Mr. Speaker, there are times in this parliamentary life when one has to wonder what in the world the government is up to. This particular blank tape levy certainly is one of them.
It was pointed out by the consumers association in its presentation to the committee that the mark-up, which is going to be applied by the government as an additional cost to everyone
buying blank tapes, will be applied at the point of entry into Canada. As everyone knows, about 95 per cent of all of the blank audio tapes sold in Canada are imported.
Therefore, if a nominal 35 per cent charge is applied on to a60 cent tape, now it becomes a 95 cent tape. When it was a 60 cent tape it would have gone from the original importer to some kind of a jobber or distributor, possibly to a wholesaler but more likely directly from the jobber or wholesaler directly to a K-Mart, a Wal-Mart or Eaton's or wherever it would go and we would have a lot of 99 cent tapes or $1.29 tapes with the mark-up applied to the 60 cent landed cost of the tape.
We have been promised what will now happen is the addition of 35 cents, more or less. I do not buy that but let us take 35 cents. Instead of a starting point of 60 cents it will be 95 cents and we will never see 99 cent tapes again. We are going to see a sale price of $1.49 or $1.89 instead of a 99 cent tape.
I do not understand the thought process of the government because if the $12 million it says this tape tax will end up creating was going to be ending up in the hands of the people who they intend for it, I would like to ask who is going to pay the administrative cost to collect the money in the first place? Who is going to pay the administrative costs to be able to distribute the$12 million?
We are going to create a business of collecting and distributing a certain portion of the money that will be extracted from the consumer. The consumer will be paying substantially more because of the decision not only to apply, if it is indeed a 35 cent charge, but the place in which it is applied in the feeding change of the mark-ups. It is applied right at the very start.
If the 35 cents is applied to a 60 cent tape, 95 cent starting point, $1.49 sale price, then on top of that will be the provincial tax and GST applied to the mark-up that was applied to the 35 cent charge. It is absolutely crazy.
This money is not going to get to the people who the government says it is going to get to because of the cost of administration, collection and distribution, really makes me wonder why we are doing this. The minister seems to pride herself very frequently on talking about protecting Canadian culture.
What really goes on more often than not-we just need to take a look at Sports Illustrated for an example-is we end up punching Uncle Sam in the nose. Unfortunately the people on the other side of the 49th parallel have a tendency to get a little bit agitated when we do that.
The industry in the United States is going to say now: "Just a second. Is it not true that the majority of the things that are being recorded from, in other words the CDs and the tapes, is it not a fact that the majority of the music in that medium that is being purchased in a Canadian store is actually an American product?"
The answer to that question is, yes, the vast majority of it is. About 70, 80 to 90 per cent of the product that is being purchased in a store comes through U.S. distribution.
How much logic does someone need to realize that the industry on the other side of the 49th parallel is going to say "you say you are collecting $12 million, we want 80 per cent of the $12 million, we want to collect the money that is due us because the music that is being copied is our property in the first place".
To turn around and make this money available, which will be coming from the blank tapes, exclusively to Canadian based artists and organizations is absolutely going to draw the attention of the U.S. We have already had a warning shot across our bow on this one.
If we are going to be saddling the Canadian taxpayer with taxes on taxes on mark-ups that are created to create this $12 million pool which is going to be attacked by the U.S. government, what are we accomplishing? We are just creating another trade irritant. It does not make any sense.
Furthermore, there is the matter of principle, which we have talked about from a very pragmatic perspective. When the minister was before the heritage committee she said that the vast majority of the 44 million tapes purchased in Canada every year, and there is some question about that number, are being used for the illegal copying of prerecorded material.
What about the churches? What about the colleges? What about the reporters? What about the people putting on sale seminars? What about people who have a legitimate use for these blank tapes? They are guilty by association and they are guilty by virtue of having the audacity to buy a blank audio tape. Suddenly they are guilty of some kind of crime. They are not guilty.
Any law in Canada that as a matter of principle assumes the guilt of a person who is undertaking a normal commercial transaction or indeed doing anything fundamentally in principle is wrong.
In collecting this $12 million, I predict this here and now. I look forward unfortunately with some chagrin to knowing that five years from now we will look back on this speech and be able to say "He was right, we created a trade irritant. That trade irritant actually spilled over to something to do with lumber and to something to do with wheat. It spilled over to something to do with the wool suit trade we have out of Quebec. It was a trade irritant that became part of a conflict between Canada and the United States, all over $12 million that the artists, composers and producers will never ever see".
Why are we doing this? The only answer that I can come up with is that it is very typically Liberal and with due respect to the minister, very typical of the way she does things. If the government does not do it, it will not get done. If the government does not interfere, if the government does not mandate, if the government does not take control, it will not get done.
The mischief that is going to be caused by the blank tape levy I predict within five years will be very measurable. I hope I am wrong but unfortunately I know I am right.
