Submitted August 2, 2024 Contact: Andrew Cash, President and CEO andrewcash@cimamusic.ca Following is a list of CIMA’s recommendations:  Recommendation 1: Fulfill the Government commitment for a permanent increase to the Canada Music Fund (CMF) to $50 million in Budget 2025, along with an additional $10 million for new live programming for a total of $60 million. Recommendation 2: Move forward with amendments to the Copyright Act in an expedited fashion and support reforms that benefit Canadian-owned independent music. Budget 2025 Recommendations

1. Fulfill the Government commitment for a permanent increase to the Canada Music Fund (CMF) to $50 million in Budget 2025, along with an additional $10 million for new live programming for a total of $60 million.

In the 2021 election platform, subsequent mandate letter, and most recent Departmental Plan for Canadian Heritage, the Liberal government committed to ensuring better and stable funding for the music sector by increasing the annual contribution to the Canada Music Fund to $50 million. In Budget 2024, the Government of Canada took an initial step towards this commitment, by investing $32 million over two years to the Canada Music Fund. CIMA applauds the Government on this investment, which represents a positive step towards fulfilling its commitment and investing in Canadian music businesses. While the Budget 2024 increase by the federal government was welcomed by the music sector, it fell short of fulfilling the promise made to the Canadian-owned music sector to support musicians and music companies as they compete in a global music market. It also did not address the expanded programming needed to meet the current demand and to support new live music sector programming. In the strongest possible terms, CIMA urges the Government of Canada to implement the full, permanent investment that it has promised to the Canada Music Fund. This investment would ensure that the Canada Music Fund’s highly successful investment platforms, FACTOR and Musicaction, have the resources necessary now and into the future to continue to build and strengthen vital program investments in Canadian owned music companies and Canadian artists. Without a permanent investment to the full amount committed to, the system is put at risk. Indeed, we are already seeing troubling signs. Despite the Government’s top up to the CMF, announced in the Spring of 2024, Canada Music Fund recipients through FACTOR and Musicaction have reported diminished year over year investment.  This is due to the vastly increased demand on an overall diminishing investment pool when plummeting radio contributions are considered. CIMA has often heard that the investment in Budget 2024 is sufficient, given the impending contributions from streamers that will emanate from the implementation of the Online Streaming Act (formerly Bill C-11). While CIMA has and will continue to participate actively in the regulatory process, the two investments are not inherently linked. The Government of Canada’s promised investment in the CMF to $50 million annually was not, and has never been, tied to other actions the public sector takes. By its nature, a permanent investment is made to help stabilize the industry, level the playing field with highly capitalized global competitors and, continue to build a Canadian-owned music sector where Canadian artists can flourish. That said, it is still very unclear exactly when contributions as a result of the implementation of the Online Streaming Act will commence.  What’s more, recent legal action which challenges the CRTC’s decision on initial base contributions, and the potential for more litigation in the future, risk delaying investments from foreign owned digital platforms even further., Fundamentally, to ensure the stability of existing programs and to develop new ones that meet sector demands and the market challenge, it is crucial to implement this permanent increase to the Canada Music Fund in this budget cycle. We urge you and the Government more broadly to use all the budgetary paths available, including the upcoming Fall Economic Statement, to finalize this investment for the sector and help set the future course for success for our artists and the companies that invest, support, promote and believe in them.

2. Move forward with amendments to the Copyright Act in an expedited fashion and support reforms that benefit Canadian independent music.

The 2021 mandate letters for both the former Minister of Canadian Heritage and Minister of Innovation, Science and Industry call on the government “to amend the Copyright Act to further protect artists, creators and copyright holders.” 2023 marks over a decade since the last fulsome update to the Copyright Act, with significant need for revision coming more into focus in recent years. Three years ago, the Government of Canada moved forward with limited amendments to Canada’s copyright regime through Budget 2022, which updated term extension provisions to align Canada with international trade obligations, as well as a commitment to pursue further copyright reforms that “protects all creators and copyright holders”.  With discussions currently ongoing between government departments on the best path to follow on copyright reform, CIMA urges the federal government to act in an expedited fashion, either through Budget 2025 or a broader Copyright Act bill to implement reforms to the benefit of the Canadian-owned music industry. The 2019 statutory review of Canada’s Copyright Act, in which CIMA participated, marked key areas for modernization and advancement that, if implemented, would increase opportunities to monetize copyrighted content. This would increase the value of copyright holdings, encouraging investments in the creation, acquisition, and commercialization of existing and future copyrighted content. Key components of proposed changes that would benefit the Canadian-owned music industry include (but are not necessarily limited to):

• amending the definition of ‘sound recording’ under the Act;
• narrowing the radio royalty exemption (i.e., repealing the $1.25 million broadcaster exemption)
• making the private copying regime technologically neutral

These amendments would fix historical imbalances and close loopholes in Canada’s copyright regime that directly take money out of the pockets of Canadian-owned music labels and musicians. CIMA would be pleased to submit a more detailed summary of these proposals to the Committee should this information be of benefit. Conclusion Budget 2025 represents a very important opportunity for the Government of Canada to ensure that the gains achieved through the Canada Music Fund are secured and the future of the Canadian-owned music sector is set up for continued growth and global success. As always CIMA welcomes the opportunity to work with the government on issues regarding diversity, equity, inclusion, innovation and cultural diplomacy; to build a dynamic and competitive music industry where incredible Canadian artists are building global careers and gaining global audiences, supported by smart, well-resourced, skilled and highly competitive Canadian-owned companies, with the beneficial ownership of IP remaining in Canada; where the profits from these innovations are then reinvested in good, green, middle-class jobs that build and strengthen Canadian culture and the Canadian economy. Thank you for your time and consideration of CIMA’s pre-budget submission.  We would welcome the opportunity to appear before the Standing Committee on Finance to discuss these recommendations further. We look forward to growing a strong, dynamic Canadian music sector together. Yours sincerely, Andrew Cash President and CEO Canadian Independent Music Association Email: andrew.cash@cimamusic.ca   About CIMA Founded in 1975 CIMA is the not-for-profit national trade association representing over 350 Canadian-owned music companies connected to over 6000 artists in every province and territory in Canada. CIMA's membership ranges from individual artists and solopreneurs to Canadian-owned global music companies. CIMA’s mission is to empower and engage Canada’s music community to build and sustain equitable, inclusive, diverse, and successful global businesses and careers through advocacy, professional development, collaboration, networking, and celebration.