Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 14 - Evidence for the morning sitting

OTTAWA, Tuesday, April 15, 1997

The Standing Senate Committee on Transport and Communications, to which was referred Bill C-32, to amend the Copyright Act, met this day at 9:30 a.m. to give consideration to the bill.

Senator Lise Bacon (Chair) in the Chair.


The Chair: Honourable senators, we wish to welcome our witnesses. We have before us representatives from the Canadian Music Publishers Association; la Société professionelle des auteurs et des compositeurs du Québec; the Society of Composers, Authors and Music Publishers of Canada; and la Société du droit de reproduction des auteurs compositeurs et éditeurs au Canada.

Please proceed.


Ms Claudette Fortier, Director, Société du droit de reproduction des auteurs, compositeurs et éditeurs au Canada (SODRAC) inc.: Madam Chair, we have agreed on the order in which we will proceed. Ms Bertrand will begin.

Ms Francine Bertrand-Venne, Director General, Société professionnelle des auteurs et des compositeurs du Québec (SPACQ): I am pleased to be here today. The SPACQ was established in 1981 by a group of songwriters and composers who wanted to improve their lot in life and push for a review of the Copyright Act. For songwriters and composers, the Copyright Act is not a piece of intellectual fiction. Rather, it is a fundamental economic instrument that ensures that they are remunerated when their works are used. Authors and composers must follow the economic life of their work. It is with this in mind that we will be making our presentation today. We have followed Bill C-32 closely as it has moved through the various stages. Initially, songwriters were hoping that the bill would improve their lot in life and either eliminate or restrict the exceptions already provided for in the Act.

On the contrary, all exceptions in place in Commonwealth countries were ultimately included in the bill. Some amendments were introduced last December with the support of the collective societies, and by extension with the support of the songwriters and composers themselves.

The bill grants additional powers to the Governor in Council, namely the right to intervene not only in the administrative recommendations of the Copyright Board, but also in the fixing of royalties and in the rendering of decisions. This is an important factor for us. We endorse the proposals that SOCAN will be making to you regarding this matter.

Between the second and third reading stages of the bill, new exceptions were included in the area of reproduction rights: these pertained to ephemeral recordings and transfer rights.

It is important to realize the essential nature of the non-derogation clause which applies to SODRAC. We are pleased with this provision and we urge you not to make any changes whatsoever to it at this stage of the legislative process. It is critical that this clause be retained, so that songwriters and composers who have moved to take control of their lives and who have arranged to have a collective society to collect royalties on their behalf can continue to exercise their rights as they see fit and continue to negotiate the reproduction rights to which they are entitled. The collective society SODRAC was created without the help of the state. It is the jewel of the SPACQ. A group of Quebec authors and took steps to have a collective society represent them, following the European civil law and copyright model. This was a goal that they had pursued for many years.

At this stage of the process, it is essential that SODRAC's non-derogation clause remain intact. One of the SPCAQ's biggest challenges is to make people understand why songwriters joined forces. Their objective in doing so was to make people understand that their profession is worthy of respect in Canada, that it is a rather unique profession, albeit one that complements that of artist, performer or record producer. The SPACQ remains convinced that in all other pieces of legislation where neighbouring rights were introduced, these were dealt with separately from copyright.

In Canada, most likely for constitutional reasons, there was some concern that the federal government might lose the upper hand. The fact remains that we are unhappy with the situation. I feel comfortable saying so because neighbouring rights advocates did not necessarily ask for this.

I want to make myself clear. Songwriters and composers are not opposed to having artists, performers and producers receive some form of remuneration. In conclusion, I want you to understand that songwriters and composers have already made major concessions where Bill C-32 is concerned.

I am telling you today that you must not amend the provision respecting reproduction rights. However, with respect to public performances, I want you to know that I support SOCAN's position because for songwriters and composers, there are two proprietary rights which involve the payment of royalties. They are entitled to be remunerated when their work is performed in public and when it is reproduced.

Unfortunately, Bill C-32 leaves us with mixed feelings. I repeat, it is critical for you to understand that songwriters and composers have already made major concessions and compromises.

You also have to understand that the organizations that will be speaking to you are members of SODRAC, at least in Quebec, and of SOCAN. Songwriters and composers have assigned these two proprietary rights to their collective societies which administer them on their behalf. I will now turn the floor over to Ms Fortier.

Ms Fortier: SODRAC is a collective society to which responsibility for administering reproduction rights has been assigned. It represents over 3,500 songwriters, composers and publishers in Canada. It also represents in Canada the musical repertoires of over 45 countries.

The Copyright Act is the legal instrument which gives creators control over how their works are used and which allows them to be associated with the economic life of their works. SODRAC grants licences for the reproduction of works such as sound recordings, television programs, films and other medium.

In 1989, the Supreme Court clarified that when a broadcaster recorded a program, the licence granted by SOCAN for the public performance of the work did not include the right of reproduction assigned by the authors to collective societies other than SOCAN.

Further to this ruling, SODRAC began to exercise the right that had been assigned to it by songwriters and composers, that is the right to collect royalties for the reproduction of works. This prompted broadcasters to begin demanding an exception to the Copyright Act because what they wanted ultimately was not to have to pay these royalties.

They got the exception they were asking for in clause 30.8 of Bill C-32. However, this provision stipulates that the exception does not apply to the undertaking when a licence is available from a collective society. We are happy with this provision.

Almost one year ago, we instituted proceedings against a group of radio stations. We took this action following two years of attempts to negotiate an agreement over the right to reproduce and transfer works to another medium. Clause 30.9 of the bill also provides an exception for the transfer of works to another medium. Here again, the exception does not apply if the undertaking can obtain a licence from a collective society such as ours. Again, we are satisfied with this provision.

Yesterday, Minister Copps explained that the government had sought to strike a balance. In legislation which must protect creators, such a balance will never be achieved because the scales will always be tipped in favour of users. Creators have made many compromises in the case of this bill. We are prepared to accept it as is. Therefore, we ask that you adopt it without amendment so that we can move on to Phase III.

The information highway and other new technologies are already taking over and here we are still attempting to decide how outdated technologies can be used. Yesterday, Michel Hétu from the Copyright Board explained to you that he had appeared before the Senate committee in 1988 during the phase I review. I was also present during phase I when the act was amended.

I started working in the creative field in 1976. Already there was talk of reviewing the legislation and updating it. I simply want to stress how urgent these amendments are. We have waited too long already. We urge you to adopt the legislation as quickly as possible without amendment. I would now like to introduce my colleagues from SOCAN.


Mr. David A. Basskin, Barrister and Solicitor, Executive Director, Canadian Music Publishers Association: The Canadian Music Publishers Association was founded in 1949. Our members represent the vast majority of musical works which are owned, administered, performed and reproduced in Canada. For licensing purposes, our organization represents more than 30,000 copyright owners and, generally speaking, we are pleased to see this bill in front of the Senate. We are delighted to be here today, after so many years of effort on the part of so many people. I appreciate this opportunity to address some brief comments to you.

We support this legislation and urge you to pass it in the form in which it has been presented to you. As the minister stated yesterday, the bill is the result of compromise. My colleagues have noted that, and I think many other people coming before you will note that as well.

This is not a perfect bill. The history of copyright legislation has always been one of compromise. Copyright is always a matter of balancing the interests of creators and users. It will never be entirely the way one side would wish it to be. This is inevitable. While we all do our share of lobbying and attempting to persuade people, I think we are all resigned to the fact that the bill will be a series of compromises. On that basis, I can tell you that the music publishers whom we represent would like to see this bill passed in the form in which it now appears.

The users have artistic objectives in deciding which works they will use, but the concerns of users, as opposed to those of creators, are largely related to property. The concerns of the creators of works are primarily artistic. Obviously, they are related to making a living. The primary distinction between creators and users is that copyright is all that we have. Users of works always have other sources of income. Educators receive financing from the public and their students through tuitions, et cetera; broadcasters can exclusively sell and control the commercial time, and so on.

This is all we have. Copyright is, in many ways, life and death to us. There is no common law of copyright. It is all contained within the Copyright Act. As Madam Fortier and others have said and will say, it is crucial to get on with the job of passing copyright legislation now. This bill will not bring our law up to date. It will update it to perhaps a decade ago. Other issues related to the information highway, and other issues in Phase III -- as those of us who have been in the process for a while are used to calling it -- are vital and we must have them.

The music publishers before you here support the major initiatives in the bill. We certainly support the creation of a levy on the sale of blank recording tapes, because the use of those tapes robs us all of revenue that would otherwise be driven into the sale of records, tapes and other sound carriers.

We support the creation of a neighbouring rights regime to the extent that it does not harm the interests of authors and publishers. We particularly support the creation of a statutory damages remedy and other measures in the bill that will make it more affordable for copyright owners to protect their copyrights. As things now stand, it is almost impossible for anyone to afford a copyright infringement suit, meaning that infringers can hide behind the cost of litigation. The elements of the bill that make it a little more affordable for copyright owners to pursue remedies are very important. They are a good balance of the interests of both the public and the copyright owners.

Finally, the exemptions in the bill have been a subject of continuous controversy. Generally speaking, we think the exemption package in the bill strikes a fair balance, but this brings me to the issue that you will probably have more questions about than any other -- and certainly the one on which the broadcasters will be speaking to you in the greatest detail <#0107> namely, as Madam Fortier has already discussed, the creation of the so-called ephemeral exception, clause 30.8 of the bill.

