Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce
Issue No. 49 - Evidence - November 21, 2018 (noon meeting)
OTTAWA, Wednesday, November 21, 2018
The Standing Senate Committee on Banking, Trade and Commerce met this day at 12:02 p.m. to examine the subject matter of those elements contained in Divisions 3, 4, 6, 7 and 10 of Part 4 of Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures.
Senator Douglas Black (Chair) in the chair.
The Chair: Good afternoon, colleagues and members of the general public who are following today’s proceedings of the Standing Senate Committee on Banking, Trade and Commerce, either here in the room or listening via the Web. My name is Doug Black, I’m a senator from Alberta and I chair this committee. I will ask my colleagues to introduce themselves, starting with the deputy chair.
Senator Stewart Olsen: Carolyn Stewart Olsen, New Brunswick.
Senator C. Deacon: Colin Deacon, Nova Scotia.
Senator Duffy: Mike Duffy, Prince Edward Island.
Senator Tannas: Scott Tannas from Alberta.
Senator Wallin: Pamela Wallin, Saskatchewan.
Senator Wetston: Howard Wetston, Ontario.
The Chair: Wonderful.
We’re continuing our subject matter examination of five divisions of Part 4 of Bill C-86, the Budget Implementation Act, 2018, No. 2. We must report our finding to the Senate by no later than December 4 this year. Today, we will focus on Division 7 of Part 4, which deals with various aspects of the Patent Act.
For our first panel, we will hear from officials who will provide us with an overview. I am pleased to welcome, in the first panel of our meeting, from Innovation, Science and Economic Development Canada: Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategy and Innovation Policy Sector; Martin Simard, Director, Copyright and Trademark Policy Directorate, Strategy and Innovation Policy Sectors; and Patrick Blanar, Senior Policy Analyst, Patent Policy Directorate, Strategy and Innovation Policy Sector.
We also have, from Canadian Heritage, Kelly Beaton, Acting Director General, Creative Marketplace and Innovation Branch; and Kahlil Cappuccino, Director, Copyright Policy, Creative Marketplace and Innovation Branch.
From National Research Council Canada, we also welcome Christopher Johnstone, Director General, National Programs and Business Services.
Thank you all for being here with us today. We will move to opening remarks, beginning with Innovation, Science and Economic Development, then Canadian Heritage. I understand that the NRC official does not have opening remarks. Then we will move to questions and answers.
Mark Schaan, Director General, Marketplace Framework Policy Branch, Strategy and Innovation Policy Sector, Innovation, Science and Economic Development Canada: I’ll be speaking on behalf of the sections for both Canadian Heritage and Innovation, Science and Economic Development. I think my colleague from the National Research Council has some brief discussions. We’ll just use that at that time.
Mr. Chair, thank you for your invitation. It is a pleasure for me to be here today to present the legislative pillar of Canada’s first ever Intellectual Property Strategy. As you may know, Budget 2018 proposed $85.3 million over five years and $10.1 million per year on an ongoing basis for measures to increase intellectual property, or IP, awareness, education and advice, as well as for the provision of strategic IP tools for business growth.
Bill C-86 complements these efforts by proposing amendments to key IP laws, notably the Patent Act, Copyright Act and Trademarks Act. These amendments are intended to encourage creation and innovation by either clarifying acceptable behaviours or discouraging actions that have possible negative consequences.
Proposed amendments to the Patent Act would set minimum requirements and standards for the use of patent demand letters to discourage the sending of a deceptive or unsubstantiated demand letter. Businesses that receive vague and/or deceptive demand letters that do not meet the minimum requirements could bring action in Canadian court and seek damages from the sender of the letter. The law would make statements made by the patent applicant during the patent examination admissible as evidence to prevent patent owners from making inconsistent statements in court cases. The law would clarify the scope of the research that is exempt from patent infringement, and it will modify the prior user rights for patents so that a business is not required to cease its operations because of a subsequent patent covering its existing operations. It will also ensure that subsequent owners of a standard essential patent must honour licensing commitments made by previous owners of the same patent. Finally, it will ensure consistent treatment of IP licences and that IP licensees can continue to rely on their licences in liquidation proceedings.
The proposed amendments to the Trademarks Act would prevent the abusive use of the trademark regime, such as applying for registration with the sole intention of seeking remuneration from the legitimate owner of the trademark, by creating a new ground of objection for bad faith registration and by requiring use to enforce a trademark within the first three years after registration.
The amendments would also improve the efficiency and effectiveness of registration proceedings by authorizing the registrar to award costs for abusive practices during proceedings and by no longer automatically admitting additional evidence on appeal of the registrar’s decisions, a change that would be balanced with the ability for parties to obtain confidentiality orders when they file commercially sensitive evidence.
Lastly, the bill would empower the registrar to withdraw official marks from the database to prevent official marks that are owned by entities that no longer exist or are not public authorities from creating obstacles to trademark registration.
Proposed amendments to the Copyright Act would protect consumers by clarifying that notices that include settlement offers or payment demands do not comply with Canada’s copyright notice and notice regime.
The Copyright Act changes would reduce delays at the Copyright Board, notably by establishing an overarching mandate and decision-making criteria, empowering case management, requiring tariffs to be filed earlier and be established for longer, creating a regulatory power to set decision-making deadlines, and by allowing more collectives and users to enter into direct agreements and seek support from the board only as necessary.
Finally, to ensure that the professional and ethical standards of IP agents are maintained, a college of patent and trademark agents would be established. This college would be responsible for the formalization of a code of conduct and disciplinary process. This college would be self-regulating and governed by members of the profession and the public.
I am happy to answer any questions you may have on these legislative proposals. Thank you.
The Chair: Thank you very much.
Christopher Johnstone, Director General, National Programs and Business Services, National Research Council Canada: We’re pleased to have this opportunity to describe the amendments to the National Research Council Act in terms of intellectual property and authorities related to real property.
For some context, the NRC has some 3,700 researchers and staff in 14 research centres, operating at 22 locations across the country. The NRC is also home to the nationally recognized Industrial Research Assistance Program, or IRAP.
Budget 2018 recognized the potential to reimagine the NRC as a collaborative platform for science excellence, bringing together the best in innovative minds across the country to deliver solutions and breakthroughs that matter to Canadians. The proposed amendments to the NRC Act will enable the NRC to be more responsive in terms of both intellectual property and real property holdings.
Clause 278 of the act clarifies that the NRC can dispose of any real property. This change will provide the NRC with the flexibility it needs to effectively manage the NRC’s real property portfolio with well substantiated real property investment decisions.
Clause 279 proposes amendments to the intellectual property provisions of the NRC Act. There are two parts.
The first part amends the act to broaden the NRC’s right to dispose of its intellectual property to include all forms of intellectual property and future intellectual property rights that may arise under contracts. Previously, the NRC’s authority did not clearly cover certain forms of intellectual property rights such as copyright.
