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Full text of "Sport in Canada : leadership, partnership and
accountability : everybody's business
"
See other formats
hOnS
The Speaker of the House hereby grants permission to reproduce this document, in whole or in part, for use in schools and for other purposes such as private
study, research, criticism, review or newspaper summary. Any commercial or other use or reproduction of this publication requires the express prior written
authorization of the Speaker of the House of Commons.
If this document contains excerpts or the full text of briefs presented to the Committee, permission to reproduce these briefs in whole or in part, must be obtained
from their authors.
Also available on the Parliamentary Internet Parlementaire: http://www.parl.gc.ca
Available from Public Works and Government Services Canada — Publishing, Ottawa, Canada K1A 089
STANDING COMMITTEE ON CANADIAN HERITAGE
SUB-COMMITTEE ON THE STUDY OF SPORT IN CANADA
Leadership, Partnership and Accountability
ESE % CEs
Clifford Lineoln, M.P.
Chair
Dennis Mills, M.P.
Chair of the Sub-Committee
ae om
HOUSE OF COMMONS
CANADA
NOVEMBER 1998
Ls IBUKI DESIGN
808 — 1396 Ogilvie Rd.
Gloucester, Ont. K1J 8V8
(613) 745-7369 e-mail ibuki@uact.com
Sub-Committee on the
Study of Sport in Canada
CHAIR
Dennis Mills, M.P.
MEM BE R 8
Albina Guarnieri, M.P. Vice-Chair George Proud, M.P.
Denis Coderre, M.P.
John Solomon, M.P. Pat O’Brien, M.P. Peter MacKay, M.P. Suzanne Tremblay, M.P.
:
me
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'
Digitized by the Internet Archive
in 2023 with funding trom
University of Toronto
https://archive.org/details/31761119703049
OTHER MEMBERS OF
PARLIAMENT
PARTICIPATING IN THIS
STUDY
Mark Assad, M.P. (Qué.)
Réginald Bélair, M.P. (Ont.)
Mauril Bélanger, M.P. (Ont.)
Paul Bonwick, M.P. (Ont.)
Rick Borotsik, M.P. (Man.)
Pierre Brien, M.P. (Qué.)
John Cannis, M.P. (Ont.)
Yvon Charbonneau, M.P. (Qué.)
Hec Clouthier, M.P. (Ont.)
Joe Comuzzi, M.P. (Ont.)
Claude Drouin, M.P. (Qué.)
Wayne Easter, M.P. (P.E.I.)
Joe Fontana, M.P. (Ont.)
Ivan Grose, M.P. (Ont.)
Tony Ianno, M.P. (Ont.)
David Iftody, M.P. (Man.)
Nancy Karetak-Lindell, M.P. (N.W.T.)
Derek Lee, M.P. (Ont.)
Eric Lowther, M.P. (Alta.)
Preston Manning, M.P. (Alta.)
Bill Matthews, M.P. (Nfld.)
Mark Muise, M.P. (N.S.)
John Nunziata, M.P. (Ont.)
John O’Reilly, M.P. (Ont.)
Janko Peric, M.P. (Ont.)
Gilles Perron, M.P. (Qué.)
Beth Phinney, M.P. (Ont.)
Louis Plamondon, M.P. (Qué)
Charlie Power, M.P. (Nfld.)
David Pratt, M.P. (Ont.)
Dick Procter, M.P. (Sask.)
Nelson Riis, M.P. (B.C.)
Guy St-Julien, M.P. (Qué.)
Monte Solberg, M.P. (Alta.)
John Solomon, M.P. (Sask.)
Andrew Telegdi, M.P. (Ont.)
Joe Volpe, M.P. (Ont.)
Elsie Wayne, M.P. (N.B.)
Bryon Wilfert, M.P. (Ont.)
Bob Wood, M.P. (Ont.)
CLERK OF THE SUB-COMMITTEE
Eugene Morawski
RESEARCH OFFICERS
Claude Blanchette
Lane MacAdam, Consultant
The Sub-Committee also wishes to thank Bernard Fournier, Bev Isles, Kevin Kerr,
Vivaldo Latoche, Finn Poschmann and Norm Radford for their contribution.
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STANDING COMMITTEE ON
CANADIAN HERITAGE
SSS
CHAIR
Clifford Lincoln, M.P.
VICE-CHAIRS
Inky Mark, M.P.
Ted McWhinney, M.P.
MEMBERS
Mauril Bélanger, M.P.
Paul Bonwick, M.P.
Sarmite Bulte, M.P.
John Godfrey, M.P.
Joe Jordan, M.P.
Erik Lowther, M.P.
Dennis Mills, M.P.
Mark Muise, M.P.
Jim Pankiw, M.P.
Caroline St-Hilaire, M.P.
Raymond Lavigne, M.P.
Wendy Lill, M.P.
Suzanne Tremblay, M.P.
ASSOCIATE MEMBERS
Jim Abbott, M.P. Christiane Gagnon, M.P.
André Bachand, M.P.
Claude Bachand, M.P.
Rick Borotsik, M.P.
Cliff Breitkreuz, M.P.
Pierre Brien, M.P.
Serge Cardin, M.P.
Denis Coderre, M.P.
Antoine Dubé, M.P.
Maurice Dumas, M.P.
Gordon Earle, M.P.
Albina Guarnieri, M.P.
Monique Guay, M.P.
Rick Laliberte, M.P.
Francine Lalonde, M.P.
Peter MacKay, M.P.
Pat O’Brien, M.P.
Louis Plamondon, M.P.
George Proud, M.P.
Benoit Sauvageau, M.P.
Elsie Wayne, M.P.
CLERK OF THE COMMITTEE
Norm Radford
RESEARCH STAFF OF THE COMMITTEE
Parliamentary Research Branch
Gaston Blais
Grant Purves
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THE STANDING COMMITTEE
ON
CANADIAN HERITAGE
has the honour to present its
SIXTH REPORT
In accordance with its permanent mandate under Standing Order 108(2), your
Committee has agreed to conduct a study on Sport in Canada and report its
findings and recommendations.
2 .
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Sie Tax sPolieys-c ri me Pre ga ers 09
a. GST and Provincial Sales and Amusement Taxest.yeneee ee 99
be Miunierpal Taxes: ssc, . cance co Steet eee bate ees sey eee oD
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Sport Pact: sc. deus ght accreteagastt ce ean roe a 101
Section 8: Broadcasting (Sport and Media irae ete ee eet ee eee ea 106
Ax Context (voce sae cau ge ae ee ee rr 106
BssProblems.and:Soluti onsale cent eae een en 108
Section 9: Government Coordination, Collaboration and PrOScariniinin Capes reer eee M12
A. Intergovernmental and Intersectoral Collaboration and Coordination ......... 112
i. Data Gollection’on'the Spor Sector aes na nee 114
2. Human Resources Development for Coaches .............+e0e0e0e0:- 116
Be The Sporting ‘Goods‘Industiyae essere a tee ee 116
4, Hotse Racing industry? aa = eee 118
5) Sports, Wagering «ccs ae ee 119
6. Intemational:Sport Policy> 229). os aa ee 120
B.. Government Programming Win) eee, oe 121
ig Programs for Athletes: <2 ee 121
A Sport Medicine and. Research cn a.c ace eae ee 122
Section 10: New Financing for Sport in Canada: “The Millennium Sport Bond” ..... 124
POOT NOTES: on ais ecacs poe vin tsi core gps teen et Sree oe es)
Summary of Recommendations and Estimated 4@osts, 3 seen ee 126
CONCLUSION, gigs ensreeta ples wags sheet Pe 135
APPENDIX I
The: Sport Delivery Systeman Ganadan +...4. wee ee ee ee 139
APPENDIX IU
List, of Withesseserd tte desis Beaheree dace. o Sie eo) eek Reem we Se mea 1 a ee 140
APPENDIX III
List of Sibmittéd Briefs, <../.:000 2. 2G oo ee here te sate ep ae ete eee 145
APPENDIX IV
Survey Respondents: <5 45.45 -:< 0024 ed oe aes ieee es eee ee er 146
APPENDIX V
Canadian Tax Provisions Dealing with Amateur and Professional Sports ............ 148
APPENDIX VI 161
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SPORT IN CANADA: EVERYBODY'S BUSINESS
PART II: ROLE OF
GOVERNMENT IN
SPORT
It is interesting to speculate about the scholarly inattention to
sports policy. In common parlance, sport falls under the rubrics of
“play” and “games.” If sports are merely play, they would seem
less significant than matters of clearly instrumental concern, such
as education, social welfare, or national defense. If sports are
merely games, they would seem less worthy of concern than crime,
public health, or environmental quality.
Yet ironically, the ways we conceive and implement sport may be
fundamentally tied to those same policy concerns. The ways we
construct sport programs are closely aligned to the ways we seek
to educate and socialize our children. Sport has been used as a
tool for nation-building and diplomacy. Sport can affect public
health and the environment. Indeed, it has been shown that our
sense of community has been determined, at least in part, by the
nature of sports programs and opportunities that our policies
afford. Thus the study of sports policies can tell us a great deal
about our most instrumental policy concerns.
National Sport Policies — An International Handbook — Chalip,
Johnson, Stachura, 1996
eens eee EEE
Government involvement in sport policy is a fairly recent phenomenon, having
arisen primarily in the post-World War II era. Sport activity itself has been
common-place in most countries of the world for many centuries. In fact, the
Olympic Games can be traced back over 2000 years.
aes
SPORT IN CANADA: EVERYBODY’S BUSINESS
Governments around the world have put forward various justifications for their
involvement in this area: from the traditional “physical culture” emphasis in the
People’s Republic of China, to the more recent (1971) “Ping Pong Diplomacy”;
from the nation-building focus of the post-Revolution era in Russia, to the military
and defence objectives of sport and physical training in many countries and the
foreign policy implications of attaining sport supremacy; from Japan’s promotion
of sport as an acceptable way of dealing with human conflict, to the hosting of
major international games as a means of developing a country’s infrastructure.
Whatever the initial motivators for state involvement in sport, most countries of the
world have some form of sport policy which include the following objectives:
° Social cohesion
- health education focusing on certain values through physical education
- management of risk groups (e.g. young people)
- promotion of national unity
° Economic development
- construction of sports facilities
- encouragement of private sponsorship
- position in international competition
° Promotion of foreign policy
- diplomatic pressure (boycotts, etc.)
- bringing nations together and co-operation (e.g. Commonwealth
Games, Jeux de la Francophonie)
- promotion of a country’s international image
° Social development, welfare and health
- promotion of sport as an instrument for promoting good health
- reduction in inequality of access to sports facilities
- promotion of equity (male/female, minority groups, etc.)
(Jean Harvey, Marc Lavoie and Maurice Saint-Germain, brief)
SPORT IN CANADA: EVERYBODY’S BUSINESS
The Canadian Scene
Fa ee
The Canadian government’s role in sport can be traced to the mid-1950s.
Government action was prompted by poor showings in the 1954 World Hockey
Championships and in the 1956 Olympics, when Canada was defeated at its
“own” game by the Soviet Union, followed by a disappointing performance at
the 1960 Olympic Games in Rome. At the same time, Canada’s perceived poor
level of physical fitness created headlines in 1959, when the Prince of Wales
delivered a speech to the Canadian Medical Association citing Canadians’ “sub-
health”: “There is evidence that, despite everything, people in Canada are not
as fit as they might be... Some scheme, therefore, which exists to encourage
participation in all sports and recreations, for all ages and sections of the
community, is absolutely essential to any modern community with a high
standard of living.”
As a result of these events, Parliament was prompted to examine the role of the
state in addressing these national shortcomings. In 1961, the Fitness and
Amateur Sport Act was enacted to “encourage, promote and develop fitness and
amateur sport in Canada...” This Act paved the way for the Government of
Canada to enter into cost-sharing arrangements with the provinces and to
provide funding to volunteer-driven national sport organizations. However, this
early federal involvement did not enhance Canada’s international success. In
addition, federal/provincial cost-sharing agreements did not prove to be an
effective mechanism for distributing the $5 million made available through Bill
C-131. These challenges led to a series of further analyses and discussion.
During the national election campaign of 1968, as the national unity debate was
heating up, Prime Minister Pierre Trudeau reflected on how sports might play a
role in promoting national unity. The first Canada Games had been held the
year before, in Quebec City, with the theme “Unity through Sport.” Mr.
Trudeau promised to establish a federal task force on the issue. The report of
the Task Force on Sports for Canadians, which was tabled in the House of
Commons in 1969, set the course for the government’s emerging role in sport
policy. The government created a number of new arm’s-length sport agencies:
SPORT IN CANADA: EVERYBODY’S BUSINESS
the National Sport and Recreation Centre, which would provide administrative
services and office space to national sport organizations; the Coaching
Association of Canada, mandated to provide more structured support for
Canadian coaches in developing elite athletes; ParticipAction, an organization
intended to promote more active lifestyles; the Canada Games Council to
organize the Canada Games on a permanent basis; and Hockey Canada, created
to halt the decline in Canada’s international hockey success. While the federal
government was still concerned with the fitness of average Canadians, the
original focus of the Fitness and Amateur Sport Act, these early policy
developments began to carve out the federal role in supporting Canada’s high
performance national and international sport infrastructure.
The proliferation of these new arm’s-length agencies also increased the federal
bureaucracy, with the creation of the Fitness and Amateur Sport Directorate
(later upgraded to a separate branch with a dedicated Assistant Deputy
Minister). Between 1971-1978, grants to sport and fitness organizations grew
from $6 million a year to $39 million, of which about three quarters was
directed to sport groups. This stimulus came about in part because of Canada’s
role in hosting the 1976 Olympic Games in Montreal, in which this country
improved its overall standing from 21st to 10th, and the 1978 Commonwealth
Games in Edmonton, when it finished as the top nation. The first Minister of
State for Fitness and Amateur Sport, the Honourable Iona Campagnolo, was
appointed in 1976 to oversee this unprecedented growth in federal involvement
in sport.
The building blocks of Canada’s sport and fitness system continued to be put in
place in the early 1980s, with new programming support targeting women and
people with disabilities in sport, bilingualism, international relations and fitness
promotion (e.g. FitWeek, Canada Fitness Survey). When Canada was awarded
the right to host the 1988 Olympic Winter Games, additional funding was
provided to support Olympic winter sports preparation. A similar “Best Ever”
program for Olympic summer sports followed in 1984. This injection of new
funds into the system brought total annual federal funding for sport and fitness
programs to a peak level of $66.7 million in 1987.
SPORT IN CANADA: EVERYBODY’S BUSINESS
The early 1990s were characterized by federal budget restraint, during which
contributions to national sport organizations were reduced by approximately
25%. In addition, the government conducted a major review of its funding
eligibility program and the Sport Funding and Accountability Framework was
introduced. This reduced to 38 the number of organizations eligible for funding.
In addition, the new funding guidelines further shifted the government ’s priority
towards supporting high performance sport.
This period of restraint was reversed somewhat in early 1998 when the Minister
of Canadian Heritage announced new funding for sport and a commitment to
increase funding for high performance sport by $10 million per year over the
period 1998-99 to 2002-03.
Provincial, Territorial and Municipal
Government Roles
The provincial/territorial governments provide funding to provincial/territorial
sport organizations; they support and promote sport development through
provincial championships and provincial games as well as by preparing teams to
participate in the Canada Games. These governments also develop facilities
and provide direct support to athletes. The differing roles and responsibilities of
the federal and provincial/territorial governments are fairly well defined and
maintained through regular dialogue among officials and at the political level.
Local governments carry primary responsibility for facility development and
maintenance. Municipal recreation departments play a key role in providing
active living programs through organizing and managing community sport
activities.
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SPORT IN CANADA: EVERYBODYS BUSINESS
PART Ti: ECONOMICS
OF SPORTS
Sport is part of the life of many Canadians. Canadians participate in amateur
sport to keep themselves physically active and challenge their physical abilities.
According to Statistics Canada’s 1992 General Social Survey, 9.6 million
Canadians aged 15 and over regularly participate in one or more sports.
Canadians are not involved in sport only as participants, however. Many are
also involved as coaches, organizers and parents supporting their children’s
athletic activities. Canadians also support amateur or professional sports. Sport
is an important facet of the culture, traditions and identity of our country; it is
also a major contributor to the social life of Canadian communities.
Such activities, so popular among Canadians, also have a significant impact
upon the Canadian economy, a factor that is not often recognized and rarely
examined. The Sub-Committee’s primary focus was to address the economic
impact of sport and expand general awareness of how sport affects the
collective wealth.
The importance that Canadians attach to sport and recreation is reflected in
family spending on sport-related goods and services. Table | shows the total,
average and proportion of spending by families on sporting goods and services
in 1996.
TABLE 1
Total and Average Annual Family Expenditures and Market Share of
Sport-Related Spending, 1996
Total Annual Average Market
Spending Annual Share
($ million) Spending ($) (%)
Active sportswear & athletic shoes
Sporting & athletic equipment
Live sports spectacles
Use of recreational facilities
Membership fees
Single usage
Source: Family Expenditures in Canada 1996, Statistics Canada.
- Ua -
1992
Market Share
(%)
SPORT IN CANADA: EVERYBODY’S BUSINESS
In 1996, Canadian families spent $7,827 million on sporting goods and services,
representing $718 per family and 1.46% of total family expenditures.
Compared to 1992, the latter represents an increase in the proportion of family
expenditures devoted to sport-related goods and services. Family spending on
sport is split equally between sporting goods (sportswear and sporting and
athletic equipment) and sporting services (live sports spectacles, use of
recreational facilities, etc.). For comparison purposes, in 1996 Canadian
families spent 16.3% of their budget on shelter; 9% on food purchased from
stores; 2.6% on automobiles; 2.1% on health care; 1.1% on education and 0.5%
on reading material and other printed matter.
Sport activity has a direct as well as an indirect impact on the economy. The
direct impact is measured by aggregating the incomes of the various factors of
business production, including “primary inputs” (wages and salaries and
supplementary labour income, indirect taxes, net income of unincorporated
businesses, and operating surplus). The indirect impact is made up of various
interactions among other businesses, generated by intermediate input
requirements and representing the value of goods and services purchased from
other industries for use in the process of production.
Chart 1, draws a broad picture of the direct and indirect components of the sport
economy. The finished products — sporting goods, sportswear, sport shoes and
pleasure craft — require primary level activity, for raw materials as well as
activity at the initial and semi-processing levels. The direct economic effects of
manufacturing sporting goods are the value added in their production. Indirect
economic effects upstream are the value added resulting from activity at the
primary and secondary sectors.
Direct and indirect economic effects are also generated at the tertiary level
through the sport and recreation sector. Wholesaling and retailing of sporting
goods and professional sports competitions also have direct and indirect
economic effects. These include activities such as infrastructure management
services, sport administration, media, banks, food and beverages, transport and
communication, medicine and trade. Workers in those sectors would be directly
affected if the sport industry were to decline.
-12-
SPORT IN CANADA: EVERYBODY'S BUSINESS
Chart 1
The Sports Industrial Cluster
Primary Activities—Raw Materials
Forestry operations and
logging
Raising animals (skins)
agriculture (plant and
animal fibres)
Extraction and
concentration of minerals
Oil production
Secondary Sector—Initial Processing
Other intermediate
Electrolysis, light | Textile yarns Abattoirs and Organic chemistry
consumption
metals, steel,
alloys
tanneries
petrochemical
Energy, imports,
machines,
infrastructure
construction
| Sporting goods
Plates, wires,
tubes, milled parts
Secondary Processing, Semi-Processed Products
Weaving and
hosiery, fabric
Leather, rubber,
synthetic fibres
enhancement
Finished Products
Plastics, composites
Sportswear Sport shoes Pleasure craft : |
Tertiary — Services for Production and Services for Consumption
Retailing and whole-
saling of sporting goods
Physical education
primary to post-
secondary, coaches
Research and develop-
ment of materials and
services
Transport and
communications
Professional sports
competitions, events
Hunting and fishing,
supply stores
Media, specialized
magazines, advertising,
display, agents
Miscellaneous corporate
services
Management of federal
and provincial parks
Public administration of
sport and of the sports
industry
Medicine, care and
pharmacy services for
sportsmen and women
Banks, insurance
Infrastructure manage-
ment: swimming pools,
stadia, gymnasia
Administration of sports
associations
Import-export brokers or
services for sporting
goods
Food and beverage
SPORT IN CANADA: EVERYBODY’S BUSINESS
Statistics Canada has estimated the direct and indirect economic impacts of the
sport industry in Canada. As reported in Table 2, the whole sport industry can
be divided into five broad categories: coaches, referees and athletes; the
sporting goods industry; the sport and recreation service industry; national sport
organizations; and government.
An estimate of the economic impact of sport in Canada per sector of activity is
outlined in Table 2. Overall, the impact of the sport and recreation sector on
Gross Domestic Product (GDP) is $8.9 billion, or 1.1% of the Canadian GDP,
and related employment is 262,325 or 2.0% of the total jobs in Canada.
TABLE 2
Impact of Sport in Canada, 1994-95
|) pear
Coaches, referees and athletes 58,919
Sporting goods industry
2,975 59,122
GDP
($ millions)
Manufacturing, wholesale & retail
Sport and recreation service industry
Professional sport clubs
Sport and recreation clubs
Live sport spectacles
Use of recreation facilities
Other sports related-services
Total
National sport organizations
Government
Federal
Provincial
Municipal
Total
Source: Statistics Canada, November 1998.
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This study represents the first time that Statistics Canada has tried to assess the
importance of the sport industry in Canada. The evaluation contains some
imprecision, since Statistics Canada provided only the information that it had
already assembled at another aggregate level.
For comparison purposes, the brief from Jean Harvey, Marc Lavoie and
Maurice Saint-Germain suggests that in 1990-91 the direct and indirect
economic impact of the sport industry was a GDP of $5.9 million and 237,106
jobs. These figures are somewhat compatible with the estimated total gross
expenditures (not GDP) of $16.2 billion! presented in the task force report,
Sport: The Way Ahead.
Table 3 compares the sport and recreation sector’s direct share of national GDP
and employment with those of selected Canadian industries. For instance,
agriculture accounts for about 1.81% of GDP; mining, 1.07%; logging and
forestry, 0.68%; the motor vehicle and parts industry, 2.05%; and the aircraft
and parts industry, 0.39%.
TABLE 3
Sport Sector and Selected Other Industries
Share of Canadian Employment (1994) and GDP (1995)
Share of GDP
(%)
Share of Total
Employment
(%)
Industries
Agricultural & related services industries
Sport
Food industries
Printing, publishing & allied industries
Motor vehicle and motor vehicle parts & accessories industries
Wood industries
Paper & allied products industries
Logging & forestry industries
Mining industries
Fishing & trapping industries
Crude petroleum & natural gas industries
Aircraft & aircraft parts industries
Source: Statistics Canada, CANSIM matrix 3472 and 467 7 and The Vitality of the Sport Sector in Canada, April 1998(b).
tise
SPORT IN CANADA: EVERYBODY’S BUSINESS
Sections 1 to 4 present in more detail the broad categories outlined in Table 2.
Section 5 deals with sporting infrastructure and section 6 outlines the
importance of international sport for Canada in the context of global markets
and foreign policy. Finally, section 7 discusses government revenues generated
by sport activity.
The Sub-Committee consulted persons or organizations in each of these sectors
through hearings, briefs and a questionnaire sent to 215 national organizations
that operate in the sport economy, as well as through other documentation
submitted to the Sub-Committee. Statistics Canada was an important source of
statistics. It should be noted, however, that the Sub-Committee has not verified
the figures and numbers that were provided to it by organizations. Also, it is
worth noting that the economic impact presented in this chapter is the gross
effect; that is, the numbers show only what current dollars are spent in the sport
industry and attached value added. It does not evaluate the net effect of $1
spent in any other industry than the sport industry.
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SPORT IN CANADA; EVERYBODY'S BUSINESS
Section I: Athletes, Coaches, Referees
and Volunteers
ig pe ee
Athletes, from beginners through to high-performance amateurs or
professionals, represent the basis of the whole industry of sport. They are the
engine of the sport economy. They create demand for coaches and trainers,
they are consumers of manufactured sporting goods, and they use the sporting
facilities. High-performance athletes attract people to the stadium for amateur
or professional sport events and their performances are broadcast on TV. They
are the best promoters of sport in Canada. Greater vitality in sport means more
vitality in the manufacturing of sporting goods and sporting facilities. In
addition, high profile Canadian athletes are promoters of Canadian products at
home and ambassadors for Canadian businesses abroad.
As indicated in Table 2, coaches, referees and athletes have a total impact on
the economy of $1.6 billion, which represents one fifth of the total economic
impact of the sport and recreation sector. There are about 58,919 people in
Canada who report their primary occupational activity as coach, referee or
athlete.
At the amateur level, there are 1,026 carded athletes who receive direct funding
support from Sport Canada. There are about 226 professionals playing for
Canadian franchises in the National Hockey League (NHL), Major League
Baseball (MLB) and National Basketball Association (NBA). There are more
than 300 professionals playing in the Canadian Football League (CFL), and
about 150 players for the National Hockey League and Major League Baseball
farm clubs located in Canada.
Just one athlete can have a tremendous impact on the economy. A study in
Fortune magazine indicates that, over his career, Michael Jordan has had a total
impact of about $10 billion on the United States economy. What sort of an
economic impact did Wayne Gretzky have on the Canadian economy while he
was playing with the Edmonton Oilers? More recently, what has been the
impact of Myriam Bédard, Elvis Stojko, Donovan Bailey, or Ross Rebagliati,
for example, on the Canadian economy?
amet
a a
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SPORT IN CANADA: EVERYBODY’S BUSINESS
For every athlete who reaches the top level there are many thousands of athletes
in the development stream. Sport Canada estimates that there were 2.7 million
competitors registered as members of national and provincial sport
organizations in 1994; that is, they paid membership fees which allowed them
to compete in recognized competitions. Of the millions of registered members,
just over 1,000 were federally carded athletes receiving direct funding for their
training and competition expenses. The two largest groups of registered
athletes are with the Canadian Soccer Association (582,565 registered players in
1997) and the Canadian Hockey Association (507,737 registrations in 1996-97).
Appendix | depicts the competitive sport delivery system in Canada.
Coaches and trainers are essential inputs in the sport economy. This human
resource is the basis of the sport economy structure. According to the Coaching
Association of Canada (CAC), between 1992 and 1996 more than 65,000
coaching certificates were awarded. The majority of these certificates were for
the first level of coaching (76%); only 260 were for levels 4 and 5.
However, remunerated coaches are only the tip of the iceberg of the gigantic
human resource structure set up for the development of the entire sport sector.
For instance, the Canadian Hockey Association has a total of 73,580 registered
coaches and the Canadian Soccer Association has 72,000 registered coaches.
Overall, there are 188,000 registered coaches in national sport organizations.
Many coaches and trainers play a part in the development of just one top level
athlete.
Since most of the trainers are volunteers, it is not possible to measure their time
investment in terms of direct economic impact. Even if their quantifiable
contribution to the economy is limited, coaches and trainers are one of the
pillars of the sport industry. According to a 1997 Statistics Canada National
Survey of Giving, Volunteering and Participating, there are about 1.8 million
volunteer jobs in sport and recreation in Canada. An average of two hours a
week per job over the 11-month survey totalled over 172 million hours. This
represents approximately 83,000 full-time, full-year jobs. If these jobs had paid
$5 per hour they would have generated a payroll of $16.6 million a week or
$864 million per year.
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Section 2: Manufacturing, Wholesaling
and Retailing of Sporting Goods
Manufacturing, wholesaling and retailing sporting goods all depend on
participation in sport. In 1996, Canadian families spent $2,289 million on
active sportswear and footwear, up 28% from 1992. Moreover, spending on
sporting and athletic equipment was $2,071 million, an increase of 31% from
1992.
Many jobs are related directly to sporting activity. Sporting goods factories are
primarily engaged in the manufacturing of sporting, athletic and recreation
equipment, including equipment for archery, badminton, baseball, basketball,
cycling, billiards, bowling, curling, fishing, football, golf, gymnastics, hockey,
hunting (excluding firearms), lacrosse, skating, skiing (excludes boots),
snowshoeing, squash, table tennis, tennis, tobogganing, and track and field.
Amusement and sporting goods wholesalers are primarily engaged in the
wholesale distribution of sporting goods and accessories, billiard and pool
supplies; sporting firearms and ammunition; and marine pleasure craft
equipment. Sporting goods retailers are primarily engaged in selling
sportswear, and sporting and athletic equipment. Since 1990, the number of
employees, wages and salaries, the value of shipments and the value added in
the sport sector have all increased. Table 4 shows that, in 1997, there were
about 200 manufacturing establishments in Canada, a reduction of 2.8% per
year from 1991.
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TABLE 4
Sporting Goods Industry (millions of dollars)
eS
Manufacturing (SIC 3931)
Number of establishments
Number of employees
Wages and salaries
Value of shipments
Value added (GDP)
International Trade
Canadian market
Exports
Imports
Wholesaling? (SIC 5942)
Number of employees 1994 = 2,164
Value added (GDP) 1994 = 612.7
Retailing?
Number of employees 1994 = 36,477
Value added (GDP) 1994 = 876.7
(e) Estimates from Industry Canada.
(1) Average annual change between the latest available year (estimates from Industry Canada are not taken into account).
(2) Number derived from the value of sales by Statistics Canada.
(3) Number derived from the family expenditure by Statistics Canada.
Source: CANSIM matrix 6880 and 9550, Statistics Canada and /ndustry Profile: The Canadian Equipment Industry,
Trade Industry Report, Bernard Ouellet, Industry Canada, May 1998.
In 1995, there were 8,693 manufacturing workers employed in sporting goods
production. Since 1991, employment in this sector has increased at an average
annual rate of 5.2%. Industry Canada estimates that there were 10,500
employees in sport manufacturing industries in 1997. The wages and salaries
paid in this sector in 1995 came to $224 million, an annual increase of 6.6%
since 1991. Between 1990 and 1997, the value of shipments in this industry
increased at an annual rate of 10.9%, reaching $1,131 million in 1997. In
addition, the value added increased at an annual rate of 14.2% between 1991
and 1995. In 1995, the latest year for which data are available the value of
shipments totalled $626.9 million.
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The wholesaling and retailing of sporting goods provide employment to many
Canadians and have a significant economic impact. In 1994, wholesaling
accounted for a total of 2,164 direct jobs and had a value added (GDP) of
$612.7 million. For the same year, retailing of sportswear and sporting and
athletic equipment accounted for 36,477 direct jobs and a value added of $876.7
million.
Canadian manufacturing industries are very exposed to international trade, more
so than is the average for the Canadian economy (Saint-Germain et al., 1998).
Canada exported 48% of its total shipments in 1997, while 63% of sporting
goods sold here were imported. Canadian exports increased at an annual rate of
21.9% between 1991 and 1997, while imports increased by 12.0% per year
during the same period. The Canadian market increased at an average annual
rate of 9.6% during that period, reaching $1,677 million in 1997.
Canadian exports of sporting goods are mainly concentrated in swimming and
wading pool kits and accessories (26.7%); gym and exercise equipment
(25.9%); ice skates, protective headgear and ice hockey equipment (24.6%); in-
line/roller skates (9.5%); snow ski and snowboard equipment (5.1%); and
bicycles (3.1%). Canadian exports are shipped mainly to the United States
(76.6%) and, to a lesser extent, to Western Europe (15.0%).
Canadian imports consist mainly of bicycles, parts and accessories (18.6%),
gym and exercise equipment (18.7%), golf equipment (18.3%), skate and
hockey equipment (11%), ski and snowboard equipment (7.1%), fishing
equipment (5.3%) and racket equipment and accessories (1.3%). The United
States, Asia and Western Europe account for 50.1%, 37.0% and 9.8% of total
imports respectively.
As it is the case for Canada, international trade in sporting goods is very
important globally; international trade accounts for about one-third of the world
market. Generally, lower-cost products are sourced from low-wage countries in
the Far East, while developed countries (including Taiwan) provide higher
value-added items (Ouellet, 1998).
