Tag: canada

Canada’s Creative Sector Uneasily Awaits the Carney Government’s Next Steps on AI Training

Blasting a Wide TDM Hole in the Structure of Copyright is Not the Answer

A cartoon-style illustration showing a fist breaking through a brick wall labeled 'COPYRIGHT', with the fist wearing a band labeled 'TDM', surrounded by explosive graphical effects.
Image: Author (via DALLE-E)

The ongoing wrestling match-cum-dance between the creative sector and AI developers over the uncompensated and unauthorized use of copyrighted content for AI training is being played out in different ways in different countries. In the US it is largely a legal play in the courts at the moment, with mixed results for both sides. However, President Trump has made concerning public comments siding with the AI industry, saying it is impractical for AI developers to pay copyright holders for AI training (and besides, China doesn’t do it). Congress is still considering its options. In Australia, the Productivity Commission, never a friend of intellectual property, has just issued an interim report recommending the adoption of a Text and Data Mining (TDM) exception in Australia to boost development of the AI industry locally. The Australian creative sector mobilized quickly and has pushed back hard against this proposal, with the government now saying that it has no plans to amend the Copyright Act. In the UK, where there is a TDM exception but only for non-commercial purposes, the Starmer government quickly adopted a pro-AI strategy, part of which was to propose an expansion of TDM to include commercial purposes, although subject to an opt-out for rights-holders. That ignited a major storm among leading British creatives from Paul McCartney and Elton John on down. Through a unified campaign, British creators were able to gain support in the Upper Chamber (House of Lords) to slow down the legislation. As a result, the TDM issue has now  been earmarked for further consultation and study. One thing is certain, the creation of a wide TDM exception is a sure way to stifle a nascent but rapidly developing licensing market for copyrighted content used for AI training.

It seems as if TDM, or more permissive TDM, is testing the boundaries of copyright just about everywhere. So, what about Canada? Canada has no TDM exception in its copyright law and, unlike the US, has clearly defined fair dealing exceptions that do not lend themselves to expansive court interpretation. Like other countries, it is trying to figure out how to not get left behind as the AI race accelerates. Canada initially had a first mover advantage in terms of AI research, given the work of Geoffrey Hinton, Yoshua Bengio and others, but recently it has been falling behind, notably lacking native startups. The cluster effect is not happening, with Canadian innovation going elsewhere for commercialization. To address these challenges, the new Carney government has appointed a dedicated Minister of Artificial Intelligence and Digital Innovation, former journalist Evan Solomon. This is the first time such a position has existed. One of Solomon’s first acts was to accelerate launch of an AI strategy beginning with a new consultation released on October 1 (closing at the end of this month), in the form of a survey to “help define the next chapter of Canada’s AI leadership”. This survey asks many relevant questions regarding AI and how it could be best developed in Canada but manages to mostly steer clear of the thorny question of AI training and copyright. The only question tangentially related to this issue is the following;

“Which infrastructure gaps (compute, data, connectivity) are holding back AI innovation in Canada, and what is stopping Canadian firms from building sovereign infrastructure to address them?”

Clearly this consultation is not going to turn over the TDM rock, at least not directly.

In the past couple of years, the government has issued two consultation papers on AI, one in 2021 and another last year as well as a “What We Heard” report. This report, issued earlier this year, summarizes the “great divide” between AI developers and the content industry. It’s first observation was that “Creators oppose the use of their content in AI without consent and compensation” but then goes on to say that “User groups support clarifications that TDM does not infringe copyright”.

After a couple of other observations about the centrality of human authorship and the need for transparency surrounding the use of copyright-protected works in the training of AI, the paper observed that there is “no consensus about whether existing legal tests and remedies are adequate”. That is the nub of the issue. There is no consensus, and while the courts are struggling with this issue (including in Canada, as I wrote about here and here), what Canadian creators fear is the introduction of a wide TDM exception in the name of maintaining “Canadian competitiveness”.

The launch of the new AI strategy and the evolution of the way in which copyrighted content is described in government consultation documents is indicative of the pressures on the government to shore up Canada’s AI strategy. It is interesting to note the shift in the definition of TDM from 2021 to today.

The definition provided in the 2021 consultation document described TDM as follows;

“The process of conducting TDM may require the making of reproductions of large quantities of works or other copyright subject matter to extract particular data and information from them. This process may be carried out using scientific or text-based data, as well as images, sounds, or other creative works.”

In the most recent consultative document, that definition has evolved;

“Text and data mining (TDM) consists of the reproduction and analysis of large quantities of data and information, including those extracted from copyright-protected content, to identify patterns and make predictions.”

Note the shift from “works” to “data”.[i]  It’s a subtle difference but is hugely significant because data and facts are not protectable under copyright whereas the creative elements of original works are. The cultural sector is rightly concerned.

The Coalition for the Diversity of Cultural Expressions (CDCE), a major arts and creatives lobby group, is currently pressing Ottawa on a number of cultural issues, including AI. Among its AI asks are to;

  1. Ensure that the Copyright Act is not modified through an exception permitting Text and Data Mining (TDM) or any other exception allowing technology developers or users to use protected works…to train generative AI systems without authorization or compensation;
  2. Adopt national legislation on generative AI that requires developers of generative AI systems to disclose the training data they use; and
  3. Adopt legislative provisions requiring public identification of content that is purely AI-generated.

Against these demands is the pressure coming from AI advocates who will argue that if the US loosens restrictions on use of copyrighted content for AI training, Canada will have no recourse but to follow. In other words, as goes the US, so goes Canada (or for that matter, the UK, Australia and others). Thus, what is happening in the US courts, and perhaps in Congress, is of critical importance for the creative sector everywhere including, in particular, Canada.

The issue of AI training on copyrighted content will need to be resolved sooner or later. Licensing solutions are developing quickly and if Canada can wait a bit longer it may be able to adopt licensing as the preferred solution (although the “What We Heard” report noted that “Some (intervenors) argued that licensing is an unnecessary burden because it may not be clear that copyright is engaged or that works used in TDM are being reproduced in the first place.”). There is pressure on the Carney government to take early action since AI industry developments are moving at lightning speed. With the TDM train gaining momentum in Canada and elsewhere, Canadian creators are understandably uneasy about what is likely to happen next.  

As the CDCE notes, culture is a major economic and social pillar in Canada. In 2023, it generated $63.2 billion in value added and employed 669,600 people. Throwing all that under the bus in the name of remaining competitive on AI is a flawed choice, a point also made by the creative sectors in the UK, Australia and elsewhere. However, with the AI horse well out of the barn, copyright cannot be seen as an obstacle to innovation, an accusation freely levelled at it by some in the AI industry. Rather, it must be seen as a partner in innovation, which is where licensing comes in.

Blasting a wide TDM hole in the protection and incentive structure that copyright provides the creative sector is not the answer. The creative sector is watching and waiting anxiously.

© Hugh Stephens, 2025. All Rights Reserved

[i] I am indebted to Erin Finlay, partner at Stohn Hay Cafazzo Heim Finlay LLP for drawing these changing definitions to my attention

Canada and the Digital Services Tax (DST): A Humiliating Climbdown to Mark Canada Day

A black coffee mug with the text 'Proud Canadian from Eh to Zed' and decorative moose antlers, displayed on a shelf.

Photo: Author (in Agnew’s General Store, Wilberforce, ON)

Mark Carney’s first Canada Day as Prime Minister (Canada’s 158th) was supposed to mark a milestone; the end (or at least the beginning of the end) of federal-provincial trade barriers, the enactment of legislation to fast-track major projects, and passage of tax relief. All were achieved by the July 1 deadline, no small feat for just a couple of months in office. But just two days before Canada Day, one more action took place that Mr. Carney surely had not planned for when celebrating the birthday of the True North Strong and Free. This was the decision to rescind Canada’s Digital Services Tax (DST) late on Sunday, June 29, after a phone call between Carney and President Trump, subsequent to Trump’s post on Truth Social that he was immediately suspending trade and security negotiations with Canada owing to the imminent imposition of the tax. The DST, enacted into law in 2024 but with an 18 month “advance notice” period prior to actual implementation was supposed to go into effect on June 30, with taxes owing backdated to 2022. It was estimated that companies like Google, Amazon, Uber, META, AirBNB and others were on the hook for back payments of about two billion dollars, with more to come in future years. Not surprisingly, these companies weren’t happy and enlisted the support of the Trump Administration, as indeed they had sought support from Joe Biden earlier.

The DST was controversial in Canada. It was opposed by, among others, the Canadian Chamber of Commerce and the Business Council of Canada. Reasons for opposition were several; it was a tax that the tech giants and could and would pass on to consumers (Google has already imposed a 2.5% “digital tax” on its customers to compensate for the anticipated impact of the DST—don’t count on getting that money back), but the main argument against the DST was it painted a big target on Canada’s back. The DST had already attracted significant opposition from the tech industry in the US during the Biden Administration and was certain to provoke an unpredictable Donald Trump at a time when disruption on the Canada-US trade file was already endemic.

Is important to remember what the DST is and why it is on the tax agenda. It is not a sales tax, nor a tax on profits. It is a three percent tax on revenues generated in Canada from specific services provided by large digital companies that have global operations. In the case of Canada’s DST, companies that are “in scope” to pay the tax must earn a minimum of $20 million in revenues in Canada from specified services such as sales of digital advertising, online marketplaces, social media services or sale of user data (significantly, however, not content streaming), plus have worldwide income of more than 750 million Euros, about one billion CAD. Canada’s DST legislation was passed in 2023, came into force on January 1, 2024 (when taxes began accumulating retroactive to January 1, 2022), with first payments due on June 30, 2025. Due, that is, until it was announced, just a few hours before the payment deadline, that the legislation would not be enforced and would be ultimately rescinded. The fact that legislation duly passed by Parliament that had been in force for a year and half could be rescinded within 48 hours of the US President opposing it in a “tweet” says it all. How did Canada paint itself into this corner from which there was no reasonable escape?

