Good morning, and thanks for the invitation to present on behalf of The Writers' Union of Canada.
Our organization represents 2,100 professional authors across the country, and we chair the International Authors Forum, with over 700,000 members globally.
Copyright is core to how we as creators earn a living: Erode copyright, and you erode writers' incomes. It's that simple. Earning a living as a writer is difficult at the best of times. It's been immeasurably more difficult in the past decade, as we've seen sweeping digital disruption across the creative industries. We hear that content is king in the digital age, but the creators of that content are being paid and treated like serfs.
In 2012, Canada's authors and publishers were asked by Parliament to trust and respect a new understanding—a new model—around educational copying and fair dealing. What followed was anything but fair for writers. It's been a disaster, and our members have felt it first-hand. A recent survey of Canadian authors received almost 1,500 responses, and here's what they told us.
Authors have suffered a 27% decline in incomes in the past three years alone.
Compared to 20 years ago, we've seen our real incomes decline by 78%.
The average net income from writing is only $9,400.
Even worse, income from educational copyright royalties has declined on average by 42% in five years as a result of illegal free copying by the education sector.
In 2012, as Parliament was reforming the Copyright Act, writers knew that we faced a difficult road ahead. Not surprisingly, we've been adapting. More of our member authors are self-publishing, and the writers' union has been delivering professional development workshops on self-publishing, book promotion and publicity. Many authors are embracing entrepreneurship, yet writers are now expected to do more for less or, even worse, for nothing.
As our publishing partners can confirm, producing content isn't free. Researching, writing, rewriting, editing, graphic design, layout and distribution all cost money, yet authors are now expected to work for free for the benefit of the education sector. In fact, with recent proposed changes to the Copyright Board of Canada, our serfdom has been confirmed. The reality for Canada's writers is that the copyright board is toothless. We work for it, but it doesn't work for us. We put in the time and effort to get tariffs approved, and when they are approved, the education sector simply ignores them.
We have asked for statutory damages for our tariffs to encourage compliance by the educational institutions, but the government has declined to make that simple change. We are discouraged and disappointed by that decision.
Perhaps we should look to the Europeans on how to balance copyright, privacy and online content in the digital age. The European Parliament recently passed a directive laying out rules for how content is to be protected and paid for by giant tech platforms that have long avoided regulation. The directives require platforms and aggregators online to pay for licences for the use of content snippets.
As well, the directive imposes greater responsibility on the platforms for lawful sharing of content online, a measure that should help in the fight against content piracy and provide a new licensing opportunity to authors for the use of their work online. The Europeans are disrupting the disruptors and telling Silicon Valley that a business model built on others' free labour is unacceptable.
Another disruption from the tech sector itself could also prove valuable to creators. There's increasing talk that a new decentralized technology could allow creators to circumvent centralized platforms and connect directly to readers. The technology, called a distributed ledger or blockchain, has been around for decades and has become famous recently for powering cryptocurrencies like Bitcoin. Blockchain could now disrupt books.
How does the technology work? The platforms of Amazon, Apple, Facebook and Google are essentially gargantuan centralized relational databases. They are intermediaries controlling our relationship to readers and facilitating sales transactions.
In contrast, distributed ledger technology has no centralized authority controlling a database. Instead, transactions are stored on immutable ledgers, which are replicated on many computers across a peer-to-peer network. Since the ledger actually exists in many places, it's really hard to hack.
Transactions can be bundled into what they call digital blocks on a chain, which gives the technology its name of blockchain. For a book, these transaction blocks could be for the authorship, publishing, distribution and ultimately, the reader's purchase. The technology could have several applications for authors. It could guarantee attribution of a digital work to an author or rights holder. Through smart contracts, it could distribute and authenticate copyrighted material to readers, and via a digital wallet, it could automatically distribute royalties, directly and immediately, back to authors.
A number of tech start-ups are already using the technology to distribute content and reward creators, including blockchain publisher Publica.io, Smoogs.io, Po.et, and authorship.com. Access Copyright launched its own start-up, Prescient Innovations Lab, to build and test blockchain technology that is focused on the creator. The Writers' Union supports Access Copyright in this pioneering work.
The Writers' Union of Canada is committed to innovation and to empowering our members to adopt new technology, new skills and new business models to survive. Given the sorry state of our earnings, we have little to lose and a lot to gain.
There is possibly something promising in the new technology on the horizon to help us develop new, innovative remuneration models. However, stronger copyright is key. Fair dealing needs to be fair, not free, for educators, and we need a Copyright Board that's more than a paper tiger. Significant statutory damages will give the Copyright Board some teeth in dealing with those who refuse to pay their tariffs.
If we value culture, then we must value the work of those who produce it. The Writers' Union will submit a brief detailing the ideas I've discussed, and we're happy to take questions.
Thank you to the chair and committee members for the invitation to appear on behalf of Universities Canada.
We represent Canada's 96 universities, whose teaching, research and learning mission is key to providing Canadian students with the skills they need for the knowledge economy.
Thank you to each one of you for the vital role that you are playing in the statutory review of Canada's Copyright Act, particularly looking at remuneration models for artists, including writers and creative industries.
Universities across this country play a vital role in supporting Canada's creative communities. From the beautiful new campus at the Emily Carr School of Art and Design to the Purdy Crawford Centre for the Arts on Mount Allison's campus, universities are hubs for Canadian creators.
It is for this reason and based on the importance of a balanced approach to copyright that Universities Canada and its member institutions have been actively engaged in the INDU committee's review of the act, as well as contributing to the Government of Canada's 2016 review of Canadian cultural policy.
I am very pleased to be joined today by Allan Bell, who is the associate librarian for digital programs and services at the University of British Columbia. Like universities across this country, UBC has implemented extensive measures to ensure compliance with copyright law. Mr. Bell would be happy to take any questions that you might have about how copyright compliance works on campuses.
