EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, October 9, 1996

.1815

[English]

The Chairman: I call the meeting of the Standing Committee on Canadian Heritage to order to hear witnesses regarding Bill C-32,

[Translation]

an Act to amend the Copyright Act.

Tonight, it is our pleasure to hear from a panel of radio broadcasters. I am going to askMr. Marc-André Lévesque, who is chairing the round table this evening, to introduce his colleagues to us, please.

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Mr. Marc-André Lévesque (President, Groupe Radio Antenne 6): Mr. Chairman, each of us will introduce his station.

The Chairman: All right.

[English]

Mr. Stu Morton (Vice-President, OK Radio Group Ltd.): My name is Stu Morton. I'm the vice-president and co-owner of the OK Radio Group, and I'm based in Victoria, B.C.

Mr. Dwaine Dietrich (General Manager, CHAT Radio & Television; Monarch Broadcasting Ltd.): My name is Dwaine Dietrich. I'm the general manager of CHAT Radio & Television, in Medicine Hat, Alberta.

Mr. Paul Osborne (Vice-President and General Manager, Cambridge Radio International): My name is Paul Osborne. I'm the general manager and sales manager of CIAM-AM 96 Radio in Cambridge, Ontario.

Mr. Blair Daggett (General Manager, Newfoundland West, Newcap Broadcasting): My name is Blair Daggett. I'm general manager for Newfoundland West of Newcap, at CKXX Country in Corner Brook, CKXG Radio Network in Grand Falls, and CKXD in Gander, Newfoundland.

[Translation]

Mr. Lévesque: My name is Marc-André Lévesque. I am president and co-owner the Groupe Radio Antenne 6, which operates five stations in Lac-Saint-Jean.

[English]

Mr. Johnny Lombardi (President, Canadian Association of Ethnic (Radio) Broadcasters (CAEB)): My name is Johnny Lombardi of CHIN Radio and TV International in Toronto. I'm here representing the Canadian Association of Ethnic (Radio) Broadcasters throughout Canada. The stations are in Vancouver, Edmonton, Winnipeg, Brampton, Mississauga, Oakville, Toronto and Montreal.

The Chairman: Boy, you have quite a job. Do you ever sleep at night?

Mr. Lombardi: I like the job.

[Translation]

The Chairman: Mr. Lévesque, do you have another colleague who is on your panel?

Mr. Lévesque: No, he is with Mr. Lombardi.

[English]

Mr. Lombardi: Mr. Carl Redhead is our operations manager. Because I have trouble with my left ear, he's going to help me in case I miss out on some things. He'll pass me a note.

The Chairman: Okay, Mr. Lombardi, by all means.

Mr. Lévesque, you know the format. You make your own presentation - and we are hoping it will be short and concise in order to give time for the members to question you. But it's up to you. The meeting and the floor are yours.

[Translation]

Mr. Lévesque: Thank you, Mr. Chairman. Mr. Chairman, lady and gentlemen members of the committee,

[English]

on behalf of my fellow broadcasters who are here with me, I primarily would like to thank the committee for selecting us and for giving us the chance to tell you about the feelings of small broadcasters from all over Canada in regard to Bill C-32.

My colleagues and I met for the first time this afternoon, as you have seen, but it did not take long to realize that we have a lot in common in spite of our regional differences. We all feel Bill C-32 represents a real threat to the future of many radio stations across the country. During this session, we're going to try to explain why it is so. If you please, we'll start with Mr. John Lombardi.

Mr. Lombardi: Thank you very much.

Mr. Chairman, ladies and gentlemen of the committee, my name is Johnny Lombardi, president of CHIN Radio-TV International, and I'm here in Ottawa wearing two hats today as president of the Canadian Association of Ethnic (Radio) Broadcasters in Vancouver, Edmonton, Winnipeg, Brampton, Mississauga, Oakville, Toronto and Montreal. We are eleven community radio stations, each of us speaking out to twenty to thirty or more cultures and languages other than the official languages. I assure you that we are all Canadians first, but we are very proud of the communities we serve by promoting day in and day out culture, heritage and language, and by interpreting Canada, speeding up integration, informing and entertaining.

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Community ethnic radio is different from mainstream radio. Mainstream radio mostly serves a particular, unilingual segment and age group, with each station picking a particular format and dividing the official language pie. Some large cities in Canada have over 35 radio stations dividing the market. On the other hand, the ethnic community stations must be all things to all members of families in each different language and cultural community. All officially licenced radio stations should be exempt from neighbouring rights fees, just as all community stations are exempt.

I would like to comment of ephemeral rights. Radio without the tape recorder is like a clerk without a pencil and an eraser. Today, computers have taken over from the tape recorder. It is simply a tool like the pencil, pen and eraser. The tool is used to process sound, transfer it, edit it, and save it. This process is a necessity of modern broadcasting. Transfer is a cost but not a financial gain. Each of our stations requires many storage and library archives to draw from in recorded playback of community song festivals and picnics sponsored by our ethnic community stations. We find this delayed broadcasting of events particularly stimulating for our community audiences. They, the live participants, hear themselves performing later on in the comfort of home. This helps talent to improve for the next live performance. It is our way of finding and then developing Canadian content and ethnic talent.

We should not be required to pay a mechanical fee for using the legitimate tools of our profession. I might add that as a long-time professional musician, I salute the hard work and talents of authors and composers. We, as ethnic broadcasters, do pay our share to authors and composers through SOCAN, and have been doing that for years. All our ethnic music is hard to come by, and requires us to purchase all our records at the total retail price in the country of origin, be it Italy, Portugal, Greece, Afghanistan or the Far East. We cannot buy here in Canada because U.S.A.-owned and Canadian record companies in Canada do not press or import ethnic records. Small record shops await ethnic radio to buy and air the hit records and to create a market, and they then import a little stock for a sure sell and profit.

So you see, we do not get any free records, and even buying at retail in foreign countries requires each producer to travel to his particular homeland to first audition and then purchase the records. Imagine the cost to our ethnic producers and stations to air programs with music from the homeland. The record companies do nothing for us. Why should we pay over and above SOCAN?

Again, I repeat, over eleven ethnic community stations employ many homeland producers in each diverse and exciting community, some of whose members did not come to Canada until ten or fifteen years ago and have need more and more for their own programming in the language and culture they most understand. To continue to serve the radio needs of communities within communities, the members of our Canadian Association of Ethnic (Radio) Broadcasters must be made exempt from further costs to their already additional unique costs to operate. Imagine how many libraries, translators, producers, announcers, studios and equipment and administrative staff are required by our Canadian Association of Ethnic Broadcasters and their members, who are very dedicated to communities. Each producer and language is a radio station in itself. Therefore, we oppose Bill C-32 because it will further risk the survival of our ethnic broadcasters.

Thank you very much.

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The Chairman: Thank you, Mr. Lombardi.

[Translation]

Are there other participants?

[English]

Mr. Daggett: Thank you, Mr. Chairman.

First of all, let me tell you about my stations' situation in Newfoundland. I'm responsible for three stations, CKXX AM in Corner Brook, CKXG AM in Grand Falls, and CKXD AM in Gander, all known as KIXX Country. I've been a radio broadcaster since 1979. During that time, I've seen small station staffing levels decline considerably. When I started, we'd have at least twenty people in a small station. Today, we have eleven each in Corner Brook and Grand Falls, and there are just four in Gander. Nevertheless, even these small numbers of full-time jobs in Newfoundland are in jeopardy thanks to the legislation you see before you.

Gone are the days when radio stations were licences to print money. Declining retail advertising dollars have meant a long struggle to profitability. Two of my stations do manage to make a marginal profit, but any increases in expenses will curtail our modest gains.

I understand and appreciate that small stations will be exempt from neighbouring rights; however, my stations are part of a larger company. I am very concerned that the provisions in C-32 will cause our parent company to lose interest in smaller holdings that they now subsidize. By adding costs to our bigger stations, you will force them to cut expenses elsewhere. One obvious choice would be to drop smaller, borderline properties.

Another aspect of Bill C-32 that I wish to discuss is the transfer of format provision. All of my stations play a significant amount of local music. This music is unique to Newfoundland, and some of these selections are on old records that are irreplaceable. If we are forced to pay extra to bring these songs up to date by either dubbing them onto a cassette, reel-to-reel or digital platform, they will likely disappear from the airwaves. A significant part of Newfoundland and Canadian heritage will be lost.

The time-shifting portion of this bill is particularly distasteful to my fellow broadcasters in Newfoundland. Imagine not being able to do a simple thing like start a program at the beginning of an hour, which is a half hour sooner on the mainland, because it will cost more. Feature programs originating in Ontario arrive in Newfoundland too late for prime times. Having to pay extra to store them for later airing in prime time is downright prejudiced. KIXX Country Radio in Corner Brook features a Newfoundland music program called The Banks of Newfoundland. It is produced in Alberta and shipped to us on tape. If we have to pay extra to air the show, local artists will lose air time and suffer will loss of sales as a result.

It seems to me that the CRTC and Heritage Canada are working at cross purposes. One encourages diversification, while the other brings in extra taxes to discourage it. Any local program initiatives like talent contests and other musical entertainment programs will now be discouraged because of the added expense. And it's not just the extra fees the legislation will add that are painful. How are we to administer these fees? How will the government enforce them? You will add expenses as all of these additional payments are processed.

As an industry, we are losing money. This legislation may well put small stations, such as the ones I am responsible for, on the endangered list. I urge you to make the radio industry exempt from these provisions of Bill C-32.

Thank you.

The Chairman: Thank you, Mr. Daggett. Mr. Osborne.

Mr. Osborne: Once again, I'm Paul Osborne, from CIAM Radio.

You'll notice that my brief is also signed by Kimberley Thompson, who is now the president of the Cambridge Chamber of Commerce. She had hoped to be here. Unfortunately, they had a very important chamber of commerce meeting tonight that she could not miss, given the short notice. But she was the leader of a group who sat down with myself to talk about what could happen with Bill C-32.

I represent a lot of small radio stations across Canada that are the only radio stations in their markets. That's it, there are not many. We are really our communities' only true link to local news and local information, so it's really basic.

When you wake up in the morning and it's snowing like crazy out, you go for the radio and turn it on to see if the buses are running. When you have to get get your day planned, we are there for the city of Cambridge. If there are road closures and you've maybe picked up the children are heading home, we can help you out and make sure you get there with the quickest and safest route. We're the only station that will attend the church bake sale when the Pentecostal Church is trying to raise a few dollars for their church. We'll be the station the Big Brothers call to put on a benefit baseball game in order that they can raise some money. We're the ones who will put an announcer in a skyjack three stories above a shopping mall to raise money for the United Way.

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That's the type of station we are in our city, like many others. We're also the only station that will take the time to go to the Cambridge Fall Fair and tape the talent contest - and the word ``talent'' is sometimes used rather freely there.

This bill scares me, and it scared Kim Thompson from the chamber a bit as well. She was a little nervous about what this could mean to us in the big picture.

We've been in Cambridge since 1954. We are owned by Power Broadcasting, which has several stations in Ontario and Quebec, but we are one of the smallest stations in that chain. We would not qualify to have to pay the tax, because we don't make the $1.25 million.

But let me tell you what we do pay already. This year we paid roughly $24,000 in SOCAN fees. This goes to the composers and the writers of the music. But keep in mind that 80% of all authors and composers play their own music, so David Foster, who would write a song and play it, would be compensated through SOCAN fees. That's 80%. That would be Bryan Adams and Shania Twain. If they write their songs and sing them, they are compensated through SOCAN fees.

Also, we give 30% of our airtime to Canadian music. Think of yourself as a television store giving up 30% of your inventory to sell a certain type of television. That's what we do. At my station, if we were to charge a cost for that as we would for a commercial and pay by the minute for this time, it would work out to about $720 an hour, and we would be the least expensive of anyone on this panel, I would think.

So we feel we do give a lot in SOCAN fees and also in our airtime. There's a cost to airtime. It's very expensive, and we are glad to give it up to promote Canadian heritage. I'm proud of the Canadian artists. I have many of their CDs myself. We don't have a problem with that. We do have a problem with now having to pay more.

As we budget this year, the best we hope for is to break even. We're not making a lot of money. Our investors, our shareholders, would be better to put the money in the bank and earn 5% or6% interest. We're budgeting to break even, but we feel we have an important part to play in our community.

To be honest, the reason we're not just shut down is that, as a group, Power Corporation could, let's say, have McDonald's come to them to make a commercial buy. Power Corporation can offer them a market radio station in Cambridge, Guelph, Barrie, Oshawa, Peterborough or Kingston. It's easier for them to have another market to sell them, and from that point of view it makes good business sense.

Also, we hope the economy does turn around. It's showing signs that it will. But we had26 employees and are now down to 14 employees.

To survive, especially as a stand-alone AM radio station in a market like Cambridge, which is surrounded by Toronto, Hamilton and United States signals, we have to be more local and better in our community than our out-of-market competitors. We're already cut right to the bone.

To tape the talent contest I mentioned, it's eight hours of taping and at least four hours of editing, but with Bill C-32, we would then have to start chasing things down. Who does this music? Is it properly documented? Do we have to pay? It's a lot of administration and a lot of time. We obviously don't have the money, when we're budgeting just to break even, but money aside, it's time and our short staff that would be very difficult.

We tape a local church service as well, which gets played later in that evening. We're pleased to do this for the community, but if it is more administration on top and possibly more money than we already have paid, as I've outlined, that becomes very difficult for us to swallow.

Radio and performing artists have always gotten along well. It's fun to have them into your radio station to promote their CDs. I think Shania Twain said it best at the Country Music Awards the other night when she was named top performer. She thanked her mother, her father and her family, her manager and her record company, and she said ``Last but not least, I would like to thank radio, because without radio, I would not be standing here today and have enjoyed the success I have.''

That's the relationship we've had for years. That's a relationship that works. Any more is unpalatable to us.

Thank you.

Mr. Dietrich: Mr. Chairman, ladies and gentlemen, my name is Dwaine Dietrich and I'm from Medicine Hat, Alberta.

In my opinion, there are three major issues in the amendments to the Copyright Act that will have a profound impact on our business. These three issues are neighbouring rights, transfer of format exception and ephemeral rights.

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First let me deal with the neighbouring rights. Private radio in Canada already pays 3.2% of its total revenue for today's music rights, compared with only 2.8% for the Americans. Canadian television stations pay 2.1%, compared with less than 1% for our American counterparts.

If the objective of the copyright reform is to modernize the old act, then I suggest we're going backwards instead of forward. By instituting neighbouring rights, you will increase costs to Canadian broadcasters while American broadcasters will remain the same. This continued inequity could result in better programming being produced by American broadcasters, which would ultimately be detrimental to Canadian broadcasters.

There is a perception that the exemption for the first $1.25 million will be a major benefit for small stations; and you're absolutely right. But just because a station, whether it is in a small market or a major market, generates $1.25 million doesn't mean it's more profitable. Major-market stations that generate more than $1.25 million in revenue are not profitable today.

But I feel the real unresolved quandary in this situation is that Canadian broadcasters have been regulated by the CRTC to carry 30% Canadian content on radio and 50% and 60% Canadian content on television. We feel we are presently contributing to the social fabric of Canada as well as promoting Canadian talent and all its ancillary businesses.

Now Heritage Canada wants to reform the Copyright Act and impose more costs for Canadian talent. Broadcasters are caught in the middle of two government departments, both trying to exercise their mandates for their own specific agenda. CRTC has regulated Canadian content. Now the copyright reform suggests broadcasters increase their music fees to encompass artists and record companies.

Please, ladies and gentlemen, don't look at copyright reform in isolation. Broadcasters already contribute to Canadian artists and record companies by the 30% legislated Canadian content. That means we give 30% of our inventory free to Canadian artists.

As a suggestion, why not convince the CRTC to drop its 30% Canadian content rule? Then broadcasters would have the same freedom to change suppliers. In fact, the Canadian government does not condone giving out untendered contracts. Why should broadcasters be forced to play30% Canadian content and then have to increase their music fees to accomplish that?

As an aside, a suggestion, as I stated in a letter to the Honourable Michel Dupuy in September 1994, might be that it's because of the exposure from radio stations that producers and performers become famous and in many instances quite rich. Maybe the broadcast industry should be applying for financial compensation from them. For example, if a recording achieves gold or platinum status, the recording company and the artist could contribute 2% of their gross sales back to the broadcast industry as compensation for helping them achieve their stardom.