It is important to note that the Canadian legislation, as well as DST legislation in other countries, does not specifically name US tech giants as the targets, (a small number of Canadian companies would have also been required to pay the tax in Canada) but targetting the “GAFAMs” (Google, Apple, Facebook, Amazon and Microsoft etc.) is the import of digital service taxes generally. This is because these are the companies that dominate the digital space–and which have been accused of manipulating profits to minimize and avoid paying tax in countries where their revenues are generated. It is argued that having disrupted the business environment (by upending the advertising market, for example), the companies should at least contribute tax revenues in the jurisdictions where they have a digital presence. It is no secret that most of these companies have exploited the fact they have little or no physical presence in many of the countries where they generate significant revenue. Although headquartered in the US many of them have set up offshore operations to conduct their global business, ensuring that their operations in third countries are barely profitable. This allows them to pull back the proceeds to the low-tax offshore jurisdiction (like Ireland) from where they ostensibly conduct international operations.

Profitability is reduced by legal techniques such as charging high fees to the local subsidiary for its use of the intellectual property in the technology platform, thus ensuring that profits are attributed back to the office registered in the tax shelter location. It is no accident that if you book accommodation through AirBNB in Canada, your payment goes to AirBNB Ireland, 8 Hanover Quay, Dublin. Your refund, if any, comes from the same source. The Library of Parliament published a detailed research paper on the tax avoidance phenomenon in 2020. To counteract these manoeuvres governments have deployed various measures to plug the loopholes. One of these is a tax on revenues instead of profits. Note however that it is a blunt instrument because it captures the just and the unjust alike. A company may have low profits for a variety of reasons, such as being in start up phase, not just because of tax avoidance. Additionally, it is normal when DSTs are applied that no credit is provided for other taxes paid, disincentivizing good tax behaviour.

Be that as it may, the DST is one way for governments to fight tax venue shopping by multilateral corporations engaged in digital trade, although it is not the preferred way of dealing with the problem of tax avoidance. Since 2013 the OECD, ostensibly with US cooperation, has been trying to find a multilateral solution that would provide for an agreed reallocation of digital revenues, as well as application of an alternative minimum tax. However, since this could result in it losing out on some revenues that would be dispersed to other countries, the US has slow walked the process. While the Biden Administration agreed in principle, it did not submit the OECD “Global Tax Treaty” to Congress for fear of defeat. On assuming office in 2025, Donald Trump tore up all previous US commitments to the OECD tax reform process.

In 2021, an interim agreement was reached. The US agreed to continue to engage in the treaty negotiations provided that other countries contemplating introduction of a DST agreed to pause implementation (ie. there would be a moratorium on the introduction of new DSTs) pending conclusion of a final agreement. However some countries, notably Austria, France, Italy, Spain and the UK, had already implemented a DST and were therefore “grandfathered”. Thus, they enjoyed the tax revenue from digital companies all the while the OECD was dithering over next steps. Canada looked on with envy.

Canada appears to have felt it missed the boat by not introducing legislation earlier (it was first mooted by the Trudeau government in 2019), which would have allowed it to benefit from grandfathering. The Canadian position was that it would introduce legislation only if the OECD treaty process did not move forward as planned (which is what happened in 2023, when it stalled). While agreement was not reached, there was broad consensus on extending the DST moratorium. Canada opposed an extension, the only OECD member to do so. It then proceeded to introduce its own DST legislation, backdated to 2022 (to capture the revenue it thought it should have been receiving all along), with collection including arrears to begin on June 30 of this year. No doubt the anticipated $2 billion in revenue had already been “booked” by the Department of Finance against the budget deficit.

On one plane—the fiscal plane–this all makes sense. However, looked at from the perspective of Canada-US trade relations, it was asking for trouble. Why be the “tall poppy” when you could stick with the pack and wait out the process, especially given the asymmetry in Canada-US economic power and Canada’s dependence on the US market? Why impose an ill thought-out retroactivity provision? Why be the threatened breach in the DST dam, inviting a disproportionate response to head off others who may have the same idea? Add in the re-arrival of Donald Trump on the political scene and you have a crisis waiting to happen.

Although the implementation of the DST at the end of June, 2025 had been well publicized for a couple of years (and was the subject of a USMCA/CUSMA dispute settlement case under the Biden Administration), it seems to have only caught Donald Trump’s attention on the eve of the scheduled implementation date. Coming right in the middle of an agreed 30-day self-imposed window to reach a bilateral agreement, a timeframe agreed between Carney and Trump at the G7 summit earlier in June, Carney had no choice but to back down. The DST was not the hill to die on.

How did the government allow itself to be so backed into a corner that craven capitulation was the only reasonable outcome? Why not simply suspend the DST’s implementation for a few weeks, kick the can down the road and roll the DST into the bilateral agreement? At worst, use it as negotiating coinage. My guess is that it would likely have ended up on the cutting room floor but at least that concession could have been potentially offset against some other issue of benefit to Canada in the new agreement. What has happened now is that Canada has given up a key card simply for the privilege of being able to stay at the table with the US. What is to stop Trump from announcing next week that something else has to go or else negotiations will end? With his zero-sum approach to negotiations, he could in theory continue to pry concessions out of Canada item-by-item well before any deal is reached, if one is reached at all. It used to be that “nothing is agreed until everything is agreed”. This has now been changed to allow the dominant partner to cherry pick concessions just for the “concession” of keeping talking. We have gone from “elbows up” to “hit me”.

This is the lesson, if any was needed, as to what happens when you are dealing with someone like Donald Trump who has never heard of “principled negotiation” (defined by Google’s AI Overview as “a collaborative approach to conflict resolution that focuses on finding mutually beneficial solutions while preserving relationships”) or “win-win”. It’s all about raw power and today’s deal.

No sooner was the announcement made about rescinding the DST than the pundits jumped in. The University of Ottawa’s Michael Geist crowed that the government had “caved” (on this he was right) and went on to point out all the times in the past he had warned the government this would happen. If there was ever an “I told you so” moment, this was it. (Gee, Michael, if only they had listened to you). He offers the obvious point that the US tech industry doesn’t like paying taxes, especially to little old Canada, so be careful how hard you poke the bear, but offers no solution as to how to deal with the tax avoidance issue. Mind you, as far as I can tell, there has never been much daylight between Dr. Geist’s positions and those of the US tech industry, so I am not surprised. On the other hand, Canadian nationalists like former Foreign Minster Lloyd Axworthy (a member of the same Liberal Party as Mark Carney no less!) called it “forelock-tugging diplomacy”. Commentators Perrin Beatty and Fen Hampson appropriately described it as an “own goal we could do without”.

Personally, I had hoped for a better strategy from this new government. There is no need to gratuitously pull the eagle’s feathers but at the same time, recognizing reality, ensure that when you pick a fight, you don’t find yourself alone in the corner. Or if you have to be pummelled, make sure it is about something fundamental, not just stubbornness over the means of bringing the tech giants to heel. Canada still needs to deal with both disruptions to Canada-US goods and services trade as well as how to appropriately regulate and tax digital services. Caution and realism are important watchwords, but so is sovereignty.  Let’s learn a lesson from this sad chapter and do better next time.

© Hugh Stephens, 2025. All Rights Reserved

The Online Streaming Act Was Already Complicated and Controversial Enough, But Now Quebec Enters the Fray (No Surprise: It’s Happened Before)

An illustration depicting a tug-of-war scenario, featuring a Canadian flag on one side and a Quebec flag on the other, symbolizing the cultural and political tensions between Canada and Quebec.

Tug of War Image: Shutterstock (modified)

Welcome to Canada, where the difficult can become the intractable when you add the inevitable additional ingredient of federal-provincial politics to any policy issue. Throw in the survival of the French language and Quebec culture in Canada and you have another classic Canadian drama. How to ensure that in protecting majority interests you don’t damage minority interests, or put another way, how to govern in the national interest without making a special exception for Quebec that will undermine the federation, especially now that some other provinces, such as Alberta, are playing the “Quebec card”. It has always been a delicate dance to keep the two linguistic groups rowing in the same direction, often accomplished by providing concessions to Quebec that have managed to meet its unique needs while maintaining provincial interoperability and minimum national standards. The latest challenge is broadcasting, or more specifically, streaming—which may or may not meet the definition of broadcasting.

It has been a well-established principle for decades that broadcasting in Canada is regulated by the federal government, although this was initially contentious (as it is once again). Perhaps not surprisingly, the original challenge came from Quebec which passed its own Broadcast Act in April 1929, before any federal legislation in the broadcast space had been enacted. A Royal Commission on Radio Broadcasting had been established by the federal government the year before to examine British and US systems (one leaning heavily toward a national public broadcaster, the other taking the lightly regulated commercial broadcasting route). Quebec quickly seized the initiative before any recommendations were issued by passing its own legislation. The Royal Commission’s findings, known as the Aird Report after Chief Commissioner Sir John Aird, former President of the Canadian Bank of Commerce, were finally issued in November of 1929.

That report recommended a public broadcasting system and laid the foundations for the establishment of the CBC/Radio-Canada. The stock market crash and ensuing Depression delayed action, along with a change of government, but by 1931 the R.B. Bennett government was ready to act. Quebec further forced the issue by passing a provincial Radio Act relating to licensing of receivers and transmitters. The federal government then referred the jurisdictional issue of broadcasting to the Supreme Court of Canada which ruled, 3-2, that broadcasting was a federal responsibility under Section 92(10)(a) of the BNA Act on the grounds that broadcasting was an undertaking, like the telegraph, that extended beyond provincial boundaries. Quebec appealed, but the Privy Council in London upheld the Supreme Court’s decision. The Bennett government then established the Canadian Radio Broadcasting Commission (CRBC), the forerunner of both the public broadcaster, the CBC, and the broadcast and telecoms regulator, the CRTC (Canadian Radio-Television and Telecommunications Commission). Originally national broadcasting was in both official languages but to meet criticisms from Quebec, the CRBC launched French language programming unique to Quebec in 1934, marking the beginning of Radio-Canada’s French language service. An excellent summary of the history of Canadian broadcasting, produced by the Canadian Communications Foundation, can be found here.

