The Committee’s study and mandate

On 29 March 2018, the House of Commons Standing Committee on Canadian Heritage (the Committee) adopted the following motion:

That the Standing Committee on Canadian Heritage, following the letter from the Standing Committee on Industry, Science and Technology conduct a study on remuneration models for artists and creative industries, including rights management and the challenges and opportunities of new access points for creative content. That the Standing Committee on Canadian Heritage call upon a broad range of stakeholders and experts on such matters and that it provide the Standing Committee on Industry, Science and Technology a summary of testimonies and recommendations related to the items mentioned above for the parliamentary review of the Copyright Act.[1]

Pursuant to this motion, between 22 May and 6 December 2018 the Committee held 19 meetings and heard testimony from 115 witnesses. It also received 75 briefs. Witnesses included representatives from various cultural industries as well as government officials. The Committee would like to thank all those who contributed to the study.

The first part of this report presents the major themes that are common to all creative industries. The second part examines the challenges and possible solutions proposed by witnesses and is divided as follows:

• a) Issues common to all creative industries;
• b) Issues related to the music industry;
• c) Issues related to the film and television industries;
• d) Issues related to the writing and publishing industries;
• e) Issues related to the visual arts industry.

The third part of the report summarizes the views heard and the recommendations made by the Committee.

Major themes

During its study, the Committee sought to understand the everyday situation of Canadian artists. In addition to the challenges and possible solutions discussed in Part 2 of this report, witnesses told the Committee about the ecosystem in which they work and its transformation in recent years.

Several major themes emerged from the stories of Canadian artists. These themes, which connected testimony throughout the study, are: the increasing value gap, the decline in the artistic middle class, the impact of technology on creative industries, changes in consumer culture and the Indigenous perspective on copyright.

Increasing value gap

Witnesses from the creative industries spoke about a disparity between the value of creative content enjoyed by consumers and the revenues that are received by artists and creative industries.[2] According to many witnesses, this disparity, which is known as the “value gap,” is growing.

According to Graham Henderson, President and Chief Executive Officer of Music Canada, the origins of the value gap extend back more than two decades.[3] As creative industries shifted with the advent of the internet, copyright policy and protections became outdated and ineffective.[4] Miranda Mulholland, artist and entrepreneur, aptly described, “the biggest reason for [the value gap] is that the laws in place today reflect a time of home phones, of scrunchies, and of buying a CD at a music store instead of today's world of streaming.”[5]

The inability of policy to evolve with technology has prevented artists from receiving fair market value for their work.[6] According to witnesses, these outdated rules have diverted wealth from creators to large digital intermediaries on which artistic content is consumed. As Paul Novotny, Screen Composer of the Screen Composers Guild of Canada, stated, “The value gap is real. Basically, we're experiencing minuscule copyright remuneration from plentiful media consumption, and it's a woefully disproportionate remuneration.”[7]

Decline in the artistic middle class

Closely linked to the widening value gap is what many witnesses described as a severe decline in the ability of artists to earn a middle-class income.[8] While there are many highly successful, well-known Canadian musicians, artists, writers and performers, most artists and creators in Canada struggle to earn a living from their art.[9]

According to Music Canada, the impact of the value gap has had a severe impact on the artistic middle class. Music Canada states that “In the music industry, virtually overnight, this once-thriving community of songwriters and performers has seen their chance of entering the middle class as professional musicians nearly vanish.”[10]

Witnesses painted a vivid picture of the “difficult realities”[11] facing the declining artistic middle class; namely, significant decreases in earnings since the 1990s and a growing number of artists living below the poverty line.[12] Damhnait Doyle, Vice-President of the Board of Directors of the Songwriters Association of Canada, said:

I wish I could use the term “middle class,” but the middle class of creators has been eviscerated at this point. I know only one musician in Toronto who has bought a house in the last 10 years; most cannot pay their rent, let alone go to the dentist.[13]

The reality for some witnesses is that not only are their overall earnings low, they are decreasing annually.[14] Consequently, many creators cannot pursue their artistic endeavors full time and must seek other forms of employment.[15]

Impact of technology on creative industries

Witnesses described the ways that technology has impacted creative industries, with a focus on the opportunities and challenges offered by the Internet. Artists also declared that their remuneration from online content is largely insufficient.

In recent years, the number of digital access points for creative content has seen exponential growth. The rise of illegal file-sharing software and the advent of online streaming platforms have changed the ecosystem. The effects are two-fold: access to content has been greatly increased, but remuneration has not kept up the pace due to new remuneration models from these services as well as piracy.[16] Witnesses said that digital technologies can also mean new opportunities, such as in the case of OutTV,[17] an LGBTQ2 television network and streaming service, and the Aboriginal Peoples Television Network.[18]

Stuart Johnston, President of the Canadian Independent Music Association, added that technology can be a “double-edged sword”:

[T]echnology and the digital world has enabled artists and companies to more efficiently record and distribute. It allows artists more of a level playing field; they can get their product into market, but now there is such a volume of product on the market that the challenge now is discoverability, being discovered and being paid for that.[19]

Creators, producers, and others who work in the creative sector do not agree on whether the shift to digital has been a positive or negative change, as it differs by industry. Nathalie Théberge, director general of Creative Marketplace and Innovation and Deputy Director of Investments at the Department of Canadian Heritage, explained that “[through] the emergence of new distributors, new technologies have not only shifted how money is made but also who benefits and how those benefits flow through to creators and rights holders.”[20] She added that digital intermediaries such as on-demand content providers, are gaining in importance; and that technology is also used by some to better manage their copyright.[21]

Recommendation 1

That the Government of Canada increase its support for creators and creative industries in adapting to new digital markets.

