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Canadians May Face 25% Download Tariff 615

Posted by timothy
from the show-me-the-clause-in-the-social-contract dept.
C-Yo writes "While Canadians have battled against an iPod tariff for more than a year, now comes news that Canada's copyright collectives are seeking a tariff on iTunes as well. Professor Michael Geist (who last week dismantled music industry claims about peer-to-peer) reports that one collective is demanding an incredible 25% of the gross revenue of music download services as well as 15% of webcasters' gross revenue and 10% of gamers gross revenue (free version of report or Toronto Star reg. version). When combined with other tariff proposals, it would appear that Canada's collectives want to the kill the download industry, demanding at least 40% of everything iTunes, Napster, and other new services earn."
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Canadians May Face 25% Download Tariff

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  • by Greg Wright (104533) * on Monday April 18, 2005 @08:28PM (#12276534) Journal
    I am not so sure that Canada's collectives want to "kill the download
    industry" as much as they are still upset about the United States
    failure to comply with the WTO ruling on the Byrd Amendment. In fact,
    on March 31st of this year Canada put this out:

    "The Government of Canada announced today that it will retaliate
    against the United States in light of its failure to comply with the
    World Trade Organization (WTO) ruling on the Byrd Amendment. Following
    extensive consultations with domestic stakeholders, Canada will impose
    a 15 percent surtax on U.S. live swine, cigarettes, oysters and
    certain specialty fish, starting May 1, 2005"

    Seems to me this download tariff is just another retaliation like the
    above. It isn't just Canada either, several countries are upset that
    the US has not complied.

    For those that don't know, The Byrd amendment, passed by Congress four
    years ago, provides that when foreign manufacturers are found to be
    dumping goods in the U.S. market -- that is, selling at unfairly low
    prices -- any anti-dumping duties that are imposed can be handed over
    to the U.S. companies that brought the dumping case, rather than to
    the Treasury. It has benefited U.S. firms in industries including
    steel and pasta, with one of the largest beneficiaries being Timken
    Co., an Ohio maker of bearings, which collected about $40 million last
    year.
    • by eviloverlordx (99809) on Monday April 18, 2005 @08:33PM (#12276591)
      Canada will impose a 15 percent surtax on U.S. live swine...starting May 1, 2005

      I knew it was pretty easy and cheap to buy politicians, but now Canada is taxing them? How do I get into this racket?

    • by Anonymous Coward
      [Greg Wright wrote :]
      I am not so sure that Canada's collectives want to "kill the download
      industry" as much as they are still upset about the United States
      failure to comply with the WTO ruling on the Byrd Amendment. In fact,
      on March 31st of this year Canada put this out:


      Will this produce a negative impact on any Canadian artists such as k.d. lang, barenaked ladies, Celine Dion, Avril Lavigne, etc., etc.?
    • I am not so sure that Canada's collectives want to "kill the download
      industry"


      I think Canada's collectives want to assimilate us and fit us with various technological improvements, like unhinged heads. Resistance is futile.

      My apologies to the Canadians, I couldn't help it. Much love!
  • by FunWithHeadlines (644929) on Monday April 18, 2005 @08:30PM (#12276561) Homepage
    "one collective is demanding an incredible 25% of the gross revenue of music download services as well as 15% of webcasters' gross revenue and 10% of gamers gross revenue"

    And 7% of gross revenue from hamburger sales since it's been shown that copyright violaters eat them, and 11% of posters of 70s rockers in cheesy poses since their images retain valuable copyrightable money-making potential, and 3% of the sale of every wheelbarrel since they can be used to haul off copyrighted material, and 1% of every breath you take since that's part of a copyrighted song lyric...

  • by the_skywise (189793) on Monday April 18, 2005 @08:31PM (#12276578)
    The whole point of the tariffs were to collect funding based upon implied piracy. (IE tariff's on blank video tapes because blank tapes were used to "illegally" copy movies and broadcast NFL games and such)

    But, at least in the case of iTunes, you're already PAYING for the product. So there's no need to tariff it because the product is being legitimately purchased.

    (Of course, that won't stop your friendly government from figuring out how to tax you...)
    • by iamnotanumber6 (755703) on Monday April 18, 2005 @08:51PM (#12276762)
      actually it's not a government tax, the government doesn't get any of the money. it's a copyright collective representing the copyright owners that gets the money, which is called a "levy" rather than a "tax". the money goes to the musicians. and their lawyers. well mostly to their lawyers i'd guess :-)
      • It's a "tariff", which means the government gets ahold of the money first and eventually gets around to doleing it out for its proper use.

