Canada facing reinstated levy on digital audio players

It looks like Canada's neverending adventures in MP3 player levies has now turned another corner, with the Copyright Board of Canada recently releasing its decision on a series of motions that the Canadian Private Copying Collective (CPCC) had been advocating for. Those proposals had been challenged by the Canadian Storage Media Alliance and the Retail Council of Canada but, according to lawyer/blogger Michael Geist, the Copyright Board appears to have clearly sided with the CPCC. What's more, the Copyright Board seems to be saying that the levy could not only be slapped on what they define as "digital audio recorders," but cellphones, computers, and other devices as well. Needless to say, the ruling will likely be appealed, so it doesn't seem like you have to worry about dropping a few extra loonies on your next iPod just yet.

[Via Slashdot]

[Rob @ Jul 20th 2007 11:27AM]

Let's see how long it'd take for the MPAA and RIAA to try this nonsense here in the U.S. too.
Well, MS already gave them what they want by paying them a cut for every Zune sold.

What a bunch of greedy BS. And please, don't give me the "it's taking money away from the artists" argument. We all know where all that money is going to.

[Javi0084 @ Jul 20th 2007 12:12PM]

Yup, bunch of greedy BS. What if we want to use our audio players to play indie music?!?!

[phoomp @ Jul 20th 2007 12:42PM]

*all* I listen to is indie-music. Got tired of listening to the same-old, just repackaged, thing from the RIAA members.

[CowboyGA @ Jul 20th 2007 11:28AM]

Future Engadget thread: Canadians use Ebay to buy iPods.

[Matt @ Jul 20th 2007 11:42AM]

Blame Canada.

[Bb @ Jul 20th 2007 11:52AM]

If it keeps on rainin' the levy's gonna break.

[mcloki @ Jul 20th 2007 11:44AM]

Just give us the names of Politicians to vote out of office.

[Phil @ Jul 20th 2007 3:35PM]

It's not a political thing, the Copy Right Board of Canada are Bureaucrats. They have probably been in their high paying, un-fireable, job since the boards inception. That is one thing you have to remember about Canada. There are no comities or the like. Politicians just create laws, the actual running of the country is by bureaucrats, the same ones who have been running this country for the past 40 years, no mater who is in office.

[psxp @ Jul 20th 2007 11:45AM]

Welcome to Canada - We Tax EVERYTHING

[Matt @ Jul 20th 2007 11:50AM]

That levy is (supposedly) used to compensate musicians for piracy/home recordings (back when it only applied to CD-Rs and tapes). I'd MUCH rather pay an extra $30 or whatever for a 60Gig iPod than have to deal with the kind of shite that the RIAA pulls down in the U.S. Pay a levy or get sued.... gee, tough call.

[sracer @ Jul 20th 2007 11:52AM]

If they institute levies on digital audio players does that mean that they are free to download whatever they want from P2P networks? (since they are being charged anyways?) If so, sign me up! :D

[Matt @ Jul 20th 2007 12:01PM]

Yes. Our copyright laws allow for downloading of music, it becomes illegal if you have a public directory that other download FROM. That's why our version of the RIAA isn't able to go around suing everyone willy-nilly. That and our ISPs don't really like to cooperate with them.

[chris @ Jul 20th 2007 12:00PM]

This is so insane. You've got to wonder how these people can get together, have a conversation, and come out with such a ridiculous conclusion. There are so many things wrong with the idea of a levy, it's mind-boggling. The first of which is that you're legally sanctioning theft. You're telling everyone it's alright to go out and download as much crap as you want and not pay the artist for it, because, hey, we'll do it for you. WHICH THEY WILL NOT. There is no provision to pay a fee to any non-Canadian. Steal all the Beyonce and Jay-Z you want, they'll likely never see a cent from the levies. Even if there is a clause to provide compensation to American labels with Canadian branches, exactly what kind of mind-boggling schedule will they have to come up with fairly distribute this collected fees to the artists? Will they watch the Much Music Countdown every week to see who is and is not popular? Doubtful. No, the levies will probably go to crap Canadian artists like the Barenaked Ladies, who need money because they suck so much.

A levy isn't fair to anyone.

