FEBRUARY 2000 | VOL. 4, NO. 2
ALSO THIS MONTH
A fiesta in Arizona and a football game broke out.
MARC CIAMPA, a native of St. Albert, Alberta, Canada is the staff sports writer for Renaissance Online Magazine. A student at the University of Alberta, Ciampa is the public relations coordinator for the St. Albert Saints and writes a weekly article in the Edmonton Sun on junior hockey during the winter. During the summer he runs the official Calgary Cannons website.
The future of hockey in Canada will never be in question. Everywhere you look across the great nation there will be children playing hockey. In the streets, on local ponds, in hockey rinks and anywhere else they can fit two nets, a stick and a puck.
The future of professional hockey in Canada is, so to speak, on thin ice however.
The federal government of Canada has made a major gaffe in its handling of a team subsidy program. Early in January it announced that each team would have a chance of receiving approximately $3 million provided they met a set of guidelines. The guidelines were such that the wealthiest Canadian team, the Toronto Maple Leafs, would not qualify.
The deal struck by the Feds was to offer each team 25% of the total amount of annual subsidies they would receive from other organizations. In order to qualify, however, the team had to already be receiving money from the NHL as per its currency equalization program, plus receive tax breaks from both the provincial and municipal levels. The program would go until the year 2004, at which point the NHL's collective bargaining agreement would be opened up and the NHL would then have to do all it could within its power to institute a salary cap and/or revenue sharing.
"It's about helping these teams get through a difficult period so they will be in a position to emerge from their current financial problems as sustainable Canadian NHL franchises," stated John Manley, the government Industry Minister who hatched the plan.
From the news that the Canadian teams were going to be receiving this subsidy, however, there arose a massive uproar. An extremely vocal minority in Canada saw the subsidies as giving million dollar players and million dollar owners even more money-money they didn't need. The government subsequently caved in to the demands, and pulled the financial assistance program off the table.
"Million-dollar players certainly don't deserve tax breaks," Toronto Maple Leafs backup goalie Glenn Healy said. "But the teams do. If you earn your dollars in Canadian and pay out in U.S. dollars, then something has to be done. One way is to get outside help."
The fact is, that the deal was created because sometimes you have to spend money to make money. Six NHL teams have a combined payroll of about $222 million with almost half of that going back to the government in the form of income tax. Each Canadian NHL team pays on average about $20 million in property tax, amusement tax, payroll tax and other forms of contribution to the government. If even three Canadian teams left -- which is not a stretch since Vancouver, Edmonton and Ottawa have all threatened to move with Calgary soon to follow if the situation worsens -- that would leave the government with close to $150 million less money. A vacuum does not last long in politics, and the money loss would be made up by the taxpayer.
It is a shame that the government does not realize that hockey is the same as every other business in Canada. There are hundreds of businesses which receive millions of dollars each year from the government in the form of subsidies -- businesses which make millions of dollars, like Nortel, AT&T and the very wealthy American film industry which likes to film movies in such locales as Vancouver, Calgary and Toronto.
The economic impact of the loss of Canadian teams would arguably be even worse than a production crew deciding to film a TV series in Los Angeles and not Vancouver. What about the hotels that the visiting players stay in? An NHL team visits another city about 50 times a year, taking up about 20 rooms. At $150 a room, that generates $150,000 a year for that hotel. Without that extra revenue, a number of jobs at the hotel would be lost. And what about jobs at the arena, or nearby restaurants that are frequented before games?
[ CONTINUED: governmental logic ]