Change in consumer culture

Witnesses said that one of the consequences of technology has been a change in consumer culture. In the past, consumers paid for the product, such as a book or a CD. Today, however, they consider that paying for access to cultural content is sufficient. Johanne Guay, of the Association nationale des éditeurs de livres, explained this shift:

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.[22]

According to Mark Schaan, Director General of Marketplace Framework Policy Branch at the Department of Innovation, Science and Economic Development Canada, this shift is reflected by the fact that there is “record-high consumption,” yet the value that consumers are willing to pay for content has diminished, which affects artists’ remuneration.[23] Witnesses told the Committee that the Internet has led many consumers to believe that content should be free. Brad Danks, Chief Executive Officer of the OUTtv Network, said that “free” should not be considered a business model. When content is made available for free, it is often by Internet giants with complementary businesses that can compensate for their costs, not by the artists who produce the content.[24]

In this regard, Suzanne Aubry, President of the Union des écrivaines et écrivains québécois, said that better education would be helpful and that consumers should be taught that “free access will destroy creativity and creators,”[25] if they are not remunerated for their work.

Indigenous perspective on copyright

Throughout the study, the Committee heard of the importance of considering the Indigenous perspective regarding copyright. Scott Robertson, President of the Indigenous Bar Association, explained that Western views on copyright do not necessarily align with the Indigenous perspective as individual property rights is not a concept shared by all nations.[26] He told the Committee that:

In order to address these historical wrongs and to foster support for [I]ndigenous artists that respects and honours their laws and concepts of intellectual property, this committee should undertake a wide and meaningful consultation with [I]ndigenous peoples. Artists who generate creative work need to be consulted to determine the kinds of protections and amendments needed to ensure them the power to control their knowledge. Failing to do so may lead to untoward and inappropriate taking of knowledge under the guise of artistic reinterpretation.[27]

Ms. Théberge agreed with that perspective and explained that Canada has been working with international partners to develop international norms regarding traditional knowledge and cultural expressions.[28]

William Huffman, marketing manager of the West Baffin Eskimo Co-operative, explained that the Cooperative can help bridge that knowledge gap for the artists it represents.[29] Speaking about the theatre industry, Lori Marchand, representative of the Indigenous Performing Arts Alliance, told the Committee that current structures and practices “do not currently reflect or accommodate an Indigenous way of working.”[30] Speaking to the different approaches regarding stories, she added:

The underlying concept, or value, is that the stories belong to the community.… Any storytelling or sharing of those stories and histories beyond the community is really through permission and a consultative process in which the community participates fully and has buy-in on the final product.[31]

Artist Andrew Morrison said that any review of the Copyright Act should look to the relationship with Indigenous music forms.[32] He asked for “specific attention put to Indigenous art forms to protect them” and to ensure proper remuneration for Indigenous artists.[33]

Issues common to all creative industries

While many of the issues raised by witnesses were specific to their creative industry, some issues were common to all creative industries. These issues are: the creation of Canadian content; copyright literacy and the promotion of copyright; combatting piracy and enforcing existing rules; Copyright Board reform; and copyright term extension.

The creation of Canadian content

Canadian artists and creators play a central role in the creation of high-quality Canadian content. Not only does it benefit Canadian consumers, it produces income for Canadian content creators and is an important sector of the Canadian economy.[34] For all creative industries, the Committee heard that changes are needed to create a functioning marketplace for the creation of Canadian content.[35]

Many of the concerns raised by the creative industries were regarding the distributors and distribution channels of Canadian content. For example, Jean­Pierre Caissie, Administrator of the Alliance nationale de l’industrie musicale, asked, “Why do [internet service providers] not have the same responsibility in terms of Canadian content, so that their distribution channels can contribute to new works and distribute new songs from French-speaking Canadian artists?”[36] Jean La Rose, Chief Executive Officer, Aboriginal Peoples Television Network, noted that for many Indigenous artists creating Canadian content, “the main question is still finding opportunities and getting airplay—at all—in mainstream media.”[37]

Some witnesses also noted that declining creation and consumption of Canadian content can lead to the shrinking of creative industries, as well as job losses. For the writing and publishing industries, declining revenues for educational content has led some Canadian publishers of Canadian educational content to decrease or terminate production.[38] For the film and television industries, declining commissions for Canadian content can lead to significant job losses for artists and creators.[39]

For the music, film and television industries, the vast quantity of content coming from the United States makes the continued creation of quality Canadian content more important. Witnesses raised concerns about “over-the-top” platforms such as Netflix, Spotify and Amazon, which have millions of Canadian subscribers and which are not subject to regulations that promote the creation and distribution of Canadian content. Erin Finlay, Chief Legal Officer of Canadian Media Producers Association, noted that this reality creates “an unfair competitive advantage … [and] is putting immense stress on our funding system for Canadian content.”[40]

Failure to regulate these foreign entities poses a significant threat to Canadian artists and creative industries.[41] According to some witnesses, measures ought to be put into place to level the playing field. These measures include extending Canadian Radio-television and Telecommunications Commission (CRTC) Canadian-content requirements to streaming services and that such services be required to fund Canadian content.[42] Emily Harris, President of the Canadian Association of Film Distributors and Exporters, added that non-Canadian streaming services must contribute to the “cultural ecosystem to ensure Canadian content is discoverable by Canadians.”[43]

The Committee heard the importance of preserving, promoting and developing Canadian culture and creative content in Canada.

The Committee also heard how important a role the CRTC plays in overseeing and helping to develop Canadian cultural industries. The arrival of new media platforms provides the CRTC with great opportunities to further develop creative industries in Canada.

Recommendation 2

That the Government of Canada develop mechanisms by which streaming services will develop and promote Canadian content.

Copyright literacy

Representatives from across the artistic industries discussed the importance of educating creators regarding copyright, contracts, and their implications.[44] Basic copyright literacy is “absolutely fundamental and goes across all creative sectors.”[45] When creators understand their rights, they are empowered to demand fair remuneration when signing contracts.