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SPORT IN CANADA: EVERYBODY’S BUSINESS
In 1997, the global value of sports equipment at the wholesale level was
estimated at $90 billion, a 5% increase since 1996. At the national level, there
is a high degree of market concentration, with the top 10 countries estimated to
represent more than 80% of the world market and 75% of international trade.
However, the opposite is true at the supplier level, with industry estimates
indicating the top 10 companies control less than 20% of the market. Although
exact world-wide market figures are unavailable, industry estimates suggest that
the U.S. has 30% of the sports equipment market, the European Community
about 33%, Japan has 22%, Canada has 3%, and the rest of the world accounts
for 12% (Ouellet, 1998).
Forecasts for the next decade suggest that annual growth will continue, although
it may not reach the 8-10% annual growth witnessed in the 1980s. Moreover, in
the future, sporting goods will make greater use of composites and new
materials in place of traditional materials; this will improve sourcing
opportunities and gain ready acceptance among consumers. The successful
firms will be marketers with control over the brand name, distribution, service,
and manufactured quality of the products rather than just manufacturing
operations (Ouellet, 1998).
The North American Free Trade Agreement (NAFTA) is expected to have little
impact on the sporting and recreational equipment sector. With the
implementation of the agreement on January 1, 1994, nearly all Mexican tariffs
were eliminated. The major exceptions are bicycles (tariffs to be eliminated
January 1, 2003) and a few other sport and recreation products (tariffs to be
eliminated January 1, 1999) (Van Zant, 1996).
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SPORT IN CANADA: EVERYBODY'S BUSINESS
Section 3: Sport and Reereational
Service Industries
Participation in a sport activity as either a competitor or a spectator creates a
need for businesses and workers to provide services. For instance, golfers’ need
of golf clubs provides jobs and facilities to manufacture these. In the same way,
attendance at a sport event requires workers to stage the event and provide
support services for spectators.
The sport industry includes commercial spectator sports (professional sports
clubs and horse race tracks) and sports and recreational clubs and services (golf
courses; skiing facilities; boat rentals and marinas; and other amusement and
recreational services). The economic activity related to the sport and
recreational service industries has a broad impact on the economy.
Table 5 presents the number of firms primarily engaged in providing sport and
recreational services from 1982 to 1994. In 1994, a total of 5,336 firms
provided sport-related services producing $3.1 billion in revenues. While only
one out of four enterprises was operating in commercial spectator sports, these
enterprises generated one out of every three dollars produced in the industry.
TABLE 5
Selected Sport and Recreational Service Industries, Canada, 1992 to 1994
Total revenue
($ millions)
Number of Firms
Type of Service
~j9s2 | 1988 | 1994
1.878] 1165] 1,317
88 96 | 149
626
Commercial spectator sports
Professional sports clubs
Horse race tracks
Sports and recreation clubs and services
Golf courses
Curling clubs
Skiing facilities
Boat rental & marinas
Other sports and recreation clubs
Source: Statistics Canada, CANSIM matrix 41 and 42.
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SPORT IN CANADA: EVERYBODY'S BUSINESS
Between 1982 and 1994, the number of firms engaged in the sport and
recreation sector in Canada grew by 68%; however, most of the increase (55%)
was before 1988. Professional sports clubs showed the most growth, increasing
69% to stand at 149 in 1994. Only the number of horse race tracks decreased in
this period. Total revenue in all sectors grew in both current and constant
dollars, with the biggest increase in professional sports clubs and the smallest
increase in horse race tracks.
It is worth noting that the total revenues shown in Table 5 are only a fraction of
all revenues in the sport and recreation service industries. The reason is that
Table 5 presents numbers only for firms that are primarily engaged in this area,
while Table | took into account total family expenditures on all sport-related
services.
Moreover, amateur sport events make an important contribution to the economy
by providing a service to local communities. A good example of an amateur
sport event is a Canadian Hockey League (CHL) game. With its 47 franchises
in Canada, the CHL had an attendance of 4.5 million spectators in 1997-98,
more than any major league sport in Canada. The charts at the end of this
section compare attendance at Canadian Hockey League events and at
professional sport league events in Canada and shows the evolution of
attendance at Canadian Hockey League games since the 1979-80 season.
According to the Canadian Hockey League, the direct and indirect economic
impact of its activities is estimated at $135 million annually.
The next three sub-sections emphasize some particular aspects of the sport and
recreation sector: groups the Sub-Committee heard specifically (professional
sport clubs); factors not taken into account in the calculation of the sport
industry GDP (major games hosted in Canada); and examples of how the sport
and recreation sector contribute to the tourism industry.
A. Professional Sport Clubs
Professional sport clubs have been in Canada for many years. The National
Basketball Association (NBA) was present in Toronto 40 years ago, Montreal
had professional baseball clubs in the 1950s, and football has over 100 years of
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SPORT LN CANADA EVERYBODY¥*5 BUSINESS
history in Canada. Professional sport clubs provide high-level entertainment
and give a very high profile to the sport industry. The employment and
economic activity created through their Operation are significant. Professional
sport teams, in addition to the economic advantages they bring, focus North
American attention on any city in which they play.
Canada has six National Hockey League (NHL) clubs, eight Canadian Football
League (CFL) clubs, two Major League Baseball (MLB) clubs and two
National Basketball Association (NBA) teams. There are also four professional
soccer clubs and two professional lacrosse clubs. Canada also has four baseball
farm teams and four hockey farm teams. The professional and semi-
professional clubs also make an important contribution to Canada’s economy.
Statistics Canada (see Table 2) has estimated that professional sport clubs and
the retailing of live sport spectacles have a total GDP (direct and indirect) value
of $608 million and account for 23,715 jobs.
The National Hockey League estimates that the six professional hockey clubs
generate 8,689 full-time and part-time jobs in Canada as well as 3,039 indirect
jobs. In terms of annual wages, this represents $300.7 million directly and
$100.3 million indirectly. The total impact (direct and indirect) of the National
Hockey League, in terms of GDP, is estimated to be $437.6 million per year.
Major League Baseball (MLB) in Canada also has an important impact on the
economy. A 1991 study shows that the Toronto Blue Jays and the SkyDome
provide 2,700 direct jobs (part-time and full-time) and 500 indirect jobs.
Moreover, the net GDP is estimated at $97.3 million. The Montreal Expos
estimate that they have a GDP of $105.3 million, of which $37.9 million comes
from outside Montreal. In addition, it is estimated that the Montreal Expos
create roughly1,252 jobs, of which 451 are attributed to expenditures by
individuals coming from outside the city.
The National Basketball Association teams in Vancouver and Toronto also have
a very important economic impact. For basketball activity only (arena activities
have already been covered for the Vancouver Canucks), the Grizzlies sete:
that they generate 375 full-year jobs and a GDP of $43.9 million. The impact of
the Toronto Raptors would be similar, though this has not been calculated.
Watley 2
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SPORT IN CANADA: EVERYBODY'S BUSINESS
Although there are no figures on the exact economic impact of the Canadian
Football League, the league has over 1.8 million spectators a year and most
revenues stay in Canada.
While the operation of these teams generates significant economic activity,
there is also an enormous investment in infrastructure, which, in turn, has a
great economic impact. Between 1995 and 2000, Canadian professional sport
clubs in the National Hockey League and the National Basketball Association
will have invested about $1 billion of private money on facilities and related
infrastructure. If the Montreal Expos proceed with plans for a new ballpark,
there would be a private investment of almost $100 million. The Toronto
SkyDome has a private investment of about $300 million. Such investments
also generate economic activity. For instance, the Expos have estimated that
the construction of a new ballpark ($250 million) would generate 3,785 jobs a
year and a total provincial GDP of $181 million.
As indicated at the beginning of this chapter, the aforementioned data should
not be interpreted as a net economic effect. They represent only the size of the
professional sport industry in Canada. The dollars that spectators spend at the
stadium are dollars that will not be spent in other sectors of the economy. It
does not necessarily follow that the absence of professional sport clubs
(unfortunate as this would be) would reduce GDP by the entire amount of the
clubs’ economic GDP, as expressed above. Part V, section 7, B(1) discusses the
weaknesses and limitations of the economic impact evaluations that are
generally presented by professional sport clubs in the United States in their
attempts to get subsidies to finance their facilities.
B. Major Game Events Hosted in Canada
Major games have been a critical factor in the very rapid development of
Canadian sport since the passage of the Fitness and Amateur Sport Act and the
advent of significant federal funding for sport in 1961. In addition, multi-sport
events have proved to be a very effective means of levering major financial
commitments from provincial governments, and national and international
private sectors. The economic impact of the infusion of public and private
funds in regions where games have been hosted has been considerable. Past
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SPORT IN CANADA® EVERYBODY'S BUSINESS
achievements (such as the 1967 Pan-American Games, the 1976 Olympics, the
1978 Commonwealth Games, the 1983 World Student Games, the 1988 Calgary
Olympics, the 1994 Commonwealth Games and over 16 editions of the Canada
Games) are evidence of Canada’s proud tradition of hosting major games.
These events are generally regarded as having been highly successful and have
enhanced Canada’s reputation as a major sporting nation at home and abroad.
As a result, several trends can be identified showing the economic and social
benefits accruing to the host region and the nation.
From an economic perspective, the hosting of major events brings significant
economic activity to local industry, in particular the construction and hospitality
industries. This activity produces hundreds of full and part-time jobs and
contributes substantial tax revenues to various levels of government. The
hosting of the 1988 Calgary Winter Olympics created 28,000 person-years of
employment and had a $1.3 billion impact on the Canadian economy. Private
and international sector investments in the form of television revenues and
sponsorships stimulated by the hosting of the Calgary Games accounted for
more revenue than the direct and indirect contribution of the three levels of
government. The upcoming Pan-American Games (Winnipeg) are expected to
generate $178.9 million in direct and indirect gross expenditures and create
2,068 person-years of employment.
The economic impact studies published by proponents of bids for games are
generally somewhat optimistic in attempts to garner public support. In most
cases, public investment in hosting major games is only partially recovered
through the resulting income and consumption taxes, but the hosting of major
games generates non-monetary benefits for the host country region which can
be characterized as the “real return.” These intangibles include: sporting and
cultural development, social cohesion and civic/national pride, international
recognition, and post-games tourism (Pilon and Cowl, 1994).
Cumulatively, over $230 million has been invested directly in the Canada
Games since their inception in 1967, about half of it in capital projects. From
track and field complexes to ski hills, soccer pitches to swimming pools, a
legacy of sports facilities has been built up in 16 medium-sized communities
across Canada. These facilities have provided a springboard for Canadian
S\N co Pe
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oS ans Sig re
gy
ay
Canada
Games
Jeux du
Canada
SPORT IN CANADA: EVERYBODY'S BUSINESS
growth in sports excellence and fitness and for training of coaches, technical
officials and sport administrators.
Table 6 provides a summary of the economic impact of several editions of the
Canada Games and other international events. These results have been
generated by economic models from reputable agencies such as the Manitoba
Bureau of Statistics and the Conference Board of Canada’s TEAM Economic
Impact Model. The economic activity measured includes capital and operating
spending as well as spending by visitors to the host area. In all cases, an
economic multiplier is applied to provide a total net injection from hosting the
events.
TABLE 6
Economic Impact of Hosting Major Games (millions of dollars)
Canada Games
1987 Cape Breton
1991 PEI
1995 Grande Prairie
1997 Brandon
2001 London
International Games
1988 Calgary Olympics
1994 Commonwealth Games
Source: See text above.
While the investment in capital and operating expenditures for major games has
created the greatest economic impact, the staging of these events in Canada has
also been used very effectively to encourage significant advances in Canadian
sport, in terms of both performance and participation levels. The fact that
Canada hosted the 1976 and 1988 Olympics, in particular, led to tremendous
enthusiasm among sport organizations to accelerating sport development. In
each case, the federal government, in partnership with the provinces and non-
profit sport organizations, initiated new programs to capitalize on the increased
interest in sport. Game Plan ‘76 (a federally funded program offering direct
support to athletes) contributed in a major way to Canada’s 10th place finish
» 23 =
SPORT IN CANADA: EVERYBODY'S BUSINESS
overall in 1976 (compared to 17th place in the preceding Olympics). Similarly,
the Best Ever Winter Program (followed shortly after by the Best Ever Summer
Program) provided significant new federal resources for the training of
Canada’s high-performance athletes and the development of general
competitive opportunities in the winter and summer Olympic programs. These
programs in turn prompted the provinces to initiate their own Game Plans or
Best Ever programs targeting the lower tiers of the sport system. Finally, the
spinoff from the staging of these major events was increased general enthusiasm
for and participation in sport among Canadians of all ages.
In addition to the positive economic benefits of hosting major games, several
other important gains can be identified over both the short and long term. These
include: concentrated media coverage; increased tourism; accelerated
infrastructure development; business development in the community; national
pride and identity; cultural awareness; improved sporting infrastructure to serve
the community after the event; sport development opportunities and an army of
experienced volunteers.
Cc. Tourism
Participation in sport and attendance at major sporting events are important
generators of tourism activity in many regions of this country. According to
Statistics Canada, many travel agendas include participation in recreational and
competitive sports; in some cases, sport may be the overriding purpose for
travel. Both athletes and spectators travel to such major sporting events as the
Canada Figure Skating Championships, the Canada Games or the National
Hockey League playoff games.
The Canadian Travel Survey shows that nearly 8.6 million person trips taken by
Canadian travellers included attendance at a spectator sporting event in 1996
and 35.84 million person-trips included participation in sports or an outdoor
activity. In fact, sport activity represents 26% of all person-trips taken by
Canadians.
Travellers from the United States and other parts of the world also enjoy
sporting activities in Canada. In 1997, 728,000 overnight person-trips from the
POR i ee ee
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SPORT IN CANADA EVERYBODY’S BUSINESS
United States to Canada included attending a sport event and nearly 3.9 million
included participation in sports or some outdoor activity; these features were
present in 34% of all overnight trips. Moreover, in 1997, 433,000 overnight
international person-trips (excluding trips from the United States) included
attendance at a sport event, and nearly 1.2 million included participation in
sports or outdoor activities; these features were included in 38% of all
international person-trips. These spectator and participator sport events
contribute to the economy of our local and regional communities through tourist
spending on accommodation, food and related goods.
Travellers to Canada often take advantage of our spectacular geography and
wilderness areas. Recreational physical activities such as swimming and other
water sports are popular with both domestic and foreign travellers to this
country. Canadian travellers also enjoy fishing, golfing, downhill skiing and
cycling. While hunting/fishing activities are popular with American travellers,
downhill skiing is popular with other international visitors to Canada (Statistics
Canada, 1998(b)).
Many sport activities and events have a long tradition of spectator popularity
and success, while others are particularly relevant to Canada’s key tourism
markets (e.g. hockey, equestrian, baseball, tennis, figure skating, golf, football,
cycling, soccer and skiing). Some spectator sports have an established ability to
attract tourists; these tend to involve professional sport teams (National Hockey
League, Major League Baseball, figure skating, alpine skiing, tennis, equestrian,
auto racing). Also showing potential for attracting tourists are spectator sports
that are not currently established in Canada, or do not possess all the attributes
of sophistication, high level marketing, quality venues, prime location necessary
to attract the tourist spectator. Nonetheless, there is a positive interest and
potential demand for these sports and they could become strong tourism
spectator products; examples are soccer, rugby, cricket, NFL football and golf
(Statistics Canada, 1998(b)).
Major multi-sport games are another example of how sport attracts tourism.
Not only athletes, coaches, officials and delegations, but also visitors to the
sporting event create important spinoffs for the local economy and increase
public awareness of the host region.
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In that sense, the 1988 Winter Olympic Games in Calgary are a tremendous
example of tourism resulting from a major sport event. According to the
Calgary Tourism and Convention Bureau Research Department, over 150,000
people arrived in Calgary during the month of February 1988 and 21% of games
spectators stayed 13 or more nights. Moreover, almost 40% of spectators were
visiting Calgary for the first time; 27% of them had never heard of Calgary
prior to the Olympics. A Department of Canadian Heritage report by Terrence
Cowl (1994) found that international tourist volume has grown significantly
since the 1988 Olympics. Such tourism really makes an important contribution
to the Canadian economy; first it brings in dollars from outside the country and,
second, these travellers stay longer and spend more money. Canada has held, or
will hold, other international major multi-sport events since the Calgary Games.
The Commonwealth Games in Victoria attracted 133,000 visitors and the
200,000 visitors predicted for the Winnipeg Pan-American Games in 1999 are
expected to spend about $21.7 million.
The Canada Games, which are held every two years in a different city, are also
an important source of tourism for the host area. The Manitoba Bureau of
Statistics has estimated that the 1997 Summer Games in Brandon attracted
4,065 overnight visitors including 2,100 athletes and 1,965 support staff
(including mission staff), technical officials, VIPs, broadcasters, media, parents
and so forth. These 4,065 visitors were expected to spend about $3 million,
increasing Manitoba’s GDP by $2.4 million and providing 58 person-years of
employment. These visitors’ expenditures were expected to generate $0.7
million for the three levels of government, not including the tourism generated
during and after the events.
International professional single-sport events held once a year, such as the
Canadian Tennis Open in Toronto and Montreal, the Grand Prix of Canada in
Montreal, the Indy Race Car in Toronto and Vancouver, or an event like Canada
Cup Hockey, held every four years, give tremendous visibility to Canada
throughout the entire world. Not only are international visitors attracted to
these events, but general awareness of Canada is raised and this has a major
influence on people selecting a vacation destination.
~ Zi -
SPORT IN CANADA: EVERYBODY’S BUSINESS
The Montreal Grand Prix is broadcast in 130 countries and has a TV audience
of 300 million people. Moreover, all major newspapers follow the event, which
attracts more than 200,000 people yearly, about 20% of whom come from
outside Canada, 14% from the United States, 4% from Europe and 2% from
Asia. The 1997 event attracted 104,000 foreigners.
Professional teams in major leagues attract tourists from both Canada and the
United States. For instance, the Toronto Blue Jays have estimated that they,
and other SkyDome events, generated some $39.4 million for the tourism
industry in 1991, with multiplier effects representing $91.9 million and the
creation of 1,800 jobs. This represents half of the total economic impact of the
Blue Jays for that year, with over 11% of Blue Jays patrons being visitors to
Toronto. “Tourist spending augments local fan support and contributes to what
is widely recognized as a valuable component of the Canadian economy.
Studies conducted in the early 1990s indicate that the Blue Jays contribute more
to tourism than any other Canadian sports franchise” (Blue Jays, Meeting
No.18).
For the Montreal Expos, the situation is similar: “11% of fans attending Expos
games are visitors from outside the Province of Quebec. For two thirds of these
tourists, the primary reason for their visit to Montreal is baseball” (Expos,
Meeting No. 14). According to the Expos, of the $105.3 million the team
contributed to the economy, $22.6 million is from tourists from outside the
Montreal region, representing 21% of the total impact. The media impact
measure for the Expos shows that the team allows Montreal to receive over one
billion impressions in newspapers valued at more than $22 million yearly.
Orca Bay has estimated that overnight expenditures of visitors to the Vancouver
Grizzlies at General Motors Place provide 55 full-year equivalent jobs and a
GDP of $1.6 million.
There are over 250,000 sport events hosted annually in Canada, each of which
had an impact on the tourism industry. Despite its significance, sport’s impact
on tourism goes largely unnoticed. Nevertheless, it contributes roughly $4
billion in tourism expenditures (SOAR International, brief). Sport activity is
clearly a major way of attracting tourists to all regions of the country. Many
world citizens now know Canada better because of the international sport events
held here and because of internationally renowned Canadian athletes.
- 32.
SPORT IN. CANADA: EVERYBODYS BUSINESS
Considering that tourism in Canada, in 1997, had an economic impact (GDP) of
$29.2 billion2 (or 3.4% of the GDP) and generated 503,200 person-years of
employment, the role that sport plays in attracting tourists is significant.
CHART 2
1997-98 Regular Season Attendance
Canadian Teams
GHiflotaliSeasonyAttendancel
a
6-000,000 ——$ $$$ _@
SF a oe |. oe
4,000,000 -
y ‘8. ‘82. 91 eX ones, Se Sea, ie |
‘gg 89 (90: 919293 94 9S 9H OTB
- 33 -
Ligue Canadienne de Hocke y
SPORT IN CANADA: EVERYBODY'S BUSINESS
TIGRES
wy
- 34 .-
SPORT IN CANADA: EMERY BODY Ss BUSINESS
Komcon
ANIGRS
Spokane
Chiefs
noeKeY CLVR
SPORT. IN CANADA: EVERYBODY’S BUSINESS
CHART 3
CHL Total Season Attendance
5,000,000
4,500,000 |
4,000,000 |
3,500,000 |
3,000,000 }~
2,500,000 \~
2,000,000
1,500,000
1,000,000
500,000
0
Ps’
Yeh
ewer Meaty Lisgey
Source: David Branch, CHL
- 36 -
SPORT IN CANADA* EVERYBODY "s BUSINESS
Section 4: National Sport Organizations
WSS a eared pipers
The national sport organization is the pivotal agency in each
category of sport ... A national! sport organization is generally made
up of provincial/territorial sport organizations and various regional
and local clubs and organizations which are affiliated to the
national body through the provincial body.
Amateur Sport: Future Challenges. Second Report of the Standing
Committee on Health and Welfare, Social Affairs, Seniors and the
Status of Women (Dec. 1990)
SS LS
National sport organizations are generally non-profit organizations that provide
support for athletes and organized competitions, hold the sanctioning rights for
international competitions, establish coaching certification standards, provide
technical development programs, and prepare national teams. Sport Canada
provides financing for 50 organizations (38 as single sport and 12 as multi-sport
organizations) through the National Sport Organization Support Program, which
is aimed at assisting the organizations to achieve sport objectives that
complement those of the federal government. The program is open to national
sport organizations that have qualified under the Sport Funding and
Accountability Framework.
This Framework is a comprehensive, objective tool to ensure that federal funds
are allocated to national sport organizations that contribute directly to federal
sport objectives and priorities. It encompasses three main components:
eligibility, funding determination and accountability. To be eligible for funding
for the period covering 1996 to 2001, national sport organizations must have
met established prerequisites and, following a detailed assessment by Sport
Canada, achieve a high score above the eligibility threshold. Prerequisites
include accepting national sport organization guidelines, responsible
accounting, and adherence to Sport Canada policy with regard to gender
accessibility, official languages, drug use and tobacco sponsorship. The
assessment is based on evaluation criteria organized into three key categories:
COL ee ee eee
- 37 -
(0) re iiieeas es
ATHLETES
-CAN-
SPORT IN CANADA: EVERYBODY'S BUSINESS
high performance, sport development, and management practices. Support
provided to national sport organizations is targeted to priority areas such as
national team programming and the development of coaches and officials.
Assistance is also provided for staff and coaches’ salaries along with the general
operations of the national sport organization. Total federal funding to the
organizations recognized by Sport Canada in 1997-98 amounted to $26.5
million. These organizations, as reported in Table 2, generate a total of 331
jobs and add $53.3 million to the GDP.
Not all sport organizations meet the criteria for Sport Canada funding, however.
There are currently 10 Olympic sports that do not receive any Sport Canada
funding and 10 others where funding was phased out in 1996-97; such sport
organizations still provide services for high-level athletes, professional athletes
or recreational athletes. They also organize competitions and provide support
for the sport practitioner. The Sub-Committee consulted over 200 sport-related
organizations, of which about 120 were directly related to national sport
organizations. The 74 survey replies indicate that national sport organizations
(funded or not by Sport Canada) generate approximately 10,000 jobs
representing 2,000 full-time equivalent jobs and have operating budgets of
about $62 million. On average, most of their revenue (70%) comes from
private donations or the sponsorship activities of the organizations.
- 38 -
SPORT UN CANADA EVERYBODYS BUSINESS
Section 5: Government and
Public/Private Infrastructure
=i ee eis Oe eS
Governments at all levels play an active role in the provision of sporting
infrastructure, organization, funding of provincial and national sport bodies, and
support for provincial, national and international sport events. Table 2 shows
the economic impact of government on the sports sector in terms of GDP and
employment. The total economic impact (direct and indirect) on GDP is worth
nearly $1.1 billion and jobs are provided to 3,891 people. Most of GDP
contribution (62%) by government is provided at the municipal level. However,
the federal government makes the most important contribution on the
employment side; 42% of jobs are created by that level of government.
Municipal infrastructure represents the backbone of the sport delivery system.
According to a project report produced by KPMG Peat Marwick Stevenson and
Kellogg, in Saskatchewan alone, there are a total of 3,141 non-private sporting
facilities. Table 7 shows how these are split among different uses. According
to the same study, the total cost, including wages and salaries, utilities, repairs
and maintenance, and all other cash operating are estimated to amount to $114.4
million for Saskatchewan alone. These figures are for operating the facilities
and do not deal with the capital investment in such facilities.
TABLE 7
Estimated Numbers and Types of Sports Facilities in Saskatchewan
(Excluding Educational Institutions and Private Facilities)
Non-Urban
Source: The Economic Impact of the Sports and Recreation Industry in Saskatch
Stevenson and Kellogg.
2 a
- 39-
ae
ewan, KPMG Peat Marwick
SPORT IN CANADA: EVERYBODY'S BUSINESS
The Recreation Facility Association of British Columbia estimates that there are
more than 5,000 people working in recreation facilities, for an approximate
wage bill of $20 million and other operating expenditures evaluated at $75
million. This represents, however, a very small part of the overall number of
sporting facilities in Canada. For example, the Canadian Curling Association
estimates that there are approximately 1,200 curling facilities in Canada, each
worth about $1 million.
The economic value of public sporting facilities in Canada cannot be calculated
because of insufficient data; nor is much information available on private
sporting and recreation facilities.
Statistics Canada, as reported in Table 5, provides figures on the number of
businesses primarily engaged in operating golfing facilities (1,267), curling
clubs (133) and skiing facilities (248). Overall, there are 5,422 firms primarily
engaged in sports and recreational clubs. This does not represent the total
number of private sporting facilities for several reasons, since a firm may have
many sporting facilities for its chief sporting activity; a firm may also be
involved in the activities of another sport; and a firm may not be primarily
engaged in sport and recreational activities, but may still operate some sporting
facilities.
- 40 -
SPORT IN CANADA: EVERYBODY'S BUSINESS
Section 6: Globalization and
International Trade
a a ee ee
We have already mentioned the importance of athletes in promoting Canada
abroad, but there is more to this concept. Each time Canadian athletes win a
medal, the country as a whole gains in reputation, as do Canadian industries.
Moreover, major sport events held in Canada, like the Olympic Games,
Montreal Grand Prix, Canadian Open Tennis, Figure Skating Championships,
and National Hockey League, Major League Baseball, and National Basketball
Association games, all help to promote Canada as a world-class tourism
destination, and give a higher profile to Canadian-based multinational
companies.
With better access to television all over the world and the extensive coverage
given to international sport events, sport is becoming more international and
provides a fabulous window for the multinational companies who sponsor such
events.
A concrete example is the success of Roots, a Canadian
clothing manufacturer whose supply of clothing to the
Canadian Nagano team has greatly broadened demand
for its product worldwide, and particularly in the United
States, where its phone has been ringing off the hook,
almost literally, with requests from the U.S. to supply it
with product. Its clothing is manufactured here in
Canada, so the greater the demand, the greater the need
for supply; and the greater the need for supply, the
greater the need to fill employment positions at the
manufacturing plant. It’s as simple and straightforward
as that, and that all arises out of the leverage they got
out of supplying the Canadian team with their product
in Nagano. (COA, Meeting No. 13).
Canadian companies need exposure in international markets and international
sport is one of the best ways to reach people abroad. International games are
WOON OMG
- 4f -
DUNO, cts ee
SPORT IN CANADA: EVERYBODY'S BUSINESS
not only a means of demonstrating the athletic talent of a country but also its
expertise in technological, commercial, and social matters. This has been
grasped by Air Canada, a company that is involved in the international
environment and will be the next main sponsor for the Montreal Grand Prix.
Sport sponsorship is quickly becoming an important way for companies to
promote their enterprise or products. In North America, sponsorship
represents approximately US$6.8 billion. Canadian companies can be involved
in sponsoring individual athletes or an entire Olympic team. An excellent
example of a good relationship between business and an athletic organization is
the association between Owens-Corning (formerly Fiberglas Canada, Inc.) and
the Canadian freestyle skiing team. Owens-Corning began to sponsor the team
in order to expand its product scope and the countries in which it was
marketing. Sponsorship is a very inexpensive way for the company to promote
its products (Amis, Pant, and Slack, 1997). Thus, when freestyle skiing became
an Olympic sport and the team was successful at the 1994 Winter Olympic
Games, the company gained international exposure.
-42.
SPORT IN CANADA; EVERYBODY'S BUSINESS
Section 7: Government Revenues
ee a ee eg ee
The economic activity created by the sport industry also contributes to the fiscal
balance of all levels of government in Canada. Professional sport clubs have
provided estimates on the amount of tax revenue they have generated for
governments. Economic impact studies of major games hosted in Canada have
also evaluated the tax revenues resulting from such events.
Professional sport makes a significant contribution to government treasuries.
The six Natiohal Hockey League teams pay annually $211.5 million in income
and payroll taxes, property taxes and capital taxes. The SkyDome, where the
Toronto Blue Jays play, pays $7 million in municipal taxes mainly from the
Blue Jays. In 1996, the Montreal Expos generated $20.5 million in federal tax
revenues and $23.3 million in provincial tax revenues.
Economic impact studies of major games hosted in Canada also show the tax
dollars generated for governments by such events. The Olympic Games in
Calgary generated $129.4 million in taxes for the federal government alone.
The 1997 Canada Summer Games are estimated to have generated $1.6 million
for the province of Manitoba and an additional $0.5 million for local
government. Federal government tax revenues are estimated to be $2 million.
The 1999 Pan-American Games in Winnipeg are expected to generate $22.8
million in tax revenues, of which $11.4 million will go to the federal
government.
- 43 -
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SPORT IN CANADA: EVERYBODYS BUSINESS
PART IV: SOCIAL AND
CULTURAL
ASPECTS OF SPORTS
Sport has always been pervasive in Canadian history and heritage. As part of
our physical culture, sport contributes to the health, well-being and identity of
individuals, communities and the nation as a whole. For the individual, sport is
an activity of personal expression combining physical, mental and emotional
components. For communities, sport activities become the hub of social
interaction through volunteering, family involvement and participation in
sporting events. For the nation, sport enables Canadians to feel a collective
pride in supporting our athletes as they compete across the country and on the
world stage.
Sport is manifested in many aspects of our culture. The sports section of the
daily newspaper is the first read by many. Numerous Canadians begin their day
with television sports reports or Internet scores. Sport is one of the most
common metaphors used by Canadian business and sport is one of the few
constant sources of Canadian heroes.
Canadians understand what sport provides to them — character-building,
physical and moral development, healthier lifestyles, improved self-esteem and
fun. Sport pervades Canadian life as part of our culture, economy,
entertainment, educational system and leisure.
Section 1: Ethics in Spert
It is the essence of athletic competition that it should be conducted
fairly in accordance with the underlying principles of ethics and
= 45 =
CANADIAN CENTRE FOR ETHICS IN SPORT
SPORT IN CANADA: EVERYBODY'S BUSINESS
morality. That is what sport is all about. Based on such premises,
there are valid and legitimate reasons to justify government
involvement in and funding of sport.
The Commission of Inquiry into the Use of Drugs and Banned
Practices Intended to Increase Athletics Performance, 1990.
As we approach the new millennium, Canada’s amateur and professional sport
community has acquired a sense of responsibility and public accountability for
the development and delivery of fair and ethical sport. Canadians expect the
institution of sport, as broad and diffuse as it may be, to adhere to high moral
and ethical standards. From the physical and moral development of our youth to
the presentation of our national character on the world stage, sport represents a
powerful social, cultural and economic force in our society — a force over
which the federal government and sport organizations, amateur and
professional, must exercise diligent stewardship to ensure a positive, productive
and healthy sport environment for all Canadians.
Ethics in sport is not a static state that is achieved with great fanfare and
congratulatory rewards all round. It is in fact a dynamic state, which requires
ongoing vigilance, analysis and action in order to deal with both situational
ethics and sport policy issues. The integrity of sport is intimately tied to the
integrity of society as a whole. Both the moral and the financial health of sport
in Canada are matters of significant public interest. For instance, there is an
unquestionable negative impact on sport from scandals and unethical conduct.
