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Ontario Passes Protecting Child Performers Act

On April 30, 2015, Ontario passed Bill 17, entitled the Protecting Child Performers Act; on May 5, 2015, Bill 17 received Royal Assent, and so, by its terms, the Act will come into force in February 2016 (nine months from Royal Assent). As set out in Section 2 of the Act, its purpose is to “promote the best interests, protection and well being of child performers”. The text of the legislation as passed can be accessed here. The Act changes in critical ways the obligations of Ontario employers of children in the entertainment industries.

Effect of the Act

The particulars are set out below, but the “big picture” summary of the Act is that it extends to all child performers in a wide range of entertainment activities the types of working condition protections which have historically been associated with the collective agreements of performers’ unions and guilds, such as ACTRA. It is impossible to avoid the minimum protections afforded by the Act, but where an employment contract, collective agreement or other statute applies directly to a matter addressed by the Act and the provision in the employment contract, collective agreement or other statute provides “a greater right or protection to a child performer, the provision in the employment contract, collective agreement or other [statute] applies” and thus “trumps” the application of the Act. In short, a child performer can contract for better protection than that provided by the Act, but cannot contract for worse protections.

Scope of Application

To begin, we need to determine the scope of the Act’s application. At its core, the Act governs the relationships between employers, parents and “child performers”. Failure by an employer to comply with the Act can result in liability under the Employment Standards Act. The following criteria must be present for the Act to apply:

  • the “child performer” must be under 18 years of age;
  • the child performer must be receiving “monetary compensation” (i.e., the Act does not apply when the child performer is not being paid, or is being compensated by means other than monetary payments); and
  • the child performer must be performing work or supplying services in the “entertainment industry”
    • “entertainment industry” means either (i) the “live entertainment industry”, which means the “performing arts industry that provides live entertainment in theatre, dance, music, opera or circus” or (ii) the “recorded entertainment industry”, which means “the industry of producing visual or audio-visual recorded entertainment that is intended to be replayed in cinemas, on the Internet, on the radio, as part of a television broadcast, or on a VCR or DVD player or a similar device, and includes the industry of producing commercials”

We can see at this point that there are some ambiguities about the precise scope of the Act’s reach – namely, it is unclear the extent to which it applies to what we might colloquially refer to as the “music industry”. From the definition of “recorded entertainment industry”, it does not appear that the Act covers the rendering of performing services where what is being produced is an audio-only sound recording – but that’s not entirely certain, since the definition does include recorded entertainment that is intended to be replayed “on the radio”. Using the example of a “boy band” made up of members under the age of 18, it seems the Act would not apply to their in-studio recording work, but would apply to their live concert performances. (The Act has some other drafting oddities – is it really necessary to refer to “VCRs”?)

General Engagement Rules

The Act imposes three different sets of obligations on employers: (1) obligations which apply to all engagements of child performers, irrespective of which aspect of the entertainment industries they are providing service sin; (2) obligations which apply only to engagements in the “recorded entertainment industry”; and (3) obligations which apply only to engagements in the “live entertainment industry”. The following obligations apply to all engagements of child performers:

