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Canada's CD Tax Out of Hand?

CRIA Watcher writes "The Canadian Copyright Board has just announced that it is bringing back the tax on blank CDs, called the private copying levy, in 2007. Michael Geist demonstrates how the tax has created a huge distortion in the retail price of blank media on his blog with as much as 70 percent of the purchase price now heading directly to the music industry."

41 of 599 comments (clear)

  1. In related news... by TripMaster+Monkey · · Score: 3, Funny


    Sales of blank CDs in Detroit area soar! Details at eleven!

    --
    ____

    ~ |rip/\/\aster /\/\onkey

  2. Unfair by spikestabber · · Score: 4, Interesting

    This is a load of crap, I'm sick and tired of paying a fortune for blank CDR's while the Canadian Recording industry is out to call everyone a criminal and lobbying to cripple our rights by introducing ludicris laws to ruin what us Canadians take for granted. Either fuckoff trying to take our rights away, or do away with this stupid tax!

    1. Re:Unfair by Anonymous Coward · · Score: 2, Informative

      Which is incidentally what the Ontario Court of Appeals said, and why there was no levy for a while.

    2. Re:Unfair by Winterblink · · Score: 3, Interesting

      That's a great reaction, one I think most folks will share. Does posting it here on Slashdot matter? How will it make a difference at all?

      Does anyone know who to contact in order to get our views voiced PROPERLY?

      --
      "I'm a leaf on the wind. Watch how I soar."
      -Hoban Washburn
    3. Re:Unfair by Andrzej+Sawicki · · Score: 2, Informative

      No, you are paying for the security (and other) copies you might want to make on those CDs from original CDs (i.e. for whatever the "fair use" copying is allowed in your country). Call it the fair use tax if you will.

      This tax has nothing to do with illegal copies (i.e. burning an ISO you just downloaded). That is a separate issue.

    4. Re:Unfair by Crazy+Man+on+Fire · · Score: 3, Insightful

      Why do you have to pay a tax to have access to your fair use rights? Didn't those come with the purchase of the original content?

    5. Re:Unfair by epiphani · · Score: 3, Insightful

      Dont complain - this tax gives us exactly the artillary we need to fight off further legislation. Right now I can download music guilt-free because every time I buy a blank CD, I pay for music.

      I paid a levy on my ipod. As long as I own that Ipod, I intend to use it to listen to music I downloaded without paying for.

      --
      .
    6. Re:Unfair by jleq · · Score: 2, Insightful

      I don't find this unfair at all. Having such a tax legitimizes free copying and distribution of copyrighted works on applicable CD-R media. If we had this in America, the amount of "pirated" music would skyrocket - since it would no longer be pirated, as a royalty had been paid.

    7. Re:Unfair by DeeKayWon · · Score: 4, Informative
      Section 80 of the Copyright Act says thus:

      --

      80. (1) Subject to subsection (2), the act of reproducing all or any substantial part of

      (a) a musical work embodied in a sound recording,

      (b) a performer's performance of a musical work embodied in a sound recording, or

      (c) a sound recording in which a musical work, or a performer's performance of a musical work, is embodied

      onto an audio recording medium for the private use of the person who makes the copy does not constitute an infringement of the copyright in the musical work, the performer's performance or the sound recording.

      (2) Subsection (1) does not apply if the act described in that subsection is done for the purpose of doing any of the following in relation to any of the things referred to in paragraphs (1)(a) to (c):

      (a) selling or renting out, or by way of trade exposing or offering for sale or rental;

      (b) distributing, whether or not for the purpose of trade;

      (c) communicating to the public by telecommunication; or

      (d) performing, or causing to be performed, in public.

      --

      (emphasis mine)

    8. Re:Unfair by Stripe7 · · Score: 3, Interesting

      What happens to business uses of blank media? Do you get a tax refund? Ie if your media is used for backup of your HD with no music or if you are using it in a corporation do you get a refund? Also can you take that tax as a deduction from your normal taxes?

