Proceedings of the Standing Senate Committee on
Banking, Trade and Commerce

Issue 23 - June 26, 2012 - afternoon meeting


OTTAWA, Tuesday, June 26, 2012

The Standing Senate Committee on Banking, Trade and Commerce, to which was referred Bill C-11, An Act to amend the Copyright Act, met this day at 1 p.m. to give consideration to the bill.

Senator Irving Gerstein (Chair) in the chair.

[English]

The Chair: Honourable senators, I call this meeting of the Standing Senate Committee on Banking, Trade and Commerce to order.

As you know, the Senate referred Bill C-11, An Act to amend the Copyright Act to this committee for its examination. We began our consideration shortly thereafter, hearing from the responsible ministers. We continued that study on Friday, hearing from seven panels of interested stakeholders and experts in the field, and a further three panels this morning.

This afternoon, we will continue in that regard, hearing from the final three panels. In this first session of the afternoon, we are pleased to welcome Brigitte Doucet, Deputy Director-General, Association des producteurs de films et de télévision du Québec. Also, representing ACTRA, we welcome Joanne Deer, Director, Public Policy and Communications, who is accompanied by Warren Sheffer, Lawyer, Hebb & Sheffer.

We have one hour for this session. Ms. Doucet, we will hear from you first.

[Translation]

Brigitte Doucet, Deputy Director General, Association des producteurs de films et de télévision du Québec: Good afternoon, Mr. Chair. My name is Brigitte Doucet. I am a lawyer and I have spent much of my career dealing with copyright matters. I am the Deputy Director General of the Association des producteurs de films et de télévision du Québec. APFTQ represents its 140 members, the majority of the independent film and television production companies in Quebec. We appreciate this opportunity to meet with you to explain APTFQ's recommendations on the efforts to modernize copyright in Bill C-11.

Today, we are presenting to you the three recommendations for amendments that we consider priorities; they are fully described in the document we have submitted to you. Our first recommendation deals with the new rights for performers. As you are no doubt aware, one of the objectives of Bill C-11 is to bring us in line with WIPO's Internet treaties, one of which is the WPPT, which deals with performances and sound recordings.

In 1997, after signing the WPPT, Canada added a section on new rights for performers to the Copyright Act. As per the WPPT, the rights are to apply to sound performances but are not to apply to audiovisual performances. To comply with the distinction, Canada clarified section 17 of the Copyright Act to the effect that, when a performer authorizes the embodiment of the performance in a film, the performer may no longer exercise the copyright on that performance.

Bill C-11 includes new rights for performers, still pursuant to the WPPT, but it does not adjust section 17. This omission means that the new rights could apply to audiovisual performances. We submit that, not only does this unintentional consequence fail to reflect the scope of the WPPT, but it also fails to reflect the wording agreed during the negotiations in which Canada is participating towards a new treaty specifically dealing with performers' audiovisual performances.

In fact, these two international treaties provide for a watertight application that is not reflected in Bill C-11 as drafted. We feel that this is nothing more than an oversight, but it is an oversight that creates confusion in the legislation because the clear intent of the new provisions is for sound performances only. The impact on our industry is a major one because confusion implies differences in interpretation that could result in legal proceedings.

Our document proposes a simple way to correct this unintentional effect.

Our second recommendation deals with large-scale piracy. It proposes an amendment that would, in the event of a lawsuit, offer rights holders a choice to either prove their actual damages or to ask for predetermined damages. As presently drafted, Bill C-11 makes it clear that piracy is illegal. But, in the event of a lawsuit, it forces right holders to prove the actual damages they have suffered. With large-scale piracy, it is often difficult to find out who is behind the facilitator. But if even if we have all the elements to proceed, it is almost impossible to find out the extent of the piracy that has gone on. As a result, it is also almost impossible to prove actual damages. In the event of a lawsuit, we believe that, if rights holders do not have the option to ask for predetermined damages, piracy will be illegal in theory only.

In our document, we propose an amendment that would provide rights holders with that option.

I now move to the recommended amendment that addresses our third and final priority. In this, we support the Canadian Conference of the Arts, whose representative, Alain Pineau, appeared before you last Friday. The recommendation contains the text of a clause interpreting the exceptions that the legislation provides for.

We would simply add that the three-step test set out in the WIPO international treaties, and which our legislation must reflect, boils down to this: it is possible for national legislation to allow certain exceptions to copyright. But, in order to keep a fair balance between copyright and the exceptions, the latter must satisfy the conditions of the three-step test that we are hearing so much about and that is described in detail in our document.

In order to meet our international commitments, Canada must add the interpretation clause as proposed by the Canadian Conference of the Arts.

Thank you for your attention; we are ready to answer your questions.

[English]

The Chair: Thank you, Ms. Doucet.

Ms. Deer?

Joanne Deer, Director, Public Policy and Communications, Alliance of Canadian Cinema, Television and Radio Artists: Thank you. I am the Director of Public Policy and Communications for ACTRA. With me is Mr. Sheffer, legal counsel from Hebb & Sheffer.

Thank you for inviting us to speak on behalf of ACTRA's 22,000 professional performers in film, television, sound recordings, radio and digital media who live and work in every area of this country.

My national president and executive director would love to have been before you today. However, they are in Beijing where, just a few hours ago, they witnessed the signing of this historical treaty — the Beijing treaty — which is recognizing new moral and economic rights for performers.

We will soon be urging the Canadian government to seize this opportunity to be a leader on the international stage and demonstrate its commitment to artists by being one of the first to sign and ratify this historic treaty.

In the meantime, we are here to talk about Bill C-11. I want to start by saying that ACTRA supports the goal of this bill to make it easier for Canadians to use technology and access content anywhere at any time. We also applaud the efforts this bill takes to adopt an international standard fight to content theft. However, we believe that good copyright legislation must do more than punish those who violate the law; it must protect the right of those who own the copyright to control and license their work.

Unfortunately, in many respects we believe that Bill C-11 does not meet this test. There are just too many new exceptions. To that end, ACTRA has three major concerns and suggestions for amendments. The first is the user-generated content exception; second is the area of statutory damages; and, third, we believe there is need to bring scope to the numerous exceptions proposed by the bill.

Before I go into more detail in these areas, I want to paint a picture of what it is like for working artists. For ACTRA's members and thousands of other Canadians in creative industries, creating art is not just a hobby — it is a job. It is how they pay their mortgage, feed their families and pay their taxes. In reality, professional artists are small business people; creative entrepreneurs whose contribution supports the $85 billion creative industries in Canada.

One thing that makes professional artists a bit different from many other workers is they do not live on one paycheque from one single employer. They rely on many small cheques from different streams of revenue to add up to allow them to pay their bills and invest in new projects. Do not forget that new projects mean the opportunity to help create new jobs and more economic spinoffs.

Bill C-11 threatens to wipe out many of these small but crucial revenue streams by introducing many new exceptions that weaken copyright and by failing to extend, for example, the private copying levy to new technology being used to copy music. As a result, there will be less money flowing to these artists who are already struggling to piece together the income to create the music and culture that we love. We need you to understand that letting these small sources of revenue wither away means lost revenue for these small business people.

Let us take a recording artist as an example. Having the money to invest in recording a new album means booking studio space from another small business owner, hiring an engineer and session musicians, and even a designer to create album art. When this artist takes the album on tour, there is more money being returned to the economy through travel, hotels, road crew, musicians, meals and venues.

In a very real sense, we believe the Copyright Act establishes the business model for professional artists and allows them to create a market for their work. We know that in many cases a recording artist's and visual artist's greatest asset is the work they have done and recorded in the past, and they can only make a living if their intellectual property is protected.

ACTRA supports the 20 amendments put forward by the Canadian Conference of the Arts last Friday on behalf of 68 cultural organizations. Today, we would like to speak to a couple of those that are of particular interest to our members.

First is the user-generated content exception. One of the best things about Bill C-11 is that it finally puts the 1996 WIPO Internet treaties into Canadian law, giving performers moral rights in their aural performances and the "making available" right.

However, a few pages later, these moral rights are then threatened by the UGC provision that allows people to mash up creative works at their whim. We understand the government's intent with this, but we believe that this You Tube or mash-up exception is too permissive as written and threatens to trample on creators' economic and moral rights.

This exception will also remove the opportunity for Canadian artists and makers, such as studios and record labels, to license their product. In other countries, collectives are entering into licence agreements with businesses like You Tube. Canadian creators need to have the same right to control and license their work. We urge you to remove the UGC provision from Bill C-11, or make an amendment to the bill to protect creators' moral and economic rights.

The second issue is statutory damages. Statutory damages are an important tool in deterring copyright infringement. We believe that damages should be proportionate to the infringement, and so far in Canada they have been. We therefore do not see any reason to create a new distinction between commercial and non-commercial infringement. Drawing this distinction reinforces the message that it is okay for me as an individual not to pay for music or movies, as long as I am not selling my illegal copies to anyone else.

Bill C-11 also gives illegal file-sharing sites a licence to keep enabling illegal activity by exempting them from statutory damages. We do not think this was intended and we urge you to fix this technical error.

I will ask Mr. Sheffer to give you a potential scenario that illustrates the pitfalls that we see in Bill C-11 as drafted.

Warren Sheffer, Lawyer, Hebb & Sheffer, Alliance of Canadian Cinema, Television and Radio Artists: If you will bear with me, we have put together an illustrative example that demonstrates the challenges that creators will face if the UGC and statutory damages provisions become law.

Imagine that you have an emerging indie band. They are building a fan base and have a website where they have chosen to make half a dozen of their songs available for free to the public.

On the other hand, you have an anti-Semitic, neo-Nazi organization headed up by one individual. This individual happens to like this band and thinks it would be clever to mash up the band's six songs and mix in some of his own lyrics. The lyrics do not qualify as hate speech, per se, but are objectionable to the band. He uses the mash-up as the soundtrack to the organization's own website and is heard all around the world online. His purpose is solely non-commercial.

If the UGC provision becomes law, he will be able to assert the UGC provision as a defence to the band's claim of infringement because, one, his purpose is non-commercial; two, he credited the band as author and performer of the songs in the mash-up; three, he had reasonable grounds to believe that the songs he downloaded with consent of the band did not and do not infringe copyright; and, four, he similarly did not think the mash-up had any adverse effect on the band's songs.

It would be up to the band to demonstrate that the mash-up does have an adverse effect on the band's songs by going to court. Since the UGC provision does not reference the band's moral rights, they would be at a huge disadvantage. There is a competition being set up by this particular bill's provision between the rights of the authors/ performers and the person who wants to create the mash-up.

