Proceedings of the Standing Senate Committee on
Issue 14 - Evidence for the morning sitting
OTTAWA, Tuesday, April 15, 1997
The Standing Senate Committee on Transport and Communications, to which was
referred Bill C-32, to amend the Copyright Act, met this day at 9:30 a.m. to
give consideration to the bill.
Senator Lise Bacon (Chair) in the Chair.
The Chair: Honourable senators, we wish to welcome our witnesses. We have before
us representatives from the Canadian Music Publishers Association; la Société
professionelle des auteurs et des compositeurs du Québec; the Society of
Composers, Authors and Music Publishers of Canada; and la Société
du droit de reproduction des auteurs compositeurs et éditeurs au Canada.
Ms Claudette Fortier, Director, Société du droit de reproduction
des auteurs, compositeurs et éditeurs au Canada (SODRAC) inc.: Madam
Chair, we have agreed on the order in which we will proceed. Ms Bertrand will
Ms Francine Bertrand-Venne, Director General, Société
professionnelle des auteurs et des compositeurs du Québec (SPACQ): I am
pleased to be here today. The SPACQ was established in 1981 by a group of
songwriters and composers who wanted to improve their lot in life and push for a
review of the Copyright Act. For songwriters and composers, the Copyright Act
is not a piece of intellectual fiction. Rather, it is a fundamental economic
instrument that ensures that they are remunerated when their works are used.
Authors and composers must follow the economic life of their work. It is with
this in mind that we will be making our presentation today. We have followed
Bill C-32 closely as it has moved through the various stages. Initially,
songwriters were hoping that the bill would improve their lot in life and
either eliminate or restrict the exceptions already provided for in the Act.
On the contrary, all exceptions in place in Commonwealth countries were
ultimately included in the bill. Some amendments were introduced last December
with the support of the collective societies, and by extension with the support
of the songwriters and composers themselves.
The bill grants additional powers to the Governor in Council, namely the right
to intervene not only in the administrative recommendations of the Copyright
Board, but also in the fixing of royalties and in the rendering of decisions.
This is an important factor for us. We endorse the proposals that SOCAN will be
making to you regarding this matter.
Between the second and third reading stages of the bill, new exceptions were
included in the area of reproduction rights: these pertained to ephemeral
recordings and transfer rights.
It is important to realize the essential nature of the non-derogation clause
which applies to SODRAC. We are pleased with this provision and we urge you not
to make any changes whatsoever to it at this stage of the legislative process.
It is critical that this clause be retained, so that songwriters and composers
who have moved to take control of their lives and who have arranged to have a
collective society to collect royalties on their behalf can continue to
exercise their rights as they see fit and continue to negotiate the
reproduction rights to which they are entitled. The collective society SODRAC
was created without the help of the state. It is the jewel of the SPACQ. A group
of Quebec authors and took steps to have a collective society represent them,
following the European civil law and copyright model. This was a goal that they
had pursued for many years.
At this stage of the process, it is essential that SODRAC's non-derogation
clause remain intact. One of the SPCAQ's biggest challenges is to make people
understand why songwriters joined forces. Their objective in doing so was to
make people understand that their profession is worthy of respect in Canada,
that it is a rather unique profession, albeit one that complements that of
artist, performer or record producer. The SPACQ remains convinced that in all
other pieces of legislation where neighbouring rights were introduced, these
were dealt with separately from copyright.
In Canada, most likely for constitutional reasons, there was some concern that
the federal government might lose the upper hand. The fact remains that we are
unhappy with the situation. I feel comfortable saying so because neighbouring
rights advocates did not necessarily ask for this.
I want to make myself clear. Songwriters and composers are not opposed to having
artists, performers and producers receive some form of remuneration. In
conclusion, I want you to understand that songwriters and composers have
already made major concessions where Bill C-32 is concerned.
I am telling you today that you must not amend the provision respecting
reproduction rights. However, with respect to public performances, I want you
to know that I support SOCAN's position because for songwriters and composers,
there are two proprietary rights which involve the payment of royalties. They
are entitled to be remunerated when their work is performed in public and when
it is reproduced.
Unfortunately, Bill C-32 leaves us with mixed feelings. I repeat, it is critical
for you to understand that songwriters and composers have already made major
concessions and compromises.
You also have to understand that the organizations that will be speaking to you
are members of SODRAC, at least in Quebec, and of SOCAN. Songwriters and
composers have assigned these two proprietary rights to their collective
societies which administer them on their behalf. I will now turn the floor over
to Ms Fortier.
Ms Fortier: SODRAC is a collective society to which responsibility for
administering reproduction rights has been assigned. It represents over 3,500
songwriters, composers and publishers in Canada. It also represents in Canada
the musical repertoires of over 45 countries.
The Copyright Act is the legal instrument which gives creators control over how
their works are used and which allows them to be associated with the economic
life of their works. SODRAC grants licences for the reproduction of works such
as sound recordings, television programs, films and other medium.
In 1989, the Supreme Court clarified that when a broadcaster recorded a program,
the licence granted by SOCAN for the public performance of the work did not
include the right of reproduction assigned by the authors to collective
societies other than SOCAN.
Further to this ruling, SODRAC began to exercise the right that had been
assigned to it by songwriters and composers, that is the right to collect
royalties for the reproduction of works. This prompted broadcasters to begin
demanding an exception to the Copyright Act because what they wanted ultimately
was not to have to pay these royalties.
They got the exception they were asking for in clause 30.8 of Bill C-32.
However, this provision stipulates that the exception does not apply to the
undertaking when a licence is available from a collective society. We are happy
with this provision.
Almost one year ago, we instituted proceedings against a group of radio
stations. We took this action following two years of attempts to negotiate an
agreement over the right to reproduce and transfer works to another medium.
Clause 30.9 of the bill also provides an exception for the transfer of works to
another medium. Here again, the exception does not apply if the undertaking can
obtain a licence from a collective society such as ours. Again, we are
satisfied with this provision.
Yesterday, Minister Copps explained that the government had sought to strike a
balance. In legislation which must protect creators, such a balance will never
be achieved because the scales will always be tipped in favour of users.
Creators have made many compromises in the case of this bill. We are prepared
to accept it as is. Therefore, we ask that you adopt it without amendment so
that we can move on to Phase III.
The information highway and other new technologies are already taking over and
here we are still attempting to decide how outdated technologies can be used.
Yesterday, Michel Hétu from the Copyright Board explained to you that he
had appeared before the Senate committee in 1988 during the phase I review. I
was also present during phase I when the act was amended.
I started working in the creative field in 1976. Already there was talk of
reviewing the legislation and updating it. I simply want to stress how urgent
these amendments are. We have waited too long already. We urge you to adopt the
legislation as quickly as possible without amendment. I would now like to
introduce my colleagues from SOCAN.
Mr. David A. Basskin, Barrister and Solicitor, Executive Director, Canadian
Music Publishers Association: The Canadian Music Publishers Association was
founded in 1949. Our members represent the vast majority of musical works which
are owned, administered, performed and reproduced in Canada. For licensing
purposes, our organization represents more than 30,000 copyright owners and,
generally speaking, we are pleased to see this bill in front of the Senate. We
are delighted to be here today, after so many years of effort on the part of so
many people. I appreciate this opportunity to address some brief comments to
We support this legislation and urge you to pass it in the form in which it has
been presented to you. As the minister stated yesterday, the bill is the result
of compromise. My colleagues have noted that, and I think many other people
coming before you will note that as well.
This is not a perfect bill. The history of copyright legislation has always been
one of compromise. Copyright is always a matter of balancing the interests of
creators and users. It will never be entirely the way one side would wish it to
be. This is inevitable. While we all do our share of lobbying and attempting to
persuade people, I think we are all resigned to the fact that the bill will be a
series of compromises. On that basis, I can tell you that the music publishers
whom we represent would like to see this bill passed in the form in which it
The users have artistic objectives in deciding which works they will use, but
the concerns of users, as opposed to those of creators, are largely related to
property. The concerns of the creators of works are primarily artistic.
Obviously, they are related to making a living. The primary distinction between
creators and users is that copyright is all that we have. Users of works always
have other sources of income. Educators receive financing from the public and
their students through tuitions, et cetera; broadcasters can exclusively sell
and control the commercial time, and so on.
This is all we have. Copyright is, in many ways, life and death to us. There is
no common law of copyright. It is all contained within the Copyright Act. As
Madam Fortier and others have said and will say, it is crucial to get on with
the job of passing copyright legislation now. This bill will not bring our law
up to date. It will update it to perhaps a decade ago. Other issues related to
the information highway, and other issues in Phase III -- as those of us who
have been in the process for a while are used to calling it -- are vital and we
must have them.
The music publishers before you here support the major initiatives in the bill.
We certainly support the creation of a levy on the sale of blank recording
tapes, because the use of those tapes robs us all of revenue that would
otherwise be driven into the sale of records, tapes and other sound carriers.
We support the creation of a neighbouring rights regime to the extent that it
does not harm the interests of authors and publishers. We particularly support
the creation of a statutory damages remedy and other measures in the bill that
will make it more affordable for copyright owners to protect their copyrights.
As things now stand, it is almost impossible for anyone to afford a copyright
infringement suit, meaning that infringers can hide behind the cost of
litigation. The elements of the bill that make it a little more affordable for
copyright owners to pursue remedies are very important. They are a good balance
of the interests of both the public and the copyright owners.
Finally, the exemptions in the bill have been a subject of continuous
controversy. Generally speaking, we think the exemption package in the bill
strikes a fair balance, but this brings me to the issue that you will probably
have more questions about than any other -- and certainly the one on which the
broadcasters will be speaking to you in the greatest detail <#0107>
namely, as Madam Fortier has already discussed, the creation of the so-called
ephemeral exception, clause 30.8 of the bill.
I will go back a step or two to ensure that we have set the context properly.
