Canada’s 2023 Budget and the Creative Industries: Not Much to Cheer About

Supporters of Canada’s creative industries—writing and publishing, music, film making, the visual and performing arts—would be hard pressed to find much to celebrate in the most recent federal budget unveiled on March 27. In a political landscape where the focus is on health care, climate change and energy transition along with security challenges such as the war in Ukraine, the creative industries didn’t get much of a look-in despite the fact they comprise about 3% of Canada’s GDP and provide almost 700,000 jobs. Among other things, hints of positive action in last year’s budget have failed to materialize leading to concerns that the government will not follow through on commitments to support educational book publishing, such as by enacting needed reforms to the Copyright Act.

Last year’s 2022 budget included some tantalizing language that gave writers and publishers a sense of optimism that action would be taken sooner rather than later on this issue;

“The government is committed to ensuring that the Copyright Act protects all creators and copyright holders. As such, the government will also work to ensure a sustainable education publishing industry including fair remuneration for creators and copyright holders, as well as a modern and innovative marketplace that can efficiently serve copyright users.”

This gave some hope to those involved in educational publishing which, by some estimates, has lost over $200 million in revenues since the expansion of fair dealing in 2012 to include “education”. This change, combined with a couple of court decisions, has undermined collective licensing and resulted in many provincial ministries of education and post-secondary institutions dropping their reproduction licences with the authors’ and publishers’ collective society, Access Copyright, instead relying on a unilateral and expansive interpretation of fair dealing to avoid paying for content when they reproduce copyrighted material used in teaching and research. As I wrote a year ago with regard to the 2022 budget, (“Copyright References in the Budget: Good Intentions Are Welcome but Early Action is Needed”), the government should act on its commitments and convert those intentions into legislation as quickly as possible.

Since then, the only action taken on copyright issues has been an amendment to align Canada’s term of protection with that of the United States (and more than eighty other countries around the world, including the EU, UK, Australia, Japan and Korea) by extending the term of protection by an additional twenty years, from the lifespan of the author plus fifty years to “life plus 70”. That action was required because of commitments Canada had made in the updated NAFTA trade agreement (the CUSMA/USMCA). The extension had to be enacted before the end of 2022, and the clock was running out. Therefore, rather than introduce a separate piece of legislation to amend the Copyright Act– thus subjecting that essential Bill to all the vagaries of a minority Parliament–the Liberals bundled the changes into the 2022 Budget Implementation Act. That legislation was a confidence motion and had to pass or the government would have been required to resign. The confidence and supply arrangement the minority Trudeau government has reached with the New Democratic Party (which controls 25 seats in Parliament, enough to ensure passage of legislation when combined with the Liberals current count of 156) meant that a non-confidence vote was not going to happen, so why not throw in a few extra loose ends that also needed Parliamentary approval to ensure expeditious enactment? This is the only recent change to the Copyright Act.

Updating of the Copyright Act has been pending for several years, including the need to address issues such as text and data mining and artificial intelligence, in addition to bringing fair dealing back into balance. There was zero indication in this year’s budget that this will be a priority for the government going foreward. However, budget announcements are normally reserved for new funding initiatives (unless, as mentioned above, there is a need to attach an unrelated but essential piece of legislation to the budget bill), so perhaps it is not surprising that the word copyright was not even mentioned in the 2023 budget. With respect to the creative sector generally, there were some limited funding announcements related to the arts and museums; the National Arts Centre in Ottawa is to get an additional $28 million over two years for programming and upgrading and six museums (four of them in Ottawa—it’s nice to live in the national capital) will get additional funding. In addition there will be some funding to support the “Building Communities Through Arts and Heritage” program, which supports local festivals and community anniversaries and can be used for such things as restoration of objects, community history books, statues and murals. A statue here, a mural there. But the Canadian Association for the Performing Arts complained that, “We are extremely disappointed by the blatant omission of the Canada Arts Presentation Fund in this year’s budget”, although the Canadian Media Fund did get a $40 million top up to increase production of content by francophone and “equity deserving” communities.  

Performers weren’t the only ones shortchanged. Publishers complained there was no increase to the Canada Book Fund, (financial support for Canadian booksellers and publishers) despite campaign promises to do so, and writers were disappointed to see that no additional funding was provided for the Public Lending Right (PLR). The PLR, established in the 1980s, provides compensation to authors for the distribution of their works by public libraries and is based on the presence of a title in public library catalogues that are consulted during the annual PLR survey. The average annual payout last year was around $800, a considerable reduction from when the program began. It’s not much, but when you are a starving writer, every little bit helps.

Another measure to support creators (and yet another where there has been no action) is the establishment of an Artists Resale Right (ARR) in Canada, an objective contained in the mandate letter issued to Heritage minister Pablo Rodriguez when he took the portfolio in 2021. However, as part of his ministerial mandate, Rodriguez was handed an extensive “to do” list and the ARR was just one item among many. The list of objectives included changes to the Broadcasting Act to cover streaming services, requiring “foreign web giants” (in the words of the mandate letter) to contribute to the creation and promotion of Canadian stories and music. This has resulted in Bill C-11, now back before the Senate as the two Houses play ping-pong with the legislation. Rodriguez was also instructed to introduce legislation requiring digital platforms that generate revenues from the publication of news content to share a portion of their revenues with Canadian news outlets. Thus, we have Bill C-18. In addition, he was mandated to take action to combat harmful online content by holding social media platforms accountable for the content they host. That proposed legislation is bogged down and now subject to further consultations. As you can see, Mr. Rodriguez is a busy guy and his department is stretched, which may explain why some things are delayed.

The Artists Resale Right will probably come about as a result of the expected conclusion of a UK-Canada Trade Agreement. (The government could then bury that legislative change in a future budget implementation bill.) The Canada-UK negotiations have been dragging on for some time, ever since Brexit, but the agreement reached on March 31 for Britain to join Canada and ten other countries in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP, should open the way to speeded up bilateral negotiations.

Meanwhile, hopes that the 2023 budget might lead to some indication of a way forward on copyright reform, particularly the need to fix “Canada’s broken copyright market framework”, as The Writers’ Union of Canada (TWUC) has phrased it, have been dashed. However, as TWUC CEO John Degan has said, “While discouraged by seemingly endless delay…(we) will continue to hold government to its promises.” But the clock is ticking, the legislative agenda is loaded, and the government is starting to approach the half-way point of its mandate. If promises of rebalancing copyright to ensure that the education industry pays its fair share for using copyrighted educational materials are to happen—thus ending the free ride for one industry at the expense of another–then the Trudeau government and the departments responsible, Innovation, Science and Economic Development (ISED) and the Department of Canadian Heritage, had better get moving. Despite not having much to cheer about in the 2023 budget on this issue, there is still hope that the government will get around to doing the right thing well before the next election.

© Hugh Stephens, 2023. All Rights Reserved.