Archived - Le Regroupement des artistes en arts visuels du Québec

The Case for the Inclusion of Artists Resale Right (Droit de suite) in Canada's Copyright Act

What is the Artists Resale Right?

• The Artists Resale Right (also known as Droit de suite) aims to provide Visual Artists with a share of revenue from sales of their work after the initial sale of that work to a dealer or other buyer.
• The Artists Resale Right relates to sales by art dealers and auction houses and covers work above a specific value.
• The Artists Resale Right provides that Visual Artists or their estates receive a royalty on the resale of artworks; that royalty is usually between 3% to 5% of the price of the work, with individual payments being made to copyright collecting societies on behalf of the artists.
• Resale Right is concerned with the resale of physical entities — for example a painting, a sculpture, a work on paper — and is independent of other rights like Reproduction Rights and Exhibition Rights.
• Resale Right lasts while a work is in copyright (in Canada, 50 years after the original creator's death), thus benefiting the families and heirs of the artists.

Why do Canadian Visual Artists need the Artists Resale Right?

• Among Artists, whose income is generally lower than average Canadians', the income of the vast majority of Visual Artists is among the lowest.¹
• One of the reasons for this is that, once their art works are sold for the first time, generally at a very low price, especially those of young artists and those of First Nations Artists, they will never benefit from the increased value their works acquire over time.
• If their art works are resold in one of the more than 50 countries in the world that have adopted the Resale Right, they won't benefit from this right because their country of origin, Canada, is not part of this group of more advanced countries.
• So, while Visual Artists in other countries may hope for a better future benefitting from the increase in value of their creative works for themselves and their families, Canadian Visual Artists cannot.
• Improved income for Visual Artists also means an increased autonomy from federal, provincial and territorial cultural granting agencies, as well as health and welfare agencies.
• Finally, the federal, provincial and territorial governments, need the Artists Resale Right in order to obtain a more accurate reporting of all art sales in the country, allowing a better collection of sales and income taxes.

How will the Artists Resale Right work in Canada?

• The adoption of the Artists' Resale Right (Droit de suite) in Canada will require its inclusion in the Copyright Act which will soon be under revision to modernize it.
• The Artists Resale Right will apply to works of art that are resold after the legislation takes effect; it will not be restricted to works created after that date.
• The Artists Resale Right will cover original works of graphic or plastic art, such as a painting, a collage, a drawing, a limited edition print, a sculpture, a ceramic, an item of glassware or a photograph. This definition reflects similar arrangements in the EU and other countries.
• A bill of sale must be issued by the merchant or auction house to the purchaser for every sale of an artwork, making it obligatory to declare all sales and pay the appropriate taxes.
• When the artwork is sold again to another buyer by a merchant or an auction house, they will charge a royalty of 5%. This royalty will be collected before taxes and remitted to the artist or the artist's estate through a collective copyright management organization such as Canadian Artists Representation Copyright Collective (CARCC).
• The Artists Resale Right will be inalienable and unwaivable, meaning that an artist will not be able to sell or licence this right, and that he will not be able to renounce its application.
• Resale royalties will be paid to artists who are Canadian citizens or permanent residents, or their heirs if they are Canadian citizens or permanent residents.
• It will cover works being resold during an artist's lifetime and for 50 years after the artist's death.
• Where the seller and the other 'relevant person' in the resale are jointly and severally liable to pay, the 'relevant person' is taken to be, in sequence, the agent of the seller, or the agent of the buyer, or, the buyer.
• The Artists Resale Right will include all resales involving art market professionals, public institutions or organisations, and all resales subsequent to the first transfer of ownership, regardless of whether the first transfer was made by sale, gift or any other means.
• The applicable rate to all resale of art works in Canada after the legislation enters into effect will be of 5%, uncapped.
• The minimum resale price before a resale royalty is imposed will be $1000.
• The Artists Resale Right will be managed by a single collecting organisation, appointed by the Canadian Government following an open tender selection process.
• Works by Canadian artists sold overseas, and works of foreign artists whose countries have adopted the Artists resale Right, may also be eligible for royalty payments under the Berne Convention for the Protection of Literary and Artistic Works.

Who might object and why?

• It is likely that private gallery owners, art merchants and auction houses will object to the adoption of the Artists Resale Right for diverse reasons.
• Claims will be made that it will hinder and eventually reduce the local market of original art works, but in every country where it has been implemented this in fact was not the case because the Artists Resale Right applies only to « resales » not on the initial sales of original works.
• The Artists Resale Right will be presented as just another tax unfairly imposed on art collectors The Artists Resale Right is not a tax, it is an intellectual property royalty rewarding and encouraging creativity.
• Some will argue that buyers will refrain from purchasing art works in Canada and will purchase them in other countries. However, more and more countries are adopting the Artists Resale Right and in those countries it has not acted as a barrier. International movements affect only those art works whose market is primarily international in the first place. Moreover, transport and insurance costs, as well as border crossing duties and differences in exchange rates, are sufficient to protect the internal market of more affordable local original artworks.
• Other opponents will present the Artists Resale Right as yet another administrative burden added to the numerous reports merchants have to fill. This will only be one more bill to pay to the collective copyright agency which will be in charge of locating the artists and remitting them the monies collected.
• Some others will finally claim that the Artists Resale Right will be helping the wrong artists at the wrong time of their career, meaning those who are already « stars ». However, the Artists Resale Right will be helping the numerous successful artists ( ie. Aboriginal Artists), throughout their careers, especially when they reach their retirement.

---

¹ According to Statistic Canada, between 2000 and 2005, the income of visual Artists has dropped by close to 30 %. Hill's Strategies repreted in Feb. 2009 that the average income of visual artists was 13 976 $ in 2005, more than 7 000 $ below the Canadian level of low income.