The second part modernizes the act by moving the administration and control of inventions made by NRC employees from the minister responsible for the NRC to the NRC itself. It also clarifies that any patents resulting from those inventions will vest in the NRC itself. The addition of this clause brings the NRC Act in line with legislation of similar government organizations.
We’re happy to answer any of your questions that you have on this.
The Chair: Thank you very much. Is there an opening statement from Heritage Canada?
Kelly Beaton, Acting Director General, Creative Marketplace and Innovation Branch, Canadian Heritage: No.
The Chair: Very well. Let’s move to questions.
Senator Stewart Olsen: I have a brief question on the cost of the college of patent and trademark agents. Is there anything in the legislation that would cover off the cost? Who is going to build it and fund it and staff it?
Mr. Schaan: Currently the regulation of patent and trademark agents in Canada is a relatively incomplete and opaque governance system. They are currently managed by, in the case of patents, the Commissioner of Patents, and in the case of trademarks, it is the Registrar of Trademarks, which is the head of the Canadian Intellectual Property Office.
The rationale for this self-governing initiative is that in the current governance model, the commissioner has limited powers and very little procedure around the governance of these agents. Right now, the commissioner has the ability to put people on the register of licensed agents and take them off, and that’s it.
Moreover, should there actually be a complaint about the behaviour or comportment of a given agent, right now there is no procedure or transparency to that.
Finally, one of the reasons for the self-governing college is that, in the case of agents, they appear before Canadian Intellectual Property Office, or CIPO, and often appeal the decisions of CIPO, so having the head of CIPO be the person who ultimately renders discipline is seen by some as a perceived conflict of interest.
Right now, agents pay a registration fee to CIPO to be able to be added to the register. The college itself will be self-funded through the fees it collects on the part of its membership. We’re simply transferring the function away from CIPO into a new entity that will continue to use member fees as the mechanism by which it will sustain its efforts.
Senator Stewart Olsen: In your view, these amendments you’re speaking of will reduce a lot of the opacity of all of your departments. You hear a lot about intellectual property in the news, but you really don’t know what is going on, so in your view, will these amendments put forth answer some of the questions?
Mr. Schaan: They will. This is the third pillar of two related to the national intellectual property strategy. The other two are non-legislative in nature. The first was related to education, awareness and outreach. There is a significant element of that, which is further improvements to the entire ecosystem around Innovation’s knowledge of intellectual property as a strategic tool. Second, there are some specific programmatic measures introduced in Budget 2018 to support innovators to better understand and use intellectual property in a sophisticated manner. This legislative component both creates a level playing field in the use and administration of intellectual property and clears up these issues around the opacity of governance, particularly for those most involved in intellectual property rights, the IP trademark agents and patent and trademark agents.
Senator Stewart Olsen: Thank you.
Senator Wetston: Looking at your notes here, I am wondering a little bit about the budget that you have allocated here over five years. Obviously $83 million is a lot of money, but it may not be that much money for what you’re attempting to accomplish here.
Can you tell me — and I think Senator Stewart Olsen more or less was getting at that a moment ago — the relationship between these amendments? As I look at them, I wouldn’t describe them as housekeeping, but I would not describe them necessarily as fundamentally changing the patent environment that we have for Canada.
As you know, there are a number of areas that have been commented on a great deal, in particular about patents, patent infringement and accessibility. Can you discuss the relationship between this and the recently-agreed-to USMCA and intellectual property components of that agreement and how it may relate to these amendments, if any?
Mr. Schaan: I’ll start on your important question on budget, which is a good one. While $85.3 million is the specific elements related to intellectual property, they need to be put into the broader basket of innovation efforts in total. An important piece of that $85.3 million is the creation of a group of IP experts within our business innovation programs to be able to ensure that they are putting intellectual property at the forefront of considerations of how we support businesses to innovate. The $85.3 million is specific to intellectual property, but it needs to be thought of as a broader aim in terms of the innovation strategy writ large.
In terms of the relationship to these amendments, they are consistent with the general approach of trying to create an innovation-friendly intellectual property regime. These amendments are aimed at striking a level playing field and ensuring that small innovators and large innovators equally have access to the utilization and the strategic use of intellectual property rights.
Finally, with respect to the USMCA, I would say Canada has been continuously modernizing its intellectual property regime over the course of the last decade, going back to changes we made with accession to the WIPO treaties through to the Canada-European Union Comprehensive Economic and Trade Agreement, and even more recently into the Comprehensive and Progressive Trans-Pacific Partnership agreement.
The USMCA does further embed intellect property rights and require us to make some changes to the agreement. These initiatives are separate from that in the sense that they are what we believe to be common sense innovation amendments that we are doing for our domestic ecosystem, which does have a relationship to the international trading environment, but it is really aimed at that level playing field and the use of IP as a strategic asset.
Senator Wetston: I want to stick with the patent area for a moment, if I could, Mr. Schaan. On the second round, I might get into trademark and copyright.
With your innovation strategy, I know the minister and the department have been talking a lot about this area and very important policy goals that you’re attempting to achieve. You cover a lot of territory, everything from competition law and intellectual property to corporate, which are very important framework legislation for the country. Can you tell me more about the connection to the innovation strategy and how you are approaching this across the country?
I will give you an example. I know this is a broad question, but universities are really important in this area, as NRC is. If I look across the strategy — I want to get this right — you have chosen sort of five hubs. I am calling it hubs.
Mr. Schaan: The super clusters, yes.
Senator Wetston: Tell me about how you would view these amendments, for example, the nature of the cluster choices as well as the relationship. I can see what you’re doing with NRC, but with universities, where a lot of intellectual property discussions occur, can you fit that in with respect to what you’re trying to achieve here? I know it’s a broad question, but I think from the point of view of what you’re trying to achieve broadly, I would like to hear your comments on that.
Mr. Schaan: I’ll take two tacks at it. One, you speak to the broad remand of marketplace frameworks. We are in the lucky — though some might argue unlucky — position of being able to hold the custodianship of all of our laws of general economic application: competition, corporate governance, bankruptcy and insolvency, all of the intellectual property statutes, privacy and data protection. I would say we are attempting to have a coherent and consistent approach across those to ensure we are using each of those levers to their most efficacious outcomes and also that there is coherence between our various approaches within them.
Second, on the broader issue of the innovation strategy writ large, I think the relationship here is that we obviously have taken a number of programmatic approaches, whether it’s Innovative Solutions Canada on the procurement side, the super clusters initiative in terms of trying to facilitate enhanced partnerships across ecosystems to develop spillover and significant benefits to particular sectors of the economy, or the economic strategy tables. The relationship of these amendments, in part, to that is that we’re trying to take a holistic, sophisticated approach to innovation across the entirety of the ecosystem; and second, these are really trying to embed intellect property as a fundamental consideration of strategic importance to the innovation economy.
