Healthy Sector > History: Neighbouring Rights And Live Events

History: Neighbouring Rights And Live Events

For many years Canadian composers and authors have received royalties from the broadcast and public performance of their compositions. These royalties are collected by SOCAN. In 1997 the Copyright Act of Canada was amended to acknowledge the essential contribution of artists (including feature performers, background musicians, etc.) and record companies in the creation of recorded music, and to add a right to equitable remuneration for artists and record companies, which is in line with similar rights in the rest of the world. This right to equitable remuneration is sometimes also called a “neighbouring right”.

Created in 1997 (originally as NRCC), Re:Sound is the Canadian not-for-profit music licensing company mandated by its members to license recorded music for public performance, broadcast and new media.

Tariff 3 (Background music) was one of the first tariffs certified by the Copyright Board of Canada to Re:Sound in 2006. In 2008, Re:Sound submitted a series of live event tariffs to the Copyright Board. Tariffs 5.A-G (Use of Recorded Music to Accompany Live Events, 2008-2012) were certified in May 2012 and became payable by performing arts organizations back to 2008.

In summer and fall 2012, when Re:Sound started collecting royalties under these tariffs, many performing arts organizations were unprepared and turned to CAPACOA for advice and support. In response, CAPACOA agreed with Re:Sound that all member communication would be channelled through CAPACOA until further negotiations had taken place.

In the same year, Re:Sound filed these tariffs for renewal and submitted new tariffs for certification to the Copyright Board. However, the royalty rates for these tariffs were considered too high and several provisions seemed unfair to CAPACOA members. CAPACOA therefore joined a group of performing arts organizations to file an objection to the Copyright Board on proposed tariffs 3, 5 (parts A, D, E, I and J) and 6.A.

In May 2013, CAPACOA renewed its efforts with the assistance of attorney Mark Hayes. In August, CAPACOA submitted a series of observations and proposals to Re:Sound, including a request to reduce the number of tariffs and new wording for Tariff 5.A to account for all use of recorded music as part of a live performance. Re:Sound responded in late December 2013, indicating that they were in agreement with several of our recommendations and provided reassurance they would not move forward with their proposed fee increases.

In 2014, CAPACOA intensified consultations with members, arts service organizations, and other objectors. This included aligning our position with the Canadian Associations of Fairs and Exhibitions (CAFE), an objector to the Tariff 5.D (Festivals, Exhibitions and Fairs) and with Festivals and Major Events. After much analysis and negotiations, Re:Sound agreed in November 2014 to amend Tariff 5.D as proposed by CAPACOA and CAFE in order to address inequities in the fee structure. By December, a settlement agreement was struck between CAPACOA and Re:Sound.

CAPACOA and Re:Sound came to a settlement agreement in December 2014. This agreement included the agreed upon changes for Tariff 5.D and introduced Tariff 5.K for the use of music as part of a live event. The agreement also included conditions for the payment of neighbouring rights royalties by CAPACOA members and members of affiliate networks.

The settlement tariffs were certified by the Copyright Board nearly three years later, in September 2017.

While this certification should in principle have streamlined the reporting process for music users, new issues surfaced when Re:Sound and SOCAN created the Entandem joint venture in 2019 to collects royalties for both neighbouring rights and copyright. Because certain Re:Sound and SOCAN tariffs were not harmonized, reporting via Entandem was complex and led to occasional double invoicing. CAPACOA issued guidance to help members report for the 2017 calendar year and beyond. This guidance was updated in 2022 to minimize risks of double reporting.

The streamlining of copyright and neighbouring rights remains an ongoing preoccupation for CAPACOA.