Universities are producers, owners and and users of protected documents, and advocate for a balanced approach to copyright.
Universities stimulate the creativity of millions of students, allow researchers to give free reign to their intellectual curiosity, and strengthen communities.
Our sector respects copyright and helps artists and emerging and established creative industries to succeed.
We are fully aware of the real financial difficulties experienced by many Canadian artists like musicians and authors. However, we also know that fair use by educational institutions is not the reason for those difficulties.
The reason, rather, lies with the disruption caused by digital technologies, which change the way content is consumed the world over. That is the main problem that needs to be overcome by copyright holders.
When they testified before your committee last November 22, federal officials spoke at length about the impact of the digital disruption on Canadian creative industries. They also recognized that changing the Copyright Act was not the most effective strategy to improve creators' remuneration.
This is also what we observe on campuses across the country.
Universities value copyrighted material and are committed to copyright compliance. Canadian university library expenditures are increasing annually, exceeding $1 billion over the past three years combined; however, to meet the evolving needs of their communities, libraries are changing what they buy.
Students today are demanding access 24 hours a day across multiple platforms. For example, at the University of British Columbia, the library's digital resources grew from 21% in 2002 to 82% in 2017. That's a 60% shift in just 15 years. Over that same period, the circulation of the library's print collection steadily declined. Nearly 70% of the library's print collection has not been taken off the shelf, let alone signed out, since 2004. That's 70%.
There has also been a sharp increase in the use of e-reserve systems instead of printed course packs. In other words, new platforms for accessing course materials are enhancing educational opportunities offered to students and are making university studies more affordable and accessible.
Unlike printed books, digital content accessed by university libraries generally includes reproduction rights. Contracts control how this content is used and whether fair dealing applies. In most cases, content is shared though links by protected digital locks rather than copied, so that reliance on fair dealing is actually decreasing on campuses across the country. As a result, limiting fair dealing through changes to the Copyright Act would not be an effective tool for subsidizing an industry that, as we have just heard, is trying to adapt to the changing values and consumer patterns of its customer base.
The Supreme Court of Canada has identified fair dealing as a right and has repeatedly recognized the importance of balancing copyright interests. Five landmark decisions made by the court in 2012 transformed the way copyright is being managed, and they were a genesis for a shift in the way the education system is approaching copyright. However, the legal context for fair dealing is continuing to evolve. Several active court cases are still pending. Parliament should allow the courts to continue their work before further legislative intervention.
While limiting fair dealing for education is not the solution, the government can indeed mitigate the impacts of digital disruption on the creative community. We encourage committee members to consider policies and programs that can directly assist individual creators and support industries that help get creators' works to market. For example, federal funding programs and organizations that provide direct support to current creators could increase. This might include organizations like the Canadian Council for the Arts, which manages a program called the public lending right, which provides financial compensation to eligible authors for lost royalties due to public access to their books in Canadian libraries.
On support for industry, such programs as the Canada Book Fund or Creative Export Canada, both managed by the Department of Canadian Heritage, assist publishers and other organizations, including not-for-profits and indigenous governments, in helping Canadian creative content reach local and global markets.
Finally, an expanded investment in work-integrated learning and entrepreneurship for students across all disciplines, including the full scope of fine arts and arts disciplines, will help prepare Canadian graduates for the changing global creative economy. Canada's future prosperity and the success of our creative industries depend on an exchange of ideas and knowledge. Changes to fair dealing would stem this vital flow, hampering the education, research, innovation and creation that are essential to a vibrant and thriving cultural economy.
Thank you for the opportunity to come and speak with you today. We welcome any questions you might have. That includes Mr. Bell, who will provide further details on how copyright materials are accessed and managed at the institutional level.
Thank you very much.
Thank you very much, and good morning, everyone.
We want to first of all thank all of you for the opportunity to appear before the committee, and we certainly appreciate being asked for our perspective on the critical question of creator compensation and copyright in Canada.
My name is David Swail. I am the president of the Canadian Publishers' Council. With me is Kevin Hanson, president of Simon & Schuster Canada and vice-chair of the Canadian Publishers' Council.
This morning I will briefly outline our principal concerns with the state of creator compensation in Canada, and I will also introduce to the committee our solutions, including some legislative amendments and the co-creation of a digital commons for Canadian educators.
First, if you'll allow me, I'll provide you with a little bit of background on the Canadian Publishers' Council and our membership.
Our organization represents 16 of Canada's largest publishers, operating across all segments of our industry, including trade publishing, higher education, K-to-12 and professional.
Our members are a mix of both Canadian-owned firms and Canadian subsidiaries of global publishers, such as Penguin Random House, HarperCollins, Simon & Schuster, Pearson and Scholastic, among many others.
Our members' aggregate revenue in 2017 was $853 million. Collectively, we directly employ more than 3,000 very highly skilled, knowledge-based workers in this country and many thousands more in freelance and contract capacities as writers, editors, subject matter experts, designers, illustrators, and researchers, and the list goes on. We are all for-profit companies among our members, and most of our members receive no government grants for their undertakings.
We are very proud to be part of a very vibrant and successful industry. I think that point gets lost often in our discussions about the state of the sector.
Canadians are among the most highly literate and supportive reading public in the world, and our authors are celebrated as never before, both in Canada and globally. Our educational publishers are widely recognized for their expertise and are key contributors to global initiatives within their firms across the world. We want to continue building on that success and developing both Canadian writers and Canadian publishers and bringing more Canadian authors to global audiences.
Our members are very heavily involved in creator compensation, as you would expect. In fact, our business very much depends on it. At last count, our members had more than 9,000 Canadian authors in print in Canada. We compensate many thousands of Canadian creators in myriad ways, and I'll just outline them quickly.
