Thank you very much, Mr. Chair and committee members.
I do want to recognize Wanda Noel, who has been the counsel for CMEC on the copyright issue for quite some time. I would like to recognize Andrea John and Chris George, in the audience, who are here in a supportive capacity. Selfishly, I would like to inform the committee that my wife and daughter, Katie and Cecilia Churchill, are also in attendance. That's who the baby is.
We very much appreciate the committee's time on a very important issue in this country. There has been substantial conversation around copyright since the 1990s. I think it's important to recognize that we're trying to accomplish two key public policy objectives.
One is to ensure that the rights of authors and creators are protected, that they're fairly compensated for their work, and that that industry can flourish in this country. The other is to ensure that our public education system is able to access the widest range of materials as possible to ensure the long-term success and well-being of our students.
Fundamental to this conversation are two key aspects around copyright. One is fair dealing, and our understanding of fair dealing. A difficult question to understand is what's fair in terms of trying to juggle these two public policy priorities. Luckily for all of us in the room, the courts have done a lot of work for us in that regard, and have worked very hard over the course of 10 to 15 years to establish an understanding of fair dealing in the country, which we, as ministers of education, believe our policies fit well within.
The second question is around the idea of a mandatory tariff to be imposed on the education system. This is something that we do oppose. We support the court's definition of fair dealing. We do oppose a mandatory tariff on education materials.
I think it's important to recognize why that is. We believe that with the scarce public resources in our provincial jurisdictions in this country, we need to ensure that every single dollar that we spend is in the classroom and geared toward student success, achievement, and well-being. A mandatory tariff would take tens of millions of dollars out of our education system, and out of the classrooms of potential future writers and creators in this country.
I think it's important to note that this is not an education sector versus the creative industry issue, although there is some disagreement. We have a vested interest in the success of a vibrant, robust, healthy, successful, innovative, creative sector in this country. In fact, our education system is dependent on that. We recognize that there have been some changes to the economic model of these sectors as a result of technology, the Internet, open source information, and information that's being used in our education systems.
We don't believe a mandatory tariff is the best way to provide support to that industry, because we believe that takes money out of our classrooms where our precious dollars are very much needed.
I do want to discuss two issues that I know have come up in conversations at this committee. One is around the amount of full textbooks that are being copied. I know that's a concern for the industry. That would be a concern for us as well. That would fall outside of the guiding principles of fair dealing and use of copyrighted materials in the country.
Thankfully, we've had the Federal Court of Appeal and the Copyright Board look at this question on two separate occasions, and they've discovered that 98% of copying that does happen in our education system is actually within the context of following the principles of fair dealing. I think that's something that we should take great pride in. Ninety-eight per cent is a passing grade. I don't think we should look at bringing in a mandatory tariff in response to what is a 2% anomaly in our education system.
Also, I know it's been argued that the revenues from the education sector to the publishers and to writers has been impacted by the change in fair dealing and copyright legislation. I think if you look at the Statistics Canada information that we've provided, you'll see that sales have actually gone up for the K-to-12 education sector for books in our country since 2012. That's something that we should also take great pride in. That's happening at a time when technology is changing and the delivery of education in our system is changing.
In closing I do want to state that as ministers of education in this country who are responsible to be stewards of our education system, and who are responsible for delivering high-quality education to our students, we do support the court's definition of fair dealing and I believe our guiding principles are in line with that. We've provided those as well to you, and we are committed to working with yourselves, the federal government, and industry to come up with innovative, creative ways to support that industry to make sure that it's successful and thriving so that we can all benefit from it.
We just don't believe that subsidizing it with money from the classroom is the best way to accomplish that.
I will let the committee know that we're also, as ministers, investing $5 million nationally to further copyright education with our educators to make sure they are very well aware of their roles and responsibilities and also to do further assessments of compliance around copyright. I thought that would be of interest for the committee as well.
Thank you very much for those opening moments, Mr. Chair. I'm very happy to entertain any questions.
There are a lot of questions there.
