Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue 23 - June 22, 2012 (afternoon meeting)
OTTAWA, Friday, June 22, 2012
The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill C-11, An Act to amend the Copyright Act, met this day at 1 p.m. to give consideration to the bill.
Senator Irving Gerstein (Chair) in the chair.
[English]
The Chair: Honourable senators, yesterday afternoon the Senate referred Bill C-11, An Act to amend the Copyright Act, to this committee for its examination. We began our consideration shortly thereafter, hearing from ministers responsible. This morning, we heard from four panels of interested stakeholders and experts in the field. This afternoon, we will continue in that regard, hearing from a further three panels.
In this first session, we are pleased to welcome three witnesses with experience and expertise in this field. We welcome writer Sylvie Desrosiers and two lawyers, Francine Bertrand-Venne and Barry Sookman, each of whom are appearing in their own right.
Colleagues, we have one hour for this session. We will hear first from Ms. Desrosiers, followed first by Ms. Bertrand-Venne and finally by Mr. Sookman, after which we will ask questions.
Ms. Desrosiers, the floor is yours.
[Translation]
Sylvie Desrosiers, Literary Writer, as an individual: Ladies and gentlemen, I am here as an individual in my capacity as a professional writer. I have written 40 novels; I have won awards, including a Governor General's Award. I write mostly for young readers.
I would like to start by reading you a short letter I received on June 12.
Dear Ms. Desrosiers,
We are a grade 3 French immersion class at J.H. Sissons School in Yellowknife. We liked your book Au revoir, Camille very much. We were extremely touched. It is a sad book, but funny at the same time. We liked the part where the little sister asked Thomas a lot of questions about death. The characters are very real and interesting. They are a lot like us! We also understood for the first time the things we feel when a friend is going to die. We realized that, when a friend we love dies, he lives on in our hearts.
So thank you very much for writing the book. It was our favourite novel in class this year.
My readers are students and they can be in any grade. Here is how things work. A copy of Au revoir, Camille costs $10, more or less. For each copy sold, I get 90 cents. That is the royalty I receive.
I get no salary for writing. I get 90 cents per copy sold, calculated each calendar year. I get the money I am owed the following spring.
What about the remaining $9.10? A percentage goes to the illustrator. About 45 per cent goes to the publisher, who has to pay salaries and office expenses, to a bunch of people at the publishing house, to the printer and the computer people who make the object that we call the book, either the print version or the digital version.
Then 15 per cent goes to the distributor or the computer company where the books are stored. Sales representatives, drivers and managers take care of the distribution. Finally, the bookstore takes 40 per cent to cover its rent, its staff, its heating costs and so on. All those people have jobs because a writer took a risk and wrote a story.
I say "risk" because, I repeat, the writer is the only one who gets no salary. If I sell 100 copies, I will get $90. If I sell 1,000 copies, I will get $900, and so on.
My readers, my audience, my customers are mostly schools and the students in them.
The education exemption in the new bill will mean that a school can buy a single copy and make as many paper copies as it likes. It is the same for digital copies. So I will earn 90 cents and an entire school will have access to my book.
The objection will be raised that versions protected by digital locks will not be subject to the act. That leads me to the subject of the user that the act wishes to acknowledge. That user hates digital locks and will not buy the book. I lose either way. I should also remind you that free access to books is already possible through a huge network of public libraries.
I have always made a living from my writing, from my royalties. In this new climate, I will no longer be able to do so. A lot of other writers will be in the same situation. That will have consequences for the entire industry. What will they have to sell?
Of course, there will always be people who will write, but they will have to have another job, as is most often the case. But I sincerely believe that children have the right to high quality books that can only be written when there is enough time, experience and talent, like Au Revoir, Camille that those children in Yellowknife liked so much. I believe most definitely that, if the education exemption is passed, there will only be losers. I personally will have to think about changing professions; I will not write any other books like Au Revoir, Camille. You do not teach children to love reading by teaching them grammar, you know, but by giving them good novels.
Here is my final word. If you told a dairy farmer that, in order to get more milk into schools, he was going to be paid for one bottle but he had to provide the others free, how would he react? He would yell "that is highway robbery"! But I am in business like he is. He sells milk, I sell stories.
In the term "intellectual property", it seems to me that the word "property" indicates an inalienable right. Thank you.
Francine Bertrand-Venne, Lawyer, as an individual: I am pleased to appear here as an individual, despite 20 years of experience with copyright. I have worked in a number of positions that have led me to reflect on a number of points of law concerning works of art.
Today, I would like to focus on the education exemption as an intrusion into the exclusive jurisdiction of the provinces over education matters. Not only is the exemption not restricted to educational institutions, but we also have no indication in the bill of what the word "education" might mean. How broad will the exemption be? We have every reason to believe that the exemption will to some extent impede provincial ministers who wish to support French-language culture in the knowledge that the market for French-language materials is quite limited. This applies specifically to Quebec ministers, who, regardless of political party, have always had empty chairs to talk to when they wanted exemptions for their copyright act. This intrusion into provincial jurisdiction could prevent a Quebec culture minister, for example, from exercising his power to the fullest.
In its recent Lacombe decision, the Supreme Court discussed the incidental effects rule. I quote:
The incidental effects rule. . . applies when a provision, in pith and substance, lies within the competence of the enacting body but touches on a subject assigned to the other level of government.
Under this rule, we cannot conclude that the provision is invalid, but we can ask ourselves the question.
It is very important to understand that copyright is a human right. Until now, if you look specifically at clauses 29 and 29.1, you might feel that exceptions for educational institutions actually deal with human beings: students doing research, private studies, reviews or criticism.
In the context of educational institutions, the exceptions were also restricted to what we might now call some very archaic uses — people were talking about rear-view mirrors in classrooms, public performance in a rear-view mirror. So it is important to understand that, until now, lawmakers have provided an exchange in the form of an exception for a human right, to a person who is a student. But when it is opened up to education, with no definition and no understanding of what education is, it could be claimed that a for-profit karate school down the block could be considered to be a user that is exempt from paying copyright.
And do not suppose that this is trivial, because there is a huge amount of controversy right in the current act. Moreover, in the Access Copyright decision, I would point out to you that the Supreme Court case is only about copies made for examinations.
But it is interesting to think about the current act. You may tell me that it is very precise, but if I tell you about the number of photocopies made in schools and you will see that it is quite exhaustive.
To start with, 10.3 billion photocopies were made in Canadian schools, not including Quebec. Quebec was not part of the Access Copyright decision. It turned out that only 250 million copies were protected by copyright.
So it is important for me to tell you that education has a troubling constitutional scope, it is extremely broad. It can include people who are not supposed to be included. I want to make one comment to you here. I do not believe that, in using the word "education", the intention of lawmakers was a noble one. As a Canadian citizen, I agree that education is a noble goal. But you know as well as I do that human beings often interpret good and noble values in a negative way.
If education is so noble, why do we pay teachers?
When the great economist Marcel Boyer appeared at the Access Copyright hearing, he explained to us that copyright is only a social convention, a way of paying authors. It is a social convention.
If tomorrow morning we decided to pay authors like we pay teachers, it would be a convention. There would be negotiations, probably of a different kind and in a different way. You might think in terms of unions. But, as a society, we have chosen copyright as the way for Ms. Desrosiers and her colleagues. Even you yourselves, honourable senators, if you decided to write a book today, you are subject to the Copyright Act and you would receive royalties.
It is important to understand. I could tell you about many other things in the bill, but I felt the need today to talk about education in the constitutional sense because it clearly intrudes into provincial jurisdiction. Strictly speaking, educational institutions already constitute an intrusion. But since the exemptions are limited to very specific actions, such as we see here, it is hugely more serious, more substantial and more wide-ranging. Potentially, it could prevent some provincial culture ministers from exercising their desire to pay their authors well.
[English]
The Chair: Thank you very much. Mr. Sookman, the floor is yours.
Barry Sookman, Partner, McCarthy Tetrault: I would like to thank the committee very much for inviting me to appear today to provide input on Bill C-11.
Before starting my remarks, I would like to give you some background about myself. I am a senior partner with the law firm McCarthy Tetrault. I am adjunct professor at Osgoode Hall Law School, where I teach intellectual property law. I am the author of five books, including the leading six-volume treatise on Internet computer law. I have also been involved in copyright matters for creators, users and intermediaries spanning decades of practice.
I am telling you this so you will understand that I do not approach these important issues only from an academic perspective but also as someone who has insights into how modern copyright laws affect the digital economy.
I am here today in my personal capacity and not representing any clients.
Senators, the bill does a number of very important things to bring Canada into the 21st century. It contains amendments required by the WIPO treaties. This will provide Canadian creators standards of copyright protection creative industries receive around the world.
The new enablement section creates a new tool that will give creators a means of shutting down pirate sites that facilitate massive online content theft. This is a very important framework law that will help Canada be a leader in the digital economy.
The bill also protects Internet intermediaries from copyright liability where they might have been technically liable for infringement. It also legalizes certain individual uses of content such as format shifting and time shifting.
When I appeared before the House of Commons legislative committee studying this bill, I drew to the committee's attention that the bill needed some technical amendments to ensure that the objectives of the government were met. The legislative committee made important and needed amendments to clarify the bill.
These included amendments to clarify that the enablement section would apply to all sites that primarily enable infringement, to ensure that pirate sites caught by the enablement provision could not hide behind the new safe harbours contained in the bill and to ensure that those pirate services would be subject to statutory damages necessary to deter commercial scale infringement.
Senators, a significant feature of the bill is the legal protection for technological protection measures — what is referred to as TPMs. You often hear them referred to as digital locks to suggest they frustrate consumers' uses of content.