First is direct employment. We employ editors, writers and designers directly. We spend about $226 million every year, and related costs include benefits, pensions, employment insurance, etc. We are big employers; in fact, we are the biggest group of direct employers in the sector.
Contract and freelance is an area where we engage creators on a contract basis, working with artists, photographers, illustrators and subject matter experts across a very wide spectrum of publishing endeavours. In aggregate, our freelance and contractor expenses are in the order of $15 million annually.
Author royalties and advances are a very important part of what we do. We advance pre-publication royalties to authors and other creators in an amount of approximately $36 million every year. As you probably all know, much of that total is never really earned out by subsequent book sales. In other words, we essentially subsidize the creation of Canadian creative work and culture by many, many millions of dollars every year as for-profit enterprises. In that process we keep creators employed and engaged along the way.
How has the creator compensation model been affected, in our experience, by copyright modernization, and particularly the fair dealing exception for education?
The first and most obvious way that we have all heard about is in the breakdown of collective licensing in the education sector, outside of Quebec. It's well documented that the near-total collapse of that licensing is costing creators some $30 million annually, with licensing royalties down about 90% since 2012.
For writers, whose annual compensation, as the Writers' Union has recently publicized, is estimated at about $9,400 a year, that is a significant hit to their incomes.
There is a major spillover effect as well for our members. Our publishers are finding it increasingly difficult to engage creators in educational publishing projects in particular, as they turn to other, more reliable means of making a living while they see royalty payments shrinking.
A further corollary effect, and perhaps more concerning in the medium and long term, is that investment in Canadian learning resources is dropping. We have had several significant K-to-12 publishers discontinue or exit their publishing program, causing significant job losses, and as I mentioned, these are well-paying, knowledge-based jobs that we believe are critical to the future of this country and this economy. Oxford University Press, McGraw-Hill and Emond Montgomery have all left the K-to-12 sector in the past few years in response to an environment they feel is no longer commercially viable.
Statistics Canada indicates that the book industry has lost about 3,800 jobs since 2012, and that's a 27% decline. Investment loss has also, as you would expect, reduced the quality and the quantity of Canadian learning resources for K-to-12 students in particular, and this is not just about print textbooks.
Canadian publishers among our members and also among the Canadian firms at the ACP have been world leaders in the development of learning technologies. We've built Canadian solutions and adapted global platforms for Canadian students, and have been embarked on that endeavour for many years with great success. The efforts led to a major redirection of publishing investment, away from print and towards technology that is adaptive to student needs and therefore more efficient, more current and often ultimately less expensive for education customers. That investment and the improvement to learning outcomes that comes with it for students is inherently at risk when the market for compensated content is diluted or eroded. We're also at risk of reducing the Canadian stories and voices that are used in our classrooms as creators and publishers reduce their time and investment in the sector.
To maintain Canada's considerable achievements in education, therefore, we must encourage rather than penalize investment and innovation in Canadian educational resources. It's critical to Canadian student outcomes and their ability to compete in an increasingly global job market.
To summarize, in addition to direct compensation for creators, the areas that are hurt most by what we consider to be very ill-defined legislation in copyright are jobs, investment and innovation. I can't think of any government in the world that would want that track record. Add to that list a diminishment in Canadian culture and a loss of Canadian stories and voices in our classroom and you get a full picture of what ambiguous legislation has brought about for us since 2012.
Let me turn now to solutions, which we're far more interested in talking about.
Alongside the adoption of technology in education, the use of—
I'll go quickly. Thank you.
The use of excerpts will continue to be a solution in classrooms, as shown by the many millions of pages that are copied in classrooms every year. To facilitate access to that content, we propose developing an online portal, which we're naming “the digital commons”, that can serve educators and students in a far more efficient manner than the current largely paper-based approach that predominates.
With the Association of Canadian Publishers, we have been conducting initial research into this concept, and we looked to Quebec for a model called “SAMUEL”, which we think is a very good starting point. We think it's an important step, this project towards normalizing the commercial use of educational content that has been eroded by lack of clarity in the current legislation.
However, a digital commons alone will not help without change to the legislative language. Many of us in the creative sector have proposed very specific solutions to that language, including as a first step the harmonization of statutory damages, which we've heard about. We would encourage the government to consider looking at those solutions, and we would also be happy to come back to this group with the legislative language we have proposed over the past several months.
In closing, we would ask this committee for a very specific recommendation in your report that compels the Government of Canada to support the publishing industry's call for a solution to our challenges by considering funding for the digital commons initiative and a resolution to the legislative situation that restores the commercial marketplace for educational resources.
Thank you. I'm very happy to take questions when the time comes.
Universities in Canada are in a competitive business, but we're not competing with print publishers or the collective rights administrators over royalties. We're competing on an international level to produce the best research and create the best teaching environments. To do that, the best tools....
Frankly, print-based materials are being replaced with enhanced digital content, content that is more than just words on a page, content that is available to our students 24/7, and content that is directly licensed. There is no reprographic need with digital content that we've licensed directly. In our particular case with our e-reserve system, fully 54% of what we provide by our e-reserve system is already licensed by the library. Another 10% is available through open access content. Only 19% is done through the fair dealing analysis. Then we get transactional licences for the rest of them.
That's a fairly common breakdown for most of the universities out there. Really, it is not based on the fair dealing in the Copyright Modernization Act; it's based on the landmark decision in July 2012 wherein the Supreme Court of Canada recognized that teachers are “there to facilitate the students’ research and private study”. Teachers cannot “be characterized as having the completely separate purpose of 'instruction'”. As well, “the teacher’s purpose in providing copies [to students] is to enable the students to have the material they need for the purpose of studying”. The Supreme Court of Canada characterized teachers as sharing “a symbiotic purpose with the student/user” who is engaged in research and private study.
