Category: Technology Author : Steven Hodson Posted: December 16, 2008
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Canada increases its ‘you are a digital criminal’ tax


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Here in Canada we have the pleasure of paying some of the highest prices for blank CDs due to the fact that it is thought that anyone using blank CD is automatically a copyright breaking criminal. This is the same idea that was a popular believe back when cassettes were all the rage. The belief was; and heavily promoted by the recording industry – then and now – that there is no reason why anyone would want to use blank CDS other than to pirate music.

This resulted in a 21 cent tax being levied per blank CD which before any other of our famous taxes being applied cost the consumer $11.99 per 50 pack of blanks – without cases. Now that is pretty well the cheapest price with it ranging upward from there depending on the store. Don’t expect that price if you’re shopping in a brick and mortar retailer.

The increase of 8 cents to 29 cents levy on each blank CD-R is being justified by the Copyright Board of Canada because of the increasing usage of  compression which allows for more stuff to be recorded on CDs. The interesting thing is that this digital criminal tax isn’t being applied to blank DVD even though they hold more data. This has resulted in CDs being more expensive to buy than blank DVD.

This tax levy amounts to about $30 million per year which is then handed right over to the music industry with a wink and a nod that the musicians will see any of the money.



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  • Grumble
    Yes, in Canada you're a guilty copyright infringing community before you touch the keyboard and we're gonna tax yer butt just in case. Kinda like Mom or Dad punishing you for something you might do wrong later. Gives you a feeling that "I might as well 'cause I'm paying the penalty anyways!" and I suspect that is the feeling promoted by the music industry. A reflection of how much free reign the music industry has - taxation without representation.
  • except right now Canada is getting a lot of pressure from the entertainment industry and its various trade groups to adopt the US style DMCA policy. On top of that Canada - again at the urging of self same trade groups - has been participating in the secret meetings surround the new ACTA trade agreements. These would in effect bring all members into line with US entertainment interests instead of the consumer interests.

    The idea is that this would replace our current levies system with the restrictive policies of the DMCA - in otherwords change one semi-bad screwing of the consumer for an even worse one.
  • Techmusic
    Does this mean that for instances where we are using blank CDs to NOT infringe copyright we can sequester the levy back given that we are not utilizing the media as per the specifications to which it is imposed? Given the amount of legal backups, data archiving, demo compiles, linux distros, and the fact that I have yet to burn any audio to disk that I myself have not created and recorded, I know I've gone through a good several 100 disk spindles in the past couple years, I think the Copyright Board should be responsible for refunding the 'levy' / 'tax' / 'cash leech'.

    And what if someone were to use the disks as media in some kind of sculpture? They're not infringing any copyright there. OR using blank disks as beverage coasters?

    The imposed levy upon a data storage media as being for a singular criminal intent such as this is similar to putting a consumer levi on blank paper as it may be used to plagerize another written work, rediculous. I've been opposed to the levy since it was created and still am to this date, its does not impart fair usage rights of consumers, nor does it protect national industry in any way as it is a 'tax' imposed on blank medium which is used in almost all industries for a multitude of purposes and intents as a storage/presentation/archival means as examples and the levy is irrepresentative of origin or purpose.
  • no you can't 'sequester' the levy back .. it's a one way street -- from our pockets to the entertainment industries slush funds. the idea is that everyone pays the levy in order to compensate the entertainment industry for losses incurred by the massive number of pirates there are in Canada.
  • Nate
    Steven how can you say that the industry has to compensate for loses due to piracy fullwell knowing that if you couldn't pirate music people may not buy it anyway? I really haven't heard anything in music nowadays that I would consider paying money for. If I was going to purchase an overpriced, half filled CD I would have to listen long and hard to the music before hand.

    You can't call something that "may" be purchase a loss. That would be like me saying that we "may" have 200 engines come for overhaul at the aerospace facility but we lost 7 million because only 150 showed up. That's not a loss, that's showing that your budget was not met. Whether you make a profit or not is dependent on what you charge or don't charge for the work.

