Canada Taxing Blank CDs?

Anonymous Coward writes "Canada has restarted talks on a tax of 74 cents per 15 minutes on digital recording media that is scheduled to begin on January 1st." It's interesting that when DAT was taxed, the format never caught on. Then again, CD-ROM is already a popular format. For more on the DAT issue, which this very closely parallels, RMS has an interesting article that appeared in Wired about 7 years ago, titled "The Right Way to Tax DAT".

Comments

Taxing is the Candian Way (tm)

[SirSlud]

I live in Canada, and tho I'd never move from it, let me say this: Canada will and does find a way to tax just about everything. It's the cost of social programs I suppose, but we also have this insane notion that the way to protect our culture and musicians is by taxing the consumer. So now, when I buy a CD, it'll be:
7% provicial tax (Ontario)
8% GST (federal tax)
74 cents per 15 minutes (so another 2 dollars)?

I'll tell you though, I'm reaching my limit.

Re:Taxing is the Candian Way (tm)

[andymac]

As a Canadian who keeps up on current events, I know that this tax was scheduled to go into effect last January (that is, Jan 1, 1999 not Jan 1, 2000). It was held back because of the public and (mostly) corporate outcry over it. Last I heard, it was being held off indefinitely. You can read about Bill C-32 here (it is an amendement to the Copyright Act). The bill did pass, and is legislation, but has not been implemented (as such that a consumer would notice any price differences).

This tax would extend to cover all recordable media (audio cassette tapes, CDs, video tapes, etc - not pre-recorded media), and is designed to help reduce copyright infringement of copyrighted materials.

Re:Taxing is the Candian Way (tm)

[SirSlud]

actually, isn't that every government?

Re:Taxing is the Candian Way (tm)

[SirSlud]

> "This tax would extend to cover all recordable media (audio cassette tapes, CDs, video tapes, etc - not pre-recorded media), and is designed to help reduce copyright infringement of copyrighted materials...."

... but takes with it anyone using recordable media for legal purposes. Ergo, it's a blanket tax. Like charging everyone in the city for a 'parking' tax, regardless of whether or not you own a car.

I'm screwed

[SirSlud]

Oh, incidentally, I'm an independant musician. Now I get to spend another 2-4 dollars per blank CD that ends up in the pockets of succesful Canadian musicians. I'm really happy about that too. As an intelligent, cultured musician, I'm proud to say my tax dollars will end up in the pockets of such amazing Canadian musicians as:

Brian Adams
Celine Dion
Sarah McLaughlan

And yes, I'm being just a tiny bit sarcastic. Thank god for mp3.com

Hard drives?

[HP LoveJet]

What about hard drives, which are digital media frequently used to store music in both dedicated and general-purpose systems?

If you assume that music is stored as uncompressed 16-bit 44.1kHz 2-channel samples, an 8GB drive contains roughly 54 15-minute units, for a total tax of 0.74*54 = C$39.96, which is not bad.

On the other hand, if music is stored as 112kbit stereo MP3s (using the rule of thumb that 1MB=1min), that same 8-gig drive can store 559,240 units of 15 minutes, for a total tax of C$413,837.60.

I personally would find that excessive.

Hello, Reality's Over Here.

[Eric Seppanen]

A. It's impossible to determine whether a blank piece of media is destined to be used to duplicate copyrighted material.

B. At over $2 per CD-R, I'd buy my media from Afghanistan if I had to.

C. Copyrighted material can be stored on lots of other media- attempting to tax one media is a slippery slope... what, are you going to add a $200 tax on hard drives because you could store music on them?

A+B+C = somebody's smoking crack.

Here's the worst part

[DonkPunch]

Actually, it will end up in the pockets of the record companies who signed Brian Adams, Celine Dion, and Sarah McLaughlin. :P

You're dead-on right, though. Taxes or penalties on new media formats (be they CD-ROM, DAT, or MP3) HURT independent musicians. I've never ripped a CD to my DAT deck, but I've recorded a heck of a lot of original stuff with it.

e-commerce to the rescue

[rde]

If you're going to have to pay more when you buy blank media locally, get 'em on the internet. 'Computer media' are likely to get over the border with little problem.

