The legal fallout from Canada’s 2012 Copyright Modernization Act has once again led international observers to question Canada’s commitment to its creative industries and the intellectual property framework that sustains them. In February 2018, a group of provincial governments and school boards initiated legal action against Access Copyright (the copyright collective responsible for administering Canadian licenses outside of Quebec), seeking to recover more than $30 million (CAD) in legally certified tariff fees collected for the period of 2010-2012, an aggressive action that Canadian writer and publisher organizations have described as as everything from a “cynical tactic,” to a “disturbing attack” on creators and publishers.
How Did We Get Here?
The suits are the latest development in an ongoing battle that began with the introduction of fair dealing as a purpose for education under the Copyright Act in 2012.
Following the 2012 change to the Copyright Act, the provincial Ministries of Education informed Access Copyright that they would be “opting out” of the K-12 tariff starting January 1, 2013, and ceased making payments to the collective. In 2016, the Copyright Board of Canada, an independent federal body mandated to establish royalty rates for the use of copyright protected works, set a mandatory K-12 tariff rate of $2.46 (CAD) per FTE for the years 2010-2012 and $2.41 (CAD) per FTE for the years 2013-2015. These tariffs were retroactive and replaced the previous rate of $4.81, which covered the period of 2005-2009.
In the Ministries’ view, because they had continued paying the 2005-2009 rate through the end of 2012, they had overpaid their bill. But in Access Copyright’s view, because the K-12 system stopped making mandatory payments when the 2013 term began, millions of dollars in unpaid royalties are in fact owed to rightsholders—not the other way around.
The amount the provinces are trying to recover in this latest suit amounts to a rounding error in a country that spends more than $50 billion (CAD) annually on K-12 education, but is significant to a cultural industry that operates on slim margins, and would go a long way to fuel investment in Canadian learning resources.
In their legal action, the Ministries point to Alberta (Education) v. Access Copyright, a 2012 Supreme Court of Canada decision, as having removed their obligation to pay for educational copying. They fail to acknowledge, however, that that case examined only the copying of “short excerpts” of supplementary textbooks, not the widespread and systemic copying that is now viewed by the education sector as being permitted by Canadian law.
In arriving at the mandatory rates payable by K-12 schools, the Copyright Board closely examined and applied both the Supreme Court’s Alberta (Education) decision and the change to fair dealing in the Copyright Modernization Act. And after making a considerable deduction to account for fair dealing, the Copyright Board determined that K-12 schools copy more than 150 million pages of published works annually that do not qualify as fair dealing and require compensation.
Indeed, the status of tariffs certified by the Copyright Board, which is at the heart of this dispute, is a question that was examined by the Federal Court of Canada in Access Copyright v. York University, along with the legality of York’s copying guidelines. And in a clear and carefully considered 2017 decision, the Court determined that the guidelines do not “withstand the application of the two-part test laid down by the Supreme Court of Canada,” and that “there is no opting out” of tariffs approved by the Copyright Board.
Given that the copying guidelines adopted by Ministries of Education are virtually identical to those scrutinized during the York trial, and that approved tariffs are in place for the period outlined in the suit, the legal action appears both aggressive and frivolous, intended to deplete the already limited resources of a vital cultural sector.
Not surprisingly, the education sector has appealed the York decision. What is surprising, however, are these new lawsuits being filed during the lead up to that appeal.
Where are we going?
I am often asked by international colleagues about the prospects for the long awaited parliamentary review of the Copyright Act, and whether that process will solve Canada’s copyright mess. While the Association of Canadian Publishers and our industry colleagues will participate fully in the review, we do not believe that this process will restore a functioning marketplace, at least not any time soon.
Over the next year, testimony will be heard, briefs will be submitted, competing positions will be debated, and a report will eventually be presented to Parliament. If recommendations for legislative change are included in that report, they will likely be made mere months before a federal election, leaving writers and publishers to withstand another election cycle and endure the uncertainty that comes along with it.
An optimistic estimate places the prospect for meaningful copyright change coming sometime in 2021, provided a number of variables fall into place, of which there is no guarantee. In the meantime, economic damage continues to mount and investment in new curriculum resources for Canadian students is on the decline.
Collective licensing remains a practical solution for Canada’s education sector, and is recognized around the world for its flexibility and good value. A return to a licensed system would be welcomed by the writing and publishing sector. But until then, the actions—and inaction—of governments at all levels speak louder than words.
Kate Edwards is Executive Director of the Association of Canadian Publishers.