Part Three: Horse Sense & Government Nonsense

July 30, 2012 9:02 am

Public-Private Partnerships Are Not Subsidies

The Ontario government’s decision to end the Slots at Racetracks Program has a detrimental effect for Ontario’s vibrant horseracing and equine industries.

The McGuinty government’s decision to end the Slots at Racetracks Program has become a political football which has been kicked back and forth between the OLG, the Liberal government and the NDP (the Progressive Conservatives have been on the sidelines due to their decision to withhold support for the Ontario Budget even before it was announced), with no one party clearly wanting to deal with the consequences that ending the program would have for the province. The OLG’s play is summed up by their spokesman Tony Bitonti, who insists that “the implications for ending it fall into the camp of the government, since Slots at Racetracks is a government policy and we’re a Crown corporation, not a government body.”

The Liberal government’s play is to set up a straw man argument, presenting itself as making a tough but necessary choice between continuing to support the province’s health care and education systems or its horseracing industry, a clearly fictitious argument. Dwight Duncan’s spokesperson Aly Vitunski captures the government’s play by stating that “we are committed to the people in the industry, but there comes a point when it’s health care and education or horseracing. It’s unfortunate but we have to choose health care and education.” Health care and education on the one hand and horse racing on the other are not mutually exclusive. In fact, much of the McGuinty government’s 75 per cent share of the revenue generated from the Slots at Racetracks Program is allocated to providing generous support for health care and education in Ontario.

The example of one Ottawa-based racetrack demonstrates that the “either or” play used by the Liberal government does not stand up to scrutiny. Jean Larose, general manager of Ottawa’s Rideau Carleton Raceway, states that: “Since the Slots Program began, Rideau Carleton Raceway has generated $643 million for the provincial government that is specifically earmarked to be spent on health-care costs for all Ontarians. That represents the cost of nearly 80,000 hip replacements.”

Many in the industry view the panel and its $50 million fund as little more than an economic band-aid and an attempt by the government (and also the NDP) to show that they care about the 55,000 non-unionized industry workers.

It should also be noted that, on the issue of health care, the Ontario government has a less than sterling record. On Premier Dalton McGuinty and Finance Minister Dwight Duncan’s watch, eHealth squandered more than $1 billion in taxpayers’ money on the province’s failed initiative to create electronic health records for Ontarians. And, earlier this year, it came to light that Ornge, the province’s not-for-profit air ambulance provider, lost more than $200 million of taxpayers’ money through mismanagement. Allegations of unsound business practices and questionable invest-ments, some unrelated to running an air ambulance service, were compounded by the fact that the number of patients transported by Ornge was steadily declining. But the funding Ornge received from the Ontario government increased rather than decreased. The McGuinty government claims that Ontario must act now and choose between, as Aly Vitunski said, “health care and education or horseracing.” Yet, in the case of Ornge, the government was informed of alleged wrongdoing long before it was finally forced to act. One might wonder why the government is now moving so quickly to terminate a successful revenue-sharing program like the Slots at Racetracks Program when it was in no hurry to deal with the Ornge debacle.

Andrea Horwath, the leader of the Ontario New Democratic Party, delegated the NDP’s play in the Slots at Racetracks political football game to NDP MPP Taras Natyshak, who has been the party’s point man on this issue. Representing the riding of Essex which is closely tied to the horseracing industry, Natyshak stated that “the Ontario government’s decision is not a prudent move and is fiscally irresponsible.” (…) “The provincial NDP as a whole disagree with the Premier and the Ontario government’s decision.” However, actions speak louder than words. When asked what exactly this statement meant and why the NDP abstained rather than vote against the Budget if it so strongly disagreed with the government’s decision, Natyshak responded that, “because the modernization initiative was spearheaded by a government agency, OLG, it did not rear its head in the context of the Budget. No amendments within the Budget could have been made by us to specifically address the OLG modernization initiative since the details of the initiative were absent and they were the prerogative of the OLG.”

Andrea Horwath and the Ontario NDP were prepared to vote against the Budget over wages for unionized government workers but would not do the same for the province’s horseracing and equine industry because of the OLG modernization plan’s lack of clarity and detail. Instead, the NDP claim to have won a victory for Ontario’s horseracing and equine industry by having secured the $50 million funding for the Horse Racing Transition Panel.

However, many in the industry view the panel and its $50 million fund as little more than an economic band-aid and an attempt by the government (and also the NDP) to show that they care about the 55,000 non-unionized industry workers. In politics, per-ception is reality. Across the aisle, Liberal Minister McMeekin says: “We in agriculture had nothing to do with the OLG decision. We discovered it about the same time as everyone else did.” And so the political football continues to be passed.

Many in the industry adamantly insist the government needs to realize it wrongly assumed that ending the Slots at Racetracks Program would adversely affect only the upper echelon of Canadian society.

Regardless of who assumes responsibility for ending the Slots Program, it is abundantly clear that the issue as a whole can be seen as symbolic of a predominantly urban-focused and urban-centric government being unable to understand a predominantly rural-based industry and way of life. As Dennis Mills puts it, “very few legislators understand how this industry works because most legislators are from cities” and they are unfamiliar with the horseracing and equine world. Ian Russell explains that many legislators who hail from Ontario’s cities have a preconceived notion that horseracing is a sport limited to Bay Street investment bankers and corporate lawyers who own and race thoroughbreds. This is not the case. “In fact, the majority of the tracks in Ontario race standardbred horses that are owned, trained, managed and raced by salt-of-the-earth, everyday Ontarians,” Russell says.

Many in the industry adamantly insist the government needs to realize it wrongly assumed that ending the Slots at Racetracks Program would adversely affect only the upper echelon of Canadian society. Or, as Anna Meyers explains, “the Ontario government needs to look at the whole province and not just the urban centres when it considers the implications for any decision it makes.” The argument could be made that this was not the case with its cancellation of the Slots at Racetracks Program.

Instead, the government suddenly and unilaterally ended a program that has allowed the horseracing and equine industry to thrive in Ontario. And, as Conservative Senator Bob Runciman points out, “a true cost-benefit analysis of ending the Slots at Racetracks Program has not yet been undertaken.” He goes on to state that the decision “doesn’t make any sense” because when a production line at an Oshawa automotive assembly plant is shut down with a loss of about 2,000 jobs, there is blanket coverage in the media. Yet, when the province’s entire horseracing and equine industry, accounting for some 55,000 jobs, is placed on life support by a hastily implemented government decision, there is very little coverage by the media.