Given the fractious history over who should regulate the airwaves, particularly given the importance of communications when it comes to cultural and linguistic identity, it is not surprising that differences have arisen with regard to streaming. The key question is whether streaming constitutes broadcasting. The federal regulator, the CRTC, has always maintained that mass communication transmitted digitally (new media) is a form of broadcasting although for many years it declined to regulate it on the grounds that there was no current need and that regulation might stifle innovation. In 1999, it issued a New Media Exemption Order, the main conclusion of which stated;

“…pursuant to subsection 9(4) of the Act, the Commission exempts persons who carry on, in whole or in part in Canada, broadcasting undertakings of the class consisting of new media broadcasting undertakings, from any or all of the requirements of Part II of the Act or of a regulation thereunder. New media broadcasting undertakings provide broadcasting services delivered and accessed over the Internet,…”

The Exemption Order was extended in 2009, but all that changed with the introduction in 2023 of the Online Streaming Act. That legislation amended the Broadcasting Act to specifically bring streaming content under the purview of the regulator, thus allowing the application of many provisions regarding streaming content, a number of them controversial. In particular it extends CRTC authority over foreign based streamers distributing programming in Canada. While the legislation gave authority to the CRTC (the Commission) to implement key parts of the Act, this will be a slow process as extensive hearings are required. Nonetheless, the Commission fired the first shot almost exactly a year ago, even before hearings had commenced, by requiring “base contributions” of 5% of Canadian revenues from (mostly foreign) streaming services for the creation of Canadian content, including funding to support local news broadcasting in Canada. This occurred prior to the CRTC’s review of how to define Canadian content, and determining who is entitled to claim a Canadian content credit for its creation. In the meantime, the foreign streamers have gone to Federal Court to fight the mandatory “contributions”, and so far not a nickel has been paid.

Another element of the CRTC’s deliberations will be deciding how to implement measures to ensure “discoverability” of Canadian content on streaming platforms. “Discoverability” in a broadcasting/streaming context goes beyond the plain English use of the word. Canadian Heritage (now the Ministry of Canadian Culture and Identity) has published a whole research paper on the technical aspects of discoverability. The paper offers a general definition (“…how content can stand out in order to reach an audience in a universe of hyper choice, where the catalogues of major cultural dissemination platforms offer tens of thousands of titles and products to users..”), but then goes on to point out the difference between content discoverability based on actions aimed at target audiences (such as highlighting certain content), and the use of technical tools or automated systems to showcase content and make it more findable (such as modifying or influencing algorithms). In short, it is a complex issue.

Discoverability was one of the most controversial and misinterpreted aspects of the Online Streaming legislation, then known as Bill C-11. Amendments introduced during the legislative process to encompass user-generated content, requiring that from a platform perspective it too be subject to the discoverability rules, were wildly and inaccurately criticized as internet censorship. Some groups purporting to represent the creative and user communities criticized the discoverability requirements as interfering with market forces and altering algorithmic results. But the Bill passed, including the discoverability requirements, the details of which remain to be established by the CRTC. While this process is underway, Quebec just threw a grenade into the room through the introduction of its own legislation, Bill 109, ”An Act to Affirm the Cultural Sovereignty of Québec and to Enact the Act Respecting the Discoverability of French-Language Cultural Content in the Digital Environment.”

Michael Geist of the University of Ottawa has described the Quebec bill as “unconstitutional, unnecessary and unworkable”, which is a pretty damning but largely accurate indictment. The problem that Quebec is trying to address, as MediaPolicy.ca blogger Howard Law has pointed out, is the “drastic underconsumption of French-language music on streaming platforms, a stunning 4.6 per cent of the top 10,000 song streams in Quebec, a province that is 80 per cent native French speakers.” Compare this to the French-language content requirements imposed by the CRTC on French-language radio stations. These stations must devote at least 65% of all popular music broadcast each week to French-language selections. The CRTC policy, whether it is Canadian content or French-language content, is based on the same premise; if you don’t require a minimum of Cancon/French-language content, the stations will default to non-Canadian, non-French language content. This will deprive Canadian anglophone and francophone artists of exposure and hinder development of “desirable” cultural content. And possibly contribute to weakening the French language in Quebec.

The cultural libertarians would say, so be it. If quotas are required to ensure that Cancon or French-language content gets consumed, then maybe it is not worth listening to or watching. Let the consumer decide (which is essentially how streaming works; the consumer chooses what to consume rather than consuming what is offered). The counter policy argument is that the content industry is so dominated by (take your pick; Hollywood, the major US labels, English language content, etc) that countermeasures are required to balance the playing field and ensure that local cultural content has a chance to breath before it is suffocated by the dominance of outsiders. In a society like Quebec, that represents roughly 7 million francophones in a sea of well over 350 million anglophones in North America, this is an especially critical issue. Will regulating discoverability requirements change the listening or viewing habits of Quebecois, especially young people. I have my doubts, but what is the alternative?

Governments regulate markets in many ways for the greater good, so why not cultural content? In Canada, the whole premise of broadcasting (going back to the 1920s and 1930s), and now streaming, has been to preserve and encourage Canadian voices, whether they be anglophone or francophone. How that should be done and who should do it has always been a tricky question and at times has required a delicate balancing act, sometimes between Canada and the United States, and sometimes between the Canadian federal government and Quebec. It would seem that we are in the midst of another one of those moments. Quebec’s desire to put its thumb on the scale to protect the French language is not new and should not be a surprise, although whether Bill 109 is constitutionally legal and, if it is, whether it will be effective, are valid questions. But we have been here before. As I said at the outset, welcome to Canada.

© Hugh Stephens, 2025. All Rights Reserved.

Copyright, Cultural Issues and Canada’s General Election, 2025

Image: Shutterstock (AI generated)

As we complete the first few days in what is the shortest election campaign in Canadian history, the minimum 37 days required by law, where do the copyright and cultural industries stand with respect to electoral platforms and public consciousness? Given the overwhelming focus on dealing with economic and even potential political disruption coming from south of the border, along with traditional bread and butter issues like the cost of living, especially food and housing, one could be tempted to say that cultural and copyright issues are largely invisible. Party platforms have not yet been released (and are probably still being worked on) and by the time they are made public, the election will be well underway. So while there still may be a couple of small references to copyright issues in party platforms (as occurred in the 2021 election, none of which led to any substantive legislation), they will simply be part of a laundry list of possible actions in many disparate areas. However, that has not stopped the cultural sector from outlining its policy proposals, which have been laid out articulately by the Coalition for the Diversity of Cultural Expressions (CDCE), an umbrella group that represents more than 350,000 creators and artists, and more than 3,000 cultural enterprises. Despite the fact that copyright issues are not at or even near the top of the agenda, there is a strong undercurrent of Canadian nationalism in this election that will inevitably have an influence on policies in the cultural sector.

In 2021 the governing Trudeau Liberals included a promise to “protect Canadian artists, creators and copyright holders by making changes to the Copyright Act including amending the Act to allow resale rights for artists”. They were re-elected but did nothing. The Conservatives for their part undertook “recognize and correct the adverse economic impact for creators and publishers from the uncompensated use of their works…”. They weren’t elected so the commitment was meaningless. This time proposed changes to copyright legislation are unlikely to move the needle for any party although the issue of the unauthorized use of copyrighted content to train AI still needs to be resolved, since AI will become a front-burner issue for any party elected. The CDCE’s paper addresses this issue, among others, in its 9 recommendations. Broken down into 4 buckets, the CDCE’s proposals address (1) International Trade and Cultural Sovereignty (2) Broadcasting and CBC/Radio Canada (3) Copyright and (4) Artificial Intelligence and Culture.

The CDCE proposal under “International Trade” is to insist that the cultural exemption clause be retained if the CUSMA/USMCA is renegotiated, and that cultural activities, goods and services be excluded from all future agreements. The cultural exemption clause, (Article 32.6 of the CUSMA) is based on a similar exemption in NAFTA and the original US-Canada bilateral trade agreement of 1989 but is more of a political fig-leaf than a real protection since if the provision is invoked, the US can retaliate with equivalent effect in any trade sector. However, it provided comfort to the cultural sector at a time when free trade with the US was seen to make Canada vulnerable culturally. Thirty plus years of bilateral, and now trilateral, trade proved that fear to be unfounded—until now—and the cultural exemption has never been used. During the period from 1989 to the present, even through the ups and downs of Trump 1.0, the fundamentals of the initial bilateral Free Trade Agreement, then NAFTA, and now the CUSMA/USMCA were basically respected by all parties. Under Trump 2.0 this has all been called into question. If the Trump Administration is going to disavow the basic elements of the CUSMA, having a cultural exemption clause becomes less than meaningless.

On April 2, the US will unveil its “reciprocal tariff” regime. It has arrogated to itself the right to include, in addition to tariffs imposed by other countries, self identified non-tariff measures in its calculations. Among these may be various cultural support measures imposed by Canada on foreign entities operating in Canada requiring them to make financial contributions to Canadian content. If that happens, the US will be violating yet again the provisions of the CUSMA/USMCA as it has already done with regard to the imposition of tariffs on some products on the specious grounds of fentanyl trafficking from Canada to the US, (less than 20kg in all of 2024). However, given the surge in Canadian nationalism as a result of the tariff threats but more particularly the verbal diarrhea coming daily from President Trump about Canada becoming the 51st state, it is unlikely that any Canadian government would throw Canada’s cultural identity under the bus for the sake of preserving tariff-free access to the US market for some commodities. Thus, seeing Canada sacrifice cultural support measures that may annoy some US businesses operating in Canada (like online streaming content providers) in return for a degree of tariff relief is an unlikely outcome in the present circumstances.