Secondly, I agree with my colleagues that it is absolutely essential that radio and television stations be allowed to transfer from one format to another. In this day of modern technology, when more and more information is stored on hard drives, including CDs at radio stations, doesn't it seem logical that the ability to transfer from one format to another be extended to broadcasters, as Bill C-32 provides for computer users? Consider the following two scenarios. A consumer buys a software package and transfers it to a hard drive, and a radio station buys a CD and transfers it to a hard drive. Aren't they identical? Please extend this transfer of format exception to both radio and television broadcasters in Canada.

Third, about ephemeral rights, how can you resolve that it is in the best interests of all Canadians and how can you resolve that it's in the best interests of Canada's creative and cultural sectors if broadcasters cannot tape-delay a program so it can be aired in a time slot with a large listening and viewing audience? It seems almost bizarre that this right, which has been promised repeatedly by the government, hasn't been granted yet. I would very much like to know who or what is the driving force or what is the motivation for not wanting broadcasters to have ephemeral rights. Doesn't it beg the question why there is opposition to something so fundamental as tape-delaying programming in a country with six time zones? The only answer I can come up with is that somebody is looking for more opportunities to create income for themselves.

At our radio station in Medicine Hat we carry programs that are delivered by satellite and that are tape-delayed in order to give them a better play time, but these same programs are also recorded earlier, sometimes days earlier, and usually by a third party, in order to have Canadian talent available and to keep costs down. Will there be a fee for every time that selection is handled?

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Even the coverage of our local Sunday morning church service would have to be rethought. At our television station we would have to consider whether it was feasible to pay the additional music rights fees for tape delaying, programming or dropping it. Is this the kind of copyright reform that strengthens the social fibre of Canada? I think not.

Minister Sheila Copps stated in a news release dated April 25, 1996, regarding Canadian reforms:

These measures are about fairness and they acknowledge the rights of creators to receive recognition and remuneration for the use of their works. With this Bill, Canada is joining50 other countries, including France, the United Kingdom and Japan, in modernizing its copyright laws.

Why is it, then, that 28 other countries including the United Kingdom, Australia and the United States have all given their broadcasters a time-shifting right, but Canada hasn't?

In plain prairie English, Mr. Chairman, there is no more money. The present Liberal government has said this to both CBC radio and CBC television. In fact, the federal government has drastically reduced CBC's operating budgets. We are saying the same thing. There is no more money. If this copyright bill goes through in its present form, cuts will be made in other areas in every radio and television station across this country. Canadian television initiatives will be reduced. Programs may be cut or staff may be reduced. Is this in the best interests of the Canadian broadcast system? I think not.

Members of the Standing Committee on Canadian Heritage, we implore you to seriously consider our requests in the best interests of Canadian culture, Canadian content and Canadian businesses. Thank you.

The Chairman: Thank you, Mr. Dietrich.

Mr. Morton.

Mr. Morton: Thank you.

My company is a western Canadian broadcast company with AM and FM radio stations in Victoria, Edmonton, Fort McMurray and Grande Prairie, Alberta. We also have a 50% interest in the new ethnic FM licence in Vancouver.

I've been a radio broadcaster since 1963, and I've spent my entire adult life in this business, both on air and then in management and ownership. I believe the content of this bill reflects a tragic misunderstanding of the role of local Canadian radio in protecting and promoting Canadian music.

The Canadian recording industry, regardless of its public statements, knows without question that radio is the leading influence on record buyers. In Victoria we operate an FM rock station and an AM country station. Every week the record reps are on the phone or in the station with one mission: to get their new releases on our playlist. Our program directors spend hours on the phone with the record reps every week. The record promoters repeatedly emphasize how important it is to get their new releases on radio because it helps them to get their CDs into the stores and into the consumers' hands. They ask for airplay, promotion and artist interviews, and they get all this willingly and enthusiastically at no cost to the record company or the recording artist.

After a song is placed on our charts, they phone back asking us to increase the number of plays per day because this helps their songs climb up the national charts. Radio airplay is a barometer in the creation of hits.

We were recently at the Calgary Canadian country music awards, where Sam Sniderman of Sam the Record Man asked the presidents of the four major record companies in a seminar if they could guarantee the neighbouring rights money collected from radio would go to the artists. This caused a lot of consternation, and after a lot of humming and hawing and nodding of heads and whispering, the answer from the record execs was no.

Bill C-32 attacks one of the cornerstones of Canada's cultural industry: radio. This medium adds significant value to the music industry by creating the audio environment that attracts an audience. Radio doesn't simply play CDs like a jukebox. It adds personality, promotions, entertainment, music enrichment, attitude, pacing, emotional flow. It puts Canadian music in the best possible spotlight and adds star quality to our artists.

Before our AM country station signed on in Victoria last year, there was no focal point for country artists and fans on southern Vancouver Island. Many of the artists were largely unknown. American stations from Seattle had a large influence on what people were listening to. TodayRick Tippe of Vancouver, Rachel Matkin from Kelowna, the Cruzeros based in Vancouver, and Sean Hogan from Victoria are household names among country fans around Victoria.

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Not all our stations are profitable. We subsidize the operation of a couple of stations, including our ethnic programming, provided by our Edmonton ethnic FM station, with the earnings from our mainstream country and rock stations in other market. Neighbouring rights payments may eliminate our ability to provide this unique form of radio service to Canada's ethnic minorities.

If the threat posed by neighbouring rights payments is not enough, Bill C-32 inflicts additional hardship on Canadian radio by arrogantly attacking long-standing internal operating procedures, employed by almost every radio station in our industry. I can only assume someone somewhere thinks DJs are still spinning records. I can tell you that went out twenty years ago. Transferring music from one recording medium to another has been a basic operational tool of radio stations for the last twenty years.

I'll give you an example of how it works in our stations. When we decide to add a song from a new CD to our radio station's music universe, we catalogue the song in our computerized database and then copy it to the hard drive for air play. In the on-air control room the announcer, who is usually doing several things at once, can start the next song simply by pushing the start button on the hard drive control unit. In our smaller stations in northern Alberta this system allows the announcers to initiate long suites of music so they can leave the control room to perform other functions, such as writing and production. This is an absolutely crucial element to the way our stations operate.

Bill C-32, however, as it now stands, would require us to pay a royalty fee for the mechanical transfer of music to these hard drives. This fee would go to the authors and the composers, who already receive our royalty payments for the right to air their music.

I can't tell you how upset I am by this potential situation, but I can tell you that many small-market stations will cease to exist if changes are not made to Bill C-32 in this regard. We would probably have to hire someone full-time to chase these mechanical clearances. This kind of structure would force us to move human resources from programming to paper-shuffling. I can assure you at our stations we have to watch costs very carefully, so it's not a matter of just adding people.

Even if these problems are solved, why should I pay the same people twice for essentially the same thing? It violates any reasonble principle of value.

The Chairman: Thank you, Mr. Morton.

[Translation]

Mr. Lévesque.

Mr. Lévesque: When I began my radio career at CHRL in Roberval, in the early 1980s, our station provided employment to about twenty people. It provided our region with local service from 6:00 a.m. to midnight and broadcast regular news, sports and weather every hour on the hour. We had a program manager, a four-person newsroom, a sports reporter and a morning team with commentators and a number of participants. Doing radio was an exciting thing! At that time we had close to 60,000 listeners.

Toward the end of the 1980s, and especially in the early 1990s, we were confronted with the phenomenon of the fragmentation of the advertising market, a multiplication of radio and television stations and a recession of such scope that our sales suffered a catastrophic decline. Between 1988 and 1993, CHRL's sales declined by more than 50 per cent. You heard correctly: 50 per cent! Today, our station does not employ more than six people, including a single reporter, a single full-time announcer and two part-time. We broadcast locally less than six hours per day. We no longer have local newscasts in the afternoon and evening. We no longer have local sports and we have no more than 20,000 listeners.

The picture I have just painted you is that of my station, CHRL, in Roberval. The same situation was experienced at the same time in Dolbeau and in Alma, and this is what led to the formation in 1993 of the Groupe Radio Antenne 6, which now includes all the radio stations from Lac-Saint-Jean to Chibougamau. By getting together, we have been able to rationalize our operations considerably and get an FM licence for the region. This has enabled us to straighten out the financial situation of our stations. Our local service, however, is still minimal. We would have a lot to invest, but the new profits remain precarious. To get there, however, we are relying a lot on modern technology and the enormous possibilities offered to us by computerization, in which we have already invested a lot.

In the context I have just outlined to you, Bill C-32 constitutes a threat to my business in two respects.

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First, there is the transfer of format. As I just said to you, we are counting a lot on the possibilities now available to us through computers to increase our effectiveness and make some more than necessary improvements in our stations' local service. For example, we hope to transcribe on our computer hard disks the repertoire of music that we want to use in each of our stations.

Furthermore, we will have to regularly update our computerized record holdings to transcribe the new releases that come onto the market, which the record companies prevail on us to play. Yet, under Bill C-32, failing any exception to the right of mechanical reproduction, our stations, to use computer technology, will have to pay reproduction fees or risk being fined. Even the production of a backup copy, which is essential for the station's security, is considered to be reproduction and therefore subject to this fee.

We cannot allow ourselves to assume such an expense, especially since the royalties paid out accordingly will go to the authors, composers and music publishers to whom we are already paying considerable money for the right to broadcast their music. Radio should be exempted from paying this transfer fee. It is simply a question of common sense.

Neighbouring rights: The bill proposes to exempt the first $1,250,000 of a radio station's revenues from neighbouring rights, as if each radio station in the country was living in a vacuum and the only ones grappling with financial problems were those taking in less than $1,250,000 in annual revenues.

The Groupe Radio Antenne 6 operates five small stations with total sales in excess of two million dollars. The formation of our company in 1993 enabled us to put an end to the crippling deficit that each station in the region was individually registering year after year. The slight profit we are now making stems from the fact that our stations with the best performance in many respects support those in the greatest difficulty.

Within the next two years one of our stations will probably cross the one and a quarter million in revenue threshold established in the bill. It will of course make a further contribution to the recovery of the other stations by assuming a greater share of a number of expenses that the others cannot assume by themselves, such as general management and bookkeeping expenses, or some generous donations, for example.

The new neighbouring right seriously limits the capacity of our best performing station to support the recovery efforts of our problem stations and will reduce our capacity to invest in local programming and community services. Sooner or later we will be obliged to make the decisions that we are trying to avoid today.

We are currently paying more than $60,000 a year in copyright. That is the annual salary for two full-time announcers. We think it is absurd to have to pay additional money to record companies because we air some music that we help them sell.

The bill acknowledges the value of radio to the music industry, since it sets an exemption threshold and even totally exempts the community radio stations. However, all stations, irrespective of their size, render the same service to their listeners, the recording companies and the performers.

Radio has always contributed to the success of the music industry, particularly in Quebec. The record companies contact our stations on a daily basis to get us to air their latest releases. They are well aware that radio exposure is indispensable to a performer's success. The music industry, which has been particularly profitable for many years now, contrasts with the radio industry, which is having a hard time of it, with an unprecedented number of stations going under during the last decade.

Bill C-32 flies in the face of all these considerations. If Parliament wants to play Robin Hood, it would do well to reread the story, since the one I knew took from the rich to give to the poor, and not the converse. Thank you.

The Chairman: Thank you very much, Mr. Lévesque. I would like to ask the members if they have any questions. Mr. Leroux, I am giving you five minutes.

Mr. Leroux (Richmond - Wolfe): You think I have some questions?

The Chairman: I think so.

Mr. Leroux: I would like to begin by thanking you for your presentation. When our committee agreed to participate in a roundtable discussion with the radio stations from the regions, it was for the purpose of learning about the repercussions of Bill C-32 on their life, their viability and their market.

However, I must tell you that I am hearing things that make me jump. I sense that you are very firm and very energetic. The Canadian Association of Broadcasters have sent you to the front with a good speech.

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It is very interesting that you defended with such energy all that space you occupy, and to hear you talk about your major concerns in regard to the closure of our stations and the catastrophic consequences you foresee.

I would like to try to put the situation in some perspective. The objective of the Copyright Act goes back to 1924; it was not until 1985 that it was revised for the first time. We are trying to determine the appropriate place in this entire market for the copyright owners, those who produce the source material, the creators, those concerned by neighbouring rights, that is, the interpreters and production companies. We are not talking about just anyone. We are talking about those who make the source material. I imagine that you pay fixed costs to everyone, that you pay your banking fees, etc. Here we are talking about people who make the source material.

Our objective must be to recognize some fundamental things, and I don't think that an approach sheltering us from recognition of copyright would be productive. Look at the bill that is on the table. You have already reacted. You are faced with a bill that establishes copyright, the first 13 pages or so of which explain that it is non-existent, so to speak. Later, when the bill seeks to recognize neighbouring rights, everyone comes and sits down at a table to tell us that they must be exempted. Where are we going with this?

Sensitized to the economic impact that the bill might have, Parliament provided an exemption for certain small stations. How many stations in the Groupe Radio Antenne 6 will be exempt under the $1,250,000 threshold?

Mr. Lévesque: If the legislation were in force today, none of my stations would have to pay more than $100.

Mr. Leroux: Since you have five, it would cost you $500 per year.

Mr. Lévesque: However, a few years from now, within the very near future, one of my stations will overshoot the mark and it will have to contribute to neighbouring rights. This station is important to us since it is now helping redress the situation of the others. It allows us to modernize our stations and maintain a local service that we ought to be augmenting. As I was explaining, if we have had some problems in our stations, it is because we had to reduce our local service. We cannot regain our audience and our revenues in our markets if we do not reverse course and give our listeners or the people in our communities further reasons to listen to us again. This will be done through a greater presence in our communities and not by rebroadcasting programs from CKAC Montréal. It will be done through broadcasting local programs.

Mr. Leroux: I understand the regional situation very well. I am grateful to you for spelling it out as you are doing. It is important to be able to testify about one's home environment, particularly where you are in Lac-Saint-Jean, and I think you are doing that job. But you say that your station will surpass the $1,250,000 threshold within two years. The bill provides for a progression over five years in that regard. You may expect to become a player who will have something to share. Are there other stations represented around this table that exceed the $1,250,000 threshold? Two of you.

[English]

Mr. Dietrich: If I may make two points, in my station I'd be happy to pay the neighbouring rights, but don't force me to play 30% Canadian content. Give me the ability to choose the music I'd like.

[Translation]

Mr. Leroux: I am going to come back to these questions later, after the questions I will put to each. I have read the reports.

In your report, you talk about the staggering profits being rung up by the big record companies like MCA, PolyGram and Sony. I would like this information to be resituated in its context, because we can make some progress only if we base ourselves on accurate information. The Donner report states that the major record companies have always been profitable. You are right. However, it adds, and I quote:

The record companies of average size are just beginning to be profitable. The small ones, with annual revenues below $100,000, which are for the most part Canadian-controlled, have never been profitable. In 1992 and 1993, they produced more than three quarters of the new, wholly Canadian sound recordings.

.1905

Can we make a distinction, as you wrote in your report, between the foreign-controlled recording companies and the Canadian-controlled companies?

I will add that the Donner report states that seven out of 10 records lose money and that the average salary of a musician in Canada is $13,700. I jumped earlier when you referred to very wealthy performers. We're basing ourselves on impressions here, around this table, just as when we heard some people argue that neighbouring rights were implemented in the United States. As long as the agreement on neighbouring rights, the Rome Convention, has not been signed, it is not applicable. We don't get any in Canada; we don't pay any because we haven't signed the Convention. The situation is the same in the United States.

I would like you to explain whether you make any distinction between the foreign companies and the Canadian companies when you allude to their great wealth. Do you subscribe to the description in the Donner report?

Mr. Lévesque: I based my comments on the data we obtained when we compared two industries. Obviously, in any industry, there are some firms that are profitable and others that aren't. That has always been the case and it always will be. In radio, there are some companies that are not profitable and others that are at present. But when we look at the industry as a whole, we see that there is a world of difference between the profits in the music industry and the accumulated losses in radio.

Mr. Leroux: I would like to ask a question to the representative of Monarch Broadcasting Ltd. In your report, it is alleged that the Donner report states that half the money collected in neighbouring rights would leave Canada and that new performers would be entitled to only 1 or 2 per cent of the neighbouring rights. You also allege that the 1993-94 profits were up by a staggering amount.

