Commission du droit d’auteur
Non-Commercial Radio Reproduction Tariff (2003-2017), 2022 CB 12
Proposed Tariffs Considered
CMRRA Tariff 3 – Non-Commercial Radio Stations, 2003-2007
CMRRA Tariff 3 – Non-Commercial Radio Stations, 2008
CMRRA Tariff 3 – Non-Commercial Radio Stations, 2009-2010
CSI – Non-Commercial Radio Stations, 2011
CSI – Non-Commercial Radio Stations, 2012
CSI – Non-Commercial Radio Stations, 2013
CSI – Non-Commercial Radio Stations, 2014
CSI – Non-Commercial Radio Stations, 2015
CSI – Non-Commercial Radio Stations, 2016
CSI – Non-Commercial Radio Stations, 2017
Approval of Proposed Tariffs
Non-Commercial Radio Reproduction Tariff (CMRRA:2003-2010, CSI: 2011-2017)
REASONS FOR DECISION
 The “Proposed Tariffs” cover reproductions of the musical works in CMRRA’s repertoire for the years 2003 to 2010 and CSI’s repertoire for the years 2011 to 2017 by a conventional, over-the-air non-commercial radio station.
 Three objectors are participating in this proceeding: L’Association des radiodiffuseurs communautaires du Québec (“ARCQ”); L’Alliance des radios communautaires du Canada (“ARCC”); and The National Campus and Community Radio Association (“NCRA”) (together, the “Associations”). Other objectors withdrew over the years.
 On March 10, 2020, the parties informed the Board that they had reached an agreement and asked the Board to approve a tariff based on three jointly-submitted “settlement” texts. In their submissions, the parties also provided a contract that forms the basis of their agreement (the “Agreement”). Our analysis leads us to conclude that no documents submitted by the parties —neither the Proposed Tariffs, nor the jointly-submitted Texts, nor the Agreement — can serve as an appropriate basis, without modifications, to approve a tariff.
 We therefore approve a single tariff for the years 2003-2017. For broadcasting reproductions, we fix a royalty of $25 per year per station payable to CMRRA for the years 2003 to 2010 and a royalty of $50 per year per station payable to CSI for the years 2011 to 2017. In addition, we fix a royalty of $20 per year per station payable to CSI for the years 2011 to 2017 for reproductions made to facilitate simulcasting. We also make several modifications to the Proposed Tariffs.
 With modifications, we approve the Proposed Tariffs as a single tariff under the title Non-Commercial Radio Reproduction Tariff (CMRRA:2003-2010, CSI: 2011-2017).
A. The proposed Tariffs
1. CMRRA Tariff 3 – Non-Commercial Radio Stations, 2003-2007, 2008, and 2009-2010.
2. CSI – Non-Commercial Radio Stations, 2011, 2012, 2013, 2014, 2015, 2016 and 2017.
B. Procedural History
 There is a lengthy history to this proceeding. Parties to the proposed CMRRA Tariff 3 began negotiations in 2003. By October 2008, CMRRA had reached agreements with some of the objectors in relation to the years 2003 to 2010 but was unable to reach an agreement with all objectors. Starting in 2011, CMRRA and SODRAC filed a single proposed tariff (CSI Non-Commercial Radio Stations) for both of their repertoires under their joint venture ‘CSI’ for each of the years 2011 to 2017. Early negotiations between CSI and the Associations were not successful.
 In Notice CB-CDA 2017-170 of December 21, 2017, the Board advised parties of its intent to commence a single, merged proceeding for several proposed tariffs applicable to non-commercial radio stations, including the Proposed Tariffs.  On January 17, 2018, the Collectives and Associations indicated their intent to participate in the merged proceeding and requested time to negotiate, which was granted.  After four extensions, the parties filed a joint request on March 10, 2020, asking the Board to approve the Proposed Tariffs based on jointly-submitted “settlement” texts further to an agreement between CMRRA, CSI, SOCAN  and the Associations.
