1) I doubt they\'re going to sue anyone outside the states... it says as much in the article, from an RIAA spokesman.
2) Cliff notes:
Canadians in 1998 started paying a levy of 77c per blank CDR, and 22c per tape they bought. This levy came with a addendum to the copywright law in Canada, which said Canadians can now copy music, and the cost to the companies would be paid by the levy (at the time, the music companies were very happy with 77c per cd).
So, I can have lots of MP3s on my HDD, and as long as I don\'t give them away, but other people choose to copy them, they\'re ok. I can also copy music for myself, so basically filesharing has a big loophole in Canada making music swapping in it\'s current form legal.