Copyright Review in Canada: Myths and Facts

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The Need for Regular Copyright Review

Five years after the introduction of the Copyright Modernization Act (Bill C-11) in 2012 under Stephen Harper’s Conservative government, preparations are being made for the statutory five year review in late 2017 by the relatively new Liberal government of Justin Trudeau. The 2012 Act, which brought Canada’s copyright laws into the digital age and implemented legal changes required to give effect to Canada’s accession to the WIPO Internet treaties, satisfied some copyright stakeholders and dissatisfied others, as is often the case with legislative change. New fair dealing exceptions for education were introduced, a move that has severely damaged the Canadian educational publishing industry, and which many publishers and authors would like to see repealed or narrowed. Some of the new provisions were phased in and it is only relatively recently that Internet Service Providers (ISPs) have been legally required to forward infringement notices to those on their network. This system is still being “broken in”, and has suffered some teething pains. Given the lengthy delay that occurred prior to the passage of C-11 (Canada signed the WIPO Internet treaties in 1997 but it took fifteen years before implementing legislation was adopted), a legally mandated legislative review every five years is a good idea. In the fast moving digital age, there will always be a need to take stock of how well the regulatory framework responds to the real world of consumers, creators and industry.

The lead up to the last review attracted significant public interest, with a Parliamentary committee reviewing or hearing over 200 submissions and witnesses. As James Moore, one of the two ministers jointly responsible at the time for the new legislation has recently commented, “Effective intellectual property laws are essential for everyday Canadians, for investors, for the digital economy, for artists, for our academic communities, and more broadly, for Canada’s place in the world.” He has urged the government to take the review exercise seriously and to ensure that Members of Parliament are properly briefed on the law and the issues at stake. While so far there has been little attention focussed on the upcoming 2017 review, this will probably change as the date approaches. Given the likely public interest, it is worth thinking about what is at stake in this review.

Some Copyright Myths

We are inevitably going to hear a lot from the copyright minimalists about how copyright laws stifle innovation, how they favour big corporations, how they are more in the interests of other countries than Canada’s, and other myths. This is a standard refrain. It is worth debunking some of these myths and in doing so, I can’t think of a better place to begin than with John Degen, Executive Director of the Writers’ Union of Canada and his “Five Seriously Dumb Myths about Copyright that the Media Should Stop Repeating”. Degen takes issue with the myth that copyright only helps corporations, pointing out that it is corporations who pay artists–no corporations interested in investing in copyrighted content means no contracts for creators. (Degen reserves a special comment for those “giant corporations” who base their business model on using other peoples’ content without paying). He challenges the myth that copyright hurts consumers and points out that paying for content (as we pay for anything else that we consume) is how a cultural economy is built (more on this below). He debunks the myths that copyright is an attack on artistic freedom and that artists feel restricted by copyright. As I have pointed out in an earlier blog, there is sometimes a fine line between inspiration and infringement, but as Degen puts it well, a true artist knows the difference between “creative remixing and uncreative copying”. Finally, Degen takes on the distortion that copyright harms the public domain. In fact, the existence of copyright gets material published precisely because there is an economic motivation to doing so. There is no evidence to suggest that because a work is not in the public domain it is not accessible to the public. In fact, exactly the opposite is the case.

Some Important Facts

So much for myths. How about some facts? It is a fact that copyright industries are a major economic driver and provider of employment, in Canada as elsewhere. Current statistics for Canadian cultural industries are hard to find, but there are some fairly recent studies that give a good indication of the economic contribution of the sector. The Department of Canadian Heritage tracks the value of the contribution of cultural industries to the Canadian economy through a Statistics Canada mechanism called the Provincial and Territorial Culture Satellite Account. The most recent year for which this is available is 2010 although an update is expected this year. The latest report indicates that cultural industries in GDP terms were worth $47.7 billion, or 3% of national GDP in 2010. The sector supported over 700,000 jobs or over 4% of all jobs in the economy. The sector was an important contributor to GDP in all provinces, with Ontario and Quebec being the highest.

Film and television production is a good example of the economic contribution of one copyright subsector. It is major cultural economic driver, both from production of domestic cultural content and from so-called “Hollywood North” productions of mostly US content in Canada. In 2014-15 the film and television sector supported 148,500 Full Time Equivalents, with $7.1 billion in production volume contributing $9 billion in GDP to the Canadian economy, led by Ontario and followed by BC, Quebec and Alberta. Export value totalled $3.2 billion. About a third of the total economic activity was Foreign Location and Service (FLS) production (about 70% of which was by US studios) which contributed significantly to the strong growth of the Canadian animation and visual effects industries. In addition, the sector contributes indirectly to economic activity through film induced tourism, soundstage construction and film festivals of which TIFF (Toronto International Film Festival) is the best known.

Vancouver, the third largest production centre in North America, saw 353 productions in 2015, up from 235 the previous year. Film production in Vancouver resulted in spending of over $2 billion and contributed $143 million in wages in the city in that year. If we slice the data another way and look at individual productions, one show like Warner Bros’ Supernatural, which has filmed for 11 seasons in BC, contributed $509 million in direct production expenditure and $810 million in total output, in the process creating employment of 9,615 Full Time Equivalents over the period of production. Put another way, this is the equivalent of the employment created by the construction of almost 4000 new homes. NBCUniversal’s Suits, filmed in Toronto, has contributed over $100 million in direct production expenditure, $224 million in total output and created 2,304 full time jobs. Suicide Squad, spent well over $80 million and created over 4,700 jobs during its 98 days of filming and 168 days of pre and post production work in Ontario. Twentieth Century Fox spent over $105 million on production of X-Men: Apocalypse in Quebec. I could go on, but you get the drift. This is the value of just one copyright industry subsector—admittedly a large one—but it underlines the importance of protecting the copyright value chain. Some other sectors, such as music and publishing, have seen revenue declines in recent years owing to piracy, changing business models and market forces, but still make substantial contributions to the Canadian economy. When videogames and software development, both industries of the future, are added to the mix, the importance of knowledge-based copyright industries to Canada’s prosperity is evident.

These are some of the facts—and some of the myths–that officials and politicians responsible for copyright legislation will have to consider carefully when dealing with next year’s review of the Copyright Act in Canada. Let’s hope they stick to the facts and avoid the myths.

© Hugh Stephens, 2016. All Rights Reserved.

 

 

 

 

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