Owners of music copyrights have primarily two streams of rights that flow from
the copyright: the right to perform the music in public, which our friends at
SOCAN represent; and the right to control reproduction of the music -- that is,
reproduction of the music into a film or television program as well as
reproduction of the music on tapes, CDs or other sound carriers.
The recording of music into programming is not a trivial matter to those who own
copyrights. Today, most authors want to have the right to approve the manner in
which the music is used in programs. In any event, as confirmed by the Supreme
Court in the Bishop case in 1989, this is a right that belongs exclusively to
the copyright owner.
The broadcasters came before the standing committee of the other place and filed
a brief saying that it was too difficult for them to obtain clearance to use
music on a timely basis. The word "clearance" is simply industry
jargon for "permission to use music". Copyright law today requires the
user of music, when he reproduces it into a film or a television program, or on
the radio, to obtain the consent of the copyright owner. There are, of course,
millions of copyrights out there. The broadcasters came before the standing
committee and said that they cannot obtain these rights on a timely basis. They
said that they recognize that people have rights, but that if they cannot obtain
them on a timely basis they would be held up in making programs and they would
like to see the law of Canada reflect a balance to give them an adequate
opportunity to have access to the works.
Naturally, those who own and control the works would like to see some payment
flow from the use of their works, particularly for the reproduction right. This
strain between the desire of the broadcasters to obtain rights on a timely
basis and the desire of those who own the works to get paid for their use is
what has lead to the controversy over the so-called ephemeral exception. I say "so-called"
because the term "ephemeral" tends to imply in our minds "trivial"
or "incidental". Literally, it means "short-term use".
The argument of the broadcasters was that they cannot get the rights on a timely
basis. I think that the ladies and gentlemen in the other place did a pretty
good job of balancing these concerns. The broadcasters raised the spectre that
the new statutory damages remedy would be applied to take what would otherwise,
in their minds, be incidental uses of music and expose them to massive amounts
of financial liability, which is a little extreme because they could not get
the rights "on a timely basis".
Clause 30.8 grants the broadcasters what they asked for. It gives them a 30-day
window to reproduce music without obtaining the permission of the users. This
is a carve-out from the rights of authors and copyright owners but, in the view
of the House, this was an appropriate balance. We think that, in terms of the
overall balance of the bill, we can live with this if that is the choice before
us. We think it is very instructive that the bill carves out an exemption from
the exemption in the case of those rights which are made available by a licence
from a collective.
This is interesting because it addresses directly the concern that was raised by
the broadcasters. The broadcasters said they cannot get the rights on a timely
basis, and the bill reflects the fact that rights that are available on a bulk
or blanket basis from a collective are in fact available on a timely basis and
in advance, and so that particular concern of broadcasters has been met.
When the broadcasters appear before you, I anticipate they will say some of the
things they suggested in a recent press release and I should like to take the
opportunity to address their concerns.
They are suggesting that under the law, radio stations will have to dump and
rerecord all their music every 30 days. The argument they are making is that
the bill will require them to get rid of recordings made after 30 days. As the
law stands today, the copies that broadcasters make are an exercise of our
rights which we frankly do not bother pursuing. Our members have no intention
now, and have never had any intention, of pursuing this particular right. In
other words, the broadcasters are raising a sham argument. It is not a problem
today and we have no intention of making it an issue in the future.
We have already discussed the issue of a collective. They argue that it is not
appropriate for a collective to have an exemption from the exception.
Obviously, we disagree.
The primary argument the broadcasters are making is that they will be exposed to
a tremendous amount of financial damage by this exemption. In practice, this
will not be the case. Rights are available for programs on an every-day basis
from licensing organizations and from copyright owners directly. To make one
distinction about what this fight is really about, we think there are certain
occasions on which broadcasters make reproductions of music that are essentially
of a trivial nature. For instance, in coverage of the Santa Claus parade, if
the marching bad goes past playing White Christmas by Irving Berlin, a
copyrighted song, and a recording is made in the course of covering the parade,
we do not pursue that and have no intention of doing so, even though,
technically speaking, it is a use of a reproduction right. Under the exemption
in the bill, they would be covered to use that tape for 30 days without
obtaining anyone's consent provided they met the technical requirements of the
legislation, which we do not think are onerous. The distinction is where the
broadcaster creates a program ab initio from scratch and decides to use a
particular piece of music -- the distinction in this case being a program by a
broadcaster about Santa Claus parades or shopping in the holiday season, and he
or she decides to use White Christmas in a scene. That voluntary choice to use
programming represents the use of a right that belongs to someone else. For the
broadcasters to suggest -- which I have always believed and have said on many
occasions is their real agenda in this exercise -- that they should get that
right at no cost because it is more convenient for them is simply wrong. It
would be as wrong as my suggesting that they should not have the right to sell
their commercial time.
Music publishers are in the marketplace and are licensing their songs and doing
business in their property under copyright law, which is the only protection we
have. We believe the bill strikes a fair balance and, particularly with regard
to the ephemeral exception, should not be enlarged any further because the only
arguments that can be made for enlarging it further are: "Give us their
property for nothing." Those arguments will not be made to you in that
form, but that is the underlying agenda of the broadcasters, namely, something
I look forward to your questions and once again thank you for the opportunity to
appear this morning.
Mr. Paul Spurgeon, General Counsel, Society of Composers, Authors and Music
Publishers (SOCAN): On behalf of the Society of Composers, Authors and Music
Publishers of Canada, I should like to thank you for giving us the opportunity
to appear before you to express our views concerning Bill C-32. I am here with
Mr. François Cousineau, a well-known Quebec-based composer, who is also
a SOCAN director and its past president.
To make it easier for to you follow our presentation, I would ask you to turn to
our two-page table of contents of our submission to the committee. I will not
waste your time going through the submission word for word; however, I should
like to highlight just two key areas of concern that SOCAN has. After that,
hopefully, there will be some time for questions.
First, I should like to deal with the fundamental question of who will pay for
these new rights that the Government of Canada is creating called "neighbouring
rights". As you can see from the top of page 2 of our submission's table
of contents, we believe that the users should pay and that clause 90 of Bill
C-32 should therefore be tightened to ensure that Parliament's intention is made
Second, after I finish, Mr. Cousineau will discuss our views on how copyright
royalties should be determined. He will therefore deal with clause 66.9(1) of
Bill C-32 and discuss the role of the Copyright Board and the collective
administration of copyright.
Allow me to turn to the first point of SOCAN's presentation, which is a question
that members of Parliament frequently encounter in legislative committees all
the time. The question is, of course: Who pays? The Government of Canada
answered this question when Bill C-32 was tabled in the House of Commons on
April 25, 1996.
That day, the ministers of Canadian Heritage and Industry issued a press release
These measures are about fairness and they acknowledge the rights of creators to
receive recognition and remuneration for the use of their works...
It is therefore clear that Bill C-32's intent is to require users of works, and
not other creators such as SOCAN's members, to pay for neighbouring rights. Do
not forget that SOCAN's members are authors, the creators of the original
underlying work, the song, that goes on the recording. The neighbouring right
is the recording itself, the production.
SOCAN's performing rights have been recognized in Canada for seven decades. It
is therefore important that Parliament clearly express its intent that
composers, authors -- in other words, lyricists -- and their music publishers,
not be required, either directly or indirectly, to compensate or to make room
for Bill C-32's new neighbouring rights.
If Canada now wishes to recognize the neighbouring rights envisaged in the 1961
Rome convention, users must pay new and additional royalties regarding these
rights. In other words, the royalty pie must expand to accommodate the new
rights. Our expanding pie theory stands in stark contrast to the so-called cake
theory advocated by some users.
For example, the CAB Radio Board stated in their submission on Bill C-32 to the
House of Commons committee that broadcasters support the "cake theory"
that the amount payable for the use of sound recordings should be a fixed
amount. This means that if the cake, the fixed amount, is to be divided among
more rights holders, then they will get smaller slices.
Parliament has provided both large and small radio stations with a generous
threshold exemption in addition to a three-year transition period for larger
stations. In addition to these generous exemptions, we do not believe it is
fair for the users to now say that they do not intend to pay for neighbouring
rights and SOCAN's members should accept smaller slices.
The last point I should like to make is that the question of who is to pay for
Bill C-32's neighbouring rights is a fundamental policy issue that should be
decided by Canada's elected representatives. SOCAN believes that Parliament
must decide this pivotal question rather than leave it unclear and let the
Copyright Board or the courts decide.
In order that its intent is respected, Parliament must ensure that Bill C-32
contains what is commonly referred to as a "non-derogation clause".
This clause must make it clear that the addition of Bill C-32's new
neighbouring rights must not prejudice, dilute or derogate in any way from
SOCAN's distinct and long-standing performing rights for authors.
It is important to note that SOCAN did not dream up the concept of
non-derogation clause. The very first article of the 1961 Rome convention
stated that neighbouring rights must leave intact and not prejudice the
performing rights of SOCAN's members, authors.
As you can see on page 16 of SOCAN's 19-page submission, we believe that clause
90 of Bill C-32 is a step in the right direction. However, it needs some
fine-tuning. It is a technical amendment we are requesting. It is just four
words we want removed. Those words are "in and of itself" or, in
French, they are three words "par elles-mêmes".
We have provided in our appendix to our submission legal opinions from the law
firm of Gowling, Strathy and Henderson that conclude that these words are
superfluous and unclear. I should note that we are presently involved in
hearings before the Copyright Board on commercial television. During one of the
breaks, I overheard one of the counsel for the broadcasters chuckle to himself
about what clause 90 really was. His statement was that it was a "non-non-derogation
clause". I think that says it all. In our view, the introduction of the
words "in and of itself" create ambiguity where it is not needed.
