Article originally published on the Financial Post website by Sarah Schmidt.

OTTAWA — Consumers will be locked out of some digital content they have already paid for and face penalties up to $20,000 if they try to get around any digital lock to copy CDs or DVDs for themselves under Canada’s proposed new copyright bill.

The federal government tabled the legislation in the House of Commons on Thursday, dubbing it as a "Made in Canada" solution to stamp out online piracy. "This is truly a win-win for Canadian consumers who use digital technology and for everyone who creates material that becomes digitally accessible," said Industry Minister Jim Prentice.

But just as soon as the government unveiled the details, the proposal split members in the arts and business communities over whether the hard line approach is the right way to deal with consumers in the digital age. And some rebranded it as an American duplicate.

Only in cases where companies do not put a digital lock on their material will consumers be allowed to make a backup copy of a legally purchased CD or DVD, or transfer it to an MP3 player or another device for personal use. And while the new bill proposes to make expressly legal the "time shifting" of television programs through widely used personal video recorders, there is a catch.

The shows cannot be kept indefinitely to build a library of recordings, and if broadcasters block the ability to digitally record certain shows through broadcast flags, consumers will not be allowed to get around that lock legally. The legislation also proposes a ban against tools to circumvent digital locks.

"The effect of the digital lock provisions is to render these rights virtually meaningless in the digital environment because anything that is locked down cannot be copied," said Michael Geist, a law professor specializing in digital copyright at the University of Ottawa.

Mr. Prentice defended the approach, saying it strikes the right balance in changing times.

"Think about it in these terms: 10 years ago, the first portable MP3 player hit the market. The 1998 version bragged about storing up to one hour of music. Today’s players can hold thousands of songs, videos and photographs," said Mr. Prentice, pointing out Canada’s copyright law was last amended in 1997.

In cases where people download copyrighted songs or other digitized material, penalties will be capped at $500. But in cases where teenagers legally purchase songs online, then e-mail them to a friend or share them through a peer-to-peer service, this transgression will still carry a maximum penalty of $20,000 per copyrighted song.

Duncan McKie, president of the Canadian Independent Record Production Association, was quick to praise the government for starting "on the right road. I think they’ve addressed the right issues. I think they’ve been sensitive to everyone’s concerns."

He added the music industry isn’t keen to take regular consumers to court to collect damages. The industry is more "concerned with the most egregious violators, people who try to make a business out of the trade of illicit and infringing materials. I’m not really concerned about people in their basements sharing a few files here and there."

The Canadian Record Industry Association, the Canadian Music Publishers Association and the Alliance of Canadian Cinema, Television and Radio Artists also applauded the draft legislation.

But the Canadian Music Creators Coalition slammed the bill, characterizing it as "an American-style approach to copyright. It’s all locks and lawsuits," according to Safwan Javed, coalition member and drummer for Wide Mouth Mason.

"Rather than building a made-in-Canada proposal to help musicians get paid, the government has chosen to import American-style legislation that says the solution to the music industry’s problems is suing our fans," said Mr. Javed.

The coalition of nearly 200 Canadian acts includes household names Avril Lavigne, Sarah McLachlan, Broken Social Scene, Matthew Good, Billy Talent, Sloan, Chantal Kreviazuk, Sum 41 and Sam Roberts.

The minister was set to table the legislation last December, but pulled it amid concerns the Canadian legislation too closely resembled the U.S. Digital Millennium Copyright Act, recognized as the toughest legislation worldwide. Like the Canadian proposal, the U.S. law takes a hard line circumventing digital locks, even for legally purchased content for personal use.

If passed into law, Internet service providers in Canada will get a reprieve, an area where Canada deviates from provisions under U.S. law.

The American legislation requires ISPs to block access to allegedly infringing material or remove it from their system when they receive a notification claiming infringement from a copyright holder or their agent. The proposed legislation will require ISPs to forward a notice of infringement to the subscriber, a so-called "notice and notice" system already widely used voluntarily in Canada.

But Mr. Geist says an absence of a U.S.-style "notice and takedown" system under Canadian copyright law could be meaningless if Canada signs on to the proposed Anti-Counterfeiting Trade Agreement (ACTA). Mr. Prentice confirmed Thursday that the government is working to reach such a deal with international trading partners.

An ACTA discussion paper, recently leaked on the Internet, could require ISPs to filter out pirated material, hand over the identities of customers accused of copyright infringement, and restrict the use of online privacy tools.

The fate of the Canadian legislation was in doubt on the same day it was tabled, as opposition politicians lined up to question key aspects of the proposed legislation. The government will require support from some opposition Members of Parliament for the bill to become law. It could also die on the order paper if an election is held before it’s fully debated.

Liberal heritage critic Denis Coderre suggested the maximum penalty of $500 for downloading copyrighted songs may not protect creators. Besides, he said, enforceability is a real problem. "Are we going to have cyber police now? How are they going to manage to go and keep respecting privacy in the house."

Charlie Angus, digital affairs for the NDP, said the digital lock provisions around personal use pose a real problem. "The fact is this bill was not created with any serious consultation with any of the stakeholders, except, as far as we could tell, the American lobby interests."

The proposed legislation creates specific education and research provisions, which will allow teachers and students to use material they find online as long as it’s used for educational or training purposes. They’ll also be able to use copyright material in lessons conducted over the Internet.

Librarians will also be to digitize print material and send a copy electronically to a client through an interlibrary loan. The client, in turn, can print a copy on their computer.

"This is a huge benefit for educational institutions, and certainly the publishers and authors will be disappointed by the breadth of it," said Mark Hayes, a partner in the Intellectual Property Group at the law firm of Blake, Cassels & Graydon.