Latest On Lane Hutson

While there isn’t a significant gap between the Canadiens and pending RFA defenseman Lane Hutson in extension talks, the two sides are expected to pause dialogue for a while after what Elliotte Friedman of Sportsnet described as an “emotional” recent round of negotiations on Monday’s 32 Thoughts podcast.

The base-level framework of a deal isn’t a point of contention. Both sides are amenable to a max-term, eight-year deal. They aren’t far off on the cap hit, either – both are within the range of $9MM per season, although Friedman believes both player and team have a little more to give to get to that point.

The hangup is instead on the “philosophy” of how Montreal is trying to get Hutson the most after-tax dollars while keeping his cap hit below eight digits, Friedman reports. Late last week, Marco D’Amico of RG took a deep dive into what mechanisms the Habs have to limit his cap impact, aside from his relative lack of leverage as a pending 10.2(c) RFA who can’t sign an offer sheet and isn’t arbitration-eligible. In there, he mentions a Canada-specific tool to lower the amount of cash Hutson loses to taxes – a Retirement Compensation Agreement (RCA) trust. However, it appears Hutson’s camp isn’t sold entirely on those benefits being as major as Montreal is trying to sell in talks.

An RCA agreement allows a player to defer up to 49% of their salary – delaying earnings but retaining more of them. The deferred money isn’t taxed at its usual rate, which can exceed 50% in Canada for top NHL earners. Whatever is deferred is split in half, with one half going to a refundable deposit with Canada’s tax agency and the other half going into the trust. After an American player (i.e., Hutson) retires and returns to the United States, they receive the deposit back with no tax deducted. In contrast, withdrawals from the trust are taxed at American federal and state rates, which are often lower than the rates the player would pay in Canada.

In any event, it’s likely the Habs are on track to operate without an eight-figure AAV on their books for the foreseeable future, barring a UFA splash. The only deal they ever signed in franchise history with a cap hit north of $10MM was Carey Price’s eight-year, $84MM extension in 2017. They just traded the final year of that contract to the Sharks to remove themselves from LTIR and to provide San Jose with added cap clearance over the floor. Price hasn’t played in over three years and will not play again due to a knee injury.

A $9MM cap hit is directly in line with what Ducks defender Jackson LaCombe just landed on his extension and is what Luke Hughes landed from the Devils as a 10.2(c) RFA this offseason. Hughes is the more direct comparable – while LaCombe’s stats are less impressive, he’s far older and the contract buys out six years of UFA eligibility. An eight-year extension for Hutson would only swallow up three of them.

Whether the Habs can continue to develop Hutson’s all-around game to make him a true cornerstone No. 1 remains to be seen. Still, the diminutive 21-year-old is coming off one of the more impressive rookie seasons in recent memory. The 5’9″ lefty took home last year’s Calder Trophy after recording a 6-60–66 scoring line in 82 games, tied for sixth in the league among defensemen and the most by a first-year rearguard since Brian Leetch’s 71 points in 1988-89.