Canadian civilization has blessed the world with many gifts: talented hockey players, SCTV, bargain prices on American prescription drugs, for example. But Dec. 12 the Canadian government bestowed upon the world a most curious unwelcome present -- a new tax on MP3 players.
The Copyright Board of Canada (CBC) decided to hit digital music players with a sliding tax that ranges from $2 to $25 (Canadian) per unit. The proceeds are earmarked to compensate the record industry for the presumed piracy that incoming MP3 players engender.
What's next, a tax on figure skates with the proceeds payable to maligned Canadian Olympians?
Quit your snickering. This is serious business. Canada has had a long-standing tax on other suspect products, like blank tape and discs. It is only one of dozens of countries that impose such a tax. And it could have been much worse. The Canadian Private Copying Collective had been asking for levies of up to 100 bucks on high-capacity digital-music players.
It's no surprise that manufacturers and retailers lashed out against the ruling immediately. The heaviest salvos come from the Canadian Coalition for Fair Digital Access, which includes companies such as AMD
You can't blame them for worrying. As Dave Marino-Nachison pointed out last week, the market for MP3 players is really booming, with heavyweights like Dell and Creative trying to muscle in on the high-end market that's currently dominated by Apple's iPod. Competition tends to shave margins, and making money with thinner margins means selling more units. Who needs an extra 10% price increase to help scare off consumers?
The greater issue, of course, is what the future may hold. The computer industry is likely to remain antsy about operating in Canada if its upcoming storage and media technology are going to be subject to such arbitrary taxation. By the CBC's logic, any memory device, even the ubiquitous hard drive, is culpable and subject to a punitive levy.
Indeed, some other media narrowly escaped last week's ruling. Luckily, the CBC decided not to pursue a tax on DVDs and flash cards. And in a decision that muddles this bear of little brain, the CBC also argued that downloading digital music files from the Web, even without paying, is not illegal.
Huh? Then why tax the medium on which these files allegedly end up?
Sounds to me like Canadian bureaucrats and legislators are suffering from brain freeze.
Former Minnesotan Seth Jayson used to live disturbingly close to Canada, eh. He'd be happy to discuss the media tax with Canadian officials over some walleye fishing in Poobah Lake. Invitations accepted at FoolishSeth@sethj.com .