        The government is getting its cream out from this, at the very least charging the collectives for doing the work for them.
    • It makes sense if the interests behind the "copyright collectives" are losing significant revenue to competition from sales on iTunes, e.g. of tracks by more independent artists not represented by the "copyright collectives." Sometimes shutting down the competition is easier than actually competing.
    • Somebody somewhere HAD to have bought a CD legit, and then shared it. This tax, just eliminates the need to track that person down.
  • As a Canadian (Score:5, Interesting)

    by mark*workfire (220796) on Monday April 18, 2005 @08:32PM (#12276579)
    I don't really like our new music & movie association overlords. Thank goodness for sites such as www.allofmp3.com. Since I already pay a tax on my blank media, I feel no shame in downloading from KaZaA or Usenet or Morpheus or IRC. And the music & movie industries blatant cash grabs such as this are simply going to make it harder for legitimate business to prosper, since users won't be as eager to move to them. Quite frankly, since I pay the copyright tax, I really haven't bought that many CD's. However, the movie industry still makes a killing off my kids
    • Re:As a Canadian (Score:2, Insightful)

      by drg55 (409730)
      Well, kill the golden goose, the return that a record comapny makes from a retail cd is at least a fifth of what they charge on line.

      You idiots, set a reasonable fee, like 5 cents, and watch 200 million people download your song. Charge $1 and get nothing.

      I use Allofmp3 because they do pay royalties, I do not condone illegal copyright violations.

      Dave from Downunder
    • Re:As a Canadian (Score:3, Interesting)

      by zakezuke (229119)
      Quite frankly, since I pay the copyright tax, I really haven't bought that many CD's. However, the movie industry still makes a killing off my kids

      As a Canadian, do you know who gets money from the media tax? I don't mean this as a flame but rather a legit question. In principal it's seems like a very good idea to tax the medium in order to support media to put on it. But do copyright holders actually get compensated, and if so is it limited to Canadian copyright holders? What is the purpose of this t
  • As if. (Score:5, Insightful)

    by Staplerh (806722) on Monday April 18, 2005 @08:33PM (#12276586) Homepage
    It doesn't stop with the cited sources either, this proposal has an extremely wide scope. From TFA:

    SOCAN's proposal does not stop with music download services. The new Tariff 22 also calls for a tariff of 15 percent of gross revenues from both audio webcast sites that feature content similar to conventional radio stations as well as from established radio stations that webcast their signal. Moreover, gaming sites that communicate musical works as part of their games face a potential tariff of ten percent of gross revenues. In fact, to ensure that no one escapes Tariff 22, SOCAN envisions a tariff of ten percent of gross revenues for all other sites that communicate music.

    Ultimately, this is all a bunch of legal poppycock. It's a proposal, and I'd argue that it's a damn stupid, untenable proposal. We need to let the Canadian government know that its a stupid proposal, but I have a feeling that they'll see it for what it is. After all, they've ruled positively in downloading cases before - what with our tariff on blank media.
    • Re:As if. (Score:4, Informative)

      by DM9290 (797337) on Tuesday April 19, 2005 @03:22AM (#12279168) Journal
      Ultimately, this is all a bunch of legal poppycock. It's a proposal, and I'd argue that it's a damn stupid, untenable proposal. We need to let the Canadian government know that its a stupid proposal, but I have a feeling that they'll see it for what it is. After all, they've ruled positively in downloading cases before - what with our tariff on blank media.

      The Canadian Government does not make rulings. It passes laws.

      Courts or tribunals make ruling.

      The government on the other hand, merely votes and passes a law. The government is essentially free to completely ignore reality if it chooses to, and put anything a majority of MP's would support into law.

      What the government puts into law has nothing to do with any kind of "ruling". It is just politics.

      It is illegal to lobby the courts in Canada. (at least in any way the court would notice your lobbying).

      This makes sense, because to lobby the court, suggests that the court's ruling would be based on external factors beyond the "law" and the "facts" of the case at hand. It is insulting to the Court to suggest that sign waving and yelling has any relevence to the case. If you have anything RELEVENT to say, you would be permitted to testify under oath just like all the other witnesses.