    9. Re:Unfair by dougmc · · Score: 3, Interesting
      I know there used to be "special" CD-Rs for copying music (special only when looking at the price tag, mind you)
      No, they weren't special `only when looking at the price tag'. They were special all the time -- just not very special. And at least here in the US, they're still available.

      The audio CD-Rs have a bit set somewhere that audio equipment looks at before deciding if they'll record on this media. So if you have cd writer in your stereo, it probably will only work with audio CD-Rs. Of course, the audio CD-Rs cost more, and some equipment can be hacked to not require this bit to be set, or you can swap it with a data CD-R at the right time and things will work, etc.

      The cd writer in your computer, on the other hand, has no such restriction, since it's meant to store data. Of course, you can also burn audio onto your data CD-R on your computer, and people do do this.

      As for the law changing in Canada, I have no idea. In the US, I know that audio CD-Rs include a tax that goes to the RIAA or the artists or somebody, and data CD-Rs do not. More on the DAT tax here. (It's called the DAT tax because it was originally written for DAT (4mm tapes) and is probably the #1 reason why we don't have consumer DAT audio drives in our stereos now.)

      In any event, when I'm at Frys and I see somebody pick up a batch of Audio CD-Rs, I'll often ask them if they're going to burn them on a stereo component or a computer, and 95% of the time, the answer is `computer'. And then I tell them that they don't need the expensive audio CD-Rs -- the data ones will work just as well.

      The DAT tax does have one good benefit though. From the article above --

      It explicitly makes it legal (or more precisely, non-actionable) for you to copy audio works for your own use ( section 1008). That's right, it is now perfectly legitimate for you to borrow the latest Madonna album from a friend and make yourself a copy, despite the copyright. Pretty neat, huh?
      Of course, this page was written pre-DMCA. I've no idea if the law has changed since.
    10. Re:Unfair by seanvaandering · · Score: 3, Insightful

      Right now I can download music guilt-free because every time I buy a blank CD, I pay for music

      Sounds good until, they charge 100% of the price, then 150%, then 200%, etc etc etc.

      Once they have their foot in the door, it will be next to impossible to get them out. This only serves to set a dangerous precident, that is nothing but a slippery slope for consumers. It's afforable now, how about in 5 years? I'll guess they'll blame it on inflation, and you wont even remember why it costs 5x what it costs today.

  3. Canadian could always use... by ColdCoffee · · Score: 3, Funny

    ...their Olympic gold medals for recording media!

    --
    Sig? - yeah, whatever.
  4. I still don't understand this by rlthomps-1 · · Score: 4, Insightful

    Even if I set aside the flawed logic, why does the music biz get it all? What about other businesses that are hurt by "copying". Surely some of this money should go to software companies, as well as private media/content producers that distribute their work via CDs.

  5. ROTFLMAO by l3v1 · · Score: 2, Funny

    70 percent of the purchase price now heading directly to the music industry

    LOL, that sounds peculiar indeed, Canada's music industry now gets rich from blank media instead of music content :D Kiddin' of course, but still, it's hard to keep from [uneasy] smiling.

    --
    I am putting myself to the fullest possible use, which is all I can think that any conscious entity can ever hope to do.
    1. Re:ROTFLMAO by Dystopian+Rebel · · Score: 3, Funny
      Canada's music industry now gets rich from blank media instead of music content


      Obviously you do not appreciate the melodies of Avril Lavigne, the emotional maturity and unpretentiousness of Alanis Morrisette, the economy of expression of the Bare Naked Ladies, the understated phrasing of Céline Dion, or the raw production style of David Foster.

      Tear off your ears, Sir! You are not using them, anyway.
      --
      Rich And Stupid is not so bad as Working For Rich And Stupid.
  6. Trade for Prescription Drugs by cpirate · · Score: 2, Funny

    That is until their computer industry reveals reports that American blank CDs are not as safe as Canadian ones.