Under Bill C-11's statutory damages provisions, the band would only be able to seek a maximum of $5,000 against this individual for all violation of all six songs. Considering that it would cost the band thousands of dollars to pursue the claim in small claims court with a lawyer, it might not make financial sense or be financially possible to pursue such a claim under the law proposed by the bill.

Proving actual damages would be extremely difficult, especially for emerging artists. The prospect of being able to afford the cost of seeking an injunction is not realistic, and because of the broad permissiveness of the UGC provision, there is a distinct possibility that the band would lose any lawsuit it commenced. In the event of such a loss in court, the band would likely have to that pay the legal costs of the neo-Nazi organization and that organization would be able to continue to use the mash-up.

Surely the government does not intend the foregoing consequences of either the proposed introduction of the UGC provision or proposed reduction of statutory damages. ACTRA urges you to redraft the foregoing provisions in accordance with the book of amendments the Canadian Conference of the Arts has submitted to this committee.

As Ms. Deer mentioned, the third area we would like to address is bringing scope to the numerous exceptions proposed by the bill. Specifically, we are proposing — like other creator organizations have proposed to you over the past few days — that the language of the Berne three-step test be added to Part III of the act as an interpretive provision. I will not repeat the elements of the test here, but I will stress that this technical amendment will not change the substance of the exceptions proposed by the bill.

I will also stress that by including the Berne three-step test as an interpretive provision in the Copyright Act, we will move closer to harmonizing our copyright laws with many of our trading partners while avoiding unintended damages to creators. Its inclusion will give performers and other creators the confidence in knowing that their rights will not unfairly or arbitrarily be diminished in the marketplace.

I will turn back to Ms. Deer to conclude.

Ms. Deer: The creative industry can only be a real industry and create jobs and contribute to the economy if creators have the tools needed to build robust business models. We urge you to fix Bill C-11. Let us give our creators the tools they need to get a fair return for the goods they produce.

Thank you for inviting us to appear. We look forward to your questions.

The Chair: Thank you. We will move to the questions right away.

Senator Tkachuk: Ms. Deer, what do you mean when you say "user-generated content exceptions" as one of your first problems with the bill, and then statutory damages and scope? Let us go to user-generated content. What do you mean by that?

Ms. Deer: The bill allows people to take content distributed on the Internet and remix and recreate it to produce new works. Mr. Sheffer can tell you why that is so problematic.

Mr. Sheffer: The provision in the bill is a statutory of licence of sorts to take existing copyright-protected works and create a mash-up or a new work.

Senator Tkachuk: For yourself?

Mr. Sheffer: That is right: for yourself and also for others. There is a condition on that particular provision that it will not apply if you are creating it for commercial purposes, so you cannot go about selling your mash-up; that would negate the licence that you would be getting under the new law.

Senator Tkachuk: It would basically be for your own purposes?

Mr. Sheffer: I would not say that.

Senator Tkachuk: Give me a commercial example of where someone would be making money off this and abusing the creative right of the author.

Mr. Sheffer: If that were the case — if there were a commercial element to this — the UGC provision would not exist.

If you are sharing this with family and friends, or posting it, and not doing that for commercial purposes, you stay within the conditions of the particular provision and that would be legal.

Senator Tkachuk: You mean posting it, say, on You Tube or for yourself and just taking excerpts from each one?

Mr. Sheffer: That is right.

Senator Tkachuk: What is the time limit, and how big a piece can you take?

Mr. Sheffer: There is no guideline for that. That is part of what causes consternation for some creators. There is no bright-line test.

Senator Tkachuk: What would you suggest?

Mr. Sheffer: As with most things in copyright, it is context specific. What I would suggest with the example we shared with you today, just on a plain reading of the bill provision, is that it would be entirely fine for an individual to take existing songs, mix in his own lyrics and come up with what is essentially a derivative work and put it out there. Again, if this bill becomes law, that would be legal.

As our example seeks to demonstrate, that could really have adverse consequences for the rights holder.

Senator Tkachuk: How would you prevent it? What kind of law should be passed that would prevent me from doing that?

Mr. Sheffer: As Ms. Deer mentioned earlier, as did I, we have taken a look, under the umbrella of the Canadian Conference of Arts, at that provision. You do have a copy of how we would amend the bill. One of the things is making specific reference to the author and the performers' moral rights. They are almost prioritized over the person seeking the mash-up. We also believe that there should be an opportunity to commercially licence; that is, for the author to be able to commercially licence the use that the masher is seeking.

Frankly, one of the real beneficiaries of this provision —

Senator Tkachuk: They do mash-ups on CBC now when they do the NHL stuff. They do a mash-up, right?

Mr. Sheffer: Yes. Listen, in other jurisdictions, the You Tubes of the world pay for the privilege to be able to do that and to have their own consumers, their own customers, create those mash-ups. The provision in this bill is pre-emptively taking that away.

Senator Tkachuk: Does YouTube have any legal issues with that? If you post something on YouTube that is a mash-up that you borrowed from other artists, do they have an obligation to ensure that they are not infringing on copyright or that the artist is being protected? Do they have legal responsibility or civil responsibility? They could be sued, in other words.

Mr. Sheffer: Under the provision that is put forth under Bill C-11, they could not. This is, again, setting up a licence for end users to create mash-ups and go about posting them on YouTube.

The Chair: Next is the deputy chair of the committee, Senator Hervieux-Payette.

[Translation]

Senator Hervieux-Payette: As regards clause 17, people talk about lawsuits, costs and damages. How would that work? Because it really is not worth the trouble to go to small claims court for $5,000 and then try to establish our rights later.

If we are just talking about a knock-off of a piece and the Criminal Code is violated, of course there would be sanctions. But are we really talking about $5,000 because it is done for non-commercial purposes? I am from Quebec; my training is in civil law. Maybe I am not explaining myself clearly. How do we define the damages? You say that, because it is difficult to establish the amount of the damages, the sum of $5,000 is set as a symbol. But what would be an appropriate penalty for people who break the law? Should we put from $5,000 to $50,000 or $500,000, as some acts do? Basically, can we set criteria that would prevent people from claiming ownership of a work that they did not create? It was your colleague who mentioned $5,000.

Ms. Doucet: A number of things have been discussed.

Senator Hervieux-Payette: Maximum amount $5,000. You said that it was complicated to go to court.

Ms. Doucet: Yes. Your question has different aspects to it. But our request was to make sure that the services that make piracy easy are subject to predetermined damages. As my colleague said — and we are in agreement —what is in place at the moment is quite fair. We have used it in the past; there is a range from $500 to $5000, I think, and that is fine because what we are asking for is an amount per work.

But say we want to sue a facilitator, the services, the torrent sites of the world. We have seen in the past on the Internet that, when we want to sue them, we do not succeed in establishing damages. The legislation does not allow us to use predetermined damages; it requires us to prove our damages. In order to be able to assess what has been copied or exchanged, we have to follow the site from the moment it opens to the time of the lawsuit and try to make an evaluation. I do not know how that would be possible because we do not have the precise technical information to tell whether such and such a work has been copied, and how many times. We do not have that information. At that point, it is almost impossible to establish the precise damages we have suffered.

So when we are faced with a service that facilitates large-scale piracy, we are specifically asking to be bound by predetermined damages. This means that we do not have to prove the real damages; it allows our case to be based on the values inherent in the act.

Senator Hervieux-Payette: We are not talking about someone sitting at home all by himself, but rather the intermediary who makes it possible.

Ms. Doucet: Yes, and who makes money from it. Those are the people we are after. My understanding of Bill C-11 is that services like that would become illegal.

Senator Hervieux-Payette: Illegal, or liable to pay compensation? Could there not be fair compensation in both cases? If there is a facilitator, and if technically it is worthwhile, should he not be paying for the use instead?

Ms. Doucet: That could have been one way of looking at the situation. My understanding of the way in which Bill C-11 is set up is that they have decided to make it illegal and to allow us to sue as well. But given that Bill C-11 is set up that way, with the clarification that it is illegal, they are being told to make it more practical. Because, at the moment, if we are not able for predetermined damages, it will all be theoretical because the real damages are impossible to prove.

Together with other organizations, we have already had occasion to sue a file-sharing website. We won, but it cost a fortune and we had to do a huge amount of work to find out who they were and where they were located in order to bring them before the Superior Court of Quebec.

We asked for the minimum amount of predetermined damages. We asked for an injunction, and, in the first interim injunction, the judge ordered the site to be shut down. That was done. They opened up again somewhere else later, but that is another story. They complied. But if it had not been possible for us to seek predetermined damages, I am not sure that we would have spent the hundreds of thousands of dollars that it cost us as an association because we would not have been able to prove the damages.

But that was our story. What my colleagues were saying is that there is a reduction in damages now. It depends whether things are done for commercial or non-commercial purposes. If the purposes are not commercial, damages are reduced. As I understand it, they are asking for there to be no reductions and for the current status of the legislation to be maintained. I hope that I am not putting words into your mouth.

Senator Hervieux-Payette: Turning to ACTRA, you say there are too many exceptions. Are there too many, or are they just not precise enough? I was under the impression that, in general, people were mostly complaining that, in terms of the exceptions, the law was rarely applied. That is because the exceptions cover more or less every activity and that very few copyright provisions apply across the board. I would like to hear how you interpret that. Are there too many exceptions or is it that they are too broad?

[English]

Ms. Deer: That is a good question. Are there too many, or is it too broad? We would say probably both. For example, we would rather the YouTube exception not be there all together, but there is a way that you could include it there to get to what we know the government's intent is in terms of allowing someone to be able to upload a video of their kid dancing to Justin Bieber without infringing copyright. We understand that, but the way it is currently written in Bill C-11, it is way too broad. For example, when you are talking about the fair-dealing exceptions, that is another area where it is not clear what the definition is around some of those, which is why many organizations, ACTRA and many others, are pressing for the inclusion of the Berne three-step test to be included in the bill. Then at least there is a bit of a fence around it to ensure that the exceptions that are happening are not detrimental to the creators.

Senator Hervieux-Payette: Do you have a reason for it being done that way? We feel that when we talk about fairness, the fairness inclines more on one side, which is those who are making money out of the creation, and the creators are not getting their fair share. What is your own view about this? Do you feel that the creators have their fair share of the industry?

Ms. Deer: We feel right now, with Bill C-11, the deck is being stacked against creators in a way. When you look at all of the exceptions combined with the reduction of statutory damages, it will be more and more difficult. The onus will be more on the artists and creators to keep proving and coming back and being able to make a living from these things. Perhaps Mr. Sheffer has more to add.

Mr. Sheffer: I do not know that I can really add too much more to that comment. It is a very broad question, whether creators are dealt with fairly or getting a fair share. Some artists do better than others. On balance, as I am sure all of us in this room know, it is very difficult to make a living from your art. In a number of respects, I would say that this bill will make it more difficult to make a living from your art.

