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Music Media Media (Apple)

Canadians [Will] Pay Levy on MP3 Players - Updated 665

Capt. Canuck writes "According to this Toronto Star story, the Canadian Copyright Board may approve a 20% levy on electronic media tomorrow, including MP3 players and hard drives. With the Canadian Dollar rising and this on the horizon, maybe now is the right time to get that iPod." Update: 12/12 16:33 GMT by M : rcpitt writes "The Canadian Copyright Board has (finally - a year late) issued its ruling on the latest round of blank media levy - the controversial (in the rest of the world as well as Canada) private "tax" on recordable media used to copy music which proceeds go to the music artists in Canada. The ruling by the board and a press release were posted to the Board's web site at 10AM Ottawa (CST) today. The ruling continues the levy amounts from the previous 2 year period (2001-2002) to the end of this period (2003-2004) at the same amounts as previously set but adds new levies on portable (MP3) digital audio recorders of from CDN$2/unit to CDN$25/unit depending on internal storage capacity."
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Canadians [Will] Pay Levy on MP3 Players - Updated

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  • by Geek Boy ( 15178 ) on Thursday December 11, 2003 @09:10PM (#7696384)
    You're paying for it now, so copy as you like. Don't feel remorse. The government is just making it easy - now Canadians can download music and movies off the Internet instead of wasting time walking to a store. You think the recording industry would dare take you to court and lose when the judge learns that you paid them for it already? That court loss would open the floodgates!

    Use this stuff for legitimate reasons only? Go buy in the US. You have a right to do that.
  • by StandardCell ( 589682 ) on Thursday December 11, 2003 @09:18PM (#7696459)
    Why does one group get to have its way with all digital media without respect for other groups? Why is it that musicians and songwriters deserve to impose a "guilty until proven innocent" handout? If they get that much, then what will happen when other groups ask for them? What about film producers and movie studios? What about software companies? What about print publishers? If you take all of these groups into consideration, given what is already charged, the average CD blank will end up with a $4 per blank tax.

    Great. The deal is then that I will get all of my software, music and books from warez newsgroups, filesharing networks and wherever else I can.

    Does this make any sense whatsoever? Because if these groups think they can tax all this blank media, they will utterly destroy retail sales of both original media and blanks and the incentive of the consumer to engage in purchases thereof. This will end up hurting the artists represented by the collective. They will also drive blank media into the underground where trucks haul this stuff into black markets. Who loses in this scheme? Everyone but the people who supposedly get these taxes.

    I consult for a living in the video editing and commercial production field, and now I have to tell my clients to make an emergency purchase tomorrow of spindles of DVD-Rs, CD-Rs and any other media and stockpile them because of this ridiculous tax. My clients don't deal in pirated material, and often we have to license music, images and footage from the creators anyway. They will never be able to apply for the proceeds from these taxes because they'll never qualify.

    Enough is enough. E-mail Claude Majeau at majeau.claude@cb-cda.gc.ca and let him know what you think of him and his band of thugs. Find the MP for your riding [parl.gc.ca] and tell them that the Canadian Copyright Board needs to be stopped before they destroy retail sales in Canada and end up fueling mass piracy and the black market for the sake of artists who should be paid based on the merits of their music, not because they have been somehow directly robbed.
  • by StandardCell ( 589682 ) on Thursday December 11, 2003 @09:28PM (#7696559)
    The Canadian prices for iPods [apple.com] are $439, $579, and $729 for 10GB, 20GB and 40GB iPods, respectively. You must pay 7% GST on top of anything that you buy.

    The US prices for iPods [apple.com] are $299, $399, and $499 for the same above. If you're not in California you only pay shipping and no tax.

    At $1.32 Canadian exchange rate, assuming no skimming by your bank, the US prices to Canadians are $395, $527, and $658. Aside from the difference in price, to then bring it across the border you will be charged 7% GST and unknown amounts of excise, brokerage, inspection and other taxes, and they're not small change. I can guarantee you that it will end up costing you more to order it from the US if you're in Canada.

