Posted by Howard Knopf
http://excesscopyright.blogspot.com/2025/10/the-latest-from-canadas-copyright-board.html
The
Copyright Board has recently published its 2024-2025 Annual
Report.
It’s
difficult to find any tangible indicators of substantial progress following the
scathing 2016 Senate
report nine
years ago that concluded that the Board was “dated, dysfunctional
and in dire need of reform”. Here are some of my detailed
posts about the Board going back from 2023.
As for the
current Annual Report, the following may be noted:
- The Board has not held an oral hearing
since October of 2022.
- It has renovated its very commodious
and large prime real estate space at 56 Sparks St., Ottawa’s most famous address,
which includes a large and now very rarely used hearing room.
- The Copyright Board has SIX (6) legal counsel. It is difficult to imagine why the Board
needs more than one, considering its very limited and repetitive caseload and its
very infrequent contested hearings. What do they all these counsel actually do?
- The Board lists 24 people on its
payroll.
- The
cost of operating the Board for the year ending March 31, 2025 was $5,674,097.
That’s $638,343 MORE than was planned. https://www.cb-cda.gc.ca/en/about-us/reports-publications/financial-reports/2024-2025-financial-statements
- The Board issued only 8 decisions re
unlocatable copyright owners in 2024-25. These are typically only a few lines
long and devoid of any details or reasoning. It is difficult to see how any of
these would require more than a few minutes of consideration by anyone. Note
that in 2014 the Board made concerted attempts to justify this regime including
impassioned statements
by former Chair William Vancise and Barry Sookman at the Fordham Conference. My aforesaid blog also has a
good discussion about the unlocatable regime including comments from Andrew
Martin and Ariel Katz. The Board has recently made an elaborate
presentation on
the topic. It would be interesting to know just how much time and resources are
spent on these files and by whom and at what cost.
The Chair
of the Copyright Board must be a judge or retired judge. Judges are presumably supposed
to be judicious and follow the law – and not advocate on behalf of
stakeholders. Former Chair William
Vancise was quite outspoken in this respect. See also here. He also took almost four years following his retirement from the
Board to render his last decision. Ironically, it was about Access Copyright,
the tariffs of which have now been declared to be non-mandatory by the Supreme
Court. It would be interesting to know if and how much he was paid for this
unusually lengthy deliberation. As I’ve pointed out before:
Judges of the Federal Court
and Federal Court of Appeal have eight weeks after retirement to render any
pending decisions. Even Supreme Court of Canada justices have only six months
after they retire to participate in decisions in cases on which they sat.
The Canadian Judicial
Council has specifically pronounced that “judges
should render decisions within six months of hearing a case, except in very
complex matters or where there are special circumstances.”
The most
recent Chair has been retired Justice Luc Martineau. The Chair position is a GCQ5 Order in Council
appointment. Soon after the publication of the 2024-2025
Annual Report, he was re-appointed until October 9, 2027. Interestingly,
that’s only for two more years. It could have been for five years. Justice
Martineau has been notably taciturn until now in his public pronouncements. However,
he did say this in his Annual Report from
2021-2022:
The 2021‒2022 fiscal year was also marked by the Supreme
Court of Canada’s decision in York v. Access Copyright, an important decision
that clarifies, among other things, the scope of tariffs approved by the Board.
This decision will
certainly have an impact on the Board’s ability to deliver on its mandate,
but it will be some time before we see the concrete results of this decision,
including the cumulative effect of the decision and the changes made to the
Copyright Act in 2019.
(highlight
and emphasis added)
One would
have thought that the Board’s “mandate” is defined by the Copyright Act as
interpreted by the Supreme Court. If that means that Board tariffs aren’t
mandatory, then they aren’t mandatory. The delivery of non-mandatory tariffs
is, therefore, the Board’s “mandate”. In
other words, the Board’s mandate is presumably to deliver tariffs that provide
fair compensation to creators and sufficient value to users that they
will be utilized voluntarily, like the analogy I made to the SCC about the
railway passenger tariffs in the old, regulated days. Then, fares were prescribed but nobody was forced to
take the train, e.g. from Ottawa to
Toronto, if they had other less expensive or otherwise preferable options. Even
the SOCAN tariffs aren’t de jure “mandatory”, but they are de facto mandatory,
for example, if you own a radio station and don’t want to limit your music to
Bach, Mozart, and Beethoven. And even then, you would have to deal with the
rights in the sound recordings and performances that aren’t in the public
domain.
Justice
Martineau says the following in the current Annual Report:
I am proud to present our 36th Annual Report, covering
the period from April 1, 2024, to March 31, 2025. For the past few years, the
Board has made great strides in terms of operational efficiencies. As I enter the last year of my
first term as Chair of the Board, I am pleased to see the
significant progress we have made in modernizing our operations and look
forward to continuing this path of success with our new ViceChair and CEO, Drew
Olsen.
Since my appointment in 2020, the Board has strengthened
its role as a specialized tribunal and marketplace facilitator in the public
interest. We have enhanced the efficiency, transparency and predictability of
our procedures, and reduced our case inventory. Engaging with our stakeholders
has been instrumental in supporting this transformation. In particular, the new advisory group will help
ensure the Board remains aware of market realities and stakeholder needs.
As highlighted in our report Modernizing the Copyright
Board: Status Update - May 2023, I am concerned about the related and growing economic and regulatory
gaps in Canada’s collective management ecosystem that demand urgent action.