There is increasing public cynicism and distaste for sport that lacks the kind of
moral centre with which Canadians want to be associated. There is also a
potential shift of interest away from organized sport because of concerns about
morality and ethics. When the Canadian Health Monitor surveyed Canadians’
attitudes towards drug use in sport in 1994, it found that 26% of respondents
(parents) said that they would be “somewhat” or “very unwilling” to have their
child participate in organized sport because of concern about drugs in sport. If
sustained over time, withholding young people from sport undermines not only
the economic health of sport, but also the value of sport to society. As part of
our Canadian heritage, sport should therefore reflect, protect and promote the
values and ethics Canadians expect from sport.
- 46 -
SPORT IN CANADA EVERYBODY'S: BUSINESS
Section 2: Sport Participation and
Health Benefits
ee eee
The sport and physical activity policies in most countries of the world are
rooted in the belief that sport and physical activity can lead to a healthier
population. That concept is not new and in fact goes back to ancient Greeks of
the 5th century B.C. (Surgeon General, 1997). The emergence of the Canadian
government’s involvement in sport and physical activity in the early ‘60s can be
traced, in part, to this same historical belief. Since that time, Canadians have
discovered that being active and having a range of physical activities can
contribute to personal and societal well-being. Sport, therefore, is but a small
part of the physical activity continuum, which also includes play, fitness
activities, recreational sport, organized competitive sport and high-performance
sport.
There is growing evidence that establishes not only the link between physical
activity and resistance to certain diseases, but also how much being active
contributes to better health, improved physical functioning, and increased
longevity. Canada realized long ago the benefits of being active. In 1995, 37%
of Canadians were active, compared to 21% in 1981.
The recent drastic reorganization of health care systems in the country and
Canada’s ageing population have put health at the top of the agenda of all
governments. Sport, in the context of physical activity, is the best way to
achieve the objective of having a healthier population, physically and mentally.
Promoting physical activity is an investment that increases the well-being of
Canadians while reducing health care costs. This investment can bring very
significant returns. According to the Economic Burden of Illness in Canada,
the total direct cost (drugs, physicians, hospitals, research) of illness in 1993
was $44 billion out of an overall cost for health care in Canada of $70 billion.
Moreover, the indirect costs such as time lost due to long-term and short-term
disabilities, and the present value of future productivity lost due to premature
mortality and illness in Canada represents an estimated economic value of $129
- 479 -
SPORT IN CANADA: EVERYBODY’S BUSINESS
billion, nearly 21% of the GDP. Reducing the number of inactive Canadians
by a further 10% would result in an additional saving of $5 billion.
Cardiovascular disease, the number one cause of premature death in Canada,
claims the lives of 79,000 Canadians annually and costs the health care system
over $7.3 billion in direct costs and $12.4 billion in indirect costs. In 1995,
cardiovascular disease accounted for 294,000 lost years of potential life.
Regular physical activity reduces the risk of high blood pressure, stroke, and
coronary heart disease — the latter by as much as 50%. For ischemic heart
problems alone, treatment of which costs the health care system $2.3 billion
annually, each percentage point increase in the number of people that are
physically active (i.e. from 24.1% to 25.1%) would reduce annual treatment
costs by $10.3 million.
Cancer in Canada has an economic burden (of direct and indirect costs) of $13.1
billion. Physical activity can reduce the risk of colon cancer by as much as
50%. There were 5,900 deaths in Canada from colorectal cancer in 1997 and an
estimated 16,400 new cases. The treatment cost for colon cancer is $255
million annually; each percentage point increase in the number of people who
are physically active reduces the cost treatment by $407,000. Research also
shows that physical activity may protect women against breast cancer. Over
2,300 Canadian women died of breast cancer in 1997 with an estimated 18,400
new cases appearing in that year.
Eleven percent of Canadian women and men over the age of 65 suffer from
diabetes, with the disease accounting for over 5,000 deaths annually. Diabetes
resulted in over $1 billion in direct and indirect costs in Canada in 1993.
Physical activity can reduce the risk of developing non-insulin-dependent
diabetes by as much as 50%. Diabetes is also a complicating factor in heart
disease and stroke.
Some 25% of women over age 50 and 50% over age 70 will develop
osteoporosis. Seven in ten fractures in those over the age of 45 are due to this
disease. The risk of osteoporosis is reduced through regular physical activity
during childhood and adolescence.
-~A4$ -
SPORT IN CANADA EVERYBODY'S BUSINESS
Arthritis affects over 4 million Canadians and is the leading cause of disability
in more than 600,000. Musculoskeletal conditions including arthritis account
for $15.3 billion in indirect costs to the Canadian economy annually to which is
added $2.5 billion in health care costs. Regular physical activity improves
functioning and relieves symptoms among people with osteoarthritis and
rheumatoid arthritis and, in many cases, reduces the need for medication.
Physical activity affects body composition and weight favourably by promoting
fat loss. Active individuals have a lower risk of being overweight. Obesity
increases the risk of coronary heart disease, osteoarthritis, and various cancers.
It also increases the risk of back injuries, which are a significant cost to
industry. Over half of Canadians carry some excess weight and two-thirds of
these are considered to be at probable health risk. Obesity in children and youth
increased by over 50% between 1981 and 1988 alone.
Mental disorders account for over $5 billion in direct costs to the health care
system each year. In 1994-95 there were over 210,000 admissions to Canadian
hospitals for mental conditions, accounting for almost 16 million days in
hospital. Physical activity may help improve mental health and even prevent
some mental health disorders by improving self-confidence, self-esteem and
other psychological variables.
Physical activity is clearly associated with fewer symptoms of anxiety and
depression, is a proven antidote to stress, and has a positive effect on mood.
The current Health Canada budget for fitness and active living is $10 million
(1998-99 fiscal year). Of this, $2 million is distributed regionally through the
Community Action Program for Children (CAPC) and $8 million is
administered by the Fitness/Active Living Unit. As a result of the
implementation of program review, the Fitness Contributions Program
(approximately $7 million of the $8 million administered by the Unit) was to
have been terminated by the 1998-99 fiscal year. The Minister of Health has
extended that deadline, maintained funding levels, and put in place a working
group to study this situation and to make recommendations, including options
on long-term funding of fitness and active living at the national level. The
group is to report to the Minister by December 1998.
MOONS ie
- 49 -
2 OL ee eee
SPORT IN CANADA: EVERYBODY'S BUSINESS
Section 3: Youth at Risk
While sport as a means of social intervention has not been widely promoted in
Canada, there is growing evidence that sport programs may have an impact on
youth at risk. Sport participation is no longer viewed as simply a means of
keeping people busy. It is recognized as a support for the development of
individuals, to help them gain a positive identity and overcome personal and
social difficulties.
A six-year study in Quebec showed that children who participated in five
hours of sport per week had significantly higher marks than children who
did not (Sport Nova Scotia, 1997).
The likelihood that youth will never smoke is directly related to the level
of physical activity. More than 80% of Canadians between the ages of 10
and 24 who are active have never smoked (Sport Nova Scotia, 1997).
In Northern Manitoba, there was a 17.3% reduction in crime in
communities with a sports program and a 10.6% increase in communities
without a program (Sport Nova Scotia, 1997).
Girls who are active in sports are 92% less likely to use drugs and 80%
less likely to have an unwanted pregnancy (Sport Nova Scotia, 1997).
It costs 100 times more to incarcerate a young person than it does to
provide recreation programs (Sport Nova Scotia, 1997).
During the gambling crisis in the Akwesasne Territory in 1990, the sport
of lacrosse was used as a “healing” process to bring a very divided
community back together (CLA, brief).
On
SPORT IN CANADA: EVERYBODYS BUSINES S
PARTICIPATION IN PHYSICAL ACTIVITIES’, BY SEX?,
1994-95
Total Population Total Males
Females
(000s) 23,949 11,780
12,168
(%) (%)
eS
Home exercise “25.6
(%)
Ice hockey
Baseball or softball ,
Tennis Fall
mee a ae
ee
Volleyball
Yoga or tai chi
Other activity
(1) Respondents could participate in more than one activity. Participation rates are by activity.
(2) The survey year was from June 1994 to May 1995 and included respondents 12 years and older.
Source: Statistics Canada, 1998(b).
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SPORT IN CANADA EVERYBODY'S BUSINESS
PART V:
RECOMMENDATIONS
Se at ets a ee Fee Sy
Because sports is so integral to who we are and who we want to
be, sports’ problems must be addressed collectively. Industry,
government, the voluntary sector and ordinary Canadians must
contribute to that discussion and collaborate on the solutions.
Molson Breweries, brief
SSIS SSS SSS ESSENSE
Preamble
The findings of the Committee demonstrate that sport must be taken seriously in
Canada. Government intervention is the best investment that can protect
262,325 jobs and use sport as a driving force to create many more. With an
$8.9 billion contribution to GDP (direct and indirect), sport has an economic
weight greater than aircraft, wood, logging and forestry industries. Canada
must take advantage of this dynamic economic force that affects all branches of
the economy.
Sports have a direct impact on the manufacturing, wholesaling and retailing
sectors and also on all national industries by providing ambassadors that can
sell Canadian products internationally and gain world recognition for Canada’s
expertise. In the context of globalization of markets, Canada’s success in
international sport gives this country an asset that is worth a great deal.
The dynamism of our tourism industry, national and international, is directly
linked to a strong sport sector; sport activity is involved in 26% of all person-
trips taken by Canadians, 34% of American person-trips to Canada and 38% of
international person-trips to Canada. Tourism represents 3.4% ($29.2 billion)
ON ee ee
iZ.<
Ch nee
SPORT IN CANADA: EVERYBODY'S BUSINESS
of Canada’s GDP, sport is a major contributor to tourism not only through
people travelling in Canada, but also through the international visibility and
promotion that are provided by international sport events hosted in Canada.
However, the major economic impact of sport on GDP, which is in itself huge,
does not incorporate the most important assets that sport can bring to each
Canadian: better health, well-being and self-esteem. While it is difficult to
place a dollar value on this, it must be emphasized that illness is a burden on the
Canadian economy, on public finances and, most important, on Canadians’
quality of life. Government investment in sport will pay for itself many times
over in reduced health care costs. Almost two-thirds of Canadians are not
physically active enough to achieve critical health benefits through physical
activity. Increasing the number of Canadians who are physically active is a
proven approach to combating health care costs and can help ensure the long-
term sustainability of the health care system.
Important work has already been done to show that between 1981 and 1995, the
number of physically active Canadians increased by 16 percentage points. This
improvement translates into a net benefit of $9 billion due to lower costs related
to health care, health insurance, sick leave, disability coverage, group life
insurance, and lost tax revenue. More can be done, however, by encouraging
sport and physical activity; a 10% reduction in the number of inactive
Canadians would be worth $5 billion.
Sport as practised by our hero-athletes, express the values of excellence,
achievement, character and leadership. The noble values of sport must be
protected and enhanced. In the final report of the Commission of Inquiry into
the Use of Drugs and Banned Practices Intended to Increase Athletic
Performance (1990), Justice Dubin noted how sport unifies Canadians, how it
contributes to the health of our citizenry and the integrity of our society.
The conclusion drawn from Justice Dubin’s report is that government
investment in sport, justified as a matter of public interest, is only of value to
society if sport is fair and ethical, and reflects the values and ethics of the
nation.
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SPORT IN CANADA: EVERYBODYS BUSINESS
As noted in the Minister’s Task Force on Federal Sport Policy (1992):
Society’s image and expectations of sport have
changed. Sport is considered part of the cultural fabric
of our society and, as such, has a significant impact on
society. With a service to the public role, special tax
status and a virtual monopoly, sport organizations are
considered to hold a public trust for which they are
responsible.
The infusion of public tax dollars into sport has added a
greater sense of sport belonging to all Canadians. With
the revelations of the Dubin Inquiry, the Canadian
public expect sport organizations to act responsibly and
model the values and moral and ethical conduct which
should be communicated through the experience of
sport.
The principle of sport as a public trust is fundamental to the notion of
accountability in sport, especially where public funds are involved. This
conclusion applies to sport at all levels, amateur and professional, and to ethical
issues generally, whether they be about violence, sexual harassment or drug use
in sport. It is imperative that this principle of public trust guide any and all
initiatives designed to strengthen the Canadian sport system at all levels.
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Section |: High-performance Athletes
and National Sport Organizations
A. Context
The development of athletes in Canada relies on a decentralized system in
which national sport organizations, communities, provinces and the federal
government work together to provide the athletes with facilities, a human
resource network and financial assistance. At the federal level, one aspect of
Sport Canada’s mission is “to support the achievement of high-performance
athletic excellence as a means of stimulating pride in Canada and promoting
Canadian identity at home and abroad...” (Sport Canada, brief). The federal
government, through Sport Canada, also supports high-performance athletes
through the national sport centres, operating grants for the national sport
organizations and direct financial assistance for top-level athletes. Moreover,
athletes and national sport organizations benefit from fiscal incentives provided
through the Canadian tax system.
Athletes need not only financial assistance, but also a network which provides
leadership, support, expertise and guidance. Coaches provide this sort of
leadership; the athlete-coach relationship is essential for athlete development.
Support for coaches is essential but, according to Athletes CAN, we have not
been able to pay coaches, forcing them to pursue other careers; there are even
sports where there are presently no coaches (Athletes CAN, Meeting No. 6).
Witnesses generally stated that the development of competent coaches is critical
for the development of athletes. This is true for athletes at high levels, but it is
also true at the developmental level. The Canadian Soccer Association told the
Sub-Committee that the Oakville soccer club has a full-time coach who spends
all his time working with the 265 coaches in that club to make sure they provide
the right leadership to the boys and girls who are members (CSA, Meeting No.
17):
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1. Sport Canada Funding
Table 8 shows Sport Canada funding in 1997-98 devoted directly to athletes and
their development. Overall, $34.2 million was directed to this area: $6.7
million to athletes’ financial support, $19.4 million to national sport
organizations, $7.1 million to multi-sport organizations and $1 million to
national sport centres. In 1998-99, Sport Canada expenditures will decrease
from $64.9 million in 1997-98 to $57.9 million.
TABLE 8
Program Spending Devoted Directly to Athletes and Athlete Development, 1997-98
Program Name Total
Athlete assistance 6,650,000
1,000,000
Canadian Sport and Fitness Administration Centre
Total 34,904,650
Sport Canada total budget 64,899,965
National sport organizations
Multi-sport organizations
National sport centres
a. Athlete Assistance Program
Sport Canada, through the Athletes Assistance Program, provides direct funding
to qualified athletes of international calibre through a tax-free monthly living
and training allowance. Tuition expenses may also be covered. The Athletes
Assistance Program is not designated to cover an athlete’s total expenses,
however. Direct support to national sport organizations for national team
training, coaching, and sport sciences complete the financial support available.
Athletes who qualify under the Athletes Assistance Program are then “carded”
according to their level of international rank. Different card levels provide
different levels of financial assistance:
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A cards (218 athletes, $810 per month)
For consideration as A card athletes, individuals must meet the
following standards at Olympic Games, Paralympic Games or
World Championships:
° Events limited to one entry per country: top four
° Events limited to two entries per country: top six
° Events with three or more entries per country: top eight (counting a
maximum of three athletes per country)
Athletes must also finish in the top third of the field.
B cards (113 athletes, $685 per month)
For consideration as B card athletes, individuals must meet the
following standards at Olympic Games, Paralympic Games or
World Championships:
° Events limited to one entry per country: top eight
° Events limited to two entries per country: top 12
° Events with three or more entries per country: top 16 (counting a
maximum of three athletes per country)
Athletes must also finish in the top half of the field.
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C cards (373 athletes, $560 per month)
C cards are intended to support athletes with demonstrated
potential to achieve A or B card status in Olympic events. C card
criteria are negotiated between Sport Canada and national sport
organizations and should whenever possible be based on objective
results achieved in designated competitions.
C-1 cards (220 athletes, $435 per month)
C-1 cards are probationary cards used during the first year an
athlete has satisfied the C card criteria.
Development (D) cards (9 athletes, $375 per month)
D cards are intended to provide support for young high-
performance athletes who have demonstrated A card potential
through outstanding international and domestic competitive results
or other objective data and who have not yet achieved C card
status to train in advance programs directly supervised and
monitored by national sport organizations.
| cards (17 athletes, $560 per month)
Injury card
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Training Centre (TC) Cards Criteria (31 athletes, $375 per month)
Like D cards, TC cards are intended for athletes who have the
potential to achieve A or B card status. Certain athletes may
qualify for TC cards if they are required to make a long-term
commitment to a Sport Canada/national sport organization
recognized high-performance sport centre.
Reserve (R) Cards (34 athletes, $310 per month)
R cards are available to athletes in Olympic team sports who are
members of the National A team training squad or who are a
member of a Sport Canada supported Universiade or National B
team.
Junior (J) Cards (6 athletes, $185 per month)
J cards are available to athletes in Olympic team sports who make
a significant commitment and contribution via their participation on
the Junior National Team Program supported by Sport Canada.
According to The Status of the High Performance Athlete in Canada (Ekos,
1997), in 1995 A card athletes reported an annual income of $29,690, B card
athletes reported $21,092, and C card athletes reported $17,522. Athletes
holding D, I, J and TC cards reported a range of personal income between
$8,680 and $9,300. Athletes with R cards reported $13,145 on average.
Moreover, the average amount received by carded athletes from governments
(Sport Canada and/or provincial financial assistance) was $5,754 and the total
sport-related income (including government support) was on average $9,076.
Non-sport-related income was on average $10,634. Of the athletes who are
currently carded, two-thirds are living on less than $15,000 per year (Athletes
CAN, Meeting No. 6).
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b. National Sport Organization Support Program and
Multi-sport/Multi-Service Organization Support
Program
Sport Canada provides financial assistance to the national sport organizations
and multi-sport/multi-service organization, which help athletes’ development by
financing the national team programming and the training of coaches and
officials. Assistance is also provided for staff and coach salaries and the
general operations of national sport organizations. Sport Canada finances 38
national sport organizations, 9 sport organizations servicing athletes with
disabilities, 14 multi-sport/multi-service organizations and games organizations
and 4 sport organizations that have a large youth participation base but a limited
international component under the Domestic Sport Pilot (Sport Canada, brief).
Financial assistance to the national sport organizations is through the National
Sport Organization Support Program. The Program is open to national sport
organizations that exceed the eligibility threshold established under the Sport
Funding and Accountability Framework as described in PART IU, section 4.
National sport organizations are assessed in three key categories: (1) In the
high-performance category, a national sport organization’s score is based on its
high-performance system and on athletes’ results. Factors relating to coaching,
training, athlete monitoring, and athlete involvement in decision-making at
World Championships and Olympics are also evaluated. (2) The sport
development category includes athlete development, coach development and
officiating. These factors are scored according to the national sport
organization’s membership, participation in national and provincial
championships and the Canada Games, technical resources,» and certification of
coaches and officials. (3) The management practices category is assessed
according to a national sport organization’s financial operations and service
capacity in both official languages, as well as opportunities for women in the
sport; for example, in membership, competitions, coaching and officiating.
Moreover, Sport Canada provides financial contributions, through the Multi-
sport/Multi-Service Organization Support Program, to a number of
organizations such as the Coaching Association of Canada and the Canadian
SPORT IN CANADA: EVERYBODY'S BUSINESS
Centre for Ethics in Sport as a cost-efficient means of supporting the generic
needs of the sport community. Other organizations that receive federal funding
support include games organizations such the Canada Games Council, the
Commonwealth Games Association of Canada, and the Canadian
Interuniversity Athletic Union.
ec. National Sport Centres
The Coaching Association of Canada, Canadian Olympic Association, Sport
Canada and the provinces where they are located have entered into a partnership
committed to creating a network of national sport centres across Canada. The
centres’ mission is to enhance the training environment for high-performance
athletes, including those with a disability. The partners view this network as a
major vehicle for enhancing the level and improving delivery of services for
high-performance athletes and coaches. With a focus on coordinating access to
and delivery of essential support services for athletes and coaches, centres,
activity is intended to complement national sport organization programming in
the pursuit of high-performance excellence. There are established centres in
Calgary, Montreal, Victoria and Winnipeg and others are planned for Toronto
and Vancouver in 1998 as well as in Atlantic Canada.
In January 1998, the Minister of Canadian Heritage, Sheila Copps, announced
an additional $10 million annually over a five-year period for sport in Canada.
Of this annual amount, $5 million will allow athletes to train and participate
more often in competitions, particularly international events; approximately
$3.3 million will be used to train and hire the best Canadian coaches; and
approximately $1.7 million will go to the Athlete Assistance Program, allowing
Sport Canada to provide direct support to 300 additional high-performance
athletes.
2. Other Sources of Funding
The federal government has also implemented a taxation policy to respond to
the financial needs of amateur athletes. Registered Canadian amateur athletic
associations (RCAAAs) recognized by Revenue Canada may give charitable
donation receipts under the same conditions as registered charities. Thus, an
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individual who makes a contribution to a registered Canadian amateur athletic
association is entitled to a non-refundable 17% federal tax credit on the first
$200 of a gift and a 29% tax credit on any donation above that amount.
Donations can now represent up to 75% of a taxpayer’s net income. For
taxpayers in all provinces except Quebec, which collects its own taxes, the
combined rate of the federal and provincial credit is approximately 27% on a
donation of less than $200 and approximately 47% on any amount claimed
above this figure (Domingue, 1996). For a corporation donor, the deduction is
even more generous in that the entire gift may be deducted from taxable
income. In 1995-96, 99 registered Canadian amateur athletic associations
issued official donation receipts for a total amount of $14.6 million. However,
the 38 national sport organizations funded by Sport Canada issued receipts for
only $2.4 million and the 10 national sport organizations for athletes with
disabilities issued receipts for $0.8 million.
Since 1992, athletes have been able to create an amateur athletes’ reserve fund
in which their earnings as an athlete may be deposited. No tax is payable by the
trust. The amount earned by an athlete is required to be held by a national sport
organization registered as a Canadian amateur athletic association in accordance
with the rules of an international sport federation, in order to preserve the
athlete’s eligibility to compete in a sporting event sanctioned by the federation.
Any amounts paid to the athlete out of the trust are added to his or her taxable
income.
Athletes can have other sport-related income from Canadian enterprises. The
Ekos (1997) survey indicates that 44% of the carded athletes earn non-
government, non-national sport organization sport-related income (e.g.
professional athlete’s salary, endorsement/sponsorships, appearance fees/prize
money, athletic scholarships); these athletes receive on average $6,498
annually.
B. Problems and Solutions
According to Lori Johnstone (Chair of Athletes CAN), athletes believe they are
not supported adequately, especially athletes whose sports do not receive
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funding and are not part of the carding system or part of the Sport Funding and
Accountability Framework. An income for an athlete of $15,000 a year is quite
inadequate. Moreover, there is tremendous pressure on athletes to perform and
training costs are considerable (Athletes CAN, Meeting No. 6).
Witnesses from Non-Federally Funded Olympic Sports, Triathlon Canada and
Athletes CAN expressed their disapproval of the present Sport Funding and
Accountability Framework. Non-Federally Funded Olympic Sports report that
the criteria are too restrictive and the approach to funding amateur sport is
inconsistent. “There’s been a de facto abandonment of non-core sports as well
as failure to recognize the cyclical nature of high-performance sport” (NFFOS,
Meeting No. 6). New Olympic sports, such as triathlon and snowboarding, are
not receiving any funding at the moment, yet participation is growing and
participants are enjoying increasing international success.
The impact of the Sport Funding and Accountability Framework on athletes is
very important. According to Athletes CAN, athletes in sports that are not
qualified for funding do not have access to the Athlete Assistance Program,
which means they do not have access to tuition grants. Nor do they have access
to other services and programs, or to the training centres, which, according to
Lori Johnstone “is the way to train our athletes” (Athletes CAN, Meeting No.
6).
Implementation of the Sport Funding and Accountability Framework followed
severe financial reductions at Sport Canada. Sport Canada reduced the funding
from 60 to 38 core sports that are eligible for the full range of carding. Eight
Olympic sports previously funded by Sport Canada no longer receive any funds.
The problem that arises for Non-Federally Funded Olympic Sports is that the
new system fails to recognize the cyclical nature of high-performance sport,
which does not follow the four-year pattern of Sport Canada funding. Some
sports that have been cut from federal funding, such as rhythmic gymnastics and
shooting, won Olympic gold medals for Canada in the 1980s (NFFOS, Meeting
No. 6). One of the most significant repercussions of the cuts has been the loss
of professional support staff working from a national office; as a result,
expertise developed in Canada in such fields is lost. “The coaches have left to
work in Malaysia, Barbados or Europe because we weren’t able to keep them.
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We paid to train them and now that they are trained we can no longer keep
them” (NFFOS, Meeting No. 6).
A tax incentive program for parents with a dependent child who is a high-
performance athlete would allow such parents to receive a tax credit for the
expenses incurred in developing the potential of their child. The high
performance sport tax credit would apply to parents with children who are
nationally or internationally ranked by a recognized sport federation and would
cover such expenses as participation in national or international competitions,
equipment and training fees (coaching and support staff, clubs fees and
equipment rental). The high performance sport tax credit would be subject to
a non-refundable tax credit up to $1,000 or total expenses up to $5,882 per child
per year. No income threshold would have to be met to be eligible for this tax
credit. Moreover, the tax credit would also apply to the athletes themselves if
they were not considered as dependent children. The tax credit would cover
around 4,000 athletes and cost the Government of Canada approximately $4
million.
Therefore, in recognition that role models, exemplified by Canada’s Olympic
and Paralympic medallists, are an excellent means of encouraging participation
in sport.
The Committee recommends that:
The government continue its policy and funding support for
amateur sport generally. Specifically, and repeating a
recommendation from the 1992 Minister’s Task Force on Sport
Policy, the federal government should provide a substantial
federal commitment to and support for the future of sport in
Canada over the long term, in keeping with its current and
potential contribution and benefits to Canada.
Those responsible for administering federal funds ensure that
all organizations in receipt of government funding for sport
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meet specified ethical standards. Ethical criteria for the
funding or support of professional sports should be the same as
ethical criteria for the funding of amateur sport, including
provisions for drug-free sport.
The federal government continue to support and fund the
Canadian Centre for Ethics in Sport, an independent agency
responsible for the promotion, monitoring and evaluation of
ethics in sport, including stable and sufficient funding for
Canada’s drug-free sport program. That part of a national
strategy for ethics in sport include the establishment of an
ethics-in-sport legacy to ensure the necessary independence,
stability and sustainability of Canada’s ethics in sport program.
The number of national sport organizations eligible for federal
funding be increased. (A minimum funding level of $100,000
per year would allow national sport organizations representing
Olympic sports to provide a basic level of service to their
athletes and maintain a limited program.)
The carding eligibility requirements be changed to provide
funding to all qualified national team athletes regardless of the
funding status of the national sport organization.
National high performance training centres allow access to non-
carded national team athletes.
The Government of Canada support the continuing
development of high-quality coaching in Canada through
programs like the National Coaching Institute and set up a
longer-term coaching endowment of $5 million to ensure
stability within coaching.
The Finance Department examine the possibility of creating a
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non-refundable high performance sport tax credit to help
parents to meet the significant expenses associated with the
development of high-performance athletes.
Estimated Costs of the Recommendations
° A minimum funding level of $100,000 per year for the 10 Olympic sports
organizations not currently funded would cost $1 million a year.
° The carding eligibility requirements recommendation would cost around
$650,000 annually, based on the average number of 10 carded athletes per
national sport organization, receiving an average annual allocation of
$6,500 in 10 national sport organizations.
° The high performance sport tax credit would cost up to $4 million a
year.
° The endowment fund for coaching would cost $5 million yearly.
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Section 2: Sponsorship
Sport sponsorship can be defined as a cash or in-kind fee paid (typically in
sports, arts, entertainment or causes) in return for access to the exploitable
commercial potential associated with the program or event. Sponsorship should
not be confused with philanthropy, which generally supports a cause without
having any commercial expectation.
While sponsorship can include media extensions such as TV broadcasting,
sponsorship is not advertising. Advertising is the direct promotion of a product
or company through space or TV air time bought specifically for that purpose.
Advertising is therefore quantitative since it is sold and measured in terms of
cost per thousand impressions. Sponsorship, on the other hand, is a qualitative
medium since it promotes a company associating itself with an event or cause.
Sponsorship spending in North America for 1998 is projected to be $6.8 billion.
This estimate is for sponsorship rights only and does not include additional
expenditures for advertising, promotion or client entertainment, nor does it
include philanthropic contributions. In the Canadian context, a study conducted
in 1988 estimated that Canadian corporations expended $1.2 billion in
donations, sports-related advertising and sponsorship of amateur sport events.
Since the early 1990s, growth in sponsorship spending has consistently
outpaced spending in the more traditional means of advertising and sales
promotion. This growth can be attributed to several factors. First, sponsoring
companies can connect with their customers in ways that traditional advertising
cannot. In addition, the fragmentation of traditional media means that ratings
and readership are declining all the time. Finally, changes in social priorities
have led to a realization that the needs of society and the interests of business
can overlap. When a company sponsors something, it provides a benefit for its
customers beyond simple advertising.
Companies sponsor a number of types of properties. In a 1997 Financial Post
Top 400 Canadian Companies Survey, 78% of respondents supported social and
cause-related properties. Sport sponsorship remains one of the most stable areas
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with some 70% of responding companies reporting such investment.
Arts/culture/entertainment sponsorship was supported by 62% of respondents.
Finally, support for partnerships with government agencies stands at 38%. From
an investment standpoint, however, North American estimates suggest that sport
properties account for 65% of sponsorship spending, compared to 9% for
festivals and fairs, 9% for causes, 6% for the arts and 11% for entertainment
tours and attractions (Source: IEG, 1997).
Who sponsors in Canada:
The top 12 sponsor categories in Canada, according to IEG
consulting, are:
(1) Travel—airline 28.0%
(2) Automotive—cars 21.7%
(3) Beverage—beer 25.0%
(4) Financial services—bank 20.7%
(5) Telecommunications—local 19.6%
(6) Media and publishing 16.3%
(7) Beverage—soft drink 15.8%
(8) Computers and info.systems 14.7%
(9) Tobacco 12.0%
(10) Fuel 10.3%
(11) Retail—supermarket 10.3%
(12) Telecommunications — cellular 10.3%
The above ranking relates to the percentage of Canadian properties with a
sponsor in the particular category as opposed to overall spending.
Despite the growth of sport sponsorship, significant challenges continue to face
event properties and sport organizations alike in their self-financing efforts: the
lingering effects of a major recession, ferocious competition among sport and
non-sport properties and the proliferation of private businesses specializing in
sport events and properties that have captured the most lucrative activities,
leave sport organizations to support the less profitable sectors. Despite these
challenges, the organized amateur sport system has demonstrated its ability to
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develop alternative funding sources. However, it must also be recognized that a
national or provincial sport organization’s ability to fund itself has its limits.
After exploiting all the currently available options (increased dues and
participation fees, organization and development of fundraising activities,
soliciting and association with commercial partners and sponsorships), the
sports community has now reached the saturation point in its search for
alternative funding. Volunteers and permanent employees of sports
organizations must devote increasingly large amounts of their time to
fundraising and less to the actual delivery and coordination of their sport.
Consider the example of European or Asian countries where sport is part of the
business culture. Companies directly train sports teams or provide financial
support to federations or top-level athletes. In return, they receive tax benefits in
addition to the benefits of media coverage. Canada would do well to analyze
these models in greater detail in order to encourage Canadian companies to
invest more in the sports system. In the context of strong competition,
compounded by the disappearance of certain sponsoring industry sectors
(tobacco sponsorships), self-funding efforts have reached a critical threshold
and have very marked negative effects on volunteers, such as withdrawal,
demobilization and saturation. This phenomenon is serious because the sports
system relies first and foremost on its volunteer resources. Although the
professional sports community can afford to offer its investors all the visibility
they request, this is not true of the amateur sports community, where such
demands increase the financial and administrative workload.
