Has the tax man contributed to the Canadian Stanley Cup drought?

Five of the last six Stanley Cups have been won by a team from a state with no personal income tax, according to a new report

Published May 28, 2026  •  Last updated 12 minutes ago  •  3 minute read

Head coach Martin St. Louis of the Montreal Canadiens looks on during the third period in Game Four of the Eastern Conference Final of the 2026 Stanley Cup Playoffs against the Carolina Hurricanes at Bell Centre on May 27, 2026 in Montreal. The Canadiens were the last Canadian team to win the Stanley Cup. A report released by MEI on Thursday suggets taxes play a role in the Canadian Cup drought. Photo by (Photo by Minas Panagiotakis/Getty Images)

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Are high taxes one reason why a Canadian-based NHL team hasn’t won the Stanley Cup since the Montreal Canadiens more than 30 years ago? 

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A recent survey from MEI suggests Canadian teams are not on equal footing with their American rivals, as tax policies directly affect teams’ ability to attract and retain top players. 

“Professional athletes have short careers and therefore a limited window in which to earn income through their salaries,” MEI senior economist Vincent Geloso said in a report released by the Montreal Economic Institute on Thursday morning. “This creates a strong incentive to play where taxes are lowest.”

MEI is an independent public policy think tank with offices in Montreal, Calgary, and Ottawa. Through its publications, media appearances, and advisory services to policymakers, the MEI promotes public policy debate and reforms based on sound economics and entrepreneurship. 

Excluding the ongoing pursuit of Lord Stanley’s mug, five of the last six Stanley Cups have been won by teams from states with no personal income tax. Depending on future results, it could become six of the last seven winners coming from states with no personal income tax.  

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The Vegas Golden Knights, currently waiting for the winner of the Montreal Canadiens and Carolina Hurricanes series, play in a state with no personal income tax. Vegas won the Cup in ‘23. The Tampa Bay Lightning and Florida Panthers have each won two. The state of Florida also has no personal income tax. The only outlier was the Colorado Avalanche in ‘22. Colorado’s personal income tax rate is 4.4%.  

An economic disadvantage 

The NHL’s salary cap is based on gross salary rather than net salary, meaning a team in a state with no income tax can offer the same contract as a Canadian team while allowing the player to keep more money in his pocket. Consequently, teams in low-tax states can make smaller gross salary offers and still match the net pay available in higher-tax markets. 

“On a yearly salary of $750,000, a player on the Canadiens pays $364,312 in taxes, an effective tax rate of 48.5%,” the report said. “For a player on the Panthers or the Dallas Stars, for example, this tax bill drops to $234,520, for a rate of only 31.2%. 

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“The salary cap is supposed to level the playing field among teams. But when it’s calculated based on gross salary, it increases the advantage for teams in low-tax markets.” 

Gross salary is a salary before deductions. Net income is loosely defined as the final amount of money a person receives that can be spent.  

Effect on the number of wins 

A publication titled, Erik Hembre’s “State Income Taxes and Team Performance,” published in International Tax and Public Finance, looked at the period from1980 to 2017 and found that income tax has a measurable effect on NHL win rates. For every one-percentage-point increase in the tax rate, a team’s win rate decreases by 1.55 to 1.57 percentage points. 

“In professional leagues, a handful of wins or losses can make a huge difference: to the playoffs, to the standings, to a championship,” Geloso said. “When tax policies force Canadian teams to work harder to attract the same players, that’s no small matter. It’s a real disadvantage, season after season.” 

But Geloso was not offering excuses for Canadian teams. 

“One should be careful not to ascribe a team’s performance to tax differences alone, but it is necessary to understand that these rates do matter,” he said.  

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