In December of last year the Government of Canada released its 2024 Fall Economic Statement (Economic Statement),1 an economic, fiscal and social policy review and proposed plan to promote economic growth for the year to come. One interesting proposal set forth in the Economic Statement is the government's plan to amend the Copyright Act to include an artist's resale right (ARR).2 For those readers unfamiliar with the mechanism of ARR, it is a royalty that attaches itself to an original work of art payable on every sale of the work on the secondary market when sold through professional auction houses and commercial galleries. Generally recognized as a related copyright, the resale right typically lasts for the duration of copyright in the applicable jurisdiction of its adoption.
According to the Economic Statement, the intention of establishing an artist resale right in the Copyright Act is to ensure that Canadian visual artists can benefit from future sales of their work.3 The government reported that: "[a]rtists, particularly visual artists, are among the lowest income earners in Canada despite their significant cultural contributions" and that by providing visual artists with an ARR, artists (or their estates) can benefit from additional income streams in connection with their work.4
It is no surprise to copyright enthusiast that the government is endeavoring to introduce an artist resale right. The idea has been seriously floating around in recent years, particularly with the recent statutory review of the Copyright Act and its accompanying Report of the Standing Committee on Industry, Science and Technology (the Report).5 The Standing Committee on Industry, Science and Technology (INDU Committee or Committee) heard from several stakeholders both for and against a Canadian artist resale right.
According to the Report, key proponents in favour of the right, mainly collective agencies and representatives for artists, argued that an artist resale right would allow artists to benefit from future sales of their works, which they claimed can be substantial if the value of the work appreciates over time.6 In one evidence Committee hearing, a representative for Copyright Visual Arts7 highlighted that writers and composers continue to profit from their art so long as people continue to buy their books or songs. Thus, it was argued, that visual artists should be extended the same economic opportunity and benefit.8 Representatives for Canadian Artists' Representation/Le Front des artistes Canadiens,9 wrote in a submission to the Committee that while the market grows, a Canadian artist does not further benefit from the appreciation of his or her work in the secondary market, notwithstanding the fact that such appreciation in value often directly corresponds with the growing reputation of the artist.10 CISAC – the International Confederation of Societies of Authors and Composers11echoed this perspective in its submission that "[w]ithout the Resale Right in place, the artist receives no compensation after the initial sale, while auction houses, art dealers and private collectors' cash in on the growing value of the work, which is attributed to the artist's reputation."12
However, in the Report, witnesses against a Canadian resale right stated that it is an "inappropriate tool to help low-income visual artists," specifically because, as they claim, it benefits only a small portion of renowned visual artists whose works are sold through professional institutions like auction houses and commercial galleries.13 A submission made by Ariel Katz and Guy Rub, both law professors specializing in copyright law, cited several studies supporting the claim that the most successful artists (or their estates) disproportionally benefit from ARR, including a 2008 UK study which concluded that 80% of all royalties collected were shared among the top 100 artists.14 A 1999 French report revealed that only about 2,000 artists benefited from the resale right over a three year period and that among those artists the top 50 received 43% of the royalties, while the remaining 1,950 artists on average collected less than 400 euros annually.15 Further, in 2018 Mr. Rub and Christopher J. Sprigman conducted a two-month long study of the US art market and found that if ARR were to have existed in the territory, that the heirs of Andy Warhol alone would have collected 13% of all resale royalties.16
As reported, other witnesses claimed that ARR would negatively impact the art market in Canada as it might result in a decline in both the price and the volume of primary artwork sales.17 However, advocates for the resale right argued that such a claim of a negative market impact is unsubstantiated; citing rather, several studies on the topic from the European Commissioner in 2011, the US Copyright Office in 2013 and the World Intellectual Property Organization in 2017, all of which concluded that the resale right has no economic impact on the art market.18
