John Tavares' war against the CRA could change the NHL forever

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Axel Williams
September 6, 2024 (8:31)

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John Tavares signed with the Toronto Maple Leafs over half a decade ago, however, he is still dealing with tax implications from that contract.

At the time, Tavares was given a hefty signing bonus of $15 million. Tavares was taxed about $8 million for it, which is just over 50 percent. However, the Toronto Maple Leafs star argues he should have been taxed at 15 percent since it is a bonus. Well, the CRA completely disagrees, citing the language of the contract as their reasoning.

Now, Tavares is set to go to court. NHL agent Allan Walsh isn't so sure that Tavares is going to be victorious. In an article from CTV News, Walsh noted that the deal is structured in a way where the bonus is conditional. That would constitute it as regular income. In fact, Walsh went so far as to say that Tavares got bad advice. While Walsh has no way of predicting what is going to happen, he most certainly has experience in these matters.

"It's a very good example of why players need to surround themselves with the most competent representation," Walsh said. "The CRA has taken the position that since the signing bonus has conditions on it, and if a player does certain things, that's no longer an inducement. By virtue of the language of the deal, it's been converted to regular income, and can be taxed at a regular income tax rate."

If Tavares loses, it could change the NHL forever in terms of how they sign players and how they tinker the language in these contracts. Ultimately, this has proven to be a learning experience for everyone involved. However, only time will tell whether or not Tavares can go up against a government entity, and actually win.

Do you believe that John Tavares can prevail against the CRA? Let us know in the poll down below and stay tuned to Hockey Unplugged for the latest news and updates from around the hockey world.

Source: CTV News
John Tavares is taking the CRA to court. A ruling against him could change how NHL teams sign players