The recent suggestion to no longer allow NHL tickets to be declared a legitimate business expense in Ontario seems to lack legs and is a cheap ploy by a political party to gain easy publicity. And I am glad this is the case. I am certainly not crying poor for the Toronto Maple Leafs or the Ottawa Senators (they are at least a little poorer or less richer). I feel sympathy for those Leafs fans who know the scarcity of available Leafs tickets, the incredibly high price of such tickets and, most of all, the too-often unsatisfactory result on the ice.
We have to look at the bigger picture. Corporations and legitimate businesses can get what usually amounts to a 25 per cent [and up to 50 per cent] deduction for meal and entertainment expenses.This type of allowable tax deduction is consistent with other provinces in Canada and the United States.
It is not so much the Maple Leafs, but other sport activities, theatre groups and eating establishments that are stimulated by the ability to write a portion of tickets off as a legitimate business expense.
Our businesses should be allowed to operate on that same playing field.
Should it be reduced, as it has been over the years, I’m fine with it — as long as it is across the board. An argument can be made for how much the ability to deduct actually does encourage those into using more of their disposable income on meals and entertainment or not. If we ever get to an overall straight flat tax with no deductions allowed, great, so be it. But for now, these are the rules, and just as entities like Maple Leaf Sports and Entertainment (MLSE) shouldn’t get any excessive government benefits, they also shouldn’t be singled out in this case.
Where else but MLSE can ownership make so much money for such an unsatisfactory return in terms of the product. I was a part of it years ago, and it’s the same more than 20 years later. If we were to remove the tax break, could those funds be channelled to trade for Rick Nash or sign Zach Parise as a free agent this summer? Now that would provide more hockey entertainment.
What about breaks for the rest of us? Most sports arenas are constructed in a way that taunts those of us who can only afford to sit in the nosebleeds. An escalator ascends to the upper deck, giving us a chance to gawk at the luxury suite level’s amenities (lo and behold, carpeting!). Then, inside the rink, the catered food, multiple televisions and first-class seats that one’s posterior can comfortably slide into are as eye-catching as a breakaway goal.
We’re eating oversteamed hot dogs and nachos with atomic cheese. They’re eating ... well, something eatable.
With that inherent jealousy established, I scoff at the notion that corporations should be allowed to write off up to 50 per cent of their ticket purchases and luxury suite rentals, as is currently the case in Ontario. A private citizen who purchases a season ticket could be located in the seat next to one that a business purchases, and yet only one gets the tax benefit because of ... intent? Because the fan attends the game for entertainment, and a corporation uses the ticket for entertaining. The non- corporate ticket buyer is getting screwed. Not only because their taxes increase to cover the budgetary problems that corporate welfare creates, but because his or her ticket prices are also being adversely affected.
Taxation pundits Richard Schmalbeck and Jay Soled have argued whether to write off baseball tickets, and said, “These deductions have led to higher ticket prices in two ways. On the demand side, they have fuelled competition for scarce seats, with business taxpayers bidding in part with dollars they save through deductions. On the supply side, the large number of businesses bidding for expensive seats has driven the expansion of [premium seating] and a reduction in overall seats in new ballparks.”
Their solution? Limit deductions to a low, fixed rate rather than allowing for a 50 per cent deduction on every ticket. That’s a workable one, but it doesn’t go far enough. Extend the same tax breaks to the average fan as a ‘quality of life’ benefit. For the citizen and the company, it means more money to spend on taxable items, right?
Well, at least they’re loopholed, too.