Oh, Canada!

Oh, those crazy canucks. The Songwriters Association of Canada (SAC) has proposed a $5 monthly fee on the internet, collected by ISPs, in order to compensate artists for songs being transferred via P2P sharing. Yikes. Not that many people would really notice that extra charge (considering they probably already pay a good bit in weird taxes and fees above their rate quote), but this just ISN'T a solution. First of all, how does the revenue from this get distributed fairly and evenly? Chances are pretty good that the vast majority (if not all) of the funds will go directly into the pocket of the major labels. Not only that, but since this would be a new thing, the labels wouldn't be contractually obligated to pay ANY of it to the artists. And if the labels needed another way out of paying the artists, there's no way of tracking exactly how many times each artist's music is downloaded. So what it would come down to is essentially the government taxing people because they're not making as much money as they're used to. Great.
But think further--wouldn't the movie industry want in on this, too? I mean, clearly music isn't the only thing getting pushed and pulled through those tubes of the internet. Heck, I don't have the numbers in front of me, but isn't porn likely to have about as many downloads, too?
Let's break down a few numbers:
Canada's Population= 32 million
Multiply by approx 2/3, since presumably not each individual has their own internet account= 20 million
x $5 = $100 mil
x 12 months = $1.2 billion (1/1000th of Canada's GDP--that's a pretty significant tax)
That's no chump change they're throwing around. Especially since not everyone (in fact, percentage-wise, relatively few) downloads music and movies for free. In fact, it's double punnishment for those who choose not to steal--not only are they taxed for things they don't get (taxation without representation!), but they're also still paying for the music they want.
Am I insane, or is exploiting loyal customers a bad strategy? Clearly the labels are not flat broke (by any stretch), so the majority of people still do evidently pay for their music--why make them pay again?
If, somehow, this proposition gets through, don't be surprised if download rates skyrocket and music sales plummet in Canada. The oldest lesson is business is if you piss your customers off, they'll find alternatives. Why can't industry folks put their money and business accumen to use towards a constructive, rather than destructive solution?