Canadian Law

Retail Council Wants Levy Scrapped

According to The Wire, the Retail Council Of Canada has formally asked the Conservative government to scrap the blank audio media levy.

The group had previously stated in a March 12th, 2010 press release that they oppose any extention of the levy, stating that it would disadvantage Canadian retailers. And in this press release they stated they believed this “anti-competitive tax should be repealed altogether” :

Retailers contend the levy system is obsolete in an age of rapid technological change and does nothing to support and protect Canadian artists.”

I agree. And strangely enough the proponants of the levy also agree because they’re constantly trying to levy the next technology by stating the previous technology is no longer being used to copy music.

In less than five years the current levy was made obsolete, resulting in the following question on the savethelevy.ca web site : “It’s 2011 … who uses CD-Rs to copy music anymore?”

Well, cell phones and tablets are now being used to play back music files and cloud services will stream music to these devices shortly in Canada, making mp3 player obsolete soon. But of course like the Retail Council of Canada I believe the CPCC’s arguements are fundementally flawed :

Retail Council of Canada calls for changes to the Copyright Act to provide an explicit exception recognizing that private copying for archival or backup purposes and for format shifting purposes by individuals of legitimately acquired copies of works or sound recordings and movies is legal. This should include private copying for such purposes as platform shifting, backup purposes, or the avoidance of obsolescence.”

Remuneration is not required from consumers that have purchased music from online music retailers whose formats imply use on portable music devices in which electronic memory cards can be placed or embedded. And individuals that make personal copies for private use from recordings they’ve purchased fail to qualify as distributors because the recordings and resulting copies remain in their possession, regardless of the format shifting involved.

Private copying in no way infringes copyright, as defined by Part III, Section 27 of the Copyright Act. And a levy is not required because royalties have already been collected from the sale of legally purchased compact discs or music files, from which the private copies are made.

The alledged prominence of piracy on the internet in no way make devices like mp3 players conform to the term “blank audio media”, as defined by the Copyright Act. And the Copyright Board have already ruled that memory cards also did not qualify in a December 12th, 2003 decision.

BC Voters Asked To Keep Reduced HST

British Columbia residents are being asked to vote for the Harmonised Sales Tax during a referendum.

The BC provincial government is hoping that a promise to reduce to tax to 10% by 2014 will result in a vote for the unpopular 12% tax on goods and services in that province

The first 1% reduction would be scheduled for Canada Day, 2012, conditional of course on the re-election of the provincial Liberal Party into office. And transition cheques would also be issued to families and low to modest income seniors.

The ballots for this referendum will be mailed out on June 13th, to be counted on July 22nd. Click here for additional information.

Copyright Reform In New Session

It appears that Bill C-32 will be re-introduced into Parliament virtually intact, according to Peterborough MP Dean Del Mastro.

In a Toronto Sun interview Del Mastro claimed that as a member of the special legislative committee on Bill C-32 he had not heard “a lot that was overly critical of the bill” from the many witnesses that testified for this committee.

Del Mastro believes that minor changes will be made to the legislation prior to its introduction by the newly appointed Minister of Industry, Christian Paradis. But the opposition, the NDP, state they will introduce amendments and negotiate with the government “Clause by Clause“.

The New Democrat Party have stated they support the extention of the blank audio media levy to mp3 players including iPods but oppose the digital lock provisions found in Bill C-32.

NDP MP Charlie Angus had introduced Private Members Bill C-499 last March, which would have enacted a levy on mp3 players.

Levy On Memory Cards Proposed, Again.

The Canadian Private Copying Collective had applied for a levy on memory cards at the Copyright Board.

On March 31st, the CPCC has asked the Copyright Board to extend the definition of Blank Audio Recording Media to include memory cards so they can obtain up to $3 in levies per card from manufacturers and importers of this media.

Published in the supplement of the Canada Gazette on May 14th, the rates are as follows :

$0.50 on each memory card that is less than 1 GB
$1.00 on each memory card that is above 1GB but under 8GB
$3.00 on each memory card that is 8GB and more

Unfortunately for the CPCC the definition of what can be and cannot be levied is clearly defined in Section 79 of our Copyright Act :

“audio recording medium” means a recording medium, regardless of its material form, onto which a sound recording may be reproduced and that is of a kind ordinarily used by individual consumers for that purpose, excluding any prescribed kind of recording medium

In respect to this definition the Copyright Board had ruled in December 2003 that the evidence presented to them had not clearly demonstrated “that these recording media are ordinarily used by individuals for the purpose of copying music.”

To store and play back music all one requires is a class 2, 2GB per second memory card. A higher class card is not necessary as it does not improve the sound quality of the recording nor the performance of the device in which this memory card is placed.

Class 4, 4GB per second memory cards were introduced to facilitate the storage of photographs whilst Class 6 (6GB/s) and Class 10 (10GB/s) memory cards were created to record and store high definition video.

The only Secure Digital card created explicitly for music is the SD-Audio format, so a blanket levy on all memory cards is inappropriate or justified.

That said, one then has to wonder why the proposed rates are quite low in comparison to their previous request.