The reasoning behind this event continues to defy logic. The McGuinty government’s past eHealth and Ornge boondoggles pale in comparison with the likely long-term loss of revenue and the number of Ontarians who will be forced to rely on unemployment or social welfare programs, given their industry-specific skills which are not easily transferable. The province’s unresearched and unpredictable decision to terminate the lucrative Slots at Racetracks Program will have lasting consequences. Senator Runciman sums this up by stating that “maybe the original contract and revenue-sharing agreement should have been updated or renegotiated, but to blindside everyone by unilaterally ending the program without even doing a cost-benefit analysis speaks volumes about the unpreparedness and hastiness of this government.”

The Slots at Rideau Carleton Raceway generated $52 million for the City of Ottawa, which the city has said helps keep annual municipal property tax increases lower.

The impact of that questionable decision will be felt by more than the 55,000 Ontario workers who are part of the horseracing and equine industry with its web of ancillary businesses. The province’s horse tracks are not just the workplaces of jockeys, trainers, and farriers – nor do they simply provide a venue for the leisure of gamblers and spectators. The tracks also serve as meeting places for people from all walks of life. For instance, Ottawa’s Rideau Carleton Raceway has been the home of the Gloucester Fair for the past 13 years. Every year, the Raceway hosts fundraising events for more than 100 charities and businesses, as well as the annual events of several embassies.

It is also worth noting that much of the revenue that has been raised from the 14-year-old Slots Program is being put to use outside the tracks themselves. The Rideau Carleton Raceway’s general manager Jean Larose explains that: “The Slots at Rideau Carleton Raceway generated $52 million for the City of Ottawa which the city has said helps keep annual municipal property tax increases lower.” Thus, even city dwellers will feel the impact of the Slot Program’s termination as more of the province’s horseracing tracks will be forced to call off all bets and close down. Ultimately, the termination of the Slots at Racetracks Program will be a great loss to Ontario and to Canada as a whole because as Dennis Mills notes, “there’s no other product in Canada that has the global sports presence and the tourism reach of horseracing in Ontario, but a lot of city people don’t know this.”

Many Ontarians who live in rural areas are well aware of the importance of the province’s horseracing industry, the third largest of its kind in North America. Dr. Garth Henry is one of those people. He has invested hundreds of thousands of dollars in building and operating his veterinary practice and horse training facility and is very conscious of the negative effect that cancellation of the Slots Program will have for his business and for his employees.

Dr. Henry states that when the program ends on March 31, 2013, “the Hamstan Farm’s training facility will be shut down overnight and the 13 people who work there will be unemployed immediately.” As will doubtless be the case for similar businesses in Ontario’s horseracing and equine industry, the future does not look rosy for the 100-acre Hamstan Farm. It will become the victim of an urban-centric government that is seeking to reduce its $15-billion deficit at the expense of the Slots at Racetracks Program.

Part Two: Horse Sense & Government Nonsense

July 27, 2012 4:43 pm

Public-Private Partnerships Are Not Subsidies

The Ontario government’s decision to end the Slots at Racetracks Program has a detrimental effect for Ontario’s vibrant horseracing and equine industries.

This is a serious problem with major ramifications. Dennis Mills, the former Liberal MP whose web site Racing Future builds awareness of Ontario’s horseracing and equine industries, points out that the industry is considered to be one of the top three in the world. He states that: “Our province has a horseracing industry that is of similar calibre to that of the United States (home to the renowned Kentucky Derby) and England (which hosts the world-famous Royal Ascot).” High-profile Canadian races like the Queen’s Plate, North America’s longest-running annual horse race, are broadcast and webcast worldwide with betting from all corners of the globe. Furthermore, Ontario has become the world’s premier harness racing destination. As a result of this importance, Ontario horseracing “is an industry that represents a huge valuable export market for Canada in terms of horses, trainers, equipment and expertise,” Mills states.

Terminating the Slots at Racetracks Program threatens the very existence of this enviable industry. As Jane Holmes vice-president of corporate affairs at the Woodbine Entertainment Group, owner of the Woodbine Racetrack in Toronto  states: “You may see horseracing survive in Ontario, but it certainly will not be the international sport that it is today.” There will also be a negative impact on the purse for races. Holmes says that even “if we have enough money to survive, the purse for the surviving races will simply be too small to sustain the sport.” Put differently, without the program, the purse money will not cover the high costs associated with breeding, training, feeding, maintaining and racing a horse in Ontario. This is crucial, because over 60 per cent of the horseracing industry’s take from its share of slot machine revenue is used to pay for purses.

As Robert Wright, the former lead veterinarian for Equine and Alternative Livestock at the Ontario Ministry of Agriculture, Food and Rural Affairs and publisher of the Horse News and Views web site, explains: “Horse owners receive their share of the Slot revenue through money added to the purses and they reinvest these winnings in the local economy, purchasing everything from feed and bedding to vehicles and trailers.” Owning and maintaining a single horse costs upwards of $20,000 annually and “a reduction in purses trickles down to lower spending power.” As a result, certain rural communities that depend on this spending for their existence will likely disappear.

Ontario horseracing “is an industry that represents a huge valuable export market for Canada in terms of horses, trainers, equipment and expertise,”-Dennis Mills

Ending the long-standing program also threatens the viability of the many industries that help support the horseracing industry. The most immediate of these is the heart and soul of the equine industry: the breeding industry — and it is particularly hard hit by the decision to end the Slots Program. Anna Meyers (of the Standardbred Breeders of Ontario Association) captures the essence of the problem by stating that “with the government’s decision, there will be a ripple effect that will be felt across the province.” But that ripple effect will likely be first felt by Ontario’s horse breeders since, as she explains: “Breeders need almost five years of lead time to respond to changing market forces.” Because the breeders were not forewarned about the cancellation of the program, they did not have the required lead time to compensate for the sudden lack of demand for race-ready horses arising from the cancellation. To make matters worse, “breeders in Ontario are sitting on roughly three years worth of horses due to the timing of the birth to yearling sales to racing process.”

