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Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 16 - Evidence - June 20, 2007

OTTAWA, Wednesday, June 20, 2007

The Standing Senate Committee on Transport and Communications, to which was referred Bill C-59, to amend the Criminal Code (unauthorized recording of a movie), met this day at 6:40 p.m. to give consideration to the bill.

Senator David Tkachuk (Deputy Chairman) in the chair.


The Deputy Chairman: I call the meeting to order. I would ask officials to take us through the substance of the bill, after which senators may ask questions of the minister when he does arrive.

Before us today from Justice Canada are Mr. Michael Zigayer, Senior Counsel, Criminal Law Policy Section, and Ms. Patricia Neri, Director General, Copyright Policy. Mr. Zigayer, please proceed.

Michael Zigayer, Senior Counsel, Criminal Law Policy Section, Department of Justice Canada: Thank you. Honourable senators, it is a great pleasure to be here with you this evening. I will do my best to answer your questions as I ``rag the puck'' waiting for my minister to arrive.

With that said, although Bill C-59 is short, with only one clause, it is a daunting task to explain. I will happily take you through it and explain how it fits within the general scheme of the Criminal Code. Perhaps afterwards the minister can give you the policy explanation for why we have enacted these provisions.

The proposed new section will be located in the Criminal Code in the part that deals with theft-like offences. One can think of joyriding, the taking of a vehicle without the owner's consent, but not a full taking. That is the kind of neighbourhood in the Criminal Code where this offence will be located.

We have taken on board and considered the concerns of the industry that simple camcording is a problematic activity that, in itself, should be criminalized. We have examined how other jurisdictions have dealt with the issue and have designed a Canadian response. The sanction might not be as high as that in other countries but it has other features in common with what you would see in other jurisdictions.

First, subsection 432(1) of the Criminal Code would make it a hybrid offence, which is an offence that can be prosecuted either by way of indictment or by way of summary conviction, to record a movie in a movie theatre without the permission of consent of the theatre manager. If a person is prosecuted by way of indictment, that offence carries a maximum of two years imprisonment. If a person is prosecuted by way of summary conviction, the maximum is six months in prison.

The other offence, 432(2), takes that conduct one step further, which means that in addition to seeing the person engaged in recording without the theatre manager's consent a movie in a movie theatre, there was some evidence that there was a purpose, an ulterior purpose, an intent to later sell, rent or otherwise commercially distribute this copy of the movie that had been made by the person with the camcorder.

This kind of crime has been facilitated by the miniaturization of recording devices. Everyone has a camcorder or knows someone who has one. This technology has been put to a criminal purpose. These provisions of the Criminal Code will put a stop, or hope to put a stop, to this kind of practice.

The third subsection in section 432 — 432(3) — is a provision that will give to the court the authority to order the forfeiture of anything used in the commission of this crime. That would clearly be the recording device, but it may be something else — perhaps a tripod or a microphone. Whatever it is, especially in the case of the second offence, camcording for the purpose, other evidence might be collected in the course of the investigation, such as a computer, multiple copies of DVDs or other kinds of equipment that might be ordered forfeited.

Finally, the last clause, 432(4), is a kind of safety catch. The provision says that the judge will not order the forfeiture of this kind of equipment if the equipment used by the person camcording was not that person's property. If your child goes to the theatre with your camcorder and records the movie, that is an offence. However, you did not give consent to the child to take the camcorder, so, in that case, the court would return the recording device to its rightful owner.

Essentially, that is the scope of the scheme. It is very important that it also be understood that enforcement of this legislation, because it is in the Criminal Code, will fall to the local police and to the provincial Crown. In a sense, that is a significant change because the local police are better placed to respond to calls for an intervention to stop or to arrest someone in the process of camcording.

The film industry has indicated that their belief is that much of the camcording that does take place in Canada takes place in Montreal, which is the jurisdiction of the Montreal Urban Community Police. One would expect the Montreal police would undertake the intervention necessary to prevent the continuation of camcording.

That is a walk through this lengthy bill. With that said, I welcome any questions, and I hope I can answer them.

