OP-ED: High taxes are killing Canada's Stanley Cup dreams
Money talks in the NHL. Until Canada levels the playing field, top-tier talent will continue chasing the bigger paycheques south of the border.
By: Lee Harding
Lee Harding is a research fellow at the Frontier Centre for Public Policy. He holds a Master of Public Policy (U of C) and a BA in Journalism, with a career spanning major networks like CBC and Global TV, as well as landmark published research on Canadian economic and social policy.
Canadian hockey fans are still waiting for their first Stanley Cup since 1993. Odds are, they will still be waiting when these playoffs end. The table is forever tilted against Canadian teams, not just because there are fewer of them, but because tax incentives lure great players south.
Players in many United States markets can keep millions more of their salaries than players in Canada. That gives American teams a powerful advantage when competing for elite talent.
The NHL’s salary cap is US$95.5 million for the 2025-26 season. In B.C., Ontario and Quebec, the highest combined federal and provincial income tax rate exceeds 53 per cent. In several U.S. states, there is no state income tax at all.
The effect on take-home pay is substantial. Table-napkin math suggests a roster paid to the salary cap would collectively take home about US$44.4 million in Ontario or Quebec. In Alberta, that figure rises to US$49.7 million. In states with no income tax, it exceeds US$60.2 million.
That means teams in places such as Tampa Bay, Dallas, Vegas, Seattle and Nashville enjoy a take-home-pay advantage of roughly US$15.8 million over teams in Ontario and Quebec. That’s an advantage of almost 36 per cent before a player ever steps onto the ice.
The gap has also widened over time. Canada’s highest federal income tax rate rose from 29 per cent to 33 per cent beginning with the 2016 tax year. In the U.S., the top federal rate fell from 39.6 per cent to 37 per cent in 2018.
Taxes aren’t the only factor affecting where players choose to play, of course. Weather, media attention, organizational stability and championship opportunities all matter. But it would be naive to dismiss taxes as a factor.
Among players who changed teams with contracts worth US$1 million or more, only 15 to 20 per cent signed in Canada in any given year since 2021. That’s less than the 21.8 per cent share of NHL teams located in Canada.
The impact becomes even easier to see when looking at an individual player. Toronto Maple Leafs star Auston Matthews keeps roughly US$6.15 million of his US$13.25 million salary after income taxes. Had he played in Florida, he would have kept about US$8.34 million. The difference is US$2.19 million a year, or nearly C$3 million.
It’s doubtful Matthews, an American, would be in Toronto had the Leafs not drafted him in 2016. If he spends 20 years in Toronto instead of with a team such as the Tampa Bay Lightning, the difference in after-tax career earnings could approach US$42 million, or roughly C$60 million. That is downright staggering.
The southward pull isn’t limited to hockey players. Bank of Canada data shows that about 40 per cent of Canadians who would rank in the top one per cent of earners have moved to the U.S., along with 30 to 50 per cent of the next nine percentiles of high earners.
According to the same research, the departure of top earners accounts for roughly three-quarters of the Canada-U.S. gap in GDP per adult. Hockey simply provides a highly visible example of the same economic reality.
In fact, Canada continues to produce much of the world’s elite hockey talent. The 2018 Washington Capitals remain the only Stanley Cup champion in NHL history whose roster was made up of less than half Canadian players.
Canada is losing elite earners because it taxes them more heavily, and its Stanley Cup futility is one more sign of the damage. The U.S. is a better place to keep what you earn, and that’s a big reason why it keeps the Stanley Cup too.