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Canadians Overpay Millions on Copyright Tax 144

An anonymous reader writes "Michael Geist has up a post on his site about the Copyright Board of Canada's decision last week on the controversial private copying levy, which functions like a tax on blank media. The good news? The Board reduced the levy on certain media such as CD-R Audio, CD-RW Audio, and MiniDiscs. The bad news? The millions of dollars in overpayment from these media will go into the pockets of manufacturers, importers, and retailers, not back to the consumers who paid in the first place. 'In addition to the overpayment issue, the decision contains several interesting revelations ... the decision sheds some light on the CPCC's enforcement program. The collective has aggressively targeted those parties that do not pay the levy, with 21 claims over the past three years. In fact, the enforcement program has been so effective that the Board found that concerns about the emergence of a gray or black market for blank CDs has not materialized.'"
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Canadians Overpay Millions on Copyright Tax

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  • by sayfawa ( 1099071 ) on Tuesday May 15, 2007 @09:30AM (#19128971)
    So I wonder if there's no tax on DVD-Rs. And if not, why not?

    Last year I got 100 DVD-Rs for $25. At 25 for 4.7GB there's not much incentive to even buy CD-Rs if the tax alone is 21 for 700MB.
    • Re: (Score:2, Funny)

      by Anonymous Coward
      Tax is on ALL blank media. Because if you are using blank media, it's piracy!!
    • by faloi ( 738831 )
      The current levy only applies to audio media (from what I'm reading). While you can put a lot of MP3's on a DVD, that's not (in the eyes of the board) what primarily goes on there. Chances are another levy will be put on blank video recording media given the chance.
    • by CastrTroy ( 595695 ) on Tuesday May 15, 2007 @09:57AM (#19129299)
      First, it's a levy, not a tax, and no, there aren't any levies on DVD-+*/^R's. I think the reasoning behind this is that you can't copy a DVD because of all that CSS stuff (nevermind how easy it is to remove). You can often find a spindle of DVDs for cheaper than a spindle of CDs, because there is no levy.
      • CSS doesn't prevent you from copying DVDs.. wherever did you get that funny notion? It simply prevents you from playing them on unauthorized players (one's that haven't paid the play tax) or in unauthorized zones.

        People over in the PRC press out massive quantities of DVD copies, CSS included, *all the time*.
        • Re: (Score:3, Informative)

          *He* doesn't have the funny notion, our stupid government does. Because yes, he is correct, they don't charge the levy on the larger, more useful dvd blanks, so they obviously think they're "different" some how.
      • Re: (Score:2, Informative)

        All "levy" means as a verb (in this case) is "to collect". "Levy" as a noun is whatever is being collected. As the Canadian government [cb-cda.gc.ca] is issuing the "levy" on behalf of their versions of the **IA, I wouldn't argue with it being called a tax. Also, from my link to the Copyright Board of Canada website:

        The Board concluded in the decision issued today that recordable and rewritable DVDs, removable memory cards (such as SmartMedia, CompactFlash and Secure Digital Memory cards) and removable micro hard d
      • by debrain ( 29228 )
        If I remember correctly (I was an official objector to this levy, right through to the Federal Court), the reasoning for not applying the tax to DVD's is that DVD's are not a primarily audio medium.

        The levy only compensates for musical works by Canadian creators (broadly speaking). There's no equivalent for film, photos, or literature (which I unsuccessfully argued was arbitrary and discriminatory) or foreign-produced musical works (which I successfully argued was a violation of our NAFTA treaty obligations
        • by kalaf ( 963208 )

          Wasn't the levy also based on the size of the media? (i.e. a 20GB player paid more than a 512MB version)

          If that were the case, it probably would have made DVDs too expensive.

          • by debrain ( 29228 )
            Yes, the levy was proportional to the size of the media. The CPCC wanted to apply it to things like MP3 players and iPods and blank DVD's, which is absurd if made proportional to the size of the media.

            The iPods and MP3 player levy was overturned at the Federal court, I'm glad to say. This is why Apple had an iPod rebate in Canada, after and because of this ruling. When active, it was divvied up with different charges depending on the size, i.e. some thing like media players less than 5GB, those from 5GB-20G
    • Because my car's CD-MP3 player doesn't play MP3s on DVDs.

