Proceedings of the Standing Senate Committee on
National Finance
Issue 32 - Evidence - May 27, 2015
OTTAWA, Wednesday, May 27, 2015
The Standing Senate Committee on National Finance met this day, at 1:48 p.m., to study the subject matter of Bill C-59, An Act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.
Senator Joseph A. Day (Chair) in the chair.
[Translation]
The Chair: Honourable senators, this afternoon, we are continuing our study on the subject matter of Bill C-59, An Act to implement certain provisions of the budget tabled in Parliament on April 21, 2015 and other measures.
[English]
We will continue where we left off yesterday, which was at Part 2, Division 2, the Universal Child Care Benefit Act. It deals with clauses 35 to 40, and that is at page 36 of the bill. That is one way to follow all of this.
We are pleased to welcome back a number of yesterday's witnesses from Finance Canada: Miodrag Jovanovic, Director, Personal Income Tax Division, Tax Policy Branch; Geoff Trueman, General Director (Analysis), Tax Policy Branch; and Daniel MacDonald, Chief, CHT/CST and Northern Policy, Federal-Provincial Relations Division, Federal-Provincial Relations.
From Employment and Social Development Canada, we welcome Siobhan Harty, Director General, Social Policy.
Ms. Harty, are you taking the lead?
Siobhan Harty, Director General, Social Policy, Employment and Social Development Canada: I am, indeed.
The Chair: We try to work our way through clause by clause, but if clauses are grouped together with the same policy, then speak of them in the policy sense.
You have the floor.
Ms. Harty: Thank you. Let's start with clause 35, please.
This is simply a definitional change to bring into line the definition of "qualified dependent" that was in the Universal Child Care Benefit Act with that which exists in the Income Tax Act. So that is just a slight change, in part because we're changing the age of eligibility for the benefit by moving it up to 17.
In clause 36 we're indicating the purpose of the act and also introducing the changes to the benefit amount. There are two, because the benefit has two parts. The first one is for children from the ages of 0 to 6. They can receive up to $1,920 a year. The second part is for kids between the ages of 6 and just under 18 years of age. They can receive up to $720 a year.
Clause 37 is a bit complicated. The intent is to draw a distinction between the benefit as it existed before the enhancements and the benefit after the enhancements. The first part, clause 37 amends subsection 4(1). It reminds us that before January 1, 2015, the amount of the benefit was set to $100 a month; it doesn't say that specifically, but it was $100 a month, and it was for children under the age of 6.
The next part of clause 37 takes us to the enhancements. Those state that starting January 1, 2015, there's going to be a change in terms of the age of eligibility.
The rest of that clause lays out more specifically the amounts that can be received for an eligible individual per month, because the benefit is paid per month. Those amounts are $80 if the eligible individual is in a shared custody arrangement, or $160 in every other case. That's up to the age of 6.
The Chair: Is there any disability involved here or is the qualification simply age?
Ms. Harty: Age, yes.
It further clarifies the amounts for every month as of January 1, 2015, for children between the ages 7 to 18, and that is $30 if you are in a shared custody arrangement. It is $60 in every other case.
That is it for the changes to the UCCB Act.
Clause 38 lays out changes to the Children's Special Allowances Act. I would like to introduce a caveat: That act falls under the authority of the Minister of National Revenue, so it does not fall under my minister. For the purposes of this presentation, I can say that the intent here is just to bring the same changes to kids who are in care by laying out the changes to the age of eligibility as well as to the amounts. Because those are written into the act, they have to be changed.
Proposed subsection 3.1(1) lays out the changes with respect to the amount before January 1, 2015, and then the amount after January 1, 2015. Then it specifies that there is a new benefit for children above age 6 but under age 18.
The Chair: Will those payments be in a lump sum once we pass this legislation, or has it already started, subject to approval?
Ms. Harty: It hasn't started. They will be retroactive. Most Canadians receive this through direct deposit. Payments will be made to eligible families in the month of July. The July payment will be the retroactive payment from January to June, as well as your July payment. Those can be expected toward the end of July, depending on your bank, or, if you receive a cheque, depending on where you live in the country and the postal service.
The Chair: It sounds like a happy July.
[Translation]
Senator Bellemare: I would just like a clarification. It is called the Universal Child Care Benefit; is it really universal or is it no longer provided above a certain income threshold?
Ms. Harty: It is universal.
Senator Bellemare: Therefore, everyone can receive this benefit.
Ms. Harty: Yes.
Senator Bellemare: But it is taxable.
Ms. Harty: Yes.
Senator Chaput: Senator Bellemare asked my question; I wanted to know whether it was taxable, and they said yes.
Ms. Harty: Yes, exactly.
The Chair: Please continue.
[English]
Ms. Harty: For my part, that is it.
There is one additional portion, clause 39 regarding the Children's Special Allowances Act. Here, there was a clarification because we changed the age of eligibility. It is just the reminder that, by the age of 18, a child would no longer be eligible.
Clause 40 is about the coming into force. It will be deemed to have come into force for July 1, 2015.
The Chair: Thank you.
That takes us to Part 3, which is entitled "Various Measures." I'm at page 38 of both the English and French versions of Bill C-59, the proposed federal balanced budget act.
Mr. Brad Recker from Finance Canada, usually your colleagues like to have a lot of help with them, but you are up here on your own. This must be very popular.
Brad Recker, Senior Chief, Fiscal Policy Division, Economic and Fiscal Policy Branch, Finance Canada: Yes, exactly. I will just go through the 13 proposed sections of the proposed balanced budget act.
Section 1 simply gives the short title of the act, the "Federal Balanced Budget Act."
Section 2 provides the definitions of key terms that are used within the act, the most important being, I would say, "extraordinary situation" and "recession." The rest of the definitions are fairly straightforward.
Sections 3, 4 and 5 provide specific clarifications. Section 3 indicates that the act does not apply to fall economic fiscal updates. Section 4 indicates that it begins to apply this fiscal year, and section 5 states that surpluses will be used to pay down debt.
Sections 6, 7 and 8 describe the consequences of a projected deficit in a budget. In the case of a projected deficit, section 6 requires the Minister of Finance to appear before the House of Commons Finance Committee to deliver a plan with concrete timelines within which the government is to return to balanced budgets and requires that the plan include the measures that are specified in either section 7 or section 8.
The Chair: Not the Senate but just the House of Commons Finance Committee?
Mr. Recker: Just the House of Commons Finance Committee.
The measures in section 7 apply if the deficit is due to a recession or an extraordinary circumstance. The measures in section 8 apply if the deficit occurs for any other reason.
With respect to section 7, which is in the case of a deficit due to recession or extraordinary circumstance, it indicates that the minister's plan needs to include an operating budget freeze on departments and a pay freeze for ministers and deputy ministers that is to begin when the recession or extraordinary circumstance ends.
Section 8, which takes precedence in the case of a deficit that arises for any other reason than a recession or extraordinary circumstance, indicates that the plan still includes an operating budget freeze and also a pay reduction of 5 per cent for deputy ministers and ministers that is to begin as soon as practicably possible.
Sections 9, 10 and 11 describe the same consequences of a deficit but for one that is recorded as opposed to projected. The consequences mirror those in sections 6, 7 and 8.
Moving forward to section 12, it is an override section meant to ensure that measures are never implemented during a recession. Basically, any measures that were to take effect within the act due to a deficit are not to be implemented during recession. This is just to avoid any pro-cyclical fiscal policy that is a cut to spending during a recession.
The Chair: The ministers' and the Prime Minister's salary reduction doesn't take place during the —
Mr. Recker: That's right. It is just to make sure this doesn't happen during the recession.
Section 13 allows the Governor-in-Council to amend the schedule which lists the DM positions affected by potential pay freezes or reductions, which is attached at the end of the act.
The Chair: I have some senators who would like to ask you some questions. That concludes your comments in relation to this particular initiative, which is all in clause 41 of Bill C-59 but has 13 of its own sections?
Mr. Recker: Yes.
[Translation]
Senator Bellemare: With respect to revenue, when the deficit is calculated, there is a $3 billion reserve which is set aside. This year, the reserve is $1 billion. The surplus that was calculated includes the reserve. Therefore, total spending and total revenue must be taken into account, including the $3 billion or the $1 billion that is set aside for the reserve. Is that correct?
[English]
Mr. Recker: This is right.
[Translation]
Senator Bellemare: Is the deficit calculated as soon as a negative amount is reached, including the $3 billion, or is the deficit confirmed with spending and income excluding the $3 billion?
[English]
Mr. Recker: For the purposes of this act, the budgetary balance referred to within the act is before you have made any reduction for a set-aside for contingencies. It would just be the straight revenues for that fiscal year, less the expenses of that fiscal year.