Ms. Deer: The bottom line for a lot of my members is that they want people to be able to see and enjoy their work at any time and any place. There are a lot of great opportunities for artists in this new digital era in terms of being able to distribute your work, but we need to be able to strike that balance where the creators still are able to maintain some control. Basically, it is their intellectual property, their creation and, as workers, they want to be able to be compensated for that fairly.

Senator Moore: Ms. Doucet, I have heard the comments of Ms. Deer and Mr. Sheffer. If the Berne three-step test were added, had it been there in the new bill, would it have avoided the legal contest that you had to go through and the hundreds of thousands of dollars you had to expend to prove that artists' rights were trampled and that they suffered damages? If they had been there, would you not have had to do that?

Ms. Doucet: No, that is not in the same section. If we had the three-step test, and we have asked for it, it is to limit the exceptions that are already in the law and that will be added with Bill C-11.

Our suit, which cost $200,000 or $300,000, was something else. There was an infringement of the law, and they were not suggesting that there was an exception in the law. They were doing it. I think they knew that it was illegal. Actually, the enabler said that he was not doing anything illegal. People were doing it, not him. That was his defence. We decided to sue him, and it worked. However, even with the three-step test, it is nothing to do with the exceptions. It is clearly illegal regarding section 3, the copyrights.

Senator Moore: How do we today structure this bill to avoid what you had to go through?

Ms. Doucet: It will not. We do not ask to avoid it. We are asking to ensure that we can still do it. Right now, with Bill C-11, the enablers are not subject to the statutory damages. We have to prove our damages, which is impossible. I do not know if it is clear, but for us it is impossible to look at the websites and to know exactly what is infringed.

Senator Moore: Yes, infringement.

Ms. Doucet: Excuse my English.

Senator Moore: No, no.

Ms. Doucet: It is impossible to quantify. We ask that if we have to sue an enabler, it has to be subject to the statutory damages so we will be able to sue them and to obtain something.

Senator Moore: Yes. Thank you.

Ms. Doucet: Is it clearer?

Senator Moore: Yes, I understand. Thank you very much.

The Chair: Did you have anything you would like to add, Ms. Deer or Mr. Sheffer?

Ms. Deer: No.

The Chair: Witnesses, that concludes the questions of our committee. We thank you for appearing before us today.

Before we start with our next panel, I want to mention that at the conclusion of the two panels we will be hearing this afternoon at 4 p.m., we are anticipating bringing back some officials from the ministries to respond to certain questions related to testimony that we heard today. I would suspect that might take approximately a half an hour or so. We will have that confirmed, so if you will just put that into your scheduling.

With that, we now continue with our study of Bill C-11, An Act to amend the Copyright Act. In this second session this afternoon we are pleased to welcome, representing the Canadian National Institute for the Blind, Kevin Burns, Past Chair and Acting Treasurer, Library Board; Sam Fulton, a consumer; and Georgina Blanas, National Director, Public Affairs. Representing the Visual Education Centre we have John Fisher, President and Chief Executive Officer and Suzanne Hitchon, Vice-President, General Manager. Representing the Alliance for Equality of Blind Canadians, we have with us Marc Workman, Chair of the Copyright Committee.

We have one hour for this session. We will hear from each organization in turn, beginning with the Canadian National Institute for the Blind, after which we will ask our questions.

Georgina Blanas, National Director, Public Affairs, Canadian National Institute for the Blind: Mr. Chair, esteemed members of the Senate committee and guests, it gives us pleasure to be here to present.

CNIB provides alternative format reading materials and specialized library services to Canadians living with print disabilities.

An estimated 10 per cent of Canadians have a print disability — blind, learning disability or the inability to hold a book — for whom the access to information in an alternative format is the basis for education, employment, recreational reading and social inclusion.

The commercial availability of alternative formats is slim. It is an approximate 5 per cent plus of materials that are published. Very few of these Canadian formats that are available make it in terms of accessible format. Therefore, the CNIB Library produces the alternative format versions of books for its collection or acquires them from alternative format producers. This includes digital text, audio or Braille, structured in a way that a person using text to speech or other adaptive technology can read and navigate or work independently — the same way any other person can read print — by heading index and so on. To do this, CNIB relies on section 32 of the Copyright Act — an exception for persons with perceptual disabilities.

I would like to introduce Kevin Burns, our past president and acting treasurer from CNIB Library to proceed.

Kevin Burns, Past Chair and Acting Treasurer, Library Board, Canadian National Institute for the Blind: Honourable senators, in 2010 the Canadian National Institute for the Blind submitted recommendations to amend the Copyright Act during the consultation process led by the Government of Canada. We focused on three issues. First was the need to amend section 32. This is the section that addresses persons with perceptual difficulties. There should be no room for misinterpretation about the provision of not-for-profit accessible library services for these Canadians.

CNIB recommended wording changes in section 32 of the act, adding the hyphenated word "non-profit" in section 32.1:

It is not an infringement of copyright for a person, at the request of a person with a perceptual disability, or for a non-profit organization acting for his or her benefit, to . . .

CNIB is pleased that Bill C-11 now includes this first recommendation. Our second proposed amendment has two parts. The first is about the importation of alternative format materials. We suggest the following wording:

Copyright is not infringed by the importation into Canada by a non-profit organization acting for the benefit of persons with perceptual disabilities of any materials for such persons that that organization could lawfully make under section 32.

We link this to a recommendation about the exportation, which does the same thing in reverse. Copyright is not infringed by the export of a non-profit organization, acting for the benefit of persons with perceptual disabilities, of any materials produced in Canada under section 32 to a non-profit or other organization in another country that has, in its legislation, an exception or other legal provision permitting the making of materials in formats accessible to the perceptually disabled.

Together, these two recommendations enable the controlled import and export of titles because this is how we, in this area of library service, share titles between ourselves and other trusted intermediaries, for example, the Royal National Institute for the Blind in the United Kingdom or the National Library Service for the Blind and Physically Handicapped of the Library of Congress in the United States and equivalent libraries in France.

No matter the language or the source of an accessible title, we do not want to duplicate production efforts or waste our limited charitable resources by producing a title that may already be available in other legislation. As Ms. Blanas pointed out, unlike conventional libraries, the CNIB already produces many of the titles that it acquires. This explains our third issue. If technical protection measures are legislated in a revised Copyright Act, then the CNIB recommends the inclusion of this wording:

That it is not an infringement of copyright for a person at the request of a person with perceptual disability or for a non-profit organization acting for the benefit of a person with a perceptual disability to circumvent a TPM for the sole purpose of making the work perceptible.

Circumventing TPMs will be how CNIB creates accessible titles. As much as we support Bill C-11, we are a little uneasy about wording that might not fully protect us as we continue to provide equitable and accessible library services to Canadians across the country.

I invite Sam Fulton for his comments. He is a member of the CNIB National Board and the library board that I serve reports to the national board through him. Mr. Fulton has been a CNIB client and a very active and serious library user since 1994.

Sam Fulton, Consumer, Canadian National Institute for the Blind: Good afternoon. I am one of the 10 per cent who is print disabled. I am also one of those people who only have access to 5 per cent of materials. Doing business, going to school and keeping up with what is going on in the world when you only have access to 5 per cent of the material that the people around you have access to makes it very difficult.

The thing that people who are print disabled really want in legislation — obviously has to be there in a certain way to ensure it happens — is more materials and we want access to them quicker. I often find myself seeing a particular document or book that I would like to access in order to be able to do the things I am doing. I find that it will become available, but probably a year or two later. That really does not help in terms of keeping up in this information age with how we actually do business.

I want to speak to that second provision which Mr. Burns mentioned, namely that there are books and materials out there in accessible format that have been developed by other jurisdictions. We would like to see that those be made available on a basis whereby we can share materials that have been created in alternative format because they have already gone through the same kind of scrutiny and exceptions to copyright that we have here in Canada.

I want to leave you with that particular one. Remember, we are in an information age and 10 per cent of the population in Canada is having problems getting access to the materials which they need. Thank you very much. If you have any questions, we would be pleased to answer them.

The Chair: Thank you very much for your presentations.

Suzanne Hitchon, Vice-President, General Manager, Visual Education Centre: Good afternoon and thank you, Mr. Chair and the committee members, for allowing us to appear today to outline how Bill C-11, specifically proposed section 29.5, will effectively shut down our business and our industry.

We are here representing Visual Education Centre, one of the largest distributors of cinematographic works in Canada. We distribute curriculum-based materials for in-classroom educational purposes. We have been in business since the 1960s and our primary customer is the K to 12 and post-secondary educational market.

The legislation before you proposes to provide our assets, and those of our industry, for free to the educational community. Without consultation and consideration of the negative financial impact, this government has decided that our private property rights, the assets of our company and that of the creators we represent are now to be given to schools at no cost and without any compensation to our business or that of our producers.

At the outset of this journey, and after meeting with many members of Parliament and governmental departments, we had been led to believe that the consequences of proposed section 29.5 of this bill were unintended. We were led to believe that if we could shed light and educate parliamentarians, a balance between educators and our industry would easily be met.

We hired a copyright lawyer and studied the educational testimony submitted during both Bill C-32 and Bill C-11. We garnered Conservative, NDP and Liberal support. We proposed an amendment that would provide educators with what they were seeking while preserving the $50 million this industry generates and the 8,000 jobs it sustains — an industry, I might add, that receives no government subsidies or grants.

Our hopes were shattered when our proposed amendment was not even considered. It was not considered without an explanation, nor were we provided with a suggestion on how our industry would survive this crisis. We were told instead, "adapt; find a new business plan" — a plan that we could implement without our assets.

I apologize if I sound emotional. However, I struggle to understand how a government that claims to be the champion of jobs, the economy and private investment could so easily decide that the investments we have made and the people we employ simply do not matter. It is difficult for me to comprehend how this government could implement a law that strips our rights from us and gives them to someone else for free, without due process or compensation. We have spent over $100,000 trying to find a solution to this problem — a solution that would meet the educational community's needs and preserve our business. After all, is that not what this government would want — a balance that meets all parties' needs?

Our amendment to section 29.5 of the Copyright Act would do the following: preserve our industry and the Canadians employed by it, provide access for schools to copyrighted material without fear of infringement for materials that are not commercially available, provide clarity for Internet use for teachers who will have access to a wider variety of audio-visual materials for teaching purposes, and sustain thousands of jobs and the $50 million to the economy this industry generates.

The educational community itself has testified that they are not asking for anything for free. In the words of the Minister of Education for Nova Scotia, when she appeared at committee:

We're not asking for anything for free. The education system, the sector, pays for licences and copyright and will continue to do so. What we're asking for with these amendments is to have things clarified.