Let's deal with Minister Jennex's comments in the Copyright Modernization Act. Minister Jennex's statement in 2011 or 2012 was correct. It's still correct. That's because adding education as a fair dealing purpose, which is what happened when the Copyright Modernization Act was passed, had nothing to do with the fair dealing guidelines. The fair dealing thresholds and guidelines are based on Supreme Court of Canada decisions that took place after the Copyright Modernization Act was passed. That's one thing. I saw a headline recently that said something like Minister Jennex lied to Parliament. Well, that's not correct, at all. It's just wrong.
On your reference to the PricewaterhouseCoopers' report, the origins of that was one report that was filed at the Copyright Board by Access Copyright, who is in the audience this afternoon, and another expert report that was done by Deloitte. When you're in a Copyright Board proceeding, you have duelling experts. That PricewaterhouseCoopers' report took one point of view. There was a corresponding study that said everything in that report is incorrect.
It's duelling economic experts. I would be more than happy, on behalf of Minister Churchill, to provide a copy of the other expert report that said PricewaterhouseCoopers is wrong.
The rates of the tariffs are set by the Copyright Board, and they're almost constantly appealed.
Prior to the tariff system, the fee was around $2.50 for a full-time student equivalent. The Copyright Board set a tariff that was $5 and pennies. It ended up at $4.81 when the appeals were exhausted. There are four million students, so it's four million times $5. You can do the math.
That was the case that the ministers of education took to the Supreme Court of Canada, and the decision was that short excerpts could be copied by teachers without paying copyright royalties. Then, in 2013, based on that decision, the ministers of education stopped paying the tariff, and decided to rely on fair dealing and licences, databases and repositories, and other things to meet their copying needs.
That's the range.
Yes, this is what we're running into.
In general, though, what we're hearing from not only the witnesses.... I know you have StatsCan stuff in front of us. When we have witnesses and people coming forward, it's not always representative of the full picture; there's no doubt. But it would seem to me we're running into a pattern of experiences, where there seem to be some winners and losers in the transition.
When government policy changes something, I think there's probably some expectation that there should be some amelioration or some public policy to help. Do you believe there have been any changes from your experience in the works you've been purchasing or your interaction with some of the content providers, maybe in your own province? Has there been any look as to whether there's been a shift since this has taken place?
Some authors say they've given up. They're not producing anymore. They have reduced their amounts. Has there been any examination to find out whether Nova Scotia has transitioned to new content providers, or has it just been the same?
I understand. I guess I'm looking for the response.
Any time I hear that the courts are dealing with a process, that's a failure of public policy, from our point of view federally...in this particular instance. We make decisions here that need sorting out in other jurisdictions, because they still haven't fully.... Perhaps with the complexity of copyright and the changing ways things are done, it was bound to end up there in some way anyway.
I'm looking for the things that were done, or could be done, to help some of the artists who are still transitioning here. That's what I'm curious about. In terms of your representation of the provinces, was there any overall plan, or is it each province? You mentioned Nova Scotia and what you've done. I represent an area of the underground railroad to Canada, so I know some of the stories directly that link my community to yours. Do you know if the other provinces are doing more comprehensive work to try to bring forth local culture, maybe new artists and new content providers?
Thank you very much, Minister.
I appreciate your being here, as well as Wanda, to help us with this copyright review today,
Recently we did a cross-country tour that allowed us to hear from various regions, various school districts, authors, and universities and colleges from coast to coast. When we were in Toronto, we heard testimony from someone who was fairly good, and who likened it to the 401, which is their superhighway, where someone will drive 100 when they first get their licence but then go up to 105, 110, and so on, then it's 120, and next it's the autobahn. She likened that to copyright, where someone takes one copy just because, and then so on. Then fast forward, we heard testimony from some authors in western Canada about their whole works being photocopied and distributed to classes.
What steps do school boards or the provincial ministers of education take to educate teachers and students on the copyright laws, and what kinds of policies do they put in place?
That's a really important question, because this is important to us as well.
