The private copying regime remains the best solution to what is an ongoing problem. Streaming may dominate the legal music market, but Canadians still value and make copies of music—over 2 billion a year since 2010—and the levy system is the best mechanism to compensate rights holders for copies that can't be licensed. It just needs to be amended so it can keep up with how Canadians consume music in a changing marketplace.
With minimal revisions, the private copying regime can be restored to what it was originally intended to be: a flexible, technologically neutral system that monetizes private copying that cannot be controlled by rights holders, without undermining legitimate online music services.
The process for setting levies would remain the same, as the CPCC would be required to file a proposed tariff with the Copyright Board and to prove, through empirical evidence, which devices and media are ordinarily used to copy music.
As it stands now, Canada is an outlier. Most countries in the EU, central and eastern Europe, embraced the technological shift years ago, and now have healthy private copying regimes that extend levies to a wide variety of media and devices, like smart phones and tablets.
A comprehensive global study of private copying produced in December of last year by CISAC, the international organization of authors' societies, called out Canada on the need for our regime to be “updated and adapted to new uses with levies on digital devices”.
Without a legislative solution like the one that the CPCC now proposes, Canadians' private copying activity will remain illegal, and royalties to music creators to compensate for the massive private copying of their work will very soon be completely eliminated. Canadian music creators need to be paid for this extensive use of their work, just as the businesses producing and selling the devices used to make the copies all get paid. The private copying levy is not a tax, nor is it charity or a subsidy program. It is earned income.
The Copyright Board ultimately determines the value of the levy. However, CPCC's proposed levies will certainly be a small fraction of the cost of a smart phone or tablet, and will be comparable to the levy rates in many European countries, where the average levy payable on a smart phone, for example, is around $3, the price of a cup of coffee.
As always, the levy would be payable by manufacturers and importers of the media and devices. In fact, we all know that the cost of many smart phones and tablets is already subsidized for consumers by intermediary companies that provide these devices in a bundle with mobile network services.
We can't begin to stress how urgent the matter has become. At the same time as music creators have been losing revenue from private copying, their income from many other sources has also been in decline, in part due to additional exceptions to copyright introduced in 2012.
The individual Canadian artists and Canadian businesses whose music is copied for personal use can only produce and compete on the international stage if they are paid when their work is used.
We urge the government to immediately follow this parliamentary review with the introduction of legislation, so that the necessary minor amendments to the act can be made as soon as possible.
Thank you for your time, and we look forward to your questions.