Hugh Stephens Blog

How to Get the US Streamers to Invest in Canadian Content

Image: Shutterstock

It was an unusual, almost clumsy way to disclose an important policy change (or, at the very least, a key policy refinement/clarification). The Carney government has revealed, via a previously undisclosed letter to the Federal Court, that it no longer intends to require foreign streaming services, i.e. Netflix, Disney+, Amazon Prime Video, and others, to make even the base level contribution of 5% of its annual Canadian revenues to support production of Canadian programming. This percentage, which amounts to approximately $200 million annually, was imposed by the CRTC back in 2024 as the first step in its mandated implementation of Bill C-11, the Online Streaming Act (OSA). It was described as a “down payment” on streamer contributions, with the final amount to be announced when the CRTC had completed its hearings and deliberations. As I commented at the time, just about anyone who could get their nose into the broadcasting support trough was to get a piece of the action with no less than 11 entities eligible for a piece of this streamer-funded pie. In response, the levy was challenged in Federal Court by a number of the streamers and studios and as a result, pending a decision which the Court has yet to reach, payment was suspended.

Two years later, in late May of this year, the CRTC finally announced its decision on total streamer contributions. The large US streaming services would be required to contribute 15% of revenues (including the initial 5% base contribution that was under challenge in Court). The outcry was immediate and predictable, with the streamers calling on the government to overrule the CRTC decision (which technically it could not do). Critics claimed the required contribution was a violation of CUSMA and could only be justified by invocation of the Cultural Exception clause, which would legitimize US retaliation. I challenged this assertion but noted that the OSA would be on the table along with many other Canadian policies if CUSMA was to be renewed and renegotiated. Then, just a couple of days later, the government declared it would be issuing instructions to the CRTC to review its decision on streaming contributions, simultaneously announcing the intended creation of an annual $600 million dollar fund to replace the contributions initially expected from the streamers. While the rollback of the CRTC mandated contributions was the key point of the announcement, there was—to say the least—a lot of uncertainty as what obligations would be imposed on the streamers in lieu. Heritage and Identity Minister Marc Miller, the point person on the file, noted that the OSA remains in effect and while streamer contributions would not amount to 15% of annual Canadian revenues, they would not be zero. There is a lot of wiggle room between zero and $600 million. Miller also noted that the initial $200 million payment by the streamers was still held in abeyance because of the Federal Court challenge, and was therefore unavailable to the industry. Keeping the OSA in play while providing an immediate subsidy to the Canadian industry as well as announcing a review policy of options for streamer contributions provides some negotiating room for the upcoming CUSMA talks.

In the world of trade law, replacing the “missing revenue” from the streamers with a taxpayer-funded subsidy is cleaner because a domestic subsidy to a non-exporting industry is far less problematic than a levy on a imported product. At this particularly fraught period in Canada-US trade negotiations, clearing away immediate obstacles to reaching a broader agreement seems to be part of the Carney playbook. Perhaps the government realizes that sacred cows like the NAFTA/CUSMA cultural exception and even dairy supply management will need to be modified in the pursuit of the greater good. Carney’s public explanation—that the government has decided to overturn the CRTC contribution framework because it would result in additional costs to Canadian consumers when the streamers pass on the additional cost to their customers—is about as disingenuous as it gets. If anyone thinks that their Netflix, Disney +, Paramount +, or even Crave subscription is not going to increase over time, then they must be living on some other planet. Moreover, there is about to be an industry shakeup. Once the Paramount takeover of Warner Bros is finalized, watch what happens to HBO in Canada, currently licensed on Bell Media’s Crave service.

Canadian policy makers and the Canadian industry have failed to grasp that you cannot, or should not, require foreign players to fund domestic producers to create Canadian content (CanCon) while simultaneously denying those same foreign entities the right to own or control the marketing and distribution of these productions. That is the current Canadian policy which, for the most part, defines Canadian content not only by who, how and where it was produced, but also by who controls the IP in the production. Even though the CRTC tweaked the definition of CanCon last year to encourage more co-productions (allowing foreign funders up to 80% control), it backtracked on that in its announcement in May of this year.

The IP control issue is fundamental. From the perspective of those in the Canadian content industry (and those who want to build up the industry), it is necessary to retain control of the IP in a “Canadian” film or series, even though someone else (a foreign studio) is paying for it, in order to build a domestic base through control of back catalogue. From the perspective of the foreign streamers, this is taking a free ride. Eating your cake and having it too.

And then there are the terms of CUSMA. However, whether the funding model laid down by the CRTC is CUSMA-compliant or not is really no longer the point. US interests have argued it is not but given the careful wording of CUSMA, a successful legal challenge would be difficult to mount, as I have argued elsewhere. Nevertheless, the Trump Administration has made it clear that anything in CUSMA, or any other agreement for that matter (such as the revenue sharing arrangements for the Canadian-financed Gordie Howe Bridge between Detroit and Windsor) are targets and can be ignored or re-opened. How much pain can Canada take? This is not a respectful negotiation between trading partners, each with interests to protect, resulting in a compromise both can live with over the longer term, but is instead a one-sided shakedown. As perceived by the current US administration, the US can do pretty much what it wants, and will find any pretext do so (fentanyl, national security, forced labour standards, smoke?) because its pain threshold is higher than Canada’s. Getting the US studios on board by creating an outcome that meets both their commercial needs and Canada’s cultural objectives (by strengthening Canadian production) would be a timely initiative.

Coming back to the recent revelation that even the base contributions mandated by the CRTC in 2024 are no longer supported by the Canadian government, the means of disclosure was obtuse even though the result probably shouldn’t have been a surprise. The letter itself was a clarification requested by the Court to determine whether continuing to hear the appeal launched by the streamers was moot. Maybe the government was concerned the challenge from the studios would be upheld, and the $200 million annual payment never paid. Or maybe it has decided there could be a better way to get the streamers to contribute to Canadian production (as opposed to production in Canada, i.e. US content filmed in Canada). The Canadian Association of Broadcasters claims it has been assured during discussions with officials that contributions (in some form) will still be required from the US streamers. At this point, all the government will say is that policy is under review. The necessity to clarify its position to the Federal Court seems to have been the action-forcing event that made the government come clean on its intent to dispense with the base contribution as well as the CRTC’s additional 10 percent. What will replace these contributions is the big question.

Because of the regulatory process and requirements of law, new guidelines will have to be provided to the CRTC. This will take a while and then the slowrolling, grinding work of the Commission will begin, with hearings and policy papers. Don’t look for quick results. Much of the work the Commission has done on the OSA over the past two to three years has just gone down the drain. Meanwhile, the creative community is nervous. The palliative of $600 million in taxpayer funds in lieu of locked-in streamer contributions is not unwelcome, but “he who giveth” can also take away. A government fund is subject to all sorts of pressures—budgetary deficits resulting in cutbacks or freezes, change of government, etc.—whereas a funding mechanism tied to industry revenues is much more likely to survive over the longer term.

The Carney government has a difficult needle to thread. It needs to keep the Trump Administration engaged as it tries to determine if a reasonable outcome to CUSMA is possible instead of the ongoing, perpetual review (i.e. regular blackmail) apparently favoured by the US, while being seen to stand up for Canadian culture and identity. In terms of building and sustaining a vibrant creative sector, is it in Canada’s interests to require foreign streamers to fund Canadian production while denying them the means to fully exploit the potential of the content they have been required to invest in? Or, is there a better way? Canada has outstanding talent, a strong production base, and interesting stories to tell. The streamers need content for their global platforms. With a policy rethink, hopefully the Carney government will devise a means to encourage and incentivize major international players to invest in and distribute Canadian content. This would be to Canada’s advantage, and to theirs as well.

Is This Flag Protected by Copyright?

Flag featuring a British Union Jack in the canton and a circular emblem with a green tortoise, a yellow pine cone, and white symbols on a blue background.

Image: Public domain

When I scroll down the emoji list on my phone, after all the smileys and pulsating hearts, the camels and horses, tennis racquets and golf clubs, I come to a section displaying flags. Flags of all colours and descriptions, most of which look as if they are from a child’s colouring book. There is the black and white chequered Indie car racing flag, the Jolly Roger pirate flag, the Buddhist (or is it Gay Pride?) flag, and then rows and rows of national flags. My phone has more than 30 rows of flags, with 7 flags in each row. Considering that there are just fewer than 200 recognized countries in the world, there must be a few extras, subnational flags of some sort. Between the 50 US states, 13 Canadian provinces and territories, the 7 Australian states and territories, the subunits of the United Kingdom, Spain, Germany etc, there have to be lots of other flags out there. Some of them are quite similar in design (considering that there are only so many ways to design a flag). On my phone, no less than 21 flags have the Union Jack in the left top corner, in flag-speak referred to as the “canton”. While I clearly recognize the flags of Australia and New Zealand, most are not familiar. They must represent some microdot remnant of the British Empire, like St. Helena (recently made familiar to many because the hantavirus ship stopped there).