In fact, TPMs are enablers of content access that greatly benefit consumers and content owners. Legal protection for TPMs will support current and future innovative product and service offerings that consumers want. These include music streaming subscription services such as Slacker Radio, Spotify and SIRIUS, video streaming services like Netflix and YouTube, which you have no doubt heard about, and distribution of entertainment software and movies.
Legal protection for TPMs has been in place for decades in the EU, North America, Asia and around the world. In fact, 89 countries around the world, including every one of Canada's leading trading partners, are contracting parties to the WIPO copyright treaty. Our leading trading partners use legal protections for TPMs to support new innovative digital offerings.
There were submissions made to the legislative committee to significantly weaken the legal protections for TPMs, including submissions made by Michael Geist, who appeared this morning before you. His proposals were scrutinized by Dr. Ficsor, the former assistant director general of WIPO at the time that the WIPO treaties were enacted. He concluded that Professor Geist's main proposals would be contrary to the requirements of the treaty. I have given the clerk a copy of his exhaustive paper that deals with this.
There were also concerns expressed about the need for specific exceptions. The bill contains express exceptions from the TPM provisions. Furthermore, and this is important to understand, it provides broad powers to create new exceptions by regulation. Accordingly, there should be no concern about the framework for legal protection about TPMs in the bill.
The bill has a mandatory review process. This is good because technology moves quickly and can raise unanticipated problems. It is also good because there are several potential problems with the bill that need to be watched closely. I will highlight two of them.
One is the exception for user-generated content. The intent of the exception is to permit an individual to use content to make a home video or create mash-ups of video clips.
As I noted in my remarks before the legislative committee, the exception is so widely cast that it would mostly likely violate Canada's WTO TRIPS obligations to comply with what is internationally known as the three-step test.
Another potential problem is the proposal to add education to the current list of fair dealing purposes. The government background documents say that the permitted uses cannot harm the market for a work; yet, there is no assurance that this will be the case. This was pointed out at the legislative committee, including by Professors D'Agostino and Gendreau, two distinguished copyright law professors.
I thank the committee for inviting me to appear and I look forward to answering any questions you have about my remarks or anything else.
The Chair: Thank you to all of our panelists for their opening remarks. I will move directly to questions.
[Translation]
Senator Hervieux-Payette: I think that, this weekend, we should run to the bookstore to buy Au Revoir, Camille. My impression is that we would all benefit from reading it and would understand your testimony better. I admire people who try to make a living with their pens. It takes a lot of courage; I have friends who do it and, if they had not had other jobs that allowed them to put some money aside, they might not have been able to put three square meals on the table.
When the minister appeared, he told us that we should not get upset, that protections were in place, that there would be no discrimination against authors, and that the bill is fair.
Either the minister does not understand his own bill, or you are reading it wrongly. Even as lawmakers, we are having trouble grasping the spirit of this. Ms. Bertrand-Venne, are you a lawyer?
Ms. Bertrand-Venne: Yes.
Senator Hervieux-Payette: That makes things easier for me. This morning, we heard from several groups whose job was to manage copyright. We asked Ms. Desrosiers if she was satisfied with that kind of management and if, up to this point, the management was done in a way that makes you happy to work under those conditions. Basically, if something is working well, I do not see the use in changing it. There is also the question of agreements.
Mr. Sookman talked about the WTO as well and said that we would not be meeting the requirements. That means a long, exhaustive and expensive process. If the WTO says that we are not meeting the requirements and that Canada has to appear to explain itself, I doubt if that is the frame of mind we need to be writing a new act.
Starting with Ms. Desrosiers, could each of you tell me whether the present system adequately serves the interests of authors?
Ms. Desrosiers: Thank you for saying that you admire people who try to make a living with their pens and that, actually, most do not manage to.
In terms of the way in which things work at the moment, I feel that the 18,800 writers in Canada have accepted the principle of copyright, of being paid only for each book sold and of not getting a salary. We accept that.
In terms of protection, whether or not the decision on the use of digital locks or other safeguards is made by publishers or editors, users generally do not like digital locks. If schools have access to books that have no protection, they would be pretty stupid to buy ones that do. They would have to pay for a number of copies, whereas, if there is no protection, they can distribute the book at no cost to every student in the school, as I mentioned.
I do not know whether that answers your question.
[English]
The Chair: Could the other panelists answer the question: Does the current system serve the needs of authors?
[Translation]
Ms. Bertrand-Venne: In terms of collective management of copyright, yes, I can tell you that, in general, authors are very happy with it. I think that was the reason for Senator Hervieux-Payette's question. But I am sure that you understand that collective management organizations can claim nothing if they have no rights to manage. The key is the law.
I believe that everyone operates in good faith. I believe that the ministers are operating in good faith when they respond. But even if education is included as an exception, the Supreme Court has said in the CCH decision that dealings must be examined to see if they are fair. Please understand that, when there is such a broad exception in copyright in the first place, an analysis takes place and we come back to the three-step test in the international treaties. If you recall, that means finding out whether authors are deprived of their income and their basic rights.
Collective management is the answer to the user saying "we want things to be efficient, we want there to be a one-stop shop." Why not? If, for example, this lady gets ten cents for every book sold, each radio station would be calling if authors who write music had to get nine cents per song on a record. A song can be divided into three human aspects: the music publisher, the lyricist who writes the words, and the composer. That makes any remuneration very small, I am sure you agree. If we then also take away that possibility of earning a living, how are we going to turn around and fund our country's culture?
For example, would school books be written only by authors in France for us in Quebec? In Canada, would school books be written only by Americans? The language itself may not translate a culture, and that is fine. But in Canada, we have values, we have ways of thinking that are different from other countries; in fact, I really hope that we are different from other countries.
So I come back to the three steps of the test. Faced with the exception that targets education, a lawyer says to himself first of all that education is now exempt. Is that too much? It becomes almost a random exercise because, if the main goal is to exempt it, it is like saying that we are not going to keep paying schoolteachers at all from now on because theirs is a noble task. Their task is to educate so, as Canadians, we decide not to pay them anymore because it is their gift to society. That really is a lot to ask.
[English]
The Chair: I apologize, but I must interject to allow Mr. Sookman to respond, because we have more questioners after this.
Mr. Sookman: One of the problems being introduced is uncertainty. It is true that the exception for education is subject to fairness. The question is "what is fair?"
That means that some dealing is free. To go back to the milk situation that Ms. Desrosiers was speaking of, the milk man is now required to provide some bottles for free. The university will say, "We are entitled to 1,000 bottles for free." The milk man will say, "That is not fair. It is only 10 free bottles." Then there is significant litigation and high costs over how many bottles, except you are talking about the livelihood of authors who are in a difficult position to go fight how much free dealing there is. They are also in a position where they are only making so much money to begin with, as you have heard, and some of those dollars now become a subsidy, effectively.
As far as the harm is concerned, there is no guarantee that Ms. Desrosiers will not be harmed in the market for her works. That is because in the CCH case, where the Supreme Court elaborated six fair-dealing principles, it did not say that the harm to the market was the preeminent factor. Therefore, you could have a situation where the market for her books is harmed by this.
The question is: In any given case, how do you know? That uncertainty will potentially cause substantial amounts of litigation and new transaction costs just to establish the right to collect the small amounts of money she is already collecting.
The Chair: Thank you. We will move on to our next questioner.
Senator Segal: I am not a lawyer, so I approach this with some caution. However, I have written and published several non-fiction books in Canada. Depending on your political bias, you might view them as fiction.
I am responding now to Ms. Desrosiers. It has always been my sense that the challenge that writers in Canada face, quite independent of their remarkable skill and creativity, is the very small size of the market. Unless one is able to produce a product that has broader reach — francophone children around the world, for example — in Canada, the size of the market is deeply problematic. Many of our hard-working and inspired authors do not earn what they deserve, but I wonder if that is due to factors that may or may not relate to copyright. I very much appreciate that if there is something in this bill that will make this situation more difficult. . . .
[Translation]
We have to highlight it, we have to ask for a change; why not?
[English]
In your judgment, how does a government deal with the core pressure of a massive technological push of creative data and information, around the world, through 1 million points of access?
There is a new book out that deals with what is referred to as "digital barbarism," which is the ripping away from people their core rights as authors and creators of fiction, non-fiction, scientific and other work because of this broad distribution through so-called free sources and aggregation processes. It is a very real concern, and one raised by two of our entrepreneurs regarding protecting the rights of the author. I ask the question specifically in terms of efficacy and in terms of actual impact.
Do any of our intervenors believe that the government, any government, effectively enforces the existing copyright rules in a fashion that truly protects the artist? If so, do they believe that that effectiveness will carry over, causing the changes in here to produce risks, or are we dealing with one of those emperors wearing no clothes things with existing rules not being enforced by and large?
The Chair: Senator Segal, we have to let them respond or you will get no answer at all. You are out of time making a statement.
Senator Segal: That is the end of my question and probably the end of my participation in the meeting.
In committees I chair we actually let people finish their questions, but I guess in Banking and Finance it is not possible.
Mr. Sookman: Let me try to answer your question, because it is a very perceptive question and one that is being asked around the world.
At its root, the question you are really asking is can any of these laws work? Also, is there any empirical evidence that laws can change the balance and work?
There have actually been a number of studies on this because the digital challenges are being faced around the world. In fact in France they introduced a law called HADOPI, which is a graduated response system where notices are sent out to individuals suspected of infringement. There is a potential consequence if they do not stop after receiving a number of notices.
When that law was implemented a professor from the United States analyzed the effect of that law. He took it from when it was implemented to a good period afterwards. He found a direct core relation between when it was announced that the law was going to come into effect, so people thought this will come into effect and there will be a consequence, and then he also measured what the effect was after the law came into effect. He found that there was a significant increase in legitimate purchases relative the other countries that he measured.
