Same Ice, Different Rules, and a Thirty-Three-Year Drought

The ice in Montreal and Toronto is the same as the ice in Sunrise and Dallas—frozen water, painted lines, boards that rattle when a body checks into them. What happens on that ice, and who chooses to skate on it, is another matter. A report published this year by the Montreal Economic Institute suggests that the differences are not merely stylistic or cultural. They are financial, structural, and increasingly visible in the standings.

The report's central finding is straightforward: Canada's higher income tax rates place its NHL teams at a disadvantage when competing for players with American teams in low-tax states. On a yearly salary of $750,000, a player on the Montreal Canadiens pays $364,312 in taxes, an effective rate of 48.5 percent. For a player on the Florida Panthers or Dallas Stars, that bill drops to $234,520, or 31.2 percent. The difference is more than $129,000 per year on the same salary.

The NHL's salary cap is based on gross salary rather than net salary, which means teams in no-income-tax states can offer identical contracts while allowing players to keep substantially more take-home pay. "The salary cap is supposed to level the playing field among teams," said Vincent Geloso, the economist who authored the report. "But when it's calculated based on gross salary, it increases the advantage for teams in low-tax markets." The effect is not hypothetical: a study covering 1980 to 2017 found that for every one-percentage-point increase in the local tax rate, a team's win rate decreased by roughly 1.55 percentage points.

Canadian-born star Brad Marchand, who signed with the Florida Panthers in 2025, has said publicly that if "you go to a Canadian team, your contract has to be 15 percent more to be the same" as one in a no-income-tax state. Gino Reda, host of TSN's "That's Hockey," put it more bluntly: "Is the playing field level? No, it isn't."

The tax disparity is one factor in a broader pattern. Five of the last six Stanley Cups have been won by teams from states with no personal income tax. No Canadian team has won the Cup since the 1993 Montreal Canadiens—a 33-year drought that is, by a wide margin, the longest in NHL history. Teams from the U.S. Sun Belt have claimed the last four titles and six of the last seven. In current betting odds for the 2026-27 season, the Panthers, Hurricanes, and Golden Knights—all Sun Belt teams—lead the way.

Player movement has reflected these dynamics. Last season, star defenceman Quinn Hughes forced a trade from Vancouver to Minnesota. In the off-season, longtime Senators captain Brady Tkachuk pushed for a trade to Florida, where he joined his brother Matthew. Three-time Vezina winner Connor Hellebuyck demanded a trade from Winnipeg and refused to report to training camp, triggering an indefinite suspension. His list of preferred destinations, according to Reda, "doesn't include any of the teams in Canada."

Reda notes that there are ways to mitigate the tax disadvantage—endorsement dollars in markets like Montreal and Toronto are significantly higher than in many American cities, and creative contract structures can help. But the work required is substantial. Meanwhile, the Canadian dollar's weakness relative to the U.S. dollar adds another layer of complexity, as Canadian teams earn revenue in Canadian dollars but pay player salaries in U.S. dollars. Next season's salary cap is projected to rise from $104 million to $113.5 million, and could reach $127.5 million by 2028-29—figures that may strain smaller-market Canadian teams that cannot spend to the cap's maximum.

The NHL has begun to acknowledge the issue. In September, the Board of Governors selected Calgary Sports and Entertainment CEO Robert Edwards to help lead the board, in part to bring greater focus to the challenges facing Canadian teams. "Taxes are clearly something that I do talk to [Commissioner Gary Bettman] about," Edwards said. "That's not just a challenge for Canadian teams. That's also a challenge for some U.S. market teams. I think that's something we have to continue to look at."

Whether the league can or will address the structural imbalance remains uncertain. What the report makes clear is that the disparity is real, measurable, and—for Canadian teams hoping to end a three-decade championship drought—a hurdle that no amount of hometown pride can simply skate around.

AI Image Disclaimer: The visual materials in this report are generated by AI and are intended for illustrative purposes only.

Sources: CP24, Montreal Economic Institute, Front Office Sports, Noovo Info, Flipboard