Transparent remuneration models for artists and creators requires a basic understanding of copyright within the artistic industries. The Committee heard that informing artists about their rights can be a challenge.[46] Marie-Josée Dupré, Executive Director of the Société professionnelle des auteurs et des compositeurs du Québec, noted that new artists often require support in developing entrepreneurial and business skills, as such expertise is “not a given.”[47]

Mr. Huffman noted how some of the artists he represents are unilingual Inuktitut speakers rendering it incredibly “complex and challenging … for artists to both understand and navigate a copyright and permissions program.”[48]

As such, some witnesses recommended that the Government of Canada create educational materials to raise awareness of copyright provisions as well as artists’ rights and responsibilities under the Copyright Act,[49] and about the impacts of the move to digital on artists’ remuneration.[50]

Recommendation 3

That the Government of Canada create educational materials to raise awareness of copyright provisions and artist remuneration for consumers.

Recommendation 4

That the Government of Canada create educational materials to raise awareness of copyright provisions as well as artists’ rights and responsibilities under the Copyright Act for artists and creators.

Combatting piracy and enforcing existing rules

Another issue common to all the creative industries was the need to combat piracy, both by creating new rules and enforcing those already in place in the Copyright Act.

As previously discussed, technology has had many impacts on creative industries. It can be used both to increase access to culture, but also to bypass the system and steal content. Mr. Schaan explained that “with every new technological phenomenon, people have found a way to use it both as the law imagined and as the law did not.”[51] Nevertheless, he said that according to a survey, “the large majority of digital content consumed was consumed legally.”[52]

The Committee heard that the proliferation of unlawful streaming services is inextricably linked with decreased remuneration for creators.[53] Canadians are increasingly and, at times unwittingly, consuming stolen content online.[54] For copyright owners, having their content removed from such sites is an expensive, time-consuming process.[55]

Stream ripping refers to the practice of using a software to illegally copy a file from a streaming service, whether for music, television or other media, which can then be distributed without the copyright holder being aware. In the publishing industry, methods such as torrents are used to counter legal methods and acquire books illegally.[56] As explained by Mr. Henderson of Music Canada, such practices erode “the ability of legitimate services … to convert subscribers to paid subscribers.”[57] Robert Malcolmson, Senior Vice-President of regulatory affairs at BCE Inc., also noted the Criminal Code contains criminal provisions for content theft undertaken for commercial purposes, but they focus on illegal copying, while modern forms of content theft rely on streaming.[58]

Witnesses agreed that the current rules regarding piracy are hard to enforce and that more could be done to aid copyright holders. Recommendations raised by witnesses included additional efforts from the federal government against counterfeiting,[59] the review of current criminal provisions in the Copyright Act[60] and the creation of an office dedicated to enforcement.[61] Representatives of the publishing industry also argued that increased statutory damages could act as a deterrent and help reduce piracy.[62]

Another approach to combatting piracy that witnesses raised is to involve the intermediaries in content distribution such as Internet service providers (ISPs). Witnesses described different methods to do so. For the Association nationale des éditeurs de livres, ISPs ought to “inform their subscribers about copyright” and “[withdraw] access from non-compliers.”[63] For representatives from the music and the film and television industries, the courts ought to be allowed to force ISPs to block access to the websites that allow piracy.[64]

To further curb illegal copying or streaming, it was suggested profiting from the theft and sharing of rights holders' exclusive and copyrighted content on illegal streaming services be deemed a criminal offence.[65]

Many witnesses also asked for modifications to the safe harbour provisions related to digital intermediaries and ISPs. The Committee heard that these provisions ought to be reviewed to ensure that these online services are held accountable for their role in diffusing content. The recommendation is linked to the theme of Canadian content previously discussed. Witnesses told the Committee that the Internet should not be seen as a set of “dumb pipes”[66] and, rather, that ISPs “enjoy and greatly benefit from access to the music they give their clients.”[67]

Recommendation 5

That the Government of Canada review the safe harbour exceptions and laws to ensure that Internet service providers are accountable for their role in the distribution of content.

Recommendation 6

That the Government of Canada increase its efforts to combat piracy and enforce copyright.

Copyright Board reform

Many witnesses said that reform of the Copyright Board is necessary to improve its efficiency, and to ensure that it can play its role as established in part VII of the Copyright Act. The Committee recognizes that a reform of the Copyright Board was announced in the Budget Implementation Act, 2018, No. 2. This section is included in the report as most of witnesses’ testimony to the Committee was received before this announcement.[68]

As explained by Mr. Schaan, the need for reform “has been [a] long-standing consensus among stakeholders.”[69] In particular, Mr. Schaan said that the Board’s efficiency has been identified by many as requiring reform, as “it can take as much as six to seven years to set a tariff.”[70]

Because of the delay in establishing tariffs, some witnesses, such as Greg Johnston, President of the Songwriters Association of Canada, said that the current system cannot adapt to new technologies in a timely manner.[71] This creates a “negative economic impact on creators” compared to other countries when it comes to the digital uses of creative works.[72] This point of view was also expressed by Jennifer Mitchell, President of Red Brick Songs at Casablanca Media Publishing.[73]

The witnesses who discussed the workings of the Board all recommended its reform.[74] In its brief, the Canadian Music Policy Coalition[75] explained that in addition to accelerating Board proceedings, it was also necessary to “codify and clarify specific Board procedures through regulations” and to create well-defined, objective criteria for the Board to follow when setting a new tariff.[76]

While the need for a reform of the Board was expressed primarily by witnesses from the music industry, it was also raised by representatives of the writing and publishing industry.[77]

Copyright term extension

The question of the copyright term extension was raised throughout the study by witnesses representing the music industry as well as the writing and publishing industries. Article 6 of the Copyright Act says:

The term for which copyright shall subsist shall, except as otherwise expressly provided by this Act, be the life of the author, the remainder of the calendar year in which the author dies, and a period of fifty years following the end of that calendar year.[78]

The proposal made by witnesses was to extend this provision from 50 to 70 years after the author’s death to align with Canada’s main international partners.[79]

The Committee acknowledges that the new Canada – United States – Mexico Agreement, which was signed on 30 November 2018, requires Canada to modify its intellectual property framework to extend copyright protection to “life plus 70 years.” However, at the time of the study, this new agreement had not completed the legislative process towards ratification and implementation. This section therefore presents witnesses’ views on this topic.

