I'd just like to add that, on top of everything else, this clause will actually make it more desirable for the consumer to download pirated content instead of purchasing it through legitimate channels.
Under the proposed bill, consumers could be liable for $500 in damages for "private use infringements" pursued by the copyright holders.
However, the penalty could rise to up to $20,000 in damages if a consumer hacked a digital lock to make an illegal copy. That includes hacking the anti-copying mechanisms of a computer game to make illegal copies.
Suppose you want a certain movie on your iPod, to watch during a long plane trip. And suppose it is available on DVD, but not through iTunes because Canada sucks that way. You have two options: get the DVD and convert it, or download it. Now suppose you like the people who made the movie and want them to get rich from the movie, so you purchase the DVD through perfectly legal commercial channels. You then remove the copy protection, rip the movie, and put it on your iPod. Guess what? You've just broken the law, and are liable to a fine of up to $20,000. However, if you had simply gone to your favourite torrent site and downloaded the movie, you would be liable to a fine of up to only $500.
The situation in which a person would ever find themselves circumventing copy protection is if they have a legally-purchased commercial copy of the product in hand. If you make the fine exponentially higher for an act you can do only with a legally-purchased copy (and would have to do as part of the perfectly-legal act of converting content you own for a device you own), then the more enforceable you make the law, the more people will be encouraged to download a bootlegged copy and be liable to a much smaller fine.
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