Doesn't the Donner report say that, under the established formula for neighbouring rights, Canada might be a beneficiary in the monetary transfers between other countries and Canada? That's a statement that is made in the Donner report.

You say that in their report on the music industry, the producers say that the stations that cannot pay their neighbouring rights should shut down. But that is not what this report says. I will quote an excerpt to you, at page 123, which states the contrary:

We also recognize that the radio stations, which operate in modest markets -

I think that a number of you are in this category.

«should not be required to pay more than a small amount.

Isn't that what the bill now states, that all the radio stations whose revenues are below $1,250,000 will be exempted and will pay only $100?

Why make statements that contradict those in the Donner report?

[English]

Mr. Dietrich: There are three parts to this. The neighbouring rights is one of them, and the stations with under $1.2 million will only pay $100. What about the ephemeral rights? There will be a fee to pay in order to be able to tape-delay. There will be a fee for the transfer of format exceptions. There will be other costs.

I see what you're saying, that everybody would benefit from the $1.25 million, but there are other costs in this besides that. It's not just the exemption for the stations with $1.25 million. There are other costs built into this.

With the ephemeral rights, if a program produced in Toronto runs at 8 p.m. in Toronto and I run it live at 6 p.m., I wouldn't pay any fees. But why would I run it at 6 p.m. when I could get a larger audience at 8 p.m.? I would tape-delay it. If I had to pay the fee for the tape delay, that cost wouldn't be covered by the $1.25 million exemption.

I'd also like to ask you something, sir, if I may. You're saying we use the record industry's music and we should pay for that. I have a television station and the cable company takes my programming and uses my newscasts that I write, create and produce. It takes my signal, puts it on its cable and makes money from it. Would that be included in the neighbouring rights? Would it pay me a fee for that?

.1910

That's exactly what the copyright bill is saying: we should pay the creators, the music people, for using their products. So I think I should be paid by the cable people. Would broadcasters be included as part of the neighbouring rights? I would think so.

The Chairman: Mr. Abbott.

Mr. Abbott (Kootenay East): I'd like to just canvass the panel. Are you opposed to the neighbouring rights as a matter of principle, or are you opposed because you fear the cost could rise later - in other words, we're at $1.25 million right now, at $100, etc.? Which is the larger concern to you?

Mr. Morton: The largest concern I have is the financial penalty this provides. I guess I'm concerned on both sides.

Mr. Abbott: If you'll pardon me, I only want to canvass about the neighbouring rights. We'll get to the other issue in a second.

Mr. Morton: I'm still talking about neighbouring rights. My point is I don't think we're really asking for an exception. We're asking that the value we already deliver be recognized in this bill. That's not the same as asking that we be exempted from paying these. We deliver significant value now.

Mr. Abbott: I appreciate that is your perspective, and I'm not trying to be adversarial here, but, for example, Mr. Lombardi, would any of your stations have to pay more than the $100 fee?

Mr. Lombardi: Yes, as a matter of fact my own station would be paying more than the $100 fee, but I'd like to explain that. Some of my ethnic stations, because of the huge cost of operating in so many languages, may very well show a reasonable gross revenue, but when all expenses are tabulated by each language there's not much left.

A unilingual station doing say $5 million in revenue gets to keep perhaps 10% to 20%. Ethnic stations, particularly my stations, CHIN-AM and CHIN-FM, do about $5 million together, so that means $2.5 million at each station. But if we watch our costs and keep downsizing we might be able to keep about 8%. That's what the last audit said.

We have to keep our costs down and we're continually downsizing. For example, I work at the station seven days a week, believe me, including Sunday, when I work on television, and CHIN Radio cannot afford to pay the president. I don't draw one penny of salary.

Mr. Abbott: But let me play devil's advocate with the panel.

There are the Bryan Adamses and Céline Dions of the world, and Canada needs a lot more of them, but we're looking at starving artists in some cases, and you're saying they are receiving sufficient value because their cassettes or CDs are being used on air, thereby driving up their incomes, and yet not directly.

Can you see the argument from the other side? They say they don't care that you're not being paid, Mr. Lombardi - that's your problem. The point is that you're generating $5 million worth of revenue - and I'm not pointing this at you, this is a broad statement - so why shouldn't the starving artist be getting something out of this?

Mr. Morton: If you're talking about starving artists, this bill would do nothing to change that. First of all, the record-buying public believes there are two kinds of music - good and bad. It buys the good stuff and doesn't buy the bad stuff.

.1915

Certainly, with Canadian content rules we're required to play 30% Canadian content. But if a record doesn't test well, if we don't get positive audience reaction, it comes off the play list. It's gone.

The most valuable thing for that artist is the air play, that it stay on the play list. The industry will become absolutely ruthless at pulling stuff off that they're not getting a good response to, because they're paying for it. You'll lose a lot of the goodwill we've had over the years.

I don't know one program director who doesn't give ground to Canadian artists, who doesn't love Canadian music and doesn't give it the best opportunity to succeed. But when you start paying to play, you take a lot of the goodwill and the national pride out of it. It just becomes a dollar thing.

[Translation]

Mr. Lévesque: The broadcasters are not opposed to neighbouring rights. We have every interest in working together with the music industry. On both sides we have everything to gain from working together. You must understand what we are saying. We are saying that the compensation we give the performers is based on playing them and putting their pieces on the air.

In our view, we pay them fair compensation, and that is why we are asking to be exempted from the payment of fees. We put them on the air every day and we are extremely pleased to do so. The more good things they produce, the better off they will be and the better off we will be as well.

[English]

Mr. Abbott: Mr. Daggett, you in particular would have a problem with the time-shifting.

Mr. Daggett: Yes. Basically all of us outside of the Ontario and Quebec market would.

Mr. Abbott: Except for your wonderful half-hour.

Mr. Daggett: Exactly. Time-shifting is very difficult, because if something starts in Ontario at 7 o'clock, it begins at 8:30 in Newfoundland, obviously.

What happens is the later on in the evening you get, the less people listen. So if a show comes down that starts in Ontario at 9 p.m., it's far too late for us to do anything with it. We don't even bother playing it. But you'd find that right across the country in a reverse situation, obviously. It's too early. So that's difficult.

As I said, programs start on the hour. If we want to start on the hour a program that originates somewhere else, we won't be able to do that. It's a simple thing, but I'm just trying to point out what this legislation does.

Mr. Abbott: But as broadcasters - and I put this to the CAB yesterday morning -

A major concern I have - it's my own little hobby horse - is the fact that in local radio, we are losing local news, we are losing local sport, we are losing local personalities. The argument is if there are additional compliance costs and people involved with that, we're going to lose even more.

That's probably a valid argument, but what I'm concerned about is this. If you received this exemption, would that not simply aid and abet the so-called modernizing or streamlining, just getting one person into one studio to do their thing? Are we not going down the path of actually losing the ability to deliver local service and local personalities?

Mr. Daggett: In Corner Brook we are investigating the option.... We take the satellite feed out of Mississauga, the PRN Network. We run various parts during the day now, the very thing you're talking about.

Acquiring a hard-drive system will give us control over local programming. It will allow us to make the station more local in that all the programming will be produced in Corner Brook.

It will be pre-recorded in the day and aired in different other parts of the day. If we have to pay the time-shifting and the transfer fees, it will make the initial cost more and it will make the ongoing cost more. It would be easier for us to stay on the satellite.

Mr. Abbott: This is really important.

The Chairman: Briefly, Mr. Abbott - very briefly.

Mr. Abbott: I want to understand how this Corner Brook situation works, in 30 seconds or less.

Mr. Daggett: We're live from 6 a.m. to 9:30 a.m. From 9:30 a.m. to noon we take a programming feed off a satellite out of Mississauga. Then we go live again from noon to 1:30 p.m., and then from 1:30 p.m. until the afternoon we take programming again.

.1920

Mr. Abbott: Okay. Now, if you don't get the exemption what will happen?

Mr. Daggett: If we don't get the exemption, essentially the biggest problem I have with it is the transfer. For instance, if we want to do local programming on hard drive, but have to pay an additional fee to take some of the local music we'd like to play and put it onto a hard drive, it becomes less feasible. It would be much easier to take a national feed out of Mississauga.

Mr. Abbott: Okay. Thank you.

The Chairman: Mrs. Phinney.

Ms Phinney (Hamilton Mountain): Thank you, Mr. Chairman.

I have to admit that all of this is new to me and it's very technical, but I got through the gun bill, so I should be able to get through this bill. I've looked through this. We've studied. We've heard from some witnesses already.

First, could you tell me what sections or part of the bill introduces new requirements for clearing the rights for ephemeral recordings and transfer of format? Can you tell me where in here I will find any new requirements?

Mr. Morton: I believe it creates that problem by its silence, does it not? There was a case, Bishop versus whoever, that decided.... I don't know the results of that, but it.... This bill, by being silent, allows that case to stand.

Ms Phinney: Would I not be correct in saying that what this bill does is enforce what is already there? The only change is that it will be easier for authors to enforce the rights that are already in the Copyright Act. Is that not what this bill does? And is that not the only thing it does regarding transfer of format and ephemeral rights? It enforces what is already there.

Mr. Morton: Not to my knowledge, no. That legal case was an interpretation, but certainly -

Ms Phinney: I'm not asking about that particular case.

Mr. Morton: Okay.

Ms Phinney: In your opinions, are you required by law to pay copyright fees for anything you use?

Mr. Osborne: Yes. In radio, we pay SOCAN fees of 3.2% to composers and authors.

Ms Phinney: So you have a contract something like this, where you get some music that comes in off the satellite probably onto your computer, and you transfer it to here and to here, and then you have it ready to put on the air. When you fill out this form and sign it, it shows how many weeks and months you would like it for. You make your agreement at that time. Is this not enough? Are all of you making these agreements or are you broadcasting without copyright?

Mr. Morton: We all pay copyright fees.

Ms Phinney: Maybe you'd rather not answer that.

Mr. Morton: We all pay copyright.

Mr. Osborne: We all pay.

Ms Phinney: You all pay the copyright.

Mr. Morton: Yes, but not for mechanical transfer.

Ms Phinney: Then what is your problem? All this bill does is enforce what you're already supposed to be doing, which is to pay copyright.

Mr. Morton: No. It goes much beyond that.

Ms Phinney: Could you point to the parts that go beyond the bill, then? I'm not sure where you mean.

Mr. Morton: No, I'm afraid I can't. I'm not a lawyer and I don't have the bill in front of me, but -

Ms Phinney: So do you feel that in the future it may go beyond or -

Mr. Morton: No. All the briefings that we've had from the Canadian Association of Broadcasters and their counsel, and the British Columbia Association of Broadcasters and their counsel.... I can quote you statements from -

Ms Phinney: No. I'd like to know actually where it is in the bill. I've studied the bill and I can't see anything new on copyright here. I can't see anything new on transfers. I can't see anything new on ephemeral re-recording. All this is doing is making you pay copyright on something that a composer has written.

Mr. Morton: No.

Mr. Dietrich: We already pay copyright fees, ma'am. We're being asked to pay additional fees to transfer format or to tape delay.

Mr. Morton: Excuse me. Can I simply give an example here? You know we -

Ms Phinney: No. None of you can find the part of the bill that says you pay additional fees.

Mr. Osborne: I'm sorry, ma'am, but we don't have the bill with us.

Ms Phinney: Would it be appropriate, Mr. Chairman, to ask the researchers if -

The Chairman: Right now, Ms Phinney, I think the thing is to just question the witnesses. I think this is a matter for the researchers to advise us on. The witnesses will answer as best they can.

Ms Phinney: Okay.

Could you tell me approximately what you would pay - I don't mind which one of you tells me - on one of these contracts, if it was one piece of music received in your station and you signed one of these? Approximately what would it be?

.1925

Mr Osborne: We pay 3.2% on all the income we bring in to the station, not just on the Canadian music we play. It has nothing to do with music; it's on advertising sales, or money we bring in to the station. So if the station has gross sales or a gross income of $1 million we pay 3.2% of that directly to SOCAN.

Ms Phinney: So how much over and above this contract, approximately, would this be a year?

Mr. Daggett: We don't know.

Mr. Dietrich: It hasn't been stated what the fees will be.

Ms Phinney: What have you been paying until now?

Mr. Dietrich: We pay 3.2% of our gross revenue.

Ms Phinney: How much more do you think you're going to be paying to cover the two things I mentioned: the transfer of format and ephemeral re-recording. How much more do you think it will be than you're already paying on this?

[Translation]

Mr. Lévesque: We don't know how much we will be paying. It is the Copyright Board that will set the rates.

[English]

Ms Phinney: Thank you.

The Chairman: Mr. Bélanger.

Mr. Bélanger (Ottawa - Vanier): Thank you, Mr. Chairman.

My colleague brings up a good point. It's my understanding as well that the bill does not introduce new copyrights for a transfer of medium flowing from the 1990 decision. What the bill does introduce is remedies that perhaps are scary. That's our understanding collectively, and maybe we can all agree on that. Maybe we want to focus on the remedies then, but I want to tackle the ephemeral rights or exceptions question for a brief moment, Mr. Chairman.

I've listened carefully again to the examples given to invoke such an exception or a right. It related to time-shifting. The one question I asked, I'll ask of you. Does anyone care to explain why you wish to have six months as opposed to the examples you've given of a day or so. That's one question.

The second one has become a little more clear. In some cases, you want to be able to use that right or exception of time-shifting in order to delay to get to a bigger audience presumably to increase your revenues. If that is indeed the case why you in some instances want to have an ephemeral right or exception to increase your revenues, would you not believe that it would be appropriate to share those additional revenues with those whose work you're using to increase those revenues?

Have any of you had debates on the notion of first-broadcast ephemeral exceptions? By that, I presume we mean that your right or exception expires from the moment of first broadcast, so you don't have this time thing.

My final question: If you indeed have problems with the administrative side of what you may expect from this bill, how do you take into account the administrative task of proving or making sure that even after six months everything is wiped out as it should be?

Mr. Dietrich: Mr. Chairman, I'd like to answer a couple of the points.

The reason for the six months, specifically for our television station, is that when you buy programming, you buy two runs. You buy the original play and as part of the package the distributor sells you a replay. You need at least six months in the season to be able to have that replay again. That's why we would like that. In most instances for radio, it would only be for 48 hours, but there are many instances in which -

One of the suggestions today was that a minister's Sunday morning broadcast might want to refer to the speech he gave five weeks ago or that he's going on holidays and -

Mr. Bélanger: There are no copyrights on that.

Mr. Dietrich: What about the music in the church service?

I think there has to be a larger window to give more flexibility. I think that with the time-shifting, the larger audience is a benefit to both parties. The larger audience gives us more revenue, but it also costs us more. It costs me more to buy a program for prime time than for afternoons.

The larger audience also benefits the entertainer. If that program ran at 6 a.m., they wouldn't get a very large audience. They wouldn't be performing in front of great gobs of people. In prime time they stand a much better chance of performing their talents in front of an accepting crowd.

.1930

Mr. Morton: I'd like to add something to what Dwaine is saying. To use his example, if he has to replace his 6 p.m. newscast with a show that was coming from Toronto and he has to air at 6 p.m., he's not going to make more money, he's going to make less, because his newscast is pre-empted and the advertisers are not likely to be very eager to get on a program that gets bounced all over the place all the time.

The Chairman: We've arrived at the end of our time. My colleagues Mr. Peric and Mr. Solberg have asked for a brief question, if the members will agree.

Mr. Peric (Cambridge): Mr. Chairman, I know time is running out. Thank you for this opportunity.

Mr. Dietrich, I have a short question for you. You made a statement, or should I say an allegation, that somebody is looking for an opportunity to make more money for themselves. Could you be a little more specific?

Mr. Dietrich: In the software analogy I used, somebody can buy a software package and put it on their hard drive and no fee is paid for that, but in our business if I want to take a CD and put it on the hard drive so I can have access to it in my system I have to pay a fee. What's the difference? It seems to me if I have to pay a fee for that, somebody is going to make some money from it. Why is that? Why is there an exception for the two situations?

Mr. Peric: Who is that somebody?

Mr. Dietrich: That's what I'm asking. Who is that somebody? I'd like to know who the driving force behind that is. I'm asking the question too.