[Translation]
Senator Bellemare: We are talking about revenue, but the $3 billion is not taken into account. The revenue and spending is taken into account, and the reserve is not calculated. Okay. If the $3 billion are subtracted it comes back to the same thing. This year, it is $1 billion, it is not $3 billion. The revenue is counted without taking into account the reserve, the spending is taken, and it is the balance of both. Do you follow me?
[English]
Mr. Recker: I believe so, yes. For this year it would be total revenue less total expenditures.
Senator Bellemare: Without taking into account the reserve?
Mr. Recker: That's right.
[Translation]
Senator Bellemare: I would like another clarification. When we look at the deficit or the surplus, upon which conclusions will be based, we go by the numbers that are given in the document. The numbers will not change, will they?
[English]
Mr. Recker: For projected budgetary balance, yes. It's within the budget document each year.
[Translation]
Senator Bellemare: These are the numbers which would have been announced at the beginning of the year. Thank you.
Senator Hervieux-Payette: My question is similar to that of my colleague. I wonder at what point we will find ourselves with a real deficit. It makes me laugh, because I wonder whether we should be punishing the minister who created the deficit. This year, given the $3 billion reserve, could we say that we are in a deficit situation, given that they needed to use the reserve, according to the theory that we asked you to clarify? Will we have a $2 billion deficit based on the calculation that you just gave us? It is important to clarify that. I did not think that the $3 billion was excluded. Therefore, if the $3 billion is excluded, which is the spending in relation to revenue, that means that we are $2 billion short. The proof of that is that the government had to dip into the reserve. When will you say that this is a deficit? With or without the reserve? It is the same question as my colleague, except that I did not understand the answer.
[English]
Mr. Recker: The reserve is not to be included in the budgetary balance that is referred to within this act. In proposed section 2, I don't know if it will clarify at all. The definition of "balanced budget" is defined in section 2 at the very top of the clause. It "means a budget in which the total amount of expenses for a fiscal year does not exceed the total amount of revenues for that year, those revenues being calculated before any amounts to be set aside for contingencies are subtracted."
Senator Hervieux-Payette: Let's say it clearly. Don't be shy.
Mr. Recker: I'm trying to be clear. I'm sorry if I was unclear.
Senator Gerstein: You couldn't be clearer. It's very clear.
Senator Hervieux-Payette: Tell me that this year we are short of revenue and we are in a deficit situation for which we had to go into the reserve for $2 billion. I want this to be clear.
Mr. Recker: This year the forecast is for a surplus of $2.4 billion.
Senator Gerstein: Correct; clearly.
Mr. Recker: That is, $2.4 billion prior to the subtraction set-aside for contingencies. For this act, $2.4 billion would be the budgetary balance that would apply.
Senator Hervieux-Payette: There has been a big change in the value of our dollar and it has affected the government overall because we do a lot of transactions with other countries and currencies. Will this be taken into account as being something that will create a deficit? There is an expression —
Mr. Recker: Extraordinary situation?
Senator Hervieux-Payette: Yes.
Mr. Recker: For the extraordinary situation, what would qualify is specified specifically within the act, again in proposed section 2. I don't think that would fit any of the criteria listed.
Senator Hervieux-Payette: It is restricted to what is in the bill?
Mr. Recker: Yes, it is restricted to subsection (a) "a national disaster or other anticipated emergency of national significance" or subsection (b) "an act of force or violence, war or threat of war or other armed conflict."
Senator Hervieux-Payette: Do you think we could do that without a piece of legislation?
Mr. Recker: Do what, specifically?
Senator Hervieux-Payette: To achieve not just a surplus, but good management of our economy and not run into deficits. Do we need a law to do that?
Mr. Recker: You need a good fiscal plan to do that.
[Translation]
Senator Rivard: I think the witness has just largely answered my question. Still on extraordinary situations, I remember that at the beginning of the 1980s, government borrowing was at a rate of 18 per cent or 19 per cent, and today, many years later, the rate is less than 5 per cent. However, could a rapid increase in interest rates from one year to the next when they could nearly double, or 25 per cent to 35 per cent increases, be considered an extraordinary situation? You mentioned earlier a section that describes what could be considered an extraordinary situation. However, would an unexpected, drastic rise in interest rates be enough to justify an extraordinary situation?
[English]
Mr. Recker: I don't think so. I don't think that would fit within the definition in the bill, unless there was a recession accompanying said increase in interest rates.
[Translation]
Senator Rivard: Because the interest rate, of course, is paid on an annual basis; even if a loan that was at 5 per cent is renewed and it increases to 10 per cent, the annual rate will increase. That is why you say it would not be an extraordinary situation. The government would have to absorb it and balance revenue with taxes accordingly to not create a deficit. Is that what I am to understand?
[English]
Mr. Recker: If it chose to try to balance the budget immediately and avoid the consequences within the act, then I suppose so.
The Chair: I think that's all we need with respect to the balanced budget legislation. We thank you very much for being here.
We'll go on to Part 3, Division 3, "Intellectual Property," clauses 44 to 72. You should flip over to page 48 for the beginning of those particular matters.
We welcome representatives from Industry Canada: Mr. Denis Martel, Director, Patent Policy Directorate; and Scott Vasudev, Chief, Patent Administrative Policy Classification and International Affairs Division. Who would be the spokesperson?
Denis Martel, Director, Patent Policy Directorate, Industry Canada: I'll start, and then we'll go back and forth. Scott will go through the clauses.
[Translation]
To provide some context, I want to mention that the proposed amendments further modernize the administration of intellectual property to make Canada a more attractive place to invest and protect intellectual property. These amendments follow in the wake of recent progress that will make the intellectual property system easier for companies to navigate.
[English]
Bill C-59 introduces amendments to the Industrial Design Act, the Patent Act and the Trade-marks Act and to provide for the correction of obvious errors, the extension of time limits to avoid an inadvertent loss of rights in the event of force majeure circumstances, the authority to make regulations to authorize the waiving or refund of fees, and make different consequential amendments to reflect that other bills recently made amendments to the Patent Act, Trade-marks Act and Industrial Design Act.
Finally, the bill amends the Patent Act and Trade-marks Act by adding provisions to protect communications between patent and trademarks agents and their clients in the same way as solicitor-client privilege. This would allow agents to have open and frank discussions with their clients, which would mean higher IP quality advice.
I'll turn to Scott to go to through the clauses.
The Chair: Thank you for that overview.
Scott Vasudev, Chief, Patent Administrative Policy Classification and International Affairs Division, Industry Canada: I'll start with clauses 44 to 49, which relate specifically to the Industrial Design Act. You will see as I go through these that a number of parallel amendments in both the Patent Act and Trade-marks Act are being made as well.
Clause 44 relates to our "correction of obvious errors" initiative. This adds a new section that will allow the minister to correct obvious errors in the Register of Industrial Designs within six months of the registration date. A similar provision was put into the Trade-marks Act in Bill C-8, the Combating Counterfeit Products Act.
Clause 45 is simply repealing a section of the act that deals with the correction of clerical errors. This is as opposed to the obvious errors provisions that we will be inserting. You will see later that this will have a regulation-making authority to address obvious errors instead.
Clause 46 concerns the force majeure-type changes that Denis just spoke of. It authorizes extensions of time limits that expire on days that would be either prescribed by regulation or any other day that the minister considers to be in the public interest, usually due to unforeseen circumstances.
Subclause 47(1) discusses a fee waiver. Once again, this is a provision that is being placed in the Industrial Design Act, the Patent Act and the Trade-marks Act. This will authorize the minister to waive a fee if he is satisfied that the circumstances justify.
Subclause 47(2) is the regulation-making authority that will allow us to correct obvious errors in documents submitted to the minister or the Commissioner of Patents. There's a similar provision in the patent side, and this is already in the Trade-marks Act.
Clauses 48 and 49 are consequential amendments. This is due to the amendments contained in the transitional provisions in Bill C-43, which received Royal Assent last December.
The Chair: Let's see if there are any questions in relation to the Industrial Design Act first before we go on to the Patent Act.
[Translation]
Senator Hervieux-Payette: I would like to know if these amendments seek to accommodate government or if they come from a request from those who are affected by these measures, that is to say the users of the Industrial Design Act. Did they speak to you and ask you to change the way things are done? What is the basis of the decision to make these changes?