I conclude by saying that when it comes to appreciating the importance of
ensuring that legislation clearly express Parliament's intent, SOCAN speaks
with experience. In particular, we do not wish to relive the unfortunate
experience that resulted from the unclear wording used when the Copyright Act
was amended in 1989 to permit the licensing of music carried by cable systems in
Canada. If you recall, that involved a definition of the phrase "musical
work". Due to a lack of clear statutory guidance, several years of costly
litigation ensued. In the end, to ensure that Parliament's intent was clearly
expressed, a further amendment to the Copyright Act, Bill C-88 was required, at
a great cost in time and money both to Parliament and to SOCAN's members.
Some of you may recall that SOCAN appeared before this committee in 1993 during
the Senate's consideration of Bill C-88. This is why this minor technical
amendment to clause 90 is so important to SOCAN. We simply cannot afford to
repeat the mistakes of the past.
Now that we have dealt with the issue of who pays, let me turn things over to
our past president, François Cousineau, who will discuss how copyright
royalties should be determined.
Mr. François Cousineau, Director, Société canadienne des
auteurs, compositeurs et éditeurs de musique: Before I discuss the role
of the Copyright Board and how copyright royalties are determined in Canada, I
would like to step back for a moment and place things in their proper
As you know, under the Canadian collective system of performing rights
administration, SOCAN is Canada's sole performing rights society.
However, we are not a monopoly because, unlike a monopoly, we cannot restrict
supply and set our own prices. The Copyright Board establishes royalties, not
The collective administration of performing rights is not a new concept. It was
developed in its present form over a century ago. The Parliament of Canada has
regulated this system since 1931.
Over 60 years ago, when the Government of Canada set up the Parker Commission to
review how copyright royalties should be determined, the decision-makers really
had the same two options available to them as you have today.
First, they could decide to let ministers and their government officials
legislate the amount of royalties. The second option was to create an
arms-length, quasi-judicial tribunal with the technical expertise and the
procedures required to ensure that everyone had an opportunity to be heard.
In 1936, the Government of Canada chose the second option and the Copyright
Appeal Board became responsible for the regular review and approval of
royalties payable to performing rights societies like SOCAN.
Fifty years later, the Copyright Appeal Board was replaced by the current
tribunal, the Copyright Board, in 1989.
So that is how we arrived at the system we have today for determining the amount
of copyright royalties in Canada.
Let us now look to the future by answering the following two key questions.
First, does the current system work? Second, are the changes Bill C-32 is
proposing in the best interests of all of the parties concerned?
With respect to the current system, I believe that the royalties that the
Copyright Board establishes for SOCAN are too low. However, I know you will
hear from many of the people who use our creative works and they argue the
royalties are too high. I have heard it said that in politics, if both sides
are complaining, you must be doing something right.
I think it is fair to say that, although the Copyright Board system is not
perfect, responsible officials are doing their best to balance the interest of
creators and users in Canada.
Let me conclude my remarks by stating unequivocally that SOCAN believes the
changes Bill C-32 is proposing for the Copyright Board should not be enacted in
their present form.
If you turn to page 18 of 19 of our submission, you will see that we have
reproduced section 66.91 near the top of the page. I would ask you to refer to
page 18 of the brief before you. I will dispense with reading the provision.
This clause is unprecedented because Parliament has never provided such broad
and open-ended powers to government ministers and their officials to direct the
activities of this quasi-judicial tribunal.
It is not exactly clear how these undefined and vast powers will affect the way
copyright royalties are determined. However, it is clear that the transparency
of the process will be diminished because copyright users and owners will be
forced to lobby ministers, their political staff and officials to ensure that
Cabinet's regulations do not adversely affect their interests.
The democratic spirit, in its purest form, proclaims, recommends and
institutionalizes the separation of legislative, executive and judicial powers.
That is why a quasi-judicial tribunal should be allowed to function
In sum, section 66.91 could transform the Copyright Board from a quasi-judicial
tribunal into a political instrument of the government of the day.
I refer you to the next to last paragraph on page 11 of 19 of our submission
which reads as follows:
For example, during report stage in the House of Commons, members of the Bloc Québécois,
Reform Party, New Democratic Party and the Progressive Conservative Party voted
in favour of SOCAN's request to eliminate section 66.91.
The liability for a copyright licence and the amount of that liability must be
determined by an impartial adjudicator that only considers the facts and
arguments submitted by the parties. Once a tribunal becomes subject to
directives from the political arena, it runs the risk of quickly losing its
quasi-judicial nature and its credibility in the eyes of both users and
SOCAN therefore submits that section 66.91 should be deleted from Bill C-32.
Senator Roberge: We are well aware of section 66.91 and it has caused us a great
deal of concern as well. However, if we move to amend or delete this clause,
and Parliament is dissolved because an election is called, then the bill will
not be adopted. If you had to choose between going with the bill in its present
form, or proposing amendments, what choice would you make, bearing in mind that
elections could be called and Parliament could be dissolved?
Mr. Cousineau: I refuse to make that kind of choice, because it is too simple.
It is like telling a child that if he does not clean up his room, he will not
go to the movies. Parents can do that.
In this case, it is not our fault if this discrepancy appeared in the bill. We
have followed this bill closely since it was first tabled. We did the lobbying
we had to do. We believe the legislation is important and fair. We are not
talking about changing anything, only about removing a clause which allows
government ministers and officials to interfere in the activities of a
quasi-judicial tribunal. I cannot accept that. I wish I could give you a more
substantive answer. I would like to see Bill C-32 adopted, but after this
clause has been deleted.
You have to understand that I cannot change my position. I would be displaying a
lack of integrity, and above all, a lack of total fairness.
Senator Roberge: I understand and I can appreciate this recommendation because I
too feel that legislative and judicial powers should not be confused.
You were talking about virgin cassettes, Mr. Basskin. If people buy virgin
cassettes, it seems to me that they are doing so in order to reproduce
something. Why are people objecting to it? Are there other users?
Mr. Basskin: Obviously there is a wide range of uses for tapes. It has been
suggested that church sermons or dictation or books for the blind might be
uses. It is also obvious that, in the production of music itself, blank
cassettes are used in the production of commercial recordings or even recordings
in the studio.
The research done by government and by industry associations has led to the
conclusion that the vast majority of the tapes which are purchased are used to
reproduce copyrighted works. In fact, when I made the presentation in the other
place, I was able to demonstrate by simply putting slides of audio cassettes up
on a screen. These were cassettes that I had purchased the week before in dollar
stores on Yonge Street. You could do the same thing today by going down to the
Sparks Street Mall and looking at tapes all day, if you like. Virtually every
tape you see has indications on the packaging saying "best for CD", "perfect
for CD", "ideal for CD". There is even a brand called CD-it. The
vast majority of uses are for copying of pre-recorded music.
Speaking on behalf of my members <#0107> and, I suspect the view is shared
by those in the recording industry who will be attending before you later -- we
have no problem with the concept of establishing a tariff for the collection of
this levy which exempts books for the blind or similar purposes. We have no
difficulty with exemptions for people with perceptual disabilities and for tapes
used for professional purposes such as the making of original recordings of
music, obviously, but the vast majority of tapes sold in this country, as in
every country around the world, are used for copying pre-recorded music. That
takes away from the income of authors, composers and performers.
Senator Roberge: Could you specify what you mean by "vast majority"?
Mr. Basskin: I do not have the studies before me, unfortunately, but my
information and belief is that at least 75 per cent of the tapes which are sold
are sold and used for this purpose. There simply is not enough dictation going
on in this country to account for the upwards of 40 million tapes a year that
Senator Roberge: Thank you.
Senator Grimard: I too have some concerns about section 66.91. Your point is
well taken. However, when you suggest that this provision be deleted, what is
it exactly that you are saying? Are you proposing an alternative or do you wish
to continue on with the current system of judicial tribunals?
Mr. Cousineau: I simply want us to continue working with the Copyright Board as
it now exists. This quasi-judicial tribunal has worked perfectly for 60 years
and renders decisions based on fact, not on political directives. We have no
need of this provision. We do not need the government interfering in these
decisions. By deleting this clause from the bill, we maintain the status quo
which works relatively well. That is what I was trying to explain in my
presentation. I feel that the royalties we receive are not high enough, while
others believe they pay too much. Ultimately, an independent tribunal makes
Senator Grimard: I would like you to comment on the new neighbouring rights. Is
there a danger that the introduction of these rights will adversely affect the
royalties that traditional holders of copyright receive? Would you care to
comment on this very important point?
Mr. Cousineau: You are referring to the non-derogation clause. I must point out
that neighbouring rights are different from performing rights. All of the
countries that have introduced neighbouring rights have taken care to
distinguish them from copyright, as we are not talking about the same thing.
These countries have taken care to introduce a non-derogation clause clearly
stipulating that neighbouring rights would be paid with money other than
copyright royalties. That is what the government has done with clause 90. It
has taken this situation into account. So far, so good.
This brings me to the four words that we want deleted from the bill. These four
words give a quasi-judicial tribunal a roundabout way of not complying
completely with the non-derogation clause, which must be an absolute clause, as
is the case in all of the countries that we consulted where neighbouring rights
have been adopted.
The government was wise to insert a non-derogation provision, but because of
these four words, we believe that this clause could give rise to costly
litigation and that authors and composers would stand to lose a portion of the
already meagre revenues they receive. We must remember that the context of Bill
C-32 is the Copyright Act. Copyright does not mean the Sony Corporation, or
radio stations. I have been interested in this issue for close to 20 years now.
Senator Spivak: Why do you think the government brought in clause 66.91?
Mr. Cousineau: I have no idea.
Senator Spivak: And the word used is "may", not "shall".
Mr. Cousineau: In my opinion, this does the leave the door open a little. When
we have the right to do something, we often go ahead and do it. Take, for
example, my children. When they reach the age of 13, they acquire certain
rights. The same thing applies here.
Senator Spivak: If it is not broken, why fix it?
Mr. Cousineau: That is why I want this clause deleted. All it does is give the
political powers an opportunity to interfere in something that works quite
well. In law, we learn that it is important to separate powers.
