Really, one should conceptually separate two things:
1) The desire to support musicians with public money; and
2) The source of that money.
The principle of supporting the arts industry with public money is well established, and, while it's difficult to say what the "right" level of funding is, I doubt Slashdot is the forum best suited to discussing this
However, I think we can broadly agree that, due to internet-based file sharing, musicians are earning some lower amount of money than they would be in the absence of file sharing. (On average, over all musicians. File-sharing/piracy is not the only reason, but it is a reason. This should be reasonably uncontroversial.) Without implying that these are my personal views, I'm going to play the advocate and argue that, due to the benefit musicians/the arts sector provide to society in general, they should be supported to offset a decline in privately-collected revue that is of no fault of their own.
If you accept that argument (or a similar one), the second issue is then from where that money should come. I'm not an expert on the Canadian tax system, but I'm going to bet that, like most Western countries, the majority of Government revenue comes from income taxes, corporate tax, and perhaps some form of consumption tax (sales tax/VAT/GST/whatever); and, further, than the minority of its revenue is tied to a specific use when it is raised. (Technical terms differ: some countries refer to a tax where the revenue's use is pre-specified as an "excise"; I think Americans call it "earmarking"?) Most funding of Government expenditure comes from this pool of general-use funds, however, many countries have these use-specific taxes – petrol or car taxes (excises) to fund road maintenance or transport programs; specific taxes for healthcare, reconstruction funds, etc.
So – should this funding of musicians from from general revenue, or from a new (higher) tax on a specific area? (Maybe both?) It's sensible to tax the activity that is decreasing the musicians' income, but, if we could tax piracy, we'd certainly be doing so by now. What's the next-best alternative (i.e. how close can we get to taxing internet piracy)? Putting a tax on BitTorrent traffic? Not going to work. Taxing "the internet" (or its use) is probably the closest we could reasonably come to being sure of taxing this activity.
Clearly, we would also be taxing people who don't "harm" musicians through piracy. However, plenty of taxes provide benefits to other members of society than those who pay them; that's a basic part of the tax system. Use-specific taxes/excises are a little different, but, for example, Australian car owners are required to pay a tax for owning a car that goes into a fund to pay the victims of car accidents, even if they themselves never cause an accident are are therefore not able to benefit from it – it's called "third-party insurance".
Very few Australians would think of third-party insurance as a use-specific tax, but it's basically the same. Similarly, if we recast this internet tax proposal as a (compulsory) fee that then gives you the right – and this is important: the imposition of a tax would have to come with a legitimisation of the taxable activity* – to then, in this case, download music for free.
That opens up a whole new can of worms, of course: Whose music? How much of it? What would the level of the fee be? What would this state-sponsored download infrastructure look like? Would it eventually include all culture (i.e. films, literature, etc) It's at this point that the discussion gets put in the "too-hard" basket, but the concept itself is one I find fascinating; I'm not yet sure where I stand on the idea.
In any case, for a reasonably debate on this sort of proposal to occur – assuming, of course, that's the genesis of the Canadian proposal is a "culture tax" and not a simple bit of rent-seeking – I think the above issues need to separated.
* This principle doesn't apply to all taxes (e.g. drug runners still get taxed on their income without their activities being legitimised), but to most.