The extent to which Canadian copyright law is dysfunctional today can be summed up by the utter lack of transparency from Canadian Heritage.
Years of lobbying copyright collectives has produced an interesting trend. Anytime a discussion about amending the Copyright Act arises, we see a very coordinated lobbying effort. These collectives ask for wider application of tariffs, additional levies on consumer electronics, more aggressive enforcement, and so forth. But ask them once to show us how much money goes into the hands of the creators in whose name they operate? Dead silent.
Canadian Heritage is the governmental body charged with keeping the interests of creators and the public in balance. What has happened? A multi-million-dollar shadow economy has been created in the process and it’s virtually unaccountable to anybody.
This is the most important point to consider here. There are many organizations functioning in this country, acronyms upon acronyms that even most active artists cannot name. They collect money in the interest of the creators. This is all well and good. However, the issue lies in the black box that is situated in the middle of the transaction.
A System Designed to Hide the Math
Most people miss this, but copyright in Canada is managed by two distinct heads: Innovation, Science and Economic Development Canada (ISED) and Canadian Heritage. ISED usually handles the market and tech side. Canadian Heritage handles the cultural side. And it is within the cultural side that the demand for transparency goes to die.
There is no strict, heavily enforced federal mandate requiring these collectives to publish detailed, standardized, plain-language audits of their administrative costs versus their payout ratios. Some do a passable job. Most do not.
Actually—scratch that. It’s not just that they don’t do a passable job. It’s that the regulatory framework designed by Canadian Heritage effectively permits them to obfuscate their internal mechanics. When millions of dollars are tied up in “undistributed royalties” because the collective claims they can’t find the original copyright holder, where does that interest go? Often, it just funds more lobbying.
The Private Copying Black Hole
Let’s look at the CPCC. The Canadian Private Copying Collective was established to manage the private copying levy. If you bought a blank CD back in 2004, you paid a hidden tax that went to the CPCC to compensate artists for piracy or personal mixtapes.
I actually remember arguing about this years ago when the levy first hit iPods. It was a massive cash grab.
Today, nobody buys blank CDs. But the CPCC hasn’t quietly folded up its tents. Instead, they spend immense resources lobbying Canadian Heritage to extend that levy to smartphones and tablets. They want a cut of the hardware you use to listen to Spotify, assuming you might illegally download an MP3. The lack of transparency here is staggering. We rarely get clear, unredacted answers on how much of their collected revenue is eaten up simply by the cost of running the CPCC itself.
Then you have the NRCC. The Neighbouring Rights Collective of Canada (now essentially operating under the Re:Sound banner) collects performance royalties for record companies and performers when music is played on the radio or in public spaces. Again, the collection mechanism is highly aggressive. Small businesses, hair salons, and fitness studios are hammered with tariffs. But if you ask Canadian Heritage to demand a full public accounting of how long it takes for the NRCC to push that money down to an independent indie artist in Halifax? Good luck getting a straight answer.
Performer Rights and Administrative Friction
The situation gets even murkier when you look at the unions and performers’ collectives.
In English Canada, ACTRA operates to protect performers, and they have their own collective arms for managing recording rights and residuals. In Quebec, you have the UDA doing the exact same thing for francophone artists.
On paper, this is great. Actors and voice artists absolutely need a collective mechanism to negotiate with massive studios and streaming networks. But talk to working actors. The administrative friction is legendary. Money gets trapped in the system. The rules for who qualifies for what payout, and what percentage the collective holds back to cover its own operating expenses, are buried in legal jargon.
Canadian Heritage treats ACTRA and UDA as the definitive, unquestionable voices of creators during policy hearings. And they are important voices. But the government completely ignores the internal complaints from the rank-and-file members of these organizations. When an actor asks why their residual cheque for a syndicated show is a fraction of what it should be, the collective points to the complexity of the tariff. Canadian Heritage simply nods along, refusing to impose strict transparency metrics on the very organizations they empower.
The Industry Heavyweights and Regional Power Brokers
To really grasp why Ottawa won’t force open the books, you have to understand who is in the room with the ministers.
Historically, the CRIA (which eventually rebranded as Music Canada) has been the heaviest hitter. The Canadian Recording Industry Association represented the major international labels operating in Canada—your Warners, your Sonys, your Universals. For decades, whatever CRIA wanted from Canadian Heritage, CRIA generally got. They pushed for extended copyright terms and harsher penalties for digital infringement.