      (That'd be sweet... 4.7GB of MP3s - could drive across North America and never hear the same song twice...)

    • by Znork ( 31774 )
      "And if not, why not?"

      Even more interesting is, why is there no tax on _recorded_ media, going to the artists and creators?

      Let anyone produce and distribute the media, and do away with the whole IP industry debacle by simply putting a levy on revenue made off the final product and paying the creators out of that. If there really is a need to subsidize creativity beyond what the free market does anyway. Which the last decades explosion of free creative work indicates there might not be.
  • the economics of why gray/black markets form, or were they just being deliberately disingenuous?
    • Blank discs can be easily acquired in the US and moved across the border into Canada. If this copyright tax applies to jumpdrives and portable harddrives then I could see a blackmarket for computer hardware developing in Canada.
    • the economics of why gray/black markets form, or were they just being deliberately disingenuous?

      I think most people just pay and don't think twice about the price of buying a 50-pack of DVDs. Also given that the quality of readily available DVDs can be called into question, I would hardly want to consider the quality of black market DVDs.
  • The millions of dollars in overpayment from these media will go into the pockets of manufacturers, importers, and retailers, not back to the consumers who paid in the first place.

    Right, always finding something bad even in a good news, aren't you Mike.

    How on Earth would this "return in the hands of the consumers" be organized. How do you imagine the logistics of such an outcome. Maybe you bring your receipts and they give you 1 cents for each disk or something?

    What they did is the best they could do. Manifa
    • by SamAdam3d ( 818241 ) on Tuesday May 15, 2007 @09:43AM (#19129093)
      I can imagine it. How about this: since Canada has public health care, why don't they use the money to fund that? Then the people, who paid for the CDs, will get their money back!

      Brilliant!
      • Re: (Score:1, Flamebait)

        by suv4x4 ( 956391 )
        I can imagine it. How about this: since Canada has public health care, why don't they use the money to fund that? Then the people, who paid for the CDs, will get their money back!

        Brilliant!


        Oh yea, brilliant. If you can arrange that only people who buy CD-s get sick. And the more CD-s they bought, the worse the illness.

        Since, I mean, what if the whole RIAA becomes hella sick. The whole pan goes to pieces.
        • "Oh yea, brilliant. If you can arrange that only people who buy CD-s get sick. And the more CD-s they bought, the worse the illness."

          Instead of nay-saying, which is a better solution? Let's see - on the one hand, "Manifacturers (sic)/retailers/importers get back the money" and the customer sees none of it OR the customer may or may not benefit from better funded health care. In one case, the original customer is certainly not going to benefit. In the other, the customer may or may not benefit.

          Stop being s

        • by yabos ( 719499 )
          In that case, who cares if other people get the benefit from it? I sure don't. The health care system needs more money plain and simple and if they gave it away it's better than remaining in the hands of a few old men.
        • by yabos ( 719499 )
          Also, who cares if the RIAA members become sick, we're talking about Canada, duh.
        • by vorpal22 ( 114901 ) on Tuesday May 15, 2007 @12:22PM (#19131893) Homepage Journal
          I'm Canadian, and the majority of Canadians I've spoken to don't have the (seemingly) common US mentality about health care being about the individual. (e.g. "Why should I have to pay money to treat someone who overdoses on heroin?") Here, health care is viewed collectively as being about the people, and yes, some people require much more of the health care dollars than others, but in the end, it brings us a better society as a whole, which benefits us all.
    • How on Earth would this "return in the hands of the consumers" be organized. How do you imagine the logistics of such an outcome. Maybe you bring your receipts and they give you 1 cents for each disk or something?
      How about a copyright moratorium for a month?

      In order to compensate consumers for overpaying, we can download and copy anything we want royalty-free.

      If it works out well, we can do it every year.

      • by suv4x4 ( 956391 ) on Tuesday May 15, 2007 @09:59AM (#19129329)
        How about a copyright moratorium for a month?

        In order to compensate consumers for overpaying, we can download and copy anything we want royalty-free.

        If it works out well, we can do it every year.


        Don't forget: copyright isn't your enemy, RIAA/MPAA and organisations like them who abuse copyright, are.