I will go back a step or two to ensure that we have set the context properly. Owners of music copyrights have primarily two streams of rights that flow from the copyright: the right to perform the music in public, which our friends at SOCAN represent; and the right to control reproduction of the music -- that is, reproduction of the music into a film or television program as well as reproduction of the music on tapes, CDs or other sound carriers.

The recording of music into programming is not a trivial matter to those who own copyrights. Today, most authors want to have the right to approve the manner in which the music is used in programs. In any event, as confirmed by the Supreme Court in the Bishop case in 1989, this is a right that belongs exclusively to the copyright owner.

The broadcasters came before the standing committee of the other place and filed a brief saying that it was too difficult for them to obtain clearance to use music on a timely basis. The word "clearance" is simply industry jargon for "permission to use music". Copyright law today requires the user of music, when he reproduces it into a film or a television program, or on the radio, to obtain the consent of the copyright owner. There are, of course, millions of copyrights out there. The broadcasters came before the standing committee and said that they cannot obtain these rights on a timely basis. They said that they recognize that people have rights, but that if they cannot obtain them on a timely basis they would be held up in making programs and they would like to see the law of Canada reflect a balance to give them an adequate opportunity to have access to the works.

Naturally, those who own and control the works would like to see some payment flow from the use of their works, particularly for the reproduction right. This strain between the desire of the broadcasters to obtain rights on a timely basis and the desire of those who own the works to get paid for their use is what has lead to the controversy over the so-called ephemeral exception. I say "so-called" because the term "ephemeral" tends to imply in our minds "trivial" or "incidental". Literally, it means "short-term use".

The argument of the broadcasters was that they cannot get the rights on a timely basis. I think that the ladies and gentlemen in the other place did a pretty good job of balancing these concerns. The broadcasters raised the spectre that the new statutory damages remedy would be applied to take what would otherwise, in their minds, be incidental uses of music and expose them to massive amounts of financial liability, which is a little extreme because they could not get the rights "on a timely basis".

Clause 30.8 grants the broadcasters what they asked for. It gives them a 30-day window to reproduce music without obtaining the permission of the users. This is a carve-out from the rights of authors and copyright owners but, in the view of the House, this was an appropriate balance. We think that, in terms of the overall balance of the bill, we can live with this if that is the choice before us. We think it is very instructive that the bill carves out an exemption from the exemption in the case of those rights which are made available by a licence from a collective.

This is interesting because it addresses directly the concern that was raised by the broadcasters. The broadcasters said they cannot get the rights on a timely basis, and the bill reflects the fact that rights that are available on a bulk or blanket basis from a collective are in fact available on a timely basis and in advance, and so that particular concern of broadcasters has been met.

When the broadcasters appear before you, I anticipate they will say some of the things they suggested in a recent press release and I should like to take the opportunity to address their concerns.

They are suggesting that under the law, radio stations will have to dump and rerecord all their music every 30 days. The argument they are making is that the bill will require them to get rid of recordings made after 30 days. As the law stands today, the copies that broadcasters make are an exercise of our rights which we frankly do not bother pursuing. Our members have no intention now, and have never had any intention, of pursuing this particular right. In other words, the broadcasters are raising a sham argument. It is not a problem today and we have no intention of making it an issue in the future.

We have already discussed the issue of a collective. They argue that it is not appropriate for a collective to have an exemption from the exception. Obviously, we disagree.

The primary argument the broadcasters are making is that they will be exposed to a tremendous amount of financial damage by this exemption. In practice, this will not be the case. Rights are available for programs on an every-day basis from licensing organizations and from copyright owners directly. To make one distinction about what this fight is really about, we think there are certain occasions on which broadcasters make reproductions of music that are essentially of a trivial nature. For instance, in coverage of the Santa Claus parade, if the marching bad goes past playing White Christmas by Irving Berlin, a copyrighted song, and a recording is made in the course of covering the parade, we do not pursue that and have no intention of doing so, even though, technically speaking, it is a use of a reproduction right. Under the exemption in the bill, they would be covered to use that tape for 30 days without obtaining anyone's consent provided they met the technical requirements of the legislation, which we do not think are onerous. The distinction is where the broadcaster creates a program ab initio from scratch and decides to use a particular piece of music -- the distinction in this case being a program by a broadcaster about Santa Claus parades or shopping in the holiday season, and he or she decides to use White Christmas in a scene. That voluntary choice to use programming represents the use of a right that belongs to someone else. For the broadcasters to suggest -- which I have always believed and have said on many occasions is their real agenda in this exercise -- that they should get that right at no cost because it is more convenient for them is simply wrong. It would be as wrong as my suggesting that they should not have the right to sell their commercial time.

Music publishers are in the marketplace and are licensing their songs and doing business in their property under copyright law, which is the only protection we have. We believe the bill strikes a fair balance and, particularly with regard to the ephemeral exception, should not be enlarged any further because the only arguments that can be made for enlarging it further are: "Give us their property for nothing." Those arguments will not be made to you in that form, but that is the underlying agenda of the broadcasters, namely, something for nothing.

I look forward to your questions and once again thank you for the opportunity to appear this morning.

Mr. Paul Spurgeon, General Counsel, Society of Composers, Authors and Music Publishers (SOCAN): On behalf of the Society of Composers, Authors and Music Publishers of Canada, I should like to thank you for giving us the opportunity to appear before you to express our views concerning Bill C-32. I am here with Mr. François Cousineau, a well-known Quebec-based composer, who is also a SOCAN director and its past president.

To make it easier for to you follow our presentation, I would ask you to turn to our two-page table of contents of our submission to the committee. I will not waste your time going through the submission word for word; however, I should like to highlight just two key areas of concern that SOCAN has. After that, hopefully, there will be some time for questions.

First, I should like to deal with the fundamental question of who will pay for these new rights that the Government of Canada is creating called "neighbouring rights". As you can see from the top of page 2 of our submission's table of contents, we believe that the users should pay and that clause 90 of Bill C-32 should therefore be tightened to ensure that Parliament's intention is made crystal clear.

Second, after I finish, Mr. Cousineau will discuss our views on how copyright royalties should be determined. He will therefore deal with clause 66.9(1) of Bill C-32 and discuss the role of the Copyright Board and the collective administration of copyright.

Allow me to turn to the first point of SOCAN's presentation, which is a question that members of Parliament frequently encounter in legislative committees all the time. The question is, of course: Who pays? The Government of Canada answered this question when Bill C-32 was tabled in the House of Commons on April 25, 1996.

That day, the ministers of Canadian Heritage and Industry issued a press release which stated:

These measures are about fairness and they acknowledge the rights of creators to receive recognition and remuneration for the use of their works...

It is therefore clear that Bill C-32's intent is to require users of works, and not other creators such as SOCAN's members, to pay for neighbouring rights. Do not forget that SOCAN's members are authors, the creators of the original underlying work, the song, that goes on the recording. The neighbouring right is the recording itself, the production.

SOCAN's performing rights have been recognized in Canada for seven decades. It is therefore important that Parliament clearly express its intent that composers, authors -- in other words, lyricists -- and their music publishers, not be required, either directly or indirectly, to compensate or to make room for Bill C-32's new neighbouring rights.

If Canada now wishes to recognize the neighbouring rights envisaged in the 1961 Rome convention, users must pay new and additional royalties regarding these rights. In other words, the royalty pie must expand to accommodate the new rights. Our expanding pie theory stands in stark contrast to the so-called cake theory advocated by some users.

For example, the CAB Radio Board stated in their submission on Bill C-32 to the House of Commons committee that broadcasters support the "cake theory" that the amount payable for the use of sound recordings should be a fixed amount. This means that if the cake, the fixed amount, is to be divided among more rights holders, then they will get smaller slices.

Parliament has provided both large and small radio stations with a generous threshold exemption in addition to a three-year transition period for larger stations. In addition to these generous exemptions, we do not believe it is fair for the users to now say that they do not intend to pay for neighbouring rights and SOCAN's members should accept smaller slices.

The last point I should like to make is that the question of who is to pay for Bill C-32's neighbouring rights is a fundamental policy issue that should be decided by Canada's elected representatives. SOCAN believes that Parliament must decide this pivotal question rather than leave it unclear and let the Copyright Board or the courts decide.

In order that its intent is respected, Parliament must ensure that Bill C-32 contains what is commonly referred to as a "non-derogation clause". This clause must make it clear that the addition of Bill C-32's new neighbouring rights must not prejudice, dilute or derogate in any way from SOCAN's distinct and long-standing performing rights for authors.

It is important to note that SOCAN did not dream up the concept of non-derogation clause. The very first article of the 1961 Rome convention stated that neighbouring rights must leave intact and not prejudice the performing rights of SOCAN's members, authors.

As you can see on page 16 of SOCAN's 19-page submission, we believe that clause 90 of Bill C-32 is a step in the right direction. However, it needs some fine-tuning. It is a technical amendment we are requesting. It is just four words we want removed. Those words are "in and of itself" or, in French, they are three words "par elles-mêmes".

We have provided in our appendix to our submission legal opinions from the law firm of Gowling, Strathy and Henderson that conclude that these words are superfluous and unclear. I should note that we are presently involved in hearings before the Copyright Board on commercial television. During one of the breaks, I overheard one of the counsel for the broadcasters chuckle to himself about what clause 90 really was. His statement was that it was a "non-non-derogation clause". I think that says it all. In our view, the introduction of the words "in and of itself" create ambiguity where it is not needed.

