Leafs John Tavares could be gone from the team due to major battle with the CRA

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Daniel Lucente
September 10, 2024 (12:54)

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John Tavares signed a massive contract with the Leafs in 2018, and now the CRA claims he's refusing to pay millions in taxes owed. He may leave the country.

The rumors are heating up with John Tavares entering the final year of his lucrative contract with the Toronto Maple Leafs. A substantial part of the talk covers his role as former captain, with many seeming to believe it was the right move to strip him of the title, while others are quite skeptical as to whether he will remain with the Leafs past this next season.

In dealing John Tavares, the Toronto organization would be conducting a type of pre-emptive strike, saving potential locker room drama and giving new captain Auston Matthews a clean slate. But beneath the surface of this potential NHL blockbuster was another issue that might affect the future of Tavares in Toronto, a legal one that could have serious financial implications.

Flash back to 2018 when John Tavares abandoned the New York Islanders and signed a massive seven-year, $77 million deal with the Leafs, complete with a $15.25 million signing bonus. Here's where things get tricky. While Tavares is a Canadian, thanks to his residency at the time of the signing he was still a U.S. taxpayer. Once he moved to Toronto, the CRA stepped in and claimed he owed them Canadian income taxes on that signing bonus.

The CRA claims John Tavares owes up to 50% of that bonus in taxes, while he insists since he was still a U.S. resident when he signed, he shouldn't be liable. In the end, the disagreement reached the courts, and the result could become very critical to the future of Tavares with the Leafs.

If he wins, he will get to keep $8 million and may set a precedent that will benefit other NHL players in the same circumstances down the line. But if he loses, and he has already lost once in court, he might well be moving out of Toronto to a U.S.-based team situated in states with friendlier tax laws, such as Florida or Texas.

Regardless of which side prevails, the outcome could have implications for how Canadian NHL clubs deal with contracts for their star players in the future.

Source: Hockey Patrol
Legal battle to force Leafs John Tavares out of Toronto: his future with the team in doubt