A failed program to streamline federal payroll departments will cost taxpayers $2.6 billion, the Parliamentary Budget Office said yesterday. Costs did not include proposed compensation for employees who reported hardship when they were shortchanged on cheques: “We saw how that didn’t work.”
Asking Parliament’s permission each year to increase the federal debt limit is too risky, the Department of Finance has told the Senate national finance committee. A current law allows cabinet to borrow at will to the debt ceiling of $1.16 trillion: “We need parliamentarians to wonder.”
The Commons by a 227 to 42 vote yesterday rejected a New Democrat motion to declare a “climate emergency”. Liberals complained the motion had too many strings attached, including abandonment of the Trans Mountain Pipeline expansion: “This is not fearmongering.”
Journalists testifying at the Commons finance committee yesterday expressed wariness over practical or perceived government meddling in news coverage under a $595 million industry bailout. One MP called the program a “blank cheque” that leaves cabinet appointees to decide which publishers win subsidies: “If the impression is left to linger that the government is forking over cash grants to their journalist buddies, trust in media will only plummet further.”
The Commons heritage committee yesterday endorsed sweeping copyright reforms to raise by millions the royalties paid to authors, musicians and performers. Creators testified they earned a pittance – one bestselling novelist reported a $12,000 annual income – due to Copyright Act exemptions.
“Hearing those stories from artists speaking about their experiences stood out,” said Liberal MP Julie Dabrusin (Toronto-Danforth), committee chair. “We wanted to reflect the needs of creators.”
The committee report Shifting Paradigms recommended Parliament repeal a 2012 amendment to the Act that allows universities, colleges and school boards to copy works free of charge under a “fair dealing” exemption. “Fair dealing should not apply to educational institutions when the work is commercially available,” said the report: “Many writers and publishers noted how their incomes have declined since the changes to fair dealing in 2012.”
The Association of Canadian Publishers estimated licensing fees fell 89 percent due to free photocopying for educational purposes. The Federal Court in 2017 faulted York University for copying millions of articles and book chapters without royalties. The ruling is under appeal.
MP Dabrusin said only works without a commercial market like academic treatises should be copied free of charge. “If you can buy that textbook or buy that poem, that should not be exempt,” said Dabrusin.
“This is not just a clinical report,” said Dabrusin. “The creators, the authors and publishers were very clear in telling the committee of the impact the educational exemption had on their work.”
Sylvia McNicoll, a bestselling Burlington, Ont. children’s author, testified her income fell sharply due to wholesale copying. “My income is down 90 percent to $12,000,” McNicoll told 2018 hearings of the Commons heritage committee.
“The world watches as Canadian schools download and copy curated content in a government-sanctioned theft,” said McNicoll. “I’m trying to make a living. It’s impossible.”
Made 0.03¢ A Hit
The committee also recommended Parliament enact Copyright Act amendments sought by composers and performers including an extension of owners’ rights from 50 to 70 years after a creator’s death; regulation of music streaming services; payment of royalties to performers whose work is heard in film and TV soundtracks; and repeal of a 1997 policy that capped at $100 a year the music royalties owed by radio stations on their first $1.25 million in advertising revenue.
The $100 radio cap should only apply to campus stations or local independent broadcasters, said MP Dabrusin. “It was never intended to be there to support large businesses that own multiple stations,” she said.
Damhnait Doyle, vice-president of the Songwriters Association of Canada, said in testimony last June 7 that industry-friendly copyright exemptions had eviscerated middle-class composers and performers. “Creators are being hammered from all sides, from minimizing streaming income to piracy to outdated exemptions for big business,” said Doyle. “Everybody is getting paid in the music industry. They are. The only people not getting paid are creators.”
“The middle class of creators has been eviscerated at this point,” said Doyle: “Most cannot pay their rent, let alone go to the dentist.”
David Bussieres, founder of Montréal-based Regroupement des Artisans de la Musique, testified September 20 that copyright exemptions left “crumbs for the artists”. Bussieres said his 2014 hit Lumière brought him $10.80 in royalties on Spotify though the song was played thousands of times.
“It was 0.03¢ per hit,” he said. The same song generated 60,000 views on YouTube with net revenue of $153.
The heritage committee also recommended Parliament “raise awareness of copyright”, “promote copyright” and combat piracy and unlicensed duplication of works. “While there are many highly successful, well-known Canadian musicians, artists, writers and performers, most artists and creators in Canada struggle to earn a living from their art,” said Shifting Paradigms.
The committee “cares deeply about the subject”, said MP Dabrusin. “Creators talked about the impact on income they need to keep producing the works that we love.”
Industry Canada in a 2018 Study Of Online Consumption Of Copyrighted Content: Attitudes Toward And Prevalence Of Copyright Infringement In Canada said 26 percent of internet users – the equivalent of 7.3 million Canadians – admitted to illegally accessing music, e-books, movies, software, TV shows and video games.
Asked why they stole material online, respondents replied that it was easy to do (39 percent); “It’s only fair” (26 percent); “It’s what everyone does” (24 percent); and “I should be able to share my content with whomever I choose” (19 percent).
