As of January 1, 1999, businesses and individual consumers have had to pay a premium on all "blank audio recording media" purchased in Canada. "Blank audio recording media" includes CD-Rewritable media, used by many companies for data storage.
With the implementation of the Bill C-32 amendments to the Copyright Act (the "Act"), the federal government enacted a "private copying levy," which added a surcharge to blank audio recording media at the point of manufacture or import. Makers of blank media are expected to pass along this cost to end-consumers.
According to the terms of the new sections 79-88 of the Copyright Act, in force since March 1998, but only effective since January 1, 1999, a collecting body will collect the levies and distribute the proceeds to collective societies representing authors, performers, and makers1 in the music recording business, according to a distribution scheme to be set by the Copyright Board of Canada.
The Canadian Private Copying Collective (CPCC) is the collective society for the private copying levy. CPCC is also responsible for distributing the funds generated by the levy to the collective societies representing eligible authors, performers and makers of sound recordings. The member collectives of the CPCC are: the Canadian Mechanical Reproduction Rights Agency (CMRRA), the Neighbouring Rights Collective of Canada (NRCC), the Société de gestion des droits des artistes-musiciens (SOGEDAM), the Society for Reproduction Rights of Authors, Composers and Publishers in Canada (SODRAC) and the Society of Composers, Authors and Music Publishers of Canada (SOCAN).
In exchange for the levy, section 80 provides that copying of music works for "private use" will no longer be considered infringement.
A rebate of levies paid is available to societies, associations, and corporations representing persons with perceptual difficulties. No-other exemptions or rebates are available in the Act, however, the CPCC has voluntarily established a zero-rating program that will allow certain groups of users, on application to the CPCC and subject to specified conditions, to purchase blank audio recording media levy-free from participating importers and manufacturers. Levy-free purchases may also be made from a distributor of blank audio recording media if the distributor has made a prior arrangement with a participating manufacturer or importer that meets the criteria established by the CPCC. This program does not apply to CD-R's and CD-RW's. The groups covered by this program include: Religious Organizations, Broadcasters, Law Enforcement Agencies, Courts, Tribunals and Court Reporters, Music and Advertising Industry and Schools and Professional Users. ..
According to Canadian Heritage, the department sponsoring the original Bill, the hotly-debated levy system was to "remunerate creators for private copying of their musical works." However, even proponents acknowledge that the system will create some unfairness to non-infringing users of the technology.
The full text of the final version of Bill C-32, and the full text of the amended Copyright Act is available at the website of Canadian Heritage.
The amount of the levy was decided by the Copyright Board of Canada based on arguments that were presented at a hearing held in October 2000. The Copyright Board's decision was announced on December 15, 2000 approving the following rates for 2001 and 2002:
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