Re:Why the term "digital recording media" is absur

[jovlinger]

luckily, I record all my songs at 100Mhz with 64 bit stereo samples, so I only get a few seconds recording per CD. That works out to just a few millicents tax, which I'll gladly pay once they make a coin small enough.

January 1st

[ODiV]

What the little blurb up there doesn't mention, is that the tarrif was scheduled for January 1st, 1999. As I understand it, they were going to charge businesses for all cds sold after Jan 1, even though they hadn't agreed on an amount yet! This resulted in some stores adding arbitrary amounts in order to compensate for what they were going to get charged (or maybe they were just BSing me).

What I can't stand about this is, what about software piracy?! There are some $15,000 programs floating around which probably have been copied a time or two. It's not just the recording companies that are being ripped off.

Further more, there are plenty of legal uses for cd-rs.

grrrr.

Re:January 1st

[Dr. Evil]

This is absoulutely true. I looked into the draft for the document which did go through, and the fees are retroactive. However, what people fail to mention is that the $.79 per 15 mins is proposed. The US already imposes a levy of this form, and all this dates back to some international agreement made a long time ago. Canada is one of the last countries to get in line on this thing.

The fact that retailers have not jacked up their prices 100% indicates one of two possible scenarios...

1. Despite all the con-men trying to milk people for thick margins on a blank CD shortage in late 1998, retailers are ignorant of the issue. Or,
2. Retailers are confident that the Canadian Levy will mirror that of the U.S... and that they will not be put out of business when they get the bill for back-payments.

If I was a lawyer, I would have a copy of the document lying around to draw references from... but after careful reading in late 1998 and early 1999, these are the conclusions I have drawn. This whole thing will almost certainly blow over as such a small fee that the whole thing will be a non-issue.

Aside from what I learned reading the document, The concept of paying the recording industry big bucks because I want to back up my HD, or a small band wants to distribute some work independantly, leaves a horrid taste in my mouth.

Also of note is that people who are in medical need of digital audio media are exempt from the tarrif. If we are infact hit with a wicked fee for importing CDs, there could be a huge market for blind technicians... after they burn a CD, it is no longer digital recording media, and consequently, they are free to redistribute it free from tarrifs. The document prevents them from redistributing "digital recording media" without the recipients paying up, but it does not indicate "personal use", nor does it mention write-once media. :-)

15 minutes determined how?

[2megs]

Let's see... if I record my audio to a CD-R uncompressed at 44.1 kHz, two channels, 16 bits per channel, that's 74 minutes per CD-R that they need to tax for a total of $3.65. But data's data, and maybe I like high-end audio -- five channels at 24 bits apiece, for only 19.7 minutes per CD-R, and I only need to pay 97 cents tax on my blanks. But of course a bit is a bit, and if I'm intending to write the music at 32kbps MP3...why, I owe $160 dollars in tax per blank. And let's not even talk about the fact that any hard drive is potentially digital recording media!

Re:15 minutes determined how?

[SEWilco]

I'm intending to write the music at 32kbps MP3...why, I owe $160 dollars in tax per blank.

That is just what I was wondering. Canadians should ensure that their legislators know that the tax on a blank CD should definitely be $160 because of this. See what happens next.

Re:15 minutes determined how?

[SEWilco]

You know, a VCR on slow speed can record six hours of audio. The tax on a videotape should be $17.76

And even more if one instead records 32kbps MP3 using the full 5 MHz bandwidth of a video signal...

Copyrights?

[_J_]

If blank CD's are taxed and these taxes go to artists for the inevitable copies that are going to be made of their music, does that make it OK for me to copy music to one of these blank CD's?

If I pay a surcharge on a CD to cover someone's copyrights, I think I should have the RIGHT to store music on that medium.

Just another thought

J:)

Buy on the internet from a US company.

[rawlink]

How is this going to stop online purchases of $1 blank CDR's from the US. So what if I buy 100 and the UPS ground shipping costs me $20. That works out to $.20 a cd. All that's happening is Canada is destroying the sale of an item in Canada and exporting that economy to other countries (namely the US).