Senator Spivak: It is difficult to understand why this clause was included.
Mr. Cousineau: Yes, it is.
Mr. Spurgeon: If I could take a stab at your question, there are some regulatory
tribunals which have similar kinds of provisions applied to them. In this case,
we have a quasi-judicial tribunal. Do not forget that the rights of composers
have been removed. They depend on this tribunal to set their salaries, in
effect. They depend on this money. The rights have been expropriated. SOCAN must
go to the tribunal to have the rates set.
This is different from other regulatory tribunals. This is a quasi-judicial
tribunal whose sole purpose is to fix the royalties which go to creators of
musical works. It has other roles as well, obviously, but that is its prime job
as far as SOCAN is concerned.
To answer your question, yes, in other areas there have been what I would call
insidious legislative provisions which provide for political interference in
decision-making, but that is in other regulatory areas and not in a
quasi-judicial setting which involves property rights and compensation for
property rights. There is a big difference.
Senator Grimard: I have a question for Ms Bertrand-Venne. Am I to understand
that despite its shortcomings, you want this bill to be adopted?
Ms Bertrand-Venne: I will repeat what I said at the outset. Since our members
are concerned about their proprietary rights, they do have some mixed feelings.
Reproduction rights have been affected by the introduction of an exception for
ephemeral recordings and format transfers and have been diminished somewhat in
the process. SODRAC still has the non-derogation clause to fall back on. What I
wanted you to understand today is that authors and composers have made enormous
sacrifices. As Mr. Cousineau mentioned, the Copyright Act is their bread and
butter. Basically, Bill C-32 achieves its objective. Let me repeat for you
something that Robert Léger of Beau Dommage said recently to a board of
directors: "The legislators want us to be overjoyed because they prevented
a disaster from happening". This statement more or less mirrors the state
of mind of authors and composers. I did not go into all of the exceptions that
pertain to educational institutions, museums and libraries. How do you expect
authors and composers to be adequately compensated once their works have been
made commercially available through these institutions via the information
How is a contemporary author and composer to understand that a salary is paid to
the museum curator on down to the janitor, while in his case, the legislator
has decreed that the value of his work is to be negotiated by the Copyright
Board. A system is in place to determine what he is worth, and furthermore, the
legislator dictates the terms of his remuneration.
In the case of these exceptions, it is somewhat like telling a lawyer; when you
practice family law, you are not paid, but when you practice copyright law, you
are. That is the situation that we are facing. It is very difficult for me to
answer your question, because Bill C-32 places authors and composers in a very
difficult situation. They wanted to see improvements in their living conditions,
but all they got were crumbs and ultimately, their basic rights are being
Therefore, in answer to your question, I cannot say that we are happy. However,
I do hope that we will see further improvements in Phase III of the review.
Senator Grimard: How would you respond to the same question, Ms Fortier?
Ms Fortier: I believe I made my position very clear. With respect to
reproduction rights and the non-derogation clause which applies to collective
societies, I have to say that the general licensing agreements already
negotiated with broadcasters are protected. I will be able to negotiate with
radio stations over reproduction rights, because what radio stations want is
the right to copy works onto their hard programming disk.
What these stations do is take a CD and copy it onto the hard disk in order to
build up their programming repertoire. Once these works are transferred onto
the hard disk, they are also on the Internet. The day's or week's Top 30 are
not on-line. This is a new reproduction right. Once these works can be accessed
via the information highway, we have no control over them whatsoever. There are
many instances of copyright infringement on the Internet. How is it, you may ask
yourselves, that museums and libraries have sites on the Internet and reproduce
musical works? Users can listen to them and download them on to their own
computers. They can print out sheet music. Young people create their own home
pages. I have been monitoring a site where the words to as many as 750 Quebec
songs are available without authorization.
The non-derogation clause will enable me to negotiate transfer rights with
broadcasters. The private copy will be an new source of revenue in the field of
To answer an earlier question, cassette tapes used by persons with visual
impairments contain four tracks. They are quite different from any of the other
commercially available tapes. Therefore, the issue is irrelevant here.
I urge you to pass the legislation as is as soon as possible because we want to
proceed with Phase III of copyright review.
Senator Perrault: In another life many years ago, I was associated with the
broadcasting industry. I will never forget the way that record producers haunt
radio stations, begging for their selections to be played. They say that they
need this kind of publicity in order to sell their music.
There must be a compromise and a realistic assessment of the situation. Many
great creative works would be unhonoured and unsung without the active
cooperation of FM and AM radio stations. You know it and I know it. If a
selection is never played on the top radio station in a region, it will not sell
very many copies to the general public. That must be recommended as one of the
fundamentals of the business. Playing a selection on a radio station is a form
of exceptionally valuable publicity. In saying that, I support fully the right
of authors, performers and record producers to receive fair compensation for
their creative genius, but do not you think there is a compromise here?
Ms Fortier: That is what I said, Senator Perrault. We have made some major
concessions here. There is no denying that creators, the music industry people
and broadcasters are partners. However, remember that it is we who supply the
content. When a radio station hires a talking head, it pays that person. All we
want is to be paid for the use of our work. Our status as partners in this
process is undeniable.
Senator Perrault: I agree with that, but I recall that these people are paid
generously to work the radio station circuit to beg that their recordings be
played. They must see in the radio station a valuable form of assistance which
will enable them to realize profits. I am saying that we must recognize that as
a factor in establishing what is fair.
Ms Bertrand-Venne: I should like to add that it is a privilege for a radio
station to have a licence in Canada.
It is a privilege to hold an operating licence. I recently testified at a
hearing on the application for the latest FM band station in Montreal, and it
is important to know something about how broadcasters package their musical
offerings in order to obtain an operating licence. Music is at the heart of
these stations' commercial activities. That is what we have to understand. When
you tell a songwriter that he should be grateful a station is promoting his
music, it is a little like the Canadian Association of Restaurateurs telling
beef producers that they should be happy that their beef is being marketed by
Provigo and Loblaws.
While it may be true that radio stations do promote musical works, they also
commercially exploit the work of record producers, performers and songwriters.
Here in Canada, the Broadcasting Act is unique in that it enables broadcasters
to exploit these works and become multimillionaires. We are very proud of this
fact because they are not in competition with the Americans or the Germans. They
are home-grown commodities and we are proud of them. However, it is quite
another matter to target us with these exceptions and to prevent songwriters,
performers and producers from enjoying the fruits of their labour.
I would remind you that the lives of the people whom we represent are dictated
by a statute. Ours is the only industry where the user can complain and be
granted exceptions. What company would not dream of not having to pay for raw
materials? Go tell that to Domtar and see how it reacts. That would be
Mr. Basskin: Obviously, I agree with what my colleagues have said. The bottom
line is that of course people will come to radio stations asking them to sell
music. The last time I looked, broadcasters employed salesmen to sell their
advertising time to advertisers. It is a limited asset. The government only
hands out licences to a certain number of radio stations. Of course there is a
relationship between the two. However, in the determination of the value of
these rights, let the marketplace do its job. If the parties cannot arrive at
an agreement between them, they can refer themselves to the Copyright Board,
which has the powers of a court, and it will hear both sides.
An assumption is made, particularly in the arguments from the broadcasters, that
the owners of copyright are operating in a heavy handed or dictatorial fashion
and that the broadcasters are somehow the unwilling victim of unilateral
decisions made by the rights owners. The Copyright Tribunal, which exists to
resolve disputes and rule on tariffs filed by any rights holder with any group
of users in this country, is a very clever innovation which ensures that people
will have chance to be heard. The hearings are expensive and complex, but at
least they serve that public policy goal. I do not think there is any manifest
unfairness being worked here at all.
Senator Perrault: There must be fair play for performers, recorders, authors,
and so on.
I have a brother who writes books. Of course he wants fair compensation. The
library may be the worst enemy of a writer, too. I am not unaware of the
problems, but I remember the integral role played by these marketing people who
work for the record producers. They work the radio station circuit and
ingratiate themselves with disc jockeys and buy them gifts. They must see some
value in having a friendly association with a radio station.
At the present time, most broadcasters are losing money. It is a rare market
with a highly profitable radio station right now because of the turbulent
atmosphere. I am from Vancouver, la Colombie-Britannique, la belle province
bilingue de l'Ouest. We have a situation there where only two radio stations
are making money. That is not the basis upon which to determine how much an
author or a composer should receive, but these are the facts of life and the
current economics of broadcasting.
Senator Maheu: I want to come back to Senator Roberge's question to Mr.
Cousineau. I am somewhat surprised to hear you say that you will not hear of
it, that this is not feasible and that clause 66.91 must be amended as you
The fact of the matter is that sometime in the next two weeks, an election could
be called. Perhaps you do not understand that when the Senate proposes some
amendments to a bill, this bill must be referred back to the House of Commons
and debated in that forum.
It is all well and good to say that you do not want this to happen, but if it
did, would you be better served by accepting a bill that is not perfect, I will
admit, and perhaps by doing some lobbying during Phase III, than by rejecting
it if your amendments are not brought in?
Mr. Cousineau: My answer to that is that it is certainly not our fault for being
in this situation today.
Senator Maheu: It is not our fault either.
Mr. Cousineau: I am speaking for all of us. We are not the ones who created this
sense of urgency. We are not the ones who decided to go to the poles after
three and a half years in power. A government's mandate can last up to five
Senator Maheu: I do not wish to talk politics. I am merely asking you the
Mr. Cousineau: While I may appear inflexible, I think I do understand the
situation in which we find ourselves. I also have to be logical with myself.
The amendments that we are proposing to clause 66.91 are structural in nature.
All we are asking is that four words be deleted from this provision. In the
past, governments have considered two minor amendments like these and moved on
Senator Maheu: It has already rejected these proposed changes.
The Chair: Mr. Cousineau, you have to understand that we must follow the same
course of action, however minor the amendment.
