This chapter reviews the outcomes proposed by witnesses on each of the themes of the report.

3.1 Digital distribution and streaming

As described in section 2.2, digital distribution and streaming have had an impact on the revenue streams of artists. At the same time, there are challenges to launching new digital music services, which would provide more legitimate sources of music.

Regarding the issue of revenue streams, the Committee heard a number of suggestions. A number of witnesses, including Luc Fortin, President of the Guilde des musiciens et musiciennes du Québec (GMMQ), called for the private copying levy to be extended to digital audio recorders.^[91] Another suggestion came from Ian MacKay, President of Re:Sound Music Licensing Company, who called for the elimination of the $1.25 million exemption for commercial radio that is contained in the Copyright Act.^[92] Mr. Tetreault of the Canadian Federation of Musicians called on the government to sign and ratify the World Intellectual Property Organization's Beijing Treaty on Audiovisual Performances. He said this treaty recognizes the right of audiovisual performers to be fairly compensated for their work.^[93]

Regarding the launching of new services, the most common suggestion made by witnesses was to provide the Copyright Board of Canada with the resources it needs to speed up its decision-making process. The witnesses that raised this issue included SODRAC, Connect, SOCAN, the Professional Music Publishers' Association, CMPA, Songza, Re:Sound, Nettwerk, Stingray Digital, Google Canada, Music Canada and the Canadian Musical Reproduction Rights Agency.

Other suggestions for encouraging digital distribution services included the establishment of a level playing field with respect to regulation and the requirements to support Canadian content. For example, Paul Cunningham, Vice-President of SiriusXM Canada, said a level playing field would allow companies such as his to support Canadian music and to be able to compete in the marketplace.^[94] Mr. Sasseville of Quebecor Media Inc. said there should be a level playing field with respect to charging sales tax for downloads. ^[95]

On the other hand, Mr. Kee of Google Canada expressed reservations about regulating new digital services. He questioned whether regulatory intervention would be justified to meet the policy objectives regarding the creation of Canadian content and expressed concerns about the impact that regulating digital services would have on the introduction of new services.^[96] When asked about the contributions that services such as his could make to Canadian artists, Mr. Kee said that, instead of a mandatory monetary contribution, “we as a company would be more inclined to look at what can we do creatively to actually promote Canadian content.”^[97] He mentioned, for example, that the Google Play music service has a number of playlists that promote Canadian artists.^[98]

Mr. Albert of Stingray Digital suggested offering fiscal incentives to companies for the creation of Canadian content.^[99] He also supported the idea of bundling music services with mobile telephone subscriptions.^[100] Mr. Erdman of Deezer made a similar suggestion.^[101]

3.2 Music education

Witnesses made a variety of suggestions regarding music education, which can be grouped under two themes: developing young Canadians’ musical abilities and increasing consumer awareness of the cost of music.

On the subject of developing musical ability, several witnesses highlighted one of the recommendations in Music Canada’s report The Next Big Bang: A New Direction for Music in Canada. According to the report, music education could be a critical area of focus for reinvigorating Canada’s commercial music industry. Music Canada urges governments to “look for innovative ways to support music education because of the broad economic benefits it creates.”^[102] Music Canada’s recommendation was echoed by other witnesses, such as CARAS, Connect Music Licensing, the National Music Centre, Avalanche Productions and Ticketmaster Canada.

Mr. Reid from CARAS suggested creating a program that would encourage Canadians to reap the benefits of music education in the same way that ParticipACTION promotes sports and active living.^[103]

On the subject of increasing consumer awareness of the cost of music, the SPACQ,^[104] SODRAC, the Canadian Federation of Musicians, Live Nation Canada, Stingray Digital, CIRAA and Deezer stated that the public needs to be informed of the value of music. Mr. Tetreault of the Canadian Federation of Musicians called for the government to support “educational initiatives that give youth a proper understanding of how artists are compensated through the royalties.”^[105] According to Mr. Fortin of the GMMQ, music education “could even start as early as elementary school and high school.”^[106]

Mr. Vallance and some other witnesses were sceptical about the effectiveness of campaigns against illegal downloading. Mr. Mortimer-Lamb of Nettwerk Music Group believes the concept is good but, at the same time, there is a need to “ensure a market environment that provides a multitude of licensed and legitimate music-consumption options for the next generation.”^[107]

3.3 Music tourism

A number of witnesses believe that Canadian music events are not achieving their full economic potential and that greater focus could be placed on the concert industry. In his appearance before the Committee, the representative from Music Canada reiterated the recommendation in his organization’s report The Next Big Bang: A New Direction for Music in Canada and called for a comprehensive music tourism strategy.^[108] During the Committee’s study, several witnesses supported this recommendation as well, including NXNE, Live Nation Canada, Ticketmaster Canada, TIAC, the National Music Centre and RBC Royal Bank Bluesfest.