We want to be following the guidelines of fair dealing, which means short excerpts only can be photocopied. We have heard anecdotally that there are examples of educators photocopying a full textbook, for example, and distributing that. The evidence, though, which has been assessed by the Federal Court of Appeal and the Copyright Board of Canada, indicates that in 98% of cases, photocopying is happening within the confines of fair dealing.
I think part of our success in that regard is due to the education we're providing to our educators. We do have manuals that are distributed to every single school in the country. We have these sorts of posters that are supposed to be at every single photocopier to inform people.
As ministers of education, we are further investing money, $5 million, to enhance our education on copyright and on the roles and responsibilities of teachers and to do further third party assessments on how we're doing. The Federal Court of Appeal and the Copyright Board of Canada consistently say 98% of the photocopying is happening within fair dealing. We're going to spend some money to utilize an independent third party to come in and provide us with an additional assessment to make sure we're doing our part, because we do not want to be operating outside of the realm of fair dealing. We do have a vested interest in the success of our creative industries. Our education system is dependent on them. We need to make sure that short excerpts of information from a wide range of sources are accessible to our students and available and affordable.
Education was added as a fair dealing purpose in 2012. That was in the spring and summer. In parliament, the question to Minister Jennex was, “Will adding education to the fair dealing provision as a new purpose have any impact on you paying the rights holders?” Her answer was no, it would not, nor did it.
Then, fast-forward to a Supreme Court decision that interpreted fair dealing far more broadly than anyone ever anticipated. The decision was that copying for student instruction is fair dealing as long as the excerpt is short. That was a much broader interpretation of fair dealing, and that in turn, six months later, led to the decision not to take up the Access tariff any longer because it wasn't providing value for money. There were millions and millions of dollars being spent for a licence that didn't have any value anymore because of the Supreme Court decision, not because of adding education as a fair dealing purpose.
When the Supreme Court of Canada decision came down in 2012 interpreting fair dealing broadly to say that copying short excerpts for student instruction was permitted or was fair, we were faced—“we” being legal counsel for colleges, universities, and the Council of Ministers of Education—with a situation where we had to put some meaning around what is a short excerpt. The Supreme Court said that you can copy short excerpts for students in a class, but it didn't say anything about what short excerpts were.
There were a number of sources that guided us in developing the limits that are in the fair dealing guidelines.
On the same day that the Supreme Court decided how fair dealing should be interpreted in an education context, they issued another decision, which interpreted fair dealing for the online sale of music. In that case, they did put some numbers around the amount that could be copied under fair dealing, and in that case, it was previews. When you buy music online, you can preview it. You can listen to a piece of it. It was 30 to 90 seconds of a four-minute song. At 30 seconds out of four minutes, that's 12.5% of the musical work. That was one source.
We also were looking at case law in the United States, where, as there is here in Canada, a dispute is going on between publishers and a university about how much could be copied for the use of students. In those decisions, which have now gone up to the federal appeals court, back down on reconsideration, and back up again, with no decision yet, the threshold of 10%, or a chapter, was used many times in the court's decision, finding that this threshold was fair.
Hello. Thank you for inviting me here today.
My name is Frédérique Couette. I am the executive director of Copibec, the Société québécoise de gestion collective des droits de reproduction.
Established in 1997, Copibec is the management collective of the community of Quebec authors and publishers. It is a non-profit organization. We collect royalties and pay them to authors, freelance journalists, creators, and publishers after covering our management fees.
About six years ago, we appeared before the committee studying Bill . At that time, we warned MPs about the risks and potential abuse associated with introducing the word “education” into the fair dealing exception. The education sector officials offered reassurance. They said they would never end the licences with collective societies. They said it was merely a clarification with no tangible negative consequences for copyright holders.
As of January 2013, however, those same officials started terminating their agreements with Access Copyright. The situation has gone downhill steadily ever since. They claimed the right to establish copying policies that allowed them to reproduce a chapter or 10% of a work, according to the broadest possible interpretation, so they would no longer have to pay royalties to copyright holders through their collective society. The ministries of education outside Quebec have gone so far recently as to sue copyright holders through Access Copyright, while at the same time refusing to pay the minimal royalties established by the Copyright Board of Canada in 2017.