This is the first national intellectual property strategy, and its real attempt is to ground the importance and growing importance of IP to the economy into our programs, our policies and our legislation. This is one element of a much broader push that says IP is important, IP is critical, so let’s make sure that it’s in all of the right places, whether it’s policies, programs or law.
Senator Wallin: In your remarks and your notes, you make the bold statement that these amendments are going to allow you to prevent the abuse of trademark regimes, such as applying for registration with the sole intention of seeking remuneration. How exactly will you prevent that?
Mr. Schaan: A number of checks and balances are built into the trademark system already, including the requirements around a trademark to be in use or intended to be used as part of that process. The fear we’re addressing, or the potential concern, is that there are actors out there who, even with use in place, may seek to squat on the trademark roles and fill up the trademark role with a whole series of trademarks that they have no intention to use.
We have tried to come at this from a whole series of elements, whether it’s a new bad faith opposition, the ability of the Trademarks Opposition Board to award costs for frivolous or unfair practices, the ability to require use to be able to seek penalties, or to essentially be able to gain access to remedies for the abuse of trademarks. All of these various elements within the trademark regime are attempting to ensure that the rightful users of trademarks can get access to the system, but that there are a series of tools available — not just for the other trademark holders, but the Trademarks Opposition Board amongst others — to be able to combat those who may seek to use the system unfairly.
Senator Wallin: Okay, but the measures are designed to discourage bad behaviour rather than somehow being prescient about intent. It’s hard to tell what people are going to do. I mean, they may have been serious at some moment.
Mr. Schaan: I think the pattern of behaviour we’re trying to prevent is one where bad faith can become relatively obvious. When you file thousands of trademark applications that have very close proximity or relationship to existing brands with the intention of squatting on them and holding them to account and trying to shake them down for cash, bad faith becomes relatively obvious.
Senator Wallin: I guess what I’m asking for is for the guy in his garage that actually did reinvent the light bulb. You know what I mean. They want to go through the process so they don’t get caught in this net with the bad guys.
Mr. Schaan: The nice thing is that this is part of a much broader trademark modernization that is underway. With Canada’s accession to the Madrid Protocol, Canada will be part of a global network of trademark filing. Once the regulations for the Madrid Protocol are enforced next year, Canadian trademark applicants will be able to apply to the world from Canada. You’ll essentially be able to file your trademark application at the Canadian Intellectual Property Office and indicate the geographies that you also want to fulfil that trademark.
As a part of the Madrid system, we will gain access to global records and, moreover, you’ll begin to pay by class for the number of categorizations that you want to fulfil your trademark for. If someone out there really is inventing the new light bulb and wants to use a name that someone is using for a fork lift, that should be fine in theory and will allow them to do that because you’ll have to file by class and which type of product and category you are fulfilling the trademark for.
Senator Tannas: I wanted to ask a question on the college because I recall that we did have somebody express some concern about the potential for the college to become a bit of a cartel that would keep others out. I’m wondering what thought went into what you’re enabling here, anything that you might have put in around grandfathering people, rights to access or anything like that. Is that just a risk that you felt was worthwhile? To hand it over to industry and maybe it becomes a cartel? Can you talk about that?
Mr. Schaan: The joys of establishing a self-regulating profession after so many other professions have been established as self-regulating means we get to borrow all of the best practices of every other self-regulating profession and learn from some of the challenges that they faced along the way.
We have done a fairly significant study of everything from land surveyors through to immigration consultants and everyone in between — lawyers, doctors — to try to make sure that we’re really establishing a college that both allows for a high watermark for the professionalization of this important profession, but also the protection of the public interest.
For instance, a couple of checks and balances that have been put in place: there is a prohibition on directors of the college being members of a professional association whose sole job is to lobby or to pursue the goals of the profession. That would require people to suspend their membership in the professional association while they are directors of the college. There is a cooling-off period built into when the members of a significant leadership function, so a steering committee or the governance of a professional association, can become a director. That’s 12 months. The act allows for the majority of directors to actually not be elected by the profession, but appointed by the minister to allow for those public checks and balances on the operations of the college. There is an annual report that needs to be filed by the college, and the minister is expressly allowed to seek out specific information from the college to be presented in their annual report.
One of the concerns is around access to the profession and the degree to which this might become a barrier to innovation. If you choke supply of patent and trademark agents, it makes them desirable, but also potentially heightens costs for the users. One of the elements in this annual reporting can relate to things like examination pass rates and the degrees to which there is access to the profession.
In almost every element of the college, we have tried to ensure that we have thought considerably about the public interest and how we are going to make sure this isn’t either a choke on innovation or the potential for it to run amok.
Senator Tannas: Thank you.
Senator C. Deacon: Thanks very much for the comments so far.
I want to inquire about the terms of the changes to the National Research Council Act.
Just for clarification, value is consumed or invested in the process of discovering and protecting IP. It’s only unlocked and created once you’re applying that. The intention here, it seems, is to fulfil a clearer role of allowing private companies to unlock value and focus on that. I just want to understand how that might have implications in terms of how NRC changes its business or relationship with contractors, what opportunities are created and how you see engaging, so how you will be using these changes from a practical standpoint to allow more value to be created.
Mr. Johnstone: Thanks for the question.
In terms of the NRC’s approach to intellectual property, overall, the NRC is the largest holder of intellectual property in the federal government. The NRC has over 1,700 patents. The primary mechanism by which that intellectual property is diffused into industry is through licence agreements. About 756 of those patents are actually licensed out to entities currently. That’s just under half.
These changes relate to assignment. This is where the NRC would actually assign the intellectual property — not license the intellectual property but actually assign it — to a specific entity. You might ask why the NRC would do that. The NRC has always had the ability to assign patents and inventions, but this authority did not clearly relate to other forms of intellectual property such as copyright, for example. In the case where the NRC does some work specifically for a company that generates intellectual property that applies very specifically to that company’s product and would not provide value to the NRC itself or to other Canadian companies — that the NRC would want to license that out to others to help with the diffusion — if it’s very specific to that company, this would be a situation, for example, in which the NRC may decide that it maximizes the value to actually assign that intellectual property right to the company. The amendments in this case are very specific to broadening that ability to actually assign to other forms of intellectual property.
Senator C. Deacon: Thank you.
The Chair: My question is to all three representatives and all three organizations. Please give the committee your view as to the impetus for these changes. Why are these changes being made? Why are we considering these changes, from your point of view? We’ll start with the National Research Council Canada, and then I want to hear from Heritage Canada and from you, Mr. Schaan.
Mr. Johnstone: In the context of the Innovation and Skills Plan, the Budget Implementation Act and the broader intellectual property strategy that Innovation, Science and Economic Development Canada representatives have described, the NRC is a major holder of intellectual property, as I mentioned. These amendments are a good opportunity to put in place these clarifications that broaden the NRC’s ability to effectively manage its intellectual property for the benefit of Canadians.