Because of the prevailing climate of uncertainty, the breeding of mares and the sales of yearlings have dropped off more than 40 per cent since the program’s termination was announced, according to Robert Wright. Anna Meyers explains that not only have breeders’ sales been cut in half, but clients are refusing to pay stud fees and many of the mares that were boarded in Ontario have left the province for safer breeding markets with stable sire stakes programs.

A similar story can be told of Ontario’s veterinary industry. Like doctors, veterinarians have different specialties and areas of practice. Because of the stature of Ontario’s horseracing industry, Ontario has some of the most sophisticated and renowned equine veterinarians and veterinary facilities in North America. However, after the Slots Program is discontinued, things may very well change.

As Dr. Garth Henry, a long-time practicing equine veterinarian who owns the Russell Equine Veterinary Service located just outside Ottawa in Russell and owner of Hamstan Farm, one of the premier horseracing training facilities in eastern Ontario explains, “access to equine veterinary treatment in the province will decline substantially” as a result of the government’s decision. There will simply be a much smaller demand for the services provided by equine veterinarians. Dr. Henry states that this will lead to a “mass exodus of Ontario’s equine veterinarians,” the majority of whom will likely be forced to relocate their practices to American states like Kentucky, New Jersey and Pennsylvania which are less likely to discriminate against the horseracing and equine industries.

The farming industry in Ontario has also suffered from the Liberal government’s sudden cancellation of the Slots at Racetracks Program.

The farming industry in Ontario has also suffered from the Liberal government’s sudden cancellation of the Slots at Racetracks Program. Mark Wales, President of the Ontario Federation of Agriculture (OFA), states that “a lot of our members supply hay and oats to those who breed horses in Ontario” and that the demand for feed rises and falls with the demand for horses. Mark Wales notes that many of Ontario’s farmers will need to adjust their business models and explains that: “Farmers selling oats, hay and straw for racing will have to switch their crops to sell more crops that aren’t as dependent on the equine industry. This will represent a substantial loss of market for hay, oats and straw.”

Changing the staple crops a farmer grows is an expensive process and can be particularly difficult for those who have specialized in equine-specific crops and who may lack the skill sets and resources required to change.

In June, the Ontario government created its face-saving Horse Racing Industry Transition Panel in an attempt to find a way to ensure the survival of the horseracing and equine industry post-March 31, 2013. The panel is chaired by three knowledgeable former politicians representing the three provincial parties: Elmer Buchanan (NDP), John Snobelen (PC) and John Wilkinson (Liberal). They are tasked with creating a meaningful dialogue with the Ontario horseracing and equine industry to smooth the transition from the “dependency” of the Slots Program to what is deemed a “more sustainable” business model.

The panel has $50 million and three years to accomplish this task. Yet, the viable business model in question must be implemented before this September’s yearling sales, without which the remaining 50 per cent of Ontario’s breeding industry would likely collapse and the horseracing industry would be as defunct as Quebec’s. But even if the panel is able to reach a relevant conclusion, what will the horseracing and equine industry be able to transition to?

As Sue Leslie says on behalf of the OHRIA: “The panel and the broader provincial government need to understand that the industry is not looking for a way to transition out of existence. It is looking for a way to transition to a more sustainable but still profitable business model. I don’t see the government reversing its position and therefore it will be a huge challenge to adopt to this environment, a challenge which is simply impossible to overcome in a mere three years.”

Undoubtedly, the horseracing and equine industry knows that the stakes couldn’t be any higher. And, as Elmer Buchanan says on behalf of the panel, “we are well aware that we have a short timeline.” However, Buchanan feels that there should be a new model for the industry whose “dependency on the increased slot revenue happened by accident.”

Although some in the industry are hopeful that the panel can reach an agreeable, realistic and tenable conclusion and create a business plan with input from industry members, that remains to be seen.

Ontario’s Minister of Agriculture, Food and Rural Affairs Ted McMeekin (now responsible for the phasing out of the Slots Program) explains what he sees as one of the biggest problems with the current program by stating that the industry “needs a path that allows it to function without being artificially propped up by the revenue from slot machines.” Although McMeekin represents the riding of Ancaster-Dundas-Flamborough-Westdale, a riding which is home to many horse farms and to Flamboro Downs, one of the province’s most popular racetracks, his description of Ontario’s horseracing industry as being “artificially propped up” is reminiscent of the flawed reasoning of Finance Minister Dwight Duncan who does not seem to understand that the Slots at Racetracks Program is a public-private revenue-sharing program and not a subsidy.

Nevertheless, Minister McMeekin’s vision for the new business model is “a model that won’t require artificially propping up the horseracing industry and that will have roughly 60 per cent of what the industry used to be, albeit running more efficiently.” This will likely be difficult to translate into reality given both the time constraints and the paltry $50 million allocated for this process. As Anna Meyers notes, “that $50 million doesn’t even begin to cover the losses that the breeding industry alone faced this year.”

Ian Russell explains why many in the industry view the transition panel as a toothless paper tiger by stating that “$50 million is a drop in the bucket compared to the billion plus dollars the industry generates for the province every year under the Slots Program.” In fact, Ed McHale of the NCRHHA is quick to point of that “the $50 million would be enough to cover the purse money at Ottawa’s Rideau Carleton Raceway but not the other tracks in the province as well.” Russell sums up the frustration felt by many in the industry when he says that “the panel is merely a way for the government to deflect criticism that it is ignoring the consequences its decision will have for the horseracing and equine industries.”

Although some in the industry are hopeful that the panel can reach an agreeable, realistic and tenable conclusion and create a business plan with input from industry members, that remains to be seen. But the buck stops with the transition panel because, as Buchanan says: “We’re not going to come out with a Plan B.” Aside from the limited funding allocated to the panel, each day that goes by without a viable new plan pushes Ontario’s once vibrant industry closer to collapse and the Ontarians who work in it closer to the unemployment line.

Continued in Part Three: Horse Sense & Government Nonsense 

Part One: Horse Sense & Government Nonsense

July 26, 2012 4:34 pm

Public-Private Partnerships Are Not Subsidies

The Ontario government’s decision to end the Slots at Racetracks Program has a detrimental effect for Ontario’s vibrant horseracing and equine industries.

