Finance Minister Jim Flaherty is distancing himself from Ontario's proposal to end business tax breaks for NHL and NBA tickets, saying he's disappointed to see Ontario looking for scapegoats rather than tackling its major deficit troubles.
Ontario Finance Minister Dwight Duncan to Mr. Flaherty last week, suggesting Ontario work with the Canada Revenue Agency to end certain tax write-offs, including for private boxes and corporate seats at sporting events.
"I know when a mom and dad take their kids out to a Leafs game, they don't get a tax break," Mr. Duncan last week.
When asked for his response Monday, Mr. Flaherty acknowledged the Ottawa Senators are concerned with the proposal and said he is always reviewing tax policy. However he suggested Ontario is attempting to distract the public from the province's serious deficit troubles.
"We have much bigger issues than that and I was quite frankly disappointed that this has been made into some sort of major issue," said Mr. Flaherty.
"Ontario has fundamental budgeting problems. They have major spending problems that built up over eight years. And I'm not into scapegoats. I'm not into side issues," he said.
Mr. Flaherty noted that he is being "lobbied constantly" by groups who want similar tax write-offs for golf fees incurred as a business expense, an idea he rejects.
"I think we need to address the fundamental issues that we have in this country, and that includes not just the government of Canada, which is in relatively good shape, but the provincial governments and sub-national governments that have serious deficits and debt," he said.
Ontario has said that scrapping the policy of allowing businesses to write off up to 50 per cent of all tickets and corporate box seats for sporting events and concerts would raise $15-million-a-year in revenue.
"We're listening very closely to organizations that could be affected by that kind of initiative and we'll work our way through it," Ontario Premier Dalton McGuinty told reporters on Monday.
The President of the NHL's Ottawa Senators, Cyril Leeder, Ontario's proposal would force his franchise out of business.
Mr. McGuinty, a die-hard Senators fan himself, said the team has not made a formal presentation to his government about how cancelling the tax credit would affect its business.
"We will listen to them," he said. "But if not this, then what [do we do]to address our economic challenges."
Finance Canada's indicate that existing credits that allow partial deduction of meals and entertainment expenses lead to $180-million-a-year in foregone personal income tax revenue and $275-million in lost corporate income tax revenue.
Wtih a report from Karen Howlett in Toronto