C. Market Overview
 The following market information was referenced in a document submitted by the Associations and provided useful context. In 2017, the Canadian non-commercial radio sector consisted of 221 radio stations (as compared to 712 radio stations in the commercial radio sector).  Average revenues per station in the non-commercial radio sector were $325,000 per year (as compared to $2.13M per year in the commercial sector). There are four types of non-commercial radio stations: community, campus, indigenous, and religious. In 2017, the largest subsector was community radio (112 stations). As of March, 2020 the Associations party to this proceeding represent 154 non-commercial radio stations, or about 70% of all non-commercial radio stations in operation in that year. 
 In approving tariffs, the Board must determine what is fair and equitable. Our analysis considers the following four issues:
1. Are the Proposed Tariffs, Jointly-Submitted Texts or the Agreement an appropriate basis to approve a tariff?;
2. What is an appropriate structure for the tariff?;
3. What is the appropriate rate?; and
4. Are calculations of interest factors required?
 The parties asked the Board to approve tariffs in the form of three Texts they submitted to the Board, two of which pertain to this proceeding:  the jointly-submitted text for the years 2003 to 2010 and the jointly-submitted text for the years 2011 to 2018 (together, the “Texts”). 
 The parties also submitted a contract covering the terms of their Agreement. The Associations sent the Agreement to their members and asked them to countersign it. Recital D of the Agreement lists 126 non-commercial radio stations (the “Acknowledging Stations”) that signed the agreement, representing 57% of the market in 2017. The Agreement supersedes any tariff approved by the Board (clause 1.3), pursuant to section 74 of the Copyright Act.  Acknowledging Stations are subject to the terms of the Agreement instead of to the terms of the tariff that will be approved by the Board.
A. Issue 1 : Are the proposed tariffs, the texts, or the agreement an appropriate basis to approve a tariff?
 For the reasons that follow, we find that, without modifications, neither the Proposed Tariffs, nor the Texts, nor the Agreement, can serve as an appropriate basis on which to approve a fair and equitable tariff.
i. The Proposed Tariffs and Texts are not appropriate bases to approve a tariff
 First, approving tariffs based on either the Texts or the Proposed Tariffs would impose less favourable rates and terms for the same activity in cases where a station is not party to the Agreement. Under the Agreement, which for Acknowledging Stations supersedes any tariff the Board approves, Acknowledging Stations are not required to pay any of the amounts owing between 2003 to 2017 (clause 5.1) or deliver any music-use reports for the same period. The parties ask the Board to approve the Texts for non-acknowledging stations, who would thus operate under quite different conditions. Unlike the Agreement, the Texts contain a tiered royalty-rate system based on a proportion of costs of non-commercial radio stations and call for detailed music-use reporting requirements.
 The Board considered similar issues in SOCAN 4.A - Popular Music Concerts (1995-1996).  SOCAN had a side agreement with the Canadian Alliance of Music Presenters (“CAMP”) which was more favourable than the rates in its proposed tariff. SOCAN had proposed a rate of 5.0 per cent of gross receipts from ticket sales but would allow parties to its agreement with CAMP, to pay only 2.3 per cent in 1995 and 2.4 per cent in 1996. The Board rejected SOCAN’s proposed tariff, noting in its decision that “SOCAN intends to practice two prices in the same market. This is not merely ‘an unusual situation’ but constitutes an unfair commercial practice. The Board will not allow SOCAN to practice price discrimination.” 
 The current proceeding is analogous. Approving a tariff based on either the Texts or the Proposed Tariffs would mean that we approve higher royalty rates and more onerous reporting requirements for stations other than Acknowledging Stations (“Users”) compared to the Acknowledging Stations, who are bound by different conditions set out in the Agreement. In our view, it would be unfair for the Board to establish a tariff of general application that would, in effect, provide conditions more favourable to Agreement signatories at the expense of tariff Users. Given the inherent price discrimination, we conclude that the Proposed Tariffs and Texts do not provide evidence of what is fair and equitable.
 Second, our analysis concludes that the Texts do not provide evidence of what either the Associations or Acknowledging Stations “think is fair”. Generally, a jointly-submitted text can be evidence of what the submitting users believe to be fair —if those users agree to abide by its terms. That is not the case in this proceeding. The Associations and Acknowledging Stations have agreed to be bound by different terms, found in the Agreement. As a result, we find that the Texts do not provide evidence of what the parties find to be fair.
ii. The Agreement is not an appropriate basis to approve a tariff
 We considered approving a tariff with terms that are similar to the Agreement but rejected this approach because the benefits conferred by the Agreement are conditional. Additionally, we do not believe that it would be appropriate to approve a tariff that includes only the favourable terms of the Agreement.
