If you didn't hear about it, Canadian record labels and their stakeholders were dealt a blow on January 10th. The Canadian Federal Court of Appeal crushed, swept up, and dumped the so-called "iPod Tax" before throwing some used kitty litter on it for good measure.

If you've been too busy managing your torrents and wondering how you've survived since Oink! was knocked down, hit the jump for the skinny.

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The CRIA has long been something of the annoying little Canadian brother of the RIAA, famous for suing 21,000 American citizens as young as 12 years old for sharing music on peer-to-peer (p2p) networks. the CRIA have had a harder time than its USA sibling in its pursuits, thanks to the Canadian legal system consistently blocking their attempts. 2004's BMG Canada vs John Doe case was one of their bigger upsets, with the judge ruling that making music available for others to download not akin to the distribution of said music.

Burn. After this and several other failures, the CRIA decided to back what many dubbed the iPod tax. It later reneged its support of the levy (prior to the levy getting shown the proverbial door), and I'll go into a little more detail on that decision a paragraph or two below.

The latest verdict, handed down on January 10th, has more to due with collecting taxes and fees rather than targeting specific Canadian citizens. The proposed levy would've had consumers paying taxes on digital media as small as flash memory cards all the way up to high-capacity hard drive mp3 players. The tax would've maxed out at $75 added onto the final price of 30 gigabyte hard drive/flash-based media players.

When you're already paying $399.99 for your fancy-schmancy iPod Touch 16gb, plus gst/pst, those extra 75 bones really add up.

A major complaint that consumers had leading up to the decision was that the tax assumed that users would be copying media either previously purchased in a different format, or just flat out stealing the product. The fact that Canadians have had to pay this tax for years on blank discs has long since brought my blood to a boil as it forces consumers to pay for a product more than once. Legal licenses granted to consumers aside, it's fucking insulting and anti-consumerist.

With the proposal having been shit-canned, however, Canadian don't have to worry that their portable music player of choice will hit the $600 mark. But why would the CRIA withdraw support for the tax? If they rang enough bells it might've gotten pushed through, after all.

Ars Technica believes that the CRIA came to see the iPod tax as a potentially monstrous loop-hole for copyright violators to repeatedly jump through.

The [CRIA] withdrew its support for the iPod Tax once it realized that a legal argument could be made that such levies would give Canadians broad non-commercial rights to copyrighted materials. In short, some believed that the levy would essentially legalize P2P, and the CRIA didn't like the chances of that becoming common opinion.

Similar to how the big four have recently decided to test the non-DRM waters (in favor of watermarking, likely to track the movement of files on the net in an effort to further lobby American law makers. In other words, it's no better for the consumer!), the CRIA is going to have to look at other ways of pleasing the industry dinosaurs while still pissing off consumers as much as possible.

If you need to reach me I'll be on Mininova.

Original photo by Moonwire, posted on the blogTO Flickr Forum