This surge of nationalism relates to the second of the CDCE’s “demands”, protecting the CBC and the Canadian broadcasting environment. Ever since Pierre Poilievre became leader of the opposition Conservative Party, one of the Party’s mantras has been “defund the CBC”. There is no question that the CBC business model is in need of reform, particularly its English language entertainment television service which captures a very small market share, but CBC radio, CBC news broadcasts and CBC’s French language service, Radio-Canada, remain highly relevant, as this CBC explainer attempts to show. Given the need to protect national identity in the face of the Trumpian onslaught, and the recent rediscovery that perhaps Canada is not so “broken” after all, if ever there was a need for this national institution, it is now.

The third basket of issues raised in the CDCE position paper relates to copyright concerns, which get very little traction among the general electorate but are important to the creative and cultural community. Once again, the CDCE reminds parties of the lack of an Artists Resale Right in Canada (noting previous promises to establish this measure), as well as some other longstanding issues like fair remuneration for writers and publishers for the use of their works in the education sector and extending the private copying regime to electronic devices. This would impose a small levy (about $3) paid by manufacturers and embedded in the cost of a smartphone to compensate for unregulated widespread copying of music on these devices, with the funds flowing back to music creators.

The final bucket deals with Artificial Intelligence (AI) and copyrighted content. At the present time there are some 40 lawsuits in the US pitting rightsholders against AI developers, and even a couple of cases in Canada. Canada has been slow off the mark in addressing this issue; at the moment there is no Text and Data Mining exception in Canadian copyright law and both rightsholders and AI developers are not clear on the ground rules. The CDCE is asking that a legislative framework be adopted that includes the key principles of (1) Authorization (by the rightsholder) (2) Remuneration (payment for use of copyrighted content) and (3) Transparency (the establishment of disclosure rules as to what training data is used in AI systems and ensuring that all AI-generated content is clearly identified). These are reasonable asks but there is no guarantee they will be respected.

In the US, AI developers are pushing the Trump Administration to give them a pass on respecting author’s copyright, notwithstanding the cases before the courts, using the argument that the US will lose the AI race to China if US developers cannot help themselves freely to the content of others. OpenAI (which is being sued by the New York Times) and Google argued in submissions to the US government that giving them unfettered access to data, including content owned by others, is essential for national security. Described by blogger David Newhoff as “tech bro bombast”, OpenAI’s attempt to wrap itself in the national security blanket is a cynical ploy to get around the inconvenient fact that it and other AI developers are hijacking the creative work of authors, artists, and musicians without permission or compensation while creating outputs that in a number of cases can compete with or even displace the original works that contributed to their training. A similar situation is developing in the UK where the creative community is pushing back against the original copyright carte blanche that the UK government seemed inclined to give to the tech community, in the name of AI competitiveness. Canadian governments are not beyond succumbing to the siren calls of the AI community and it is timely to establish some guiding principles, of which Authorization, Remuneration and Transparency are a good place to start.

However, while AI and copyright are not going to become election issues, national identity, which is closely intertwined with cultural sovereignty, surely is. Indirectly, copyright will be important as it is one of the foundation stones of cultural sovereignty, an issue that would have played second fiddle to economic issues like food inflation, carbon pricing, cost of housing, fuel and utility costs etc until Donald Trump started spouting his annexationist nonsense.

Frankly, had Trump really wanted to absorb Canada (eventually) he should have brought Canada inside the US economic tent and made the country even more reliant on the US market, by providing it with an exception to his attempts to take on the world trading system. Instead, he has woken Canadians from a restful, dependent slumber brought on by three decades of relatively uncontroversial free trade and economic integration and made them realize that they have no one to depend on but themselves. In doing so, he has revitalized a sense of nationalism that will play out in this election. Who can best defend Canadian interests has become the litmus test for Canadian voters, leading to a remarkable resurgence for the Liberal Party under new leader Mark Carney after the political corpse of Justin Trudeau was removed from the electoral scene. This may or may not change during the course of this short campaign. One thing is certain; while copyright issues per se will not get much profile, cultural identity issues will certainly be in the spotlight. This is a shift in emphasis that in the long run is likely to benefit the creative sector.

© Hugh Stephens, 2025. All Rights Reserved.

Donald Trump’s Tariff Threats: Their Potential Impact on Canada’s Cultural Industries

Image: Shutterstock.com

With a general election in Canada now set for April 28, attention will be focussed south of the border to see what Donald Trump says and does next. Apart from his tiresome and insulting trope about Canada becoming the 51st US state, how best to deal with the economic fallout from the imposition of unilateral US tariffs on Canadian exports to the US will be the big election issue. Indeed, the drumbeat of tariff threats emanating from self-proclaimed “Tariff Man” is becoming overwhelming, both in terms of tariffs already applied, but also regarding potential future tariffs. As we have already seen, the uncertainty and almost daily changes, (government by tweet), are roiling markets and undermining investor confidence. With respect to Canada there have been repeated threats of what is to come while some tariffs, such as those on steel and aluminum that were applied globally, are already in force. Then there are the threatened 25% tariffs on all Canadian (and Mexican) imports, except for energy products which will be taxed at a 10% level, imposing additional costs on US consumers. (The example of potash, an essential product needed by American farmers is an interesting case study. It is basically only available from Canada, unless you import it from Russia, Belarus or China. The US does produce a small amount but 85% of US potash consumption comes from Canada. So much for President Trump’s mantra that Canada has nothing the US needs. When US farmers squealed loudly, the duties on potash were suddenly lowered from 25% to 10% and then suspended completely under an exemption for all products covered by CUSMA).

The 25% tariffs designed to hinder the export of automobiles and car parts (amongst other products) manufactured in Canada from being shipped to the US —a measure which incidentally contravenes the terms of the US-Canada-Mexico Agreement (USMCA/CUSMA)—are temporarily on suspension given the representations made by US auto manufacturers who had to explain to the White House how integrated North American supply chains work, but any products not covered by USMCA/CUSMA are still subject to the 25% tariff. The pretext for this violation of a ratified trilateral trade agreement is supposedly the “national emergency” created by the flow of fentanyl and illegal immigrants from Mexico and Canada. The only problem with this rationale is that, in the case of Canada,  there is a greater flow of illegals from the US to Canada than vice versa, and the seizures of fentanyl at the northern border by US officials in 2024 totalled less than 20 kilos, less than one percent of the amount seized on the southern border. Thirteen grams (that’s less than half an ounce) were seized in January. This year, US border officials have caught more people smuggling eggs from Canada into the US (where the price of eggs has shot up owing to avian influenza in US poultry flocks) than fentanyl. But the facts appear irrelevant to the Trump Administration; what is important is to create a pretext to violate the USMCA.

That pretext was used to trigger the International Emergency Economic Powers Act (IEEPA). This legislation allows the President “to deal with any unusual and extraordinary threat, which has its source in whole or substantial part outside the United States, to the national security, foreign policy, or economy of the United States”. It was first enacted in 1977 and is designed to deal with acts of terrorism or other threats to the security of the United States. It confers wide, albeit temporary, powers on the Executive Branch and has been used in situations like the Iran hostage crisis in 1979, the Soviet invasion of Afghanistan and to deal with various identified terrorist groups. Using it to punish Canada because under 20 kg (43 lbs). of fentanyl were seized in the course of a year at the Canada-US border is clearly an abuse of the intent of the Act. Notwithstanding, that is what Trump used to impose USMCA noncompliant tariffs on Canada.

The temporary suspension of the 25% tariffs on Canadian (and Mexican) imports will apparently end on April 2, when Trump plans to impose reciprocal tariffs on a global basis. How these will be calculated is anyone’s guess. The President has indicated that in addition to whatever tariff irritant he can find, he might also include other measures in US calculations that in his view discriminate against US goods and services. Thus, while most US products enter Canada tariff free (with the notable and unfortunate exception of most dairy products, which are subject to Canada’s outdated supply management system), Trump could take aim at other policies he doesn’t like. For example, while many US banks operate in Canada, none of them are full-service retail banks allowed to take deposits (but nor are they required to have the same capital requirements). Then there is the fact that Canada, like the EU, imposes a value-added tax (VAT) on most products (basic foodstuffs being the primary exception), called the GST (Goods and Services Tax). This is another potential target even though it is applied without discrimination to US, Canadian or products from any other country. Likewise, longstanding measures that provide protection and subsidies for Canadian cultural industries, like broadcasting (AV and music) content quotas or more recent mandatory financial contributions to Canadian content funds, along with funding obligations to support local journalism, could potentially become targets.

Would Google try to reopen the commitments it finally made to support Canadian journalism in order to avoid designation under the Online News Act? Will the mandatory “contributions” to Canadian content creation that the CRTC has imposed on foreign streamers become an issue? A prominent US trade association, the Computer and Communications Industry Association (CCIA), went so far as to claim that ”the CRTC’s structure of mandatory contributions contravenes Canada’s commitments to the United States under CUSMA”. While I think that claim is doubtful, if the Trump Administration regards the CUSMA as just a piece of paper to be ignored at will, US industries should think twice about using it as a lever against Canada. In any event, in my view the best approach is to continue to stress the value of cooperation and mutual benefit, as Canada has been trying to do by explaining to the Trump Administration why tariffs are self-defeating. In terms of AV production, the contribution that US content producers make to the Canadian production industry is significant even if there are disagreements about the extent to which US production in Canada helps or hinders creation and distribution of Canadian content.