  • Contracts Must be in Writing. All engagements of child performers must be pursuant to a written contract. [Section 5]
  • Pre-Contract Meeting and Ongoing Disclosure. Before entering into a contract with a child performer, an employer must meet with with the child’s parent or guardian (the child performer is entitled to be present at and participate in such meeting) and disclose the following information: (a) a general description of the role the child performer will play; (b) the location and hours of rehearsals and performances; (c) any health or safety hazards to which the child performer may be exposed during rehearsals or performances, and the precautions that will be taken to prevent injury to the child performer; (d) any special skills the child performer is expected to perform that require a level of physical proficiency or other skill superior to that of an average child; and (e) any special effects to which the child performer may be exposed. If any of the items disclosed at the pre-contract meeting change, the employer must notify the parent/guardian of the change, and the employer is prohibited from implementing any proposed change unless the parent/guardian has agreed to in writing to the change. [Section 4]
  • Script Disclosure. A copy of the portion of any script relating to the child performer’s services must be provided to the parent/guardian prior to the commencement of production.
  • Travel. If a child performer is younger than 16, the parent, guardian or “authorized chaperone” (who must be over 18 and have written authorization from the parent/guardian) must accompany the performer to and from the workplace. If a child performer is obliged to be “away from home overnight”, a parent/guardian (but not an authorized chaperone) must accompany the child “at all times”, and the employer must pay for all “daily expenses and the costs of travel and accommodation” up to maximums to be set out in the Act’s regulation. [Section 6]
  • Tutoring. An employer must “provide time in the work schedule for a child performer who is of compulsory school age to receive tutoring”. Details of the elements required in the tutoring will be set forth in the Act’s regulation. [Section 7]
  • Income Protection. Where a child performer earns more than $2,000 on a production or project, the employer must deposit 25% of the child performer’s earnings into trust (to be held until the child turns 18). Details of the trust arrangements will be set out in the Act’s regulation. The foregoing will not apply in situations where the child performer is a union member, and the union’s collective agreement requires that funds be deposited into trust. [Section 8]
  • Health and Safety Training. Employers are required to provide training for each child performer (in a manner “appropriate to the child performer’s developmental stage”) and their parent/guardian/chaperone with respect to the following matters: emergency procedures; restricted areas; safe waiting areas; the location of washrooms, make-up areas and “other areas relevant to the child performer’s work”; and “the procedure for identifying and reporting unsafe working conditions”. [Section 23]
  • Right to Refuse Work. For purposes of subsections 43(3)-(10) of the Occupational Health and Safety Act (which permits workers to refuse to work in unsafe conditions), where a child performer is under 14 years of age, their parent/guardian/chaperone is given authority to make decisions for them. [Section 24]
  • Healthy Food. When employers provide food to child performers, they must provide them with “healthy snacks and meals … as close to the child performer’s regular snack and meal times as possible”, and must ensure that any food provided “meets the child performer’s needs in respect of food allergies and special dietary requirements”. [Section 25]

Recorded Entertainment Industry

The following obligations apply to engagements of child performers in the “recorded entertainment industry”:

  • Minimum Age. No child performer who is younger than 15 days can be engaged to provide services. [Section 10]
  • Hours of Work. The Act imposes strict limitations on the number of hours that child performers can work, which are different for different age groups: performers under two years can only work a maximum of four hours a day, while those over two years can only work a maximum of eight hours in a day. Overtime is permitted only if the child performer is a union member and the child is paid overtime rates. An employer must provide at least 48 hours notice if the child performer’s start time is after 7pm. [Section 11]
  • Turnaround Time. Child performers are entitled to a minimum of 12 consecutive hours “free from work” each day and 48 consecutive hours “free from work” each week. [Section 11]
  • Limits on Time in Front of Recording Device. The Act contains very detailed limits on how much time a child performer can spend being filmed/recorded before receiving a break (and how long such break period must last), based on the age of the performer. [Section 12]
  • Parental Accompaniment. Child performers who are under 16 years of age must be accompanied in the workplace by a parent/guardian or “authorized chaperone” (who cannot be the child’s tutor or agent), who is “accessible to the child performer at all times”. [Section 14]
  • Child Performers’ Coordinator. The employer must designate one person at the workplace as a child performers’ coordinator who is “responsible for co-ordinating matters related to the welfare, safety and comfort of child performers”. If there are more than six child performers in the workplace, the coordinator cannot also be the tutor. [Section 15]

Live Entertainment Industry

The following obligations apply to engagements of child performers in the “live entertainment industry”:

  • Minimum Age. No child performer who is younger than two-and-a-half years can be engaged to provide services. [Section 17]
  • Hours of Work. The Act imposes strict limitations on the number of hours that child performers can work, which are different depending on which “phase” the services are rendered in (the “rehearsal phase” or the “performance phase”) and depending on the age of the child performer. No overtime is permitted in either phase. [Section 18]
  • Turnaround Time. Child performers are entitled to a minimum of 12 consecutive hours “free from work” each day and 36 consecutive hours “free from work” each week. [Section 18]
  • Breaks. No employer shall require or permit a child performer to work for longer than two consecutive hours without a break of at least 10 minutes. During the rehearsal phase, the employer shall give the child performer an eating period of at least 90 minutes and shall schedule eating periods so that the child performer does not work more than four consecutive hours without an eating period. [Section 19]
  • Option for Chaperone. Unlike the situation in the recorded entertainment industry (which requires parental accompaniment for performers under 16 years of age during working hours), parents/guardians of child performers older than two-and-a-half years of age in the live entertainment industry may designate a chaperone to “be available to the child performer while the child performer is at the workplace”. Thus, for child performers in the live entertainment industry there is no obligation that they be accompanied by a parent/guardian/chaperone. [Section 20]
  • Child Attendants. The employer is obliged to designate a “child attendant” who is “responsible for monitoring the child performers at the workplace while the child performers are not rehearsing or performing”. The “child attendant” must be at least 18 years of age, not otherwise employed on the production, not the child’s tutor and must possess a clean criminal (as defined in the Act’s regulations). The number of child attendants required to be engaged is determined by a formula which is based on the age of the youngest child performer: where the youngest performer is under six years of age, there must be one attendant for every six children; where the youngest performer is between six and ten years of age, there must be one attendant for every ten children; and where the youngest performer is ten years of age or older, there must be one attendant for every fifteen children. [Section 21]
  • Clean Criminal Record. Section 22 of the Act requires that “prescribed individuals” (to be defined in the Act’s regulations) who “may be required to be alone with child performers” must have a “clean criminal record” (to be defined the Act’s regulations). The Act is silent on why this requirement applies only to the live entertainment industry but not to the recorded entertainment industry.

