How the iPod Tax Affects the Cost of Your Smartphone in Canada

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tony clement
Photo taken by BlackBerryCool at the event

Today in Ottawa, Tony Clement, Minister of Industry, and the Honourable James Moore, Minister of Canadian Heritage and Official Languages, issued the following statement:

“We are here to confirm that the Harper Government will not bring in an iPod tax as part of its copyright legislation. The iPod Tax has been proposed and supported by all opposition parties.

“We simply cannot support the opposition’s massive new iPod Tax on Canadian music lovers. The iPod Tax would add up to $75 to the price of every mp3 player and smartphone on the market. It would hurt the economy, punish consumers and families, and send the wrong message during this fragile economic recovery.”

For those who aren’t aware of the situation, the “iPod Tax” stems from a levy that was introduced in 1997 on blank audio recording media including cassettes, CDs and MiniDiscs. The taxes collected from the sale of this blank media would be distributed to members of the Canadian Private Copying Collective, as a way of compensating for possible piracy. Since then, there has been a constant fight to expand what is considered “blank media” to include MP3 players, computers and smartphones.

Based on proposals from the Copyright Board, the iPad Tax would increase the cost of your MP3 player or smartphone, anywhere between $25 and $75, depending on storage capacity. It’s not obvious how this applies to a BlackBerry, considering the storage capacity differs based on what type of MicroSD card you’re using, but rest assured you’re being taxed as much as possible. Here is how you’re taxed based on storage capacity:

No more than 1 GB-$5
More than 1 GB and no more than 10 GB-$25
More than 10 GB and no more than 30 GB-$50
More than 30 GB-$75

Bill C-32 has been introduced by the government to amend the Copyright Act, which seeks to stop the extension of the levy (although not remove it entirely). The bill focuses on piracy and gives more rights for creators to control their works, but tries to avoid putting a greater tax burden on the consumer.

UPDATE: Dr. Michael Geist, law professor at the University of Ottawa who holds the Canada Research Chair in Internet and E-commerce Law has a funny blog post about the event. From the post:

“It also means making it more expensive for Canadian consumers to switch from devices such as the iPad to RIM’s Playbook, the forthcoming alternative from Canada’s leading technology company.”

  • http://www.blackberrycool.com/ Kyle McInnes

    About this line in the above: “The bill focuses on piracy and gives more rights for creators to control their works, but tries to avoid putting a greater tax burden on the consumer.”

    This is probably the biggest point of contention in this debate. Geist would probably tell you that the entire event is a ploy to distract Canadians from the copyright bill which takes away consumer rights and forces a digital lock on media, hence the cost of switching to a PlayBook.

    Not sure entirely where I stand on this issue as it does seem like Canada’s copyright legislation hurts consumers in many ways. I’m assuming our lack of access to American media is because our laws aren’t updated. On the other hand, paying twice for media already purchased seems a little extreme.

  • http://appworld.blackberry.com/webstore/vendor/1111 Eric at Ebscer

    There are similar laws in the US in regards to blank CDs and DVDs.

    It really is a law that quickly became technologically irrelevant, as most people hardly ever put music onto a CD anymore. Mostly I see blank CDs used to pass out self created PowerPoints and other documents rather than anything that would otherwise get royalties.

  • Rob

    The current approach suggested by the Conservative party is in the wrong. Everyone else, including many independent advisors would go the other way. Read about it…

  • Rob

    The current approach suggested by the Conservative party is in the wrong. Everyone else, including many independent advisors would go the other way. Read about it…

  • http://www.americanrecordablemedia.com/ Buy Blank CD

    Tax really sucks especially those ones who are gadgets or other technology items. In Asian countries especially in the Philippines the cost of $100 phone in the US costs 200 or even 250 USD in that country.

  • http://www.americanrecordablemedia.com/ Buy Blank DVD

    iPod tax plus shipment to other countries will definitely costs more than that almost 10x more than the iPod tax.

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