It is important to note that all countries impose investment or trade restrictions of one sort or another, and the US is no exception. These restrictions are weighed in terms of the balance of reciprocal benefits when trade agreements are negotiated, including the current USMCA/CUSMA signed by Trump himself in his first term. But if you are not inclined to respect the commitments you have made, and intend to ignore carefully negotiated and signed treaties, then any domestic measure can become a target. Uncertainty as to what could happen next is a major concern. Two Canadian cultural industries that are keeping their heads down and hoping for the best are art dealers and book publishing.

Earlier this month, the Globe and Mail reported that art dealers and galleries are facing slowdowns in the face of the uncertainty brought about by the Trump tariff threats. Books, art and other informational materials were granted an exemption when Trump first imposed the tariffs on Canada, using the excuse of fentanyl trafficking. Buried within the legislation used to suspend USMCA/CUSMA obligations, (the IEEPA referred to in paragraph 3 above) is a provision that creates certain exceptions, amongst which is “any information or informational materials, including but not limited to, publications, films, posters, phonograph records, photographs, microfilms, microfiche, tapes, compact disks, CD ROMs, artworks, and news wire feeds”, unless controlled by some other authority. (Section 1702 (b)(3)). While US Customs noted the exception when publishing its Notice of Implementation, the on-again/off-again tariff implementation has created anxiety and uncertainty, not least of which is the possibility that any random Customs officer can hold up a shipment based on an individual (mis)interpretation of the regulations. Compounding the issue is the announcement by Canada of 25% retaliatory tariffs that include, among other things (the targets of the retaliation are wide covering everything from toilet paper to drones), “Paintings, drawings and pastels, executed entirely by hand”.

Book publishers are also exempted under the IEEPA and are keeping their heads down, as noted by another article in the Globe. Many Canadian publishers do not ship much to the US but some do, including companies that are exclusively printers rather than full service publishers. In the case of Friesens Corp, a printer in Manitoba, the bulk of their business is from US customers. However, now a new threat has risen for Canada’s independent book sellers. Books have been included on Canada’s retaliation list, and if books from the US are subjected to a 25% retaliatory tariff, the cost will be passed on to bookstores, and ultimately consumers. Independent bookstores already work on very thin margins and an additional charge will likely affect sales. Harm to Canadian business and consumers is the flipside of punishing US exporters, just as harm to US consumers will result from US tariffs on imports. Surely it would be best to leave a cultural product like books out of the trade war.

What happens next with regard to tariffs on exports to the US, from Canada or elsewhere, seems to depend on Donald Trump’s mood of the day. The expected announcement of “reciprocal tariffs” on April 2 will create further uncertainty and likely retaliation, further feeding the spiralling trade war. The fact that import tariffs are levied on the importer and are largely passed on to consumers seems not to have registered with the Trump Administration. They can certainly raise revenues, but if the end goal is to impede imports so that all production is reshored to the US, then presumably the revenue windfall (largely ultimately paid for by US consumers) will ultimately disappear. To depend on tariff revenues to fund more tax cuts in the US is ultimately a self-defeating strategy. In the meantime, the US economy will have suffered the impact of increased prices on all imported goods.

The Trump tariffs have had the effect of causing maximum disruption and chaos, and if that was the goal, then Donald Trump has succeeded. In the meantime, Canadians have until April 28 to figure out which political party and leader is best equipped to help navigate the treacherous waters ahead. Whatever happens, copyright and cultural industries are unlikely to escape getting wet.

© Hugh Stephens, 2025. All Rights Reserved.

This post has been updated to include reference to potential Canadian retaliatory tariffs on US book imports and the impact this will have on independent bookshops in Canada.

Donald Trump’s Punitive Tariffs on Canada: A Personal Commentary

Image: CBC

This blog post is an “extra”. It is tangentially copyright-related (after all, this is supposed to be a copyright blog) but I will admit it’s essentially a non-copyright personal opinion piece. I was incentivized to write it as a result of various conversations I have had with friends and colleagues during this past weekend about the impact and rationale behind Donald Trump’s punitive tariffs on Canada.

Do President Trump’s 25% tariffs on all imports from Canada (except for oil and gas which will be tariffed at 10%) have anything to do with copyright? The short answer is “probably not”, although judging from the vindictiveness of the President toward Canada, as well as an apparent inability to understand how international business is actually conducted, I wouldn’t rule out him finding some excuse to make life difficult for US studios that produce films in Canada, or for Canada to retaliate against US content providers as it desperately searches for a way to get the message through to anyone south of the border who may have Trump’s ear. In either case this would be a mistake. Hollywood is an unlikely source of influence on the President, although Silicon Valley might be a more likely prospect. Both Canada and the US film and TV industry have benefited from having the option of producing in Canada. It’s called win/win, a formula that seems alien to the current President.

So, there could be (but hopefully not) an impact on copyright industries from the fallout from the economic war Trump has declared on Canada, and the inevitable retaliation. (Canada’s initial retaliation list focussed primarily on foodstuffs, appliances and clothing, not affecting copyright industries). Economically, retaliation is a bad idea, inflicting pain on your trading partner but also causing a degree of self-harm. However, in the world of trade negotiations, it is inevitable and frankly is the only thing that Canada can do other than to turn the other cheek and say, “Hit me again”.

However, beyond the world of copyright that I usually write about lies another world, the world of international trade and security, a space in which alliances, cooperation, and mutual respect among trading partners are important. It is what is happening in this world that I want to talk about briefly today, from a personal perspective.

The announcement of the Trump tariffs on Canada has to be just about the most short-sighted policy announcement imaginable. As the Wall Street Journal put it, this is the “dumbest trade war in history”. Not only that, it is a blatant violation of US trade and treaty obligations under the USMCA/CUSMA. What is driving Trump to punish Canada, other than personal spite, is hard to fathom.

Forty years ago, Canada embarked on the path of economic cooperation and integration with the United States through the negotiation of the Canada-US Free Trade Agreement, overcoming decades of suspicion and various failed attempts to establish Canadian manufacturing in a small market behind high protective tariff walls. I was involved in a minor way, buried in the trade bureaucracy of the Department of Foreign Affairs and International Trade, and later the Trade Negotiations Office. It was a big roll of the dice for Canada, giving up quite a bit of economic sovereignty in exchange for agreed rules on market access. Both sides negotiated hard, but at the eleventh hour finally got to “yes”. It was a big step forward, promising greater prosperity on both sides of the border. We believed that when the US made commitments, it would respect them. Silly us.

There were economic advantages for Canada to develop an integrated market with the United States, but there were also important advantages for the US and US business. Production could be specialized where it was most economically and geographically advantageous to do so, supply chains could be integrated, tariffs would be (mostly) eliminated and the border would not impede business. Within the agreed rules, people and goods could move freely. US auto companies in particular, (Ford, GM and (then) Chrysler), were particular beneficiaries, but so were consumers in both countries. The rules around this grand bargain were ratified in the form of a treaty, later expanded to include Mexico. The objective was to minimize disruptions and where disagreements occurred, to settle them through a fair and impartial dispute settlement process in a timely way. This process was renewed under the USMCA/CUSMA, signed by Donald Trump in 2018. What Trump is doing now is effectively tearing up the commitments he made and which have been respected since the late 1980s, through both Republican and Democratic administrations.

The legal excuse being put forward for this trade war is the “national emergency” of fentanyl and illegal migrants. The USMCA does have provision for a national security override, Article 32.2.1.(b) which says;

“Nothing in this Agreement shall be construed to..preclude a Party from applying measures that it considers necessary for the…protection of its own essential security interests.”

By invoking fentanyl and migration as “essential security interests” to justify his actions, Donald Trump is seeking to manufacture a pretext–at least insofar as Canada is concerned–allowing him to renege on US trade commitments enshrined in a Congressionally-ratified treaty that he signed. If there is a crisis, the problem does not lie with Canada. Last year exactly 19.5 kg of fentanyl (43 lbs) was seized at the Canadian border, less than 1% of the total seized at the Mexican border (21,148 lbs). In terms of illegal migration, US Customs and Border Patrol apprehended just under 24,000 illegal migrants coming into the US from Canada (Canada apprehended a greater number trying to sneak into Canada from the US, so the flow of illegals from Canada to the US was actually below zero). By contrast, on the Mexican border, about 1.5 million migrants were arrested by US authorities. Again, the Canadian border “problem” was about 1% of the total of migrants on the southern border. (I am not trying to trash Mexico but simply demonstrate how the rationale put forward to impose the tariffs on both countries is wildly disproportionate when it comes to Canada). How can Trump with a straight face use this “national emergency” as an excuse to try to cripple the economy of a friendly neighbour, an ally, and the largest customer for manufactured US goods globally? (Canada is the top export market for 34 states). Because he can, I guess.

It is apparent that facts have not been allowed to get in the way of what appears to be a personal vendetta. In fact, it appears that Trump is convinced in his own mind that Canada should not exist as a nation. His repetitive and insulting trolling of Prime Minister Trudeau as “Governor” Trudeau and the belief that Canada should become the 51st state is both tiresome and insulting. (Parenthetically, if Canadians ever agreed to become part of the US, why should Canadians settle for just two Senators? After all, the Province of Ontario has a larger population than 46 of the 50 US states, not to mention that Canada is the second largest country on the planet geographically). In reluctantly announcing retaliatory tariffs, which will hurt American workers and consumers, Justin Trudeau made a plea to Americans, recalling the famous words of John F. Kennedy;

“Geography has made us neighbours, history has made us friends, economics has made us partners and necessity has made us allies.”

These wise words are worth recalling. It is estimated that the tariffs, if sustained, will tip Canada into recession, increase the unemployment rate, shave several points off GDP and lead to a further drop in the Canadian dollar. As Ontario Premier Doug Ford put it, “he’s coming after our families and our jobs”. There will be negative impact on the US economy as well, but the unanswered question is “why would you want to deliberately destabilize your friend and ally, best customer and neighbour?”. Is it not in the interests of the US to have a prosperous, reliable, stable and friendly neighbour on its northern border? I would have thought so.

