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Minister’s Message

Over the past year, the Canadian economy has proven to be resilient despite continued fiscal uncertainty in other parts of the world. Since our government introduced Canada’s Economic Action Plan in 2009 to respond to the global recession, Canada has recovered not only all of the jobs lost during the recession but also all of our economic output.

As Minister of Industry, I am confident that the Industry Portfolio will play a key role in our government’s plan to strengthen Canada’s knowledge-based economy. Our efforts will focus on promoting innovation and modernizing Canada’s marketplace policies, among other areas.

In 2012–13, Copyright Board Canada will continue to issue decisions related to tariffs of general application, licences issued where parties cannot agree or licences issued where the owner of the work cannot be found. These decisions will continue to be based on the principle of ensuring fairness while seeking to provide tangible incentives for the creation and use of copyrighted works in Canada. The Board will also examine possible avenues to improve its practices and procedures while safeguarding fairness.

A significant part of the Industry Portfolio’s activities will involve developing Canada’s digital economy by updating copyright and privacy laws and building a world-class digital infrastructure for next-generation wireless technologies and services. We will also put in place conditions that allow small businesses to grow and create jobs. This will mean reducing red tape, improving access to credit and focusing programs to promote more effective research and development.

Since coming to office, our government has made science and innovation a priority. We will leverage our past investments and continue to develop and recruit world-leading research talent. We will also take measures to encourage the private sector to increase research and development investments and improve commercialization outcomes.

In our government’s pursuit to improve the well-being of Canadians, we will continue to work to secure the recovery, eliminate the deficit and invest in the drivers of long-term economic growth. We will also implement our plan to find savings in government expenditures to return to fiscal balance in the medium term.

This year’s Report on Plans and Priorities for Copyright Board Canada delivers a comprehensive approach to promote and maintain Canada’s strong and competitive economy. I look forward to working with my Cabinet and departmental colleagues, as well as with the private sector and other levels of government, to achieve our common goal of creating jobs and growth for all Canadians.

The Honourable Christian Paradis
Minister of Industry and
Minister of State (Agriculture)

Section I: Organizational Overview

Raison d’être

The Copyright Board is an economic regulatory body empowered to establish, either mandatorily or at the request of an interested party, the royalties to be paid for the use of copyrighted works, when the administration of such copyright is entrusted to a collective-administration society. The Board also has the right to supervise agreements between users and licensing bodies and issues licences when the copyright owner cannot be located.

Responsibilities

The responsibilities of the Copyright Board under the Act are to:

• certify tariffs for
  • the public performance or the communication to the public by telecommunication of musical works and sound recordings;
  • the doing of any protected act mentioned in sections 3, 15, 18 and 21 of the Act; and,
  • the retransmission of distant television and radio signals or the reproduction and public performance by educational institutions, of radio or television news or news commentary programs and all other programs, for educational or training purposes.
• set levies for the private copying of recorded musical works;
• set royalties payable by a user to a collective society, when there is disagreement on the royalties or on the related terms and conditions;
• rule on applications for non-exclusive licences to use published works, fixed performances, published sound recordings and fixed communication signals, when the copyright owner cannot be located;
• examine agreements made between a collective society and a user which have been filed with the Board by either party, where the Commissioner of Competition considers that the agreement is contrary to the public interest;
• receive such agreements with collective societies that are filed with it by any party to those agreements within 15 days of their conclusion; and,
• set compensation for formerly unprotected acts in countries that later join the Berne Convention, the Universal Convention or the Agreement establishing the World Trade Organization.

Finally, the Minister of Industry can direct the Board to conduct studies with respect to the exercise of its powers.

