Will the third time be the charm?

After signing its intention to conform its copyright act to World Intellectual Property Organization standards 11 years ago, the Canadian government has introduced Bill C-32, the Copyright Modernization Act, to fulfill that mandate.

But after the failure of two previous attempts — Bill C-60 and Bill C-61 both died on the vine due to unexpected election calls — some are warning the same fate could befall the CMA, especially since federal conservatives remain in charge and could be toppled by the opposition at any time.

Many private and public Canadian music industry interests wouldn’t mind seeing the CMA — in its present form — defeated, maintaining that the proposed copyright reform falls far short of assisting the very creators the bill is designed to protect.

“I think it’s a very flawed bill for music and needs to be improved dramatically if it’s not only going to be helpful to music, but not injurious,” says Michael McCarty, president of Toronto-based independent music publisher ole.

Although the CMA echoes much of the WIPO-compliant U.S. copyright law in terms of technological protection measures, there are some fundamental differences.

Instead of a “notice and takedown” system, which requires an ISP to block access to material upon receiving notice of copyright infringement from a rights holder, Canada’s CMA proposes a “notice and notice” system that will only warn the infringer of their illegal action and not include a takedown requirement or termination obligation.

Canadians will also be allowed “technologically neutral” measures to format shift and time shift their purchases for private non-commercial use; and, in a unique twist, the CMA allows users to post online mash-ups for non-commercial purposes.

While the proposed CMA keeps statutory damages for commercial infractions at a rate of $500 to $20,000 per infringed work, non-commercial infringement damages will be capped at a one-time payment between $100 and $5,000 for all infringements that took place prior to prosecution.

While applauding such creator-friendly measures as “making-available” rights, which allow creators to control how their works are made available online; distribution rights, which enable copyright holders to determine how and when their intellectual property is circulated; and the expansion of the fair dealing provision to encompass education, parody and satire, many are disappointed that the bill stops short with other measures, such as modernizing the private copying levy and protection against piracy.

McCarty contends that “the bill virtually provides nothing — no new way of getting paid for creators” and “seems to go further towards protecting the businesses that enable and profit from piracy.”

McCarty is disappointed that an earlier compensatory 29-cent levy tacked onto blank audio recording media purchases wasn’t updated to such digital devices as MP3 players, computer hard drives and digital recorders.

“The [CMA] should not expropriate some current rights we enjoy the revenue from, which would be broadcast mechanical royalties, and the extension of private copying royalties to devices and items beyond the current CD-Rs,” explains McCarty. “Those two things are going to take millions and millions of dollars out of the hands of Canadian creators and rights owners.”

Dr. Michael Geist, a law professor and Canada research chair in Internet and e-commerce law at the University of Ottawa, says the government position with regard to levies has remained consistent.

“There are some creators groups who are looking for an additional layer of compensation through an expansion of the current private copying levy, but I think the government has been clear from the outset that that wasn’t in the cards,” says Geist. “And frankly, the notion that a Canadian ought to be able to take a CD and copy it to their iPod without further compensation is wholly consistent with the expectation of most consumers and the basis upon which most of them buy music in the first place.”

McCarty argues that the 1997 implementation of the private copying levy suggests the government has already set a precedent for updating the levy.

“On a small scale, that’s what the private copying statute did for the music industry with regards to home recording on CD, initially cassette,” says McCarty. “It was the recognition that there’s a business here, there’s a value being created around people basically pirating music, and the people who created the music weren’t participating in receiving that value. We need a similar law.”

Songwriters Association of Canada President Eddie Schwartz feels the CMA’s biggest flaw is the failure to provide a new marketplace for creators.

“The problem continues to be that creators need a new business model going forward, and the bill doesn’t address that desperate need at this point,” says Schwartz.

Graham Henderson, president of the Canadian Recording Industry Association, is thrilled that the government is finally making the problem a priority.

“They have begun to absorb the enormity of the problem — that whether you’re a musician or an actor or a writer or a software coder, times are tough and getting worse, and that’s due to piracy,” he states.

However, Henderson is not keen on what he sees as a non-deterrent penalty for non-commercial copyright infringers.

“Once this bill is passed, you could go online and steal every movie that’s ever made, every book, and every song, put them on your hard drive, admit liability, and write a $5,000 check. That would be the full extent of it — and it would be the first rights holder who would get all the money. Nobody else would get a cent. It’s close to saying that for people who want to steal stuff, there’s a compulsory license of $5,000.”

Henderson hopes that the music industry’s recommendations will be received and considered during the bill’s second reading and subsequent parliamentary committee reviews this fall, and an improved and more balanced CMA is approved by both the House of Commons and the Senate for its third and final reading sometime in early 2011 before it’s submitted for Royal Assent and passed into law.

“It’s up to us in the [music] community to make certain that when we get to the finish line, the bill is tighter, cleaner and more protective of musicians,” says Henderson.

(Nick Krewen is a Toronto-based journalist who has written for The Toronto Star, TV Guide, Billboard, Country Music and was a consultant for the National Film Board’s music industry documentary Dream Machine.)

Third Time’s The Charm? | GRAMMY.com