First and foremost, royalties are determined by the Copyright Board of Canada. The royalties are paid to the Canadian Private Copying Collective by the manufacturers and importers of blank media. Then the collective redistributes them to the songwriters, the performers and the producers.
I do not want to get into all the details of the distribution, but I will say that it is essentially based on a model of selling music and listening to music on the radio and through distribution methods. Each of the companies that are members of the Canadian Private Copying Collective redistributes the royalties to companies of performers, producers and authors. Royalties are paid to performers, singer-songwriters and producers through a very specific and precise distribution method.