Committee Transcript 1996-Aug-20 | Legislative Assembly of Ontario

ALCOHOL, GAMING AND CHARITY FUNDING PUBLIC INTEREST ACT, 1996 / LOI DE 1996 RÉGISSANT LES ALCOOLS, LES JEUX ET LE FINANCEMENT DES ORGANISMES DE BIENFAISANCE DANS L'INTÉRÊT PUBLIC

Consideration of Bill 75, An Act to regulate alcohol and gaming in the public interest, to fund charities through the responsible management of video lotteries and to amend certain statutes related to liquor and gaming / Projet de loi 75, Loi réglementant les alcools et les jeux dans l'intérêt public, prévoyant le financement des organismes de bienfaisance grâce à la gestion responsable des loteries vidéo et modifiant des lois en ce qui a trait aux alcools et aux jeux.

Mr Peter Kormos (Welland-Thorold): Chair, if I may --

The Chair (Mr Gerry Martiniuk): Wait a minute. Could I greet everyone, Mr Kormos? Good morning, ladies and gentlemen and members of the committee. I'd just like to do my introduction, Mr Kormos, and then I will be pleased to recognize you.

This is the hearing of the standing committee on the administration of justice's consideration of Bill 75, An Act to regulate alcohol and gaming in the public interest, to fund charities through the responsible management of video lotteries and to amend certain statutes related to liquor and gaming. I welcome you to the committee hearings. The committee is very pleased indeed to be in Sudbury this day to hear representations from close to 10 individuals and organizations from Sudbury and surrounding environments. Now, Mr Kormos.

Mr Kormos: Very briefly, Chair, as you know, yesterday a submission was made that had been prepared by Professor Alan Young, a professor of law at Osgoode Hall Law School and a renowned criminal law expert both in Canada and internationally. In the submission prepared by him, Professor Young expresses great concern that the proposal by the provincial government for its slot machine regime contravenes the provisions of the Criminal Code and that in fact will be an illegal gaming endeavour subject to prosecution under the Criminal Code.

I have two concerns, one, that we have been put on notice that the whole proposal by the government does not comply with the Criminal Code of Canada and that comes from strong legal authority, and two, that there has been nothing presented by the government to contradict Professor Young or indeed to explain where Professor Young might be lacking in his analysis.

I would hope the committee would give Mr Flaherty a chance this morning to respond to this very urgent warning issued by Professor Young. I'm concerned about our participation as parties to what some would interpret, if Professor Young is right, as a criminal conspiracy to contravene the Criminal Code. I'm concerned about this committee's participation in a grossly and blatantly illegal activity by virtue of even considering this exercise.

In the absence of any explanation on the part of Mr Flaherty of the government or response to Professor's Young's concerns, I would move that this committee suspend its process until such time as the legality of this process is determined. I put that motion on the floor, sir.

The Chair: Do we have a motion on the floor?

Mr Kormos: Yes, sir.

The Chair: It would seem that Mr Kormos is concerned with an opinion by a lawyer. Mr Flaherty, do you wish to answer that? I assume that before this legislation was tabled in the House there were opinions given by the legislative counsel. Do you wish to answer Mr Kormos's motion? He chooses not to withdraw from these hearings but to move a motion that the hearings be suspended.

Mr Jim Flaherty (Durham Centre): The Criminal Code does make gaming illegal in Canada unless lotteries are conducted by a province under an appropriate authority like the Ontario Lottery Corp. This question has been faced years and years ago. It is nothing new. The Ontario Lottery Corp is legally entitled, as the provincial agency, to conduct lotteries. Video lotteries are lotteries. The act before us, as was explained by Mr Hudak yesterday, if Mr Kormos was listening, amends the Ontario Lottery Corporation Act to place video lotteries under the conduct and management of the Ontario Lottery Corp as required by the Criminal Code of Canada.

Mr David Ramsay (Timiskaming): While I am sympathetic to Mr Kormos's motion, having travelled here at the people's expense to listen to the people of Sudbury, I think this would be an inopportune time to suspend the hearings. However, I would certainly accept a friendly amendment to it that we do so after public hearings and before clause-by-clause. But at this particular point in time we are in Sudbury, many people have come out to make their representations, and I think we should hear them out.

Mr Kormos: I'm prepared to accept that proposal on the part of Mr Ramsay as a friendly amendment. Professor Young is an internationally acknowledged expert on criminal law -- I'm afraid that neither Mr Flaherty nor Mr Hudak are among his peers -- and he has raised some very serious issues. I'm prepared to accept the amendment by Mr Ramsay.

I certainly want the record to make it clear that I'm cognizant of the thin ice that this government is on and I certainly don't want to have anything to do with promoting what in effect will be an illegal gaming jurisdiction, one in contravention of the Criminal Code, where people may well end up going to jail.