Mr. Peric: Mr. Chairman, I have more questions for other witnesses, but since time is running out -

The Chairman: I appreciate that, Mr. Peric. Thank you.

Mr. Solberg, a very brief question, because we're running ahead of ourselves.

Mr. Solberg (Medicine Hat): Thank you very much, Mr. Chairman. I appreciate it.

First, let me declare my sympathy. As a former broadcaster, I'm sympathetic to what the broadcasters who have come before us are saying.

The issue Ms Phinney was getting at and where people have got hung up a bit is ephemeral rights and time-shifting and that sort of thing. My understanding of the situation is that because of the Bishop case it's possible now that broadcasters could actually be in a situation where they are open to legal action if they transfer, for instance, things from one format to another. So the problem with Bill C-32 isn't what is in it, it's what's missing. There's no exemption in it.

If witnesses would care to comment on that.... I believe I have it right.

I would just conclude by saying that if the Canadian heritage department can't come up with more common-sense legislation than this and take into account this very obvious and serious concern, then I really question what the people over there are doing.

The Chairman: Mr. Lévesque, gentlemen, I appreciate your coming to appear before us. We thank you for your appearance, for your presentations. You've heard from the questions the interest people have. Thank you for coming.

.1933

.1936

[Translation]

The Chairman: I would like to welcome the representatives of SODRAC, the Society for Reproduction Rights in Canada, and in particular Ms Diane Juster, the president. Ms Juster, could you introduce your colleagues, please?

Ms Diane Juster (president, Society for Reproduction Rights in Canada): Allow me to introduce Mr. François Cousineau and Mr. Stéphane Tremblay, but, above all, I am going to introduce you to our authors: Germain Gauthier, a composer, Frédéric Weber, a composer, and Pierre Bertrand, a songwriter for the Beau Dommage group.

I would also like to point out to you that Mr. Cousineau, Mr. Gauthier and Mr. Weber are composers and not performing musicians and that even singer-songwriters often write in collaboration with other composers. I wanted to make this comment before beginning. All have been or are still members of the board of directors of SODRAC.

I am also introducing Claudette Fortier, the manager of SODRAC, and Ms Francine Bertrand, SODRAC's legal counsel.

Ladies, gentlemen and members of the committee, I would like to begin by saying something about the organization we represent. SODRAC is the Society for Reproduction Rights in Canada. It is the only authors collective in Canada that belongs to its members and whose mission is to collect authors' and composers' reproduction fees. The Society holds the reproduction right through voluntary assignments by its members. It represents 3,200 Canadian authors and composers.

If we appear before you today it is because Bill C-32, in its present form, would have some serious consequences for Canadian songwriters and creators. The bill will amend the Copyright Act in an unacceptable way, in our opinion. It attacks the very foundation of copyright and will seriously erode the rights of creators.

.1940

We are disappointed, and what more can we say? With all the difficulties that songwriters are already having in enforcing their rights, we expected instead that the government would strengthen their position. This is the opposite of what we have found in Bill C-32.

In our opinion, the Copyright Act can only be effective if the notion of copyright remains complete and intact.

The first problem is the exceptions. Introducing exceptions for schools, museums, archives and libraries means opening the way to further exceptions, opening up a gaping hole in a fundamental right, a hole that the commercial users won't take long to exploit indirectly. Making an exception is like suspending the author's fundamental rights, his property right. A right cannot be subject to exceptions. A right is a right, and copyright must remain intact if the author is to be able to bargain freely with all users of his work.

Creators are fully capable, Mr. Chairman, and they have proved it, of taking into account the public role of some users. They too have an interest in ensuring that their works are disseminated as widely as possible, and this should not be forgotten. It is also a question of the author's right to supervise the use and the economic life of his work. Again, it is his decision in every circumstance whether or not to assign the product of his creativity and his labour to a particular user. In this sense, introducing exceptions means denying copyright itself.

We are asking the government to renounce the idea of making some exceptions in the enforcement of the Copyright Act and letting the free bargaining mechanisms govern the relationships between creators and users, whoever they are.

The Copyright Act is already hard enough to enforce as it is without Parliament, through the introduction of exceptions, making the situation still more difficult.

The second major problem with this bill is that of the terminology that is used for some rights accorded to singer-songwriters, producers and broadcasters' communications signals. Parliament is granting them a neighbouring right by calling it copyright, and is making a serious mistake in doing so.

We are not against the rights of authors, performers, producers or broadcasters, but to ensure such rights the neighbouring right must be totally distinct from copyright. It is not copyright but neighbouring rights, neighbours of copyright, that the performers and makers should have. The legislation must be clear on this, as it is in many other countries internationally. This is fundamental to us.

Finally, the third very important point is that we must, at all costs, avoid, as the broadcasters are demanding in their numerous briefs, introducing an exemption for so-called ephemeral recordings.

Copyright, as expressed in the 1924 legislation, recognizes two distinct rights and includes two major elements: first, the public performance fee collected for concerts and radio or television performances; second, the right of reproduction, a right pertaining to the work when it is reproduced on some medium, whatever it is. It is this second right that I have come to discuss with you, and it is SODRAC that handles the administration of this reproduction right.

.1945

Both of these rights were held to be legitimate and distinct by the Supreme Court in 1990. Yet this reproduction right has proved to be very hard to enforce with the broadcasters, who have done and continue to do everything they can to be exempted from paying the fee. Yet the songwriters are the source material for their trade. This attitude of the broadcasters is revolting. What supplier would agree to make a gift of his merchandise? What announcer would agree to make a gift of his talent or to be forced by the law to give it to his broadcaster? No one is prepared to do that. Including creators.

It was precisely in order to give songwriters the leverage they needed to enforce their rights that SODRAC was created in 1985. For 10 years SODRAC had to pursue a number of broadcasters, one after the other, on behalf of its members, to force them to comply with the 1990 judgment of the Supreme Court. Forced by the courts, these broadcasters had to sign agreements and comply with the law.

It is unbearable to see that now they are again asking the government to exempt them from their obligation. We look on this as an assault on Canadian creators and we think the government has a responsibility to hold the line come hell or high water by continuing to force the broadcasters to fully acknowledge the rights of the creators.

Did the broadcasters come to demand government assistance in negotiating collective agreements with their employees? No. So let the authors bargain freely with the broadcasters as self-employed workers in full possession of all their rights, including the right to receive fair compensation for their work. The government need not expropriate the authors of their rights on behalf of the broadcasters. The levies on the reproduction of works are small amounts - crumbs in comparison with the broadcasters' total sales in Canada. SODRAC is shocked therefore to see the broadcasters demanding such an exemption from the government.

The demand is completely unreasonable. Not only are the amounts at stake insignificant to them, regardless of what they say, but experience has shown that the enforcement problems could be obviated through lump-sum contracts with the broadcasters in the form of general user licences. To make an exception for ephemeral recordings would amount to depriving the songwriters of revenues that are sparse albeit important to them, and killing the only agency able to represent them effectively in relations with the broadcasters. The reproduction fee for ephemeral recordings is a decisive support to the songwriters, enabling them to have a common agency to ensure compliance with their rights. Many songwriters are here with us today to remind you of that.

This, in a few words, Mr. Chairman, is what we have come to tell the members of the committee today. For creators, Bill C-23 has only negative implications. It is a serious setback in relation to the current legislation, which was difficult enough to enforce. This bill must not be adopted. Nor must the government yield to the pressures of the powerful broadcasters' lobby, which once again is seeking to enrich itself at the expense of the creators.

Thank you for your attention. Now, we will be pleased to answer your questions.

The Chairman: Thank you very much, Ms Juster.

.1950

Mr. Leroux.

Mr. Leroux: First, thank you for your presentation and the brief you have submitted to the committee. It will help us in our work because in fact we need to comprehend the situation in relation to the bill.

I am going to go immediately to the questions. I would like to begin with the Universal Declaration of Human Rights, which states that everyone has the right to the protection of his moral and material interests resulting from any scientific, literary or artistic creation of which he is the author. It seems fairly clear to me that what is meant here is moral and economic property.

As to section 90, your report contains wording that differs somewhat in respect of the tariffs. You make a comparison with droit d'auteur in France and Belgium. I have a question to put to you in this regard.

Is it not your impression that in referring specifically to the tariff, you are to some degree narrowing the scope of your wording, which might be found, for example, in the wording used in France or Belgium, which to my way of thinking focuses more on moral rights and economic rights? I would like to hear from you on that.

Secondly, I would like you to tell us as well whether or not the exceptions, which appear to be major in this bill, since it spends 13 pages telling you that you have no rights, are possible. If so, and if there are some situations in which provision must be made for exceptions, how are you going to administer it? Isn't there already some administration at that level?

Thirdly, I would like to hear from you about SODRAC. What does it do? What is SODRAC's purpose? How does it function? We have to know how it functions if we are to get some clearer idea. I will probably also come back to the experience you have already had in the negotiations with TVA, the CBC and TV5, and also in the pending Bishop case.

Mr. François Cousineau (composer, Society for Reproduction Rights in Canada): If you will allow me, Mr. Chairman, I would like first to answer questions two and three. Then Francine Bertrand Venne may answer the first, technical question Mr. Leroux asked.

In regard to question two, it is necessary to understand our position. In our view, the definition of copyright that is found in the 1924 Act is perfect because it is complete. This copyright was established on two bases: public performance and the mechanical right.

Tonight we will just discuss the mechanical right. What we don't like, and this is natural, are the exceptions. We don't see why the government would come and remove a right that we have under the Act and that we have not requested be changed, on the pretext of assisting schools, museums or whatever.

The schools and museums pay Esso and the other companies for their heating oil. Consequently, I do not see why we can't ourselves negotiate these exceptions or these special tariffs that they would like to grant. In principle, SODRAC's position is to be against exceptions, whatever they are.

We have heard that the broadcasters have been coming before your committee in large numbers in recent days and expressing surprise at not seeing any exception for ephemeral recordings.

I think they have a lot of nerve in coming and telling you that, and I am going to tell you why. The broadcasters claim they can no longer function without the famous exceptions that have been promised for 10 years. They say they are having some difficulties owing to time shifting and the need to prerecord programs and air them later using a technological medium.

I don't see the problem, since SODRAC allows them to do all that as they want and as much as they want. They can prerecord some programs. They can also broadcast them when they want since SODRAC allows them to do so.

.1955

So, they don't need to repeal what the 1924 legislation gave them in order to succeed in operating their technology. They can do whatever they want, once they agree to negotiate a licence with the copyright holders, the songwriters. It seems to me that this is fairly clear.

The broadcasters also want to tell us about 18 countries that have allowed the ephemeral recording exception. Mr. Chairman, I think these are 18 countries that have erred in law. I could tell you about 29 countries that have not subscribed to the ephemeral exception and that function very well, for example France, Belgium, Brazil, Bulgaria, Canada, Ceylon, Spain, Greece, Hungary, etc. and, among the most important, Syria, Czechoslovakia, Portugal, Switzerland, Poland, the Netherlands, etc. None of these countries have subscribed to ephemeral recording.

I see that Parliament has not provided for this exception in the bill and I congratulate it for understanding that it was simply not necessary to deprive us of rights in order to straighten up the economic problems of the users.

Thirdly, the broadcasters have the nerve to claim that, without the exceptions, they will be unable to offer deferred programs. This is absolutely false. They will be able to do what they want, provided only that they ask the songwriters for the right to do so, as the 1924 Act provides.

I don't know if that answers your second question. Ms Fortier wants to add something. I will come back later for the third question.

Ms Claudette Fortier (manager, Society for Reproduction Rights in Canada): I am going to fill in by telling you what SODRAC is and what it does.

As Ms Juster explained to you, there are primarily two rights. There are others in the Copyright Act, but there are in particular a reproduction right and a performing right.

SODRAC administers the reproduction right. It has assignments with its 3,200 or more members in Canada. It further administers the repertoire of about thirty countries in Canada. It administers the works in the repertoire of France, Belgium, Switzerland, Spain, Germany, the South American countries and the African countries, but it does not administer the rights of the United States, Great Britain, Australia and New Zealand.

The licences granted by SODRAC are general licences or blanket licences, which allow the radio and television broadcasters, when they sign, to prerecord and make all the copies. SODRAC handles all the administration since there is no additional burden for the broadcaster, which already has to provide SOCAN with the musical program for its broadcasts. So there is no additional administrative burden. On the contrary, it frees the maker from having to request the rights in advance.

When they want to pick up a sports broadcast, whatever it is, and they don't know the musical work in advance, the broadcasters may get it quickly if it is in our repertoire. SODRAC cannot, of course, grant rights it does not hold, and it does not hold the U.S. repertoire.

We can say that, in relation to all the works that SODRAC represents, this obviates the need for broadcasters and makers to go individually and request the rights they should have been requesting since 1925 and have never requested.

The Chairman: Could you make your answer more concise, to give the other members the time to ask some questions?

I think you still have two answers to give to Mr. Leroux.

Mr. Stéphane Tremblay (songwriter, Society for Reproduction Rights in Canada): My name is Stéphane Tremblay and I am a songwriter. To answer the third question, I will give you two examples.

For example, there was an exhibition in Quebec City on Quebec songs that was later presented by the Musée de la civilisation. To get the right to reproduce the works, the Musée signed an agreement with SODRAC in the amount of $3,000.

.2000

In Quebec as well, a contract has been signed between the Quebec department of Education and SODRAC for the use of works at the preschool, elementary and secondary levels. The Education department therefore got a blanket operating licence that allows the institutions to operate freely.

The Chairman: Thank you.

[English]

Mr. Abbott.

Mr. Abbott: I must admit this is really quite amazing, because I was -

[Translation]

Ms Francine Bertrand Venne (counsel, Society for Reproduction Rights in Canada): If I understood correctly, Mr. Leroux, you wanted some more specific explanations concerning the wording of our amendment, did you not?

Mr. Leroux: It seemed to me that it reduced the scope of the wording in the Belgian and French legislation.

Ms Bertrand Venne: No, because they do not adversely affect the rights conferred on the Part I copyright holders. So they do not adversely affect the rights themselves or the tariffs. The reason why we mention the tariffs is that in Canadian law musical works are subject to the Copyright Board for public performance. And where SODRAC did not reach an agreement with the contracting party, it could also resort to the Copyright Board.

It was natural that we would get into the tariffs in order to indicate clearly« You heard the broadcasters telling us earlier how poor they are because they are already paying SOCAN. They are demanding an ephemeral recording exception, saying they are being harmed by all this. It is important, therefore, to understand that the normal economic progression of the tariffs should not diminish and should remain intact in the Act, especially in the introduction of neighbouring rights. In fact, it is absolutely necessary that it be very specific because of the Copyright Board.

Mr. Leroux: Thank you.

[English]

The Chairman: Mr. Abbott.

Mr. Abbott: I was just going to say that I find this really interesting, because you say this should not be passed because it only has negative impact, and yet on the other side of the coin, as you've heard, we've had testimony railing against this because of the negative impact that there is on the other side. I find this really quite fascinating.

To your organization, what percentage of your members are also performers?

[Translation]

Ms Fortier: We have never done a study on that. We represent authors. The two rights are not interrelated. When an author or a composer performs his work, he does two jobs. He does two different things and he must be remunerated for two tasks that are completely different.

[English]

Mr. Abbott: I suppose so, but because we are talking about neighbouring rights, which would give an additional fee to somebody who was going to perform their own work, that's the basis of my question. So I think it would be helpful, if the numbers are not immediately available, if you could provide them to the committee later.

Mme Fortier: It would be a pleasure, sir.

Mr. Abbott: Let me ask, if a radio broadcaster has 4,000 songs on his hard drive and makes a back-up copy of his repertoire each week, do you expect to be paid for that?

[Translation]

Mr. Cousineau: We think that any manipulation of a work, under the already existing law, should be authorized by a licence from the songwriter. Whatever the medium, whatever the method, the law prohibits manipulating a work, copying it, putting it on a hard disk or whatever, in any way whatsoever. The law is very clear on this.

It is very easy, at that point, to negotiate with the copyright holders and obtain the right to do so. We think this is normal. We understand clearly how the technology works, but we also understand clearly that if permission is given to the user to manipulate the works, he will do what he wants with them. He will tear them up, cut them, reassemble them in some other way or destroy them. He can do what he wants and we have no further control. This is what Parliament wanted to do in 1924 by indicating clearly in the copyright that the right of reproduction could be used only after authorization had been received.