 To benefit from the Agreement, Acknowledging Stations must comply with certain conditions, such as compliance with future tariffs (clause 6.2). Should a Station miss a single payment or reporting period, at any time, as set out in any tariffs proposed in the future under the Agreement, they immediately face liability for payments and reports going back to 2010 (clauses 5.1(i), 6.2(i)). Such an outcome would frustrate the ability to clearly determine the obligations one assumes on becoming a user of the tariff. Although conditional terms may be acceptable in the context of a contract, we believe that approving a tariff based on such terms would go against the public interest and be unfair. In Access Copyright – Governments (2005-2014) the Board similarly declined to include an obligation to delete digital copies made under the tariff that could be triggered indefinitely in the future, saying “[t]his would be a very undesirable effect”. 
 Furthermore, we find that approving a tariff with only the favourable terms from the Agreement, is inappropriate without considering the value the parties assigned to future compliance. Nor should the favourable terms be extracted from the conditional terms, as the parties negotiated the Agreement as a whole. We further conclude that it is not possible to calculate the value of any future compliance, given that such calculations rely on the value of future tariffs, of which the Board is not yet seized. For example, in Access Copyright – Post Secondary (2011-2017), the Board modified the terms of a proxy, but only after assigning value to account for differences between the proxy and the tariff. 
B. Issue 2 : What is an appropriate structure for the tariff?
 We approve the tariff with a flat rate structure and with no reporting requirements. Doing so achieves some important outcomes, namely it: (a) responds to concerns with enforcement; (b) addresses the non-commercial nature of the Users, which are often run by volunteers;  (c) mirrors the approach the Board used in its past decisions on other non-commercial radio tariffs; and, (d) avoids problems with implementing a percentage-based rate.
 Approving a flat fee reduces the administrative burden for Collectives and Users, the reporting and auditing burdens and, the time and resources to determine annually which of several rates apply. To determine which rates apply, stations must have retained information on their yearly costs going back to 2003. A flat rate structure avoids this enforcement challenge, as the only information required to calculate the rate is the number of years a station has been in operation. The Board found that a flat rate was fair in Re:Sound Tariff 1.B.2 (2013-2019) because it avoided unnecessary or disproportionate reporting and supported affordability for non-profit organizations.  In addition, the Board has approved flat rates for non-commercial radio-station tariffs where appropriate, as noted in Re:Sound 1.B (1998-2021)  and SODRAC 3.B (2003-2005, 2006-2010),  which we think is still valid.
C. Issue 3: What is the appropriate rate?
 For the years 2003-2010 we fix a rate of $25 per year per station in respect of CMRRA’s repertoire for broadcasting. We continue this rate for the years 2011-2017 and, as a flat rate, we apply it to both CMRRA and SODRAC’s repertoires. Accordingly, for the years 2011-2017, we fix a rate of $50 per year per station payable to CSI for broadcasting. We also fix a rate of $20 per year per station payable to CSI for simulcasting for the years 2011-2017. We calculate this as $10 per Collective in respect of both CMRRA and SODRAC’s repertoires. These approved rates provide for lower costs for Users compared to what they would pay under either the Proposed Tariffs or the Texts and facilitate broadcasting activities by non-commercial radio stations.
 Our reasoning for these rates follows. First, we find it in the public interest to recognize the unique circumstances of non-commercial radio stations,  including the financial constraints of non-profit radio and the role that these stations fulfil in their communities.  A nominal royalty rate acknowledges these circumstances and supports affordability for non-profit organizations.
 Second, we find that the reproduction rights in the proposed tariffs are ancillary to the main communication right and that reproductions attract a lower royalty rate compared to communications. This is because reproductions by non-commercial radio stations are incidental to broadcasting. In SOCAN 16 (2007-2009), where the Board identified certain rights as main and others as ancillary, it found for commercial radio that the main right was communication, and the ancillary right was reproduction.  We find this conclusion valid here as well.