The Deputy Chairman: Ms. Neri, you are not here to make a presentation but to assist us with information? Is that correct?

Patricia Neri, Director General, Copyright Policy, Canadian Heritage: That is correct.

Senator Johnson: As I will say to the minister, I commend you on this bill. I give it two thumbs up.

When you say ``without the consent of the theatre manager,'' is that a traditional thing to say? Nobody should be recording, with or without his permission. Why is that wording in there?

Mr. Zigayer: We thought about this as we were drafting the bill. The theatre manager is the person in charge of the theatre, the location where the film is playing. He is paid a certain amount of money to have the ability to show that movie. He is the person in charge of that location, so we thought it appropriate to incorporate the absence of consent as an element in the offence.

Further, in other jurisdictions, in the United States, for example, at the federal level they have legislation that says without the consent of the copyright owner. We are not playing in the Copyright Act here; we are in the Criminal Code.

As I said earlier, we have fashioned together a scheme or provision that talks about conduct, the recording of the movie, without the consent of the person who has lawful charge of that movie and control of the location where the movie is being shown.

Senator Johnson: On another topic with regard to film, does the government have any plans to crack down on illegal file sharing? I read an article that said file sharing on person-to-person file-sharing networks, such as eDonkey, has grown from less than 10 per cent of total Internet traffic in 1999 to 60 per cent today. It has grown, as broadband has spread along with new technologies, enabling the rapid sharing of huge files.

I am curious to know, pursuant to this legislation, can you offer the committee any comments on this aspect of movie piracy? It will move towards that level even more than theatres.

Mr. Zigayer: I cannot provide you any assistance on that.

Senator Johnson: Market research says that 93 per cent of those downloading movies in this country are doing so illegally. It seems like a bigger issue than illegal camcording of films in theatres, as I alluded to before. The cost of piracy is $173 million per year. We do not know how much of this is linked to camcording.

This legislation of course is very good and an excellent start, but has any thought been given to what lies ahead?

Mr. Zigayer: In terms of a governmental response to the whole area of movie piracy, I think we can characterize this legislation as targeting the precursor of any other kind of illicit activity. Without having illicitly recorded the film, none of the other steps can take place. A movie cannot be up-loaded via the Internet to a confederate in another part of the world where copies will be run off on an industrial scale and be marketed in one of the countries where the movie has not yet come out.

Stopping camcording helps reduce that secondary criminal activity. I guess you could say there is a linkage here, or you could conceive of one, an organized crime situation where you have people in Canada participating in a conspiracy, an arrangement with confederates in another part of the world, and it all goes to making money for some organization.

Senator Johnson: When you were considering this legislation, you obviously looked at legislation in countries such as the United States and Japan.

Mr. Zigayer: Japan just enacted; I have been trying to see it but I have not gotten it. I have managed to get a few states in the United States, and their legislation as well.

Senator Johnson: With our work in this area, do you know if any consideration has been given to a digital copyright bill in terms of legislation with regard to screen copies? I believe in the United States up to 70 per cent of the movies studied are leaked.

Can you control any of it, really? To what extent can we control any of it when we get into the digital side?

Ms. Neri: Industry figures show that 90 per cent of illicit copies in circulation come from camcording in movie theatres. This bill will have a significant effect on illicit copies.

Senator Johnson: That is only the start. I was querying about what lies ahead.

Ms. Neri: As for the digital issues, the Industry Canada and Canadian Heritage are working on developing options for the ministers for ratification of the WIPO treaties.

Senator Merchant: If you watched the body language of our first presenter, he had a big smile on his face the whole time he talked about it, just like he has right now. Therefore, I am not quite sure how serious this topic is.

What was the genesis of this legislation? Why has it suddenly come out? Was it because Arnold Schwarzenegger was here and he is in the movie business and this is something he is worried about?

Mr. Zigayer: I can tell you this is something I was working on before Arnold Schwarzenegger came to town. Maybe not long before, but I was working on it.