[English]

Mr. Abbott: As you note, the legislation comes from 1924, which was long before computers were ever thought of, and we are into a totally different technology today.

.2005

I'll be candid with you. I find it a little bit presumptuous that if a company is simply changing a format and backing up these 4,000 songs technically, so that they aren't going to lose them - or for whatever reason they do it; I'm not a broadcaster, so I don't know.... But I find it a little bit presumptuous that you would expect to be compensated for this work that's going on behind the scenes that has absolutely nothing to do with the playing of the music.

[Translation]

Mr. Cousineau: It seems fairly obvious to me that it would be absurd to have Parliament, because there is a new technology, go and defend Sony Corporation and not François Cousineau.I will explain to you why.

I don't think that Sony, CBS, NBC and ABC, who are users of works, need to have Parliament on their side to defend them. If they have some problems with the Act, they need only pay the fees and that's it. They need only pay the fees they owe to the authors. We earn an average of $6,000 to $7,000 per year with copyright. I think the companies earn a lot more money than that.

I am asking you therefore why you want to expropriate a copyright because of a technology. As far as we are concerned, we are not asking for any changes in the Copyright Act.

[English]

Mr. Abbott: Okay, but if a company is obliged to make log tapes for the CRTC - and please correct me if I'm wrong, but I understand that you are presently suing Quebec radio stations for fees for this and collecting from television for this - where they are simply following for the CRTC where they have that awful-quality, gigantic reel tape or whatever it is that they do.... Is it correct that SODRAC is presently suing for the copying onto that?

[Translation]

Mr. Cousineau: No, that is not correct, sir, and that is not the reason. I am going to let the manager of SODRAC answer you on that.

Ms Fortier: There is in fact a court proceeding against the radio stations in Quebec. It is not for the copy produced for the CRTC. During our preliminary negotiations, which lasted a year and a half, the legislation was not passed. There was no exemption for CRTC copies. What was offered to the radio stations was a blanket licence covering the recordings they were making, the copies, the editing needed for their deferred broadcasting, including the broadcast and including the CRTC copy. At present, there is no exception for that. We are not suing for that copy, however. We said that our licence was going to cover everything, that's all. They make reproductions and at present, under the Act, this is an infringement of copyright. We have therefore offered them a blanket licence. We initiated an action because there is a three-year limitation period in the Act and we wanted to protect our right.

Mr. Cousineau: You will understand of course that it is not really for this particular aspect that the actions have been taken. It is simply for all the works that are actually manipulated and therefore reproduced.

[English]

The Chairman: Mr. O'Brien.

Mr. O'Brien (London - Middlesex): Mr. Chairman, thank you. I have a long list of questions, so I made a second list with just three, and I'll try to see how many I can get in.

The witnesses have indicated that they are totally opposed to exceptions - as I understand their presentation. And yet you cited 18 countries that allow ephemeral rights, and 29 that do not. Of those 29 countries that do not allow ephemeral rights, do they allow other types of exceptions?

[Translation]

Mr. Cousineau: This is fairly difficult because I do not know the answer. I don't know. ButI know that they do not provide that exception, because it is really an error in law to allow a technology to deprive someone of a right. I don't know exactly whether there are other exceptions.

[English]

Mr. O'Brien: All right. It seems clear, though, that there are a number of countries that allow exceptions. Your stand seems to be that you're opposed to any whatsoever. Is that correct?

.2010

Ms Juster: Yes, so we can negotiate our rights ourselves.

Mr. O'Brien: Yes, okay. My reaction to that is if these negotiations had borne fruit in the past,I wonder why we would even be here with this discussion.

Second, we've had a forewarning, if you will, from the broadcasters that if we don't grant the ephemeral right, it's going to lead to all kinds of problems, such as cancellations of parades and other community events that people want in their local communities. They want to see those on broadcast. What's the experience in Quebec? Is that a problem already in Quebec?

[Translation]

Ms Fortier: Perhaps they should be asked how many parades they have cancelled so far, because the right has always been there.

Mr. Cousineau: In Quebec, there were negotiations by SODRAC with Télé-Métropole and the CBC for blanket licences that entitled them to make all the copies and reproductions they wanted. There was no problem and the amount is minimal. It is a fair minimum amount. I think, moreover, that it went very well. It gives some legitimacy to all their operations.

[English]

Mr. O'Brien: We had an indication that this is a problem already in Quebec, or would be. I hear you saying that's not your experience.

My last question is a reaction to a statement I think you made, which was that you'd be better off with the status quo than with Bill C-32. I'm surprised at that statement and I'd ask you to explain it in a little detail.

[Translation]

Ms Fortier: In fact, the creators have more rights with the present Act than with Bill C-32, which is proposed.

Mr. O'Brien: Why?

Ms Fortier: In Bill C-32 there are 13 pages of exceptions. Parliament has reproduced all the exceptions that were provided in Great Britain's legislation, plus the exceptions in the U.S. act. It has combined them in Bill C-32. That is why the creators say they would prefer the status quo, because not only are they gaining very little, they are actually losing a lot.

Mr. Cousineau: May I answer, please? The legislation is going to refer essentially to private copying, neighbouring rights and exceptions. Very succinctly, neighbouring rights apply to the performers, not the songwriters. We are the songwriters.

The exceptions concern our works and we do not want to have our rights expropriated. We are capable of judging when those rights should be given or allowed for $1, or when they should be negotiated.

The third point is that, for the time being, the Act prohibits private copying. This is a right that we have. We can negotiate. If the Act legalizes private copying for a minimal royalty that we do not at this point know, we prefer to keep the Act as it is at present, since we can always negotiate with the users.

[English]

Mr. O'Brien: I have a last short question. Are there existing agreements now, then, between your organization and schools and libraries in Quebec?

[Translation]

Ms Fortier: Yes.

[English]

Mr. O'Brien: There are? Are there a number of existing agreements or...?

[Translation]

Ms Fortier: SODRAC has a contract with the Quebec department of education for the reproduction rights to its repertoire in the elementary and secondary schools, and this applies to all the schools in Quebec.

Mr. Arsenault (Restigouche - Chaleur): What amount of money are we talking about?

Ms Fortier: If you wish, we will be pleased to communicate the figures to you. This contract was signed two years ago. SODRAC also has general contracts with the CNIB, the Canadian National Institute for the Blind, and the National Broadcast Reading Service. SODRAC has general contracts with the airline companies that make recordings for their planes. SODRAC has contracts with the Canadian Broadcasting Corporation covering television, radio, the French network and the English network.

.2015

The CBC contract is to be renegotiated but it continues to apply. The contract with TVA expired on August 31. It was renewed for one month and we are trying to renegotiate it. The contract with Télévision Quatre Saisons expired on August 31 and I needn't tell you that they are all waiting for you to give them what they are asking before signing.

Mr. Cousineau: Fortunately, it is not in the bill. So they are the ones who are disappointed, not us.

The Chairman: We have a few short minutes. Mr. Bélanger.

Mr. Bélanger: I would like to continue a bit on the question of the contracts you have with some broadcasters. I would like to take the group that was here before you. Let's take the case ofMr. Lévesque, who has five radio stations at the far end of Lac-Saint-Jean. Could you try to indicate to me the actual cost of a general agreement for a radio station of this type for the right of reproduction, since that is what we are talking about?

Ms Fortier: Yes, yes.

The Chairman: Mr. Bélanger, you are talking about a general contract with SODRAC, aren't you?

Mr. Bélanger: That is correct.

Ms Fortier: We were unable to reach an agreement with them, and that is why there is a court action.

Mr. Bélanger: You don't want to negotiate in public, is that it? I would like to have some idea of the scope of the costs that this can represent for a radio or television station. Is it possible to get some idea?

Ms Fortier: Certainly, I could tell you that«

The Chairman: You don't need to cite any names. Let's take a commercial station, for example.

Ms Fortier: But we don't have any agreement with the commercial radio stations. That is why we initiated an action.

Mr. Bélanger: And with the commercial TV stations?

Ms Fortier: With the TQS television network, which paid us $329,000 last year.

Mr. Bélanger: That's for the whole network?

Ms Fortier: That's for the entire SODRAC repertoire. So it involves prerecording, copying programs produced for the private sector for which the rights had not been released, copying archives, in fact everything.

Mr. Bélanger: If you will excuse my ignorance, it seems to me that TQS«

Ms Fortier: Excuse me, it is the TVA network.

Mr. Bélanger: TVA, all right. TVA has how many transmitters, how many stations? I would like an average.

Ms Fortier: We would have to ask them. I think they have several affiliated stations. It covers all their affiliated stations.

Mr. Bélanger: You say $320,000 for one year?

Ms Fortier: Yes.

Mr. Bélanger: And it covers everything?

Ms Fortier: Yes.

The Chairman: All the equipment, all the works?

Ms Fortier: Yes.

The Chairman: That was clear. Mr. Leroux.

Mr. Leroux: I would like to come back to the question of the contracts because it is important, in my opinion. SODRAC has agreements with the department of education, but there is also the UNEQ and a series of agreements with departments and governments on various aspects. The education departments in Manitoba and Alberta also have agreements with some licensing bodies concerning photocopies. The Alberta and Ontario governments also have agreements with some licensing bodies. Would all the agreements - and I have listed at least a dozen here - become obsolete as a result of the exceptions in the bill? Is that the basic thing for you?

Mr. Cousineau: It is obvious that if it covered ephemeral rights, it would make all the contracts that have been signed with the broadcasters, such as TVA, the CBC and the others, obsolete. But, since it isn't in the bill, rest assured.

With regard to the schools in Quebec, everyone is very happy with the agreement that was made for very little. For the blind, it costs nothing. We are doing this with everyone. It is certain that if the Act takes it upon itself to come and tell us that we no longer have any rights and can no longer exercise our rights ourselves, our contracts could become obsolescent.

.2020

Ms Fortier: I would like to add one small detail, Mr. Chairman, if you will allow me. The schools, the libraries and the other organizations with which there are agreements will be strongly tempted to say they want to remove something from the agreement because there is an exception and they no longer want to pay for it. It is certain that all the agreements will be challenged.

[English]

The Chairman: Mr. Abbott, briefly.

Mr. Abbott: I promise it will be very brief.

I believe it's very important for the government to create a level playing field, so I'm asking the question: How do you think fair negotiations can occur between you and the broadcasters over things such as ephemeral rights or time-shifting of the reproductions when, for the most part, broadcasters cannot avoid live-to-tape programming? That was what we were presented with last night.

If this legislation calls for injunctions to be filed against them or a fine of up to $20,000 for each infringement, doesn't that put the hammer completely in your hand? Does that not tip the playing field in your favour, when the legislation says you can be fined up to $20,000? Doesn't that really give you a tremendous amount of power in your negotiation?

[Translation]

Ms Fortier: The broadcasters had been warned that we would sue to stop the clock, because you must know that in the Copyright Act there is a three-year limitation period for copyright infringement after knowledge of the infringement.

All the time we spent in negotiations, that is, a year and a half in which we failed to reach an agreement, we wanted to stop the time running. That is why we initiated an action.

Secondly, negotiations can take place. There is a Copyright Board in Canada, which is a board for arbitration between the parties that can very easily set the tariff.

Mr. Tremblay: And it's our property. Why would you decide to expropriate our property? It is intangible property but it is still property. I wonder why we would be asked to subsidize directly people who should be subsidized by the government.

Mr. Cousineau: What's more, the reproduction fees should have been paid since 1924. They have not been. We asked the broadcasters to do so. I personally have requested it several times since 1964. It took the Supreme Court, in the Bishop judgment, to tell them that it was clear that they should pay if they were putting it on a technological medium.

Suddenly, instead of negotiating, they go to the government and tell it: ``Take away this right and give us an ephemeral rights exception.'' This is a strange attitude. I think the law should protect the songwriter rather than the industry magnates.

The Chairman: Ms Juster, I would like to thank you and the members of your group for having given us another point of view. As you could see, our work is not easy.

We are hearing completely opposed points of view, but it is our responsibility to make our way through it all. I can assure you that we will do so with much awareness and much interest. Thank you very much for coming.

Some Hon. Members: Thank you, Mr. Chairman. Thank you.

.2024

.2027

[English]

The Chairman: Come to order, please.

I'd like to welcome representatives from the Canadian Motion Pictures Distributors Association. The president is Mr. Douglas Frith and the vice-president is Ms Susan Peacock.

Mr. Frith, the floor is yours.

Mr. Douglas Frith (President, Canadian Motion Pictures Distributors Association): Thank you very much, Mr. Chairman and members of the committee.

I would like to preface our remarks this evening by indicating that we have submitted our brief and we have copies of our supplementary. We have no intentions of reading those except to say that generally worldwide, the motion picture industry and our association in particular support any advancement of copyright legislation. Bill C-32 is no exception. In general we have no difficulty with the thrust.

I want to establish the framework for the questioning this evening, because obviously legislators and those who are responsible for the passage of legislation with respect to copyright are driven by the need to balance the rights of the creator with the needs of the user. That's the first framework I'd like to establish.

Secondly, if you accept the fact that by necessity there are going to be areas in which you grant exceptions, the next premise is to accept that any exception or exemption is essentially expropriation. That expropriation can be with compensation or without compensation. So it's very important, when you do the clause-by-clause in the legislation, that whenever you reach into this area of exception or exemption, you be very specific and narrowly define it, because otherwise the abuses will creep out of the system.

Those two premises drive a number of areas of concern to the association, but bear in mind they're quite technical. They are in three areas. The first one deals with the criminal provisions in the proposed legislation. The second one is in this area of assignment test, the educational component and the issue of exemptions in general. Thirdly, there are -

I bring with me this evening Susan Peacock, who, just for your background information, was the first and has been the only administrator of the Copyright Collective of Canada since its inception. If you have any areas of questioning with respect to the technical areas of that legislation when you're putting forward a new collective, it may be helpful for Susan to respond.

I want to preface my remarks with one other thing before we get into the technical details.

With respect to the criminal sections of the act, I don't know if you're aware of this, but the film and video security office is fully paid for by the eight Hollywood studios here in Canada. They work in conjunction with police associations all across this country. Frankly, when you look at the results of their work over the last 10 to 12 years, they're known worldwide as a model for anti-piracy activity.

.2030

When you get into these new technologies, anti-piracy and piracy of the technologies is going to be of paramount importance to industry. It's not only the motion picture industry but the computer industry, etc., with the new advanced technologies.

So I just wanted to establish a broad framework for us to go through about six to eight clauses where we have some suggestions for you, when you're going clause by clause, that would alleviate some of the concerns we have as an industry and as an association.

Ms Susan Peacock (Vice-President, Canadian Motion Pictures Distributors Association): Under the existing act, when there are criminal sanctions being considered with respect to infringement the court has a very broad authority in subsection 42(3) to order that all plates that appear to be for the purpose of infringement be destroyed. They can be delivered up to the copyright owner or otherwise dealt with, as the court thinks fit.

Plates, as defined in the act, include copies that can be used as masters for the purpose of making more copies. It also includes appliances - the word used in the act - which are devices or machines used to make copies. Bill C-32 proposes to narrow this section so it would apply only to plates that are specifically designed or adapted for the purpose of making infringing copies.

Infringers in the video piracy area rarely, if ever, utilize plates that are specifically designed or adapted for the purpose of infringement. They use cassette copies that they may have acquired legitimately in the first instance. They use tape that is readily available at stores. They use the same kinds of VCR machines that are available to any consumer. To include this change in the act would make this section of absolutely no deterrent value. It would no longer be possible to seize plates in the case of video infringement. So we recommend that the words ``specifically designed or adapted'' be omitted from paragraph 42(2)(a) and subclause 42(3).

In 42(1) of Bill C-32 there is a list of activities -

The Chairman: Just one second, Ms Peacock.

Do you know the French version? Anyway, we'll find it.

[Translation]

In English, it is paragraph 42(2)(a).

A Voice: Yes.

The Chairman: It is 42(2)(a) and 42(3).

A Voice: Perfect.

[English]

The Chairman: Okay. Just go ahead.

Ms Peacock: Thank you. Likewise, in the part relating to criminal offences in subclause 42(1) there's a list of criminal liabilities imposed on any person who knowingly uses an infringing copy for activities that include selling, renting, distributing and importing for the purpose of selling. But one activity that is not on the list is possession of infringing copies. The act does provide for civil remedies for possession of infringing copies, and it's our submission that possession should be added to the list of offences giving rise to criminal penalties, as well.