The current situation causes me both great sadness and repressed anger. Sadness because, like many Canadians, I have spent considerable time in the US and in the company of Americans. I grew up not too far from the border like many Canadians, so US television was part of my mispent youth. I attended grad school in the US. I have taken a number of holidays in various parts of the US. During my years on many foreign postings in Canada’s foreign service, I worked with and cooperated closely with my US colleagues in similarly located American embassies. Later I worked for a US company and had, and still have, many American friends and former colleagues. I have never detected any animosity toward Canada or Canadians. Thus I simply cannot believe that when he was elected, Donald Trump was given a mandate to go after Canada. But that is what he has done.

As I said at the beginning of this post, there is not much here related to copyright–but I needed to get this off my chest. I hope that saner heads will prevail, but much damage has already been done in Canada to the goodwill and trust that has long existed between Canadians and Americans. I wish it were otherwise. Maybe one day it will be again.

© Hugh Stephens, 2025.

Just before posting this, news reports indicated that President Trump had agreed to pause the imposition of tariffs on Canadian goods for 30 days after speaking with Prime Minister Trudeau. They were to have gone into effect tomorrow (February 4). Earlier he did the same for Mexico. While a temporary reprieve, this really doesn’t change much.

Hijacking a Musician’s Identity to Promote AI-generated Music Isn’t Copyright Infringement: It’s Outright Fraud

Image: Shutterstock.com

Early last week there was a flurry of articles, including one on Billboard, reporting on the strange case of Nova Scotia musician Ian Janes. Janes discovered that his Spotify artist profile included music that wasn’t his and which he hadn’t recorded. Someone had apparently created “Musak-like” AI-generated tracks and had added an album, named Street Alone, to Janes’ artist profile as a way of boosting the album’s take-up. How they did this is not clear although they must have hacked the system in some way. Janes had Street Alone removed from his profile, although it reportedly remains up on Spotify but not under his profile.

One assumes if the AI album was surreptitiously posted to Janes’ account, it could also have been added to the profile of other artists. Janes stated that the person or entity doing the posting could actually be getting any royalties the album is earning because payments are normally made through a distributor who could be directing royalty payments, such as they are, to the fake artist. (Not that they are likely to get rich. There is a 1000 track minimum streaming requirement on Spotify before any royalties are paid, and given Spotify’s track record of paying approximately $3.00 per 1000 streams, it takes over 33,000 streams for an artist to earn the princely sum of $100). However, the fake listing could also boost the stream count of the album, raising its profile in the algorithm. In effect, it appears that someone is hijacking the profile of a known artist to promote low grade AI-generated music. Is this legal? No, it’s not, but why not? Does copyright law help?

Billboard reports that Janes’ lawyer lamented it’s not technically a copyright violation unless the music uses Janes’ likeness or his actual compositions. No one has copied his music; they have just claimed he wrote and performed a piece which he had nothing to do with. Another publication (allaboutai.com) claims this case has revealed significant gaps in Canadian copyright laws, which primarily address human-created works, noting that “Current statutes do not fully account for the complexities of AI-generated content”. This is true, as I pointed out recently in a blog post on the issue of the loophole in Canadian copyright practices that allows registration of AI-generated works even though it is generally accepted that such works do not receive copyright protection under Canadian law. Here we may have an example of an anonymously created AI-generated work trying to find a recognized human artist to associate with. While there is a tangential relationship to copyright, this story is not about copying a specific work or illegally generating income from a copy. It is about the droit d’auteur, the integrity of an author’s or artist’s work and their reputation. In this case, the key issue is the potential damage to Janes’ reputation if inferior work is passed off under his name.

However, copyright law (in Canada or elsewhere) does not specifically include the ability to protect one’s identity or name. A name or identity cannot be copyrighted–although a work by that person can be. Nonetheless, there are some forms of legal protection available. A related concept known as the right of publicity (or right of personality) affords some protection. In Canada, this either falls under provincial privacy laws (BC, SK, MB and NL) or common law principles of defamation. In the US there are laws protecting publicity rights in some states. Another way to protect one’s identity and image is to register it as a trademark, although this is usually done by well-known personalities. There are various requirements such as demonstrating a record of marketing products that use the trademark designation. (Michael Jordan shoes, Frida Kahlo dolls, even Fred Perry tennis shorts—remember him?). But in my view Janes should not have to trademark his name and identity, nor should he have to resort to defamation or privacy laws. To me, perhaps simplistically, this case is about fraud, producing a fake product and passing it off as the real thing.

Under the Criminal Code of Canada, fraud is defined as depriving someone of “any property, money, or valuable security or any service…by deceit, falsehood or other fraudulent means…”. Recently I wrote about the scandal of the Norval Morrisseau art fraud. The principal perpetrator, David Voss, was sentenced to five years in jail for the fraud (technically he pleaded guilty to forgery) while his co-accused Gary Lamont was convicted of forgery and defrauding the public. In sentencing, the judge in the case focused as much on the damage to Morrisseau’s legacy and reputation caused by the fraud as to the harm suffered by those who had purchased fake paintings. Surely the same is true of Janes, or any other musician, whose work is tainted by false claims that a shoddy piece of music was produced by them. The fraud per se would have been perpetrated against a Spotify user who thought they were playing Janes’ music, but the real fraud was perpetrated against the artist, their work and their reputation.

There are examples of fraudulent works where the false attribution of author is also a copyright violation, as in the case of the plethora of Chinese knockoffs of J.K. Rowlings’ Harry Potter works. For example, Harry Potter and the Walk-up Leopard Dragon and Harry Potter and the Chinese Porcelain Doll, both published in Chinese but labelled as being written by Rowlings, were fraudulent works, total fakes, but under US law they also violated Rowlings’ copyright so that is what Warner Bros. used to shut them down. They were unauthorized derivative works. But the definition of a derivative work is much narrower in Canada, as explained here, in this post by Carson Law. In the case of Janes, none of his works was copied or infringed, only his identity and name were misused so, as noted by his lawyer, there are apparently no grounds for bringing a copyright infringement case in Canada. But claiming that a random work was produced by someone who had nothing to do with it is clearly misrepresentation and deceit, in short, fraudulent activity.

Will anyone do anything about it? Of course not. It took two decades and a documentary film that fully exposed what was going on to shame the Canadian authorities into doing something about the Morrisseau fraud. It was only through the dogged determination of one detective in the Thunder Bay Police Service (Sgt. Jason Rybek) that action was finally taken.

The conjunction of AI-generated music (which has no copyright protection), online platforms that market tracks from literally millions of artists (it is estimated there are 11 million artists on Spotify), combined with the ingenuity of hackers who have been able to successfully post ersatz music to legitimate Spotify accounts as a way to promote machine generated tracks, has created a perfect storm allowing for these kind of shenanigans. The damage is done to legitimate artists–who have a tough enough time as it is to profile their music– without having to carry the burden of inadvertently promoting someone else’s musical garbage. To willingly assert that your work is the creation of someone else, whether it is music generated by AI, or paintings produced from a sophisticated “paint by numbers” scheme as in the case of the Morrisseau forgeries, is surely outright fraud. The real artist pays the price. And that’s not fair.

© Hugh Stephens, 2025. All Rights Reserved

This blog post was updated to include reference to Spotify’s payouts in the second paragraph.

Digital Platforms and News Content: Australia Takes Off the Gloves

Image: Shutterstock

Canada infamously tried to take a leaf from Australia’s book in dealing with large internet platforms, like Google and Meta, that benefit from news media content without paying for it. In 2023, Canada introduced the Online News Act (Bill C-18), a Canadian version of Australia’s News Media Bargaining Code. The Australian approach, first introduced through legislation in late 2021, was initially very successful. Rod Sims, the author of the Code from his then position as Commissioner of the Australian Competition and Consumer Commission (ACCC), testified before the Canadian House of Commons Committee studying C-18, pointing to the success of the initiative in generating some AUD200 million in financial support for Australian media annually. Although there had been pushback by both Google and Meta in Australia, both eventually came onside, especially after the spectacular flop of Meta’s news blackout campaign. The threat of being designated under the Australian code was enough to get the two platforms to negotiate agreements with most Australian media in the form of funding to support journalistic output. As a result of the agreements reached, neither platform was designated under the Code and thus was not subject to “final offer” arbitration imposed by the ACCC.

Canada thought it would “improve” on the Australian precedent by making the process somewhat more transparent in terms of funding offers, and by requiring the platforms to self-designate. Whether it was the tweaked Canadian legislation or, more likely, a reappraisal of the value and cost of the agreements (particularly when it became apparent that the Australian precedent was likely to be followed elsewhere, with Canada being the first out of the gate), both platforms dug in. Meta in particular refused to engage with the Canadian process and declared that it would “comply” with the legislation by removing all links to Canadian media. That is not what the Government of Canada or Canadian media had in mind when Bill C-18 was introduced. Meta has held that line, although the extent to which it is fully complying is under review by the regulator, the CRTC. Various workarounds to allow news content to appear on Facebook have been employed by both Facebook users and some news providers, and META seems willling to turn a blind eye. Why that doesn’t trigger the Online News Act requirement to reach funding agreements with news content providers is a question that cries out for a response. (CRTC take note: We are waiting).

Google was slightly more amenable to striking a deal with the Government of Canada, agreeing that in return for exemption from the legislation, it would contribute $100 million (CAD) annually for five years (adjusted to inflation) to a fund that would provide support to qualified Canadian media enterprises. The $100 million subsumes existing contributions Google was already making to some Canadian journalism programs, so the net result is not $100 million in new money. Google has now begun to disburse this funding through the Canadian Journalism Collective (CJC), an entity established by what could legitimately be called “non mainstream media”, i.e. many small digital startups. The CJC was selected by Google as the executing agency for its funding, thus snubbing the organization representing the major media enterprises, News Media Canada. There are likely to be disputes over whether some of the “little guys” actually qualify as bona fide journalists. The more mouths there are to feed, the less there is for each supplicant and the big players are not happy to see the Google revenue stream diluted.