I conclude by saying that when it comes to appreciating the importance of ensuring that legislation clearly express Parliament's intent, SOCAN speaks with experience. In particular, we do not wish to relive the unfortunate experience that resulted from the unclear wording used when the Copyright Act was amended in 1989 to permit the licensing of music carried by cable systems in Canada. If you recall, that involved a definition of the phrase "musical work". Due to a lack of clear statutory guidance, several years of costly litigation ensued. In the end, to ensure that Parliament's intent was clearly expressed, a further amendment to the Copyright Act, Bill C-88 was required, at a great cost in time and money both to Parliament and to SOCAN's members.

Some of you may recall that SOCAN appeared before this committee in 1993 during the Senate's consideration of Bill C-88. This is why this minor technical amendment to clause 90 is so important to SOCAN. We simply cannot afford to repeat the mistakes of the past.

Now that we have dealt with the issue of who pays, let me turn things over to our past president, François Cousineau, who will discuss how copyright royalties should be determined.


Mr. François Cousineau, Director, Société canadienne des auteurs, compositeurs et éditeurs de musique: Before I discuss the role of the Copyright Board and how copyright royalties are determined in Canada, I would like to step back for a moment and place things in their proper historical context.

As you know, under the Canadian collective system of performing rights administration, SOCAN is Canada's sole performing rights society.

However, we are not a monopoly because, unlike a monopoly, we cannot restrict supply and set our own prices. The Copyright Board establishes royalties, not SOCAN.

The collective administration of performing rights is not a new concept. It was developed in its present form over a century ago. The Parliament of Canada has regulated this system since 1931.

Over 60 years ago, when the Government of Canada set up the Parker Commission to review how copyright royalties should be determined, the decision-makers really had the same two options available to them as you have today.

First, they could decide to let ministers and their government officials legislate the amount of royalties. The second option was to create an arms-length, quasi-judicial tribunal with the technical expertise and the procedures required to ensure that everyone had an opportunity to be heard.

In 1936, the Government of Canada chose the second option and the Copyright Appeal Board became responsible for the regular review and approval of royalties payable to performing rights societies like SOCAN.

Fifty years later, the Copyright Appeal Board was replaced by the current tribunal, the Copyright Board, in 1989.

So that is how we arrived at the system we have today for determining the amount of copyright royalties in Canada.

Let us now look to the future by answering the following two key questions. First, does the current system work? Second, are the changes Bill C-32 is proposing in the best interests of all of the parties concerned?

With respect to the current system, I believe that the royalties that the Copyright Board establishes for SOCAN are too low. However, I know you will hear from many of the people who use our creative works and they argue the royalties are too high. I have heard it said that in politics, if both sides are complaining, you must be doing something right.

I think it is fair to say that, although the Copyright Board system is not perfect, responsible officials are doing their best to balance the interest of creators and users in Canada.

Let me conclude my remarks by stating unequivocally that SOCAN believes the changes Bill C-32 is proposing for the Copyright Board should not be enacted in their present form.

If you turn to page 18 of 19 of our submission, you will see that we have reproduced section 66.91 near the top of the page. I would ask you to refer to page 18 of the brief before you. I will dispense with reading the provision.

This clause is unprecedented because Parliament has never provided such broad and open-ended powers to government ministers and their officials to direct the activities of this quasi-judicial tribunal.

It is not exactly clear how these undefined and vast powers will affect the way copyright royalties are determined. However, it is clear that the transparency of the process will be diminished because copyright users and owners will be forced to lobby ministers, their political staff and officials to ensure that Cabinet's regulations do not adversely affect their interests.

The democratic spirit, in its purest form, proclaims, recommends and institutionalizes the separation of legislative, executive and judicial powers. That is why a quasi-judicial tribunal should be allowed to function independently.

In sum, section 66.91 could transform the Copyright Board from a quasi-judicial tribunal into a political instrument of the government of the day.

I refer you to the next to last paragraph on page 11 of 19 of our submission which reads as follows:

For example, during report stage in the House of Commons, members of the Bloc Québécois, Reform Party, New Democratic Party and the Progressive Conservative Party voted in favour of SOCAN's request to eliminate section 66.91.

The liability for a copyright licence and the amount of that liability must be determined by an impartial adjudicator that only considers the facts and arguments submitted by the parties. Once a tribunal becomes subject to directives from the political arena, it runs the risk of quickly losing its quasi-judicial nature and its credibility in the eyes of both users and creators.

SOCAN therefore submits that section 66.91 should be deleted from Bill C-32.

Senator Roberge: We are well aware of section 66.91 and it has caused us a great deal of concern as well. However, if we move to amend or delete this clause, and Parliament is dissolved because an election is called, then the bill will not be adopted. If you had to choose between going with the bill in its present form, or proposing amendments, what choice would you make, bearing in mind that elections could be called and Parliament could be dissolved?

Mr. Cousineau: I refuse to make that kind of choice, because it is too simple. It is like telling a child that if he does not clean up his room, he will not go to the movies. Parents can do that.

In this case, it is not our fault if this discrepancy appeared in the bill. We have followed this bill closely since it was first tabled. We did the lobbying we had to do. We believe the legislation is important and fair. We are not talking about changing anything, only about removing a clause which allows government ministers and officials to interfere in the activities of a quasi-judicial tribunal. I cannot accept that. I wish I could give you a more substantive answer. I would like to see Bill C-32 adopted, but after this clause has been deleted.

You have to understand that I cannot change my position. I would be displaying a lack of integrity, and above all, a lack of total fairness.

Senator Roberge: I understand and I can appreciate this recommendation because I too feel that legislative and judicial powers should not be confused.


You were talking about virgin cassettes, Mr. Basskin. If people buy virgin cassettes, it seems to me that they are doing so in order to reproduce something. Why are people objecting to it? Are there other users?

Mr. Basskin: Obviously there is a wide range of uses for tapes. It has been suggested that church sermons or dictation or books for the blind might be uses. It is also obvious that, in the production of music itself, blank cassettes are used in the production of commercial recordings or even recordings in the studio.

The research done by government and by industry associations has led to the conclusion that the vast majority of the tapes which are purchased are used to reproduce copyrighted works. In fact, when I made the presentation in the other place, I was able to demonstrate by simply putting slides of audio cassettes up on a screen. These were cassettes that I had purchased the week before in dollar stores on Yonge Street. You could do the same thing today by going down to the Sparks Street Mall and looking at tapes all day, if you like. Virtually every tape you see has indications on the packaging saying "best for CD", "perfect for CD", "ideal for CD". There is even a brand called CD-it. The vast majority of uses are for copying of pre-recorded music.

Speaking on behalf of my members <#0107> and, I suspect the view is shared by those in the recording industry who will be attending before you later -- we have no problem with the concept of establishing a tariff for the collection of this levy which exempts books for the blind or similar purposes. We have no difficulty with exemptions for people with perceptual disabilities and for tapes used for professional purposes such as the making of original recordings of music, obviously, but the vast majority of tapes sold in this country, as in every country around the world, are used for copying pre-recorded music. That takes away from the income of authors, composers and performers.

Senator Roberge: Could you specify what you mean by "vast majority"?

Mr. Basskin: I do not have the studies before me, unfortunately, but my information and belief is that at least 75 per cent of the tapes which are sold are sold and used for this purpose. There simply is not enough dictation going on in this country to account for the upwards of 40 million tapes a year that are sold.

Senator Roberge: Thank you.


Senator Grimard: I too have some concerns about section 66.91. Your point is well taken. However, when you suggest that this provision be deleted, what is it exactly that you are saying? Are you proposing an alternative or do you wish to continue on with the current system of judicial tribunals?

Mr. Cousineau: I simply want us to continue working with the Copyright Board as it now exists. This quasi-judicial tribunal has worked perfectly for 60 years and renders decisions based on fact, not on political directives. We have no need of this provision. We do not need the government interfering in these decisions. By deleting this clause from the bill, we maintain the status quo which works relatively well. That is what I was trying to explain in my presentation. I feel that the royalties we receive are not high enough, while others believe they pay too much. Ultimately, an independent tribunal makes this determination.

Senator Grimard: I would like you to comment on the new neighbouring rights. Is there a danger that the introduction of these rights will adversely affect the royalties that traditional holders of copyright receive? Would you care to comment on this very important point?

Mr. Cousineau: You are referring to the non-derogation clause. I must point out that neighbouring rights are different from performing rights. All of the countries that have introduced neighbouring rights have taken care to distinguish them from copyright, as we are not talking about the same thing. These countries have taken care to introduce a non-derogation clause clearly stipulating that neighbouring rights would be paid with money other than copyright royalties. That is what the government has done with clause 90. It has taken this situation into account. So far, so good.

This brings me to the four words that we want deleted from the bill. These four words give a quasi-judicial tribunal a roundabout way of not complying completely with the non-derogation clause, which must be an absolute clause, as is the case in all of the countries that we consulted where neighbouring rights have been adopted.

The government was wise to insert a non-derogation provision, but because of these four words, we believe that this clause could give rise to costly litigation and that authors and composers would stand to lose a portion of the already meagre revenues they receive. We must remember that the context of Bill C-32 is the Copyright Act. Copyright does not mean the Sony Corporation, or radio stations. I have been interested in this issue for close to 20 years now.

Senator Spivak: Why do you think the government brought in clause 66.91?

Mr. Cousineau: I have no idea.

Senator Spivak: And the word used is "may", not "shall".

Mr. Cousineau: In my opinion, this does the leave the door open a little. When we have the right to do something, we often go ahead and do it. Take, for example, my children. When they reach the age of 13, they acquire certain rights. The same thing applies here.

Senator Spivak: If it is not broken, why fix it?

Mr. Cousineau: That is why I want this clause deleted. All it does is give the political powers an opportunity to interfere in something that works quite well. In law, we learn that it is important to separate powers.