Andrew Mosker of the National Music Centre spoke of our country’s rich musical tradition. He emphasized the need to “brand Canada as a music country”^[109] and make music tourism “an economic pillar.”^[110]

Witnesses told the Committee that it can be difficult for foreign tourists and workers to enter Canada. Patti-Anne Tarlton of Ticketmaster Canada described the problems that foreign tourists and artists sometimes face when trying to obtain a visitor’s permit.^[111] Tracy Jenkins of the Lula Music and Arts Centre called on the federal government to eliminate the fees to apply for a Labour Market Opinion. These new fees “make such international collaboration significantly more expensive and difficult.”^[112] Ms. Jenkins proposed an “agreement of sorts between Canada and the U.S. for touring musicians”^[113] to give Canadian artists easier access to the U.S. market.

3.4 Current funding – future investment

As noted in section 2.5, many witnesses were pleased that the government has provided ongoing funding to the CMF. Mr. Mortimer-Lamb of Nettwerk Music Group said “don't change what is working.”^[114] Mr. Johnston of CIMA and Mr. Nasra of Avalanche Productions noted the importance of continued support for production, marketing and promotion.^[115]

While there was widespread support for the current level of government funding, witnesses also had suggestions for improving it. One suggestion was that a system of tax credits, similar to those provided for the film and television industry, be established.

Mr. Kane of Warner Music Canada argued that the development of artists is a form of R&D and said it deserves public support similar to the tax credits available to other R&D-intensive industries.^[116] Mr. Henderson of Music Canada made the same argument.^[117]

Another suggestion for a tax credit was made by François Bissoondoyal, Label Director with L'Équipe Spectra of Montréal, who suggested implementing one for the production and marketing of sound recordings.^[118] For his part, Mr. Nasra of Avalanche Productions suggested implementing a tax credit on specialized workers' salaries in the digital field.^[119]

Support for the idea of tax credits was not shared by all witnesses, however. Ms. Thomas of Songza pointed out that because start-up companies typically run large losses in the early years, tax credits are of little or no value to them. Instead, she called for the government to provide subsidies for the payment of royalties, which represent a significant cost for digital music services.^[120]

Government support for hiring specialized workers was suggested by Mr. Chartrand of Coup de Coeur Francophone^[121] and Mr. Cooper of Volu.me. Specifically, Mr. Cooper also suggested that a grant program be set up to match the institutional investments raised by technology companies.^[122]

Support for exporting was another area that witnesses raised. Mr. Johnston of CIMA called for the government to be a partner of the industry as they explore opportunities in foreign markets.^[123] Mr. Hetherman of Cerberus Management and Consulting suggested that funding be made available for cultural trade missions abroad.^[124] Mr. Surette of Music NB also called for support for export activity.^[125]

To better understand the changes taking place in the Canadian music industry, a number of witnesses called for a study of the various funding programs and of the ways that monies flow within the industry. These included Elisabeth Bihl, Executive Director of the CMPA; Mr. Johnston of the Songwriters Association of Canada; Ms. Thomas of Songza; Mr. Monahan of RBC Royal Bank Bluesfest; and Mr. Henderson of Music Canada.

3.5 FACTOR/Musicaction

The witnesses the Committee heard were generally positive about the level of funding provided by FACTOR/Musicaction but did have some suggestions for improving their programs.

Mr. D’Eith of Music BC believes the Department of Canadian Heritage should ensure that more money is spent “in the regions for grassroots artist development.”^[126] Music NB would like FACTOR to support export activities and to involve provincial music associations in regional program management.^[127]

Representatives from the CMPA^[128] and the SPACQ^[129] called for increased funding for their respective segments of the music industry.

The CIRAA called for FACTOR to restructure the way in which it allocates its funding and for a new funding organization to be established for independent artist entrepreneurs.^[130] Mr. Vallance also felt that FACTOR should not support established artists.”^[131]

On the other hand, some witnesses talked about the benefits of supporting established artists. In his testimony, Mr. McKie noted that FACTOR provides funding at different stages of artists’ development. It provides early-stage financial assistance for recording demos, financing for full-length recordings and comprehensive support to more established companies and artists.^[132] Musician Alan Doyle, a Member of the Board of the Radio Starmaker Fund, talked about the different stages in a musician’s career and noted that expenses increase at each stage. He said that the Starmaker Fund “kicks in on a part of a musician’s or an act’s career that is the most risky, the most costly, and the most in need of support.”^[133]

As noted in section 2.6, FACTOR plans to use its reserve funds to maintain its funding at a constant level until about 2020. To ensure that FACTOR and the Fondation Musicaction have sufficient funding in the future, Susan Wheeler, the Chair of FACTOR, suggested the CRTC could play a role in generating more funding from such transactions.^[134]