[Chicksta @ Jul 20th 2007 12:49PM]

Unfortunately your first point is completely invalid. Did you buy anything at all today? Well guess what? Its cost was determined by factoring in - and adding - an amount of anticipated shrink or loss on overall sales. Anything you buy in retail, groceries, food, etc. factors in that 'padding' to buffer losses. So saying that a levy encourages theft is like saying that the price of a candy bar at the store is encouraging shoplifting. There is no direct connection. Is it fair to honest consumers? No. Will people with no integrity use any excuse they can to steal, whether there are levies or not? Sure. But if you want the artists to be compensated, you have to buy their product and be a 'micro-patron' if you will. If they are bound by contract to receive a certain percentage of sales, that might not be the ripoff it's alluded to be; marketing, studio recording, producing, distributing, creating artwork and liner notes, legal, admin, and management services - how many artists could afford those costs upfront on the scale a label can? The reason artists still sign with labels is because they provide value. And like every other for-profit company, they pass the expected losses incurred down to the checks the artists get (the 'product developers') and to the consumers, not to themselves.

[chris @ Jul 20th 2007 4:11PM]

I disagree with your rebuttal! (Ha, of course!) Seriously, though, I didn't say it encouraged theft. I said it sanctioned it, which means it makes it permissible. And that is not the right message to send out. Furthermore, this is not an example of a business like a grocery store charging more for beef to offset losses in bulk candy (which are routinely knicked). The labels cannot charge more for music because it will just push more people into theft. So the labels lobby the government for some type of intervention to protect their market, and the government responds with a very imperfect solution that actually sanctions the very behavior that has destroyed the market in the first place. A $25 gift certificate to iTunes gets you 25 songs. A $25 levy tells you it's okay to fill that 30GB iPod with thousands of stolen songs, because in some magic way, the government will see to it that the levy you paid reaches the right artists.

And that's bullshit.

[Chris @ Jul 20th 2007 4:13PM]

I disagree with your rebuttal! (Ha, of course!) Seriously, though, I
didn't say it encouraged theft. I said it sanctioned it, which means
it makes it permissible. And that is not the right message to send
out. Furthermore, this is not an example of a business like a grocery
store charging more for beef to offset losses in bulk candy (which are
routinely knicked). The labels cannot charge more for music because it
will just push more people into theft. So the labels lobby the
government for some type of intervention to protect their market, and
the government responds with a very imperfect solution that actually
sanctions the very behavior that has destroyed the market in the
first place. A $25 gift certificate to iTunes gets you 25 songs. A
$25 levy tells you it's okay to fill that 30GB iPod with thousands of
stolen songs, because in some magic way, the government will see to it
that the levy you paid reaches the right artists.

And that's a load of crap.

[James @ Jul 20th 2007 5:00PM]

RE: Chicksta, your point is misleading. When I buy a candy bar, the *store I buy it from* may charge a higher profit margin if they have problems with "shrinkage" (shoplifting) to make up for losses. Or, they may spend some extra money on extra cameras/guards to cut back on "shrinkage". In either case, they are passing costs on to you. Notice, however, that the candy bar manufacturer is not charging an extra levy "just in case" some of the candy bars later get stolen, and promising to pool all the money and pass it on to the retailers they sell their candy bars to based on who gets stolen from the most. Likewise, the government is not charging an extra sales tax on all grocery-store shoppers that they can turn around and distribute to all the grocery stores to offset some presumed cost of theft. In other words, in real life the way people deal with theft is not through a centralized body, but is in fact local to the organization directly affected by the theft.


This is what actually happens with intellectual property as well. When you buy a CD today, the retailer includes the cost of shoplifting of CDs in the price they charge. Likewise, the record label charges the retailer a wholesale price that reflects the "cost" to them of piracy (which, of course, is actually nothing in the case of home-user piracy). Like in the candy bar situation, in America the government does not step in and try to "recover" the "lost" revenue of the record label by charging a fee at the consumer level.

Now, I'm not going to say that one system is necessarily better than the other, though I personally feel that it cannot be possible for a bureaucratic body to distribute a levy like Canada has in a truly "fair" manner. I'm just saying that the way you presented your counter-argument didn't make any sense.


I think you should look at it this way: in America, they try to figure out who's pirating music and make them pay for it. They could almost certainly do this in a more fair and even-handed way, but that's the goal: the legal system determines who is guilty of a crime, and they pay for the damages caused by the crime. In Canada, they might as well pass a law requiring that you must buy an iTunes gift card in such-and-such amount for each piece of media you buy, e.g. you must give so much to *some* musical artist, regardless of how you use the media. Which system makes more sense?