Did it completely decrease unauthorized file sharing? No. Did it provide more of a framework that facilitated legitimate digital sales? The answer is yes.
The trick in all of this is to put in place the right framework laws that will be best enabled to have the consequences we want, which is to authorize legitimate sales and put money into the pockets of the authors who are making the investment and taking the risk in creation.
The answer is yes, they can have effect.
Ms. Bertrand-Venne: The other question is a little political I would say, when you asked the question "is any government?" Ministers should never use the word "tax." It is remuneration.
[Translation]
It is a royalty as the result of the copyright.
[English]
Words are important to impress our citizens that this is a law that should be respected and not something that if it is a tax —
[Translation]
Does the money go into the consolidated revenue fund?
[English]
The answer is no. It is to pay individuals who are working under the copyright law. It is not a tax. When people disagree and voters say they do not want to pay that, well, do you go to your IGA market and decide that you do not want to pay for your milk today or you do not want to pay for the steak you are buying? It is as basic as that.
When you are talking about ripping, the law in Bill C-11 enables an individual to take a copyrighted work, if he uses it not non-commercially, and do whatever he wants with it and then send it to his friend. As you know, in music, file sharing occurred when the friend said, "Oh, you don't have to buy the record. I'll send it to you." Now it is not even a question of going internationally. It is a question of right now, right here in our law, in Bill C-11.
Maybe, if we listen too much to the citizen, I am just saying that the counterpart is about payment for the author and people who surround the authors, people who make their living out of publishing or out of producing records, and it is a way of paying these people. All governments have a little work to do to implement the law in respecting it.
[Translation]
You may be interested to know that the ministers of education objected to Crown immunity when a fee schedule was being set up for departmental photocopies, not in schools, but when departments were using copyrighted material.
The Copyright Board ruled that the Copyright Act stipulates that the Crown is also a rights holder and has to comply with copyright. That all goes to show that government bodies are also contesting copyright. At the beginning, a senator said to me:
[English]
We are learning so much about copyright today. It is not interesting? It is unfortunate that when it is up for battle. I do agree with Mr. Sookman that it is revisable every five years. However, I was part of the 1997 revision and we are today in 2012 and, as you know, it is a difficult law to grasp.
Senator Moore: Ms. Desrosiers, I want to ask you about your book, Au Revoir, Camille in the context of clause 29 of Bill C-11, which says:
Fair dealing for the purpose of research, private study, education, parody or satire does not infringe copyright.
What if your Governor General Award winning book was taken by others and turned into a parody and the context was changed? How would that impact you? What would you think of that? How would it impact on the marketplace in terms of essentially changing the nature of your book? Tell me a bit about what that would do to you. I am talking about what I have heard today referred to as "moral rights."
[Translation]
Ms. Desrosiers: I find it curious that people often have the impression that a writer is a public service that can be used at no cost because they can go to the library and get access to the author's work there.
I have nothing against libraries; I think they are great. The Public Lending Right Commission, a body set up within Canadian Heritage, compensates writers for library loans.
I can tell you that, if I cannot sell my books, or if I can just sell one copy, I cannot make a living, it is impossible. If I had not written the book for which I received the Governor General's Award, for example, I would have done something else in life. Unfortunately, writing is the only talent I have. Sometimes, I would like to change careers because it is very difficult and because there is so little remuneration. I can tell you that writers make so little money from the books they sell that this exemption for education is almost, in all sincerity, stealing from the poor.
[English]
Senator Moore: I understand that. I guess my question was not there.
If someone took that Governor General award-winning book and made parody or satire of it, how would you feel and how would that impact on your income and the marketability of this book that you created?
[Translation]
Ms. Desrosiers: First, if someone made a parody of it, it would not be me doing it. So I would not have any copyright for it. The author would be the one writing the parody. A lot of people write parodies these days on the Internet; no one is safe from it. Sometimes, you can make fun of yourself as well, but, if my books are parodied, people will automatically think that the parody comes from a book that I wrote and will associate the book with the parody. People will end up thinking that I wrote a bad book, because the two books are linked.
[English]
Senator Moore: Would you like to comment on that, Ms. Bertrand-Venne?
Ms. Bertrand-Venne: Yes, please.
Senator Moore: Then I have a question for Mr. Sookman, please.
[Translation]
Ms. Bertrand-Venne: Moral rights ensure that authors keep the integrity of, and the relationship to, their works. Introducing an exception like that, given that there is no collusion between the author and the author of the parody, means that permission would not have to be asked and so the work, one that won a Governor General's Award, would be degraded. On top of that, she would not necessarily get her ten cents either, depending on who was doing the exploiting.
[English]
Senator Moore: You said:
There were submissions made to the legislative committee to significantly weaken the legal protections for digital locks, including submissions made by Mr. Michael Geist . . . His proposals were scrutinized by Dr. Ficsor, the former assistant director general of WIPO . . . He concluded that Professor Geist's main proposals would be contrary to the requirements of the treaty.
Whereas Mr. Geist, I think, endorses the existence and the use of digital locks. He says:
The most obvious solution would have been to amend the bill by clarifying that it is only a violation to circumvent a digital lock where the underlying purpose is to infringe copyright. . . .
It is clear that digital lock trumps everything else in this bill; there is no question about that.
However, you disagree with his position on that, it seems to me, from what you are saying here. I would like to know why. What you say seems to fly in the face of the study by Rice and Duke universities last year with regard to digital locks. They say digital locks result in a decrease in piracy.
Mr. Sookman: Thank you, senator, for the question. You made a number of comments I would like to respond to; first, the assertion that digital locks trump everything in the bill, and that is simply not accurate.
The way the legal protection for TPMs work, in fact, it is not illegal to circumvent a copy control TPM. It would be an access control TPM. For example, someone who wanted to circumvent or hack a TPM for the purpose of engaging in fair dealing for research, private study, education, and so forth, could do so. Therefore, it is not everything being trumped.
The second point you raise is the disagreement we have as to whether or not the treaties would permit the kind of legal protection that Michael Geist is proposing.
Dr. Ficsor, who was the main person at WIPO at the time and the person who was the most knowledgeable expert on the treaties, specifically dealt with Michael Geist's assertion on that because they were so fundamentally diametrically opposed to the requirement of the treaties that there be adequate legal protection for TPMs.
In the paper I filed with the committee, with respect to this very proposal that Michael Geist made, he says his interpretation of the treaties is manifestly absurd and unreasonable.
Senator Moore: Those are strong words.
Mr. Sookman: Those are very strong words. His paper is about this thick to give reasons behind it, so he does not just say it.
As for the studies, senator, a couple of studies have actually looked at the effect of TPMs in the marketplace, because we now have decades of experience with it.
There was a study done by Professor Ginsburg and another professor at Columbia University, a very reputable university, very reputable professors. They actually came to the conclusion that in fact the Chicken Little problems that were asserted with TPMs had not manifested themselves, and in fact the legal protection for TPMs in the United States had enabled the digital marketplace to evolve; in fact, they were enablers that were beneficial to consumers and to business.
There was a similar study done in Europe looking at the consequences under the European implementation. Again, they found that the so-called huge problems were not manifest.
Senator Tkachuk: Thank you witnesses. It has been an interesting discussion.
I believe in the market. If you force people to give free milk at a school, you need a farmer and a cow. If there is no money, there will be no farmer, no cow and no milk.
As far as the author is concerned, if it is true what you say, Ms. Desrosiers — which I do not believe it is — there will be no books, government will panic, they will change the law, and we will be back where we are. I just do not think that the schoolteacher in a school in Canada, or anywhere, will make copies of people's books, knowing that it is against the law, and hand it out to their students.
One, I think they will have to face the consequences of the law, because they are breaking the law when they make copies. They are. You are interpreting the law way further. I think they would be breaking the law. I think they run the risk of being fired, although it is very difficult to fire a teacher. I suppose if you are out-and-out stealing and handing it out to kids, I would think that is exactly what would happen. The consequences would be untenable for a schoolteacher to do that, or a professor at a university.
I do not see how you draw this longbow that somehow that Supreme Court interpretation means that an educational institution can break the law and hand out books free of charge.
Senator Hervieux-Payette: Point of order. I am asking the honourable senator, because I want to understand what he is talking about.
I am under the impression that you say it is permitted under the law, the actual law or the new law, that someone can copy as many copies as possible in the school. You asked that question this morning and you asked it again. I want to be clear.
Senator Tkachuk: My view is that it is against law for a person to take someone else's property, a book, copy the whole thing, and hand it out to people. It is against the law.
How is a teacher going to do that in a classroom and how will a professor do it at a university when they know they are breaking the law and they run the risk of either being fired from their job or being charged with a criminal offence? There are all kinds of bad things that can happen.
Ms. Bertrand-Venne: We agree, but in the new law education will be an exception. In the agreements they have right now with the ministers of education, the teachers are allowed to do things because it is negotiated above their heads. You are right, if it is against the law, they will not do it. The agreements they have signed with Access Copyright, which represents authors of books, is truly respectful of the law.
We are just worried that the introduction of the word "education" might be so widely interpreted that it would become almost useless and the school board will invoke "I am allowed." That is where the problem lies.
The actual law right now, you are right, nothing is illegal right now, and we hope it will remain that way. The exception is so wide that we are worried.
Mr. Sookman: I have two points. First, your observation about the importance of incentives is an extremely important one. It is important that the legal frameworks be available to create the incentives for authors to write, for enterprises to invest in the distribution and publication, and we do not want to do anything to undermine that. Some of the aspects of this bill are intended to do this. The provisions dealing with enablement, for example, are intended to create that framework.