Smuggling?

[Mignon]

Maybe this will promote smuggling of blank CD-R's across the border, like during Prohibiton. I can see a modern-day Elliot Ness smashing boxes of CD-R's with a bulldozer.

Or, more likely, various Indian/Native American reservations along the border will add CD-R's to their shelves, along with the duty-free cigarettes and liquor. If the taxes are high enough and demand is high enough, it'll be worth it.

Doesn't the US do this?

[wesmills]

At my local computer store, I pay $39.99 for a spindle of 50 blank "computer" CDs, which comes to $0.7998 per CD (roughly $0.80). Now, to buy just ONE "audio" CD, which can be used in these $3,000 audio burners, I will pay $5-$6 (I believe that's right, but either way its much more than data). Supposedly this difference goes to the US Copyright office who doles it out to the labels. So, is this unlike what the US does already? If this is the case, then why doesn't Canada do the same thing? (YES, I know taxing is bad, but if they're going to do it, why not do it in a way that makes sense? Oh, and I do know that PCs can burn audio to a "data" CD, which can be played with no problem, at least in my feeble, consumer-level audio devices)

Initiative idea: "Coaster" rebates

[Tau Zero]

One way to make this tax go away is to force the recording companies to be fair about it; if the tax is to be applied to recordable media when purchased, it should be refundable when the media are returned.

Seriously. If a recording is botched and the media are not recoverable, you should be able to get a refund of the tax you paid. In practice the recording industry would be forced to refund the tax on every disk returned. That would sure teach them.

Further consequences of this would be that Parliament would be forced to criminalize the importation of recordable media for refund (fraud, y'know) just as Michigan has criminalized the import of out-of-state soft-drink containers for the ten-cent deposit. Now wouldn't that be fun!

Finally, if you're lucky, you might even get everyone to agree that the whole thing was a rotten idea and that it ought to be scrapped. But you have to force the system into the exercise of the reductio ad absurdum first, so get moving!

Me, a criminal?

[krynos]

I'm sorry, but this law assume that people buying these CD and music tape are criminals.

I was a criminal when a friend copied me on a CD the music that him and his band did.
I was a criminal when I did copy a Linux (RedHat) CD-ROM image.
I was a criminal to backup some important files on CD-ROM. I was a criminal when I kept a copy of my music CDs for myself in MP3 format (on CD-R).

I'm sure plenty small companies that need to give software to clients (by burning a CD-R) will love being considered criminals too...

Time for a new product - "Data Only" CDs

[Booker]

Hm, maybe it's time to start labeling the packages as "Data Only - not to be used for audio content." Now... you know, and I know, that this would be ridiculous. But based on the logic used in formulating this tax, it just might work. "Oh golly, no, this isn't a recording medium. This is a binary backup medium, just like this tape over here..."

Relax...

[JohnnyCannuk]

For all my US comaptriotes out there, a little lesson in Canadian government. First off they are just holding hearings. Translation - a few old judges and back-bench politicians are going to yammer about this for a long time. They may get around to doing something, they may not. They may have the price stay at 25 cents, they may drop it.
If enough Canadians make a stink about this they may just drop it (after all they already backed it off for almost 6 months for the same reason).
Even if they do pass it, it will not last long. Someone before mentioned about people heading across to the US or getting blank CD-Rs from Natives on border reservation. Well, the same thing happened a few years ago. Cigarettes, clearly a dangerous product that should not be promoted in any way, used to cost $7 Can a pack. When the US stores and smoke smuggelers began to make gobs of money while mom and pop stores in downtown Toronto went out of business, the hue and cry of a relatively small affected group cause our Prime Minister (Jean Chretien) to drop the taxes so that smokes are now about $2.50 to $3.00 a pack.
If the public can force the government to drop the price of smokes by more than half in one shot (literally $7.00 on Monday and $2.35 on Tuesday morning), dropping the CD-R tax should be real easy.

Screwed up logic...

[Danse]

How can you tax people based on the reasoning that they're going to do something illegal? It's either illegal and they should be punished for it, or it's legal and you tax it. It shouldn't be both.

Re:A short list of Canadian Artists

[dirty]

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