The Chair: So you believe that this assists you in doing what your mandate is; is that what you’re saying?
Mr. Johnstone: Yes, and I would highlight what has been said previously and what some of the members noted: this increased focus on intellectual property and having a more sophisticated view of that in ensuring those flexibilities are in place for the NRC are more important than ever as we move forward with the Innovation and Skills Plan and the intellectual property strategy generally.
The Chair: Regarding a question Senator C. Deacon was asking panels yesterday, do you believe these changes equip you to deal with the environment that is so rapidly changing around us?
Mr. Johnstone: These changes do improve the flexibility in terms of the NRC’s ability to assign intellectual property — all forms of intellectual property, not just patents. The previous act did not provide that clarity. These changes provide that clarity that provides the flexibility across all forms of intellectual property.
The Chair: Thank you very much. Canadian Heritage?
Kahlil Cappuccino, Director, Copyright Policy, Creative Marketplace and Innovation Branch, Canadian Heritage: In this case, we can talk to the Copyright Board reform that we’re involved with and co-lead with ISED. In the case of the Copyright Board, as we’ve come to learn, there are some things that need to be done to bring the Copyright Board to a place where it is more modernized in terms of how it proceeds with cases and how it treats royalty rates and tariffs.
When it comes to Canadian Heritage, the idea is that we want to look at something where there is a nice balance between creators and users. From a cultural policy perspective, we want to be able to ensure that there is good, creative Canadian content that’s accessible to Canadians, but we also to also create a creative marketplace where there’s an incentive to invest. That’s as opposed to now. When you look at how some decisions are taken, there is retroactivity. As a result, it becomes a disincentive for an artist or a company to invest.
From our perspective, the idea is that it’s a means for advancing cultural policy for Canada and Canadians and creating a creative marketplace where creators can be fairly remunerated but also where people have access to that.
The Chair: Do you believe these changes assist Canadian artists?
Mr. Cappuccino: I believe they will. In this case, the changes to what we’re doing in terms of the Copyright Board are that we’re putting in place amendments that will help speed up the processes. For anybody who has access to, in this case, longer tariff filings, case management can only help artists.
The Chair: Thank you very much. And from Innovation Canada?
Mr. Schaan: In terms of the impetus for these changes and where they fit, I can say a few things. One, this rests within the broader context of weak innovation outcomes for Canada, where we have been in an innovation paradox of having a significant amount of capacity and great fundamentals but weak outcomes in terms of commercialization and otherwise.
Those weak innovation outcomes are replicated in intellectual property. Only 9 per cent of Canadian small- and medium-sized enterprises have a formal intellectual property strategy, and only 10 per cent of Canadian small- and medium-sized enterprises own any formalized intellectual property at all. Yet we know that IP-intensive businesses — businesses that do own IP — have a higher wage rate, they’re more likely to export and they’re more likely to be high growth, by a fairly significant number. The impetus for this entire strategy was really about improving our IP fundamentals within the overall innovation ecosystem.
A second driver is that we recognize unfair practices or the malicious use of intellectual property within the system corrupts the system as a whole and brings disrepute to the system and potentially colours the views of others about using it at all, so we recognize we need to make sure that a level playing field exists.
Third, to build on the comments from my colleagues from Canadian Heritage, this is also about making IP marketplaces work and ensuring that there is a healthy and vibrant marketplace where there is not trapped capital or long delays, and where one is not held over a barrel or potentially put in a situation where they’re negotiating with someone who has unfair leverage as they try to exercise intellectual property in the marketplace. That’s true in copyright, trademarks and patents. So that’s really the impetus.
The Chair: Therefore, it is your hope and belief that the changes you are making will encourage Canadian innovators to be able to protect their assets and develop their projects in this country. Is that the hope?
Mr. Schaan: The goal of the entire intellectual property strategy — the education, awareness, outreach, the creation of new strategic tools and these legislative measures — is a comprehensive approach to trying to really create an uptick across the innovation economy.
The Chair: Thank you for that.
Senator Duffy: Thank you all for being here.
Almost every day, we read stories about creative organizations downsizing, disappearing, and the fragility of work. Mr. Cappuccino, is there a federal government policy about respect for copyright? It seems to me the Canadian government should be a leader in respecting copyright, yet we hear stories of court cases where government departments are accused of and being sued for having ripped off creators. Is there a cross-government or whole-of-government approach that says departments should follow the rules, pay their royalties and make sure that people in this creative community are justly remunerated?
Mr. Cappuccino: When you say departments should pay, what do you mean by departments?
Senator Duffy: Some federal government departments are in court being sued for having distributed or exploited, passed around copyright material without paying for it. To me, it’s like if you buy Microsoft Office for one work station and then you pass it around the whole department on the basis of paying for one. That seems to have been going on, and there are cases that have dragged on for years where creators are trying to get fair treatment from the government. I personally would have thought that the government would have been a leader in ensuring that they respect the rules and don’t waste thousands of dollars of taxpayers’ money fighting creators to avoid paying proper licensing fees.
Mr. Cappuccino: I see this in two parts. When you speak about things like Microsoft or an IT package, that would go to the IM/IT policy that there is in government where, generally speaking, the idea is to be able to use procurement to buy the necessary licences for the necessary tools. Any experience where there might have been the purchase of a particular licence and then passing it around, I’m not familiar with. However, when that happens, indeed the government has its policies and is meant to take a leadership role in terms of exercising copyright and exercising respect for copyright. Again, part of that falls under the Copyright Act. I think that as we go through the Copyright Act and look at things like Crown copyright, we will be able to decide or look at, if recommended, how we can treat Crown copyright, how we can treat our behaviour around copyright going forward as part of the statutory review.
Senator Duffy: If I could be clear: I am not suggesting people are ripping off Microsoft deliberately, but they are alleged in lawsuits to be ripping off writers and other creators that are small businesses as opposed to big business. It seems to me that if you wouldn’t do it to Microsoft, why would you do it to the mom and pop ad agency, editorial, translation, all kinds of services that are small and don’t have the muscle of the big creators?
Mr. Schaan: Thank you for the question, senator. I’m familiar with the case that you’re referencing. Those cases remain before the courts, and it’s a very particular set of circumstances that I won’t speak to.
I will say generally, the government takes its responsibilities for intellectual property very seriously. We’re significant users of copyrighted material and, as you’ll hear from our colleagues from the Copyright Board in the next panel, we have a tariff in place that allows us to be able to access copyrighted material. With respect to intellectual property more specifically, we take infringement extremely seriously and have practices and policies in place to try and prevent infringement in all cases.
In fact, as part of our overall innovation approach, whether it is Innovative Solutions Canada or otherwise, we’re increasingly partnering with a growing number of partners in the innovative sector to ensure we are drawing on the best intellectual property out there and allowing them to grow and succeed in the marketplace.