But CRIA isn’t the only player. Independent labels need representation too, which is where CIRPA came in. The Canadian Independent Record Production Association was supposed to be the counterweight to the massive multinational labels, ensuring that domestic indie labels got a slice of the pie and a voice in tariff settings.
And because this is Canada, nothing happens without a specific Quebec counterpart. ADISQ is an absolute powerhouse. They represent the independent music and video industry in Quebec. If you want to change cultural policy or copyright law in Canada, you cannot do it without ADISQ signing off, because Canadian Heritage is terrified of alienating the Quebec cultural sector.
So you have CRIA pushing the major label agenda, CIRPA pushing the English-Canadian indie agenda, and ADISQ heavily protecting the francophone market. What usually happens is these three groups spend years fighting each other in front of the Copyright Board over how tariffs should be structured.
The legal bills for these fights are astronomical. Who pays those bills? Ultimately, the creators do. The collectives use the money they collect to fund their legal battles against each other and to lobby Canadian Heritage. I guess it’s a great system if you are a copyright lawyer in Ottawa. It is a terrible system if you are a songwriter trying to make rent.
Reproduction Rights in the Streaming Era
Let’s talk about mechanical royalties. When a song is reproduced—whether pressed on a vinyl record or streamed on Apple Music—somebody has to track that reproduction and pay the publisher and songwriter.
In Canada, this was traditionally handled by the CMRRA for English Canada and SODRAC for French Canada.
The Canadian Musical Reproduction Rights Agency (CMRRA) and the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) have had an incredibly difficult time adapting to the digital shift. The internet doesn’t respect borders, but our copyright collectives are heavily regionalized and highly bureaucratic.
A few years ago, SODRAC got into a massive, protracted legal fight with the CBC over how much the public broadcaster should pay for incidental copies of music made during the digital broadcast process. It went all the way to the Supreme Court. The amount of time, money, and energy spent arguing over digital “ephemeral” copies is mind-boggling.
Wait, no, it’s actually worse than that. It’s not just the legal fees. It’s the delay. The Copyright Board of Canada is notoriously the slowest administrative tribunal in the country. It can take up to seven years for a tariff to be certified.
Imagine telling a tech company or a digital streaming service that they can launch in Canada, but they won’t know exactly what their royalty rate is until the year 2033. And they’ll have to pay it retroactively. It stifles innovation. It keeps digital services out of the Canadian market for years.
During that entire multi-year waiting period, CMRRA and SODRAC are holding funds, trying to estimate what the final tariff will be, and holding back distributions to creators. Canadian Heritage knows the Copyright Board is broken. They’ve commissioned studies. They’ve promised reforms. Yet the opacity remains, and the delays stretch on.
Where Does the Undistributed Money Actually Go?
This brings us to the most uncomfortable question in Canadian copyright policy. The black box.
Every year, collectives collect money that they cannot distribute. Maybe the metadata on a Spotify stream was corrupted. Maybe an independent artist in Alberta didn’t register their new EP properly with the CMRRA. Maybe a hair salon paid their NRCC tariff, but nobody knows exactly what radio station was playing in the salon that day, so the money just goes into a general pool.
This is referred to as “undistributed royalties.”
In a transparent system, Canadian Heritage would require every single collective to publish a public, searchable database of undistributed funds. If a creator’s name is on that list, they should be able to claim their money instantly.
Instead, collectives are largely allowed to handle this money internally. After a certain number of years, many collectives just dump the undistributed funds into their general revenue. They use it to cover their own overhead. They use it to fund the annual salaries of their executives. They use it to pay lobbyists to go back to Canadian Heritage and ask for even more tariffs.
It is a closed loop of money.
If a private bank operated this way, the federal government would shut them down in a week. But because these organizations deal in “culture,” Canadian Heritage treats them with kid gloves. They are terrified that demanding strict financial audits will be framed as an attack on artists.
The reality is the exact opposite. Demanding transparency from CPCC, CMRRA, ACTRA, and all the rest isn’t an attack on artists. It is the only way to actually protect them. Creators deserve to know exactly how much of their money is being spent on corner offices in Toronto and Montreal, and how much is actually making it into their bank accounts.
But if you ask Canadian Heritage when they plan to mandate this kind of open-book accounting?
Don’t hold your breath. They’re still trying to figure out how to tax your phone.