Why, then, will this government provide something that is not being asked for and in the process take away our rights and our property to the point where we will be driven out of business? What does this government propose our industry should do to survive this crisis and keep our employees employed? What, may I ask, are your suggestions?

I sincerely thank you for inviting us to testify. Again, I apologize for my direct nature, and I ask that you understand that we are here today representing not just ourselves but the people we employ — people with mortgages to pay and children to raise, people who truly fear losing their jobs through no fault of their own. While our industry may not be large in relative terms, its contribution is not insignificant. This committee has the power to right a wrong, and I politely ask that you do just that. Please introduce our amendment and vote to save our industry.

Alternatively, set aside the educational provision in Bill C-11 and recommend to this government that a real consultation with our industry take place. Recommend that it examine the financial, personal and cultural impact this amendment will have so that we may end up with a policy that is both fair and balanced.

You know as well as I do that if you take our property now and give it to someone else, you will never be able to reverse this process later. Once you confiscate our property, our assets and our industry will be gone forever.

Thank you.

The Chair: Thank you very much, Ms. Hitchon.

Mr. Fisher, did you wish to add anything?

John Fisher, President and Chief Executive Officer, Visual Education Centre: We are really here to seek sober second thought. We need your assistance. Without it, our company, our industry, will be out of business. Notwithstanding the money that is provided to the National Film Board of Canada and the CBC, we are the largest supplier of educational and Canadian audio-visual materials to Canadian schools, and there will be consequences to those if this act is passed as it stands.

The Chair: Thank you, Mr. Fisher.

Mr. Workman, please go ahead.

Marc Workman, Chair, Copyright Committee, Alliance for Equality of Blind Canadians: Thank you, Mr. Chair and senators around the table.

The Alliance for Equality of Blind Canadians is a national organization made up primarily of blind, deaf-blind and partially-sighted individuals. We advocate on a variety of issues at the local, provincial and national levels. If you would like to learn more about us, you can visit our website at blindcanadians.ca.

I want to begin today by recognizing some of the positive aspects of Bill C-11. As a consumer, I am glad to see the explicit recognition of user rights. As a blind consumer, specifically, I am glad to see some clarification around the exportation of alternative format works and the explicit exemption from the prohibition against circumventing technological protection measures, or TPMs. There are certainly some praiseworthy aspects of the bill.

However, the AEBC does have several concerns. Since I do not have a lot of time in this presentation and I also recognize that there is an urgent desire to pass this bill into law, I will limit my discussion to only one of our concerns and that has to do with technological protection measures.

Clause 47 of Bill C-11 is the section dealing with TPMs and their circumvention prohibitions and exemptions. The proposed subsection 41.16(2) provides an exemption to those offering services or manufacturing products for the purpose of circumventing TPMs to produce alternative format materials. Therefore, we have this exemption for people offering services and making tools for the purpose of producing alternative formats.

However, that exemption only exists to the extent that these services or circumvention tools do not unduly impair the technological protection measure. It is not clear at least to me what it means to "unduly impair" a TPM, and this ambiguity is a concern that I want to talk more about.

First, I want to point out that the unduly impair requirement does not apply to persons with perceptual disabilities, persons acting at their request, or non-profit organizations working for their benefit. I think there has been some confusion. Proposed subsection 41.16(1) deals with those three groups — the people with perceptual disabilities, those acting at their requests and the non-profits. Proposed subsection 41.16(1) does not impose the unduly impair requirement.

The unduly impair requirement limits the ability of individuals to offer the services and tools needed for people like me and organizations like the CNIB to exercise the right to circumvent TPMs that is granted in proposed subsection 41.16(1). I will give an example that makes it a little more concrete.

If I wanted to create a website that provided software and gave very clear and simple instructions on how blind people who are using assistive technologies — screen readers, Braille displays, that sort of thing — could go about removing the TPM from an e-book so that they could access it — because without doing that, it is not accessible — and if the instructions and software that I provide circumvent the TPM in a way that unduly impairs it, I would be breaking the law under proposed subsection 41.16(2).

What is strange is that as an individual who is blind, I can use my instructions and software as often as I want without fear of punishment because of subsection 41.16(1). What I cannot do is offer my services to other blind people or organizations.

All of this, of course, depends on what exactly it means to "unduly impair" a TPM. We are asking for clarification on what precisely is meant by this phrase.

I think a website similar to the one I have described in my example, which enables blind people and non-profit organizations to exercise their rights, should not be prohibited. My concern is that the ambiguity of the phrase "unduly impair" means we really just do not know if this legislation will prohibit that sort of website. We would like this phrase to be clarified, and ideally it would be clarified in such a way that those who would enable blind Canadians to exercise their rights are not prevented from doing so.

In short, we are asking you to define the phrase "unduly impair" so as to remove the ambiguity of this proposed legislation.

By way of conclusion, I want to thank you for inviting the Alliance for Equality of Blind Canadians to testify and for listening to my presentation. I look forward to clarifying and elaborating in response to any questions you may have.

The Chair: Thank you very much, Mr. Workman.

I compliment all of our presenters today. We will begin with questions.

Senator Hervieux-Payette: When we deal with the international exchange, England, France, and so on, is the regime the same in these countries as what we will have with Bill C-11, or will we be in a different club?

Mr. Burns: It would be wonderful if we were all in the same club about that. There is a lot of international activity. There is an organization called TIGAR, Trusted Intermediary Global Access Resources, working through the WIPO organization, trying to make sure that there is an equitable international service.

The director of our library, Margaret McGrory, is chairing that initiative. There is a lot of movement to try to ensure that there is a balance internationally and that we are not out of line with others.

Senator Hervieux-Payette: So are we or will we be in line with France, the U.S. and other countries? Will the new law comply with all the same requirements as the major countries that we deal with because of the language question?

Mr. Burns: I wish I had the legal knowledge to answer that question. I do not know.

Senator Hervieux-Payette: You are not sure.

Mr. Workman: I do not know necessarily have the answer, either. I think, though, that we will be narrower than other countries because clause 37 of Bill C-11 says that we can export materials only if the copyright holder is a Canadian citizen or a citizen of the country to which it is being sent. That means we cannot send a book to Australia if the copyright holder is American. I certainly hope that other countries will not adopt such a sort of restricted system. The big example for me is if France had that same provision where you have to be a French citizen or a citizen of the country to which the work is being sent, then they could not send to Quebecers the translations of American works or of British works or of Australian works — that is, any translation where the copyright holder is from some other country than France or Canada.

I think we are being unnecessarily restrictive with that exportation clause.

Senator Hervieux-Payette: That is very interesting.

Could we know the cost difference of the material that is produced for the 90 per cent and that 10 per cent? What are the incremental costs dealing with transforming the origin of material into a form that is acceptable to those who have some disability? Is it 10 per cent more, or 15 per cent more, or 20 per cent more? How much does it cost?

Mr. Workman: In some ways it can be free. If you take the DRM, digital rights management, off an EPUB book, I can read it; if you put the DRM on, I cannot.

Now, that will not be the case in all cases. Producing Braille and audio can take more resources, but in some cases, like I said, it is as simple as not having DRM on your e-text.

Mr. Burns: It is also as complicated as in the CNIB experience of using a network of volunteers to record in studios to create an audio recording. Unfortunately, like many issues in copyright, there is no simple, single answer to the question you are asking. What we do know is that the more publishers create material in digital formats and projects are born digitally, the easier it will be for all of us. The other side to that is, sadly, we know that digital does not mean accessible. That is, just because it is digital does not mean to say that it will automatically be magically accessible, as we know from a lot of the manipulation we have to do of existing files.

The answer to your question depends on the specific nature of the format. Our intent is that as we work in partnership with publishers — and maybe this could be an issue of how publishers actually get supported in Canada in relation to the accessibility of the materials that they generate — they are generating accessible content right from the start so that we do not face these hurdles of incremental costs for creating accessible versions.

Senator Hervieux-Payette: Let us say there is a novel by a Canadian author that is digital and can be accessed through the iPad or a similar device. Will this mean that if the person is part of the exception, there will not be any copyright applied to that person individually? I do not remember who mentioned that — maybe it was Mr. Workman — when someone is doing it to earn a living, then there will be a problem because we do not know if that person will be compensated for doing so. You are doing it, I guess. On printed copy I know the system that people were reading, but you need to put it also on technical support.

Mr. Fulton or Mr. Workman, will there be a difference in the future for those who would like to give more access and create a business and make sure that a great portion of the material is available?

Mr. Burns: Can I throw another acronym on the table? There is something called DAISY, which is a digital system that is the benchmark standard for accessible materials. Not all commercially published books are in that format. Many of them are close to that format, but full DAISY technology allows material to be utterly accessible right the way through. That is the goal, obviously, of providing accessible material.

The challenge always is getting beyond the top-10 list, those that are commercially recorded. We are trying to provide an appropriate library service to Canadians of all ages, all backgrounds and all needs. It is not just a question of top-10 material or being commercially successful. It is an issue of dealing with and ensuring that the rights of Canadians to access this material are being fully supported. The challenge is not so much the top-10 lists. It is all the other material, regardless.

Senator Hervieux-Payette: Would it be possible in the future for printers to ensure that the DAISY technology will be available on the same day that the copy is on the market for the rest of the customers?

Mr. Burns: It is a very rare thing in Canada when a book is launched in all versions, accessible and conventional print and digital and electronic on the same day. It is a rare occurrence.

Senator Hervieux-Payette: Why?

Mr. Burns: That is a great question for publishers to answer. I think that the issue for publishers always is, as we know from the last couple of years of the publishing industry's history in this country, that it is rough. They are managing as best they can. The challenge is one of cost reduction, and these accessible versions take time and take extra resources. It is a challenge for them.

Senator Hervieux-Payette: Can I deduce from that that they make more money with a printed copy before they make money with their electronic version? I can talk in favour of the forestry industry in my province, knowing that we want printed copies. However, at the same time, it has become an obsolete way of distributing material and making it available readily on the market. Could we not have some kind of balance for your clientele, in particular? What would be the mechanism to make it available at the same time? Is it financial help? How can we encourage that?

Mr. Fulton: I do not think there is any impediment to delivering them all at the same time. In fact, technology is advancing where it should make it a lot easier. I think the problem is that they do not seem to have the 10 per cent, as I talked about, as a sort of front of mind when they are actually putting together their production schedules. If we can actually push more to them the social benefit of actually providing it for that 10 per cent at no extra cost to them, because basically the technology which they use in creating that digital copy of a particular book is probably all that is required to actually make it available to someone like me.

Ms. Blanas: The one thing we have to keep in mind is the fundamental right of every Canadian in terms of access to information and content. That is the place we need to start from, to think about the right of every Canadian in terms of access, whether it be Mr. Fulton or yourself walking into a library, whatever format you can classify it as, whether it is digital or online paper, and what access every Canadian has to that content and how this relates to copyright.