An incentive program allowing small businesses to deduct 150% of their
sponsorship expenses would help small companies such as Joe’s Plumbing and
Louis’ Garage to promote their enterprises via sport events. Such a program
would generate the injection of new dollars into sport.
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The Committee recommends that:
Amateur sport sponsorship be encouraged by allowing, for a
two-year period, a 150% tax deduction (currently 100%) for
small business corporate sponsorship.
A sport marketing advisory board be created to promote sport
sponsorship.
Estimated Costs of the Recommendations
° Further evaluation by the Department of Finance should be undertaken to
establish the cost.
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Section 3: Sport Facility Infrastructure
Amateur sport infrastructure plays an important role in developing athletes but
also forms the backbone of the sport recreational industry. The federal
government has been active in the development of facilities for hosting major
games and the Canada Games but, there is no consensus among witnesses on
the need for new amateur sport infrastructure in Canada.
According to the Canadian Olympic Association (COA), there are already a lot
of facilities across Canada, some of which cannot be maintained. The problem
is finding the operating dollars to maintain these facilities. The COA believes
that better use should be made of the infrastructure currently in place (COA,
Meeting No. 4).
In its brief, NetStar claimed that the development of first-class facilities for
training our athletes is critical. National sports centres such as the speed skating
facility in Calgary have already proven their value in the recent Olympic Games
results (TSN, Meeting No. 8).
According to the Canadian Soccer Association, soccer in Canada suffers from
the lack of indoor and outdoor game facilities. The holding of international
matches for the men’s World Cup team is restricted to Varsity Stadium in
Toronto or Commonwealth Stadium in Edmonton. This simply does not allow
the team to be promoted properly or create the interest necessary to increase fan
support (CSA, Meeting No. 17).
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The Committee recommends that:
The Government of Canada, in conjunction with provincial and
municipal governments, undertake a sport facility
infrastructure program to improve and increase the number of
facilities; this will encourage growth at the grassroots level and
allow for the staging of high-level and profitable international
events. Federal maximum contribution for the whole program
should be capped at $100 million.
Estimated Costs of the Recommendations
e The sport facility infrastructure program would be capped at $100
million.
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Section 4: Canada Lands
Canada Lands Company is a Crown corporation that has been established to
manage and create value from certain federal properties on behalf of the
Government of Canada. As part of its mandate, Canada Lands’ provides prime
investment property opportunities through the sale, improvement or
development of surplus federal properties.
Represented by professionals experienced in marketing, sales and property
management, the entrepreneurial approach to real estate ensures tremendous
benefits for both the communities the Company serves and the Government of
Canada.
Canada Lands is a self-financing independent Crown corporation that exists at
arms’ length to the government. Above and beyond its primary goals of
realizing the maximum potential of federal holdings through timely sales and
creative development, Canada Lands also manages a number of profitable and
prestigious properties.
Although Canada Lands operates independent of government funding, all
transactions undertaken by the Company are subject to compliance with
Government of Canada policies regarding the environment, heritage and First
Nations.
By bringing non-productive land into productive use, Canada Lands delivers a
wide range of long-term economic benefits from all of the Corporation’s
development and revitalization projects. A major priority at each location is to
maximize the economic benefits to each of the local communities in which
Canada Lands is creating value.
Job creation is always an economic goal, and most of the Corporation’s major
projects create both significant short and long-term employment opportunities.
First, there is considerable employment generated in the planning and pre-
development stage of project development.
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Second, major short-term employment opportunities are created in the
construction phase. Already, projects initiated by Canada Lands will lead to
over 100,000 person-years of employment.
Finally, there are the permanent jobs created on the properties that the
Corporation brings into productive use — an estimated 25,000 permanent jobs
— directly, in the Corporation’s business parks, entertainment facilities and
other new residential neighbourhoods, and indirectly, from the increased
economic activity in local communities.
The greatest economic impact is found through bringing lands into productive
use — for industrial, commercial, residential or recreational purposes, Canada
Lands attracts private sector investment and activity — that contribute to
growth in the community and region, local employment and Canadian business
competitiveness.
Canada Lands also helps to broaden the economic and employment base of the
community. Many of the projects have diverse uses and have attracted high-
technology business, film and television, educational institutions, recreational
and municipal facilities, and residential development. These businesses in turn
enhance the economic prospects of the property, and of the local community.
The Committee recommends that:
All real estate properties sold by Canada Lands Company
stipulate that a fixed percentage of the property (20%) be
allocated for recreational use and that the purchaser make a
commitment to developing and operating such recreational
facilities.
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Section 5: Hosting Major Sport Events
The hosting of major sport events contributes significantly to the vitality of
sport in Canada in terms of both athletes’ development and economic spinoffs.
Canada has an enviable record of hosting both major multi-sport events (i.e.
Olympic Games, Commonwealth Games, Canada Games), and single-sport
championships (World Canoe Championships, World Cup Ski events). Staging
these events on Canadian soil generates significant economic activity and
provides valuable training for volunteers, and sport management and improved
training programs for athletes. The successful hosting of major sport events also
contributes to increased community confidence and pride. Canada’s progress in
international sport competitions and related funding can be readily traced to the
hosting significant level events in Canada over the past 30 years.
The Committee recommends that:
Canada bid for one major multi-sport games (Olympics,
Commonwealth Games) or significant single-sport event (World
Cup of Soccer, World Hockey Championship) in each decade in
keeping with our proud history of staging multi-sport events.
Moreover, provided Canada meets the Federation International
de Football Association (FIFA) requirement of 9 stadiums of
50,000 places with natural grass, the Government of Canada
should strike a Sub-Committee for determining the viability of
developing a bid to host the FIFA World Cup in 2010.
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Sport Canada examine the possibility of increasing the
frequency of hosting the Canada Games.
The Government of Canada continue to play a strong role in the
Canada Games program and should encourage continued
funding and policy support, in view of the role of the Games in
advancing public policy.
Estimated Costs of the Recommendations
° The additional cost of these measures should be further analyzed.
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Section 6: Encouraging Accessibility of
Sport and Physical Activities
Developing mass participation in sport by Canadians is one of the best ways to
achieve our social and economic objectives on the eve of the next millennium.
Developing sport participation among youth would help to develop not only a
healthier population but also develop better potential for this growing human
resource. The growing evidence that sport programs have an impact on youth at
risk calls for the development of coordinated initiatives.
Participating in sport in the early years of life increases the chance that this
healthy lifestyle will continue in adulthood. Nowadays, health is seen as
building social and personal resources as well as physical capabilities.
Participation in sport and physical activity can be shown to prevent disease.
More active Canadians imply lower health care costs, lower costs due to
absenteeism, a more productive population and a lower crime rate. The
consumerism associated with the practice of sport and physical activity will
lead to a greater vitality for Canada’s sporting goods manufacturers and the
overall sport services sector, and more jobs for Canadians.
A. Sport Development Fiscal Incentive
Recognizing the tremendous social impact of sport in Canada, witnesses would
like to see more fiscal incentives for putting financial resources into all levels of
sport development. More financial resources would mean more ability to
develop sport in Canada, from the grassroots to the top level, as well as
potential increases in the market for equipment. Many witnesses suggested the
introduction of tax incentives to encourage both private donations to sport
organizations and volunteer involvement. Current tax provisions allow
charitable tax deductions for contributions made to registered Canadian amateur
athletic associations but these are restricted to national level sport bodies. There
are approximately 99 such organizations in Canada.
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One initiative that would encourage families to purchase sporting equipment
and to register their children in a local sport organization is the child sport tax
credit. This credit would apply to family expenditures related to equipment
expenses and the registration of children in public and private clubs recognized
by Revenue Canada and amateur sport programs affiliated with national sport
organizations. These expenses would be subject to a non-refundable tax credit
of up to $1,000 per child or a total expense up to $5,882. Families with an
annual income of $75,000 or less and with children between the ages of 8 and
16 would be eligible. Tax credits would be determined on the basis of the
number of children and family income. Families with an income of $45,000,
$55,000 and $65,000 and less with one, two and three or more children
respectively would receive the full tax credit. The tax credit would gradually
decline for families with one child and incomes between $45,000 and $55,000,
families with two children and incomes between $55,000 and $65,000 and
families with three or more children with incomes between $65,000 and
$75,000. The tax credit would not be available to families with one, two and
three or more children with a family income exceeding $55,000, $65,000 and
$75,000 respectively.
In Canada, there are roughly 2.1 million children between the ages of 8 and 16
who are eligible for the credit as defined above. If all eligible parents would
claim the maximum child sport tax credit, the total cost would be around Wil
billion. However, according to Family Expenditure in Canada 1996 (Statistics
Canada), average annual expenses for use of recreation facilities+ come to $281
and $190 for sporting equipment, and 60% of Canadian families have such
expenses, of which only a portion would be eligible for the credit. In addition,
families earning less than $25,000 spent a lot less in this area than did wealthier
families. Assuming that 60% of families would claim such expense, the cost to
the federal government would range between $43 million (assuming an average
claim of $200) and $86 million (assuming average claim of $400).
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The Committee recommends that:
Eligibility for charitable tax deductions be extended to qualified
provincial/territorial level not-for-profit sport organizations.
The Finance Department examine the possibility of creating a
non-refundable child sport tax credit to encourage parents to
register their children in local sport and recreational
programs, and help alleviate the cost of sport equipment.
The Finance Department examine the possibility of creating a
non-refundable tax credit for annual fees up to $1,000 paid by
volunteers in taking coaching, officiating or first aid courses
connected to amateur sport.
Estimated Costs of the Recommendations
° The tax deductions for the qualified provincial/territorial level not-for-
profit sport organizations could cost as much as the charitable tax
deduction for national sport organizations.
° The child sport tax credit would cost approximately $50 million.
° Tax deductibility for coaching, officiating and first aid courses for
volunteers could cost about $2 million. There are 188,000 registered
coaches in Canada, assuming that 25% follow courses annually at an
average cost of $250 would give an average tax credit of $42.50.
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B. School Sport
The Canadian school system should represent the cornerstone of any strategies
aimed at developing and increasing sport participation in Canada. Through the
education system, almost all young people are introduced to sport in an
environment that can offer a wide range of sporting experiences. School sport
is part of a high quality physical education program, equipping young
Canadians with knowledge, basic skills and positive attitudes to sport. The
physical activity thus acquired may result in a lifetime of active participation in
physical activity and sport (CAHPERD, brief).
However, according to the Canadian Association for Health, Physical
Education, Recreation and Dance (CAHPERD), physical education and sport
are undervalued in the Canadian educational system. Most children do not
receive enough physical education per week. In most secondary schools
physical education is now an optional subject after grade nine and the number
of physical education specialist teachers, supervisors and consultants have been
reduced. (CAHPERD, brief).
Another problem is the lack of coordination, co-operation and collaboration
between the school, the community and the sports club system in Canada. Asa
result, the Canadian Association for Health, Physical Education, Recreation and
Dance find that: (1) there are parallel and duplicated coaching, facilities and
game schedules; (2) participation in club sport teams often prevents athletes
from being on school teams; (3) cost and access to club teams can be an
inhibiting factor for young athletes; and 4) schools generally have excellent
facilities that could be offered to community and club teams but; are often not
available for use by these teams (CAHPERD, brief).
C. University Sport
The Canadian Interuniversity Athletic Union (CIAU) is the national sport
organization responsible for governing interuniversity sport in and for Canada.
Its mission is to enrich the educational experience of student athletes through
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sports programs that foster excellence. There are 47-member universities, set up
in five conferences (Canada West Universities Athletic Association, the Great
Plains Athletic Conference, Ontario University Athletics, Quebec Student
Sports Federation, and the Atlantic Universities Athletic Association). There are
about 10,000 student athletes across Canada, competing in over 3,000
competitive opportunities in sporting events over a five-month period. There are
15 national championships staged in Canada every year: men and women in
basketball, cross-country running, football—the Vanier Cup—field hockey for
women, ice hockey for both men and women, soccer for men and women,
swimming for men and women, track and field for men and women, volleyball
for men and women, and wrestling.
The CIAU is also significantly involved in drug control and education. Since
1990 over 2,250 tests have been conducted with positive tests of less than 1%.
There have been 20 positive tests in 8 years. The CIAU is one of the few sport-
governing bodies that have a mandatory drug education program. All student
athletes are provided with drug education material at their respective
universities.
At the international level, the CIAU participates in the International University
Sports Federation Games, which are held every two years. Five thousand
athletes and 160 countries take part in them. In terms of coaching, the CIAU
provides more professional coaching opportunities than any other national sport
organization, and a high percentage of the coaches are certified at level 4. There
are about 1,500 coaches in 33 sports. In some sports, such as basketball,
football, field hockey, and wrestling, the national championships and programs
are considered the primary participation opportunity for Canadians competing at
the high-performance level.
Many universities are sites for high-performance centres, such as volleyball in
Winnipeg and speed skating in Calgary. Interestingly enough, 380 of the 900
federally carded athletes attend Canadian universities in an Olympic year. This
number would be 50% in a non-Olympic year. Many carded athletes attend
school in Canadian universities.
The CIAU’s total operating budget is close to $2.27 million. Of that, $455,000
or 20% comes from Sport Canada.
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At this point, the CIAU does not allow athletic awards for students entering
university from high school. The only exception is for an entering athlete who
has an average of 80% or greater, who may receive an academic scholarship
with an athletic component. There are currently 1,787 Canadian athletes on
scholarships in the United States. In men’s ice hockey alone there are 535;
men’s football, 119; men’s track, 97; men’s soccer, 95; men’s tennis, 86;
women’s track, 82; men’s golf, 81; women’s volleyball, 79; men’s baseball, 65:
women’s soccer, 56; women’s basketball, 49; men’s swimming, 47; women’s
tennis, 46; and men’s basketball, 44. In June 1998, a decision was made to not
pursue the introduction of athletic awards in Canada and discussions are
continuing.
The Committee recommends that:
The Government of Canada recognize the valuable role schools
play in the grassroots development of sport in Canada.
The Government of Canada continue to endorse the program
“Quality Daily Physical Education” of the Canadian Association
for Health, Physical Education, Recreation and Dance.
School sport programs be expanded to encourage the
participation of more students, regardless of gender, economic
status and ability.
The Government of Canada work with the provinces/territories
and the Canadian Interuniversity Athletic Union to develop a
system of student awards for athletes to support post-secondary
athletes attending Canadian universities or colieges.
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Estimated Costs of the Recommendations
° To be established in light of the particular program.
D. Women in Sport
Substantial effort is still needed to increase the participation of girls and women
in sport. Physically active girls and women are less susceptible to such
disabilities and killing diseases as cardiovascular disease, osteoporosis, breast
cancer, colon cancer, obesity, depression, adult-onset diabetes and hypertension
(Canadian Association for the Advancement of Women and Sport and Physical
Activity, brief).
About one-half of the male population (52%) and roughly one-third (38%) of
the female population participate in regular sport activity. Of the 32 sports
included in the General Social Survey, 1992, only 6 were dominated by female
participation (Statistics Canada, 1998). Moreover, the National Population
Health Survey showed that more females than males did not participate in
athletic activity (8.7% for female and 8.0% for men). Moreover, compared to
young men, young women have a higher drop-out rate and lower registration in
elective physical education classes (CAHPERD, brief).
The vitality of the sport sector in Canada and the health and wellness of
Canadians must include strategies that specifically target females. There is a
need to increase the number of female coaches, who represented only 29% of
all coaches in Canada in 1992. Strategies must be put in place to improve the
sport development structure, to make sport safer for girls and women and to
encourage them to take their place in the sport system in Canada.
The Committee recommends that:
The Government of Canada use the infusion of $50 million into
Canada’s sport system to benefit underrepresented groups, in
order to ensure that opportunities for girls and women are on a
par with those for boys and men.
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The Government of Canada establish a tracking system to
ensure that a fair portion of the new funding does in fact reach
the targeted underrepresented groups.
The Government of Canada continue to collect gender-based
statistics through the initiatives noted above; that a verification
process be established to ensure the accuracy of the data; that
additional funding incentives be provided to those sport
organizations which deliver equitable services, and that
penalties be assessed against those that do not.
The Government of Canada, as a major funder of the new
system of national sport centres, enact three criteria for ongoing
funding; significant representation by women on the beards of
directors; programming that serves the unique needs of women
and the other underrepresented groups; and higher numbers of
apprenticeship and employment opportunities for women
coaches.
In support of Canada’s hosting of the 2002 World Conference
on Women and Sport, that the Government of Canada involve
other government departments, especially those concerned with
women’s health, violence against women, and human rights;
and that a financial legacy in the form of grants and
scholarships to girls and women be established.
The Government of Canada build on the initiatives begun in
January 1997 to eradicate harassment and abuse from
Canadian sport, and continue to support activities that make
sport safer and more accessible to girls and women.
The Sport Facility Infrastructure Program be developed to
ensure accessible programs that encourage participation and
provide “catch-up” funding for girls and women.
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The Government of Canada offer a program of incentives or tax
breaks to Canadian manufacturers that develop, market, and
export female-friendly equipment.
Estimated Costs of the Recommendations
° The tax breaks to sport manufacturers could be limited to a cost of $10
million for the Government of Canada.
° Other recommendations would be nearly costless.
E. Sport for People with Disabilities
One of the biggest attitudinal obstacles to be overcome by people with
disabilities is the myth that they cannot participate in physical activities,
especially in sports (Obstacles, 1982). This 1982 House of Commons report
encouraged the federal government to emphasize accessibility in all of its
sports-related policies. The Minister’s Task Force on Federal Sport Policy
(1992) stressed the need to include athletes with disabilities in all aspects of the
sport system, and to encourage sport organizations for people with disabilities
to be encouraged to broaden their emphasis beyond a high-performance focus to
include the broad participation of such persons in sport.
The Committee agreed that more has to be done to increase accessibility in the
Canadian sports and physical activities system.
The Committee recommends that:
Further steps be taken to encourage the integration of disabled
persons into sports-governing bodies.
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F. Aboriginal People and Sport
As has been repeatedly stated, Aboriginal people have a poverty rate
comparable to that found in developing countries, an unemployment rate among
adults of almost 25%, a poorly educated population and a dramatic suicide rate,
which among 10-19 year-olds is more than 5 times higher than that of their non-
Aboriginal counterparts. More is needed to help this community and sport
development and physical activity may not be the top priority. Forty-four
percent of Aboriginal people smoke daily, 61% report problems with alcohol
abuse and 48% report problems with drug abuse. Sports and recreation
activities may play a positive role in strengthening the emotional, mental,
physical, and spiritual aspects of Aboriginal life. Sport and physical activities
may act to counter alcohol and drug abuse, and other addictions.
The Aboriginal Sport Circle states that there are certain priorities for Aboriginal
sport development: (1) Aboriginal Coaching Development; (2) North American
Indigenous Games; and (3) national/provincial/territorial Aboriginal sport
bodies. For the Aboriginal Sport Circle, the professional development of
coaches has quickly become the cornerstone of the emerging Aboriginal sport
delivery system (Aboriginal Sport Circle, brief). There is a need to increase the
accessibility of the National Coaching Certification Program for the remote
Aboriginal communities. Moreover, there is a need to design a National
Coaching Certification Program for Aboriginal coaches that will better reflect
Aboriginal realities and culture. In addition, more Aboriginal instructors should
be trained to improve the accessibility of the National Coaching Certification
Program in remote reserves.
The North American Indigenous Games is the primary vehicle for Aboriginal
youth sport development at the grassroots to provincial/territorial levels. It is a
culturally appropriate competition venue in which a large number of junior
Aboriginal athletes can express and enhance their cultural heritage. Moreover,
these Games provide the opportunity for Aboriginal athletes with high-
performance potential to improve their skills in readiness for the Canada Games
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team selection trials. However, there are no funding mechanisms supporting the
North American Indigenous Games.
The national/provincial/territorial Aboriginal sport bodies is an intrinsic
component of the Aboriginal sport delivery system. However, of the 13 regions
represented on the Aboriginal Sport Circle, there are only 6 operational bodies
with 2 additional bodies currently being formed. Only three Aboriginal sport
bodies receive core operating funds from their provincial governments, and one
receives partial program support.
SPORT IN CANADA EVERYBODY'S BUSINESS
The Committee recommends that:
The Government of Canada, as recommended in the Royal
Commission on Aboriginal Peoples, establish and fund an
Aboriginal sports and recreation advisory council to advise all
levels of government on how to best meet sports and recreation
needs in Aboriginal communities.
The Government of Canada, in collaboration with
provincial/territorial governments, the Coaching Association of
Canada and the Aboriginal Sport Circle develop funding
strategies and technical support to increase the accessibility of
the National Coaching Certification Program and to develop a
certification program more in touch with Aboriginal realities
and culture.
The Government of Canada work with the provinces, territories
and the Assembly of First Nations to develop a funding
framework for the North American Indigenous Games.
The Government of Canada work with the provinces and
territories to assure adequate funding for the Aboriginal sport
bodies.
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Section 7: Professional Sport
A. Context
Professional major league sport is part of the Canadian cultural landscape and
also a major player in the Canadian economy. There are six National Hockey
League (NHL) clubs, two Major League Baseball (MLB) clubs, two National
Basketball Association (NBA) clubs and eight Canadian Football League (CFL)
clubs. The continued existence of some professional franchises and the future
of the Canadian Football League are under threat today.
1. National Hockey League
The National Hockey League includes 26 teams, 6 of which are in Canada:
Montreal, Ottawa, Toronto, Calgary, Edmonton, and Vancouver. In the past six
years, five new National Hockey League franchises have been added and, by
the 2000-01 season, four additional teams will join. As a result, the number of
National Hockey League teams will have increased by nearly 43% in 10 years.
Although the National Hockey League is rapidly expanding, the number of
teams in Canada has dropped from eight to six since 1992-93.
Montreal, Ottawa, Vancouver (and soon Toronto) teams play in new modern
arenas. The arenas in Vancouver and Toronto are shared with the local
National Basketball Association teams, the Grizzlies and the Raptors. These
arenas were built with very little, if any, public funding. Stadiums were central
to the financial problems experienced by the Québec Nordiques and the
Winnipeg Jets when they were sold to owners who moved these franchises to
the U.S. According to their owners, these two teams could not become
profitable unless new stadiums were built—an impossibility without public
funding—and, even with new stadiums, could not be guaranteed to turn a profit.
The 6 remaining Canadian teams have reported combined losses before taxes of
$85 million, and it is projected that their combined losses for the 1997-98
season will exceed $95 million (NHL, brief).
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As a result of the difficulties experienced by Canadian-based teams, the
National Hockey League initiated two programs to alleviate the competitive
disadvantages faced by the Canadian clubs. The first is the “Group 2
Equalization Plan,” which establishes a fund for Canadian teams designed to
enhance their ability to match offers made by U.S.- based teams to “Group 2”
restricted free agents. Payments out of the fund offset the difference in
exchange rates between Canadian and U.S. dollars. The second program is the
“Supplementary Currency Assistance Plan” (CAP), which provides subsidies to
Canadian teams whose revenues fall below the League’s median. Since the
introduction of the CAP, Calgary, Edmonton and Ottawa franchises have shared
$17.6 million in funding (NHL, brief).
2. Canadian Football League
Football is a longstanding tradition in Canada. The first documented game was
played in Toronto in 1861. In 1891, the Canadian Football League’s
forerunner, the Canadian Rugby Union, was founded in Montreal from a merger
of the Quebec and Ontario Rugby Unions. The Canadian Football League as
we know it was founded in 1958.
In the 1997 season, the Canadian Football League had nine teams, from
Vancouver to Montreal. That same year, following a number of years of
financial instability, it turned a profit of over $4 million. Generally speaking,
however, there is a gap between the financial soundness of the profitable
Western Division teams and money-losing Eastern Division teams.
Following the 1998 withdrawal of the Ottawa franchise for financial reasons,
the Canadian Football League has teams in only eight cities. Even so, it has
never been more optimistic about its future. Its short-term priority is the
financial stability of the present eight teams, particularly those in the Eastern
Division; in the longer term, it expects to have a team in Ottawa again and to
add a tenth team, possibly in Halifax. The threat of seeing the National Football
League (NFL) in Toronto has somewhat disappeared but the arrival of an NFL
team in that city could spell the end for the Canadian Football League Eastern
Division.
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3. Major League Baseball
Canada has two Major League Baseball teams, the Montreal Expos, in the
National Baseball League (since 1969) and the Toronto Blues Jays, in the
American Baseball League (since 1977). On the eve of their 30th anniversary,
the Expos are in a difficult situation. The high salaries of Major League
Baseball players require more and more revenue at a time when fewer and
fewer fans are coming out to Expos games. According to the Expos’ directors,
the team needs a new stadium if it is to increase its revenues. New stadiums
have proven helpful to teams in a number of United States cities with small
markets. A fundraising campaign is now under way to raise the money needed
to build a new stadium in downtown Montreal at a cost of $250 million. The
team’s objective is to raise the first $100 million privately and the balance from
governments. If a new stadium is not built, the team will be sold and moved to
the United States.
The Toronto Blue Jays’ situation is somewhat different. The Blue Jays play in
the SkyDome, a modern stadium owned mainly by the team’s owners.
Moreover, attendance at Blue Jays games in 1997 ranked 10th out of the 30
teams in all of Major League Baseball, drawing about 2.6 million fans (one
million more than the Expos). However, for fiscal year 1997, the team lost
approximately $35 million and the projections for 1998 are expected to be in the
same range (Blue Jays, brief).
Major League Baseball has a revenue sharing-system, which granted the Expos
$9 million in 1997 and is expected to provide more than $13 million in 1998.
Moreover, Major League Baseball shares all national U.S. television, radio,
trademark and promotional revenues equally among the teams. In 1997,
revenues from the U.S. clubs represented 51% of total Expos revenues, and in
1998, these revenues will probably exceed 60% (Expos, brief).
4. National Basketball Association
The Toronto Raptors and Vancouver Grizzlies joined the National Basketball
Association for the 1995-96 season in what was the National Basketball
Association’s return to Canada, since the time of the Toronto Huskies 40 years
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ago. Basketball, new to Canada, is the country’s fastest growing sport (NBA,
brief). The Vancouver Grizzlies and the Toronto Raptors are owned by the
same corporations that own, respectively, the National Hockey League Canucks
(Orca Bay) and the Toronto Maple Leafs ( Maple Leaf Gardens).
B. Issues and Challenges
Professional sport in Canada is played on a North American scale where players
can be traded without difficulty and the asset, the team, can be relocated fairly
easily in any region in Canada or the United States. In fact, sport entertainment
is probably one of the industries most economically integrated between Canada
and the United States. Many challenges facing major league professional sport
in Canada are linked to what is happening south of the border. Professional
sport in Canada must be seen in this context in order to evaluate the challenges,
dangers and possible long-term outcomes.
Generally speaking professional teams suggested:
° That government create an environment permitting sports teams and
sports leagues to do business on a level playing field (CFL, Meeting No.
10).
: That the Committee recognize the significant impact of sport on economic
growth and community development and that it recommend measures to
ensure that treatment accorded to sport is comparable to that accorded to
other businesses in Canada (Senators, Meeting No. 12).
° That a task force consisting of government and National Hockey League
representatives be created to follow up the Committee’s report and ensure
the implementation of the solutions identified, in order to guarantee the
future of Canadian teams in the National Hockey League (Canadiens,
Meeting No. 12).
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1. Economic Impact Study
Before beginning any analysis of the problems facing professional sport in
Canada, it is important to clarify the real or net economic impact that a
professional sport club has on a city. Part III presented evaluations that
professional clubs have made of their economic contribution to the economy.
These numbers should be used only to evaluate the relative economic size of the
professional sport clubs in Canada; they do not measure the economic losses
that would result if a Canadian team were to leave.>
In their brief, Jean Harvey, Marc Lavoie and Maurice Saint-Germain argued
that, according to American academic studies, the net economic impact of a
professional sport team is far more modest than is claimed by team owners.
First, economic studies produced for the teams do not take into account the fact
that public money that goes towards construction of a stadium is not available
for any competing public project that might also create jobs. Second, the
money spent by the fans at the stadium is money that might not be spent at other
local leisure facilities, such as restaurants, skiing facilities and so on. Third, not
all the money spent at the stadium stays in the local community; for example,
the money earned by the players is not all spent in the community.
According to Noll and Zimbalist (1997), the net economic benefits of having a
team in a local community include the team revenue (attendance fees, broadcast
rights, league cash transfers, etc.) minus the annual costs of the stadium, team
operations and broadcasting. The positive externalities of having a local team
minus the negative externalities associated with travel to games (additional air
pollution, traffic congestion, and security problems) should also be included.®
The direct and indirect effects on local income should also be added to local
income and can increase in two ways: (1) through increased sales to people
outside the community (net exports), and (2) through higher-productivity jobs
for local residents.
Caution should be taken, however, in applying American results too readily to
Canada. First, it should be remembered that if a National Hockey League,
National Basketball Association or Major League Baseball team currently
located in a Canadian city moves to another city, that city will be in the United
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States. Second, the most important Canadian programming on CBC is sport
(CBC, brief); other Canadian-produced series attract few viewers outside
Quebec. Canadian professional sport teams keep out cultural imports from the
United States. Third, expertise developed by the Canadian broadcaster and the
state of the art equipment used for the coverage of professional sport events
would, in the absence of such events, not otherwise be available for the
coverage of amateur sport or any other Canadian broadcasting production.
Fourth, infrastructures used by professional sports can be used to attract other
major sport events (Calgary Saddledome, Montreal Big “O”) or major artists
(NHL arenas and SkyDome), it would not be economically feasible to build
such a stadium without a professional team using it regularly.
2 U.S. City Subsidies to Stadiums and NAFTA
The major problem facing professional sport in Canada is essentially related to
grants, subsidies and tax breaks provided to sport clubs by American
municipalities and counties in order to attract professional sport clubs.
According to Garry Bettman, “the subsidization of building arenas and the
infrastructure attendant to the construction of those arenas is probably the
biggest issue” (NHL, Meeting No. 12). In fact, U.S. venues built after 1990 had
an important share of their costs paid by taxpayers: 77% for Major League
Baseball venues (average cost of US$269 million), 74% for the National
Football League venues (NFL) (average cost of US$257 million), 42% for NHL
venues (average cost of US$148 million) and 31% for National Basketball
Association venues (average cost of US$169 million)’ (Forbes, 1997).
The United States is experiencing a significant sport facility construction boom;
experts predict that more than US$7 billion will be spent on new sports facilities
before 2006. The average subsidy from a host city to its sports team exceeds
US$10 million a year (Noll and Zimbalist, 1997). In baseball alone, 18 new
stadiums have just been built or will be built in the next few years. In hockey,
at least two-thirds of National Hockey League teams have already moved to
stadiums built less than five years ago, or will do so within five years.
According to John Tory, the professional sports infrastructure is important to
the strength and success of sports overall (CFL, Meeting No. 10).
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Public subsidies are not limited to the facilities. U.S. cities are doing much to
attract professional sport clubs to their city. For instance, the Nashville
(Tennessee) Predators have received a lump sum of $20 million for the
establishment of the team. Moreover, few sport clubs in United States cities
pay municipal taxes; 15 of the 20 U.S. teams in the National Hockey League are
exempt from paying such taxes.
American cities are willing to subsidize professional teams because they believe
they bring important economic advantages to their region and because of the
cultural importance of sport in American society. Moreover, the U.S. federal
government has an attractive program whereby local government can finance
sport facilities with bonds whose interest income is exempt from federal income
taxes. This results in an interest rate lower than the interest rate on taxable
bonds of equivalent risk. For 1989, such federal subsidies amounted to
US$171.6 million (Zimmerman, 1997).
Professional teams in Canada charge that this anomaly is impairing their ability
to be competitive with American teams. Claude Brochu stated that the Expos
cannot compete with publicly financed ballparks, lower consumption taxes,
lower property taxes and an absence of other taxes while coping with
unfavourable foreign exchange rates (Expos, Meeting No. 14).
Should governments in Canada give financial assistance to professional sports
facilities? John Tory has stated that governments could make a logical
argument for doing so as such facilities are part of the infrastructure of a city,
enabling a team to remain there and be viable. Moreover, stadiums encourage
other kinds of games, tournaments, track and field, events, etc. to come to the
city (CFL, Meeting No. 10).
