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Taxpayers Sidestep NHL Bodycheck

Author: Richard Truscott 2000/01/26
Unless you have been living in a cave, you've no doubt heard by now that the federal government has backed away from its ridiculous plan to subsidize professional hockey teams in Canada by as much as $20 million. Thankfully, Canadians from coast to coast spoke loudly and clearly on this issue and forced the government's hand.

But even as the feds beat a hasty retreat many were left to wonder why the Liberal government seemed so eager to give taxpayers the old "Trudeau salute" in the first place. Especially considering that taxpayers have overwhelmingly told the politicians that bailing out professional sports should not be a public policy priority.

Some proponents of the aid said our NHL teams are suffering because of a low Canadian dollar and high taxes. But these are the very same challenges faced by all of our country's individuals, entrepreneurs and, businesses.

Others said that if NHL teams left Canada, the effects on the local economies in Ottawa, Calgary, or Edmonton would be disastrous. Yet when the Jets left Winnipeg and the Nordiques left Quebec City, the local economies barely felt a bump. People simply spent their money on other (probably more affordable) forms of entertainment.

Besides, if subsidized pro sports franchises are such a boom to local economies, then it would make sense for taxpayers to pay to put one in every Canadian city. How about the Regina Red Wings They'd pay taxes. They'd put people to work.

If Canadian NHL teams do end up leaving Canada, as tragic as that may be, the blame should be laid squarely at the doorstep of the NHL. Player's salaries have been allowed to skyrocket by 480% over the past nine years rising from $271,000 U.S. in 1991 to $1.3 million U.S. in 1999. In fact, salaries now make up 60% to 80% of the average teams expenses. And according to NHL Commissioner Gary Bettman, 20 of the leagues 26 teams in 1996-97 lost money. They are engaged in a race they simply can't win.

The bottom line is the NHL has done little to address its own fundamental revenue and expense problems. Franchise owners have already jacked-up the prices for ticket, concessions and parking as far as they can go.

Unlike the NFL or the NBA, however, there is no revenue sharing plan to help small market teams and no salary cap to keep a lid on the destructive bidding war over players pay.

But instead of telling the NHL to solve its own problems, the federal government tried to open the taxpayer vault for pro sports. And this at a time when farmers are struggling through an income crisis, our healthcare system is in need of serious help, and our highways are crumbling.

The federal government sure would have had a hard time telling the tens of thousands of Canadians on waiting lists for surgery that scarce tax dollars are better spent on supporting the spending habits of millionaire team owners and their 22 year old millionaires on skates.

In the end, the government made the right decision - albeit after a storm of public controversy. No matter whether the bailout package was $2 million, $20 million, or $200 million, it would have done nothing but feed the appetite for even more tax dollars down

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Franco Terrazzano
Federal Director at
Canadian Taxpayers
Federation

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