[English]
Mr. Vasudev: For instance, the force majeure provisions have been a long-standing request of the Intellectual Property Institute of Canada. Situations such as the ice storm in Ottawa or the floods that were in Calgary create situations where people are unable to get to their places of business, but the current provisions say that as long as the office here in Gatineau is open for business, deadlines don't get extended. This will allow us, in those situations, to extend those deadlines. As I said, this was a long-standing ask from the agent community.
With regard to the correction of obvious errors, the current provisions talk about clerical errors, which the courts have very narrowly construed, and it limits our abilities to correct certain errors. As you've heard from the agent community representing their clients, expanding this will allow them more flexibility to deal with errors that arise in terms of naming inventors or applicants. It gives us greater flexibility that will benefit the clients.
Senator Hervieux-Payette: All in all, these clauses are for the benefit of those using this legislation? It's not to accommodate the operation of the government?
Mr. Vasudev: No. Primarily it's to provide greater flexibility and certainty in the system.
[Translation]
Senator Chaput: I had two questions that have been asked in another way, but they were on the same subject as that of Senator Hervieux-Payette. I wanted to know why, and I wanted to have examples.
Mr. Vasudev provided an answer. However, I have one last question. Over the course of a year, how many of these incidents that the minister has to correct would there be? About how many errors?
[English]
Mr. Vasudev: We receive about 500 of these requests in a given year, and I would say about 30 of them end up being rejected because they do not fall within the scope that the courts have set for the definition of what constitutes a clerical error.
The Chair: So this amendment will cover those 30 others as well if the registrar or the commissioner of industrial design decides that it's appropriate to do so?
Mr. Vasudev: The great majority of them will be covered. The term "obvious error" is a much broader definition. It is an international standard that we're somewhat used to already. It will cover the majority of those 30, yes.
Senator Mockler: I welcome this initiative, especially as I am Chair of the Standing Senate Committee on Agriculture and Forestry. We know the impact it has on IPOs. In this context, how do we protect the inventor? What mechanism do we have to protect the Canadian inventor in international markets?
Mr. Vasudev: With respect to your first question, is it a specific provision you're referring to in terms of protecting the inventor?
Senator Mockler: With respect to the inventor, who is being protected here? Are we doing this for government? But we're also doing it for the protection of the inventor. Am I right in saying that?
Mr. Vasudev: Yes, absolutely.
Senator Mockler: Therefore, can you give us an example, when we look at the national reference here in Canada and when we have to deal with a Canadian inventor, and it impacts internationally?
Mr. Vasudev: In the patent world specifically, we're responsible for national treatment provisions. In terms of how we treat inventors, we treat them equally as a whole in terms of the administration of the act.
From an international perspective, such things as the force majeure provision ensure that patent applicants don't inadvertently lose their rights here in Canada, which they then can potentially translate into applications in other jurisdictions. But, primarily, this has to do with a very basic national administration of the patent system.
Senator Mockler: If I look at the agriculture sector and the forest sector, you have mentioned, sir, that there are demands or cases, about 500 during the year, right?
Mr. Vasudev: For correction of errors, yes.
Senator Mockler: What percentage of those 500 would be related to the agriculture and forestry side of IPOs?
Mr. Vasudev: I do not have that information, sir.
Senator Mockler: Mr. Chair, I wonder if he could provide us with that information.
The Chair: Provide it to the clerk, and then it will be circulated to everybody. That would be helpful.
Now, we'll go on to patents.
Mr. Vasudev: The Patents Act amendments constitute clauses 50 to 65.
Clause 50 is a clarification clause. In situations where the commissioner or the assistant commissioner is unable to act, it would also include the situation where the office of the commissioner is vacant. This is additional language in terms of clarification.
Clause 51 repeals the clerical errors provisions that are currently in the Patent Act.
Clause 52 is an obsolete service. Essentially, section 11 of the act requires the office to confirm the existence of a patent application that has correspondence to a patent granted in another jurisdiction. A number of years ago, the patent system changed such that all patents are published at 18 months, so this service is no longer required.
Subclause 53(1) is the regulation-making authority to authorize the commissioner to waive a fee if the commissioner is satisfied that the circumstances justify.
Subclause 53(2) is another regulation-making authority to codify the handling of divisional patent applications, which are necessary when an application contains more than one invention. Presently, within the act, there's very limited legislative framework for divisional applications. This will provide some certainty to the marketplace and allow people ease of access to the information concerning divisional applications.
Clause 53(3) is, once again, a rule-making authority. This is similar to the one I spoke of with respect to industrial designs. This will allow for the correction of obvious errors as opposed to the clerical error provision that was repealed.
At this point, for clause 54, I'll turn it over to my colleague.
Mr. Martel: Clause 54 adds a new provision to the Patent Act to protect communications between clients and their patent agents in the same way as solicitor-client privilege. The clause specifies the conditions that must be met for the communication to be considered confidential. It has to be intended to be confidential and it must be made for the purpose of giving or receiving advice with respect to any matter relating to the protection of inventions. If the communication is no longer protected, it does not apply if it has been waived explicitly or implicitly by the client. The client-agent privilege will be subject to the same exceptions developed in common law for solicitor-client privilege.
Proposed subsection (4) recognizes the privilege for communication involving foreign patent agents if the privilege is recognized in the law of that country.
Proposed subsection (5) specifies that the communication is also protected if it's done on behalf of the patent agent or the client.
There are some transitional provisions as well to specify that this section applies to communications made before or after the coming into force, but it does not apply to an action or proceeding commenced before that day. So it would apply to new actions or proceedings commenced on or after the coming-into-force date.
Clause 72 deals with the coming into force. Subclause 72(5) states that clause 54 will come into force 12 months after Royal Assent.
Scott will deal with clause 55.
The Chair: Can you help us with the type of communication that might be involved here? As to a patent agent talking to a client with respect to a patent application, would that information be protected on a solicitor-client basis?
Mr. Martel: Just to give you context, lots of patent agents are also lawyers. They own the designation. But the courts have clearly made distinctions. If they act as a patent agent versus as a lawyer, their communications as a patent agent are not protected and could be divulged in court.
Often, the type of discussion that happens between an agent and their client is about their business strategies, to fully understand what the best way to protect their inventions is. So those types of communications will be considered privileged and not to be disclosed in legal proceedings.
The Chair: As to communications between a patent agent, a non-lawyer, and a client with respect to a possible court case where the agent is involved in the court case, that's also protected by this legislation?
Mr. Martel: I believe that this would fall into the litigation privilege, which is a bit different. Because of proceedings, there is already a litigation. But we're talking about communication that happens before a legal challenge is launched.
The Chair: In my question, the litigation might not have been started. It's a question of validity. It's a question of the patent potentially standing up to a court challenge, that kind of advice.
Mr. Martel: Regarding the validity of a patent, a lawyer is often involved in the assessment of it.
The Chair: The lawyer is not involved here. I'm referring to a patent agent and a client.
Mr. Martel: We will have to make sure that the patent agent is apt to provide this validity opinion. It seems there is a bit of a range in the industry of what patent agents are doing.
The Chair: The question is: Does this privileged communication apply to that situation?
Mr. Martel: Well, it may. If the agent is able to provide that validity opinion, it would apply.
The Chair: It would apply.
Mr. Martel: Yes.
The Chair: Thank you.
We are now at clause number 55 of Bill C-59.
Mr. Vasudev: The next few clauses deal with some modernization of the language in the Patent Act currently. Clause 55 amends section 26 of the act to clarify that the content of the annual report that the commissioner is required to produce is actually limited to the proceedings before the office. That wasn't always very clear. It is just a clarification. It is only relating to the commissioner's patent activities.
Clause 56 repeals section 26.1(1) of the act to eliminate the requirement for an annual publication of a list of all patents issued in the year. This is a service that is no longer required. It is superseded by the availability of all this information regarding issued patents on the website of the Canadian Intellectual Property Office.
Clause 57 replaces a portion of a section of the act dealing with a request for priority. In the patent world there are national offices, but there are also regional offices. You don't file an application in that country; you file it for certain countries through these regional offices. It is providing the change in language to account for that, and that we would say either "in" or "for" another office.
Clauses 58(1) and 58(2) deal with section 38.2 of the act concerning the possibility of making amendments to patent applications. Essentially, these are being amended to provide some consistency between the French and English versions of the act, and to introduce amendments that were consequential to the adding of the divisional application. As we're codifying for divisional applications, we had to provide for the possibility of amending those applications. That's amending the wording here in 38.2. It is also taking into account, consequential to the amendments, for the correction of obvious errors we will be putting in as well.
Clause 59 is consequential to the amendments to section 73 concerning abandonment based on the requirement to submit a final fee, which we will come across in subclauses 62(1) and 62(2). This has to amend Bill C-43 regarding intervening rights. Part of the clause for abandonment was the provision concerning non-payment of the final fee. That is being removed out of the act. That is essentially being taken out of what was previously set in Bill C-43.