It seems to be a night for talking about the broadcasters. A portion of my submission relates not to something that is in the bill, but to something that's being proposed by the CBRA, which is a collective representing the interests of private broadcasters. The proposal is supported by the Canadian Association of Broadcasters. It proposes that the rights in a communication signal be substantially broadened from the rights in Bill C-32. The broadcasters claim that they need broader rights in order to protect themselves from signal pirates, in order to be competitive and in order to get appropriate compensation for the use of their signals.

.2035

Ms Phinney: Is this the number for that one? What section is it?

Ms Peacock: It's not in Bill C-32. I'm referring to a proposal by CBRA.

Ms Phinney: It's not in here at all?

Ms Peacock: It's not in the bill.

Prior to Bill C-32, the Department of Canadian Heritage commissioned a study by Dr. Gerry Wall. He was asked to examine the economic impact and make recommendations with respect to creating a very broad signal of the type the broadcasters are asking for. It was Dr. Wall's conclusion that the only aspect of the use of broadcasters' signals that was not adequately protected was what he called the compilation, which is the selection and arrangement of programs that's done by the broadcaster that adds value to the signal. That was the only thing for which Dr. Wall thought they were not adequately compensated.

Since that study was published and since Bill C-32 was tabled, the Copyright Board has determined that, in the context of the retransmission hearings, broadcasters do have a copyright in that compilation. It said, in fact, that they have a copyright already under the existing law in the contents of their signal. Therefore, it's our submission that they do not require any expansion of their rights in order to protect them from piracy. They also have rights under the Radiocommunication Act in that regard.

They have a cause of action against unauthorized users. They are already compensated for the programming they create and for this compilation for the contents of their entire signal by the Copyright Board. They enjoy a share of royalties for that as long as their signals are retransmitted as distant signals. That's a limitation imposed on all copyright owners. It's not just broadcasters, but the owners of syndicated programming, music, and sports events. That means all programming.

The broadcasters' main thrust seems to be that they also, as unique among copyright owners, would want to be compensated for the retransmission of their signals locally. They have asked the CRTC for the authority to withhold consent to the carriage of their signals. The CRTC is sensitive to this issue, regulates it accordingly and is of the view that when a signal is retransmitted into a different market it can't ordinarily reach, it's not the owner of the exported signal who's harmed; that broadcaster's market is expanded. The broadcasters in the local market are harmed because their market is fragmented. The CRTC regulates that, and it's appropriate that they do so. It's not appropriate that it be considered in the context of copyright.

Third, on that point, if the broadcasters succeed in persuading the government that they should be compensated for the local retransmission of their signals, it would be our submission that the owners of other content on the signals, such as the owners of the programs and the music, should be compensated for that local retransmission as well.

With respect to the exemptions that are provided for in the act, the comment I wish to make most strongly in that regard has to do with proposed subsection 29.4(2), which permits an educational institution the unlimited use of any work without permission or payment as long as the use is for the purpose of an assignment, a test or an examination. I can't think of any routine, ordinary use that would be made in a classroom that would not be for the purposes of an assignment - this is very broad - or test or examination.

The more limited exemptions in proposed subsection 29.4(1) and proposed sections 29.6 and 29.7 would be meaningless. There's no reason for those limited, carefully crafted exemptions if proposed subsection 29.4(2) stands as it is. The policy decisions made to not include other exemptions, specifically not to create an exemption for the performance in a classroom of pre-recorded material, would be completely meaningless.

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We therefore recommend that the word ``assignment'' should be deleted from this exception and that the balance of the exception, which relates to tests and examinations, should be limited to appropriate types of works that teachers are likely to need to copy for the purposes of tests and examinations. We submit that this would exclude cinematographic works and computer programs at least.

Proposed sections 29.6 and 29.7 give educational institutions the right to record programs off-air and perform them in the classroom with certain restrictions and with an obligation to pay if copies of the works are kept beyond a certain period and actually performed.

Proposed section 29.3 says that a student is deemed to be a person acting under the authority of the educational institution for the purpose of those exemptions and another in proposed section 29.4. This provision makes educational institutions responsible for then infringing activities of students acting on their own initiative. We doubt if that was the intent. We doubt if that's what the educational institutions want. It's certainly not what we want, because it would lead to more infringing copies.

We are not saying students should not be allowed to make copies for this purpose. We're saying only that if they are actually authorized by the institution, let them make the copies, but if they are not actually authorized by the institution, there is a risk of infringement and of liability for boards of education when students make copies without authorization.

The educational institutions will only be able to administer the new royalty regimes established in Bill C-32 and avoid liability for unauthorized infringement by their students if proposed section 29.3 is deleted. We also recommend that the copying authorized by these sections stipulate that copying must take place on the premises of the educational institution. Again, we think this would be of mutual benefit from an administrative point view for both copyright owners and the institutions getting the benefit of these exceptions.

In the document we've handed out today, there's a discussion of a definition of the phrase ``news commentary''. I've read at least one submission by a representative of the educational community that suggests that they believe news commentary embraces all non-fiction programming. I think this underscores the need for either a definition of news commentary, which would be admittedly difficult, but necessary, or in the alternative, to specify that news commentary relates only to news commentary produced by broadcasters and intended to be broadcast one time only. This would protect documentaries and other fact-based programming that is produced specifically for the educational community or that is not intended to be captured by this exemption.

We also suggest that in the definition of infringing, because these new exemptions permit copies to be made for specific exempted purposes, if such a copy is used for a different purpose, the definition of infringing should be modified so as to make that an infringing copy when it's used for a purpose other than the purpose for which it was made.

Because of the experience I had when the retransmission regime first came into place,I recommend strongly that there be added to Bill C-32 a transition provision, as there was for the retransmission regime. It's still to be found in the act in section 149.

It would clarify matters for both owners and users if the act included a transition provision specifying the date when the new regimes are to come into place and delaying the implementation of the exceptions until that time. Otherwise, there is some potential confusion in Bill C-32, which mentions, for example, that off-air copying only applies if the institution has paid the appropriate royalties within 30 days.

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The royalties are going to take some time to establish. With retransmission, the transition provisions said the royalties became effective January 1, 1990 regardless of the date when they were certified. In fact they were not certified until October 1990, but they were retroactive in effect, so the owners were not penalized. The users had notice, because all the proposed tariffs had been filed some time before, so they were not harmed. It worked quite smoothly. I think for the same reason as it was included with the retransmission regime, it's recommended that it be included for the new royalty regimes that are being established here.

Those are our comments. We'd be pleased to answer any questions.

The Chairman: Thank you very much, Mr. Frith and Mrs. Peacock. You've been extremely helpful, with very precise recommendations, which I'm sure members will want to study with great care and interest.

Mr. Leroux.

[Translation]

Mr. Leroux: To add something, Mr. Chairman, I thank the witnesses for their brief, because this type of brief will help us advance concretely and clearly the work on this bill.

The thinking you are doing leads me to say that taking the exceptions road is extremely complex and dangerous in relation to the bill. It seems to me so obvious to see the situation you describe concerning just one aspect of video and television. It may also apply to photocopying and all sorts of other areas affected by the legislation. The potential administrative problems appear to me to be beyond description.

On administration, I would like to come back to the exceptions provided for educational institutions. You say in the brief that the collection and royalties system that is proposed raises some complex collective administration problems that are not really satisfactorily addressed by Bill C-32. I would like you to develop that point.

[English]

Ms Peacock: I think it has to be dealt with with some care. The retransmission regime is similar in structure. The right to communicate to the public by telecommunication was created, an exception was made for retransmission of distance signals, and a royalty regime was established. It has worked very well. I think copyright owners, my own members included, are often not happy with these exceptions to royalty regimes because they lose control of their works and they would rather have control. But in the modern world control is often not possible. Often the only choice is either some kind of collective administration of copyright or just being robbed, and between those two choices collective administration is preferable. It's less precise -

Mr. Frith: And some prefer to be robbed.

Ms Peacock: Some prefer to be robbed.

It has benefits to owners and users because each transaction is not separately licensed. It's a kind of quick-and-dirty method, but there are compensations for owners and users because the administration is much, much simpler than to license each individual use. So although it can look expensive at the beginning - I think the hearing costs of setting these initial tariffs will be very high - I don't think it's as high as the cost of issuing individual licences.

Mr. Frith: I concur with what Susan has indicated to you.

I thought at the end of your question you were raising the issue of collection for educational institutions. It's going to be up to the Copyright Board to determine those details if the legislation proceeds as indicated. As I said at the beginning, obviously it is the balance in legislation between the rights of the creator and the needs of the user. For you as legislators, that's the judgment call on your part. But for people to stand and say gee, there's going to be a situation where the users have no rights...I don't think that's going to work in a modern world. What you really want to do is to make sure whatever exemptions, whatever exceptions there are, they're narrowly defined, they're specifically defined, and you know what the public agenda is there for.

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Ms Peacock: We're also very fortunate here in that the Copyright Board, while I have not always agreed with them, generally have done an excellent job and have, in the first retransmission meeting, come up with a tariff that was not like any that were proposed by any of the parties, including me. I have to say theirs was better.

[Translation]

Mr. Leroux: One final question, Mr. Chairman. What do you think of the introduction in the bill of the ``no fault'' principle?

[English]

Ms Peacock: I don't know what you mean.

[Translation]

Mr. Leroux: In the bill, in connection with the exceptions, the ``no fault'' principle is introduced, in the sense that some people can reproduce some authors and defend themselves by saying they were unaware. The principle is there; you defend yourself by simply saying you didn't know there was copyright. It is in section 37, I think.

[English]

Mr. Frith: Correct.

[Translation]

Mr. Leroux: What do you think of this principle that has been introduced suddenly, when ignorance of the law does not excuse?

[English]

Mr. Frith: My understanding - and Susan is the lawyer and I am not - is that under the existing legislation, if you're found to be in possession of an illegal copy, you fall under a different section of the Criminal Code from the one being proposed in Bill C-32, which would be that if you're found to be in possession of an infringing copy it's a civil matter rather than a criminal one. We're suggesting you leave the system as is, because if you leave it as it is, then police-enforcement agencies will have no difficulty. They've been working under that system for the last fifteen years. They're obviously subject to the control of the judicial system. They have to prove a guilty mind was in place, mens rea, when the person came into possession of it. It has worked very, very well.

That's why we're suggesting that under these amendments you make sure possession of an illegal copy is deemed to be criminal, as it has been until now, and you do not change that section. It has worked very, very well.

I can say honestly, having been through the briefings I have had, for the motion picture industry, when I say piracy is a worldwide problem and Canada is the model of the world, it's because of the definitions that have always been in place within the acts within Canada. They've gone a long way towards helping the law-enforcement agencies patrol piracy. When you compare the degree of piracy in Canada with that in the U.S., Europe, southeast Asia, believe me, the rest of the industry, including the computer industry, would love to have our system, and any tinkering with it is to the detriment of not only our industry but the high-tech industry.

[Translation]

Mr. Leroux: Thank you very much.

[English]

Mr. Abbott: I'm interested in following the money. We've been talking about an educational exemption. I know we'll want to look at your other suggestions. At first blush they certainly seem very reasonable and very helpful and I too would like to thank you for them. But about the educational exemption, if indeed we're trying to find a balance between the rights of the creator and the needs of the user, as you've suggested - and I agree with that - what's in it for your industry? What is the motive for your industry agreeing to such a broad educational exemption? I'm just trying to understand the thought process. I'm not imputing motive. I'm just trying to understand.

Ms Peacock: You're referring to the author taping exemption.

Mr. Abbott: Yes.

Ms Peacock: Well, first of all, we would be singing a different song if there had been an exemption for classroom performance of pre-recorded material. This exemption is quite limited. Only one copy can be made per institution. It's only material that's broadcast.

We haven't, and I hope you're grateful, mentioned everything we put in our brief. One of the things in our brief is that the recordings should be restricted to conventional over-the-air signals and to the specialty channels - that sort of thing - but exclude pay-per-view, exclude video-on-demand, exclude the Internet; I think the Internet especially, because it's such a perfect delivery system for getting educational materials into the school efficiently and cheaply. People would be discouraged from making material available that way if it can be taken for free.

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But because of the limitations, because there's a right to payment, and because we're sympathetic to the fact that teachers may not become aware until the week of the broadcast that there's something on television they would find useful in the classroom, we accept that in most cases it's going to be virtually impossible for them to find out who can authorize that use, get approval from whoever they have to get approval from before they can spend money, negotiate the rights and get a licence to tape it in time. They buy their TV guide at the grocery store on Wednesday and the show's on Saturday night. It's not practical.

That has been their complaint, and we're sympathetic to their complaint that they truly don't have access. When that's a legitimate complaint, we're sympathetic as long as there's compensation and that's built into this -

Mr. Abbott: Would this over-the-air work that we're talking about the exemption for typically be from people who are represented on the front page of your brief this evening, or would it be for other sources? In other words, are you making a broad-brush comment that is not really specific to the people you represent?

Ms Peacock: It's not specific to them and we don't know to what extent their works will be copied under this exemption. The exemption for news and news commentary is quite a bit broader than it is for other sorts of programming. We think it's broader than it needs to be. They're allowed unlimited use for a year of news and news commentary. In fact, if the idea is for topical information to be available in current affairs studies, probably 30 days would be sufficient.

It's probable that a lot of material used in classes will be related to current affairs or will be documentaries, but most high schools, at least, have courses in drama. Many universities and so on have film appreciation courses. In those cases it would be the works of our members that would likely be affected.

Mr. Abbott: Mr. Chairman, I think it's rather interesting that my colleague from the Bloc who has been opposed to exemptions hasn't been more vociferous on this, but that's just an observation.

The Chairman: To each his own, Mr. Abbott.

Some hon. members: Oh, oh!

The Chairman: Ms Phinney and Mr. Arsenault will split their time, I understand. Ms Phinney.

Ms Phinney: I thank both of you for coming here on short notice.

Am I correct in saying, Madam Peacock, that you're a lawyer specializing in copyright?

Ms Peacock: Yes.

Ms Phinney: I have a question to ask, and you may have heard that I asked it of another group tonight. I asked if they agreed that Bill C-32 introduces no new requirements for clearing the rights for ephemeral recordings and transfer of format and if they agreed that all it does is make it easier for authors to enforce rights that are already in the Copyright Act.

Ms Peacock: Bill C-32 does not give owners any new rights in that regard. It also doesn't make it a lot easier for them. I think they're pretty much in the same position they've been in for some years. If they didn't know it before 1990, they've certainly known since then that they're required to get permission whenever they make a copy.

I should say that among our members.... And I think I can speak more broadly than that. When programs generally are licensed to broadcasters, the program supplier routinely gives the broadcaster the right to make copies as necessary. They're incidental to the broadcast. The program supplier is in a different position from the composers and authors because the program supplier has negotiated the right, a specific licence fee, and the number of plays. It's a very precise licence for their work.

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It's an interesting debate. Partly I'm always reluctant to take sides when I don't have to, and also I'm just personally not sure where I would come down on that ephemeral rights exemption.

Parties who do have a strong position, who have a vested interest on either side, tend to overstate it, because for most programs that broadcasters license, this is not going to be a problem. It's not going to be a problem for the musical works either, because the producer has obtained the rights from the composer and can pass on to the broadcaster the right to make copies.

The broadcasters' problem is really limited only to the programs they produce themselves. In the context of the programs they produce themselves, their problem is limited only to musical works and sound recordings that embody musical works. The exemptions they've proposed are expressed much more broadly than that, but from listening to them talk about the practical difficulties they have, I think an exemption relating only to musical works and sound recordings embodying musical works would be sufficient to solve all of the practical problems they truly have.

Ms Phinney: Thank you.

The Chairman: Mr. Arseneault.

Mr. Arseneault: Thank you, Mr. Chair. I have a number of quick questions.

With regard to the news commentary program definition, you said we should look at putting a very specific definition in the bill, and you mentioned the one you have. It's something along the lines that it relates only to news commentary produced by broadcasters and not ordinarily intended to be broadcast more than once. That would be acceptable to you? Would it create problems?

Ms Peacock: Well, it would be acceptable to me, and I'm not a broadcaster. I think it would more fairly reflect what I understand to be the intention of distinguishing news and news commentary programming from other kinds of programming.

