My name is Ariel Katz. I'm a law professor at the University of Toronto, where I hold the innovation chair in electronic commerce. I'm very grateful for the opportunity to appear before you today.
In my comments, I would like to focus on some of the ways in which copyright contributes to or perhaps detracts from the ability of artists and creators to be remunerated for their works.
The idea that copyright is necessary for allowing creators to reap financial rewards from their creations runs deep in our current legal thinking and policy-making since copyright arrived on the scene some 310 years ago. Since the first copyright act, the Statute of Anne in 1709, almost every major copyright reform was based on the notion and promise that copyright will guarantee authors the ability to be remunerated for their works.
For 300 years, the benefit to authors has been the banner that publishers and producers have carried in their demands for ever-increasing powers to legally control creative works. Beloved authors and creators would appear before legislators, describe their economic hardship and support the publishers' demands for more rights and stronger tools to enforce them.
This strategy has been enormously successful over the last 300 years. It even accelerated in the last decades. As a result, copyright has expanded in almost every direction. The subject matter has expanded, the term of copyright has been extended and the geographical reach of copyright has been extended. The type of activity that could constitute infringement has increased, and so have the enforcement tools and remedies available.
However, the vast majority of artists and creators seem to be earning very little from their creations. Last Saturday, for example, Michael Enright, on CBC, cited a recent survey by the Writers' Union that found that the average Canadian writer makes only about $9,000 a year, and the incomes are falling fast. Once again, not-strong-enough copyright is to blame, and “make copyright great again” seems to be the proposed remedy.
After 300 years of asking, “Are we there yet?” and finding that we aren't, maybe it's time to reflect back and acknowledge that the weakness of copyright may not necessarily be the problem and that stronger copyright may not be the solution. In fact, we should even start thinking whether the ever-expansion of copyright is part of the problem. That's counterintuitive, but that might be the case.
Don't get me wrong: Copyright is a very effective legal tool for collecting grants from the use of creative works. The stronger, broader and longer copyright becomes, the more effective is the ability to extract even more rents from the users of creative works. Indeed, copyright does make some corporations—or their shareholders or senior executives—and a relatively few superstar artists very rich. That's why they lobby so hard to protect and enhance it. That's why they have the ability to out-lobby almost everyone else in this legislative process.
If our goal is not to further enrich the rich but to ensure adequate remuneration for the average creator, then maybe it's time to acknowledge that a strategy of more copyright has been a spectacular failure.
I note in brackets that from an economic perspective, it's better to think about the marginal creator, not the average creator. It's not that the person is marginal or that the work is unimportant; I mean a person for whom a change would make a difference. If we make a policy change, how would it affect someone that we want to be affected at the margin? Hence, I say “marginal”. I just wanted to clarify that.
If copyright has not been successful in its stated purpose, why? One possible answer is that we are simply not there yet and that copyright is still not strong enough. We have to continuously strengthen it and eventually we'll get there. In some abstract, theoretical way, this is a plausible answer, but I don't think it's very likely that this is the correct one.
Consider, for example, the recent findings from the Writers' Union survey. Access Copyright and the Writers' Union cite these or similar numbers to support their demands for, for example, preventing educational institutions from relying on fair dealing or in their efforts to make tariffs that are approved by the Copyright Board mandatory in educational institutions. They could basically impose these on educational institutions, despite the fact the Supreme Court held that such tariffs are not mandatary for the users.
Let's assume that our goal is to allow professional writers to make a living off their writing. According to Statistics Canada, the median household income is approximately $70,000 a year. Obviously an income of $9,000, as per the study, is far too low. What would we have to do in terms of copyright if we wanted to quadruple this $9,000 amount to make it half the median income? The writers could earn from copyright not even the median income—just half of the median income. We would need to quadruple the $9,000 figure.
Suppose we go along with Access Copyright's proposal and we abolish fair dealing for education and make tariffs mandatory for educational institutions and so on. We don't need to spend time doing the exact calculation to figure out that if we want this instrument to significantly increase those authors' earnings from copyright, we would need to impose on educational institutions what is effectively an education tax, which would quickly bankrupt them. If that's our goal, if that's the tool we want to use....
