With the hockey season over, it’s painful to look back and wonder if the Â鶹´«Ã½Ó³»Canucks will ever win the Stanley Cup. If the Liberal government has its way, I would say it’s doubtful.
This year's Stanley Cup winner, the Las Vegas Golden Knights, have been in the league only six years. In these short six years, they have been in the Stanley Cup finals twice, and this year they triumphed. In their sixth year!
The Canucks have been in the league since 1970! 53 years and nada.
One big difference between the Canucks’ approach and the Golden Knights’ is the front office personnel and players. The Las Vegas team has three Canadians in the driver's seat. The President of Hockey Operations is George McPhee; the GM is Kelly McCrimmon and the coach is Bruce Cassidy. All three are Canadians that have been in the game for years. The team has 18 Canadians on their roster. 18! The Â鶹´«Ã½Ó³»Canucks have 12. The Florida Panthers, who were the Stanley Cup runner up, have 15 Canadians on their team. Can you see a trend here? One thing is obvious. In the playoffs, Canadian kids step up. Big time.
However there are storm clouds on the horizon should the federal government have its way with taxing athletes in Canada. It’s hard enough for Canadian teams to attract players when teams in Florida, Texas, Washington, Tennessee and, yes, Nevada, do not levy a state tax. No wonder soccer star Lionel Messi is going to wind down his career by getting paid huge money in Florida.
The Liberal tax laws are a big reason why all the aforementioned states have very good sports teams in football, baseball, basketball, and now hockey!.And what do sports teams have to deal with in Canada? Well, the Canada Revenue Agency is definitely not their friend.
For the past few years, three former Toronto Blue Jays players have been in a tax battle with the CRA over taxes and retirement income. The former Blue Jays players are Jose Bautista, Josh Donaldson and Russell Martin. At stake are millions of dollars. When players come to Canada they are confronted with a big tax hit. However, Canada does have a mechanism that allows players to defer their taxes by putting together a Retired Compensation Agreement.
These RCA’s work like our RSPs. Players are allowed to put money into these RCA funds and therefore defer some of their Canadian income. The problem is: how much can they defer? Apparently it has to be reasonable. Well, define “reasonable.” That’s what the battle is over.
The CRA is saying that the Blue Jays players are deferring too much. And on top of that, these three players live in Florida (surprise, surprise) so when they pull money out of their RCA’s they will be paying taxes where they live. The CRA is not happy with the amount of money the Blue Jays three have deducted for their RCA’s. And they want to claw their money back at 53 per cent.
Believe me, players agents, the players themselves and the fans are watching how this tax beef is going to shake down. If they cannot work something out where the tax is not level for players on both sides of the border, then Canadian sports fans are never or not at least very rarely, going to see a Canadian-based sports team lift the Stanley Cup. Or the World Series Commissioner's trophy!
This current tax beef takes me back to the early 70’s, when people like farmers and fishermen could defer their taxes in a good year by purchasing annuities. These annuities were held by institutions that released them to farmers and fishermen that had suffered a bad year due to a lacking harvest or bad salmon run. And they were taxed on the amount that was dispensed.
This is not tax avoidance. This is tax deferral. And it worked. When Bachman-Turner Overdrive exploded all over the world in the early 70’s, tax lawyers and the government tax boys, came to the conclusion that the BTO boys could take as much money as they wanted, pay the tax on it, and plug the rest into annuities. They realized that a rock and roll career can be like a roller coaster. Public taste is ever changing. That went on for a few years, but it wasn’t long before the annuities were nixed by the feds.
Last time I looked, music careers were still dodgy with a few home runs and lots of singles and strikeouts. And the tax man always has his hand out.
Bruce Allen is a music manager and a commentator.