As readers can see, the Act imposes a raft of obligations on those who engage child performers in the live and recorded entertainment industries. While there is some overlap with existing union/guild requirements, there are also new statutory obligations which go beyond what might otherwise be required under an applicable collective agreement. Those engaging child performers must therefore take the time to familiarize themselves with the Act and determine what additional steps, if any, they must take to be in compliance.

Ontario Passes Protecting Child Performers Act

Handy-dandy Comparison Chart: Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions

Everybody likes a “cheat sheet” which clearly summarizes the differences between various options – and now the Dentons Media and Entertainment practice team has prepared one to assist producers and their counsel in choosing between the various “structures” for producing film and television content in Canada: click here to access an online version of our Comparison of Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions – there is also a .pdf version which can be downloaded from the same page.

Handy-dandy Comparison Chart: Canadian Content, Production Services, Co-Ventures and Treaty Co-Productions

Permit Me to Explain – Work Permits and LMIAs for Foreign Actors

As much as we Canadians (justifiably) boast about our homegrown talent, there is no hiding the fact that to maximize the quality of our music, TV, and film we sometimes need an assist from outside our borders.  For instance, you are a producer of a multimillion dollar film shooting in Canada and want to hire a specific non-Canadian actor to play the sister of the film’s protagonist: can you simply hire the performer?  Like many legal questions, the answer is (unfortunately) “it depends.”

When attempting to determine whether an employer may hire a foreign performer, the first question to be asked is what type of performer are they?  Some categories of performers need to obtain a work permit prior to performing in Canada[1]; other categories of performers, set out in Section 186 of the Regulations to the Immigration and Refugee Protection Act (the “Regulations”), are exempt from the requirement. On June 20, 2014, amendments were made to the Regulations, which revised the list of performers in the “exempt” category.  The list of exempt non-Canadian performers includes:

  •  musicians in a band performing several tour dates in Canada;
  • guest conductors and artists performing with Canadian productions or groups for a few performances;
  • actors in foreign touring theatrical productions;
  • professional wrestlers and circus performers in foreign touring productions;
  • musicians and buskers coming to Canada to perform in festivals;
  • support crew and other workers who are integral to a live production; and
  • disc jockeys coming to Canada to work at private events, festivals, concerts and fairs.[2]

Setting aside the (puzzling) grouping of professional wrestlers with circus performers, producers and their counsel will note the continued omission of film and television actors from this list; something emphasized by section 186(g) of the Regulations which includes the wording:

A foreign national may work in Canada without a work permit as a performing artist appearing alone or in a group in an artistic performance – other than a performance that is primarily for a film production or a television or radio broadcast.[3] [Emphasis Added]

So, at this point we know that any non-Canadian actor participating in any film or TV production will be classification as a temporary foreign worker (“TFWs”) and must obtain a work permit.  The work permit allows TFWs to work in Canada to perform a specific service for a designated employer for a defined period of time.  To obtain a work permit, performers may apply at a Citizen and Immigration Canada visa office[4] or at a Canadian port of entry (in the case of citizens of contiguous states).  So, is a work permit all that is required for producers to hire a non-Canadian actor?  Yet again, the answer is “it depends.”  The producer may, in addition to obtaining a work permit for the actor, be obliged to complete a Labour Market Impact Assessment (“LMIA”).  Whether an LMIA is required is dictated by (a) whether the performance is for (i) film; or (ii) TV; and (b) whether or not the production is a Canadian co-production.