    More proof that the Canadian dollar should be at around $1.50 or that prices in Canada should fall. Every Canadian iPod sold makes Apple in Cupertino extra profit at this point, and there's nothing that Canadians can do about it.
  • by iminplaya ( 723125 ) on Thursday December 11, 2003 @09:31PM (#7696579) Journal
    "...you can get any CD for 25 pesos (less than 0.25 USD)..."
    Actually, it's $2.50usd and here near Cancun we charge 50 pesos (40 if you bring your own CD).
  • by gvc ( 167165 ) on Thursday December 11, 2003 @09:32PM (#7696597)
    Near the border? And you probably think it is warm there, too.

    It is 311 km from TB to Duluth. You have to buy a lot of CDRs to pay for your gas. Even at $0.49/CDR.
  • by z4ce ( 67861 ) on Thursday December 11, 2003 @09:41PM (#7696666)
    What you are talking about is called Purchase Power Parity. The economist does this cool little thing where they use the Big Mac to compute the purchase power parity of each currency.

    The reason the purchase power parity can very so much from currency to currency is primarily because of the financial interest in the U.S. Markets which drives the demand for our currency up.

    Unfortunately for us American's, eventually the worth of our strong dollar must eventually fall to put it back into line with PPP.

    Having a high PPP is a double edged sword though. If you have a high PPP, it means you can buy a lot of stuff from abroad with your dollar. However, conversely, your stuff looks high priced compared to other country's stuff. Thus, you tend to run trade-deficits. Eventually, it will balance out.
  • They do (Score:5, Informative)

    by phorm ( 591458 ) on Thursday December 11, 2003 @09:45PM (#7696695) Journal
    With some (Future Shop, par example), it is included in the cost of the media. You don't see it, and people are less annoyed by it.

    With others (Londons Drugs) they charge the tax at the time of sale. You then get a bill a lot larger than expected (for CD-bundles), and many people blame it on the store rather than placing blame retarded laws and corporate hand-holding as it should be.

    I think that having the tax inclusive is one of the reasons that people aren't awake/more-pissed-off about this. If everybody who bought CD's found that they increased by 25-50% at the point of sale, I think there would be a lot more of a push to have the laws repealed.

    As somebody who buys the media to store data or legal music, I wonder if I would be in my rights to pursue a lawsuit for being wrongfully charged what is equivilent to a fine on anyone who buys digital media.
  • by antiMStroll ( 664213 ) on Thursday December 11, 2003 @09:59PM (#7696801)
    Not as far as I understand. Downloading is legal but sharing is still an IP violation, which shows just how insane this legislation is. The sooner the next federal election kicks Sheila Copps' fat ass out our government the sooner we return to some semblance of normalcy.
  • by phorm ( 591458 ) on Thursday December 11, 2003 @10:00PM (#7696813) Journal
    This isn't the only thing going on in the world of media, if you look at the copyright board of Canada [cb-cda.gc.ca], most of the upcoming issues are all dealing with SOCAN [socan.ca], CMRRA and the NRCC.

    Let's see... SOCAN, CMRRA , SOCAN/NRCC, CMRRA, SOCAN, NRCC

    Included issues are: radio stations, pay audio services, radio, radio, ringtones, background music, and tariffs tariffs, tariffs

    Isn't this a bit insane? I mean, tariffs on ringtones...? Looking at the recent news page you would think that the copyright board only deals with audio issues...

    Yes, it is time for music producers to learn some new tricks, and stop milking the consumer.

    If you want a brief description of each organization and various others, go here [cb-cda.gc.ca]
  • Re:They do (Score:2, Informative)

    by Hoser McMoose ( 202552 ) on Thursday December 11, 2003 @10:07PM (#7696872)
    The store deserves to be blamed if they are charging it at the cash, since the levy is paid by the CD manufacturer/importer! By the time London Drugs (or anyone else) gets the CDs the price has already been worked into it at least one level up the food chain, and probably two levels (the distributer bought from the importer who paid the levy).

    You are correct though that most people don't know they've paid the levy. It currently sits at $0.21 a CD, or roughly half of the price we pay for blank CDs. Under the proposed tarriff that amount will jump up to $0.59 a CD. At that point in time the tarriff will make up about three quarters of the cost of blank CDs and it should push the price of CDs up dramatically.