Mr. Cousineau: You must also understand that I must continue to defend these
amendments. I base my actions on the fact that three amendments were recently
approved in the House. I believe one concerned the GST, another New Brunswick
and I cannot recall the exact nature of the third one. I believe that miracles
can happen if we want them to.
The Chair: We will give these proposals due consideration.
Senator Forrestall: You are not keeping in the back of your mind what will
happen at the end of next week. This has nothing to do with Don Quixoteism or
chaotic situations. There is a date out there and it may be all or nothing.
A question came up last evening in evidence being presented by the minister
about the GST. You reminded me of it when you mentioned that dastardly word.
Have you thought about the implications of the blended sales tax on the
revenues that will be raised with respect to these blank tapes?
Ms Fortier: These are not taxes, but rather royalties.
Senator Forrestall: There is no suggestion whatsoever of royalty. Tax is spelled
T-A-X and means "harmonized sales tax". It is levied against every
material good that I know about, but it is 15 per cent.
Ms Fortier: The royalties collected by the collective societies are already
subject to the GST, or to the TVQ in the case of Quebec. The royalty on blank
tapes to be paid by the importer or the manufacturer will be added to the
wholesale price. The taxes that the average citizen will pay when he purchases
his tape from the retailer will be collected from the distributor. I do not know
if that answers your concern.
Senator Forrestall: No, it does not. I raise it because, when we get into Phase
III and electronic transmission, the chairman and my colleagues will appreciate
that all of this will become somewhat redundant with respect to the bill. When
we get into Phase III, the dilemma that will be facing administrative bodies
such as provincial and federal governments and the question of tax revenues
will be horrendous. This will be a real problem. Whether or not it occurs to you
because it is such a remote thing, the fact is that it is 40 million tapes
today. In 10 years time -- that is, if Cape Breton does not slow down -- it
might be 400 million tapes. That is an awful lot of money. My fear is that
there may be some slippage because we are talking about a royalty charge that
goes back to the creator or the producer. I am not all that sure that the
thinking about this whole area is clear yet. I would not want to see any
diminishment of the funds flowing back to the creator.
Mr. Basskin: If I could make a brief comment on that, you raised the spectre of
the impact of electronic distribution on blank tapes or blank recording media,
as the act refers to it. I do not think there will be any significant reduction
in the number of blank media that are sold. I do not think the tax will have
that much of a direct impact. It would be a mistake to think that electronic
distribution will render home recording or private recording irrelevant. In
many ways, it may enlarge it. I do not think we will see the electronic highway
coming in through antennas on people's hats. Mobile use of music and mobility
is very important in our culture and is getting more important. I believe that
whether the music coming to people on CDs or on tapes they buy in the store or
through music they download from on-line services, there will be continuing
demand to make copies for their own personal use. Without the measures in this
bill, it will continue to be an open drain on the revenues of those who create
and produce the music and the recordings.
Senator Forrestall: Keep in mind that the article that is now worth $1 will be
worth $1.50 plus 15 per cent. What happens to that 15 per cent? Are you asking
the creators of cultural property in Canada to become tax raisers for the
Government of Canada? I think not.
Mr. Spurgeon: I can explain briefly what SOCAN does for both the GST and the
blended tax. It is a flow-through. We collect the money from the music users.
Let us say they owe us $100. We collect that $100, plus GST. We take that GST
money and pay it to the government. There is no GST credit or anything like
that with the individual composer involved.
The money simply flows through to the government. We collect it from the music
user and pay it to the government. That is how we are doing it. It is not quite
the same, but currently we are working out the details in the maritime
provinces with respect to the collection of the blended tax.
It is a very simple flow through. We made representations to the government when
they introduced the GST several years ago and they agreed that, with the
collective administration of copyright, it made sense to do it that way.
The Chair: Mr. Basskin, the United States has recognized neighbouring rights for
digital radio offered by subscription. The so-called pay radio will arrive in
about five to ten years. How will this affect payments made by Canadian
broadcasters? Will there be reciprocity?
Mr. Basskin: First, it is important to distinguish between services that
distribute music today via satellite to users or by Internet users with what
might come in the future.
There are services today, for example, if you go to "WWW.audionet.com"
on the web, where you can find a gateway to literally dozens of radio stations
and music services that are distributing the equivalent of radio on the World
Wide Web today.
In some countries there may be some amounts collected for that purpose for
performing rights, but in some countries they are not. The future that may
develop and may be much more important is not the equivalent of broadcasting on
the World Wide Web but the equivalent of the sale of recordings on the web. In
other words, the Web or its successor or some form of Internet may become a
means of distribution for recordings that will supplement or possibly even take
the place of the sale of CDs, records and other so-called sound carriers today.
It would be foolish for any of us to assume we know exactly what shape the
system will be in the future. However, the web or its successors will not go
away. They will have a major impact on the distribution of music and possibly
other forms of entertainment such as films and television programs for all we
Broadcasters will have to accommodate themselves to this. Indeed, virtually
every major broadcaster has a presence on the World Wide Web today. Probably
the greatest single search that is going on is for broadcasters and others who
run web sites to find a way to get paid for the effort that is required to put
that information on line.
It is indeed possible that the revenue of broadcasters and creators may be
affected. These are issues that certainly the Information Highway Advisory
Council and other task forces have looked at. We think these issues should be
dealt with in Phase III of copyright legislation. However, we cannot get there
without Phase III. That is why it is so vital we deal with these subjects.
Other issues such as the term of the copyright itself, which is being lengthened
in many other territories, will have a negative impact on Canadian creators
unless we similarly extend our law. These are not in Phase II. We hope they
will be in Phase III, and we have to get there from here.
The Chair: Our next group is from the Canadian Booksellers Association, the
Canadian Alliance of Student Associations, the Canadian Federation of Students
and Follett Campus Resources.
Ms Jane Cooney, President, Canadian Booksellers Association: Honourable
senators, in addition to being the president of the Canadian Booksellers
Federation, I am also the owner of a bookstore in downtown Toronto called "Books
We should like to thank you very much for hearing us. We know that this is an
extremely technical bill that you have been assigned to deal with, and you have
our condolences or congratulations.
As booksellers, we represent approximately 1,250 booksellers of all sizes,
shapes and even smells these days, because, as many of you probably know, some
of us are also in the restaurant business.
We also represent the millions of Canadians who buy books in this country, as
well as many students on campuses. Our organization represents the college
bookstores, the retail chains, some superstores and all the little ma-and-pa dépanneurs
of the bookselling business as well. Those groups constitute the majority of
We are a major component of the book industry. We have always supported all the
cultural initiatives of the government. We are anxious to have very balanced
copyright legislation. We have supported Canadian authors. We see ourselves as
kind of the farm team. New Canadian authors get shown in our bookstores first.
It is because of us that many of them have become very successful. In fact, we
sell more than 50 per cent of the output of Canadian publishers in this country.
We work in a very changing environment right now. The word "turbulent"
was used to describe the previous industry that was being discussed. I could
say that ours is the same. There has been the introduction of super-stores into
our setting as well as the Internet through which people can order books from
around the world, and book sellers are having to deal with all these changes. I
hope you will note that we are not asking for legislation to help us deal with
the marketplace. We are trying to cope as well as we can.
In this country, we buy our books primarily from publishers. The industry is
quite different here than it is in the U.S. in the sense that our publishers
also distribute books that are produced in other countries. The majority of the
business of many publishers in this country comes from the sale of books which
they do not publish but which they distribute.
This is the area of Bill C-32 with which we are most concerned. It deals with
parallel importation rights. One of the things that small bookstores do the
very best is stay very close to our customers, because that is the only way we
can compete in this changing marketplace. The key thing for us is to ensure
that we have books on hand that our customers need. We need to have them when
they need them.
To give an example that might bring it close to home for you <#0107> this
is a technical bill but there are some things in it that are not too technical
-- your mother-in-law is celebrating her birthday on Friday night. On Monday,
you are given the task of buying her birthday present. You know that she is
dying to have the very latest book on the vagaries of the economy in New Zealand
or maybe a needle point book, but you must have it by Friday. When you go to
your local bookstore, you may find that the store does not have the particular
book you want. You will ask the bookseller whether he can get it for you. The
bookseller calls the local agent <#0107> that is, the person who is
distributing this book which was published in New Zealand -- and you are told
that the agent does not have the book in stock. When you ask how long it will
take to get the book, you are told six weeks. That will not satisfy your need
at that moment.
One of the options that we now have, before Bill C-32 is passed, is to call
another source of supply, which may be a wholesaler in the United States, who
can deliver the book to us within a maximum of 72 hours. You will have that
book on Friday night. However, if clause 45 passes as it stands in Bill C-32,
we will be prevented from making that call for you.
The legislation suggests that these problems of service may be dealt with in
regulations. For two years, the industry has been meeting with our colleagues
who supply the books and so far we have reached nothing but an impasse. There
are no service standards in place. We do not know when those will appear and we
have no confidence at this stage that the matter will be dealt with quickly or
to our satisfaction. The reason we have come to an impasse is, obviously, that
we want our Canadian suppliers to be able to deliver a book across the city as
fast as we can get one from Oregon or Tennessee. Our needs are small, but they
have not yet been met.
We should like to recommend very strongly that that clause of the bill be
changed so that book sellers have the right to import a book for you when you
need it. Many other people have been given that right. An individual can pick
up the telephone and call a bookstore in the American city closest to them and
have a book delivered to them without contravening the law. A library or
educational institution can import books, but your local bookseller cannot. We
are the people who sell the most books, but we are the only people who are not
allowed to bring a book in for you. We think this is somewhat unfair. We would
like to have the ability to bring in one copy to fill a special order and to
have the rights of other people transferable to us.
This raises a very special problem in the province of Quebec because there book
sellers are the only people from whom government-supported institutions can
order books. If the rights are not transferred to the bookstore, federal law
will be in conflict with provincial law on that.