Clause 60 is a modernization. This is going to repeal section 62 of the act to eliminate the requirement to inform the commissioner when a patent or claims of a patent are voided by a judgment. This change is being made to eliminate any argument that section 62 requires that a judgment only have effect upon registration in the office. There is still a requirement to provide that a patent could be declared invalid or void, but that it wouldn't have to be registered with the office in order to have effect. Once again, it is just clarifying.
Subclause 61(1) corrects a typographical error to eliminate when it refers to sections 65 or 66. Section 66 really is not applicable and so it is eliminating that provision.
The amending subclause in 61(2) replaces subsection 68(2) of the act to eliminate a gender specific reference to the commissioner — it refers to "he" — and to eliminate references to the CPOR. The Canadian Patent Office Record is a paper publication that duplicates information easily found on the Canadian Intellectual Property Office's website, and we prefer to use that as our primary vehicle for information dissemination.
Clause 62(1) repeals paragraph 73(1)(f) of the act to remove grounds for abandonment based on the requirement to submit a final fee within six months of the date of notice of allowance. Requirements of this technical nature are typically defined in the regulations rather than legislation, and its inclusion in the act does produce a bit of an oddity as this is the only time limit that is currently specified in the act rather than the rules.
Associated with that, subclause 62(2) removes another section of subsection 73(4) concerning abandonment and re-examination upon reinstatement since this ground of abandonment has been removed by the previous clause. There's a further smaller change to subsection 73(5) of the act to ensure consistency between the French and English versions of the act.
Clause 63 relates to section 78 of the Patent Act and concerns the extension of time limits provision that I spoke of previously with respect to clause 46 of the Industrial Design Act. It is a similar situation. It would allow extensions of time for days prescribed in the regulations or in unforeseen circumstances where the commissioner feels it is in the public interest.
Clause 64 concerns consequential amendments relating to the transition provisions from Bill C-43 as to what parts will apply to what applications. It sets up the sequencing. Applications that are filed before a certain date have certain parts of the act that apply to them. Subsequent ones have different parts. This is consequential to that.
The final one is clause 65, modernizing wording. Presently in French the act speaks, with respect to divisional applications, as "complémentaire" and this is replaced with "divisionnaire," which is thought to be the more appropriate term.
That's it for the sections of the Patent Act.
The Chair: So "complémentaire" is gone. What a shame.
I don't have any honourable senators that wanted to talk to you about the patent side of things. A lot of this is modernizing, bringing it up to date, housecleaning and that kind of thing.
[Translation]
Senator Bellemare: I have a question. I remember that last year, we studied designs, licences and patents, et cetera. If you would answer briefly, do the amendments make many changes to what we did last year, or is it a matter of perfecting more important amendments adopted in the past?
[English]
Mr. Vasudev: Last year, the discussion was amendments that would allow us to be compliant with an international treaty. The Patent Law Treaty has to do with formalities, administration, trying to harmonize among different countries.
The provisions before you today are not related to that treaty but had been on our table for a while that we wanted to change. So this was our opportunity to do so.
The Chair: How did that all happen? Did somebody say, "Hey, we have this budget implementation bill coming up and what have you got to put in"?
Mr. Martel: It is a great opportunity to make a series of amendments. In some instances, they are minor but important for the business community.
The Chair: You've had these in your drawer for a while.
Mr. Martel: To reflect on the previous questions, they were in our drawer because they were long-standing from the industries or businesses, but having a vehicle to make them happen is difficult.
The Chair: Wouldn't a bill dealing with modernization of the Patent Act or Intellectual Property Act be a logical way to do that?
Mr. Martel: It is one of the options that could have been contemplated, but the budget was considered the best vehicle at this point.
The Chair: I am just trying to make a point that I've been trying to make for a few years, so I thank you for that.
Mr. Vasudev: For the Trade-marks Act, I will start with clause 66, which I will turn over to Mr. Martel.
Mr. Martel: This is the protection of communications between clients and trade-mark agents. Essentially it mirrors the clause in the Patent Act on privilege but reflects trademark agents because it is embedded in the Trade-marks Act. It specifies the same thing. It sets out the conditions for the communication to be privileged, unless the client expressly or implicitly waives the privilege. There are some exceptions — developing common-law for solicitor-client privileges. They would be subject to those. It's the same thing regarding conditions for foreign trademark agents if it's recognized in the law of that country.
Also, it would apply to individuals qualified to act on behalf of a trademark agent, and transitional provisions are similar. It is applied to communications made before or after coming into force, and it would apply to new proceedings that commence on or after the coming into force date. Similarly, the clause will come into force 12 months after Royal Assent.
The Chair: It will not happen at Royal Assent but 12 months following.
Mr. Martel: That's correct.
The Chair: So that honourable senators are aware, not all trademark agents are lawyers.
Mr. Martel: That's the same issue and the courts have made clear distinctions. A trademark agent acting as a lawyer would have communication privilege, but not acting as the trademark agent; hence, the need to have a statutory provision.
The Chair: The Intellectual Property Office maintains a list of qualified trademark agents like you do for patent agents?
Mr. Martel: The official list is made by the Canadian Intellectual Property Office, which maintains the registry of agents both on patents and trademarks.
The Chair: Senator Smith couldn't hold out a shingle and say, "I'm a trademark agent and I want all the protections of solicitor-client privilege."
Senator L. Smith: I was a C-minus law student.
The Chair: Did you take that course?
Mr. Martel: There are exams to become a qualified trademark agent.
The Chair: That's the point we're trying to make. We're authorizing this privilege, but it is to a group of individuals who have some special training.
Mr. Martel: Yes.
The Chair: Clause 67.
Mr. Vasudev: Clause 67 mirrors the authority for both patents and industrial designs. With respect to waiving the fees, one distinction on the trademark side is that it gives them the ability to refund fees to applicants. Currently, both the industrial design and patent legislation have that provision, but trademarks did not, so it is being added here.
Clause 68 is the same as in other clauses with respect to the extensions of time in force majeure-type situations.
Subclauses 69(1) and 69(2) amend transitional provisions that were contained in Bill C-31 and are consequential to the amendment to section 66.
Subclauses 70(1) to (7) are coordinating amendments with respect to provisions that were in Bill C-31, once it comes into force.
There are similar coordinating clauses from 71(1) to (12) with respect to Bill C-43. This is the challenge of having multiple bills that haven't entered into force yet and trying to make all the provisions come in at the appropriate times.
Clauses 72(1) to (6) talk about the entry into force once again. Various parts will enter into force at different times due to the interaction with Bill C-31 and Bill C-43.
The Chair: Where is the provision that Mr. Martel mentioned to us about 12 months?
Mr. Martel: It's in subclause (5).
The Chair: Why did you need 12 months after coming into force in order to allow for this privilege to take effect?
Mr. Martel: One of the main issues is to make sure that the agent community, the organization, can provide training to make sure people understand some of the issues around privilege. It means that when they interact with clients, they make sure the privilege is maintained.
The Chair: Clause 54 is privilege with respect to patent agents and clause 66 is for trademark agents.
Mr. Martel: Yes.
The Chair: What about industrial design agents?
Mr. Martel: There's no official exam to become an industrial design agent for the purpose of limiting to make sure people have credentials and through practice obtain the privilege. That's why it was left out.
The Chair: These are restricted to trademark and patent agents. No copyright either?
Mr. Martel: For copyright, the creator gets a copyright automatically. They don't have to deal with an agent.
The Chair: I don't see any senators asking for further clarification so you were clear enough in your explanation. We thank you for doing that.
We will now go to Division 4, "Compassionate Care Leave and Benefits," amendments to the Canada Labour Code. We have witnesses from Employment and Social Development. We welcome Annette Ryan, Director General, Employment Insurance Policy; Andrew Brown, Director, Self-Employed, Special Benefits and Horizontal Policy; Stuart Pearce, Senior Policy Strategist, Self-Employed, Special Benefits and Horizontal Policy; and Charles Philippe Rochon, Assistant Director, Labour Law Analysis.
Who would like to be the spokesperson and explain horizontal policy to us?
[Translation]
Andrew Brown, Director, Self-Employed, Special Benefits and Horizontal Policy, Employment and Social Development Canada: Good afternoon. I will speak to the proposed amendments to the Employment Insurance Act whose purpose is to improve caregivers' benefits, often called compassionate care benefits.
