Canadian users used to downloading the latest music track from their favorite artist, or snagging the newest movie release without paying for it will now be receiving notices from their Internet Service Providers (ISPs) regarding illegal downloading activity due to a new Canadian Copyright law which came into place on January 1st.

The federal law, called the Copyright Modernization Act, requires that ISPs forward copyright violation notices from copyright holders to customers associated with the IP address where the downloading has occurred. The ISP or website host must also keep records of such notices for six months in case the copyright holder decides to proceed with legal action against the alleged infringer. The notices are intended to protect the ISP from future lawsuits, providing they pass them along as required by the new law.

While such notices do not carry any immediate legal ramifications, Internet lawyer Allen Mendelsohn told CTV’s Canada AM that they do serve as “a warning” that a copyright holder has noticed illegal downloading activity at your IP address, and could decide to sue.

If a copyright holder decides to sue, a convicted infringer could face fines of up to $5,000 if the download of copyrighted material was for personal use, while downloads that lead to commercial gain can see damages of up to $20,000.

The Copyright Modernization Act has been called one of “the most restrictive in the world” due to some of it’s digital lock protection limitations. The law doesn’t stop at just ISPs however, and also requires VPN services to forward these notices on and disclose subscriber information if requested. One of the key features of using a VPN service is a guarantee of anonymity of it’s subscriber base. Many VPN services use shared IP addresses for their customers which would make identifying the alleged user difficult, if not impossible. ISPs and VPN services that fail to comply can face fines of up to $10,000.

What do you think of Canada’s new law requiring ISPs and VPN services to forward these notices to their customers? Let us know in the comments below or on Google+, Twitter, or Facebook.