Ottawa Senators President Cyril Leeder, speaks to the media in Ottawa on December 16, 2011.
Credits: Tony Caldwell/Ottawa Sun/QMI Agency
On Wednesday Ontario finance minister Dwight Duncan submitted a note to his federal counterpart Jim Flaherty to study the idea of scrapping the tax exemption, which currently allows businesses to claim 50% of the fees against their taxes.
"We already think that's unfair," said Senators president Cyril Leeder. "To now come out with a proposal to move it to zero - out of the blue - is extremely unfair and unreasonable."
He said the move would put the team out of business.
"It would affect the Ottawa Senators, the 67's, the CFL team - all sporting endeavours not only in Ontario, but in Canada," said Leeder.
"If you follow it to its logical conclusion, you'll lose ticket holders and suite holders and we can't afford to lose anybody from our ticket base right now. We operate right at the very margin in Ottawa, we have for 20 years."
That's a different story in Toronto and Montreal, markets that Leeder said would likely not face the real possibility of going under.
"It‘s been a tough go at times to keep the team here," he said. "It couldn't weather this type of hit."
Leeder said he's already received calls from corporate customers asking if they would be able to get out of their contracts later if the government decides to scrap the tax break.
"Not the type of news we want right in the middle of our ticket renewal program," he said. "It could be very devastating. It's one of those survival issues. It's not one of those - well, we'll pass it along to somebody, we'll find somebody to buy the tickets - this is a very significant and severe issue that we gotta deal with because it could mean survival or not for the hockey club."
Leeder said the team was given no warning and would love an opportunity to sit down and discuss the issue.
"One suggestion we have made on a number of occasions is to amend the archaic and old ticket legislation," he said.
The Ticket Speculation Act still allows for the resale of tickets by online scalpers with no tax revenue being collected.
"There is tens of millions of dollars being uncollected right now," Leeder said.
Corporations account for all suite owners and half of seat ticket holders.
Leeder said the financial impact of the team folding would be felt locally, provincially and federally.
"Conservatively the economic impact is north of $150 million a year," he said. "In terms of tax revenue, we have a payroll of about $60 million - about half of that goes to taxes every year."
On top of that, the team pays considerable property tax and generates millions in sales tax.