  7. Clarify by Lord_Dweomer · · Score: 3, Insightful
    As an American, I was wondering if someone could clarify something on this law for me...

    Since this tax goes to the recording industry to apparently make up for "lost sales due to copyright infringement"....where can independant Canadian artists who are not affiliated with the labels sign up to receive their cut of this tax? I mean...people use these blank CDs for things other than the music of the labels...

    And if this tax applies to ALL CDRs, rather than just the music CDRs that nobody buys in America...how does a Canadian citizen dispute the tax on something they've never used (assuming of course they don't burn music to CDs?

    --
    Buy Steampunk Clothing Online!
    1. Re:Clarify by stlhawkeye · · Score: 4, Insightful
      And if this tax applies to ALL CDRs, rather than just the music CDRs that nobody buys in America...how does a Canadian citizen dispute the tax on something they've never used (assuming of course they don't burn music to CDs?

      You don't. I don't get food stamps, a welfare check, my kids don't go to public schools (I don't have any), but I pay taxes that go into these programs. My real estate tax goes straight to the school district. I don't use that service.

      The majority of my taxes go towards causes, programs, or institutions whose services I neither need nor want, and a handful to which I have serious ethical and/or moral objections. But there's no recourse. If I say all of this and want my taxes lowered or changed so I can keep more of my own money, I'm called greedy. When somebody else wants my money for some purpose, they're just needy.

      And politicians arrange the transfer. Welcome aboard, Canada!

      --
      "I have never won a debate with an ignorant person." -Ali ibn Abi Talib
    2. Re:Clarify by Foobar_ · · Score: 4, Informative

      I went to school in Canada to be an audio engineer. I know about the workings of the Canadian recording industry.

      SOCAN (the Canadian equivalent of ASCAP/BMI) handles royalty collection and distribution for Canadian music authors. If you're a Canadian composer, songwriter, or lyricist, you must do this to get royalties:
      1. Apply for membership with SOCAN
      2. Register your copyrighted works
      3. Sit back and wait
      You don't have to be owned by a record label to get your royalties. Also, SOCAN has arrangements with other performing rights organizations around the world, so if your music is played in the USA, or Germany, or Japan or whatnot, you'll still get royalty payments from SOCAN but on the accounting it states that the money is coming from that territory.

      Royalties are only paid to the "writers" and the "publishing company". The "writers" are composed of the songwriter (who does the music) and the lyricist (who writes the words). A songwriter and lyricist can be the same person. Usually it gets split 25% songwriter/25% lyricist/50% publisher respectively, which means that if a composer wants to get more money, they start their own publishing company.

      There are simple yet comprehensive materials available on SOCAN's site. Quick links:
      *SOCAN Overview for Music Creators and Publishers
      *How your music makes money
      *Private Copying Royalties update

      Up until recently, the money collected from the media levy has sat in SOCAN's accounts while writers and publishing companies fought viciously to get it all for themselves. Seems the writers have won; the "private copying royalties" now go 100% to writers by default. This of course doesn't stop publishing contracts from specifying that lots of money goes to the publisher...

      By the way, I finished the audio engineer training, said "I don't want to do this as a job" and have just opened a computer repair shop. I'll be selling those taxed CD blanks soon enough...

  8. Re: Cheap CD's by Chris+Tyler · · Score: 3, Informative

    ...buy cheap CD's from the US. This is perfectly legal, and a great way to save money.

    Yes, but as an 'importer' I'm liable for the levy on imported CDs. Excuse me for a second, the doorbell's ringing...

  9. Use one problem to solve another by dcavanaugh · · Score: 4, Funny

    Maybe the Canadians can get their pharmacies to fill prescriptions for US customers and accept payment in blank CDs!