In one area, in terms of CNIB and in acknowledging it, section 32 reflects the support that CNIB provides in terms of the production of alternative format and materials without a specific consumer request, because every Canadian has that fundamental right.

Mr. Workman: The question was what we can do to encourage publishers. Mr. Burns alluded to a solution. We offer subsidies to publishers currently. Tie those subsidies to accessibility: You do not get the money unless you are also willing to produce some sort of accessible copy. I think there is a legislative besides a social-awareness-raising solution.

Senator Tkachuk: Just so that I am clear about the Canadian National Institute for the Blind, Mr. Fulton, you mentioned three objectives. Did you say that you got the first one? I was not quite clear about two and three and whether you got all of them, part of them or a little of them.

Mr. Burns: We did get the first part, which is helpful. The issue for CNIB is this issue of importation and exportation. We want to be very clear, sure and confident that the language in this bill supports what we do. It all relates to two things, our international relations but also how we deal with the TPM side. Those two are quite interconnected. Our concern is to be effectively working around the provision of an act, and we want to make sure that we are working fully within and consistent with, with no ambiguity, no uncertainty and no shadow or grey in what we do.

Senator Tkachuk: The government thinks there is no ambiguity, but you think there is ambiguity.

Mr. Burns: Yes, we do.

Mr. Workman: I do not think there is ambiguity with respect to CNIB removing TPMs themselves. If you look at 41.16(1), it clearly lists non-profits and says they have the right to circumvent TPMs. The ambiguity, if I am correct, is for people who provide services to CNIB. They will not be able to do that if their way of removing the TPM unduly impairs it. Then they will not be able to, under subsection 41.16(2). It is fairly clear in (1) that blind people and people with perceptual difficulties and those that act at their request and non-profits working for their benefit are able to circumvent TPMs without violating the law.

Senator Tkachuk: Thank you, Mr. Workman. That was very helpful.

Ms. Hitchon and Mr. Fisher, what exactly is the Visual Education Centre? Is it a private company?

Ms. Hitchon: Yes.

Mr. Fisher: It is a private company.

Senator Tkachuk: Are there other companies like you?

Mr. Fisher: There are about 500 companies.

Senator Tkachuk: Do you belong to an association?

Mr. Fisher: We have an informal coffee club association.

Senator Tkachuk: Ms. Hitchon, you were fairly explicit about how this bill would allow the theft of protected materials that your company and other companies like you are marketing. How exactly is that going to happen? How does the bill allow that to happen?

Ms. Hitchon: Our entire business is based on selling audio-visual materials with public performance rights. Our primary customer is the educational market. The bill says that education is now exempt from public performance rights for any cinematographic works, which essentially puts us out of business.

Senator Tkachuk: Give me a couple of examples.

Ms. Hitchon: There is a variety of titles. A teacher may want to show Charlotte's Web in the classroom because they are teaching the literary adaptation and they want to watch the movie. They would pay us for the rights to show that title in the classroom. They may have a program on the Canadian prairies, and they would pay us public performance rights for that a in the classroom.

Senator Tkachuk: Do they buy those titles from you? Does the school go to you? Does the board go to you?

Ms. Hitchon: Yes.

Senator Tkachuk: Is there a national fee paid for this? Do they rent it from you?

Ms. Hitchon: If the stuff is readily available at the home video market and teachers can easily access it, which a lot of it is, then they would purchase what we call a public performance licence, which gives them access to perhaps 18,000 programs. It is based on the FTEs of the school boards, and 75 per cent of the school boards currently already purchase these licences. If they were just interested in an individual program, they would buy the program with public performance rights.

Senator Tkachuk: What would the school do under this bill?

Ms. Hitchon: I know what the school would do. The school would just find the DVD —

Senator Tkachuk: I am the schoolteacher. How would I go about circumventing that payment? Would I have to circumvent it, or what would I do? I still have to go to the store and buy it or rent it.

Ms. Hitchon: Yes, but you would not have to pay us for the public performance rights. You might have paid $9.99 for a program, and we might sell it for $49.99, or $29.99, and the royalty part, the difference between the cost of the DVD versus the public performance rights, would go to the producers who produce the product and to us as the distributor of the product. That share will no longer exist.

Senator Tkachuk: Do you have a monopoly on this?

Ms. Hitchon: No.

Senator Tkachuk: How do you enforce that right? If I rent it as a schoolteacher, I go down to Rogers — I do not know if I can. Rogers closed down. I do not think you can get those any longer. Let us say I have an old movie at home and I show it to the class. Would I have to write you a cheque for $30?

Ms. Hitchon: No. Generally, the average cost is $1.50, if that, when it is done in bulk. We sell a blanket licensing agreement that gives them access to all of that.

Senator Tkachuk: I still do not know how the teachers will circumvent that.

Ms. Hitchon: If you talk to teachers, they all know that this stuff is covered. It says at the beginning of every program out there that this is for home use only and for any public performance, you must contact the copyright owner. They know who we are. Thankfully, most of the school districts comply, and they pay the public performance rights. That is what our business and our industry have been based on. The government, without talking to us or doing an impact study, has now decided that education can get that for free.

Senator Tkachuk: I do not think so, but that is your interpretation.

Ms. Hitchon: Hold on. Let me finish. My understanding is the reason they wanted to do this was because with new technology and the Internet, they wanted to provide clarity. They wanted teachers to have access to all of these new resources out there without fear of infringement, which we completely understand, so what we proposed in our amendment was simply give them that freedom to use something off the Internet if the copyright is not currently commercially available. Now the teachers have the freedom that they want, but us as the licence holders still can continue with our business.

Senator Tkachuk: Thank you.

Senator Massicotte: In your presentation, you refer to 29.5. I have read 29.5 seven times. You are right that they can do it in public, but it seems to be saying only if it does not infringe upon the rights of whoever produced the work. In your example, they should not be able to do so. If they take a home copy, I agree that they are doing something illegal there and there is not much you can do there. If it is infringing upon the rights of the person who produced the work, which you represent, they have to pay something. That is how I read 29.5.

Mr. Fisher: We would like to think so, but there are two things that mitigate against that. Number one, in discussions after the bill was drafted, because we were never consulted in the first instance, with both of the departments, first, we were told no, absolutely not, schools will have to continue to have the licence. Later on, we were told, no, that is not the case. That comes from the two departments.

Senator Massicotte: Read the words, because at the end of the day the judge will look upon the act, and the words say that "as long as the sound recording is not an infringing copy or the person responsible for the performance has no reasonable grounds to believe that it is an infringing copy." Does that not say that if it is still infringing?

Ms. Hitchon: I just want to add one thing.

The Chair: Let Mr. Fisher answer, and then we will get to you, Ms. Hitchon.

Mr. Fisher: The problem with this provision is that you cannot look at it in the absence of all of the other provisions. The difficulty for us is that a number of other things have changed in the act, one of which is that the penalty for violation has been dramatically reduced.

If you were right and we were to find someone who had infringed those rights, I believe the maximum penalty is $2,500. I am sure that there are some lawyers here. I cannot imagine any one of them would be willing to take on a lawsuit against a teacher on a contingency basis where the maximum penalty and reimbursement is $2,500.

Senator Massicotte: Non-commercial use. Is a classroom not commercial?

Mr. Fisher: No.

Senator Massicotte: The problem with interpretation is the monetary damages they would collect if they infringe.

Mr. Fisher: I would like to think your interpretation is correct, but the two departments have told us that is not the case.

Ms. Hitchon: Additionally, we have received $25,000 in cancellations of our agreements in the last two weeks in anticipation of this bill passing by Friday. The school board's interpretations are not what yours are either.

Senator Massicotte: You said you engaged a patent expert and sought his advice. What is his legal advice? Do you have a written opinion?

Mr. Fisher: Yes.

Ms. Hitchon: He is the one who recommended the amendment.

Senator Massicotte: I appreciate that. Has he given you legal opinions?

Ms. Hitchon: Yes.

Senator Massicotte: Is it inadequate?

Ms. Hitchon: Yes.

Mr. Fisher: Yes.

Senator Massicotte: Do you have copies of that?

Mr. Fisher: No. The only thing we have is the amendment.

Senator Massicotte: Everyone wants additional insurance; no one has enough safety bells and whistles. It is a new game, but that does not make it right. It only means everyone is concerned about the implementation. I am trying to get at whether it is really a problem or simply a concern that there is a problem.

Mr. Fisher: We think it is a real problem for a variety of reasons. The legal counsel for many of the boards of education are telling them that they do not have to honour the contracts they have with us, so there is a lot of legal advice out there.

Another thing which is also important is that if the maximum penalty is $2,500, any violation is not going to be decided by the Supreme Court of Canada. It is going to be decided by the teacher in the classroom who is going to say, "They are not going to catch me if I am wrong, but I think that I am right and I am going to go ahead and do it."

We are a small company. In total, we have about 15 employees. It is just impossible for us to police 15,000 schools in two languages in a country that is 3,500 miles wide. It is impossible. It will be a teacher in the classroom who interprets the law. I can guarantee you they are already interpreting that they do not have to pay for this.

The other thing that is important to understand is that those assets are ones that we bought and paid for.

Senator Massicotte: I understand clearly.

Mr. Fisher: In essence, it is private property that is being confiscated. Unlike other forms of taking over private property for public purposes, there is a hearing, there is compensation.

We have a neighbour who has a farm and they are building a new highway through his property. It has taken two years for them to have hearings, and he is going to be compensated not only on the basis of the current property value but on what it would have produced over the next 10 years. In this instance, our assets are stripped. It is gone, so we are not going to produce anymore. We have already stopped whatever production we have. Many of the producers we represent are not going to produce Canadian material any longer because there is no opportunity to recover the investment you have made.

This is the Banking Committee, so if you confiscated the assets of the CIBC or the Royal Bank, would you tell them to go out and find another business model?

The Chair: Thank you, Mr. Fisher.

Senator Hervieux-Payette: Maybe I will continue to clarify. I always see your corporate entity as firms that have bought rights to distribute, with a small amount for your administration and for the creators and editors. Of course, it makes life easier rather than going to each publisher to buy a book.

You have a catalogue of movies. The other one had a catalogue of music. We finally have the same concept that applies, which is a model. Do we find that model elsewhere? How do they administer elsewhere? Do they have the kind of firm that you have that makes it available to schools, such as in the U.S., so that they can have access with suppliers like you? You say you have 500 companies in Canada. Do you have exclusive rights on these movies?