        As someone who produces something worthwhile myself, I don't want everything I did copied around for a month, thanks.
        • Re: (Score:2, Funny)

          by DrSkwid ( 118965 )
          > I don't want everything I did copied around for a month.

          ooh your thoughts are sooo precious

          • by suv4x4 ( 956391 )
            ooh your thoughts are sooo precious

            I'm currently 25, I'm certain before I retire, the only kind of work 90% of the people in a modern country will do, will be intellectual. Be it design, engineering, research, medical (which is mostly intellectual, and surgery will likely rely more and more on guided tools in time).

            We'll be making our money with precious thoughts.
    • by mpe ( 36238 )
      What they did is the best they could do. Manifacturers/retailers/importers get back the money and they can pass the savings on to their future customers. Of course they won't, since it's not how business works, but that's a completely different matter.

      Since this "functions like a tax" then maybe the better thing to have done with it would have been to give it to the Canadian Government, like other taxes...
    • Re: (Score:2, Insightful)

      by aussie_a ( 778472 )

      Right, always finding something bad even in a good news, aren't you Mike.

      Well here in Australia we have centrelink which pays out money to various people due to various things (single-mother's benefits, old-age pension, dole, etc). If the government overpays then they take it out of the money they owe in the future. I don't know why the Canadian government doesn't do the same in this case. Oh, that's right. Its because the money goes to corporations not private individuals. I guess they're more important.

      How on Earth would this "return in the hands of the consumers" be organized.

      Pay it back to the government who then puts it to use in public services.

    • simple (Score:4, Insightful)

      by nanosquid ( 1074949 ) on Tuesday May 15, 2007 @10:23AM (#19129707)
      How on Earth would this "return in the hands of the consumers" be organized.

      By suspending the levy entirely until the overpayments have been made up for.
    • Why would manufacturers/retailers/importers pass on the savings? They already sold at the level of profit they made everywhere else. This is profit they didn't ask for and can't count on. Even if they did pass on the savings, it would be likely be passed on to the entire world. Besides, wouldn't cheaper blank media costs exasperate the piracy problem and hurt artists more (assuming the logic used to collect the levee is valid). That's not a good deal for every Canadian buisiness that uses blank media t
  • by Maury Markowitz ( 452832 ) on Tuesday May 15, 2007 @09:37AM (#19129029) Homepage
    So we pay a little more for CD's, and that money goes to the copyright holders (we hope).

    Umm, maybe this isn't such a bad idea? After all, there is a TV Tax in the UK for the same reason. Everyone complains about it, but not *that* much.

    Maury
    • by IQgryn ( 1081397 )
      The levy was already in place--this just reduced the levy amount for most mediums (it didn't change for "data" cds). If this is the solution, then why are people still being sued for copyright infringement? We have a similar tax in the US.
    • by Grendel70 ( 1000350 ) on Tuesday May 15, 2007 @09:44AM (#19129101) Journal
      As I recall, when this levy on recordable media was put into effect, the purpose was to ensure that the artists would get the money to offset loss of revenue due to copying of recorded works. As such, I've never really had a problem with paying a few extra cents per blank disk providing the collected revenue went to the right place. (Of course it the system didn't address the difference between media purchased for burning data etc. but then, no system is perfect.) I find it interesting that nowhere is there any mention of giving the surplus cash to the people that deserve it.
      • by kent_eh ( 543303 )
        Damn, where are my mod points when I need them.

        The recording industry suits got the levy put in to compensate the "poor starving artists", yet the money ends up in the pockets of the same industry people, and not the artists.
        Is anyone surprised...
        Anyone?
        anyone??
        Buhller?

        At least the existence of the levy gives us Canadians tacit approval to download.