On the specific question you ask in the education context, I think it is not so much that the educational institution is going to copy the entire book. What is happening now in the digital age is that it is possible to take more than substantial parts of many different books and put it together. At one point there were course packs that professors would put together, and those course packs would be paid for. It is a chapter here, a chapter in that book, or a chapter in that book or a piece of it. That, today, is collectively licensed and that money is collected by Access Copyright and is paid to authors.
However, if we move to a test where it says you can copy more than a substantial part, in fact you have a fair dealing for the purpose of education, the risk is that now a lot of those compilations, those pieces, will each be considered to be a fair dealing. Then, when you put it all together, there will not be sufficient compensation back to the authors.
Senator Tkachuk: The university or the school board or the province pays for those in blocks, so they would write a cheque to someone? They would write a cheque to the group that distributes the cash. Is that right?
Mr. Sookman: They write a cheque based on what the Copyright Board certifies must be paid. The tariffs for the copyright board, some of those institutions could say that they had to pay before but do not have to pay any longer because there is a new exception. At least there will be more uncertainty as to how much they have to pay, and what will be a free dealing and what is not will have to be litigated.
The Chair: Regretfully, our time has run out. This has been most fascinating, and I know I speak on behalf of all my colleagues in expressing our appreciation for your appearing before us today. Thank you very much.
Colleagues, we now continue our study with the fifth panel of the day. In this second session this afternoon we are pleased to welcome Christian Bédard, Director General of Regroupement des artistes en arts visuels du Quebec; John Lewis, Director of Canadian Affairs for the International Alliance of Theatrical Stage Employees; and Jason Kee, Director, Policy and Legal Affairs with the Entertainment Software Association of Canada.
Colleagues, again, we have just under an hour for this session. We will hear from each of the witnesses and then proceed with questions.
Mr. Bédard, would you be good enough to lead off?
[Translation]
Christian Bédard, Director General, Regroupement des artistes en arts visuels du Québec: Thank you for inviting me here this afternoon, Mr. Chair. I represent the Regroupement des artistes en arts visuels du Québec. We are partners with Canadian Artists' Representation / le Front des artistes canadiens, also known as CARFAC. Together, we represent all the visual artists in Canada: sculptors, painters, art photographers and so on.
Last May, three art auctions were held in Toronto. The works of 32 living Canadian artists were sold for a total of $1.5 million. Needless to say, the 32 owners of the works, as well as the auction houses, were happy to cash their share of the bounty. What is wrong with this picture? Who are the ones who created these works that increase in value over time and who benefited the sellers?
Why have these works increased in value over time? It is thanks to the devoted labour, the talents and the dedication of these 32 Canadian artists, most of them aging. What was their share of the $1.5 million? Zero.
If only Canada had done what 59 other countries have already done, include the artist's resale right in its copyright legislation, these artists would have shared around $75,000. This sum may sound minimal, but let us remind ourselves that we are only talking about three auction sales that happened in the month of May.
This means that each of these 32 artists would have received an average of $2,340 that month. Sadly, Bill C-11 does not include an artist's resale right of 5 per cent to be given to an artist for every resale of his or her works. Can the Senate do this?
Another hole in C-11 for visual arts: the continued inclusion of a discriminatory provision against senior artists. The Copyright Act says that the exhibition right does not apply to works created before June 8, 1988. Can the Senate stop this discrimination?
The only good news in C-11 for the visual arts is that it recognizes the copyright of photographers, engravers and portrait artists. Sadly, clause 38 of the bill reduces to shreds their capacity to financially benefit from this right. This clause should be removed from the bill. The needs of Canadian visual artists have been largely neglected in C-11. Proposals such as the adoption of the artist's resale right would help visual artists to receive a better income from their creative work, especially aging artists and First Nations artists.
To conclude, we are astounded that Bill C-11, which deprives so many artists of all disciplines of important sources of copyright income, does not conform itself with the declaration of the Government of Canada stated in its own Status of the Artist Act which underlines, and I quote:
The importance to artists that they be compensated for the use of their works, including the public lending of them.
Finally, we support the positions presented by Alain Pineau, from the Canadian Conference of the Arts, and by Hélène Messier, from DAMIC, this morning.
[English]
The Chair: Thank you, Mr. Bédard. Mr. Lewis, the floor is yours.
John Lewis, Director of Canadian Affairs, International Alliance of Theatrical Stage Employees: Thank you. My name is John Lewis. I am an International Vice-President and Director of Canadian Affairs for the International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts which represents 114,000 members working in the entertainment industry. I appreciate this opportunity to address this committee regarding Bill C-11, the copyright modernization act.
As one of the oldest and largest trade unions in the entertainment industry, the IATSE has been advocating for years for stronger copyright legislation to protect and create new jobs in Canada's film and television industry. To my members, copyright reform is about protecting and creating jobs.
IATSE members are an integral part of the motion picture and television industry. We do not appear in front of the camera, but we do operate those cameras and carry out the necessary creative activities behind the scenes to create a finished product. We are the production coordinators, set designers, costumers, special effects technicians, drivers, grips, carpenters and scenic artists. We work on big budget, foreign service productions from the United States such as Superman: Man of Steel in Vancouver, the Curious Case of Benjamin Button in Montreal as well as on Canadian television and motion picture productions such as Being Erica in Toronto, Republic of Doyle in St. John's, Heartland in Calgary, and Less Than Kind in Winnipeg.
When talk of copyright arises, much of the debate has centred on balancing the rights of the consumer with the rights of the creator. That is obviously an important discussion and is the basis for much of what is in Bill C-11, but lost in much of these discussions are the rights of Canadian workers to earn a living.
For our members, copyright protection is about protecting jobs. Seventy-five per cent of movie revenues and 50 per cent of television revenues come from downstream sources, meaning DVD sales, cable, pay-per-view and Internet downloads. Illegal downloads result in significant losses to the industry and compromise funding streams for movie and television productions. Some argue that digital theft is a victimless crime or that we should somehow not be too concerned as it only affects large Hollywood studios. That is simply not true. Thousands of ordinary working Canadians are victims of digital theft. My members only work when there are television shows or movies being produced. When the industry suffers because of digital theft, my members suffer as there are fewer movies being made.
That is why the IATSE supports strong copyright legislation. We have clear laws to stop people from hacking into computers or stealing satellite signals. We need the same safeguards for digital entertainment. While we do not believe the legislation is perfect, we do believe it is a major step in the right direction to modernize copyright legislation in Canada. We are pleased that Bill C-11 also allows for a review in five years in order to gauge the impact of Bill C-11 and determine if further changes are necessary and to stay current with technology.
Copyright issues impact every country, and Canada had fallen behind. Bill C-11 ensures that we move forward with copyright reform to protect the thousands of Canadian workers in the entertainment industry who contribute so much to our economy and culture and who, at the end of the day, are simply trying to make a living.
Jason Kee, Director, Policy and Legal Affairs, Entertainment Software Association of Canada: My name is Jason Kee. I am the Director of Policy and Legal Affairs with the Entertainment Software Association of Canada. ESAC is the industry association representing companies in Canada that make, market or distribute video games for video game consoles, handheld and mobile devices, personal computers and the Internet. Video games are actually the fastest growing entertainment medium in the world with some blockbuster titles rivalling Hollywood productions in terms of sales and excitement. In 2011 alone, retail sales of entertainment software and hardware in Canada was $1.5 billion with billions more in online sales worldwide.
The Canadian industry is third in the world in terms of video game production, and we employ over 16,000 people in high-paying, creative, cutting-edge jobs at nearly 350 companies across the country, contributing over $1.7 billion annually in direct economic activity to Canada's economy.
In our view, Bill C-11 proposes long-awaited measures that will bring the Copyright Act in line with advances in technology and current international standards in intellectual property protection. Subject to certain concerns over the scope of some new exceptions, we are very supportive of the bill and we strongly urge the committee to pass it as soon as possible. Piracy is a massive problem for the video game industry. It represents huge losses of revenues to game developers and publishers, which largely depend on upfront sales to recoup the significant costs of game production. Left unchecked, video game piracy ultimately leads to studio closures, lost jobs or worse. The bill will provide rights holders with tools they urgently need to go after those who facilitate widespread piracy. By establishing clear rules, it will enable creators and companies to choose the best way to make their own content available to the marketplace. This will spur investment in the development of new digital products, services, distribution methods and platforms, and support a diverse range of new and innovative business models which, in turn, foster legitimate competition, more consumer choice and ultimately lower prices for the consumers.
The bill introduces strong protection against the circumvention of technological protection measures, or TPMs, that are used to protect copyrighted works. The video game industry makes extensive use of sophisticated TPMs to protect its products. However, in the absence of a legal prohibition on circumvention in Canada, a robust and lucrative but illegitimate market for devices and services specifically designed to bypass TPMs and facilitate widespread piracy has developed here.
Indeed, in Canada, commercial operations selling devices and offering services that enable pirated and counterfeit video games to be played operate openly, and consequently Canada has become a major transshipment hub for global distribution of these devices. This has directly contributed to an unacceptably high level of video game piracy in Canada. The bill provides urgently needed measures to pursue those who facilitate this form of piracy by trafficking in devices and services, and we applaud and strongly support these provisions.
Further, while often dismissively characterized as digital locks and considered solely in the context of music CDs or movie DVDs, in actual fact TPMs play a critical role in new and emerging distribution channels for online content. For new streaming radio and music services, such as Rdio to film and television platforms like Netflix to gaming platforms such as XBox Live Arcade, all of these services are supported by a wide range of behind-the-scenes TPMs These measures not only help prevent illegal copying or unauthorized appropriation of content from these services, and thus provide viable revenue streams for their creators, but also enable a range of value-added features such as rentals, subscriptions or demonstration versions, which would not otherwise be possible. In this manner, TPMs actively facilitate the development of new products and services in the digital age, providing consumers with a wide array of differentiated products to choose from that are tailored to their individual preferences.