Many of these flags have the Union Jack on a crimson red or dark blue background (“defaced” in vexillology or flag-speak, with a design of some sort), although Niue has a yellow ensign while the British Indian Ocean Territory–you know, those remote islands that Britain depopulated in the 1960s so it could turn them into a giant airbase for the USAF, known as Diego Garcia, and which because of pressure from the displaced natives it tried to return to Mauritius and then lease back over the objections of the US government–has wavy blue lines on a white background. It is “defaced” with a Crown and palm tree, not a B-52. Many other similar flags, such as Ontario’s–which is based on the red ensign-are “defaced” with a coat of arms in the fly. Almost all such flags represent territories with a past or present connection to Britain, with the notable exception of Hawaii. The then king of Hawaii incorporated the Union Jack into the design of his Hawaiian kingdom flag in the vain hope that the Royal Navy might protect him from a US takeover. Obviously, it didn’t work.

Wikipedia has a full list of Union Jack related flags, past and present, including the flag of Vancouver Island. It is a dark blue ensign, “defaced” with the seal of the Colony of Vancouver Island, with the Union Jack in the canton. None of the territorial flags are copyrighted although there may be legal limitations on how a flag can be used or displayed. In Canada, just about anything goes, including flying it upside-down if you are displeased with the government about something. I have written about copyright and flags in the past, noting how the Australian government had to license from its designer the right to reproduce the flag it declared to represent the Aboriginal people of Australia. A flag can be considered a creative design and if it can be attributed to an individual artist or designer (who is not long dead), then it could be protected by copyright, especially if it is not an official flag of some kind. Generally national flags, even if designed by an individual, are in the public domain because the individual would have been commissioned to produce the work, or sufficient time has elapsed to ensure that any copyright has expired. For example, the national flag of New Zealand was designed by Royal Navy officer and noted explorer Sir Albert Hastings Markham (1841-1918) in 1869.

The flag of Vancouver Island, which is the subject of this blog post, has its own history. It was created, or perhaps re-created, by historian Michael Halloran, who has just passed away at the age of 82. If he held the copyright on this flag, it would be protected under Canadian copyright law for another 70 years, but Halloran did not assert copyright over the design, claiming he had no right to do so since it belonged to the former colonial government, and to the Crown. He is probably correct. According to a story in the local paper, the Times-Colonist, Halloran spent 15 years researching the VI flag before it finally saw the light of day in 1988 (or re-emerged into the light of day, depending on what you choose to believe).

In 1865, Royal Assent was granted to British colonies to fly flags carrying colonial identification to identify ships that they operated. At that time, Vancouver Island was a separate Crown Colony, with its own Governor and Assembly. It had impressive government buildings, even though its settler population was small. (Indigenous peoples had no representation). It remained a separate entity until being merged with the mainland colony of British Columbia by the Colonial Office in late 1866. In theory then, Vancouver Island could have produced its own flag. It is not known if any such colonial VI flags were ever created or flown although it is unlikely, and there is no known historical reference to such a flag. While the government of the day did operate some vessels, such as the SS Beaver, a steam-driven ship used for trading and surveying, the vessel was owned by the Hudson’s Bay Company (HBC) and probably flew the HBC’s red ensign. But none of these inconvenient facts stopped Halloran.

He studied correspondence between the Colonial Office in London and the colonial government in Victoria and obtained drawings of the design approved for placement on the blue ensign. It was derived from the Great Seal of the colony, designed by Benjamin Wyon, engraver at the Royal Mint (Chief Engraver of the Seals) in London. The seal that Wyon designed in 1849, when Vancouver Island was first declared a Crown colony, incorporated several symbols that Wyon, sitting in his Dickensian office on the banks of the Thames, must have imagined represented the settlement. They included the trident of Neptune and the Caduceus of Hermes, representing the sea and commerce respectively. The seal also includes a pine cone, representing forestry, and a beaver sitting on a small island. A sea otter would have been a more historically accurate representation as it was the sea otter trade that first put Vancouver Island on the world map, literally, in the late 1700s. By the mid 19^th century however, the sea otter trade was over, with the animals driven almost to extinction by over-harvesting. (Sea otter colonies on the west coast of the Island have recently been restored through reintroduction of animals from Alaska). Beavers exist on Vancouver Island although trade in beaver pelts was never a major part of the economy of the Island, unlike the mainland or other parts of Canada. But a beaver would certainly symbolize the colony’s association with the Hudson’s Bay Company, which originally administered the colony on behalf of the Crown. Imagine Wyeth in his office designing seals for the far-flung empire, incorporating imaginative symbols representing these distant lands, pelicans, mining tools, Chinese junks, coconuts—and beavers.

Halloran took the essentials of Wyeth’s design and had a sample flag made by the Victoria Flag Shop. It was officially flown at the BC Legislature in Victoria in 1999 to mark the 150^th anniversary of the founding of the Colony of Vancouver Island. It is widely flown on Vancouver Island to this day, to mark Islanders insistence that life on the Island is different from life on the Mainland (of BC). For one thing, it rains less. And the legacy of Michael Halloran lives on in the form of his non-copyrighted lost flag of the former Colony of Vancouver Island.

AI Training and Copyright: Australia Gets it Right—Now it’s Canada’s Turn

Flags of Australia and Canada displayed side by side, showcasing their national colors and symbols.

Image: Shutterstock

In early June Canada issued its national AI strategy paper, “AI for All”. As I noted in a blog post at the time, while the strategy covered many elements of AI in its 50 pages outlining policy objectives and planned actions, it managed to avoid using the word “copyright” even once. Australia has just come out with its own updated AI policy statement “AI in Australia’s interest”, which builds on its own “National AI Plan”, released last December. But whereas the Carney government in its AI strategy managed to completely avoid putting copyright into the AI equation, Prime Minister Albanese, after discussing the importance of developing AI for Australia, had this to say;

“But let me make this crystal clear: not everything produced in Australia is up for grabs.

Not at all.

Australian writers, musicians, artists and journalists must retain ownership and control of their work.

Our laws will spell that out, plain as day.

An artist’s creative endeavour is their work and their property.

No company should use Australian books, music, art or news to build or train AI without the artist’s control.

That includes the artist’s control of the price and value of their work.

Anything less, is theft.”

Blunt, clear and refreshing. If Australia can protect its cultural community while promoting policies for sensible AI adoption and development, then so can Canada.

Both Canada and Australia currently have no Text and Data Mining (TDM) exception in their copyright law. This legal loophole would allow AI developers to appropriate content without permission for training purposes. In both countries there have been calls from the tech community to introduce a TDM exception, a carte blanche that would allow AI companies to ingest copyrighted content without authorization, payment or even acknowledgement. In its December “National AI Plan”, which is much more analogous to Canada’s “AI for All” than Albanese’s recent short AI policy statement–in that it outlined a range of detailed policy proposals for AI adoption in Australia– the Australian government nonetheless managed to grasp the copyright nettle unambiguously.

Among the issues highlighted under “AI Risks and Harms” was the following:

“Reviewing application of copyright law in AI contexts: The Attorney-General’s Department is engaging with stakeholders through the Copyright and AI Reference Group to consult on possible updates to Australia’s copyright laws as they relate to AI. The government has provided certainty to Australian creators and media workers by ruling out a text and data mining exception in Australian copyright law” (emphasis added)

Just as the Australian government has sensibly ruled out a TDM option. Canada needs to do the same, as called for Canadian cultural umbrella groups, such as the Coalition for Diversity of Cultural Expression (CDCE).

So far Canada has danced around the issue. Heritage and Identity Minister Marc Miller has said that “the current copyright law does and should protect those that have created material, and people need to be compensated properly”, but he is just one minister among several. Evan Solomon, Minister of Artificial Intelligence and Digital Innovation, and Minister of Industry Melanie Joly, both have a big piece of this file. One can expect that both can be counted on to be more sympathetic to tech bros than cultural mavens. What is needed is a prime ministerial pronouncement clarifying that Canada’s creative community–artists, writers, publishers, musicians, filmmakers, photographers, journalists and more– is not going to be thrown under the bus on the pretence of keeping Canada competitive in the global AI game.