On this basis, the Supreme Court of Canada has decided that the fair dealing exception allows teachers to make copies of copyrighted works and distribute them to students as part of classroom instruction without a prior request from the student, subject to appropriate conditions, and we have created those appropriate conditions in our e-reserve system. More and more of our faculty are availing themselves of our e-reserve system based on this particular Supreme Court decision.
It's not fair dealing that is actually the problem here. The problem—and I have great sympathy for the authors in this as well—is that because of the digital disruption, we've shifted most of our purchasing into digital licences. For fiscal 2016-17, we spent $14 million on digital licences. Those digital licences, again, are not subject to an Access Copyright or reprographic licence after the fact.
We had print expenditures of $1.5 million in book monographs in 2016-17 and $1.2 million in serials. There are certain areas, such as design, where we still do print, but for most of the journals we get and for many, many of the books we get, we directly license them.
Well, unfortunately, Mr. Bell, although I don't want to talk for everyone in this committee, it's becoming quite clear, even for the Conservatives—
Voices: Oh, oh!
Mr. Pierre Nantel: That's why I was smiling. When Mr. Blaney was asking you about this, the reality is that his predecessor, Peter Van Loan, was under the impression that this fair dealing exception had been abused.
Bizarrely, with collective bargaining—we will be fighting all weekend on collective bargaining and the postal system—collective bargaining is a right in Canada, and the publishers have organized this the best way they could to make this happen. In Quebec, it works, but in the rest of Canada, it doesn't seem to work.
This is why if I ask you if there is any fair dealing for hydro or insurance bills, you're going to tell me, well, it's.... Yes, I understand, but the principle is that they don't get the money anymore. That's it, period. Pfft. They try to make a living. So do the hydro guys and the cafeteria people in the university. That's the point.
I think that as politicians—I've been here seven years—we've heard all the typical lobby talk from everyone: “No, we'll stand on this; this is so important”, etc. The reality is that we'll have to get together and the reality is that we saw five years ago that the fair dealing exception has created big damages. Everyone was well intentioned, I would say, but the reality is that we have to talk and we have to reach a settlement.
On that point of view, if I have some time remaining, I will ask Mr. Hanson and Mr. Swail to tell me more about the K-to-12 nuances that you come here with. There is, of course, paying the copyright, but also, for me, when it's the K-to-12 period, it should be only Canadian literature, period.
I won't make this a history lesson, but our sector has evolved very much as a result of moving from a business that was largely based on importing foreign product—American largely, but also British—to today, when not only are we leading in terms of providing the Canadian marketplace with educational resources but we're recognized globally, especially for our creative artists and creative writers, for their work right across the globe. That transition has been a result of our building a sector that tells Canadian stories by Canadian authors with Canadian voices, and it's been just as important in education as it has been with trade publishers, such as Simon & Schuster.
The best example I could probably give is Oxford University Press. When they decided to exit the K-to-12 publishing sector because of concerns over the interpretations of fair dealing, they had a Canadian history manuscript on the books. They shopped it around to the rest of the sector to see if anyone wanted to take that manuscript off their hands for publication, and nobody touched it.
There's a very real example of a Canadian history textbook that died on the vine because of a major leading global publisher having concerns about the integrity of the Canadian marketplace, and voila, we don't have another Canadian history textbook to replace it. That example can roll through almost every discipline you can think of.
Then you think about STEM—science, math, etc.—and how critical it is that our students be competitive in those fields. Our business, again, has been built on creating Canadian examples and Canadian relevance for K-to-12 classrooms, and that's seriously at risk. When something as small as 30 million bucks is taken out of the system.... It's not a highly lucrative, highly profitable business to start with.
Education is different in British Columbia from what it is in Newfoundland. I can build a beautiful textbook for Ontario; I can't sell it in Manitoba. I have to build a whole new one. It's very inefficient to start with; therefore, it's not a highly lucrative, high-margin business. Then when you slap fair dealing interpretations on top of it, it's no wonder firms make the decision to exit. That hurts everybody, but most of all it hurts students.
I wish I had 17 minutes. I've only been here for three years, and this may be one of the rare times when the Liberals, the New Democrats and the Conservatives are finding some sort of consensus on the matter.
I'd just like to clarify one thing. Yesterday we announced an aid package to assist journalists in their creative work, and today we are discussing authors and copyright.
I sympathize with Mr. Blaney and his then-government in 2012, which likely worked really closely with authors, very closely with the copyright officials, and with universities and educational institutions for a bargain. The bargain was to be fair, to respect fair dealing and to respect the 10% rule. I remember copying the chapters, but I remember paying the fee to do so.
Glenn Rollans, who has been here, has said that $26 would cover off all of Universities Canada's tariffs. That $26 per student would help to reduce the $50 million that isn't in the system. Maybe it's $50 million; I heard $30 million and $50 million, but I have documents here that say it's $50 million.
I'm a proud university grad. I went to the University of Alberta. I went to the University of Oxford. I have represented universities across the country as a student leader. What has happened is that the government, copyright and authors got into what has turned out to be a Faustian bargain with a sector of the economy that I respect greatly. The deal that was made in 2012 has not been respected by universities. Why would you choose to pay lawyers and go to court, and have no risk in doing so, and not just pay authors?
You could go to student leaders and say, “Put two cheap bottles of wine on the table, or a really good one, or put half a video game on the table to make sure the authors who are writing about LGBTQ people, indigenous people, people with disabilities, people of colour, and Canadian stories can have those books on university shelves in courses, digitally or not.”
We lead the world in AI. The Chinese are trying to beat us. We're not going to have Canadian textbooks in AI unless you fix this and start respecting the bargain that you made in 2012.
Now we have a similar conundrum in the 2017 review. Why would you choose to go to court, when there is no risk? Let me share this with you, because we can be selective in court judgments, Madam Therrien. At Federal Court in 2017, Justice Michael Phelan wrote, and I quote:
There is no explanation why 10% or a single article or any other limitation is fair.
