LETTER TO SECRETARY GENERAL, COPYRIGHT BOARD
Comment on the proposed levies on blank audio recording media for the years 2003 and 2004

May 8, 2002

Mr Claude Majeau
Secretary General
Copyright Board
56 Sparks Street, Suite 800
Ottawa, ON
K1A 0C9

Dear Mr. Majeau:

Thank you for the invitation to comment on the proposed levies on blank audio recording media for the years 2003 and 2004. As you know, the Canadian Advanced Technology Alliance, the trade association which represents the Canadian high tech industry, has objected to these levies since they first came into force in 1999.

We wish to offer the following comments on CPCC's proposed levies for 2003-4:

CD-ROM

The increase to 59¢ is unreasonable. It is an increase of 181% over the 2001-2 tax, and more than 100% of the price of a CD. It would be an excessive burden on those buying CD's for business purposes.

Additional Media

The CPCC proposes that removable electronic memory cards, removable flash memory storage media and removable micro-hard drives be added to the list of media subject to levy. These storage devices are commonly used in personal digital assistants, business tools which lack audio capabilities. There is no reason for them to be subject to the levy.

MP-3

In defining MP-3 storage media, the CPCC uses the phrase "device...intended for use primarily to record and play music." CATAAlliance strongly recommends that the Copyright Board apply this definition to all recordable media. Most computers, and almost all PDA's, are not used primarily for the recording or playing of music, and media used in them should accordingly not be subject to the levy.

The levies proposed by CPCC for 2003-4 are extremely high. Since 1999 we have recommended to our members that they avoid the levy on CD's by importing their needs directly from foreign suppliers. When the levy exceeds the cost of the CD, as CPCC proposes, the import strategy will become ubiquitous. There will be no Canadian market for CD's and other removable media. Devices with embedded storage will be priced out of the market in Canada, so consumers will buy them in the United States. The economic impact of the levies, on jobs and business, will clearly be negative.

CATAAlliance urges the Copyright Board to maintain the existing levies at the 2001-2 rates for the next two years, to limit levies on new media to very low rates, and to give serious consideration to extending CPCC's "device...primarily to record and play music" definition to all recordable media. Thank you again for the opportunity to comment.

Yours sincerely,

David E. Paterson
Executive Director, Ottawa