Changes to Music Remuneration Rights

Summary#

This is the federal notice titled Statement Amending the Statement Limiting the Right to Equitable Remuneration of Certain Rome Convention or WPPT Countries (registered as SOR/2020-82) published in the Canada Gazette, Part II on April 29, 2020. It changes which foreign makers of sound recordings are covered by Canada’s right to equitable remuneration, and phases some of those changes to align with the entry into force of the CUSMA trade agreement.

What it does#

• Replaces part of the earlier ministerial statement to say the right to equitable remuneration (for communication to the public by telecommunication) now applies only to sound recordings whose maker was, at first fixation, a citizen or permanent resident of Japan or Singapore, or a corporation headquartered in one of those countries.
• Adjusts an exception about broadcasts and background music for recordings made in Singapore.
• Repeals several subsections (former subsections 2(4), 2(5) and 2(6) of the earlier statement), removing other listed limits from the 2014 statement.
• Sets when the changes take effect:
  • Generally on the day the statement is published in the Canada Gazette, Part II.
  • But parts that relate to U.S. nationals come into force on the later of the publication date and the day CUSMA comes into force for Canada.
• The regulatory note explains the main reason: recent U.S. copyright changes (the U.S. Music Modernization Act) and CUSMA require Canada to remove some previous limits so it gives U.S. rights holders the same treatment as Canadians for certain uses.

Who's affected#

• Performers and makers of sound recordings from other countries — especially rights-holders in the United States, Japan, and Singapore — because the statement changes how Canada treats their claims to equitable pay for public performance and telecommunication.
• Businesses that play recorded music in public or by telecommunication, such as restaurants, bars, shops, venues, and broadcasters. Small businesses that use music could see changes to the royalties they owe.
• The Copyright Board of Canada, which determines or approves some royalty rates, and rights holders who negotiate licenses.
• It is not always clear from the text exactly how much any one business will pay; that depends on future royalty rates and which parts of the amendment have come into force.

Why it matters#

• The change is meant to make Canada meet its international obligations so U.S. rights holders receive national treatment for certain uses of their recordings. That supports Canada’s ability to implement and ratify CUSMA.
• For practical users of music (cafes, stores, radio stations), the change could mean new or higher royalty obligations when they play recordings made by foreign rights-holders, depending on how royalties are set.
• Some relief for small broadcasters is noted in the source: royalties can be limited for certain broadcasters’ first $1.25 million or less in annual advertising revenue, so impacts will vary by size and type of business.
• The timing matters: parts of the change depend on when CUSMA comes into force for Canada, which was not fixed in this notice.