TORONTO - A clean sheet of ice awaits each of the National Hockey League’s 32 teams as the puck drops on a new season this week. But as Canadian teams hope to bring home the Stanley Cup for the first time in 33 years, a new report suggests they are not on equal footing with their American rivals.
A report by the Montreal Economic Institute (MEI), a public policy think tank, found Canada’s higher income tax rates are hurting some NHL teams here and making it harder to attract and keep top players from both Canada and across the border.
“On a yearly salary of $750,000, a player on the Montreal Canadiens pays $364,312 in taxes, an effective tax rate of 48.5 per cent. For a player on the Florida Panthers or the Dallas Stars, for example, this tax bill drops to $234,520, for a rate of only 31.2 per cent. That’s a difference of more than $129,000 per year on the same salary,” says MEI’s recent report on the NHL’s taxation situation.
NHL players voice disadvantages
While NHL commissioner Gary Bettman has repeatedly downplayed any disadvantage facing Canadian teams, some players have spoken out.
Canadian-born star Brad Marchand, who recently signed a six-year deal with the Florida Panthers in June 2025, has publicly said that if “you go to a Canadian team (your contract) has to be 15 per cent more to be the same” as a team in a non-income tax state.
“The NHL’s salary cap is based on gross salary rather than net salary. In practical terms, this means a team in a state with no income tax can offer exactly the same contract as a Canadian team while allowing the player to keep much more money in his pocket,” according to MEI.
“Is the playing field level? No, it isn’t,” said TSN “That’s Hockey” host Gino Reda, who adds that there are legitimate ways to get around the tax issues for Canadian teams and some American teams in states that have a higher income tax hit.
“The endorsement dollars for players in a city like Montreal or Toronto are way higher than some of the no-state-tax teams, so there’s ways to overcome it. It just takes a tremendous amount of work and creativity to make it happen.”
One more variable is that next season the NHL’s salary cap is projected to rise from $104 million to $113.5 million, with reports that it could reach US$127.5 million by the 2028-29 season, which could leave smaller market teams in Canada who earn revenue in Canadian dollars, struggling to keep pace and spend to the maximum of the salary cap.
U.S.-born talent leave Canada
Another factor putting Canadian NHL teams on an unequal playing field is a handful of U.S.-born stars who have made the push to leave Canadian markets.
Last season, star defenceman Quinn Hughes forced the Vancouver Canucks’ hand and was traded to the Minnesota Wild.
In the off-season, longtime Senators captain Brady Tkachuk pushed Ottawa to trade him to the Florida Panthers, where he’s been reunited with his brother Matthew Tkachuk.
Three-time Vezina-winning goalie Connor Hellebuyck has demanded a trade and refused to show up at training camp for the Winnipeg Jets, triggering an indefinite suspension.
“Hellebuyck has a list of teams he’d be willing to be traded to, but his list doesn’t include any of the teams in Canada. That tells you an awful lot. It’s not a trend just yet, but it’s a concern for Canadian teams to watch their star players go south of the border,” said Reda.
But as Canadian teams hope to bring home hockey’s biggest trophy this season, Reda says not all hope is lost.
The 1993 Montreal Canadiens were the last Canadian team to hoist Lord Stanley’s mug, and “Le Bleu-Blanc-Rouge” might just have the best chance of any of the seven Canadian franchises to win it all this season, says Reda.
“The Canadiens went all the way to the conference final last year against the Carolina Hurricanes who ultimately won the Stanley Cup and they just got better, every single aspect of the Canadiens’ rebuild has gone positively,” said Reda.