All joking aside, it has been a continuing concern in the Canadian industry. Industry Canada and Canadian Heritage have been looking at it and working with it. A colleague of mine had the file before I came in and ran it the rest of the way.

With that said, we perceive this as being a serious matter. The industry presented convincing information. At first glance, it may not seem to someone who sees someone in the theatre with a camera taking a video of the movie to be a very serious matter, but it is the secondary dimension. It is what happens with that copy afterwards. The sale of that copied movie will remove revenues from where they should be going. They will be going to someone who operates a criminal enterprise.

Senator Merchant: I find it hard to believe that the kinds of copies they create are of a quality that can generate this much activity on the black market. What kind of a movie can you create with a camcorder or a cell phone?

Mr. Zigayer: I am glad to see my colleague has arrived; just in time.

The Deputy Chairman: We are in the middle of question. What we will do, honourable senators, with your permission, is let the minister get himself organized and present his policy. Then we can ask questions and then he or his officials may answer.

Hon. Robert Nicholson, P.C., M.P., Minister of Justice and Attorney General of Canada: Honourable senators, I do not know how much you have studied this. Perhaps I will explain why we are criminalizing the unauthorized recording of a movie.

We believe the unauthorized recording of movies in movie theatres should be prohibited in this country. It is akin to a theft. There are a number of reasons why we should do something about this. The motion picture industry is geared towards a distribution model heavily reliant on building interest in the first release as all-important to the industry. The fact is that under this distribution model the release into the North American market is typically around four months ahead of its release in other parts of the world. It is critical that we have some protection when movies are first released.

Needless to say, they are in high demand when a movie is first released to the public. With the advent of digital technology, it has permitted the development of compact camcorders that have facilitated the transmission via the Internet of a copy of this recorded movie almost within moments of a movie being released. There are huge transnational criminal organizations that profit by this. I think it is a serious problem, not just for the United States motion picture industry. It is a serious problem for the Canadian motion picture industry and for all those who make a living from this industry.

It is estimated that approximately $118 million is lost due to movie piracy in this country. I want the members to be aware that the DVD piracy operation is already a Criminal Code offence under Canadian law. Camcording for the purposes of commercial redistribution is already an offence under the Copyright Act. The case law is clear that selling, offering for sale, pirated copyright materials constitutes fraud under the Criminal Code, regardless of whether there is any economic loss to the copyright holder.

Where the value of the fraud exceeds $5,000 it is an indictable offence. The problem, however, is that it has proven almost impossible to convict anyone under these provisions. Typically, the person found camcording in a theatre will claim it is just for his or her personal use. Even to prove under the Copyright Act that that individual is using this for commercial purposes afterwards is not only difficult, but also the facts sometimes do not fit the case. Sometimes the individual is just being slipping a couple hundred bucks to do this and they are not in the commercial redistribution afterwards.

I believe there is quite a bit of support for this. It would make it an offence under this bill to make unauthorized copies of movies, either for one's own use, with or without the participation of others for the purpose of selling, renting or commercial distribution of the pirated movies.

Japan's parliament has already moved forward on this. This legislation would prohibit the use of any recording device in a cinema and would be punishable.

The United States has enacted legislation in this area. There are 38 states and the District of Colombia that have legislation similar to this. Even Mexico is looking at this, but they have not yet implemented their law on this.

Honourable senators are probably aware that there are two types of offences that we are enumerating. We are putting them both in the Criminal Code. It seems there is an advantage to that. Rather than having it as part of the Copyright Act as a federal piece of legislation, the police are more familiar with and are in the business of enforcing the Criminal Code. To make it a Criminal Code offence will have a considerable effect in ensuring that this kind of activity is prosecuted.

I can go on, Mr. Chairman, at length on this. However, it seems to me this is a straightforward piece of legislation. There is widespread support for it and I hope it receives support in this committee.

Senator Merchant: Is there such legislation in Europe of which the minister is aware? He mentioned the U.S. and Mexico.

Mr. Nicholson: I am not aware. The examples I have provided are Japan, Mexico and the districts within the United States.