      So, unless you want to get slapped with a contempt of court charge, I would restrict your act of "let the Canadian government know" to the actual Government. Which does not make rulings.
  • by winkydink (650484) * <sv.dude@gmail.com> on Monday April 18, 2005 @08:33PM (#12276589) Homepage Journal
    When combined with other tariff proposals, it would appear that Canada's collectives want to the kill the download industry, demanding at least 40% of everything iTunes, Napster, and other new services earn."

    I can't see it killing these globally, just in Canada.
  • by Anonymous Coward on Monday April 18, 2005 @08:35PM (#12276605)
    But thats 25% Canadian so its less than 25% American.
    • Re:Anonymous Coward (Score:3, Informative)

      by AvantLegion (595806)
      >> But thats 25% Canadian so its less than 25% American.

      Not by much these days! :(

      I saw someone confuse the Canadian price of a video game recently as being just a slightly-high price of an American video game.

      I miss the days of, "$100 Canadian? Izzn'at like t'ree-fi'ty US?"

    • Re:Anonymous Coward (Score:3, Informative)

      by Obasan (28761)
      Not for long if the US currency continues to slide the way it has in the past year...

      (As a note for Americans, a weak US dollar is actually GOOD for US exporters and may help to balance the US's trade deficits by making foreign goods more expensive and domestic goods cheaper).
  • by wheelbarrow (811145) on Monday April 18, 2005 @08:35PM (#12276610)
    This is a manifestation of one fear I have about publicly owned internet access monopolies (municipal WiFi). Some activist city council somewhere could decide that these sorts of taxes are just the thing needs to fund libraries, kiddie daycare, free everything, etc. Or, perhaps, activist city councils could decide to ban access to politically incorrect activities on the internet (e.g. cigarette purchasing).

    There are dangers to collectivist centralization. Give me the hell of high stakes competition and unclear standards.
  • by saforrest (184929) on Monday April 18, 2005 @08:35PM (#12276612) Homepage Journal
    Since it's on-topic, I'll repost a link from a recent Slashdot story [slashdot.org] about the petition for User's Rights:

    http://www.digital-copyright.ca/petition/ [digital-copyright.ca]
  • by nxtr (813179) on Monday April 18, 2005 @08:36PM (#12276622)
    They should tax the illegal downloaders. Then again 25% of 0 is... um... uh... get back to me.
  • by Sprotch (832431) on Monday April 18, 2005 @08:37PM (#12276636)
    In France all blank writable media is subject to a special tax. The proceeds of this tax are distributed to the various copyright agencies. The idea is that since they are going to be used to rip music or videos anyway, the copyright holders should get some compensation. Uterly silly, but it has been effective since the first blank audio cassettes arrived on the market....
  • Take the place where downloading illegally is probably more safe than most other places, and then charge extra to download legally.

    riiiight....
  • I can see SOCAN [socan.ca] handing Bryan Adams a big fat check; monies accrued from the greedy hordes of music downloaders at iTunes. Yeah right.

    Question is, if they were able to levy these tariffs, where would this money really go? Back to the artists? Into a legal fund? I doubt the artist would benefit one ioda from these taxes (much like Employment Insurance in Canada which is a huge ripoff taxgrab from the middle class worker).
  • by pagefaultca (859270) on Monday April 18, 2005 @08:47PM (#12276729)
    So if I am paying for them with a tarriff does that mean I can download anything I want now and not pay a cent. Since technically I just already paid for it?
  • by Grey Ninja (739021) on Monday April 18, 2005 @08:49PM (#12276750) Homepage Journal
    I mean, honestly. I don't know a single person who's ever BOUGHT a song online. Absolutely everyone I know has a ridiculously huge music collection that's come from napster, bittorrent, kazaa, morpheus, winmx, you name it. Anything but an officially sanctioned music site.

    There's no incentive for us. We already pay a tax on our blank media, and downloading and uploading music are perfectly legal in Canada. Somehow I don't think that the online music companies are going to be shaking in their boots at all.
  • I was worried that successful legitimate services like iTunes would hinder the flow of free P2P music. Let's praise the Canadian government for helping to stamp out legitimate online music!
  • by mh101 (620659) on Monday April 18, 2005 @08:55PM (#12276798)
    My first reaction from reading the blurb, was "Oh crap, a 40% price increase on iTMS?"

    After reading the article and re-reading the summary, the key point here is that these groups want up to 40% of the gross revenue. Unfortunately I'm not 100% certain as to the definition of "gross revenue," but if as I suspect, that means "whatever is left in the bank after paying the related expenses" then this would be 40% of Apple's cut. If they (or the runners of other music download services, for that matter) only get to see 5% of my $0.99, and assuming they raise their price to cover this tarriff, then that would only be a 2% increase.

