With much of his business coming from corporate customers, Mr. Leeder says he has staffers in Queen's Park and calling all local MPPs in an effort to counteract the proposal, first brought to light on Tuesday.
"My response is that it is really poorly thought out," said Mr. Leeder in an OBJ interview late Thursday. "We would be out of business."
Noting that deductions are available for business expenses such as renting meeting rooms or buying advertising, he said it was unfair to single out sports franchises to be excluded.
"We're a business like everybody else, and we're not asking for subsidies. This isn't a subsidy. We're asking that someone who spends money for business purposes can deduct it."
However, a local Liberal MPP said the government is not backing down from its stance despite vociferous opposition from Ottawa's largest sports franchise.
The Senators, Yasir Naqvi said, will not be hurt by the proposal, nor any other sports team in Ontario.
"One thing is important to keep in context – that this particular deduction we're talking about costs the province $15 million a year," Mr. Naqvi said in an interview with OBJ.
"To result in managers saying any hockey team or other entertainment business will vanish may be a little too much of a stretch at this point. It is all speculative."
On Tuesday, the Ontario government announced it will review how the provincial government supports businesses, with an eye to the Liberal's plan to eliminate the deficit by 2018.
The tax credit, which is jointly administered by the federal and provincial governments, allows corporations to claim 50 per cent of the expense of taking clients out to theatre performances, nightclubs, sporting events, vacations and similar events.
However, under Canadian tax rules it must be for the purpose of generating income, for example by sealing a deal or treating a valued client.
"It is not clear that taxpayers should be subsidizing certain business expenses for income and sales tax purposes, such as private boxes and corporate seats at sporting events," read a publicly released letter from provincial finance minister Dwight Duncan to his federal counterpart, Jim Flaherty.
The letter called for a review with the Canada Revenue Agency to discuss eliminating the subsidy. The letter included other proposals to discuss such as "reducing opportunities for corporate tax avoidance" and adding enforcements against businesses that engage in "underground economy" activities.
The province has already solicited the help of former chief economist Don Drummond, who in mid-February released a report outlining 362 austerity recommendations to minimize the province's debt.
According to that report, the province puts out $1.3 billion to directly support businesses, and $2.3 billion through indirect tax support.
"We are considering everything right now," Mr. Naqvi said of the proposal, saying that the Liberals are taking into account feedback from all parties as they work towards the next budget, where spending changes will be finalized.
"Nothing is off the table, including many tax loopholes that exist," he said.
He noted there have been reductions in provincial tax rates for businesses since Ontario Premier Dalton McGuinty took office in 2003, and repeated the premier's recent assertion that no tax increases would take place in the next budget.
With the larger Senators Sports & Entertainment - which includes the team, the stadium, Capital Tickets and other divisions - traditionally operating at a loss in a business with thin margins, Mr. Leeder said losing the deduction could mean losing the team.
He noted that 100 per cent of the suites and up to 50 per cent of season tickets are held by corporate clients. If the Senators were to lose even 10 to 20 per cent of this business, he said, the team would no longer be viable.
The tax proposal would rob the Ottawa Senators of the corporate support the hockey club needs to survive in a small market, added a local sports business analyst.
"It just showed a real lack of understanding of how the sports industry works, and the importance of the sports industry in Ottawa," Howard Bloom, the publisher of SportsBusinessNews.com said in an earlier interview.
The opportunity for businesses to claim hockey tickets as a tax deduction is especially important in a city such as Ottawa, Mr. Bloom said, given the large proportion of the workforce that's employed by the federal government.
"In Ottawa, we're already working at a competitive disadvantage because most of the population works in the government and most can't buy tickets for a corporate purpose."
He added that the effects of removing the credit would bleed into other activities that the local team does, which include attracting sporting events to the city such as the recent All-Star Game, as well as its charitable work.
"This is one of the strongest organizations of the National Hockey League (and they) have worked to sell themselves to corporate Ottawa," he said.
"It impacts all the great work they've done."
Corporations pay the entire cost of the ticket up front and then are reimbursed at tax time. The amount of the credit is based on the tax rate for a particular business. In 2011, for example, businesses paid between 15.5 per cent and 28.25 per cent tax. The credit would reduce that rate by half.
"They are very stringent on those rules. It is not a free-for-all for corporations," said Craig McIntyre, a tax manager at local accounting firm McLarty and Co. The company recently received an OBJ Employees' Choice Award.
When asked what he thought about the broader issue, Mr. McIntyre said from his clients' perspective, "any deduction for a business expense, I'm probably in favour of."
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