Study: Software piracy on the rise in Canada

According to a study released by The Canadian Alliance Against Software Theft (CAAST) on Tuesday, all but four Canadian provinces indicated a rise in software piracy – results which mean huge economic losses for the country.

According to the report, Alberta, Ontario, the Northwest Territories and Quebec have the lowest software piracy rates and are the only provinces below the national average of 39.4 per cent. The highest instances of software piracy came from Prince Edward Island with a rate of 65.3 per cent, an increase of 15 points over 2001.

Allan Steel, director at large for CAAST in Toronto, said the reasons that one province has a higher rate of software piracy over another is generally due to one of two possibilities: hard provincial economic times, or a lack of understanding as to what software piracy is.

Before acknowledging the full extent of the repercussions that can come with software piracy, companies need to have a better understanding of what intellectual property is, said Steel, adding that Canada lost $408 million in retail sales of business software applications in 2002.

Steel said it is difficult for people to understand that the information found on small insignificant-looking compact disks have value to them and added that many software programs have price tags of thousands of dollars.

“If you equate it to a vehicle, if a vehicle was stolen I’m sure that people would take a different perspective on it,” he said.

Steel said that it is especially important for Canadians to avoid this type of copyright infringement because of the amount of software this country has begun to export annually.

“This is becoming a forte for Canada and it is pretty hard to have people around the world respect your intellectual properties if [we] won’t even respect them at home,” Steel added.

Software piracy was also the reason behind $1.9 billion in lost wages and more than 32,000 lost jobs, according to the report. Steel said it is up to government agencies to look at piracy and understand that copyright infringement is not only impacting the software publishers and related IT industries, but that it also impacts the government in lost revenues from taxes placed on the legitimate sales of software.

“We would like the government to take a harder look at what the impacts are and assess fines and legislation to appropriately fit the software industry,” he added.

Steel explained that often times companies don’t purposely go over software licensing boundaries and that organizations often have the best of intentions to buy additional licenses, but often these good intentions don’t lead to payments.

Organizations typically caught in a crunch and copy a couple of applications over onto additional machines, and once the crisis is over the company simply forgets to pay for the added licenses, Steel explained.

“And another situation that happens all too often with organizations is that as a department upgrades its hardware, they take the old hardware and put it into another department that continues to run the software that’s on it, and load the old software that was used in that department onto a new computer,” Steel said.

He said the most efficient way for organizations to ensure that they are not infringing on their software licensing agreements is to perform regular audits and strive to keep better tabs on the software being used within the company.

According to an economic impact study of copyright protection conducted by the Business Software Alliance (BSA) and International Data Corp. (IDC) in April, globally 40 per cent of software programs are pirated. A reduction of 10 points could add 1.5 million jobs, increase economic growth by US$400 billion and generate US$64 billion in new taxes, according to the report. [Please see: Reducing software piracy beneficial to economy, study says]

CAAST can be found online at

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Jim Love, Chief Content Officer, IT World Canada

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