Clement Speaks on Artist Compensation Levy

by Jordan Richardson on November 18, 2010

Industry Minister Tony Clement has offered his comments on the proposed artist compensation tax I discussed yesterday. In a predicted response, Clement said that the proposed levy would hurt the market for the products under the proposed taxation collective and harm the innocent.

The ACTRA idea would extend an existing levy on CDs and media devices, including BlackBerry units and iPhones, to compensate artists for inevitable file-swapping. Canada already has an existing levy on CDs intended to do this purpose, but ACTRA wants the tax extended to cover digital media devices. The current tax only collects about $15 million a year, as most of the file sharing is done via other means.

Clement, however, says that the change in the industry makes the levy idea a dinosaur. “The business model that the original levy was [based] on has changed. The whole music industry has changed. The whole entertainment industry has changed,” he said.

Clement also warned of an underground market for iPhones and smart phones created by those trying to avoid the extra tax.

Ottawa’s solution, says Clement, is to go after “the bad guys.” The “bad guys” are, of course, all those nasty pirates. As I mentioned in yesterday’s discussion, the general attitude of the Conservatives here is to increase the punishment and penalties with respect to piracy.

In other words, instead of a tax of a few dollars on the purchase of an iPod, Mr. Clement and the Tories support harsher fines directed to the “crooks” that are committing the ultimate sin of file sharing. In doing so, Clement is handing over the task to the entertainment industry executives and ensuring that penalties that far exceed the damage of the “crime” continue. This means more cases like Jammie Thomas-Rasset in Canada and less money for the performing arts community.

As for the artists themselves, the ones who would benefit from the proposed levy, Clement’s answer is clear. “Many creators have come up with ways to create a new revenue stream whether through the internet or by other means for their creation and that’s what I would encourage ours to do as well,” he said.

In sum, the proposal to affix a small levy (the current one is 29 cents on a CD) to compensate for the legal copying of the content from the CD to digital media or elsewhere is a “dinosaur.” The idea of enforcing harsh copyright penalties to punish the “bad guys,” however, is not. Furthermore, the artists who can’t make it because of this environment can figure it out for themselves.

Clement, incidentally, is an iPhone owner.

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