Moreover, even if doing that was sustainable, using this copyright mechanism would not only improve payment to low-earning authors whom we might care about, but would simultaneously provide a much greater remuneration to the ones who already make quite a lot of money. That's how copyright works. You don't get it according to your income; you get it according to your ownership. Those who own more, earn more, and tend to get even more.
Here's a simple inconvenient truth: Using copyright to improve the earnings of the average or marginal creators would simultaneously enrich the already rich. Of course, the money would have to come from somewhere. Someone would have to pay for that. It could come from students or taxpayers, or from other expenses that would no longer be available. The money would have to shifted away from other resources. This points to the fact that using copyright to improve the earnings of marginal creators entails a massive transfer of money from the public to the already super-rich, with a tiny portion going to those we might really care about.
I have tried to explain it briefly. I really encourage you to read chapter 2 from a new book by Professor Glynn Lunney, called Copyright's Excess. He makes the point and explains it much better than I did.
I know that he would also be happy to appear before you. He is a U.S. law professor. He would be very happy to appear before you to talk about his new book.
Why has copyright been such a failure for most creators? Why does the great wealth that it creates for some publishers, some producers and some media companies fail to trickle down to creators, even though the creators are the first owners and the supposed beneficiaries of copyright law?
The answer is that while more copyright increases the ability of those who sell content to extract rents from the paying public, how much of those rents trickle down to authors is not a function of the strength of copyright. Rather, it is a function of the competitive structure of the industry and the relative bargaining power of creators vis-à-vis producers.
I'm close to finishing.
Unfortunately, there are some inherent reasons most creators have earned very little from their writings and will likely continue to do so, notwithstanding copyright.
It's also possible that more copyright could make things even worse. Let me explain very briefly. Let's hope we'll have more time later.
Even though copyright makes the creator the first owner of the copyright, most creators cannot really commercialize their works in the market. They need to contract with producers or some other types of intermediaries who have the knowledge, capital and ability to take advantage of economies of scale and scope.
Therefore, they need to enter those contracts, and those contracts primarily determine their remuneration, which would be a function of their relative bargaining power.
There are some reasons that are not fully understood by economists. Creative industries tend to be highly concentrated. At the same time, the market of creative talent tends to be highly competitive.
At the risk of alienating our friends from the Conservative Party, and maybe in the hope of appealing to our friends from the NDP, let me borrow from Karl Marx's concept of a reserve army of labour.
What we have is a reserve army of creative labourers. There is an abundant supply of creative talent. Creative people like to create and are eager to create, and because the market is so competitive among themselves, but much more concentrated among those with whom they have to contract, creators are inherently in an inferior bargaining position with heavy producers. They are often required to sign away their copyright to the producers and to agree to very exploitative terms with publishers.
To make things worse, there are information asymmetries.
I see that I'm—
Yes. Thank you, Madame Chair.
Good morning, everyone. Thank you for having us here.
I'm Matt Williams, vice-president at House of Anansi Press/Groundwood Books in Toronto. We are an independent trade publisher, and we publish books for readers of all ages.
Anansi is now over 50 years old, which is venerable for a Canadian publishing house. Since the beginning, we have been known for publishing new Canadian writers and helping those writers establish, build and sustain their careers. We publish Canadian poetry, short stories, novels, drama and non-fiction, with particular attention to the work of indigenous writers and the work of writers from French Canada, whom we publish in translation. We publish the novelist Monia Mazigh, who is also present here today. As you said, we'll split our allotted time.
At Anansi and Groundwood, we work with some 500 different authors, illustrators and translators. Author remuneration is central to our thinking and our activities.
Here's our model. We pay authors royalty advances as a way of financing their new work, and we pay ongoing royalties on sales. We sell our authors' work into many different markets—bookstores, libraries, K to 12, post-secondary, and export. We publish books in multiple formats—print, audio, and digital. On every sale we make, we pay part of the revenue to the author as a royalty.
Since the 2012 changes to the Copyright Act and the widespread adoption of the self-declared fair dealing guidelines by Canadian educators, we have seen a steady decline in revenue from Canadian educational sources. From 2013 through this year, the drop in revenue has been close to $200,000. That amounts to a drop of around $100,000 in author royalties. Over that same period, our income from educational sources outside of Canada has held steady. There has been no drop in author royalties there.