    Of course, I may be wrong in my understanding. IANALOA (lawyer or accountant).
  • did non-gov't organizations get the ability to tax people or even suggest a tax? Hell, I'd love to start a company and propose they tax the hell out of everyone and collect it. Considering that those "collectives" do not represent everyone, it seems quite unfair. I'd say boot them out just for thinking about it.
  • Don't bothe reading any newspaper article with "may" in the title, or whose title is a question.... which also seems appropriate here (:-))
  • absurd (Score:2, Insightful)

    by YayaY (837729)
    I don't see why anyone would think this tax would be a good idea. After all, if a compagny thinks that music downloaded from online store are going to get rip, why don't they just raise the price? Plus, how do you distribute fairly the amount of money raised by the tax? IMHO, the song that get downloaded the most get the largest piece of the pie. From my point of view, it seems the same as raising the price tag for a song.
  • As a canadian... (Score:5, Interesting)

    by meanfriend (704312) on Monday April 18, 2005 @09:00PM (#12276856)
    There might be a scenario that would be acceptable to me. The blank cd levy may not be perfect, but as we saw in a previous slashdot story, it more than compensates the industry for *ahem* lost revenues due to illegal copying.

    From the article:

    "...The SODRAC/CMRRA proposals demand the greater of either 15 percent of gross revenues or ten cents per permanent download..." Emphasis mine.

    If by "permanent download", they mean non-DRM encumbered file that I may have unlimited personal use in perpetuity, then to me, that is a fair tradeoff for a small tarriff. The 25% figure quoted on the front page would be way too high, but if I can legally download an mp3/flac/ogg/whatever and burn it as many times, put it on as many portable players, and stream it from as many computers as I want for my own personal use, without some retarded DRM app phoning home to ask for permission, then that might be worth a small surcharge.

    If they insist or crippling it with DRM or if (download price + tarrif) > (price I'm willing to pay), then guess what? They've just outsmarted themselves out of potential revenue (though we know who they'll want to blame for that...)

    True, legimate buyers end up covering the costs of the thieves, but the same goes for any other industry (retail, insurance, etc). I think it's more important for both sides to compromise a bit to keep the system usable for the vast majority of legitimate users, then to screw everyone in sight.

  • Canadian Gov. (Score:3, Insightful)

    by Deliveranc3 (629997) <deliverance.level4@org> on Monday April 18, 2005 @09:01PM (#12276860) Journal
    Canadians wouldn't retaliate in this way against U.S. companies, the Byrd proposal is in direct violation of Nafta which was a pretty damn big deal and Canadians were largely against.

    That out of the way I have faith in Canadian regulators to find public methods of stimulating Canadians arts into which to dump the money so it won't benefit corperations (like it would in the states)...

    The main reason, well if the RIC (or whatever is pushing it) then it's simply because they don't want to negotiate with apple which is silly because we have the same large music corperations (Sony etc.) but who knows maybe they're bitter.

    The main thing that Canadians have and many other countries also have is regulations requiring media distributers to distribute a certain level of Canadian content (it's not bad maybe 15% or 25% but it's well regulated and has to be in prime time etc.) This leads to strange effects where artists become huge in Canada without any international acclaim.

    Anyway this tarriff could be used to replace this clause, since we're getting RIC lawsuits anyway (Despite the fact that our laws will rule against them) it seems the only possible reason.

    It's nice to be able to trust our government to have the interest of the citizens and artists at heart rather than industry, they do get a trifle misguided sometimes though I'll admit.
    • Re:Canadian Gov. (Score:3, Interesting)

      by doc modulo (568776)
      At the moment, in Canada and the Netherlands. It is legal to download copyrighted "works of art". This is because we all pay a tariff on blank tapes, CDs and DVDs. The money ends up in an organization that's supposed to distribute the money to the artists that received less money from you because you copied their CD from a family member instead of buying their offical CD with money.

      There are a few problems with this, but overall it's a good system:

      * I'm not sure about this one but it might not be a govern
  • by ScrewMaster (602015) on Monday April 18, 2005 @09:03PM (#12276879)
    they simply want to be the only ones that can do it. The simplest way to do that is to have the government tax any competition out of existence, and then make any such competition illegal. iTunes is certainly competition (even though it has to pay royalties for every song it sells). And, sure as Hell's a mantrap, you can bet that there will "exceptions" to any such tax regulations that exempt the big boys from forking over a penny. It stinks, any way you look at it.