THE COMEDIAN GROUCHO MARX ONCE COMMENTED that: “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” That observation may well describe the Ontario government’s decision to abruptly end the Slots at Racetracks Program, a successful revenue-sharing program that has, for almost 15 years, mutually benefited the government, the horseracing and equine industries and many small towns in rural Ontario.

The vehicle for the Ontario government’s unexpected decision was its March 27, 2012 Budget when Finance Minister Dwight Duncan rose to his feet at Queen’s Park and unveiled the document entitled Strong Action for Ontario. It outlined how Premier Dalton McGuinty’s Liberal government would eliminate the province’s massive $15-billion deficit within the next five years. Ontario horsemen, jockeys, breeders, equine suppliers, black-smiths, saddlers, veterinarians and farmers had no warning that contained within the 332-page document was a proposed initiative named Modernizing the Ontario Lottery and Gaming Corporation (OLG), which would eliminate the Slots at Racetracks Program by March 31, 2013, threatening the sustainability of the industry and a large segment of Ontario’s agricultural industry that it supports.

Since its inception in 1998, the Slots at Racetracks Program earned Ontario roughly a billion dollars in revenue every single year.

Since its provincial government-initiated inception in 1975, the OLG has been the Crown corporation responsible for running Ontario’s gaming industry, ranging from the sale of lottery and bingo tickets to the oversight of Ontario’s many resort casinos. Betting on the horses has been a time-honoured practice in Ontario since before Confederation, but, with the introduction of the Slots Program in 1998, horseracing became more closely tied to the gaming industry. The Budget initiative’s plan to remove slot machines from racetracks will undoubtedly loosen those ties. But why would their removal deliver such a crippling blow to the horseracing and equine industry, the second largest sub-sector of Ontario’s agricultural economy? The answer can be found in first identifying why OLG and the Ontario government put slot machines at the racetracks in the first place and also how the program functioned for the past
14 years.

Under a revenue-sharing agreement, profits from slot machines located at the tracks were split among the government, the horseracing and equine industry and the rural municipalities where the slot machines were located. The government received 75 per cent of every dollar spent at a provincial track and the industry got 10 per cent for wages and employment purposes. An additional 10 per cent was distributed to the racetracks to augment the purses of prize money, to maintain the tracks and for renovations. The final 5 per cent went to the rural municipalities. The subtext of the initial implementation of the Slots at Racetracks Program reveals a financial olive branch offered to the horseracing industry and a calculated conclusion based on social perception.

In the 1990s, knowing that slot machines were a crucial source of revenue, the OLG and the government needed to find an appropriate venue to expand the use of slots beyond Ontario’s numerous pre-existing casino facilities. Social perception made this a difficult task, since many Ontarians were reluctant to have new gambling facilities anywhere near where they lived. The province’s racetracks soon came to be seen as the appropriate place for the excess slot machines. As Ian Russell – president of Canada’s largest equine supplier, Greenhawk Harness and Equestrian Supplies Inc. – explains, “[the] racetracks are already located in socially acceptable places for gambling to occur.” Ed McHale, who serves as director of the National Capital Region Harness Horse Association (NCRHHA), offers the Ottawa-area perspective on this same issue by noting that: “Nobody wanted the slots anywhere and they decided that the best place (because they had nowhere else to put them) was the racetracks.” Yet there was another reason that the province’s newly expanded slot facilities found what many thought would be a permanent home at the province’s racetracks: a compromise with the horseracing industry.

Anna Meyers, president of the Standardbred Breeders of Ontario Association, identifies the compromise offered to the racing industry by the OLG in 1998 by stating that “we knew with the introduction of slot machines at racetracks, there would be some cannibalization of the wagers placed on the horses involved in horseracing, but we also knew that the revenue-sharing element of the Slots at Racetracks Program could also raise a lot of money both for the horseracing industry and the province.”

Or, as John Macmillan, executive director of NCRHHA, puts it: “We thought we could play off of one another, allowing both horseracing (through bets placed on horses) and the slot machines to be profitable. We felt that it would even out, because whatever revenue the industry lost through reduced wagers placed on horses due to the presence of the slot machines would be offset by the share of revenue kept from the slot machines.” And, as the results demonstrate, these two competing forms of gambling were able to “play off of one another” for quite some time.

The Ontario government and OLG have attempted to rationalize their decision to end the Program on purely economic grounds.

Since its inception in 1998, the Slots at Racetracks Program earned Ontario roughly a billion dollars in revenue every single year, most of which was gladly accepted by the province to help pay for essential services. In fact, between 2001 and 2011, after OLG commissions and expenses were deducted, the program delivered over $9 billion in revenue to the province. Each year, hundreds of millions of dollars from the horseracing industry’s portion of the lucrative revenue-sharing agreement were reinvested in the horseracing community. In 2010 alone, the industry received $334 million from its share of the Slots Program. That $334 million was split down the middle between the horse owners, racers, trainers and breeders on the one hand, and the racetracks on the other hand.

However, the $334 million pales in comparison with the approximately $2.3 billion the industry spent in Ontario that same year. Most of the $2.3 billion was spent in rural communities, stimulating the local economy through the purchase of services like training and grooming or goods like saddles, trucks, trailers and gasoline. All of these essential goods and services, part of the cost of doing business in Ontario’s thriving horseracing and equine industry, provided additional tax revenue for Ontario. But with the delivery of the Ontario Budget on that cold day in March, and its passage on the first day of summer three months later, the fate of the Slots at Racetracks Program was officially sealed.

The Ontario government and OLG have attempted to rationalize their decision to end the Program on purely economic grounds. They maintain that it is a necessary first step in the modernization initiative which will promote economic efficiency in the province’s gaming industry and will help reduce the province’s unsustainably high deficit. However, the reasoning simply does not add up. On page 39 of the Ontario Budget, it is stated that the modernization initiative will further benefit the province since it “will create 2,300 net new jobs in the gaming industry and nearly 4,000 additional jobs in the hospitality and retail sector by 2017-18.” While this may seem positive, closer examination reveals that it requires a tradeoff that is less-than-beneficial for Ontario.