Qualitatively, the parts copied can be the core of an author’s work, even to the extent of 100% of the work.
Equally importantly, listen to this. This is shocking: “allowing universities to copy for free that which they previously paid for” is not fair.
Help me square the circle. Why are you going to court, where you have no risk, instead of mobilizing and getting the $26 per student so that authors can be paid?
Thank you very much for your question. I really appreciate the passion and the energy that you bring to it. I say that in all seriousness.
This is a question of balance and it is a question of transition. This is a time of transition. It started before 2012, and it has accelerated since then. Back in 2011, did we know where we would end up in 2017? Not exactly.
I think one of the challenges that the committee has before it right now—and that we all have before us as a sector where, as you say, we are interconnected with one another—is to try to predict where we need to be in the future and to set up a business model that would allow us all collectively to make the best use of taxpayer dollars. Let's not forget that education is completely taxpayer-funded in Ontario and Canada, so where are we using those resources, and to what end? To what extent should we be paying for resources?
Of course we should be paying for resources. We continue to pay for resources. We talked about that, so I'm not going to reiterate it, but we do continue to pay to clear copyright.
The business models are changing. We needed to change the way we acquired resources. We needed to change toward digital collections. At the same time, Access Copyright probably needed to change its repertoire. It sounds like there's an evolution that's happening there as well. The publishing companies also changed the way that they do business.
We need to continue to evolve together in a way that works for the Canadian taxpayer, for Canadian students, but that also respects the right for fair dealing.
I appear before you today on behalf of the Canadian Copyright Institute, an association of authors, producers, publishers and distributors of copyright works. Founded in 1965, the institute seeks to encourage a better understanding of copyright.
We strongly support two basic models for the remuneration of authors and publishers. The first is the traditional publisher model, in which the publisher holds and manages the rights of professional authors, whose works they edit, design, produce, market, sell and distribute. The second is the exercise and management of some rights by collective societies representing authors and publishers. Both basic models are important, as they support each other. Collective societies engage in experiments to provide educators with convenient sources of copyrighted material, and publishers continue to experiment with new methods of delivery, including new ways of making works available.
Getting permission to make copies of published copyrighted content was onerous prior to the formation in 1988 of Access Copyright, which at the time was known as CANCOPY. This is a collective society that today represents more than 12,000 Canadian authors and 600 publishers and, through agreements with other collectives, countless authors and publishers worldwide.
When Access Copyright's blanket licences became available in the 1990s, the arduous task of clearing individual permissions from individual rights holders was replaced by negotiated collective licences covering most published copyright material. Collective licensing became the norm for copying at schools and other educational institutions. It was easy, efficient and cheap for educators to access content from both Canadian and foreign publications from Access Copyright and Copibec. Authors and publishers were paid by these collective societies.
Today widespread, large-scale, systematic copying of copyrighted content in educational institutions, without compensation, damages the remuneration models I have described and hurts both authors and publishers. Copying substitutes for purchasing books and other publications from publishers and for obtaining licences, mainly from collective societies, to copy excerpts from publications. Emboldened by the 2012 copyright amendment extending fair dealing to include education as a purpose, educators decided that most of what was being copied should not be paid for at all. They promulgated arbitrary fair dealing guidelines permitting, for example, copying of 10% of a work, a chapter from a book, an article from a periodical or newspaper, or an entire poem or artistic work from a publication containing other works.
These guidelines more or less reflect the guidelines in the licences that educators had negotiated with Access Copyright and complied with for over 20 years. The only difference is these new guidelines provide for no revenue. The market for selling and licensing copyrighted material is now badly damaged, both for publishers and for writers. A reduction of revenues in an industry such as ours with narrow profit margins for publishers and low income for writers and authors is significant.
Before moving to our specific recommendations, let me say that we welcome the amendments in the budget bill, Bill , intended to accelerate Copyright Board proceedings, including case management and new timelines. We generally affirm our support for the role of the Copyright Board in setting tariffs and mediating disputes on licensing terms between users and collective societies.
Our recommendations to you today fall into two categories, both essential for the functioning of the two remuneration models we have described. The first recommendations address what may be licensed by collective societies, and the last recommendations concern enforceability and remedies that will deter infringement and encourage users to negotiate seriously with collective societies on the use of copyright material.
First, we recommend that copying for the purpose of education in educational institutions be clarified by clear parameters, either in regulations or in the Copyright Act itself. There are already a number of specific exceptions designed for educational institutions, but fair dealing for the purpose of education is a wide-open door for large-scale infringement.
Australia provides an example of a statutory licence for educational institutions managed by a collective society designated by the Australian government and subject to guidelines. In the United Kingdom, copying of excerpts from a work for the purpose of instruction for non-commercial purposes without a licence is restricted to not more than 5% of any work in any 12-month period, but only to the extent that licences are not available for that copying.
This is a precise exception, not a category of fair dealing.
Copying for the purpose of education in Canada should require permission either from a collective society or a rights holder. For most educational institutions this permission should be a comprehensive or blanket licence, which is either an agreement negotiated by a collective society and users of its repertoire, subject to the oversight of the Copyright Board, or a tariff administered by a collective society requiring the approval of the Copyright Board, usually following a hearing.
Second, we recommend clarification that tariffs approved by the Copyright Board are mandatory. There should be no uncertainty regarding the enforceability of royalties set by the Copyright Board. The education sector is unlikely to pay voluntary tariffs.
Third, we recommend the repeal of a provision inserted into the Copyright Act in 2012 that reduces awards of statutory damages against non-commercial infringers to trivial amounts. Any copyright owner whose work is infringed should be entitled to damages sufficiently high to be a deterrent, whether the infringer had a commercial or non-commercial purpose or whether any other copyright owner has elected to receive damages from the same defendant. Few authors or publishers have the resources to engage in the litigation necessary to prove actual damages. Electing statutory damages avoids the necessity of that much litigation.