Senator Spivak: It is difficult to understand why this clause was included.

Mr. Cousineau: Yes, it is.


Mr. Spurgeon: If I could take a stab at your question, there are some regulatory tribunals which have similar kinds of provisions applied to them. In this case, we have a quasi-judicial tribunal. Do not forget that the rights of composers have been removed. They depend on this tribunal to set their salaries, in effect. They depend on this money. The rights have been expropriated. SOCAN must go to the tribunal to have the rates set.

This is different from other regulatory tribunals. This is a quasi-judicial tribunal whose sole purpose is to fix the royalties which go to creators of musical works. It has other roles as well, obviously, but that is its prime job as far as SOCAN is concerned.

To answer your question, yes, in other areas there have been what I would call insidious legislative provisions which provide for political interference in decision-making, but that is in other regulatory areas and not in a quasi-judicial setting which involves property rights and compensation for property rights. There is a big difference.


Senator Grimard: I have a question for Ms Bertrand-Venne. Am I to understand that despite its shortcomings, you want this bill to be adopted?

Ms Bertrand-Venne: I will repeat what I said at the outset. Since our members are concerned about their proprietary rights, they do have some mixed feelings. Reproduction rights have been affected by the introduction of an exception for ephemeral recordings and format transfers and have been diminished somewhat in the process. SODRAC still has the non-derogation clause to fall back on. What I wanted you to understand today is that authors and composers have made enormous sacrifices. As Mr. Cousineau mentioned, the Copyright Act is their bread and butter. Basically, Bill C-32 achieves its objective. Let me repeat for you something that Robert Léger of Beau Dommage said recently to a board of directors: "The legislators want us to be overjoyed because they prevented a disaster from happening". This statement more or less mirrors the state of mind of authors and composers. I did not go into all of the exceptions that pertain to educational institutions, museums and libraries. How do you expect authors and composers to be adequately compensated once their works have been made commercially available through these institutions via the information highway?

How is a contemporary author and composer to understand that a salary is paid to the museum curator on down to the janitor, while in his case, the legislator has decreed that the value of his work is to be negotiated by the Copyright Board. A system is in place to determine what he is worth, and furthermore, the legislator dictates the terms of his remuneration.

In the case of these exceptions, it is somewhat like telling a lawyer; when you practice family law, you are not paid, but when you practice copyright law, you are. That is the situation that we are facing. It is very difficult for me to answer your question, because Bill C-32 places authors and composers in a very difficult situation. They wanted to see improvements in their living conditions, but all they got were crumbs and ultimately, their basic rights are being assailed.

Therefore, in answer to your question, I cannot say that we are happy. However, I do hope that we will see further improvements in Phase III of the review.

Senator Grimard: How would you respond to the same question, Ms Fortier?

Ms Fortier: I believe I made my position very clear. With respect to reproduction rights and the non-derogation clause which applies to collective societies, I have to say that the general licensing agreements already negotiated with broadcasters are protected. I will be able to negotiate with radio stations over reproduction rights, because what radio stations want is the right to copy works onto their hard programming disk.

What these stations do is take a CD and copy it onto the hard disk in order to build up their programming repertoire. Once these works are transferred onto the hard disk, they are also on the Internet. The day's or week's Top 30 are not on-line. This is a new reproduction right. Once these works can be accessed via the information highway, we have no control over them whatsoever. There are many instances of copyright infringement on the Internet. How is it, you may ask yourselves, that museums and libraries have sites on the Internet and reproduce musical works? Users can listen to them and download them on to their own computers. They can print out sheet music. Young people create their own home pages. I have been monitoring a site where the words to as many as 750 Quebec songs are available without authorization.

The non-derogation clause will enable me to negotiate transfer rights with broadcasters. The private copy will be an new source of revenue in the field of reproduction rights.

To answer an earlier question, cassette tapes used by persons with visual impairments contain four tracks. They are quite different from any of the other commercially available tapes. Therefore, the issue is irrelevant here.

I urge you to pass the legislation as is as soon as possible because we want to proceed with Phase III of copyright review.


Senator Perrault: In another life many years ago, I was associated with the broadcasting industry. I will never forget the way that record producers haunt radio stations, begging for their selections to be played. They say that they need this kind of publicity in order to sell their music.

There must be a compromise and a realistic assessment of the situation. Many great creative works would be unhonoured and unsung without the active cooperation of FM and AM radio stations. You know it and I know it. If a selection is never played on the top radio station in a region, it will not sell very many copies to the general public. That must be recommended as one of the fundamentals of the business. Playing a selection on a radio station is a form of exceptionally valuable publicity. In saying that, I support fully the right of authors, performers and record producers to receive fair compensation for their creative genius, but do not you think there is a compromise here?


Ms Fortier: That is what I said, Senator Perrault. We have made some major concessions here. There is no denying that creators, the music industry people and broadcasters are partners. However, remember that it is we who supply the content. When a radio station hires a talking head, it pays that person. All we want is to be paid for the use of our work. Our status as partners in this process is undeniable.


Senator Perrault: I agree with that, but I recall that these people are paid generously to work the radio station circuit to beg that their recordings be played. They must see in the radio station a valuable form of assistance which will enable them to realize profits. I am saying that we must recognize that as a factor in establishing what is fair.

Ms Bertrand-Venne: I should like to add that it is a privilege for a radio station to have a licence in Canada.


It is a privilege to hold an operating licence. I recently testified at a hearing on the application for the latest FM band station in Montreal, and it is important to know something about how broadcasters package their musical offerings in order to obtain an operating licence. Music is at the heart of these stations' commercial activities. That is what we have to understand. When you tell a songwriter that he should be grateful a station is promoting his music, it is a little like the Canadian Association of Restaurateurs telling beef producers that they should be happy that their beef is being marketed by Provigo and Loblaws.

While it may be true that radio stations do promote musical works, they also commercially exploit the work of record producers, performers and songwriters. Here in Canada, the Broadcasting Act is unique in that it enables broadcasters to exploit these works and become multimillionaires. We are very proud of this fact because they are not in competition with the Americans or the Germans. They are home-grown commodities and we are proud of them. However, it is quite another matter to target us with these exceptions and to prevent songwriters, performers and producers from enjoying the fruits of their labour.

I would remind you that the lives of the people whom we represent are dictated by a statute. Ours is the only industry where the user can complain and be granted exceptions. What company would not dream of not having to pay for raw materials? Go tell that to Domtar and see how it reacts. That would be ludicrous.


Mr. Basskin: Obviously, I agree with what my colleagues have said. The bottom line is that of course people will come to radio stations asking them to sell music. The last time I looked, broadcasters employed salesmen to sell their advertising time to advertisers. It is a limited asset. The government only hands out licences to a certain number of radio stations. Of course there is a relationship between the two. However, in the determination of the value of these rights, let the marketplace do its job. If the parties cannot arrive at an agreement between them, they can refer themselves to the Copyright Board, which has the powers of a court, and it will hear both sides.

An assumption is made, particularly in the arguments from the broadcasters, that the owners of copyright are operating in a heavy handed or dictatorial fashion and that the broadcasters are somehow the unwilling victim of unilateral decisions made by the rights owners. The Copyright Tribunal, which exists to resolve disputes and rule on tariffs filed by any rights holder with any group of users in this country, is a very clever innovation which ensures that people will have chance to be heard. The hearings are expensive and complex, but at least they serve that public policy goal. I do not think there is any manifest unfairness being worked here at all.

Senator Perrault: There must be fair play for performers, recorders, authors, and so on.

I have a brother who writes books. Of course he wants fair compensation. The library may be the worst enemy of a writer, too. I am not unaware of the problems, but I remember the integral role played by these marketing people who work for the record producers. They work the radio station circuit and ingratiate themselves with disc jockeys and buy them gifts. They must see some value in having a friendly association with a radio station.

At the present time, most broadcasters are losing money. It is a rare market with a highly profitable radio station right now because of the turbulent atmosphere. I am from Vancouver, la Colombie-Britannique, la belle province bilingue de l'Ouest. We have a situation there where only two radio stations are making money. That is not the basis upon which to determine how much an author or a composer should receive, but these are the facts of life and the current economics of broadcasting.


Senator Maheu: I want to come back to Senator Roberge's question to Mr. Cousineau. I am somewhat surprised to hear you say that you will not hear of it, that this is not feasible and that clause 66.91 must be amended as you suggest.

The fact of the matter is that sometime in the next two weeks, an election could be called. Perhaps you do not understand that when the Senate proposes some amendments to a bill, this bill must be referred back to the House of Commons and debated in that forum.

It is all well and good to say that you do not want this to happen, but if it did, would you be better served by accepting a bill that is not perfect, I will admit, and perhaps by doing some lobbying during Phase III, than by rejecting it if your amendments are not brought in?

Mr. Cousineau: My answer to that is that it is certainly not our fault for being in this situation today.

Senator Maheu: It is not our fault either.

Mr. Cousineau: I am speaking for all of us. We are not the ones who created this sense of urgency. We are not the ones who decided to go to the poles after three and a half years in power. A government's mandate can last up to five years.

Senator Maheu: I do not wish to talk politics. I am merely asking you the question.

Mr. Cousineau: While I may appear inflexible, I think I do understand the situation in which we find ourselves. I also have to be logical with myself. The amendments that we are proposing to clause 66.91 are structural in nature. All we are asking is that four words be deleted from this provision. In the past, governments have considered two minor amendments like these and moved on them.

Senator Maheu: It has already rejected these proposed changes.

The Chair: Mr. Cousineau, you have to understand that we must follow the same course of action, however minor the amendment.