The Budget speaks of “public sector investment” that will be reduced while still allowing the province’s gaming industry to make more revenue “through shifting day-to-day operations of gaming sites and lottery distribution to private operations.” Is this realistic? Bear in mind that this “public-sector investment” of about $345 million between 2011 and 2012 (and the cumulative total of roughly $3.7 billion that made its way to the horseracing industry from 1998 to date) is not a “subsidy”, as Dwight Duncan has said in the past. It represents the horseracing industry’s portion of the revenue accumulated under the Slots at Racetracks Program, a revenue-sharing agreement, not a “subsidy.”

“There’s an absolute genuine possibility that there will not be horseracing in Ontario in two or three years from now,” says Sue Leslie.

Will the modernization initiative’s plan raise more revenue than is now being generated by the current revenue-sharing program when the revenue provided by the OLG’s lottery and bingo operations has remained largely stagnant and that generated from charity and resort casinos has declined? Nevertheless, OLG’s modernization initiative projects that by eliminating the Slots Program, its most profitable revenue stream, and by further developing gaming operations which have historically returned less revenue to OLG and the province, net revenues will increase by more than $500 million by 2015. OLG spokesman Tony Bitonti explained how this paradoxical situation could be plausible by claiming that: “At the moment, it may be true that the bulk of revenue in the gaming industry comes from slots, but the demographics are changing. More and more people are becoming interested in table games.” Maybe so, but the OLG’s own data seems to show that the resort and charity casinos that provide a cross-section of slot machines and table games continue to see their revenue decline.

Perhaps the answer can be found in the cautionary tale of Quebec’s experiment with revenue restructuring in its gaming industry which led to a nightmare scenario that could be repeated in Ontario — but at a higher risk of 55,000 jobs lost. In 2006, Quebec’s horseracing industry undertook a revenue-restructuring initiative that resulted in the total collapse of the province’s horseracing industry and a near-death experience for the province’s equine industry two years later. The plan was to privatize the horseracing industry by allowing a private sector company called Attractions Hippiques to install Video Lottery Terminals (VLTs) in restaurants and bars while removing many of the existing VLTs from the province’s tracks and restricting Off-Track Betting. These actions, coupled with mismanagement, led to an inability to generate sufficient revenue through diversification and the subsequent bankruptcy of Attractions Hippiques. The horseracing and equine industries disintegrated almost overnight. Today, there remains only about 13 per cent of the pre-2006 jobs in Quebec’s horseracing and breeding industry. While VLTs were found in 6 per cent of Quebec’s tracks, slot machines are now present at (but will shortly be removed from) 100 per cent of Ontario tracks. The stakes could hardly be higher or the fallout worse from the sudden removal of the slots, because 10 per cent of their revenue had been kept by each track under the Slots Program.

The OLG and Ontario government predict that the modernization initiative will increase job opportunities for the gaming and hospitality industries. This is an attempt to divert attention away from the fact that, by adding some 6,000 jobs in five or six years’ time, Ontario risks sacrificing its horseracing and equine industries, as well as their satellite industries which employ about 55,000 Ontarians in full-time, part-time and seasonal jobs. The government position is perplexing since the modernization initiative has already caused 560 layoffs when the slots operations in Sarnia, Windsor and Fort Erie were closed down in April.

When speaking about the direct implications of the McGuinty government’s sudden decision, Sue Leslie, who serves as the President of the Ontario Horse Racing Industry Association (OHRIA), the organization which is the voice of horse racing in the province, captured the urgency of the situation by stating that, “there’s an absolute genuine possibility that there will not be horse racing in Ontario in two or three years from now.” John Macmillan from the NCRHHA elaborates on the fallout of the government’s decision by noting that, “there has been almost no investment in horse racing in Ontario since the ending of the Slots at Racetracks Program was announced in March.”

Continued in Part Two: Horse Sense & Government Nonsense 

“Changing the Conversation”: Campaign Distractions on the Road to the White House

July 23, 2012 9:00 am
Don Draper

In an episode of Mad Men, the popular series set in the early 1960s, Madison Avenue advertising executive Don Draper offers this advice to a colleague: “If you don’t like what is being said, change the conversation.” This dictum is not limited to the realm of advertising.

Last week’s coverage of the American presidential campaign, shows that both Democrat and Republican political operatives are attempting to use the tactic to reframe the November election in a way which favors their candidate and diminishes his opponent. But one party appears to be doing a better job than the other in “changing the conversation.”

As election day approaches in a presidential contest which will likely be the most significant since the pivotal 1860 election (in terms of establishing the general trajectory of the country and what it means to be American). Both incumbent President Barack Obama and his Republican challenger Mitt Romney no longer appear to be running issues-based campaigns.

If Obama were to “change the conversation” of the campaign to divert attention away from both these issues and also from his past performance, he would have a better chance of winning a second term.

Here are the issues: America is saddled with an almost unrepayable deficit, an array of unsustainably expensive social welfare programs which are decades overdue for reform, an overly complicated 71,000 page tax code, a near-stagnant economy with a weakening job market and a looming budget crisis which, if unaddressed, will raise interest rates to crippling levels and trigger massive automatic spending cuts that will damage the nation’s credibility and the global economy. Instead of hearing both Romney and Obama discussing how to right these wrongs and how to restore the country’s competitive edge in the increasingly interconnected global economy, they have “changed the conversation.”

Obama has done so out of necessity. As the incumbent president, he wears the steady stream of bad economic news and likely knows that offering credible plans to address these crucial issues requires him to first acknowledge their existence. He therefore risks being portrayed by the media as a president who, throughout a four-year term of office, did not deal with these issues as America moved ever-faster towards the fiscal and socio-political cliff. If the election were to be a referendum on his performance on these issues and also on the ideological trajectory he implemented in those four years, he would undoubtedly lose the November 6th election. However, if he were to “change the conversation” of the campaign to divert attention away from both these issues and also from his past performance, he would have a better chance of winning a second term. The issue which has allowed him to do so has been Mitt Romney’s business record.

