There's problem. The crayons push the paper away, making it impossible to draw on the paper. You can fix that by making a few changes:
1. Remove all collision layers from the paper (uncheck the checkbox for the "A" layer).
2. Glue the paper to the background.
3. Move paper to the "back" layer (right click on the paper, then on the "selection" selection, click on "Move selection to back".
After doing that, you should be able to pick up a crayon and draw on the paper. But there are a couple more issues:
1. The crayon's trace only lasts a few seconds. (you can increase the time that the trace is visible by right clicking on each tracer, then increase the "fade time".
2. The crayons not only draw on the paper, but they also draw on the sky! That will be much more difficult to fix, but I'll leave that to you (I can't do EVERYTHING for you! )