Mr. Cousineau: You must also understand that I must continue to defend these amendments. I base my actions on the fact that three amendments were recently approved in the House. I believe one concerned the GST, another New Brunswick and I cannot recall the exact nature of the third one. I believe that miracles can happen if we want them to.

The Chair: We will give these proposals due consideration.


Senator Forrestall: You are not keeping in the back of your mind what will happen at the end of next week. This has nothing to do with Don Quixoteism or chaotic situations. There is a date out there and it may be all or nothing.

A question came up last evening in evidence being presented by the minister about the GST. You reminded me of it when you mentioned that dastardly word. Have you thought about the implications of the blended sales tax on the revenues that will be raised with respect to these blank tapes?


Ms Fortier: These are not taxes, but rather royalties.


Senator Forrestall: There is no suggestion whatsoever of royalty. Tax is spelled T-A-X and means "harmonized sales tax". It is levied against every material good that I know about, but it is 15 per cent.


Ms Fortier: The royalties collected by the collective societies are already subject to the GST, or to the TVQ in the case of Quebec. The royalty on blank tapes to be paid by the importer or the manufacturer will be added to the wholesale price. The taxes that the average citizen will pay when he purchases his tape from the retailer will be collected from the distributor. I do not know if that answers your concern.


Senator Forrestall: No, it does not. I raise it because, when we get into Phase III and electronic transmission, the chairman and my colleagues will appreciate that all of this will become somewhat redundant with respect to the bill. When we get into Phase III, the dilemma that will be facing administrative bodies such as provincial and federal governments and the question of tax revenues will be horrendous. This will be a real problem. Whether or not it occurs to you because it is such a remote thing, the fact is that it is 40 million tapes today. In 10 years time -- that is, if Cape Breton does not slow down -- it might be 400 million tapes. That is an awful lot of money. My fear is that there may be some slippage because we are talking about a royalty charge that goes back to the creator or the producer. I am not all that sure that the thinking about this whole area is clear yet. I would not want to see any diminishment of the funds flowing back to the creator.

Mr. Basskin: If I could make a brief comment on that, you raised the spectre of the impact of electronic distribution on blank tapes or blank recording media, as the act refers to it. I do not think there will be any significant reduction in the number of blank media that are sold. I do not think the tax will have that much of a direct impact. It would be a mistake to think that electronic distribution will render home recording or private recording irrelevant. In many ways, it may enlarge it. I do not think we will see the electronic highway coming in through antennas on people's hats. Mobile use of music and mobility is very important in our culture and is getting more important. I believe that whether the music coming to people on CDs or on tapes they buy in the store or through music they download from on-line services, there will be continuing demand to make copies for their own personal use. Without the measures in this bill, it will continue to be an open drain on the revenues of those who create and produce the music and the recordings.

Senator Forrestall: Keep in mind that the article that is now worth $1 will be worth $1.50 plus 15 per cent. What happens to that 15 per cent? Are you asking the creators of cultural property in Canada to become tax raisers for the Government of Canada? I think not.

Mr. Spurgeon: I can explain briefly what SOCAN does for both the GST and the blended tax. It is a flow-through. We collect the money from the music users. Let us say they owe us $100. We collect that $100, plus GST. We take that GST money and pay it to the government. There is no GST credit or anything like that with the individual composer involved.

The money simply flows through to the government. We collect it from the music user and pay it to the government. That is how we are doing it. It is not quite the same, but currently we are working out the details in the maritime provinces with respect to the collection of the blended tax.

It is a very simple flow through. We made representations to the government when they introduced the GST several years ago and they agreed that, with the collective administration of copyright, it made sense to do it that way.

The Chair: Mr. Basskin, the United States has recognized neighbouring rights for digital radio offered by subscription. The so-called pay radio will arrive in about five to ten years. How will this affect payments made by Canadian broadcasters? Will there be reciprocity?

Mr. Basskin: First, it is important to distinguish between services that distribute music today via satellite to users or by Internet users with what might come in the future.

There are services today, for example, if you go to "" on the web, where you can find a gateway to literally dozens of radio stations and music services that are distributing the equivalent of radio on the World Wide Web today.

In some countries there may be some amounts collected for that purpose for performing rights, but in some countries they are not. The future that may develop and may be much more important is not the equivalent of broadcasting on the World Wide Web but the equivalent of the sale of recordings on the web. In other words, the Web or its successor or some form of Internet may become a means of distribution for recordings that will supplement or possibly even take the place of the sale of CDs, records and other so-called sound carriers today.

It would be foolish for any of us to assume we know exactly what shape the system will be in the future. However, the web or its successors will not go away. They will have a major impact on the distribution of music and possibly other forms of entertainment such as films and television programs for all we know.

Broadcasters will have to accommodate themselves to this. Indeed, virtually every major broadcaster has a presence on the World Wide Web today. Probably the greatest single search that is going on is for broadcasters and others who run web sites to find a way to get paid for the effort that is required to put that information on line.

It is indeed possible that the revenue of broadcasters and creators may be affected. These are issues that certainly the Information Highway Advisory Council and other task forces have looked at. We think these issues should be dealt with in Phase III of copyright legislation. However, we cannot get there without Phase III. That is why it is so vital we deal with these subjects.

Other issues such as the term of the copyright itself, which is being lengthened in many other territories, will have a negative impact on Canadian creators unless we similarly extend our law. These are not in Phase II. We hope they will be in Phase III, and we have to get there from here.

The Chair: Our next group is from the Canadian Booksellers Association, the Canadian Alliance of Student Associations, the Canadian Federation of Students and Follett Campus Resources.

Please proceed.

Ms Jane Cooney, President, Canadian Booksellers Association: Honourable senators, in addition to being the president of the Canadian Booksellers Federation, I am also the owner of a bookstore in downtown Toronto called "Books for Business".

We should like to thank you very much for hearing us. We know that this is an extremely technical bill that you have been assigned to deal with, and you have our condolences or congratulations.

As booksellers, we represent approximately 1,250 booksellers of all sizes, shapes and even smells these days, because, as many of you probably know, some of us are also in the restaurant business.

We also represent the millions of Canadians who buy books in this country, as well as many students on campuses. Our organization represents the college bookstores, the retail chains, some superstores and all the little ma-and-pa dépanneurs of the bookselling business as well. Those groups constitute the majority of our membership.

We are a major component of the book industry. We have always supported all the cultural initiatives of the government. We are anxious to have very balanced copyright legislation. We have supported Canadian authors. We see ourselves as kind of the farm team. New Canadian authors get shown in our bookstores first. It is because of us that many of them have become very successful. In fact, we sell more than 50 per cent of the output of Canadian publishers in this country.

We work in a very changing environment right now. The word "turbulent" was used to describe the previous industry that was being discussed. I could say that ours is the same. There has been the introduction of super-stores into our setting as well as the Internet through which people can order books from around the world, and book sellers are having to deal with all these changes. I hope you will note that we are not asking for legislation to help us deal with the marketplace. We are trying to cope as well as we can.

In this country, we buy our books primarily from publishers. The industry is quite different here than it is in the U.S. in the sense that our publishers also distribute books that are produced in other countries. The majority of the business of many publishers in this country comes from the sale of books which they do not publish but which they distribute.

This is the area of Bill C-32 with which we are most concerned. It deals with parallel importation rights. One of the things that small bookstores do the very best is stay very close to our customers, because that is the only way we can compete in this changing marketplace. The key thing for us is to ensure that we have books on hand that our customers need. We need to have them when they need them.

To give an example that might bring it close to home for you <#0107> this is a technical bill but there are some things in it that are not too technical -- your mother-in-law is celebrating her birthday on Friday night. On Monday, you are given the task of buying her birthday present. You know that she is dying to have the very latest book on the vagaries of the economy in New Zealand or maybe a needle point book, but you must have it by Friday. When you go to your local bookstore, you may find that the store does not have the particular book you want. You will ask the bookseller whether he can get it for you. The bookseller calls the local agent <#0107> that is, the person who is distributing this book which was published in New Zealand -- and you are told that the agent does not have the book in stock. When you ask how long it will take to get the book, you are told six weeks. That will not satisfy your need at that moment.

One of the options that we now have, before Bill C-32 is passed, is to call another source of supply, which may be a wholesaler in the United States, who can deliver the book to us within a maximum of 72 hours. You will have that book on Friday night. However, if clause 45 passes as it stands in Bill C-32, we will be prevented from making that call for you.

The legislation suggests that these problems of service may be dealt with in regulations. For two years, the industry has been meeting with our colleagues who supply the books and so far we have reached nothing but an impasse. There are no service standards in place. We do not know when those will appear and we have no confidence at this stage that the matter will be dealt with quickly or to our satisfaction. The reason we have come to an impasse is, obviously, that we want our Canadian suppliers to be able to deliver a book across the city as fast as we can get one from Oregon or Tennessee. Our needs are small, but they have not yet been met.

We should like to recommend very strongly that that clause of the bill be changed so that book sellers have the right to import a book for you when you need it. Many other people have been given that right. An individual can pick up the telephone and call a bookstore in the American city closest to them and have a book delivered to them without contravening the law. A library or educational institution can import books, but your local bookseller cannot. We are the people who sell the most books, but we are the only people who are not allowed to bring a book in for you. We think this is somewhat unfair. We would like to have the ability to bring in one copy to fill a special order and to have the rights of other people transferable to us.

This raises a very special problem in the province of Quebec because there book sellers are the only people from whom government-supported institutions can order books. If the rights are not transferred to the bookstore, federal law will be in conflict with provincial law on that.

