Welcome, everybody, to meeting 136, as we continue our statutory review of the Copyright Act. Is there a hockey player with the number 136? No, there are no hockey players with the number 136—too bad.
Today we have with us, from the Business Coalition for Balanced Copyright, Gerald Kerr-Wilson, partner, Fasken Martineau DuMoulin LLP. We have, from the Canadian Chamber of Commerce, Scott Smith, senior director, intellectual property and innovation policy.
It's good to see you again, sir.
We have, from the Canadian Internet Policy and Public Interest Clinic, David Fewer, director. Finally, from the Public Interest Advocacy Centre, we have John Lawford, executive director and general counsel.
We will start. You'll each have up to seven minutes. We'll do a round of questions, and I believe we'll be leaving some time at the end for debating a motion that will be on the floor. That should leave us about half an hour to debate the motion, and we'll go from there.
Why don't we start with you, Mr. Wilson? You have up to seven minutes.
Thank you very much, Mr. Chairman.
Good afternoon, members of the committee.
My name is Jay Kerr-Wilson. I'm a partner with Fasken Martineau and am appearing today on behalf of the Business Coalition for Balanced Copyright, or BCBC.
The members of BCBC include Bell Canada, Rogers, Shaw, Telus, Cogeco, Vidéotron and the Canadian Communication Systems Alliance. BCBC's members support a copyright regime that rewards and protects creators, facilitates access to creative content, encourages investment in technology and supports education and research.
The exceptions that were added to the Copyright Act in 2012 were necessary to eliminate uncertainty that would restrict or inhibit the development of innovative new products and services. Reducing or eliminating these exceptions will put at risk hundreds of millions of dollars in investments. It will cause disruptions in the rollout of legitimate new services that would otherwise provide copyright owners more opportunity to earn revenue by giving Canadians more access to more content.
The coalition does not believe that new copyright levies should be imposed on ISPs or other intermediaries in an attempt to create new sources of revenue for Canadian creators and artists.
First, requiring ISPs to make content-specific payments is a clear violation of the principle of network neutrality.
Second, and more important, the Copyright Act is not the appropriate statute for promoting Canadian cultural industries. Canada's obligations under international treaties require that any benefit that is granted to Canadian copyright owners must also be provided to non-Canadians when their works are used in Canada. As a result, most of the money collected from Canadians would go to the U.S.
Third, copyright owners are already paid for lawful online activities through commercial licence agreements, and in the case of SOCAN, tariffs approved by the Copyright Board. Forcing Canadians to pay another fee for receiving these same lawful services is a form of double-dipping, a practice that was rejected by the Supreme Court in ESA v. SOCAN.
The government has other, far more appropriate policy tools at its disposal to promote Canadian cultural content and Canadian creators. Using these tools enables measures to be specifically targeted to Canadian creators in a way that the Copyright Act cannot.
The BCBC supports the addition of a new exception for information analytics. A human being can access and read a document without having to make a new copy or reproduction. Automated processes need to make technical copies in order to read and analyze the content of documents. Just as Parliament recognized the need in 2012 to create exceptions to apply to the reproductions that are required to operate the Internet, the BCBC believes that a new exception is required to eliminate any uncertainty regarding the making of reproductions for automated information analysis.
The BCBC recommends an additional improvement to the existing “notice and notice” regime. In Bill , the budget implementation act, the government introduced amendments to prohibit the inclusion of settlement demands and infringement notices. The BCBC strongly supports this proposal but believes additional amendments are necessary to protect consumers and to give ISPs the tools they need to stop these settlement notices.
Bill makes clear that ISPs are not required to forward settlement demands to subscribers; however, it contains no useful deterrent to dissuade rights holders or other claimants from including settlement demands in copyright notices. We believe the onus for excluding settlement demands from copyright notices must rest solely with the rights owner, not the ISPs, who currently face liability for failing to forward compliant notices.
The other needed change is to adopt regulations establishing a common standard for infringement notices. Canadian ISPs and the motion picture industry co-operated on the development of a standard format known as the Automated Copyright Notice System, or ACNS, which is freely available at no charge and reflects Canadian requirements. The government should enact regulations establishing the form and content of notices based on ACNS.