    Good to know that the next time I need to buy a CD for a new Linux ISO I'll be paying twice as much, but my hard earned money will go mostly to help Celine Dion pay for her next castle in France.
  • by djmurdoch ( 306849 ) on Thursday December 11, 2003 @10:25PM (#7697015)
    It's not a misconception, it's part of the 1998 revisions to the Copyright Act. See the "Private Copying" section of this Copyright Board fact sheet [cb-cda.gc.ca].

    Canadians are explicitly allowed to make copies of recordings for private use. Not just backups, recordings of other items too. And the levy is designed to pay for this. To quote:

    The amendment to the Act legalized private copying of sound recordings of musical works onto audio recording media - i.e., the copying of pre-recorded music for the private use of the person who makes the copy. In addition, the amendment made provision for the imposition of a levy on blank audio recording media to compensate authors, performers and makers who own copyright in eligible sound recordings being copied for private use.
  • by topham ( 32406 ) on Thursday December 11, 2003 @10:54PM (#7697218) Homepage
    This is government stupidity at it's best. As it is a levy, and not a tax, it CANNOT be collected by Customs. It is a level which is collected when sold to a RETAILER. (Note: that is any company which will sell the end product to the consumer. That includes 'wholesalers' when selling to the public.).

    But it means they cannot collect the levy if I order DVD-Rs from the U.S., or take a trip south and bring back an iPod.

    (Note: it can be difficult to get consumer electronics mailed across the boarder, but picking them up yourself isn't hard.)
    (thats how I got my Tivo; and it was fully declaired to customs when I came back).

  • by djmurdoch ( 306849 ) on Thursday December 11, 2003 @10:59PM (#7697248)
    You should check out this Canadian Copyright Board fact sheet [cb-cda.gc.ca]. It is okay to copy music recordings; it's not piracy, it's legal private use. The levy is the way that people who copy recordings pay for their music.

    Yes, it's definitely an issue that blank recording media is used for other things besides recording music. But the issue is that the levy may not be targeted as well as it should be, not that it is "welfare to support those who don't feel like they should have to pay for music".

    I really do encourage you to read that fact sheet. It is surprisingly clearly written for something coming from the government. For example, can you believe that this was written by a government board?

    4. I buy blank CDs regularly to use in my computer. Are they subject to the levy and if so, how much is it?

    Both "ordinary" CD-Rs and CD-RWs and their "Audio" counterparts can be used to copy music. Having said this, most CDs used to copy music are "ordinary" CD-Rs and CD-RWs (for which the levy is 21 cents), not "Audio" products (for which the levy is 77 cents).

    CD-R Audio and CD-RW Audio products were created at least in part to comply with US legal requirements. They are encoded so as to be recognized as audio products when played on digital audio recording equipment and may not be readable by all CD-ROM drives. Otherwise, they are technologically identical to their non-Audio counterparts.

    CD-Rs Audio and CD-RWs Audio are marketed as such, and are sold at a much higher price (sometimes twice as much or more) than "ordinary" CD-Rs and CD-RWs. They also represent less than one per cent of the Canadian recordable CD market.

    From a practical perspective, if the package of blank CDs you purchase does not state that they are Audio CDs or "for music use only", then they are subject to a levy of 21 cents.

    The use to which a recordable CD is actually being put does not determine whether it is subject or not to the levy. Manufacturers and importers of blank CDs pay royalties on all the CDs they sell blank.


    Note that this page is a little old; those rates they state are probably out of date.
  • by Anonymous Coward on Thursday December 11, 2003 @11:20PM (#7697377)
    Nope, you're right. Even U.S. travellers have to pay the GST up front here but then just file a form to have it refunded later.
  • by Ray Radlein ( 711289 ) on Thursday December 11, 2003 @11:23PM (#7697390) Homepage
    And, indeed, that is how companies in Canada havve been getting around the existing levy for years.

    I think I even remember talk about loading songs onto IDE Hard Drives sold as components.

