of communicating (e.g. social media) and make expectations clearer for recipients. Ongoing monitoring of recipients and third-party administrators’ compliance with public recognition requirements will take place. We will take appropriate action with those not complying with the requirements. I am confident that these steps will significantly improve the public’s recognition of federal funds being spent in support of Canadian music by all programs recipients, including FACTOR and Musicaction.

Copyright regulation and awareness: Recommendations no. 1 and 3

With respect to copyright, I agree with the Committee that the Copyright Act is an important legislative tool to recognize and protect the rights of Canadian creators in the sound recording industry. Through actions such as implementing the Copyright Modernization Act and ratifying the World Intellectual Property Organization (WIPO) Internet Treaties, we continue to ensure that Canadian performers and producers get recognized and paid for their work, both at home and abroad.

Our Government has taken a strong stand against copyright piracy, giving creators better tools to protect their investments in the digital environment and discourage online infringement. Through the “notice and notice” system, creators can inform internet users when they are suspected of infringing copyright; the “making available right” allows creators to control the release of material on the internet; and Canada’s “enabling liability” is a flexible tool that allows creators to take legal action against businesses that seek to profit from online piracy. Our Government encourages stakeholders to take advantage of these tools available through the Copyright Act. We also welcome collaborative, market-based solutions on how to effectively discourage illegal downloading, and look forward to engaging with cultural stakeholders on these initiatives as they develop.

On the time it takes for the Copyright Board to issue decisions, the Copyright Act provides the Board with authority to set its internal procedures. I understand that the Board is currently reviewing these procedures in an effort to streamline the royalty-setting process. Changes to that end could be considered as early as fall 2014. Beyond this, the next mandated Parliamentary review of the Copyright Act will be an opportune moment to consider important copyright issues, such as the broader framework in which the Copyright Board operates.

Music tourism: Recommendation no. 4

The report highlighted that live performances, either through concerts or festivals, are an effective means to promote tourism. Our Government supports the Committee’s recommendation of making music a key component of tourism marketing campaigns. In fact, the Canadian Tourism Commission (CTC) already promotes major music festivals as part of its ongoing marketing activities. Furthermore, the CTC is currently developing a multi-year plan in which music festivals and events would be used to entice youth to travel in Canada. This past summer, the CTC collaborated with the Pemberton and Osheaga music festivals to build music into the youth travel plan.

Department of Canadian Heritage programs provide support to music festivals and events that allow Canadians to experience live music in their communities and provide established as well as up-and-coming artists with opportunities to showcase their talent to new audiences. These music festivals are very important drivers for the tourism industry and generate important economic benefit. In addition to providing long-term stability for the CMF, Budget 2014 also put forth our Government’s commitment to renew on a permanent basis supplemental funds of $18 million to the Canada Arts Presentation Fund and $30 million to the Canada Cultural Spaces Fund.

As part of the Roadmap for Canada’s Official Languages 2013-2018: Education, Immigration, Communities, funding of $5.75 million for the Music Showcases for Artists from Official-Language Minority Communities (OLMC), as well as funding of $10 million for the Community Cultural Action Fund, were renewed for five years. These two initiatives provide OLMCs with access to musical performances, as well as arts and cultural activities in their language and help build the careers of OLMC artists, while also stimulating tourism in these communities.

Music education: Recommendation no. 2

While education, including music education, is primarily a provincial responsibility in Canada, our support to music festivals and events that engage Canadians helps increase their awareness, knowledge and appreciation of Canadian music. By supporting these initiatives, we recognize the benefit of building Canadians’ musical knowledge and skills, and support the overall intent of the Committee’s recommendation in that regard. In addition, knowing that education extends beyond the classroom, our Government introduced in 2011 the Children’s Arts Tax Credit to encourage the development of young talent in arts and culture, including music.

CRTC regulation: Recommendation no. 10

Finally, with respect to the Committee’s recommendation to provide the CRTC with the capacity to enforce the requirement for broadcasters to pay their required Canadian Content Development contributions in a timely manner, while we agree that contributions should be paid on time, our Government does not believe that additional enforcement powers of general application with respect to CRTC broadcasting regulatory obligations are appropriate at this time. We will explore options moving forward.

On behalf of the Government of Canada, I would like to thank the Standing Committee on Canadian Heritage for its report. Please rest assured of our commitment to continue to support Canadian music through policies and programs that encourage creativity and innovation, as well as support global competitiveness in a digital economy while ensuring effective spending.

Please accept my best wishes.



The Honourable Shelly Glover, P.C., M.P.