WINNIPEGGERS aren't just cheering for the Jets, they're also funnelling $6.9 million to True North Sports & Entertainment this year through city and provincial subsidies for pro sports teams.
And public support for the NHL club will climb to almost $11 million a year, once the province completes the transfer of 90 VLTs to the vicinity of the MTS Centre.
Winnipeg's 2012 operating budget calls for True North Sports & Entertainment to collect $5.8 million in entertainment-funding taxes, which the company remits to the city and then gets back in the form of a refund. This money is included in the price of Jets tickets and does not affect the city's bottom line, although the city enables the club to levy the 10 per cent charge.
The city does, however, grant True North a full refund on its business taxes, worth $250,000 a year. The city and province also grant the club a 79 per cent discount on property taxes, thanks to a special designation for the MTS Centre as a recreational property instead of as a commercial business. This break amounts to $816,140 under the current property assessment, according to the city.
Together, these mechanisms account for $6.9 million this year. The province is also in the midst of transferring VLTs to the Tavern United pub and, potentially, a cityplace sports bar, and allow the club to retain the gaming revenue from these machines. This contribution will be capped at $4 million a year for 20 years, the province announced in 2011.
Given True North's demonstrated success, it's not clear why two levels of government are supporting the business, said Colin Craig of the Canadian Taxpayers Federation.
"I support the Winnipeg Jets, but you have a very, very profitable company. It's legitimate to ask why the taxpayer has to give the Jets special tax breaks," Craig said.
Mayor Sam Katz, however, noted most of the revenue in question would not exist if the NHL did not return to Winnipeg. And a spokesman for Premier Greg Selinger said the city would not be able to support the Jets without the help of the province.
"We are committed to ensuring the long-term viability of this community asset," Selinger's office said in a statement. "The provincial commitment going forward allows True North to focus on the business of running an NHL franchise and entertainment venue, without worrying about the mortgage on the MTS centre."
PUBLIC funding mechanisms that support True North Sports & Entertainment:
City entertainment tax refund: $5.8 million in 2012
Provincial gaming revenue: Up to $4 million a year, for 19 more years
City-provincial property-tax break: $816,140 annually, based on current assessment
City business-tax refund: $250,000 annually
— sources: City of Winnipeg, Province of Manitoba