  10. Re:Assumed Guilt by SeeMyNuts! · · Score: 3, Insightful

    Sigh. I have never illegally downloaded music. 9 out of 10 CD-Rs I use are for data backup, and occasionally I do make a fair-use copy of a CD I bought.

    It has been said a thousand times that the revenue losses for piracy are basically made up. Pulled out of thin air. I know, because I was a teenager once. I went to college and lived among other students. The basic fact is that people buy the things that are important to them, and anyone who "pirated" music or games valued their collections so little that a failed hard drive or lost disc simply meant nothing. A shrug of the shoulders, and they move on. The perception of value is what drives the free market, right?

    The only successful competition for Free is Better Than Free. Apple seems to have learned this. Red Hat is still in business. Somehow, GNOME and Firefox have found corporate backing. Or, am I dreaming all of this?

  11. Then they'll convieniently forget by MrPerfekt · · Score: 2, Insightful

    When it's reinstated and they're making millions upon millions of dollars per year on a product that isn't even theirs, they'll still insist that the recording industry is dying and it's all because of you downloading/burning scum! "Never mind the fact that we're making a profit on that too".

    --
    I just wasted your mod points! HA!
  12. If I'm paying anyway... by xtal · · Score: 4, Interesting

    be stupid not to copy as much as I can get my paws on, eh?

    I got mad enough before to start dreaming up "piracy booths", where you could burn cds from a "collection" - for free, of course, with your own hands. My understanding is this would be completely legal..

    --
    ..don't panic
  13. Verbatim copy of the post by Tester · · Score: 2, Informative

    The Private Copying Levy Distortion

    The Copyright Board of Canada last week released its proposed tariff for 2007 for the private copying levy. The numbers remain unchanged: 21 cents per CD-R. As prices have dropped, however, the levy now frequently comprises a significant percentage of the retail price. Consider the purchase of 100 blank Maxell CDs. Future Shop retails the 100 CDs for $69.99. The breakdown of this sale is $48.99 for the CDs and $21.00 for the levy (even worse is a current Future Shop deal of 200 blank CD-Rs from HP, which retails for $59.99. The levy alone on this sale is $42.00 (200 CDs x 21 cents/CD) which leaves the consumers paying $17.99 for the CDs and $42.00 for the levy).

    This results in a huge distortion in retail pricing when compared to the U.S. market which does not have a levy system. For example, the same Maxell CDs retail for US$34.99 at CompUSA. When you add in the exchange differential, the Canadian cost is just over $40.00. Obviously the price is slightly lower in the US even without the levy (35 cents per CD vs. 40 cents per CD). With the levy, the price increases by another 50 percent.

    Given how little Canadians get for their money (the private copying right doesn't cover copying CDs to Apple iPods) is it any wonder that countries such as Australia are considering allowing for such private copying without a levy scheme? The solution in Canada is obvious: either ensure that the levy covers the full panoply of private copying as is the case in France or drop the levy altogether and institute a fair use user right.

  14. Re:Dumb Canadians... by garcia · · Score: 5, Insightful

    If that law was passed in the U.S.A., people would be protesting in front of Congress by burning blank CDs on their laptops and tossing them at their representatives.

    Yeah, in the same country where we went to war on questionable intelligence and are still there fighting for who the fuck knows what reason. Or in the same country where e-voting fraud could occur and no one could give a shit. Or in the same country where the President authorized wiretaps on American citizens and no one batted an eye. Or perhaps in the same "free" country where protesters are told where they can and cannot protest and are removed for exercising their right to freedom of expression.

    Right. Like anyone in America gives a fuck about their rights and how they are losing them.

  15. Re:Commerce, its not national anymore by garcia · · Score: 2, Interesting

    Its easy. Just do what we Americans do for prescription drugs. We buy them from Canada because they are about 1/2 the price.

    The State of Minnesota asks that its employees purchase their prescription drugs from Canada for savings. That's great and all if Customs would stop seizing them.

    I love being told by my Governor to break Federal Law. Awesome.

