Number Crunching

Earlier this month, U.S. Ambassador David Wilkins stepped up the pressure on Canada on copyright.  The speech that launched a round of media coverage has now been posted by the U.S. Embassy.  The relevant passage is:

We are asking the Government of Canada to strengthen your copyright laws. There is a lot of pirating that goes on, a lot of counterfeiting of movies and songs and whatnot. And it is not some effort to protect some high-paid Hollywood star or studio, it is about ensuring that Canadian and American innovators and entrepreneurs are encouraged and protected so they will continue to make North America competitive in the world marketplace.

And we are working with the Canadian government now on that issue. We have met with Ministers Bernier and Oda and members of the Prime Minister's staff and we are requesting a stronger copyright bill be introduced and be passed. We are joined by the U.S. and Canadian motion picture and sound recording and computer software industries. Right now the copyright laws or the intellectual property right protection in Canada is considered the weakest of the G-7 countries. So we are asking that be strengthened. And it really does cost the Canadian economy a huge amount every year. It is estimated to be from some $10 to $30 billion per year.

Leaving aside the rhetoric, what is particularly remarkable about these comments is the claim that Canadian copyright law is costing the economy between $10 to $30 billion per year.  Obviously any estimate that varies by up to $20 billion is not particularly credible.  Further, even the low end figure looks ridiculous as it is four times the losses claimed by the MPAA in China and is more than three times the total amount of cultural goods that Canada imports from the U.S. every year.  Or considered another way, the $10 billion figure is more than the Finance Minister committed yesterday to new health care initiatives, the environment, education, and special services for armed forces veterans combined.  And that is the low end – the $30 billion figure represents nearly 13 percent of total government revenues and nearly equals the total amount of provincial transfers and subsidies.  All of this from "a lot of counterfeiting of movies and songs and whatnot?"


  1. When will those idiots in the pay of the movie and music industry learn to stop pulling random numbers out of their asses. Its not like large numbers grab people’s attention anymore anyway. I wonder why there isn’t a law against trying to lie to the people and distorting the facts. That would solve this problem pretty quickly. Then again, the government would probably collapse as they’d fall afoul of this law quite often then.

  2. John Dickson says:

    Deputy Chief of Mission, US Embassy
    Before more people question the numbers and throw around insults, it might be useful to ask a question – where did Ambassador Wilkins get those figures?

    From the RCMP for starters. Check out his site [ link ]

    He is quoting Canadian sources.

  3. Chowarmaan says:

    Keep reading the same article though, the RCMP indicates that 90% of the $10-30 Billion comes from external sources to Canada.

    From the article:
    * cost estimated between $10 – $30B annually – no comprehensive studies available
    o software piracy losses – approx. $736M/year, tax losses – approx $345M , job losses – approx. 32,000
    * 90% produced from external sources, 10% from domestic
    o Asia – particularly China – main source
    * increasing number of counterfeit goods seized – and a wider range of products and sale venues, including large retail chains
    * significant cross-border movement – both from and to the US
    * no longer confined to luxury goods and apparel
    o electrical products, pharmaceuticals, automotive parts, food products
    * organized crime – especially Asian-based – primary actor
    o often operate through import-export and retail companies – conceal counterfeit items in shipments of legitimate goods

  4. Oh yes, an RCMP publication as a resource for numbers… when it clearly states that there is no comprehensive studies available to back up those numbers. In any scientific field, that would NOT be an acceptable source of information and people trying to use it as such would be subject to ridicule. It _IS_ the equivalent of pulling numbers out of \\\’no where\\\’.

  5. I have a quote for the Ambassador:
    “Canadian officials would rightly never tolerate any American official dictating to them […]”

    OK, I took the quote out of context; it still fits.

  6. Tim Armstrong says:

    Assistant Professor of Law, University o
    I suspect that the figure ultimately rests upon an extrapolation from the high statutory damages provided under U.S. law for copyright infringement. That is, multiply the number of alleged acts of infringement times US$750, the minimum damage award provided under Section 504 of the Copyright Act, and call that figure the “loss from piracy.” It’s not a loss in the sense of an out of pocket cost, but only in the sense of the forgone aggregated awards of damages should copyright infringement cases actually be filed and proved in the U.S. By lobbying for successive increases in the statutory damage awards (as the content industry did in 1999, for example, increasing the minimum from $500 to $750), the industry magically increases its claimed “losses from piracy” in like measure.

  7. Ray He nry says:

    I’m intrigued by the claims of how pirating takes money from the economy and taxes keeps coming up. Has nobody figured out that the greatest portion of the lost revenue actually leaves the country? As in goes to Hollywood? As for the tax loss, I’m not buying into that. Sure, the maybe pirating costs specific industries money, and of course there would be taxes. But does everyone think that Canadians are filling their mattresses with all the money saved by our “lax” copyright laws? No, that money is spent elsewhere (camcorders, perhaps?), and the gov’t gets the taxes there. At the end of the day, Canadians have only so much money to spend. Generally speaking, we spend it all. So the best one could say is that were pirating completely removed from the lives of Canadians, taxes paid in other areas would decrease as we (maybe) spent more of our finite income in the theaters. Get rid of pirating, the gov’t wouldn’t get a penny more in taxes. We don’t have any more money to give.

  8. I have a study of my own. I have learned that there are between 10 and 30 billion exagerations about the Canadian copyright problem every single day. I would like the staff at the Prime Minister’s office to take my equally scientific study under advisement.

  9. The United States does not provide for moral rights in works except in limited cases, despite their existence in the Berne Convention and the International Covenant on Economic, Social and Cultural Rights. These rights are designed to protect things like the author’s honour and reputation. In this regard, the U.S. is out of step with the rest of the world which protects the dignity of the author, which, as Kant said, is incomparably greater than any market price – even of $30 billion! I am sure the Deputy Chief of Mission of the U.S. Embassy will undertake to work with a Canadian delegation to assist Congress in immediately introducing these rights in the U.S. in order to correct this grave affront to artists’ dignity.



  10. Jon Dixon:

    Aside from the fact that the RCMP has been shown to too often trust its instincts and bias more than science, or any rational analysis (two famous examples being its scientifically untenable opinions on harm reduction, and its utter bungling of Maher Arar’s case), why should anyone believe to be reliable conclusions that are honestly admitted in the document in question itself to be just back-of-the envelope calculations? It is disappointing that an official of the US government should cherry pick conclusions of this document, omitting the document’s caveats (“no comprehensive studies available”), and have them figure in a bilateral discussion on copyright laws.

    Your Ambassador, mr Deputy Chief of Mission, is failing to advance government through rational discourse. He’s failing his democracy. If you actually personally cared about it, I hope you’ll remind him of this.

    I have hope that the staff of the U.S. embassy will actually read this, given that cullings of web-flotsam form the basis of the official American position towards Canadian copyright 🙂 …