Senator Eyton: I have read that certain distributors were in fact black lining Canada as a place for first release.

Mr. Nicholson: That is right. Warner Brothers.

Senator Eyton: I have trouble, like some of the earlier questioners, thinking it was a problem. My vision was a guy sitting in the second row with a home movie camera trying to get a picture. However, you have persuaded me that in fact it is high quality, it is effective and it is distributed commercially and very efficiently.

You and your colleagues referred to the precedent for this. In general terms you talked about something in the U.S. and something in Japan. Are those precedents as severe as this? Do they all provide for jail sentences, for example? It seems for the amateur in front of the camera, a jail sentence seems extreme.

Mr. Nicholson: First, with respect to a jail sentence, as you can see, we have broken it down into two separate offences with a lesser penalty for the initial offence. If an individual is in the business of commercially distributing this, there is the higher penalty.

Generally Criminal Code offences, and theft is one, are accompanied with a criminal record and a possible jail sentence. These things are left to the discretion of the judges. Because you have a maximum in each of these cases does not necessarily mean — in fact it is very rare in this country that anyone would receive a maximum sentence. Nonetheless, there must be a prohibition there to get the message out that this country will not be a safe place for video piracy. As I say, it is a huge business involving tens of millions of dollars and I think that is fair.

With respect to a comparison between that and other jurisdictions, I defer to Mr. Zigayer.

Mr. Zigayer: I will start with the most recently enacted legislation in Japan. Again, our legislation is a bit different. They have a maximum penalty of 10 years imprisonment and a maximum fine of 10 million yen, which I understand is approximately $85,000. California, on the other hand, has established a less serious penalty. It is a fine of $2,500, or a term of one year imprisonment or both. It is very similar to what we have in terms of a summary conviction offence. Our maximum fine for summary conviction is $2,000 and the maximum term of imprisonment is six months.

Therefore, in terms of what I would call your entry level offence, the simple camcording, we are comparable to California and we are a light year away from Japan. On the other hand, we have criminalized the more serious offence with a greater penalty, which is a maximum of five years imprisonment, which means the person has the right to a jury trial.

The other offence that the minister mentioned a moment ago that we are not touching in this legislation is that the actual bringing forward for sale of these camcorded counterfeit movies is a fraud. The penalty for fraud in the Criminal Code is 14 years in prison. It is an indictable offence.

Senator Eyton: The second question related to the reference to the theatre manager. It seems unusual that you can finger an individual out there, probably not very well paid, and make him party to all of this, and the offence. Do you think it will work? I am thinking practically now about a manager in a theatre and suddenly there is an issue with a camera. It seems that a lot of managers will not volunteer because it will mean trouble for them. Has there been much thought about that?

Mr. Nicholson: We must have a person who can blow the whistle on that. In terms of the police who have interacted and have been called into cases where there has been video piracy, there always seems to be an individual, the theatre manager, the individual most concerned about this activity. That is the term. Mr. Zigayer, do you have anything else?

Mr. Zigayer: In terms of the prosecution itself, you would see the police arriving on the seen and you would see them apprehend the person either in the course of taping the movie or at some point in the course of taping the movie. They would bring him to court and he would be charged with this offence.

One of the issues is consent. It would be up to that individual to demonstrate that he had consent. Absent consent, that is it another element in the crime. It will not be very difficult for the Crown to prove. It is a local individual — again, local persons are involved, the local manager. The local police are investigating and the local provincial Crown will be doing the prosecution.

Senator Eyton: Typically, the manager would have to be there.

Mr. Zigayer: Yes, and he has an interest. I would think, on behalf of the movie industry, that the theatre manager has an interest to ensure that people are not camcording in his theatre.


Senator Dawson: Mr. Minister, as Senate critic, I have said that I was going to support the bill without reservation and I think that it is perfectly justified. I can provide you with the reference to my speech if you like.

