The John Tavares Saga makes it difficult for the Habs to sign free agents

The Montreal Canadiens have never been the most sought-after destination for free agents in the National Hockey League.

For some reason, they always seem more interested in signing with the Dallas Stars, Florida Panthers or Nashville Predators than the Canadiens. Maybe it's because of the weather during the hockey season, or the insane media pressure on players in Canada's big markets, or even the drastic improvement in the tax situation anywhere in the league.

It has been argued online that the tax situation is not as big a problem as many people think. Some look at the basic tax rates in different states and provinces, and a player who signs with the Canadiens pays about 53% of his salary in taxes, while a player who signs in Florida pays only 38%.

This is a huge difference of 25 percent of the total salary. However, others point to loopholes that players and agents can jump through to keep more of their money. Players technically work 41 nights a year in their home city, and many have residences in other states or provinces and feel they don't need to pay the full tax rate to a province they don't spend much time in.

That was John Tavares' argument when he signed with the Toronto Maple Leafs on July 1, 2018. He still lived on Long Island when he signed a contract with a $15.25 million signing bonus payable on the day the contract was signed. signed. He and his lawyers and agents believed that the province of Ontario would not be able to collect the full tax rate because he had deposited the money into a bank account in the United States while living south of the border.

However, Tavares is currently in the middle of a legal battle over a total of $8 million that the Canada Revenue Agency believes he owes them. They justify this by saying they have to pay $6.2 million in taxes on their original signing bonus and another $1.8 million in imputed taxes.

Now, I'm not a financial lawyer, so I don't know which way this would go. However, Tavares going to court for $8 million, which is just over 10% of the total value of his contract, is not a good look for Canadian teams.

There seems to be quite a gap between what NHL agents think they can get away with and what the Canada Revenue Agency thinks they owe. This means that if the Canadiens try to sign a free agent this summer, they must understand that the player will waive more than 50% of the contract in taxes, which they only have to do if they sign in the provinces of Quebec or Ontario. .

Whether Tavares takes home $36 million or $42 million over the course of his seven-year contract doesn't really matter to me, or if it's truly insane money, but the drama will be worth watching as it unfolds. Will have a big impact on the Canadiens' ability to sign free agents in the future.

Bringing big-ticket UFAs to Montreal has been difficult enough, but if Tavares loses another $8 million in lawsuits, even more players will add Canadian teams to their unsigned list.