Mr. Fisher: We hold exclusive rights to most of the product that we distribute. To answer your question specifically with regard to the international marketplace, according to the Copyright Board we are officially a collective. There is one other collective that does the same kind of business. There are the 400 other individual companies that produce and distribute product for themselves and others.

In Australia, there are comparable collectives. There is a collective here in Canada to aid schools in off-air taping of radio, television and Internet programs.

The most striking example I can give is that a number of years ago in the United States, before there was all the new technology, Congress exempted schools from the public performance provisions. The consequence of that was that the large companies, such as Encyclopedia Britannica, McGraw-Hill and Learning Corporation of America — all of which generate $50 million or more in business — are all gone. Without the ability to control the use of their product and the public performance of it, they were stripped of their assets.

Senator Hervieux-Payette: I guess that certainly gives us food for thought because as far as I am concerned, this is one of the major roadblocks when it comes to the creators.

Do you sell the same service to private people? Can I have access to your catalogue and order a movie?

Ms. Hitchon: Yes.

Mr. Fisher: Yes.

Senator Hervieux-Payette: What is the relationship, in terms of your business, and between me as a private citizen who wants to pay?

Ms. Hitchon: We sell public performance rights, so we sell to those who require public performance rights.

Mr. Fisher: Basically we deal with institutions, community organizations.

Senator Hervieux-Payette: Are the 499 other firms dealing only with public entities or also with the general public?

Mr. Fisher: To survive in the film business in Canada you have to be able to diversify and move from one segment of the industry to another, depending on technological changes and marketing opportunities.

Ms. Hitchon: Let me ask you this: How many private citizens are interested in watching a movie on the Canadian moose or the Prairies? They cannot generate enough revenue in the commercial market to sustain doing business on Canadian-produced programs.

Senator Hervieux-Payette: Maybe I would because I specialize in wild animals, but I agree with you.

I was wondering if there was another option for your industry or another place where you could collect a certain amount of money for distribution while part of it is being shared with the author.

Mr. Fisher: Unfortunately, the rights we hold are the public performance rights. That is the difficulty. That is what puts us out of business.

Ms. Hitchon: I am going to put this out there because I do not know what success we are going to have here today and I know this bill needs to be passed. I know there is a process before it becomes law and I believe you can make some suggestions.

There is a possibility we could survive this crisis if we were given ample time to develop a business model on a digital platform or something similar that could buy us time. I would just like to put that out there for you to consider.

Senator Tkachuk: I had asked you previously, Mr. Fisher, whether you were a company. You said you were a private company.

Mr. Fisher: Yes, we are.

Senator Tkachuk: Then Senator Hervieux-Payette asked you, and you said you were a collective.

Mr. Fisher: Yes.

Senator Tkachuk: There is a big difference. What do you mean by "collective"?

Mr. Fisher: Under Canadian law and under the rules and regulations that guide the Copyright Board, we are a private company and have been designated as a collective.

Senator Tkachuk: What does that mean, exactly?

Mr. Fisher: It means that we are a major source of public performance rights for institutions such as schools, colleges and universities, public libraries and community organizations.

Senator Tkachuk: Was it a federal bill that enabled you to become that collective? What about all the other companies that you say are out there; are they all collectives?

Mr. Fisher: No, they are not all collectives.

Senator Tkachuk: Then what is the difference between you and them?

Mr. Fisher: We are much larger. We hold more rights and we license rather than just sell.

Senator Tkachuk: Are you granted rights by someone? Who gives you the right to do that?

Mr. Fisher: We buy them from the people who produce them — the producers.

Senator Tkachuk: I am still not clear about this because I am not sure what you mean by collective. As a private entrepreneur, I would be buying rights. I would be selling those rights from time to time. At the end of the year, I would have dividends to be declared and profits to be made. Do you do that now?

Mr. Fisher: Yes, we are a private company.

Senator Tkachuk: You get to keep for yourself the money that is left over?

Mr. Fisher: If there is any left over.

Yes, we are entrepreneurs; we are business people. There is no doubt about it. We did not designate ourselves as a collective.

Senator Tkachuk: Who did?

Mr. Fisher: We were designated by the Copyright Board of Canada.

Senator Tkachuk: Okay. That is different.

Mr. Fisher: For a detailed answer, you really would need to speak with them. They contacted us, interviewed us and notified us that they had identified us as a collective.

The Chair: To all of the members of the panel, I would like to express on behalf of all members of the committee our great appreciation for your appearing today. You have been very helpful and you have raised interesting questions for us. Thank you.

Before we start our final session, I did want to inform colleagues that we have confirmed that officials from both ministries, Industry and Heritage, will be with us at four o'clock.

We now continue our study of Bill C-11, An Act to amend the Copyright Act. In this third and final session this afternoon, we are pleased to welcome, representing Access Copyright, Roanie Levy, General Counsel and Director of Policy and External Affairs; and representing the Writers' Union of Canada, Merilyn Simonds, Chair, and Marian Hebb, Legal Counsel.

Colleagues, we again have one hour for this session, and we will hear from each of our witnesses in turn, beginning with Ms. Levy.

Roanie Levy, General Counsel and Director of Policy and External Affairs, Access Copyright: I know that Access Copyright has been mentioned a couple of times in the last few sessions of the committee, so I would like to first thank you, senators, for inviting us to have an opportunity to answer any questions you may have.

[Translation]

Access Copyright is a not-for-profit, collective society that represents the interests of creators and publishers of printed works, including books, school textbooks, newspapers, magazines and so on. We provide blanket licensing, a kind of one-stop shop, that facilitates access to literary works and ensures that creators and publishers get fair remuneration when their works are used.

[English]

In the last 20 or so years that Access Copyright has been in existence, we have distributed over $300 million in royalties back to Canadian publishers and creators. The education sector is the largest consumer of published works, and so it is not surprising to learn that the educational institutions are in fact the largest beneficiaries of Access Copyright comprehensive licences. They have been licensed by Access Copyright and our sister organization, Copibec, in Quebec, for over 15 years.

When education was added to fair dealing, creators and publishers, Access Copyright and others came before the legislative committee and then the Senate raising concerns about the consequence of adding education to fair dealing; concerns about existing and future business models; concerns about licensing revenues disappearing; concerns about primary sales being reduced and investments being challenged; and concerns about increased litigation.

Our stakeholders in the education sector, on the other hand, came before the legislative committee and the Senate and said that they will continue paying for licences and they will continue paying for books, as they have always in the past, insinuating that we were grossly exaggerating the negative impact of adding education to fair dealing.

In the next few minutes, I would like to give you a concrete example on how adding education to fair dealing has already negatively impacted the market for published works. It has done so in anticipation of the bill coming into force.

Very recently, Access Copyright was successful in negotiating model licences for the post-secondary sector. It negotiated these licences with representatives from the Association of Universities and Colleges of Canada as well as the Association of Canadian Community Colleges. Negotiations included presidents of universities. The model licence is essentially an extension of a licence that has been in place for well over 15 years. The past licence covered photocopying and this model licence covers photocopying and digital uses of copyright protected works.

What is most instructive about the impact of adding education to fair dealing is the reaction from some of the stakeholders in the education community regarding these model licences. Immediately after the model licences were announced, stakeholders from the education community rose up and challenged the need for educational institutions to sign these licences, again covering uses that have not been paid for in over 15 years.

I will simply quote from what they have been in saying in opposition to the model licence. Here, I have an open letter addressed to the AUCC from the Canadian Alliance of Student Associations. CASA came before the committee last week. They are urging universities not to sign the licence and they say:

Canada's Parliament has just passed Bill C-11. Upon receiving royal assent, this legislation will allow for Fair Dealing for education. This means that many uses of the works in Access Copyright's repertoire will be permitted.

Here I have a letter by the Atlantic Provinces Library Association, again urging the universities in the Atlantic Provinces not to sign the model licence for uses that have been covered and paid for well over 15 years. They say:

Why would AUCC sign this agreement now with Access Copyright? Bill C-11, the Copyright Modernization Act that is like to be passed soon, will expand the fair dealing rights that the academic community currently enjoys.

Here I have a memo to University of Windsor faculty, staff and students. It is written by the University of Windsor copyright officer, explaining the university's decision not to sign the model licence as follows:

Any value a licence agreement with Access Copyright may have is likely to be reduced with the imminent passing of Bill C-11 and its introduction of new language into the Act in support of educational uses of copyright material.

Now I have here before me a column published in the Toronto Star by Professor Michael Geist. He, too, was before the committee last week. He is encouraging universities not to sign the model licence. He says:

Even more curious is the timing of the AUCC agreement. Bill C-11, the government's copyright bill, features several provisions designed to assist education.

It goes on and on and on. I have dozens and dozens of such examples.

Adding education to fair dealing is having an impact today on the ability of creators and publishers to continue to be paid for the uses of their work. We urge the Senate committee to consider in its report back to the Senate to include an observation that "fair dealing" should be clarified so that the government's stated intention, the intention that was expressed by the government in its backgrounders, namely that fair dealing not prejudice the legitimate interests of the copyright owner or have a negative impact on the market, be actually clarified. Thank you.

The Chair: Thank you, Ms. Levy.

Ms. Simonds.

Merilyn Simonds, Chair, The Writers' Union of Canada: Good afternoon. I am pleased to have this opportunity to speak on behalf of the Writers' Union of Canada. Do not try to follow along in our text; I have condensed my text so as not to take up too much of your time since you have had a long day.

I am a writer, the author of 15 books. I am also Chair of the Writers' Union of Canada, which is the national voice of our country's English language professional book writers. The union was founded 40 years ago by writers such as Margaret Atwood and Margaret Laurence, in order to give writers a voice in this country. We were certified in 1998 by the Status of the Artists Act, and we now represent some 2,000 professional book writers working in every region of the country.

The Copyright Act, as you know, provides essential protection for our writing, which is the soul of Canada's education and information cultures. It is also the beating heart of our flourishing but somewhat fragile national publishing industry, through which all Canadians share their stories. The crafters of the original Copyright Act rightly understood that protection of original work is essential to the commercial development of that work. I think we all agree on this. Original work requires protection from those who would steal it or abuse it.

Bill C-11 intends to update the Copyright Act for the digital environment. We recognize the need to accommodate the evolving digital information age. We recognize the urge to provide greater access to users, but we insist that this not be done at the expense of the principle of payment for the use of work.

We are at the eleventh hour. We know this. For the writers of this country, the passage of an unamended Bill C-11 will drastically alter our working lives and compromise our ability to work at all.

In our view, some of the exceptions in Bill C-11 amount to nothing less than expropriation without compensation, legalized theft. Not only are we denied the outright payment for certain reproduction of our work, but this free copying will result in fewer sales of our books. Forced donation or legislated giveaway of the results of one's labour is not a sustainable business model. Writers' markets and incomes will shrink. We will find it increasingly difficult to survive. The writing profession will be less attractive to a new generation of writers. What will be the result? Fewer made-in-Canada books for Canadian students and for Canadian readers. In the end, an act that is intended to protect creators will, in fact, discourage creation, which I do not believe is the intent of the legislators at all.