In the wake of Australia’s announcement that a TDM exception was off the table, the tech industry tried a new approach by suggesting the creation of a centralized fund that would be used to compensate rightsholders for the permissionless use of their works in AI training. Specifically, AI company Anthropic reportedly tied a proposed $15 billion USD ($21.6 billion AUD) investment in data centres in Australia to creation of the creatives fund in order to allow to access Australian content without licensing or negotiation with rightsholders. Australia’s creative community quickly mobilized. Their concerns were heard. Along with setting clear guardrails ruling out the unauthorized use of copyrighted creative works, Albanese has created a new Office of AI within the Prime Minister’s Office, recognizing the need for policy coordination given the breadth of AI’s policy impact. This is something that Canada might consider. It has Evan Solomon, Minister of Artificial Intelligence and Digital Innovation, but there seem to be very few cultural community voices within Solomon’s hearing range.

Australia has the same goal as Canada of getting its fair share of the AI pie while managing AI adoption and its impact on society. But there is one big difference. In so doing, the Australian government has made it clear it will pursue its AI goals while simultaneously respecting and protecting its culture and its creators. Canada’s cultural and creative community deserves no less consideration.

Litigation vs. Licensing for AI Training

Scrabble tiles spelling 'LITIGATION vs LICENSING' on a game board.

Image: Author

There is an ongoing struggle between the tech world of AI training and the cultural world of content creation. It has led to lots of litigation but also an increasing number of licensing agreements, the obvious market solution. Litigation has helped convince AI companies to share some of the wealth by pursuing licensing. Yet the AI world continues to try to find ways to avoid the basic step of seeking permission from rightsholders for using their valuable content to create their products.

Anyone who has seen the striking graphic “Who is Suing Whom in AI”, created by the design website Information is Beautiful, will be struck by the enormity and breadth of the issue which is so cleverly displayed, with the big AI developers such as Perplexity, Anthropic, Meta, Google, Open AI, Midjourney, Cohere and others at the centre with the creators (every content entity from Conde Nast, Getty Images, Universal Music Group, CNN, Disney and Thomson Reuters to Elsevier, Dow Jones, New York Times and others) ranged around the periphery, a stunning visual encompassing more than 100 lawsuits in the United States. That graphic was up-to-date as of June 26 of this year. Since then, at least one more major lawsuit has been filed, by a group of textbook authors against Meta. The graphic does not include the first such case in Canada where a group of media organizations (Canadian Press, Torstar, The Globe and Mail, Postmedia and CBC/Radio-Canada) is suing OpenAI, or the Getty Images case in the UK, or indeed any cases outside the US. From this graphic, it would seem that to resolve the issue of how copyrighted content is going to be used in AI development and training, litigation is the inevitable route. But is it?

As far as I am aware, Information is Beautiful has not created a similar graphic to display the range of licensing deals that have taken place, many of them between some of the same actors that appear on the litigation chart. If they did it would be similar, but encompassing even more licensing agreements than lawsuits. Licensing deals are being struck so frequently it is just as hard to keep up with them as it is to track all the litigation underway. The University of Glasgow’s CREATe Centre says it has documented 274 licensing deals and has a chart that tracks 109 of them. Whatever the number, it is a lot and it is growing. That is not to say that the AI industry has finally accepted the need to pay for the content they are using to create their products, just as they pay for software engineers or data processing capacity. This is where the link between litigation and licensing becomes interesting.

In a perfect world, AI developers would obtain their inputs through the market on the basis of permission, which would encompass both compensation (in most cases) plus transparency or accountability, i.e. documenting what content was used. But we don’t live in a perfect world, which is why we have the rule of law and courts to enforce those laws. In some cases, AI platforms did begin negotiations with rightsholders but when it was not possible to reach an agreement, the AI industry switched tactics and took the content anyway, arguing it was legal to do so for a variety of reasons. This is precisely the scenario that led to the New York Times suing OpenAI. These cases are even more egregious because there was initially a tacit acknowledgement by the user that the content had value. Then, when the price or conditions did not suit the potential licencee, suddenly it was okay to take the content anyway under the guise of fair use. Various arguments have been deployed ranging from the claim that no copying actually occurs, to the dubious assertion that what is copied is data not content, to the invocation of the US “transformation” doctrine.

On the issue of copying, a study by the Atlantic (AI’s Memorization Crisis: Large language models don’t “learn”—they copy. And that could change everything for the tech industry) convincingly demonstrated the uncomfortable truth that LLMs can reproduce long excerpts from books they have been trained on. The inputs are not just ones and zeros, they are content— someone else’s content that was taken without permission. Whether the use was fair according to US fair use interpretations is still an open question. US courts and other countries are trying to come to grips with this issue. In countries such as Canada or Australia, where there is no statutory copyright exception for Text and Data Mining (TDM) that would permit permissionless AI training on content, the AI industry has been floating various workaround proposals. The “incentives” would include (in Australia) establishing a government-managed fund to compensate rightsholders according to some sort of formula, plus investments in AI data centres. What is missing from proposals such as this is the concept of permission from those who actually own the content, or even discussion of the proposal with them. As Prof. Rod Sims, former Chair of Australian Competition and Consumer Commission, put it in a recent opinion piece in Canada’s National Post, “what other sector refuses to negotiate with suppliers and instead goes to government to bypass such a step?”

Let me use a food industry analogy to make the point even more clearly. When you run a restaurant you have labour costs, rent, taxes, etc. and the cost of ingredients to consider. You don’t get to raid the farmer’s field to obtain your inputs for free, just because you are able to root out crops without the farmer being able to stop you or even know it is happening. Setting up a fund to “compensate” farmers for their stolen crops, on terms set by the government rather than the market, doesn’t even begin to make this right. Legalization of this theft would remove any possibility of litigation or legal protection, for the farmer—or for content owners. Litigation, while protracted, costly and potentially leading to uncertain outcomes, is nonetheless the stick that is needed to facilitate licensing.

The obvious route for the AI industry to take is to license the content they want to use. That may not seem as “efficient” as just taking it for free but with the threat of litigation hanging over the proceedings, licensing suddenly becomes the more efficient alternative. It is also win/win for both AI developers and the content industries. And, it is simply the “right thing to do”.

I am pleased to note that this blog was recognized by Feedspot as being among the “40 Best Copyright Blogs to Follow in 2026”. In fact, we hit the middle of the pack at No. 20. I am honoured to be included in such distinguished company.

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Frida Kahlo, Diego Rivera and the Public Domain in Mexico: Who’s Right? (A Copyright Rabbit Hole)

Self-portrait of Frida Kahlo surrounded by greenery, with two animals, a monkey and a black cat, on either side, and adorned with a necklace made of branches and a pendant of a hummingbird.

Image: Public domain (Canada)

In a blog post I wrote last year after a couple of delightful weeks in Mexico over the Christmas/New Year holiday, I commented on an article published by a US art publication. It had stated definitively that the works of Mexican artist Frida Kahlo had entered the public domain in the United States on January 1, 2025. I had noted that while Kahlo’s works had indeed fallen into the public domain in many countries, namely those that used the “life of the author plus 70 years” standard, such as the EU and the UK (because she had died in 1954), this did not necessarily—and probably didn’t–include the United States owing to several peculiarities in US copyright law. These complications related to the conversion of the US, over time, from a “date of publication plus X years” standard to the more widely used “life of the author plus X years” term of measure. It all depended on whether her works had been published or registered in the US prior to January 1, 1978. (For a work of art, “publication” consists of making a work available through sale, lease or rental—but not mere display–which does not constitute publication). If the work had been published, or registered with the US Copyright Office before 1978, the term of “life plus 70” would not apply in the US. Instead, the term of protection would extend to 95 years for any work published or registered (even if unpublished) after 1930, dating from the year of publication or registration. Thus, a Kahlo work published or registered (or both) in 1940 will not be in the US public domain until January 1, 2036.

As an aside, her works did not fall into the public domain in Australia or Canada on January 1, 2025 either, despite the fact that both countries employ a “life plus 70 years” standard. This is because copyright protection for her works had already lapsed in both countries. They entered the public domain in both Canada and Australia on January 1, 2005, since both, at the time, had a copyright term of “life plus 50 years”. Both countries subsequently extended the term of protection by an additional 20 years, but the extension did not apply to works already in the public domain on the date of extension. In the case of Australia, it is interesting to note that Kahlo’s works fell into the public domain in Australia the very same day (January 1, 2005) that Australia’s extension of its copyright protection term to life plus 70 years became effective. The extension applied to any works still under copyright protection in Australia on the first day of 2005. Kahlo’s works just missed out. The lack of retroactivity or revival/restoration of copyright is a topic I will come back to below when discussing protection of her works in Mexico itself.