Romney has spent most of the week staying off-message and defending his private sector business record against virulent allegations by the Obama campaign that Romney’s tenure as the chief executive officer (CEO) of the private equity and venture capital firm Bain Capital in the 1990s resulted in countless hostile takeovers, the shuttering of many American businesses and the exporting of thousands of American jobs overseas. Furthermore, the Obama campaign accuses Romney of committing a felony, claiming that, for three years following his 1999 departure from Bain to serve as the CEO of the 2002 Salt Lake City Olympics, Romney still controlled Bain. Since Romney’s name appears on a variety of Securities and Exchange Commission (SEC) documents between 1999 and 2002, the Obama campaign claims that Romney was illegally operating Bain Capital after he had formally resigned. The Obama campaign ignores the fact that it is not unusual for the names of former executives to remain on SEC disclosure forms for a number of years as a company formally vets and brings the replacement CEO up-to-speed on the inner workings and complexities of the position he or she inherits. This process may have taken longer than usual at Bain Capital since Romney’s departure in 1999 occurred without much warning and other executives at Bain had little time to prepare the transition given Romney’s absence.

The Obama campaign accuses Romney of committing a felony, claiming that, for three years following his 1999 departure from Bain to serve as the CEO of the 2002 Salt Lake City Olympics, Romney still controlled Bain.

Furthermore, Romney has also been off-message for quite some time due to the controversy raised by his refusal to release a more extensive selection of his annual income tax returns. There may be a number of reasons why he has refused to release income tax returns that predate the legally required two years preceding the election date. One reason may be that they will reveal that he consistently made a substantial amount of money, thereby reinforcing Obama’s definition of Romney and the Republicans as the candidate and party of extreme wealth, out of touch with the majority of Americans. All accusations of class warfare aside, it is undeniably true that Romney’s estimated personal wealth of about $250 million marks him as a rich man, but it is important to remember that he is not the only wealthy man ever to have run for election in America.

President John F. Kennedy’s father, Joseph P. Kennedy Sr., served as the Chairman of the SEC despite the fact that he made a large portion of his fortune through insider trading and market manipulation tactics like “bear raiding” and “pumping and dumping” albeit before these tactics were technically illegal. He would eventually rise to the position of United States Ambassador to the United Kingdom in the final years before the Second World War. Between the 1920s and his death in 1969, Joseph Kennedy made roughly $500 million which he contributed to the family war chest. Adjusted for inflation, in today’s dollars, that $500 million would represent well over $3 billion. When his son John F. Kennedy won the presidency in 1960, there were no accusations that the Democrat was out of touch with the majority of Americans due to his family’s extreme personal wealth. It is worth noting that, even as early as 1935 during the height of the Great Depression, the Kennedys had a net worth of at least $180 million dollars, or $3 billion in today’s money, a sum which is approximately 11 times the net worth of Mitt Romney.

During the height of the Great Depression, the Kennedys had a net worth of at least $180 million dollars, or $3 billion in today’s money, a sum which is approximately 11 times the net worth of Mitt Romney.

Another reason Romney may be hesitating to release a more extensive array of tax returns could be that they would show that much of his annual income was accumulated through investments which carry far lower tax rates than does income tax in the USA. This could increase the criticism that he, and many wealthy individuals like him, pay tax rates which are disproportionately too low. That characterization would further hamper his ability to break free of the Obama campaign’s framing of him as being out of touch with ordinary Americans. Instead of skirting around these issues, Romney should take a page from Don Draper’s book and “change the conversation.”

To get his campaign back on track and back on message, Romney should release more annual tax returns and confront the Bain Capital accusations head on. He should address the lower tax rates he benefited from under the US Tax Code and also remind the American public about the large charitable donations he makes as a form of socially responsible compensation for his lower tax rates. For example, in 2010 alone, Romney gave 14% of his income to charity while two years before winning the presidency Obama donated 6.1% of his income. Obama’s future running mate, now Vice-President, Joe Biden only gave a paltry 0.15% of his 2006 income to charity. Romney should then change the conversation of his campaign to a discussion of how the Obama presidency has not lived up to confronting the challenges which could cripple the United States of America in the twenty-first century. He must then redefine himself as the man who offers a business-based approach in dealing with these challenges, in stark contrast to the community-organizing sitting president. The point should be made that rhetoric can no longer suffice and that appropriate, measured and tangible policies (which he, Romney, can offer) are what is needed for America to survive in the brave new globalized world.

Disabilities in Public Life

July 9, 2012 4:01 pm
President Kennedy in a rare 1961 photograph

Fifty-two years ago, in 1960, Massachusetts Senator John Fitzgerald Kennedy threw his hat into the ring as a presidential contender. In November of that same year, at the age of 43,  Kennedy would be elected as the United States of America’s 35th president thanks to a combination of his father’s wealth and political connections, his own oratorical skill as well as his ability to convince the American people that he could reform Washington. He would do so by implementing what he called the “New Frontier,” a modern and more accommodating foreign and domestic policy agenda which, amongst other things, sought to end partisan bickering and gridlock in Washington, to minimize poverty and to beat the USSR in the space race. In the eyes of many, the young, vigorous and photogenic president himself appeared to be the perfect man to steer America towards its New Frontier of progressivism. However, few Americans knew that behind the thin veneer of publicly-projected vigour was a man who was anything but healthy.

Jack Kennedy, as he liked to the called, suffered from debilitating back pain which resulted from injuries he sustained when his torpedo boat PT109 was rammed and sank during the Second World War. Between the end of the war and the beginning of his presidency, he underwent two serious back surgeries that nearly left him crippled. For the rest of his life, Kennedy would be in severe physical pain and would often require the use of crutches to move around the White House, not to mention daily dosages of medication to keep his chronic pain under control as he conducted the nation’s business. To make matters worse, he also spent his entire life battling Addison’s disease, a disease which severely lowers the ability of one’s immune system to fight off infection. But Americans were unaware of their president’s physical frailty since Kennedy refused to allow the press to photograph him on crutches for fear that, if the public knew that he was not the healthy man he projected, he would be rejected by the American people and seen as weak and vulnerable by America’s enemies.

President Roosevelt in one of the few known photographs that exposes his disability.