The Canadian Music Policy Coalition held that the current term is outdated and disadvantages both creators and Canadian interests in international trade.[80] In his testimony, Jérôme Payette of the Association des professionnels de l'édition musicale explained that the length of the copyright term was meant to protect creators for two generations and that due to an increase in life expectancy, protection should be extended.[81] The economic benefits of term extension for copyright owners would be additional investment “in the career development of Canadian songwriters and composers.”[82]

Artist Miranda Mulholland said that extending the copyright term would be a “legacy move” that would give artists like herself “the ability to leverage their success.”[83] For the Canadian Academy of Recording Arts and Sciences, aligning Canada’s copyright term with its major trading partners would ensure “robust compensation” to creators and their families.[84]

No witnesses expressed outright opposition to extending of the copyright term from 50 to 70 years after death. Paul Verhaegh of the Professional Writers Association of Canada told the Committee:

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.[85]

Brianne Selman of the Cultural Capital Project brought forward a nuanced approach. She explained that there is “no incentive up front to artists to extend term to 70 years after death” and that she sees more value in rights reversion.[86] However, she added that “reversion and ownership of rights do not exclude actual term extension.”[87]

Recommendation 7

That the Government of Canada pursue its commitment to implement the extension of copyright from 50 to 70 years after the author’s death.

Music industry

Over the course of the study, witnesses from the music industry explained how their work has been affected by new access points and made recommendations to improve their remuneration.

New distribution models

The advent of streaming platforms has had a profound impact on the music industry. The main issue raised by artists is that the rules have not evolved with technology and that, consequently, artists do not receive their fair share when it comes to remuneration. Ms. Théberge explained that “overall revenues from sound recordings in the Canadian music industry remained relatively stable”[88] between 2010 and 2015 due to an increase in streaming revenues. However, artists’ remuneration has not increased. As explained by Mr. Henderson, “wealth has been diverted from creators into the pockets of massive digital entities.”[89]

A concrete example was raised by artist David Bussières, who is also the founder and spokesperson for the Regroupement des artisans de la musique. He explained that the remuneration for one of his popular songs, Lumière, differed greatly between platforms. He described that his band:

received $10.80 for 30,000 plays on Spotify, or 0.036¢ per play. For 60,000 views on YouTube, we received $153.04, or 0.5¢ per play. I compared it to traditional commercial radio, where the song had reached fifth place on the charts after about 6,000 spins: we received $17,346.89, or about $2.89 per spin.[90]

Artist Andrew Morrison of The Jerry Cans told the Committee that music production has become “such a small part” of their income generation, and that their remuneration comes mostly from performances.[91]

Dominic Trudel, Chief Executive Officer of the Conseil Québécois de la musique, raised specific issues faced by classical musicians. He explained:

Concert music is unique in that ensembles vary in size.… Another unique thing about concert music is that it’s a niche market.… The other thing about classical music is that all orchestras share the same repertoire of internationally renowned composers, making it very hard to stand out in the digital landscape.[92]

He added that the new platforms are “sometimes ill-adapted”[93] to classical music and that their remuneration models is disadvantageous for classical musicians. Revenues from those platforms remains low.[94]

Witnesses explained that the current royalty rate being paid for streaming is too low.[95] Jean-Pierre Caissie, administrator of the Alliance nationale de l’industrie musicale, told the Committee that the current rate of 0.012 cents per play is 25 times lower than in the United States of America.[96] While the Copyright Board is responsible for establishing royalty rates, Ms. Dupré of the Société professionnelle des auteurs et des compositeurs du Québec, told the Committee that the role of the federal government should be to take “the necessary measures to ensure that creators are adequately compensated for all uses of their work” as “equitable remuneration is essential to the survival of creativity.”[97]

Recommendation 8

That music streaming services be regulated like other Canadian music services.

Recommendation 9

That tariffs for online music services be reviewed by the Copyright Board to ensure  royalty payments provide fair compensation for artists.

Frequent recommendations

Throughout the study, witnesses from the music industry raised several frequent recommendations, which were presented by members of the Canadian Music Policy Coalition[98] as well as by Music Canada.[99]

Radio royalty exemption

Many witnesses from the music industry recommended the removal of the radio royalty exemption from the Copyright Act. Currently, except for a $100 nominal fee, “radio stations [are] exempted from paying royalties on their first $1.25 million”[100] in advertising revenue due to the provisions of article 68.1.[101] Witnesses who argued against this exemption said that it helps subsidize profitable businesses,[102] only targets performers and record labels,[103] was only supposed to target “mom-and-pop stations” but now applies to all broadcasters,[104] and that it was supposed to be a temporary measure.[105]

While most witnesses who discussed the radio royalty exemption were in favour of its removal from the Act, the Canadian Association of Broadcasters told the Committee that it should remain in the legislation. In their opinion, “[a] balance has been achieved” and they “believe it would be counterproductive for Canada, for radio stations, and for artists”[106] to modify that provision. Corus also asked that the Committee does not recommend removing the exemption as “Canadian broadcasters pay more than their fair share.”[107]

Recommendation 10

That the Government of Canada amend the radio royalty exemption found at section 68.1(1) of the Copyright Act so that it applies only to independent and/or community-based radio stations.

Definition of sound recording

Another recommendation raised by many witnesses from the music industry was to modify the definition of sound recording.[108] This recommendation was part of Music Canada’s testimony and received approval from artists, producers and other organizations representing rightsholders. Currently, the Act states that a sound recording:

means a recording, fixed in any material form, consisting of sounds, whether or not of a performance of a work, but excludes any soundtrack of a cinematographic work where it accompanies the cinematographic work[109]

According witnesses the definition must be amended “so that performers can collect royalties when their recorded performances of music on soundtracks of audiovisual works, such as TV programs and movies, are broadcast or streamed.”[110] The Committee heard that the current definition represents over $45 million in losses for artists every year.[111]

Ms. Mulholland described how she has been affected by the current definition of sound recording. She said:

Even though I played on every episode of CBC's Republic of Doyle, which is now syndicated worldwide—I've seen it on TV in Germany—I only received the one-time union rate I got per session, which is about $280. However, the composer of the songs collects residuals every time that show airs around the world. In 44 other countries around the world, they give artists the right to receive public performance royalties when their sound recordings are used as part of a soundtrack for TV and film.[112]

In its brief, Corus opposed modifying the definition, calling the proposal an “attempt by large foreign conglomerates to ‘double-dip’ at the expense of Canadian media businesses.”[113]

The Canadian Association of Broadcasters opposed this proposal to modify the definition of sound recording. They told the Committee that:

Any consideration of adding new costs on conventional television broadcasters, or on the digital sector, should be rejected as it would diminish Canadian broadcasters' ability to invest in Canadian productions by shifting more than $50 million into the hands of foreign owned corporations.[114]

Recommendation 11

That the Government of Canada amend the definition of sound recording found in section 2 of the Copyright Act to allow sound recordings used in television and film to be eligible for public performance remuneration.

