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Thursday, October 28, 1999
Ontario offers tax break to NHL arenas
The move, which will cut the province's share of property taxes from privately owned arenas by as much as $16 million a year, is contingent on local governments agreeing to match the reduction in their own tax rates, Finance Minister Ernie Eves told the legislature on Thursday.
Hockey fans, team-owners and federal Industry Minister John Manley expressed delight over the news while Eves quickly deflected suggestions that he's subsidizing the league.
"We can't solve all the problems of the NHL, and they're far more serious than just property taxes," he said.
"We do believe we have an obligation to address the issue of property taxes when it's a jurisdiction that we have some control or say over."
The province will give municipalities more flexibility in setting their own tax rates within the new tax class regarding professional sporting facilities that aren't municipally owned.
Ontario will then match whatever tax reductions the municipality chooses to implement.
Not everyone likes the idea.
"The Ontario government has shown an appalling lack of principle on the property tax front and given in to the extortion," said Walter Robinson, national director of the Canadian Taxpayers Federation.
"Why can't they reduce my property taxes to zero?"
The tax break applies to four facilities in Ontario: the Air Canada Centre, Skydome and Maple Leaf Gardens, all in Toronto, and the Corel Centre in Ottawa.
The Corel Centre, home to the financially-strapped Ottawa Senators, pays a tax bill of $7 million annually.
All told, the province could lose $16 million a year in revenues if Ottawa-Carleton and Toronto take full advantage of the offer.
"The province could be out $16 million on an annualized basis, and we'll have to make that up elsewhere or hopefully receive revenue from elsewhere," Eves said.
The concession is not unlike the deal privately-owned theatres in Toronto get in order to compete with those that are owned by the city, he added.
It's that deal that has aggravated Senators owner Rod Bryden, who has insisted that as a provider of entertainment, his business should be subject to the same reduction.
Bryden suggested the province's initiative could have enough of an impact to allow the Senators to stay in Ottawa.
"I'm feeling more confident now that I ever have," he said Thursday night.
Bryden has also complained about a 10 per cent amusement tax levied on sporting teams, but Eves said unequivocally Thursday there's no more room to move.
"We're not prepared to do anything further with respect to assisting the NHL at this time," he said.
Until the league can sort out its own problems with respect to revenue-sharing programs, exorbitant salary caps and a collective agreement with its players that remains in place until 2004, there will be no more relief, said Eves.
Prime Minister Jean Chretien said from Ottawa that there's no hope of a federal tax-break for NHL teams.
"We don't receive any tax from them," said Chretien, following Eves's announcement.
"The only tax that we receive from them is a corporate profit tax... So there is no room for us to give back money."
Earlier in the day, Liberal backbencher Mauril Belanger said he had a 'partial' solution on the hockey issue.
He said the federal government could allow teams like the Senators to offer flow-through shares which would give investors a share in the capital cost allowance the team gets each year on the Corel Centre.
In other words, the investors get to use the tax break on their own income as well.
Belanger said other industries such as oil, gas and mineral exploration receive such a break.
"Even though I will not and do not support a cash grant, I do believe that hockey in Canada has a glorious past, and I believe it would not be in our advantage to lose our professional hockey teams," Belanger told an Ottawa news conference.
Federal Industry Minister John Manley was unavailable for comment but spokeswoman Jennifer Sloan released a statement lauding the move as a "positive signal" from the province.
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