Canadian Franchises Will Get Government Subsidies

TORONTO —  Acknowledging the importance of hockey to Canadian culture, the Canadian government announced Tuesday it is prepared to provide up to $2 million to each of the country’s six NHL franchises each year to ensure that they do not move to the United States.

Industry Minister John Manley said the subsidies are justified because some Canadian teams find themselves in a financial squeeze because of the decreased value of the Canadian dollar, the smaller size of its urban markets and the generous tax breaks some American teams get from their cities.

However, payment of federal money to any team is contingent upon contributions from the league, which have been arranged, and from its city and provincial governments, which are not assured.

But Manley also expressed the government’s ambivalence about using taxpayer funds to aid millionaire team owners and players. He warned that the subsidies would last only for four years--enough time for the NHL to develop a more equitable formula for sharing revenues among its teams and a new collective bargaining agreement with the players that would put a cap on player salaries, which have been growing at 20% a year.

To qualify for each dollar of the federal aid, Manley said teams would have to win $3 in other financial assistance from provincial and city governments and from the NHL. No team is expected to get more than $2 million of federal money in any year and each team’s arrangement with the government will be reviewed annually. All subsidies would have to be refunded if the team moves before 2004.

Although the issue had been under study for a year, sources in Ottawa said Prime Minister Jean Chretien pushed it through a reluctant cabinet last week.

Within hours of Manley’s announcement, Ottawa Senator owner Rod Bryden took down the “For Sale” sign on his money-losing franchise, saying an expected package of subsidies and tax breaks would substantially close the $9-million gap between the team’s revenues and expenses.

Officials of the Vancouver Canucks, Edmonton Oilers, Calgary Flames and Montreal Canadiens said they hoped to hammer out similar deals, although some provincial and municipal government leaders have been lukewarm on providing tax breaks.