 Third, we find simulcasting to be a secondary activity compared to the primary activity of broadcasting and thus also attracting a lower rate. This aligns with CBC Radio (2006-2011), where the Board considered simulcasting to be a secondary activity to the primary activity of radio broadcasting and assigned it a lower rate.  We find this to be an appropriate approach because simulcasting is fundamentally duplicative of broadcasting; the additional value to the broadcasters comes mainly from the act of communicating to additional listeners instead of from any additional reproductions.
 Accordingly, we adopt the royalty set in Re:Sound 1.B.2 (2013-2019) as an appropriate proxy. We find this proxy appropriate because the Board, in that decision, considered the public interest for non-commercial radio stations, used a primary right as a benchmark, and implemented a rate for a secondary activity. We explain each of these in turn.
 First, considering the public interest, the Board reasoned that a flat fee of $25 per year was nominal and likely reflected the cost of tariff administration for these non-commercial uses.  Similarly, we consider a flat fee of $25 per year per collective to be nominal  and reflect the cost of tariff administration in this proceeding.
 Second, regarding the use of a primary right as a benchmark, this is not novel. The Board, in Re:Sound 1.B.2 (2013-2019), used the $100 per year royalty for the primary use of broadcasting found in Re:Sound 1.B (1998-2021) as a benchmark to fix a lower royalty of $25 per year for the secondary uses of simulcasting and webcasting.  Similar to the Board’s decision in Re:Sound 1.B.2 (2013-2019), we benchmark the ancillary right of reproduction to the $100 per year royalty set in Re:Sound 1.B (1998-2021) and fix a royalty of $25 per year per collective.
 Although this proceeding deals with rights in musical works and not the equitable right to remuneration, considered in Re:Sound 1.B (1998-2021), we find this benchmark the most appropriate of those available, given our decision to implement a flat rate and the public interest considerations identified above.
 Third, in respect of implementing a rate for a secondary activity, by the logic explained above, we set a nominal fee for simulcasting but one that is lower than that set for broadcasting, namely, $10 per collective per year.
 We also conclude, after our analysis, that no repertoire adjustment is appropriate in this proceeding.
D. Issue 4 : Are calculations of interest factors required?
 The Board may calculate and include pre-judgement interest for certain tariffs, such as when the Board fixes royalties for a particular use of a particular repertoire in respect of which the Board has not previously approved a tariff, or when the royalties payable change relative to the last approved tariff.
 However, we determine that interest factors are not appropriate in this proceeding for two reasons. The current status of payments is unclear, complicated by the existence of marketplace agreements, and the potential that a previous tariff approved for SODRAC repertoire, involving musical works reproduction of French language works by Community Radio Stations, is still being paid by certain stations.  These cross-payments and the presence of rates with multiple components, introduces complexities in calculating and applying pre-judgement interest factors. Given that the royalties and overall amounts of interest payable are expected to be small (less than $100 for the entire period, excluding any interest on refunds), we find that it would not be reasonable or in the public interest to impose these calculations on non-commercial radio stations.
V. Tariff wording
 In approving the tariff, we make the following modifications to the Proposed Tariffs. These changes do not alter the scope of the application of the tariff.
1. A single tariff: We approve a single tariff for the term 2003 to 2017. While parties asked the Board to approve two tariffs for this period based on the Texts, we find these Texts to be largely similar, except for the Collective being referenced.
2. References to licences removed: Under the Act, when seized of proposed tariffs, the Board’s mandate is to fix royalty rates and related terms and conditions in approved tariffs.  The Board’s mandate in approving tariffs does not include the issuance of licences. It is the role of collective management societies to issue licences, as described by the Supreme Court of Canada in Access Copyright v York University.  Accordingly, we have removed references to “licences”.
Update to definitions: We remove three definitions found in the Proposed Tariffs, which are not relevant after our approval of a flat royalty rate with no music-use reporting requirements: “French non-commercial radio station”, “gross operating costs”, and “non-commercial low-use station.” We also remove the definition of “copy”; it is not necessary since there is also a definition of “reproduction”.