Private copying regime

Another frequently raised recommendation was related to the private copying regime. The private copying regime is a levy paid by manufacturers for the sale of private copying devices. The money is sent to the Canadian Private Copying Collective, which administers its distribution back to artists.

With music consumption changing from physical to digital, artists’ remuneration through private copying decreased significantly: 89% less revenue in 2016 compared to 2004.[115] The issue, as explained by the Canadian Private Copying Collective, is as follows:

[The] private copying regime is focused on audio recording media…. The court’s interpretation of the term “media” excludes devices or recording media embedded in devices. Although they could understand the desire, the rationale, the logic, in doing so, they felt that word “medium” was too restrictive … in French it’s “support” which is a much broader term and could certainly be interpreted to encompass both.[116]

Witnesses recommended that the private copying regime be made “technologically neutral” so that it could apply for all types of devices without requiring the law to be amended whenever a new device is created.[117] The Screen Composers Guild of Canada told the Committee that the legislation should be “techno-moral”, explaining that “it should be agnostic across all existing and all future technology.”[118]

While some witnesses supported the recommendation to update the private copying regime, others expressed concerns. Oliver Jaakkola, Senior Vice-President and general counsel at SiriusXM Canada, warned that, should the private copying levy be extended, “care should be taken that it does not apply to memory in dedicated devices when the music service is already paying the tariff for such copies”[119] and avoid the double payment of royalties. Jason Kee, representing Google Canada, told the Committee that such a change might not be well-received by consumers as “it would increase the cost … with respect to their monthly subscriptions.”[120]

In addition to amending the private copying regime, some witnesses suggested the creation of an interim fund to compensate music creators for their loss of revenue until the changes to the regime could be applied. This four-year fund of $40 million per year would come from the federal government and the money would be administered by the Canadian Private Copying Collective. Witnesses who raised this idea all said that it should be a temporary solution and should not become permanent.[121]

Other recommendations

In addition to these frequent recommendations, witnesses from the music industry also suggested other changes that would support artists.

Reducing the number of exceptions

Witnesses from the music industry also said that the Copyright Act contains too many exceptions, and that their application is unclear.[122] Therefore, many requested that as part of the statutory review of the Act, a thorough review of those exceptions be conducted and that they be clarified and/or removed if needed.[123]

Recommendation 12

That the Government of Canada review, clarify and/or remove exceptions contained in the Copyright Act, ensuring that any exception respects section 9 of the Berne Convention for the Protection of Literary and Artistic Works, to which Canada is a signatory.

Recommendation 13

That the Government of Canada meet international treaty obligations (including Berne Convention for the Protection of Literary and Artistic Works, the Trade-Related Aspects of Intellectual Property Rights Agreement, and World Intellectual Property Organization Copyright Treaty).

Rights reversion

When he appeared before the Committee, musician Bryan Adams recommended a modification to another aspect of copyright law: the reversion of rights back to the author of the work.

Currently, the Copyright Act states that authors who assign their rights by contract may only get them back 25 years after their death. Their estate then manages these rights. In his proposal, Mr. Adams suggested to modify the words “death of the author” in article 14 (1) of the Act by the word “assignment.”[124] This would, according to Daniel Gervais, professor at the Vanderbilt University Law School and President of the International Association for the Advancement of Teaching and Research in Intellectual Property, would “limit [the] unfairness” that comes from the unequal bargaining position of an artists compared to a producer, and align Canada with its international partners.[125]

This recommendation received support from other witnesses. Dr. Brian Fauteux, primary investigator at the Cultural Capital Project, said that it “does offer some balance to the historically imbalanced relationship between artists and labels, where creators are often pressured to sign away their rights for life.”[126] Brianne Selman, secondary investigator at the Project, added that “rights reversion offers a real incentive to artists” compared to term extension.[127] Artists and Lawyers for the Advancement of Creativity said that this type of measure would “give the author (or author’s heirs) an opportunity to obtain greater benefit from works that may continue to have a market.”[128]

Recommendation 14

That the Government of Canada amend subsection 14(1) of the Copyright Act so that it reads “from 25 years after assignment.”

Tariffs

As discussed above, many witnesses agreed on the need to reform the Copyright Board. In addition to its reform, witnesses also recommended other possible changes to its tariffs.

Regarding online performances, both Artisti[129] and the Regroupement des artisans de la musique[130] said that the compensation artists receive for such performances should be increased. Artisti also recommended the creation of a new tariff for broadcasters who would like to use a reproduction of a work.[131]

In addition, Caroline Rioux, President of the Canadian Musical Reproduction Rights Agency, asked that the Board be required “to protect a minimum per use value for the copying of musical work.”[132]

Additional support from the federal government

Some witnesses also asked that the federal government play a bigger role in supporting music creators. They suggested different ways it could be achieved: through funding, promotion and data collection.

