INDU considers Blockchain as method for administering ARRs

Originally written Nov. 31 2018

The government is deciding whether to implement Blockchain, an online transaction system, to automatically administer resale fees to artists, otherwise known as Artist Resale Royalties (ARRs).

“Blockchain is fundamentally an online digital ledger system to record transactions and events,” said Johnny Blackfield, a certified Blockchain professional.

Blockchain tracks transactions back to the items creation and ensures that artists collect ARRs for each transaction, he said. The online system will automatically take off the percentage and pay it to the artist.

The discussion comes about as part of The House of Commons Standing Committee on Industry, Science, and Technology (INDU) statutory five-year review of the Copyright Act. Not only are members deciding whether to implement ARRs, but also the best method to do so.

In her presentation to INDU, April Britski, executive director of the National Association of Visual Artists (NAVA) said ARRs would entitle visual artists to receive a royalty payment of 5 per cent every time their work is sold publicly. Britski maintained that the ARR is not a tax, and would not be collected, spent, or administered by the government. How the fee is administered could be decided upon by the market.       

Blackfield explained the three main benefits of Blockchain, including secure and reliable record keeping abilities, its smart and digital contracts, and its transfer of value.

“Blockchain allows for secure, low-cost, near real-time transfer of value between two parties without the need for a trusted third-party intermediary,” he said.

Blackfield, who is already working to create this registry, also advised that the system would also be useful for Indigenous artists.

“Regarding art authentication and provenance, blockchain will allow every Indigenous artist to register their art on the blockchain, and they will have a claim to that art for eternity,” he said.

Indigenous artists’ ability to control copyright is something INDU has spent considerable time on during its review.

Brain Masse, the Liberal chair for the committee said “one of the most important things” the committee is addressing is Indigenous artists and artwork. He noted that it has not be considered under previous reviews of the Copyright Act.

While Blackfield said the benefits of Blockchain included “specifically simplified transactions, immutable data, increased transparency and increased trust he also noted that the system is not yet perfected.

Some of these concerns include users’ abilities to access and understand the digital platform.

“Although there is tremendous potential to empower artists through blockchain technology, certain technological and commercial challenges are also being worked on right now,” he said.

Michèle Marcotte, INDU’s clerk, said members still have had time to consider the issues and build opinions on them before tabling their recommendations to the government in April.

“It’s just a matter of deciding what’s feasible,” he said.

INDU resumes on Jan. 29, and the first few meetings are in-camera, meaning they will not be accessible to the public.

In these meetings, members will decide what recommendations to move forward with, including whether they want to see Blockchain implemented, said Masse.  

Published by rachelemmanuel

Rachel has covered government institutions from a variety of levels and for a variety of outlets. A Carleton University journalism student she is an experienced news writer and editor who has mentored and trained reporters with The Charlatan, Carleton’s weekly student newspaper. Rachel has worked as a multimedia reporter for three of Metroland Media’s Niagara newspapers, covering education, marijuana legalization, and business. Her work has been published in the Toronto Star. Rachel currently writes for iPoliticsINTEL, where she covers Parliamentary committee meetings, specializing in Canadian copyright law.

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