We are in the midst of a fundamental change in the way that we consume content and creators increasingly use online platforms and other innovation distribution methods to deliver their content to consumers. Strong anti-circumvention measures such as those contained in the bill are essential not only to prevent piracy and allow creators to determine for themselves how their works will be consumed but also to ensure that new platforms are secure and maintain the integrity of the nascent digital marketplace.
Some have argued that circumvention should only be prohibited if it is for the purpose of infringing copyright. While this may sound attractive on the surface, it is important to know that this type of highly limited prohibition will not allow rights holders to go after the bad guys who facilitate piracy and will be of virtually no assistance in our ongoing efforts to stem the flow of video game piracy and support emerging models and platforms. Weak anti-circumvention prohibitions create massive loopholes and permit offenders to escape liability by simply denying their intention to infringe copyright. Accordingly, we support the strong TPM provisions included in the bill.
Briefly, I would like to mention some other areas of concern from the industry in relation to the bill. We are concerned with the new exception for user-generated content that has been introduced in the bill. Generally our industry takes a permissive approach to user-generated content. However, the wording of the bill is essentially so broad that it would provide widespread appropriation of existing works. Consequently, we recommend that the exception be narrowed and factors such as those contained in the fair dealing exception be added.
The Chair: Mr. Kee, I will ask you to slow down a little.
Mr. Kee: I apologize; that always happens.
Another issue of concern is with regard to the statutory damage provisions. The new multi-tiered approach is clearly intended to limit damages payable by private individuals who infringe copyright for personal purposes, but the drafting is such that it would create perverse incentives and have the unintended consequence of giving a free pass to large-scale pirates. We recommend that this distinction be eliminated and that factors courts must consider when determining the appropriateness of an award be emphasized in the bill instead.
With that, I look forward to your questions.
[Translation]
Senator Hervieux-Payette: My question goes to Mr. Kee. If I understand correctly, you are saying that Bill C-11 will not reduce piracy, or will not provide the tools that will allow piracy to be reduced. Do I have that right?
[English]
Mr. Kee: I would disagree with that interpretation in my comments; they were not intended to convey that.
There are several tools the bill provides primarily aimed at decreasing widespread piracy. The ultimate policy objective as stated by the ministers has been not to target the individual consumers who are s engaged in downloading activities but to facilitate those that facilitate widespread piracy. That is, these bad actors.
In the case of the video game industry, we have commercial operations that exist to bypass the copyright protection that we have built into our devices to prevent piracy and help us sell our video games. We are interested in pursuing activity against those. The anti-circumvention provisions, the TPMs, the digital locks that have been introduced into the bill, will enable us to pursue legal action against those kinds of actors. Similarly there has been a new provision added that will allow private actors to go against those who "enable infringement." It is aimed at pirate websites. That is, those that offer widespread access to all sort of digital goods online without the permission of the copyright holder and will enable copyright owners to take legal action against those kinds of sites.
[Translation]
Senator Hervieux-Payette: How is copyright handled for the creators, the people who write the scripts for these games? Once the story is written, it has to be illustrated. I assume the two steps are done by different people. How are the royalties distributed?
In your business, there is the commercialization side, meaning selling lots of copies, which is where the figure of a billion dollars comes from. But how are people within the industry compensated? Are all the creators employed by the companies? Or are they individuals who sell the stories to the companies who then run with them? How does it work inside the industry?
[Translation]
Senator Hervieux-Payette: My second question goes to Mr. Bédard. Have you made representations to the House of Commons? Were you consulted prior to this?
There has been a huge amount of consultation; we have been told that 8,000 people have been consulted about this droit de suite, which, basically does not exist in the visual arts, but does exist for other forms of creativity. So, in terms of the droit de suite, is there no protection in this bill for our artists in Canada?
Mr. Bédard: Not in Canada. Around the world, 59 countries have adopted the droit de suite in the resale of works of art. It applies to the secondary market.
There is no protection like that in Canada. Yes, we did testify before the Commons committee that was studying Bill C-32 and we made a formal request for the droit de suite to be included. We also have with us a complete amendment that could easily be inserted into the bill.
We were told that it could be done later, the next time round. But we are still making the request again because it is important for us. It is important for an artistic community with an average annual income estimated at $14,000. When you take out the costs of creating their works, the income drops to $8,000 per year.
Naturally, artists have other jobs in order to make a decent income, but we can still clearly see that the artistic community needs this new source of income.
Take Aboriginal artists. In this room, we are surrounded by magnificent works of Aboriginal art. They are often bought very cheaply in the north and then resold in the south for amounts that can reach 10 or 15 times the value of the piece, from which the artist gets nothing.
Joe Talirunili is an example. One of his pieces was sold for $278,000 in 2006. He had sold it for somewhere around $400 or $600. That is a major loss of income for an artistic community that has difficulty earning a decent income from its work. The quality of the artist's work is what gives it its value over time.
Senator Hervieux-Payette: So you did go to the House of Commons. You made your point even before the bill was finalized.
I recently went to the Emily Carr exhibition that was featured in the Globe and Mail last week. She produced pieces that are worth millions of dollars today. Some artists' work has increased in value. She probably has heirs. You mentioned heirs, whether the children or a spouse. Often works of art increase in value over time. Perhaps only Picasso made money with his paintings.
Mr. Bédard: Often a work of art appreciates in value after the artist's death. But the artist's heirs and successors, the family, have major responsibilities for keeping the art alive. They have to store the pieces, list them, document them, show them, produce descriptive catalogues, arrange exhibitions. So heirs and successors have every reason to be included in the droit de suite. We are working for living artists first and foremost, and I described the situation they are in just now, but it is important for heirs and successors to be included too.
Senator Hervieux-Payette: It happened with Riopelle too. His works are worth a fortune today. In his case, he did not end up in poverty, but he still had patrons to help him along the way.
In terms of our national heritage, we as a parliamentary body must recognize that this is all part of our collective wealth and that the person who created it should at least derive some benefit from it, not just those who sit and admire it.
Mr. Bédard: Exactly. In those sales that took place in Toronto, only the sellers and the auctioneers made any profit.
[English]
Mr. Kee: I am more than happy to describe that. Each individual sector of the entertainment industry is very distinct with regard to these kinds of issues. Mr. Lewis can speak to more how film does it. We are more like film than, say, the music industry, which parses up the rights of the different groups of creators. You then have royalties that are set by the copyright board that are then allocated to those groups.
In our case, video games nowadays require teams of 2 to 300 people working several years together to create the game. It generates about 40 to 60 hours of game play for the big budget titles. All of these teams are either full-time employees or they work on contract for us. They all provide their particular piece to the overall collaborative work and they assign to the individual development studio the rights to that. The development studio is the one that basically owns the copyright and will essentially either licence that out or obtain the piece from the units that are being sold in the marketplace.
We operate what I call an up-front scheme where we pay someone up front, through either a salary or a licence fee for rights to access that work. As a copyright industry ourselves, we are very sensitive to concerns raised by certain segments of the artistic community who feel that they are not necessarily getting the value that they deserve. We are careful to go out to ensure that we have proper rights before including copyrighted works in our own materials.
[English]
Senator Moore: Thank you, witnesses, for being here. Mr. Bédard, on the first page of your brief, at the bottom, you say that the Copyright Act says the exhibition right does not apply to works created before June 8, 1988. What is the magic or significance of that date?
Mr. Bédard: The exhibition right, as you may know, is that when a public institution presents an artwork, there is an exhibition right that is to be paid to the artist or the owner of the right. When this new right was adopted in Canada in 1988, I figured that they did not want to apply it to go before, so they decided to apply it on that date for all the works created after that date. However now, 24 some years after, the works that had been created before that date had been done by older artists, so those older artists cannot benefit from that exhibition right. While it was probably good in 1988 from a legislative point of view, after a while it has become a discriminatory mention, so we feel that it should be removed. It is a simple thing to do. I hope that answers your question.
Senator Moore: I want to ask you about the top of page 2, dealing with the copyright of photographers, engravers and portrait artists. The only good news for Bill C-11 for the visual arts is that it recognizes the copyright of photographers, engravers and portrait artists. If we have a photographer who takes a photograph of an RCMP officer in uniform on board his horse, that image is owned by the Mounted Police Foundation, so what does he own, or does he own anything?
Mr. Bédard: Before, in the actual law, a photographer is generally hired to do a photo. He is commissioned, and it is the commissioner who owns the right to the picture. Bill C-11, and we are thankful for this, says that this right now belongs to the photographer, except that clause 38 of the bill says that the commissioner of the picture may make as many copies as they want, for free. You give a right to somebody, and then you give another right to another person. In fact, you intervene in a private contract between the photographer and his customer.
Senator Moore: That applies, if I understand what you are saying, with regard to a commission arrangement. What if I am a professional photographer walking down the street and the Mountie and take his picture? That image is the property of the Mounted Police Foundation. Can I then say, "Oh, no, it is mine now?" I am not commissioned. I am just walking by. I am a freelance photographer, and I think, "Oh, there is a nice shot," and I take it. It is already somebody else's property.
Mr. Bédard: For the original work that is hung on the wall, the copyright belongs to either the ones who commissioned the picture or the author. It depends on the contract that they signed. The new photographer that takes the picture or the picture does not have a right on that. It can be dangerous if he tries to use it and make money with it.
Senator Moore: There are consequences, to use the words of my friend Senator Tkachuk. There are some things you just cannot do.
