3 min

Goodhandy’s fighting copyright tariff

Bar owner says retroactive bills unfair to small businesses

Todd Klinck won’t be paying his bills, even if they ask nicely.

He’s ready to face the music.

Klinck is on the hook for $2,200 for a levy he didn’t know existed. That’s why he was so shocked when the bill arrived at his club, Goodhandy’s. The invoice was from Re:Sound, a government-sanctioned music licensing organization that few people know anything about.

“I would have been happy to pay it,” Klinck says. “I just don’t agree with the method.”

Klinck’s club will rack up only about $400 a year in fees. However, after getting the tariff approved in 2011, Re:Sound is charging businesses retroactively back to 2006. That, Klinck says, “is not a way to treat small businesses in a recession.”

Goodhandy’s, which styles itself as “Toronto’s pansexual playground,” set up shop six years ago, just south of the gay village. While it has managed to stay afloat thus far, it’s not exactly a cash cow. “[Twenty-two hundred dollars], out of the blue, is not something I can afford to pay — the margins are that tight,” Klinck says.

The original invoice came with a warning that if the bill wasn’t paid within a month, a collection agency would become involved. When Klinck complained, the best they would do was offer him better payment plans.

Re:Sound, a not-for-profit collective, has been around since 1998. Until recently, it concerned itself primarily with licensing music to radio. As new tariffs came online in recent years, however, the collective has branched out. With newly approved tariff 6-A coming into place last year, Re:Sound now has the right to charge clubs, bars and gyms for playing copyrighted music.

“Music is a competitive advantage for businesses,” says Re:Sound’s director of communications, Matthew Fortier. He says that the collective aims to work with businesses to ensure the music industry gets its due. “The money doesn’t go to us; it goes to artists and labels.”

This has left some, like Klinck, scratching their heads. Many business owners already pay royalties to the Society of Composers, Authors and Music Publishers of Canada (SOCAN) and can’t fathom why Re:Sound exists at all.

SOCAN has been around, in various forms, for about a century. It is the name most associated with paying royalties in Canada. The organization represents much of the music industry — namely songwriters, lyricists and publishers.

Fortier admits there’s a perception of “double-dipping” when it comes to collecting royalties, but the two organizations have two very different mandates. Re:Sound’s tariffs go largely to performance artists and labels, whereas SOCAN pays out mostly to song-writers. Many businesses will wind up paying to both groups, with the fees going to different ends of the music industry.

Re:Sound originally went to the Copyright Board of Canada with the proposed tariff in 2006. The process — by all accounts, a very slow one — drew testimony from both sides of the debate in a meeting open to the public. In 2011, the board approved the tariff and gave Re:Sound the option of enforcing it for five years, retroactively. That’s exactly what they did.

Fortier points out that it’s the Copyright Board of Canada that sets the timelines for the tariff.

“We have to certify retroactively,” says Gilles McDougall, secretary general of the Copyright Board. “It doesn’t mean [they] have to collect retroactively.”

After the tariff came into effect, business associations were saddled with the responsibility of informing businesses of the impending tariff. That memo, evidently, didn’t reach some.

As bars and clubs faced the realities of paying those fees, there was some grumbling. In January, Montreal nightclub 1234 challenged the process, calling it “aggressive.” The club was on the line for more than $6,000. When they had not paid the tariff by November — a month after it was due — Re:Sound set loose a collection agency. The board dismissed the challenge, as the actual collection process was outside its jurisdiction. It’s not clear whether 1234 paid the invoice, and requests for comment were not answered.

While Klinck agrees wholeheartedly that the music industry deserves its due, he’s “pissed off” at the way Re:Sound is handling the matter. He’s agreeing to pay this year’s fees but is standing firm on his refusal to pay the whole invoice.

Although the tariff has been in place for more than a year, many bars and clubs are just now facing the music. Re:Sound is rolling out the fees slowly, as it sifts through the onerous task of contacting every club and bar affected by the tariff.

McDougall says that if anyone objects to the tariff, they have two months to send in their input on its 2013 renewal.