Fourth, we recommend harmonizing the statutory damages available to collective societies at a level sufficiently meaningful to ensure better compliance with licences and tariffs approved by the Copyright Board. Currently, performing rights collectives like SOCAN may opt for an award of statutory damages between three and 10 times the amount of the applicable royalties. This remedy should be available to all collectives, including collectives like Access Copyright. Otherwise, the worst-case scenario for a user is retroactive payment of applicable royalties.
There is no reason musicians and songwriters deserve to be paid for the use of their work while authors and visual artists do not. We recommend that all copyright collectives should be eligible to collect statutory damages between three and 10 times the value of the tariff. This system has worked well for performing rights music collectives for 20 years and should be extended to collectives representing other rights holders.
It is our view that changes to the Copyright Act along the lines we recommend will provide fairer remuneration for authors and publishers and better access to creative works for users, will go a long way towards restoring a functioning marketplace for Canadian content and will benefit all Canadians.
Yes, if you don't mind.
Thank you, Madam Chair and members of the committee, for inviting me to this meeting. My name is Paul Verhaegh, and I'm the regional director for the Prairies and the north of the Professional Writers Association of Canada, PWAC, a Canadian association for people who have made writing their profession.
Copyright is a crucial instrument for our members. Without copyright they would not have any ownership in what they produce. In such a situation, writing professionally would be an unpaid hobby instead of a way to make a living.
Two issues are of particular concern to our members. First, there is the fair dealing rule in the Copyright Act for educational institutions. It is our opinion that the fair dealing exception for educational institutions has been abused at the expense of both publishers and authors.
We warn that this exception could not be limited to a fair quotation exception. A fair quotation exception would mean that reproducing parts of an existing work is acceptable to support or illustrate a point made in an educational text, and should not constitute the point of such a text. Copying more than a few pages of an existing work, let alone a whole chapter of a book, should be excluded from the exception and should give rise to payment of compensation. Turning copyright into a “right to copy” undermines the publishing industry and destroys the writing profession.
The second point is whether or not to extend the copyright protection from 50 to 70 years after the death of the creator. In many countries this has been done already, but not in Canada—at least, not yet. PWAC tends to favour the extension.
Some will argue that such an extension only benefits the heirs of the creator and not the creator himself or herself. We don't see why that would be a reason not to extend the copyright protection, since in our society it is the rule and not the exception that heirs benefit from what a deceased person created and produced during his or her lifetime.
Last, I would make a remark in general about copyright legislation. We live in times of rapid technological developments, and the pace at which new technologies appear will not slow down. Laws, including copyright laws, will only last if such laws are functional enough to make room for future developments in technology. Therefore, PWAC says: accept and embrace technological change, but do protect the ownership rights of creators.
Thank you very much.
My name is Doreen Pendgracs. I'm from Manitoba, and I am the national vice-president of PWAC. We really appreciate the opportunity to participate in the discussion.
I sat in on the hour that preceded us and was happy to see The Writers' Union of Canada participating, because I am also a member of that organization, as I am a hybrid author. I write books and I've been traditionally published and have self-published as well, and I do freelance writing and a number of other things.
The point that I'd really like to make is that most writers nowadays have to do a number of other things to create a significant income on which to live because, as you heard in the last hour's testimony, the average annual income of a freelance author is $9,400, and I'm sure that's below the poverty level by a considerable amount. This means most writers do have other jobs that they take on to be able to exist and pay their bills.
For me, I earn more money from speaking about the kind of writing that I do than from the actual writing, and that includes sales of books, writing freelance articles and doing other kinds of writing.
Writing has eroded very much since digitization became common. I started freelancing in 1993, and in the 1990s and even into the early 2000s, I could make a very comfortable income from my writing, but when the digital world opened up, it took the rates way down. Now we have a very large segment of the writing community who will write for free, just to get their names out there, because they're told that will give them the exposure they need in order to get published in a more fair-paying market, but that's not true, because once you get yourself in the ghetto of writing for publications and markets that pay very poorly, it's very difficult to make your way up.
As a result, most of us have had to find other ways to create incomes, because we are being driven out. The writers who were making good money and writing for a dollar a word or two dollars a word are now having to settle for 50 cents a word in many cases, because many publications have lowered their rates. Some are paying nothing at all for content and just saying that it's good exposure.
I'm a travel writer, so I enjoy the opportunity to take trips in accordance with a lot of the writing that I do, but there's a big bubble in the population—new retirees—who are doing that kind of writing for free, because they don't care if they get paid. They just want to take a trip.
As professional writers, we're finding we're combatting so many different groups that don't care if they get paid. The biggest ones, I guess, are the content mills that come out of India and Pakistan. Those people will write for nothing or for five dollars for an entire article, because that's what their markets pay.
I was very encouraged by the commentary in the last hour about the fact that some of the members of the committee here understand the importance of Access Copyright and what it has tried to do to protect the rights of writers. I sat on the Access Copyright board for six years as a member of the creative community, and I really valued what we were doing.
Now, unfortunately, Access Copyright is a mere shadow of what it used to be. The incomes have dropped so much there that they've had to get smaller offices and reduce their staff, and they're not able to provide the same kind of service to their members. Plus, as you heard in the commentary earlier, they now have three times as many members as they did before, so people are gravitating there thinking it's going to help them, but in the end, it's really not.
There are so many things that are preventing writers from making a fair living. Somebody said something in the previous hour that I wanted to rebut: the idea that the Canadian Council for the Arts has a public lending rights program that helps authors get income. Those programs do not pay royalties for non-fiction books, such as travel guides or self-help books, and unfortunately for me, my books have never qualified under those programs because they are mostly travel guides. I wrote a book on volunteerism, and they said it was a self-help book and disqualified it.