Mr. Kee, I am sensitive to what you are saying here, is because HB Studios is one of your members and they are in my town of Lunenburg, Nova Scotia. They are an active and successful company. At the end of your statement, you are calling for, you say, a new exception for a user-generated account. The wording of the bill would essentially permit widespread appropriation of existing works, and you made another comment about the statutory damage provisions. Do you have a draft or suggested wording that you think might be helpful to the committee that you can send in to us to look at?
Mr. Kee: Certainly. We formulated some potential draft proposals that I have not presented here in light of the rapid time in which I appeared but that I am happy to circulate.
Senator Moore: If you could send them to the clerk, we may have an opportunity to look at that.
Mr. Kee: There is another thing I can recommend, and I do not know if she will be appearing, but Dr. Pina D'Agostino from Osgoode Hall, as Mr. Sookman referred to, and her clinic at Osgoode Hall Law School also drafted some potential language that dealt with exactly this issue. The concern is not the existence of the user-generated content exception; the concern is that, as drafted, it is a bit too broad.
Senator Moore: Could you get that to us by Monday afternoon?
Mr. Kee: I could certainly send you ours, and I will reach out to Dr. D'Agostino as well.
Senator Moore: Thank you.
The Chair: Colleagues, are there further questions of our witnesses? If not, to our panel, we greatly appreciate your being here. On behalf of all the members of our committee, I extend our appreciation.
In the third and final session for this afternoon, the seventh session of the day, we are pleased to welcome, in the room with us, Michael McCarty, President of ole, and by video conference from Toronto, Stephen Stohn, President of Epitome Pictures.
Michael McCarty, President, ole: Good afternoon, Mr. Chair, members of the committee and ladies and gentlemen. Thank you for this opportunity.
I am Michael McCarty, the president of ole, Canada's largest music publisher. We have over $115 million invested in music copyrights, and our large catalogue generates significant royalty revenue from around the world, which flows back into Canada, contributing to our economy. Our songwriters have received numerous Canadian awards, as well as a Grammy for one of the many Taylor Swift compositions that we own. Two week ago, we proudly announced the signing of legendary rock superstar and lead singer of Aerosmith, Steven Tyler.
I have an admission to make. I admit that the copyright business has lost the nomenclature war. When we stand up for our artists' right to earn a living from their work, we are roundly demonized by our opponents. They use emotionally charged terminology to position us to be against God and country, and we have failed to prevent this.
They are for freedom and innovation. We are for regulation and intrusion on privacy. They are the great protectors of freedom of speech. We are just greedy companies and rich rock stars trying to put a tax on their innovation. They say information wants to be free, and we say it is okay for it to feel like it is free, but somebody needs to pay for it.
There is an excellent new book by journalist Robert Levine, which you will all receive on Monday courtesy of ole, which exposes what drives our opponents. In his book, Free Ride, Mr. Levine points out that this messaging often emanates from large companies that make a great deal of money from other people's pirated works. These companies are all about perpetuating their freedom to profit from the theft of our copyrights.
Here is the reality: It has been almost 20 years since the Internet was switched on and 13 years since Napster launched the era of mass digital music piracy. This resulted in a decade-long frat party attended by the Silicon Valley gang. Creators and copyright owners were not invited to the party, but we ended up with the hangover, and Bill C-11 is not the cure.
In the past, as new developments in technology disrupted copyright markets, governments could be relied upon to fix it by adapting intellectual property laws to the new products and services. From printing presses to piano rolls, radio, records, TV and cable, society has always been able to rely on governments to reset the ground rules for a proper copyright marketplace — until now.
Bill C-11 fails to create any useful new rights or stretch existing ones to keep copyright markets in step with technology. Worse, it will actually pick the pockets of artists and songwriters to the tune of $30 million as year through the proposed elimination of the broadcast mechanical and private copying. Ironically, the two most modern rights are now being dumped in the name of modernization. Make no mistakes; this is a backwards step in our ability to turn digital art into dollars.
In copyright, the role of government is to create rights then leave it to the marketplace or the Copyright Board to establish the value of those rights. With Bill C-11, the government has overstepped its role and decided that our reproduction rights should be worthless when a radio station digitally copies our music, leading to the probable elimination of approximately $25 million per year in revenue for our industry.
The private copying royalty concept, which is paying creators for the widespread unstoppable copying of their music, is a highly effective solution to a problem that digital music and the Internet have made more widespread than ever. To not use the copyright modernization act to modernize this right for digital makes no sense at all.
Bill C-11 favours the free riders who are happy to benefit from music but think it is someone else's responsibility to pay for it. It allows delivery systems to be built at the expense of the content creators. For instance, "notice and notice," which supposedly targets ISPs for the piracy on their networks, simply requires them to assist in redistricting blame to the consumer. This amounts to even greater protection for the ISP as they profit from piracy and enshrines their argument that they are merely dumb pipes for data. ISPs are not dumb pipes; they are smart networks that can act dumb when it suits them.
There are relatively simple amendments that can be made to Bill C-11 to make it work. First, rein in the free riders by broadening the enabling provision. This provision was intended to make the enabling of online copyright infringement itself an infringement of copyright, but it is so narrowly written that it will only apply to the most egregious pirates. It should be broadened to include all the industries that profit parasitically from piracy. It was the existence of a similar law in the U.S. that led to the creation of the iTunes Store, one of the most innovative digital services ever devised.
Second, reverse the expropriation of current rights. If Bill C-11 goes ahead without revisions, millions of dollars of annual broadcast mechanical revenue disappears and, because of a major loophole in the legislation, broadcaster will simply have to refresh their hard drives every 30 days by copying one drive onto another in order to avoid paying royalties.
Finally, in the absence of strengthening the enabling provision sufficiently, ole supports the extension of the private copying levy to digital devices. However, an improved enabling position would eliminate the need for extending the private copying levy since companies that enable infringement would be liable for their actions and would seek a marketplace solution.
A fair marketplace exists when a willing seller and a willing buyer are free to negotiate the sale of goods or services. When the buyer can take the product without paying, there is no real marketplace. Bill C-11 will severely limit the ability of creators of music to turn their digital art into dollars.
Your deliberations represent an historic fork in the road for Canada's future. In the digital age, where ideas may be more important and valuable than tangible goods, a country that fails to protect creators' ability to profit from their intellectual property fails to protect its economic future. You are the last hope to stop or fix this bill before it damages not only the near-term pockets of Canadian song writers and musicians, but also the long-term interests of Canada as a whole. We must not discourage our children's' dreams of becoming artists who can also pay the rent. The time to get it right is now. It is in your hands. Thank you very much.
Stephen Stohn, President, Epitome: Epitome Pictures Inc. is a small business. We are a mom-and-pop shop. I am the president and my wife, Linda Schuyler, is the CEO. We have been in business for over a third of a century and we are a television production company. While we produce a number of series, the one that you would be most familiar with is the Degrassi series. In fact, on the set of the newest incarnation of Degrassi, The Next Generation, we had a cake and candles this week to celebrate the production of our three-hundredth episode. It is a show that we are very proud to have had the good fortune to work on.
Because the audience of Degrassi is primarily teens, we have an audience that has been highly engaged in the digital realm from the very beginning, so we have had no choice but to embrace the digital realm and to go where our audience goes.
If you search "Degrassi" on the Web through Google, you will find about 10 million hits. You will find that we have about 3 million likes on Facebook. We hire writers to create Twitter accounts, not just to assist our actors, but our characters on Degrassi also have their own Twitter accounts.
We have a game, a mobile app coming out and a social media loyalty program. We have been very active in this area, and we have been had to be.
Mr. McCarty, who just spoke, is a friend of mine and is arguably one of the best publishers in Canada if not in North America. As a friend, I respect his views and indeed share many of his frustrations.
At the same time, I have a different take on it. While there absolutely are flaws in the current bill — it is not the perfect bill that I or indeed anyone would probably like it to be — it is a matter of urgency that it be passed and passed in its current form.
The cyberlockers and the bit torrent sites that take our Degrassi product and make money from it are hurting our business. We need to do what is necessary to stop them, and even an imperfect bill is by far the better alternative to nothing.
I want to applaud the current House of Commons for doing something that previous Houses of Commons have been unable to do, that is to pass copyright legislation that, if not bringing Canada into the 21st century, is at least bringing us into the 20th century and putting our content producers on a level playing with our competitors elsewhere in the world.
I want to make a special note of the mash-up provisions because they are of particular interest to us. There are tens of thousands of mash-ups of Degrassi episodes on the Web. These mash-ups, while technically illegal under the current law, are, in fact, a primary source of engagement for many of our fans and, indeed, an advertisement of what we do. I want to applaud the mash-up part of the legislation. I have been concerned that some of the technical language might permit unintended uses of the mash-up provisions to do something such as to take an entire episode of Degrassi, put an introduction and an end on it and rely on the mash-up provisions to make that legal. While I think that this is a genuine concern, I also know from speaking to members of the government that they believe it is a "nervous Nelly" concern that is certainly not intended in the law and that the law, as passed, will not permit that kind of blatant infringement but will proceed to encourage the other kind of mash-ups. By that I mean the 3-minute kind where you take shots of some of our actors from different episodes, put them together in kind of a love story to your favourite actor, put a song to it and post it to You Tube. That kind of activity we applaud, and I think it is the intent of the act to support it.
While overall, as I say, I share the frustration of Mr. McCarty, and I have my own frustrations with some of the language in the act, I do want to implore the Senate to pass the legislation as it is. I would recommend any mechanism possible to review the application of this act in a relatively short time, perhaps 18 months to two years, to see whether the provisions, as intended, are actually working in the real world or whether there are some unintended consequences that could be dealt with with some further, relatively minor amendments and clarifying language.
In summary, it is my belief that, for the most part, the act is very well intentioned. While I and many of my colleagues are concerned that maybe the drafting is not as perfect as it might be, rather than wait another 20 years, I am fully in favour of passing the bill as is and then proceeding to see how it unfolds in reality and addressing any necessary changes at that time.