    Where it got written (in either Canadian or U.S. law) that monopolies are entitled to maintenance and protection by either of our respective governments is beyond me. It's ridiculous. I'm sorry, I like music as much as the next man, but I don't consider the studios to be such an important national treasure that they can't be allowed to stand a little competition. And, if that competition proves to be a little too stiff and the music cartels just happen to go under ... well, I certainly won't shed many tears for them.

    I believe they are the "evil entities" that both Captain Kirk and Captain Picard referred to in a number of episodes.
  • Not so bad (Score:3, Funny)

    by cmcguffin (156798) on Monday April 18, 2005 @09:06PM (#12276902)
    You have to put it in its proper perspective.

    25% Canadian is only 20% American, after all.

    And that's before converting from metric to Imperial.
  • Fat Chance (Score:5, Interesting)

    by IamLarryboy (176442) on Monday April 18, 2005 @09:10PM (#12276938)
    "Canadians May Face 25% Download Tariff"

    Canadians are not facing ANYTHING. The governing party is in the midst of the biggest political scandal in 50 years. In addition, they are a minority government. They were only able to pass the budget because the conservatives were not ready for an election and allowed it to pass. By all the indication of the polls the next government will be a Conservative minority. That government won't be able to pass a bill against murder let alone something as complex as copyright. Canadians, for the forseeble future, have a government that is for all intent and purposes, nuttered; Just as it should be :-)

    • Remember also that Ch.11 of NAFTA states that any Foreign Corporation (say Apple) can defeat any domestic Law, if found to inhibit " property, ownership, the right to market and sell a product, and the right to earn a profit" by the foreign corporation.

      So considering that Apple makes $.01-.02 cents a track, and now they want to charge .25 levy... well Apple gets to sue, especially if this law makes it unprofitable to sell (or unpopular).

      Apple will probably win, far more nefarious businesses have usurped p
  • Why a 40% tax for piracy on something that can't be pirated?
  • Can one of you nice Canadians with an entrepenurial spirit please start a web-based business selling blank CD's? Sending those to the U.S. should follow the same rules as importing pre-recorded CD's. I mean, then I could tell officier friendly, "No worries mate, these are Canadian CD's, and I've paid the duty on them. I can record whatever I want on them now, Eh?"

    Somehow, I still think AssHol^H^H^H^H^hcroft and his band of merry goons would object. (SIGH).

  • ... that makes it legal, right?
  • I just got to thinking that the only type of legal decision that would ever stop this satanic greed by the music industry would be a judge with the wisdom of King Solomon in the bible.

    The story goes that two women pitch up at King Solomon's court, both claiming that a baby they have with them is theirs. King Solomon, realising that he doesn't have his DNA testing kit handy, deals out a judgement that both women have a right to the baby and that the baby should be cut in half with swords and each woman shou
  • Not going to happen (Score:5, Informative)

    by KillerBob (217953) on Monday April 18, 2005 @09:43PM (#12277258)
    Title says it all. This is a proposal from SOCAN, which represents some Canadian musicians. It's just a proposal. As long as the government is still collecting the tariff on blank media, there's no way this would ever actually happen, because organisations like SOCAN are *already* receiving funds as anti-pirating compensation.

    The government's already decided that the blank media tax more than pays for lost revenue from the artists, and I doubt very much that SOCAN et al. will ever be willing to give that up.
  • by PhYrE2k2 (806396) on Monday April 18, 2005 @10:55PM (#12277868)
    There are a lot of flames going around as to how this is very bad, but it's the way things have worked above the border for a LONG time. We pay a tad more for MP3 players and blank CDs, and in exchange legally download and burn.

    So why should online be treated differently from regular purchases in this case? This money then gets sent off to the music industry.

    -M
    • by Mant (578427) on Tuesday April 19, 2005 @05:07AM (#12279540) Homepage

      The music industry already gets paid for the download. The compnay (like Apple) have an agreement with the record lables, and a cut of the download goes to them.

      Further, how is buying a blank CD like a download? Itsn't the download more like buying a pre-recorded CD? The download is a purchase, so why would they need compensation for a "non-purchase".

      This is like wanting 40% gross on non-blank CDs, when they already get money from them.

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