By Josh Truba
One of the hottest topics of debate in Canada recently has focused around Canadian NHL teams and whether or not they should be receiving government subsidies in order to assist them in preserving a competitive team and to ensure that they remain located in Canada.
The lines have been drawn regarding the argument, and no matter which side of the fence someone sits, it always ends up being a passionate and heated debate when the two sides converge. In one corner is the hockey purist and hardcore fan, who has seen the NHL virtually crumble in Canada over the last five years and avidly supports the idea of Federal subsidies aimed at supporting Canadian teams. In the other corner, is the person who may or may not be a hockey fan, but cannot condone subsidizing a sport played by millionaires and operated by millionaires, while healthcare and education in Canada are seemingly underfunded and cashstrapped.
Often the debate turns to issues of "cultural importance" and asks just how important hockey and the NHL is to Canada. Is it part of our social fabric, and if so, what are Canadians willing to do to preserve the game? The debate rages on, questioning the true importance of the sport in our society, what it really means to us as Canadians and what we should be willing to do to support the NHL
The heat surrounding the argument was cranked up a notch last week to inferno-type levels when Federal Industry Minister John Manley announced an aid package designed to subsidize NHL teams in Canada and ensure that they would remain in Canada, at least until 2004, when the current collective bargaining agreement expires. The package put forward was a shared solution with the burden of the subsidies to be shared between all three levels of government at a total price tag of around $20 million.
To the hockey purist, the subsidies were a godsend, but to the person who could not look past the use of federal funds in supporting, as they saw it, NHL fat cats, it was an outrage — an inappropriate use of tax funds. Simply put, everyone in Canada has a take on NHL subsidies, and they are animated and fervent when it comes to defending their stance or making their position known. Everyone is ready and willing to jump in and offer an opinion. In fact, the dissatisfaction with the proposed subsidies was so great that just two days after the subsidies were announced, they were rescinded.
I too am ready to weigh in, let my voice be heard, and offer up a take for the record and add it to the list of epic takes already enshrined in Gauntlet glory. While I believe that hockey is one of the great components of Canada’s social fabric and one of our greatest "cultural" successes and exports, the epicentre of the earthquake which is my argument lies within the sphere of the Canadian tax regime. This is where the key issues dwells.
The reason people refuse to support an NHL subsidy in Canada is not because they do not believe that the NHL is important to Canada. Everyone knows that hockey is meaningful to this country in some way, although the degree of importance placed on the sport is up for debate. The reason many Canadians do not support NHL subsidies is because they require federal tax dollars. Dollars that could be used to support other programs like healthcare or education. They see an NHL subsidy as a net cost to the Canadian taxpayer.
Nothing could be further from the truth. Like all individuals and businesses in Canada the NHL operates under a pernicious tax burden. It has been estimated that every year the six NHL teams in this country generate $200 million dollars of tax revenue for the federal government, this compared with our neighbours to the south who operate under a much more favourable tax climate. The six NHL teams in Canada actually pay more total property tax (a major point of contention for Canadian teams) on their arenas than do all 22 NHL teams in the US combined. Working against numbers such as these, one can understand the problem Canadian teams face, competing against their American counterparts. The bottom line is that the NHL in Canada creates net tax revenues for the government, and even with a measly $20 million dollar subsidy Canada will still receive approximately $180 million in taxes from the six NHL teams in Canada.
In order to save NHL hockey in this country, and to save the tax revenues which they provide Canada with, we need to embrace the idea of NHL tax cuts instead of NHL subsidies. That is how this whole aid package should have been introduced in the first place — it is a tax break, not a gift from the government. I wonder why an allegedly savvy politician like Manley was unable to cut through the lies and the illusions of the predicament in order to clarify the issues for the Canadian public and sell this deal as a tax cut. Also, congratulations to John Manley for melting down and rolling over at the first hint of opposition to his plan and not even attempting to further explain his plan or sell the deal to the Canadian public — very nicely done. He never even made mention of the tax money that NHL teams provide this country with, the biggest weapon he had in his arsenal for defending the subsidies.
No matter what you call them – tax cuts or subsidies, they are unquestionably a good thing for Canada.
Is it preferable to lose all $200 million of tax revenue the six teams provide while at the same time losing NHL hockey in our country, in a league dominated by Canadian players — rather than give a small $20 million subsidy (more appropriately termed a tax cut) to keep hockey alive in Canada and to retain the $180 million of tax wealth generated for Canada by the teams? An NHL subsidy is a win-win situation for all Canadians both socially and economically.