If the performer is being brought into Canada to perform in a certified Canadian co-produced film (i.e. commonly referred to as a “treaty co-production”)[5] [6], then the producer of the film is not required to complete an LMIA.  For non-Canadian performers appearing on a (a) film; or (b) TV series, that is not a Canadian co-production, then an LMIA will be required in order to determine whether a work permit will be granted (and the length of the work permit).  The LMIA is performed by Employment and Social Development Canada (“ESDC”)[7] and is meant to evaluate whether the employment of the non-Canadian performer is likely to have a positive or negative effect on the Canadian labour market.  To commence the LMIA process, the producer submits a completed LMIA[8] [9] to Service Canada.  Employers may also create an account with the TFW Web Service[10] which allows them to submit their LMIA application online and monitor its ongoing status.

When it comes to television series, the situation is less clear. There is some ambiguity in the wording on the ESDC website: the wording specifically mentions an LMIA exemption for “actors and workers on a film co-production between Canada and a foreign country”[11]; but elsewhere on the same page, reference is made to “film” and “television”, hinting that the absence of “television” in the description of the LMIA exemption indicates a deliberate intention to not include television co-productions as being eligible for the LMIA exemption.  However, producers we have spoken to have relayed that, as a practical matter, they have qualified for this LMIA exemption for Canadian co-produced television productions.  Producers seeking to utilize this exemption may wish to submit a LMIA exemption request to Service Canada who will provide the producer with an opinion as to whether they qualify.[12]

At some point along the way, the budget-conscious producer (i.e. any producer) reading this article must be wondering about costs.  The June 20, 2014 amendments previously mentioned increased the LMIA application fee from $275 to $1,000.  Despite this over 350% increase, likely of greater significance is that the June 20th amendments increased the processing time for LMIA applications.[13]  The ESDC website currently states that LMIA applications will be processed within 10 business days.  This could potentially be problematic for producers who find themselves in a situation whereby the casting of a performer takes place less than two weeks prior to that performer’s first day of principal photography.  Concern may be further magnified if the performer is needed for pre-production activities.

Apprehensive that this processing time may harm productions in Canada, in mid-July members of the film and TV community met with federal immigration Minister Chris Alexander.  It was reported that during this meeting Minister Alexander gave assurances that film and TV productions facing time constraints would receive quick and efficient services in regard to their LMIA applications.  Speaking with colleagues, and barring some initial hiccups, Mr. Alexander has seemingly been good to his word.  Despite a 10 business day processing period, those administering the LMIA application process appear cognizant of the time sensitive nature of film and TV productions.

Although there is reason to expect continued expedient LMIA application processing, producers who are required to complete an LMIA should remain mindful of the 10 business day timeline.  When completing one’s LMIA application[14] careful attention should be given to box 4 on page 3 entitled “Expected employment start date”.  Producers would be wise to give themselves flexibility.  Performers at one time not considered necessary for pre-production may later be needed prior to principal photography or perhaps shooting schedules may change such that Actor #8 is now an “SW”[15] on the Day 2 call sheet as opposed to Day 6.  As unforeseen events are inevitable during the production process, when completing box 4 producers should ensure that either (a) they are 100% certain the performer is not needed any earlier than the start day written on the LMIA; or (b) give themselves some flexibility in choosing a date in order to provide for unpredicted delays or changes in schedules.

 

Summary of Requirements for Different types of Performers

Type of Performer

Work Permit Required

LMIA Required

Actor in Film (Canadian co-production)

Yes

No

Actor in Film (Not Canadian co-production)

Yes

Yes

Actor in TV Series (Canadian co-production)

Yes

ESDC wording is unclear, but we hear they are treated like film actors

Actor in TV Series (Not Canadian co-production)

Yes

Yes

[Many thanks to articling student Ben Iscoe for his invaluable assistance in researching and writing this post.]


[1] Immigration and Refugee Protections Regulations <http://laws-lois.justice.gc.ca/eng/regulations/SOR-2002-227/>See section 8(1) A foreign national may not enter Canada to work without first obtaining a work permit.  See also section 8(2) which states [s]ubsection (1) does not apply to a foreign national who is authorized under section 186 to work in Canada without a work permit.  Provisions of section 186 to be discussed.

[2] Employment and Social Development Canada <http://www.esdc.gc.ca/eng/jobs/foreign_workers/higher_skilled/film//index.shtml>.

[3] See Section 186(g) of the Regulation to the Immigration and Refugee Protection Act <http://laws-lois.justice.gc.ca/eng/regulations/SOR-2002-227/>.

[4] Citizen and Immigration Canada Offices <http://www.cic.gc.ca/english/information/offices/index.asp>.

