How to Bring the Cup Back to Canada

A competitive hockey team requires a dynamic economy to support it.

I was in Los Angeles for Game 5 of the 2007 Stanley Cup Finals. On the radio that morning, I heard a local DJ – in the midst of his celebrity gossip and baseball scores – mention that the Anaheim Ducks might win the Cup that night. It was clearly the first time he’d mentioned it, and just as clear that his sidekick had no idea what he was talking about. “That’d be neat,” she said.

That night the Cup was indeed claimed by a city with no business having an NHL team, let alone a Stanley Cup winner. Why? Money. It’s the same reason NHL Commissioner Gary Bettman sprinkled franchises across the American south and southwest, from Raleigh to Tampa to Denver. Hockey may not be a passion there – nor even a passing interest – but each of those cities has a sizeable population and a relatively robust private sector economy. A private sector means corporate boxes and season tickets; boxes and tickets mean team revenue; team revenue means top talent and a deep roster; talent and a deep roster mean Stanley Cups. And so Canada watches as its native sons Simon Gagne and Jonathan Toews battle to bring the Cup to Philadelphia or Chicago.

Of course, six Canadian teams with talent and deep rosters would still face a challenge overcoming twenty-four American teams. We’d improve our chances simply by growing the number of Canadian NHL teams. But Canada has only six teams for the same reason Canadians end up playing in American cities: money. If you’re an owner, and you can put a team in Quebec City (population: 715,000; major industry: government) or Denver (population: 2.5 million; major industry: not government), which would you choose? The bottom line is this: if we want more Canadian Stanley Cups, we either need more talent on the teams we have now, or more Canadian teams. Neither is going to happen until Canadian cities become as economically powerful as their neighbors to the south.

Consider the following graph, which superimposes Canadian Stanley Cup wins since 1960 (marked with a vertical red line) over a chart comparing Canadian and American GDP per capita. Although the correlation isn’t perfect, it’s there: when Canada was economically competitive with the United States, we won Stanley Cups. When Canadian competitiveness fell off after about 1990, the Cup went south. I’m not suggesting perfect causation here: just getting Canada back to economic competitiveness won’t automatically bring the Cup home. But it will help.

And we’re already on the way. Notice in the graph above that Canadian per capita GDP has been making serious advances relative to the United States over the past decade. And while we haven’t caught up yet, nor won a Cup, we’re getting closer. Consider the next graph – it’s the same as before, only now it shows (by a vertical blue line) each Canadian Stanley Cup finalist – that is, each Canadian team that made it to the finals but lost. When you consider both champions and finalists, the economy/Stanley Cup correlation becomes stark. As the gulf in relative GDP per capita widened in the 1990s, Canadian teams were entirely shut out of the big show. But as the gulf has narrowed over the past decade, we’ve seen three teams (Calgary in ’04, Edmonton in ’06 and Ottawa in ’07) make it to the finals.

So the answer to our Cup drought won’t be found in peewee hockey drills or increased athletic funding. It’ll be found in national and provincial policies: competitive corporate tax rates to grow domestic industries and entice foreign ones, investments in infrastructure and human capital to grow the private sector. Canada’s solid economic foundation in an increasingly unsound global market will give us a further advantage. Build a dynamic economy, and Lord Stanley will come home.