All things considered, the Committee noted in its observations the potential constitutional challenge of Parliament establishing a resale right in the Copyright Act. As Katz and Rub highlighted to the Committee in their Brief:
[c]opyright, at its core, is a right in an intangible asset ...[u]nder the Copyright Act, in the case of a work that is in the form of a tangible object, the copyright holder only has a right "to sell or otherwise transfer ownership of the tangible object, as long as that ownership has never previously been transferred in or outside Canada with the authorization of the copyright owner"19...[t]he buyer of the tangible object, of course, owns that object but not the copyright in the work. The rights with respect to such tangible objects are thus part of personal property law and determined by the applicable provincial law.20
Under section 92(13) of The Constitution Act, 1867 (The Constitution),21 the provincial legislatures have exclusive power over property law; and although the Act expressly provides Parliament with the right to legislate over matters of copyright under section 91(23), as Katz and Rub revealed, it is "inconceivable" that the drafter(s) of The Constitution would have intended to capture ARR under the broad category of copyright.22 The pair explained that ARR was not law in any country until 1920 when it was first implemented in France as the droite de suite, over half a century after The Constitution was passed in Canada.23 Therefore, they argued, an artist resale right would not have been conceived of as a form of copyright at the time of drafting the law. Moreover, its unique nature lends itself conceptually to a personal property right, which falls under the exclusive jurisdiction of the provinces.
Recognizing the broader potential conflict between ARR and The Constitution, the INDU Committee recommended that the Government work with provincial and territorial governments and other stakeholders to explore the costs and benefits of implementing a national resale right and to report their findings to the Committee within three years.24 It is unclear if such consultations were ever launched or if any further reporting returned to the Committee on the matter. According to the Government of Canada website, the departments of Canadian Heritage and Innovation, Science and Industry launched an open survey in November of 2023 about the subject of ARR, the results of which remain to be publicly reported on. It will be interesting to see how this matter unfolds in Parliament, if at all, following the Government's broad declaration in the Economic Statement. After all, it is questionable if Parliament has the authority to implement a national artist resale right in federal legislation. The Constitution clearly sets out the edges of Parliament's powers: "Parliament can make laws for all of Canada, but only about matters the Constitution assigns to it."25 Given the unique nature of ARR as a right attached to a tangible object, that is, as a personal property right, there is a credible legal argument that challenges whether ARR falls under said assignment of power. With a federal election on the horizon, the prospect of a Canadian resale right may be dead on arrival in connection with the ambitions of the Economic Statement, however, there is always the possibility of resurrection as more countries around the world look to adopt the artist resale right.26
Footnotes
1 2024 Fall Economic Statement, online https://www.budget.canada.ca/update-miseajour/2024/report-rapport/toc-tdm-en.html (Economic Statement).
2 Economic Statement, see Annex 3, Legislative Measures.
3 Ibid, at 140.
4 Ibid.
5 House of Commons Canada, Statutory Review of the Copyright Act (June 2019), online: Report of the Standing Committee on Industry, Science and Technology, online: [https://www.ourcommons.ca/Content/Committee/421/INDU/Reports/RP10537003/indurp16/indurp16-e.pdf] [the "INDU Report"]
6 INDU Report at 40-41.
7 Copyright Visual Arts (CVA), a not-for-profit copyright management society providing Creator's rights administration for professional Canadian and Québécois visual and media artists, see online: [https://www.cova-daav.ca/en/About]
8 INDU (2018), Evidence, 1535 (David Yazbeck, CVA), online: [https://www.ourcommons.ca/DocumentViewer/en/42-1/INDU/meeting-131/evidence]
9 Canadian Artists' Representation/Le Front des artistes canadiens↩(CARFAC), a non-profit corporation that is the national voice of Canada's professional visual artists, see online: [https://www.carfac.ca/about/].
10 CARFAC Brief Submitted to INDU, 26 October 2018, online: [https://www.ourcommons.ca/Content/Committee/421/INDU/Brief/BR10093096/br-external/CanadianArtistsRepresentation-e.pdf] at 2.