    Everyone seems to by trying to play the blame game and its starting to show through. Instead of looking like respectable businesses companies are beginning to look like crooks. CEO's making piles of money even when their companies tank (GM, Ford, Chrysler, Fannie, Freddie, etc...). If we're going to talk about piracy or theft lets put more on the big companies taking ideas from copyrighted material and making into movies without permission. Who's the pirate???
  • the 'compensate' remark was meant as sarcasm Nate :)
  • Bor
    I didn't like it when it came in, especially after hearing an interview where a music exec pretty much said "tough luck" in response to a question about non-infringing users of blank tapes. But, the industry basically screwed themselves. Because of the levy, you have the right to copy music as you see fit, as long as you're not selling it or suchlike.
  • which is why the US entertainment industry is trying so hard to get our copyright laws changed. Laws that have proven over and over to be among the fairest in the world to both consumer and artist alike.
  • pat
    I view it as a license fee. Since I've paid for potentially copying copyrighted stuff I don't feel any guilt in doing it.
  • mike
    oh come on. you all can honestly say you have not watched a youtube video? downloaded a song? done anything on the internet that without it you would have two pay?

    this tax is amazing. were the only country in the world really that does not charge twelve year old girls fifty thousand dollars. for crap. if you feel jiped and you can say honestly you have not done above. then get on board we have a great advantage here in Canada make use of it.. get on youtube download lime wire. and if you love that artist go buy his cds. its only been the last 100 years music became a commodity. and that needs to change

    labels are good. but they take like 80 percent of the artists money. a concert those numbers switch. so go to concerts, buy there shirts and buy cds blank ones, keep media accseable by all Canadians.
  • Mike
    Who uses cd's anymore... Oh well this is just another instance of big industry manipulating our old technically incompetent politians. Like when someone let Bell shape internet.
  • you mean they've stopped shaping it?? </sarcasm>
  • Freezer
    What do I need with blank cd's anyway, I have flash drives.
  • Timothy Groves
    Canadian Charter of Rights and Freedoms:

    PROCEEDINGS IN CRIMINAL AND PENAL MATTERS.
    11. Any person charged with an offence has the right
    ...
    (d) to be presumed innocent until proven guilty according to law in a fair and public hearing by an independent and impartial tribunal;
    <quoted from efc.ca>
  • ya .. like our Charter of Rights means anymore than the toilet paper in the bathroom.
  • zak
    are they saying its now legal to download music if you buy blank cds
  • in Canada the idea is that 'everyone knows that copies of music you own already are going to be made. In principal this allowed you to make copies of the physical media you already own without breaking any copyright laws as the levy is supposed to go to the musicians.
  • P
    Oh good, so it's legal for me to make copies of music then since I'm paying for it. Yay!
  • RAS
    "Because of the levy, you have the right to copy music as you see fit"

    That's actually incorrect. The copyright laws in Canada identify what is illegal and they do not contain identification of personal uses as illegal. On top of that, it's distribution - and specific sets thereof - which are illegal. Making a copy for personal use is not illegal.

    Court trials have also set precedent clearly identifying personal uses as valid uses under Copyright law. There was one I recall from a couple years back wherein the Judge explicitly identified that downloading anything off the Internet is appropriate use under copyright law and it is up to those making things available which may or may not be in breach of distribution. Note that Judge said "may or may not". He didn't identify whether it was legal as he wasn't examining that within the case.

    So... the belief that "copying copyright protected works for personal use is illegal" is something which has been spread by the recording industry. Personally, I wonder if the "tax" placed on cd's and other such materials is actually illegal as it is - in effect - having people pay for something which is legally their right for free. Of course, that question would have to be asked in a court of law to be properly answered.
  • as I have said in other replies here the whole idea is that this levy allowed you to make copies of the physical media you already own and have the artists still compensated.
  • RAS
    You and I are not quite saying the same thing....

    I think your point is best captured with: "allowed you to make copies of the physical media you already own without breaking any copyright laws"

    My point is that as far as I understand Copyright law - which is limited as I am not a lawyer - is that I am within my legal rights to make the copies you are talking about without having to pay the levy.