Also suggested was the establishment of a system of tax-exempt bonds, similar
to those used in the United States to finance sporting facilities: bonds would be
issued for sport and culture infrastructures and the return on the bonds would
not be taxed; however the interest rate would be lower than interest on taxable
bonds of equivalent risk.
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The subsidies in American cities raise the issue of trade between Canada and
the U.S. under the North American Free Trade Agreement (NAFTA). Barry
Appleton claimed that professional sports—hockey, basketball and baseball, in
particular — are all covered as investments under the definition of NAFTA
(Appleton, Meeting No. 16). The first reason, according to Mr. Appleton, is
that an agreement to keep a sports team in a particular location, an anti-
relocation clause, would violate NAFTA performance requirements; a number
of examples of such agreements are set out. They violate NAFTA because they
are an inducement to keep an investment, or to operate an investment, in a
particular place (Appleton, Meeting No. 16).
Mr. Appleton’s second point is linked to the national treatment rule that requires
a domestic government to treat foreign investors like local citizens.
Accordingly:
American measures that provide a benefit to local over
foreign entities can violate the national treatment
obligation. For example, county or municipal tax
abatements or financing assistance provided to a local
sports team could violate the national treatment rule
unless the same benefits are made available to all teams
playing in that locality. Otherwise, the government
benefit could be an incentive to advantage local
investments over investments of investors from other
NAFTA countries (Appleton, brief).
Canadian professional sports teams can seek two different remedies for the
violation of NAFTA by subsidies to American professional sports teams:
C Canadian teams can seek intervention by the Canadian government to
commence a dispute against the United States government under
NAFTA’s Chapter 20. Under this process, Canadian teams would be able
to seek a decision by a NAFTA panel indicating that the American
practices violated NAFTA (Appleton, brief).
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° Alternatively, the Canadian teams could make use of the NAFTA’s
innovative investor-state dispute settlement system. This system, only
available to deal with complaints arising from the violation of the NAFTA
Investment Chapter, allows a NAFTA investor to directly bring a
compensation claim against another NAFTA government. (Appleton,
brief).
Thus, if a challenge were successful, the Canadian teams would receive a
monetary award from the U.S. federal government (Appleton, brief).
3. Salaries
As a result of court rulings and adversarial labour situations, players have
secured expanded rights to sell their skills to the highest bidder. With the
advent of free-agency in professional sport, player salaries are exploding. In
1997-98, the average player earned US$1.2 million in the National Hockey
League, US$1.25 million in Major League Baseball and US$2.6 million in the
National Basketball Association. Moreover, the average salary in Major
League Baseball could double over the next four years (Expos, Meeting No.
14). This could also occur in the other major league sports.
Other than the free agency problem, the main explanation for this increase in
player salaries is the extra income generated locally by new stadiums. In
Canada, only three professional teams, excluding Canadian Football League
teams, are not now (and will not soon be) playing in new facilities: the Calgary
Flames, the Edmonton Oilers and the Montreal Expos.
4. Exchange Rate
Many Canadian team problems are linked to the exchange rate between Canada
and the United States. Players in North America are being paid in U.S. dollars.
For Canadian National Hockey League teams, 80% of their revenues are in
Canadian dollars while 80% of their expenses are in U.S. dollars (Senators,
Meeting No. 12). For the Blue Jays, each one-cent decline in the U.S.-Canadian
exchange rate results in an increase in team expenses of $600,000 per year
(Blue Jays, Meeting No. 18).
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3. Tax Policy
Canadian professional sport teams are facing taxation measures which reduce
their margin for meeting their costs. Following are some of these taxation
problems.
a. GST and Provincial Sales and Amusement Taxes
Since spectacle sport is a service, the federal government collects the Goods and
Services Tax (GST) on the gross price of the tickets. As was mentioned at Sub-
Committee meetings, the professional sport industry was the loser when the
GST replaced the manufacturing sales tax. Ironically, for professional sport
operating in an international context, the implementation of the GST was
supposed to increase Canada’s international competitiveness (NHL, Meeting
No. 12). For the Toronto Blue Jays, the 7% GST on all tickets amounted to
$3.2 million in 1997.
Moreover, all provinces (except Newfoundland) not only apply provincial sales
tax to the ticket price, but also charge an amusement tax (2% in Ontario). In
1997, the Ontario government collected, on Blue Jays tickets, $4.5 million in
taxes of which $900,000 was amusement tax (Blue Jays, Meeting No. 18). Rod
Bryden has indicated that the direct taxes on Ottawa Senators’ tickets range
from a low of 20% to a high of 39% of the pre-tax price (NHL, Meeting No.
12).
b. Municipal Taxes
The six Canadian hockey teams pay more than five times the amount of
municipal taxes paid by the 20 American teams. The Montreal Canadiens pay
more than twice what is paid by all American hockey teams (NHL, brief).
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ec. Ineome Tax Policy
Recently, Revenue Canada has changed the fiscal year for professional sport
players; it is now based on “duty days” or the number of days the league season is
running. Revenue Canada then taxes the players’ income on the ratio of the number
of days spent in Canada to the total number of days in the season. The result is that
about 65% of the salary of the non-resident professionals playing for National
Basketball Association Canadian teams is taxed at the Canadian rate. Before this
new policy, such players in Canada would have paid about 51% of their salary at
Canadian rates and 49% at American rates (NBA, brief (b)). The Toronto Blue Jays
players, having a lower number of duty days in Canada, have about 41% of their
income taxed in this country.
According to Richard Peddie (Raptors, Meeting No. 11), this taxation policy has
threatened the ability of National Basketball Association teams in Canada to attract
top players. For Stephen Bellringer (Grizzlies, Meeting No. 11), this issue is
becoming even more critical; next fall the Vancouver Grizzlies will hold their
training camp out of Canada to reduce the number of duty days in Canada.
d. Payroll Taxes
Canada and the provinces have several payroll taxes that the employers, Canadian
professional teams, must pay out of players’ salaries. According to Sam Pollock,
the Toronto Blue Jays pay approximately $500,000 in employment health tax
payments on behalf of their players; however, because of the revenue requirements,
the team receives absolutely no benefit from this for the players or their families
(Blue Jays, Meeting No. 18).
6 Immigration
Immigration policy makes it difficult for players’ spouses to work in Canada.
Stephen Bellringer cited an example of a foreign national who was hired but whose
higher educated spouse could not come to work in Canada (Grizzlies, Meeting No.
iG
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C. Recommendations
Sport Pact
The Government of Canada recognizes that high-level commercial sport is an
important contributor to the country’s economy as well as to its cultural
identity. The economic contribution of commercial sport goes well beyond the
people directly employed by the professional teams; it has spinoffs for the
broadcasting industry, the manufacturing industry and the tourism industry, to
give only a few examples. Canada has achieved international recognition for
its expertise in sports entertainment.
Canadian major league cities also possess an intangible competitive advantage
in terms of attracting foreign tourists and businesses. The “world-class-cities”
visibility received by urban areas with teams, increases Canada’s international
status. Major sports are part of the amenities vital to the definition of cities as
global players on the world economic and cultural stages. Canadian
professional sport is a key element in the development of sports talent in
Canada. For a long time, Canada has developed the best hockey players in the
world; it is important to preserve this expertise and to develop equal expertise in
other sports. The development of sport at the grassroots level depends in part
on a vigorous professional sport sector.
Sports are an important source of social cohesion, enabling all individuals 1n the
community to share the same passions and dreams. The Government of Canada
wants to be a partner with communities in preserving and creating jobs in the
sport entertainment industry and participating in the collective life of
Canadians.
The sport pact would embrace a federal strategy aimed at creating a favourable
environment for promoting the vitality and stability of professional sport in
Canada within the North American market. It would cover all federal action in
the field of professional sports.
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The Government of Canada initiative would be directed through
five key strategies:
1. | The Canadian professional sport stabilization program would
have two components.
Professional teams are severely impacted by the exchange rate
between Canadian and United States currencies, and by public
funding for facilities in which United States base franchises play.
To assist Canadian franchises that are viable and to reduce the effect
of these factors, the Committee recommends that:
a) Small businesses, as defined under the Income Tax Act, be
permitted to deduct eligible entertainment expenses arising
from purchase of tickets, premium seating or suites at
professional and quasi-professional (e.g. CHL) games at
100% of such expense, rather than 50% as would otherwise be
deductible from income for tax purposes; and either
b) Revenue as defined by the Income Tax Act, arising from the
operation of a professional and quasi-professional team, be
subject to a credit calculated to be 10% of the first $50 million
of such revenues for the taxation year, less 25% of such
revenues in excess of $60 million, and that this credit be
deductible from amounts of tax of any kind otherwise payable
to the Government of Canada by the taxpayer to which
income from the franchise is attributable under the Income
Tax Act; or
c) Capital Cost Allowances provided for under Section 14 in the
Income Tax Act or Schedule 2 of the Income Tax Regulations
arising from investment in a facility that is the home of a
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professional or quasi-professional team be deductible in full
in any year from and after commencement of regular season
play by such franchise, and the right to utilize such deduction
from taxable income may be transferred to a related or
unrelated party once for any asset for which such allowance is
claimed.
The Canadian professional sport stabilization program would be
in place for two years. To be eligible, the professional sport
franchise would have to respect the following criteria:
° The team would have to contribute to minimum employment
requirements.
° The National Hockey League should maintain the
Supplementary Currency Assistance Plan and continue to
explore new ways of distributing equitably team revenues.
° The team would have to meet a profitability test based on the
team’s revenue base and costs.
° The team would have to demonstrate long-term viability as a
franchise in a city.
° The team would have to show the socio-economic benefits it
would bring to the local community.
3 The team would have to develop and train employees in the
field of sport marketing, administration, broadcasting,
merchandising.
° The team would have to demonstrate that financial assistance
NY RS A eee ee
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was required in order for it to compete with its international
competitors.
° The team would have to demonstrate financial involvement
and support in their local community as well as in the
promotion of fair and ethical amateur sport. This includes
offering volunteer clinics with professional players to assist
skills development of youth.
e The sport facilities used by the team should be made available
for amateur sport at least 20 nights per year in order to allow
competitions to be held and to raise funds for amateur sport.
° The team would have to work towards influencing the control
of player salaries within their league and to commit to
controlling increases in ticket prices.
2, The Government of Canada, through the Finance Minister, would
negotiate a Canada-U.S. protocol of income tax harmonization for
sport professionals. This harmonization protocol would aim to
abolish the “duty days” notion applied by Revenue Canada. The
protocol would eliminate the gap between U.S. rates (federal, state
and county) and Canadian rates (federal and provincial).
3. | The Government of Canada would change its immigration policy in
order to allow professionals in the sport industry and their families
to immigrate easily to Canada and work here.
4. The Canadian Radio-Television and Telecommunications
Commission (CRTC) would examine the possibility of allowing
more channels for broadcasting local professional games on Pay-
Per-View.
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5. The Government of Canada, through the Minister for International
Trade, would maintain a constant inventory of all subsidies to sport
franchises in the United States and advise Parliament of the status
of professional sport financing in North America to permit the
creation of good public policy. If the information collected
warrants action, the Minister should consider the possibility of
launching a NAFTA challenge.
The Committee recommends that:
The sport pact be initiated to protect, enhance and promote the
vitality and stability of professional sport in Canada.
Estimated Costs of the Recommendation
° Evaluation should be conducted by the Department of Finance to
determine the costs of implementing the sport pact.
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Section 8: Broadeasting (Sport and
The association between sport and the media is essential to the creation of a
vigorous sport industry in Canada. In particular, broadcasting sport events
raises awareness of athletes and gives visibility and a high profile to them, their
teams and their sport. On one hand, broadcasters see sport as a significant
means of attracting viewers to their channel. It has long been believed that a
channel cannot have credibility without sport programming. For people in the
broadcasting industry, sport overpowers all other programming in providing an
incentive for viewers to subscribe to cable and satellite television (Economist,
1998). There is, however, a tendency towards having sport programming
accessible only via cable and satellite. According to Mr. Clark, sports once
made a lot of money for Canadian networks (CBC, brief). In that context, it is
not surprising that the CBC alone, which has a public mandate, produced 916
hours of professional and amateur sports programming, representing 11% of the
network schedule (CBC, brief). For Hockey Night in Canada alone, CBC
attracts five to six million Canadians every Saturday night. Moreover, the
specialized channels The Sport Network (TSN) and Réseau des sports (RDS)
broadcast 4,300 hours of original sports programming. Not surprisingly, these
two NetStar channels are the most successful specialty services in Canada
(NetStar, brief).
On the other hand, television sport coverage makes an important contribution to
the vitality of sport in Canada. The appearance of TSN and RDS on the
Canadian broadcasting scene, in addition to CBC/Radio-Canada, has provided
an even greater profile for sport in Canada. The Canada Games Council said it
is difficult to sell broadcasting rights to television; however, for the first time,
TSN and RDS have made a commitment to cover the Canada Games of 1997,
1999 and 2001. This long-term commitment allows the Canada Games Council
to plan accordingly. The arrival of NetStar’s specialty services increased
awareness of curling, international hockey, world junior hockey, international
world championships and women’s hockey, none of which had been covered to
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any great extent in previous years (TSN, Meeting No. 9). This greater visibility
could help amateur athletes attract more sponsors.
The Nagano Winter Olympic Games gave unprecedented coverage to the
Winter Olympics: 350 hours for CBC and 250 hours for Radio-Canada.
Moreover, between 7 p.m. to 11 p.m., the average number of viewers was
nearly two million for English television and 854,000 for French television.
However, specific events garnered even larger audiences; 2.9 million viewers
watched skater Elvis Stojko, and 3.2 million watched the early part of the aerial-
skiing competition (CBC, press release).
There is an obvious relationship between the 17 million Canadians that watched
the 1998 Winter Olympics and the unprecedented number of medals won by
Canadian athletes during those Games. Sport is no different from the rest of the
world in loving winners (CBC, brief). The better the Canadian athletes and
Canadian professional teams, the better will be the rating for broadcasters.
Television networks are important beneficiaries of sport vitality in Canada.
Moreover, sport is an important contributor to the “Canadianization” of our
country’s television. At the CBC and Radio-Canada, the prime time schedule
no longer contains any American series. It is critical to the success of
Canadianization that large audiences and, as a result, sponsors be drawn to less
popular Canadian programming (CBC, brief). For NetStar, sport is an
extremely powerful expression of our culture and it is also the key to economic
success as a private sport broadcaster since “Canadian content is king.”
Canadians want to watch their athletes and their teams (NetStar, brief).
In this context, the broadcasting industry and all the media that give extended
coverage to sport are important drivers of the sport engine. The vitality of sport
is directly linked to the number of hours on air. This is true as much for
amateur sport as for professional sport in Canada. Broadcasters do need
champions to attract viewers, however. At the CBC, profit from hockey
depends on how Canadian teams perform in the playoffs. As was noted by Mr.
Clark (CBC), “television is a business and our business is driven by ratings. It
takes viewers to generate sponsor dollars” (CBC, brief).
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However, broadcasters have a role to play in helping the development of
athletes, the people who make their business successful. When athletes win
Olympic medals or World Championships, broadcasters win viewers and earn
more profits. When Canadian professional teams win a championship, the
result is an increase in revenues for Canadian broadcasters; broadcasters already
know this. NetStar is committed to awarding scholarships and internships to
university athletics, funding the training of Canadian coaches with the Coaching
Association of Canada; and it is involved in fundraising for the Special
Olympics in Canada. The assurance that CBC/Radio-Canada will broadcast all
Olympic Games for the next 10 years encourages it to promote athletes. The
broadcaster is conscious that a 14-year old athlete now performing at the local
level might become an Olympic hopeful 10 years from now (Radio-Canada,
brief).
B. Problems and Solutions
Over the years, massive budget downsizing at CBC and Radio-Canada left little
space for amateur sport outside major sport events and reduced the exposure of
amateur athletes on air. Certainly, the limited audience for amateur sports
programs cannot generate sufficient advertising revenue to cover a significant
share of the high-production costs of broadcasting or reporting on sports events
(CBC, brief). However, TSN devotes over 1,400 hours or 33% of its original
programming to amateur sports, while RDS devotes 2,400 hours.
CBC has chosen to reduce its coverage to main sports to match budget
constraints, drawing a parallel with Sport Canada and its core-sport program
(CBC, brief). In 1997-98, CBC/Radio-Canada gave extensive coverage to
professional hockey, baseball, football, car racing and figure skating and to
amateur sport World and Canadian Championships. However, the Canadian
Soccer Association would like to see more sports on CBC/Radio-Canada; it
believes the National Hockey League, Olympic Games, Major League Baseball,
and other organizations can stand on their own feet (CSA, brief).
This comment raises the question of what role the CBC, a public agency, should
play in the development of sport in Canada. Should Radio-Canada/CBC focus
only on sports that already have a mass audience? Why should sport at CBC be
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self-financing while many other Canadian cultural products are subsidized?
CBC’s overall Department of Canadian Heritage contribution is $844 million
for 1998-99; however, CBC sport pays for itself (CBC, brief). What should be
the role of the CBC in developing amateur sport if private corporations like
NetStar can turn the presentation of amateur sport into profit? Is the role of the
CBC in professional sport only to make more money in order to present other
sport events?
The CBC points out that heroes, trends, and marketing dominate sports today.
The fact of television ratings means that if there is no hero in a particular sport,
CBC can hardly justify carrying it. The example of Alpine skiing is eloquent:
CBC could attract 850,000 viewers for the World Cup race the week after
Kerrin Lee-Gartner had won the gold at Albertville; last year, with only four
weekends of Alpine skiing, CBC attracted fewer than 300,000 viewers. This
year CBC carried only two weekends of Alpine skiing (CBC, Meeting No. 8).
It seems clear that all broadcasters have a vested interest in developing high-
level Canadian athletes; they are certainly part of a comprehensive solution to
such development.
According to the Canadian Soccer Association, the Government of Canada
should direct the CBC/Radio-Canada to broadcast more sporting events
involving Canada’s national teams, as opposed to the restricted window of
events they currently present. “Is it not time for CBC/Radio-Canada to turn
National Hockey League/Major League Baseball over to the private sector
where there is already considerable interest in picking up these rights?” (CSA,
brief).
Radio-Canada mentions that it will take advantage of the opportunity to
broadcast the Olympic Games for 10 years to raise the profile of amateur
athletes more than a month before the Games. It is important for the four
broadcasters which are broadcasting the Olympic Games to make use of this
opportunity in this way. Being familiar with the athletes will encourage
Canadians to follow the Olympic Games, which will mean higher ratings for
broadcasters and more sponsorship for amateur sport.
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CBC also raised other important questions. One is the television representation
of women in sport. For the CBC, an important means of increasing audiences is
attracting more female viewers. The CBC has acquired sports properties such
as figure skating, swimming, diving, and equestrian events that provide more
space to women athletes; however, outside the major multi-sport games, women
athletes are poorly represented on television. Sports for disabled athlete
competitions also have a weak representation on air. CBC television
broadcasted 350 hours from the Nagano Olympics, but only a two-hour
highlight show covering the Nagano Paralympics. Finally, the regional
broadcasting of sport is underrepresented. The problem is more particular to
Atlantic Canada, which does not support professional teams and where the costs
of covering events are significant (CBC, brief). The CBC does not have
solutions to these problems.
The Committee recommends that:
The CRTC not authorize any more foreign programming
services with strong U.S. sports components for broadcast in
Canada.
The government work with the media to create a broad-based
public awareness campaign which speaks to the benefits of sport -
and recreation.
The CRTC extend mandatory simultaneous signal substitution
to specialty services.
The government direct the CBC/Radio-Canada to broadcast
more sporting events involving Canada’s national teams rather
than the restricted window of events they currently present.
The CRTC encourage broadcasters to co-operate in providing
Canadians with the best possible Canadian programming.
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The CRTC initiate a study of sport on Canadian television. The
purpose would be (1) to analyze Canadian sport content
compared with American sport content (programming
involving Canadian teams or athletes) on channels available in
Canada and (2) to evaluate the market share of broadcast
Canadian sport.
Radio-Canada/CBC be required to broadcast a minimum
number of hours of amateur sport in both official languages and
the actual number of hours broadcast be equivalent on both
networks.
The federal government implement, for a two-year period, a
150% tax credit for firms that advertise on Canadian amateur
sport programs broadcast by specialty services.
Estimated Costs of the Recommendations
: For most of these the cost would be very low, since resources are already
in place. The Department of Finance should evaluate the cost of the
proposed tax credit.
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Section 9: Government Coordination,
Collaboration and Programming
A. Intergovernmental and Intersectoral
Collaboration and Coordination
Sport development is a field where coordination among the various levels of
government is particularly important. Municipalities play their part by
providing sporting infrastructures and by organizing sport at the very basic
development level and for recreation. The federal government’s role is
concentrated at the very top level, where Sport Canada provides financial
assistance and services to 1,026 athletes. Moreover, the federal government is
involved in funding the hosting of major sport events. Between the
municipalities and the federal government, the provinces fill an important gap.
Their role is to coordinate and to fund provincial sport federations for the
development of national level athletes and to provide financial assistance for the
development of facilities in the municipalities.
The three levels of government often act in partnership and coordinate their
affairs to avoid duplication. For instance, organizing the Canada Games
requires the financial participation of all three levels of government. The
provinces of Alberta, British Columbia, Manitoba and Quebec are involved
with the federal government, the Canadian Coaching Association and the
Canadian Olympic Association in financing national sport centres. Moreover,
solutions to the problems of professional sport in Canada must also involve the
concerned provinces and the municipalities. The three levels of government
must work together to develop strategies that will encourage professional sport
to flourish in Canada.
Sport overlaps various jurisdictional structures. A strong sport sector needs to
incorporate all government agencies and all resources in our society. Resources
already available in federal departments such as Industry Canada, Human
Resources Development Canada, and Foreign Affairs and International Trade,
must be mobilized to help the development of the sport sector in Canada. Many
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of the Committee’s witnesses expressed a need to create a national, arm’s length
sport organization to provide a national voice for sport in Canada.
The Committee recommends that:
The government establish a separate department responsible
for sport in keeping with the significant role of sport in
Canadian society. The mandate of this department would
include the development of high-performance athletes as well as
sport for all and responsibility for mobilizing and coordinating
all the resources involved in the Canadian sport sector. The
funding directed to the development of sport for youth,
communities and specific populations across Canada be
increased by $10 million.
The federal government examine its relationship with the
national sport community in keeping with the evolution and
maturity of the national sport system. Furthermore and in
consultation with all stakeholders, the government should
consider the creation of a new mechanism which would allow
for more formal consultation and collaboration with
stakeholders in the sport system. This new organization would
include the following characteristics:
° be arm’s length from government
G be responsible for areas of programming currently
delivered by government (i.e. Athlete Assistance Program)
2 be able to leverage private sector involvement
o be responsive to government’s wider social priorities and
be accountable for the provision of public funds
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The division of responsibility and coordination of both facets of
the sport system, grassroots and high performance continue to
be addressed through the federal and provincial/territorial
ministers responsible for sport.
The Fitness and Amateur Sport Act (enacted in 1961) be
updated.
The Government of Canada, as part of a millennium sport
development program, organize a national sport summit to be
chaired by the Prime Minister of Canada and held annually in
Ottawa, and involving amateur sport groups, coaches, sport
manufacturers, professional sport franchises, major media and
government agencies.
A Prime Minister’s council for health and fitness be created.
Estimated Costs of the Recommendations
° The existing $65-million budget of Sport Canada would be merged with
the existing $10 million allocated for fitness and active living. An
additional $10 million should be devoted to the development of sport and
the promotion of physical activity.
1. Data Collection on the Sport Sector
Statistics Canada is only now beginning to gather data on the sport industry, but
specific knowledge must be enhanced in order to develop public policy for
encouraging the development of sport in Canada. According to The Vitality of
the Sport Sector in Canada (Statistics Canada, 1998 (b)), “the amount of sport
data currently available is insufficient to provide a comprehensive profile of the
characteristics, benefits and value of sport to Canadians. Until the means are
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available to monitor, measure and evaluate all facets of the sport industry across
the nation, the ability to formulate sound strategic policies, undertake effective
planning and make the right choices is severely limited and often problematic.”
The lack of homogeneity in the existing available data is also problematic.
To fill the statistical gap, Statistics Canada is recommending that an effective
information infrastructure for National Sport Statistics be developed over three
to five years to harmonize and develop a consistent approach to the study of the
sport sector, to build a national and regional information infrastructure, and to
foster research partnerships within the sport research community. This
initiative would be established through six strategies: (1) increase the public’s
understanding of sport and recreation; (2) develop the analytical potential and
utility of sport data; (3) improve the efficiency of process and operations while
reducing respondent burden; (4) improve the accessibility and utility of sport
products; (5) support the development of integrated approaches to sport
statistics; (6) improve the utility of services.
The Committee recommends that:
Statistics Canada develop the effective information
infrastructure for National Sport Statistics as recommended in
The Vitality of the Sport Sector in Canada (Statistics Canada,
1998 (b)) and make as a priority the implementation of the six
strategies outlined in its recommendation. A report on the
development of National Sport Statistics should be presented
annually to a House of Commons standing committee
responsible for sport to allow it to monitor the development of
the strategies over the implementation period.
Estimated Costs of the Recommendation
: Statistics Canada should estimate the cost of developing a National Sport
Statistics structure.
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2. Human Resources Development for Coaches
Coaching is mainly seen as a volunteer occupation, therefore the labour market
for coaches needs to be stimulated. Human Resources Development Canada
has a program called Job-creation Partnerships for developing such employment
in the local community. This kind of program could be used in partnership with
the Coaching Association of Canada to develop local strategies for initiating
programs aimed at hiring professional coaches in local communities.
The Committee recommends that:
Human Resources Development Canada work in partnership
with the Coaching Association of Canada to perform an
extensive study on the labour market for coaching in Canada in
order to assess the labour market conditions pertaining to
coaching occupations.
Human Resources Development Canada work with the
Coaching Association of Canada to develop a community
business plan for hiring professional coaches under the Job-
creation Partnerships Program.
Estimated Costs of the Recommendations
° Costs would probably be limited and should be determined by Human
Resources Development Canada.
3. The Sporting Goods Industry
The sporting goods industry is an important contributor to the sport economy.
In the global context, a Canadian sporting goods sector that concentrates on
labour-intensive production cannot compete with the countries of Southeast
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SPORT IN CANADA: EVERYBODY'S BUSINESS
Asia. Canada’s sporting goods industry must be based on technology-intensive
production and on research and development for producing high quality goods.
The Committee believes that enhancing the partnership between the industry
and universities is the best way to achieve this. For instance, NIKE, Bauer
Canada and the Science and Engineering Research Council of Canada jointly
fund the Hockey Biomechanics Laboratory at the University of Ottawa and its
research on developing better, safer and more comfortable skates, which will be
manufactured in Canada by Bauer (Jean Harvey, Marc Lavoie and Maurice
Saint-Germain, brief).
Canada is internationally recognized for products reflecting its special
character. For people around the world, Canada is synonymous with wide-open
spaces, lakes, rivers, the winter and all the open-air and sporting activities that
they foster. Canada should capitalize on this competitive advantage by
producing and selling products related to this image (Jean Harvey, Marc Lavoie
and Maurice Saint-Germain, brief).
The Committee recommends that:
Industry Canada continue to track and provide current
information on the development of the domestic and foreign
sporting goods market, the trends for the next year, and the
proper strategic positioning to be developed by Canadian
manufacturers.
Industry Canada continue to work in developing co-operation
and partnership among the sporting goods manufacturers and
research and development laboratories in order to use new
technologies for producing high-performing sporting
equipment.
Estimated Costs of the Recommendations
C Cost is very limited, since the service is already provided to the industry.
-Liv-
SPORT IN CANADA: EVERYBODY'S BUSINESS
4. Horse Racing Industry
Horse racing is a major sport in Canada and contributes significantly to the
Canadian economy. Canada is respected around the world for its production of
competition horses. The industry has recently come under pressure from new
and expanded gaming initiatives including casinos, slot machines, lotteries and
bingo (Racetracks Canada, brief).
Over the past 10 years horse racing has become quite widespread. In this more
global market, one problem facing the horse industry is that Canadians are
subject to tax-withholding on winning bets in a U.S. pool. This means a
separate and smaller pool in Canada; many Canadians are setting up wagering
with racetracks in the United States in order to bet into U.S. pools. This
seriously hurts the Canadian racing industry because it means that wagering and
associated commissions are lost to it.
Losses incurred by horse owners who are not full-time farmers are tax
deductible only to a maximum of $8,500. These rules apply to “farms,” as
defined in the Income Tax Act, and were put in place to prevent “hobby
farmers” from benefiting from artificial losses. The unintended effect of these
rules is to put Canadian race horse owners and the Canadian horse racing
industry at a significant disadvantage in relation to their U.S. counterparts and
other Canadian businesses. This industry would benefit from having fair tax
treatment, the same as that given to other businesses in Canada.
The emergence of new technologies has created opportunities for foreign
competitors to advertise and offer betting facilities to Canadian residents that
cannot be offered by Canadian tracks. The problem is that the Criminal Code
permits only telephone account wagering, so that the Canadian industry cannot
benefit from other mediums such as the Internet or digital satellite television to
provide a modern wagering distribution system.
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SPORT IN CANADA: EVERYBODY’S BUSINESS
The Committee recommends that:
The Department of Finance undertake negotiations to change
the current tax treaty between Canada and the U.S. to ensure
that Canadian betting in Canada on races in the United States
will be subject to the Canadian tax laws rather than U.S.
regulations.
The Minister of Finance examine the possibility of amending the
Income Tax Act so that the losses incurred by horse breeders
and owners receive the same tax treatment as losses incurred by
any other businesses in Canada.
The Minister of Justice examine the possibility of amending the
Criminal Code paragraph 204(1)(c) to add the words or any
other telecommunications devices after the words telephone
calls. This would allow the horse racing industry to take
advantage of emerging new technology to allow wagers directly
into betting pools une seule fois au titre de tout |’élément d’actif
hosted by Canadians tracks, over mediums such as the Internet
or digital satellite television.
Estimated Costs of the Recommendations
o The cost of amending the Income Tax Act needs to be established.
e Other recommendations would incur ne additional cost.
5. Sports Wagering
While various forms of gaming are allowed in Canada under the Criminal Code
(lottery, casino, horse racing, bingo), sports wagering is illegal. Like any
PANIC ia) eee
; -119-
eae
SPORT IN CANADA: EVERYBODY’S BUSINESS
prohibited activity, the sport wagering industry exists as an underground
activity in Canada. More control over this industry could better protect people
who bet and could also be a good source of revenue for governments. Sports
wagering could be a means of increasing financial resources for developing
athletes and encouraging sports participation. The Minister of Justice could
establish a task force to investigate the economic and social impacts of
legalizing sports wagering in Canada.
The Committee recommends that:
The Minister of Justice establish a task force to investigate the
economic and social impacts of sports wagering in Canada and
to study the feasibility of legalizing it.
Estimated Costs of the Recommendation
° Cost would be limited as resources are already in place.
6. International Sport Policy
Sport is one of the most powerful images that can be projected through
international relationships. Canada receives a great deal of fame when an
Olympic athlete wins a gold medal at the Olympic Games and our country’s
expertise will continue to be recognized in the particular sport. Canadian
companies need such international exposure in the realm of global market
competition. Moreover, the “world-class city” status attracted by international
sports events and major league sport draws intangible amenities to the host city
and to Canada’s tourism sector, as well as highly qualified workers from abroad
and foreign investment.
The Committee recommends that:
The Department of Foreign Affairs and International Trade
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SPORT IN CANADA: EVERYBODY'S BUSINESS
work with the national sport organizations to develop strategies to
encourage Canadian corporations to sponsor Canadian
international-level athletes who could promote their overseas
business.
The Department of Foreign Affairs and International Trade work
with the sport community to develop an international sport
strategy for promoting international tourism, foreign investment
and the world-class status of Canadian cities through major sport
franchises and major games.
Estimated Costs of the Recommendations
° Cost would be limited as resources are already in place.