How is that we are not addressing other forms of piracy, decoding, illegal parabolic dish antennas and other kinds of fraud that result from the modern technology that people now have access to? This part of my question is very important. Many young people have been doing it for a long time, and now, suddenly, it is going to become a serious crime. It is no longer just something for which they will get a slap on the wrist. How will this new pseudo-government ensure that the public understands that this is a drastic change, a real shift in emphasis, and that, as of now, it is criminal? How will you go about informing the public about this new offence?


Mr. Nicholson: I would be surprised, senator, if there are individuals doing this who think this is all right and a great idea. First, it is difficult to prove and to get a conviction. My understanding is that when these individuals are confronted, they usually have a pretty good idea they have been up to something they should not have been doing.

Having said that, those who own movie theatres and the industry itself will assist us in getting the message out that there has been a change and that this is a criminal activity.

Senator Dawson: I realize that, minister. I do not mind attacking the big fraud, but people have been doing this innocently and not for purposes of copyright infringement and distribution. They were just doing it. It will be very difficult for the theatre manager or the police to make the distinction between these types of people. I want to be sure that we have informed them. If they continue doing it and it is illegal, I understand they are committing a crime. I want to ensure a period of transition between today, when I think we will be supporting this bill and pass it, and the day the legislation starts being applied by the police and theatre owners in Montreal; I want to be ensured that there will be a serious effort on the part of the government to inform people about that. You can share it with the industry, if you like, or ask Mr. Schwarzenegger to publicize it, but I want to be sure that people know it is a crime.

Mr. Nicholson: Senator, you will help us get that message out. I have encouraged my colleagues and my members of Parliament that if and when this bill gets passed to make this known. If members of Parliament and senators help get this out, that would be helpful. If you think I have some coast to coast advertising budget to do this, that is not me — it probably would not fall under Justice Canada anyway. I am quite sure the motion picture industry and the theatre owners in this country would get the word out.

For the person who just likes to do this and thinks it is all right, for whatever reason, there is always, of course, Crown discretion. The Crown has an opportunity to decide whether to proceed on a charge like this. The message will get out and most people will be able to figure this out — if they have not done that already — namely, that what they are doing is not right.

Senator Dawson: If you can find millions to run ads against Stéphane Dion, you might be able to find a bit to do some advertising on this bill.

Mr. Nicholson: Thank you for that suggestion.

The Deputy Chairman: You do not want to leave the impression, senator, that it was government money that was doing that.

Senator Dawson: Sorry. It was probably because of the hour delay that I got a bit irritated.

Senator Milne: Mr. Minister, it is intriguing to me. We were being told just before you came in that the State of California considers this to be a lesser offence than this particular bill will put into law here in Canada.

Mr. Nicholson: I am not sure about that, senator. My understanding is that they have a fine of $2,500 and they have a six-month penalty. That is a summary conviction offence for simple camcording. I guess it is comparable, but it is not just a question of aligning ourselves with other jurisdictions. We try to make it consistent within our own Criminal Code. That is the general penalty for a summary conviction offence, which is $2,000 and/or six months in jail. It may not line up exactly with other jurisdictions but, in the end, I think it is important for us to make our own statement and put our own bill in place.

Senator Milne: An indictable offence is liable to imprisonment for not more than five years, and somewhere I read $1 million.

Mr. Nicholson: You are quite correct. That is the existing law within the Copyright Act, where individuals who are into the distribution of stolen goods are liable to imprisonment for up to five years and $1-million fine.

The offence that you have before you, which is called ``camcording for the purpose,'' if proceeded by indictment would be punishable for not more than five years. That is consistent with other theft-related offences in the Criminal Code, if they are proceeded with by way of indictment.

Senator Milne: It will be difficult to prove, if someone is sitting in a theatre with a camcorder, that they are actually in the business of reproducing it to sell it.

Mr. Nicholson: That is part of the problem, senator. With the provisions of the Copyright Act as they exist, many times the individual that is sitting there and stealing this film is not actually in the business of commercial redistribution. He or she is not part of a wider group. This person may be getting $200 to sit there and do it, and that is their only involvement in it. One of the offences we have in this bill is simple camcording. That is, if you are there stealing that film, that is an offence under the Criminal Code, if this bill is passed. It is a simple, straightforward offence, but it is not linked to commercial or organized crime; that is a separate offence.