Mr. Ron Johnson, First Vice-President, Canadian Booksellers Association; Senior Vice-President, University of Toronto Press, Retail Division: I should like to speak to the issue of the used textbook amendment. I am here representing the Canadian campus stores on behalf of CBA. Campus stores are also represented locally through the eastern and western associations.

All of us in the campus side of the business were surprised when we heard of the amendment at the beginning of January. Whether by misunderstanding, misinformation on our behalf, or whatever, we had been labouring under the misunderstanding that this bill did not apply to used texts at all. Consequently, we were quite surprised when we found that the bill had been amended and that a provision to exclude the importation of used texts was added.

We were surprised not only by its existence but also by the fact that there was a strange blend of both breadth and narrowness to the nature of the amendment. When we first read the amendment and took it at face value, it appeared to restrict the importation of any used text, which seemed strange since 15 to 20 per cent of the texts that are currently used, varying from campus to campus, are not covered under Canadian distribution at all.

However, in the first of a series of changes of position, or perhaps clarification of our initial misunderstanding, it was later explained to us that the intent was not to prevent the importation of all used texts but only used texts that were covered by Canadian distribution.

We were also surprised because many of us do not normally think of the movement of texts from campus "A" to campus "B" within Canada as being importation. We believe that "importation" is something of a misnomer in this case. In many cases, texts bought in one part of Canada, on one Canadian campus, are shipped south and then come back to us from facilities in the U.S. Therefore, it is not exactly importation in the true sense of the word.

Unfortunately, there does not exist at this time a study that indicates that there would not be likely to exist in the future a viable distribution network for used texts in Canada. This is only partly what makes this amendment problematic for us. The second holdback, if you will, from the initial at-face-value statement in the amendment was that not only do we not mean to restrict the importation of used texts in total but also we actually do not really intend to restrict trade in used texts <#0107> that is, providing they are Canadian.

All of this began to enhance our sense of surprise that the amendment had been added without really asking for submissions from all the affected parties -- that is, the campus stores, in particular, and the students. The amendment seemed to be curiously naive in terms of the underlying sense of what the used text market was about and how its dynamics worked.

If you consider that the policy position is to prevent trade in used texts or the dumping of used texts into the Canadian market, thereby protecting Canadian publishing or enhancing the ability of publishers in Canada to produce Canadian texts, that premise is not founded on a solid or rational argument at this time. Nor is it likely to be founded on a solid argument in the future.

If we look at the kinds of text that are involved in the market, the used text market primarily involves textbooks in the hard sciences or in the social sciences that are largely the products of big publishers. If you look, for example, at the ACP membership list of 100-some odd publishers, you will find that most Canadian domestic publishers do not produce texts and are not affected in any particular way by the used text business. Those who are affected are large corporations or branch plants of very large corporations existing in Canada.

The proposed money that would accrue to these corporations from the restriction of used texts trading across the border is relatively small in terms of the costs that would be borne by Canadian students and campus stores were the trade in used texts restricted. We must think about the fact that, in addition, there is nothing within the bill that would demand of publishers that they reinvest any moneys gained into Canadian publishing programs.

Finally, if you ask anyone who has spent their time on a daily basis on the front lines of Canadian campus stores -- that is, any text buyer, any clerk on the floor or anyone who manages in a campus store; and, the students will back this up <#0107> about the belief that if students were denied full access to used texts they would rush in droves to buy new ones, you would be told that it is very ill-founded. The fact is that they will not rush out. Our experience has been that in other situations when students do not have an alternative, they do not go out and buy in full numbers. In other words, the perceived shortfall and sell through from the publisher's side will not be made up by trying to force the students to buy new texts.

Rather, what will result is a situation in which students will be forced to share more or photocopy more illegally, thereby compounding the problem that exists to a very large degree today, at least in comparison to the problems caused by used texts. Worse still, they will be forced to do without.

Effectively, this amendment denies students a lower-cost alternative to acquire educational materials. It creates a virtual monopoly and reduces the pressures on the manufacturers of those educational materials to maintain prices at as reasonable a level as possible. In a minor way, it also interferes with the freedom of choice on behalf of faculty to order books. There are a number of faculty -- and all of us in campus stores have encountered this -- who do not wish to teach from the current edition. For example, they want to use the fourth edition even though the sixth edition is out. If the sixth edition is the one available to them and it is being carried by whichever publisher, then under this bill it may be impossible for us to acquire sufficient copies of the used editions, which are the only ones that will be available to us, in order to meet the demands of this faculty member.

Furthermore, one of the biggest issues we face today in campus stores is the dynamic nature of enrolments. Students are able to enrol both by electronic means and by telephone. In fact, there are many different ways they can get in and out of courses today. That makes it difficult to keep track of enrolments. This means that registration information is often available to us only on a late basis. Timing is extremely important in the textbook industry. If we receive requisitions for courses late, if we are uncertain of enrolments until the last minute, we must have every route available to us to acquire the goods required for the courses.

Bill C-32 will impede our ability to acquire new texts elsewhere in a timely fashion. We are not like a trade store. If the book is not there, the course will still start on September 6, or whenever. The current practice in many stores is that if the publisher is not able to fulfil your requirement you order used texts as a back up. You must remember that there is a very small lead time between placing the order and the time the book is required. It is not always an economic alternative. In some cases, it is the only alternative to get stock in the store.

The provisions under the regulations for service performance will not address that issue. In my experience and that of my fellow booksellers, even with the best of intentions, publishers will tell you, "Yes, we will have it for you in a week." Many of these books are coming across the border to the distributors. What you find out is that a week goes by and the book does not arrive. Most campus stores will order additional stock as a back up from a used wholesaler.

We are asking that this amendment be removed and that an amendment be added to Bill C-32. It has been argued before that there will be a study made and that you are not interfering with the market at present. However, as it stands, the amendment leaves the sword of Damocles dangling over the heads of Canadian students. There is no assurance that the amendment will not be implemented in some fashion in the future.

Thank you, Madam Chair.

Ms Jennifer Story, Member of Executive, Canadian Federation of Students: I wish to thank the members of the committee for providing us with an opportunity to participate in these hearings.

The Canadian Federation of Students represents close to 400,000 students across Canada on nearly 60 campuses. I am here today on behalf of students as buyers of used textbooks. I am also here as a student who has been lucky enough to have the experience of working in a student-run campus bookstore. I have experienced firsthand the value of being able to import used textbooks.

First, I will run through four brief concerns that we have with the bill. I will then focus specifically on the used textbook amendment.

It is not our intention to review all the changes made to Bill C-32. We realize that some of them are quite technical and involve legal ramifications that we have not explored fully. Nevertheless, the federation would like to state its shared concerns with many of the other organizations on the following issues. The first is the definition of "commercially available" found in clause 1.(5) of the bill. The definition was amended to include cases where a licence to reproduce, perform in public or communicate a work is available from a collection society.

Originally, the definition required that the item be:

(a) available on the Canadian market within a reasonable time and for a reasonable price and may be located with reasonable effort,

However, under the expanded scope of the definition, educational institutions would be unable to claim exemptions even if the commercial copies were not actually marketed appropriately.

Our second concern involves reproduction for assignments, clause 29.4(2). According to the revised draft of the bill, an educational institution or a person acting under its authority will no longer be able to claim an exemption to reproduce, perform in public, or communicate to the public by telecommunications a work or other subject matter for the purpose of the giving of an assignment. However, tests and examinations are still covered. From our perspective, this deletion makes very little sense since students are graded through the assignments they carry out, which is why we endorse the use of the following phrase, "as required for a formal assignment used for the purpose of grading students".

Our third concern is with the off-air taping of news, commentary, and documentaries, clause 29.6. In the revised draft of Bill C-32, educational institutions will no longer be permitted to make a single copy of a news documentary and perform it for the purposes of training students. Again, we fail to comprehend what purpose will be served by such an exclusion. Documentaries have a time-honoured history in Canada, and any serious study of the development of media specifically or, I would argue, the serious study of a number of disciplines, would be incomplete and the quality would be seriously compromised without that inclusion.

The fourth concern, and the last cursory concern we have, is the explicit coverage of students under certain educational exceptions. As originally drafted, Bill C-32 provided explicit protection for students under certain circumstances. However, we are told that a majority of members of the Heritage committee apparently felt that these circumstances were too vague. What was the committee's solution? Unfortunately, they eliminated explicit coverage for students altogether. We believe a more reasonable solution would have been to use more circumscribed language.

The fifth concern, and the one upon which we will focus along with our colleagues in the Canadian Booksellers Association, is the restriction on used textbooks. In the previous draft of the bill, used textbooks were exempt from any importation restrictions, and the tables were changed very suddenly and without any notice late last December. Under the proposed restrictions, retailers could only go to a wholesaler or the publisher of origin if they first obtained, as explained, the authorization of a Canadian distributor. Of all these changes made to Bill C-32, this one is the most puzzling for our members and of the gravest concern, and we should like to devote the rest of our presentation to this.


Mr. Jocelyn Charron, Coordinator of Government Relations, CFS: Many explanations have been given in support of this amendment. In short, we have heard that the provision was included to protect the new textbook market in Canada and to avoid any turbulence as a result of increased demand. Unfortunately, we have not seen any proof that this provision is warranted. We have not been presented with any kind of study showing that this scenario is possible.

The government itself admitted that it has not conducted a study of this industry. It is also aware that at the present time, Canada exports 40 per cent more used books to the United States than it imports from that country.

