Canada's recording industry is threatening to launch legal action against Canadian Internet users who illegally share music files online.

The head of the Canadian Recording Industry Association, Brian Robertson, says his organization will target Internet music uploaders who allow people to access music stored on their computer hard drives.

Robertson says the music industry has been "devastated" by file sharing. He says his group has spent more than $1 million on "a value-of-music public education campaign,'' but the file-swapping continues.

According to CRIA, which represents Canada's major record labels, sales of compact discs in Canada have fallen by $450 million, or 23 per cent since 1999.

Robertson would not say when the legal action would be launched, noting "it would be sooner, rather than later.'' He said the legal action would be similar to lawsuits filed in the United States.

In September, the Recording Industry Association of America launched 261 lawsuits against users who uploaded or shared files using software like Kazaa. The targets included a 12-year-old girl who settled her case for $2,000 US and a 71-year-old Texas grandfather.

But there are some doubts about whether similar lawsuits would be successful here, since Canadian laws on reproducing music for personal use differ.

For example, it has been legal in Canada since 1998 to make a single copy of a recording for personal use, such as copying a CD onto your hard drive or MP3 player. But the practice is illegal in the U.S.

But under the Copyright Act, it remains illegal to give or sell a CD copy to a friend, since it's not for personal use. In the same vein, distributing copies to friends online is prohibited.

Last week, the Copyright Board of Canada gave the go-ahead on a new levy for MP3 digital audio recorders with non-removable memory. The board ordered tariff of up to $25 be applied to recorders, depending on the size of their memory.

The fight to add levies on recordable devices was spearheaded by a group representing the music industry, the Canadian Private Copying Collective, which wanted compensation for lost sales.

The group, which collects the tariffs on behalf of performers, songwriters and music producers, argued that more money was needed to compensate them because of the widespread practice of downloading music.

Meanwhile, SOCAN, the Society of Composers, Authors and Music Publishers of Canada, is arguing before the Supreme Court of Canada that Internet service providers should pay a blanket royalty fee since so many users are downloading music.

They say that because of illegal downloads of copyrighted content, ISPs should pay a blanket annual royalty -- regardless of whether the ISP is transmitting legal or illegally downloaded music.

Jay Thomson, president of the Ottawa-based Canadian Association of Internet Providers says if the suit is successful, consumers could see an increase in their Internet costs and a slowdown in the transmission speed of their Internet communications.

A decision is expected next year.