Mr. Frith: That was really in response to some of the briefs that have been submitted to the committee that broadly interpreted it to mean even documentaries, let's say, on specialty television channels. Unless you tighten it, it's pretty broad.

Mr. Arseneault: Does Bill C-32 make it more difficult for an educator to obtain a licence for public performance of a motion picture, or does it make it easier?

Ms Peacock: It doesn't affect it at all.

Mr. Arseneault: So it remains the same, as is?

Ms Peacock: Yes.

Mr. Arseneault: Okay.

Being an educator, I have a certain viewpoint, but in your estimation, how easy is it for an educator? Is it the opinion of most educators that it is very difficult?

Ms Peacock: I don't think so. Licences are available for feature films that are owned by our member companies. All of those companies are represented by one or the other of two distributors, so it's not as though an educator has to make many phone calls.

Those two distributors have very large repertoires, much larger than just the repertoires of our member companies' features films. It's probably fair to say that a public performance licence for a classroom could be obtained for anything that could be found in a video rental store, without having to make too many phone calls and without having to get into too long a negotiation.

Mr. Arseneault: Would you have to pay a distributor even if they didn't have that motion picture repertoire?

Ms Peacock: Well, you shouldn't. You should only pay someone who has the rights.

Mr. Arseneault: Okay.

In your document you say students are not under the authority of the institution and as such should not have the right to benefit from the exemption. Is that what you're saying?

Ms Peacock: No, sorry. Not at all.

Bill C-32 says a student is deemed to have the authority whether they actually have the authority or not. For example, let's say a keen group of high school students is studying a particular topic and there's a program on television about it. So without getting anybody's permission, such as their teacher's, five of them decide to make a copy at home and bring it into class. Well, now there are five copies and four of those are infringing.

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Mr. Arseneault: So you are saying you would be against that in the bill; you would not want that to happen.

Ms Peacock: I'm saying there should be nobody who's deemed to have authority. If the teacher says ``Here's this show and we want to tape it, and Johnny, I want you to go down to the AV department and see Mr. Jones and fill in the form and tape it'' - fine. If the student has authority from the institution - good. What I'm concerned about is that any time a student makes a copy, they are deemed to have the permission of the institution, and therefore they're the institution's agent, and if that copy is in fact infringing, the institution is going to be liable.

Mr. Frith: We put that in because we believe that the educational institutions that would be affected by it didn't really realize the ramifications of it. It's just a tightening up.

Mr. Arseneault: There's the other side too. What happens if the student forgets to get the authority from...? You're speaking about taping only on-site. Now that's another issue.

Ms Peacock: That's the other side of it; it's a separate issue.

Mr. Arseneault: If you allow them to do it at home at night, when most of the news programs and most of the better programs are on, then I'm sitting at home as a student and I don't realize there's a program on and all of a sudden there's a program on. ``My gosh, we're dealing with this in class, that's exactly what the teacher talked about today. I'm going to tape it.'' But I don't have the authority. You're saying now you're recommending that would be an infringement, first because it's not on-site, and second because the student did not receive prior authority from the teacher. Would you go along with that?

Ms Peacock: Yes, that's exactly what we're saying. I think that if I were responsible for administering this regime on behalf of a school or a school board, I would agree with me, if I can put it that way, that I would not want to be responsible for doing the reporting that's going to be required, for paying the royalties, unless I'd authorized this in the first place. The student is going to be at least incurring charges and administrative obligations on behalf of the school, and at worst, making the school board - because that's the legal entity - liable for infringement when nobody told him to go ahead and do it in the first place.

It's very similar to saying if a student goes to Grand & Toy and buys a box of pencils and intends to take them to the school and have them use them, the school is liable to pay for those pencils whether they want them or not. I think it's doing a disservice to the school as much as to the copyright owner.

Mr. Arseneault: But would you not have blanket agreements with institutions?

Ms Peacock: The exemption that's proposed in Bill C-32 authorizes one copy per institution.

Mr. Arseneault: I realize that.

Ms Peacock: How is the institution going to make sure that their agents, 5,000 students, are not infringing copyright, unless they have to authorize and not have them deemed to be their agent?

Mr. Arseneault: What types of fees are we talking about?

Ms Peacock: We won't know until the Copyright Board tells us.

Mr. Arseneault: You must have a general idea of what you would expect.

Ms Peacock: Not really.

Mr. Arseneault: What argument would you make?

Ms Peacock: I don't know yet. I wish I did; I'm sure I'll be making it.

Mr. Frith: Susan and I have talked about this. It's possible that it could be done on the basis of so many pennies per student per school. Or to simplify matters, it may be that for example the Peel School Board or Hamilton West School Board is going to pay an across-the-board flat rate, which would really ease up the Copyright Board -

Mr. Arseneault: That would be an easier way to administer it?

Mr. Frith: Absolutely.

Ms Peacock: I think it will be some sort of blanket licensing. It may be per student per year, it may be -

The Chairman: Excuse me. Just before we close, we've got two minutes left of your time. If the members would allow me, I would like to ask you a very short question to sort of understand the system.

What you seem to be saying is that when a music producer negotiates with a broadcaster the big deals to effectively waive the provisions of the 1990 judgment, in effect -

Ms Peacock: No, no, I don't want to give that impression.

The Chairman: Not specifically, but in practice.

Ms Peacock: No. The 1990 judgment said that the broadcaster must have permission to make a copy of a composition.

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I'm saying, first of all, that will only be of concern to the broadcaster when they have produced the program, because if Warner Brothers produces a program, Warner Brothers gets rights from the composer to copy that music in the program in the first instance, and then to make copies and to authorize its licensees to make copies.

So when Warner Brothers licenses a program to CTV, Warner Brothers' main interest is ``We are licensing you two plays on the CTV network for this much money, within this period of time, and by the way of not a waiver but a specific grant, a licence, you can make copies that are required in order to effectuate the broadcast''.

The Chairman: I appreciate that. I expressed myself wrongly. But by a licence, it's a way of getting around -

Ms Peacock: It's a way of complying; it's not getting around it.

The Chairman: Okay, complying.

You take SODRAC, which appeared before us today. They signed a licence with the Minister of Education. They signed a licence with TVA, or whoever. Under the contract, they give them almost blanket rights to do all these things that would normally not be possible. Is that the bridge between one side and another, in a sense?

Ms Peacock: This is complicated. One way to look at it is the program supplier, Warner Brothers, owns that program. They are comparable to SODRAC's member who owns the composition.

The Chairman: Right.

Ms Peacock: When Warner Brothers has a licence and they're going to get paid for the performance for the broadcast, they will routinely also throw in the right to make copies incidental to the performance. That's what the program suppliers do; maybe that's what the law should require composers and authors to do. But I'm not sure, and it's not necessarily what I'm recommending, because of the difference in the position.

The program supplier is negotiating for that particular performance and still has all the control. The performing right is something like an exemption; it's something like a compulsory licence. It's a little bit different, but there are comparisons and analogies that might help you in your difficult deliberations.

The Chairman: Thank you. You've been extremely helpful, and I appreciate your presence here.

Thank you very much, Mr. Frith, and thank you, Ms Peacock.

Mr. Frith: Thank you. Mr. Chairman, I'd like to end by saying I've learned one thing in my very short time with Ms Peacock. She's extremely competent in this whole area, and if at any time you want to come back to us to seek some counsel, we're available.

The Chairman: Thank you, we appreciate it.

We'll suspend for two minutes.

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The Chairman: Order.

[Translation]

I would like to welcome the members of ALAI CANADA, the International Literary and Artistic Association Canada, Mr. Ghislain Roussel, attorney, Ms Claudette Fortier, who is vice-president and general manager of the SODRAC (Montréal) and Mr. Stefan Martin, attorney.

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Mr. Roussel, you have the floor.

Mr. Ghislain Roussel (attorney, International Literary and Artistic Association Canada Inc.): Thank you, Mr. Chairman, ladies and gentlemen members of the standing committee.

Allow me first of all to thank you for the invitation you sent to ALAI CANADA to make its representations. We will be pleased to answer your questions.

I pay tribute to all the members of the Standing Committee on Canadian Heritage who are interested in the issue of copyright. To us, the members of ALAI, this is a fascinating but extremely complex subject, and your merit is all the greater in that Bill C-32 does not simplify your task.

The persons accompanying me can be invaluable to you this evening. First, I believe you have already heard the contribution by Ms Claudette Fortier. Ms Fortier has extensive experience, not only in the sound or musical works field but also in the field of writing, sound recording and audiovisual. She is a former president of the Canadian Conference of the Arts.

Mr. Stefan Martin is a lawyer with Byers Casgrain. Franco-German in origin, with a knowledge of two different legal systems, he has conducted extensive research in the area of neighbouring rights and in particular private copying, and has negotiated an agreement on reprography for the universities.

I am one of the persons responsible for the negotiations for the Quebec department of education on photocopying in educational institutions.

You have before you some experts who will be able to reassure you in connection with the collective administration of copyright, without exception.

In our brief, we have emphasized the defence and promotion of general principles, but within a practical perspective of copyright administration.

There is another reason why we have taken this approach. We note, in light of the amendments to the Copyright Act since 1988 - and I find it comical to refer to that phase as the second or third since there have been many amendments to the Copyright Act, which does not simplify your job - that we are misconstruing copyright in the course of these amendments.

Copyright originally is a monopoly, but limited in its duration, the author's life being 50 years. It is also limited in its rights and in terms of the status of the right, which is subject to certain limitations that are found in various international promotions and national laws.

Reading Bill C-32, one notes a dangerous shift in copyright. Indeed, I think that in some ways copyright is so badly defined that one might recognize, as an author, a maker or broadcaster who would thus become the first owner of the copyright. Even the exclusive distributor is brought into the act.

The other concern is that we no longer protect works. The raw material, in terms of copyright, is in the first place the work. This notion is extended a fortiori to performances, recordings, copies, and communications signals, which puts a question mark around the very concept of copyright, namely, that an author's work is protected if it is original. How is a signal original? If you were talking to me about a television program, I might understand something.

I referred also to the status of copyright, which is shifting. Another copyright principle is granted to the authors, the first owners of copyright, and this is sole rights, which appear in clause 3 of the bill.

Sole rights are being increasingly recognized in performances and recordings of signals. These are not rights that have to do with works, but are simply rights derived from copyright in a work, what are called neighbouring rights of copyright. This is what common law legislators may call neighbouring rights, rights in sound recordings, rights in programs or rights in artists' performances, but it is certainly not a performer's copyright.

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So there is this alteration in the nature of copyright which is dangerous in terms of this legislation.

In other cases, sole rights are not recognized or, if a sole right is recognized, it is made a right to remuneration, which is simply subject to an involuntary licence or to compensation and terms and conditions that are not included in negotiations between users and copyright owners.

However, one need not be entirely negative, and we should rejoice in the fact that Bill C-32 makes some clarifications in terms of remedies, exclusive licence rights, imports and the recognition of so-called neighbouring rights - ALAI Canada having called for recognition of so-called neighbouring rights, albeit within the perspective referred to earlier.

The other problem noted over the years in light of the recent bills, and particularly Bill C-32, is the consistency in terms of legislative drafting. The bill covers modes of dissemination but these are so structured by the medium of dissemination or mode of performance that in some respects the bill that you have before you is already obsolete, because there are already media on the market that go beyond what is provided in the bill, particularly in terms of sound recordings and private copying.

Narrow concepts and definitions will also entail an even more rapid revision of the Act. You have Bill C-32 before you, while a diplomatic conference has been called for December by the World Intellectual Property Organization in Geneva on three proposed treaties: one on databases, one on the rights of performers and producers of sound recordings and a third to modernize the protective framework for literary and artistic works traditionally protected by copyright under the Berne Convention of 1886, revised in 1971.

Another aspect of the bill may also be noted: the list of proposed exceptions, which alters the nature of copyright and strips the sole rights granted to authors of their content - rights which, in some cases, are already covered in agreements with the users. Many of these exceptions are in the agreements with educational institutions. This creates a dangerous precedent because all the efforts that have been made since 1983-84, particularly in Quebec, to make the educational institutions accountable for copyright are more or less negated by these exceptions.

Although this is a decade of responsibility and accountability, you give a strong impetus to irresponsibility and the use of copyright without regard for the rights of the users. You uphold the state of mind that copyright is something that paralyzes broadcasting, access to information and communications in a society in which everyone is entitled to culture and information, although there are some mechanisms such as collective copyright administration that are included in the legislation.

Instead of creating rights to remuneration or exceptions and relying systematically on the Copyright Board, we should be encouraging collective copyright administration and negotiations among educational institutions, in particular between the users and owners of copyright. Failing an agreement, in the case of disputes - because we must still provide some parameters and guideposts - any party, the copyright owner or educational institution as the case may be, should be able to ask the Copyright Board for a determination of proposed guidelines, terms and conditions and licences or even to ask it play the role of an arbitrator.

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We forget that the Copyright Board already has this authority under the Copyright Act. The Board's powers could be expanded to give it the role of a genuine tribunal that would issue decisions on the contentions that might be made on this or that side.

We prefer this approach to the one that is transparent in the bill, which judicializes copyright, not brazenly but at a very refined level. Copyright is there in the first place to serve authors either through licences or through limitations. There are so many nuances and ambiguous words in it that, in the end, the author is often at a disadvantage when confronting educational institutions or other categories of users who have the necessary resources to wear down the copyright owners, if you will pardon the expression. The owners will be in an untenable position in defending their rights when they are confronted by legal proceedings and claims.

I will end on a question that was raised earlier. Would the already negotiated agreements become obsolescent? Given the exceptions, I will provide but one example. The Quebec government has just negotiated an agreement on dramatic works for the elementary and secondary schools with the Association québécoise des auteurs dramatiques. With the bill, this agreement becomes obsolete and invalid.

Thank you, Mr. Chairman. I think I have covered all bases. We are now ready to answer your questions.

The Chairman: Mr. Roussel, it is 9:30 and I think the members have followed your presentation with great interest. We have recognized in you a person who knows his trade and whose presentation will help us in our research. We thank you for this. I am now going to ask Mr. Leroux to ask some questions.

Mr. Leroux: I think this ties in with one of the concerns of the Opposition in relation to the bill, namely, that we should be moving in the direction of accountability in the copyright bill and not in the direction of removing accountability from large sectors of society and major institutions, which have a duty to meet with the representatives of the copyright owners to set some parameters for the use of works. As you say, it is necessary to use the existing tools, such as the Copyright Board, and acknowledge fundamentally this whole issue of negotiation.

I was very pleased to receive your brief and I would like to introduce the first question. This is the first time that the issue of judicialization has been raised in the briefs presented to us. You tell us in your brief that you might be told in reply that there are some exceptions in the U.S. Canadian, French, etc. laws, but that no national legislation includes so many exceptions that are so extensive or so judicialized. I would like you to explain that to us in greater detail, to indicate to us the nature of the exceptions that exist elsewhere, and to tell us of the consequences of judicialization.

Mr. Roussel: Judicialization may appear in the wording of some documents, that is, some limitations may be provided. I think Mr. Abbott pointed that out earlier. There may be a copy for a pupil for this or that purpose. But there are many nuances in terms of wording. For example, for museums, document depositories or libraries, one copy could be made unless copies were available in reasonable number, on reasonable terms, at a reasonable price, etc. The bill is full of qualifiers or epithets which would mean that I would have extraordinary ammunition if I were representing copyright owners or users.

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Judicialization may appear in the wording of the exceptions, because there are many and each may be subject to interpretation.

Judicialization may appear at another level, namely, that sole rights are no longer negotiated as such, but there must be a licensing body that can file a proposed guideline, after which the whole matter will be transferred to the Copyright Board.

But in many respects, in terms of private copying, in terms of the rights of performers and makers of musical works that are the subject of sound recordings, in terms of the right of public performance and in terms of the right of communication to the public, the Board itself, which is an administrative tribunal with judicial powers, has more or less some latitude, because it is subject to criteria and guidelines in many provisions of the bill. It must ``comply'', ``adhere to'', ``ensure'', ``take into account'', etc. This is in at least three provisions of the bill.

Since the Board operates to some degree as in the adversarial system, it hears representations and objections and must have regard to the evidence that is placed before it. The guidelines will also be fought over on all sides and be subject to interpretation. Some of these criteria and guidelines are unenforceable, unrealizable and unrealistic, because they are already obsolete or will greatly limit the Copyright Board in its decisions. The Board should be left some leeway and made a genuine copyright tribunal.

