Ticket to ride

How to turn that NHL game into a tax-deductible expense. Hint: it’s better to be self-employed

It’s not just Canadian hockey teams that seem to have no chance of winning it big. Most Canadians get the short end of the stick when it comes to buying tickets. Rising prices are one thing that continues to shut out the average sports fan from attending games. But the tax regime in Canada doubles the burden, because it means that if you haven’t figured out a way to write off that ticket, you are probably going to be hard-pressed to compete against the people who have.

Let’s not pick on sports: all forms of entertainment are just that much more expensive for the individual, because the cash used to buy tickets is coming from after-tax dollars.

Jamie Golombek, managing director, tax and estate planning at CIBC Private Wealth Management, says corporations deduct 50% of the amount of a ticket from income for tax purposes. But self-employed individuals using tickets for entertainment purposes might do even better because they are taxed at a higher tax rate than a corporation. “If you’re paying 50% [marginal rate] in Ontario and you’re saving 50% of the ticket, that’s higher than any corporation,” Golombek says. Take an insurance agent or broker who is not incorporated and entertains a client at a game. He or she can claim the 50% of the cost as an expense, just like any other form of entertainment.

There are certain situations where employees can make a claim, but it’s far more restrictive, usually limited to people who earn commission income. For the average Canadian with just a T4, the cost is all coming off your after-tax money. And that’s a huge sum when you think how much a hockey ticket costs today.

Statistics Canada’s latest data from January found the average Canadian employee makes $48,250 a year. After-tax income will vary by province and let’s factor in other deductions, but a basic return would leave you $40,101 in Toronto. The average ticket price last year for a Maple Leafs game was US$368.60, according to Forbes calculations, but that’s probably on the high side. A more realistic figure might be the Fan Cost Index produced by Team Marketing. It uses a weighted average, but an average Leaf ticket still cost US$124.69. The league average was US$61.01. The high cost probably means the average fan can make one or two games a year if he can get access to the ticket at face value — a tall proposition in a market like Toronto.

Vijay Setlur, a sports marketing instructor at York University’s Schulich School of Business in Toronto, notes season ticket holders hold more than 90% of the seats in Toronto and many of them deduct the cost of those tickets to bring the cost down. “The average fan only competes through the secondary market,” Setlur says. “There has been a proliferation of those sites, but whether they are cheaper depends on a number of factors.”

Something tells me one factor won’t be the prospect of playing in the Stanley Cup finals. But ordinary fans can take comfort that there likely won’t be a Canadian team in that anytime soon.