[English]
It is important to note briefly as an overview before getting to clause by clause that Employment Insurance currently provides six weeks of compassionate care benefits for workers and for self-employed Canadians that have opted into the EI program. Those six weeks may be taken once a doctor signs a medical certificate attesting to the fact their family member is seriously ill with a significant risk of death within 26 weeks. Those benefits may be taken by workers who are self-employed Canadians in the 26 weeks after the doctor has signed that medical certificate.
Corresponding changes are proposed to the Canada Labour Code. Before I get to each clause, I will pass it to Mr. Rochon.
Charles Philippe Rochon, Assistant Director, Labour Law Analysis, Employment and Social Development Canada: This would lead into the clause-by-clause review.
Currently under the Canada Labour Code, which, as you know, applies to federally regulated enterprises such as banking, telecoms, et cetera, there are provisions regarding compassionate care leave. They provide now for eight weeks of leave and this is for employees, again federally regulated enterprises, who wish to provide care and support to a family member who has a serious illness with a significant risk of death within 26 weeks.
Essentially what the legislation will do, and this is where I go to subclause 73(1), is extend the maximum duration of compassionate care leave, raising it from 8 weeks to 28 weeks in total. This will cover the 26 weeks or maximum weeks of EI benefits plus the two-week waiting period in order for a claimant to avail him or herself of those benefits.
Subclause 73(2) makes a change to the period within which the leave can be taken. Currently 8 weeks of leave may be taken within a 26-week period. This will be extended to a period of 52 weeks. So the 28 weeks of leave can be taken within a 52-week period, which basically starts from the time a medical certificate is issued, attesting to the condition of the family member, or if the leave had to start earlier before the medical certificate could be issued from the first day of the week when the leave started. Again this is to the extent that the medical certificate can at least attest as to the condition at that time.
Subclause 73(3) brings a bit of clarification. Currently the leave has to be taken within a 26-week period, which corresponds to the period covered by the medical certificate. The certificate states that there's a significant risk of death within 26 weeks. What 73(3) will do is clarify that where the leave continues beyond that 26-week period, it will not be necessary for an employee to actually obtain an additional medical certificate. The initial certificate will still be considered valid for those purposes, and the reason for that is to avoid adding unnecessary burden to families and medical professionals.
Subclause 73(4) simply clarifies that the aggregate amount of leave that can be taken for compassionate care purposes among two or more employees who are caring for the same family member will also be extended from 8 to 28 weeks. Again the leave can be shared amongst any number of family members who are providing care.
I should probably mention, as part of context, that the eligibility requirements for the leave will remain untouched: the necessity of obtaining a medical certificate, and there are still some notice requirements to the employer. All reinstatement provisions under the code that apply to compassionate care leave will continue to apply.
The Chair: Under "Employment Insurance," I think you will get on to the benefits someone who is taking this leave is entitled to.
Mr. Rochon: Yes.
The Chair: But is the person who takes the leave entitled to return to the same position? Is the employer required to maintain that position for the person?
Mr. Rochon: Yes. The code currently provides that the employer must reinstate the employee in the same job at the end of the leave. However, if there are valid reasons why that's not possible — for example, the job no longer exists — then the employee is to be reinstated in a comparable position with the same wages, benefits, et cetera. There are some provisions under the code to recognize that there may be a major reorganization within the workplace, in which case the employee will be entitled to the same rights as if he or she had been in the workplace. For example, if there are changes in wages or anything like that, then they would be entitled to what they would be entitled to had they been in the workplace.
The Chair: We have senators who asked to intervene under the Canada Labour Code aspect before we get into Employment Insurance.
[Translation]
Senator Chaput: I would like to have a clarification. If I want to qualify for leave up to a maximum of 26 weeks to take care of a family member, I would have to get a certificate from a qualified physician attesting to the fact that this person may die in the next 26 weeks. Is that correct?
Mr. Rochon: Yes, indeed.
Senator Chaput: For example, if a member of my family is gravely ill with cancer, but who might still be alive next year, could I get the certificate?
Mr. Rochon: The medical certificate must basically attest to the fact that the person is seriously ill and is very likely to die over the next 26 weeks. Of course, we can never be sure that the person will indeed die within that time frame, but there has to be a high probability, and that condition has not changed.
Senator Chaput: Very well.
I am now going to say something which I perhaps should not say, but I will do so anyhow, which is fine. If for instance I have received the certificate, and the person I am looking after is still alive after 28 weeks, what then? The person will in all likelihood die in the next 28-week period. That is a possible scenario. What happens in this situation if I cannot provide care anymore and the person is still alive?
Mr. Rochon: First, I can answer the part of the question dealing with the reason why the period for compassionate leave has been increased. In the past, it was 8 weeks, and now it is 28 weeks. The reason for that is so that people can spend more time with their loved ones and to give them more flexibility when it comes to choosing the weeks they will take leave. It often happens that people wait until the very last minute, and then they do not know when it will happen. So the point was to improve those conditions.
However, the fact remains that once those 28 weeks are up, under the law, there is no additional job protection. That said, this does not prevent employers from offering additional leave under their own policies, and it also does not prevent unions and managers to negotiate provisions in collective agreements which could contain more generous conditions.
Senator Chaput: I understand. Thank you.
Senator Hervieux-Payette: Where does the money come from to pay for those 26 weeks of leave? From government or from the Employment Insurance Program?
Mr. Brown: The money is paid out from the Employment Insurance Program.
Senator Hervieux-Payette: Regarding this 26-week period if, for instance, a family has three children, and they each want to take 26 weeks, are the 26 weeks based on the patient or can each family member take 26 weeks to look after the patient?
If I have used up my 26 weeks, can my sister take 26 weeks and receive the same employment insurance benefits as I did? Generally speaking, you cannot find out from God when the person will die. So can a second person take 26 weeks to look after the same patient?
Mr. Brown: There are 26 weeks' worth of benefits per patient. You can split those 26 weeks between several people, but the maximum number of weeks is 26. After 52 weeks, it is possible to qualify for another benefit period if the family member is still alive.
Senator Hervieux-Payette: If a physician is willing to state that this time it will happen. In fact, I find the idea of a certificate rather crude, since it basically says that the patient will die. That requirement is quite barbaric. You can say that the patient is very ill, but to say that he or she may die in the next 26 weeks, I find this is not very sensitive towards people who are at the end of their life.
So, a person has to be working for an employer. Will the benefits be paid out from employment insurance? If I earn $100,000 per year, I am entitled to the maximum amount, but if I make $30,000 per year, I would get a different amount.
Mr. Brown: Benefits depend on a person's salary or income if they are self-employed. The maximum threshold is about $50,000, on which the maximum benefits per person are based. In short, the benefits paid out depend on a person's salary or income.
Annette Ryan, Director General, Employment Insurance Policy, Employment and Social Development Canada: I would like to add that the ratio to calculate the benefit amount is 55 per cent under the $50,000 threshold. That is a weekly benefit of about $500 at the most.
Senator Hervieux-Payette: Will part-time workers be entitled to half the benefits, or will they simply not qualify? That is often the case for women who earn an income, but who do not necessarily work full-time. If they want to make up for that loss — since after all women do earn an income, even if they work part-time — will they have to work a certain number of hours to qualify?
Mr. Brown: Yes, 600 hours for a salaried worker, be it on a full-time or part-time basis. However, the amount of benefits still depends on the salary or income of a person over the previous 52 weeks.
Senator Hervieux-Payette: In your opinion, do 600 hours add up to 52 weeks per year?
Mr. Brown: No, but that is the minimum number of hours of work required for a person to qualify for special benefits paid out under employment insurance, such as compassionate care leave. So if a person works 35 hours per week, that is about 18 weeks. In the case of a salaried employee working 15 hours per week, they would need to work about 40 weeks to qualify for this benefit.
The Chair: I would suggest that we now move on to the next division, which is about employment insurance. Perhaps Ms. Ryan would like to speak?
Ms. Ryan: I will ask Mr. Brown to begin with the explanation.
Mr. Brown: Unfortunately, I had forgotten to explain this change before giving the floor to Mr. Rochon a little earlier.
[English]
What is changing with the compassionate care benefit is a proposal to go from 6 weeks of benefits currently to 26 weeks of benefits, and to allow the period over which those benefits may be taken to grow from 26 weeks to a period of 52 weeks. That is to give families more flexibility in terms of a larger benefit, an additional number of weeks, but also additional flexibility in determining how to draw down those weeks. There are no changes to the eligibility criteria, simply to the benefits that are now available.
If you take a look at subclause 74(1), it increases the duration of the compassionate care benefit to 26 weeks.
