Initially, a levy was imposed on certain types of media, in other words, blank cassettes and CDs. As you said, the act is supposed to be technologically neutral. The Copyright Board of Canada began allowing levies to be imposed based on the memory capacity of devices like MP3 players. When that levy was introduced, people who objected to it launched court challenges.
Since the language used in the English version of the Copyright Act is not as clear on the issue as the French version is, the Federal Court of Appeal ruled that a levy could not be imposed on the basis of the memory capacity of these devices. It involved technicalities, and the result was that we were no longer entitled to collect levies on MP3 players and other such devices.