The BCBC is aware that the ministers have written to this committee and the heritage committee with respect to the changes to the Copyright Board and collective management of copyright. The BCBC supports many of the changes that have been introduced to improve the efficiency of Copyright Board proceedings.
The coalition is concerned that some of the changes will eliminate important protections for licensees and could result in monopoly copyright licensing practices that are no longer transparent or subject to regulatory oversight.
The coalition strongly supports amendments that will make it easier for copyright owners to effectively enforce their rights. The act should allow for injunctive relief against all of the intermediaries that form part of the online infrastructure distributing infringing content. For example, it should be explicit that courts can issue a blocking order requiring an ISP to disable access to infringing content available on preloaded set-top boxes or an order prohibiting credit card companies from processing payments for infringing services.
The BCBC recommends that the Copyright Act be amended to eliminate a potential conflict between a court order for ISPs to block access to infringing services and the CRTC, using its authority under section 36 of the Telecommunications Act, to prohibit that blocking.
The BCBC finds it unacceptable that an Internet service provider could be ordered by a court to block access to an infringing Internet service and prohibited by the CRTC from complying with that court order. This conflict must be resolved in favour of the court order.
Finally, the BCBC warns the committee against unfounded claims of a value gap between the music industry and Internet services. The claims made by the music industry and the amendment they're demanding ignore how rights are cleared through commercial transactions. If adopted, these measures would disrupt well-established commercial relationships and would ultimately result in substantial net outflow of money from Canadians to U.S. record companies. For example, the music industry wants the definition of “sound recording” revised so that record companies and performers get paid public performance royalties when sound recordings are used in soundtracks in film and television programs.
The music industry appears to suggest performers and record labels aren't paid for the use of recorded performances in soundtracks. This is simply false.
Record companies are free to negotiate the terms of using recorded music and soundtracks with the movie producer. Performers have to agree to the use of their performances in soundtracks and are entitled to demand payment through their agreements with the record labels. Furthermore, the Copyright Act already provides detailed provisions protecting the rights of performers to be paid for the use of their performances. Revising the definition of “sound recording” as suggested would result in record labels and performers getting paid twice for the same use.
If the committee is concerned about improving the financial fortune of performers, it could recommend that the division of royalties between record companies and performers in subsection 19(3) be adjusted. The simple change would immediately put more money in the pocket of every performer who's performance is played on the radio, streamed online, or played in bars and restaurants.
Thank you. Those are my comments. I look forward to your questions.
Thank you very much, Mr. Chair, and members of the committee, for the opportunity to address you today.
I'm actually here for the Canadian intellectual property council, which is a special council within the Canadian Chamber of Commerce—the national voice of business, representing over 200,000 businesses across Canada.
The CIPC is dedicated to improving the intellectual property rights regime in Canada and has broad-based participation from a variety of industries, including manufacturers, the entertainment industry, information and communications technologies companies, telecommunications and logistics firms, legal professions, retailers, importers and exporters, pharmaceutical and life science companies, and business associations.
The leaders of the CIPC are senior executives from corporations and associations who have a strong understanding of their industries' challenges and recognize the need for the protection of IPR in Canada. The mandate of the council is to promote an improved environment in Canada for businesses interested in innovation and intellectual property, by raising the profile of IPR among key policy-makers in the government and the general public.
I'd like to start by thanking the government for efforts to recognize the link between innovation and intellectual property rights in its intellectual property strategy.
Our counterparts at the Global Innovation Policy Center, GIPC, undertake a systematic evaluation of the strength of the IPR regimes in 45 economies. This year, Canada ranked 18, but the score has improved from previous years. Measures such as digital rights management and the enablement provisions introduced in the last update of the Copyright Act are important tools to help protect the significant investments made by creators in Canada. We would like to see those measures preserved going forward.
I'd also note that we are pleased to see that many of the suggestions put forward by the CIPC regarding changes to the Copyright Board have been reflected in Bill , announced last week.