Strategic Outcome(s) and Program Activity Architecture (PAA)

STRATEGIC OUTCOME		PROGRAM ACTIVITY
Fair decision-making to provide proper incentives for the creation and use of copyrighted works		Copyright Tariff Setting and Issuance of Licences
		Internal Services

Organizational Priorities

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
Ensure timely and fair processes and decisions	Ongoing	Fair decision-making to provide proper incentives for the creation and use of copyrighted works
Description
Why is this a priority? The requirement to have timely decisions is expressly stated in the Act: the Board is to certify and publish tariffs “as soon as is practicable.” The requirement to have fair processes and decisions is implicit: the Act gives the Board the powers, rights and privileges of a superior court; as such, the Board is required to follow the principles of natural justice which, taken together, ensure both fair processes and fair outcomes. Plans for meeting the priority To achieve this priority, the Board will need to ensure that participation costs in the hearing process are kept as low as possible, thus encouraging participation of the parties and streamlining the process. The Board will also need to provide appropriate guidance, information and analysis to the participants in order to facilitate the examination process and to foster greater participants’ satisfaction. This will be done, in particular, through telephone advisories and case management meetings with representatives. Finally, by engaging in prehearing consultations and information gathering, and by conducting well-organized proceedings which address key issues facing copyright-related industries, the Board will be able to issue timely and fair decisions. The monitoring of this priority will be achieved by informally surveying hearing participants, with follow-up examination and determination of alternative procedural practices to improve the efficiency of the regulatory process. The achievement of this result is also directly monitored through the timely conduct of hearing processes and lack of interruption in proceedings due to administrative and technical delays. In addition, the implementation of a pre-hearing joint statement of (non-contested) facts and handling of legal issues solely through written submissions will improve the efficiency of the process. Finally, the Board plans to continue to examine, for each process, how to structure and sequence witnesses and hearing stages so as to eliminate duplication and maximize time spent on relevant issues. In addition, in 2012-13, the Board plans to establish a working group comprised of key stakeholders that will examine possible avenues to improve the Board’s rules of practice and procedure. These improvements should aim at reducing uncertainty and streamlining the procedures while safeguarding the fairness of the process. The rationale underlying this priority is to minimize administrative costs to Canadians from the setting of tariffs and to streamline the process in the face of increasing complexities in hearing subject matter, thus increasing regulatory efficiency. To the extent that this also leads to fairer decision-making, the overall innovation capability of parties affected by the copyright tariff process will be improved.

Priority	Type	Strategic Outcome(s) and/or Program Activity(ies)
Advance the analytical framework for decisions and the regulatory processes for tariffsetting	Ongoing	Fair decision-making to provide proper incentives for the creation and use of copyrighted works
Description
Why is this a priority? The Board is required, under the Act, to give reasons for its decisions. In keeping with the modern principles of judicial review, the Federal Court of Appeal typically defers to the Board’s expert understanding of the facts before it. The Board can only maintain this deference by constantly advancing its analytical frameworks. Plans for meeting the priority Among the most significant risks which the Board faces in achieving its strategic outcomes are the potentially disruptive impact of new technologies, in particular on how copyright material is utilized, distributed and monitored. Fair and equitable decisions critically depend on the Board’s ability to identify, understand and assess the industry issues before they adversely impact existing copyright regimes. The Board’s approach to managing the technology risk is to systematically monitor relevant journals, other publications and websites, and to attend industry seminars and conferences. Knowledge of the international experience is also a key tool in addressing the challenges of changing technology and the impact of global events. By comparing experiences across different countries, the Board expects to gain early warning of significant developments and their likely impacts on the Canadian situation. Leadership in copyright matters will continue to build on the groundwork performed in the past. The Board plans to continue its leadership role in the establishment and expansion of international activities such as sharing of procedures, data, analysis and other information. With a view to further this leadership, the Board will continue to be actively involved with the international Society for Economic Research on Copyright Issues in 2012-13. By its involvement in international activities as they relate to copyright tariff setting in other parts of the world, the Board ensures that its own tariff-setting processes and decisions are cognizant of developments outside of Canada.

Type is defined as follows: previously committed to – committed to in the first or second fiscal year prior to the subject year of the report; ongoing – committed to at least three fiscal years prior to the subject year of the report; and new – newly committed to in the reporting year of the RPP or DPR.

Risk Analysis

Operating Environment

The Act details the mandate of the Copyright Board of Canada. The Board has substantive and procedural powers, granted both in the Act and implicitly recognized by the courts.

The Act requires that the Board certify tariffs in the following fields: the public performance or communication of musical works and of sound recordings of musical works, the retransmission of distant television and radio signals, the reproduction of television and radio programs by educational institutions and private copying. In other fields where rights are administered collectively, the Board can be asked by a collective society to set a tariff; if not, the Board can act as an arbitrator if the collective society and a user cannot agree on the terms and conditions of a licence.