Copyright stakeholders are still adjusting to legislative and judicial changes,
including the Supreme Court’s decision in York University v Canadian Copyright
Licensing Agency (Access Copyright), 2021 SCC 32. At the same time, the
rapidly growing influence of AI on content creation and dissemination make the
need for transparency obligations and access to credible market data even more
urgent.
(highlight
and emphasis added)
Some
questions and comments:
· Does the explicit reference to his
“first term” suggest that he was expecting to be re-appointed for a second
term?
· Does he really expect much to come
out of the “advisory group”? Several of them are counsel
who have presumably lucrative practices before the Board. The vast majority of
“users” have no meaningful, economical, or practical access to justice before
the Board. As for ADR, that has been available for years. See Canadian
Broadcasting Corp. v. SODRAC 2003 Inc., 2015 SCC 57 (CanLII), [2015] 3 SCR
615, <https://canlii.ca/t/gm8b0> On behalf of Professors Ariel Katz and David
Lametti (as he then was), I then persuaded the SCC that the result of the so-called “arbitration” regime
was not binding even on willing parties to such hearings. Anyway, at least the
Board mechanism for ADR under the current legislation doesn’t require paying an
outside arbitrator or mediator, if that is what the Board
is currently proposing.
The cost of
operating the Board for the year ending March 31, 2025 was $5,674,097.
That’s $638,343 MORE than was planned.
Almost all of the Copyright Board’s tariff decisions are
formulaic rubber stampings of previous tariffs without objection and with routine
adjustments now and then for inflation. Even the Board doesn’t tout the “ confusing,
arguably counterfactual and certainly counterintuitive” statistics suggested a
decade ago in Jeremy de Beer’s very problematic
2015 study paid for by Industry Canada and Canadian Heritage.
There have been very few “inaugural” tariffs involving
substantive issues since the launch of the modern Board in 1989 – and the Board
has not fared well in the judicial review process of many of these decisions. I
must confess to taking some credit for the Board’s embarrassing setbacks in its
attempt to impose costly “levies” on the memory embodied in devices such as
iPods, cell phones, and conceivably even computers. The CPCC (Canadian
Private Copying Collective) wanted a “memory tax” that would have potentially
amounted to $21,000 per terabyte. So, for example, a 5 TB external hard drive
that currently sells for about $224 at Best Buy would have a “tax” of $105,000
according to the CPCC arithmetic. The Board still props up the CPCC with a levy
of $0.29 on blank CDs as the CPCC bides
its time waiting for better days. Does anyone know anybody who has bought any
blank CDs in recent years, let alone use them for music? They are somehow still
for sale. I think that the last time I ever used one was in a law firm many
years ago to provide copies of very many and large files. That can now be done
online or via cheap thumb drives. It’s impossible to believe that anyone still
uses blank CDs to “ordinarily” record music. But the Board duly continues to
keep this “levy” alive and the CPCC on
life support. Here’s the CPCC’s latest proposal
for 2025-2027.
BTW, here's the THIRD judicial review
application now
underway in the Federal Court of Appeal in the Copyright Board's
never ending undead Retransmission 2014-2018 saga that goes back at least a
dozen years.
I’m old enough to remember the old Copyright Appeal Board. I
wrote about this in 2019:
This current Copyright
Board “2.0” is the 1989 replacement for Canada’s then 53-year-old
internationally admired and exemplary Copyright Appeal Board “1.0”, which was
established in 1936 as a result of the legendary 1935 report
of the Parker Commission. The
Copyright Appeal Board consisted of a judge and two public servants, all of
whom served part time. The secretariat services were provided on a part time
basis by an employee in the predecessor of today’s Canadian Intellectual
Property Office (“CIPO”). The Copyright Appeal Board had a mandate restricted
to music performing rights societies – which then meant the two predecessors of
SOCAN (which is itself the result of a merger that was permitted at about the
same time as the new Board was created) and following the landmark 1988
revision of the Copyright Act.
See: The 30th (or 83rd?)
Anniversary of Canada’s Copyright Board: Waiting for Version 3.0
The Copyright Board, with its ~$6 million budget which is
less than a rounding error by most federal government measures, is clearly
under the radar for long overdue reform. The Board states that “The total value
of the royalties generated by tariffs approved by the Board was approximately
$733 million in 2024, based on the annual reports of collective societies and
internal Board estimates.” The music
business and copyright has often been said to be a “business of pennies.” But those pennies add up to millions and billions
for consumers. A handful of creators make a lot of money from this system, and
most of the rest get occasional lunch money if they are lucky. And, of course,
lots of lawyers, lobbyists, and executives do very well.
The music collectives still have way too much power,
augmented by the availability of multiple statutory damages. SOCAN has filed hundreds of lawsuits in
the Federal Court. Thankfully, there are still bits of freedom at the “retail”
level. My barber shop can still use an FM radio and not have to pay. The “double for dancing”
wedding music “tax” is a relatively modest cost of such
proceedings, all things considered, and most folks don’t get married very often.
But SOCAN still has the
unnecessary and potentially devastating weapon of being able to
sue for three to ten times the amount of any “applicable royalties.” So be
careful about allowing dancing at weddings.
And other unknown dangers still lurk. Somewhere some lawyer
or lobbyist is dreaming of “tariffs” for AI ingestion and/or output, DVR
storage, internet “tax”, or some other type of nightmare and, of course, Making
Tariffs Mandatory Again. What could possibly go wrong?
HPK
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