We believe it's important to have a consistent, timely and predictable board, and one that supports and encourages new and existing businesses operating in Canada's cultural industries, through a more efficient and productive tariff-setting process; through provisions to enact reforms by way of regulation, particularly as it pertains to delays; through the provision to support independently negotiated tariffs; and through the adoption of clear decision-making criteria.
We look forward to seeing these provisions come into force in the spring of 2019.
I'd like to focus the balance of my comments today on two issues: addressing online piracy, and keeping the door open to research and innovation for artificial intelligence.
I'll start with a pervasive problem: the significant threat of online piracy that now includes new forms that were not dominant the last time the Copyright Act was reviewed. This includes the commercial operation of illegal online streaming platforms and set-top boxes preloaded with illegal add-ons that provide users with unauthorized access to entertainment content.
According to the MUSO piracy insight report, Canada is now one of the highest consumers of global web streaming piracy. In fact, this same report finds that Canada has moved up to eighth in the global country rank by piracy visits, totalling 1.88 billion visits to all piracy sites in 2016. That web streaming is now the most popular type of piracy in Canada.
In the Government of Canada's own study on online consumption of copyrighted content that was issued in May 2018, one quarter of all Canadians self-reported as having consumed illegal content online. Sandvine also estimates that 10% of Canadian households use illegal subscription services.
The economic harm caused by online piracy is all too real. According to research by Frontier Economics, the commercial value of digital piracy of film in 2015 alone was estimated at $160 billion worldwide. In Canada, where the film and television industry alone accounted for over 170,000 jobs in 2016 and 2017, and generated $12 billion in GDP for the Canadian economy, the impact of online piracy is significant.
Unfortunately, the current tools available in the Copyright Act are insufficient to deal with these new threats. While there is no single solution to piracy, the Copyright Act should be modernized and leverage tools proven to be effective in helping to reduce online piracy, including those available in Europe.
CIPC encourages the government to enact provisions that expressly allow rights holders to obtain injunctive relief from competent authorities, such as site blocking and de-indexing orders against intermediaries whose services are used to infringe copyright.
Illegal content is accessed through Internet intermediaries, and they are best placed to reduce the harm caused by online piracy. This principle has long been recognized throughout Europe where article 8(3) of the EU copyright directive has provided the foundation for copyright owners to obtain injunctive relief against intermediaries whose services are used by third parties to infringe copyright.
The need for modern and effective tools to help address online piracy has been supported by the broadest range of Canadian stakeholders, including Canada's largest Internet service providers, all of whom have recognized the harm caused by international piracy sites that harm Canada's creative economy.
Even the CRTC has acknowledged the harms caused by piracy in considering the application filed by the FairPlay Canada coalition earlier this year, but ultimately pointed to the current review of the Copyright Act as the appropriate forum to address this pressing issue. Building on precedents that already exist in Canada, the Copyright Act should be amended to expressly allow rights holders to obtain injunctive relief against intermediaries by site blocking and de-indexing orders of infringing sites.
I'll conclude with preserving an opportunity, and I'm going back to data here. Data, and the techniques and technologies employed to collect and analyze it, will allow Canada and the world to solve some of the world's most pressing economic, social and environmental problems. Data is now the engine of economic growth and prosperity. Countries that promote data's availability and use for society's good and economic development will lead the fourth industrial revolution and give their citizens a better quality of life.
Machine-learning frequently necessitates the use of incidental copying of copyrighted works that have been lawfully acquired. Works are used, analyzed for patterns, facts and insights, and those copies are used for data verification. To avoid the risk of blocking this activity, we suggest that any legislation that deals with the applicability of copyright infringement liability rules should examine carefully how these rules apply to all stakeholders in the digital network environment as part of ensuring the overall effectiveness of a copyright protection framework.
Thank you for the opportunity to present to you today.
Good afternoon, members of the committee. My name is David Fewer. I'm the director of CIPPIC, which is the Samuelson-Glushko Canadian Internet Policy and Public Interest Clinic at the centre for law, technology and society at the University of Ottawa.
We are Canada's first and only public interest technology law clinic. We're based in the university. We essentially bring lawyers with expertise in technology law issues together with students to advocate on behalf of the public interest on technology law issues.
