Federal finance minister Jim Flaherty says he is not considering a proposal to end corporate tax credits for business, a situation that the Ottawa Senators say would have put their team in danger.
A 2010 photo of Scotiabank Place. (Photo by Dan Plouffe)
In a scrum with reporters Monday, Mr. Flaherty said the province of Ontario has fundamental budget issues and that he will not remove the credits as his provincial counterpart, Dwight Duncan, asked for in a letter.
The Ottawa Senators declined comment on the situation, saying they had not had a chance to speak with the provincial or federal government as of yet.
In an OBJ interview last week, Senators president Cyril Leeder said it was unfair to single out sporting events for the subsidy given other business expenses such as buying advertising and renting meeting rooms would still be accepted.
Since half of the season tickets and all of the suites come from businesses, he said removing the credit would put the Ottawa Senators' viability at risk.
"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," he said.
The tax credit, jointly administered by the federal and provincial governments, allows corporations to claim 50 per cent of the expense of taking clients out to venues such as nightclubs, sporting events and theatre performances.
However, under Canadian tax rules it must be to generate income, for example by rewarding a valued client.
Liberal MPP Yasir Naqvi dismissed the Senators' worries about the sustainability of the team in an interview last week.
"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."
But late Monday, Premier Dalton McGuinty said the provincial government was aware of the Ottawa Senators' concerns and willing to hear them out.
"We're listening very closely to organizations that could be affected by that kind of an initiative and we'll work our way through it,'' he said.
– With files from The Canadian Press