[Colin Nowra @ Jul 20th 2007 12:15PM]

I'd rather pay the levy and not have to worry about being sued by the music and or movie industry. I don't mind paying for levy's or taxes. If i had no plans on downloading files i still would not mind paying the levy so that other people could do so if they wanted.

[phoomp @ Jul 20th 2007 12:43PM]

Agreed. Thank-you Copyright Board of Canada for making P2P legal and cheap

[AndrewS @ Jul 20th 2007 12:24PM]

I live in Canada, and I love this system better. A small, one time fee to be able to store gigabytes of copyrighted music? Yes the system makes people who don't steal music pay too, it's kind of like our healthcare system.

[Jake @ Jul 20th 2007 12:32PM]

These things are just silly.
Taxing a "computer" because it has the *possibility* for playing back a file that MIGHT be copyrighted ?
Or any other portable player for that matter , what if all the music i listen to is in the public domain, or if i OWN that music either from an online store such as iTunes or i ripped from a purchased CD?
It's just silly to tax everyone , more so when you're not making all aspects of sharing copyrighted files legal.

[Jason @ Jul 20th 2007 1:08PM]

Tarriffs like these are common in Europe, Particularly in Germany where they tax all media capable of storage, as well as any device capable of recording (with few exceptions) these moneys are paid to an association, who then theoretically passes it on to the artists...

[Jake @ Jul 21st 2007 8:29AM]

Yet you still get a jail term in Germany for piracy, that nice now isn't it ?

[jamesc @ Jul 20th 2007 3:46PM]

Music, or sound, travels through air, doesn't it? Why isn't it being taxed!?

[Jeff Lewis @ Jul 20th 2007 4:25PM]

Ok. As usual, people who have no clue about how it works chime in with strong opinions.

First off, having actually been involved with the Copyright Board's decision making process on levies, I think I can clarify a few things.

The levy is one part of a system that attempts to eliminate the need for complex and restrictive laws (like the DMCA and NET laws in the US, lest we forget). The idea is that in exchange for a clear law (Bill 43 sections 68 and 80) that make the copying of digital music for personal use completely and openly legal (including the copying of music you do not actually own), everyone pays a fee for each blank medium capable of storing digital music.

The trick, of course, is to establish a fair levy - and that's done through negotiation between all interested parties. However, the levy computation is done solely through evidence - and in the past the digital storage media groups have been bad at providing hard numbers while the music industry, of course, has numbers (mostly suspect - as the Copyright Board themselves state in the last levy review).

The levy is reviewed every few years to make sure it reflects the current situation in the industry and of course, SOCAN (our equivalent to the US's RIAA) always wants it raised high and to apply to anything that can store music. However, so far, every year the Copyright Board has sided on the consumer's side as much as they can - even to the point where they've included explicit advice to the storage media side on how to get their views better represented.

That being said, currently the government here is being run by Conservatives who, much like your Republicans, tends to favour business over consumer needs. They are, however, in a minority government, so tinkering with this kind of thing is very dangerous.

My advice is to cool yer jets until the Copyright Board actually sets the levy. During the last session, SOCAN demanded that all hard drives and DVD blanks be levied. The Copyright Board told them to go sit and spin, so don't assume the government will automatically give them what they want.

[Jake @ Jul 21st 2007 8:36AM]

How about ... you piss off ? If i want to store your crappy music on my digital media I'll pay for it then.

>> The levy is one part of a system that attempts to eliminate the need for complex and restrictive laws

There is no need for those laws in the first place.

>> that make the copying of digital music for personal use completely and openly legal (including the copying of music you do not actually own), everyone pays a fee for each blank medium capable of storing digital music.

Well that's the point , you're not making anything legal , you're just giving permission because you're already getting paid. I don't want your music and i don't want to pay for it either . How's that ?

Your pc is capable of storing my music , care to give me some money for every HDD , blank CD , etc you buy ?
See the defect ? you're charging people for all music , even if it's free , non existent or does not belong to you . You're telling me you're going to pay back Beethoven? in his grave ?

[Mark @ Jul 25th 2007 1:54PM]

Er... it is defective logic, but back when the law used to be in power, you would indeed receive money for every HDD, blank CD, DVD, etc that would be bought. Which is why it got removed. I'm not sure what the hell the CBC is thinking. At time like these I'm ashamed of our government. Not to say that the other way's any more reasonable (DMCA etc). Anyhow, if anyone knows of any petitions that need to be signed or places where political pressure needs to be applied, kindly link.