Senator Duffy: Thank you.
Senator Wetston: I want to ask you a question about the copyright reform. In thinking about the copyright reform, I know we will have Mr. Blair and others appear shortly, but can you connect the reform to the nature of the commercial activities? As I understand it, copyright commercial activities are affected a great deal within the country by copyright. I haven’t really studied this, but I know that past experiences suggest there are a lot of copyright cases in the courts. Invariably you see a lot of litigation in copyright, and they cover a wide variety of areas. Just top of mind, it is everything from sculptures to architectural plans and film and music, so it’s an important commercial activity. Tell me about the consultations that you had in arriving at this, because we’re in pre-study, and perhaps elaborate on how you view these reforms as enhancing or aiding in commercial activity and economic growth.
Mr. Schaan: For the consultations on copyright, it depends on where one wants to start. If one goes back to the 2012 Copyright Modernization Act, you can go back to many years’ worth of consultations that led to the ultimate passage of the 2012 reforms.
With respect to the Copyright Board reforms you will find in this particular bill, you can see that over the course of a number of years of both academic study and engagement. There have been conferences held on this subject. In fact, this committee itself made very clear recommendations that urged the government to take urgent action to improve the overall state of the Copyright Board.
This is really a three-way approach. We’ve made changes to the overall allocation of the budget of the Copyright Board, so there is a 30 per cent increase to the budget of the board, there are new appointments to the board, and this is the legislative reform that really allows for that procedural improvement and the modernization, both from the board and from the departments responsible, both in lockstep to be able to bring about a thriving marketplace.
It really is aimed at that commercial activity. It is aimed at the uses of copyright and being able to have clarity and predictability around how much and when someone will have to pay for the usage of copyrighted material in the marketplace. I don’t think most Canadians have a full understanding of the degree to which they are engaging with copyrighted material that goes through a board certified tariff on a daily basis. When you walk through the mall and listen to background music, when your kid is at the skating rink and there is background music, when you turn on Spotify, all of those are copyrighted uses that are certified through the board process.
The marketplace is huge and the marketplace is important, and this modernization effort tries to go from a period when we had a significant history of retroactive tariffs — you can imagine what retroactive tariffs have as an impact on the market when you find out what you will pay four years after you were supposed to start paying it. There is a lag, which means you have frozen capital and uncertainty, to a zone to where you’re moving towards less retroactive tariffs and allowing people to have that clarity. So it really is aimed at the thriving copyright marketplace. That was the nature of the consultations.
The consultations were also a summer’s worth of consultations led by the department that had more than 60 submissions from across the entirety of the copyright landscape — from users, businesses and the creative community — that fed into these ultimate reforms.
Senator C. Deacon: From my standpoint, as somebody who has spent a fair amount of money on patents, the longevity of trademarks and branding and copyright is for as long as you maintain it, where a patent is very limited and, in cases for pharmaceuticals, extremely limited after you get approval. I’m looking at how we’re coordinating internationally at an increased level to make sure that not just our patents but our copyright and trademark materials are protected in some larger economies that have not been as well known for protecting those assets and abiding by international conventions. How much more confidence might you have that we’re going to start to make some meaningful headway on those broader issues as those economies grow in size and importance?
Mr. Schaan: I have a few comments.
On the longevity, as part of the ongoing amendments to Canada’s intellectual property regime, we have made changes to almost every one of our IP statutes in various formats, particularly on the patent side and particularly related to pharmaceutical patents to create new measures that extend the period of patent protection.
Under the European Union-Canada Comprehensive Economic and Trade Agreement there is a provision for a certificate of supplementary protection, a CSP regime, that provides a sui generis period of protection that adds to the general patent. Then, under the Canada-U.S.-Mexico agreement on trade, there are further provisions that potentially will have an impact on the pharmaceutical IP landscape.
To your general question about how we’re coordinating internationally, we’re increasingly engaging in trade negotiations where we’re bringing people up and having enhanced dialogues around intellectual property, including things like co-operation on patent quality and ensuring that there is cooperative agreements in those zones. We are robust members of the World Intellectual Property Organization, where there is a healthy dialogue on things like improving patent quality and the provision of intellectual property rights of a consistent nature across the entirety of the World Intellectual Property Organization, which is a UN organization so has a fairly wide stance. Also, we are in specific dialogues. Obviously the Comprehensive and Progressive Trans-Pacific Partnership is a particular zone where we’re engaging with countries that potentially will have to make significant modifications to their intellectual property regime which, because of that trade agreement, will allow for that continued trade and respectfulness.
With regard to the general zone that I think you’re getting at, we are engaging thoughtfully in a number of international dialogues with emerging nations that have a growing intellectual property role and are continuing the dialogue to ensure the certainty and confidence that they can have in the Canadian intellectual property system and we can have reciprocally in the intellectual property regime of their given jurisdiction.
Senator C. Deacon: So you think you’re seeing sufficient progress that the traditional path will be effective?
Mr. Schaan: In some of these zones, the traditional path, many would suggest, would be a trade agreement, and in many cases we’re creating intellectual property dialogues that are specific to us and other nations. We have them in a number of zones. We are creating one under the Canada-U.S.-Mexico agreement that is specific to intellectual property and includes some important issues like location of jurisdiction of the forum for patent disputes, which we think is a very important issue. We’re trying a series of tools, bilaterally and multilaterally, that aim to have broad dialogue on these issues.
The Chair: Panellists, thank you all very much for the presentations that you provided today. It’s been very helpful to us. Thank you very, and we look forward to seeing you again at some other point.
Continuing our subject matter study of Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018, and other measures, and in particular, division 7 of Part 4 which deals with the Patent Act, for this panel we are specifically examining sub-topic H, dealing with the Copyright Board.
I am pleased to welcome the witnesses in our second panel: from the Copyright Board of Canada, The Honourable Robert A. Blair, Q.C., Chair; Nathalie Théberge, Vice Chair and Chief Executive Officer; Gilles McDougall, Secretary General; and Sylvain Audet, General Counsel.
Thank you all for being with us. We look forward to your opening remarks, to be followed by questions.
Robert A. Blair, Chair, Copyright Board of Canada: Thank you very much, Mr. Chair and honourable senators. We are very grateful to the committee for providing us with this opportunity to discuss these matters with you. With your permission, Mr. Chair and members of the committee, our recently appointed vice-chair will make the presentation on behalf of the board.
Nathalie Théberge, Vice Chair and Chief Executive Officer, Copyright Board of Canada: It is my pleasure to be here today.
Pursuant to its mandate, the board plays a fundamental role in the Canadian intellectual property ecosystem. Moreover, it is the instrument through which many Canadian creators are being remunerated for their work.