[5] A co-production appears to need Telefilm certification to qualify for the exemption.  For more information on Telefilm certification, visit “http://www.telefilm.ca/en/coproductions/coproductions/guidelines”.  Once certified, for assistance bringing performers into Canada to work on the co-production, visit “http://www.telefilm.ca/document/en/04/ProcedureImmigrationversionanglaise.pdf”.   This latter link provides helpful guidance; including offering a template letter that will may be used by Telefilm if Canadian authorities contact them to confirm information.

[6] Citizen and Immigration Canada does not define “film.”  A feature length live action production seems to be the template format, but for other formats (e.g. episodic television series, movie of the week, short film, animated film, etc.) a producer will likely have to submit a LIMA exemption request.  For information on submitting a request see “http://www.cic.gc.ca/english/work/employers/lmo-basics.asp”.

[7] Employment and Social Development Canada <http://www.esdc.gc.ca/eng/home.shtml>.

[8] The LMIA form may be found on the Employment and Social Development Canada website <http://www.servicecanada.gc.ca/eforms/forms/esdc-emp5517(2014-11-019)e.pdf>.

[9] Please note that “[e]mployers in the Film and Entertainment sector are exempt from the recruitment and advertisement requirements.”  Employment and Social Development Canada <http://www.esdc.gc.ca/eng/jobs/foreign_workers/higher_skilled/film/index.shtml>; see “Recruitment and Advertisement” tab.

[10] Employment and Social Development Canada <http://www.servicecanada.gc.ca/eforms/forms/esdc-emp5536(2014-01-003)e.pdf>.

[11] Employment and Social Development Canada <http://www.esdc.gc.ca/eng/jobs/foreign_workers/higher_skilled/film//index.shtml>.

[12] For information on submitting a request see “http://www.cic.gc.ca/english/work/employers/lmo-basics.asp”.

[13] Mas, Susana.  “Temporary Foreign Workers: Film, TV industry assured timely permits.”  CBC.ca. July 18, 2014 <http://www.cbc.ca/news/politics/temporary-foreign-workers-film-tv-industry-assured-timely-permits-1.2710488>.

[14] A link to the LMIA form may be found under footnote 8.

[15] An acronym standing for “Start Work” and indicates the performer’s first day of principal photography.

Permit Me to Explain – Work Permits and LMIAs for Foreign Actors

Canada’s Anti-Spam Law – New Guidance on Offering Apps, Software

Canada’s Anti-Spam Law (CASL) targets more than just email and text messages 

CASL also prohibits installing a “computer program” – including an app, widget, software, or other executable data – on a computer system (e.g. computer, device) unless the program is installed with consent and complies with disclosure requirements.  The provisions in CASL related to the installation of computer programs will come into force on January 15, 2015.

Application outside Canada

Like CASL’s email and text message provisions, the Act’s “computer program” installation provisions apply to persons outside Canada.  A person contravenes the computer program provisions if the computer system (computer, device) is located in Canada at the relevant time (or if the person is in Canada or is acting under the direction of a person in Canada).

Penalties

The maximum penalty under CASL is $10 million for a violation of the Act by a corporation.  In certain circumstances, a person may enter into an “undertaking” to avoid a Notice of Violation.  Moreover, a private right of action is available to individuals as of July 1, 2017.

CASL’s broad scope leads to fundamental questions – how does it apply?

The broad legal terms “computer program”, “computer system” “install or cause to be installed” have raised many fundamental questions with industry stakeholders.  The CRTC – the Canadian authority charged with administering this new regime – seems to have gotten the message.  The first part of the CRTC’s response to FAQ #1 in its interpretation document CASL Requirements for Installing Computer Programs is “First off, don’t panic”.

New CRTC Guidance 

The CRTC has clarified some, but not all of the questions that industry stakeholders have raised.  CRTC Guidance does clarify the following.

  • Self-installed software is not covered under CASL.  CASL does not apply to owners or authorized users who are installing software on their own computer systems – for example, personal devices such as computers, mobile devices or tablets.
  • CASL does not apply to “offline installations“, for example, where a person installs a CD or DVD that is purchased at a store.
  • Where consent is required, it may be obtained from an employee (in an employment context); from the lessee of a computer (in a lease context); or from an individual (e.g. in a family context) where that individual has the “sole use” of the computer.
  • An “update or upgrade” – which benefits from blanket consent in certain cases under CASL – is “generally a replacement of software with a newer or better version”, or a version change.
  • Grandfathering – if a program (software, app, etc.) was installed on a person’s computer system before January 15, 2015, then you have implied consent until January 15, 2018 – unless the person opts out of future updates or upgrades.