B. Government Programming
1. Programs for Athietes
Witnesses suggested creating transparent selection mechanisms to ensure that all
athletes are treated fairly and that the athlete development system in Canada is
working for athletes. Equity and fairness should be at the basis of all sport
delivery systems.
The Committee recommends that:
The Government of Canada, in conjunction with the provinces and
territories, take action to create mechanisms for ensuring fairness
in the selection of national teams and access to participation in
sport and fitness activities by all Canadians.
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SPORT IN CANADA: EVERYBODY’S BUSINESS
The government ensure that top-level athletes have more control over the
system by encouraging sports organizations to give them significant decision-
making strength in those issues that affect them.
The Government of Canada ensure the development and delivery of services
and programs in both official languages.
Estimated Costs of the Recommendations
° The cost would depend on the type of program that is developed.
2. Sport Medicine and Research
Studies show that people engaged in sport, particularly young men, can display
reckless behaviour causing fatal injuries. Half of the men who die during sports
or recreational activities have been drinking alcohol. Trauma specialists are
calling for programs aimed at educating youngsters about safety in sport.
Moreover, significant research must be carried out to ensure the safety of
athletes. In the realm of drug use to improve sport performance, the Committee
recognizes the need to find solutions to current problems.
The Committee recommends that:
Mechanisms be established that will make it possible to ensure
that physiological and biomechanical monitoring of athletes
becomes more accessible so as to reduce the temptation to use
drugs.
The Government of Canada create a program designed to
educate youngsters about safety in sport.
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SPORT IN CANADA: EVERYBODY'S BUSINESS
The Government of Canada establish a research fund for
projects that study the causes, effects and prevention of all
injuries in sport, particularly those that are catastrophic.
The Government of Canada invest in specific sport research
determined by sports stakeholders and that research contracts
be awarded to university institutions. A formal mechanism
would be needed for coordinating research and distributing
findings.
Estimated Costs of the Recommendations
° The cost of the educational campaign should be capped at $1 million.
° The Research Fund should be capped at $1 million per year.
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SPORT IN CANADA: EVERYBODY'S BUSINESS
Section 10: New Financing for Sport in
Canada: “The Millennium Sport Bond”
New funding sources for amateur sport in addition to direct subsidies to national
sport organizations and indirect support through tax measures have been
severely limited since the late 1980s. The creation of a new and innovative
fundraising program on a national scale would assist in supporting the growing
needs of the national sport infrastructure. One such revenue-generating scheme
would be the proposed millennium sport bond program. The basic concept of
this program is to sell bonds to Canadians in $100 denominations. The
principal would be placed in a trust and 80% of the interest earned would be
directed to assisting amateur sport. The remaining 20% of the interest earned
would be redistributed to bondholders in the form of a lottery.
The province of Alberta is implementing “Sport Prize Bonds” to improve
professional sport facilities and possibly support the operating costs of
community-owned teams. The concept is that a charitable foundation sells
bonds for a stated face value (i.e. $100), redeemable at face value at the option
of the bondholder. In lieu of interest, the bondholder receives a chance to win a
significant cash prize, determined periodically during the period in which the
bond is outstanding. The aggregate principal amount of the issued bonds is held
in a segregated account. The interest earned on the account is used: (1) to pay
the operation costs of the program; (2) to give prizes to randomly selected
bondholders; and, (3) to stabilize professional sports franchises in Alberta
(Turner, 1998). Revenue Canada is currently examining the tax treatment of the
cash prizes (with respect to income tax) and the bonds sold (with respect to the
Goods and Services Tax).
Gaming in Canada has an estimated market of $20 billion. The federal
government became involved in lotteries to help finance the 1976 Olympic
Games in Montreal, Quebec, and launched the Olympic Lottery in November
1973. In 1985, an agreement between the federal government and the provinces
left the field to the provinces. Provincial lottery ticket sales totalled $5.6 billion
in the fiscal year, 1996-97, and made a net profit of $1.9 billion. Sales of sport-
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SPORT IN CANADA EVERYBODY'S BUSINESS
related gaming alone accounted for $344 million. However, according to the
1985 Lottery Agreement between the Government of Canada and the provinces,
the federal government received $100 million in 1984 which it used for the
Calgary Olympic Games and an annual amount of $24 million in 1979 dollars,
which represented $51.6 million in the fiscal year, 1996-97.
TABLE 9
Provincial Lotteries, 1996-97
(in thousands of dollars)
Gross Sales | Sport-related | Net Profits
Lottery Sales
Payments to
the Government
of Canada
867,452
602,029
2,066,723
1,570,052
454,244
5,560,500
21,460
59,865
202,208
50,001
10,100
343,634
6,714
8,800
19,600
12,869
3,635
51,618
British Columbia Lottery Corporation
Western Canada Lottery Corporation
Ontario Lottery Corporation
Loto-Québec
Atlantic Lottery Corporation
Total
502,155
287,106
1,937,294
Source: Annual reports of provincial lottery corporations for the fiscal year 1996-97.
The Committee recommends that:
The Government of Canada, in collaboration with the
provinces, establish a millennium sport bond program to
generate funds for amateur sport in Canada.
Footnotes
1 The task force takes into account all the dollars spent, and not only the net value added to the economy, as Statistics Canada does. The
GDP based result used by Statistics Canada represents only the net gain (value added) to the economy. For instance, the GDP of
manufacturing sporting goods is the output less the material bought to produce the output; the GDP of wholesale and retail of sporting goods is
only the gross margin.
2 Of which $17.8 billion is the direct effect and $11.4 billion the indirect effect.
3 “Technical resources” refers here to the extent of leadership provided by the NSO in developing resource materials and programs for
athletes, coaches and officials.
4 Use of recreation facilities include; membership fees and dues for clubs and for single usage fees (golfing, bowling and billiards, skiing,
racquet sports and other recreation facilities and services) children’s camps and admission to museums and exhibitions.
5 However, it is worth noting that the economic contribution (GDP) (direct and indirect) calculated by the professional teams is somewhat
relevant in the estimates of Statistics Canada (see Table 2).
6 Economists define externality as an event that has a notable economic effect, positive or negative, on people who were not part of the
economic transaction that generates the event.
7 When the NBA and the NHL share the venue, the taxpayers’ contribution represents 11% of the cost.
“UCL S\ CUS RI 0 en ety fF SiR
- 125 -
Ue Ne ae eee
Summary of Recommendations and Estimated Cost
SPORT IN CANADA: EVERYBODY'S BUSINESS
(Millions of dollars)
Recommendations
Section 1: High-performance Athletes and
National Sport Organizations
Ue
The government continue its policy and funding support for amateur sport
generally. Specifically, and repeating a recommendation from the 1992
Minister's Task Force on Sport Policy, the federal government should
provide a substantial federal commitment to and support for, the future of
sport in Canada over the long term, in keeping with its current and potential
contribution and benefits to Canada.
Those responsible for administering federal funds ensure that all
organizations in receipt of government funding for sport meet specified
ethical standards. Ethical criteria for the funding or support of professional
sports should be the same as ethical criteria for the funding of amateur
sport, including provisions for drug-free sport.
The federal government continue to support and fund the Canadian Centre
for Ethics in Sport, an independent agency responsible for the promotion,
monitoring and evaluation of ethics in sport, including stable and sufficient
funding for Canada's drug-free sport program. That part of a national
strategy for ethics in sport include the establishment of an ethics-in-sport
legacy to ensure the necessary independence, stability and sustainability of
Canada's ethics in sport program.
The number of national sport organizations eligible for federal funding be
increased. (A minimum funding level of $100,000 per year would allow
national sport organizations representing Olympic sports to provide a basic
level of service to their athletes and maintain a limited program.)
The carding eligibility requirements be changed to provide funding to all
qualified national team athletes regardless of the funding status of the
national sport organization.
National high performance training centres allow access to non-carded
national team athletes.
The Government of Canada support the continuing development of high-
quality coaching in Canada through programs like the National Coaching
Institute and set up a longer-term coaching endowment of 5 million to
ensure stability within coaching.
The Finance Department examine the possibility of creating a non-
refundable high performance sport tax credit to help parents to meet the
significant expenses associated with the development of high-performance
athletes.
Yearly
No additional
cost
No additional
cost
Oa
1
0.65
Estimate not
available
Total for 5 years
10.5
3.2
20
- 126-
SPORT IN CANADA: EVERYBODY'S BUSINESS
Recommendations Yearly. Total for 5 years
Section 2: Sponsorship
9. Amateur sport sponsorship be encouraged by allowing, for a two-year Estimate not oa
period, a 150% tax deduction (currently 100%) for small business corporate available
sponsorship.
Estimate not Fo
10. A sport marketing advisory board be created to promote sport sponsorship. TEATS
Section 3: Sport Facility Infrastructure
11. The Government of Canada, in conjunction with provincial and municipal = 100
governments, undertake a sports facility infrastructure program to improve
and increase the number of facilities; this will encourage growth at the
grassroots level and allow for the staging of high-level and profitable
international events. Federal maximum contribution for the whole program
should be capped at $100 million.
Section 4: Canada Lands
No additional 0
12. All real estate properties sold by Canada Lands Company stipulate that a cost
fixed percentage of the property (20%) be allocated for recreational use and
that the purchaser make a commitment to developing and operating such
recreational facilities.
Section 5: Hosting Major Sport Events
13. Canada bid for one major multi-sport games (Olympics, Commonwealth Estimate not se
Games) or significant single-sport event (World Cup of Soccer, World available
Hockey Championship) in each decade in keeping with our proud history of
staging multi-sport events. Moreover, provided Canada meets the
International Federation of Association Football (IFAF) requiremeni of 9
stadiums of 50,000 places with natural grass, the Government of Canada
should strike a Sub-Committee for determining the viability of developing a
bid to host the IFAF World Cup in 2010.
14. Sport Canada examine the possibility of increasing the frequency of Estimate not =
hosting the Canada Games. available A
15. The Government of Canada continue to play a strong role in the Canada No pari es ba
Games program and should encourage continued funding and policy cos
support, in view of the role of the Games in advancing public policy.
Section 6: Encouraging Accessibility of
Sport and Physical Activities
A. Sport Development Fiscal Incentive
16. Eligibility for charitable tax deductions be extended to qualified Estimate not =
provincial/territorial level not-for-profit sport organizations. available
Oe oe ta
- 127 -
Se a ee
We
SPORT IN CANADA: EVERYBODY’S BUSINESS
Recommendations
The Finance Department examine the possibility of creating a non-
refundable child sport tax credit to encourage parents to register their
children in local sport and recreational programs, and help alleviate the cost
of sport equipment.
. The Finance Department examine the possibility of creating a non-
refundable tax credit for annual fees up to $1,000 paid by volunteers in
taking coaching, officiating or first aid courses connected to amateur sport.
. School Sport and C. University Sport
. The Government of Canada recognize the valuable role schools play in the
grassroots development of sport in Canada.
. The Government of Canada continue to endorse the program “Quality Daily
Physical Education" of the Canadian Association for Health, Physical
Education, Recreation and Dance.
. School sport programs be expanded to encourage the participation of more
students, regardless of gender, economic status and ability.
. The Government of Canada work with the provinces/territories and the
Canadian Interuniversity Athletic Union to develop a system of student
awards for athletes to support post-secondary athletes attending Canadian
universities or colleges.
. Women in Sport
. The Government of Canada use the infusion of $50 million into Canada's
sport system to benefit underrepresented groups, in order to ensure that
opportunities for girls and women are on a par with those for boys and men.
. The Government of Canada establish a tracking system to ensure that a
fair portion of the new funding does in fact reach the targeted
underrepresented groups.
. The Government of Canada continue to collect gender-based statistics
through the initiatives noted above; that a verification process be
established to ensure the accuracy of the data; that additional funding
incentives be provided to those sport organizations which deliver equitable
services, and that penalties be assessed against those that do not.
. The Government of Canada, as a major funder of the new system of
national sport centres, enact three criteria for ongoing funding; significant
representation by women on the boards of directors; programming that
serves the unique needs of women and the other underrepresented groups;
and higher numbers of apprenticeship and employment opportunities for
women coaches.
Yearly
64.3
2
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
Total for 5 years
S2iEO
- 128 -
SPORT IN CANADA EVERYBODY'S BUSINESS
le
35.
Recommendations
In support of Canada's hosting of the 2002 World Conference on Women
and Sport, that the Government of Canada involve other government
departments, especially those concerned with women's health, violence
against women, and human rights; and that a financial legacy in the form of
grants and scholarships to girls and women be established.
. The Government of Canada build on the initiatives begun in January 1997
to eradicate harassment and abuse from Canadian sport, and continue to
support activities that make sport safer and more accessible to girls and
women.
. The Sport Facility Infrastructure Program be developed to ensure
accessible programs that encourage participation and provide “catch-up"
funding for girls and women.
. The Government of Canada offer a program of incentives or tax breaks to
Canadian manufacturers that develop, market, and export female-friendly
equipment.
. Sport for people with disabilities
. Further steps be taken to encourage the integration of disabled persons
into sports-governing bodies.
Aboriginal People and Sport
. The Government of Canada, as recommended in the Royal Commission on
Aboriginal Peoples, establish and fund an Aboriginal sports and recreation
advisory council to advise all levels of government on how to best meet
sports and recreation needs in Aboriginal communities.
. The Government of Canada, in collaboration with provincial/territorial
governments, the Coaching Association of Canada and the Aboriginal Sport
Circle develop funding strategies and technical support to increase the
accessibility of the National Coaching Certification Program and to develop
a certification program more in touch with Aboriginal realities and culture.
. The Government of Canada work with the provinces, territories and the
Assembly of First Nations to develop a funding framework for the North
American Indigenous Games.
The Government of Canada work with the provinces and territories to
assure adequate funding for the Aboriginal sport bodies.
Section 7: Professional Sport
36.
The sport pact be initiated to protect, enhance and promote the vitality and
stability of professional sport in Canada.
- 129 -
Yearly
No additional
cost
No additional
cost
No additional
cost
10
No additional
cost
Estimate not
available
Estimate not
available
Estimate not
available
Estimate not
available
Estimate not
available
Total for 5 years
50
EVERYBODY’S BUSINESS
SPORT IN CANADA:
Recommendations
Section 8: Broadcasting (Sport and Media)
37.
38.
The CRTC not authorize any more foreign programming services with
strong U.S. sports components for broadcast in Canada.
The government work with the media to create a broad-based public
awareness campaign which speaks to the benefits of sport and recreation.
. The CRTC extend mandatory simultaneous signal substitution tospecialty
services.
The government direct the CBC/Radio-Canada to broadcast more sporting
events involving Canada's national teams rather than the restricted window
of events they currently present.
. The CRTC encourage broadcasters to co-operate in providing Canadians
with the best possible Canadian programming.
. The CRTC initiate a study of sport on Canadian television. The purpose
would be (1) to analyze Canadian sport content compared with American
sport content (programming involving Canadian teams or athletes) on
channels available in Canada and (2) to evaluate the market share of
broadcast Canadian sport.
. Radio-Canada/CBC be required to broadcast a minimum number of hours
of amateur sport in both official languages and the actual number of hours
broadcast be equivalent on both networks.
. The federal government implement, for a two-year period, a 150% tax credit
for firms that advertise on Canadian amateur sport programs broadcast by
specialty services.
Section 9: Government Coordination, Collaboration and
Programming
A. Intergovernmental and Intersectoral Collaboration and
Coordination
45.
The government establish a separate department responsible for sport in
keeping with the significant role of sport in Canadian society. The mandate
of this department would include the development of high-performance
athletes as well as sport for all and responsibility for mobilizing and
coordinating all the resources involved in the Canadian sport sector. The
funding directed to the development of sport for youth, communities and
specific populations across Canada be increased by $10 million.
. The federal government examine its relationship with the national sport
community in keeping with the evolution and maturity of the national sport
system. Furthermore and in consultation with all stakeholders, the
Yearly
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
No additional
cost
Estimate not
available
Estimate
not available
- 130 -
Total for 5 years
50
SPORT IN CANADA EVERYBODY’S BUSINESS
2.
3,
Raver ay
Se ieee
Recommendations
government should consider the creation of a new mechanism which would
allow for more formal consultation and collaboration with stakeholders in
the sport system. This new organization would include the following
characteristics:
* be arm's length from government
* — be responsible for areas of programming currently delivered by
government (i.e. Athlete Assistance Program)
¢ be able to leverage private sector involvement
* be responsive to government's wider social priorities and be
accountable for the provision of public funds
. The division of responsibility and coordination of both facets of the sport
system, grassroots and high performance continue to be addressed
through the federal and provincial/territorial ministers responsible for sport.
. The Fitness and Amateur Sport Act (enacted in 1961) be updated.
. The Government of Canada, as part of a millennium sport development
program, organize a national sport summit to be chaired by the Prime
Minister of Canada and held annually in Ottawa, and involving amateur
sport groups, coaches, sport manufacturers, professional sport franchises,
major media and government agencies.
A Prime Minister's council for health and fitness be created.
. Data Collection on the Sport Sector
. Statistics Canada develop the effective information infrastructure for
National Sport Statistics as recommended in The Vitality of the Sport Sector
in Canada (Statistics Canada, 1998 (b)) and make as a priority the
implementation of the six strategies outlined in its recommendation. A
report on the development of National Sport Statistics should be presented
annually to a House of Commons standing committee responsible for sport
to allow it to monitor the development of the strategies over the
implementation period.
Human Resources Development for Coaches
Human Resources Development Canada work in partnership with the
Coaching Association of Canada to perform an extensive study on the
labour market for coaching in Canada in order to assess the labour market
conditions pertaining to coaching occupations.
_ Human Resources Development Canada work with the Coaching
Association of Canada to develop a community business plan for hiring
professional coaches under the Job-creation Partnerships Program.
-I3L-
Yearly Total for 5 years
No additional 0
cost
No additional 0
cost
No additional 0
cost
No additional 0
cost
Estimate i
not availabie
Estimate not
available
Estimate not wy
available
EVERYBODY’S BUSINESS
SPORT IN CANADA:
Recommendations
3. The Sporting Goods Industry
54. Industry Canada continue to track and provide current information on the
development of the domestic and foreign sporting goods market, the trends
for the next year, and the proper strategic positioning to be developed by
Canadian manufacturers.
55. Industry Canada continue to work in developing co-operation and
partnership among the sporting goods manufacturers and research and
development laboratories in order to use new technologies for producing
high-performing sporting equipment.
4. Horse Racing Industry
56. The Department of Finance undertake negotiations to change the current
tax treaty between Canada and the U.S. to ensure that Canadian betting in
Canada on races in the United States will be subject to the Canadian tax
laws rather than U.S. regulations.
57. The Minister of Finance examine the possibility of amending the Income
Tax Act so that the losses incurred by horse breeders and owners receive
the same tax treatment as losses incurred by any other businesses in
Canada.
58. The Minister of Justice examine the possibility of amending the Criminal
Code paragraph 204(1)(c) to add the words or any other
telecommunications devices after the words telephone calls. This would
allow the horse racing industry to take advantage of emerging new
technology to allow wagers directly into betting pools hosted by Canadians
tracks, over mediums such as the Internet or digital satellite television.
5. Sports Wagering
59. The Minister of Justice establish a task force to investigate the economic
and social impacts of sports wagering in Canada and to study the feasibility
of legalizing it.
6. International Sport Policy
60. The Department of Foreign Affairs and International Trade work with the
national sport organizations to develop strategies to encourage Canadian
corporations to sponsor Canadian international-level athletes who could
promote their overseas business.
61. The Department of Foreign Affairs and International Trade work with the
sport community to develop an international sport strategy for promoting
international tourism, foreign investment and the world-class status of
Canadian cities through major sport franchises and major games.
Yearly
No additional
cost
No additional
cost
No additional
cost
Estimate not
available
No additional
cost
No additional
cost
No additional
cost
No additional
cost
- 132 -
Total for 5 years
SPORT IN CANADA: EVERYBODY S BUSINESS
= 6)
Recommendations
. Government Programming
. Programs for Athletes
. The Government of Canada, in conjunction with the provinces and
territories, take action to create mechanisms for ensuring fairness in the
selection of national teams and access to participation in sport and fitness
activities by all Canadians.
. The government ensure that top-level athletes have more control over the
system by encouraging sports organizations to give them significant
decision-making strength in those issues that affect them.
. The Government of Canada ensure the development and delivery of
services and programs in both official languages.
. Sport Medicine and Research
. Mechanisms be established that will make it possible to ensure that
physiological and biomechanical monitoring of athletes becomes more
accessible so as to reduce the temptation to use drugs.
. The Government of Canada create a program designed to educate
youngsters about safety in sport.
. The Government of Canada establish a research fund for projects that
study the causes, effects and prevention of all injuries in sport, particularly
those that are catastrophic.
. The Government of Canada invest in specific sport research determined by
sports stakeholders and that research contracts be awarded to university
institutions. A formal mechanism would be needed for coordinating
research and distributing findings.
Total Estimated Cost
Section 10: New Financing for Sport in Canada “The
Millenium Sport Bond"
69.
The Government of Canada, in collaboration with the provinces, establish a
millennium sport bond program to generate funds for amateur sport in
Canada.
- 133 -
Yearly
No additional
cost
No additional
cost
No additional
cost
Estimate
not available
Estimate not
available
1
Estimate not
available
Estimate not
available
Total for 5 years
578.2
ih aT aS
i noe aes
a a mAjcate 3
& ee 5 -ia agee
we mes
2 JP yee
a as my bh ey
oc i -
md
‘ ae
1Pos oe welheg jee
bY oe ned nga
ree ad
oF
=a
i aT
CONCLUSION
The future of sport in Canada depends on strong leadership, partnership and
accountability. Our report leaves no doubt as to the significance of the role
played by sport in this country. Sport is vital in terms of Canada’s economy,
cultural identity and the general health and well-being of Canadians. Many
Canadians — employees, participants and spectators — are touched by sport in
some manner each and every day. Sport permeates both goods-producing and
services-producing sectors of the economy. In the mid-1990s, sport’s share of
the total output of the Canadian economy exceeded 1% and the sport industry
employed more than 262,000 individuals. Sport’s share of total output in the
Canadian economy exceeds many other industries including wood; logging and
forestry; fishing and trapping; and aircraft and aircraft parts. In 1996, Canadians
spent almost $8 billion on sport-related activities. Sport imparts a large impact
on other sectors of the economy, especially tourism. It is estimated that sport
contributes some $4 billion in tourism expenditures.
Today, millions of Canadians participate in one or more sports. Many
individuals also participate in sport as coaches and organizers. The participation
of spectators is also significant, as evidenced by the high-attendance levels at,
and TV ratings afforded to, sporting events across the country. Canadians’
participation in sport exceeds all other activity.
Despite the upward trend in the number of physically active Canadians over the
years, there is considerable scope for improvement as it is estimated that less
than 40% of Canadians were active in 1995. And, since it is now widely
accepted that physical activity contributes to a stronger and healthier
population, increasing the level of activity among Canadians is growing in
importance. Health Canada research suggests that a 10% reduction in the
number of inactive Canadians would save the Canadian economy $5 billion.
The Committee is very cognizant of sport’s role in this context and proposes a
number of recommendations designed to enhance the general level of activity
among Canadians and the vitality of sport in this country. Special focus is
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SPORT IN CANADA: EVERYBODY'S BUSINESS
afforded to youth, women, disabled and Aboriginal people. The Committee
recommends that a federal department of sport be created. It also calls for the
introduction of a non-refundable tax credit for training costs incurred by
volunteer coaches and officials and a non-refundable child sport tax credit, an
allocation of some of the recent increase in Sport Canada funding to benefit
underrepresented groups, an expansion of school sport programs, the integration
of disabled persons into sports governing bodies and the creation and funding of
an Aboriginal sports and recreation council.
The Committee recognizes the important role played by Canada’s high-
performance amateur athletes and recommends that the number of national
sport organizations eligible for funding be increased and that a minimum level
of $100,000 be available to national sport organizations for olympic sport to
provide a basic level of service for athletes. Furthermore, equity considerations
call for a change in carding eligibility criteria so as to permit funding for all
eligible national team athletes. The Committee also recommends that the federal
government continue to support the Canadian Centre for Ethics in Sport in
Canada’s fight to eliminate drug use in sport.
Professional sport is an important contributor to the economy and to the lives of
many Canadians. Statistics Canada estimates that in the mid-1990s, professional
sport and the presentation of live sport spectacles contributed approximately
$608 million to Canadian GDP and created 23,715 jobs. However, the financial
health of professional sport and its continued existence in this country are
threatened by higher payroll and infrastructure costs and by the level of public
support provided to professional teams south of the border. In recognition of the
growing problems facing this component of Canada’s sport industry, the
Committee recommends that a five-part federal strategy called the sport pact be
established to promote the vitality and stability of professional sport in this
country. This strategy would, for example, provide tax incentives to eligible
sports franchises and encourage more small businesses to support their local
teams.
Our vision of the future of sport in Canada, shared by many Canadians, calls for
a stronger partnership between the public and private sectors and more co-
operation between governments. All levels of government play an active role in
- 136 -
SPORT IN CANADA EVERYBODY'S BUSINESS
promoting sport-related activities. As noted in this report, municipalities
represent the backbone of our sport delivery system. It is at the community level
that tomorrow’s world class athletes begin their training. To assist in the
continued development of sports facilities, the Committee recommends that the
federal government, in conjunction with provincial, territorial and municipal
governments, initiate a sports facility infrastructure program. In addition, the
Committee recommends that a fixed percentage of property sold by Canada
Lands be used for recreational purposes. Equally important, new sources of
sport funding must be developed and, in this context, the Committee
recommends the creation of a new vehicle for funding amateur sport called the
millennium sport bond.
These and the many other recommendations in this report represent the
Committee’s vision for strengthening sport in this country. Much work lies
ahead and the Committee invites all Canadians to work together to make this
collective vision a reality. Finally, the Committee would like to thank all of
those who generously shared their views and expertise on this very important
subject and who made this report possible.
- 137 -
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APPENDIX I
The Sport Delivery System in Canada
International Competition
* elite club to individual meets
* elite athlete to individual meets
e Canadian team to World Cup/World
Championships
* Canada team to major games
(e.g. Olympics, Commonwealth)
Organism
Body
Major Games
Organizations
National team
p junior national training camps
pe junior / juvenile team
p senior team
» national carding / support
National Championships
> provincial teams
p clubs through qualifying standards
p league team winners
>» regional winners
National
Sport Body
interprovincial Competition
p» Canada Games
p> provincial teams
p elite club
elite team of city league
Federal
Government
Provincial Teams
» select international bilateral teams
p provincial carding / support
Provincial Championship
» universities / community colleges
p clubs, independent teams, leagues
Provincial
Sport Body
Interprovincial Teams
p schools
p universities / community colleges
» clubs, independent teams, leagues
Provincial
Government
Municipal
Sport
Organizations
Start Competition/Advanced Skills
p schools
p clubs
Basic Skills
p schools
p universities / community colleges
> clubs, independent teams, leagues
Municipal
Government
- 139-
APPENDIX Ii
List of Witnesses
Organizations and Individuals Meeting Date
Department of Canadian Heritage 3 December 1, 1997
Norman Moyer, Assistant Deputy Minister, Citizenship and
Canadian Culture
Dan Smith, Director General, Sports Canada
Canadian Olympic Association (COA) 4 December 8, 1997
Carol Anne Letheren, Chief Executive Officer
University of Ottawa 5 February 5, 1998
Jean Harvey, Professor, School of Physical Activity Sciences
and Vice-Dean (Research), Faculty of Health Sciences
Marc Lavoie, Professor, Department of Economics
Athletes CAN 6 February 11, 1998
Lori Johnstone, Chair
Non-Federally Funded Olympic Sports (NFFOS)
James Bandola, Executive Director, Ski Jumping Canada
Kathy Millar, Federation of Canadian Archers Inc.
Jocelyn Langlois, Shooting Federation of Canada
Norman O’Reilly, National Team Manager
Neil Wilson, Canadian Snowboard Federation
Triathlon Canada (Triathlon)
Patrice Brunet, Director
William J. Hallett, President
Canada Games Council (CGC) 7 February 25, 1998
Lane MacAdam, President & CEO
Canadian Broadcasting Corporation (CBC) 8 March 25, 1998
Daniel Asselin, Director of Sports Programs, Radio-Canada
Alan Clark, Head of Television Network Sports, English
Service
- 140-
NetStar Sports (NetStar) 8
Jacques Boucher, Vice-President Programming, Le Réseau
des sports (RDS)
Jim Thompson, President
Metro Toronto Hockey League (MTHL) 9
John Gardner, President
As Individual
Lois Kalchman
Canadian Football League (CFL) 10
John Tory, Commissioner
National Basketball Association (NBA) 11
Jeffrey A. Mishkin, Executive Vice-President & Chief Legal
Officer
NBA Canada, Inc.
Ken Derrett, Managing Director
Toronto Raptors (Raptors)
Richard Peddie, President & CEO
Vancouver Grizzlies (Grizzlies)
Stephen Bellringer, President & CEO, Orca Bay
National Hockey League (NHL) 12
Stephen Bellringer, President & CEO, Orca Bay Sports &
Entertainment, Vancouver Canucks
Gary Bettman, Commissioner, National Hockey League
Rod Bryden, Chairman and Governor, Ottawa Senators
Ronald Corey, President and Governor, Montreal Canadiens
Ken Dryden, President and General Manager, Toronto Maple
Leafs
Harley Hotchkiss, President and Governor, Calgary Flames,
Chairman, NHL Board of Governors
Glen Sather, President and General Manager, Edmonton
Oilers
Canadian Olympic Association (COA) 13
Michael Chambers, Vice-President
Carol Anne Letheren, Chief Executive Officer
Montreal Expos (Expos) 14
Claude R. Brochu, President
- 141 -
March 25, 1998
April 21, 1998
April 21, 1998
April 23, 1998
April 28, 1998
April 29, 1998
May 5, 1998
Canadian Interuniversity Athletic Union (CIAU) 15 May 7, 1998
Jennifer Brenning, Director of Operations
Kerry Moynihan, Chief Executive Officer
Appleton and Associates International Lawyers (Appleton) 16 May 12, 1998
Barry Appleton, Counsel
Marjan Neceski, Counsel
Department of Foreign Affairs and
International Trade (DFAIT)
John Gero, Director General, Trade Policy Bureau II (EBD)
John Klassen, Director General, General Trade Policy Bureau
Canadian Lacrosse Association (CLA) 17 May 13, 1998
William Hutton, Chairman of the Board
Michael Lachapelle, General Manager
Canadian Soccer Association (CSA)
Nick Filippone, Vice-President
Kevan Pipe, Chief Operating Officer
Eastern Ontario District Soccer Association
Joyce Stewart, President
Ontario Soccer Association
Brian Avey, Executive Director
Ed Grenda, President
Toronto Blue Jays Club (Blue Jays) 18 May 25, 1998
Bob Nicholson, Executive Vice-President, Business
Sam Pollock, Chairman & CEO
Association for the Advancement of
Women & Sport & Physical Activity 19 October 7, 1998
Karin Lofstrom
Marg McGregor
Canadian Centre for Ethics in Sport Canadian
Victor Lachance, Director General
Canadian Special Olympics Inc.
Deborah Bright
Jim Jordan, Chairman
- 142-
Coaching Association of Canada 20
John Bales, President
Carolyne Hudson, Promotions & Communications Co-
ordinator
Eric King, Vice-President
Tom Kinsman, Coaching Consultant & Executive Director
Lang and Associates
Chris Lang, Chairman
Dan Thompson, Principal ““Architectus”
Molson Breweries
Jeff Carefoote, Senior Vice-President
Canadian Association for Health,
Physical Education, Recreation and Dance ot
Sue Cousineau, Executive Director
Daniel Parthenais, Special Programs Director
Health Canada
Janet Davies, Acting Director General, Strategies and
Systems for Health Directorate
Tim Weir, Acting Manager, Fitness, Active Living Unit
Assembly of First Nations 22
Ted Nolan, Representative
Paulette Tremblay, Education Director
*‘Sports-Québec” 23
Jean-Guy Ouellet, Chairman
Claude Pelletier, Director General
Canadian Sporting Goods Association 24
Yves Paquette, President
Canadian Hockey League 25
David Branch, President
Gilles Courteau, Vice-President
Dev Dley, Vice-President
Racetracks of Canada Inc.
