Survey: Canada

Software piracy rates jumped slightly in Canada in 2002, as the country continues to lead the United States in theft of commercial software, says an annual survey on global software piracy.

The study, commissioned by the Canadian Alliance Against Software Theft (CAAST) and its sister organization, the Business Software Alliance (BSA), found that although the Canadian piracy rate has decreased seven points over the last eight years, it still trails the global decrease of 10 points over the same period.

The rate in Canada, which currently sits at 39 per cent, has increased by one per cent from 2001. In recent years is has fallen from an all-time high of 46 per cent in 1994, said Toronto-based Jacqueline Famelak, president of CAAST.

In other words, one in three business software applications purchased in Canada in 2002 were illegal. “Although piracy rates seem to be going down in general [across the globe], they are still quite high in Canada,” she added.

Many reasons could be to blame in Canada for the current piracy rate, Famelak said, as software such as the Microsoft Office Suites, Adobe Photoshop and Norton Anti-Virus, are the main victims of piracy each year.

Famelak calls for more education.

“What we try to tell people is that it’s illegal, it’s theft and it’s a criminal act to copy software,” she said. “Not only that but you are going to ruin your reputation as a business and be susceptible to viruses and you are not going to get the proper support you need.”

By educating some of the corporations in Canada, CAAST would like to decrease piracy in Canada.

The fact that the Canadian piracy rate of 39 per cent is significantly higher than the U.S. which has a piracy rate of 23 per cent, is also something for Canadians to be aware of, she added.

“In Canada, compared to the U.S., the penalties in the U.S. for software piracy are very stiff.”

Penalties of up to US$150,000 per software title copied, is an example of the deterrents against software theft with Canada’s neighbours to the south . In Canada, Famelak said, penalties are around $20,000.

“Corporations in the U.S. are under heavy scrutiny and we think that education is getting out there in the U.S. and that’s what we want to do here in Canada,” she said.

Famelak said she would like to see the piracy rate in Canada eventually fall in line with that of the U.S. If the Canadian piracy rate was 16 per cent lower, rivalling the rate in the United States, it could amount to millions of dollars in savings in retail sales.

When it’s all put into perspective though, Famelak said a one per cent increase isn’t something to hit the alarm bells over.

“The increase or decrease by year over year hasn’t been more than two per cent,” she said. “If I see a jump of more than five per cent, than we’re going to have to rethink the way we are doing business here and really start cracking down.”

So while a one per cent difference either way on the rate scale doesn’t make a huge difference, it does affect the retail sales industry.

That one per cent increase in 2002 was also the cause of a significant loss in retail sales, the study said. Losses of sales in 2001 were at $289 million in Canada because of software piracy. In 2002 those numbers skyrocketed to $419 million.

Famelak explained that market expansion has a lot to do with the increase in the loss of retail sales. So while the market has grown for software, the number of software purchases hasn’t followed suit. “So the retail losses have jumped, to an equivalent to a 70 per cent.”

Since 1994, CAAST said the Canadian economy has lost over $3 billion in retail sales of business software applications because of software piracy.

International Planning and Research conducted the study for CAAST and BSA. Later in the year the research company will be releasing statistics on piracy for each province.

The Toronto-based CAAST is a non-profit organization that works with the BSA to provide educational information for corporations, consumers and resellers about software piracy and its implications. It can be found on the Web at