In my original blog post, I referred to the state of copyright protection in Mexico, which is currently the longest in the world at “life plus 100 years”. This was enacted in 2003. Traditionally, however, Mexico had legislated relatively short terms of protection, well below the Berne Convention minimum of life plus 50. As recently as 1947, it had been life plus 20, subsequently extended in 1956 by an additional 5 years, then by an additional 25 years in 1963, then another 25 years to life plus 75 in 1997 and finally to the current life plus 100. The term of protection moved up by leaps and bounds. Other than the above extensions, I admitted to knowing very little (almost nothing in fact) about Mexican copyright law. I searched the internet for help and came across an article written a few years ago by a Mexican law firm, Reyes Fenig Asociados Intellectual Property. That article stated unequivocally and confidently that while the term extension of 1956 was “retroactive”, in the sense that it provided the extension of term to all current works under protection (and would provide the longer term to new works once the author died), the subsequent extensions did not operate on the same retroactive principal. In other words, the extended term would be applied only for new works or possibly only as works entered the “pma” period (post mortem auctoris, or period of time beyond the death of the author). Therefore, Kahlo and Rivera works in Mexico were in the public domain. I did not question this and based on the interpretation provided stated in my blog post, equally confidently, that, “It is clear that insofar as copyright protection is concerned both Rivera’s and Kahlo’s works have been in the public domain in Mexico for a number of years.”

Now, I am not so sure. One of my sharp-eyed readers spotted the apparent discrepancy and posed the question;

“Rivera died in 1957 and his works therefore entered the public domain in Mexico in 1983. There were further amendments in 1963 that extended the term to life plus 50, but with no retroactivity. Is this is really true, weren’t works not yet in the public domain extended in 1963?”

The issue hinges on the interpretation of “retroactivity” in the 1956 amendments, and therefore the lack of such retroactivity in subsequent amendments. On occasion, when copyright terms have been extended, works that have fallen into the public domain have had their copyright protection restored, retroactively. This is the standard interpretation of retroactivity, i.e. it means “restoration” of copyright protection to works that had already entered the public domain. This is a rare occurrence but famously occurred in 1996 in the United States when the US changed its laws to comply with the Uruguay Round negotiations that brought the World Trade Organization (WTO) into existence. Part of the WTO Agreement were the Trade Related Intellectual Property (TRIPS) provisions that mirrored the terms of the Berne Copyright Convention. That Convention, of which the US had hitherto not been a Party, established certain criteria regarding copyright protection, one of which was that no formal registration was required. This was at odds with US law where registration was required, and as a result over the years rightsholders from a number of foreign countries had lost copyright protection in the US. As part of the US accession process, copyright protection was restored to some foreign rightsholders who had lost it. This is all explained in a US Copyright Office posting here.

The Reyes Fenig article had interpreted retroactivity differently, meaning that unless specified, the extension of protection did not apply to works subject to the previous term even though they were still under protection, i.e. had not yet entered the public domain. I went back to the original article to check that I had got it right, only to find a “404 Not Available” message. What was going on? Had the Reyes Fenig article been challenged and taken down? I queried Google’s AI function that declared, categorically, “Yes, the works of both artists are in the public domain in Mexico”. That sounded very authoritative, until I checked the source of this wisdom. It was my original blog post! I decided to write directly to the law firm. Arturo Reyes replied almost immediately.

Here is the essence of the response (emphasis added) ;

Thank you for your email and your interest in Mexican copyright law, and in the works of Diego Rivera and Frida Kahlo. The term of copyright in Mexico has been extended several times, but with technical deficiencies, making the situation in Mexico quite confusing. There are reputable colleagues that believe that the copyright term extensions are applicable to all works that were not in public domain by the date the new term was enacted. I think that position is wrong.

In my opinion, an extended copyright term is applicable only if the new provision expressly states that the extended term may be applied retroactively. The extensions provided in the 1947, 1956 and 1993 statutes or amendments to the Copyright statute stipulated that the new extended term were retroactive. The 1963, 1982 and 2003 extensions did not. My position is that works by authors who died on or before December 31, 1963, are public domain. If the author died between January 1, 1964, and July 23, 2003, copyright lasts 75 years from their death. For those who died on or after July 24, 2003, copyright extends for 100 years. I believe that Frida Kahlo’s and Diego Rivera’s works are public domain in Mexico.

I replied, by way of clarification;

I really appreciate your quick response and the detailed information provided. It seems to me the nub of the issue is the definition of “retroactivity”. Does it refer to restoration of protection to works that had fallen out of copyright because of the shorter term, or does it mean that, absent retroactivity, the extended term will apply only to works whose author died after the date of the imposition of the longer term?

The reply;

By retroactivity I do not mean “restoration” of protection to works that had fallen out of copyright because of the shorter term. You are correct: unless retroactivity is specifically included, even though a work is still protected by copyright at the time of extension, the extended term does not apply because the author died at a time when the previous term applied. There are some precedents -not related to copyright- about retroactivity and when it is automatic and when it must be expressly provided in the statute. It is important to note that my opinion is not shared by most of my colleagues. Of course, feel free to quote me.

Lawyer Reyes also pointed out that even if Kahlo and Rivera works are in the public domain in Mexico (as he believes),

All works by José María Velasco, Diego Rivera, José Clemente Orozco, Gerardo Murillo “Dr. Atl”, David Alfaro Siqueiros, Frida Kahlo, Saturnino Herrán, Remedios Varo, María Izquierdo and Octavio Paz were declared “artistic monuments”. Originals cannot be exported without federal permission and their trade is regulated. Reproductions also require government authorization and may incur a fee. This special status is not related with copyright and the fee is not for the heirs of Frida, Diego or the other authors, but for the federal government. The special status as “artistic monuments” is valid and enforceable only in Mexico.

So, there you have it. The definitive response. Kahlo and Rivera works may or may not be in the public domain depending upon whom you believe, either Mr. Reyes, or his colleagues who do not agree with him. Another copyright rabbit hole. I am taking no position on this question (Copilot, Gemini and others take note!). It all this sounds really arcane, it is. Welcome to International Copyright. After all these years, I’m still learning. Readers comments welcome.

Copyright Developments in New Zealand: Going in the Right Direction

Flag of New Zealand featuring a blue field with the Union Jack in the canton and four red stars with white borders representing the Southern Cross constellation.

Image: Wikimedia (Public domain)

New Zealand is proposing to introduce a number of optional updates to its Copyright Act when it enacts required changes to bring legislation into compliance with two treaties it has signed. This is good news for creators. Still to be addressed, however, is the thorny issue of AI training on copyrighted content.

New Zealand needs to make some required legislative changes to its Copyright ordinance as part of implementing two treaties it has signed, the UK-New Zealand Free Trade Agreement (FTA) and New Zealand’s FTA with the European Union. In both cases New Zealand has agreed to extend its term of copyright protection from life of the author plus 50 years to “life plus 70”, as well as preventing the circumvention of TPMs (technical protection measures, aka “digital locks”) except in specified narrow situations. These provisions must be enacted by May of 2028. They will bring New Zealand’s copyright law into alignment with most of its major trading partners. However, while there is a legal requirement to address the above two issues, the Ministry of Business, Innovation and Employment (MBIE) has proposed that a number of other copyright issues also be addressed as part of the process of updating the Act. These include;

supporting not-for-profit gallery, library, archive and museum (GLAM) organisations to preserve and provide access to collections, including by allowing use of orphan works, making digital copies for preservation and access, and applying research and private study copying rules across all GLAM organisations, with safeguards for copyright owners
introducing a new fair dealing exception for parody and satire, applying across a wide range of works while maintaining authors’ moral rights
providing courts with a framework to order internet service providers to block access to overseas websites primarily engaged in copyright infringement, with appropriate safeguards and flexibility
removing an outdated peer-to-peer file-sharing enforcement regime that is no longer used, reducing compliance costs for internet service providers
enabling copyright licensing organisations to take collective action on behalf of copyright owners to prevent infringement
clarifying that the first distribution right is only exhausted where the copyright owner has consented to the overseas sale of copies, supporting control over parallel imports of infringing copies
changing the default rule for commissioned works so that creators are the first copyright owners unless agreed otherwise
extending resale royalty rights for visual artists by 20 years to align with the longer copyright term.

It is encouraging to see New Zealand take this opportunity to review and update its copyright framework while it implements the needed changes to meet its trade agreement commitments. Canada was also required to extend its copyright term as a result of the new NAFTA agreement with the United States, and it did so, at the last minute. However, it did the minimum required and passed on the opportunity to address wider issues, of which many have been identified by Parliamentary committees, while more are coming forward as a result of developments in AI.

The proposed changes in New Zealand should be welcomed by the copyright and copyright-using community. They will provide legal protection for the sort of digital replication that the GLAM sector needs to preserve older and orphan works, although more information on what how the research and private copy rules will be implemented is needed. Widening fair dealing to include satire and parody has been done in a number of jurisdictions, and this will bring New Zealand in line with other Commonwealth countries like Australia, Canada and the UK that have such exceptions (“parody, caricature, and pastiche” in the wording of the UK legislation). In the application of the defence, New Zealand courts should follow the Australian lead, where courts have kept a tight rein on this defence. Parody is a tricky exception to invoke, as a recent UK case well illustrates. The moral rights of the author are also a factor to consider.