Thank you for the opportunity to make these comments.
The Chair: Thank you, Mr. Stohn.
Senator Hervieux-Payette: What you have written is very down to earth. Even I, as a French person, find it very colourful and very direct.
Mr. Stohn's proposal is to have a mechanism for review in a much shorter period of time, 18 months to two years. I was going to recommend a year to a year and a half. I was wondering if you would delay the bill and make further amendments in the fall or pass it and have an independent monitoring group report 18 months after the implementation to see if the fears that you and other members of the industry have are founded and if there have been very negative consequences. Make sure that if it passes, we analyze it and report back to this committee, Mr. Chair. Normally the people who take the time to study this bill and meet with you do not do so before the Banking Committee.
I am quite willing to get the report in a year and a half and make corrections if necessary.
Are you willing to take the chance of us going ahead with this and to make sure that we correct it in a year and a half and not in 20 years? What is your preference?
Mr. McCarty: It sounds like a good idea in theory, but history has shown that, even though something may be done with the best of intentions, it does not usually work out that way, particularly with copyright. The previous copyright reform package that was passed when Sheila Copps was Minister of Canadian Heritage had, I believe, a mechanism in there for a mandatory review every five years, and that never got done. As everyone in the room is acutely aware, copyright seems to be one of the toughest political issues. If there is any way of avoiding bringing it back in the future by delaying or procrastinating, I am sure that any future government would be more interested in doing that than in reviewing it.
I just believe that meaningful legislation can only come around every five, 10 or 15 years.
Senator Hervieux-Payette: If you consider the size of your industry — and I am talking about every form of protection of every creator in this country — we are certainly talking about a significant chunk of our GDP. Why would the government and parliamentarians not be interested in coming back to this issue since technology moves so fast?
My question is to either or both of you. I feel that it is unacceptable that we do not review after five years. If it is in the law, it should be done but not just to oversee. We have to make sure we are doing the job properly. I have the feeling that we will be going ahead with this because the session will be complete in a few days.
What kind of mechanism is there besides review? Are there terms that could be better defined in the regulations, for instance? Could we recommend to the government, when they pass the regulations, that they be more specific if there are some uncertainties?
Mr. McCarty: If the question is aimed at me, we have actually, in the past, provided some more specific technical suggestions to a parliamentary committee. I would be happy to distribute those to anyone who is interested.
Senator Hervieux-Payette: Do you have any comments, Mr. Stohn?
Mr. Stohn: Only to support your position. It would be wonderful to have a review not just of this precise legislation but also to take into account your point that technology is changing so quickly.
On the television side, every day and every week our audience is accelerating their move toward watching what we still call television programming, but watching that same programming online. There are many different aspects of that which will profoundly change the nature of our industry, and in 18 months the industry itself will have changed.
To the extent that there could be a mechanism that is enshrined to review these changes — how has the copyright modernization act unfolded in real life — but also be open to any additional changes that might be required by the relentless ongoing march of technology, it would be a good thing; not just for Canada but for North America and the content industries which, as you point out, form such a large part of our GDP.
Senator Hervieux-Payette: Mr. McCarty, what would your competitors in the U.S. think of our law? I suppose you do not just put Canadian music in what you sell, but that you also have other countries' productions.
If they receive the same treatment that you say is not proper, would your American counterparts be unhappy? Would it make your life difficult? Who will suffer the consequences if we are not protecting the creators of other countries when it is being transmitted in our country?
Mr. McCarty: That is certainly a great point. It is a worldwide issue. Legislation all over the world must evolve, hopefully in lockstep. We cannot wait for other countries to lead the way; we have to lead the way.
As far as the U.S. goes, the people who are spokespeople for the copyright industries tend to have one perspective. I think there is a lot of Canada-bashing going on to try to get Canada to pass a law that has certain aspects that the Americans are interested in. Below the surface, many of my colleagues in the music publishing industry in the U.S. share many of the same concerns I have articulated today.
The U.S. recently tried to pass the SOPA law which had some elements that I am describing. As I said in my speech, it was roundly shouted down by the foes of copyright in the name of freedom of speech, et cetera. In my opinion, it is mostly to defend their own business models of the people that have Internet-based businesses, search engines, that sort of thing. Those companies and industries have a lot of public opinion power. It becomes difficult to have proper copyright reform when the public can be mobilized to oppose it on emotional, rather than logical and business terms.
Senator Hervieux-Payette: What about the American public? Are they more inclined to protect their creator or are they quite happy to bypass the whole system of collecting rights for the authors?
Mr. McCarty: I think people all over the world will take what they can get. If you ask them — in theory — if are they interested in protecting authors and composers and creators' rights, they will say, "Oh, yes, absolutely." Then they will go to their computer and without thinking they will access music, movies or television.
I am not one who is a proponent of suing individual consumers. I think the real problem is the economic and the business ecosystem that allows them to get their media that way. This bill and many others around the world are really ignoring that. I think it was a big mistake by the record industry to sue individuals in the U.S. I think people are people.
As I said in my remarks, in the music publishing business we are generally in favour of feeling like the consumption of music is free, even though it is not. There is no such thing as a free ride. It is similar to radio; it feels like it is free to listen to radio but it is actually not. The cost of radio and the music is embedded in the price of every product and service that is marketed and advertised on radio. It just feels invisible to the public.
One of the issues our industry has that many others do not is this public exposure of how our business works and the value chain. You do not see Parliament committees on the cost of engines in cars. If other businesses were exposed to the same kind of public scrutiny ours is, public reaction to the cost, value chain and everything that goes on would be very similar to ours.
Senator Moore: Thank you for being here, witnesses. Mr. McCarty, I was looking at your brief. On the second page you are talking about how it will actually pick the pockets of artists and songwriters to the tune of $30 million through the proposed elimination of the broadcast, mechanical and private copying.
Is that the ephemeral rights or something different? In the next paragraph you talk about $25 million and I am trying to sort those two things out. Can you explain those?
Mr. McCarty: Right now, the annual revenue from what is called "broadcast mechanical," which is related to ephemeral rights issue, is approximately $12.5 million going to songwriters, composers and music publishers. Approximately the same amount goes to artists and record companies, so $25 million is the revenue to the music industry at stake from that right.
The private copying levy and royalty stream, which at its height was approximately $30 million per year, has now declined to $7 million or so. I rounded the two numbers — the $25 million and the $7 million — down to about $30 million.
Senator Moore: What is the broadcast mechanical and private copying? What is that versus the ephemeral thing you just described?
Mr. McCarty: Without getting too technical — I am not a lawyer myself — it works is as follows: Radio broadcasters had an ephemeral exception to the Copyright Act which basically said if they were copying music ephemerally, they were not infringing on the copyright. During the last round of the copyright reform, there was an exception to the exception introduced. It said that the licence-free copying of music was not available if there was a licence available from a collective to license the activity.
That activity ever since then has been licensed. The Copyright Board of Canada adjudicated a long hearing and established the value of it. In fact, there was a famous moment at the hearing where broadcasters were on the stand saying that it is useless, trivial, has no value and we should not have to pay for it. Someone asked them why they do not stop doing it. They said they would not be able to run their radio stations if they did that.
Therein shows the value of it. It is our right in obtaining value, so we get paid for it.
Private copying started in the era of the home cassette recorder. By the way, these rights exist in most countries in the world. Back in those days, people started realizing that instead of buying records, they were borrowing their friend's record and copying it on a cassette or buying one copy and making copies for different locations in their house or life where they listen to music. This was an economic problem, so the solution to that was to say, "Okay, rather than prevent this activity, let us monetize it to the benefit of the creators and rights owners." They said somewhere in the value chain, the government needs to leverage our way in and extract some of this value from the value chain on behalf of the creators. The logical place to do that was at the blank tape distributor point. The levy was put at that level; manufacturers had to pay the levy.
Fast-forward to when the blank CD for home recording on a computer was created. A levy was put on that as well. It is monetizing something you cannot control. We have the right to authorize reproduction of our music, but cannot control it. Rather than arrest people or futilely try to control it, we get a piece of the economic activity being generated by the unauthorized use of our music. It seems to me it was prescient, a foreshadowing of the digital era. Why can we not apply the same solution in the digital era? It is just politics that is preventing it.
Senator Moore: In that case, we had the blank CD. Part of the price included a levy that would go back to the creators eventually.
Mr. McCarty: Right.
Senator Moore: Now we are into digital. What do you attach a levy to today? There does not seem to be a physical thing like that blank disk, so what are you suggesting?
Mr. McCarty: The best way to answer that would be to give an example of free market negotiated equivalent of a levy, which would be a free market royalty.
A few years ago Microsoft tried to emulate iTunes and Apple with their iPod and iTunes store, and they launched a product called Zoom. It was their version of an iPod. They had an online music store. In order to lodge that, because of the U.S. contributory infringement laws and copyright laws, they needed to have the participation and authorization of certain rights-holders. One of them was Universal Records. By this time Universal Records had looked at Apple and its iTunes and all the economy around it and they realized that the music industry had a tiny portion of the economy and economics value of the whole iTunes-iPod ecosystem. They said, "We are happy to take our 70 per cent of the 99-cent downloads, thank you very much, but we would like to get a bigger part of the value chain."
They negotiated their own $1 per unit royalty on each Zoom sold. Microsoft in the end was happy to do that because they agreed that the value of music in their future business was not entirely reflected by the percentage of the download price that the record companies and music publishers received.
This was a case where in the free market people could negotiate something that is equivalent to a private copying levy.
To answer your question, it should be on devices or anyone in the economy who aids and abets the use of the music.
Senator Moore: In your example, there was a Microsoft store. If I went to buy a piece of music from that store, what would happen?