The situation is worrisome in Quebec as well. In June 2014, Université Laval adopted a copying policy based on the one used by educational institutions in the rest of Canada. The other universities in Quebec, the CEGEPs, and the ministry of education are still working with Copibec, but each time an agreement is renegotiated, the royalties are further reduced. The annual royalty per university student has accordingly fallen by close to 50%, from $25.50 in 2012 to $13.50 in 2017, while the CEGEP rate has fallen by 15%.
Unfortunately, we have to recognize that our fears have for the most part been realized. The licence revenues of copyright holders are vanishing under pressure from the education sector, lawsuits are multiplying and dragging on, while intellectual property is being steadily devalued with each licence negotiation. Although Copibec has maintained its 15% management fees, the royalties paid to authors, creators, and publishers have fallen by 23% for each page copied by universities.
The universities told you about the millions of dollars allocated in their acquisition budgets to access the content of major foreign publishers of scientific journals. Yet about 80% of the reproduction declarations that we receive, regardless of the level of education, pertain to the reproduction of books and not international journals. It is not the large international publishing groups that have suffered from declining royalties, but our small and medium-sized publishers, our own publishers, for whom royalties account for 18% of net profits on average. For certain book publishers, royalties can account for as much as 30% of net profits. These revenues also make a significant contribution to the long-term survival of specialized Canadian and Quebec journals and can be the deciding factor in a publication's survival or demise. For our authors who are already in a difficult position, any drop in revenue in the copyright chain affects their financial ability to create.
Quebec's experience is nonetheless an example of collective management that allows for the negotiation of agreements between users and copyright holders. I am not saying that everything is great, because that is not the case. In fact, if nothing is done to correct the disastrous effects of the changes made in 2012, the situation in Quebec will only worsen and we will see a steady drop in royalties, if not their complete disappearance.
Quebec university students currently pay $13.50 per year for the Copibec licence. That amounts to less than half a per cent of a student's annual tuition fees in Quebec. Further, there is nothing in the agreements signed with the universities—they are signed with the universities and not the students—that requires them to pass those costs on to the students. For Concordia and the University of Montreal, for instance, this represents 0.08% and 0.07% of their annual operating budget for 2017-18 respectively.
Tuition fees are not higher in Quebec than in the rest of Canada. Paying royalties for the reproduction of excerpts of works has never jeopardized the Canadian education system or led to excessive student debt.
The fair dealing exception for education has been presented to you as the best way to access works. We are extremely puzzled by those statements, which are not backed up by any relevant evidence. At the same time, we know that collective management has always included this aspect of access to works, including digital works, owing to the agreements signed with foreign management organizations that belong to the International Federation of Reproduction Rights Organisations, or IFRRO.
Collective management is an undeniable benefit of a balanced act, as it balances access to works and ease of management on the one hand, with the compensation of rights holders through the payment of reasonable royalties on the other. It not only promotes direct access to knowledge, but also preserves creativity and cultural diversity for the future. It is for good reason that UNESCO considers collective management “an essential element in the construction of a modern national system of protection of copyright which would effectively promote a dynamic cultural development.”
Fundamental rights protect the compensation of authors and publishers. The Universal Declaration of Human Rights provides that all work should be paid and protects intellectual property. Copyright and all its elements is also intrinsically linked to authors' freedom of expression as it allows them to earn independent income that supports independence of thought.
Mr. Chair, vice-chairs, and members of the committee, thank you for your attention today. I would point out that our demands reflect a modern and forward-looking approach for a society that invests in its culture in the digital age. Collective management is not a model of the past, but rather a contemporary model that guarantees access and cultural diversity. The decisions you will make at the end of the current review will profoundly affect the future of the book publishing sector and cultural development in Canada.
I will conclude my presentation by quoting from the Creative Canada Policy Framework, published in 2017, regarding the review of the Copyright Act:
[...] Our copyright framework remains a vital part of our creative economy, and will continue to do so in the future. A well-functioning copyright regime should empower creators to leverage the value of their creative work, while users continue to enjoy access to a wide range of diverse cultural content.