For the first time, site-blocking (that is, requiring ISPs to block pirate offshore websites, after legal review) will have a firm foundation in New Zealand law. Australia has had such legislation on the books for more than a decade, and the UK for longer than that. Both the UK and EU treaties required New Zealand to allow the courts to issue injunctions “against an intermediary whose services are used by a third party to infringe intellectual property rights.” Canada has dealt with this issue through the courts exercising their inherent jurisdiction without the enactment of specific site-blocking legislation, with initial challenges from some ISPs being dismissed on appeal. The process has now become routine. It seems the New Zealand government intends to ensure clarity by amending copyright legislation to “provide courts with a framework to order internet service providers to block access to overseas websites”. IP scholars in New Zealand, such as Prof. Graeme Austin, have been calling for the government to take the lead. It seems they have been heard.

The empowering of collective management organizations (CMOs) to take legal action against infringers on behalf of their members is also an important step. Under present provisions, CMOs cannot bring actions because they do not hold the rights to individual works. This requires multiple authors either to take individual actions or join in a joint action. Given the cost of such an exercise, this is not feasible (large publishers who have licensed rights from authors may be in a position to do this, but authors themselves are hamstrung). Giving their collective management organization the right to represent them is a positive move. This is a move that Canada could well replicate to enable CMOs like Access Copyright to represent authors.

Changing the default rule for commissioned works will, for example, give photographers greater control over their work. Clients can contract for the right to display copies of the work but the copyright in the original work will belong to the creator. The same is true for artistic works unless there is a specific agreement that the work is created under an employment contract. Canada enacted this provision in 2012 when it passed the Copyright Modernization Act. Extending the resale royalty rights for authors to match the longer copyright term keeps these two provisions in alignment. New Zealand, like Australia and the UK, and EU member states, has enacted an Artists’ Resale Right (ARR), which allows a small portion of the proceeds of a resale of artwork through a professional dealer to be paid to the original artist (or their estate). Canada has been promising for several years to enact an ARR but has not yet done so.

The one big issue this round of copyright amendments will not address is use of copyrighted content for AI training. That is a rapidly evolving issue in many countries and is a moving target. The solution, as suggested in this article by Prof. Austin, is to foster market solutions, that is facilitating the licensing of content to AI developers. The way not to do this is to provide a wide exemption for AI training, as many in the tech world are advocating, but to ensure that rightsholders have the right to protect their content and to grant access to it on terms that they agree to. This is already happening in a number of areas such as licensing agreements between major publishers, news enterprises, and the AI industry, but individual authors are still being left out of the discussions.

Australia has just ruled out creating a fair dealing exemption for AI training (known as the TDM or Text and Data Mining exemption). Even the notoriously anti-copyright Productivity Commission supports this position. Such an exemption would remove any incentive for AI developers to negotiate with rightsholders for use of content. Hopefully New Zealand will follow suit in this regard. While we will have to wait for further developments when it comes to dealing with AI issues, the current set of proposals will be very useful in renewing and updating the copyright framework in New Zealand.

The AI Copyright Crisis Contains an Opportunity for which Publishers have Waited Centuries

A promotional graphic for Citations LLC, featuring the tagline 'Rights-aware AI access infrastructure' and three services: REVEAL™ (Semantic extraction engine), CITATIONS GATEWAY™ (Access & transaction engine), and CITATIONS CORE™ (Settlement & analytics engine). The design has a dark blue background with gold text.

We read daily about new lawsuits brought by rightsholders against AI developers, strategy papers floated by governments seeking to solve the riddle of reconciling copyright and AI, and declarations issued by authors proclaiming the end of human creativity. The creative community seems to have coalesced around the principles of transparency, permission and remuneration but the tools to effect those key elements remain elusive. The AI community would generally prefer not to pay or ask permission but is gradually accepting the need to license content. Yet there is still a technical gap in terms of knowing what content has been used, when and how. Without that knowledge, the principles of permission and remuneration are left treading water. The blog post below by Jim Bryant, Co-Founder and CEO, Citations LLC, offers potential solutions to this challenge, and I offer it to you as a possible pathway forward. I have no financial interest in Citations LLC, nor did they pay me to post this information. It is presented as a contribution to the search for a world where copyright and AI can co-exist for mutual benefit. (Hugh Stephens)

A problem or an opportunity?

Imagine a student in Montreal asks an AI assistant a question about traditional Chinese medicine, in French. The AI answers fluently — in French — drawing on the Encyclopedia of China, a monumental work with over 125 million characters that has never been translated into any language. Now imagine the same student switches to English and asks a follow-up question. The AI answers again, equally fluently, in English. The student is satisfied. The publisher gets nothing. No notification, no attribution, no compensation. They don’t even know it happened.

This scenario is entirely plausible with current AI technology. And while it represents a genuine copyright problem — real-time AI translation of a protected work, without license, in a jurisdiction whose law was not written to contemplate it — it also represents something else: an extraordinary, unrealized opportunity.

For the first time in the history of publishing, the technology exists to know, at the moment it happens, that someone in Montreal, Mumbai, or Mexico City is asking a question that your content just answered. The question is whether publishers will help build the systems to capture that signal — or whether they will leave it entirely to the AI companies, who are already building without them.

Publishers have always been flying blind.

Think about what publishers have never been able to know — and what AI companies, for the first time, can. An AI system that has trained on your works without permission is, in effect, drawing on your content every time it answers a relevant question. Which of your titles is it using right now, and where? Which readers are getting answers derived from your content without ever being directed back to the original? Which backlist titles are generating AI responses in markets where you have no distribution and no visibility? Which gaps in your catalogue are readers repeatedly trying to fill — and how would you know, if the only signal is buried inside a system you have no access to? The argument for independent monitoring infrastructure is not only about compensation. It is about visibility. Publishers are currently funding AI responses with their content and receiving nothing in return — not money, not data, not even the knowledge that it is happening.

For centuries, publishers sent their works into the world and largely lost sight of them. Sales data arrived months or years later, filtered through agents, booksellers, distributors, and described what sold — not what readers wanted but couldn’t find. The feedback loop from reader demand to editorial decision has always been slow, indirect, and incomplete.

A properly instrumented knowledge access infrastructure changes all of that. Real-time query data across AI systems is, in effect, a continuous signal of what readers want — more granular, more current, and more honest than any market research tool the industry has ever had. That data is a byproduct of the same system that creates the copyright exposure publishers are currently fighting in court.

The moment of demand is the moment to act.

Here is the specific opportunity that AI creates, and that no prior technology has made possible: when an AI system surfaces content in response to a query, it creates a demonstrated moment of demand. A reader who just received an AI-generated answer drawn from a specific book is, at that moment, maximally interested in that book. That is the moment to offer them the chance to borrow it from a library, purchase it from a retailer, or access an authorized digital edition.

Rather than substituting for the book, the AI interaction becomes the discovery mechanism that leads to it. Publishers have spent decades trying to close the distance between the moment a reader becomes interested in a title and the moment they act on that interest. AI closes that distance to zero — but only if the infrastructure exists to capture it. Without that infrastructure, the moment passes, the reader moves on, and the publisher never knew the opportunity existed.

Libraries are being bypassed — and publishers are losing their best customers. Libraries are among the largest single customers some publishers have. A major academic or reference publisher may depend on library subscriptions for a substantial share of its revenue. AI is disrupting that relationship in ways that have received too little attention. When a patron who would previously have borrowed a book — or prompted their library to acquire it — instead receives an AI-generated answer derived from that same book, the library never makes the purchase, the publisher never sees the revenue, and neither institution knows the transaction occurred. The AI company captures the value; the library loses a use case; the publisher loses a sale. The institution most structurally committed to legal, compensated access to knowledge is being systematically bypassed by systems that obtained that knowledge without payment.

The same logic applies to real-time trend identification. Aggregate query patterns across an AI knowledge system are a leading indicator of what readers want — not what they bought last quarter, but what they are looking for right now. Which subjects are rising? Which titles are being asked about in markets where they have no distribution? Which authors are generating interest that isn’t yet reflected in sales? This intelligence, continuously available, would transform publishing from a reactive industry into a responsive one.

The translation question is the hardest — and the most important.

The Encyclopedia of China example is worth dwelling on, because it illustrates both the opportunity and the complexity in their sharpest form. That encyclopedia has never been translated — into French, English, or any other language. The economics of translation have made it prohibitive: 125 million characters, uncertain commercial return, no obvious path to a global audience. As a result, it has been accessible only to readers of Chinese. That constraint has nothing to do with the quality or the importance of the content.