Kennedy was not the first president to hide his ailments from both the press and the public. Another Democrat, Franklin Delano Roosevelt, America’s only four-term president, spent the second half of his life paralyzed and wheelchair-bound from contracting polio at the age of thirty-nine. When Roosevelt ran for the presidency in 1932, he too took every measure possible to hide his disability from the American people fearing that they would not elect a president who could not walk. For instance, he wore special leg braces which allowed him to stand upright. He would arrive at the podium to deliver a speech well in advance of any spectators and would not move away from the podium until well after the last of the press and the audience had left the venue, thereby preventing the American public from seeing that he could not walk. In order to convince Americans that he was not disabled but healthy, Roosevelt drove a car in which the gas, brake and clutch pedals were secretly operated by hand levers hidden below the window line. And, of course, he too refused to allow the press to see him in his wheelchair or from any vantage point that revealed his leg braces. For the most part, like Kennedy, Roosevelt’s strategy worked. Very few pictures of him revealed his disability and, as the saying goes, the public cannot know what the press doesn’t see.

American presidents are not alone in going to great lengths to hide their health problems from the public in the fear that being handicapped or ill could translate into a political drawback on election day or an unfavorable perception in the court of public opinion. For instance, throughout the 1980s and 1990s, Diana, the late Princess of Wales, suffered from manic-depressive disorder, anorexia and bulimia. It is alleged that she cut herself numerous times and flirted with suicide on several occasions. Yet, aside from her admitting publicly that she had suffered from “eating disorders” in the past, very few knew that the Princess had many more serious psychological problems. The Royal Family made every effort to prevent this information from becoming public knowledge and it remained confidential for more than a decade after her death in 1997.

American First Ladies have also hidden their illnesses and disabilities from the public for fear their health problems would reflect poorly upon the approval ratings of the president. For instance, Ida McKinley, the wife of Republican William McKinley, who served as the President of the United States at the turn of the twentieth-century, suffered from epilepsy. She was rarely photographed candidly and, when she had a seizure, the president would quickly cover his wife’s face with his handkerchief in an effort to hide the effects of her seizure from any witnesses but also to calm her down since, in her case, darkness helped to alleviate the symptoms of the seizure. But if Republican presidential challenger Mitt Romney wins this November’s presidential election, the historical pattern of public figures and their spouses hiding their disabilities or illnesses will be over.

Ann Romney has broken with tradition by refusing to hide her health problems from the public.

Ann Romney has broken with tradition by refusing to hide her health problems from the public. Fourteen years ago, she was diagnosed with Multiple Sclerosis (MS), a disease that strikes close to half a million Americans and which wages war on the body’s immune system and erodes the protective covering of nerve bundles in the spinal cord. It is a disease which can be treated but not cured. Multiple Sclerosis leads to extreme pain, muscular rigidity, severe exhaustion and possibly paralysis. While on the campaign trail with her husband, in a number of high-profile interviews with leading American newspapers like the Wall Street Journal and USA Today, Ann Romney recently openly discussed her struggle with MS and how the disease has affected her life. She is adamant about eliminating the taboo that disabilities still carry in political life — albeit now to a much lesser degree than in the era of both Franklin Delano Roosevelt and John Fitzgerald Kennedy. Times have changed and, today, ordinary citizens living with a disability or chronic disease no longer always seek to hide that reality under a cloak of false normalcy. Why should it be any different for a public figure?

Welcome to Rowdy Beach! Bay of Constance Sorrow: Frustrated Residents, Powerless Police and Drunks on the Beach

July 3, 2012 4:00 pm
Constance Bay 8

John Nightingale’s hands shake as he grabs his cell phone from the lawn table. Drops of sweat appear on his forehead. Nightingale dials the police and reports that he was threatened by drunks on his property when he asked them to put their dogs on a leash.

The temperature is sky-high, and so is the tension at Constance Bay’s Point Beach.

It is not even June, and yet dozens of visitors occupy the beach. Loud music erupts from one of the boats nearby. Even though there are “No Stopping, No Alcohol, No Walking after Sunset” signs posted beside every property, young people amble about with beers in their hands. A bottle of Smirnoff Vodka is the favoured beverage of another group of teenagers.

Even though there are “No Stopping, No Alcohol, No Walking after Sunset” signs posted beside every property, young people amble about with beers in their hands.

Point Beach is privately owned. Underaged youth freely consume alcohol, smoke, litter and party like it’s 1999. Dogs run free off their leashes. “Effing” is a word often heard here.

The main reason this situation is allowed to continue is the inability of beach owners, the president of the Constance and Buckham’s Bay Community Association (CBBCA), the West Carleton-March city councillor Eli El-Chantiry and the Ottawa Police Service to deal with the deplorable state of affairs that has been ongoing at Point Beach for years. Instead, all sides are just pointing fingers at each other.

While waiting for the police to arrive, Nightingale explains: “It’s nerves.” He is angry that he and his neighbours must deal with drunken parties for yet another summer.

Nightingale’s cottage is just a few meters away from the bank of the Ottawa River. Eight other neighbours own a beach strip to the water’s edge. In the city subdivision, their property is designated as Plan 412.

In 1862, the Crown granted these residents a land patent; a notation to the plan says the property extends to the shoreline. In 1984, West Carleton Township confirmed that it is indeed a private property. As questions were raised about the boundaries of the ownership, the police force sought a legal opinion. In 2010, the City solicitor concluded that property of Plan 412 extends to the water’s edge at low mark.

John Nightingale, 54, is the youngest among other retired residents. He became a leader and a representative of his neighbours in their plight to convince the police, the city and the community to enforce bylaws.

Joyce Nightingale joined forces with her neighbour John by agreeing to talk to Ottawa Life, though both residents confess they have lost faith in local media. Many articles have been written about this situation, but little action has been taken.

“This is a rowdy beach. This is where crap happens.”

When people from the city realized that the beach was private and free of oversight, they began advertising through Facebook and Twitter that it was a “beach without rules.”

In the past, they shared their beach with community residents. But, when people from the city realized that the beach was private and free of oversight, they began advertising through Facebook and Twitter that it was a “beach without rules.”

Elderly couples and young families have started avoiding the place, preferring to go to other public beaches on Constance Bay. On one hot day, the owners counted as many as 600 people – far beyond Point Beach’s capacity.

As we spoke, the music drowned out our conversation. Asked how they can tolerate such loud noise, both neighbours laughed bitterly.

“That music is nothing – you should hear it when it gets really loud!” Sometimes, John Nightingale says, the music is so loud that his cottage shakes.

“Boom! Boom!,” Joyce Nightingale imitates. “It’s wild! We are not exaggerating! It’s just nuts!”