The Copyright Board of Canada is an independent, quasi-judicial tribunal created under the Copyright Act. This is emphasized by the requirement under the act that the chair be a judge of a superior, county or district court, either sitting or retired. The board’s role is to establish the royalties to be paid for the use of works and other subject matters protected by copyright, when the administration of these rights is entrusted to a collective society.
Collective societies are entities that pool copyrights for efficient management purposes. In the 1980s, there were approximately five collective societies, while today, there are more than 35. The direct value of royalties set by the board’s decisions is estimated at almost $500 million annually.
Because the board acts as an economic regulator, it must issue decisions based on solid legal and economic principles, reflect a thorough understanding of constantly evolving business models and technologies such as streaming of music, and be fair and equitable to both copyright owners and users.
The board has similarities to a trial division of a court for all matters it determines. In particular, it deals extensively with complex facts and evidence based on testimony and expert reports. The board is also often the first to interpret new legislation or to apply legal principles established by the Supreme Court of Canada. The board’s reasons must be reliable, understandable and convincing, drawing heavily on the board’s resources and the skill and expertise of its members and staff.
Today, the board is on the eve of a major reform that will result from the changes to the Copyright Act brought forward in Bill C-86. This is something that both stakeholders and the board itself have called for for several years now. This is also something this Senate committee recommended in November 2016 in its report entitled Copyright Board: A Rationale for Urgent Review. In that report, members of this committee highlighted the many challenges faced by the board, including its struggle with lengthy delays and tariff-setting, resulting, in part, from an ever-increasing workload, grossly insufficient resources, a mandate in need of updating to better reflect market realities and the public interest, and procedural shortcomings attributed to both the board and the parties.
The board believes that the proposals in Bill C-86 address these challenges head on, although caution will need to be exercised in their implementation through regulations to ensure they do not undermine the independent nature of the board. I will come back to this later in my presentation.
The proposals in Bill C-86 are the result of extensive consultations with stakeholders, as mentioned by the departments in the previous panel. These consultations also took place with the board. As such, the proposals reflect the general views of the board.
In particular, the board welcomes the government’s proposal to set in law the public interest as part of its mandate. This is something the board was already doing, but setting it in law will bring more clarity and hopefully more predictability to its decision-making authority.
With respect to the mandatory regime for the music industry, the government also put forward proposals that will allow market-based solutions to prevail when parties agree among themselves if those solutions are applicable and aligned with the public interest. Other copyright tribunals in other countries operate in a similar manner, whereby their intervention is sought only in cases of market failure and when arbitration is required. We believe this is a good and forward-looking proposal, although its impact on the board’s overall workload is difficult to predict.
We welcome and thank the government for recognizing that any meaningful reform requires additional resources to the board by giving us a 30 per cent increase in our budget as part of Budget 2018. As this committee recognized in its 2016 report, a lack of resources has plagued the board for years. The board will use this new intake wisely to support a more efficient decision-making process, leaner internal practices and less exposure from an HR point of view. I remind you that the board currently only has 16 employees.
If adopted, the board will actively participate in the implementation of these legislative changes proposed in Bill C-86, including the publication of rules and guidelines to foster more discipline across all parties involved and the development of regulations on timelines over the coming months. These regulations will need to be respectful of the board’s independence as a quasi-judicial tribunal, and they will need to reflect modern and transparent tribunal procedures. They will also need to account for the flexibility the board requires to oversee the processes that lead to decisions that are fair, equitable and that consider the public interest. This is fundamental, and we urge the government to uphold this principle as key to an efficient modernization of the board.
To that extent, we encourage the Senate committee to consider carefully the proposed changes under section 66.91 of the Copyright Act to ensure that the scope of the Governor-in-Council regulatory power is not overreaching and protects the board’s ability to regulate its processes leading to the rendering of a decision.
As a reminder, the board cannot avoid due process requirements, such as seeking all parties’ submissions on specific issues that arise in the course of the proceedings. Despite the flexibility afforded to administrative law processes, the board must account for the fact that the tariffs it certifies are of general application, contrary to court decisions, which only bind the parties involved.
This procedural requirement can significantly slow down the process, yet it cannot be bypassed. It is essential to consider the public interest. The implementation of Bill C-86 will need to account for the specificities of the work and mandate of the board.
Thank you for your attention. My colleagues and I would be happy to answer your questions.
The Chair: Thank you very much for that presentation. We will now begin our questions.
Senator Wetston: I think you may have heard my comment to the last panel that we’re in pre-study. We have just received this bill. In looking at the bill, there are a couple of things I wanted to address with you.
You may have heard me say that I think copyright is an important part of commercial activity in Canada. You have a small board, in relative terms. You will get an increase of 30 per cent. What does that mean from the point of view of the improved resources that you have to be able to do the job you’re asked to do, not just in relation to these amendments? That’s my first question.
I want to pursue your comment with respect to independence and the role of the Governor-in-Council and ask you about your concerns there. I haven’t studied the provision, but you obviously have. Can you elaborate what your concern is with respect to the Governor-in-Council? Is it the regulation-making process? Are you concerned about your independence? Are you concerned about political intervention?
Mr. Blair: Thank you very much, senator —
Senator Wetston: And I’m happy for Justice Blair to answer the question, since he’s very familiar with this area of activity.
Mr. Blair: Others can speak to the issues surrounding the increase to budget, which will certainly enable us to improve our resources and better use the tools this legislation is going to provide us, such as case management, for example.
Let me speak to your second question, if I might: How do these amendments affect or relate to the independence and the role of the board and of the Governor-in-Council? That’s a matter of some concern to us. I need to say at the beginning that we have worked very closely with ISED and with Canadian Heritage to come up with a proposal that is agreeable to us all. We have no issues with the objectives of the departments, which, as we understand it in this context I wish to speak to right now, are essentially that they wish to place some parameters on the board’s decision-making processes to ensure that our decisions are made in a more timely fashion, both on contested matters and in matters that turn out to be uncontested.
To that end, there is a provision in the proposed bill that provides for regulation-making authority on the part of the Governor-in-Council. Speaking for myself at any rate, I have a little bit of concern about the reach of that provision because it permits the Governor-in-Council, by regulation, to really govern every single step in the process of the board, from beginning to end. That has a couple of implications that concern me. One is that it’s impractical. It’s impractical for cabinet members or members of their departments to determine the appropriate time periods for the various steps in what is a very complicated administrative process.
The other issue is that an administrative tribunal, for purposes of its independence, must have control of its own process. It must not be subject to whatever the loudest political winds of the day are. That’s a bit of a concern, because while we agree completely with the goals of the departments, we’re a little concerned that the regulatory authority might be phrased in a way that is a little bit overreaching. That’s our concern.
Senator Wetston: I’m not going to ask you to provide what you think would be a better approach to this, because that would be a bit unfair.