AI removes that constraint entirely. In this hypothetical, a reader anywhere in the world could ask the encyclopedia a question in their own language and receive an answer. This is, genuinely, one of the most remarkable things that AI makes possible: the dissolution of language as a barrier to knowledge, overnight, at no marginal cost.

But it raises a set of copyright questions that existing law is not equipped to answer. A real-time AI translation is, in the most precise legal sense, the creation of a derivative work — at the point of query, in a foreign jurisdiction, without a license, without attribution, and without compensation to the original publisher. It is not covered by any existing text-and-data-mining exception, because it is not mining — it is real-time derivation. It is not covered by fair use or fair dealing analysis that was designed for static reproduction, not dynamic on-the-fly translation.

And yet the underlying interest of the publisher is not to prevent this from happening — it is to be compensated when it does, and to have some say in how their content is represented. A framework that would allow the publisher of the Encyclopedia of China to authorize AI-mediated translation under defined conditions, receive a per-query payment, and have the source attributed, would serve everyone’s interests. The absence of such a framework means the publisher gets nothing, the AI company gets everything, and the reader gets an answer of uncertain provenance.

The ten copyright challenges — briefly.

It is worth cataloguing the specific challenges, because they are often discussed in isolation when they actually share a common cause. The publishing industry currently faces at least ten major copyright issues arising from AI:

AI training — whether training on copyrighted works requires permission and compensation, currently being litigated in multiple jurisdictions.

Transparency — AI developers do not disclose what content their models were trained on, making it impossible for rights holders to assess exposure or negotiate terms.

Reproduction — models can and do reproduce passages that closely approximate protected expression, as documented in peer-reviewed computer science research.

Market impact — AI summaries and Q&A responses can substitute for the original work, displacing revenues that would otherwise flow to the publisher.

Derivative works — the degree of transformation required to render AI output non-infringing remains genuinely unsettled, particularly for outputs that blend multiple protected sources.

Attribution — AI outputs routinely fail to identify the works they draw on, undermining both the moral rights of authors and the practical basis for any royalty mechanism.

Compensation — no industry standard governs AI licensing fees; per-query, per-token, and blanket models are all being proposed, with no settled framework.

Retrieval — retrieval-augmented generation systems access copyrighted content at inference time, raising rights questions distinct from and additional to those arising from training.

International law — training data crosses borders; copyright law does not; EU, US, UK, Japanese, and Canadian frameworks diverge in ways that create genuine compliance complexity.

Auditability — without verifiable records of what was accessed, when, and in what context, no licensing agreement is enforceable and no royalty calculation is credible.

These are not ten separate legal problems. They are ten symptoms of one missing piece of infrastructure: a neutral, independent system for monitoring how AI systems access and use copyrighted content, reporting on that usage in real time, and enabling settlement between AI platforms and rights holders on the basis of verified data rather than estimates.

Why the infrastructure must be independent.

This point deserves emphasis, because there is a tempting shortcut that would not actually work. Publishers cannot rely on AI developers to build and operate the systems that monitor AI’s use of their content. The conflict of interest is structural: the party whose compliance is being measured cannot be the party doing the measuring.

What is required is a neutral layer — operated independently of both AI developers and publishers — that records access events, aggregates usage data, reports to rights holders, and enables automated settlement. Think of it as the knowledge economy’s equivalent of a financial clearinghouse: not owned by any single participant, trusted by all of them, and essential to the functioning of the market.

This is not a novel concept — it is exactly the model that makes collective rights management organizations function in the music industry and payment card networks function in financial services. Every industry that has needed to account for consumption at scale and distribute revenues to multiple rights holders has eventually built a neutral clearinghouse.

The window is open — but not indefinitely.

Canada’s AI strategy, recently released, makes almost no mention of copyright or the rights of content creators — a significant omission that Hugh has written about on this blog. The European Parliament’s work on AI and copyright has moved further, but still focuses primarily on training rather than on the access and retrieval layer where the most tractable opportunities lie.

The practices governing how AI systems access knowledge are being established right now, largely by default. The companies building AI systems are not waiting for a legal or regulatory framework; they are building, and the norms are hardening around what they build. Publishers who are not at the table when that infrastructure is designed will find themselves subject to whatever framework others have built for them.

Copyright law exists to balance access and incentive — to ensure that knowledge can circulate while the conditions that make knowledge production sustainable are preserved. AI does not change that objective. It changes the technical conditions under which the balance has to be achieved. The good news is that those technical conditions, for the first time, make real-time monitoring, attribution, and settlement not just possible but straightforward.

The question is not whether AI will access books. It will. The question is whether publishers will be watching when it does — and whether they will have built the systems to act on what they see.

That system already exists. It logs the moment, attributes the source, and settles the account — not as a future framework, but as infrastructure operating today. It’s called Citations, and it’s already watching.

* * *

About the author

Jim Bryant is the co-founder and CEO of Citations LLC, which has built the independent infrastructure for rights-aware AI access to authoritative content — enabling real-time monitoring, attribution, and settlement between AI platforms and publishers. See how it works at: citationslogic.ai. Jim previously founded ProCD, one of the first CD-ROM reference publishing companies; managed Information Please, which became one of the most visited reference destinations of the early internet; and founded Trajectory, which developed and deployed natural language processing algorithms to read and extract structured metadata from over one million books in English and Chinese.

The Artists’ Resale Right in Canada: Many Promises but No Delivery (Let’s Get on With It)

A speaker in a suit addresses an audience in an art gallery, while attendees hold up numbered paddles during a bidding event.

Image: Shutterstock

The recent sale, or re-sale to be more exact, for $5.7 million of a 1948 painting by the late BC artist E.J. Hughes (“Coastal Boats Near Sidney, BC”), who spent much of his life in relative poverty, reminded me that the oft-promised but yet-to-be-delivered Artist’s Resale Right (ARR) in Canada is still in limbo. Canadian artists are still waiting for its implementation. Introduction of an ARR was first discussed more than a decade ago when in 2013 Independent MP Pierre Nantel introduced a motion to this effect. Later a private member’s bill was introduced by Liberal MP Scott Simms, but it did not get to Second Reading. In 2019, a Parliamentary Committee (Shifting Paradigms) recommended that the government establish an ARR. Introduction of an ARR was part of the Liberal Party election platform in 2021 and after its re-election, the mandate letter issued to the then Minister of Innovation, Science and Industry, François-Philippe Champagne included instructions to “Work with the Minister of Canadian Heritage to amend the Copyright Act to further protect artists, creators and copyright holders, including to allow resale rights for artists.” In 2022, the Globe and Mail reported that the Industry and Heritage ministers at the time were working on reforms to the Copyright Act to include an Artists’ Resale Right. There was also speculation it would be included in a Canada-UK Trade Agreement, but that agreement is still under negotiation some four years later. More recently, reference to an ARR was included in both the 2024 Economic Statement and the 2025 Federal Budget. In the case of the budget, the precise wording was:

“Artists, particularly visual artists, are great contributors to Canada’s cultural scene and among the lowest income earners in Canada despite their significant cultural contributions. An Artist’s Resale Right provides the creators of original visual artwork with a royalty whenever their work is resold through an eligible sale, providing an additional income stream. In Budget 2025, the government announces its intent to amend the Copyright Act to create an Artist’s Resale Right in Canada, ensuring Canadian visual artists benefit from future sales of their work.”

That budget has now been passed but there was no mention of amendments to the Copyright Act or the introduction of an ARR in Canada in the omnibus Budget Implementation Bill. So close yet so far. You could be forgiven for asking, “Just what is going on?”

Let’s look at what an ARR is—and is not. It is similar to a royalty stream enjoyed by writers but adapted because of the nature of the work. While books are widely distributed and thus an author can earn royalties each time a book is initially sold, a visual artist gets to sell an original work but once. The principle of the ARR is that where sales of artistic works (works of graphic or plastic art such as pictures, collages, paintings, drawings, engravings, prints, lithographs, sculptures, tapestries, ceramics, glassware and photographs) take place beyond the initial sale, a small proportion of the re-sale price is remitted to the original artist or their estate, with post-mortem payments limited to a specified number of years. Often there is a sliding scale for payments, with the percentage going to the artist decreasing as value increases. Sometimes there is a ceiling beyond which a resale royalty is not levied. There can also be a ceiling on the amount paid. The cost is normally paid by the seller, or sometimes the purchaser, but not by the dealer. It is not a tax on art nor is it funded by the taxpayer. Works not sold through an art professional, such as a private sale or sale to a museum, are exempt from the ARR. One assumes a Canadian ARR would follow similar principles.