All of these facts are clearly important. What bothers us the most is that with this amendment, legislators are attempting to impose a principle on us. If students were to suddenly stage a run on used textbooks to the point where demand in Canada approximated that observed in the United States, the difference would be in the neighbourhood of 20 per cent. Even if that were to happen, the government's solution would be unacceptable. What the government is telling us basically is that students are the ones who must subsidize the new textbook market in Canada. For us, that it what it all boils down to. We do not really agree with the government's position. It is trying to appeal to our patriotism in an effort to have us accept this provision. We have pointed out that the comfortable profit margins that publishing houses earned often went to produce Canadian textbooks. This is one cause that we obviously support. No one here is opposed to a healthy Canadian textbook publishing industry. Surely there are other options available. After all, the Canadian government subsidizes books of a scholarly nature through the granting councils. It also supports creators and authors through the Canada Council. These are direct ways of helping producers and the publishing industry. If we are really concerned about the Canadian textbook industry, why not support it using the same methods?

We feel that the concerns that have been expressed about this principle are unwarranted. The government already employs other methods to achieve the same objectives. Committee members should not be overly surprised by our forceful comments.

They need only talk to their colleagues currently examining the post-secondary education system to realize that in our opinion, and in the opinion of many organizations, the most serious problem right now is student indebtedness. Currently, Canadian students are among the most indebted in the world. Their debt load is comparable to that of American students attending large private universities. In our public system, tuition fees do not begin to compare with those charged at major U.S. universities. Yet, because of the type of financial assistance available to Canadian students, debt levels for undergraduate students are nearing the levels seen in large American universities.

For example, analysts of the Canada Student Loans Program estimate that this year, the average student debt load will be approximately $17,000. They estimate that this figure will rise to $24,000 by the year 2000.

I will spare you an exhaustive list of the reasons for this staggering increase in student debt levels. However, it is worth mentioning so that you understand how exasperated our members have been with the debate on Bill C-32.

At times, one would have thought that purchasing used textbooks was a form of deviant behaviour and that the essential, or natural, role of students was to ensure the survival of the publishing industry. It is worth noting that when times are tough, it is quite natural for students to buy used textbooks. We have tried to accurately assess the savings students realize by purchasing used books, but this is not so easy to do. The price of textbooks varies, of course, depending on the course curriculum.

Nonetheless, we have done some calculations which should prove interesting to you. Take the average price of books for social science courses. Generally speaking, these books cost $50.00 or less. When a student purchases a used textbook, he pays approximately 25 per cent to 30 per cent less for that book, or $35, which translates into a savings of $15. If we multiply this figure by the number of courses, semesters and years of study required to obtain a university degree -- generally four years -- at the rate of four to five courses per semester, we see that this translates into a savings of approximately $600 over four years.

In the case of scientific textbooks where prices can sometimes climb to $100 or $110, cumulative savings can be as much as $1,320. This is assuming that the textbooks are available, which is not always the case, and that students always purchase used textbooks, which is not necessarily the case either. This is merely to give you an idea of the savings that can be realized.

To our members, these savings, while not enormous, are nothing to sneeze at either. These are genuine savings which allow students to live and breathe a little easier.

We have, of course, shared our concerns with the government. We have met with government officials on two separate occasions. We were given assurances that the legislation would have no immediate impact. The regulations which will eventually dictate how the legislation is applied have yet to be drafted. We were told that we would be consulted during this process, and we hope that this will be the case if the legislation passes.

However, we want more than simple assurances. To our minds, the government has failed to demonstrate that a problem does exist. As representatives of students, we cannot be expected to go along with the thinking that the sound operation of the new textbook market in Canada is our responsibility. Thank you for your attention. We will be happy to answer your questions later on.


Mr. Matthew Hough, National Director, Canadian Alliance of Students Associations: Good morning. Hopefully, my brief has been circulated. I apologize for not having the French version available yet. That will be available in the next couple of days. I did not have a lot of preparation time for this presentation.

The CFS has elaborated on several clauses of Bill C-32 and they are also listed in my brief. I will leave them as read. Those include the areas of copying for assignments, documentaries to be shown in classrooms, self-serve photocopies and liability, and the term "commercially available". All these terms will be reiterated to you by other witnesses from the education sector who are coming before your committee in the next couple of days.

I will now deal with the used text issue. Needless to say, students take advantage of the used text market by saving money on the cover price of a book. They then have the option of reselling that same book back to campus stores. These books are then exported to distributors in the United States. Bookstore managers order used texts from the same distributors and the cycle is complete.

Mr. Charron gave an excellent example of savings that can be realized by purchasing used texts at a very low cost of $50 per book. Over the course of four years, that would be a $600 saving. We have a couple of other examples that were noted as well. On a $75 book, there is a $900 saving. As the highest example, on a $110 book, there is a $1,540 saving.

Everyone is being pragmatic about this point. To realize those savings is very difficult. The number of used books on the shelf rarely allows students to access the number of used books that I am sure they would like to access.

From personal experience, I have gone to the bookstore a couple of days after the first day of semester and been unable to find used textbooks on the shelf. The demand is high. The take-up is fast. The savings, as demonstrated, are considerable.

The average rate of tuition is $2,900 this year across Canada. The average debt load is $15,000 to $17,000 per student this year and is projected to reach an average of $24,000 by the year 2000.

The potential effect of Bill C-32 on the used textbook market is unknown. In meetings with the officials of Heritage Canada, we were told it was never the intent of the heritage committee to stop the importation of used texts. However, the present clause in the bill rewords the Copyright Act. That is in front of you. We have focused on this statement in clause 45(1)(e):

...except textbooks of a scientific, technical or scholarly nature for the use within an educational institution in a course of instruction.

That is fairly explicit and is something that frustrates us very much.

At a meeting with heritage officials on March 17, we were told: is not the intention of the government to prevent the importation of used textbooks, and as drafted, the Bill does not prohibit the importation of used textbooks. Rather, the bill provides a safeguard, should the importation of used textbooks become a problem and undermine the ability of publishers to invest in and publish new Canadian titles for the post-secondary market.

At a meeting with representatives from Heritage Canada, Industry Canada, booksellers and publishers on March 24, we were told again that it was not the government's intention to prevent the importation of used textbooks. We were, however, asked whether it would be possible to mark textbooks sold in Canada so that they would be the only books allowed back across the border. It is our opinion and our position that this would, in fact, end the trade by making it too difficult and expensive to make importation worthwhile.

We have been told that if Bill C-32 is to pass in its present form, regulations will be put in place before the law is enacted. We have been assured that studies will be done to find out whether there actually is a problem with the amount of used texts imported into Canada. We have been invited to participate in the creation of regulations. We have already seen a study. We know that there is no problem and believe that there is no need for regulations.

We would prefer to see Bill C-32 re-amended to allow the importation of "any" used books. The balance between creative rights and the needs of users has clearly been lost in this case. Publishers have the upper hand. If the importation of used texts is stopped, then students will be forced to buy new texts, perhaps, or to find alternatives such as photocopying, scanning or course packs.

The bottom line in this issue is just that, namely, the cost of purchasing a new book. To help put this issue in perspective, I brought a few props. These books are American material. They include a first-year psychology text at $75 for a new edition.

The bottom line is that one $100 textbook represents 15 hours of work at $7 per hour for an independent student. To bring that home with a personal analogy, I was a lifeguard in first-year engineering and I earned $8.50 per hour. Taking into account GST, employment insurance and CPP, such a book would cost me approximately 12 to 13 hours of work. The used edition, which is even neatly marked "used", at $56.30, provides a good saving in this case.

Mr. Fred Weber, Vice-President, Follett Campus Resources: Thank you for this opportunity to testify here today. I recognize it as a privilege.

Follett Campus Resources is a family-owned and family-managed company which has been recycling textbooks for over 120 years. Follett began trading in Canada approximately five years ago during a period of extremely rapid growth in the North American used book market. We are very proud of the relationships that we have cultivated with Canadian booksellers. We are proud of the millions of dollars which Canadian students have saved by purchasing our products. We are equally proud of the contributions we have made to improve efficiency in the college textbook distribution channel.

My interest, of course, is the used book amendment, clause 45.(1)(e) of Bill C-32. I believe this clause jeopardizes all that we have built in the past three decades in Canada. While Canadian trade represents a very small percentage of our total business, it is perplexing that this amendment has been crafted without a problem being defined. As previous witnesses have already testified, the Department of Canadian Heritage has recently proposed a comprehensive study of the used book market to determine if there even is a problem.

This amendment is a solution in search of a problem. It has been described as a safeguard. It is a safeguard in that the used book amendment gives the government the unfettered power to restrict or even prohibit textbook imports.

While today's government says that they have no intention of invoking this amendment in the foreseeable future, no one can say for certain what future governments will do. The language of the bill and the used book amendment does not define when, how or why this unfettered power may be exercised. That is why we and others are deeply concerned and anxious. Even more disturbing to me is that this amendment appears to be a based upon a complete misunderstanding of the used book market.

The fact is that Canada has been and for the foreseeable future will be a net exporter of used books. Market research has confirmed and quantified what these two student organizations have already testified, namely, that 70 per cent of all college students prefer to purchase used textbooks when they are available. Student demand greatly outstrips the available supply. In the U.S., used books represent 28 per cent of total textbook sales. In Canada, they represent only 8 per cent of total textbook sales. The root of this disparity between demand and supply is that used book companies and campus booksellers alike have only one source of used books -- students.

Please make no mistake. Used books are not remainders. Remainders are new books that are left over after a book has been printed and distributed. Used textbooks, on the other hand, are transformed from new books into used books by students who read them, study from them, and then decide to sell them. Many students, however, decide not to sell their books but, rather, to keep them for future reference. In addition, approximately one-third of all books cannot be recycled, either because they are pre-empted by revised editions, consumed during use, or they are customized for one use only. The supply of used books is naturally constrained. Therefore, there cannot be a surplus that can pour over the border into Canada. In fact, there is active competition among college stores to acquire used books and used book wholesalers like Follett must very carefully allocate their inventories.