4. Modified wording in the adjustment clause: This clause permits adjustments in the amount of royalties owed if an error is discovered.  However, the clause in the Proposed Tariffs makes the adjustment contingent on an agreement by the Collectives, suggesting that a Collective could decline to make such an adjustment. We therefore amend the adjustment clause in subsection 5(4) so that an adjustment is triggered by a notification, instead of by the Collectives agreeing to the adjustment.
5. Sharing confidential information: In order to promote information-sharing while protecting the user of the tariff, we have accepted to include provisions that clarify conditions according to which Collectives may share confidential information provided by the user pursuant to the tariff.
6. Electronic communications: We add a provision for electronic means of communication in the approved tariff. Subsection 7(3) of the Proposed Tariffs describes the methods for Collectives and Users to communicate and make payments. However, the Proposed Tariffs were filed at a time where electronic communications were less common. In contrast, the Commercial Radio Reproduction Tariff (2020-2023), deals with the same repertoires and allows communication through email and payments through electronic bank transfers. 
7. Transition clause: Given the retroactive nature of this tariff, we include a transition clause that provides a single payment date for the first business day of the month that occurs three months after the tariff is approved. 
 Having given due consideration to the record, we approve a single tariff for the years 2003 to 2017. For broadcasting reproductions, we fix a royalty of $25 per year per station payable to CMRRA for the years 2003 to 2010 and a royalty of $50 per year per station payable to CSI for the years 2011 to 2017. In addition, we fix a royalty of $20 per year per station payable to CSI for the years 2011 to 2017, for reproductions made to facilitate simulcasting.
 We are satisfied that the royalty rates and related terms and conditions of the approved tariff are fair and equitable. We therefore approve the Proposed Tariffs, with modifications, as a single tariff under the title Non-Commercial Radio Reproduction Tariff (CMRRA:2003-2010, CSI: 2011-2017).
 CSI is a joint-venture between CMRRA and the Société du droit de reproduction des auteurs compositeurs et éditeurs au Canada inc (“SODRAC”). Generally, CMRRA manages the reproduction right for English language musical works while SODRAC managed the reproduction right for French language musical works. SOCAN acquired SODRAC in 2018. As a result, CSI no longer operates in regard to tariffs approved for 2019 onwards. CSI still collects royalties on behalf of SOCAN and CMRRA for CSI tariffs proposed in the past.
 In February 2022, pursuant to section 69 of the Copyright Act, CSI submitted an application to withdraw its proposed CSI-Online Music Services (2014-2017) tariff, which included reproductions made by non-commercial radio stations and had been included in this proceeding by Notice CB-CDA 2017-170. The Board approved the application in CSI – Online Music Services Tariff (2014-2018), 2022 CB 3.
 Copyright Board Notice CB-CDA 2017-170 (21 December 2017).
 Copyright Board Notice CB-CDA 2018-023 (21 February 2018).
 SOCAN is a party to the agreement and joint submission, having acquired SODRAC in 2018.
 See Joint Submissions from the Collectives and the Associations to Registrar, Copyright Board (10 March 2020) “Re: Non-Commercial Radio (CMRRA: 2003-2010; CSI: 2011-2018; Re:Sound 2013-2018) and Non-Commercial Radio Reproduction (CMRRA/SOCAN: 2020) at p 5; See also Canadian Radio-television and Telecommunications Commission, Communications Monitoring Report 2018, (Ottawa: CRTC, 2018), online: CRTC <https://crtc.gc.ca/eng/publications/reports/policymonitoring/2018/cmr4b.htm#s80vi>, at p 210.
 The third text relates to the period 2020-2023, which, along with the year 2018, is the subject of a separate proceeding.
 Joint Submissions, supra note 6. The parties call these Texts the “First Settlement Tariff” and the “Second Settlement Tariff”, respectively. The Board seeks to avoid using the terms “settlement” and “tariff” in reference to texts that parties jointly submit as the basis to approve tariffs, for two reasons. First, agreements between parties to Board proceedings differ in their significance and effects compared to how settlements are understood in other contexts, such as in civil litigation. Second, the word “tariff” denotes a legal significance to these texts, that is not found in the Copyright Act. For these reasons, the Copyright Board’s preferred terminology is “jointly-submitted text”.
