The new proposed rates are as follows:

Introduced when private copying was legalized in an amendment to the copyright act in 1997, these levies are collected by the Canadian Private Copying Collective from manufacturers and importers of the above mentioned media, who sell this media within Canada. The associated costs are included in the price of the media by the manufacturer or importer, regardless of the media's use (as audio media or not).

What is private copying to the consumer ?

In the past, most people simply made copies to prevent from changing tapes or records on their players to listen to a few songs on each tape or record, usually outside of their home environment (in personal players, their car, etc.). Most did not rent, sell, trade or give these recordings away so I doubt most people would consider this illegal and prosecution of such an individual would have resulted in negative publicity for the artist, label and rights agency involved in the case. The consumer of the copied material was the same person who purchased the original material and the public would not have found it reasonable to demand individuals purchase multiple copies, especially when multiple formats have come and gone resulting in the consumer already purchasing multiple copies of the same material.

Today technology has enabled the consumer to compile more of his/her favorite material to smaller devices and again, he/she does this for convenience. The situation has not really changed except now the industry is claiming that private copying was piracy prior to the passing of the 1997 amendment and instead of investing in technology, in digital distribution, they've decided to sit back and "levy" new technologies.

Guilt by Association

Piracy in understandably a problem and most consumers would accept a reasonable compensation scheme but I do not believe the proposed rates are justified. I believe they simply create a situation in which consumers are considered pirates simply because they purchase material that can be used as audio media, by default.

The proposed rates are not based on piracy but based on the estimated use of media as audio media. And "Private Copying" has enabled the Canadian Private Copying Collective to include consumers who make legal copies in their estimations resulting in the astronomical rates they have and will continuously propose.

Piracy will not be removed by criminalizing the consumer. Such an unacceptable precedent will result in the additional levying of recording media by the software and film industries.

Computer Industry Concerned

The new proposed levies have also resulted in concern in the computer industry. In a Reuters article published in the Ottawa Citizen on March 16th, 2001, Compaq Canada spokesman Ron Ireland was quoted to say that the new proposed levies "could add significant costs to the end-user" and that the company is "watching it closely", "it" being the proposed inclusion of devices with internal hard drives "that are intended for use primarily to record and play music". The proposal states the devices with the internal hard drives included in the proposal are "similar" to mp3 players but the amount of similarity is not defined. And individuals who use CD-R, CD-RW, DVD-R, DVD-RW and removable memory/flash cards for data other than audio recordings will still pay more as the manufacturers pass their levy associated costs down to them.

What can be done ?

A date for the hearing on the proposed 2003-2004 tarrifs has been set at the May 23rd, 2002 pre-hearing (html/pdf). The board will be accepting letters of comment until October 22nd, 2002, the day the hearings begin.

You may send your polite letters of comment to the Copyright Board by email or by fax at (613) 952-8630. Please include your name, address, phone/fax numbers and email address.

An online petition against the levy can also be found here but please file a letter of comment as well.

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UPDATE - On December 12th, 2003, the Copyright Board has released its decision :

DVD-R, DVD-RW, smart/flash media and removable micro hard drives will not be subject to the blank media levy in 2003-2004 because the CPCC had failed to "clearly demonstrate that these recording media are ordinarily used by individuals for the purpose of copying music". This will likely be reviewed in a few years.

MP3 players with non-removable hard drives or media are now subject to the blank audio media levy - $2 for players that have up to 1 gigabyte of storage, $15 for players that have up to 10 gigabytes of storage and $25 on all players exceeding 10 gigabytes of storage.

Audio cassetes tapes, CD-R/CD-RW, CD-R/CD-RW Audio and minidisc will be subject to their previous levy rates until the end of 2004. The Copyright Board has denied the CPCC's request to increase the rates, stating in their official press release that the requested 20% increase "was not justified at this time, and that fairness and equity dictated that the status quo for the existing levies be maintained".

In this decision, the Copyright Board has also concluded that :

- the CPCC is not authorised to create a "zero-rating" exemption program, and they will therefore be required to cancel their existing exemption programs.

- the levy itself may be reviewed as copy protection and online music purchases with digital rights management become more prevalent.

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UPDATE - On December 14th, 2004, the Federal Court Of Appeal has ruled the following :

- The levy is not a "tax" as defined by law (Application A-11-04, page 8)

- The Canadian Private Copying Collective are authorised to operate a Zero-Ratings program, this ruling overturning the December 12th, 2003 decision by the Copyright Board (Application A-9-04, page 25)

- Mp3 Players cannot be levied because they are not media but devices that contain media, this ruling overturning the December 12th, 2003 decision by the Copyright Board (Application A-10-04, page 43)

The CPCC is currently considering an appeal of the later with the Supreme Court Of Canada, according to their December 17th, 2004 Press Release (PDF). Dec 14th, 2004 Federal Court Of Appeal ruling (PDF).

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UPDATE - On July 28th, 2005, the Supreme Court Of Canada dismissed the Canadian Private Copying Collective's appeal of the December 14, 2004 Federal Court Of Appeals rulling (CPCC - Official Press Release - PDF)

UPDATE - On January 10th, 2008, the Feberal Court of Appeals dismissed the Copyright Board's certification of levies on iPods and Mp3 players, in respect to their previous decisions (Decision Text)

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