Mr. Leroux: Give us an example.

Mr. Roussel: I would first like to point out to you that the film makers associations and ADISQ, in particular the CIRPA and the CRIA, will no doubt tell you a lot about sound recordings. You know that the Board must have regard to certain criteria in fixing the levies in the area of sound recordings, in terms of private copying, for example. What are the rates that are allowed in other legislation or in other countries?

The experts from the departments of Industry and Canadian Heritage will excuse me for not having the exact wording, since I am unable to tell you at what page this is. You have to take into account the American industry insofar as sound recordings are concerned. I understand, but when you know the vitality of the record industry in Quebec, I think it can distort things when fixing the levies. It is at page 84 of the bill. It says, in setting a guideline for the Board, that it is to determine levies that are just and equitable and that that criteria should suffice. I am reading, in French, what is stated at page 84 of the bill concerning private copying:

«the Board shall satisfy itself that the levies are just and equitable, having regard, among other factors, to (a) the amount of the levies payable under comparable laws of other countries; (b) the nature of the North American sound recording industry; and (c) any prescribed criteria.

Reading that leads me to something else. I am not overlooking the international dimension, which I will address shortly.

There is indeed a judicialization here, but there is also another aspect of the bill that is dangerous. In many of the bill's provisions the Governor in Council is given the power to intervene through regulations. Through regulatory means you can extend the field of beneficiaries of the so-called neighbouring rights to other countries, including the members of NAFTA or to other subjects of copyright.

You have definitions of ``educational institution'', but there could be other definitions. From memory, I think there must be similar provisions in the bill in at least fifteen or so places, in which there is an expansion of a statute through regulatory means without any procedure or consultation.

You also asked another extremely important question, which was earlier put to SODRAC. Are there exceptions elsewhere?

Yes, but there are two approaches. There are some statutes that are called civil or Romano-German law, which contain no exceptions, or very, very few, and provide negotiating mechanisms between the parties. There are some exceptions but it tends to be for purposes of private copying, for purposes of consultation or research, as there are already in the Canadian legislation concerning fair dealing, for example.

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You have the system in the Nordic countries, which is based on a ``gentlemen's agreement'' system. There are certain exceptions, but they force negotiations. Failing negotiations among the copyright owners or holders, arbitration boards are established. This is a rather special approach in the Nordic countries.

You have the American approach where there are some exceptions, but based on a completely different philosophy. There are some exceptions that are provided or earmarked, but alongside the law there are guidelines to fetter these exceptions.

I will give you an example. You have some exceptions in the U.S. statute concerning audiovisual and printed matter and reprography. Independently of these exceptions and the guidelines that appear, there are nevertheless negotiations. There are even lawsuits which were brought because of noncompliance with the guidelines. There are even some agreements that have been negotiated.

Of greater concern to Canada, which is a common law country in terms of copyright, copyright for performers and for us is not ``copyright'' but author's right.

ALAI CANADA is situated within an international perspective, being the Canadian group of an international association of which, I might add, the president is a Canadian.

The common law statutes include pages and pages of exceptions. I urge you to ask your research branch to provide you with a copy of the Australian statute or the New Zealand statute; you are going to have fun.

You have many exceptions, but they are more limited. I will give an example: the educational institutions.

The Chairman: Mr. Roussel, could you summarize, to give an opportunity to the others?

Mr. Roussel: All right. When you have some exceptions, they are limited in their applicability and much more qualified. But in those countries there are no collective administration mechanisms. The British legislation provides some exceptions, but many of them are conditional or applicable when there is no collective administration mechanism within the government.

As you see, there are many exceptions in these laws, but their applicability will be much more qualified or subject to collective administration mechanisms.

Mr. Leroux: Thank you, Mr. Chairman, for your patience, because I think this was important. This is not philosophy. It was very detailed and important to us.

Mr. Roussel: I'm sorry, Mr. Chairman, if my comments were so lengthy.

Mr. Leroux: No, sometimes there are things that must be said and cannot be shortened. Thank you, sir.

[English]

Mr. Abbott: I would agree with you when you suggest that this legislation gives power to the government to intervene, but I say for the benefit of my Liberal friends that this is fairly typical of Liberal legislation.

You've mentioned that it is over-legalized, that you're concerned about the exemptions, and you are concerned about the interpretation. You've talked about making it into a copyright court.I wonder if you would agree that as a result of this legislation there is a very real possibility that legal actions and the amount of money spent by lawyers in front of the Copyright Board will probably increase.

[Translation]

Ms Claudette Fortier (Vice-president of the International Literary and Artistic Association Canada Inc.): No, I don't think so. As a collective representative, I am happy with the remedies that are provided and the minimum measures in them. It is clear that if one sues for a repertoire, the sums seem enormous. But for an individual copyright owner, the damages provided are not very high. They are minimal if you bring an action for having manufactured, for example, an advertising message or a highly commercial product. The present bill changes nothing. I repeat, all that the collectives are trying to do is to enforce the law as it exists. There will not be more proceedings in the courts.

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[English]

Mr. Abbott: If I were to take your colleague's testimony as I understood it, he said that with it being - and these are his words in English - over-legalized, he is concerned about the exemptions and about the interpretation. That being the case, it may be true that this will aid or not aid the collective.

I'm suggesting that if there are all of these exemptions, and if we have layered more minuscule detail on top of the detail that we already have, there will be more people trying to defend themselves as a result of this legislation, and there will therefore be more legal activity.

[Translation]

Ms Fortier: In point of fact, here is what the exceptions will do for the collectives. To exercise negative rights, they will have to spend time and money and monitor for a negative right that does not include any payment. That is how the exceptions will apply as they are drafted.

Who will monitor whether a dramatic work is performed before an audience composed mainly of students at a concert in a college or university for music or performing arts students? It is posted on the front of the school that the parents are invited and the admission price is $5. Who is going to go and count? Are there more students than adults? Those are the kinds of cases that lead us to say that the wording of the bill as it is presently drafted is going to complicate things.

Mr. Stefan Martin (attorney, International Literary and Artistic Association Canada Inc.): Allow me to add some particulars or observations with respect to the remedies. I will speak here from my perspective and in light of my experience as a lawyer in private practice.

It is true that the possible remedies and their diversity have been expanded, since the bill now provides that one may proceed by an action or a motion. However, many things make a court action more complicated, and some good initiatives have been somewhat adulterated.

First, I refer you to the statutory damages. A question of mens rea has been introduced into the Act, in proposed subsection 38.1(2), where it states:

(2) Where a copyright owner has made an election under subsection (1) and the defendant satisfies the court that the defendant was not aware and had no reasonable grounds to believe that the defendant had infringed copyright, the court may reduce the amount of the award to less than $500, but not less than $200.

You will agree that where an infringement had brought in a certain amount, $200 is not much. You know that in the preceding sections it states that the court shall have regard to the profits, but first determine the damages. Few people will rely on the statutory damages when they know they run the risk of being required to prove mens rea, which is a quite complex thing to do. We know this, since if you refer to the judgments that have been rendered under section 46 of the Copyright Act, which deals with criminal remedies, you will find very few decisions. To prove an intention as it is required in the criminal law is something that is very difficult.

In my opinion, this mens rea requirement and these amounts should go. We see statutory damages varying from $500, which I think is a bit low, to $20,000. How do you expect to have, at some point, a comminatory function, that is, attempt to deter the infringing, with a predetermined risk of $500?

I would make one final observation on the remedies. I agree with our president when he says there has been an effort at over legislating. The real intention was to structure the powers of the courts, as it was to structure those of the Board. Here, you structure the powers of the courts. I refer you in particular to proposed subsection 38(4), which states:

(4) In making an order under subsection (2), the court shall have regard to all the circumstances, including

(a) the proportion, importance and value of the infringing copy or plate, as compared to the substrate or carrier embodying it; and

(b) the extent to which the infringing copy or plate is severable from «the substrate or carrier»

Here again, you will be required to submit evidence. You are going to require the copyright owner or author to submit evidence and, in addition, you structure the powers of the judge, who hitherto had very broad discretion in this regard in terms of setting the damages.

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So I think that this whole aspect, both in terms of the judicialization and in terms of this structuring of the remedies, which we think is excessive, is certainly harmful to the defence of copyright.

The Chairman: Thank you.

Mr. Bélanger.

Mr. Bélanger: I find the discussion very interesting. I must confess that we will have to examine further some of the concepts that have been raised. You have, among other things, raised the fact that the bill is already obsolete in some areas, such as in relation to any royalties or tariffs on audio cassettes.

I believe you are asking why we would not require a similar tariff on video cassettes and, I will go further, on computer diskettes. Is that actually what you would like to see? If we are to go in that direction, should we cover all the technologies?

Mr. Roussel: Private copying should cover all technologies, including audio and video and equipment used for sound or audiovisual reproduction.

Mr. Bélanger: And also computer diskettes?

Mr. Roussel: I am going to be very honest with you. Logically, we should say yes. However, we didn't look into this question, but logically, for the new media of reproduction by computer and on CD-ROM, etc. the answer should be yes.

Mr. Bélanger: Do you know whether in other countries in which your organization operates, that is indeed the case?

Mr. Roussel: In some countries video and audio are covered, as well as the equipment. I know that in Germany they go much further and require a levy on photocopiers.

Mr. Martin: I can give you the exact reference. It is section 54 of the German statute as it is in force. It applies also to the devices. This is explained historically because Germany was the first country to institute a private copying levy. At the time, tapes were so expensive that people had perhaps two or three; it was not like the cassettes nowadays. That is why they instituted a fee on the devices in 1965.

Mr. Bélanger: Allow me to come back to photocopying. How does this levy operate?

Mr. Roussel: We would have to refer to the provisions of the German statute. I will answer you from memory. We could make available to you the extracts from the legislation, although your advisors or researchers probably have a copy.

There are two examples on photocopying devices. The French example is simply a tax and not a levy directed to the rights holders. I think I recall that it is a tax which, originally, went to the Centre national de l'édition; Stefan Martin could correct me.

As to Germany, I will not go into the details, because there is a protocol in that regard. I could send you a copy if you wish. The legislation provides for a collection and distribution mechanism, covers equipment and provides for subsequent negotiations. You pay so many pfennigs per photocopy, distribution of pages per photocopier capacity - what they call the A4 metric format - and depending on whether it is black and white or colour pages or other degrees of sophistication.

Mr. Martin: To explain to you the methods that have been instituted, I can tell you that there is of course a tax that is collected directly by the device, but there is also a tax that is collected by volume, for example in educational institutions, thanks to meters that are installed by the copyright collectives.

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At one point they conducted statistical studies and estimated that out of 10 million photocopies there were perhaps 25 per cent that were made by reproducing works covered by copyright.

Mr. Bélanger: You are talking here about phase 3!

Mr. Martin: To continue a bit on the technological overtaking of the statute, I don't know if you have already heard of the notion of the smart copier.

I don't know if it means anything to you, but nowadays one can scan documents, put them on a diskette, insert the diskette in a photocopier and end up with a very, very impressive quantity of works you have scanned.

Based on that, when you talk of substrate or carrier, you can be sure that very soon the law will not only be obsolete, but somewhat outmoded. So there!

Mr. Bélanger: Thank you, Madam Chair.

[English]

The Vice-Chair (Ms Phinney): Are there any more questions?

Thank you very much. Merci beaucoup. We're sorry we kept you so late, but we do appreciate you staying and letting us hear you tonight.

I would ask the members to stay for a couple of minutes.

Mr. Lincoln asked me to say a couple of words on his behalf. He had to catch a plane to Montreal and will be back about 11:30 a.m. tomorrow. He has some information about changes of scheduling, but he particularly has information about the subject Mr. Abbott brought up and wants to discuss tomorrow. He just received it this afternoon. He is asking - and I'm also asking - if we could put off that meeting because he can't be here tomorrow morning, and the clerk would schedule it as soon as possible after our break. Would that be all right? Is there any comment, Mr. Abbott?

Mr. Abbott: Is there any conceivable way we could do it tomorrow? Is that doable?

The Vice-Chair (Ms Phinney): That depends whether or not people will be here tomorrow afternoon.

Mr. Arseneault: What's the schedule tomorrow morning?

Mr. Abbott: I'm doing this in good faith - no games. I'm just saying that I think, all things considered, it would be very healthy if we could resolve the issue and not leave it dragging over the break.

The Vice-Chair (Ms Phinney): Are there any comments from this side? Mr. Bélanger.

Mr. Bélanger: I can go on Friday, but not tomorrow.

The Vice-Chair (Ms Phinney): I can't go Friday.

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Mr. Peric: I respect your view and agree that we should do it as soon as possible, but I don't think we should do it in two minutes.

Mr. Abbott: I agree.

Mr. Peric: It's better to deal with the issue when we get back and take whatever time we need.

The Vice-Chair (Ms Phinney): Mr. Lincoln did say that the part you want discussed will take some time, but he has some other -

Mr. Peric: So let's do it promptly.

Mr. Arseneault: If we're going to discuss it we may as well discuss it properly.

Mr. Abbott: Are we still going to be discussing it in camera?

The Vice-Chair (Ms Phinney): We're not going to bring that up now. There will be the same conditions but just later on, after the break. Is that agreed?

An hon. member: As soon as possible after the break.

The Vice-Chair (Ms Phinney): Mr. Leroux hasn't said anything yet.

[Translation]

Mr. Leroux: We had planned to meet tomorrow before the meeting. I had adjusted my schedule accordingly. I think we should stop letting things drag on. Is there some last-minute obstacle? Is it because the chairman cannot be present?

[English]

The Vice-Chair (Ms Phinney): Yes, he can't be here until -

[Translation]

Mr. Leroux: Isn't it possible to start the discussion in the absence of the chairman?

[English]

The Vice-Chair (Ms Phinney): We don't know what information he has.

[Translation]

Mr. Leroux: We are taking our time and continually postponing.

[English]

The Vice-Chair (Ms Phinney): We have to answer this question first.

[Translation]

Mr. Leroux: Is it possible to deal with this issue in the absence of the chairman? Mr. Abbott raised it; nevertheless, he followed the procedures, etc. I wanted to know if it was possible. I am simply raising the question.

[English]

The Vice-Chair (Ms Phinney): No.

[Translation]

Mr. Arsenault: Why postpone the meeting?

[English]

The Vice-Chair (Ms Phinney): Excuse me, let me just answer this question first.

Mr. Lincoln has further information we don't know about. He received it this afternoon and he'd like it to be at the meeting. I guess it involves a considerable amount of discussion and explanation, so he'd like that brought up.

[Translation]

Mr. Leroux: All right, I understand.

[English]

Mr. Peric: Before I propose to close this meeting, I would suggest that since Mr. Leroux had most of the time tonight and is so hungry he take us out for supper.

The Vice-Chair (Ms Phinney): Could I have a motion?

Mr. Arseneault: I have a point of order first. My understanding was that the meeting tomorrow was to discuss whether we will have a meeting or not to discuss what Mr. Abbott has asked. He has given us notice of a request to call a meeting tomorrow, 48 hours later. We will decide whether this committee wants to meet to discuss the issue or not.

We haven't decided to meet to discuss the issue, to my knowledge. We have decided to listen to the request to have another meeting on the issue. We haven't decided to discuss the issue. We may decide tomorrow not to discuss the issue. We may not feel there's need for another meeting.

Mr. Peric: Then that discussion should be in camera.

Mr. Arseneault: That's the impression I had.

Mr. Abbott: I agree with that.

The Vice-Chair (Ms Phinney): Mr. Arseneault, are you saying you still want a meeting tomorrow morning?

Would somebody make a motion that we not have it or would somebody make a motion about something?

An hon. member: I move we adjourn.

The Vice-Chair (Ms Phinney): Please make a motion. I'm getting hungry and tired.

Mr. Peric: I had a motion and you ignored me.

The Vice-Chair (Ms Phinney): No, it wasn't a motion.

Mr. Bélanger.

Mr. Bélanger: Out of respect for the chair, although it's the third Thursday in a row he has had a difficulty, I move that we hold a meeting to discuss Mr. Abbott's motion at the earliest time possible after the break.

Motion agreed to

The Vice-Chair (Ms Phinney): Thank you. The meeting is adjourned.

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