Collective management is consistent with these and the other objectives of Canada's cultural policy.
Thank you for the invitation to appear before this committee.
My name is Roanie Levy, and I am president and CEO of Access Copyright. Access Copyright is a not-for-profit copyright collective created in 1988 by Canadian creators and publishers of textbooks, trade books, newspapers, magazines, and journals to manage the reuse of their works.
The copying that creators used to get paid for is now being done for free under so-called fair dealing guidelines. These copying policies reflect the education sector's interpretation of fair dealing, and were developed without the input or support of creators and publishers. These copying policies, which mimic the copying limits that had previously been paid for under the Access Copyright licence, effectively replaced the collective licence with an uncompensated exception under the guise of fair dealing for education.
The outcome is that 600 million pages of copyright-protected content is being copied for free each year by the education sector. This is content that is not licensed through academic libraries or made available under open access licences. Royalties collected by Access Copyright from the education sector have declined by 89% since 2012. Historically, these royalties represented 20% of creators' writing income and 16% of publishers' profits. The estimated loss of licensing royalties to creators and publishers due to the education sector's interpretation of fair dealing is $30 million a year. To this loss we must also add the loss in primary sales due to the substitution effect of free content copied under the education sector's copying policies.
I have structured my remarks today around four questions, which I hope will be helpful to the committee. One, when the act was amended, was it Parliament's intent to eliminate the collective licence and replace it with an uncompensated exception? Two, are the copying policies supported by the teachings of the Supreme Court of Canada? Three, are the copying policies damaging to the writing and publishing sector in Canada? And four, what should be the true purpose of fair dealing for education?
To learn what was intended and understood by the addition of education to fair dealing, it is useful to refer to the representations made by the education sector during the legislative hearings on the bill. Representatives from the education sector repeatedly and emphatically assured the legislative committee that the changes would not result in the education sector stopping to pay for the copying of works. Fair dealing for education, according to their testimonies, was not going to replace the collective licence.
For example, Paul Davidson, president of Universities Canada, said the following:
In particular, it has been suggested that the education community does not want to pay for educational materials and that Bill C-32, especially the addition of education as a new fair dealing purpose, will undermine the publishing industry in Canada and decimate the revenues of copyright collectives such as Access Copyright....These claims are false and are not supported by the facts.
Similar assurances were made again and again by representatives of the elementary and secondary sector. “We are not asking for anything for free” was repeated numerous times.
The Honourable Ramona Jennex, as was mentioned earlier, came before the legislative committee and said:
Nothing in Bill C-32 alters the current relationship among education, publishers, content providers, copyright collectives, and the Copyright Board.
Although replacing the collective licence with an uncompensated exception was not intended with the introduction of education to fair dealing, we now know that this is exactly how the education sector acted following the coming into force of the Copyright Modernization Act. Educational institutions across the country, except in Quebec, adopted copying policies that encourage the mass systemic and systematic copying of protected works without payment to the creators. Once these policies were adopted, most educational institutions walked away from their long-standing licence agreements with Access Copyright.
So if the copying policies were not intended by the changes to the act, are they in keeping with the decisions of the Supreme Court that you heard about earlier today?
Following the adoption of the copying policies, the creators' and publishers' only recourse to clarify fair dealing was to bring the matter to the courts. That is why Access Copyright sued York University. In a decision issued in June 2017, the Federal Court unequivocally concluded that the copying policies and practices adopted by York University, which are virtually identical to the policies adopted across the country by educational institutions, including the K-12 sector, are:
...not fair in either their terms or their applications. The Guidelines do not withstand the application of a two-part test laid down by the Supreme Court of Canada jurisprudence to determine this issue.
The copying policies are not in line with the Supreme Court of Canada's teachings.
