José Bautista, Josh Donaldson and Russell Martin were all part of a Blue Jays team which came closest to repeating the glory days of 1992 and 1993, twice falling just short in the ALCS. Now they are facing a different kind of challenge, with the Canadian Revenue Agency (CRA).
As originally reported by Christopher Nardi of the National Post, Bautista, Donaldson and Martin are all currently involved in legal battles with the CRA. More specifically, how the trio calculated their income and the amount they were able to deduct through contributions to Retirement Compensation Arrangements (RCA) during their time in Toronto.
Bautista had the longest tenure of the three with the Blue Jays, being named an All-Star six times in Southern Ontario. Donaldson was a two-time All-Star in Toronto who was also named AL MVP in 2015, while Martin earned one All-Star nod during his time with the Jays.
The reason for RCAs
Setting up an RCA is common for professional people who will only be living in Canada temporarily. It allows for the deferral of tax payments until after said person retires.
The issue the CRA has with the three former Blue Jays, is how reasonable their contributions were from their time in Canada. The outcome of each case could have implications which impact all professional sports teams in the country.
The Blue Jays, Leafs, Raptors, etc, already face enough challenges persuading players to join them, due to higher tax rates compared to in the United States. If the CRA wins against any or all of the cases versus Bautista, Donaldson and Martin, it creates a potential scenario where even more professional athletes will shy away from teams North of the Border.
Bautista facing the biggest battle
For Bautista specifically, as per Nardi, the CRA has apparently disallowed more than $16 million in contributions over a four-year period. Their assessment is that these deductions should not be considered as a pension plan.
Unsurprisingly, the three-time Silver Sluggers is disputing this. His counter-argument is that the contributions should be considered as a valid RCA, due to helping him with his transition into retirement.
The respective cases against Donaldson and Martin are different. Both RCAs are considered legal, but it is the amount of the contributions which are being disputed.
The reason for this action by the CRA relates to how much time the two spent each season in Canada and the United States. As per Nardi, their cases are scheduled to be heard together next month.
In one respect, most people won't be feeling sorry for three multi millionaires. At the same time, there will be plenty of Canadian sports fans hoping the CRA do not win any of the cases, to avoid far-reaching ramifications when it comes to their teams remaining competitive with their American counterparts.