We are fully digital. We make and sell e-books and audiobooks. These are discrete digital products, each with a set retail price and a defined marketplace, and we pay royalties to our authors on all those sales. However, selling in digital form into Canadian classrooms is not so much about selling discrete products with price tags: We are licensing parts of books or stand-alone artistic works. We are licensing content.
Educational institutions used to pay for the use of a poem, a short story or an excerpt from a book through a system of collective licensing, an efficient model to manage payment for use, but that system has now been largely replaced by the educators' fair dealing guidelines, which have effectively removed the payment obligation. Our material is still being taught in classrooms across the country, but the payments have dried up.
Much of the material that is delivered to students, especially in a post-secondary setting, is in digital form—for example, via scanned excerpts distributed through a university's learning management system. I would like to emphasize strongly that this is just fine with us. We contract with our authors to publish their work widely and to find as many readers for it as we can. Canadian teachers and Canadian students are, to us, highly valued readers. Classroom use of our content for successive years and even generations of Canadian students is our goal.
The other part of the deal with our authors is an undertaking to earn them royalties and contribute to their livelihood, and that is where developments since 2012 have let us down. The post-2012 demise of the collective licensing model has removed what we might call the “cash register moment” from the Canadian educational licensing market. We no longer have an agreed mechanism whereby use and reuse of material in a form that is convenient in the modern classroom—and I particularly have in mind material in digital form—will generate royalties for those who worked to create it. I think that if we agree that Canadian content has value, then we should stand by a model that allows that value to be realized not only by the users but also by the creators.
We made three recommendations to this committee as part of our written submission. For time reasons, I will reiterate only the first one. It is that this committee work with the Standing Committee on Industry, Science and Technology to clarify fair dealing provisions to help restore our ability to realize a return on the ongoing use of our work. We believe that a return to a system of collective licensing will go a long way towards achieving that end.
Thank you for your attention.
Thanks. Good morning. Bonjour.
Thank you for inviting me to this committee.
My name is Monia Mazigh. In a previous life I was a finance professor; today I am a Canadian author. I published my first book in 2008, and I have since published two novels. I write in French, and I consider myself one of the lucky Canadian authors to be published in both French and English. My English publisher is House of Anansi, and I am very grateful to be published by this talented and dedicated Canadian house. Their trust in me and their strong support have been crucial in building and developing my writing career.
Today I am a full-time writer. I write columns, blogs and books. I have been invited to several salons du livre across Quebec and to many literary festivals, as well as to other book events across Canada. I also participated in salons du livre in Geneva, Switzerland, and in Paris, France. Last summer I spent three months at the Historic Joy Kogawa House as a writer in residence to work on my third novel.
When I started my writing career, I kept a day job, mainly part time, so I could write while benefiting from the financial security and receiving a paycheque at the end of the month. However, three years ago I took the radical decision to dedicate all my effort to writing. That came with a cost: the loss of my income. Added to this, with the drop of the royalties, even what used to be a cheque for a couple of hundred dollars is now almost non-existent.
I don't have the absolute certainty to link the drop of my income to the changes in the 2012 Copyright Act and the widespread adoption of the self-declared fair dealing guidelines; nevertheless, I personally think it is very likely related to it.
Today, if it was not for the grant that I receive from the Council for the Arts, which my author friend refers to as social welfare for the writers, and the cheque from the public lending right program, my income from writing would be a white noise like what we used to describe in finance models: all the factors that cannot be predicted, and mostly negligible.
I came to writing with a tremendous passion for education. I still believe that books, poems and novels are tools that can help students to complete their education and improve it. When I wrote my first novel, Mirrors and Mirages, about Muslim women in Canada, it had a huge educational component. I corresponded with grade 12 students from a French immersion high school in Vancouver who had been assigned to read my novel and write their French final assignment about it. What a great achievement it is for an author to be read, discussed and reflected on by students. It would be even better if, at the end of the year, that achievement were reflected in some additional royalties paid by the educational institutions to my publisher and thus to me.
Unfortunately, with these changes in laws, those royalties are being denied to us. Our creative work is being used for free. In the meantime, Canadian authors are seeing holes in their incomes getting bigger and bigger. This should be reversed.