Witnesses recommended different forms of additional funding that could come from the federal government. For the Regroupement des artistes de la musique, a federal tax credit should be created for “producers and self-producing artists”.[133] Guillaume Déziel supported the creation of a new funding system that would favour creative works with more permissive licences,[134] a recommendation that could be applicable for all creative industries.[135]

In addition to new funding, the Conseil québécois de la musique told the Committee that the federal government could further support music creators through promotion and enhanced data collection. It said that to improve the discoverability of Canadian artists, “promotion initiatives to spread awareness for content available on the large, international platforms”[136] should be created. To ensure that artists are remunerated fairly for their work, the Conseil also recommended the creation of “a uniform system of data collection that would allow people to identify rights holders.”[137] This would be particularly helpful to classical musicians due to the difficulties in correctly identifying “composers, performers and various elements of any given classical music recording.”[138]

Recommendation 15

That the exception for charitable organizations in subsection 32.2(3) of the Copyright Act be clarified to apply strictly to activities where no commercial monetary gain is intended.

Film and television industries

New distribution models

Much like the music industry, players in the film and television industries have been affected by the shift to digital streaming services. Foreign-owned platforms such as Netflix, Amazon and Apple have simplified the way that film and television are consumed. As Laurie McAllister, Director of the Performers' Rights Society and Recording Artists' Collecting Society of ACTRA, said: “While it's easier than ever to have your creative work seen and heard around the world, it's harder than ever to be properly compensated.”[139] For the Aboriginal Peoples Television Network, the shift to digital platforms has seen payments for artists decline.[140]

The Screen Composers Guild also noted how the shift to digital has impacted their remuneration. Ari Posner, Screen Composer of the Screen Composers Guild of Canada, raised the example of his work with the television program Anne with an E, which aired on CBC and on Netflix. He explained:

It's playing on CBC, and I do see some broadcast royalties from CBC.… Everywhere else in the world, it's on Netflix.

I can tell you that I've seen a staggering drop in the remuneration for that property; I would say it's close to 95%. If it were playing terrestrially in all those places, it would be a massive, massive difference. SOCAN, which is the advocate for someone like me, really has no way to get behind those closed doors of Netflix. Netflix will not give them the data they need in order for them to properly tabulate the views and turn them into a proper remuneration model.[141]

Much of the industry’s concern with the shift to digital is its impact on the creation and consumption of Canadian content. Namely, there are no policies to ensure that digital streaming services contribute fairly to the creation of quality Canadian programming.[142]

Canada’s proximity to the United States is a key factor to consider as the Canadian market is saturated with American programming.[143] Of particular concern for witnesses from the Indigenous film and television sector was discoverability.[144] “Part of the challenge we're currently facing,” said Jonathan Frantz, Producer of Kingulliit Productions at Isuma Collective, “is the ability to get our content out to Indigenous audiences.”[145] To further compound this issue, Canadians in northern communities have limited access to online streaming services as internet access is extremely expensive and slow.[146]

Recommendations regarding remuneration models

Extension of moral and economic rights

For performers, a key recommendation was the extension of moral and economic rights in the Copyright Act to audiovisual performers.[147] Extension of economic rights would give audiovisual performers exclusive rights to authorize the use of their performances. Moral rights would provide audiovisual performers with the right to be identified as a performer in the performance and the right to object to any material distortion or modification of the performance that would be prejudicial to their reputation.[148]

Recommendation 16

That the Government of Canada extend moral and economic rights to audiovisual performers.

Definition of Sound Recording

The Committee heard that for performers, amending the definition of sound recording in the Copyright Act to allow sound recordings used in television and film to be eligible for public performance remuneration would be beneficial. ACTRA noted that currently, performers are not compensated when sound recordings are used in film and television productions, resulting in an estimated $55 million of lost revenue annually.[149]

Authors of cinematographic works

The Committee heard opposing perspectives on who should have copyright ownership when it pertains to cinematographic works.

Producers were in favour of maintaining the status quo.[150] According to Stephen Stohn, President of SkyStone Media and member of Canadian Media Producers Association, “A producer's copyright is the foundation for all private and public funding sources for film and television projects in this country and in the United States.”[151] He added that authorship and ownership of copyright in the cinematographic work is what allows the producer to commercialize the intellectual property and that producers would be unable to perform their role if they are not considered authors of the cinematographic work.[152]

Scott Garvie, Executive Producer, Shaftesbury Films Inc., also cautioned against such amendments, indicating that “the Canadian tax credit system is premised on the producer's ownership of copyright.”[153] In correspondence submitted Committee, Mr. Garvie described that to be eligible for the Canadian Film or Video Production Tax Credit, for example, the Canadian Audio-Visual Certification Office requires that the production company must be the exclusive copyright owner in the production.”[154] The Film or Video Production Services Tax Credit similarly requires that a producer own the copyright in the work.

The Committee also heard that introducing a multiplicity of copyright owners in each individual episode of a television series could problematic for the industry. Mr. Stohn, President, SkyStone Media, Canadian Media Producers Association, discussed his work producing the Degrassi television series in this context. He said:

We have now delivered 525 episodes over nearly 40 years.… To suggest that, for example, a screenwriter we hired to write episode 487, long after the characters, settings, formats, scenes, plot, storylines and music have already been in place for years and years, ought to be considered the author of that episode is simply wrong. However talented that screenwriter may be, she is working off a foundation—an ongoing foundation—and creative expression that has been built up over many years by many different contributors.[155]

Screenwriters and directors asked that the Copyright Act be amended so that producers are no longer deemed “authors” of cinematographic works. Specifically, they asked that screenwriters and directors be defined co-authors and first copyright owners of such works.[156] As producers are responsible for the financial and administrative facets of a production, they are defined in the current Act as “makers.” According to screenwriters and directors, these roles are not creative in the artistic sense and does not qualify a producer as an author.[157] They added that recognizing screenwriters and directors as joint authors provides support for creators and places them on a more level playing field.[158]

Recommendation 17

That the Government of Canada amend section 34.1 of the Copyright Act to deem the screenwriter and director the co-owners of copyright and co-authors of a television or cinematographic work.

Canadian feature film

Film distributors asked that the government of Canada “update its commitment to Canadian feature film.”[159] Specifically, film distributors suggested that broadcaster be required to air Canadian films on a regular basis.[160]

Writing and publishing industries

The Committee’s conversation with representatives from the writing and publishing industries centered around fair dealing and education and the impact on remuneration models for artists and creators. Fair dealing is an exception to copyright protection that permits certain activities that might otherwise constitute infringement, provided that the user does so “fairly,” and for one of the purposes listed in sections 29, 29.1 and 29.2 of the Copyright Act.