I’m looking at the provision. As I examine it, I would pose the following question to you: I would agree that it looks like it inherently affects the independence of the tribunal to manage its procedures in a way that we would expect. What is the rationale for this? You were part of the consultation. Why do you believe the government went this far in putting in a provision that would — as I look at it, Justice Blair — say that establishing timelines for the board’s proceedings that would prevail over any regs made by the Copyright Board?
I think you indicated what you believe the objectives were, but why would they put in a provision like this? What would be the rationale? Was it because of the consultations? The participants view, the fact that the work of the board was too slow? It was taking too long? What would the reason have been?
Ms. Théberge: Thank you for your question, senator. I think it would be inappropriate for me to come up with a clear interpretation of their motive.
Senator Wetston: Somebody has to.
Ms. Théberge: First of all, I should reinforce what Judge Blair has said about the fact that we fully understand and are committed to the overall intent behind this provision, which is to set in law timelines for the rendering of a decision. I have heard, and we have heard it through the consultations many times, that the board takes too long to render a decision. To that, I would probably agree, but I would also point out that the entire process is comprised of interactions with parties, and sometimes delays are the result of processes having to be tailored and adapted to a particular circumstance, including at the request of a party. That’s the nature of a process led by the Copyright Board. In the context of your own report, you heard parties say exactly the same thing.
We also understand that the departments had some advice coming from the Department of Justice that there needed to be a hook and a provision from a regulatory point of view. There needed to be a specific hook in the text to be able to exercise the Governor-in-Council authority they are seeking to exercise here. We may have a different opinion as to whether this is the perfect wording or that this is just going too far for what we’re trying to achieve, hence, the comment about us being uncomfortable and questioning whether this perhaps is not the most appropriate wording and whether we’re creating a problem that wasn’t there before because of the overreaching wording.
Again, like the judge just mentioned, we want to be careful not to open a door in such a way that comes a new government, new decision-making, suddenly there is an opportunity to dig deep into what is under the authority of the board, which is to articulate its internal processes in a way that leads and supports an efficient decision-making authority.
Senator Wetston: Thank you.
Senator Tannas: I am sorry; I’m multitasking. I kind of lost the plot here, but I want to carry on with this.
I was part of the oversight hearings that we had with respect to the Copyright Board. Some of you were there. Maybe you read the transcripts. It was pretty plain that your system was broken. It was not functioning to anybody’s interests. We got wholly unsatisfactory answers from the people that you sent to defend your board at the hearing. That’s the groundwork. That’s the basis on which we heard there was going to be a major shakeup and change to the board.
Can you tell me, clearly, that you will establish deadlines, you will accept them and you will report on how you’re performing against those deadlines? I think that was what we heard. We also heard from artists, from creators and from users that they would accept good enough decisions as opposed to perfect decisions if you would just hurry up. So what I’m wondering is, did that message all get through? Is that what we’re talking about here, crystal clear deadlines and a report about how you progressed against those deadlines? For those of us like me who have short attention spans, could you answer that crisply?
Mr. Blair: Thank you, senator.
As you know, we report annually, so that’s what we will continue to do. But as I indicated in my response to Senator Wetston’s questions, we have worked hard with the two departments, and we are in complete agreement with their goal to establish time parameters within which the board will render its decisions in contested matters and in uncontested matters. Key to our ability to be able to do that is the increase in the budget that we have received. Another key is the tools that the case management process that is proposed in the legislation will give to us. That will help us streamline the process and move it along in a faster manner. We are committed, sir, to following those processes.
Gilles McDougall, Secretary General, Copyright Board of Canada: One little precision: there is also the fast-track approach that the additional resources will allow us to implement. That’s for an important chunk of our tariffs that are being proposed annually. For these particular ones where the approach applies, we’ll be able to certify in all cases, even before the year for which it begins to apply. There will already be a significant improvement there, and this is only possible because of the additional resources that we have been able to obtain.
Senator Tannas: Perfect. One more —
Ms. Théberge: This is step one. Step two is the regulatory process. We are going to be working with both departments, Canadian Heritage and ISED, to support the development of regulations that I think will provide the assurance and the granularity that you’re looking for. Then the board has to develop its own set of regulations that will put in text all those deadlines, the steps, the way case management will be implemented and the type of decisions that will be taken in the context of case management. So there is more to come. These bring changes to the broad legislative framework that will allow us to move forward with the implementation of these changes, and we are certainly committed and quite hopeful that we will see changes.
As the chair mentioned, we are obligated to report annually. This will absolutely not change.
Senator Tannas: I have two more questions. One is uncomfortable, and the other is hopefully a happy way to end.
First, were there significant personnel changes made at the board as a result of the review, or is it the same people that will be going forward?
Second, we heard a lot about comparisons between the Canadian system and the U.S. system and how the U.S. system was performing much better. If we called you back in two or three years and dialed up the results of the U.S. system or called in industry that works in both places, will we get a response saying, “They are approaching to be as good as the U.S.?” Will we get something that says, “No, we actually think they are better now?” Is this the platform that will allow us to over-perform? I’m interested to get some good news and something that we can hold you to a few years from now.
Ms. Théberge: I think we will be able to give you good news, but tailored to a Canadian context. I think it’s quite unfair to compare the Copyright Board to the U.S. Copyright Royalty Tribunal. I’ll give you numbers. The U.S. Royalty Tribunal each year certifies about five tariffs. Last year, we were involved with 50 tariffs. So it is apples and oranges. I don’t know if that’s a satisfactory answer, but I think international comparison, in particular with the American model, is perhaps a little uncomfortable and perhaps not the best.
Senator Tannas: Who would you like to compare yourself to?
Ms. Théberge: We are more similar to the Australian Copyright Council, or the equivalent of the Australian, with some differences certainly. If you’re absolutely looking to compare the board to another organization —
Senator Tannas: Any organization that I have ever heard say they can’t be compared to anybody captured my suspicion, when it comes to performance measures.
Ms. Théberge: I fully understand and appreciate that.
With respect to changes in personnel, well, I’m new. We now have a full board for the first time in a very long time. The government announced three part-time board members, so this is entirely new. With respect to the rest of the personnel, these are employees of the federal public service. Right now, we haven’t hired anybody new because even though new funds were announced in Budget 2018, we have yet to access those funds, but it certainly will be our priority in the coming months once we can access those funds to accelerate the hiring. We will beef up the capacity, which will then allow us to deliver on those commitments, including case management.
Senator Tannas: Thank you very much for your candid answers. It is very appreciated.
The Chair: I have a couple of supplementals in respect to that, because I also had the opportunity to participate in that hearing respecting your board. While it was very tough, our intention was to be helpful. We heard a story of woe and dysfunction that clearly was not in the interests of this country, so we gave a number of recommendations, albeit hard-edged, I agree, saying this is what needs to happen. In the spirit of being helpful again, do you now believe that you have tools that you need to do the job that you’re expected to do? Do you believe the blocks in your way of doing your job has either been removed or can be removed?
