"Two main factors led the Board to raise the CD levy rate to 29ʼ", said Claude Majeau, Secretary General of the Board. "First, the mechanical royalties that record labels pay to record a song onto a prerecorded CD have increased. Second, because consumers now use compression technology when they record music, the average number of music tracks copied onto a CD went from 15 to more than 18."
Manufacturers and importers of blank audio recording media are required to pay private copying levies to the Canadian Private Copying Collective (CPCC) when these media are sold in Canada.
The amounts collected by CPCC are distributed to eligible authors, performers and producers of recorded musical works copied by individuals for personal use in Canada.
Even though the CD levy rate has increased, the Copyright Board of Canada expects that the total amount of royalties CPCC collects will remain relatively stable, at about $30 million per year. This is because the sales of both blank audiocassettes and CDs are expected to decline, as individuals abandon these media for digital players, which cannot be levied as part of the private copying regime.
The Board is required by the Copyright Act to set rates retroactively to January 1, 2008.