Joyce Nightingale gave up approaching the partygoers, asking them to turn the music down. She says it makes her “very upset” when young people under the influence of alcohol become aggressive and rude. Once she approached a drunk, and his response was: “See this? It’s sand, you bitch. Get in your house and leave us alone.” Another time, Joyce says, she asked wayward youth to take their empty beer and liquor bottles home. She faced a middle finger; bottles were left there, stuck in the sand.

It doesn’t end with verbal abuse and threats, says John Nightingale. Some people will occupy his driveway, and while passing through his yard, grab his lawn chairs.

John Nightingale says the police officers don’t always respond in a timely manner.

John Nightingale says the police officers don’t always respond in a timely manner. Last June, he made a call at 4:15 p.m. when he saw a drunken trespasser’s dog chasing a neighbour’s cat. Next morning, the neighbour across the street said she saw a police car arrive after 10 p.m. It pulled into John Nightingale’s driveway, remained there for five minutes and left. Nightingale was surprised that the officer didn’t even knock on his door because he was still waiting; his lights were still on.

Police: “We are pawns here.”

This time, Constable Kevin Myers and Constable Mark Lystiuk arrived in 45 minutes.

Cst. Myers kept asking what John Nightingale wanted him to do. Nightingale said he wants drunks removed from the beach, and even though it is a private beach, the young folk are welcome to use it if they bring no alcohol.

“John, here is the thing. Now, you know, you got the letter from the chief last year, right?,” asked Cst. Myers. “We are pawns here, okay? We are stuck in the middle. We are doing what the chief wrote in that letter.”

The letter was written by Ottawa’s former police chief Vern White in June 2010.

White acknowledges that the beach is privately owned. So, the police can’t enforce section 31 (2) of the Liquor Licence Act, which states: “No person shall have or consume liquor in any place other than a private place as defined in the regulations.” The police can’t issue trespassing tickets either, because the property boundaries are unmarked.

The police explain, to enforce the Trespass to Property Act, residents must mark, delineate, and fence out each property lot.

The police explain, to enforce the Trespass to Property Act, residents must mark, delineate, and fence out each property lot. Otherwise, the police say, it will be hard to take any measures. The police also advise beach owners to hire a private security guard. The residents of Plan 412 don’t think they should have to abide by these requirements.

Cst. Myers said police officers can just go talk to people, but if a criminal act should occur, they will return to the site.

It took almost an hour before Cst. Myers addressed the crowd. By that time, young people, seeing the arrival of the police, hid their alcohol supply and jumped into their boats. Those who didn’t have a boat left the beach. The crowd dwindled to six people on the beach, playing volleyball – six sober individuals who were just having a good time.

Cst. Marc Soucy, media person for newly appointed Ottawa Police Chief Charles Bordeleau, confirmed that Vern White’s letter is still valid, unless the residents are willing to challenge it in Ontario Superior Court.

Doomed Agreement

Last year, Plan 412 residents decided to license a portion of their beach property to the City for the symbolic fee of $10 a month. In return, the City would enforce bylaws. The residents spent $2,500 to write the agreement. But the CBBCA turned down the proposal. The owners indicated they want to limit the overflow of people by making Point Beach a community-only beach. This was the demand that derailed the reaching of an agreement, according to Ian Glen, president of the CBBCA.

City councillor Eli El-Chantiry, who also chairs the Ottawa Police Services Board, was involved in the agreement talks. The beach owners are still frustrated that El-Chantiry – quoted in a 2008 article in the Ottawa Sun – promoted Constance Bay as a “secret jewel”, attracting even more attention and more people.

According to Nightingale, El-Chantiry approved construction of a parking lot close to the beach and the installation of public toilets. A green sign with the CBBCA’s logo was erected near the beach entrance; the sign reads: “Not a City of Ottawa Beach. Use at Own Risk and Liability. Respect Our Community. No Glass. No Alcohol. Remove Garbage. Keep Animals Under Control. Poop and Scoop. No Unauthorized Fires. No Unauthorized Vehicles” – all these rules were disregarded on the afternoon I visited the beach.

Ottawa Life tried to reach El-Chantiry several times by telephone and email, but calls were not returned and email messages weren’t acknowledged. At one point, El-Chantiry set up a time to discuss the matter and then did not show up for the call.

Joyce Nightingale never imagined that in her retirement years, she would have to wear rubber gloves and pick up broken bottles. She has been coming to her cottage every summer for 77 years – but she doesn’t want to anymore.

“I wanted to be here until I die, but I just don’t think I will be able to hang in there. I mean it upsets me so badly. You can’t even come out and read a book. If you go to the city beach, none of this would happen.”

After spending one afternoon with the residents – seeing first-hand what these people go through on a daily basis – you can’t help but wonder why the city, community and residents are so reluctant to compromise and, at last, come to a resolution.

Why can’t they all get along?

That’s a good question and one that deserves to be answered. However, it would appear the residents can’t count on any leadership from their (West Carleton-March city) councillor Eli El-Chantiry, who has ignored the matter and the interests of the residents he is supposed to be representing at City Hall. What makes El-Chantiry’s stance doubly vexing is that he also chairs the Ottawa Police Services Board, making him ideally suited to hammer out a deal between the police, the beach infiltrators and beachfront property owners. So far El-Chantiry has done nothing, adding to his list of underwhelming achievements as both a city councillor and as chair of the impotent and irrelevant Ottawa Police Services Board, a toothless paper tiger with no real authority, power or influence in the city. So residents will continue to suffer.

As private property owners, they have the right to build fences down to the waterline, forbidding the beach to outsiders, but when city lawyers floated this suggestion to residents, they refused to even consider the idea.

The Ottawa police constables are doing the best they can to deal with the sticky situation at Point Beach, but as they must cope with limited budgets, resources and manpower, they cannot be expected to patrol the beach on a regular schedule to prevent young people from gathering to drink beer or smoke the ganja weed or spout cuss words and behave poorly.

However, the residents themselves must take a measure of the blame for this sad state of affairs. As private property owners, they have the right to build fences down to the waterline, forbidding the beach to outsiders, but when city lawyers floated this suggestion to residents, they refused to even consider the idea. So for want of a nail and a few fences that would make good neighbours and restore harmony to Constance Bay, the conflict is likely to persist at Point Beach during the good weather months for many years to come.

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