Mr. McCarty: The store I believe had the same price as iTunes, which was 99 cents, but they also sold the device, their equivalent of an iPod — they call it a Zoom — and in every Zoom $1 of the purchase price went to Universal Records.
The whole thing was not successful, although not because of that. It was because of Microsoft's lame attempt to emulate Apple. Had it continued, I am sure the rest of the music industry would have negotiated a similar piece of the pie.
Senator Moore: Mr. Stohn, you mentioned that this is not perfect but we should go ahead with it, and a review period, which Senator Hervieux-Payette asked you about, but you said there could be some minor amendments or some clarifying wording.
Have you thought about that and put anything to paper? If you have, could you send to it to our clerk?
Second, you said that more and more people are shifting to viewing conventional television programs online. How is that happening? What percentage of people are now going from the conventional television screen to online devices?
Mr. Stohn: There are two questions there. The first one: I am a former law partner of Barry Sookman, who I believe was also making a presentation to this committee, and I would recommend his comments and suggestions totally. He is a very bright man. You can take those as my comments as well.
It is a fascinating situation as to what will happen with broadcast television. No one knows the answer.
Currently, people are still watching the television screen approximately the same number of hours per week that they always have. A large part of that, of courses, is to sports and to live events and it is unlikely that that kind of viewing will decrease. In fact, it may very well increase as more reality shows come on board.
However, there is a shift in two ways. One is to services like Netflix and Hulu. They used to take programming after it had been on conventional television airwaves. For example, a show that we now produce called The L.A. Complex is on the CW in the United States and it is aired simultaneously on the CW channel and on Hulu. Hulu is an Internet service. You pay a monthly fee like Netflix and you have the opportunity to see movies and old episodes of TV shows, but also more and more actually current television programming.
In effect, Hulu is cannibalizing the CW but is paying the CW for some of those rights.
As the CW loses broadcast dealers, they are picked up again on Hulu and are monetized in that way. That is one way in which a shift is happening.
Senator Moore: What is CW?
Mr. Stohn: CW is a network like ABC, NBC or FOX, a consortium between CBS and Warner Bros. It is the fifth television network in the United States.
The second type of cannibalization is occurring within the broadcaster itself. Virtually all broadcasters now simultaneously with their on-air broadcast will make the same programming available on their website but with less advertising inserted in it. Particularly, in the youth programming areas such as Degrassi, more and more people are saying that rather than watch Degrassi at nine o'clock on Tuesday, which is inconvenient for me, I will pick it up on the MuchMusic website three hours later or the next day. It is like a DVR or a PVR. That is a controlled kind of switch to the Internet. Then, of course, there are the illegal services that are so predominant now and that hopefully this bill will address.
Senator Moore: With regard to your example about Degrassi, which network did you say was online?
Mr. Stohn: It is the CW with our show, The L.A. Complex.
Senator Moore: You mentioned you might watch it three hours later on?
Mr. Stohn: Degrassi is broadcast first in Canada on MuchMusic, but you could watch it indeed over the next month at any time on muchmusic.com.
Senator Moore: You have licensed the use of that product to MuchMusic?
Mr. Stohn: Exactly, and to muchmusic.com.
Senator Moore: Do you license exclusively to one online facility or to others?
Mr. Stohn: For the first broadcast, it is generally an exclusive licence. When I say "generally," it is almost always an exclusive licence. However, after it has been on air for a while, for example, on MuchMusic, then certain rights revert and we could then on a non-exclusive basis licence the show to a Netflix or a Hulu or some other find of service.
The Chair: Are there further questions of any member of the committee?
Senator Hervieux-Payette: What is the Canadian content when it comes to your bank of music? Do you have any kind of quota that you decide or how do you decide what goes into the bank or whatever?
Mr. McCarty: Do you mean catalogue or roster?
Senator Hervieux-Payette: Yes.
Mr. McCarty: We are a proud Canadian company and are connected to the Canadian music industry. We are proud to help promote Canadian music around the world.
We do not have an internal quota system. We just look for the best talent that the world can provide. We find a lot of it in Canada.
Currently we have joint venture agreements with partners that help us develop Canadian talent and bring it to the world market. Our company is strong in country music and right now we have about 20 per cent of the Canadian country chart of Canadian country artists.
Therefore, we have a very large percentage of Canadian country artists, and we are looking to build our non-country roster and catalogue in every nation in the world. We will undoubtedly have a lot more Canadians in that end, too.
You cannot have a viable music publishing company that just operates inside the borders of Canada. As a multinational, international, cross-border company, we look for the best talent wherever we can find it.
Senator Hervieux-Payette: You operate outside of Canada, then?
Mr. McCarty: Yes, we have head offices in Toronto, with satellite offices in Nashville, Los Angeles and we have a bit of a presence in New York at the moment.
Senator Hervieux-Payette: In Canada, how many competitors do you have with catalogues? How many catalogues exist?
Mr. McCarty: I honestly could not tell you how many Canadian catalogues we have. At this point in time, I would say that probably a third or a little bit more than that of our active roster of songwriters are Canadians.
Senator Hervieux-Payette: How do you select the pieces? Do you write an agreement with the creators, or the producer? Who is approaching whom in this case? You talk about one of the artists that you just signed, but did that person go to see you or did you go to see them?
Mr. McCarty: In the case of Steven Tyler, his lawyer brought him to us because we did a good job for another one of her clients.
There is a large component of our company that I have not mentioned yet which is almost entirely Canadian: We are one of the biggest publishers in the world of music in television shows. I am speaking of the background instrumental score in shows.
Many of Steven's colleagues in the Canadian television production industry have done deals with us where we manage the copyrights of their music, or sometimes we co-own and partner in it. Sometimes we partner with them in finding new ways of making more money from their copyrights.
In that our area of our business, probably 80 per cent of our clients are Canadian companies. We provide an important venture capital financing aspect to their business. We bring very large cheques to the table to do our agreements and they take that money and plow it into creating more productions.
Normally, there are two ways of us bringing in songs and songwriters. We either look for an establish catalogue of songs that has been in existence for a while, and the owner, which is usually the writer, wants to sell it. In this case, it is a combination of our own intuition as to how well that will perform in the future, as well as a sophisticated financial analysis of how well the catalogue has been performing.
When it is a new writer who does not have an established career, it is an intuition thing. We have a spider-sense about it. If somebody is talented and you have a vision that you can help them create a career, then we do an agreement with them.
Those people come to us, or we go to them. There is a type of person in the industry that just has so much excitement about finding talent and they will usually mention them to us and we will network with them.
Increasingly, we find them on the Internet, or we want to validate their commercial viability by seeing how well they are doing on the Internet, YouTube, and so forth.
Senator Hervieux-Payette: So if I am on Facebook and you find that my tunes are good, you will call me.
Mr. McCarty: Yes.
Senator Hervieux-Payette: I will think about it.
It is important to know the chain of decisions. Then I go back to the creator — the person who has written a song. You do not seem to be happy with the law. Of course, it has a financial impact. You are losing. The artists are losing. The producers are losing. In fact, who are the winners, besides — supposedly — the customers, who get a free product that you feel you should be compensated for?
Mr. McCarty: First, you used the word split when it comes to revenue. One of the things that people find surprising in the modern song writing and music publishing world, the music publisher generally ends up with about 25 per cent of the pie and the songwriter with about 75 per cent. It is one of the fairest deals in the entertainment business.
The second part of your question was around who benefits. All the companies that facilitate the unauthorized use of our music — companies that facilitate piracy — benefit.
We used to talk about needing to monetize our music in the digital world. The fact is that it has been heavily monetized to the tune of billions of dollars, but we are not able to participate in a lot of that value.
With respect to Mr. Stohn's comments, he is a well-respected person in the television production world and his show Degrassi has done more to transmit Canadian culture into America than probably than anything else since hockey.
I sat down with some old friends in Los Angeles with my family about five years ago. We had not seen his kids since they were infants. They kept looking at my wife, me and my kids, staring at us throughout dinner. Finally, halfway through, one blurted out and said, "You do not sound Canadian." I said, "What do you mean?" They said, "You do not sound like those people on Degrassi."
We are infecting America with Canadian culture through Mr. Stohn's work.
There is a big difference between the reality that Mr. Stohn and his industry face and the one our industry faces in terms of the technicality of transmitting his product over the Internet versus ours. To transmit a song over the Internet, it is such a small file and there is such great bandwidth available, that it is nothing — any cell phone can transmit a song instantly. To transmit an episode of Degrassi requires a much larger file and involves different technology. It is more website based; you have to go to a website, even a pirate website, to be able to view or download it. There is more there to attack on the anti-piracy side.
Music is out there in the ether and there are fewer targets to identify to stop the piracy.
I want to make it clear that I am all for stopping the egregious piracy, I just do not think you can stop much of it. There are people monetizing piracy, and I want them to either stop or give me some of the money they are making off the piracy of our work.
Senator Hervieux-Payette: Some years ago, we were lobbied by the good players against those who were stealing signals with their satellite dish that they were not paying for. The Americans were not happy with that.
Would this bill correct the situation? I am tempted to call you Mr. Degrassi, but Mr. Stohn: Do you think that this era is gone with that bill?
Mr. Stohn: That is my view, yes. The Motion Picture Association of America has for a while, oddly enough, had Canada on of its watch list of copyright piracy havens, up there with some very bad users. It is very hard for Canadians to think ourselves in this way. This bill will go a long way to getting us off that list entirely.
Senator Hervieux-Payette: That is reassuring.
The Chair: Mr. Stohn and Mr. McCarty, on behalf of all the members of the committee we thank you for appearing before us today. You were very helpful in our deliberations.
This meeting is concluded.
(The committee adjourned.)