You don't need to be making money from fan generated content to have infringed copyright; if you've infringed it, you've infringed it. Also some jurisdictions give weight to an artist's moral rights.

The problem with legislation is that it changes slowly, and certainly nowhere near as fast as technology. And btw, the Copyright Act was amended in 2006 under the previous government, though it's been criticised as being more of a 'tick box' event (ie, "we amended it two years ago, we don't have to look at the Copyright Act for at least another government term or more").

And I don't think anyone expects fan-created material will go away; the powers that be probably just want to clarify the law applying to it.

a clarification of the CA is probably what most people want.

HA. Good luck with THAT, since if you want /real/ clarification you need to understand not only the CA, but the latest common law developments which interpret the CA, and let's not forget all the wonderful international treaties and conventions that are all pushed by the United States since like it or not they are the most powerful nation when it comes to IP and they can make other countries follow their policy or refuse to do business with them that also apply.