The serious problem of dumping alleged by the sellers of Canadian new books is, in my opinion, a fabrication. It is a fabrication of a small group of large, multinational companies who know, from the Ernst & Young study of 1994, that the Canadian market is too small and vast to support a cost efficient, indigenous operation.

Let me be clear: The problem does not exist; the problem will never exist. The used book amendment will not correct a problem; rather, it will create a problem. Canadian students will have fewer choices and they will spend more for books. Canadian booksellers will earn less and incur more risk; the profits of only a few multinationals will be protected.

I read this morning in the paper that Minister Copps maintains that Bill C-32 is "a very fine tapestry". She says that it has been woven by years of negotiations and compromise. Following that metaphor, it seems to me that the used book amendment is a patch on this tapestry that was added on Christmas Eve, just before the gift was delivered. Removing this patch, in my opinion, will not damage the tapestry. It will only restore the integrity of the tapestry. We ask that you simply delete clause 45.(1)(e) and remove this threat once and for all.

Senator Perrault: The state of the book industry in Canada is one of narrow margins and tough competition at the present time. Bollum's Books in Vancouver have filed for bankruptcy protection, which is very sad, because I am a collector, along with millions of other Canadians.

On the Internet, there is a bit of jungle warfare. There is an organization known as the Amazon Books. They are telling the entire world, "Come to us and we will give you far lower prices." What kind of threat does that represent to you?

Ms Cooney: I think it has become a question now of either put up or shut up. We all must take a look at the way we do business. is selling books all around the world.

Senator Perrault: They tell me it is very successful.

Ms Cooney: They certainly have very high sales, but whether they have very high profits is debatable at this point.

Senator Perrault: Could we develop a consortium of Canadian companies to have a presence on the net to promote sales of Canadian publications?

Ms Cooney: Sure. At the moment, many Canadian publishers have their own Internet sites where they are selling directly to the public.

Senator Perrault: But not a bookstore such as Amazon?

Ms Cooney: There is a Canadian bookstore which is the Canadian equivalent of Amazon. I do not think they have the resources that Amazon has, but Amazon is about to go public.

Senator Perrault: Duthie Books has had a presence in Vancouver for some time, of course.

Ms Cooney: A number of individual book stores have started to put their own sites up on the web.

Senator Perrault: I do not think books will be replaced by the Internet. A friend phoned the other day and said, "Ray, I do not believe it. Tolstoy's War and Peace is on the Internet." I am not about to lose my eyesight by parking in front of a screen to read War and Peace.

Ms Cooney: They have been threatening since the day of Marconi that the book is not dead.

Senator Perrault: It is not dead.

Ms Cooney: That is correct. You cannot take your computer to bed with you.

Senator Kinsella: Concerning page 63 of the bill, clause 28, I have heard two different suggestions from the panel for dealing with the problem. One was to delete paragraph (e) entirely and the other suggestion was to delete the last three lines of paragraph (e) so that, in one case, we would still allow for the exception to import copies made with the consent of the owner of the copyright in the country where they were made of any used books, period. That is one suggestion from the panel. In other words, delete the last three sentences. The other suggestion was to delete altogether paragraph (e).

What do you think this committee should do by way of amendment? Should we get rid of paragraph (e) altogether or get rid of the last three lines -- that is, lines 41, 42 and 43?

Mr. Weber: I am not as familiar with the intricacies of this complex legislation but it seems to me that the net effect of both amendments would be the same, namely, to allow the lawful importation of used textbooks.

I would defer to those who are better acquainted with those details to determine whether or not the better solution is to delete clause 45.(1)(e) in its entirety or the last three lines. I do believe, however, that the net effect will be the same.

Mr. Johnson: Our recommendation that paragraph (e) be returned to its original wording as it stood before the amendment was added involves the deletion of the end lines. In other words, it would simply say "to import copies made with the consent of the owner of the copyright in the country where they were made of any used books", period.

Senator Kinsella: That is the position that the Government of Canada adopted when the bill was tabled in the other place. That is the position that the minister who introduced the bill argued for in the other place. Is that not correct?

Mr. Johnson: Yes.

Senator Kinsella: In your view, therefore, this would be a friendly amendment? When the bill was introduced, if ministers of the Crown argued, "This is how it is reading and this is how it read when the bill was introduced"; if they spoke in favour of the government bill; and if we were to amend it in this chamber, we would be effectively amending it to the pristine condition in which it found itself with the support of the government one year ago.

Mr. Weber: My understanding is that is correct. That would be the very fine tapestry that was woven over years.

Senator Spivak: I want to return to the statement that Mr. Weber made. You must ask yourself why the government wanted this amendment. I assumed that it was as a safeguard to protect small publishing companies. You have stated that it will not protect any small publishing company, it will merely assist the multinationals. I do not have a copy of your text. Would you mind detailing the reasons again why you say that?

I am extremely sympathetic to students and their reasons for wanting to have books at a reasonable price. Everyone would be in favour of that.

Senator Johnson: They should be free.

Senator Spivak: Exactly. However, I am also sympathetic to the need for small publishing companies to flourish. The reason we have a flourishing Canadian literature is because these small companies gave those authors a chance. You can understand my question.

Mr. Weber: If I may, I will make one comment and then I will defer to Mr. Johnson, who is probably better equipped to answer your question. There is an important distinction between the textbook and the trade book. I know there was reference in debate to Margaret Atwood. Those titles are typically purchased in what we call a trade bookstore, the general store you find in towns across the country. The textbooks we are referring to here are of a different character and tend to be published by different types of companies. I will defer to Mr. Johnston on that.

Mr. Johnson: Almost the entire used text market in the stores really relates to hard science texts, social science texts. What you are normally talking about are the high-end textbooks that run into the $7500 range. There is not really a used market for the lower-priced paperback editions because, first, they do not have a long life. The second reason is the price differential at a point where you are down into $7 to $10. These are things such as Penguin paperbacks, and generally we do not buy or trade in them.

The high-end textbooks are largely produced by large publishers. There is not really a fully owned Canadian operation that is in the business in the way that companies such as McGraw-Hill, Prentice-Hall, John Wiley, Addison-Wesley are. All of those are big companies. We are not implying that they do not contribute to the Canadian publishing scene. That is not the issue.

The premise that closing off the used texts option to some degree by shutting down imports would increase the sell-through, which would result in a trickle down that would be reinvested in Canadian publishing, is extremely tenuous. Our experience in the campus stores is that if they do not have an option, the students who traditionally buy used will not buy new. The money will be not be there. Also, by the time you get down to percentages of percentages of percentages, the real amount of money being reinvested into Canadian publishing is negligible. We are talking about companies, so they owe their shareholders and owners some money in some other way.

Senator Spivak: I also asked the minister about a possible remedy to the problem that Canadian publishers need to have the federal government put more money in, and use other measures, to assist small Canadian publishers. She did mention one item, but I would be interested in whether you think we should be using this particular mechanism to address the issues of the small publishers.

Mr. Johnson: For the small publishers, it is difficult. There is a connection to distribution in some ways, which is the publishers' perspective.

Overall, our sense was that Bill C-32, with its parallel importation provisions, does more to support the larger rather than the small publisher. I think there is approximately 100 members in the ACP. You can go to the ACP web site and see the members. You can go to the CPC web site and see the members. You will see quite a contrast in the size of membership, in terms of the size of the companies. Many of the smaller companies are little affected by this because they themselves do not distribute, although they may benefit from reduced distribution costs if someone else has a better distribution deal.

Senator Kinsella: The House of Commons had this bill for a year and it appears the Senate will have the bill for five or six days, but we will attempt to ensure that this is not a charade.

The difficulty of having panels is you hear from five excellent presenters. Ms Story made reference to subclause 29.4 of the bill, the exemption dealing with the making of copies for communication by telecommunication to the public, a work or other subject-matter as required for an assignment, test or examination. In order to achieve your objective, I want to focus on the specificity of the amendment that would be required to accomplish that objective.

Would it suit your purposes if we were to amend, on page 30 of the bill, which is under clause 18 of the bill, subclause 29.4(2)(b), to make it read, as currently written, "communicate by telecommunication to the public", and leave off the words, "situated on the premises of the educational institution", which seem to be the offending words, "a work or other subject-matter as required for", and add "an assignment", delete the indefinite article, and then "test or examination"? Do you follow me?

Mr. Charron: I can probably answer that. What we proposed here was to answer one of the criticisms made by the committee in the other place. While tests and examinations were seen as clearly linked to the process of grading students, we suggested making the same formal link between the assignment and the process of grading. For that part, the language we suggested was "as required for the formal assignment used for the purposes of grading students, where tests and examinations are also exempted". That is what we suggested.

Regarding the first part of what you said, we did not really address it here. Perhaps Mr. Hough would like to comment.

Mr. Hough: I was reading up on this point last week and you will hear testimony later in the week as to the impact on distance education of that amendment. The part you noted was the offending portion, "on the premises". If that were withdrawn, it would allow assignments to be given electronically.

Senator Kinsella: The issue was distance education?

Mr. Hough: Yes. That issue was distance education. A second issue was with regard to the regular written assignment. I provided some wording in my brief to deal with that.

The Chair: Thank you very much for your briefs and the answers to our questions.

We will adjourn until 3:30 this afternoon.

The committee adjourned.

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