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Sunday, November 14, 1999
Taxing situation
Feds key in fight to keep Sens
Ottawa is better off with the Senators.
But, that's about the only thing most people have agreed on since majority owner Rod Bryden said he needs $10-12 million in tax relief if the team is to stay put in Kanata.
Who will step up and take the lead in saving the team -- or shoulder the blame if those efforts fail -- has become a political hot potato.
Bryden wants his tax relief in place by the end of the month, and needs all levels of government to be part of the solution.
So far, the municipal, regional and provincial governments have taken steps towards a solution, but what's desperately needed is action from the federal government.
From the start, industry minister John Manley said he would do his best to get the federal government on board, but Thursday afternoon Manley said he won't pledge federal help for the Senators until all other levels of government and the league chip in.
Problem is, they already have.
The province will create a new property tax class for privately owned sports stadiums and would match property tax cuts made by the region and municipality, a potential savings of $3-$3.5 million.
NOT AMUSED
Bryden also claims the team is now exempt from Ontario's 10% amusement tax, saving another $3.5 million, due to a charitable exemption because the Ottawa Senators Charity Foundation now sponsors all home games. That one might end up being decided in court, if the province tries to collect.
The region and City of Kanata want to support property tax relief, and are working out how much they can afford to reduce taxes on the Corel Centre. The club pays about $4.5 million in property taxes annually, with the region and province collecting about $2 million each and Kanata $450,000.
The region, as the upper-tier government, will make the final decision, but Regional Chair Bob Chiarelli wants the two councils in synch.
"We can dictate a solution, but we're not going to create a solution unless Kanata co-operates with us," said Chiarelli. "I'm satisfied in my own mind there's a solution there that will be satisfactory to both Kanata and the region."
Last week Kanata council voted to put the subject on ice until Nov. 23.
"I've never made a decision without having all the information on which to base my decision," says Kanata Mayor Merle Nicholds. "Especially when it impacts the taxpayers. We have staff doing research on the issue."
Despite Kanata's decision to delay the debate, Chiarelli feels there's "a strong commitment on the part of Kanata to be part of a solution."
The challenge for both local governments is to reduce the Corel Centre tax load without increasing it for other taxpayers.
"It might be a little cautious by Kanata, but who can blame them?" said Bryden. "The visual impact (of the Corel Centre) might be on Kanata, but the overall economic impact is on the region. It's more appropriate the decision be made by the region."
But time is running out.
Even if Bryden does get the property taxes reduced and eliminate the amusement tax, he has said the $7 million in savings won't be enough. It's $10 million or the sale will go ahead.
STILL HOPEFUL
"The timing has been concerning me for the past five or six weeks," said Chiarelli. "The (federal government) is trying to meet some challenges that they have and I expect from signals we're getting from Mr. Manley that they'll put something on the table."
Yet he's not predicting how things will turn out.
"I don't feel confident that something will be resolved in time," he added, "but I feel confident everyone is making an effort to resolve it in time."
Nicholds is just as concerned.
"I can't help but wonder what is the answer," she said. "Everyone wants to help, but at what cost? If we pay the price, what guarantee do we have?"
Bryden wants just one thing from the federal government -- to help offset the exchange rate between the Canadian and U.S. dollars, which he says has cost the team $13.5 million. Bryden is looking for the government of Canada to at least match the NHL's equalization payment.
NHL commissioner Gary Bettman is encouraged the process has been ongoing for as long as it has.
"The more the people understand it, the better," he said. "I remain optimistic in the entire effort for the future of all six teams in Canada."
Bettman had a hard time accepting Manley's comment that the league hasn't "chipped in."
"We believe we've put forward a fair amount," Bettman said. "Frankly until Ontario offered the property taxes we were the only ones (offering anything)."
Canadian teams are eligible for up to $3.7 million Cdn each year from the NHL in equalization payments and Bettman has offered the use of NHL logos for sports lotteries, with the proceeds staying in Canada.
NO MORE HELP
Ontario nixed that idea from the start and despite being under pressure to eliminate the Senators payments for the Hwy. 417-Palladium Dr. interchange leading to the Corel Centre, which was paid for by Bryden, Finance Minister Ernie Eves' assistant Rita Smith says "nothing else is being planned or contemplated."
It is likely Kanata and the region will agree on a property tax cut. What's not clear is if the federal government will step up in time.
"The solution for the federal government is a lot more difficult," Chiarelli explained. "They have to produce something that is national in scope which permits provincial options and that's a lot more complicated than (Alberta Premier) Ralph Klein or Mike Harris offering support."
As an illustration of the feds' problems, Klein is willing to consider giving the Calgary Flames and Edmonton Oilers a portion of Alberta's sports lottery funds. That's the same idea so quickly shot down in Ontario.
Despite all the trials and tribulations, Bryden remains realistic -- and optimistic.
"I'm not going to waste my own money on something that's not important to anyone but myself," said Bryden. "But I intend to be here for a long time."
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