  16. You're paying to remove the songs. by raehl · · Score: 3, Funny

    People need to realize that blank CDs don't just grow on trees. In order to sell a blank CD, you have to take a regular CD and remove the content. It doesn't make sense to remove content people want, like software, so most blank CDs are originally Britney Spears or N'Sync CDs with the songs taken off. The music industry gets the money because only the music industry produces CDs with content so poor that it's worth paying a little to remove it and resell as a blank.

  17. It's not nearly as bad as it sounds by Lexor · · Score: 2, Informative

    If it's the same as it was before, it only applies to blank CDs that are specifically designed for CD-Audio use, not bulk (eg. spindle) packs that may or may not be used for music.

    More importantly, this levy goes hand-in-hand with the philosophy not of assumed guilt, but of "fair use" that includes sharing. Yes, sharing your tunes is perfectly legal in Canada, as it's simply assumed that people will continue to make copies and mixed CDs for friends, etc. in the new digital world.

    --
    Regards, Lex
  18. What About Data Storage? by IflyRC · · Score: 2, Insightful

    If I am purchasing a pack of blank CDs to use as family photo picture storage, family video transferred over from the camcorder and backing up data such as tax records, etc. this tax has no bearing on what I would be using the CDs for. I don't see how they can justify that a percentage of the tax should go back to the recording industry when they cannot prove that the CDs are being used to copy songs. Also - even if I am burning songs or copies of songs that I own the right to (purchased online or an original CD) through fair use provisions I see it as totally illegal to charge me an additional tax for the specific reasons they have laid out.

  19. Doesn't Really Cover Non-Canuck Artists by Firewalker_Midnights · · Score: 2, Insightful

    I think this assumed guilt thing is a bit "too much" since it doesn't benefit artists that aren't Canadian (with the exception of those paid through the AMF, which aren't that many in comparison to the rest of the world).

    CPCC Royalty Distribution Info

    I would think that if we're paying that much on CD's it should go to every organization possible instead of a select few.

    --
    I Lost My Virginity While Waiting for BSD to Compile.
  20. Re:Who uses blank CDs? by NamShubCMX · · Score: 3, Interesting

    I do.

    I play in a small punkrock bands. We produce everything "D.I.Y." which means we burn all our CDs on blank CDs and sell them for 3$.

    We don't care about the CRIA. We don't care about their crap and we don't want to be on their labels. It seems they'll still have a cut off of every CDs we produce... awesome.

    --
    We've always been at war with Eurasia.
  21. Someone should push for this improvement by erroneus · · Score: 2, Interesting

    I don't know nearly enough about 'law' but I think it is extremely illogical for the consumer to pay for crime of which they haven't been found guilty. However, this is a 'tax' and isn't a criminal matter. And I am unfamiliar with the Canadian constitution, but I have a feeling they have the same "no taxation without representation" rule that we have in the U.S. And if that's the case, I'd like to know what 'service to the people' is being bought through these taxes? My assumption would be that the services are in the form of musical licenses since this is all about copying music.

    These taxes essentially make copying music to canadian-purchased blank CD media legal.

    I'm sure this will take a huge team of lawyers and a lot of public outcry to make it happen, but one way or the other, the music industry will have to give something up -- they can't have both a 'tax' and pursue additional civil penaties against individuals at the same time. If a person who downloaded music can show that he did so in order to utilize his rights granted to him by purchasing blank media from Canada, then I doubt there's much more damage that can be claimed. If this idea holds up, I predict a huge increase in the sale of blank CD media from Canada.

  22. The authour is on crack. by brunes69 · · Score: 2, Informative

    Consider the purchase of 100 blank Maxell CDs. Future Shop retails the 100 CDs for $69.99. The breakdown of this sale is $48.99 for the CDs and $21.00 for the levy (even worse is a current Future Shop deal of 200 blank CD-Rs from HP, which retails for $59.99. The levy alone on this sale is $42.00 (200 CDs x 21 cents/CD) which leaves the consumers paying $17.99 for the CDs and $42.00 for the levy).