    For that matter, the Canadian RIAA-equivalent has been collecting this money for several years now; but as of the last time this subject came up, they had yet to distribute a single cent to Canadian artists. At the time, it had been at least two years, although the article seems to be saying that they have, in fact, finally started sharing the wealth. Does anybody know when they finally started distributing the proceeds?

  • by Sven The Space Monke ( 669560 ) on Thursday December 11, 2003 @11:24PM (#7697400)
    London Drugs as a company is opposed to the levy (specifically, the proposed increases to said levy). The do the add-on at the till to make people aware of it. Most people won't know/care about the levy until they see it directly effecting their pocketbook, so they try to bring this situation to the consumer's attention. The best way they came up with is to show -- on every reciept -- how much this levy actually costs on a per-purchase basis.

    Check out London Drug's official position [londondrugs.ca]. Also worth a look is the Canadian Coalition for Fair Digital Access [ccfda.ca] - a non-profit group against all this foolishness. Especially look at their member companies - they include the likes of London Drugs, AMD, Intel, Creative Labs, Apple, Dell, FutureShop/Best Buy, Hewlett PAQard, Wal-Mart, Radio Shack and (sweet Jesus, is this one right?) Sony Canada.

  • attribution (Score:2, Informative)

    by Thinkit3 ( 671998 ) * on Thursday December 11, 2003 @11:33PM (#7697449)
    That's what magnatune and creative commons are doing. Check out their license terms which allow free duplication but require attribution. It's interesting, but abolishment means no attribution either. Besides, nobody creates information anyway. You just discover it, usually with plenty of influences.
  • by Anonymous Coward on Thursday December 11, 2003 @11:47PM (#7697540)
    Considering Mozart's music was neither religious nor patriotic, what's your point exactly? I won't bring up other "classical" composers, for the simple fact that you didn't. ;)
  • by Phantasmo ( 586700 ) on Friday December 12, 2003 @12:09AM (#7697702)
    1. Go to France and learn how to protest

      What if university and college students in Toronto, Ottawa, Montreal etc. shut their cities down when things like this happened?

    2. Join the NDP [www.ndp.ca] or the Green party [green.ca] and get involved

      The New Democrats and the Greens are the only parties in the country that don't have the "yes sir, no sir, may I please suck your balls sir?" attitude towards industry.

    3. Write to SOCAN [socan.ca] and demand a refund for all the CDs you've bought

      Send SOCAN your receipts and tell them what you've done with your discs - burned Linux ISOs, saved photos, etc. Also, tell them that you wouldn't pirate their music, since it's all slop anyway.... OR

    4. Run a "music exchange"

      Really rub the private copying [cb-cda.gc.ca] decision in SOCAN's face by having a "music exchange". Get a bunch of computers with fast CD-burners, then invite a whole bunch of people and tell them to each bring 10 of their favourite CDs. Then give everyone free blank discs. As long as the person who's keeping the copy actually MAKES the copy (i.e. puts the discs in the provided computer, clicks "copy", collects discs), it's all nice and legal.

  • by Anonymous Coward on Friday December 12, 2003 @12:12AM (#7697719)
    "As an added bonus, artists who have limited distribution of their works (i.e. the Little Guys) see some of this cash."

    Not likely. According to the testimony of the CPCC, they base their magical redistribution formula on some fuzzy guess about what is being downloaded. How do they figure that out? They look at what is popular on the radio in a given month. So the "Little Guys" cut is probably vanishingly little compared to the Celine Dions of the world. Most likely, the rich get richer and the "Little Guys" probably stay where they are.

    It's kind of the opposite of Robin Hood -- rob a little from everybody on the premise they are probably doing something illegal. Then give most of it back to the rich because, after all, they own most of what people are probably using illegally. People are probably poaching rabbits from the duke's land, so, tax them for it.

  • by rcpitt ( 711863 ) on Friday December 12, 2003 @03:01AM (#7698555) Homepage Journal
    AKA 7AM PST - and I expect to be up and reading it as soon as it is available since I was one of the 100 "official" objectors this round.