    In short: we are paying for something which we already have the right to without having to pay. The levy is quite possibly an illegal levy.

    The concept that we are doing something wrong was not raised by the Courts but by the recording industry because the recording industry wants copyright law to cover more then copyright law currently covers. The cases that the recording industry have taken to court have shown the recording industry - under the existing laws - is wrong. That - more then anything else - is why the recording industry wants copyright law to change.
  • we're both dancing around the same answer :) .. From my understanding (having a father who was a writer and dealt with this type of thing) as Canadian citizen we are allowed under our current copyright laws to make copies - within reason - of physical media we already own. What the levy was meant to do was to compensate the artists for lost revenue from that copying. It wasn't a part of the "copyright law" per se but more a by product of it.

    Now whether the levy is legal enough to stand up in the Canadian court system is another question altogether separate.
  • RAS
    Heh, I keep hitting the reply button on your post but it doesn't seem to attach it there...

    "as Canadian citizen we are allowed under our current copyright laws to make copies - within reason - of physical media we already own"

    That fits my understanding as well. It is legal - and rightly so - for us to make those copies without paying for them.

    "the levy was meant to compensate the artists for lost revenue from that copying"

    Ah... now there we have - in my opinion - the truth/lie that has been perpetuated by large groups of copyright owners. Legally, the artists don't have a right to that "lost revenue" because it is not - in fact - lost revenue. It is an allowance within copyright law as part of the whole balance. Otherwise one could argue that a second-hand book store selling used copies of a given book is causing lost revenue for the author. After the intial sale, it is within my right to resell the copy I own, the right of the person that buys it to resell it themselves. The author/artist is not entitled to that money.

    Copyright is suposed to be an exchange of "the work being made available to the public and eventually belonging to the public" for "a limited grant of a monopoly". The idea was that the harm caused by having a monopoly was balanced out by the value brought to the public.

    So... the fair use aspects of copyright law - those uses which are allowed by copyright law as that is not a specific right granted to the copyright owner - exist as part of that exchange. For example, there are allowances with regards Libraries. I posit that my being able to make a personal copy of something I have purchased, or a newspaper printing an article on a movie review, etc, is within our rights and the artists are not entitled to compensation for those activities.

    By placing a levy on the media for those activities, the businesses have effectively taken away part of our rights under copyright law. After all, if it really meant for the law to change to compensate then legislation would easily take care of that. However, there are certain allowances of rights under the Canadian Charter of Rights and Freedoms so I wonder if such legislation would actually go too far and would not be allowed.

    In that same sense, by working around the law to charge a levy - one which is not their's by right - I wonder if that's a breach of law and can be removed. This is one of those times I wish I was wealthy so I could afford to hire appropriate legal representation to fight that.

    Think of the levy along these lines: your local baker figures you should eat a loaf of bread per week. You don't purchase a loaf of bread a given week but he charges you anyway because of "lost revenue". That's simply not right.

    I can understand taxes to take care of such things as public road repair. But a tax which basically says: Even though you don't want to be a customer of Company X, you must pay! That I do not accept and sure wish I could afford to fight it.
  • Kriff
    It certainly would be interesting to be able follow this tax money with some sort of mole- right to it's final destination, to see if in fact it gets delivered and distributed to the big labels and then follow it to see actually what percentage of this tax money is apportioned to the various artists that are judged by barcode tracking to be the artists that are selling the most works and therefore probably the most copied artists! ( In reality that may or may not be the actual copied music at all, but that is how it is supposedly done I was told! ) Any way we could get an audit on this? Maybe all these big label record companies should be audited by top IRS and CRA ( Canadian Revenue Agency ) Auditors just to see if these characters at the RIAA and CRIA mostly members from corporate Record Labels are sharing the pie legally? :>)
  • there has been more than one report that has followed RIAA settlements to see what happens to the money. It doesn't go any further than the RIAA wallet. So in this case I don't see the levy money being raised as having any different destination - but then that is just the biased opinion of one cranky old fart.
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