Our work resides at the heart of Canada's innovation policy agenda. We work on everything from privacy to data governance and artificial intelligence, network neutrality, state surveillance, smart cities policies and, of course, copyright policy. Our work essentially is to ensure respect for Canadians' rights on technology policy, as governments and courts respond to Canadians' use of ever-changing, new technologies.
I want to start with two background comments with respect to approaching copyright policy. Number one is the concept of balance. It's been long settled now in Canadian copyright policy that balance is essential to the overall scheme and objective of the act. That means Canadian copyright policy must be directed towards achieving a balance between providing a just reward for creators and owners of copyright works and the public interest in the dissemination of works more broadly. This guiding principle is basically the touchstone of copyright policy and should be central to any review of the Copyright Act.
That brings me to my second background point, which is the USMCA. The recent conclusion of the renegotiated NAFTA agreement upsets the balance in Canadian copyright law policy. This is not the place to go through an extensive review of the changes to copyright law that will be required by the legislation, but three that jump out to me were a copyright term extension, the enhanced digital lock provisions which were further unsettling a troubling area of Canadian copyright policy, and the new customs enforcement rights, revamping an area of law that we had just within the last two years upgraded.
These are just some of the benefits to copyright owners that are promised in this trade agreement. We would ask the committee to engage in these hearings with a view to resolving or restoring the balance that's at the heart of Canadian copyright policy.
Substantively, I want to talk about three specific points. One is digital locks. To the extent that this can be done by Canadian copyright policy, we should be looking to roll back the overprotection of the digital lock provisions. There's an incredible imbalance between the rights that copyright owners enjoy with respect to digital locks versus the rights they enjoy with respect to the content itself. The content itself respects a healthy balance. It has a nod towards future creativity and innovation policies. The digital lock provisions do not.
Many provisions of the Canadian Copyright Act intended to benefit future creators and innovators are locked out where a digital lock is used, and it's difficult to justify that on any kind of reasoned analysis of Canadian copyright policy.
We would ask that the USMCA provisions be studied with a view to determining how best to maintain fair and flexible dealings with content in the face of digital locks. Essentially we say that draconian digital lock provisions deter and undermine Canadian innovation policy, and they undermine digital security. This is not just a user issue. It's an innovation issue. Creators such as documentary filmmakers and new forms of artists—appropriation artists, for example—encounter difficulties in the face of digital locks. That content is beyond their reach.
We would also ask that we look to the extent to which we can restrict criminal circumvention to commercial activity because of the tremendous disincentive of criminal prosecution for innovation and artistic work in the face of digital locks.
Second, I want to turn to fair dealing. CIPPIC has long asked that Canada look to make the list of fair-dealing purposes illustrative, rather than exhaustive. If the dealing is fair, it ought to be legal. That's the bottom line. Failing that, CIPPIC would support extending fair dealing to transformative dealings, to recognize different kinds of authors, such as appropriation artists and documentary filmmakers. Transformative dealings aren't covered well, within the existing fair dealing paradigm.
We would also echo the repeated calls that this committee has heard to extend fair dealing to what I'll call AI activities. We would look for a specific exception for informational analysis.
Other jurisdictions have done this, particularly within the context of the data mining exception, in jurisdictions such as Britain. Canada should be looking to this too.
Finally, I have a brief comment on the notice and notice system. CIPPIC supports the changes to the system that were recently tabled in Bill to curb abuses of that system, but we would actually echo Mr. Kerr-Wilson's comments about the need for adverse consequences for reckless or deliberate misuse of that system.
Thank you, Mr. Chair. Thank you very much for having me, committee members.
The Public Interest Advocacy Centre is a national non-profit organization and registered charity that provides legal and research services on behalf of consumer interests, in particular vulnerable consumer interests, concerning the provision of important public services.
PIAC has been active on copyright, from a consumer perspective, since the mid-2000s. In particular, we were heavily involved in the creation of the balance between creator and public rights achieved in the major overhaul that led to the .
Our message today is simple. The present Copyright Act has generally helped Canadian consumers to enjoy copyrighted works, as they should, without excessive strictures that do not align with the realities of how consumers watch, listen to or interact with copyrighted works.