Meanwhile, back in Oz, Meta has announced that once they expire it will not renew the media agreements it reached back in 2022. Many will end this year. It appears Meta has decided it will adopt a consistent global position by insisting that news media content provides it with no value. Zero. None. And therefore it will not pay a cent. In part, this is to head off similar moves in the US where news media providers would like to bring in an arrangement similar to that instituted in Australia, or Canada. A separate initiative in California ended up with an outcome close to the one in Canada, with Google reluctantly agreeing to contribute funding to local journalism while Meta walked away. The Australian government has seen where this is heading, and it is not happy. It is taking the gloves off.

The Albanese government has announced it will be taking measures to require that any internet company that refuses to negotiate with publishers or removes news from its platform will be forced to pay, regardless. This is the big stick to counter META. What happens next is a consultation process, beginning now, to determine how what is being called a “news bargaining incentive” will actually be applied, retroactive to January 1. All digital platforms with annual revenues of AUD250 million annually will likely be subject to it. This will expand the net to include ByteDance (Tik Tok) and Microsoft (Bing, LinkedIn) as well as META and Google. Google has already said it will carry on and will renew the deals it signed with Australian media, allowing it to be exempted under the Code. META is not backing down.

The so-called “incentive” will take the form of a discounted penalty or fine. The initial proposal is that companies that sign deals amounting to 90% or more of the total of the fine that would otherwise be levied will be exempt. In other words, find ways to strike deals that in the end will save you money. Simply refusing to carry news content, as META has done in Canada, will not let a designated platform off the hook, a significant variation from the Canadian legislation, which many have criticized as being flawed. Rod Sims, now back in academia, fully supports the new incentive initiative. It appears the only way META can avoid payment is by closing its business in Australia. Given META’s track record, this might even be a card it is prepared to play. One can expect it to pull out all the stops to oppose the “incentive”, from legal challenges to threatening a pullout to seeking to invoke the support of the Trump Administration.

What position will the Trump Administration adopt? Donald Trump certainly has no love for the news media, as evidenced by his current and threatened lawsuits against US media outlets for providing coverage he doesn’t like. On the other hand, NewsCorp, which has strong holdings in Australia, has in recent years built its reputation and business model on catering to Trump’s vanity and desires. Trump also is not fan of Facebook, but Mark Zuckerberg has smelled the coffee and has donated a $1 million to Trump’s inauguration, after having kissed the ring by dining with the President-elect at Mar-a-Lago. So in the end, who knows where the US government will be on this question? All I can say to the Australian government’s expressed intention to deal head-on with META’s scorched-earth tactics is “good on ya, mate”. I wish Canada had the gumption to do the same.

© Hugh Stephens, 2025. All Rights Reserved.

Looking Back at 2024: It’s All About AI and Copyright (And a Few Other Things)

Image: Shutterstock

A retrospective on the year now coming to a close is what one expects this time of year, so I will try not to disappoint. However, when I look back at the copyright developments I wrote about in 2024, the dominant issues that jump out are AI, AI and AI. You can’t read or think about copyright without Artificial Intelligence, or to be more correct, Generative Artificial Intelligence (GAI), occupying most of the space despite many other issues on the copyright agenda. The mantra of “AI, AI and AI”, as in “Location, Location and Location” is apt because there are at least three important copyright dimensions related to AI; training of AI models; copyright protection for outputs generated by AI; and infringement of copyright by works created with or by AI. Of the three, the use of copyrighted content for AI training is the most salient.

Last year in my year-ender, I also discussed AI and the numerous lawsuits that were emerging as rightsholders pushed back on having their content vacuumed up by AI developers to train their algorithms. Those lawsuits have only multiplied. At last count, there are more that 30 cases in the US, ranging from big media vs big AI (New York Times v OpenAI/Microsoft) to class action suits brought by artists and authors, as well as litigation in the UK, EU, and now in Canada (see here and here). That is just on the input side.

In terms of output, i.e. whether works produced by an AI can be copyrighted, there are a couple of interesting cases in the US where applications for copyright registration have been refused by the US Copyright Office (USCO) because of a lack of human creativity. A couple of months ago, I discussed two such high profile cases, one brought by Stephen Thaler, and the other by Jason Allen. To date the USCO is not budging, although it is undertaking an extensive study of the issue. Part 1 of its study, on digital replicas, was published in July of this year. The next section on copyrightability is expected to be published in January with the issues of ingestion for training and licensing in Q1 2025.

While the USCO has to date denied applications for copyright registration of AI-generated works, the Canadian copyright office (CIPO-Canadian Intellectual Property Office) has been caught up in a problem of its own making. This is because Canadian copyright registration is granted automatically, so long as tombstone data and the prescribed fee is provided. The work for which registration is sought is not examined. As a result, copyright certificates have been issued to works created by AI, notwithstanding the general presumption that copyright protection is only accorded to human created work (although this is not explicitly stated in the Act). In July a legal challenge was launched against copyright registrant Ankit Sahni, who successfully registered a work with CIPO claiming an AI as co-author. The case was brought by the Canadian Internet Policy and Public Interest Clinic (CIPPIC) at the University of Ottawa, as I wrote about here. (Canadian Copyright Registration and AI-Created Works: It’s Time to Close the Loophole).

While the courts in the US, UK, Canada and elsewhere are grappling with various issues related to AI and copyright, governments are studying the issue.

In Australia, the Select Committee on Adopting Artificial Intelligence issued its final report in November. While the report was wide-ranging, three of its recommendations related to copyright;

• engagement with the creative Industry to address unauthorized use of their works by AI developers and tech companies,

• transparency in Training Data by requiring AI developers to disclose the use of copyrighted works in training datasets and ensure proper licensing and payment for these works, and

• remuneration for AI Outputs, with an appropriate mechanism to be determined through further consultation

These are important principles, but how they will be implemented in practice remains to be determined.

In Canada, a consultation on AI and copyright was launched late in 2023 with submissions to be received by January 15, 2024. The Canadian cultural community put forth three key demands;

• No weakening of copyright protection for works currently protected (i.e. no exception for text and data mining to use copyrighted works without authorization to train AI systems)

• Copyright must continue to protect only works created by humans (AI generated works should not qualify)

• AI developers should be required to be transparent and disclose what works have been ingested as part of the training process (transparency and disclosure).

Submissions to the consultation were published in mid-year but since then there has been no apparent action. Given the current political crisis facing the Trudeau government, none is expected in the near term although the issue will inevitably have to be addressed after the general election in 2025.

While the EU has already established some parameters dealing with use of copyrighted materials for AI training, the new UK Labour government is taking another run at the issue after various proposals in Britain to find a modus vivendi between the AI and content industries under the Tories went nowhere. The current UK discussion paper on Copyright and Artificial Intelligence, which seems excessively tilted in favour of the AI industry, has aroused plenty of controversy. While it says some of the right things, such as proclaiming that one of the objectives of the consultation is to “support…right holders’ control of their content and ability to be remunerated for its use” the thrust of the paper is to find ways to encourage the AI industry to undertake more research in the UK by establishing a more permissive regime with respect to use of copyrighted content. It is based on three self-declared principles; (notice how these things always seem to come in threes?);

• Control: Right holders should have control over, and be able to license and seek remuneration for, the use of their content by AI models

• Access: AI developers should be able to access and use large volumes of online content to train their models easily, lawfully and without infringing copyright, and

• Transparency: The copyright framework should be clear and make sense to its users, with greater transparency about works used to train AI models, and their outputs.

These three objectives then lead to what is clearly the preferred solution;

“A data mining exception which allows right holders to reserve their rights, underpinned by supporting measures on transparency”

Fine in principle, but the devil is always in the detail and the details in this case revolve around transparency (how detailed, what form, what about content already taken?) and, in particular, reservation of rights, aka “opting out”. This is easy to proclaim in principle but difficult to do in practice. British creators are up in arms, led by artists such as Paul McCartney, and supported by the creative industries in the US. The British composer Ed Newton-Rex has penned a brilliant satire explaining how AI development in the UK will work if current proposal is enacted. The problem with an opt-out solution is essentially twofold; it doesn’t deal with content already absorbed by AI developers and it would be cumbersome if not impossible for many rightsholders to use.

Other governments have addressed the issue in different ways. Singapore has taken a very loose approach toward copyright protection, putting its thumb firmly on the scale in favour of AI developers. It is currently considering additional proposals that would strip even more protection from rights-holders, who are pushing back strongly. Japan had been widely and incorrectly reported to have been on the same path, resulting in a welcome clarification this year from the Agency for Cultural Affairs regarding the limits of Japan’s text and data mining (TDM) exception.

While AI dominated the copyright agenda in 2024, there were other issues relating to copyright and copyright industries that I wrote about. The ongoing question of payment for news content by large digital platforms continued to play out in different ways. In Canada, the struggle between the government and US tech giants Google and META was finally “resolved” (after a fashion) at the end of last year. Google agreed to “voluntarily” pay $100 million annually into a fund for Canadian journalism in return for being exempted from the Online News Act (ONA) while META called the government’s bluff by blocking Canadian news providers from its platform thus, in theory, avoiding being subject to the ONA. However, META has a very subjective interpretation as to what is Canadian news content, allowing some news providers to post to it, while many users have found workarounds, as documented by McGill’s Media Ecosystem Observatory. While the CRTC investigated, the issue is still unresolved.