      • by Trails ( 629752 ) on Tuesday May 15, 2007 @10:29AM (#19129813)
        "it is not for us to determine who, in the supply chain leading to the final consumer, will be the ultimate beneficiary of these refunds."
        - CPCC
      • What bothers me about this "solution" is that the levies apply whether one is using the media for copying music or not. The copyright collectives always want to expand the scope of these levies. They've tried going after hard drives, MP3 players, and now SD cards.
        • by Noishe ( 829350 )
          Actually, the levies don't apply to data discs. When you go into the store to buy cd's there will be two stacks. One stack is labeled audio, the other stack is labled data. The discs are exactly the same, but priced differently. Atleast, that's what happans in london drugs.
    • The trouble here is that this solution was forced on the recording industry by government, they are fighting it tooth and nail. The provisions of the law also make any ripping and filesharing (as long as there is no commercial activity involved) legal, which is a huge sticking point that CRIA (Canadian RIA) is trying to change now. So unless US government comes out and says this is the deal and you have to live with it, there is no way this happens.
      • by yabos ( 719499 )
        The courts ruled downloading was legal but sharing is illegal because you are breaking copyright by providing the files. This is exactly how it should be. God only knows how much money I've had to pay to these greedy bastards. They even put the levy on portable music players.

        Interesting side note: I was listening to the radio once and they were asking the question "How much music on portable music players is actually paid for?" The answer was around 2% and the rest was pirated or ripped from CDs.
    • Re: (Score:3, Interesting)

      by dave420 ( 699308 )
      It's not a tax but a license. The money goes to the Licensing authority, which then passes it on to a company which then spends it to make more programming. It has nothing to do with copyright.
      • by vrai ( 521708 )
        It's a tax. The level is set by the Secretary of State for Culture, the money collected is paid in to a Government fund and non-payment is a criminal offence. It's no more a licence than my council tax is a licence to live the in the borough of Wandsworth.
    • by SuperMario666 ( 588666 ) on Tuesday May 15, 2007 @09:50AM (#19129199)
      Which copyright holders? Who gets to pick? Do we really want government (even the Canadian government) deciding who is rewarded for producing content?
    • by suv4x4 ( 956391 ) on Tuesday May 15, 2007 @09:50AM (#19129203)
      So we pay a little more for CD's, and that money goes to the copyright holders (we hope).

      Umm, maybe this isn't such a bad idea? After all, there is a TV Tax in the UK for the same reason. Everyone complains about it, but not *that* much.

      Maury


      Oh even better, it's a great idea. Pure capitalism economics forces in place.

      So you buy blank CD-s and copy hard metal all day long, and the fee you paid goes to... Britney Spears' come-back album. Since according to "statistics" she has much larger market share than anyone.

      Of course it's even worse than this, since right now the actual singers don't see a single cent from the blank media fee. It goes back to RIAA (and equivalent in other countries) and the labels.
    • What solution? (Score:5, Insightful)

      by Opportunist ( 166417 ) on Tuesday May 15, 2007 @10:02AM (#19129369)
      We pay that "copyright mafiaa tax" too, but that doesn't mean we actually may copy anything. We still are not allowed to remove or circumvent copying restrictions to actually execute our right to create a backup, we still have no right to actually burn copyrighted content on those media, so I wonder what this "tax" is based on.

      In fact, we pay for nothing.
    • So we pay a little more for CD's, and that money goes to the copyright holders (we hope).

      Why would you pay copyright holders anything when you don't use the blank CDRs to copy copyrighted material?

      What if you simply used those CDs to burn Linux distro's or make fair use backups? Why should you pay the tax?
  • You know, those guys they always talk about as the losers of piracy.
  • ...they should pirate more stuff.
  • Something to make fun of Canada for, eh?

    *ducks*
    • Re: (Score:1, Insightful)

      by Anonymous Coward
      Let's not start the Canada bashing while we have an idiot savant like Bush drooling in the Oval Office.

      thanks.
  • by hexed_2050 ( 841538 ) on Tuesday May 15, 2007 @09:50AM (#19129207)
    The collective has aggressively targeted..

    Who wrote this? Am I going to be assimilated?

    h
  • by Hohlraum ( 135212 ) on Tuesday May 15, 2007 @09:51AM (#19129219) Homepage
    Lets make a deal.
  • Since I'm overpaying via the levy, maybe they won't mind that I just never buy a DVD or CD ever again and just pirate them all? I mean seriously, the fact that they are taxing me on that no matter what I used the media for (backups anyone?) really chafes.
  • The Grey Market in Canada, at least here in Montreal is pretty weak for any sort of goods. People don't seem to grasp the concept of depreciation and try to sell used goods at new prices and aren't open to negotiation. Considering the inflated retail prices relative to the US (which is only a half hour away)and insanely high sales tax (15%) one would think that the grey market would thrive.
  • Comment removed based on user account deletion
    • Free market? Where do you live?

