Major ramifications in the balance for John Tavares

Earlier this summer, reports emerged that Toronto Maple Leafs captain John Tavares owes over $8 million to the Canada Revenue Agency (CRA), an amount that Tavares himself argues. The CRA contends that Tavares owes $8 million sheets while but Tavares maintains that a provision in his contract entitles him to millions in tax savings. The former Leafs’ captain claims that they taxed him incorrectly back in 2018 when he first signed with the Leafs after spending nine years in the United States with the New York Islanders.

Tavares believes that when he signed in Toronto, the major bonus he landed would be taxed at a much lower rate, one that Tavares thought would be the 15% rate should be used on his $15 million signing bonus, rather than over 50% like it has been.

On Thursday, famed NHL agent Allan Walsh explained to CTV News how Tavares most likely received terrible advice for his finances, and now how he thinks the language in the deal may decide whether or not the Leafs’ veteran forward is successful.

“It’s a very good example of why players need to surround themselves with the most competent representation," Walsh added.

“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,» Walsh said. "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.”

Many believe that a ruling against Tavares could change how NHL teams sign players, meaning significant ramification to the veteran forward, who is coming at the end of his current contract in Toronto.

We will have to see what happens with this dispute that has garnered a lot of attention in Canada. If unsuccessful, this could further hamper the way that Canadian teams go about free agency in the NHL. If Tavares can win this, maybe it will help level the playing field across the league.