In 2012, the Copyright Modernization Act[161] added the term “education” to the permissible purposes for fair uses. This exception has created significant divide between the writing and publishing industries and the education sector, which will be discussed below.

Perspectives from the writing and publishing industries

Many writers and publishers noted how their incomes have declined since the changes to fair dealing in 2012.[162] The Committee heard that the industry experienced a significant drop in educational copyright royalties paid to writers and publishers as a result of free copying by the education sector.[163] As author Monia Mazigh said, “Our creative work is being used for free. In the meantime, Canadian authors are seeing holes in their incomes getting bigger and bigger.”[164]

Sylvia McNicoll, Author and representative of Access Copyright, described how her income has dropped significantly following 2012 amendments. She noted that in 2012, her income was $45 000, and in 2018 she would likely earn $17 000 as an author.[165] She noted that this issue is a direct result of illegal copying in the K-12 education sector. To compound the issues, she added that illegal copying does not foster students’ interest in reading. She said:

I have nine grandchildren, and they come home with photocopied segments of stories—Canadian stories, Canadian-written, Canadian-illustrated—and not only that, they don't like reading. It is sloppy, crooked, crappy content. Our kids deserve more.[166]

In addition to writers, the Committee heard that Canadian publishers have been negatively impacted by the 2012 amendments to fair dealing. House of Anansi Press/Groundwood Books, an independent publisher from Toronto, noted that there has been a steady decline in revenue from Canadian educational materials.[167] Matt Williams, Vice-President of Publishing Operations at House of Anansi Press / Groundwood Books, noted that “from 2013 through [2018], the drop in revenue has been close to $200,000. That amounts to a drop of around $100,000 in author royalties.”[168] Glenn Rollans, President of the Association of Canadian Publishers, described that:

The numbers from my company were down in licensing revenue, about 86% of where we were in 2012. You survive by finding ways to do more with less, but there are sacrifices.… We do fewer titles; we take fewer risks on important titles.[169]

Although there are other streams of revenue—such as books sales and freelance writing[170]—royalties are an important form of remuneration for writers and publishers.[171] Any changes to how these royalties are paid directly affects their incomes.[172]

Impact on Canadian educational content

In addition to the impact that fair dealing has had on remuneration models, witnesses said there are also cultural implications.[173] As revenues in the Canadian educational publishing industry declined over recent years, so has investment in the development of new materials.[174] According to Fernwood/Roseway Publishing,

With publishers no longer developing materials that reflect current scholarship and that meet quality standards, teachers will have to find other resources for their classrooms. It will be a challenge to find such materials, because, as mentioned, quality costs, and expertise must be compensated for. Ultimately, Canadian students are the losers.[175]

Impact of new digital access points

To compound the loss of income coming from royalties, the Committee also heard about the impact of new digital access points on remuneration models for writers and publishers. One writer noted that with the digital shift, rates of pay decreased[176] and infringement increased due to piracy.[177]

For the broader industry, sales of physical books are decreasing, whereas new technologies are allowing increased access to digital content.[178] Additionally, the digital shift requires the industry to invest in the creation of digital books and the development of new skills and marketing practices.[179]

Recommendations for fair remuneration

In light of declining revenues as a result of the fair dealing provisions, witnesses from the writing and publishing industries made the following four recommendations.

First, the industries asked that the fair dealing provisions regarding education be clarified in the Copyright Act.[180] Many authors and publishers pointed to section 29 of the Act, suggesting it should be more narrowly defined so that it does not allow the excessive copying of works.[181] “Without more defined parameters for fair dealing for the purpose of education,” said William Harnum, Chair of the Canadian Copyright Institute, “the door is left open for large-scale infringement.”[182]

Second, many industry representatives recommended that a return to licensing through collective societies be promoted.[183] Since 2012, a “breakdown of collective licensing in the education sector, outside of Quebec”[184] has occurred, resulting in a significant reduction in royalties. Witnesses noted that the collective licensing model is an effective means of ensuring that students and educational institutions can easily and inexpensively access the copyrighted materials while providing creators and publishers with fair remuneration.[185]

Third, to discourage systemic infringement, writers and publishers also called for increased statutory damages.[186] According to witnesses, the low penalty of $5,000 per infringement for non-commercial use does little to dissuade large institutions from complying.[187]

Lastly, the writing and publishing industries also asked that remedies for collective societies be harmonized under the Copyright Act.[188] According to Roanie Levy, President and Chief Executive Officer of Access Copyright, ensuring that all collectives have access to statutory damages will “make the Copyright Board's certified tariffs meaningful and ensure that writers and visual artists are paid when their works are copied.”[189]

Recommendation 18

That Government of Canada amend the Act to clarify that fair dealing should not apply to educational institutions when the work is commercially available.

Recommendation 19

That the Government of Canada promote a return to licensing through collective societies.

Recommendation 20

That the Government of Canada review, harmonize and improve the enforcement of the statutory damages for infringement for non-commercial use in section 38.1(1) of the Copyright Act.

Recommendation 21

That the Government of Canada harmonize remedies for collective societies under the Copyright Act.

Perspectives from the educational sector

Representatives from the education sector held that changes to the current fair dealing provisions would hamper education, research, innovation and creation.[190] They further added that as educational institutions, millions are spent annually on licenses for educational materials.[191] The Canadian Federation of Students added that students struggle to afford textbooks and learning materials.[192] In that light, many representatives from the education sector asked that the fair dealing exceptions be maintained.[193]

The Committee heard from the education sector that the financial challenges faced by Canadian authors and publishers are the result of the disruptions caused by digital technologies, not fair dealing.[194] Revenues in educational content are declining because educators are shifting the kind of content they use.[195] For example, the Council of Ministers of Education noted that “the education sector does not purchase as many textbooks as previous years, as digital disruption is shifting the kind of content used by K–12 educators.”[196] Michael Geist, Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, noted a similar shift is occurring in post-secondary institutions. He noted, “As universities and colleges shift to digital course management systems … the content used changes too.”[197]

Visual arts industry

The Committee also heard from witnesses from the visual arts industry, including artists, gallery owners and other stakeholders.