Who is liable?

CRTC staff have clarified that as between the software developer and the software vendor (the “platform”), both may be liable under CASL.  To determine liability, the CRTC proposes to examine the following factors, on a case-by-case basis:

  • was their action a necessary cause leading to the installation?
  • was their action reasonably proximate to the installation?
  • was their action sufficiently important toward the end result of causing the installation of the computer program?

CRTC and Industry Canada staff have indicated that they will be publishing additional FAQs, in response to ongoing industry stakeholder questions.

See:  fightspam.gc.ca  and consider signing up for information updates through the site.

 

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Canada’s Anti-Spam Law – New Guidance on Offering Apps, Software

A Clarifying Development – “Canadian Content” Tax Credit Regulations Amended

The October 4, 2014 Canada Gazette (being vol. 148, no. 40), contained something of note for Canadian film and TV lawyers: amendments to the Income Tax Act regulations which govern the “Canadian content” tax credits for audio-visual productions. The full text of the amendment in the Gazette can be accessed here.

What Was the Problem?

Before the October 4, 2014 amendments, it was not entirely clear who was to be considered an “owner” of copyright in a production, and there was further uncertainty regarding whether licensing someone exploitation rights or granting them a right to share in the revenues of a production could make them qualify as an “owner” of “copyright”. That led to confusion surrounding how to properly structure ownership, licenses and revenue participations so as not to inadvertently fall afoul of the regulations (and thereby render the production ineligible for “Canadian content” tax credits). The confusion was further compounded by some inelegant drafting.

So What Has Changed?

To borrow from the Gazette‘s description of the amendments, the regulation has been changed so that:

  • “copyright owner” is now a defined term in the regulation – one which uses terminology found in the Copyright Act (e.g., the definition uses terms such as “maker” and “copyright” that have particular meanings under the Copyright Act);
  • it is now definitively stated that a person having the right to share in revenues generated by a production is not in and of itself an interest or a right held by a copyright owner;
  • it is now definitely stated that the grant of an exclusive license does not constitute an assignment of copyright for purposes of the tax credit analysis
  • the definition of “excluded production” has been re-worded to make it clear that a production will be deemed to be an “excluded production” (and therefore ineligible for “Canadian content” tax credits) if someone other than a “prescribed person” owns copyright at any point during the first 25 years after the production has been completed; and
  • the list of “prescribed persons” has been expanded to include Canadian individuals, Canadian taxable corporations, and partnerships of prescribed persons.

The amendments will take effect forty days after October 4, 2014 (so, November 13, 2014), and will not be retroactively applied to any production if before November 13, 2014 (a) the Minister of Canadian Heritage has revoked or refused to issue a certificate of completion for it or (b) the Minister of National Revenue has assessed a return of income on the basis that the production is not a Canadian film or video production and that assessment’s basis is not vacated or varied on or after that date.

That’s Nice. So?

While not changing very much on a substantive level, these changes provide some comfort and further guidance on structuring elements that many of us rely on in structuring productions:

  • entering into a license or distribution agreement does not constitute a transfer of copyright
  • granting rights to participate in revenues (such as “back-end” or “net profit” participation) will not, in and of itself, cause the production to go “off-side” – while such “back-end” participations have often been granted to individuals providing services in connection with projects (such as directors or actors), these amendments appear to permit “hands-off” investors to be granted such participations as well, something which historically was regarded as somewhat risky
  • there is now greater flexibility in structuring productions because the list of acceptable (or “prescribed”) persons who can own a copyright interest in the production has been expanded to include not just Canadian corporations, but also Canadian individuals and Canadian partnerships (all of whose partners are prescribed persons)

Fine. Now Say Something Really Nerdy.

These amendments do something interesting with the term “maker”, which is defined in the Copyright Act as “the person by whom the arrangements necessary for the making of the work are undertaken”. The amendments, in the way that they define “copyright owner”, seem to imply that the “maker” of a production is the first “owner” of copyright in the production – however, a close reading of the Copyright Act reveals that the term “maker” is something of an analytical dead-end: being the “maker” of a production has no bearing on the ownership or authorship of that production for copyright purposes. In other words, by trying to tie “maker” and “owner” together, the amendments do something that not even the Copyright Act does. It’s not a problem – ownership for copyright purposes and for tax purposes can be different things – but it is interesting to note that the regulatory instinct is to rely on “maker” status in a way which is not present in the underlying copyright regime.

A Clarifying Development – “Canadian Content” Tax Credit Regulations Amended