The examination process is always the same. Tariffs always come into effect on January 1. On or before the preceding 31^st of March, the collective society must file a statement of proposed royalties which the Board then publishes in the Canada Gazette. Users (or, in the case of private copying, any interested person) or their representatives may object to the statement within 60 days. The collective society and the objectors present oral and written arguments. After deliberations, the Board certifies the tariff, publishes it in the Canada Gazette, and provides written reasons for its decision.

Hearings before the Board often involve expert witnesses, litigation specialists and detailed econometric, business and financial studies, surveys and evidence. The Board needs to assess the ever-changing technological environment, global events, new business models and the interests of owners and users in order and sets tariffs to contribute to the continued growth of Canada’s knowledge industries and the rest of Canada’s economy. These assessments are reflected in the Board’s decisions and its certified tariffs, since a tariff’s structure and terms and conditions need to be set in accordance with the industry’s technology, business models and economic environment.

As a rule, the Board holds hearings. No hearing will be held if proceeding in writing accommodates a small user who would otherwise incur large costs. The hearing may be dispensed with on certain preliminary or interim issues. No hearings have been held yet for a request to use a work whose owner cannot be located. Information is obtained either in writing or through telephone calls.

Overall, the Board is responsible for tariffs worth over $400 million annually. In fact, copyright tariffs support several industries which generated 7.4 per cent GDP and 1.1 million jobs in 2007.

Risk Evaluation

Among the most significant risks which the Board faces in achieving its strategic outcomes is the potentially disruptive impact of new technologies (i.e., in terms of how copyright material is utilized, distributed and monitored). The Board’s approach to managing the technology risk is to systematically monitor relevant journals, other publications and web sites, and to attend industry seminars and conferences, as described before in this report.

The decisions the Board makes are constrained in several respects. These constraints come from sources external to the Board: the law, regulations and judicial pronouncements. Others are selfimposed, in the form of guiding principles that can be found in the Board’s decisions.

Court decisions also provide a large part of the framework within which the Board operates. Most decisions focus on issues of procedure, or apply the general principles of administrative decision-making to the specific circumstances of the Board. However, the courts have also set out several substantive principles for the Board to follow or that determine the ambit of the Board’s mandate or discretion.

A smaller risk, which the Board faces in achieving its strategic outcome, is reversal risk. While decisions of the Board are not appealable, they are subject to judicial review. The ability to schedule a number of cases in a year could be impaired if a case from a previous year were reversed on judicial review. The Board’s principal strategy to mitigate this risk is issuing fair and equitable decisions.

There is always a risk of not being able to hire or retain the staff with the necessary technical expertise to achieve required results. To mitigate this risk, the Board runs well-organized job competitions, designed to target a significant share of the pool of potential candidates. The Board also takes measures to encourage a large number of applications. The Board also works at creating a stimulating working environment conducive to a high retention rate among its employees.

Planning Summary

Financial Resources ($ thousands)

2012-2013	2013-2014	2014-2015
3,118	3,118	3,118

Human Resources (Full-Time Equivalent – FTE)

2012-2013	2013-2014	2014-2015
16	16	16

Strategic Outcome: Fair decision-making to provide proper incentives for the creation and use of copyrighted works

Performance Indicators	Targets
Time to render decisions	One year, for at least 70% of the cases
Time to deliver licences	45 days, for at least 70% of the cases

Planning Summary Table
($ thousands)

Program Activity	Forecast Spending 2011-12	Planned Spending			Alignment to Government of Canada Outcomes
		2012-13	2013-14	2014-15
Copyright Tariff Setting and Issuance of Licences	2,531	2,526	2,526	2,526	An innovative and knowledge-based economy
Total Planned Spending		2,526	2,526	2,526

Planning Summary Table
($ thousands)

Program Activity	Forecast Spending 2011-12	Planned Spending
		2012-13	2013-14	2014-15
Internal Services	594	592	592	592
Total Planned Spending		592	592	592

Expenditure Profile

Copyright Board of Canada Spending Trend

Estimates by Vote

For information on our organizational appropriations, please see the
2012-13 Main Estimates publication.

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