Mr. Ron Johnson, First Vice-President, Canadian Booksellers Association; Senior
Vice-President, University of Toronto Press, Retail Division: I should like to
speak to the issue of the used textbook amendment. I am here representing the
Canadian campus stores on behalf of CBA. Campus stores are also represented
locally through the eastern and western associations.
All of us in the campus side of the business were surprised when we heard of the
amendment at the beginning of January. Whether by misunderstanding,
misinformation on our behalf, or whatever, we had been labouring under the
misunderstanding that this bill did not apply to used texts at all.
Consequently, we were quite surprised when we found that the bill had been
amended and that a provision to exclude the importation of used texts was
We were surprised not only by its existence but also by the fact that there was
a strange blend of both breadth and narrowness to the nature of the amendment.
When we first read the amendment and took it at face value, it appeared to
restrict the importation of any used text, which seemed strange since 15 to 20
per cent of the texts that are currently used, varying from campus to campus,
are not covered under Canadian distribution at all.
However, in the first of a series of changes of position, or perhaps
clarification of our initial misunderstanding, it was later explained to us
that the intent was not to prevent the importation of all used texts but only
used texts that were covered by Canadian distribution.
We were also surprised because many of us do not normally think of the movement
of texts from campus "A" to campus "B" within Canada as
being importation. We believe that "importation" is something of a
misnomer in this case. In many cases, texts bought in one part of Canada, on one
Canadian campus, are shipped south and then come back to us from facilities in
the U.S. Therefore, it is not exactly importation in the true sense of the
Unfortunately, there does not exist at this time a study that indicates that
there would not be likely to exist in the future a viable distribution network
for used texts in Canada. This is only partly what makes this amendment
problematic for us. The second holdback, if you will, from the initial
at-face-value statement in the amendment was that not only do we not mean to
restrict the importation of used texts in total but also we actually do not
really intend to restrict trade in used texts <#0107> that is, providing
they are Canadian.
All of this began to enhance our sense of surprise that the amendment had been
added without really asking for submissions from all the affected parties --
that is, the campus stores, in particular, and the students. The amendment
seemed to be curiously naive in terms of the underlying sense of what the used
text market was about and how its dynamics worked.
If you consider that the policy position is to prevent trade in used texts or
the dumping of used texts into the Canadian market, thereby protecting Canadian
publishing or enhancing the ability of publishers in Canada to produce Canadian
texts, that premise is not founded on a solid or rational argument at this
time. Nor is it likely to be founded on a solid argument in the future.
If we look at the kinds of text that are involved in the market, the used text
market primarily involves textbooks in the hard sciences or in the social
sciences that are largely the products of big publishers. If you look, for
example, at the ACP membership list of 100-some odd publishers, you will find
that most Canadian domestic publishers do not produce texts and are not
affected in any particular way by the used text business. Those who are
affected are large corporations or branch plants of very large corporations
existing in Canada.
The proposed money that would accrue to these corporations from the restriction
of used texts trading across the border is relatively small in terms of the
costs that would be borne by Canadian students and campus stores were the trade
in used texts restricted. We must think about the fact that, in addition, there
is nothing within the bill that would demand of publishers that they reinvest
any moneys gained into Canadian publishing programs.
Finally, if you ask anyone who has spent their time on a daily basis on the
front lines of Canadian campus stores -- that is, any text buyer, any clerk on
the floor or anyone who manages in a campus store; and, the students will back
this up <#0107> about the belief that if students were denied full access
to used texts they would rush in droves to buy new ones, you would be told that
it is very ill-founded. The fact is that they will not rush out. Our experience
has been that in other situations when students do not have an alternative,
they do not go out and buy in full numbers. In other words, the perceived
shortfall and sell through from the publisher's side will not be made up by
trying to force the students to buy new texts.
Rather, what will result is a situation in which students will be forced to
share more or photocopy more illegally, thereby compounding the problem that
exists to a very large degree today, at least in comparison to the problems
caused by used texts. Worse still, they will be forced to do without.
Effectively, this amendment denies students a lower-cost alternative to acquire
educational materials. It creates a virtual monopoly and reduces the pressures
on the manufacturers of those educational materials to maintain prices at as
reasonable a level as possible. In a minor way, it also interferes with the
freedom of choice on behalf of faculty to order books. There are a number of
faculty -- and all of us in campus stores have encountered this -- who do not
wish to teach from the current edition. For example, they want to use the
fourth edition even though the sixth edition is out. If the sixth edition is
the one available to them and it is being carried by whichever publisher, then
under this bill it may be impossible for us to acquire sufficient copies of the
used editions, which are the only ones that will be available to us, in order
to meet the demands of this faculty member.
Furthermore, one of the biggest issues we face today in campus stores is the
dynamic nature of enrolments. Students are able to enrol both by electronic
means and by telephone. In fact, there are many different ways they can get in
and out of courses today. That makes it difficult to keep track of enrolments.
This means that registration information is often available to us only on a late
basis. Timing is extremely important in the textbook industry. If we receive
requisitions for courses late, if we are uncertain of enrolments until the last
minute, we must have every route available to us to acquire the goods required
for the courses.
Bill C-32 will impede our ability to acquire new texts elsewhere in a timely
fashion. We are not like a trade store. If the book is not there, the course
will still start on September 6, or whenever. The current practice in many
stores is that if the publisher is not able to fulfil your requirement you order
used texts as a back up. You must remember that there is a very small lead time
between placing the order and the time the book is required. It is not always
an economic alternative. In some cases, it is the only alternative to get stock
in the store.
The provisions under the regulations for service performance will not address
that issue. In my experience and that of my fellow booksellers, even with the
best of intentions, publishers will tell you, "Yes, we will have it for
you in a week." Many of these books are coming across the border to the
distributors. What you find out is that a week goes by and the book does not
arrive. Most campus stores will order additional stock as a back up from a used
We are asking that this amendment be removed and that an amendment be added to
Bill C-32. It has been argued before that there will be a study made and that
you are not interfering with the market at present. However, as it stands, the
amendment leaves the sword of Damocles dangling over the heads of Canadian
students. There is no assurance that the amendment will not be implemented in
some fashion in the future.
Thank you, Madam Chair.
Ms Jennifer Story, Member of Executive, Canadian Federation of Students: I wish
to thank the members of the committee for providing us with an opportunity to
participate in these hearings.
The Canadian Federation of Students represents close to 400,000 students across
Canada on nearly 60 campuses. I am here today on behalf of students as buyers
of used textbooks. I am also here as a student who has been lucky enough to
have the experience of working in a student-run campus bookstore. I have
experienced firsthand the value of being able to import used textbooks.
First, I will run through four brief concerns that we have with the bill. I will
then focus specifically on the used textbook amendment.
It is not our intention to review all the changes made to Bill C-32. We realize
that some of them are quite technical and involve legal ramifications that we
have not explored fully. Nevertheless, the federation would like to state its
shared concerns with many of the other organizations on the following issues.
The first is the definition of "commercially available" found in
clause 1.(5) of the bill. The definition was amended to include cases where a
licence to reproduce, perform in public or communicate a work is available from
a collection society.
Originally, the definition required that the item be:
(a) available on the Canadian market within a reasonable time and for a
reasonable price and may be located with reasonable effort,
However, under the expanded scope of the definition, educational institutions
would be unable to claim exemptions even if the commercial copies were not
actually marketed appropriately.
Our second concern involves reproduction for assignments, clause 29.4(2).
According to the revised draft of the bill, an educational institution or a
person acting under its authority will no longer be able to claim an exemption
to reproduce, perform in public, or communicate to the public by
telecommunications a work or other subject matter for the purpose of the giving
of an assignment. However, tests and examinations are still covered. From our
perspective, this deletion makes very little sense since students are graded
through the assignments they carry out, which is why we endorse the use of the
following phrase, "as required for a formal assignment used for the purpose
of grading students".
Our third concern is with the off-air taping of news, commentary, and
documentaries, clause 29.6. In the revised draft of Bill C-32, educational
institutions will no longer be permitted to make a single copy of a news
documentary and perform it for the purposes of training students. Again, we fail
to comprehend what purpose will be served by such an exclusion. Documentaries
have a time-honoured history in Canada, and any serious study of the
development of media specifically or, I would argue, the serious study of a
number of disciplines, would be incomplete and the quality would be seriously
compromised without that inclusion.
The fourth concern, and the last cursory concern we have, is the explicit
coverage of students under certain educational exceptions. As originally
drafted, Bill C-32 provided explicit protection for students under certain
circumstances. However, we are told that a majority of members of the Heritage
committee apparently felt that these circumstances were too vague. What was the
committee's solution? Unfortunately, they eliminated explicit coverage for
students altogether. We believe a more reasonable solution would have been to
use more circumscribed language.
The fifth concern, and the one upon which we will focus along with our
colleagues in the Canadian Booksellers Association, is the restriction on used
textbooks. In the previous draft of the bill, used textbooks were exempt from
any importation restrictions, and the tables were changed very suddenly and
without any notice late last December. Under the proposed restrictions,
retailers could only go to a wholesaler or the publisher of origin if they
first obtained, as explained, the authorization of a Canadian distributor. Of
all these changes made to Bill C-32, this one is the most puzzling for our
members and of the gravest concern, and we should like to devote the rest of our
presentation to this.
Mr. Jocelyn Charron, Coordinator of Government Relations, CFS: Many explanations
have been given in support of this amendment. In short, we have heard that the
provision was included to protect the new textbook market in Canada and to
avoid any turbulence as a result of increased demand. Unfortunately, we have
not seen any proof that this provision is warranted. We have not been presented
with any kind of study showing that this scenario is possible.
The government itself admitted that it has not conducted a study of this
industry. It is also aware that at the present time, Canada exports 40 per cent
more used books to the United States than it imports from that country.