11 CISAC – the International Confederation of Societies of Authors and Composers a not-for-profit collective management organization that protects the rights and promotes the interests of creators worldwide, see online: [https://www.cisac.org/about/cisac-overview].
12 CISAC, Brief Submitted to INDU, 14 December 2018, online:[https://www.ourcommons.ca/Content/Committee/421/INDU/Brief/BR10271292/br-external/InternationalConfederationOfSocietiesOfAuthorsAndComposers-e.pdf] ["CISAC Brief"] at 2.
13 INDU Report at 41.
14 Ariel Katz & Guy Rub, Brief Submitted to INDU, 10 December 2018, online: [https://www.ourcommons.ca/Content/Committee/421/INDU/Brief/BR10268441/br-external/RubGuy-e.pdf] ["Katz & Rub Brief"] at 3.
15 Ibid.
16 Ibid.
17 INDU Report at 41-42
18 INDU Report at 41 referencing the CISAC Brief at 3 (Impact on the Market).
19 Katz & Rub Brief citing Copyright Act, RSC 1985, c C-42, online: [https://laws-lois.justice.gc.ca/PDF/C-42.pdf], s 3(1)(j) (emphasis added).
20 Katz & Rub Brief at 1-2.
21 The Constitution Act, 1867, 30 &31 Vict, C 3 (U.K.).
22 Katz & Rub Brief at 2.
23 Ibid. Moreover, the right was only incorporated into the Berne Convention for the Protection of Literary and Artistic Works (as amended on September 28, 1979) ["Berne Convention"] (arguably the leading international treaty on the subject of copyright) in 1948 on an optional basis, that is, the treaty does not obligate its Member States to establish a national resale right, see World Intellectual Property Organization ("WIPO") Magazine, "The artist's resale right: a fair deal for visual artists," online: [https://www.wipo.int/web/wipo-magazine/articles/the-artists-resale-right-a-fair-deal-for-visual-artists-39997] and see Berne Convention Article 14ter ("Droit de suite" in Works of Art and Manuscript).
24 INDU Report, Recommendation 9: "[t]hat the Government of Canada consult with provincial and territorial governments, Indigenous groups, and other stakeholders to explore the costs and benefits of implementing a national artist's resale right, and report on the matter to the House of Commons Standing Committee on Industry, Science and Technology within three years," at 43.
25 Citing the Government of Canada Website, The Canadian Constitution: "What is a federal system?", online at [https://www.justice.gc.ca/eng/csj-sjc/just/05.html].
26 In May 2018, the Standing Committee on Copyright and Related Rights ("SCCR") from WIPO established a Task Force on the Artist's Resale Royalty Right to study and report back on the practical elements of ARR on a national and international level in an effort to mandate the universal adoption of the right within the Berne union (currently, the right is optional for Members under the Berne Convention), see WIPO, SCCR/37/5, Task Force on the Artist's Resale Royalty Right (14 November 2018), online: [https://www.wipo.int/meetings/en/doc_details.jsp?doc_id=420989] and supra note 8 (Yazbeck (CVA) Submission). The initiative was the result of a proposal from Senegal and Congo to include ARR in the SCCR's future agenda in order to study the impact of a universal and mandatory ARR, see WIPO, SCCR/31/5 Proposal from Senegal and Congo to include the Resale Right (droite de suite) in the Agenda of Future work by the Standing Committee on Copyright and Related Rights of the World Intellectual Property Organization, online:[https://www.wipo.int/meetings/en/doc_details.jsp?doc_id=323077]. The push for a global resale right is the result of reciprocity under the Berne Convention. The principle of reciprocity mandates that a Member State extend the same national rights and protections to other foreign members of the Berne Convention. For example, if France provides its national artists with ARR, then a Canadian artist benefits from ARR in the territory, notwithstanding the fact that such a right does not exist in Canada. Conversely, a French artist does not benefit from ARR if his/her work is sold on the secondary market in Canada. Thus, it is a matter of establishing equity among the Berne territories with respect of the resale right.
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