December 18, 1999

              Feds slap tape tax on blanks

              Consumers pay $9M to artists

                     By STEPHANIE RUBEC -- Ottawa Bureau

                OTTAWA -- The feds have slapped a tax on blank tapes in time
              to penalize Christmas shoppers.

               Heritage Canada plans to make $9 million off Canadians who buy
              blank audio tapes, MiniDiscs, CD-ROMs and CDs by next
              Christmas, and then distribute the cash to a select group in the
              Canadian music industry.

               After a year-long debate on how to enforce the tape tax, the
              Copyright Board unanimously voted to collect 60.8¢ per CD,
              5.2¢ per CD-ROM and 23.3¢ per blank tape starting today.

               Digital audio tapes and micro cassettes have been spared
              because the board found they're generally not used for private
              copying.

               The amounts are set for a year and will then be reviewed. The
              cash collected will go to artists who have their music played on
              radio.

               Claude Majeau, Copyright Board spokesman, said he hopes
              manufacturers will absorb what he calls a levy, in the name of
              competition.

               "The distributor might want to absorb a certain portion of it so
              they can take the market," he said.

               Majeau said the board needed to make sure Canadian artists
              were compensated for changes in legislation last year which made
              it legal for people to tape off the radio, causing a drop in tape and
              CD sales.

               TAKES THE FIFTH

               Brian Chater, spokesman for the Canadian Independent
              Recording Production Association, said the country's troubled
              music industry will benefit from the cash injection, but wished it
              had been more.

               Chater said the levy is only one-fifth of what he wanted, and
              hopes the amount will be raised next Christmas.

               Chater said it's a small price to pay for the privilege of recording
              music off the radio or dubbing tapes and CDs without penalties.

               Reform MP Inky Mark doubts if any level of the music industry
              will absorb it.

               "To me its like another GST tax."

               Mark said he's skeptical that the up-and-coming artists will see
              any of the tax proceeds and the only artists who will benefit from
              the levy are the successful ones.
 

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