All of these facts are clearly important. What bothers us the most is that with
this amendment, legislators are attempting to impose a principle on us. If
students were to suddenly stage a run on used textbooks to the point where
demand in Canada approximated that observed in the United States, the
difference would be in the neighbourhood of 20 per cent. Even if that were to
happen, the government's solution would be unacceptable. What the government is
telling us basically is that students are the ones who must subsidize the new
textbook market in Canada. For us, that it what it all boils down to. We do not
really agree with the government's position. It is trying to appeal to our
patriotism in an effort to have us accept this provision. We have pointed out
that the comfortable profit margins that publishing houses earned often went to
produce Canadian textbooks. This is one cause that we obviously support. No one
here is opposed to a healthy Canadian textbook publishing industry. Surely
there are other options available. After all, the Canadian government subsidizes
books of a scholarly nature through the granting councils. It also supports
creators and authors through the Canada Council. These are direct ways of
helping producers and the publishing industry. If we are really concerned about
the Canadian textbook industry, why not support it using the same methods?
We feel that the concerns that have been expressed about this principle are
unwarranted. The government already employs other methods to achieve the same
objectives. Committee members should not be overly surprised by our forceful
They need only talk to their colleagues currently examining the post-secondary
education system to realize that in our opinion, and in the opinion of many
organizations, the most serious problem right now is student indebtedness.
Currently, Canadian students are among the most indebted in the world. Their
debt load is comparable to that of American students attending large private
universities. In our public system, tuition fees do not begin to compare with
those charged at major U.S. universities. Yet, because of the type of financial
assistance available to Canadian students, debt levels for undergraduate
students are nearing the levels seen in large American universities.
For example, analysts of the Canada Student Loans Program estimate that this
year, the average student debt load will be approximately $17,000. They
estimate that this figure will rise to $24,000 by the year 2000.
I will spare you an exhaustive list of the reasons for this staggering increase
in student debt levels. However, it is worth mentioning so that you understand
how exasperated our members have been with the debate on Bill C-32.
At times, one would have thought that purchasing used textbooks was a form of
deviant behaviour and that the essential, or natural, role of students was to
ensure the survival of the publishing industry. It is worth noting that when
times are tough, it is quite natural for students to buy used textbooks. We
have tried to accurately assess the savings students realize by purchasing used
books, but this is not so easy to do. The price of textbooks varies, of course,
depending on the course curriculum.
Nonetheless, we have done some calculations which should prove interesting to
you. Take the average price of books for social science courses. Generally
speaking, these books cost $50.00 or less. When a student purchases a used
textbook, he pays approximately 25 per cent to 30 per cent less for that book,
or $35, which translates into a savings of $15. If we multiply this figure by
the number of courses, semesters and years of study required to obtain a
university degree -- generally four years -- at the rate of four to five
courses per semester, we see that this translates into a savings of
approximately $600 over four years.
In the case of scientific textbooks where prices can sometimes climb to $100 or
$110, cumulative savings can be as much as $1,320. This is assuming that the
textbooks are available, which is not always the case, and that students always
purchase used textbooks, which is not necessarily the case either. This is
merely to give you an idea of the savings that can be realized.
To our members, these savings, while not enormous, are nothing to sneeze at
either. These are genuine savings which allow students to live and breathe a
We have, of course, shared our concerns with the government. We have met with
government officials on two separate occasions. We were given assurances that
the legislation would have no immediate impact. The regulations which will
eventually dictate how the legislation is applied have yet to be drafted. We
were told that we would be consulted during this process, and we hope that this
will be the case if the legislation passes.
However, we want more than simple assurances. To our minds, the government has
failed to demonstrate that a problem does exist. As representatives of
students, we cannot be expected to go along with the thinking that the sound
operation of the new textbook market in Canada is our responsibility. Thank you
for your attention. We will be happy to answer your questions later on.
Mr. Matthew Hough, National Director, Canadian Alliance of Students
Associations: Good morning. Hopefully, my brief has been circulated. I
apologize for not having the French version available yet. That will be
available in the next couple of days. I did not have a lot of preparation time
for this presentation.
The CFS has elaborated on several clauses of Bill C-32 and they are also listed
in my brief. I will leave them as read. Those include the areas of copying for
assignments, documentaries to be shown in classrooms, self-serve photocopies
and liability, and the term "commercially available". All these terms
will be reiterated to you by other witnesses from the education sector who are
coming before your committee in the next couple of days.
I will now deal with the used text issue. Needless to say, students take
advantage of the used text market by saving money on the cover price of a book.
They then have the option of reselling that same book back to campus stores.
These books are then exported to distributors in the United States. Bookstore
managers order used texts from the same distributors and the cycle is complete.
Mr. Charron gave an excellent example of savings that can be realized by
purchasing used texts at a very low cost of $50 per book. Over the course of
four years, that would be a $600 saving. We have a couple of other examples
that were noted as well. On a $75 book, there is a $900 saving. As the highest
example, on a $110 book, there is a $1,540 saving.
Everyone is being pragmatic about this point. To realize those savings is very
difficult. The number of used books on the shelf rarely allows students to
access the number of used books that I am sure they would like to access.
From personal experience, I have gone to the bookstore a couple of days after
the first day of semester and been unable to find used textbooks on the shelf.
The demand is high. The take-up is fast. The savings, as demonstrated, are
The average rate of tuition is $2,900 this year across Canada. The average debt
load is $15,000 to $17,000 per student this year and is projected to reach an
average of $24,000 by the year 2000.
The potential effect of Bill C-32 on the used textbook market is unknown. In
meetings with the officials of Heritage Canada, we were told it was never the
intent of the heritage committee to stop the importation of used texts.
However, the present clause in the bill rewords the Copyright Act. That is in
front of you. We have focused on this statement in clause 45(1)(e):
...except textbooks of a scientific, technical or scholarly nature for the use
within an educational institution in a course of instruction.
That is fairly explicit and is something that frustrates us very much.
At a meeting with heritage officials on March 17, we were told:
...it is not the intention of the government to prevent the importation of used
textbooks, and as drafted, the Bill does not prohibit the importation of used
textbooks. Rather, the bill provides a safeguard, should the importation of
used textbooks become a problem and undermine the ability of publishers to
invest in and publish new Canadian titles for the post-secondary market.
At a meeting with representatives from Heritage Canada, Industry Canada,
booksellers and publishers on March 24, we were told again that it was not the
government's intention to prevent the importation of used textbooks. We were,
however, asked whether it would be possible to mark textbooks sold in Canada so
that they would be the only books allowed back across the border. It is our
opinion and our position that this would, in fact, end the trade by making it
too difficult and expensive to make importation worthwhile.
We have been told that if Bill C-32 is to pass in its present form, regulations
will be put in place before the law is enacted. We have been assured that
studies will be done to find out whether there actually is a problem with the
amount of used texts imported into Canada. We have been invited to participate
in the creation of regulations. We have already seen a study. We know that
there is no problem and believe that there is no need for regulations.
We would prefer to see Bill C-32 re-amended to allow the importation of "any"
used books. The balance between creative rights and the needs of users has
clearly been lost in this case. Publishers have the upper hand. If the
importation of used texts is stopped, then students will be forced to buy new
texts, perhaps, or to find alternatives such as photocopying, scanning or course
The bottom line in this issue is just that, namely, the cost of purchasing a new
book. To help put this issue in perspective, I brought a few props. These books
are American material. They include a first-year psychology text at $75 for a
The bottom line is that one $100 textbook represents 15 hours of work at $7 per
hour for an independent student. To bring that home with a personal analogy, I
was a lifeguard in first-year engineering and I earned $8.50 per hour. Taking
into account GST, employment insurance and CPP, such a book would cost me
approximately 12 to 13 hours of work. The used edition, which is even neatly
marked "used", at $56.30, provides a good saving in this case.
Mr. Fred Weber, Vice-President, Follett Campus Resources: Thank you for this
opportunity to testify here today. I recognize it as a privilege.
Follett Campus Resources is a family-owned and family-managed company which has
been recycling textbooks for over 120 years. Follett began trading in Canada
approximately five years ago during a period of extremely rapid growth in the
North American used book market. We are very proud of the relationships that we
have cultivated with Canadian booksellers. We are proud of the millions of
dollars which Canadian students have saved by purchasing our products. We are
equally proud of the contributions we have made to improve efficiency in the
college textbook distribution channel.
My interest, of course, is the used book amendment, clause 45.(1)(e) of Bill
C-32. I believe this clause jeopardizes all that we have built in the past
three decades in Canada. While Canadian trade represents a very small
percentage of our total business, it is perplexing that this amendment has been
crafted without a problem being defined. As previous witnesses have already
testified, the Department of Canadian Heritage has recently proposed a
comprehensive study of the used book market to determine if there even is a
This amendment is a solution in search of a problem. It has been described as a
safeguard. It is a safeguard in that the used book amendment gives the
government the unfettered power to restrict or even prohibit textbook imports.
While today's government says that they have no intention of invoking this
amendment in the foreseeable future, no one can say for certain what future
governments will do. The language of the bill and the used book amendment does
not define when, how or why this unfettered power may be exercised. That is why
we and others are deeply concerned and anxious. Even more disturbing to me is
that this amendment appears to be a based upon a complete misunderstanding of
the used book market.
The fact is that Canada has been and for the foreseeable future will be a net
exporter of used books. Market research has confirmed and quantified what these
two student organizations have already testified, namely, that 70 per cent of
all college students prefer to purchase used textbooks when they are available.
Student demand greatly outstrips the available supply. In the U.S., used books
represent 28 per cent of total textbook sales. In Canada, they represent only 8
per cent of total textbook sales. The root of this disparity between demand and
supply is that used book companies and campus booksellers alike have only one
source of used books -- students.
