December 15, 2000
1. What is the Copyright Board?
The Copyright Board is an economic regulatory body empowered to establish, either mandatorily
or at the request of an interested party, the royalties to be paid for the use of works protected by
copyright, when the administration of these rights is entrusted to a collective society. The Board
also supervises agreements signed between users and collective societies and can issue licences
when the copyright owners cannot be located.
2. What is "Private Copying"?
Before the Copyright Act was amended in 1998, copying any sound recording for almost any
purpose infringed copyright, although, in practice, the prohibition was largely unenforceable.
The amendment to the Act legalized private copying of sound recordings of musical works onto
audio recording media - i.e., the copying of pre-recorded music for the private use of the person
who makes the copy. In addition, the amendment made provision for the imposition of a levy on
blank audio recording media to compensate authors, performers and makers who own copyright
in eligible sound recordings being copied for private use.
3. Which blank audio recording media are subject to the levy?
Analog Audio Cassette Tapes: All analog audio cassettes with a recording time of 40 minutes or
more are subject to the private copying levy. No distinction is made among types of cassettes
(e.g., normal versus high bias cassettes), nor between standard length and custom length
cassettes or cassettes with other characteristics (e.g., record protect tabs removed) that may make
them less suited to private copying.
CD-R and CD-RW: These digital media are typically used in CD writers found in personal
computer systems. They are used to record and store data, including digital sound recordings.
CD-R Audio, CD-RW Audio and MiniDisc: CD-R Audio and CD-RW Audio are recordable and
re-writeable digital media formats, respectively, that are electronically marked for use in certain
consumer audio recording equipment. MiniDisc is a re-writeable digital medium (i.e., a 2 ½ inch
disc) that relies on data-compression to store recorded music.
Other recording media, including Digital Audio Tapes and microcassettes, typically not used for
private copying, are not subject to a levy. Some media, such as MP3 player memory cards, are
not subject to the levy because the Canadian Private Collective Society (CPCC) did not ask for
one. As markets evolve, new types of blank audio recording media used for private copying may
be identified and be made subject to a levy.
4. I buy blank CDs regularly to use in my computer. Are they subject to the levy and if so,
how much is it?
Both "ordinary" CD-Rs and CD-RWs and their "Audio" counterparts can be used to copy music.
Having said this, most CDs used to copy music are "ordinary" CD-Rs and CD-RWs (for which
the levy is 21¢), not "Audio" products (for which the levy is 77¢).
CD-R Audio and CD-RW Audio products were created at least in part to comply with US legal
requirements. They are encoded so as to be recognized as audio products when played on digital
audio recording equipment and may not be readable by all CD-ROM drives. Otherwise, they are
technologically identical to their non-Audio counterparts.
CD-Rs Audio and CD-RWs Audio are marketed as such, and are sold at a much higher price
(sometimes twice as much or more) than "ordinary" CD-Rs and CD-RWs. They also represent
less than one per cent of the Canadian recordable CD market.
From a practical perspective, if the package of blank CDs you purchase does not state that they
are Audio CDs or "for music use only", then they are subject to a levy of 21¢.
The use to which a recordable CD is actually being put does not determine whether it is subject
or not to the levy. Manufacturers and importers of blank CDs pay royalties on all the CDs they
sell blank.
5. How were the new levies for 2001 and 2002 established?
The Copyright Board conducted a public proceeding, starting in March of this year and recently
concluding with public hearings in November, to review and set new levies for 2001 and 2002.
CPCC filed evidence and proposed levies for this period on behalf of eligible rights holders (i.e.,
eligible authors, performers and makers). Major manufacturers and importers of blank audio
recording media were represented in the proceeding by the Canadian Storage Media Alliance
(CSMA).
The new rates announced today are based on the evidence provided by these parties along with
testimony provided by expert witnesses appearing on their behalf during the public hearings
phase of the proceeding. The case was heard by a panel of Copyright Board members composed
of the Honourable Mr. Justice John H. Gomery, Chairman, Stephen J. Callary, Vice-Chairman
and CEO and Sylvie Charron, Member. The decision was unanimous.
