Yes, we do need higher taxes

Unfortunately, as is often the case, new technological developments frequently breed new controversies. The invention of the iPod, despite all its widespread popularity and success, is no exception. Currently at issue is the decision of The Copyright Board of Canada to allow an additional ‘tax’ to be placed on the sale of MP3 and iPod players respectively. The proposed tax is intended to be a way in which to compensate recording artists for the private copying of their musical recordings by purchasers of their work, and any ensuing loss of profit. The tax would form part of the levy attached to all blank media, and would be redistributed according to a system which takes into account a particular artist’s sales and popularity – with greater sales and popularity translating into greater remuneration.

It seems odd, at first glance, to talk about compensating Canadian recording artists given the sometimes astronomical incomes which they enjoy. Realistically, does someone who lives in a multi-million dollar home, owns a fleet of high-end cars, and owes all of it to their singing voice, really need the small percentage granted to them from a $75 iPod levy? Do they actually deserve to complain about such a monetary loss? After all, society boasts people like surgeons and ER doctors who not only save the lives of others regularly through their profession, but make substantially less in comparison to their musical counterparts. This, at least, is the rationale used by many to morally justify illegal internet downloading and the private copying which is at issue here.

However, in truth, the financial status of musical artists is wholly and entirely irrelevant. It does not matter if an artist’s extravagant lifestyle proceeds completely unencumbered by the absence of a pre-emptive sales tax on blank media devices. The law in Canada is what it is, and only the copyright owners of the music are afforded the right to reproduce it. As David Basskin, director of the Canadian Private Copying Collective, so succinctly puts it, consumers are afforded the right to purchase and own a copy of any given musical work, not the right to reproduce the work themselves. That, irrefutably, is still the law.

And, lest we forget, the very purpose of Copyright is to reward the ingenuity of the creator and the benefit which that ingenuity endows upon society, so as to further stimulate and sustain continued creativity. Hence, if and when an artist’s works are being reproduced on a large scale by non-rights holders, as is certainly the present case with today’s proliferation of iPod and MP3 use, that artist’s reward of exclusive rights to copying is effectively being diluted. Such artists are no less entitled to compensation for such a loss than are the victims of theft. Anything less would be plainly unfair.

Thus, any direct attack on the proposed tax should not be directed at the tax itself, but rather at the Copyright Act which refuses consumers the right to reproduce the music which they purchase, albeit legally. The need for the levy — or another method of compensation like it — will continue so long as personal reproduction of music continues and the Act remains

Now, that being said, whether or not the proposed tax and the method by which it will operate is the most effective solution is still very much open to debate. The University of Ottawa’s Michael Geist warns that the current scheme will ultimately be funding the more ‘mainstream’ Canadian artists at the expense of their lesser known counterparts, and that this is not always reflective of in what proportions copying is actually being done. While this may seem grossly unfair, it is simply the current band-aid solution to an already unfair situation, where the copying rights of recording artists are being infringed upon by a large portion of the public. Again, it is this situation which forms the very reason for the levy’s existence. Perhaps asking how the purposed tax could be better distributed is not the best approach. Perhaps more emphasis needs to be placed on methods of preventing – or at least alleviating – private copying altogether, thereby eliminating the need for such a tax.

One Comment
  1. Making iPod Tax Equitable

    The foregoing comment states that “the Copyright Act … refuses consumers the right to reproduce the music which they purchase…” proffering that “more emphasis needs to be placed on methods of preventing … private copying altogether, thereby eliminating the need for such a tax”. I am unable to agree with these remarks.

    The reason for introducing the tax in the first place was that Parliament found it impossible, in practice, to prevent individuals from making private copies of copyright music.[1] Consequently, Part VIII of the Copyright Act both legalizes private copying and compensates copyright owners via tariffs on blank audio recording media. If anything, the tax model needs to be tuned, not eliminated.

    As a matter of elemental fairness, the tax model ought to be adjusted in terms of vertical equity. The Copyright Board would allow a set tariff to be affixed to any “thing that is ordinarily used by individual consumers to make private copies”[2] notwithstanding that many eligible items such as removable memory storage cards and devices including cellular phones, computers, iPods, etc., may primarily be used for other purposes. A more equitable approach would be to categorize these items and implement a variable tax based on their calculated average use. For example, if “25% of content copied onto [electronic memory] cards is music”[3] then only 25% of the tariff should apply. Tailoring the tax model in such a manner addresses technological versatility and best preserves the status quo between owner and user rights.

    [1] Re Private Copying 2008-2009 (19 July 2007), Copyright Board of Canada Decision at para. 71, online: CBC [PC 2008-2009]. See also Re Private Copying 2004-2004 (12 December 2003), Copyright Board of Canada Decision at 19, online: CBC .
    [2] PC 2008-2009, Ibid. at para. 70.
    [3] Canadian Private Copying Collective, “Backgrounder on the Proposed Private Copying Tariff 2008-2009” online: , cited in Michael Geist, “CPCC Goes For Broke, Part One”, Blog, (11 February 2007), online: Michael Geist .

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