In 2002 they had requested $8 per gig on memory cards according to the March 9th, 2002 edition of the Canada Gazette. But the Canadian labels the CPCC represent still claim that more and more people are copying music “illegally” to devices with memory cards.

It appears their proposals are inconsistant and somewhat arbitrary.

Perhaps they’re attempting to make the levy more palatable. But it makes no sense to reduce the levy whilst claiming there is more harm to the copyright holders since 2002, unless the proposed rate in 2002 was exagerated.

I believe in proposing this levy the CPCC are actually attempting to solicit a definition that enables them to levy the memory cards embedded in mp3 players.

After all, the term they used in the proposal was “electronic memory card“, which doesn’t distinguish embedded from non embedded memory cards. And they could attempt to argue that though most memory cards are not ordinarily used for music that memory cards that are embedded inside mp3 players are.

Technically such a levy would not be a mp3 player levy but a levy on the memory card inside the mp3 player, that they could repackage as a “compromise” during the upcoming copyright reform process.

But we’ll cross that bridge when we get to it. For now we can object to the levying of memory cards that we primarily use for our own photographs and videos.

The Copyright Board will be accepting objections to the “Statement of Proposed Levies to Be Collected by CPCC on the Sale, in Canada, of Blank Audio Recording Media for the Years 2012 and 2013“, as published in the May 14th, 2011 supplement of the Canada Gazette, until July 13th, 2011 at the following address :

GILLES MCDOUGALL
Secretary General
56 Sparks Street, Suite 800
Ottawa, Ontario
K1A 0C9

613-952-8630 (fax)

Please note that these objections may become part of public record so it is preferable to address the issue politely.

Blockbuster Canada Not Safe After All

The Globe And Mail reported that Blockbuster Canada has gone into receivership.

It appears that when Blockbuster restructed in the United States in September 2010 they had used the profitable Canadian operation as collateral. And now the studios have decided to sell Blockbuster Canada to recoup some of their losses.

Blockbuster Canada had issued a statement last September that their operations would be unaffected by the restructuring of the American operation. But had in April issued a notice to customer that they would not be issueing gift cards or Blockbuster Rewards memberships by April 30th, 2011.

So, what does it mean ?

As you may have heard the Conservative Party was elected as a majority in Canadian Parliament yesterday, the New Democratic Party having been elected into the opposition. And you must be wondering what next ?

Well, it obvious that copyright reform will likely be on the agenda shortly.

When the election was called Bill C-32 died whilst it was being reviewed by a legislative committee, the legislation’s digital lock provisions having been a major issue.

Had Bill C-32 passed, consumers in Canada would have been able to make private copies but would not have been able to circumvent copy protection to do it.

This meant that the counsumer would again be subjected to the whims and experimentations of the film and music distributors, who in the past had attempted to impose digital locks that kept people from copying material, even for personal use, to the extent that it caused security issues (i.e Sony BMG’s rootkit).

Basically Bill C-32 appeared to give the music and film industries an ability to disable private copying whenever it suited them, independently from the democratic process, whilst possibly giving them the ability to impose additional levies to conform to several World Intellectual Property Organization treaties. And of course this didn’t bode well with the Canadian consumer, who refused to pay the exhorbitant rates proposed on iPods/mp3 players and were wary of RIAA style copyright litigation.

Format shifting, the ability to copy copyrighted material from one medium or device to another, will probably remain a major issue in the forthcoming new copyright reform bill. And i’m hoping we have progressed on the issue.

The majority of consumers simply want more control in regards to the accessibility and portability of the content they purchase. They should not be subjected to obtuse allegations of piracy nor should be subjected to levies or taxes on devices on which they store legally purchased material.

Royalties are obtained from this legally purchased material, some of which is dependant on the existance of devices that enable the consumer to access this material.

For example, if it weren’t for iPods and mp3 players the consumer would not be purchasing music downloads from legal distributors, who pay royalties to rights agencies.

Levies on such devices may sound good to some artists but in reality it would result in fewer purchases because the consumer would eventually be presented these extra costs by the manufacturers. After all, the WIPO treaty ratifications would have resulted in additional levies for foreign content, resulting in prohibitive costs for the consumer.

This may be being sold as a compensation scheme for artists and composers but in reality quite a large amount of levies collected from the sale of blank audio media failed to be distributed from the current levy.

According to the Canadian Private Copyright Collective ‘s financial highlights, only $183,301,000 of the $284,878,000 collected from 1999 to 2009 was distributed. And nearly 11% of the monies collected were used as expendatures by the collective itself.

One can only guess how much of these levies would remain available for distribution if international copyright owners were to get levies. But is clear that all of these schemes would be quite costly to the consumer.

In March 2002, the CPCC had requested a rate of $21 per gig, as publisized in the Canada Gazette, and the Copyright Board had decided on a rate of $15 or $25 per device in December 2003 until having their decision overturned by the Federal Court Of Appeal, twice.

I certianly hope both the Conservatives and New Democrats appreciate the fact that this is not the time to hinder the sale of consumer products by introducing costly levies that fail to be distributed to the artists and composers.