Stephen Edwards, Executive Vice-President :
Yvon Guiguére, Simulcast Director, Hippodrome de Montréal
- 143 -
October 21, 1998
October 22, 1998
October 28, 1998
October 29, 1998
November 4, 1998
November 5, 1998
International Olympic Committee 26 November 16, 1998
Richard Pound, Vice-President
Informal Meetings November 4, 1998
Dennis Mills, M.P., Chairman of the Sub-Committee on
the Study of Sport in Canada of the Standing Committee on
Canadian Heritage
Francois Trudeau, Professor of Sport, Laval University
Athletics Canada
John Thresher, President and CEO
Hugh Wilson, Director of Athletics and Coach
Development
SEVERAL MEMBERS OF THE SUB-COMMITTEE ALSO CONSULTED WITH:
National Hockey League Players Association November 10, 1998
Bob Goodenow, Executive Director (Toronto)
As Individual
Bob McCown, Sport Journalist
- 144-
APPENDIX Il
List of Submitted Briefs
— Ser rin Pr ee
Aboriginal Sport Circle, Aboriginal Sport Development:
The Role of Coaching Development, the North
American Indigenous Games and
Provincial/Territorial Aboriginal Sport Bodies.
Appleton & Associates International Lawyers, NAFTA &
Sports.
Assembly of First Nations
Athletics Canada
Canada Games Council, Sport Development, Community
Confidence, National Unity: The Canada Games
Council.
Canada Games Council, The Canada Games.
Canadian Association for Health, Physical Education,
Recreation and Dance, Role of School Physical
Education in the Canadian Sport System.
Canadian Association for the Advancement of Women and
Sport and Physical Activity.
Canadian Centre for Ethics in Sport.
Canadian Hockey League
Canadian Lacrosse Association, The Impact of Sport in
Canada.
Canadian Modern Pentathlon Association
Canadian Rhythmic Sportive Gymnastic Federation
Canadian Soccer Association, The Industry of Soccer in
Canada.
Canadian Sporting Goods Association
CBC
Coaching Association of Canada, Strengthening the
Canadian Sport System.
Federation of Canadian Archers Inc.
Francois Trudeau
Harvey, Jean, Marc Lavoie and Maurice Saint-Germain,
Sport In Canada: Its Economic Importance and
Impact and the Role of the Government.
- 145 -
Health Canada
Lang & Associates and Architectus, Connecting
Corporations to the Sport Community.
Lois Kalchman
MacRae, Tuck, et al. The Ottawa Senators Hockey
Franchise.
McCown, Robert The Legalization of Sports Wagering in
Canada.
Metropolitan Toronto Hockey League
Molson Breweries
Montreal Expos Baseball Club
National Basketball Association (a, b)
National Hockey League
National Hockey League Players’ Association
NetStar Sport Group
Non-Funded Olympic Sport Organizations, Going (for)
Broke while Going for Gold.
Ontario Soccer Association, The Industry of Soccer In
Canada: Regional Perspective.
Ottawa Senators Hockey Club
Racetracks Canada/Hippodromes du Canada
Ski Jumping
SOAR International, Canadian Sport Tourism Initiative.
Société Radio-Canada
Sport Canada, Role of Sport Canada.
Sport Medicine and Science Council of Canada
Sports-Québec
Toronto Blue Jays
Triathlon Canada (a, b)
Turner, Robert J., Sports Prize Bonds For Alberta.
APPENDIX IV
Survey Respondents
Alberta Volleyball Association
« Association québécoise des directeurs et directrices du
loisir municipal »
Athletics Canada
Baseball Canada
Basketball Canada
BC Volleyball
Brewers Association of Canada
Canada Games Council
Canadian Adult Recreational Hockey Association
Canadian Amateur Wrestling Association
Canadian Amputee Sports Association
Canadian Association for Health, Physical Education,
Recreation and Dance
Canadian Barrel Jumping Association Inc.
Canadian Blind Sports Association
Canadian Boating Federation
Canadian Canoe Association
Canadian Centre for Ethics in Sport
Canadian Cerebral Palsy Sports Association
Canadian Curling Association
Canadian Cycling Association
Canadian Equestrian Federation
Canadian Fencing Federation
Canadian Figure Skating Association
Canadian Fitness and Lifestyle Research Institute
Canadian Ski Association—Freestyle
Canadian Handball Association
Canadian Hockey Association
Canadian Interuniversity Athletic Union
Canadian Junior Football League
Canadian Kendo Federation
Canadian Lacrosse Association
Canadian Modern Pentathlon Association
Canadian Olympic Association
Canadian Olympic Foundation
Canadian Paralympic Committee
Canadian Professional Golfers Association
Canadian Professional Rodeo Association
Canadian Shooting Sports Foundation
Canadian Ski Patrol System—Québec Division
Canadian Soccer Association
Canadian Special Olympics Inc.
Canadian Sport Parachuting Association
Canadian Sporting Goods Association
Canadian Table Tennis Association
Canadian Tenpin Federation
Canadian Tire Dealers Association
Canadian Trotting Association
Canadian Wheelchair Sports Association
Canadian Yachting Association
- 146 -
« Club de hockey Les Rafales S.E.C, »
Coaching Association of Canada
torportion Sports - Québec
Edmonton Drillers
Edmonton Oilers Hockey Club
Edmonton Trappers Baseball
« Fédération canadienne de pétanque »
Federation of Canadian Archers Inc.
Federation of Canadian Municipalities
« Fédération québécoise des jeux récréatifs »
Field Hockey Canada
General Motors Place
Hamilton Bulldogs
International Sports Organization for the Disabled
Judo Canada
Lawn Bowling Canada
Lifesaving Society Canada
Manitoba Moose Hochey Club
National Fitness Leadership Advisory Council
National Hockey League
National Karate Association of Canada
National League of Professional Baseball Clubs
Newfoundland & Labrador Volleyball Association
Quebec Fashion Apparel Manufacturer’s Guild
Rainwear and Sportswear Manufacturers’
Association/Mens Clothing Manufacturers’ Association
Recreation Association of Nova Scotia
Recreation Facilities Association of British Columbia
« Regroupement Loisir Québec »
Royal Canadian Golf Association
Sarnia Sting Hockey Club
Sask Sport Inc.
- 147-
Saskatchewan Athletics
Saskatchewan Council of Cultural Organizations
Saskatchewan Volleyball Association
SaskCulture Inc.
Ski Jumping Canada
Skills Program for Management Volunteers
Soaring Association of Canada
Softball Canada
Sport Information Resource Centre
Sport Manitoba
Sport Medicine and Science Council of Canada
Sport New Brunswick Inc.
Sport Newfoundland and Labrador
Sport Nova Scotia
Sport PEI
Sport Yukon
Squash Canada
Swimming Natation Canada
Synchro Canada
Team Canada Volleyball Centre
Tennis Canada
Toronto Blue Jays Baseball Club
Vancouver Grizzlies
Variety Village
Volleyball Canada
Water Polo Canada
Water Ski Canada
Western Hockey League
WTE Taekwondo Association of Canada
APPENDIX V
Canadian Tax Provisions Dealing with Amateur
and Professional Sports!
The Income Tax Act allows for a deduction for any reasonable expense incurred by a business for the purpose of
earning income.
This provision applies to all businesses, including professional sports organizations.
Examples of deductions by businesses include advertising in arenas, or advertising in a game program to promote
a product or service.
Examples of deductions by a professional sports team include marketing of team merchandise, or the advertising
and promotion of team logo to generate ticket and/or merchandise sales.
Common specific examples of deductible expenses for businesses include advertising on ice or floor surface at
arenas, advertising on the rink boards, advertising on the scoreboard, and advertising and promotion on game
programs
The expense must be incurred for the purpose of earning income.
SUBJECT: INCOME TAX ACT
DATE: May 13, 1991
REFERENCE: Section 6 (subsection 2(3), sections 8, 115 and 212 and paragraphs 18(1)(p) and
125(7)(d) and the definitions of “retirement compensation arrangement” and “salary deferral
arrangement” in subsection 248(1))
APPLICATION
This bulletin cancels and replaces Interpretation Bulletin IT-168R2 dated November 28, 1984.
SUMMARY
This bulletin deals with the taxation of Canadian resident athletes and players (and prospective
athletes and players) employed by professional sports clubs, such as football, hockey and similar
clubs that participate in leagues having regularly scheduled games. In this bulletin, these individuals
are referred to as “players”. The bulletin discusses the items to be included in the income for tax
purposes of such players and the timing and manner of these inclusions, as well as the deductibility
by these players of certain expenses. The taxation of non-resident players is briefly discussed.
Finally, the bulletin explains the tax treatment applicable to players who receive employment income
through a corporation rather than from the sports club directly.
- 148 -
DISCUSSION AND INTERPRETATION
1
For tax purposes, a player’s income from employment includes any of the following items received in
respect of employment:
(a) salaries, including income from personal service contracts (see 7 below),
(b) bonuses — for good performance, for allstar rating, for signing contracts, etc.,
(c) fees — for promotional activities or other special services performed on behalf of the club,
(d) _ living and travelling allowances (see 2 below),
(e) honoraria,
(f) payment for time lost from other employment,
(g) commuting expenses,
(h) free use of automobiles,
(i) | awards — including cash and the fair market value of bonds, automobiles and other merchandise
Q) | payments made by a club on a player’s behalf that would otherwise be a non-deductible expense to the
player, such as agents’ fees, legal fees, income taxes, fines, etc.,
(k) other benefits.
Players’ living and travelling expenses that are borne by the club are treated as follows:
(a) Non-accountable allowances paid to players, including those paid in the training and tryout period, are
income to the player unless they are exempt by virtue of:
(i) subparagraphs 6(1)(b)(vil) and (vii.1) (see the current versions of IT-522 and IT-272 on the
subject of travelling expenses for employees), or
(ii) Subsection 6(6) (see also the current version of IT-91, Employment at Special Work Sites).
Where a non-accountable allowance is income to a player, the player may deduct reasonable expenses to the
extent that the requirements of paragraph 8(1)(/) are met.
(b) Reimbursement of a player’s properly vouchered travelling expenses incurred for away-from-home
games, or any other bona fide club business away from the club’s home base, is not considered to be
income to the extent that the expenses are reasonable in the circumstances. Similar expenses paid
directly by the club are also not considered to be income of the player. However, amounts paid by the
club in respect of the player (or reimbursed to the player) for personal travelling, such as for personal
vacations or for family members, are considered to be income from the player’s employment.
(c) The value of dining and dormitory facilities that are available to all players during the training and
tryout period are not regarded as income to the players provided that the amounts are reasonable in the
circumstances. Where a player lives in the general location of the training and tryout camp, and for
- 149 -
personal reasons commutes daily from home, any allowance paid to the player for travelling, meals,
etc., will be considered to be for personal living expenses and will be included in the player’s income;
the employee will not be eligible to claim expenses pursuant to paragraph 8(1)(h) against this income.
DEFERRED INCOME
3:
A contract of employment may state that part of the player’s remuneration will be payable on a deferred
basis, referring either to a part of regular salary, or to some special amount such as an annual bonus.
Deferring (or advancing) payments such as salary or bonus can affect the player’s level of income for tax
purposes in a year. Because of the variety of arrangements that may be made, each case must be considered
separately, with due regard to the terms of the employment contract and of any trust or other agreement
entered into by either party pursuant to that contract, including an employee benefit plan. Plans or
arrangements to defer the salary or wages of a professional athlete for services as such with a team that
participates in a league having regularly scheduled games are exempted from the rules in the Act applicable
to a “salary deferral arrangement”, as defined in subsection 248(1). Such plans or arrangements will also be
excluded from the provisions in the Act applicable to a “retirement compensation arrangement’, as defined
in subsection 248(1), provided, in the case of a Canadian team, that the custodian of the plan or arrangement
is a trust company licensed to do business in Canada and carries on business through a fixed place of
business in Canada. In such cases, the plan or arrangement is treated as an employee benefit plan (see the
current version of IT-502).
Generally, however, the player should include deferred remuneration in income for the year in which the
player actually or constructively receives it, rather than for the year in which it was earned but not received.
Where the year of inclusion in income is after the player has ceased to be employed by a particular club,
subsection 6(3) is applicable (see the current version of IT-196).
NON-RESIDENTS
oS
Where a player or former player is a non-resident or ceases to be a resident of Canada and receives
remuneration or deferred remuneration on account of services performed in Canada for a Canadian club, the
player will be liable for tax on that income pursuant to subsection 2(3), as calculated under section 115,
except where the payment is one of those specified in section 212 to which Part XIII is applicable (for
example, a retiring allowance or deferred profit sharing plan payments). Non-residents are also liable, by
virtue of paragraph 115(2)(c.1), for tax on payments received for agreeing to enter into a contract for
services to be performed in Canada (i.e. signing bonuses), for undertaking not to enter into such a contract
with another party or as remuneration for duties or services to be performed in Canada, if the amount so
received is deductible by the payer in computing income for Canadian income tax purposes. Consideration
must also be given to the various tax treaties Canada has with other countries.
- 150 -
DEDUCTIONS FROM INCOME
6. Players employed by sports clubs are limited to the same deductions from employment income as are
available to any other employee by virtue of section 8. For example, fines paid by players personally are not
deductible. Legal fees incurred in the negotiation of player contracts are also not deductible since paragraph
8(1)(b) stipulates that to be deductible, the fees must be incurred in collecting salary or wages owed by an
employer or former employer or, after 1989, paid to collect or establish a right to such amounts.
PERSONAL SERVICES BUSINESS
7. Rather than employing a player directly, a sports club or organization may retain the services of a
corporation with which the player is in turn engaged under a personal service contract. Income from such
personal service contracts may be reported by a corporation if the services are in fact provided through the
corporation and documentary evidence supports that fact. Such income will be considered to be income from
a personal services business carried on by the corporation if it meets the definition of “personal services
business”. If it does, such income is taxed at full corporate rates. (If it does not, it may qualify for the small
business deduction, provided the corporation is a Canadian-controlled private corporation.) Paragraph
125(7)(d) defines the expressions “personal services business” and “incorporated employee’. These
definitions deal with situations where a corporation has been interposed in what would normally constitute
an employee-employer relationship. As a general rule, a corporation will be treated as carrying on a personal
services business where a player:
(a) is, or is related to, a “specified shareholder” of the corporation, as defined in subsection 248(1),
or
(b) provides services to a person or partnership that, in the absence of the corporation, would
reasonably be regarded as the services of an officer or employee of the person or partnership.
An exception is provided where the corporation employs, throughout the year, more than five full-time
employees or where the services are provided to an “associated corporation”. For a discussion of the terms
“personal services business” and “specified shareholder”, see the current version of IT-73. The meaning of
“associated corporation” is discussed in the current version of IT-64.
8. Paragraph 18(1)(p) restricts the deduction of expenses of a personal services business of a corporation to:
(a) the remuneration and the cost of other benefits or allowances provided to an “incorporated
employee”,
(b) certain expenses of the corporation associated with selling property or negotiating contracts that
are ordinarily deductible from employment income, and
NN ie ee
- 151 -
MS 8 oe ) ee
(c) amounts paid for legal expenses incurred by the corporation in collecting amounts owing for
services rendered.
Paragraph 18(1)(p) ensures that the use of a personal services corporation does not permit the deduction of
an expense which would not have been deductible had the income been earned directly by the player.
ENDORSEMENTS AND PUBLIC APPEARANCES
9:
Notwithstanding the above, income from the player’s personal endorsements and public appearances
negotiated between the player and third parties is business income against which necessary and reasonable
expenses may be claimed. The contract may be structured to allow the income to be earned either directly by
the player as business income or by a corporation as active business income subject to the small business
deduction. Expenses claimed against such income could include costs of negotiating these endorsements and
public appearance contracts, office expenses, travel expenses and accounting fees. Such income earned by a
corporation is not income from a personal services business
Non-Profit Organizations
IT-496 February 18, 1983
REFERENCE: Paragraph 149(1)(/) (also paragraphs 110(8)(b) and (c), and sections 149.1 and 168)
i
The purpose of this bulletin is to comment on some of the factors that are considered when determining
whether a club, society or association is, in a particular taxation year, exempt from income tax pursuant to
paragraph 149(1)(J), that is, qualified to be a tax-exempt non-profit organization. Although a particular
organization is qualified to be tax exempt pursuant to paragraph 149(1)(J), it may, pursuant to subsection
149(5), be subject to tax on its property income and on certain taxable capital gains. For the Department’s
interpretation of subsection 149(5), see IT-83R, “Non-profit Organizations — Taxation of Income from
Property”. The Department considers the expression “club, society or association”, used in paragraph
149(1)(/) (hereinafter referred to as an association) to be wide enough to include an incorporated company.
In general terms, the conditions set out in paragraph 149(1)(/) that an association must comply with to
qualify for exemption are as follows:
(a) it must not, in the opinion of the Minister, be a charity;
(b) it must be organized exclusively for social welfare, civic improvement, pleasure, recreation or any
other purpose except profit;
(c) it must in fact be operated exclusively for the same purpose in (b) for which it was organized or for
any of the other purposes mentioned in (b); and
(d) no part of its income may be paid, payable or otherwise made available for the personal benefit of any
proprietor, member or shareholder, except in connection with the promotion of amateur athletics in
Canada as described in 13 below.
- 132 -
The fact that a proprietor, member or shareholder of an association is a tax-exempt non-profit organization
or a registered charity, will not relieve the association of the necessity of complying with the above
conditions. In addition, the conditions to be complied with are neither waived nor altered by the fact that
most or all of the assets and facilities of the association are leased to a tax-exempt organization or a
registered charity. Where the association maintains that certain of its activities are carried on in trust for, or
as agents for, another association, and the evidence supports this position, these activities will affect the
status of that other association.
If, during a period in a particular year, an association is, in the opinion of the Minister, a charity within the
meaning assigned by subsection 149.1(1), then it cannot qualify in that period as a tax-exempt non-profit
organization. The Department considers this to be so whether or not it was a registered charity as defined in
paragraph 110(8)(c) and, if registered, whether or not its registration has been revoked pursuant to section
168. An organization that is a charity as defined in section 149.1 may be exempted from tax only if it
complies with one of the provisions in section 149. To qualify for exemption under paragraph 149(1)(/), the
charity must be a “registered charity” as defined in paragraph 110(8)(c). For further information concerning
registration of a charity see Information Circular 80-10, “Registered Charities”.
To be tax-exempt an association must be both organized and operated exclusively for social welfare, civic
improvement, pleasure or recreation or for any other purpose except profit. An association may also be
organized and operated exclusively for any combination of these purposes. To establish the purpose for
which an association was organized, the Department will normally look to the instruments by which it was
created. These instruments may include letters patent, articles of incorporation, memoranda of agreement,
by-laws, articles and so on. In general terms, “social welfare” means that which provides assistance for
disadvantaged groups or for the common good and general welfare of the people of the community. “Civic
improvement” includes the enhancement in value or quality of community or civic life. An example would
be an association that works for the advancement of a community by encouraging the establishment of new
industries. Under the categories of social welfare and civic improvement care must be taken to ensure that the
purposes of the association are not those of a charity. “Pleasure or recreation” means that which provides a
state of gratification or a means of refreshment or diversion. Examples are social clubs, golf clubs, curling
clubs, badminton clubs and so on that are organized and operated to provide recreational facilities for the
enjoyment of members and their families. The final category of “any other purpose except profit” is
interpreted as a catch all for other associations that are organized and operated for other than commercial or
financial reasons.
“Any other purpose except profit” may be used to describe the aims of an association whose activities are
directed toward the general improvement of conditions within one or more areas of business. An example of
this would be where an association was organized to advance the educational standards within a particular
industry or profession, to publicize, improve and promote its objectives in a general way and to encourage
the exchange of relevant technical information. If the activities of such an organization were consistent with
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these aims, then it would qualify for exemption provided all other conditions of paragraph 149(1)(/) were
complied with in the year. However, the association will probably not so qualify if it is primarily involved,
for example, in an activity that is directly connected with the sales of members’ goods or services and for
such services a fee or commission computed in relation to sales promoted. Such an association is normally
considered to be an extension of the members’ sales organizations and will be considered to be carrying on a
normal commercial operation. “If the fees and commissions charged are well beyond the needs of the
association and these earnings are accumulated and invested as described in 8 below by the association, this
would be another reason why the association would not qualify as a non-profit organization exempt from
tax.
The Department is of the view that an association is not operated exclusively for non-profit purposes when
its principal activity is the carrying on of a trade or business. Some characteristics of an activity that might
be indicative that it is a trade or business are as follows:
(a) it is a trade or business in the ordinary meaning, that is, it is operated in a normal commercial manner;
(b) its goods or services are not restricted to members and their guests;
(c) it is operated on a profit basis rather than a cost-recovery basis; or
(d) it is operated in competition with taxable entities carrying on the same trade or business.
An association may earn income in excess of its expenditures provided the requirements of the Act are met.
The excess may result from the activity for which it was organized or from some other activity. However, if
a material part of the excess is accumulated each year and the balance of accumulated excess at any time is
greater than the association’s reasonable needs to carry on its non-profit activities (see 9 below), the
Department will consider profit to be one of the purposes for which the association was operated. This will
be particularly so where assets representing the accumulated excess are used for purposes unrelated to its
objects such as the following:
(a) long-term investments to produce property income,
(b) enlarging or expanding facilities used for normal commercial operations, or
(c) loans to members, shareholders or non-exempt persons.
This may also be the case where the accumulated excess is invested in a term deposit or guaranteed
investment certificate that is regularly renewed within a year and from year to year, whether or not the
principal is adjusted from time to time.
The amount of accumulated excess considered reasonable in relation to the needs of an association to carry
on its non-profit activities is dependent on such things as the amount and pattern of receipts from various
sources such as membership fees, training course fees, exam fees and so on. It is conceivable that there
would be situations where an accumulation equal to one year’s reasonably anticipated expenditures on its
non-profit activities may not be considered excessive while in another situation an accumulation equal to
two months’ reasonably anticipated expenditures would be considered more than adequate. For example, a
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10.
At:
year-end accumulation equal to the following year’s anticipated expenditures would probably be considered
reasonable where an association carries out its “annual fund drive” in the last month of its fiscal period in
anticipation of its non-profit activities planned for the following year. However, where another association
raises its funds on a regular basis throughout the year, it may be difficult to justify a year-end accumulation
in excess of an amount equal to its expenditures for one or two months. It is noted that where the present
balance of accumulated excess is excessive or an annual excess is regularly accumulated it may indicate that
the association’s aims are two-fold, to earn profits and to carry out its non-profit purposes. In such a case,
the “operated exclusively” test in paragraph 149(1)(J) would not be met.
To qualify for exemption, an association must not only be organized exclusively for non-profit purposes but
it must in fact be operated in accordance with these purposes in each year for which it seeks exemption
under paragraph 149(1)(/). A determination of whether an association was operated exclusively for and in
accordance with its non-profit purposes in a particular taxation year must be based on the facts of each case
which can be obtained only by reviewing all of its activities for that year. Such a determination cannot be
made in advance of or during a particular year but only after the end of the year. An association that
qualifies for exemption in a particular year may cease to qualify in a subsequent year by failing to operate in
accordance with one of the purposes specified in paragraph 149(1)(J), by revising its objectives so that it is
no longer organized in accordance with that provision or by otherwise failing to meet the requirements of
that paragraph. See also IT-409, “Winding-up of a Non-profit Organization”, for the Department’s
interpretation, in paragraph 3, as to where an association’s tax-exempt status is lost in this special situation.
To qualify for exemption pursuant to paragraph 149(1)(/), no part of the income of an association, whether
current or accumulated, may be made available for the personal benefit of any proprietor, member or
shareholder of an association (hereinafter referred to as a member). An association may fail to comply with
this requirement in a variety of ways. Some of these are as follows:
(a) the association distributed income during the year, either directly or indirectly, to or for the personal
benefit of any member;
(b) the association has the power at any time in the current or future years to declare and pay dividends
out of income; or
(c) the association in the case of a winding-up, dissolution or amalgamation has the power to distribute
income to a proprietor, member or shareholder.
The presence of any of the circumstances described in (a), (b) and (c) would be conclusive evidence that
income was payable or available for the personal benefit of a member, subject to the comments in 12 and 13
below and in 4 of IT-409 which deals with the distribution of taxable capital gains to members. To avoid
possible difficulties regarding (c), an association may in its enabling documents provide that upon a
winding-up, amalgamation or dissolution all of its assets and accumulated income are to be transferred to an
organization with similar objects that qualifies for exemption pursuant to paragraph 149(1)(/) or (J) of the
Act.
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It is the Department’s view that certain types of payments made directly to members, or indirectly for their
benefit, will not, in and by themselves, disqualify an association from being exempted from tax pursuant to
paragraph 149(1)(/). This view applies to payments such as salaries, wages, fees or honorariums for services
rendered to the association, provided the amounts paid are reasonable and in line with those paid in arm’s
length situations for similar services. It also applies to payments made to employees or members of the
association to assist them in covering their expenses to attend various conventions and meetings as delegates
on behalf of the association, provided attendance at such conventions and meetings is to further the aims and
objectives of the association. In addition, the Department considers the campaign expenditures of a political
party, but not the payments to a candidate other than reimbursement of reasonable expenses, which will
often result in an indirect benefit for a candidate, are not the type of personal benefit contemplated by
paragraph 149(1)(J) that would cause the party to be denied exemption under that paragraph.
Without disqualifying itself under paragraph 149(1)(/), an association may distribute income to or for the
benefit of any member that was an association the main purpose and function of which was the promotion of
amateur athletics in Canada. This provision will normally be of particular advantage to a registered
Canadian amateur athletic association that receives amounts from contributors who claim a paragraph
110(1)(a) deduction for contributions made to it. To obtain registration, on application to the Minister of
National Revenue pursuant to paragraph 110(8)(b), an association must be both resident and established in
Canada as a non-profit tax-exempt organization according to paragraph 149(1)(/), and its main purpose and
function must be the promotion of amateur athletics in Canada on a nationwide basis.
An association that is tax-exempt pursuant to paragraph 149(1)(/) is not required to file an annual income tax
return unless, in any particular year, it is a corporation, its income as a deemed trust (per subsection 149(5))
exceeds $500, or the Minister has demanded a return be filed. Although an association may not be required
to file an annual income tax return, it must still comply with the other requirements of the Income Tax Act.
For example, where such things as salaries and wages are paid, the association must comply with the
withholding and remittance requirements as well as the requirements concerning the preparation of T4 and
other forms.
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SPECIAL RELEASE
Non-profit Organizations
IT-496 June 16, 1989
Paragraph 149(1)(/) (also sections 149.1 and 168 and the definitions of “registered charity” and
“registered Canadian amateur athletic association” in subsection 248(1)). This Special Release
includes comments on amendments to the Act resulting from Tax Reform.
APPLICATION
The purpose of this Special Release is to revise Interpretation Bulletin IT-496 dated February 18, 1983,
to make certain changes in paragraphs 4 and 13 as a result of Tax Reform and to clarify paragraph 14.
The changes in paragraphs 4 and 13 reflect the amendments to the Act under which the tax relief in
respect of donations made by individuals is changed, for 1988 and subsequent taxation years, from a
deduction in computing taxable income to a tax credit determined by formula as well as certain
related amendments. Revised paragraph 14 clarifies the circumstances under which a tax-exempt
association is required to file an annual income tax return. Minor changes have also been made to
paragraphs 1 and 4 to update references to other Interpretation Bulletins and Information Circulars.
BULLETIN REVISIONS
1. In paragraph 1 the reference to IT-83R, “Non-profit Organizations — Taxation of Income from Property” is
999
replaced by the reference “IT-83R2, “Non-profit Organizations — Taxation of Income from Property’”.
2. Toreflect amendments to the law resulting from Tax Reform paragraphs 4 and 13 are replaced by the
following:
“4. If, during a period in a particular year, an association is, in the opinion of the Minister, a
charity within the meaning assigned by subsection 149.1(1), then it cannot qualify in that period
as a tax-exempt non-profit organization. The Department considers this to be so whether or not it
was, before or during that period, a “registered charity” as defined in subsection 248(1)
(formerly defined in paragraph 110(8)(c) for taxation years before 1988) and, if registered,
whether or not its registration has been revoked at any point pursuant to section 168.
Although an organization that is a charity as defined in subsection 149.1(1) will not be exempted
from tax by paragraph 149(1)(/), an exemption from tax will be available under paragraph
149(1)(f) if the charity is a registered charity. For further information concerning the registration
of a charity, see the current version of Information Circular 80-10, “Registered Charities”.
“13, Without disqualifying itself under paragraph 149(1)(/), an association may distribute
income to or for the benefit of any member that is an association the main purpose and function
of which is the promotion of amateur athletics in Canada. This provision will normally be of
particular advantage to a registered Canadian amateur athletic association that receives gifts
from:
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(a) corporations that are thereby entitled to a deduction in computing taxable income under
paragraph 110.1(1)(q), or
(b) individuals who, as a result, are entitled to a deduction in computing tax payable
determined by the formula in subsection 118.1(3).
(For taxation years before 1988, individuals and corporations contributing to registered
Canadian amateur athletic associations were entitled to a deduction under former paragraph
110(1)(a) in computing taxable income.)
To obtain registration, on application to the Minister of National Revenue as required by the
definition of a registered Canadian amateur athletic association in subsection 248(1) (former
paragraph 110(8)(b) for taxation years before 1988), an association must be both resident and
created under a law in Canada, and must be a non-profit tax-exempt organization described in
paragraph 149(1)(/), whose main purpose and function is the promotion of amateur athletics in
Canada on a nationwide basis.”
Paragraph 14 is replaced by the following:
“14. An association that is tax-exempt pursuant to paragraph 149(1)(/) is required to file an
annual income tax return for each particular year in which
(a) itis a corporation, or
(b) its income as a deemed trust (per subsection 149(5)) exceeds $500, or for any particular
year in respect of which the Minister has demanded that it file a return. In the
circumstances where an association is not required to file an annual income tax return, it
must still comply with the other requirements of the Act.
For example, where amounts such as salaries and wages are paid, the association must comply
with the withholding and remittance requirements as well as the requirements concerning the
preparation of T4 and other forms.”
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SUBJECT: CANADIAN AMATEUR ATHLETIC
ASSOCIATIONS RECEIPTS — ISSUING POLICY
POLICY PURPOSE:
This document sets out departmental policy with regard to the issuance and control of receipts by
registered Canadian amateur athletic associations (RCAAAs).
POLICY
1. The payment by the donor must meet the common-law requirements of a gift, i.e., it must be a voluntary
transfer of property without consideration.
2. In light of paragraph 168(1)(f) of the Income Tax Act, the gift must be made to the RCAAA, without any
implied or express condition or understanding that it be transferred to a local club or other issued
beneficiary~.
3. There can be an agreement whereby the local club raising the funds receives back a percentage of the funds
raised as financing for the club’s activities that are consistent with two RCAAA’s over-all purpose, but
because of s. (168)(/) of the Act (see note 9), the specific percentage returned to the local club must not form
part of any solicitation for funds by the local club, or any agreement with a prospective donor.
4. __ A significant amount of the monies raised should be retained by the RCAAA for its own use, for
contingencies or to re-distribute to other clubs. An administration fee basically covering the expenses of
receiving the monies and issuing the receipts is not considered a significant amount and would tend to
indicate that the RCAAA is merely acting as a conduit for a local club’s own purposes.
5. | The RCAAA should maintain significant accountability and control over the issuance of receipts and the
amount of funds raised. It is unacceptable for an RCAAA to “lend” its registration number to a member
club.
6. A local club that receives “percentage” funding should account to the RCAAA and must enable Revenue
Canada to verify whether receipts are issued according to the Act and this policy>. In light of the widespread
practice of soliciting contributions from parents whose children receive direct support from the clubs, an
RCAAA should require as part of its granting policy, that accounting from local clubs include the names of
all those athletes who receive subsidized training. If during the course of an investigation the Department
uncovers any substantial abuse at the local level under paragraph (1) above, the RCAAA will be deemed to
have failed meeting the requirements of paragraph 166(1)(s) and subsection 230(2) of the Act unless it
demonstrated to the Department’s satisfaction that it had proper mechanisms in place to reasonably ensure
the proper issuance of receipts.
