Ottawa Business Journal

Software pirates got a little busier in Canada in 2006, with a new study showing that Canada's software piracy rate rose by one percentage point to 34 per cent last year.

The report by the Canadian Alliance Against Software Theft (CAAST) and the Business Software Alliance (BSA) said losses to the Canadian economy due to software piracy totalled $890 million in 2006.

Although Canada remains among the top 20 countries with the lowest software piracy rates worldwide and had a lower rate than the 35-per-cent global average, the country lags behind the United States where the software piracy rate remained unchanged at 21 per cent.

"The fact that Canada's software piracy rate has remained more or less unchanged over the past few years indicate that a lot more work needs to be done before we can achieve rates found in countries that we usually compare ourselves to, such as the U.K. and Australia," said CAAST president Michael Murphy in a statement.

Mr. Murphy said more than one-third of PC software used in Canada in 2006 was obtained illegally, and pushed for stronger legislation to reduce the negative impact of piracy on Canada's IT industry and resources for future innovation.

The study also showed that on a worldwide basis, for every two dollars of software purchased legitimately, one dollar was obtained illegally, with global losses from software piracy last year increasing by 15 per cent from the previous year to US$39 billion.

Of the 102 countries surveyed in the study, the number of countries where piracy rates dropped increased to 62 from 51 in 2005, while 13 countries saw increases in their piracy activity compared to 19 the previous year.

The report singled out the reduction in China's piracy rate, noting that the country had seen a 10-percentage-point drop in its piracy rate in the last three years to 82 per cent, saving more than half a billion dollars in the process.

"The reduction in the piracy rate and the savings are the result of government efforts to increase the use of legitimate software within its own departments, vendor arrangements with PC suppliers to use legitimate software, and increasing industry and government education and enforcement efforts," the study said.

China's piracy rate fell by four percentage points in 2006, its second consecutive yearly decline. As well, the legitimate software market in the country grew to nearly US$1.2 billion last year, an increase of 88 per cent from 2005's numbers and of more than 358 per cent since 2003.

However, China still had the second-highest losses in terms of dollar value, at $5.4 billion. The United States had the greatest total losses to software piracy, at $7.3 billion, despite having the lowest piracy rate of all countries surveyed.

The report predicted that businesses and consumers worldwide will spend $350 billion on PC software over the next four years, with more than $180-billion worth of PC software being pirated during the same period if current trends continue.

In more than half of the countries surveyed, the piracy rate was higher than 60 per cent, while one-third of the 102 countries had piracy rates exceeding 75 per cent, the report added.