We recognize that it is very late to incorporate into the Copyright Act the many amendments that we suggested in our original submission to the House. We, therefore, confine ourselves to just one request: Incorporate the Berne Convention's three-step test as a guideline for those who will have to interpret this act and its most difficult clauses.

The scope of many of the new exceptions in Bill C-11 is uncertain. You have heard this over and over again, I know. Ill-defined or undefined exceptions will lead to prolonged litigation. The courts, not the government, will be required to decide what is permissible. Most damaging for writers is, once again, the fair dealing for education provision, which creates incredible uncertainty around just how much work can be copied without compensating the rights holder. A page? A story? A few chapters? Half a book? The whole book? As it stands, this is only going to be resolved by costly litigation on a case-by-case basis.

We believe strongly, furthermore, that certain exceptions in Bill C-11, including the fair-dealing exception for education, depart significantly from the international recognized norms referred to in the bill's preamble.

In fact, we believe that these actually breach Canada's international commitments. Without some guide to interpretation, these exceptions will almost certainly expose Canada to complaints from foreign rights holders. Because they will interfere with current and potential revenue streams, it is our opinion that these will be viewed by our international colleagues as a breach of the three-step Berne Convention, which states, in reference to literary and artistic work, that it is possible to permit the reproduction of such works in certain cases, "provided that such reproduction does not conflict with the normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author."

That is echoed in NAFTA, in the TRIPS agreement and in the WIPO Copyright Treaty, which Bill C-11 is intended to implement. In Canada, as you know, international treaties do not become part of the law until their provisions are actually implemented into our own legislation. Therefore, we believe that it is essential for the three-step test to be incorporated into the Copyright Act to assist judges in interpreting Parliament's intent. Consequently, we recommend to the Senate that the three-step test articulated in the Berne Convention and the WIPO Copyright Treaty, as proposed by the coalition coordinated by the Canadian Conference of the Arts, whom you have already heard from, be inserted into the Copyright Act to assist the courts in future interpretation of exceptions.

For Canadian writers, adding this provision is an acceptable alternative to amending specific sections of Bill C-11. It is and it will, we believe, help to ensure that the modernization of the Copyright Act preserves the reasonable, legitimate interests of creators, who are fundamental to our Canadian society now and in the future.

Thank you. Marian Hebb, our legal counsel, and I welcome your questions.

The Chair: Ms. Hebb, do you have any additional comments that you would like to make?

Marian Hebb, Legal Counsel, The Writers' Union of Canada: You heard how broad these exceptions are, especially in the case of the education. The word "education" does not just include the schools and the thousands of students in this country that you have heard about. It would also include education within corporations, private businesses that provide education in some way and whale watching. These very broad words have absolutely astonished some of our international colleagues.

Adding this three-step test into the act as an aid to interpretation would not take away any of the exceptions that the government wishes to create. It would simply be a lens through which the courts would look at the exceptions and take into account conditions that already bind Canada. The courts normally just look at the words. In the case of fair dealing, people have told you that the Supreme Court has talked about various factors that would ensure that there was fairness, but those particular factors give no comfort to writers. If you were to add this three-step test as a lens for the courts, it would give some comfort to our trading partners and probably head off some international challenges, as well as giving some comfort to our own rights holders.

The Chair: Thank you, Ms. Hebb.

I understand, honourable senators, that we have a vote at 4:15, so we will have to work on a little rescheduling. I assume that we will depart here at 4 for the vote at 4:15, and we will have to get the panel back from the ministries. I will leave that with you.

Senator Hervieux-Payette: Thank you, Mr. Chair.

It may be a question of priorities, but we feel, from what you have said, that it would not be very encouraging for future generations to become writers. On the shelves of our great bookstores in this country, what is the percentage of Canadian authors?

Ms. Simonds: I believe that at the moment it is around 25 per cent Canadian content. It is fairly low, and that is one of the consequences of living where we do, beside a very large English-language country that produces 10 times the number of books that we do. Hence the nature of our publishing industry as fragile and also the extremely low incomes that even professional book writers in this country enjoy. We survey our members, and the average income among our members is well below the poverty line, something between $11,000 and $15,000 a year, approximately 10 per cent of which comes from secondary uses, reproduction through Access Copyright. The impact on us is significant, especially when you consider what a marginal industry it is. Without us, you would not have the stories that we share with each other, now and in the future.

Senator Hervieux-Payette: It is important to have that factor in mind. We do not legislate in a vacuum. The context is important. I feel that we are even less privileged. I do not think that it is even 25 per cent in the French language.

Why the Berne Convention? Maybe Ms. Hebb could explain to us why it was not retained. What was the argument that you got as to why this was not included?

I agree with you that we can sign all the conventions in the world, but they do not apply to the legislation. We have to incorporate them in legislation. Why would the ministry not incorporate the international standard?

Ms. Hebb: This was something that we proposed after we saw the bill. It was not something that would normally be necessary to start with, because a country that belongs to these international conventions is supposed to craft exceptions in such a way that they would comply with these international conventions. The assumption is that all the exceptions they have created do comply with the three-step test, but education covers a huge swath of material. This was our way of trying to rescue the bill for the government. Frankly, none of us know what it will mean. What the courts will do with this is unpredictable, and the government has chosen not to tell us what we should or could be doing. They have not given us anything definite. They have left the responsibility to the courts. We are saying that it will help the courts to have this international test that they must look at when interpreting a particular provision.

Senator Hervieux-Payette: When it comes to banks, we have the law and the regulations, and then we have the guidelines. I would say that the guidelines and the regulations are thicker books than the bill itself.

I am wondering whether at this time we could convince the ministers to introduce some regulations that would at least give the intention of the legislator, as well as introducing some guidelines. The people in the banking industry take that very seriously, and they are even more specific for each player in the sector. We need both regulations and guidelines.

The effect of this law is taking place before the law is even passed, something I have not seen very often in my life on the Hill.

"Education" covers a very large area. I understand why students do not want to pay in any way, shape or form, but nothing is free. The ones who are the least rewarded for their work are the creators.

How can we have a balanced approach? Do you believe that it would be appropriate to recommend regulations and guidelines to the ministers?

Ms. Hebb: In order for there to be regulations it would have to be written into the bill that the ministry can prescribe regulations. Otherwise, regulations will make no difference. The regulations themselves are outside the bill, but the fact that there is regulation power has to be written into the bill, which would involve a change. I think that regulation power would be a good idea. I would not like that to be a replacement for the three-step test, because I think that is crucial, but it would be good to have both of them. There could be consultation to work something out between the competing sectors. It is very sad to see the education sector fighting with the rights holder sector. None of us have the money to litigate.

Senator Hervieux-Payette: Should we have a clause requiring a review in five years? Should we watch the behaviour of the sector for the next 12 or 18 months to reassess the situation?

I am worried because the bill has supposedly been interpreted by many players as meaning that they will not have to pay. Perhaps the minister could give a strong signal that that was not the intent.

I sit on the Standing Joint Committee for the Scrutiny of Regulations which reviews the regulations of the government. Parliamentarians are much more involved in that than we used to be. I agree with you that it is better to have it in the law, but I have seen many regulations before that committee that extended the power of the minister to a large extent. I feel that we have to find an accommodation that would maintain the fairness part of the bill. Would you be in favour of reviewing this in 12 months to see how it is being implemented?

Ms. Hebb: I am simply saying that if there is not a mention in the bill of there being regulations, there will not be regulations that would affect the bill. Some players will certainly disappear in the next 12 months if this bill is not amended in some way.

Ms. Simonds: I think that is true. These consequences started over a year ago, and they are reaching a pitch now. This is essentially destroying collective societies. It is breaking apart a structure that exists now for the convenience of the user and the creator, and it is destroying that essential centre.

My fear is that by the time it is reassessed, that will no longer exist. We are not against access. Writers want to share their work, but we want to share it on an individual basis for research. However, where it replaces the purchase of our work, where it replaces sales, then we need to be compensated, and the principle of compensation for the use of work will be destroyed, and a generation of people will grow up not honouring the right of creators to what they have produced, which is fundamental to our society.

Senator Nancy Ruth: Witnesses on the last panel said that their "rights are given away for free and traded for user rights." You have said "no payment for the use of our work." That seems quite out of sync with what should be. I am inclined to support what you are asking for.

Within the last half hour I have received an email from a university president from Nova Scotia asking whether the copyright bill has passed yet. Do you have any idea how much money the universities will save if this bill passes as it is now?

Ms. Simonds: They will save $26 per student. They pay more to go to the gym. That $26 per university student gives them access to millions of works, and it compensates creators sufficiently, so it is a small amount of money on a per-student basis.

I have had conversations in the last three weeks with several university presidents and legal counsels, and they are watching today with huge anticipation. They are all poised. It will change their lives.

Senator Ringuette: But they are all paid.

Ms. Simonds: Yes, they all have large salaries, thank you very much.

Senator Nancy Ruth: How much would the boards of education save at the high school or grade school level?

Ms. Levy: That is a good question. We actually do not know the answer to that question because the Copyright Board set a rate in 2009 of $5.16 per student. That is how much they would save. However, the ministers of education disagree with the Copyright Board's interpretation of how much of the use they make in the classroom is actually fair. They appealed to the Federal Court of Appeal. The Federal Court of Appeal said, "Actually, the Copyright Board's decision sounds reasonable to us. We will let it stand." They sought leave to appeal to the Supreme Court. We were at the Supreme Court in December. At the Supreme Court, they essentially asked that they not have to pay for as much of the copies that they make, even though the Copyright Board did a very rigorous analysis of what they were copying, what kinds of works and the markets for those works. It went through the six steps of the Supreme Court decision in 2004 and came with a reasonable decision. We do not know the decision to that, but that is an example of the uncertainty created simply around the concept of fairness and the willingness of the education sector, including ministries of education, to go all the way to the Supreme Court in order to pay less.

Senator Nancy Ruth: Can I assume, then, that your organizations might be interested in taking this law to court as an infringement of rights to be paid for work?

Ms. Levy: We would take it to court if the result is that creators and publishers are not paid for the uses of their work. We would rather not have to go to court. Creators and publishers can ill afford the costs of litigation. Going to the Supreme Court has cost literally millions of dollars. To the ministries of education of Canada, that may not be that large in their budget, but to the creators and to the publishers that essentially financed it through the royalties they would have otherwise received directly from Access Copyright, it is a lot of money.