Subclause 74(2) clarifies that when the compassionate care benefit is taken by two or more people, whether they be salaried employees or self-employed workers, the total number of weeks available is 26 in a 52-week period. So even if it's shared, the total maximum number of weeks is 26.
Subclause 75(1) clarifies that what we call the benefit window, but that period over which benefits may be received, is increasing to 52 weeks from the current 26 weeks.
Subclause 75(2) clarifies that an additional medical certificate is not required. You heard earlier that we are asking the doctor to actually sign a certificate indicating that there's a significant risk of death within 26 weeks. This is to clarify that, in effect, once that's been signed, we are seeing it as a certificate that is valid for a 52-week period, so we are not requiring the family, the caregiver, to go back and have the doctor sign an additional certificate.
Subclause 75(1) is again clarification of the ability to share the compassionate care benefit amongst claimants, and again the maximum is 26 weeks.
Clause 76 is giving authority to the Canada Employment Insurance Commission — that's essentially in terms of administration of Employment Insurance, which is done by Service Canada on their behalf — to require an additional certificate if there's some reason to ask for one. This would typically be seen if there was some concern about fraud, that there would be an authority to ask for a certificate that wouldn't normally be used.
[Translation]
Subclauses 77(1), (2) and (3) and subclauses 78(1) and (2) apply to self-employed workers, and these subclauses correspond to the previous provisions dealing with salaried workers. They are the same, because in the Employment Insurance Act, there are two different parts, one on salaried workers and the other on self-employed workers.
[English]
Subclauses 79(1) and (2) are transitional provisions, again for ensured workers and for the self-employed, to clarify that for people in receipt of benefits when the new provisions come into force, they are able to benefit from the enhanced compassionate care benefit.
Finally, clause 80 provides that these amendments, both to the Canada Labour Code as well as to the Employment Insurance Act, will come into force concurrently on January 3, 2016.
[Translation]
Senator Bellemare: That modality is very interesting. It provides much more flexibility. I am convinced that the people who will benefit from this will be delighted.
By amending the Canada Labour Code, we will allow the workers in question to notify their employer that they qualify. This means that provincial labour codes will have to be amended. The good thing is that we are not asking the employer to directly fund the employee's leave but to give the employee flexibility in the way their work is organized, so that the employee can take advantage of this benefit. Is that correct?
Mr. Rochon: Yes, indeed. The Canada Labour Code will not only apply to employees and employers who fall under federal jurisdiction. In order to provide the same kind of protection, provinces will have to amend their own labour code standards. That said, leave —
Senator Bellemare: One moment. This means that the Canada Labour Code gives the right to employees to take advantage of this benefit.
Mr. Rochon: That is correct.
Senator Bellemare: The employer cannot refuse.
Mr. Rochon: Indeed.
Senator Bellemare: As it now stands, at the provincial level, even though labour codes have not been amended, the employer can still decide whether or not to grant this leave.
Mr. Rochon: Absolutely. Employers can always offer more. There is no limit. So if the objective is for the province to give the same rights to their employees, they would basically all have to amend their legislation.
That said, some provinces award additional leave under their legislation, and this leave could be used for that purpose. However, it might not add up to exactly 26 weeks. So we are assuming that some provinces will probably want to review their provisions.
Senator Bellemare: Have you had discussions with the provinces?
Mr. Rochon: Not exactly. What I can say is that when the leave for caregivers was included in the Canada Labour Code in 2003, every province and territory adopted it in the following years. So, as it now stands throughout Canada, there are protections which give people at least eight weeks' worth of leave.
Senator Bellemare: Fine.
Mr. Rochon: Therefore, if the same thing happens again, we can expect there to be amendments. No province has officially made a statement on this issue.
You talked about the fact that employers will not have to incur costs. Indeed, employers will not be forced to pay two salaries. They will not be obliged to continue to pay a salary. However, there are certain obligations with regard to social benefits. If there was a pension plan, insurance and other such benefits, where an employee continues to pay their contribution, the employer will have to do the same.
So it is not as if there are no costs, but the employer will not have to pay the equivalent amount of the salary, since there is compensation; the compensation will come from the Employment Insurance Program.
Senator Chaput: In the Canada Labour Code, the maximum number of weeks employees can take leave for is 28. All of the employees cannot take more time off, is that right?
Mr. Rochon: That is right.
Senator Chaput: In the Employment Insurance Act, when you look at the breakdown of benefit weeks — maybe it is not the same thing — you can have a breakdown, but the maximum in that case is 26 weeks.
Why is it 26 weeks on the one side and 28 weeks on the other?
Mr. Rochon: That is an excellent question. The reason there are two more weeks under the Canada Labour Code is that according to the Employment Insurance Program, payments start after a two-week waiting period. This ensures that the person will receive job protection not only for the 26 weeks which they receive payments, but also for the two-week waiting period.
Senator Chaput: The employee can help up to 28 weeks, but out of those 28 weeks, employment insurance will only provide compensation for 26. So there are two weeks in which there will not be compensation.
Mr. Rochon: Exactly.
[English]
Senator L. Smith: To follow up on Senator Chaput's question, what is the maximum? You talked about percentage of compensation. How does that work and what's the maximum someone would be able to claim on compassionate leave? You said it was based on their salary. How does it work? The amount of money; the amount of benefit?
Mr. Brown: Exactly. In very rough terms, under the current rules of six weeks of benefits, the maximum someone could receive in 2015 would be just over $3,000. After the changes, where it will be become 26 weeks, that would lead to just over $13,500 in benefits.
The way that that's calculated is it's based on a maximum weekly benefit rate. So a person's benefit rate is determined by taking a look at what their earnings were in the previous year, up to a current maximum of $49,500. That's the maximum insurable earnings. For example, someone earning more than $49,500 in a year does not pay EI premiums beyond that on their salary. That is the maximum amount of your salary that is insured. Whatever your salary was, we take that figure and multiply it by 55 per cent, dividing by 52 to turn that into a weekly rate. That's your weekly benefit rate. For someone earning $49,500 or more, that weekly benefit rate is $520.
Senator L. Smith: So all you've done is take the base rate of 500 and multiply it by 26 or 28.
Mr. Brown: Exactly.
The Chair: Thank you very much for helping us with this initiative. It's now much clearer to us all, and we will now go on to the next section of the bill, which you can stay and listen to, if you like. It's all about copyright.
Colleagues, we're now moving along to page 66 of the bill. Clauses 81 and 82 relate to the Copyright Act, which is Division 5.
From Canadian Heritage, we welcome Nathalie Théberge, Director General, Copyright & International Trade Policy Branch; and Thomas Owen Ripley, Manager, Legislative & Parliamentary Issues, Copyright and International Trade Policy Branch.
Welcome and thank you. Can you help us with these two clauses at page 66 of Bill C-59?
[Translation]
Nathalie Théberge, Director General, Copyright & International Trade Policy Branch, Canadian Heritage: If you will allow me, I can explain the intention behind the proposal you are studying, and then I will give the floor to my colleague to go through the provisions step by step.
The proposal you are seized with is a limited modification of the Copyright Act which aims to extend the duration of copyright protection for sound recordings and performances fixed in a sound recording from 50 years after their publication to 70 years after their publication.
The Copyright Act protects the rights of producers, and of record companies and performing artists generally, such as musicians or singers, for a limited period, and this is called the protected period.
During this period, performing artists and producers can control the use of the work or receive compensation, in other words they can be paid for the use of their sound recordings, such as a musical piece or a recorded album. This compensation comes from the copyright protection that they have under the Copyright Act, and it constitutes an important source of revenue for these artists.
[English]
Under the current law, these rights are protected for 50 years from the time the sound recording is fixed or recorded. Furthermore, if the track is published within this period of 50 years, the rights are protected for 50 years from the time it is published.
The amendment to the Copyright Act we are discussing today will change the second term of protection following the publication of a sound recording or a performance fixed in a sound recording from 50 years to 70 years. This will give producers and performers 20 additional years to control and/or make money on their recording and, therefore, share the success of their creation.
The amendment also preserves the current total amount of time that a sound recording or a performance fixed in a sound recording can be protected, set by the Copyright Modernization Act at 100 years. With this amendment, all sound recordings and performances fixed in a sound recording still under copyright protection today would benefit from the additional 20 years, as would all future sound recordings and performances fixed in a sound recording.
The Chair: You say an additional 20 years?
Ms. Théberge: From 50 to 70, so an additional 20 years.
The Chair: I thought we were talking about the 100 years, then all of a sudden you were back to the 70 years. Okay, I've got it.