Those programs do exist, but they mainly help literary writers, and it's the same with the Canada Council grants. As a result, there is a group of us writers out there who are trying to make a living, but it's getting harder and harder.
Madam Chair and members of the committee, thank you for the invitation to testify before you today.
I am Arnaud Foulon, vice-president of the HMH Group and president of the Association nationale des éditeurs de livres, or ANEL. I am joined by Johanne Guay, vice-chair of publishing at Groupe Librex and chair of the Copyright Committee and Members' Rights. Our director general, Richard Prieur, is also with us.
ANEL brings together about one hundred Canadian French-language publishing houses of all sizes, in four provinces. These enterprises publish approximately 5,000 titles every year, which range from novels to how-to guides, and include scientific works, school books, art books, poetry and plays.
Historically, ANEL has always advocated for the reaffirmation and strengthening of copyright. In 2009, we presented a brief to Canadian Heritage and Industry Canada on the reform of copyright in the digital age. In 2012 we submitted several amendments in the brief we tabled with the legislative committee studying Bill . None of the amendments we submitted were taken up.
We are here before you again in 2018 to discuss remuneration models for artists, at a time when technology is disrupting traditional models. Let's be clear; we are discussing the value placed today on a work as it compares to the work involved in creating, producing, and disseminating it, and ultimately, to the price the user is willing to pay to have access to it.
We wish to discuss the way in which digital and related technologies continue to change our profession, and also the changes in readers' habits and the use that is made of literary works. To that end, we will briefly touch on a few points. First, we will give you our interpretation of the impact of this law on Canadian publishers and citizens. We will then give an example of what the act did not do. Finally, we will reflect on the trade of publishing in the digital age, and we will conclude with our expectations following this exercise.
We hope that the book sector, and, more broadly, the Canadian cultural sector, will get a better hearing this time, and that your work will again give creators a legal framework that will provide them with the stability needed to innovate in the creation, production and dissemination of Canadian books. Copyright has always been and remains an economic right for the specific purpose of remunerating the work of creators and regulating the market for these products of the mind.
Since its modernization in 2012, The Canadian Copyright Act, much criticized internationally, has become the example of what not to do. This bad reputation is mostly due to the addition of several exceptions, such as the one for education. In addition to not respecting the three-step test of the Berne Convention, of which Canada is a signatory, on the production of literary and artistic works, the act has had and continues to have a significant economic impact on Canadian publishing and its authors.
Over the past five years, Access Copyright royalty distributions have dropped by 80%. In Quebec, Copibec, the collective reproduction rights management organization, has seen the university rights per student decline by 50%, and the amount collected by a rights holder per reproduced page dropped by 23%. The result is that the royalties paid to authors and publishers are in free fall, even though, paradoxically, the student population is increasing.
I will not spend too much time on the loss of income of the management companies, but I do want to mention the opposition to the book sector shown by educational institutions and student associations. That opposition, we need to point out, derives mostly from two Supreme Court decisions from 2004 and 2012. The creation of user rights, confirmed in the broad fair use exceptions in the 2012 act, particularly in education, stifled reflection on the place occupied by creators in the development of culture in our societies. Worse yet, copyright was viewed as a perverse principle that limits access to intellectual works, which is of course completely false. On the contrary, for close to fifty years, the education and publishing worlds collaborated to provide pupils and students with access to school books and a diverse, rich and high-quality national literature.
I am going to discuss what the 2012 act did not accomplish.
As ANEL mentioned recently in its testimony before the Standing committee on Industry, Science and Technology, that law did not manage to curtail piracy. Not only is it proliferating, but the tools put in place to frighten the offenders are not effective. By leaving the burden of proof with the violated rights holder, by minimizing sanctions and by imposing a simple notification regime, and a requirement of notification for Internet service providers, the legislator did not fulfil its mandate, as shown by the increase in publishers' legal expenses to defend their authors. The government has to tighten the rules to fight piracy, or at the very least, broaden the private copy regime to reading and content-sharing devices.
The legislator must ensure that Canadians are made aware of the need to respect copyright, and of the use they can make of works, especially when they are in digital form. Systematically the terms “accessibility” and “free of charge” are confused. However, even though accessibility is a false problem, the lack of fees is completely illusory: the user purchases an increasing number of electronic devices and software programs, whose short shelf life forces periodic reinvestment, and the user also has to subscribe to an increasing number of online services.
Priorities are shifting from the content to the containers, and the value of goods is moving from the content to the technologies to access that content, and this contributes to the devaluation of cultural goods, and to the loss of income of the rights holders. While the cost of subscribing to these technological services is increasing, the sale of books is decreasing.
The Canada Book Fund data show a decrease in the net sales of Canadian works of more than $63 million between 2010 and 2017, with an important drop between 2011 and 2013 of more than $41 million. For the francophone publishing sector alone, there was a decrease of $30 million. In Quebec, data from the Observatoire de la culture et des communications du Québec indicate a drop of more than $119 million in the total sale of new books between 2010 and 2017.
I will now address the digital shift in the publishing world.
Today, we publish both paper format and digital works, and we are increasingly exploring the production and commercialization of audio and multimedia books. These new formats require both internal adaptation in our publishing houses, and a financial investment, and this is also the case for the other actors in the book publishing sector.
Publishers note that the digital shift requires reinvestment that is not at all offset by an increase in revenue. Many feel that the part of the value chain that returns to them does not correspond to the amount of work they do. That reinvestment is not only required by the creation of digital books and the development of new skills, but is also due to the new marketing practices for the paper book in the digital world.
You must understand that the financial risk taken by the publisher is assumed by the publisher; the publisher is the one who pays. For a digital production, the average salaries in the cultural sector are a far cry from those in the technological sector. The book industry should not be defined by a format, but judged on the value of its contents and on its capacity to create them; that is our trade.