Canadian writers are ambassadors around the world. In 2017, I joined a delegation of Canadian authors to visit Senegal in West Africa. We went to schools to speak to youth. We had round tables with Senegalese authors. We told them about our creative work, and through it they imagine our country, our people and the colour of our sky, but how can we keep our creative work going if, in counterpart, we don't receive our financial due through royalties?
History is filled with famous classic authors who died in poverty, despised and abandoned by their societies, but later recognized and adulated for their genius, creativity and artistic merit. Why do we want to perpetuate these human tragedies?
Creativity is an added value for a country. It is part of our common wealth. It should be cherished, shared and recognized. The Government of Canada should protect the users as well as the creators of such creativity.
I strongly support a re-examination of the 2012 Copyright Act so that authors can earn back royalties from their books being used by Canadian educational institutions.
Yesterday I appeared before the INDU committee, and that was the focus of my testimony there.
I'm afraid that there has been a lot of misinformation, and I'd love to spend more time with Matt and Monia, maybe later, because I suspect—at the risk of being condescending—that they are victims of this misinformation.
At least when it comes to higher education, the reality is that universities use very little Canadian literature in the higher education curriculum. In fact, actually I brought with me this book published by Anansi, by Nick Mount, who's an English professor and historian of Canadian literature at U of T, and he notes that at most English departments in most Canadian universities, you can major in English without ever being required to read a single Canadian piece.
By and large, Canadian universities don't teach Canadian literature. Canadians may teach in English departments, and Nick Mount teaches—my son takes his course. He assigns books, and students buy those books, and there are 400 students in the course every year; they sell 400 copies. Again, Professor Mount just told me that one of the authors told me that his course alone was responsible for a second printing of the book.
Actually, teachers love it. When there is content that's available, we have no problem asking students to buy it if it's available and it's reasonably priced. The reason teachers make their course packs and create their own customized teaching is we don't get paid for doing that. It's hard work, and we're not getting paid directly for doing that. If there is already good teaching material available, we would happily assign it. One of the reasons the major educational publishers are so lucrative is that there is this issue that the professors who assign the books are not the ones who pay for them. That's why the prices of textbooks have increased so much over the last four decades. We are lazy. If there is already a book, we're happy to assign it.
The second misinformation, I think, is how Access Copyright used to distribute its money. I suspect that the bulk of the money that has now been lost for Matt and Monia is not the money related to the use of their work, but the other pot of the money, where Access Copyright collected for everything but Access Copyright does not have everything in its repertoire. It collects for everything; it divides some of it according to who owns those rights, but then it keeps this pot of money and distributes it among it members. It has different names—there is the payback scheme for the author, the repertoire, and part for the publisher. This is the amount of money that actually Access Copyright used to distribute to its members, but by definition is not for the use of those members' works but for the use of other copyright owners' works, who are not members of Access Copyright.
I think that is a significant part of what we now have.
Madam Chair, distinguished committee members, thank you for inviting me to speak to you.
With me today are Assistant Deputy Minister of Cultural Affairs Jean-Stephen Piché
and Andrew Francis, Chief Financial Officer.
It's a true privilege to be Minister of Canadian Heritage and Multiculturalism. Since I was appointed, I have met with many engaged Canadians, creative entrepreneurs, artists, and dedicated leaders. Their passion and energy inspire me in everything I do.
I'd like to highlight some of our progress over the past several months.
My mandate as Minister is clear: to strengthen and promote our cultural and creative industries, celebrate Canada's diversity and foster greater inclusion.
My department is working hard to fulfil our vision for a Creative Canada. We are investing in creators, including those from Indigenous and official language minority communities, and strengthening public broadcasting, that is to say, CBC/Radio-Canada.
In addition, as you know, we launched the review of the Broadcasting Act and the Telecommunications Act this past June. It is absolutely necessary that we modernize our broadcasting and telecommunications laws so that the system works for everyone: artists, businesses, consumers and broadcasters.
Together with my colleague, the , we are also reviewing the Copyright Act. An enormous amount of work is being done on this. At the same time, this committee is studying remuneration models for artists and creative industries.
The goals for all this are threefold: to support Canadian cultural content; to compensate our artists in a fair and timely manner; and to ensure greater access for Canadians to creative content.
