Report: John Tavares in Court Battle with Canada Revenue Agency Over $8 Million in Owed Taxes and the Impact it Could Have on Maple Leafs' Ability to Recruit Players

The Mississauga, Ontario native signed a seven-year, $77 million contract with the Maple Leafs on July 1, 2018. In his deal, the Maple Leafs paid out $15.3 million of his 2018-19 compensation in a signing bonus on that same day. 

In the appeal, Tavares' representatives say the $15.3 million signing bonus offered by Toronto “was integral” in his decision to sign with the Maple Leafs when there were other suitors for his services.

Impact on Maple Leafs signings

The outcome of a player's taxes would normally not have any impact on the Maple Leafs, but if this case goes against Tavares, there is a potential spillover effect on the NHL club and other Canadian sports franchises in trying to sign professional athletes. 

The Maple Leafs use signing bonuses as a sweetener to get around the disadvantage of higher taxes compared to other states in the United States. The Maple Leafs have used a similar structure in signing bonuses for all of their star players and some mid-range players following the signing of Tavares. 

In June, it was revealed that the CRA and Jose Bautista were involved in a legal battle over the Toronto Blue Jays star's pension deductions in 2015 and 2016.

With players being aware that signing with a club in Canada could one day lead to a dispute with a CRA, that might be enough of a deterrent for players to choose to play elsewhere.