John Tavares’ move from the Islanders to the Maple Leafs is still making noise eight years later, and now the dispute is in a Canadian court.
The former NY Islanders captain is facing a battle over the structure of the seven-year contract he signed with Toronto in 2018, a deal carrying an $11 million AAV. The Canada Revenue Agency is seeking $8 million it says is owed because of the way Tavares’ signing bonus was handled, including $6.85 million in taxes and another $1.2 million in interest.
The tax issue centers on the first season of that contract, when Tavares earned a base salary of $650,000 and also received a $15.25 million signing bonus. He paid 15% tax on that bonus to the United States because he was still in New York, while the payments were spread out over multiple years. The CRA’s position is that the money should be treated as normal income rather than a bonus.
Tavares said in court that the bonus-heavy structure was part of what he wanted from the deal.
“Much of that is in a signing bonus, so it can’t be bought out, and it’s protected during a lockout,” Tavares said in court.
He also described the negotiations with then-Maple Leafs general manager Kyle Dubas, saying Dubas texted him one minute after he became eligible to speak with other teams on July 1, 2018.
“If you really want me, why can’t we agree on $11M (AAV)?” Tavares said regarding the negotiation.
The outcome could matter far beyond this case. If the CRA prevails, the ruling could affect how NHL contracts are structured, especially for players from American teams who sign with Canadian clubs.
Those deals often include large first-year signing bonuses, a setup designed to keep more money in the player’s pocket instead of going to the government. If Tavares loses, it could become a factor for players weighing whether to sign with a team north of the border.
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