Would-be Tampontreal Ex-Rays co-owner Stephen Bronfman hired lobbyists this week to ask the province of Quebec for public cash toward a new Montreal stadium, and it sounds like Quebec premier François Legault is willing to listen, on one condition:
“We have an open mind towards the project,” Legault told reporters Tuesday in Quebec City. “There are several business people who are behind this project, and not just Mr. Bronfman. If we are able to bring a baseball club and it can generate more in revenue than the aid we give the company, everybody wins — including Quebecers.”…
“The principles that we will use to help or not this baseball team is to see how much additional revenue do we expect to get from this activity. For example, the baseball players will pay tax in Quebec, so the idea is to give back less than the additional money that we would get.”
The idea here would be to issue “forgivable loans,” which the team owners wouldn’t have to repay if they met certain goals. In the past, these have been used as a way to threaten to claw back subsidies if certain minimal job goals aren’t met — train manufacturer Alstom, for example, is getting $56 million if it promises to maintain at least 350 employees for ten years. But in this case, Legault is talking about ensuring that the province is made whole via new spending.
At first glance, that could be tricky. The average MLB payroll is $120 million, and Quebec taxes local income for high earners like baseball players at about 25%. That would be enough to justify $30 million a year in spending, or maybe $400 million in total outlay — if players paid taxes on that full amount. However, most nouveaux-Expos players almost certainly wouldn’t live in Montreal full-time — aside from those tax rates, it’s damn cold there in the winter — even before you get to the part where they would play half their home games in Tampa Bay. Anyone resident in a Canadian province for less than 183 days in a year isn’t considered a resident, but still has to pay income taxes on money they’ve earned there.
That would get into some weird epistemological calculations: Is a player paid for time they’re living elsewhere during the offseason? What about road games? And, of course, if half the season’s home games are in Florida, how does one assign which salary was earned there and which was earned in Canada?
The nice part about a forgivable loan is that it’s based on actual tax payments: If players end up paying, say, $10 million a year in taxes, then team owners would have to repay everything above that amount. The devil, though, will be in the loan details, which is why it’s especially worrisome that Legault said “for example” about player income taxes: If you start counting additional things like “economic activity” that can be hand-waved into existence whether they’re real or not, then suddenly a lot more in loans would become a lot more forgivable.
Clearly, way more details are needed on what Legault is considering and how any loan agreement would be phrased. Still, this is potentially a large barn door that he’s considering opening, and something that makes the possibility of a new Montreal baseball stadium significantly more likely. If, you know, the developer of the proposed site can be made happy, too. Hey, I bet residents of their buildings would pay taxes, too! This could work out great — everyone gets their income taxes rebated to pay for their new homes, and Quebec still has enough money to pay for all its services because if it were just a vast, empty plain it wouldn’t get any tax revenue at all, and, hmm, there must be a logical flaw in this, but I have too many visions of baseball stadiums dancing in my eyes to be able to see it.