By Staff 
The Office of the Auditor General says it is so short of funding it’s cutting audits. MPs on the Commons public accounts committee expressed alarm: “This is about as big as it gets.”
A federal labour board has upheld the firing of an $86,000-a year auditor at the Canada Revenue Agency for snooping through tax files. “Employees are required to conduct themselves in an exemplary manner,” says the Agency’s Code Of Ethics And Conduct: “No, no and no.”
Cabinet has proposed 11th hour amendments to the Fisheries Act to allow more exemptions to habitat protection. The changes introduced in the Senate fisheries committee follow lobbying by farmers and industry: “The government is balancing the needs.”
Health Canada faces a federal lawsuit over its long phase-out of a pesticide rated lethal to bees. Four environmental groups in a Federal Court application allege regulators breached their own Act: ‘The effect is the environment is exposed to unacceptable risk for years.’
Federal agencies will publish an A-list of newspapers and websites deemed reliable under a multi-million dollar subsidy program, the Department of Finance yesterday told the Senate national finance committee. Subsidies to federally-approved news media invite government meddling in a free press, cautioned one senator.
“The rules themselves allow for the publication of a list of qualifying journalism organizations,” said Trevor McGowan, director general of tax legislation: “It would allow for, say, the Canada Revenue Agency to have a list saying here are the organizations that qualify for the digital tax credits. You could go to that list.”
Bill C-97 the Budget Implementation Act proposes a 15 percent tax credit to a maximum $75 for subscribers of websites operated by a “qualified Canadian journalism organization”. Criteria are not known. The tax credit is projected to cost $11 million in 2020. It expires in 2024.
The bill also amends the Income Tax Act to offer lucrative payroll subsidies for news organizations “primarily engaged in the production of original written news content”. A total $360 million would be paid over four years through a 25 percent payroll tax credit for publishers, the equivalent of a maximum $13,750 per newsroom employee, retroactive to January 1, 2019.
An unnamed cabinet-appointed group will decide which media qualify for subsidies. “The government will decide whether or not to change certain criteria,” said Maude Lavoie, Finance Canada director general of business tax programs.
Senator Raynell Andreychuk (Conservative-Sask.), chair of the foreign relations committee, yesterday described the subsidy program as troubling. “I’m very concerned that Canada has been one of the countries that that has staunchly talked about freedom of the press,” said Andreychuk. “We know how many journalists have lost their lives. So, we monitor and fight back and say democracy is the free press, an independent judiciary. And here we’re going to be setting up criteria by the government to get government funds.”
“Manipulation Of The Press”
“In the countries I’ve worked, survival for a lot of people to get their information meant they had to go to the government,” said Andreychuk. “And I’ve watched how original rules might have had good intentions, but we don’t know what’s going to happen down the line. Sometimes we look the other way and we wake up and find there is manipulation of the press.”
“I’m worried here you have criteria, you’ll have to jump those; selection committees appointed by the government – we’re intruding on the freedom of the press,” said Andreychuk. “It may not be our intention; it’s the survival of newspapers. But we’re going to be creating opportunities for others to come in, and we may not be really helping those we intended to in the first place.”
“To me it’s very dangerous ground, and it shouldn’t be through a tax credit,” said Andreychuk. “It should be wide open as a debate for Canadians, whether this is the way to support a freer press, a press that’s struggling against bloggers and the new internet systems, tweets and whatever else. I think it’s a bigger national debate than a question tucked into a tax bill.”
“We all want to encourage the survival of the press, whether it’s in a small town or elsewhere, but if we start down this road, with these criteria, with government setting that criteria and interpreting that criteria, I think we’re on the wrong road,” said Andreychuk.
“Those are very important and understandable concerns,” replied Pierre Leblanc, the finance department’s director general of personal income tax: “Your concern is certainly heard.”
The department suggested details of the program have been finalized by cabinet, but remain unannounced. “We’re not in a position to talk about specific news organizations,” said Director General Leblanc.
“What frightens me about some of these things is there are a lot of assumptions and you’re not willing to provide us with hard facts,” said Senator Nicole Eaton (Conservative-Ont.)
By Staff
Attorney General David Lametti last night told the Commons he has not offered SNC-Lavalin Group Inc. any out-of-court settlement of fraud and bribery charges. Lametti said he discussed the company’s legal troubles with two aides to the Prime Minister, but “felt no pressure”.
The Canada Revenue Agency is grossly overstaffed, the Commons finance committee was told yesterday. The Agency has five times the number of agents per capita, and three times per actual taxpayer, than the U.S. Internal Revenue Service: “How is that possible?”
A Liberal senator yesterday asked Finance Minister Bill Morneau “why should I vote for you” over inadequate federal measures to curb tax avoidance. The Senate last November 27 passed a private Liberal bill compelling the Canada Revenue Agency to publish a yearly blacklist of tax cheats, including those with offshore accounts: “What are you waiting for?”
The RCMP in an internal audit acknowledge they’ve failed to meet equity hiring targets. Auditors blamed a decline in overall recruitment: “The pool is limited.”
The Senate last night unanimously passed a cabinet bill to remove accessibility barriers nationwide. A handful of amendments must still be ratified by the Commons before the bill becomes law: “We can get to work.”