Shaw Communications, when they appeared before this committee, said:
Overall, our Copyright Act already strikes an effective balance, subject to a few provisions that would benefit from targeted amendments. Extensive changes are neither necessary nor in the public interest. They would upset Canada's carefully balanced regime, and jeopardize policy objectives of other acts of Parliament that coexist with copyright as part of a broader framework that includes the Broadcasting Act and the Telecommunications Act.
However, the FairPlay coalition application recently brought in CRTC, and now brought to this committee by several vertically integrated media and telecommunications companies, substantially misrepresents the context in which this committee's report must be made.
In reality, first, expedient judicial relief is available against intermediaries. Secondly, administrative censorship is not common around the world. Third, little online copyright infringement may actually be occurring. Fourth, online copyright infringement appears to be declining. Fifth, Canada's broadcasting industry is profitable and growing. Sixth, blocking is not very effective at reducing privacy. Seventh, blocking piracy services generates little additional revenue for broadcasters; pirated programming is predominantly not Canadian. Next, increased revenues for broadcasters may not necessarily increase the quantity or quality of content produced and finally the proposed regime will result in the blocking of legal sites.
PIAC believes that the committee should not recommend the implementation of FairPlay-type proposals. The courts are better positioned to enforce copyright, and balance enforcement against the public interest in freedom of expression, innovation and competition, and net neutrality. Secondly, technical protection measures already exist and are available to protect the interest of content owners. Lastly, the blessing of any Internet censorship in this domain will likely spread to other areas of government activity. These considerations, we feel, weigh strongly against implementing the proposed regime.
As noted above, judicial relief is already available against intermediaries under the Copyright Act, and it's actually subsections 27(2.3) and (2.4). They address the enablement of copyright infringement “by means of the Internet or another digital network”.
In other words, the FairPlay coalition members wish to replace the present judicial enforcement regime with an additional administrative regime. What matters about an administrative process, besides its duplicative nature, is that the process would be handled likely by the CRTC, which the FairPlay coalition members apparently hope through its general jurisdiction over telecom would be able to use a blanket blocking order on many alleged infringing sites on all telecommunications service providers, not just providing the right of one ISP to block one website. That is why they are so keen on enshrining this belt-and-suspenders type of remedy.
To move to fair dealing, PIAC believes that fair dealing exemptions in the Copyright Act generally have facilitated fair use by the public that benefit the public interest. We would resist calls to reduce this, whether in the educational field or elsewhere. Ideally, Canadian fair dealing should also encompass transformative uses, such as remixes of songs and other creative endeavours, including documentary filmmaking. However, we recognize that this was not in the previous act revision.
The iPod or smartphone levy has also been proposed by some in this committee, and has been rightly rejected as inappropriate on many occasions, including in the Federal Court. This recycled idea is no better today. It denies the use of such devices' full capabilities, raises prices on a staple of consumerism and makes the person who uses only licensed content pay twice: once for a licensed copy of the content, and again for others who are presumed to violate the act. This unfairness should be obvious and conclusive.
Lastly, PIAC also opposes the idea of an ISP levy or Internet tax. Such an idea does violence to the very concept of common carriage by telecommunications providers and very likely would raise prices for Internet service. This is a bad idea when Canadians, and in particular low-income Canadians, are struggling to afford broadband Internet for economic and social purposes.
PIAC thanks the committee very much. I look forward to your questions.
Mr. Smith, one of the distinguishing things is that there's a balance that you hear in terms of piracy. In Windsor, where I'm from, we had a lot of piracy in the past over DirecTV. It was an American provision of service, but it was so easy to hack it, it became what they called a “football card”.
In an assembly line, you could buy a little box and then you would just reprogram the card. That's what they did at all the different plants. That's why I said assembly line, at whatever plant. It was reprogrammed and they got DirecTV for free. Finally, they had a small innovation and eliminated all that.
Where are we in terms of direct streaming? Is it still almost too easy? Is there any control we can do here, whether it's in terms of innovation or whether we have to go directly to the Internet service providers?
It's not an excuse, but when there's almost no barrier, when it becomes so easy, it becomes easier to get it than it is to sign up for some of the actual services.