Resale right

One frequent topic mentioned by witnesses was the issue of the artist’s resale right. Unlike writers and composers who collect royalties whenever their works are performed or published, visual artists only derive revenue from the initial sale of their work. The artist’s resale right would provide that a certain portion, usually around 5% of the resale price of the work by an art dealer or auction house, is returned to the artist.

Some witnesses argued in favour of the addition of an artist’s resale right in the Copyright Act.[198] In its brief submitted to the Committee, Canadian Artists’ Representation / Le Front des artistes canadien (CARFAC) said that it would “offer greater financial independence for artists.”[199] Copyright Visual Arts added that it would be additional income for artists “that is not reliant on public funding availability.”[200]

Some witnesses gave examples as to how the resale right could benefit artists. Gina Fafard, owner of Slate Fine Art Gallery and representing the Canadian Artists’ Representation, mentioned the work of her father, artist Joe Fafard. She explained:

Over the last 30 years, at least 20 artworks by Joe Fafard sold at auction, which would have been eligible for royalties. The total price value of those works was $1.5 million. If he had the resale rights, he would have been paid almost $80,000 in royalties.[201]

The story of Annie Pootoogook, a well-known Inuit artist who died in tragic circumstances, was also mentioned.[202] William Huffman, marketing manager of the West Baffin Eskimo Co-Operative, explained that it was a very difficult situation for the co-operative as they could not find her at times and could not provide her with the remuneration she deserved.[203] Ms. Fafard added that Ms. Pootoogook used the revenue from the sale of her work to take care of family and friends in need. She told the Committee that the added benefits of the resale right would “benefit so many.”[204]

While not against the creation of an artist’s resale right, the Canadian Art Museum Directors Organization recommended that the “[C]ommittee give artist’s resale rights serious consideration, with attention to minimizing any administrative burden it may impose on institutions.”[205]

In its brief, the Contemporary Art Galleries Association told the Committee that they opposed the creation of an artist’s resale right. In their view, it is an “unfair” measure that would lead to decline in revenues for galleries and “the relocation of resold works far from … Canadian galleries and auction houses.”[206]

Law professors Ariel Katz and Guy Rub said that resale rights are not “copyright” and that their adoption in Canada would “primarily benefit the heir of successful and wealthy artists and collection societies” rather than less fortunate artists and would harm the Canadian economy and the art world.[207]

Recommendation 22

That the Government of Canada establish an artist’s resale right.

Exhibition right

Another issue specific to visual artists is the exhibition right. Currently, the Copyright Act says:

For the purposes of this Act, copyright, in relation to a work, means the sole right to produce or reproduce the work or any substantial part thereof in any material form whatever, to perform the work or any substantial part thereof in public or, if the work is unpublished, to publish the work or any substantial part thereof, and includes the sole right … (g) to present at a public exhibition, for a purpose other than sale or hire, an artistic work created after June 7, 1988, other than a map, chart or plan.…[208]

Due to this section, galleries and public museums are not legally required to remunerate artists for work created before 7 June 1988. Witnesses argued that the cut-off date is discriminatory to older artists and asked that the date be removed from the Act.[209]

The Canadian Art Museum Directors Organization opposed this recommendation, arguing that it “could have profound consequences, not only in the cost of exhibition fees themselves but also in the administrative burden of tracking down artists and estates to pay those fees,”[210] which might prevent some works from being exhibited. Instead, the organization supports a public lending right to improve the compensation of creators. This view is shared by Public Lending Right International.[211]

Fair dealing and education

Like the writing and publishing industries, witnesses from the visual arts industry expressed opinions on the fair dealing provisions and the exemptions for the education sector.

Like witnesses from other industries, CARFAC did not ask for the removal of fair dealing provisions but told the Committee that there is a “lack of clarity” that should be corrected.[212] In their testimony, both Copyright Visual Arts[213] and the Regroupement des artistes en arts visuels du Québec[214] proposed a new fair dealing exemption based on international precedents.[215] This new model “would not apply to educational institutions when a work is accessible on the market through a licence issued by a copyright collective.”[216] This recommendation also received support from CARFAC.[217]

Other recommendations

As explained in the section on the music industry, witnesses often mentioned the private copying regime as an issue. In its brief, the Société du droit de reproduction des auteurs compositeurs et éditeurs au Canada argued that not only should the private copying regime be extended to include digital recording media but also “all categories of works including visual works” for artists to be better compensated for their work.[218] This received support from Illustration Québec.[219] Tony Belcourt made recommendations to better protect Indigenous art and culture.[220]

In addition, the Visual Arts Alliance[221] proposed two other recommendations to support visual artists: the creation of tax incentives for self-employed artists (for example, income averaging), which was also supported by Illustration Québec,[222] and tools “to measure and monitor [their] socioeconomic conditions.”[223] Both these recommendations were supported by Canadian Art Museum Directors Organization.[224]

 

During this study, the Committee heard about the current realities facing artists and creative industries in Canada. As technology has evolved, remuneration models for artists and creative industries have not. Currently, artists are not being paid adequately for the use of their works, particularly online.

Witnesses overwhelmingly asked for concrete changes that would address the decline in the artistic middle class. As such, the Committee’s recommendations focus on modernizing remuneration models and leveling the playing field for artists and creative industries.

What became apparent throughout the study was that this issue affects not only artists but all Canadians. As Frédérique Couette of Copibec said, “what's at stake here is the dissemination of our culture and our conception of our cultural heritage.”[225] The Committee acknowledges that the continued creation of Canadian content depends on adequate remuneration for those who create it. The Committee shares the view of songwriter and musician Damhnait Doyle, who said, “as writers, musicians, and creators, our impact in the culture [of] this country is immeasurable, and we do deserve to get paid for our work.”[226]