Thomas Owen Ripley, Manager, Legislative & Parliamentary Issues, Copyright and International Trade Policy Branch, Canadian Heritage: It's complicated. I like to think of it as a bit of a sliding scale. Copyright kicks in the moment you create something. When you are a performer, the moment you go into the studio and record that song with your record label, that recording enjoys copyright protection. It would enjoy copyright protection for a period of 50 years. If in that 50-year period you never actually released that song, after that 50 years, it would lose copyright protection and others could use it without your permission. If you, however, decide to publish it within that 50-year period, you get another period of protection. At the moment, you get another 50 years of protection. Say you release it 30 years in, that recording would benefit from an additional 50 years of protection, for a total of 80 years.
That second period is the important one. It's the one that's really the commercialization window because that's when you're going out and you're selling it. Prior to that, you have kept it to yourself and your recording label has kept it to themselves. It's that second period that we're changing from 50 to 70.
We know that 50 plus 70 equals more than 100, so we've maintained the current maximum of 100 years. In order to benefit from the full 70 years of commercialization, if you wanted to, you would actually have to release that sound recording within the first 30 years of having recorded it at the studio.
There are just two clauses. Clause 81, first subclause, changes that term of protection for the performer's component of the sound recording, so that's the singer's performance. It changes it to 70 years and clarifies the 100-year maximum. Then subclause (2) is the copyright that belongs to the producer or the record label, and there again you see it changes it from 50 to 70 and establishes that 100-year maximum.
Clause 82 is just a clarification that what we're doing here, as Nathalie mentioned, is not restoring copyright in anything. There are songs and recordings that have already lost copyright protection. We're not reviving copyright in those things. They continue to be copyright free, so to speak. So what that means concretely is if this piece of legislation comes into force this year, sound recordings released in 1965 or later will benefit from this proposal, as well as anything created moving forward.
Ms. Théberge: Just to be clear, things that are no longer protected by that particular copyright today will not suddenly acquire a new right. That would be a retroactive application. So you would be taking something that is already in the public domain and take it back into the copyright regime. That is not the intent. The intent is to prolong the copyright for things that are either already copyrightable right now or for new creations as they are created, as they are published, et cetera.
The Chair: Let's assume that I wrote a poem but didn't publish it. I have copyright on that for a period of 50 years, for unpublished work?
Mr. Ripley: It's a very good question. It's one that's outside the scope of the current proposal because the situation you describe deals with what I would call, "a work." A poem would be considered a work. You actually get protection on that for 50 years after your death. So you often hear in copyright, "life of the author plus 50 years." That way of calculating the term of protection applies to many things, most things, in fact: poems, books, movies, paintings on the wall. Those things are all considered works.
We have two separate categories, though, in the Copyright Act that aren't calculated in that way. One of them is the performance of a singer, and the other is the sound recording of a record label. Those are calculated based on the date of recording, as I mentioned, and the date of publication.
A situation that can arise is that a singer who recorded a song in their early twenties can currently lose copyright protection of their song in their seventies. There's a situation that can arise where a living performer can lose that copyright protection, which cannot arise in the situation of, say, a literary author or a poet. They have guaranteed protection for 50 years past their death.
One of the intentions of this proposal was to ensure that performers will continue to benefit from copyright protection throughout their lifetime. Now the situation where a performer recorded a song in their twenties will now enjoy that protection into their nineties.
The Chair: Seventy years.
[Translation]
Ms. Théberge: It is terribly complicated. A singer-songwriter, for example, may alone benefit from several different rights.
This year, Gilles Vigneault will lose his right to the recording of Mon pays, which is a classic in Canadian music. He will continue to have rights as the composer and songwriter, but for the recording of Mon pays, this year the song will fall into the public domain.
The aim is to correct a situation where a person like Gilles Vigneault will no longer be able to benefit from royalties, from this sound recording in his lifetime, a sound recording which in this case dates back to 1965.
The Chair: Would passing this bill preserve that copyright for Gilles Vigneault?
Ms. Théberge: For that sound recording, it should, yes.
Senator Rivard: For Canadian visual and sound recordings, such as "Les Belles histoires des pays d'en haut." which first featured our former colleague Andrée Champagne, and which debuted in the 1950s, would this bill mean that those copyrights would be protected for 100 years, until 2050?
Ms. Théberge: "Les Belles histoires des pays d'en haut" do not constitute a sound recording, nor a performance within a sound recording. It constitutes an audiovisual work. That is not the medium in question. Today, we are speaking about performances, such as a recorded song or musical work.
Senator Rivard: In order to protect our Canadian artists?
Ms. Théberge: Absolutely.
Senator Rivard: We are invaded by American music. There is an American song recorded in the 1940s by Bing Crosby, White Christmas, that is played every year around Christmas. The fact that this song is played in Canada does not change anything, because here we are talking about Canadian artists.
It is the same thing in the case of Elvis Presley, who started singing in the 1950s. He was also American. There is therefore no longer any protection for him, nor for the Beatles who started at the end of the 1950s. We are talking about recordings by Canadian musicians.
[English]
Mr. Ripley: That's a very good question. The way the copyright framework works, generally speaking, is that we give the same degree of protection to foreigners as we do to Canadians, and that's because of the treaties to which we are a party. So this proposal will benefit Canadian performers, singers and record labels, but it will also benefit foreign performers and record labels. They will have the right to ask to continue to be paid for that extra 20-year period.
Canadians already get that treatment with some of our major trading partners. Europe and the United States, for example, have already gone to 70 years. In many of those jurisdictions, Canadian performers and Canadian record labels are already actually getting paid for a longer period of time.
[Translation]
Senator Rivard: If I think of the reach of our artists on international television, such as TV5, whether their works are broadcast in Algeria or anywhere else, their Canadian copyright will be protected, correct?
Ms. Théberge: Yes.
Senator Chaput: I am not very familiar with this topic. Let us take the example of a song Gilles Vigneault wrote. The rights belong to the person who wrote the work, is that right?
Ms. Théberge: Within a work, there are a number of rights that can be held by a number of people. Gilles Vigneault probably composed things for other people as well.
Senator Chaput: That was my next question.
Ms. Théberge: Let us say Gilles Vigneault wrote a song for Claude Léveillée, and that the latter recorded it. Gilles Vigneault would have copyright as the composer. It is governed by a particular right, and Claude Léveillée would have another copyright, which is the one we are discussing today, which is related to the sound recording of that song that Gilles Vigneault wrote for him. There is a scenario in which, as composer, Gilles Vigneault retains his right for his lifetime, over 50 years, but in which Claude Léveillée loses his right this year, for example, on the sound recording of that song that was written by another person.
Senator Chaput: I have another question. I find this fascinating. I will take a concrete example, a Céline Dion show where she sings a series of different songs written by many people, because she rarely writes songs, I believe. How does that work? The songwriter is protected, and then the person who has the recording, and the singer as well; does she receive something as well?
[English]
Mr. Ripley: Yes, all three parties have certain be degrees of copyright protection. Céline Dion gets protection in her performance, her getting up and singing. Her record label gets protection in the CD, in the recording, and the person who wrote the song for Céline Dion would get protection in that composition. If someone wrote the lyrics for her, that person would get protection in those lyrics. So all different individuals would have different copyright protection in what we think of as one song.
[Translation]
Senator Chaput: Is this protection always the same number of years? No? It depends. That can also vary.
[English]
Mr. Ripley: No. That's where it gets complicated. People who are considered authors — in the situation you described, it would be the person who wrote the lyrics as well as the composer — would get protection in that musical composition for their life, plus 50 years. Currently, the record label and Céline Dion would get protection for 50 years after publication of that sound recording.
This proposal is just focused on those last two components. So for Céline Dion and her record label, it means an additional 20 years of protection from the moment that sound recording was published. The songwriter or composer continues to get the same amount of protection, which is 50 years after their death.
The Chair: We thank you very much for taking us through the interesting world of copyright. We will now move on.
Colleagues, I will ask you to flip the page. We're not going to do Export Development Act right now because we don't have the witnesses, but we can do the Canada Labour Code. We will proceed with the Canada Labour Code, which is Division 7, and it begins at page 68, clauses 87 to 93.
We have Margaret Hill, David Charter and Charles Philippe Rochon to help us with respect to the Canada Labour Code.
Thank you for coming on short notice. We appreciate that. You can give us an overview and then we will go through the clauses.
Margaret Hill, Senior Director, Strategic Policy and Legislative Reform, Employment and Skills Development Canada: Division 7 of Part 3 of the Economic Action Plan, 2015, which is clauses 87 to 93, would amend Part II and Part III of the Canada Labour Code in order to protect interns in the federal jurisdiction.