Ue Receipt-issuing should, if required, be delegated to a subordinate body at the provincial level only. It should
not be sub-delegated by a provincial level association to member-clubs without the RCAAA’s consent. The
RCAAA must maintain direction and control over the receipt-issuing policies.
RN ie
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RM oe eee
FOOTNOTES:
1
2
Supplied by Revenue Canada.
S. 168(1) (f) of the Act states that the Minister may propose the revocation of a registered Canadian amateur
athletic association where the association “. . . accepts a gift or donation the granting of which was expressly or
impliedly conditional on the association making a gift or donation to another person, club, society or association”.
Subsection 230(2) I.T.A.: “Every (. . .) registered Canadian amateur athletic association shall keep records and
books of account at an address in Canada recorded with the Minister or designated by the Minister containing:
a) Information in such form as will enable the Minister to determine whether there are any grounds for the
revocation of its registration under this Act;
b) A duplicate of each receipt containing prescribed information for a donation received by it; and
c) Other information in such form as will enable the Minister to verify the donations to it for which a deduction
or tax credit is available under this Act.
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APPENDIX VI
References
= ae ee eater ee ee
Amis, John, Narayant Pant and Trevor Slack, “Achieving a Sustainable Competitive Advantage: A Resource-Based
View of Sport Sponsorship”, Journal of Sport Management, Vol. 11(1) (January 1997).
Anders, R®nningen, Analysis of the Economic Impact of the XVII Olympic Winter Games at Lillehammer in 1994, March
1997.
Best, J.C., Sport: The Way Ahead, Minister Task Force on Federal Sport Policy, Government of Canada, May 1992, 311
pages
Canadian Fitness and Lifestyle Research Institute, Press Release, January 1998.
Coaching Association of Canada, The Contribution of Coaching in Canada, 33 pages.
Cowl Terrence, The Economic and Heritage Impacts of Hosting Multi-sport Major Games: An International
Comparative Review, Economic Research Group, Canadian Heritage, March 1994,14 pages.
Domingue, Richard-Philippe, The Charity “Industry” and Its Tax Treatment, Parliamentary Research Branch, Library
of Parliament, July 1996, 15 pages.
Dubin, Charles L., Commission of Inquiry into the Use of Drugs and Banned Practices Intended to Increase Athletic
Performance, Report, 1990, 638 pages.
Ekos Research Associates Inc., The Status of the High Performance Athlete in Canada, 1997, Canadian Heritage, July
L997.
Federal/Provincial/Territorial Advisory Committee on Fitness and Recreation, Physical Inactivity: A Framework for
Action, January 1997, 51 pages.
Harvey, Jean and Maurice Saint-Germain, “L’industrie et la politique canadienne du sport en contexte de
mondialisation”, Sociologie et société, Vol. XX VII, No. 1 (Spring 1995), 33-52.
Health Canada, Economic Burden of Illness in Canada, 1993.
Health Canada, Improving The Health of Canadians Through Active Living, March 31, 1998, 28 pages.
Johnson, Roy S., “The Jordan Effect”, Fortune, June 22, 1998.
KPMG Peat Marwick Stevenson & Kellogg, The Economic Impact of the Sports and Recreation Industry in
Saskatchewan.
Manitoba Bureau of Statistics, 1997 Canada Summer Games Economic Impact Assessment, March 7, 1996, 59 pages.
Manitoba Bureau of Statistics, 1999 Pan-American Games, October 1992, 29-57.
“Money is the Name of Every Game: The Paymasters”, The Economist (June 6, 1998).
We ink sd ile eee
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Nt hes a ee re
Noll, Roger G., and Andrew Zimbalist, “Sports, Jobs and Taxes,” In: Sports, Jobs & Taxes: The Economic Impact of
Sports Teams and Stadiums, Roger G. Noll and Andrew Zimbalist (eds), 1997b, 495-508.
Noll, Roger G., and Andrew Zimbalist, “The Economic Impact of Sport Teams and Facilities,” In: Sports, Jobs &
Taxes: The Economic Impact of Sports Teams and Stadiums, Roger G. Noll and Andrew Zimbalist, (eds), 1997a,
55-91.
Office for the 1988 Olympic Winter Games, Economic Impact of the XV Olympic Winter Games, July 31, 1986, 21
pages.
Ouellet, Bernard, Industry Profile: The Canadian Equipment Industry, Trade Industry Report, Industry Canada, May
1998.
Ozanian, Michael K., “Fields of Debt,”, Forbes, (December 15, 1997).
Pilon, Martin and Terrence Cowl, The Economic Dimensions of Hosting Major Sporting Events, Economic Research
Group, Canadian Heritage, December 1994,14 pages.
Sport Nova Scotia, Sport Makes a Difference: Facts and Figures, November 1997, 36 pages.
Statistics Canada, CANSIM.
Statistics Canada, Caring Canadians, Involved Canadians, catalogue no. 71-542-XIE, 1998(a), 73 pages.
Statistics Canada, Culture, Tourism and Centre for Education Statistics Division, The Vitality of the Sport Sector in
Canada, April 1998(b).
Sub-Committee on Fitness and Amateur Sport, Amateur Sport: Future Challenges, December 1990.
The Conference Board of Canada, Physical Activity and the Cost of Treating Illness, August 1996, 13 pages.
Van Zant, Bill, Canadian Sporting and Recreational Equipment Sector, Industry Canada, July 1996.
Zimmerman, Dennis “Subsidizing Stadiums: Who Benefits, Who Pays-” In: Sports, Jobs & Taxes: The Economic
Impact of Sports Teams and Stadiums, Roger G. Noll and Andrew Zimbalist (eds), 1997b, 119-145.
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REQUEST FOR GOVERNMENT
RESPONSE
Pursuant to Standing Order 109, your Committee requests the
Government to table a comprehensive response to this report.
A copy of the relevant Minutes of Proceedings of the Sub-
Committee on the Study of Sport in Canada (Meetings Nos. 1
to 27, and Meeting No. 57 of the Standing Committee on
Canadian Heritage, which includes this Report) is tabled.
Respectfully submitted,
Clifford Lincoln M.P.
Chair
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Official Opposition Opinion on Sport in Canada
The Official Opposition sees sports as integral to Canadian life and Canadian communities. Whether
urban or rural, northern or southern, maritimes or prairies, freshwater lakes or mountain, winter or
summer, professional or amateur, organized or spontaneous, sport is an element of the Canadian
psyche and Canadian culture.
It is clear from the Sub-Committee’s study that there is more to “sports” than meets the eye. Sports
contribute to the moral and social as well as to the physical development and well-being of Canadian
youth and adults. We are satisfied that the main body of this report accurately reflects the testimony
given by witnesses who appeared before the Sub-Committee.
However, we identify at least two broad problems with the recommendations in the main body of the
report:
1. | The expenditure proposals, both direct grants and subsidies as well as tax concessions and credits, require
more research to ascertain their effectiveness in the medium and long terms. We would prefer to see a cost-
benefit analysis before making a decision as to the implementation of any expenditure recommendations. In
this respect we believe the main body of this report betrays a weakness.
2. The creation of new boards and committees on dimensions of sport, as well as any existing boards,
committees, and agencies of the Government, should be subject to review by the House of Commons
Standing Committee on Canadian Heritage.
In closing, we extend our thanks to the Chairman of the Sub-Committee, Mr. Dennis Mills, M.P., for
initiating what could form the basis of more detailed investigation of the role, the place, and
contributions of sport to who we are and will become as 21st-century Canadians.
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Bloc Québécois Dissenting Report on the report
by the Sub-Committee on the Study of Sport in
Canada entitled Sport in Canada: Everybody’s
Business
a SL
Leadership, Partnership and Accountability
SUMMARY
The Bloc Québécois opposes the Report by the Sub-Committee, mainly for the following reasons:
1. The Sub-Committee recommends that the federal government adopt special tax measures in order to support
professional sports teams. Although the Sub-Committee has not been able to identify the cost of these
recommendations, the Bloc considers that they could cost hundreds of millions of dollars, and consistently
Opposes any special measures aimed at directly or indirectly subsidizing professional sport in Quebec and
Canada.
2. The Sub-Committee recommends the creation of a Department of Sport and Youth. The Bloc opposes this
recommendation because it constitutes an unacceptable encroachment into areas of provincial jurisdiction,
and fears that the main objective of this department would be to increase federal government visibility at the
expense of sports and youth.
3. Notwithstanding moderating provisions such as “’in collaboration with the provinces’’ included in the text,
the Sub-Committee makes recommendations that encroach on areas of provincial jurisdiction, thus failing to
recognize the primacy of provincial authority over sports.
4. The Sub-Committee ignores the many difficulties facing both amateur and professional French-speaking
athletes in Canada and fails to propose any real measures to remedy the situation.
5. Lastly, the Bloc Québécois cannot support the Sub-Committee’s recommendation that Canada bid to host
the 2010 World Cup of Soccer, thus invalidating its application to host the 2010 Olympic Games.
Above all, however, the Bloc Québécois opposes the Sub-Committee’s Report because it cannot agree to having public
funds squandered on a thousand and one initiatives, when there is full consensus in Quebec and the provinces of Canada
that the federal government must repay $6.3 billion in provincial transfer payments for health, postsecondary education,
and social assistance. The Bloc considers that the federal government must heed this consensus, reduce Employment
Insurance (EI) premiums, and lower income taxes before committing funds to highly questionable initiatives. At a time
25ND a a eee ee eee
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ay) re enna ess eee See eT
when the entire population has had to deal with unprecedented budget cuts in crucial areas, the Bloc considers it
financially and politically irresponsible that a parliamentary Sub-Committee should make recommendations about the
cost of which it has no idea. This attitude is symptomatic of federal Liberal arrogance.
The Bloc Québécois does ask the federal government to adopt some of the recommendations contained in the Report,
particularly those aimed at enhancing amateur sport and achieving greater fairness for women, persons with disabilities,
and Aboriginal people.
1. THE BLOC QUEBECOIS OPPOSES GOVERNMENT SUPPORT FOR
PROFESSIONAL SPORT.
Montreal is a great city. A great big city. We have to say it; we have to show it.The
Expos are alive ... and playing baseball. The Olympic Stadium is a good
stadium that millions of people have packed so they can cheer their team..
Hey, give the team back to the fans.
Dennis Martinez, quoted by Réjean Tremblay, La Presse, September 10, 1998, page S5.
In order to assist professional sports teams, the Sub-Committee recommends a Sport Pact with five strategies, of which
the first two are most important.
The first strategy would be a two-year Canadian Professional Sport Stabilization Program, with two components.
The first component would allow small businesses to deduct from their taxable income 100% of the price of tickets,
season tickets, and boxes.
The second component would allow sports teams to choose between the following two options:
° using a tax credit: a professional or semi-professional team could be eligible for a tax credit of $5 million, if its
income did not exceed $80 million;
or
° applying the capital cost allowance in a single year to the costs of building and improving sports facilities, and
having the right to transfer this deduction to a related or unrelated party.
Eligibility for the Program would depend on criteria including the following:
° the team would have to demonstrate its long-term viability as a franchise in its home city;
e the team would have to provide employee training in sport marketing, administration, broadcasting and
merchandising;
° the team would have to demonstrate that it participated financially in the life of the local community and
promoted the values of fairness and ethics in amateur sport, for example, by having professional players
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volunteer their time to give practical lessons to help young persons develop their skills; and
the team would have to endeavour to promote better control of players’ salaries.
The second recommendation of the Sport Pact proposed by the Sub-Committee would be to ask the Minister of Finance
to negotiate a Canada-United States Protocol of Income Tax Harmonization for Sport Professionals. The purpose of the
Protocol would be to eliminate the “duty day”’ concept now used by Revenue Canada, as well as the present
discrepancy between taxation levels in Canada and the United States.
Since the Sub-Committee has not been able to identify the cost of these recommendations, it has asked the Department
of Finance to assess the value of this gift to sports millionaires.
The Bloc Québécois opposes these two recommendations of the Sport Pact proposed by the Sub-Committee for
obvious reasons of social justice.
The Bloc vigorously rejects the Sub-Committee’s recommendation that would allow businesses to apply, in a single
year, the capital cost allowance to all costs of building a sports facility. It also rejects the part of this recommendation
that goes so far as to allow this deduction to be transferred to a third party.
Clearly, the Sub-Committee intends to make taxpayers pay for the construction of new stadiums and other sports
facilities for professional teams. The Bloc Québécois considers this tax measure a veiled subsidy.
The Bloc also rejects the recommendation by the Sub-Committee that would allow small businesses to deduct from
their taxable income 100% of the price of tickets to sports activities. Small businesses are already eligible for a 50%
deduction for this type of expenditure, a deduction for which ordinary taxpayers are ineligible. Nor can the Bloc accept a
tax measure that would benefit only one type of business. The Bloc also finds it hard to accept that the sports industry
should benefit from a tax measure unavailable to other industries such as the culture industry: why would tickets to see
the Montreal Expos be 100% deductible, but not tickets to hear a concert by the Montreal Symphony Orchestra?
The criteria developed by the Sub-Committee to assess teams’ eligibility for the Canadian Professional Sport
Stabilization Program are odd, to say the least. Some persons may find these criteria reassuring, since no sports team
has been able to demonstrate that government support would enable it to remain in its home city. Other criteria, such as
the one that teams should endeavour to promote better control of players’ salaries or provide training for their
employees, in the field of broadcasting have more to do with good intentions.
The Bloc also rejects the recommendation by the Sub-Committee that a professional or semi-professional team be
allowed a maximum income tax credit of $5 million. The Sub-Committee that has dreamed up this recommendation
has not identified either its cost or its impact on a team’s decision about whether to remain in its home city.
In addition, the Bloc rejects the recommendation by the Sub-Committee that would ask the Minister of Finance to
negotiate a Canada-United States Protocol of Income Tax Harmonization for Sport Professionals, to the lowest common
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BORG 2. 4 ee Cee ee
denominator, of course. Again for reasons of social justice, the Bloc sees no reason to exempt the best-paid workers
from the effort demanded of all taxpayers to contribute to public finances.
The Bloc considers these positions justified since no independent study has confirmed professional teams’ economic
impact on the economy, and no professional team has made a commitment to remaining in its home city if it obtains
government support. The Bloc recognizes that the professional sports industry has financial problems, particularly
because of salary increases and the exchange rate, to which it must itself find solutions.
The Bloc Québécois considers that professional sports teams are businesses, to be treated as such and assisted
through existing programs to the extent that they are eligible for them. It is completely inappropriate to ask
taxpayers to subsidize professional teams whose players’ salaries have increased exponentially in recent years
and, over the next four years, will likely double.
Furthermore, given the influence of the United States model on Canada’s approach to sports, it would be good for
Quebec and Canadian citizens to learn about developments in Europe. On November 27, 1997 at a conference on sport,
competition, and recent developments and action by the European Commission, Commissioner Karel Van Miert stated:
[TRANSLATION] of the European Commission had conducted a survey among member states on public subsidization of
professional sports. The preliminary results of the survey showed very low levels of assistance for professional sport.
Some member states, such as Belgium, Austria, the United Kingdom, the Netherlands, Finland and Sweden do not allow
government assistance to professional clubs. France has passed legislation to phase out assistance to professional clubs
by the year 2000. Ireland and Greece still provide marginal financing to professional clubs through levies on bets.
Lastly, although Spain does not provide assistance at the national level, some of its regions assist local clubs.
2. THE BLOC QUEBECOIS OPPOSES THE CREATION OF A DEPARTMENT OF
SPORT AND YOUTH AND THE CASCADE OF OTHER ORGANIZATIONS
RECOMMENDED BY THE SUB-COMMITTEE.
With respect to the establishment of a Department of Sport, the Sub-Committee recommends
that the government establish a separate department responsible for sport, in keeping with the significant
role of sport in Canadian society. The mandate of this Department would include the development of high-
performance athletes as well as sport for all and responsibility for mobilizing and coordinating all the
resources involved in the Canadian sport sector.!
Canada used to have a Minister of State for Sport. This position was eliminated during the Honourable Kim Campbell’ s
government reform in 1993, at which time responsibility for amateur sport was transferred to the Department of
Canadian Heritage. The Liberal government endorsed the structure proposed by Ms Campbell when it came to power in
1993;
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The Department of Canadian Heritage was set up to stimulate a feeling of identity and belonging among Canadians,
based on bilingualism and multiculturalism. The new Department’s mandate was to develop and deliver programs that
support a well-defined sense of identity among Canadians. It was expected to become the key player in defining and
promoting Canadian values.”
As for Sport Canada, the agency that manages amateur sport on behalf of the Department, we find in their action plan
for 1996 the assertion that above and beyond individual participation, sport helps to strengthen Canadians’ pride and
sense of unity when their athletes play for Canada and act as their ambassadors in international competitions.>
The Bloc Québécois understands that sport is a means of cultural expression and that it has implications for national
pride; the most recent demonstration of this characteristic of sport was certainly the French victory in the last World Cup
of Soccer.
But the Bloc cannot accept that, in the current historical context, Canada should make use of sport to deny the culture of
Quebec. Incidentally, who can forget the TVA network’s initiative in presenting awards (Lys d’or) to Quebec athletes
who, during the Games, matched or broke their previous performances.
Examples of the current minister of The Canadian Heritage Department’s use of the Games to deny the culture of
Quebec include the handing out of T-shirts in Canada’s colours at the Quebec Games and the sending of hundreds of
flags to the Olympic Games in Nagano. We now know that the Minister put pressure on the Canadian Olympic
Association to postpone until after the Quebec election its announcement of the Canadian city that would be a candidate
for the Olympic Winter Games in 2010.
Propaganda for propaganda, the Bloc does not think it would be useful to create a new departmental entity to do what
Canadian Heritage is already doing.
In addition, the Bloc wishes to point out that sport is essentially an area of provincial jurisdiction, as can be seen from
the significant involvement of provinces and municipalities in this sector.
The Bloc Québécois therefore rejects the idea of creating a federal department of sport whose mandate would be
to ensure the visibility of the federal government, which the current Minister is managing to do without having a
department dedicated to this purpose. Moreover, such a department would encroach on provincial areas of
jurisdiction.
In addition, the Bloc Québécois opposes the creation of the host of agencies proposed by the Sub-Committee:
4.
c a Prime Minister’s Council for Sport and Fitness
2 an annual National Sport Summit, to be chaired by the Prime Minister;
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° a Sport Marketing Advisory Board, to promote sport sponsorship;>
° an independent agency responsible for promoting, monitoring and evaluating ethics in sport; and
° a mechanism to allow for more formal consultation and collaboration with stakeholders in the sport system.
The Bloc is convinced that it is not by setting up more and more agencies that we will improve the well-being of
Quebeckers and Canadians through physical activity. The Bloc considers that, far from pursuing the goal of the
population’s improved well-being through physical activity, the Sub-Committee’s real aim is increased visibility for the
federal government. Finally, the Bloc considers that the Sub-Committee has proposed these structures without
attempting to evaluate their cost, which is completely irresponsible.
3. THE BLOC QUEBECOIS OPPOSES THE SUB-COMMITTEE’S REPORT BECAUSE
IT DENIES THE PROVINCES THEIR LEADERSHIP ROLE IN SPORT.
Nowhere in the Report does the Sub-Committee explicitly recognize that the provinces have the principal jurisdiction
over sport. On the contrary.
The Sub-Committee is proposing the establishment of a department of sport with responsibility for mobilizing and
coordinating all the resources involved in the Canadian sport sector. If these words mean anything, it is clear that the
majority of Sub-Committee members see this federal department as primarily responsible for sport in Canada and that
the department would be mandated to coordinate sports at the national level. Quebec cannot tolerate this unacceptable
incursion into an area under its jurisdiction.
It is thus not astonishing that the Sub-Committee’s Report has markedly underestimated the role of provinces and
municipalities in the area of sport and physical activity in Quebec and Canada. According to Statistics Canada, overall
public spending on sport and physical fitness is estimated at $1.1 billion. The federal government’s $65 million
contribution represents barely 5% of this total.
Furthermore, the Bloc Québécois opposes the Sub-Committee’s Report because it contains all too many
recommendations that flout provincial jurisdiction:
° the introduction of a system of athletic scholarships at colleges and universities;
° the introduction of a Millennium Sport Bond to generate funding for amateur sport;
° a program of sports facility infrastructures®;
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° recommendations directly affecting the school system;
‘recommendations on training coaches and Carrying out studies on local employment markets for such coaches:
and
the following recommendation: that the government create a program designed to educate youngsters about safety
in sport. This recommendation duplicates what is already being done in Quebec and elsewhere in Canada.
4. THE BLOC QUEBECOIS OPPOSES THE REPORT BECAUSE IT DOES NOT
DEAL WITH THE DISCRIMINATION EXPERIENCED BY FRANCOPHONES.
Year after year, horror stories are made public about the treatment encountered by Francophones in the wonderful world
of sport, whether amateur or professional.
In its presentation to the Sub-Committee on the Study of Sport, Sports-Québec stated: “[TRANSLATION] Rare indeed are
the national associations that provide accurate service in French, whether in their documentation or their program
delivery. The development of national training centres in cities that offer few or no services in French also constitutes a
demotivating factor for many Francophone stakeholders, who must either confront exile and the corresponding
language difficulties or develop similar services at home at their own expense.”
It is interesting to note that the situation has scarcely changed since Sports-Québec made the following statement eight
years ago to the Bélanger-Campeau Commission: “[TRANSLATION] Unilingual Francophone athletes have an additional
obstacle to overcome during Canadian selection processes because they cannot communicate fully in their mother
tongue with coaches and the officials responsible for selection. In addition, unilingual Francophone athletes have less
chance of being supported in their development toward high performance in the Canadian system because the majority
of professionals and volunteers responsible for selecting and training athletes tend to be unilingual Anglophones.”
On February 9, 1998, in the daily newspaper La Presse, Gilles Blanchard wrote that the Canadian Olympic Association
operates in English: ~[TRANSLATION] Nine of the ten provincial representatives are English-speaking; Quebec’s
presidents thus always speak English at the national level. After 30 years, there are scarcely any more Francophones
than there used to be running national federations. But these national federations hold a majority of the seats on the
Canadian Olympic Association. Internally, the COA operates in English.”
The unilingualism of the Canadian Olympic Association has a distorting effect on the universe of sport in Canada. It is
the COA that recognizes the national federations represented at the Olympics. It also has a right of oversight, even a
right of veto, on the choice of coaches, and it finances the national federations.
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Recently the Bloc Québécois approached Synchro Canada, the organization in charge of synchronized swimming in
Canada, to ask it to review its decision to choose Toronto as the place where athletes will train for the next Olympic
Summer Games. Toronto still had no centre of excellence and the decision meant two years of exile for the eight young
Francophones women from Quebec, who could just as easily have been trained in the Montreal region where the best
facilities and coaches in Canada are available to them as well as an opportunity to continue their education in their own
language.
This systemic discrimination is clearly described in a document sent to the Bloc Québécois on February 23, 1998, by
Mr. Francois Trudeau, professor of kinesiology at the Université du Québec a Trois-Riviéres: [TRANSLATION] Most of
Quebec’s athletes are required to expatriate themselves to national training centres which in most cases are outside
Quebec (...) Moreover, the coaches and training programs all too often operate in English only, naturally enough. It
appears that Canadian sport programs, by serving the interests of the majority, are potentially a mechanism for
exclusion and assimilation. Certainly there are exceptions, but we must not lose sight of the forest for the trees.”
The situation is scarcely different when it comes to professional sport. Mr. Marc Lavoie, in a book entitled Désavantage
numérique, has documented systemic discrimination against Francophones in the National Hockey League:
*“[TRANSLATION] Data on the NHL draft clearly show that the future performance of Francophone juniors is
systematically underestimated by scouts from the NHL’s central office. Other facts show that Francophones in the NHL
and the QMJHL are the victims of a great many prejudices. By
It has often been assumed that Francophone teams such as the Montreal Canadiens and the Quebec Nordiques practised
inverse systemic discrimination. This is false, according to Mr. Lavoie:
[TRANSLATION] We must conclude that administrators with the Montreal Canadians and Quebec Nordiques succumb to
pressure exercised by their peers and by the central scouting office. They also, on average, underestimate the
performance of Francophone players, although to a lesser extent than do teams in English Canada and the United
States. It can be said, as was suggested to me by political scientist Stéphane Dion before he became a federal Cabinet
Minister, that the Francophone managers of the Nordiques and the Canadiens “are affected by the anti-French
prejudices of their work environment. we
It is interesting to note in passing that Canada’s national anthem is played in only one of the two official languages in
almost every sports centre outside Quebec that has a professional team. This is a symbol, but a symbol that reflects
reality: Canada is unilingual and Quebec is bilingual.
To correct this systemic discrimination, the Sub-Committee is proposing that the government of Canada ensure the
development and delivery of services and programs in both official languages.
As a crowning irony, the Sub-Committee notes that this measure would cost nothing. The Bloc Québécois considers that
on this point the Sub-Committee is right: pious wishes never do cost much.
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5. THE BLOC QUEBECOIS OPPOSES THE SUGGESTION THAT CANADA BID FOR
THE WORLD CUP OF SOCCER
The Sub-Committee on Sport is proposing that Canada submit a bid to host the World Cup in 2010 if it has the 9
covered stadiums with natural turf and seating capacities of 50,000 or more required for the Cup. At the present time,
Canada has only two stadiums that meet the IFAF criteria.
The Bloc Québécois rejects this recommendation for two reasons: first, because Canada must make choices and cannot
apply to host both the 2010 Olympic Winter Games and the 2010 World Cup, but also because Canada does not at this
time have the infrastructures required by the IFAF. It seems to us irresponsible to recommend that over the next decade
Canada push the number of its natural turf stadiums with seating capacities of 50,000 or more from 2 to 9. The Sub-
Committee did not produce any study that would enable it to evaluate the cost of building these stadiums or of
maintaining them once built.
CONCLUSION
The Bloc Québécois reiterates that sport is essentially an area of provincial jurisdiction, which the federal government
has invaded through its spending power.
As regards professional sport, the Sub-Committee’s Report does not present a full picture of the information obtained by
the Sub-Committee on the issue of government support for professional sport. While it portrays fairly accurately the
problems being experienced by professional sports in the North American context, the Report is silent on the money
paid out so far by various governments to sustain professional sport: there is, for example, the $60 million invested by
Quebec in the Montreal Expos, and the loss of more than $320 million paid by the taxpayers of Ontario when Skydome
was sold to the private sector (which still has its hand out today!).
It is ironic, to say the least, that professional teams that are losing money because of their players’ greed and their
owners’ inability to rein in that greed are today turning to the public purse — they never proposed sharing their profits
with the public in the days when they still made any. Moreover, it should be borne in mind that players on professional
teams are entitled to forward income averaging for tax purposes, a privilege that is denied to other workers, such as
artists. On the other hand, the NHL Players’ Association is sitting on $80 million that it has accumulated from profits on
selling promotional items. These profits are not taxable under a provision in the Income Tax Act that exempts unions.
Subsidizing professional sport today, either directly or indirectly, would be equivalent to feeding a monster whose
appetite will always and only increase.
The Bloc Québécois considers that the report produced by the Sub-Committee on Sport is irresponsible because it makes
recommendations in support of professional sport that could cost hundreds of millions of dollars, and because it calls for
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a proliferation of structures that would not only encroach on provincial jurisdiction but would also have increasing the
visibility of the federal government as their basic purpose.
The Bloc Québécois does support the recommendations designed to provide increased financial assistance to athletes
and their federations. The Bloc Québécois also supports the spirit of the recommendations designed to ensure that
women, persons with disabilities and Aboriginal people find a larger place for themselves in sport.
Scotland, Wales, Ireland and the Isle of Man enjoy special status at the Commonwealth Games; Puerto Rico has special
status at the Olympic Games. The Bloc Québécois calls on the Canadian government to give Quebec the status of an
independent entity at major international competitions such as the Francophones Games, the Commonwealth Games, the
Pan-American Games and international competitions in hockey, soccer and other sports.
Footnotes:
l Emphasis added.
2 Le Nouveau Visage du gouvernement: Guide de la nouvelle structure du gouvernement fédéral, 1994, p.14.
3 Strategic Research Committee, “Croissance, développement humain, cohésion social”, October 4, 1996, p.341.
a The 1961 Act provided for such a thing, but it became irrelevant when the Public Service was given a mandate to look after
amateur sport.
=) Such a structure existed under the Conservative government, but was never active.
6 The Sub-Committee proposes that the federal government invest a maximum of $100 million in this initiative. If federal
priorities do not correspond to Quebec priorities, will the Quebec government be entitled to opt out with full compensation?
4
Marc Lavoie, Désavantage numérique, Les francophones dans la LNH, Vents d’ ouest, Hull, 1998, p.136.
8 idem, pp.110-111.
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New Democratic Party Dissenting Opinion
Sa La ar TI
By: John Solomon, M.P.
Regina—Lumsden—Lake Centre
The report of the Sub-Committee on the Study of Sport in Canada is a comprehensive analysis of sport in our country.
It reflects the hope, fun and strengths that sports provide to Canadians. It also underscores how important sport at all
levels is to building a sense of community and pride in our country. It is an accurate reflection of the significance of
sport in Canada.
The recommendations pertaining to the advancement of amateur sport are basically approaches the New Democratic
Party endorses. Indeed, we support most recommendations in the report. However, the recommendations pertaining to
tax expenditures for professional sport are not supportable under current circumstances.
Professional sports are important to individual athletes, families and communities. Teams like the Toronto Blue Jays,
the Saskatchewan Roughriders or the Montreal Canadians provide entertainment to millions of Canadians. Canadians
believe their particular favourite team is worthy of support, as do the New Democratic Party Caucus Members.
It is our view that some professional sports cannot be strengthened or even maintained with some tax supports in
isolation. It is our view that professional leagues like the NHL must first review and consider pooling (or revenue
sharing) more of their revenues as a league, like the CFL and the NFL do, in order to support teams that have smaller
markets, or other financial challenges. It is also difficult to accept that the tax breaks be given to professional sports
teams, who pay their athletes over a million dollars a year on average (NHL players for example), when our Healthcare,
education and Canada’s Social Safety Net is under-funded and when western farmers’ net farm income averages around
$3,500, the same levels during the Great Depression of the 1930s.
Our Sub-Committee has not adequately explored the implications of tax expenditure recommendations. Nor have the
professional sports franchises, their owners and players agreed on what they should be doing collectively to re-invest in
amateur sport and Canadian communities to deserve additional tax consideration. Until these decisions are made by the
professional sports teams, tax considerations should be put on hold.
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DISSENTING REPORT
PROGRESSIVE CONSERVATIVE PARTY
The Progressive Conservative Party supports those recommendations made by the Sub-Committee with respect to
supporting amateur sport in Canada. The PC Party in particular is in support of those recommendations that encourage
Canadians to engage in a more healthy lifestyle as well as those that promote ethics in sport, the integration of disabled
persons into sport governing bodies and the support of parents and coaches in Canada. As well, those recommendations
aimed at overall improvements to amateur sport are strongly supported.
The PC Party does not support those recommendations that propose a Sport Pact as a means of promoting the vitality
and stability of professional sport in Canada. Of significant concern is the proposal to provide subsidies, in the form of
tax breaks to professional sport franchises in Canada. Our concerns relate to the issues that flow from these
recommendations that require further clarification, including:
° The cost of these proposed tax breaks
° The effect these initiatives would have on professional sport franchises and on the Canadian economy in general
° The need for a full and proper examination of the concept of income-sharing among organizations within the
National Hockey League
° The lack of any real undertaking by those franchises as to what they would provide in return for these tax breaks
(i.e. more community involvement)
We recommend and encourage greater study into the issues of subsidies to professional sports franchises with a mind to
ensuring their presence in Canada is balanced with the best economic interests of all Canadians.
Submitted by:
Peter MacKay, M.P. Mark Muise, M.P.
PC Member PC Member
Sub-Committee on the Study of Sport in Canada Standing Committee on Canadian Heritage
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