You could do what you're suggesting in the Federal Court. You could have a site-blocking order. I think the reason it was brought into CRTC was that there was this idea that if they did it in CRTC, the CRTC could issue an order to block all ISPs, whether that ISP came and asked to be able to block or not. In Canada, if Bell comes and asks to block, you can be pretty sure TekSavvy's going to not want to come and block.
Do we want that blanket regime—which I think is what is being proposed, although I'm not quite sure from what people are saying today—or do we want to have it in court? In court, generally, you can't get that kind of across-the-industry order. I think what's going on with this administrative version is that they want to have a wide net. That's my theory.
You could do it. It is being done in other countries where there is a blocking order. I know they tried to institute it in the U.K. and backed off from it. Now they just use the copyright law.
I submitted this last week, or even before then. Mr. Chong has said that “study” is very important, but there was no mention even by the government of a pilot project until last Friday, so this gives exactly what we'd be asking questions on. It also says that we want to actually study, table something and report its findings to the House of Commons, and then have the government respond to it. That has been effectively taken out.
Not only that, there would be only one person, who wasn't even listed originally in my motion, the chief statistician. I asked for Statistics Canada officials, but I also asked for the Privacy Commissioner, representatives of the Canadian Bankers Association, and other witnesses.
I would imagine that if he had made a motion to maybe delete one or to add another, that would be fine. But to actually be saying that this committee will just invite and have one done in an hour, with no report and no response from the government, I think is a substantial change, Mr. Chair.
I understand Mr. Graham has things that he wants to do, but then he should propose his own motion, versus making major changes to the structure of this one.
We would abdicate our responsibility if we didn't look at it. If the same logic applied, then we would fold our tent on our copyright study, because the USMCA has been signed, and it has compromised our copyright review.
As well, the minister has pronounced some changes to the Copyright Board, so we have things that are in the mix of our process that we're currently doing right now. Having the motion in front of us is a reasonable approach to dealing with some of the things that have changed. We saw legislation that was passed three years ago that mandated a different way of data collection. That was some of the debate that took place with regard to the bill, and it's coming home to roost right now, because what was debated quite earnestly at that time was the fact that Shared Services Canada was going to do some of the data collection and, in that process, use third party agreements, including from the banks, as part of the changes that took place with Statistics Canada.
What's happening now is that the process of moving from the long-form census problems with the previous government in terms of its response rate diminishing and the changes that have been brought about for data collection through the digital age have required a better oversight process. This motion only brings light to all those different issues.
One of two things will happen. Either Canadians will be further enlightened about the current situation, and they'll have officials from Statistics Canada and others who would come forth, and they would also have privacy ones who can sort out the changes that have taken place.
We have legislation that really is just coming into the moving parts of its body right now that shocked Canadians, and that's the bottom line. It's something that's appropriate for this committee to do.
The committee can do one of two things at this point in time. We can almost self-declare our irrelevancy. We've kind of been doing that in the last little bit by defeating motions that had to do with emergency preparedness, the CRTC and other things we've had that are quite reasonable. They haven't been long. They haven't been ways we could define or destroy the work we are doing on copyright.
Again, this is a reasonable approach to try to get to some answers. I don't think there is any reason not to do this.
I'm going to go back to the spirit that I understood from the point that Mr. Graham brought. This is trying to get an understanding of what this initiative, whether it's called a pilot project or study, is all about. This is why, I think, if we actually ask the chief statistician to come and explain to us what was behind this, then we're going to be in a much better position to go back to Mr. Albas's motion. We would be able to make sure that, now that we understand what the scope or the intent is, we could then say these are the extra witnesses we want, and now we want to study, and the study should be x number of sessions, etc.
Honestly, I don't want to reject this, but what I also need, as a member, to make sure I'm doing the job that I need to do for my constituents, is to try to understand what it is that drove Statistics Canada to initiate this initiative, whether it's a pilot or whether it came on a Friday afternoon. What is the driver behind it? Once we understand that, then it's most logical for us to go back to this study and say, “Let's do a study for that.” That's all I wanted to add to the record.