Currently, there are no specific provisions in the Canada Labour Code related to interns. The policy intent of the amendments is to ensure that all interns in the federal jurisdiction receive full occupational health and safety protections under Part II of the code, as well as appropriate labour standard protections under Part III.
Under the proposed amendments, an intern is considered to be a person who is not an employee but who performs activities for an employer, the primary purpose of which is to enable the person to acquire knowledge and experience.
The proposed amendments would do three principal things. First, they would amend Part II of the code to ensure that all interns in the federal jurisdiction receive full occupational health and safety protections. That includes the right to refuse dangerous work.
Second, the amendments would clarify that Part III of the code applies to interns.
At the same time, the amendments would create two exceptions. These would be exceptions when Part III protections, such as minimum wage, do not apply to interns. In practice, this would establish when an intern can be unpaid.
The first of these two exceptions is if the internship is formally part of an educational program, offered by a recognized secondary or post-secondary school or vocational school. The second exception would be if the internship meets all of six very specific criteria, which we can talk about more in a moment.
Third, the amendments would permit regulations to be made to apply and adapt Part III labour standards protections to interns who could be unpaid because their internships meet one of the two exceptions I have just described.
It is expected that labour standard protections related to maximum hours of work and also sexual harassment, at a minimum, would be provided to unpaid interns through these regulations. The regulations would be put in place as quickly as possible, following consultations with stakeholders and as part of the normal regulatory process.
I can now turn to my colleague, David Charter, who can walk you through the individual amendments.
David Charter, Senior Advisor, Strategic Policy, Employment and Skills Development Canada: First, clause 87 adds a new subsection, the intent of which is to make Part II occupational health and safety protections apply to interns. As my colleague mentioned, this would include the right to refuse dangerous work.
Clause 88 makes a consequential amendment to renumber a cross-reference to paragraph 264(1)(b) because these amendments later make adjustments to the numbering of section 264. The clause also makes minor stylistic changes to modernize the language of the provision.
Clause 89 adds a new subsection to make Part III labour standards apply to interns, but subject to certain exceptions.
Clause 89 sets out the two specific exemptions when Part III labour standards, such as minimum wage, would not apply. As my colleague mentioned, this would establish in practical terms when an intern could be unpaid. The first exception would be if the internship is part of an education program, and the second exception would be if the internship meets all of six specific criteria set out in the legislation. An example of one of these criteria is a time limit for an unpaid internship of no more than four months or the equivalent number of hours spread out over no more than a 12-month period. However, these exceptions would be subject to regulations, and these regulations would apply and adapt some provisions of Part III of the code to unpaid interns.
The Chair: This would apply to interns that might work in a parliamentary office somewhere as well?
Mr. Charter: I don't believe interns in parliamentary offices are covered by Part III of the Canada Labour Code.
The Chair: Good to know.
Mr. Charter: Next, clause 90 makes consequential amendments to again renumber a cross-reference to section 264. It also again makes minor stylistic changes to modernize the language of the provision.
Subclauses 91(1) and (2) make amendments so that offences and punishment related to regulations that would require employers to keep records for unpaid interns would be covered under paragraph 256(3)(a). In addition, there is a consequential amendment to renumber a cross-reference to paragraph 264(1)(a).
Subclauses 92(1) and (2) add several new paragraphs to allow for various regulation-making authorities. These regulation-making authorities concern, for example, record keeping and information requirements, specifying educational institutions, setting time periods, as well as setting out details of the six criteria to be unpaid. This clause also sets out the regulation-making authority to make regulations to apply and adapt some provisions of Part III to unpaid interns.
Subclause 92(3) renumbers section 264 as subsection 264(1) and also adds a new subsection. The new subsection would allow documents, such as a list of designated educational institutions, to be incorporated by reference through certain regulations.
Finally, clause 93 stipulates that the proposed amendments would come into force on a day or days to be fixed by order of the Governor-in-Council.
The Chair: Do I understand you to say that this probably wouldn't come into force until you have generated, through consultation, some regulations?
Mr. Charter: That's correct. Both Part II and Part III would come into force after the necessary regulations and regulatory processes were completed. It is possible that proposed Part II changes may come into force slightly before changes to Part III.
[Translation]
Senator Hervieux-Payette: Am I mistaken in thinking that these measures are only applied to federally regulated enterprises, that is to say banks, airlines, Canadian National, and other enterprises under federal jurisdiction?
Mr. Charter: That is correct. This change to the Canada Labour Code only applies to federal enterprises.
Senator Hervieux-Payette: Internship programs have existed for a long time, for example at the Université de Sherbrooke, at the University of Waterloo, and many others. Is there a specific work contract? I noticed certain measures stating that the person had to be informed that they would not be paid during the internship — which is elementary — and that they would not necessarily be hired after their internship. However, regarding the other conditions, namely if that person has an accident at work during their internship, do workers' compensation laws apply to that person?
Mr. Charter: Yes, the health and safety protections in Part II apply to all interns. The protections included in Part III of the labour standards apply to all interns, except those who meet both conditions for unpaid work. Compensation for workplace accidents is usually administered by the provinces, but there is a provision included in Part III of the Canada Labour Code which indicates that protections or compensation regarding an accident must be equal to that offered by the provinces. This applies to all interns who do not meet both stated conditions. For those that do meet both stated conditions, workplace standards are implemented through regulation.
Senator Hervieux-Payette: In terms of the educational institution and the employer's share of responsibility, is there a registry for one or the other to check and see that the young intern is treated as per the measures laid out in the act? Who ensures that the act is enforced? Is it the federal Minister of Labour? Who is going to ensure that there are no violations, that these individuals are not taken advantage of, that they are not being made to work more than 35 or 40 hours per week, according to the usual standards? Who is making sure that the intern is treated and supervised properly?
[English]
Mr. Charter: The enforcement regime for the proposed changes to Part III will be the same as the existing enforcement regime for all labour standard protections under Part III of the Canada Labour Code. Generally speaking, enforcement is based primarily on complaints. If a complaint were brought forward, then an inspector would ensure that the labour standard protections under the CLC with respect to the complaint were being respected. There's also the opportunity for proactive enforcement activities to ensure that employers are in compliance with their requirements under the Canada Labour Code.
Senator Hervieux-Payette: Could you explain a proactive enforcement activity? How do you do that? Do you send people to the company where they are doing their training?
Mr. Charter: It would depend on internal decisions on allocation of resources to undertake proactive enforcement activities. I don't have the specific information on how the determination is made as to which specific businesses might be subject to proactive enforcement.
Ms. Hill: In general terms, the key trust of proactive enforcement is outreach and raising awareness. As it relates to interns, the former parliamentary secretary held consultations across the country earlier this year. In those consultations, we met with universities, colleges, employers, all within the federal sector. So the work has started to make them aware of the proposed changes. There's generally a very high comfort level, but as David suggested, the system now is a complaint-driven approach.
Senator Hervieux-Payette: Where do they complain? To the ministry, the university, the employer? As far as I'm concerned, there can be some pressure on the student working for free in a company. They want to have a job and they sometimes might be treated in a way that they won't be able to refuse what they are being asked to do, which is probably more than what is normal, and the university has no oversight of what is going on. If a student has been admitted to this program, they should feel comfortable talking to the university and saying, "You know, we are treated as slaves, not as people who are just training."
I want to be sure. I agree that when you are in a training situation there might be no compensation, but there should not be any undue pressure on the students because they're young and not paid. We know what is happening anyway, even on campuses. When there is harassment, they are afraid to complain. Just imagine somebody looking for a job and preparing for the future. There is a big plus for the employers and a big minus for the students.
Ms. Hill: To answer your question, in the first instance, complaints can be filed with the labour program. That's the standard way of dealing with complaints under the code. At the same time, based on the work that we have done, we're quite confident that universities, vocational schools and colleges across the country have very good governance systems in place with respect to internships. In fact, the Association of Canadian Colleges and Universities has made a significant effort over the past two years to develop standards, principles and policies with respect to internships, co-ops, work placements and those sorts of things.
Senator Hervieux-Payette: Mr. Chair, could we get that? It is important to know how they're going to deal with that. Maybe we could get the package on how they're going to be dealt with.
The Chair: Is that something you can get easily for us?
Ms. Hill: We would certainly be happy to provide the information.
The Chair: You could send it to the clerk of the committee. That would be great. It will be circulated to everybody.
Colleagues, that concludes the time we had available for today. We will continue tomorrow in room 257-East Block, where we were yesterday. We will pick up right where we left off.
We thank Employment and Social Development Canada for being here on short notice. We were able to get one extra section done. We apologize to the others who came in the hopes that we might get to some other sections. We promise that you will be first on our list tomorrow.
(The committee adjourned.)