And that brings me to the 2018-19 Supplementary Estimates (A), and the expenditures for Canadian Heritage and five Portfolio agencies.
First, let me speak to you about the department's expenditures.
As you know, the Department of Canadian Heritage is asking for additional resources of $32.4 million. This includes $25.5 million in grants and contributions and $6.9 million in operations. This will result in total authorities of $1.4 billion for the department. These funds will allow us to continue our work in a number of areas, including strengthening official languages, supporting Canadian content and local journalism, promoting multiculturalism, and stabilizing pay administration.
We also continue to make great progress on our Creative Canada vision, a vision anchored in our diversity and focused on the talent of our creators. It is a vision that recognizes the significant contribution of the creative sector to our economic growth and our prosperity. We're investing in our creators and their stories. We're investing in our cultural spaces and creative hubs to foster the next generation of artists and creators. We're promoting discovery and distribution of Canadian content at home and abroad. We work to provide space in the digital world for stories that reflect Canada's diverse voices and cultures.
As part of this, we launched the creative export strategy earlier this year.
As you have no doubt seen, we are allocating $125 million over five years to help our creators reach wider audiences and gain access to new business opportunities. Of this, $17.2 million is contained in these Supplementary Estimates (A).
We have also announced measures to support local journalism—$50 million in Budget 2018 to help our newspapers make the transition to digital, and to ensure under-served communities have access to local news. Many communities no longer have access to local news.
As you will also recall, the Fall Economic Statement announced on November 21 included several new measures to support journalism, such as encouraging non-profit business models and providing tax credits to strengthen Canadian media.
We also fought hard to maintain the cultural exemption clause in the new U.S.—Mexico— Canada Agreement. One that is technology neutral, and covers all segments of our cultural industries. This was a significant and positive outcome for Canada and our creators.
I'm also proud of my department's progress in fulfilling our commitments to reconciliation. In budget 2017, we provided $89.9 million over three years to support indigenous languages and cultures, and increased support for the aboriginal languages initiatives. Soon we will work to introduce the indigenous languages act to preserve, protect, and revitalize first nations, Inuit, and Métis languages. This legislation is very important to mention. It's co-developed with our partners and reflects extensive engagement with knowledge-keepers, language experts and speakers.
My department is also taking concrete steps to encourage Canadians to embrace diversity and inclusion. In particular, we're focusing on addressing systemic racism against black Canadians, as well as against indigenous people. As part of this, budget 2018 included $23 million to increase the funding for the department's multiculturalism program, as well as to support cross-country engagement sessions on a new national anti-racism approach.
We are working very actively on this. I have travelled to many regions across the country, and we will continue to do so.
I will now address the additional funding to be provided to the Canadian Heritage Portfolio agencies by way of the 2018-19 Supplementary Estimates (A).
The Canadian Radio-television and Telecommunications Commission will receive $99,196 to support efforts to address issues with the pay system. The National Film Board will receive the same amount for this purpose.
Telefilm Canada will receive $1 million in funding as part of Canada's Creative Export Strategy.
The Canada Council for the Arts will receive a transfer of $127,000 from the Department of Canadian Heritage. These funds will support French-language theatre projects, and ensure Canada's participation in meetings of the Commission Internationale du théâtre francophone.
The National Arts Centre will receive a transfer of $150,000 from the Department of Canadian Heritage for the 2019 edition of the biennial Zones Théâtrales event. This is an important platform to promote professional theatre in Canada's Francophone communities.
Together, these organizations are vital to helping enrich the cultural, linguistic, civic and economic life of Canadians.
I want to also highlight our efforts to ensure transparency and diversity in Governor-in-Council appointments. Since October 2016, 126 individuals have been appointed to positions within the Canadian Heritage Portfolio. They represent a wide diversity of Canadians from across the country, and of diverse backgrounds, languages, genders and cultures.
That brings my remarks to an end. I look forward to working with all of you to advance our priorities.
I thank you for your attention. I am now ready to answer your questions.
Thank you, Madam Chair. Good afternoon, everybody. Good afternoon, Minister.
First, Minister, I want to congratulate you on becoming Minister of Heritage and Multiculturalism. I want to also compliment you on your passion and your transparency in tackling issues and answering questions. It's refreshing to see, so congratulations on that.