I started writing about the ARR back in 2021. At that time, as today, advocacy was led by CARFAC (Canadian Artists Representation), representing Canadian artists, and its sister Quebec-based group, RAAV (Le regroupement des artistes en arts visuels du Québec). They pointed out that Canada is one of the few countries not to have an ARR provision in law. They also pointed out that the establishment of an ARR would have an outsized impact on artists who achieved prominence only later in their careers and who often sold early works for a pittance. This is especially true of First Nations and Inuit artists. Finally, they highlighted that if Canada establishes an ARR—which would apply to foreign works resold in Canada as well as Canadian works—then Canadian artists would be eligible for reciprocal treatment in countries where an ARR has been established, such as the 27 member states of the EU, the United Kingdom, Australia, New Zealand, to name a few. The law would be designed to avoid providing ARR payments to artists from countries that do not themselves recognize a resale right. This relates primarily to the United States, which does not have an ARR at the federal level.

As I noted, these lobbying efforts seem to have fallen on fertile ground given all the declarations of intent, despite a counter-campaign by the art dealer community. Most dealers would naturally oppose any provision that could make sales of art more expensive or complicated, despite the fact that the cost is borne by the seller or purchaser, although I would note that some dealers think establishing an ARR is the right thing to do. Yet despite repeated promises from government, there is still no action. Despite amending more than 30 statutes, ranging from the obvious ones like the Income Tax Act to legislation such as the Judges Act, the Human Pathogens and Toxins Act and the Aeronautics Act, and repeal of the Digital Sales Tax, to mention but a few, the omnibus Budget Implementation Act (Bill C-15), which received Royal Assent on March 26 of this year, did not touch the Copyright Act. But as far as I am aware, there is no indication the government intends to renege on its commitment. So, why hasn’t it followed through? Is it inertia? Legislative overload? Distraction?

It’s not clear why this is still unfinished business but it’s time the government delivered on its promises. Surely there is no need for further consultation. This provision has been consulted to death. The ARR has been a proven instrument to protect and promote artist welfare in many countries. At a time when Canada needs to strengthen its identity and culture, the ARR is an established way to support the visual arts at no cost to the taxpayer. The tantalizing but frustrating on-again, off-again nature of the ARR needs to be settled once and for all. Canada’s artists have already been waiting too long for some relief.

Prime Minister Carney, Minister Miller (Identity and Culture Minister). It’s time to get on with it.

Canada’s National AI Strategy “AI for All”: Does Copyright Exist in the AI World?

A futuristic robotic figure with glowing blue accents, portrayed in a tech-inspired environment. A 'no copyright' symbol is visible in the corner.

Image: Shutterstock.com (adapted, clumsily)

If it does, you would never know it from reading Canada’s new AI strategy just released by the Minister of Artificial Intelligence and Digital Innovation, Evan Solomon. It is a magistral document, addressing key elements of AI under six pillars: (with my shorthand summary in brackets)

Protecting Canadians and safeguarding democracy (addressing trust, safety and privacy concerns)
Empowering Canadians (promoting AI literacy and economic opportunity)
Powering AI adoption for shared prosperity (accelerating adoption, especially for SMEs)
Building a sovereign AI foundation (building domestic compute, cloud and connectivity infrastructure)
Scaling Canadian champions (more government funding for domestic AI development)
Building trusted economic and governance partnerships and global alliances (leading the creation of a multinational middle power alliance to curb the power of hegemons and hyperscalers)

The latter objective will no doubt go down really well with the Trump Administration!

Those six headings cover just about all aspects of AI, from its creation to its use to its impact on the economy, on society and on individuals. But in all 50 pages of the document, as far as I can ascertain, you won’t find the word “copyright”, although “protecting intellectual property” is certainly featured. The intellectual property rights that are mentioned have nothing to do with the rights of those whose content was used without authorization to create AI but rather relate to protecting the intellectual output of AI developers in Canada. John Degen, CEO of the The Writers’ Union of Canada (TWUC) was the first to call this out. Given the make-up of the task force that produced the report, this is not surprising. While it was made up of the great and the good from the AI world, with academics, financiers, CEOs, cybersecurity experts, innovators, educators and so on as part of the roster, there was not a single representative from the cultural community.

There are many elements of AI this document tries to address, all of them important to a country like Canada, although there are limits to what can be done by a middle power given that the lead on development has been seized by a handful of large companies, mostly in the US. The US government itself is caught in the dilemma of wanting the US to lead AI development yet not becoming overwhelmed by it to the point that a few major corporations are calling all the shots.

As for content issues, including what must surely include some copyrighted content, they are addressed only indirectly in the Canadian strategy. The three principal issues relating to content are; (1) privacy and access to data; (2) Canadian identity and culture; and (3) AI misuse, such as creation of deepfakes and misinformation.

On privacy and data, the document notes that AI is only as powerful as the data it can access (how true!). It reminds us that governments in Canada hold vast amounts of data that should be treated as a strategic national asset and mobilized to fuel innovation and productivity (i.e. provided for AI research). Thankfully, there is a tip of the hat to the need for “strong privacy protections” but there is no mention of the unauthorized scraping of databases and protected content by AI developers, both domestic and international. Privacy is important but so is ownership of content, and the right to grant permission to use it. Unfortunately, this latter point is not mentioned.

Protecting and promoting Canadian identity and culture is also mentioned as an important goal. It is obvious that if AI developers are blocked or hindered from ingesting Canadian content, then there will be less of Canada reflected in AI outputs. That argument was put forward recently by Michael Geist in a blog post criticizing recommendations issued by the Parliamentary Standing Committee on Heritage that had called for protection of the property rights and interests of artists through the Copyright Act on the basis of authorization, remuneration and transparency. This would lead to “AI without Canada”, according to Prof. Geist. This could be true if AI developers did not need or want curated Canadian content, but they do. The solution, as I pointed out, is not to give away everything in the shop window by creating a broad AI training exception in Canadian copyright law–which would amount to legalized theft, but instead to facilitate licensing solutions by resisting the smash-and-grab. Applying the existing legislation will incentivize the AI industry to strike deals with rightsholders. In other words, they will pay a negotiated amount for the products on display. That’s the best way to get more Canadian content into AI.

On the identity issue, the government’s summary document has this to say:

“Canadian AI must support, reflect, and project Canadian culture, which includes our customs, our history, and our heritage. Canadian voices, languages, communities, and knowledge must also be represented in how AI systems are designed, built, and used. Given our diverse and multicultural society, our approach to AI must acknowledge and support this rich diversity, including strengthening the French language by capturing and projecting its idioms, expressions, and cultural contexts.”

The best way to do this is to ensure that quality content in both official languages is made available to AI developers. As I have stated above, the fairest and most efficacious way to do this is through content licensing. Broad copyright exceptions will not facilitate licensing discussions. In fact, they do just the opposite by encouraging avoidance of dealing with rightsholders.

Regarding misinformation and deepfakes, this is a huge concern, and not just in Canada. Various legislative solutions have been proposed such as the bipartisan NO FAKES Act, currently working its way through the US Congress (opposed, as usual, by the internet libertarian organization, the Electronic Frontier Foundation). Other countries, such as Denmark, are addressing the issue through amendments to copyright law, giving individuals the reproduction rights to their image and voice. The UK has an anti-deepfake law on the books, introduced earlier this year, but Canada is still struggling to get its Online Harms legislation, after a couple of false starts, finalized and across the line. Re-introduction of that legislation is expected imminently, and will likely include social media restrictions on children, a highly controversial issue.

Privacy in relation to access to data, cultural identity, and misinformation including deepfakes are all content issues that Canada’s AI strategy will need to address. And so is copyright, although not mentioned in the strategy. Putting the best possible gloss on things, perhaps it is just as well there was not some throwaway line in the strategy pointing to the need to provide wider access to copyrighted content to ensure that Canada remains competitive on AI. That is the argument often employed by those who want freer access to “OPC” (Other Peoples’ Content). The argument is that “Everyone else is doing it (i.e. giving it away–which is factually untrue), so we have to as well in order to stay competitive”. Maybe silence was better than saying the wrong thing in this document.

In the absence of any reference to copyright issues, the last word must rest with Heritage and Identity Minister Marc Miller who spoke recently to the press after the National Summit on Artificial Intelligence and Culture in Banff, AB. The Minister is quoted as saying that Canadian copyright law is already clear that artists’ work needs to be respected, and that…”the current copyright law does and should protect those that have created material, and people need to be compensated properly.”

While that is encouraging, it would have been nice to have had this reaffirmed in the AI strategy document.

The CRTC Streaming Announcement, and CUSMA: An Update (It’s Changing by the Day)

Flags of Canada, the United States, and Mexico arranged together.