Mr. Blair: Senator Black, I do think we have the tools now to allow us to move forward. We have discussed some of them. Certainly the increase in the budget is critical, as are the tools of case management and fast track and so forth. Those will allow us to move forward in a way that is more expeditious.
Forgive me. I can’t resist this comment though, sir. The board itself has been attempting to move forward in the way of process reforms for several years now. We had our own task force. We responded to studies that were done by Professor de Beer and Professor Daly. We made our own proposal to the departments well more than a year ago, which involved many of the things that we’re discussing here today and that are now found in the bill. We were asked to hold off on those proposals ourselves so we could work with the departments towards these common goals. That’s the process that we followed. It’s not as if we haven’t been doing anything, sir, or responding to the concerns. We’re well aware of the concerns. We think that, in the future, these tools that we now have will let us respond in a more expeditious fashion.
The Chair: Wonderful. That was everybody’s intention. Success has many fathers.
Senator C. Deacon: I have enjoyed this conversation so far, so thank you very much.
You described your intention to implement much leaner practices as you move forward. I’m a real believer in encouraging and enabling self-regulation versus enforcement in life. I also look at the opportunities for technology to be used as an effective tool. I also recognize that government hasn’t been historically the best developer of technology or user of effective technology in the past.
How do you see yourself moving forward? I think your objective is hugely important: that you have leaner practices that enable an awful lot of work to get done by mobilizing others and enabling others. Just describe how you intend to implement these changes as you move forward, because I think that’s really crucial to see how you feel empowered in a world where there are huge technological changes. There are huge business model changes going on all around us that you and those that you are serving have to work with.
Ms. Théberge: Thank you for your question.
We have already begun. We’re in discussions right now with some experts on lean management to help us see or get a better understanding of our process work flow. It’s challenging to pick and choose the steps that you can just push aside in a tribunal with a mandate of the public interest, because you have to ensure that by being leaner you don’t inadvertently create issues around procedural inequity. That’s one of the challenges that we face and that we are conscious of.
The use of technology, on our website in particular, is something we will put some conscious effort on. It’s unfortunate the senator has left the room, because I was going to draw a comparison to the U.S. Copyright Royalty Tribunal, which has a very interesting electronic filing system. This is something that we will be able to contemplate. Whether it’s completely applicable as is to our situation remains to be assessed, but it is certainly something we will be doing in the coming months. The applicability or the usefulness of other types of technologies, such as artificial intelligence, will also need to be assessed.
The difference is that now we’re in a position where we can actually devote resources to these assessments. It was not the case before. Before, we were so tight in terms of resources that it was very challenging for the Copyright Board to just assess itself and be able to take a certain distance from the processes to identify what is absolutely necessary or required to things that could be perhaps pushed aside or sped up in support of a more efficient process. I think you’re right that there are many opportunities in front of the board right now. We now have the means to be able to assess whether these technologies and these processes are applicable to the situation of the board.
But there is something that will never change: it’s a very complicated business. It’s a complicated business for a variety of reasons. First of all, the world of copyright, as you all know, is a very complicated business. Before joining this particular position, I was on the other side. I was the director general of copyright policy with Canadian Heritage. I can tell you, certainly from a policy point of view, that it’s extremely challenging. Business models change every week. There are new stakeholders, new groups of stakeholders and new types of creation of copyrightable work that appear on our radar screen every single week. That is not going to change. What is also not going to change is the fact that we have, as part of our mandate, the public interest. The key is to find the sweet spot between being efficient but also respectful of the public interest. It’s not easy, but I think now we have the means to do so.
Senator C. Deacon: Now I’m feeling a little concerned, because I am hearing you look at just revising processes based on what you have today versus what might be needed in this changing economy. I’m a big believer that the world has changed so much in the last five years. It’s amazing how the half life of technology and business practices is dropping. Are you looking at ways to change how you interact in a way that is not just necessarily adopting a way for people to file online or whatever else, but really how you interact entirely with the broad community and how you find opportunities to change from those who you are intending to serve? From your customers as such, the community, the stakeholders that you are, in fact, serving. Are you looking for opportunities from them? Are you going out and actively speaking to them about ways you can change the way you run your business and the way you serve the public that you are responsible for serving?
Ms. Théberge: I think our interactions with the parties are also guided by the fact that we are a tribunal.
Senator C. Deacon: Absolutely. I understand that.
Ms. Théberge: We do not make policy. We operate in the context of a policy framework that is determined by the government, not by the copyright tribunal, so I’m not sure how to answer your question.
In our business, we’re realizing the difficulties related to the lack of data. Having access to data is core to our business, because it is that data that allows us to render a decision — data that is verifiable, and not only data that comes from interested parties. You know how it works. There is a process. You get parties, and they bring forward their data. There is a responsibility, in part because we’re a tribunal but also because of the public interest mandate, to make sure the data being used for board members to render a decision is reliable. That’s part of our job.
One particular challenge we face, as an example, is the lack of economic data. We have already begun to engage with various economic departments across the country to get access to expertise around copyright economics. We’re realizing this is not expertise that actually exists in a critical mass. There is not a critical mass of a particular expertise around copyright economics in Canada, so we have embarked on a project to work with various universities to facilitate and incentivize economic departments to focus their research and their work on copyright economics, because we know that this will facilitate our job down the road.
I don’t know if I’m answering your question. I don’t know if my colleagues want to add something to that.
Senator C. Deacon: It sounds like you’re starting to work with groups outside of your organization that are affected by the decisions and the processes you are responsible for running to see how you could streamline the process.
Ms. Théberge: Absolutely.
Senator C. Deacon: I’m inferring a lot there. I just encourage you to do more of it, because there are a lot of lessons to be learned by talking to customer groups in the broadest stroke.
Ms. Théberge: Absolutely. We’re in regular contact, being mindful of the fact that we’re a tribunal. This is a small community in Canada. We were part of the consultations. We supported and actively participated in the consultations that were spearheaded by the departments last year. We are aware of the positions. I’ll be frank a little bit. There were a lot of positions, but there were not a lot of stakeholders that put forward solutions. And that’s okay. We’re conscious of that. You can be assured —
Senator C. Deacon: A good understanding of problems can be very helpful.
Ms. Théberge: Absolutely.
As we move forward in developing our regulations that will, in effect, determine the steps the parties will have to go through or no longer have to go through to be able to file a tariff with the Copyright Board, we are mindful of the necessity to test-drive some of these improvements with the key parties.
Senator C. Deacon: I’m starting to hear things that give me more confidence.
Ms. Théberge: That’s good.
The Chair: Panellists, thank you very much for being here. As you know from our past experience, we understand how important your board is to the economic environment in this country. We wish you the very best of luck. If we can ever be of support to any of your work, we stand ready to be supportive, because you’re doing important work for this country. Thank you very much for being here.
(The committee adjourned.)