My riding is Saint John—Rothesay, in southern New Brunswick. It's an interesting riding. Number one, it's Canada's first incorporated city. It has a tremendous history. It's a Loyalist city. The city and the region are rich with nationally significant historic assets. Up until the last three years, there was a lack of focus, a lack of funding available, and a lack of avenues for these assets to apply for funding.
I'm thrilled to say that in my riding I have a Martello tower, one of the few left in North America. I have Fort Howe, which is nationally significant. I have Fort Latour as well as the Loyalist burial grounds, the Imperial Theatre, and the Saint John City Market. All of these are nationally significant historic assets.
I'm thrilled to say that our government has delivered on funding to restore the City Market, to build the Martello tower, and to build Fort Latour, a wonderful, nationally significant monument. We have also secured heritage funding to help restore the Imperial Theatre, one of the first vaudeville theatres in North America.
The list goes on and on. A lot of my mandate, a lot of my passion for my riding, goes into getting funding for those nationally significant historic assets. I'm thrilled to say that the investments our government has made in Heritage Canada have been substantial and have helped my riding immensely.
The other part of my riding is immigration, and my riding is becoming much more diverse. We are celebrating, more and more every month, multicultural events and celebrations in Saint John—Rothesay. Proponents in my riding, such as the Saint John Multicultural Association and Mohamed Bagha and the Saint John Newcomers Centre, have applied for, and received, funding through Heritage Canada. That has been transformational for them and for the riding in promoting multiculturalism in Saint John—Rothesay. This hadn't happened, really, up until the last three years.
Minister, one of your priorities is to lead work across the government to strengthen Canada's multicultural advantage by implementing a revitalized multiculturalism program and developing new initiatives to celebrate diversity to foster greater inclusion.
Can you give me an update on that?
That's a very good question. As I mentioned earlier, it's really a core priority for me. In the short term, it's a major priority not only for me, but also for the , the government and, I'm sure, every one of you.
As I said earlier, indigenous languages are disappearing at a dizzying rate. Far too many of those languages have been lost. We all know that was caused in large part by former governments in the course of our history that simply wanted to wipe out those languages through various programs, such as by tearing children away from their families and preventing them from speaking their language and from preserving their culture in the residential schools. An entire system was put in place to make those languages disappear.
Considerable effort was made to erase those languages, and now we must expend as much effort, if not more, to promote them, to protect them and to enable them to spread. Why must we do it, Mr. Boissonnault? Because language represents who we are. Look at what we're doing now: we're discussing and communicating, and its language that enables us to do that. By speaking our language, we transmit our culture, our way of seeing things and our history.
You know, I only spoke Spanish when my family arrived in Canada. My father told me that, since we were political refugees, we would be here for a long time, and that's been the case. I was eight years old, I spoke only Spanish, and I couldn't speak a word of English or French.
My father loved French: he performed Molière. He told me to learn French, and to learn English too if I wanted, but to preserve Spanish and thus to preserve who I was. Today, it's a big advantage to be able to speak those three languages. I'm learning Italian, and it would be my fourth language if I had more time.
In short, Mr. Boissonnault, it's an absolute priority of this government. We've established programs to fund certain projects. That's fine, but it's not enough. We need a robust bill, and that's what we'll have soon.
To Mr. Boissonnault, the Amber Valley story from north of Edmonton is probably one of the stories of black history. I don't know if Mr. Boissonnault knows about Amber Valley or not, but it is one of those.
I met the head curator a number of times. One of the challenges we have in the parliamentary precinct with heritage is that inside the building, it's the head curator's responsibility. Outside, responsibilities are with somebody else. The historical rooms in the East Block are with someone else.
Would you in the future, as you were talking about, work to have those consolidated so that we can have an experience of heritage on our Hill that's not siloed? They can't talk to each other or do anything about the outside or the inside of different buildings.
It's strictly to do with our heritage in 2019—restored rooms in the East Block, the statues on the outside of the block, suffrage in many parts of the country. That is a significant part of the grounds outside.
Would you work to coordinate that part of our heritage, which is now siloed? The head curator inside the building, for example, can't do anything about the heritage on the outside of our building.