      Next you want freedom for all and a government representing the people. Jeesh, the youth of today...
    • ROFL. That's good. Tell me, how do you reconcile the fact that the US has the lowest life expectancy of most of the western world, despite blowing more money, per capita, on health care than any other nation, with your "capitalism-is-god" faith? Seems to me that the free market is, in that instance, remarkably *in*efficient at allocating resources.
  • just wait for some illegal immigrants to read what you just said.
  • Set us up? (Score:5, Funny)

    by Himring ( 646324 ) on Tuesday May 15, 2007 @09:59AM (#19129333) Homepage Journal
    Michael Geist has up a post on his site

    He set us up the post?

  • The entire premise of the system stinks of corruption: it is indefensible the idea of a blanket tax on media because some people use them for piracy -- I don't -- I do not go around illegally copying material -- but my government thinks I do, and decides to tax me for it. I'm sorry -- this is pure BS. How did we get such an idiot government?
  • If I'm not mistaken, "Stichting 'De Thuiskopie'" was asked to open up the books last year, they still have to do that.
    Right now, it's a very murky picture.

    We pay a copyright levy on CDs, cassettes, videotapes and DVDs (and we have a 0-levy on mp3-players, meaning that there is technically a levy on mp3players and portable storage devices, but it's 0. They wanted to increase this amount earlier this year, but that was thwarted (thankfully))
    But we have absolutely no idea how many is being received by that org
  • Why? (Score:1, Offtopic)

    by Baavgai ( 598847 )
    I'm at a loss at to why this is even seen as useful, regarless of how you feel about it.

    From TFA: Create a new crime of life imprisonment for using pirated software - Anyone using counterfeit products who "recklessly causes or attempts to cause death" can be imprisoned for life...Justice Department officials gave the example of a hospital using pirated software instead of paying for it.

    Is there a point to this? If anyone "recklessly causes or attempts to cause death", aren't they going to be punished under
  • As a Canadian, I don't mind paying the Levy on blank media, and I'd be in favour of a levy on MP3 players, IF it means that I can continue to be free from worrying about a Canadian RIAA busting down my door and lynching me for making backups of my own media or for putting a CD on my mp3 player. A very small price to pay indeed.
  • This levy saved the future of a friend of mine. He did use it as a defence in court that since he payed the levy on the cd's he buys and the HD's he used that since its done the time he thought it was alright to do the crime. The judge bought it because well its true, we have paid for piracy we might as well enjoy it. To be honest if we over pay a little into the system so much the better, it just give more fuel to the "But I've alriady paid for it" defence.
  • Mixed thoughts (Score:3, Interesting)

    by Fastolfe ( 1470 ) on Tuesday May 15, 2007 @10:37AM (#19129983)
    I have mixed thoughts on this. This levy was charged to the manufacturers/importers/retailers, right? The consumer made a free market exchange here. They thought the price was fair for the product, and they paid for it. Why should consumers get reimbursed?

    If the government retroactively reduced corporate income taxes for last year, should consumers expect checks in the mail for all of the purchases they made? These are all business costs that factor into the price.

    Now don't get me wrong: I completely disagree with the purpose of the levy to begin with. But I'm not sure how consumers must necessarily be the ones to benefit from this. Kudos to the corporations that do pass their relief onto their customers, but I don't understand how people are jumping to the conclusion that there's a legal obligation to do that.

    It might have made more sense for them to make the adjustment, and simply deduct it from future sales. Consumers get "reimbursed" by virtue of (hopefully) lower prices in the near future, until the surplus is exhausted.
    • by gobbo ( 567674 )

      The consumer made a free market exchange here. They thought the price was fair for the product, and they paid for it.

      We're talking Canada here, right? Most of us are overwhelmed by US media, and thus US legal terminology and attitudes. We generally haven't even heard of the levy. And, since it's 21 cents per disc, the lowest price available for CD-R's is inflated to false levels, so the market bears what the retailers can give, because there is no other reasonable choice. They only think the prices are fair because that's all they can get. The market is NOT free in that sense.