    Background

    The levy started in 1999, based on a change to the Canadian copyright act in 1995, and is up for changes every 2 years. This round is for the years 2003-2004, and yes, it is actually a year late.

    The previous round had a whole 3 objectors - all consortiums - retailers, importers, hardware creators - no private individuals.

    This round started out with 100 objectors - winnowed down to about 30 by the time the actual submissions and legalities got going. The hearings were to take place around October of 2002 with the ruling by the end of 2002.

    In reality, the hearings didn't start until the end of January, 2003 and ran to the middle of February - and the ruling is only now coming out.

    Having lived through this period, written much and run a (closed) mail list for the objectors, you might expect me to have some idea of what the outcome will be - but truthfully I don't. All bets are off since this round there was a lot more information presented as well as some interesting twists - new ideas as opposed to just countering the CPCC's presentation and ideas.

    The article that started this thread is quoting information that was available over a year ago - some of which was changed during the hearings. CPCC started out asking for CDN$21/Gig for "non-removeable hard drive" in each MP3 player but ended up proposing a sliding scale starting at (all figures in Canadian $) $11.10/Gig for first down to $1.99/Gig for anything over 20 Gigs. Note that this would apply to any media - FLASH, RAM, or "micro-hard disk" but doesn't apply to "full-size" hard disks used in non-portable devices such as PCs (they intimate that these are reserved for a future round)

    Rather than detail all of the things that went on during the 18+ months since I started (due to my blood boiling while hearing a couple of coleagues discuss this at a Comdex show) I'll point you at the pages on my web site at my Media Levy pages [pacdat.net]

    I'll post a summary of the actual levy as soon as I can in the morning.

    In response to some of the postings here:

    The current Canadian Copyright Act allows "private individuals" to make copies of music from wherever they can for their own private use. This means that my friend can loan me their retail-purchased music CD and I can make my own copy of it and give them back their original - or I can make a copy of my own retail-purchased CD for my self and give my friend the original - or I can make a copy of music I receive from whatever other medium (radio, TV, Internet) for my own use.

    What I can't do is make a copy of my retail-purchased CD and give the copy to my friend

    It also does not allow me to publish music I "own" to the Internet or make bulk copies and sell them - that is still "piracy".

    The levy is only on products imported or manufactured for resale. This means that a private individual may import (for example) a tube of 100 CD-Rs for their own use from the US and not have to pay the levy. The Canadian Customs people at the border don't care and are not empowered to collect the levy (although they'll collect the GST and provincial sales tax). Currently it is just about a wash to order a tube of 100 CD-Rs from the US, pay the shipping and tax - but if the levy is doubled this will make the difference up to about $25 for 100 CD-Rs - well worth it for the average Canadian to learn how to use the Internet for e-commerce. This is what the retailers are upset about. With things like the Apple iPOD, the potential gain from ordering from outside of Canada is even greater!

    CPCC (Canadian Private Copying Consortium) has graciously allowed for "zero-rating" for those who wish to register ($50 annual fee) as an importer/manufacturer of blank audio media that is not used to record music (i.e. is used to record data

  • by geoswan ( 316494 ) on Friday December 12, 2003 @11:41AM (#7701098) Journal
    The Copyright Board of Canada has just announced the details [cb-cda.gc.ca]... Less onerous than anticipated.
  • by Flave ( 193808 ) on Friday December 12, 2003 @12:25PM (#7701693)
    NEWS RELEASE

    Copyright Board Freezes Private Copying Levies for 2003 and 2004
    December 12, 2003

    Ottawa. The Copyright Board of Canada has today issued a decision on private copying levies for 2003 and 2004. This is the Board's third substantive private copying decision. The first was issued in 1999. It established Canada's initial private copying levies for 1999 and 2000. The Board's second decision, issued in December 2000, set revised levies for the subsequent two year period, 2001 and 2002. Until today, interim levies had been in effect for 2003 which were set by the Board at levels identical to those in place in the previous two years.

    The case was heard by a panel composed of the Honourable Mr. Justice John H. Gomery, Chairman, Stephen J. Callary, Vice-Chairman and CEO, Sylvie Charron and Brigitte Doucet, Members. Vice-Chairman Callary wrote a dissent.

