Sources have revealed that the four teams in the West Coast Senior Hockey League have been the subject of an investigation being conducted by Revenue Canada.  There is also some talks that Service Canada is waiting for the Revenue Canada investigation to conclude before moving in to check on the money paid to players through the hockey season.  From what is being indicated, the Service Canada investigation will focus on the players and the Revenue Canada investigation will focus on the organizations.

Each of the four teams have been contacted and asked to open their books, revealing the nature of their operations with respect to revenue, players’ salaries and team operations.  According to one email received by Newfoundland Hockey Talk

The Corner Brook Royals, Deer Lake Red Wings, Grand Falls-Windsor Cataracts and the Clarenville Caribous are the subject of a Revenue Canada investigation.  Teams will be given an opportunity to reveal the nature of their operations, including revenue received, players salaries and expenses related to their operations.  Teams will be assessed individually with respect to compliance to Revenue Canada guidelines and regulations.

It’s not clear if this is an attempt to collect any back taxes or just to ensure compliance with the guidelines and regulations.  Fromthe several emails received to Newfoundland Hockey Talk, one indicated that this investigation would not result in any penalties being assessed on the teams, and it was simply a “warning” to ensure that they were following the proper guidelines.  Yet another email indicated that this was a “serious” investigation and will result in major penalties to the organizations in question.

Sources have also revealed that the Clarenville Caribous are the first team to be investigated and that this investigation is currently underway.

What is not known by those that have emailed Newfoundland Hockey Talk is what this will mean to the operation of the league and the teams.  However, there are those that are speculating that this could have a major impact on at least two of the organizations and that the other two organizations have positioned themselves to deal with the possibility of such an investigation - ensuring that all Revenue Canada guidelines and regulations had been followed, taxes paid where appropriate, revenues all declared and players informed of the rules required for reporting income.

What has prompted this investigation?  There are some that Newfoundland Hockey Talk have contacted that speculate that the West Coast Senior Hockey League has long been in the sights of Revenue Canada and that a recent Telegram article by Robin Short, he indicates that he was in contact with several organizations and the Clarenville Caribous have confirmed that they have been contacted by the feds.

This story is definitely something that Newfoundland Hockey Talk will be following in the days / weeks / months to come as the 2009-10 WCSHL season approaches.  You can also bet that there are many players who are wondering what this will mean to them – especially if they were collecting employment insurance while getting “paid” to play hockey.