    For example, the same Maxell CDs retail for US$34.99 at CompUSA. When you add in the exchange differential, the Canadian cost is just over $40.00.

    Umm... excuse me

    This article is on crack. Maybe if the authour was actually a Canadaian he'd know WTF he was talking about.

    See above links. You can get 200 blank CDs for 40 bucks anywhere. And when they are on sale you can routinely get them for less, like 20 or 25.

    So that means either this guy doesn't know WTF he is tlaking about RE the actual cost of the levy, or all these stores are selling CDs at a loss constantly.

    I think option A is more likely.

  23. Re:Commerce, its not national anymore by hackstraw · · Score: 2, Interesting


    In the US, the Federal law regarding chemicals that people put in their bodies is just wrong.

    Many of the "FDA" approved drugs are horrible, expensive, have side effects up to and including death, etc.

    In 5 years, I will be free from having to take FDA approved drugs on a daily basis. The medication that I am on now gives me dry heaves, makes me insane at times, gives me headaches, disturbs my sleep, gives me vertigo to the point that I have almost died in a car accident, and being that it is a relatively new drug on the market, nobody knows what the long term affects are.

    I have much better results and fewer side effects from uncontrolled and/or "illegal" drugs than the FDA ones.

    I'm probably the only one that has these issues though.

  24. Re:Assumed Guilt by CsiDano · · Score: 2, Interesting

    That's why when they removed the levy from mp3 players I finally bought one, and then switched to DVD backup, there is no levy from the music industry on blank dvds as of right now anyway. Uses less disks for backup. For those who may bring up car audio, my deck has a line in for other audio devices. In response to the other idea put forth about going state side, unless you are livving in a border town, it's not worth it, the savings just aren't there, the only thing accomplished by going stateside is sticking it to the Canadian music industry.

    --
    piss off
  25. For those in Canada who wish to object... by Garwulf · · Score: 3, Informative

    Looking closely at the material, this is still in the proposal stage, and there is time to object to it (I just sent in my objection). The actual proposal and the contact information for writing in to object can be found here: http://www.cb-cda.gc.ca/tariffs/proposed/c25022006 -b.pdf

    Speaking as somebody who has dealt with proposals in the public sector before, when you object, make certain that you make a reasoned argument. Point out the flaws in the assumptions behind the levy (such as the fact that not everybody is going to use the media they're taxing for copying music, etc.), and how it makes the levy unfair. Whatever you do, don't make statements about good and evil, or corruption - it's a surefire way to get ignored. Just point out the flaws in the proposal, give concrete examples if you can when you do, and give your name, city, and province/territory.

    --
    Robert B. Marks
    Author, Demonsbane in Diablo Archive
  26. Re:Why CDs? by klang · · Score: 2, Interesting

    So the question really is:
    "Why do I have to pay the Record Industry, to send a CD with the holiday pictures to my mother?"

    It would make a *lot* more sense to tax something that's used entirely for music, such as speakers or portable music players. .. or guitars or drums or keyboards or .. ears?

    no, taxation is not the way to go .. adapting to reality is.

  27. The mods, and you, are on crack by freeweed · · Score: 2, Interesting

    Your links consisted of 2 CD spindles, each of which end up costing $60/200 blank CDs. Which is what the parent said: a current Future Shop deal of 200 blank CD-Rs from HP, which retails for $59.99.

    The levy is here, it's real, and it's by far the biggest cost of blank CDs in Canada.

    It's also a load.

    --
    Endless arguments over trivial contradictions in books written by ignorant savages to explain thunder in the dark.
  28. Re:Fair Trade.... by Skapare · · Score: 2, Insightful

    Just take lots of blank CDs with you when you go to pick up your drugs.

    --
    now we need to go OSS in diesel cars