In the last few months, the chorus of calls for "tax fairness" for Canadian pro-hockey clubs has grown louder.

But before our MPs - led by the Minister for Corporate Welfare, John Manley - jump to the rescue with our money, they should look at the arguments in favour of taxpayer support for pro-sports franchises. They are not based in economic fact.



Argument #1:

If we lose hockey, we'll lose all the taxes that hockey generates for government coffers.

Wrong. The money that you and I spend on hockey is disposable income. If we don't spend it buying tickets to the game or beers in the stands, we won't throw the money into the fireplace. We will spend it elsewhere and it will find its way into revenues and taxes. It's a simple economic principle called the "substitution" effect.



Argument #2:

We're not asking for tax breaks, we're looking for tax fairness. Other industries receive favourable tax treatment, why not professional sports

This is the "all my friends are jumping off the bridge so I should too" approach to public policy. Collectively, our governments have a brutal record in industrial policy and always pick more losers than winners. We have already flushed billions down the drain in industry specific relief and credit programs; we don't need to repeat our abysmal record of government playing financier and venture capitalist.



Argument #3:

The presence of pro-sports teams is measurable and their loss would have substantial local economic impacts.

Wrong again. Studies from respected think tanks consistently come to the same conclusion: professional sports franchises and sports stadiums have a negligible economic impact on the local economy.

The most compelling of these was a 1994 study by Professor Robert Baade from Lake Forest College who studied 48 cities over a 30-year period. Of the 32 cities that saw a change in the number of sports teams, 30 saw no change in per capita income while the one saw a slight rise and the other, a small decrease.



Argument #4:

Hockey is our game and we should be prepared to step up to the plate with taxpayer dollars.

Taxpayers are already doing their fair share! All those corporate boxes and company-owned seasons tickets are nice business development tax write-offs, partly courtesy of the Canadian taxpayer. And in Ottawa at the Corel Centre, the Government of Canada has logos on the inside and outside of the building. Then there's the taxpayer-funded advertising by Canada Post, Via Rail, and the Royal Canadian Mint. Finally, let's not forget the CBC television revenues paid to teams - courtesy of Joe and Jane Q. Taxpayer.

The NHL has a variety of problems that only it can solve. Runaway player salaries (a 407% increase in eight years), expensive ticket prices and a structure which artificially depresses the supply of franchises to keep cities in a perpetual bidding frenzy for new teams.

Two months ago, Ottawa Senators owner Rod Bryden said he was losing $7 million/year and he would have to sell the team unless he can get $10 million in tax relief. But he even if he gets his relief, he now faces a potential $10 million free agency bill which will ensure that he is still $7 million in the red. Just another reason why taxpayer help is not an option.

The NHL has its own problems which only the players and owners can solve. If MPs buy into the flawed arguments for justifying government help then we should give them a game misconduct and bench them for interfering with our tax dollars.