Senator Milne: If this happens in a theatre, who will nab the person? Will the theatre manager call the police or will it be up to the ushers?

Mr. Nicholson: I would certainly hope that whoever observes a criminal offence taking place would bring it to the attention of the appropriate authorities. The problem that we have now is that the police tell us they really do not want to get involved with it — whether it is the usher, the manager or the popcorn vendor — because it is extremely difficult to prove that the individual sitting there is a part of some larger, illegal conspiracy or activity.

Senator Milne: You are hoping to nab them on the lesser offence, really.

Mr. Nicholson: We are adding that lesser offence, you are right.

Senator Milne: A lot of numbers have been thrown around about camcording in Canada. The film industry lobby has thrown out claims that are all over the place, ranging from 20 per cent to 70 per cent for global camcording here in Canada. Do you have any notes that would tell you precisely what it is?

I understand Minister Oda received a briefing that said Montreal alone was responsible for 40 per cent of unauthorized film reproduction in the world market; that is twice what the Canadian Motion Picture Distributors Association now claims for all of Canada.

Mr. Nicholson: Did Canadian Heritage want to make a comment on that?

Ms. Neri: The figures we used in the department for the preparation of Minister Oda are based on figures from the motion picture associations. We are told that approximately 20 per cent to 25 per cent of illegally camcorded films originate in Canada, and that 70 per cent of those come from Montreal. That is 70 per cent of the 20 to 25 per cent.

Senator Milne: Who wrote the bill? I understand that Minister Oda had a meeting in Ottawa about a year ago with my old friend Doug Frith — sitting back here — the President of the Canadian Motion Picture Distributors Association, and that he provided the government with draft legislation. Is this bill pretty close to his draft legislation or did the government actually write it?

Mr. Nicholson: I wrote it myself, senator; I thought this would be a great exercise in my responsibilities as Minister of Justice. I hope you like it. I am open to suggestions.

Senator Milne: I hope the bill did not come from a lobby group; that is what I am telling you.

Mr. Nicholson: This comes from the Department of Justice. Mr. Zigayer oversaw the process. There is a drafting process that we have within the department. We do it simultaneously in both official languages and it meets with his approval.

Senator Milne: I am well aware of how legal drafting goes, as you know. Mr. Zigayer, can you confirm that it actually originated in the department?

Mr. Zigayer: It actually originated in the department. We did not copy anything. We took an analysis of the problem and worked out the approach ourselves.

Senator Johnson: I think the bill is an excellent start. I run a small film festival in rural Manitoba and I deal with filmmakers and people in the industry all the time. To them, this is not only timely but long overdue. We are very proud that Canada is in the lead — not that many countries have accomplished this yet. It is very important to them.

Filmmakers and other artists in this country and around the world do not exactly make a lot of money. This is really their intellectual property, so I am very happy with it.

I asked a few questions before you came, minister. They are on the record so I will not repeat them now, but I just have one more. Do you have anything to give us on the timeline legislation to cover illegal downloads, for example, in piracy, via the Internet? I have heard that Canadian Heritage and Justice Canada are looking into this. Are they or are they not?

Mr. Nicholson: We are looking into a wide range of possible initiatives. As I indicated to my colleagues about our justice legislation, we are just getting started.

The Deputy Chairman: Are there any further questions? If not, thank you, minister, and Mr. Zigayer and Ms. Neri. I appreciate it.

We will now go to clause-by-clause consideration, if it is agreed.

Hon. Senators: Agreed.

The Deputy Chairman: Shall the title stand postponed?

Hon. Senators: Agreed.

The Deputy Chairman: Shall clause 1 carry?

Hon. Senators: Agreed.

The Deputy Chairman: Shall the title carry?

Hon. Senators: Agreed.

The Deputy Chairman: Is it agreed that I report this bill to the Senate?

Hon. Senators: Agreed.

The committee adjourned.

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