 Copyright Act, RSC 1985 c C-42 [the Act].
 SOCAN – Various Tariffs 1994-1997 (20 September 1996), (reasons), online: CB <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/366531/1/document.do>, at p 14.
 Ibid at p 14.
 Access Copyright – Tariff for Provincial and Territorial Governments 2005-2014 (22 May 2015), (reasons), online : CB <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/item/366791/index.do>, at para 157.
 See Access Copyright – Tariffs for Post-Secondary Educational Institutions 2011-2017 (6 December 2019), CB-CDA 2019-082 (reasons), at para 234.
 See e.g., Objection of the Associations to CSI - Non-Commercial Radio Stations 2017 and Online Music Services 2017 (20 July 2016), at p 2.
 Re:Sound 1.B.2 – Non-Commercial Simulcasts and Webcasts 2013-2019 (4 December 2020), 2020 CB 17 (reasons), online CB : <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/item/489263/index.do>, at para 31, [Re:Sound 1.B.2 (2013-2019)].
 Re:Sound Tariff 1.B – Non-Commercial Radio 1998-2021 (6 July 2018), CB-CDA 2018-145 (reasons), online: CB <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/item/483920/index.do>, [Re:Sound 1.B (1998-2021)].
 SODRAC Tariff 3.B – Community Radio Stations 2001-2005 (10 May 2003), (reasons), online : CB <https://decisions.cb-cda.gc.ca/cb-cda/certified-homologues/en/item/366414/index.doa>; CMRRA/SODRAC Inc. Tariff 3.B – Community Radio Stations 2006-2010 (25 March 2006), (reasons), online : CB <https://decisions.cb-cda.gc.ca/cb-cda/certified-homologues/en/item/366394/index.do)>.
 See Re:Sound 1.B.2 (2013-2019), supra note 16 at para 32.
 See e.g. Objection from Greg Schatzmann, manager of CJLX-FM (Belleville, Ontario) to CMRRA Tariff 3 (2003-2007) (10 July 2002); Objection from VOWR Radio Board to CSI - Non-Commercial Radio Stations (2011) (13 September 2010); Objection from ARC, NCRA, ARCQ to CSI - Non-Commercial Radio Stations (2018) and CSI - Online Music Services (2018).
 SOCAN Tariff 16 – Background Music Suppliers 2007-2009 (19 June 2009), (reasons), at para 60, online : CB <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/item/366668/index.do>..
 SOCAN, Re:Sound – Tariff for CBC Radio 2006-2011 (8 July 2011), (reasons), online : CB <https://decisions.cb-cda.gc.ca/cb-cda/decisions/en/item/366708/index.do>, at paras 118-121.
 Re:Sound 1.B.2 (2013-2019), supra note 16 at para 31.
 For the purposes of this proceeding, “nominal” means small enough that it is considered not to have any meaningful impact on the user’s finances.
 Re:Sound 1.B (1998-2021), supra note 17.
 SODRAC Tariff 3.B (Community Radio Stations), 2006-2010 (25 March 2006) (tariff), online: CB <https://decisions.cb-cda.gc.ca/cb-cda/certified-homologues/en/366394/1/document.do>
 See Act, supra note 10, s 66.501.
 See York University v. Canadian Copyright Licensing Agency, 2021 SCC 32 (for a discussion of the distinct role of the Board to approve tariffs and collective management societies to grant licences).
 For example, clauses related to adjustments of errors are present in tariffs relating to Retransmission, Media Monitoring, Satellite Radio, and Background Music (Re:Sound) dating back at least 18 years.
 Commercial Radio Reproduction (2020-2023) (12 December 2020), 2020 CB 018-T (tariff), online : CB <https://decisions.cb-cda.gc.ca/cb-cda/certified-homologues/en/item/489660/index.do>, at s 15(2).
 See e.g., Re:Sound Tariff 3.B – Background Music 2016-2020 (9 October 2021), 2021 CB 10-T (tariff), at s 12; Re:Sound and SOCAN – Stingray Pay Audio and Ancillary Services Tariff 2007-2016 (29 May 2021), 2021 CB 5-T (tariff), at s 16.