Technology not taxation!

That's the battle cry of the Canadian computer industry in a war of words being waged among groups representing the nation's music, technology and retail industries.

The dispute centers around fees collected from technology companies to reimburse the music industry for losses incurred by music copying and swapping.

Canadians are legally allowed to copy music for personal use. In exchange, a small fee is added to the price of recordable CDs to compensate musicians and music publishing companies. Similar "royalties" are collected in more than 40 countries, including the United States under the Audio Home Recording Act of 1992.

But in the wake of the Canadian music industry's proposals for higher and broader levies in 2003, much of Canada's technology and retail industry is now calling for the levy's repeal.

In 2000, the levy per recordable CD was 5.2 cents (Canadian); in 2001 the fee rose to CN$0.21. The proposed fee for 2003 is CN$0.59.

In addition, the Canadian Private Copying Collective, the music industry group that collects the levy, has proposed new levies to be applied to any device that can store music, such as removable hard drives, recordable DVDs, Compact Flash memory cards and -- of course -- MP3 players.

Both sides will present their case to the Copyright Board of Canada later this month.

At the meeting, tech industry groups are likely to point out that the CPCC has not yet distributed a cent of the millions it has collected in fees over the years to musicians.

Since 1999, the CPCC has collected more than CN$28 million in copyright compensation fees. It expects to collect more than CN$100 million in levies next year.

The CPCC says the distribution of those funds is a complicated issue, (PDF) requiring as many as 12 separate payments per song.

"The CPCC is poised to begin making payments in 2003," a statement from the organization reads.

Fees are collected from product manufacturers, but the cost is passed on to consumers, according to Diane Brisebois, the president and CEO of the Retail Council of Canada.

"Most consumers are not aware of the levy, because the recording industry collective doesn't want to promote it knowing that awareness leads to outrage," Brisebois said.

And although the levy is not a government-collected tax, federal sales tax is applied to the full price of the item, including the levy.

Frustrated by the CPCC's latest proposal, the Canadian Coalition for Fair Digital Access, a 16-member group that includes Intel, Dell, Hewlett-Packard, Sony and Apple, as well as Wal-Mart Canada, Costco, Staples, Radio Shack and the Retail Council of Canada, has issued statements saying that consumers and businesses shouldn't have to subsidize the music industry.

"The coalition believes that copyrighted works should be protected and copyright holders should be fairly compensated for their work," said Doug Cooper, general manager of Intel of Canada. "However, technologies are now available to help accomplish both these objectives."

The CPCC requested the new levy increase after surveys indicated almost half of all recordable CDs purchased are used to copy music.

But the digital access coalition maintains that those numbers only prove that the levy penalizes the more than 50 percent of consumers and businesses who are not using the blank media to copy music.

The CPCC accuses the coalition of operating out of greed.

"It's not about fairness at all," said David Basskin of the CPCC. "If it was about fairness, these large U.S. multinational companies wouldn't be trying to deprive Canadian musicians of royalties they are legally entitled to."

But the Retail Council's Brisebois said the levy favors U.S. interests.

"Canadians may decide to shop in the United States where these products are generally levy-free," she said. "Also, there are certain products which would just not be introduced in Canada."

Quoted:
I see money to be made... smuggling blank CDs!

Quoted:
it says including the US another country that has a levy.

How much is it here?