    Today's decision freezes all existing private copying levies at their current levels. As a result, the current levies of 29 on audio cassette tapes of 40 minutes or longer (no levy applies to tapes of shorter length), 21 on CD-Rs and CD-RWs and 77 on CD-R Audio, CD-RW Audio and MiniDiscs will remain in effect until the end of 2004.

    The Board also sets for the first time a levy on non-removable memory permanently embedded in digital audio recorders (such as MP3 players) at $2 for each recorder with a memory capacity of up to 1 Gigabyte (Gb), $15 for each recorder with memory capacity of more than 1 Gb and up to 10 Gbs, and $25 for each recorder with memory capacity of more than 10 GBs.

    The Board denied the Canadian Private Copying Collective's (CPCC) request to establish a levy on blank DVDs, removable memory cards and removable micro hard drives. It finds that the evidence available at this time does not clearly demonstrate that these recording media are ordinarily used by individuals for the purpose of copying music.

    Vice-Chairman Callary agreed with the majority on the inadmissibility of DVDs and removable memory cards and micro hard drives. However, he would have certified different rates on medium already subject to a levy. He would have certified a rate of 28 on audio cassette tapes, 29 for CD-Rs, 21 for CD-RWs and 72 for CD-R Audio, CD-RW Audio and MiniDiscs. The rates on non-removable memory would have been the same.

    Manufacturers and importers of blank audio recording media are required to pay private copying levies to the CPCC when these media are sold in Canada. The amounts collected by the CPCC are distributed to eligible authors, eligible performers and eligible producers of recorded musical works copied by individuals for personal use in Canada.

    When the private copying levies were first implemented in 2000, the CPCC introduced a "zero-rating" program under which manufacturers and importers of blank audio recording media were permitted to sell media levy free to certain parties such as religious organizations, broadcasters, law enforcement agencies, courts, tribunals, court reporters, provincial ministers of education and members of the Association of Universities and Colleges of Canada, music and advertising industries. Audio cassettes, CD-R Audio, CD-RW Audio and MiniDiscs were covered by the program. The CPCC announced some time ago its plan to extend its zero-rating program to include CD-Rs and CD-RWs.

    However, objectors raised a number of concerns with the existing or planned extended CPCC's zero-rating program, claiming, among other things, that the program is inherently unauthorized, illegal and unfair. The Board concluded that just as it does not have the legal authority to create levy exemptions under the Copyright Act, nor does the CPCC. As a consequence, the Board concluded that CPCC's existing or proposed expanded zero-rating program is illegal.

    In his dissent, Vice-Chairman Callary disagreed with this conclusion and stated his concerns for those many organizations which have relied on the existence of a zero-rating program and that could now find themse
  • by rcpitt ( 711863 ) on Friday December 12, 2003 @04:36PM (#7704920) Homepage Journal
    IANAL but...

    One of the "interesting" items found deep (p21) in the ruling is the note that "However, an audio recording medium to which no tariff applies because the Board has decided that such a medium is not of a kind ordinarily used by individuals for recording music is, in the Board's opinion, removed from the ambit of the exemption " (bold is mine) (i.e. you can't legally copy other's music onto it) which they specifically apply (p43) to DVDs. "As previously explained, this determination means that copying music onto a DVD infringes copyright"

    The discussion on the digital-copyright.ca mail list [digital-copyright.ca] is running to the opinion that since the Board didn't rule on whether things like normal hard drives are "blank audio media" this still leaves open the right to use them for now, but that in the future (next round of levy determination for 2005-2006 for example) they (the Board) may rule that the hard disk isn't a blank audio medium and therefor Canadians may no longer copy music to them - or they may rule that hard disks are blank audio media and apply a levy to them which will confirm thier use for private copying - or they may rule that they are blank audio media but not leviable and therefor no longer allowed for private copying of music. Same applies to FLASH cards and micro-hard drives - they were not specifically ruled upon this time so still in a grey area.

Stellar rays prove fibbing never pays. Embezzlement is another matter.

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