Senator Moore: As a supplementary to Senator Nancy Ruth's intervention, it is interesting that you had a contact from the University of Nova Scotia. I have a contact from a university in Ontario who wants to know whether the bill has received Royal Assent because they are thinking about the timing, and if that is it, we will not do a deal with Access Copyright. This is Queen's.

Ms. Levy: Again, I want to highlight that these are for uses that they have been paying for for 15 years.

Senator Tkachuk: I was going to get to that. I am not sure about Access Copyright, but you are both creatures of legislation. I think Access Copyright and the union are under federal legislation, are you not, that would enable you to represent these people and to make negotiations with the universities or with the school boards across the country or with departments of education?

Ms. Levy: Actually, Access Copyright exists as a voluntary organization. The creators and the publishers who own the rights that we licence voluntarily created Access Copyright to represent them in a collective way in order to facilitate access to works. In fact, if the creators and publishers did not want to act through a collective, they could individually manage their rights. In order to increase access, because that is to the benefit of the users, they have bound together through a collective in order to do it in a more seamless, easier way, reducing transaction costs for everyone.

Ms. Hebb: The Writers' Union is not a creature of statute in the same way. We are incorporated under the Canada Corporations Act, but in fact it is a voluntary organization that tries to assist writers to set professional standards and to advocate on behalf of writers, but it is not a collective. It does not represent copyright in the same way that Access Copyright does.

Senator Tkachuk: Why do universities have to deal with Access Copyright now?

Ms. Levy: Universities have to deal with Access Copyright because professors and students use the works in Access Copyright's repertoire. When fair dealing for education gets added, some of them are now saying they will not need to rely on Access Copyright any longer given the statutory authorization or the expropriation, as Ms. Simonds pointed out, that would be created by fair dealing for education. They deal with Access Copyright because they use the works in our repertoire. That is the simple answer.

Senator Tkachuk: If they are in your repertoire, how do they use the rights outside of you?

Ms. Levy: They infringe. That is how they use it. They use it without paying. They infringe.

Senator Tkachuk: In what way? Would they be printing books or printing off articles that were copyrighted and handing them out to students? Would they not be breaking law if they did that?

Ms. Simonds: I am also a university professor as well as a writer. What the general public may not know is that there are very few textbooks studied in universities any longer. It is all course packs. A student does not buy a textbook to keep for 30 or 40 years the way we all did. They get a photocopied course pack, so that all of the material they study from, or a huge proportion of it now, is photocopied. They do not buy a book. They photocopy books that are in the library. Professors say, "Photocopy this, this and this," and they make up a course pack and sell that course pack to the students for $75. It is a bunch of photocopies. Instead of having the students buy the books, they photocopy.

The university goes to Access Copyright and buys a licence that actually allows them to photocopy all those things. If they are not a member of Access Copyright and do not pay for the licence, they are required to go to each author and gain permission. UBC, for instance, has been without a licence for quite a long time, and I teach there. We have run little samples where professors have inserted works of people that we know to see if actually the university did ask for permission, and they did not. It is a lot of work to do it individually. In our department alone, there are 60 professors, and at 10 authors per course pack, that is 600 people you have to get licences from. It is ridiculous. No one will do it. Access Copyright makes it simple.

Ms. Levy: Ms. Simonds is absolutely correct in terms of how it works. They photocopy pages, put them into course packs and sell them to students. With the digital uses of works, they scan chapters, upload them on course management sites, or essentially websites for individual courses, and that way students can access the work, read it online, print it, download it, et cetera. That is how content is being used in classrooms across the country.

It is a little bit here and a little bit there. A lot of people have come before the Senate saying, "We will never copy the entire book." That has never happened and that is not what we are talking that. Copying a little bit here and a little bit there adds up to a heck of a lot. This is conservative, because it is only the numbers of pages that get reported to us. There is a lot of use under our licence that we do not ask for reporting of because it would be very cumbersome. We only ask for reporting of some of the uses so that we know who to pay. Of the uses that get reported to us in any given year, about half a billion pages are getting copied, and that is a conservative estimate again. A half a billion pages of copyright protected work get copied — half a billion — in classrooms across this country. If you were to translate that to books and say it is about 200 pages per book, we are talking almost 3 million books. It is a lot for a country of this size and a market of this size. A little bit here, a little bit there, a chapter here and a chapter there, and it adds up to a lot. When it is compensated for through the licences, then everyone is happy. There is access, there is facility and there is payment.

I will give you an example. This is what will happen. In their mind, it is not theft. This is all about the uncertainty around Bill C-11 that we ask to be clarified. Here I have a letter from the Professional Libraries of Brock University. They are writing to go the Provost and Vice President of Brock University, urging him not to sign the model licence, again, uses that they used to pay for. They quote Michael Geist at one point and say that certain provisions created by C-11 greatly favour Brock University and other educational institutions. They quote six provisions, including fair dealing for education.

They go on to say:

With the expected passing of C-11, it is important to recognize the protections it will afford Brock.

This is how they view the change. It will protect them so that they will not be sued.

In this light, it would be hasty to sign any contract that ignores the gains obtained from C-11.

Later on, they go on to how they will use the works.

They say:

Many Canadian Universities have decided not to adopt the model license, and instead have entered into a position of fair dealing with copyright enforcement.

This is how they will continue to use the works and not have to pay for them: they will adopt a position of fair dealing.

The Chair: I have to interject because we have another questioner.

Senator Tkachuk: Do you have an agreement signed with the Canadian universities now?

Ms. Levy: There are a couple of universities that have signed the agreement. U of T and Western were the first to come on board and sign an agreement. We have some universities that are under an interim tariff, which is set up by the Copyright Board to deal with a transition provision. We are waiting to hear from the other universities to see who else will sign the model licence.

Senator Tkachuk: It says you have —

The Chair: I will go to my next questioner, and we may come back.

Senator L. Smith: It is an emotional subject. I will ask you to backtrack and help. I am trying to understand the money trail. Could you walk me through creator, publisher and distributor to the end user? Where is the money going? Who gets what? We had a writer come in last week and told us she makes 90 cents on a $10 book.

Ms. Simonds you made a comment that this compensation takes care of the creators sufficiently. Then you mentioned that this legislation will destroy any opportunity for the creator, which I found as a bit of a contradictory statement.

You also said 25 per cent of the content is Canadian.

I am trying to understand, for someone who is a writer, how does the trail work? Who gets what money and how is the system working? Maybe the system itself is flawed. I just want to have an understanding because we do not deal with this every day.

Ms. Simonds: You are talking about a few different —

Senator L. Smith: Show me the food chain. Give me a transaction, so we can all understand where the money is going.

Ms. Simonds: When you write a book, traditionally 10 per cent of the retail price goes back to the writer as a royalty. That is what that person meant. She was obviously earning a 9 per cent royalty; on a $10 book, she was earning 90 cents. On a $30 book, I earn $3. That is the royalty on the sale of a book. That is general.

What we are talking about here are reproductive rights. When that book is photocopied or digitized in some way, the digital or reproductive rights are called a secondary right. We still own those. We negotiate that in our contract with the publisher, and we usually share them with the publisher. Often it is a 50/50 split, let us say it is.

When a publisher signs on with Access Copyright and an author signs on with Access Copyright, then when our work is photocopied, it is reported to Access Copyright and a portion of the fee they pay is streamed according to our percentages: 50 per cent to the writer and 50 per cent to the publisher.

Senator L. Smith: Walk me through the $10 or the $20 purchases. Who gets all the money?

Ms. Simonds: In terms of the purchase of the book, 10 per cent goes to the writer and approximately 40 per cent goes to the distributor.

Senator L. Smith: The collective?

Ms. Simonds: No. I am talking about the bookstore. The bookstore gets about 40 per cent or so. It is the distributor. Then the publisher has all their costs. They pay printers, designers, publicists, marketers — all of those people. Their profits are in the neighbourhood of only about 3 to 5 per cent. With that, they have to reinvest in their business.

Senator L. Smith: The collectives are selling the secondary rights, are they?

Ms. Levy: The collective will license the secondary rights. The revenues collected by the collective will get redistributed by the collective itself. As Ms. Simonds has pointed out, if the creator is affiliated with Access Copyright and we are dealing with a work where the copyright is shared, Access Copyright will give 50 per cent of the revenues to the creator and 50 per cent of the revenues to the publisher.

There are some licences, as I mentioned, where we do not ask for the reporting of every title that is used, so we do not know precisely what gets used. In those scenarios, we take 50 per cent of the revenues generated from those kinds of licences and that goes to a pool for publishers. Then 50 per cent goes to a pool for creators. Those pools are redistributed out to publishers and creators with different kind of mechanisms or models attached to them. For the publishers it is based on the sales, and for the creators it is based on their publication history.

Senator L. Smith: It just seems odd when the statements are made through some witnesses that the writers are averaging between $15,000 and $24,000 per year. How can they live off of that? They must have other jobs.

Ms. Simonds: Most of us cobble a living together. We teach a course here, we write a review there. I also run a literary festival. We do a lot of things. We do not expect to earn $120,000 a year from writing a book. We are part of the gift economy; it is a different kind of economy, and that is our choice.

However, it is shattering to us as creators to earn absolutely nothing and to have the sense that our society does not respect what we do enough that they legislate away our right to be compensated for the use of our work.

Senator Greene: Increasingly, we are seeing more and more books being digitally published, whether they are novels or textbooks. They never go through the standard production route of a book. How does that situation work, and does the collective represent those people?

Ms. Simonds: I will answer the first part and Ms. Levy can answer the second.

There are two ways. If you have a contract with a standard publishing company, such as Random House, your book will be published in a print edition and also in an e-edition — an electronic edition.

Senator Greene: Suppose the author chooses to go straight to digital?

Ms. Simonds: That is one way a book can arrive in the marketplace.

The other way is that writers can self-publish. That is increasingly the case in this country. In that case, they do all of the various jobs themselves and put it online, often through a company such as Amazon, which is reaping the benefits from those. Do not forget that Amazon has a new lending library, as well.

Ms. Levy: Access Copyright represents self-published authors as well. Therefore, we will represent those rights, as well.

Senator Greene: I see. I would imagine that over the course of time, more and more people will be using digital mechanisms to publish and their products will never be part of a book where you can actually photocopy anything. That said, they will all be downloadable, though, I would expect.

Ms. Simonds: That is a huge problem. For instance, if the universities do not sign on with Access Copyright, they will not even have a dozen publishers to approach. They now have hundreds — maybe thousands — of individual authors to find and negotiate transactional licences with, which is an impossible situation.

The Chair: Witnesses, you have made excellent presentations. That concludes our questions this afternoon. We thank you very much for appearing before us.

I will ask the committee to just stay for a moment. I need two minutes.

(The committee continued in camera.)