      Consumers get "reimbursed" by virtue of (hopefully) lower prices in the near future, until the surplus is exhausted.

      I don't necessarily think that customers

      • by Fastolfe ( 1470 )
        Perhaps we disagree on what it means to be "free" or "fair". Nobody held a gun to the customers' heads and forced them to buy media subject to the levy. These people are not starving, or forced out into the streets, because they gotta have CD-Rs. They evaluated the availability of the product and its price, and decided they wanted to buy it. If they didn't think the exchange was fair, I don't think it's reasonable that they would have done it.

        No one is controlling the supply or the demand of this produc
        • by gobbo ( 567674 )

          Perhaps we disagree on what it means to be "free" or "fair". Nobody held a gun to the customers' heads and forced them to buy media subject to the levy. These people are not starving, or forced out into the streets, because they gotta have CD-Rs. They evaluated the availability of the product and its price, and decided they wanted to buy it. If they didn't think the exchange was fair, I don't think it's reasonable that they would have done it.

          I think we do disagree on the definition. For a market to be functionally "free" then customers have to be extremely well-informed about their choices. Regulated markets try to pick up the slack (well, in theory). Unfortunately, customers are not well-informed (nor even rational, but that's kind of a different discussion).

          Yes, no one was holding a gun, to use your metaphor. However, there is an element of fraud or obscurity. So: be mugged, or be conned? While this isn't life or death, what are the choic

  • As a Canadian (Score:3, Insightful)

    by DaveCBio ( 659840 ) on Tuesday May 15, 2007 @11:07AM (#19130579)
    May I say welcome to the nanny state! I am all for out healthcare system, but the government in this country goes way too far to try and prop up our "culture" and things like "multiculturalism". It goes from annoying to downright infuriating knowing my tax dollars prop up crap like this. It's just another bureaucracy that is useless and yet is held up as some kind of icon for social responsibility like the gun registry.
    • by kebes ( 861706 )
      The Canadian nanny state isn't even the problem here. What bothers me is the hypocrisy. Either establish a socialist system to encourage the arts (taxes given by government to artists, a levy on blank media, etc.) and make it legal to freely distribute said artwork, OR do not create such a system and let us spend our money how we like.

      What pisses me off is paying this levy, and yet it is illegal for me to actually take advantage of it. So what's the point? What am I paying for? More generally, it bothers me
      • What pisses me off is paying this levy, and yet it is illegal for me to actually take advantage of it. So what's the point? What am I paying for?

        You're misinformed. Its perfectly legal because of this levy for you (in Canada) to grab a CD off a friend, rip it to your computer or burn a copy, then hand it back to him or her. Americans have no such legal right. Its also legal for you to make private copies of broadcast works for your own listening pleasure, even if the artist or station tells you not to.

        Pr

  • by Bullfish ( 858648 ) on Tuesday May 15, 2007 @11:21AM (#19130839)
    And download enough to cover the overpayment. Consider it like a credit.
  • So how about the fact that most people don't even use this kind of Blank Media for music? Is this tax imposed upon iPods/mp3 players? Otherwise this has turned out to be a waste of money for Canadians, and hasn't achieved the goal set out at all.

  • Disregarding the fact that a recordable media levy is not a representative means of collecting royalties, it is a key thing that Canadians can point to in justification of their fair use rights over digital media - essentially, legitimizing copying of copyright protected material since we pay, through the levy, for that right. (i.e. the levy is a de facto assumption that all purchased media will be used for the purpose of copyright infringement, ergo we can use such media for that purpose with impunity as
  • Levy isn't charged! (Score:2, Interesting)

    by teknokracy ( 660401 )
    Folks, let's just step back for a second. I have never paid the levy on media here in Canada. Why? Because the retailers I buy it from refuse to pay it. Go shop at your local little computer store, or even at London Drugs, where they do not pay the levy and refuse to do so, simply because of this reason! The levy exists, but to my knowledge only fools are charging their customers the levy, and only fools are paying it.
  • By paying a "copyright tax" you are being effectively charged and punished for copying copyrighted data. By paying such a tax, you now have paid money for the works; after all, you're paying because it covers your potential actions. Now, logically, you've just paid for all the music you're about to download, and all the movies you're going to bittorrent.

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