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Music Canada Calls for $40 Million Annual Handout Instead of iPhone Tax

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Music Canada, a Toronto-based organization that represent the interests of companies that record, produce and distribute music in Canada, has called for an annual $40 million handout instead of applying a tax on all iPhones and other smartphones, as the Standing Committee on Industry, Science and Technology continues its copyright review (via Michael Geist).

Music

President and CEO of Music Canada, Graham Henderson, appeared before the Committee yesterday to make his case for copyright reform.

He argued that the creation of an interim four-year fund of $40 million per year will ensure that music creators continue to receive fair compensation for private copies made until a more permanent, long-term solution can be enacted.

The demand for an annual $40 million taxpayer handout makes sense from the industry’s perspective when you review how the CPCC, the collective responsible for administering the system, distributes its revenues. First, last year a hefty 28% of its revenues went toward administration, meaning that more than $11 million would go toward administrative costs, not musicians.

Second, the CPCC’s distribution framework allocates 18% of the remaining revenues to record companies, not authors, publishers or performers. That means millions to record labels, not musicians. 

One hopes the committee will recognize the annual $40 million handout request has nothing to do with business models or the state of industry.

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