Industry Canada Finalizes Regulations Exempting MicroSD Cards from Levy

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By Peter Menyasz

OTTAWA--Regulations exempting microSD memory cards from the application of copyright levies applied to blank media will support the Canadian government's commitment to promoting development and early adoption of technologies that support the digital economy, Industry Canada said Nov. 7.

The MicroSD Cards Exclusion Regulations, issued under the Copyright Act, would ensure that the copyright levy that applies to other forms of “blank audio recording” media does not impose additional costs on the manufacture or import of microSD cards that are commonly used in smartphones and other devices that drive the digital economy, the department said in an impact analysis statement published with the regulations in the Nov. 7 issue of the Canada Gazette, Part II.

“These regulations will prevent the added cost of a levy from ultimately being passed on to retailers and consumers,” it said. “[They] only seek to exempt a narrow subset of audio recording media. It will be open to the Copyright Board of Canada to consider future proposals on new forms of blank audio recording media.”

Rules Proposed in July
The regulations respond to a July 2012 announcement by Industry Minister Christian Paradis that the government planned to exempt microSD cards after an application was filed with the Copyright Board seeking a levy, the department said (131 PTD, 7/10/12).

The exemption ends what would have been an “illogical” new tax on a range of electronic equipment, Retail Council president Diane Brisebois said Nov. 7. “Imagine buying a digital camera only to discover that you are paying an extra hidden 'tax’ targeted at devices that download and play music.” Brisebois said in a statement. “This action, which is consistent with the government's approach to the digital economy, will save Canadians money and protect consumers from paying a ridiculous tax.”

The Canadian Private Copying Collective, which applied for the levy, stressed Nov. 8 that the regulations hurt songwriters, recording artists, and other rights holders. “Not only is this an unprecedented end-run around the fair and independent Copyright Board process which was established to deal with these kinds of issues in the first place, but to hand down a regulation like this with no consultation period adds insult to injury,” CPCC Chair Lyette Bouchard said in a statement.

The regulations were issued in final form on the basis of an order of the federal cabinet. Normally, regulations are published in draft form in the Canada Gazette, Part I, with a specified public comment period, with the finalized regulations being published later in Part II incorporating changes deemed necessary based on submissions received.

The private copying regime in Part VIII of Canada's Copyright Act provides a legislative framework for remunerating rights holders for the private copying of sound recordings by individuals onto blank media by imposing levies on blank media that are “ordinarily used” by individual consumers to make private copies of music.

The Copyright Board imposed in 2011 private copying tariffs of C$0.29 ($0.28) on sales of CD-Rs and CD-RWs, CD-R Audio discs, and CD-RW Audio discs. The agency also, until 2010, applied private copying tariffs to audio cassettes 40 minutes and longer and MiniDiscs. The Copyright Board launched in early October hearings on the levy that would apply in the 2012-2014 period.

By Peter Menyasz

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