Meanwhile in Australia, it seems that META intends to go down the same road of blocking news, announcing it will not renew the content deals it initially signed with Australian media in response to Australia’s News Media Bargaining Code, the model upon which Canada’s legislation was based. Unlike in Canada, the Australian government is planning a robust response. (More on this in a future blog post). Finally, on the same topic, California (which was threatening to introduce its own version of legislation to require digital platforms to compensate news content providers) emerged with an outcome very similar to that reached in Canada, with Google offering up some funding (although proportionally less than in Canada) while META appears to have walked away.

Controlled Digital Lending (CDL) was another copyright issue finally settled in 2024 (in the US). The Internet Archive, after losing a lawsuit brought against it by a consortium of publishers who argued that the digital copying of their works constituted copyright infringement, notwithstanding the Archive’s theory that they were simply lending a digital version of a legally obtained physical work held by them (or someone else associated with them), lost its appeal. In December, the deadline for further appeals expired, thus effectively ending this saga. Whether Canadian university libraries, some of whom are avid devotees of CDL, will take note remains to be seen.

The issue of circumventing a TPM (“Technological Protection Measure”), commonly referred to as a “digital lock” and often represented by a password allowing access to content behind a paywall, was also front and centre this year in Canada. In the case of Blacklock’s Reporter v Attorney General for Canada, the Federal Court found that an employee of Parks Canada, who shared a single subscription to Blacklock’s with a number of other employees by providing them with the password did not infringe Blacklock’s copyright since the employee did not circumvent (in the meaning of the law) the TPM and the purpose of the sharing was for “research“, which is a specified fair dealing purpose. Blacklock’s is a digital research service that sells access to its content and protects its content with a paywall, as is common for many online content providers, like magazines and newspapers.

Despite the hoo-ha of anti-copyright commentators asserting the Court had found that “digital lock rules do not trump fair dealing“, it was equally clear the Court had ruled that fair dealing does not trump digital locks (TPMs). The Court did not undermine the protection afforded to businesses to protect their content through use of TPMs. Rather, it determined that sharing a licitly obtained password did not constitute circumvention as outlined in the Act, as I explained here. (Fair Dealing, Passwords and Technological Protection Measures (TPMs) in Canada: Federal Court Confirms Fair Dealing Does Not Trump TPMs (Digital Lock Rules). Although the Court did not legitimize circumvention of a TPM for fair dealing purposes, contrary to claims stating the opposite, its acceptance of password sharing is an outcome that legal experts have disagreed with, (as do I for what it is worth). The law is very clear that fair dealing cannot be used as a pretext or a defence against violation of the anti-circumvention provisions of the Copyright Act. The decision now under appeal by Blacklock’s.

Finally, the last copyright point of note for 2024 is that this year marked the bicentenary of the introduction of the first copyright legislation in Canada, in the Assembly of Lower Canada, in 1824. It also marked the centenary of the entry in force of the first truly Canadian Copyright Act on January 1, 1924. This two hundred years of domestic copyright history is worth celebrating. The first legislation was introduced “for the Encouragement of Learning” so that more local school texts would be written and printed. Given the current standoff between the secondary and post-secondary educational establishment and Canadian authors and their copyright collective over license payments for use of copyrighted works in teaching, one wonders whether we have really learned anything about the role copyright plays in our society. (Copyright and Education in Canada: Have We Learned Nothing in the Past Two Centuries? (From the “Encouragement of Learning” to the “Great Education Free Ride”).

Leaving that question with you to ponder, gentle Reader, is probably a good way to end this look back over the past 12 months. Stay tuned for more commentary on copyright developments in 2025.

© Hugh Stephens, 2024. All Rights Reserved.

Government Announces an Artist’s Resale Right Will be Finally Coming to Canada!……Well, Maybe but Don’t Count On It.

Image: Author

Canada’s long-awaited 2024 Fall Economic Statement, reporting on the country’s finances for 2023-24 and outlining future spending and legislative priorities, was tabled in the House of Commons on December 16. Normally the big news would be that the budget deficit hit almost $62 billion, a 50% increase of almost $22 billion over the projected deficit announced in the last budget just over six months ago, but all that was upstaged by the announced resignation of Finance Minister Chrystia Freeland the morning of the day she was to deliver the Statement. This has led to a crisis within the Liberal caucus as to whether Prime Minister Justin Trudeau should himself resign. Buried in the 270 page document, which outlined some $23 billion in planned new spending just months after the April 2024 budget proposed over $50 billion in other spending initiatives, was a tiny little bone for the copyright community. On p. 140, we find this commitment:

“Protecting Artists’ and Creators’ Copyrights

Artists, particularly visual artists, are 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, offering an additional income stream.
In the 2024 Fall Economic Statement, 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.”

CARFAC, the non-profit that represents visual artists in Canada (along with its Quebec counterpart, RAAV,) was quick to publicize and celebrate the announcement. And so it should. It is important to get support for the Artist’s Resale Right (ARR) on the record, in the hope that this time the promise will actually be actioned. I have written about the ARR in the past, in 2021 and 2022, here (The Artists’ Resale Right: A Matter of Simple Fairness) and here (Will the “Artists’ Resale Right” Come to Canada and the US?). It is not a new idea to bring it to Canada. Artists have been campaigning for it for more than two decades. It exists in many countries (although not in the US) and has been around for more than a century, being first initiated in France in 1920. Today it exists in over 90 countries, including all members of the EU, Britain, Australia, Mexico and a number of African states. An important factor is that it is applied reciprocally, and is fully consistent with the Berne Copyright Convention.

The announcement on December 16 makes it appear that enactment of the ARR in Canada is tantalizingly close, but it is worth remembering that after the last general election in 2021, the mandate letter for the Minister for Innovation, Science and Industry, who holds lead legal responsibility for amending the Copyright Act, included the following instruction; “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.” That was three years ago and since then absolutely nothing has happened to implement this instruction. In fact, the only action to date has been the restatement this month of the government’s continued intention to do so. But time is fast running out for the Liberals– and consequently on any real prospect that the Copyright Act will be amended before the current Trudeau minority government falls, resulting in a general election. To say that the governing Liberal Party is not expected to win would be the understatement of the year.

Before speculating further on the prospects of the ARR actually coming to Canada any time soon, it is worth a quick refresher on what it is. CARFAC’s press statements describes the ARR as “a royalty that allows artists to share in the wealth they generate in the marketplace”. It is not known how exactly it would be implemented in Canada. While most Resale Right regimes are similar, they are not identical although the basic premise 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. Private sales are usually excluded; the ARR applies only to works sold through galleries or auction houses. You can guess who might be opposed to it.

CARFAC’s proposal is for an ARR to be applied to secondary sales of $1000 or more that are conducted by a dealer or auction house, at a flat rate of 5%, with the liability to pay shared between the seller and the dealer, as is currently the case in the UK. It would apply only to Canadian artists and to artists of countries that offer an ARR (thus the reciprocity angle). Works of Canadian artists resold in other countries offering an ARR would be eligible for ARR payments from galleries or auction houses in those countries. Payment would be collected through a copyright collective, Copyright Visual Arts, owned jointly by CARFAC and RAAV. Notably, since the US does not have an ARR, works of US artists resold in Canada would not be eligible.

However, for all this to happen, the current Trudeau government will have to get its act together to introduce and pass the legislation, something that seems unlikely given the dilatory approach of the past three years plus the current existential crisis facing this government. The government has mused about copyright reform but has not walked the talk. Now it has almost run out of runway, and seems to be sleep-walking over a cliff. Public opinion polls put the party and the Prime Minister at all time lows, around 20% support, and a large number of the Liberal caucus has spoken up to urge Trudeau to resign. As a minority government, it must be supported in a confidence vote by at least one other party, and that support seems increasingly tenuous. In a best-case scenario for the Liberals, the government could last until October 2025 when there is a statutory requirement for a general election, but its demise is likely to come months before that.

Where is there room to introduce ARR amendments to the Copyright Act in the midst of all this uncertainty? Such amendments would have to be reviewed in Committee, given the guaranteed opposition of the art dealers. With the Trudeau government’s fate hanging by a string, not to mention the increasingly strident threats to impose punishing tariffs on Canadian exports to the US coming from the Truth Social account of Donald Trump, dealing with this bit of legislative housekeeping seems most unlikely.

That is not to say that amendments to the Copyright Act have not been introduced quickly in the past. The extension to Canada’s term of copyright protection required by the CUSMA/USMCA agreement was quietly and quickly enacted to meet the deadline of December 31, 2022 and back in the Stephen Harper era an amendment was quickly passed to extend copyright protection on sound recordings by twenty years from date of release. The big difference is that Harper held a strong majority in Parliament at the time, and the amendment was relatively noncontroversial. However, to think that the current limping government will expend much political capital to introduce an ARR in Canada at this time is most unlikely. As for the apparent “government-in-waiting” of Pierre Polievre’s Conservatives, as far as I know they have not pronounced on the issue. It is unlikely to be a priority, insofar as they claim to have so many other things to do from ending the so-called “carbon tax” (aka price on carbon) to defunding the CBC.

One element in favour of an ARR is its “reconciliation” and social justice impacts. It is supported by Indigenous artists and organizations representing them, such as the Inuit Tapiriit Kanatami and the Nunavut Arts and Crafts Association. Often cited is the case of the noted Inuit artist Kenojuak Ashevak, whose famous graphic work “Enchanted Owl” (the image on this blog) was initially sold by her for the princely sum of $24 in 1960. That’s all she got in her lifetime although the original work was sold and resold for many multiples of that both in her lifetime (she died in 2013) and after.

If Canada ever gets around to introducing an ARR, will the US follow? I suppose it is a possibility. Since Donald Trump seems to be making policy daily by tweet on Truth Social, I guess we will have to stay tuned. Maybe someone could float the idea with Elon? In the meantime, don’t hold your breath for the ARR to come to Canada within the life of the current Trudeau government, tantalizing as the recent announcement is. I wish it were otherwise. And I would love to be proven wrong.

© Hugh Stephens, 2024. All Rights Reserved.