Copy that!

Copy that!

Gwynn Scheltema

My Access Copyright notification came the other day to say that the Writers and Artists Payback Claim period for 1997 to 2016 opened on April 1 (closing date is May 31). I’ve also received several updates about the ongoing battle for creator rights in our Canadian Courts and what we as writers can do to help. The Writers’ Union of Canada (TWUC) also sent an update on the court cases and the advocacy they are doing.

I’ve watched my Access Copyright cheque shrink drastically over the last few years because of the education sector’s refusal to pay royalties, as has every other writer. Access Copyright and TWUC, along with other national writers organizations, are working hard on our behalf to address this issue, but ultimately, we the creators should also take action.

I’ll bring you up to date on the legal situation, and tell you how you can help.

What is Access Copyright?

Access Copyright is a non-profit, national organization representing Canadian writers, visual artists and publishers, and the work they create. Access Copyright also partners with similar organizations around the world doing the same thing abroad. Together they represent our creative works when it comes to those who want to copy and share those works in schools, corporations, governments and research situations.

Access Copyright manages the licenses and the collection of licensing fees for copied, shared and remixed content and passes those royalties on to the copyright holders. These royalties have traditionally formed around 20% of writers’ and 16% of publishers’ income. Advocacy around intellectual property is also an important part of the services Access Copyright offers to creators.

Background to the current court action

Prior to an amendment to the Copyright Modernization Act in November 2012 adding “education” as an allowable purpose under fair dealing, the education sector assured Canadian writers, visual artists and publishers they had nothing to be worried about and that this change would not impact their royalty income negatively.

Then in 2013 the ministries of education and post-secondary institutions walked away from long-standing licensing agreements. According to Access Copyright, over 600 million pages are now copied FOR FREE each year by that sector. Education’s new copying policies have devastated royalty income for creators and publishers resulting in a whopping 80% decline.

And it goes further: Course packs containing entire chapters of books, full short stories from collections and anthologies and shared online digital book copies have reduced primary book sales so that publishers receive less and, in turn, writers receive less in royalties from their publishers.

Taking the matter to court

Access Copyright felt it was time to take the matter to court. They sued York University for non-payment of mandatory fees (known as the Interim Tariff) and York counterclaimed that they did not have to pay because their actions constituted “fair dealing” under Fair Dealings Guidelines.

Finally, in 2017, the court ruled in favour of Access Copyright on both claims, but York immediately appealed.

Then at the end of 2017, the Federal Government launched a Parliamentary Review of the Copyright Act. There was now hope that the review would rebalance the law allowing creative professionals to earn the income they were due.

The big surprise, and disappointment, came in February of this year when most of Canada’s provincial education ministries and all of Ontario’s school boards launched legal action against Access Copyright.

It becomes vital now that we make our voices heard by the policy makers conducting the review, so that the legislation can be made stronger to ensure that creators are fairly compensated.

So what can you do to help?

  1. Start by understanding the issue fully. Go online and check out Access Copyright, TWUC, I Value Canadian Stories and Focus on Creators.
  2. Watch and share this video to learn how present copying practices impact the creation of content for tomorrow’s classrooms, and create a value gap for creators.
  3. Write a letter to your MP urging them to support creators during the ongoing Federal Parliamentary Review. Several of the sites listed in #1 have letter kits to guide you.
  4. Make a personal submission, to the Standing Committees from both Canadian Heritage (CHPC committee) and Innovation, Science, and Economic Development (INDU committee) who have begun considering witnesses and submissions as part of the Parliamentary Review.
  5. Tell other writers and urge them to get involved. 

Want to learn more about copyright in Canada?

(links and explanations thanks to Access Copyright website)

Tax tips for writing income

Tax tips for writing income

Gwynn Scheltema

A query arrived in the Writescape’s comments mailbox last week the gist of which was:

I self-published a book in 2015 and sell via Amazon.com. I received a form in the mail (1042-S Foreign Person’s U.S. Source Income Subject to Withholding). My Amazon book sales are pretty paltry (a whopping $277!). Must I report this on my Canadian tax return? 

I answered in a private email, but thought that this question and others related to writing income may be on the minds of many Canadian writers preparing tax returns this time of the year, so below is the answer to this question and a few more tips about reporting writing income to get you started.

One of the many hats I wear, is that of a tax preparer at a local accounting office, which I have done for decades, so I do know a thing or two about filing Canadian taxes. And since 2009, Writescape has periodically offered a workshop on tax tips for writers and artists.

That said, a caveat: The tips offered here are general information only. Your tax situation could be influenced by other factors not dealt with here, so if you are at all in doubt, contact your accountant or follow the links to CRA’s website for more information.

What kinds of income are considered writing income?

  • royalties/ advances for book sales 9print/e-book) from your publisher (T5)
  • independent book sales, print and e-book, (possible foreign income slips )
  • grants, bursaries and residencies (T5 or T4A)
  • school visits and speaker honorariums (possibly a T4A)
  • access copyright royalties (T5)
  • public lending rights payments (PLR) (T4A)
  • freelance earnings (possibly a T4A)
  • workshops, coaching, retreat facilitation ( possibly a T4A)
  • writing contest winnings

How much do I have to make before I have to report writing income?

Canadian taxation works on the honour system. Even if you do not receive a T slip from the entity that paid you, you are obliged to report all your income from all sources worldwide. That includes sales through Amazon, PayPal, eBay and other websites, books sold at craft fairs, honorariums for being a guest speaker, etc.

Where on my return do I report my writing income?

That depends on whether you are, by Canada Revenue Agency’s (CRA) definition, a “hobbyist” or a “writer” operating as a small business. In VERY general terms:

  • a “hobbyist” reports T slip income on the lines instructed by the T slip. Generally, hobbyists do not deduct expenses, although deductions are allowed on some grants and scholarships.
  • a “writer” operating as a small business (with an expectation of profit), reports all income including income on T5s and T4As as part of business income on form T2125. (Be aware you may have to inform CRA by letter that you are doing so, so that they do not think you forgot to report the T slip income.)
  • any T4 income as a writer or editor is employment income and should not be reported as part of a writing business.

What do I do about income from outside Canada?

  • Foreign T slips you may receive include a 1042-S for the US or a SA103S for the UK.
  • Canadian residents must file worldwide income regardless of whether a return is required or not in the foreign country where the income was generated.
  • Double taxation agreements exist between Canada and many countries, e.g. the US. This means that if you paid tax on certain income in the US, you will not be taxed again on that income in Canada. CRA may, however, charge a difference between rates.
  • Foreign income must be reported in Canadian dollars. You can use the exchange rate for the date/s the income was received, or you can use the Bank of Canada average rate for the year.

 Best for last

  • Most contest winnings are considered “prescribed prizes” and are not reportable or taxable. Yeah!!
  • Unlike employment income, writing business income and grants and bursaries can be reduced by expenses paid to generate that income. What expenses? That’s a whole other blog.

Useful links