6. When will the Board's reasons explaining how the new levies were set be issued?
The public hearings phase of the proceeding was completed only a few weeks ago in late
November. In order to ensure that the new levies could be implemented on schedule for January
1, 2001, the Board released its decision regarding the level of the new rates today. However, the
detailed reasons for the new levies, explaining the methodology and data used to set them, will
be issued early in the New Year.
7. What are the new private copying levy rates set by the Board?
Effective January 1, 2001, the Board has certified that the following levies come into effect:
- Analog Audio Cassette Tape (of 40 minutes or more in length): 29¢ per unit
- CD-R and CD-RW: 21¢ per unit
- CD-R Audio, CD-RW Audio and MiniDisc: 77¢ per unit
The new levies are certified by the Board for the years 2001 and 2002.
8. The new levies have increased from current levels. What are existing levy rates?
The existing private copying levies, which were set by the Board in December 1999, are as
follows:
- Analog Audio Cassette Tape (of 40 minutes or more in length): 23.3¢ per unit
- CD-R and CD-RW: 5.2¢ per unit
- CD-R Audio, CD-RW Audio and MiniDisc: 60.8¢ per unit
These levies remain in effect until December 31, 2000.
9. Why have the levies been increased?
In setting the new levies, the Board took into account the evidence and testimony provided by
both the CPCC and CSMA. This evidence demonstrated that significant changes in private
copying behaviour had occurred over the last year since the Board set the existing rates
including, among other things, increased usage of digital media, such as CD-Rs, for the copying
of pre-recorded music. The Board's detailed reasons for its decision regarding the new levies will
be issued early in the New Year.
10. Who pays the levy?
Manufacturers and importers are responsible for paying the levy on each unit of leviable media
that they sell or otherwise dispose of in Canada. While the levy is paid at the wholesale level, the
cost of the levy could be borne, in whole or in part, by retailers and other distributors and, in
turn, passed on to consumers. Consequently, while prices for blank audio recording media have
generally been declining, the prices consumers pay for recording media could likely be higher
than otherwise as a result of the new levy rates.
Based on its projections of leviable blank audio recording media sales in Canada for 2001 and
2002, the Board expects that the private copying levies will generate approximately $27 million
in 2001 and $32 million in 2002.
11. Who benefits from the levy?
The entitlement to receive remuneration in respect of private copying of sound recordings
applies to eligible authors, performers and makers. This is a corollary to the right of individuals
to copy musical works for their own private use.
The Canadian Private Copying Collective (CPCC) has been designated as the collecting body for
the private copying levy. CPCC is also responsible for distributing the funds generated by the
levy to the collective societies representing eligible authors, eligible performers and eligible
makers. The member collectives of CPCC include:
Canadian Mechanical Reproduction Rights Agency (CMRRA)
Neighbouring Rights Collective of Canada (NRCC)
Société de gestion des droits des artistes-musiciens (SOGEDAM)
Society for Reproduction Rights of Authors, Composers and Publishers in Canada
(SODRAC)
Society of Composers, Authors and Music Publishers of Canada (SOCAN).
12. Is anyone exempt from paying the levy?
The Board cannot grant exemptions from the levy. However, the Copyright Act does grant one
exemption to associations representing persons with perceptual disabilities. In this respect, to
help mitigate the effect of the levy on certain groups, the CPCC has implemented a zero-rating
scheme which permits manufacturers and importers to sell blank audio recording media to
certain categories of users without having to pay the levy. These include religious organizations,
broadcasters, law enforcement agencies, courts, tribunals, court reporters, provincial ministers of
education and members of the Association of Universities and Colleges of Canada, music and
advertising industries. This waiver applies to all blank audio recording media except CD-Rs and
CR-RWs. Those interested in finding out more about the terms and conditions of the zero-rating
scheme may contact CPCC at telephone (416) 486-6832 or visit its Web site at: www.cpcc.ca.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.