On that point, I would like to add a word on the will of departments of Education to make schools and other educational institutions increasingly digital.
In conclusion, I would simply say that it is urgent that the government call on all of those who benefit from the work of Canadian creators, otherwise we run the risk of having classes that will have the latest in interactive white boards, but without quality content to justify their use for educational purposes.
What do we expect from the legislator? We want him to fulfil the mission to stop counterfeiting, we want the law to have more teeth, and if the legislator cannot put in place even preliminary solutions, that he finally be convinced that private copying is not a tax, but a way to support culture.
We expect the legislator to review the fair use principle for educational purposes by bringing in a narrow definition of education and restricting the broad interpretations of what constitutes a teaching environment.
We expect the legislator to bring in effective promotion of copyright, and encourage users to respect it, particularly in the field of education.
Finally, the legislator needs to make Internet providers accountable by demanding that they inform their subscribers about copyright, and cooperate in withdrawing access from non-compliers, when the need arises.
On behalf of the vibrant world of Canadian French-language publishing, we thank you for your attention.
You asked about a number of things.
To start, I would say our association brings together book publishers all over the country, many being French-language publishers outside Quebec. These publishers are hugely important to Canadian culture, so it's vital that they be listened to, heard and respected.
Now I'll come back to what you said about fair dealing and the drop in revenues it caused, for authors, publishers and copyright holders. Aside from allowing an open-ended definition of the term “fair” and leaving it up to the courts to resolve any disputes that arise, the current approach has not been without cost, to be sure. Publishers in Quebec and other provinces have had to spend money and hire legal advisers to enforce authors' rights.
It's important to understand something. Earlier, we talked about the costs associated with a book. A publisher's first commitment is to the author. Under the contract signed with the author, the publisher endeavours to promote the work and protect related rights. Now, though, the act has given rise to somewhat of a distortion in that the use of fair dealing by some schools has resulted in the work being disseminated outside the scope of the copyright framework we adhere to. We signed an agreement with our authors to make sure those rights are respected.
That's where the decline in revenues comes in. The fair dealing exception is used properly by some, but less so by others. This means that the work is being disseminated in parallel, if you will, mirroring the distribution of works through piracy and other phenomena my colleague Mrs. Guay talked about. We are under no illusions: piracy existed before the digital age. Although the digital world did not create piracy, it greatly amplified the problem.
Thank you, Madam Chair.
It certainly isn't easy being in the business of creation, is it?
I experienced the downward spiral of the music industry after 22 or 23 years in the business. True, things have never been as tough as they are now. As you said, however, the situation wasn't exactly optimal to begin with, so it's not that bad.
I think everyone was surprised to learn that authors make just 10% on book sales. I'm not saying that to single out the publishers, but simply to state the reality of the situation. It's standard practice around the world, and Quebec followed suit. The same is true on the music publishing side, where 50% goes to the writer and 50% to the publisher. That is standard practice.
It's inevitable given that we are conducting a study that is constantly bringing new issues to our attention. Mr. Blaney talked about this earlier, and it is now crystal clear to us that you, too, fall under the column of those who believe fair dealing has gone too far. There is no denying that it has done damage.
I think this morning is the first time we've heard someone put a figure on the losses caused by piracy. Kim Thúy lives across the street from me, and I had no idea just how much was being stolen from her on the Internet.
It's been going on for ages in the music world, with the introduction of peer-to-peer file sharing. Legal distribution platforms have come along since, iTunes and others, and so people turn to peer-to-peer file sharing less. However, we have been told that, nowadays, people are able to copy streamed content onto their computers. People steal content from digital streaming services.
In terms of written works, though, how does piracy work? How, for instance, does one of Ms. Thúy's books end up on an illegal platform? Does it work like Napster, through peer-to-peer file sharing?
Thank you, Madam Chair.
I'd like to begin with a comment. It will be very important to find out whether Mr. Blaney's colleagues on the Standing Committee on Industry, Science and Technology, Mr. Yurdiga and Mr. Shields, share his view on fair dealing. We'll have to see.
To the Canadian copyright organization, Mr. Harnum, I did some research. I want to know if your crystal ball in 2018 is as good as it was in 2009. I'm reading from the report that your organization submitted to similar committees in advance of the 2012 review. I think you telegraphed what you meant by the fact that the document was called, basically, fair dealing's not a good idea.
Here's what you said:
“Fair use” has been described as an “astonishingly bad” system amounting to little more than “the right to hire a lawyer.”
Then it goes on to talk about the United Kingdom, the EU, Australia, and New Zealand rejecting those methods, and how there were lots of ways in Canadian law to protect authors but also let people have access to that material.
Here's what is really interesting for me, from what you said then:
Far from solving copyright problems, adopting fair use would only exacerbate them. Its drawbacks are numerous. Fair use would lead to uncertainty, expensive litigation and leave important public policy decisions to be made by courts instead of Parliament. It would reduce revenues available to the Canadian creative industries; revenues which are vital to their indigenous growth. It would undermine legitimate licensing models including collective licensing of copyrights.
It's a very prescient report from 2009.
We know that there are still good news stories. We know that Canadian creators are exporting content. There's the Frankfurt book fair. We know that Canadian stories are being turned into movies, and people get paid for that.
We hear clearly that the education sector's a mess. We talked about the $26 tariff for universities earlier today. In K-to-12 it's $2.41 that the school boards aren't prepared to pay to make sure that authors get their fair share. That's not even a couple of chocolate bars in this country, and it's certainly less than a latte for the teacher, so I don't get it.
What we have now is a regime in which we have the stick, which is the tariff. How do we get back to a carrot so that everybody can just play in this field together, we can have our good stories, you guys can get paid, and the educators can educate? Are there any carrots left, or are we now in a framework where it's only the stick?
Then I'm going to go to your colleagues here around the table, beginning with Mr. Harnum.