This defense was struck out at a very early stage by a BC Supreme Court Master in this ruling that parody was not available as a "fair use" [sic] defense under the Copyright Act, based upon the Michelin decision of 1996. The Master's ruling is being appealed.
Prof. D'Agostno has publshed a lengthy analysis of the SCC's CCH decicsion in which she twice states that, in light of the 2004 CCH judgment from the SCC, the Michelin decision "no longer seems to be good law." Unfortunately, the Courts don't seem to be agreeing with her.
I hope she is right and there is, indeed, recent SCC jurisprudence since her paper boosting freedom of expression in Canada in the defamation context.
But I disagree with her that the CCH decision means that no legislation is necessary. I've published a paper recently entitled "Why Canada Needs Parody Parity and Comedy Comity: Copyright Control of Canadian Humour" in Vol. 20 No. 3 (October 2008) of Les Cahiers De Propriété Intellectuelle in which I said:
I strongly disagree with Prof. D'Agostino's position that we do not need legislative intervention in this instance. It is primarily the responsibility of Parliament, and not individual litigants, to take the necessary steps to provide clear and predictable laws in Canada. The current Bill C-61, for example, would provide a dream list of new, overreaching and unnecessary rights for content owners. Unfortunately, there are no highly paid lobbyists fighting for creators and users who strongly need a satire and parody right in Canada. When Parliament proceeds with copyright revision, a satire and parody right should be included. It would even be justifiable on its own, if a larger package does not proceed in the near future.
Test case litigation is not an answer in this situation. There are major costs risks in seeking a ruling from the Federal Court of Appeal or another appellate court that parody is now included in fair dealing and is therefore a user's right in Canada. While there is reason to hope that this would be the result of such litigation, one cannot count on this being the case. There were serious splits on copyright doctrine that were exposed in the Supreme Court's Kraft decision in 2007.
Moreover, the recent retirement of Justice Bastarache and the imminent appointment of new Justice on the Supreme Court thereby ensure even more post-Kraft unpredictability if the case were to get that far. Furthermore, well and thoroughly fought copyright litigation is quite rare in Canada and there is no guarantee that the "right" case will arise in the foreseeable future. In terms of how it may arise, it may not be necessary to wait for a lawsuit to be launched by an aggrieved rights holder, since pre-emptive litigation is now possible in principle. However, pre-emptive copyright ligation is rare, risky and expensive. In any event, resolution of the parody issues in the Canadian courts at an appellate level will take several years from whenever a test case is started.