The opening day of Canadian Music Week saw heated discussion on who should pay for losses incurred by record companies due to piracy, with many suggesting Internet service providers are central to a solution.

A standing-room only crowd watched a group of international experts, as well as an executive from telecommunications giant Rogers Communications Inc. and the head of the Canadian Association of Songwriters, debate the merits of either placing a tariff on all IPS and mobile accounts, or forcing ISPs to pay for pirated music that crosses their networks. The SAC, led by its president, Eddie Schwartz, put forward a proposal in December that said a $5 levy should be placed on each Canadian mobile and broadband internet connection. That money would then be used to pay music organizations for losses incurred due to piracy, and would essentially make file sharing legal in the country.

Schwartz said it has been almost 10 years since the launch of Napster and that members of his organization have been devastated by illegal downloading.

"We sat on the sidelines," he said. "We come to this party rather late."

Mario Bouchard, general counsel for the Canadian Copyright Board, said while he prefers a "market-based solution," he added after the panel that the government could amend current laws to make ISPs liable for all pirated material that is transferred on their networks.

Michael McCarty, president of EMI Music Publishing's Canadian operations who was in the audience for the debate, sided with Bouchard.

"One way to be sure the ISPs come to the table and are open to discussion is to make them liable for what goes on their networks," McCarty said.

But Ken Thompson, director of copyright law for Rogers Communications, said the tariff solution was unworkable and it was too easy to make the ISPs a scapegoat for all the failures of the music industry. A levy could also violate international trade treaties, he added.

In other new:

-- Jim Balsillie, co-CEO of Blackberry giant Research In Motion Ltd., kicked off Canadian Music Week with the announcement of a partnership called DipDive, a social networking platform created by, a member of the Black Eyed Peas. The move is designed to take RIM, based in Waterloo, Ont., deeper into contact with social networking.

"It defies categorization, but it will be categorized in a few months," Balsillie told the audience.

Some pundits in attendance at the conference saw the move as a means for RIM to move further into the consumer market, and defend itself from Apple's iPhone.

Balsillie added that RIM expects to launch other entertainment-based applications for the Blackberry, noting the company is regularly approached with partnership opportunities.

-- In a state of the Canadian industry, Chris Muratore, Director of Retail Relations and Research Services for Nielsen Entertainment, said while retail music sales are down 13% for the first two months of 2008, digital sales continue to surge. Digital album sales in the year are up 83% from the same period in 2007, and in the first two months of the year digital album sales have accounted for 10% of overall sales. Digital track sales are up 58% with an expectation of 40 million tracks being sold over the Internet and mobile phones over the course of the year.

Muratore pointed out Quebec lags well behind Canada in terms of digital sales, accounting for 29% of overall physical sales across the country, but only 10% of digital sales.

-- Nettwerk founder Terry McBride and Canadian Idol producer John Brunton are being elected into the Canadian music hall of fame at a ceremony that is part of the Canadian Music Industry Awards.