Do they harm writing and publishing in Canada? The York case involved a four-week hearing, during which time the Federal Court judge heard extensive evidence, including the evidence of duelling economic experts. They were presented by both sides. The court looked at York's copying policies and their impact on creators and publishers. After careful examination, the judge found that the policies are arbitrary and unfair, and ultimately result in an unfair “wealth transfer” from creators to educational institutions. Importantly, the court concluded that “any suggestion that the Guidelines have not and will not have negative impacts on copyright owners and publishers is not tenable.”
It is important to note that this decision is the only court decision or Copyright Board decision that examines the fairness of the copying policies. There are no other decisions by any court that examine whether 10% or a chapter is fair—only this one.
What, then, should be the true purpose of fair dealing? Here again I think it is instructive to go back to the representations made by the education sector during the legislative committee.
Here is a first example. Steve Wills, at the time manager of government relations and legal affairs for the Association of Universities and Colleges of Canada, stated it clearly:
First of all, in regard to the educational community, nothing in Bill C-32, for starters, is going to change the revenue going to the collectives such as Access Copyright and Copibec. It's not about saving money. What it is about—the change to fair dealing in particular—is allowing certain educational opportunities that right now sometimes don't occur.
The Honourable Ramona Jennex also helps us understand what the true purpose of fair dealing should be:
We're not asking for anything for free. The education system, the sector, pays for licences and copyright, and will continue to do so. What we’re asking for with these amendments is to have things clarified.
The true purpose of the 2012 amendments, as represented by the education sector to the legislative committee, was to clarify that fair dealing can be relied on by educational institutions when the copying of a work is not covered by licences or easily available through the rights holders, not to do away with collective licensing.
We urge the committee to recommend that this be clearly stated in the act. As the litigation endures, uncertainty around what can be copied challenges educators every day. Creators are deprived of a significant chunk of their income and educational publishers are making tough decisions. Publishers are leaving the educational market, resulting in lost jobs and significantly reduced investments in the creation of Canadian content. This in turn means fewer opportunities and reduced income for creators.
At the end of the day, we all lose when Canadian creators and publishers do not have the economic incentives and ability to continue to create content that reflects who we are, our experiences and values as Canadians.
Thank you for your presentation, Ms. Couette.
Thank you, Ms. Levy, for being here.
We are hearing two sides. On one hand, the universities come in, their representatives saying we're paying more and more. On the other hand, we're hearing from authors, publishers, and yourselves as your association saying we're getting less and less.
Can you help clarify that? Do you agree with that? Are they paying more? Are you getting less? If so, what's happening?
We don't dispute that the university sectors may in fact be paying more and more for content. What's important to keep in mind is that the content that they are licensing and paying through their library licences is different from the content that they are copying under their copying policies. We're talking about two different buckets of content. There is some overlap, but very little overlap.
The content that they are licensing is, through their own testimonies before you, mainly journal articles. As an example, CRKN testified that out of $125 million, $122 million is spent with foreign publishers. That content is created often by academics, people who rely on a salary in order to be compensated for their contributions.
The content that is copied historically under the Access Copyright licence, today under their fair dealing guidelines, is mostly books, not journals. This is content that is created by professional authors who rely on royalties for compensation. It is not content that is licensed, by and large, through the library licences.
It's two different buckets of content. The Canadian content that is adapted and customized, that tells our story, is in that “B” bucket, the content that is being copied today for free.
If I may, I've been at Access Copyright for 17 years. I've been there, in a way, through this whole process, and what I'm going to express is my personal view of what has happened through the years. The Copyright Modernization Act took 15 years.
For 15 years the parties came before committees—sometimes legislative committees, sometimes standing committees—to look at another iteration of the Copyright Act. You had the creators, the writers and publishers, and the collectives on one hand, and you had the education sector on the other hand. Creators and publishers wanted stronger copyright, and the users—in our situation, the education sector, the libraries—wanted more exceptions.
We were at odds with each other for 15 years, and in the context of that tug of war around what the Copyright Act is ultimately going to say, big licences came up for negotiation. It became increasingly difficult for us to sit down at a table and negotiate the licence, and that's why we ended up before the Copyright Board. As the process continues, with these five-year reviews and litigation that takes almost decades to conclude, we are stuck in this tug of war. It is not our preferred situation.