Please make no mistake. Used books are not remainders. Remainders are new books
that are left over after a book has been printed and distributed. Used
textbooks, on the other hand, are transformed from new books into used books by
students who read them, study from them, and then decide to sell them. Many
students, however, decide not to sell their books but, rather, to keep them for
future reference. In addition, approximately one-third of all books cannot be
recycled, either because they are pre-empted by revised editions, consumed
during use, or they are customized for one use only. The supply of used books
is naturally constrained. Therefore, there cannot be a surplus that can pour
over the border into Canada. In fact, there is active competition among college
stores to acquire used books and used book wholesalers like Follett must very
carefully allocate their inventories.
The serious problem of dumping alleged by the sellers of Canadian new books is,
in my opinion, a fabrication. It is a fabrication of a small group of large,
multinational companies who know, from the Ernst & Young study of 1994,
that the Canadian market is too small and vast to support a cost efficient,
Let me be clear: The problem does not exist; the problem will never exist. The
used book amendment will not correct a problem; rather, it will create a
problem. Canadian students will have fewer choices and they will spend more for
books. Canadian booksellers will earn less and incur more risk; the profits of
only a few multinationals will be protected.
I read this morning in the paper that Minister Copps maintains that Bill C-32 is
"a very fine tapestry". She says that it has been woven by years of
negotiations and compromise. Following that metaphor, it seems to me that the
used book amendment is a patch on this tapestry that was added on Christmas
Eve, just before the gift was delivered. Removing this patch, in my opinion,
will not damage the tapestry. It will only restore the integrity of the
tapestry. We ask that you simply delete clause 45.(1)(e) and remove this threat
once and for all.
Senator Perrault: The state of the book industry in Canada is one of narrow
margins and tough competition at the present time. Bollum's Books in Vancouver
have filed for bankruptcy protection, which is very sad, because I am a
collector, along with millions of other Canadians.
On the Internet, there is a bit of jungle warfare. There is an organization
known as the Amazon Books. They are telling the entire world, "Come to us
and we will give you far lower prices." What kind of threat does that
represent to you?
Ms Cooney: I think it has become a question now of either put up or shut up. We
all must take a look at the way we do business. Amazon.com is selling books all
around the world.
Senator Perrault: They tell me it is very successful.
Ms Cooney: They certainly have very high sales, but whether they have very high
profits is debatable at this point.
Senator Perrault: Could we develop a consortium of Canadian companies to have a
presence on the net to promote sales of Canadian publications?
Ms Cooney: Sure. At the moment, many Canadian publishers have their own Internet
sites where they are selling directly to the public.
Senator Perrault: But not a bookstore such as Amazon?
Ms Cooney: There is a Canadian bookstore which is the Canadian equivalent of
Amazon. I do not think they have the resources that Amazon has, but Amazon is
about to go public.
Senator Perrault: Duthie Books has had a presence in Vancouver for some time, of
Ms Cooney: A number of individual book stores have started to put their own
sites up on the web.
Senator Perrault: I do not think books will be replaced by the Internet. A
friend phoned the other day and said, "Ray, I do not believe it. Tolstoy's
War and Peace is on the Internet." I am not about to lose my eyesight by
parking in front of a screen to read War and Peace.
Ms Cooney: They have been threatening since the day of Marconi that the book is
Senator Perrault: It is not dead.
Ms Cooney: That is correct. You cannot take your computer to bed with you.
Senator Kinsella: Concerning page 63 of the bill, clause 28, I have heard two
different suggestions from the panel for dealing with the problem. One was to
delete paragraph (e) entirely and the other suggestion was to delete the last
three lines of paragraph (e) so that, in one case, we would still allow for the
exception to import copies made with the consent of the owner of the copyright
in the country where they were made of any used books, period. That is one
suggestion from the panel. In other words, delete the last three sentences. The
other suggestion was to delete altogether paragraph (e).
What do you think this committee should do by way of amendment? Should we get
rid of paragraph (e) altogether or get rid of the last three lines -- that is,
lines 41, 42 and 43?
Mr. Weber: I am not as familiar with the intricacies of this complex legislation
but it seems to me that the net effect of both amendments would be the same,
namely, to allow the lawful importation of used textbooks.
I would defer to those who are better acquainted with those details to determine
whether or not the better solution is to delete clause 45.(1)(e) in its
entirety or the last three lines. I do believe, however, that the net effect
will be the same.
Mr. Johnson: Our recommendation that paragraph (e) be returned to its original
wording as it stood before the amendment was added involves the deletion of the
end lines. In other words, it would simply say "to import copies made with
the consent of the owner of the copyright in the country where they were made
of any used books", period.
Senator Kinsella: That is the position that the Government of Canada adopted
when the bill was tabled in the other place. That is the position that the
minister who introduced the bill argued for in the other place. Is that not
Mr. Johnson: Yes.
Senator Kinsella: In your view, therefore, this would be a friendly amendment?
When the bill was introduced, if ministers of the Crown argued, "This is
how it is reading and this is how it read when the bill was introduced";
if they spoke in favour of the government bill; and if we were to amend it in
this chamber, we would be effectively amending it to the pristine condition in
which it found itself with the support of the government one year ago.
Mr. Weber: My understanding is that is correct. That would be the very fine
tapestry that was woven over years.
Senator Spivak: I want to return to the statement that Mr. Weber made. You must
ask yourself why the government wanted this amendment. I assumed that it was as
a safeguard to protect small publishing companies. You have stated that it will
not protect any small publishing company, it will merely assist the
multinationals. I do not have a copy of your text. Would you mind detailing the
reasons again why you say that?
I am extremely sympathetic to students and their reasons for wanting to have
books at a reasonable price. Everyone would be in favour of that.
Senator Johnson: They should be free.
Senator Spivak: Exactly. However, I am also sympathetic to the need for small
publishing companies to flourish. The reason we have a flourishing Canadian
literature is because these small companies gave those authors a chance. You
can understand my question.
Mr. Weber: If I may, I will make one comment and then I will defer to Mr.
Johnson, who is probably better equipped to answer your question. There is an
important distinction between the textbook and the trade book. I know there was
reference in debate to Margaret Atwood. Those titles are typically purchased in
what we call a trade bookstore, the general store you find in towns across the
country. The textbooks we are referring to here are of a different character
and tend to be published by different types of companies. I will defer to Mr.
Johnston on that.
Mr. Johnson: Almost the entire used text market in the stores really relates to
hard science texts, social science texts. What you are normally talking about
are the high-end textbooks that run into the $7500 range. There is not really a
used market for the lower-priced paperback editions because, first, they do not
have a long life. The second reason is the price differential at a point where
you are down into $7 to $10. These are things such as Penguin paperbacks, and
generally we do not buy or trade in them.
The high-end textbooks are largely produced by large publishers. There is not
really a fully owned Canadian operation that is in the business in the way that
companies such as McGraw-Hill, Prentice-Hall, John Wiley, Addison-Wesley are.
All of those are big companies. We are not implying that they do not contribute
to the Canadian publishing scene. That is not the issue.
The premise that closing off the used texts option to some degree by shutting
down imports would increase the sell-through, which would result in a trickle
down that would be reinvested in Canadian publishing, is extremely tenuous. Our
experience in the campus stores is that if they do not have an option, the
students who traditionally buy used will not buy new. The money will be not be
there. Also, by the time you get down to percentages of percentages of
percentages, the real amount of money being reinvested into Canadian publishing
is negligible. We are talking about companies, so they owe their shareholders
and owners some money in some other way.
Senator Spivak: I also asked the minister about a possible remedy to the problem
that Canadian publishers need to have the federal government put more money in,
and use other measures, to assist small Canadian publishers. She did mention
one item, but I would be interested in whether you think we should be using
this particular mechanism to address the issues of the small publishers.
Mr. Johnson: For the small publishers, it is difficult. There is a connection to
distribution in some ways, which is the publishers' perspective.
Overall, our sense was that Bill C-32, with its parallel importation provisions,
does more to support the larger rather than the small publisher. I think there
is approximately 100 members in the ACP. You can go to the ACP web site and see
the members. You can go to the CPC web site and see the members. You will see
quite a contrast in the size of membership, in terms of the size of the
companies. Many of the smaller companies are little affected by this because
they themselves do not distribute, although they may benefit from reduced
distribution costs if someone else has a better distribution deal.
Senator Kinsella: The House of Commons had this bill for a year and it appears
the Senate will have the bill for five or six days, but we will attempt to
ensure that this is not a charade.
The difficulty of having panels is you hear from five excellent presenters. Ms
Story made reference to subclause 29.4 of the bill, the exemption dealing with
the making of copies for communication by telecommunication to the public, a
work or other subject-matter as required for an assignment, test or
examination. In order to achieve your objective, I want to focus on the
specificity of the amendment that would be required to accomplish that
Would it suit your purposes if we were to amend, on page 30 of the bill, which
is under clause 18 of the bill, subclause 29.4(2)(b), to make it read, as
currently written, "communicate by telecommunication to the public",
and leave off the words, "situated on the premises of the educational
institution", which seem to be the offending words, "a work or other
subject-matter as required for", and add "an assignment", delete
the indefinite article, and then "test or examination"? Do you follow
Mr. Charron: I can probably answer that. What we proposed here was to answer one
of the criticisms made by the committee in the other place. While tests and
examinations were seen as clearly linked to the process of grading students, we
suggested making the same formal link between the assignment and the process of
grading. For that part, the language we suggested was "as required for the
formal assignment used for the purposes of grading students, where tests and
examinations are also exempted". That is what we suggested.
Regarding the first part of what you said, we did not really address it here.
Perhaps Mr. Hough would like to comment.
Mr. Hough: I was reading up on this point last week and you will hear testimony
later in the week as to the impact on distance education of that amendment. The
part you noted was the offending portion, "on the premises". If that
were withdrawn, it would allow assignments to be given electronically.
Senator Kinsella: The issue was distance education?
Mr. Hough: Yes. That issue was distance education. A second issue was with
regard to the regular written assignment. I provided some wording in my brief
to deal with that.
The Chair: Thank you very much for your briefs and the answers to our questions.
We will adjourn until 3:30 this afternoon.
The committee adjourned.