Public Engagement on the Development of the Next AI Strategy

1. SOCAN (Society of Composers, Authors and Music Publishers of Canada) is pleased to present its views to the AI Strategy Task Force for consideration in developing Canada’s next AI strategy.
2. SOCAN is Canada’s largest rights management organization. We have over 200,000 direct songwriter, composer, and music publisher members and clients, and we license tens of thousands of businesses and organizations across Canada. We also connect more than 4 million creators and publishers worldwide, ensuring they receive fair compensation for the use of their music.
3. SOCAN issues licences for the performing rights and reproduction rights of musical works and collects and distributes royalties to its members and the international rights management organizations with which it has reciprocal agreements. We have licensed music rights for 100 years, licensing virtually all musical works in every new technology, including Internet streaming. SOCAN has consistently responded to major technological developments and market disruptions over the years and there is no reason the emergence of generative AI technology will be any different.
4. With proper safeguards, AI provides tremendous opportunities to support the Canadian music industry and grow its contributions to Canada’s economy. To accomplish this, we present three key priorities to the AI Strategy Task Force:
   • Ensure that a healthy licensing market is provided space to develop;
   • Publicly reject a text-and-data mining exception; and
   • Require AI companies to be transparent about the works they use to develop their models and to clearly label AI-generated outputs.
5. It is important that we champion and support the Canadian music industry in the age of generative AI, not only for the development of Canadian songs that reflect Canadian attitudes, opinions, ideas and values, but also to preserve the industry’s important contributions to the Canadian economy.
6. And the contributions of the Canadian cultural sector are significant. The CDCE (Coalition for the Diversity of Cultural Expressions) reported that in 2023, per Statistics Canada, the sector generated $63.2 billion.[1] The Canadian Chamber of Commerce recently released a report finding that Canada’s arts and culture sector directly contributed $65 billion to the Canadian economy in 2024 and has outpaced growth in key sectors like oil and gas, manufacturing, and wholesale trade since 2011.[2] AI technology companies ingesting and training models on copyrighted musical works without permission from, compensation for or credit to creators is theft and presents a threat to the cultural economy and Canada’s economy.

Ensure a Healthy Licensing Market is Provided Space to Develop

7. A free market voluntary licensing system allows rights holders to control the use of their works while requiring interested parties to negotiate on the terms of that use. It also empowers creators and rights holders to determine the appropriate level of remuneration for works used to train and operate AI models, or for other AI-related purposes.
8. The scale and amount of music used by AI companies to develop their models is not a new phenomenon. For the past decade, SOCAN has licensed online music services that use tens of millions of musical works and we collect royalties to distribute on the billions of performances in Canada to rights holders worldwide. Licensing is what we do, and AI will be no different.
9. AI companies have made clear that creative works are essential to the success of their platforms, therefore collaboration with creative industries is integral to the development and growth of AI. Ensuring that a licensing market governed by the principles of consent, credit, and compensation can flourish is imperative to establishing Canada as a leader in AI. The failure to do so risks foreign AI companies extracting and monetizing Canadian works without returning value to the Canadian economy and the creators who produced them.
10. We urge the AI Strategy Task Force to avoid encroaching on the free market by pursuing any suggestions – like copyright exceptions – that would have the effect of destroying the burgeoning market between AI companies and rights holders before it has had any chance to develop.
11. As mentioned above, licensing schemes and agreements are already happening and will continue to mature and evolve over the years. Compensation for creators and technical innovation can successfully co-exist.

Publicly Reject a Text-and-Data Mining Exception

12. SOCAN strongly recommends the AI Strategy Task Force to publicly declare that a text-and-data mining (TDM) exception is unequivocally off the table and will not be considered. Such a commitment will demonstrate Canada’s leadership in supporting our cultural economy and encouraging the nascent licensing market.
13. Some AI companies have advocated for a TDM exception that would allow them to use high-quality protected works, including musical works, for the programming of their AI models to reap the full benefits of a creator’s labour without requiring their permission and without providing any remuneration or credit to rights holders. This suggestion is untenable and must be rejected. AI companies depend on human creative works to function, and creators must share in the economic value their works generate.
14. Music creators must be compensated for the use of their works in developing and operating generative AI models; licensing, not exceptions, makes that possible. Creating new exceptions to allow the use of creators’ works without consent, credit, and compensation prevents creators and their representatives from controlling how their works are used, by whom, and on what terms.
15. Earlier this year, the Australian government was considering introducing a TDM exception into its Copyright Act. In October, it was publicly announced that they would not be moving forward with the exception as creators have a fundamental right to be fairly remunerated for the use of their works.[3] We recommend the AI Strategy Task Force to make the same announcement for Canada.
16. Respect for copyright does not stifle innovation. The AI Strategy Task Force should make this a cornerstone of Canada’s AI strategy.

AI Companies Must Have Transparency Obligations

17. It is extremely difficult, if not impossible, for music creators and rights holders to know when and where their creative works have been used in the development of an AI model. Without this knowledge, music creators and rights holders cannot effectively exercise or enforce their rights. As a question of fundamental fairness, the creators whose works are taken by AI companies to build their models deserve to share in the benefits generated by those models, and transparency obligations are the key to making this a reality.
18. AI companies must be required to meet adequate transparency, record keeping, and disclosure obligations to ensure that music creators and rights holders understand how and when their works are used by AI companies and whether that use has been licensed or not. This includes which copyright-protected works are ingested and stored in their datasets. Without appropriate transparency requirements, it would be difficult, if not impossible, for a creator or rights holder to know that their rights have been infringed, much less to pursue and obtain any remedy for that infringement.
19. Imposing transparency obligations will encourage AI companies to obtain music creators’ or rights holders’ permission through licensing agreements to use their works to program their AI models or for other purposes. Licensing copyright-protected works is not, and has never been, a barrier to innovation. Engaging in fair licensing practices will ensure that human creativity and labour is respected and compensated, allowing creators to participate fairly in AI-related economic opportunities, while fostering the development of generative AI in a fair and transparent manner.
20. We recommend the AI Strategy Task Force to require AI companies, and every person involved in the programming and testing of an AI model, to keep and make readily available detailed and accurate records identifying the works they have used for that development and how they have used them, including the source of the works and details of any licences authorizing the use of the works and how those works are kept, maintained, or stored by the AI companies. AI companies are best positioned to track that information.
21. Furthermore, AI companies should be required to make sure an AI-generated output is clearly labelled. In a study conducted for SOCAN by Pollara, 87% of Canadians said that they want music created by humans rather than AI. Clear labelling of AI outputs will provide the transparency necessary to allow the public to make informed decisions about the type of content they consume.

Conclusion

22. SOCAN thanks the AI Strategy Task Force for its consideration of our comments and we would be happy to explain more about how music licensing works or answer any further questions you may have.

[1] Statistics Canada, Provincial and Territorial Cultural Indicators, 2023

[2] Canadian Chamber of Commerce Report

[3] Australia Rules Out Changing Copyright Law