Image: Shutterstock

Scarcely was the ink dry on the blog I posted on Monday, June 1, when things began to happen. The next day Canada officially informed the US and Mexico that it wished to renew CUSMA, and Dominic Leblanc, Minister responsible for Canada-US Trade (among several other responsibilities) went to Washington to meet with US Trade Representative Jamieson Greer. There he was given the laundry list of US grievances which surely included the Online Streaming Act (OSA) and in particular the CRTC decision to impose a 15% levy on the Canadian revenues of large foreign (read US) streamers to fund domestic Canadian production (only some of which the streamers could use at their discretion). The day after that, June 3, the Carney government announced that it would be providing “direction” to the CRTC to review its decision, on the basis that additional costs imposed on the streamers would likely be passed on to Canadian consumers.

To sweeten the pot, the government announced the creation of a $600 million annual fund to “provide stability and immediate support to Canada’s audio and audiovisual sectors”. This is to offset the funding the streamers may no longer be contributing, including the initial five percent contribution still held up in the courts owing to a legal appeal. Six hundred million dollars is a good chunk of change; it’s about the same amount the streamers would have contributed based on CRTC calculations estimating that the original five percent levy (currently suspended pending a decision from the Federal Court) would have generated $200 million annually. This would suggest either that the streamers may not be expected to make financial contributions or that their contributions will be additional to the base amount. Even though the government has thrown a lot of money at the problem, this has not satisfied the cultural sector however. The Coalition for the Diversity of Cultural Expression (CDCE), a major cultural industries umbrella group, has just issued a press release calling Ottawa’s request for the CRTC to reverse course “a major setback for cultural sovereignty”. The CDCE doesn’t mind the offer of $600 million. It’s just that such funding is at the whim of the government of the day whereas embedded funding through regulation of online streamers would be part of the broadcasting regulatory framework and thus more predictable and reliable.

As for the argument that a levy on the streamers would be passed on to consumers, Howard Law in his blog MediaPolicy.ca points out that “Netflix upped the price on its standard plan from $14 monthly to $15 in 2020. Then to $16.50 in 2022. Then to $19 in 2025. That was twice the rate of inflation.” But of course, no-one could blame the government for these increases. That was just greedy old Netflix. The streamers will price their product at whatever level is optimal from their perspective, just like any other business. If they price themselves too high, people will find alternatives, either a competing service or (horror of horrors), a pirated feed. The industry is well aware of the limits of consumer tolerance, particularly in this age of stressed household finances. Nonetheless, the Carney government’s “concern” for consumers is good politics.

Why didn’t the government just tell the CRTC what rate to set? By statute the government does not have the authority to reverse or overrule CRTC decisions in matters other than the issuance of broadcasting licences (the CRTC being an independent quasi-judicial body), but the government does have the authority to issue policy directives as to how legislation is to be implemented. What that guidance will be, Heritage Minister Marc Miller (the point person on this file), was not willing to say except that the amount of the streamer’s contributions would be reduced. By how much, we do not know. However, he hinted they would still be required to contribute. Once again, the CRTC will need to consult stakeholders and hold hearings. There is lots of wiggle room (or room for further negotiations with the streamers).

There was no mention of the CUSMA negotiations being a factor in the government’s decision but if you don’t think CUSMA was in play, you have been living on another planet. Nonetheless, the action the government has taken suggests it has learned a lesson from its previous policy reversal on the Digital Services Tax, when it scrapped the legislation on the very eve of implementation to appease the Trump Administration and get CUSMA negotiations back on track. That concession achieved absolutely nothing. In the case of the Online Streaming Act (OSA), it will continue in force as legislation for which the CRTC is required to develop implementing regulations. The government has signalled flexibility but has not rescinded the authority of the CRTC to regulate streaming services in Canada, nor has it definitively exempted the streamers from making a financial contribution or meeting discoverability requirements. It thus retains the OSA as a bargaining tool, something it could have done with the DST if it had only suspended the imminent application of the tax instead of withdrawing it completely. Once burnt, twice shy. Its action on the CRTC decision is exactly what it should be doing, signalling flexibility but retaining the essentials of the policy as a bargaining chip.

The other significant development on the trade negotiations front, announced coincidentally on the day that Leblanc and Greer were meeting in Washington, was the announcement by the US Trade Representative’s Office that they will be imposing tariffs ranging from 10 to 12.5 percent on over 60 sixty countries who allegedly either don’t block goods produced with forced labour or do so inadequately. Canada is one of half a dozen countries in the latter category, along with the EU. Everyone else completely fails on this score, according to USTR. Not a single country is exempted although “only” 60 of the US’s major trading partners are targeted. There will be hearings to examine the USTR announcement but the results are a foregone conclusion.

I mentioned in my earlier blog post this week that the Trump Administration will do whatever it takes to justify its unilateral imposition of tariffs, whether or not this is in violation of bilateral and multilateral treaties. Once its “fentanyl tariffs” imposed under the International Emergency Economic Powers Act (IEEPA), were overturned by the US Supreme Court, the Administration resorted to whatever other excuse it could find, including using both national security (Section 232 of the Trade Act of 1962) and balance of payments (Section 122 of the US Trade Act of 1974) as pretexts. These are “temporary” measures authorized by Congress to address specific emergencies. The Trump Administration has made a mockery of these remedies, employing them on the flimsiest of pretexts. But even these measures are time limited, (although for some the time can be measured in years). However, the Section 122 tariffs imposed in lieu of the IEEPA tariffs after they were overturned will expire in July so Trump and USTR had to come up with another justification in US domestic law to maintain their import tariffs. The answer was trade in products produced with forced labour. Suddenly, most of the world’s trading economies are accused of allowing goods produced with forced labour to undermine international markets, so sixty countries must be punished by the US through the imposition of tariffs on their exports to the US. This ludicrous misuse of Section 301 of the US Trade Act is clearly for purposes other than dealing with forced labour.

While the US does have a robust regime to block the import of products produced with forced labour, it is far from perfect itself. According to the Canadian Centre for Policy Alternatives, a labour oriented self-declared “progressive” publication, last year the Trump administration cancelled around $577 million from the Bureau of International Labor Affairs (ILAB) in grants allocated to various programs meant to promote labour rights abroad. Also, products produced for private companies by prison labour in the US have been a concern. Last year, the University of Toronto produced a report “Uncovering US Prison Labour in Canadian Supply Chains” that concluded “the Canadian supply chain has many likely linkages to prison-made goods from the US, particularly in the automotive and food sectors.”

Canada’s hands aren’t completely clean either. Prime Minister Carney has just announced his government will introduce new legislation this month to strengthen the current Canadian ban on imports made with forced or child labour. However, while forced labour is a real issue, the USTR action is not only hypocritical, it also demonstrates the lengths to which the Trump Administration will go to use any pretext or legal loophole it can find to impose tariffs. Even if Canada had the tightest regime in the world to prevent the import of products produced with forced labour, this would not stop the US from using this, or some other pretext, to fill the tariff gap created by the collapse of the fentanyl tariffs. When the fentanyl tariffs were first announced, Canada responded by creating a “fentanyl czar” and equipping the RCMP with new Blackhawk helicopters for improved surveillance, among other measures to beef up border security. While useful, this did not exempt Canada from US tariff punishment. It wasn’t about fentanyl; it was about imposing tariffs on a trading partner that had naively expected CUSMA rules to be followed.

This has been one of the problems with CUSMA. While—remarkably considering what has been going on in Washington– much of the trade conducted between Canada, Mexico and the US under the CUSMA/USMCA/TMEC agreement continues tariff-free (for now), the sectoral exceptions introduced by the US based on contrived grounds (e.g. the imports of fentanyl from Canada) raise the question of whether the US really intends to honour what it has agreed to, or will agree to in future. That is also a point I made in Monday’s blog when examining the issue of the Cultural Exception to CUSMA (Article 32.6) and whether the US would try to use it to impose retaliatory tariffs on Canada. Using Article 32.6 against Canada would likely fail “legally” (i.e., the OSA is not a violation of the terms of CUSMA, and therefore Canadian action to implement the legislation would not need to be justified by Article 32.6), but then the US could find another excuse if it really wanted to take action. Fentanyl, national security, forced labour, smoke from Canada. Take your pick.

Assuming the US agrees to extend CUSMA/USMCA through renegotiation, a lot will be up for grabs. For example, the US apparently wants to further increase the percentage of US and North American content in automobiles traded under the Agreement. While a good idea in principle, will it make US or North American vehicles more competitive? Maybe Article32.6, the Cultural Exception that applies only to Canada, will disappear. While in theory cultural industries in Canada can be exempted from the terms of the Agreement, the penalty for doing so is so draconian that the Exception is really more of a political fig-leaf than a policy reality, although it may salve Canadian pride. Canada for its part will want some assurances that the sectoral “national security” tariffs on steel, aluminum and lumber will be lifted and not reimposed on a whim. Whatever eventually happens, some sense of economic certainty and security will be the goal.

Right now, things are changing by the day. Stay tuned for the next update. It could be tomorrow!

Hugh Stephens Blog

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