The Chair: I take it you have accepted the amendment. What will your motion read now, Mr Kormos?

Mr Kormos: That subsequent to today's session this committee suspend until such time as the concerns of Professor Young are adequately addressed. Is that fair, Mr Ramsay?

Mr Ramsay: Yes, it's fair.

Mr Flaherty: Let's put the question now.

The Chair: Yes, I was going to do that.

Mr Kormos: Recorded vote, please.

Ayes

Crozier, Kormos, Ramsay.

Nays

Jim Brown, Flaherty, Ford, Ron Johnson, Marland, Parker, Skarica.

The Chair: The motion is defeated.

Interjection.

The Chair: The committee welcomes Ms Martel.

Mrs Margaret Marland (Mississauga South): Mr Chair, could you ask Mr Kormos to withdraw that comment? Was that comment on the record?

The Chair: I don't think his microphone was on.

Mr Kormos: What I said, Chair, was that they're prepared to sleep with the mob. Why shouldn't they be prepared to break the Criminal Code?

The Chair: Mr Kormos, I have on a number of occasions suggested that imputing that motive to the government members is improper and unparliamentary. I've asked you to withdraw in the past, you've refused on a number of occasions to do so, and really I think you are saying to the government members that in some way they are corrupt and associated with the mob.

Mr Kormos: Yes, Chair, I most certainly am. An association promoting 20,000 slots in this province, if that doesn't constitute corruption, both ethical and moral, nothing does, never mind the fiscal corruption.

The Chair: I would ask you to withdraw it. I think you know it's unparliamentary.

Mr Kormos: No, Chair, please. It also happens to be true.

The Chair: Mr Kormos, I don't know why a person of your intelligence and acumen would have to cheat when you know that --

Mr Kormos: Oh, please, Chair.

The Chair: I've asked you to withdraw it. You've refused to.

Mr Kormos: I certainly do.

The Chair: That will be on the record.

SUDBURY FAMILY SERVICE

The Chair: Excuse me, sir. We have concluded our preliminary matters this morning. Mr Dan Piché, welcome this morning. You represent the Sudbury Family Service and you have 20 minutes starting now. We haven't used your time up, and I would appreciate your proceeding.

Mr Dan Piché: Good morning. My name is Dan Piché, financial administrator for Sudbury Family Service. My reason for being here today is to explain my reasons for not supporting Bill 75. I'd like to concentrate on two issues today. The first issue is the effects of VLTs on charities, and the second is the effects of VLTs on social problems. Before I talk about these issues, I'd like to give you a brief background of our agency.

Sudbury Family Service is a charitable, non-profit organization dedicated to the needs of the family unit and its members. Sudbury Family Service offers its services, without discrimination, to all residents of the region of Sudbury. Our mission statement is, "To improve the quality of life and to resolve the psychosocial problems of individuals, families and our community systems."

I would now like to concentrate on the first issue, the effects of video lottery terminals on charities. One of our agency's major sources of revenues is from the sale of Nevada tickets. If VLTs were introduced, our Nevada sales would plummet by 50% or more. As a result of this loss of revenue, many jobs would be lost at Sudbury Family Service. If our agency had to lay off staff, imagine all the layoffs that would occur for all charitable organizations in Ontario that rely on Nevada revenues as a major source of financing. This would be devastating to the charities of Ontario.

I would now like to concentrate on the second issue, the effects of VLTs on social problems. VLTs will only be installed in establishments with a liquor licence. Therefore, we will see more people returning to bars and hotels, causing an increase in alcohol-related problems, including drinking and driving, not to mention the problems related to compulsive gambling.These problems are then brought into the home, where our children will suffer the consequences. Is that what this government wants for our adults and our children?

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Having read the sixth printing of the Common Sense Revolution, I have noticed several inconsistencies between this document and the introduction of VLTs. I would like to quote some excerpts from this document: "We put the priority on the people who need health care"; "and more into the preventive care, which can help people avoid becoming ill in the first place"; "our obligation to those in need is even greater in the case of our children."

As you can see, the introduction of VLTs is inconsistent with your objectives of putting the priority on the people and the children.

To conclude, I agree with your philosophy of balancing the provincial budget, but VLTs are not the answer. However, I do have a strategy for you to consider. I have a quote from Premier Mike Harris concerning the Windsor casino:

"I don't want a million dollars a day into the province of Ontario. I don't want the money, I don't want the Ontario government to have it. Part of the problem is the Ontario government has too much money, borrows too much money, spends too much money. We don't have a revenue problem, we have a spending problem." This quote was taken from the Hamilton Spectator, May 5, 1995. Now there's your solution.

I would like to thank you for giving me the opportunity to comment on Bill 75.

The Chair: Thank you, sir. We have approximately five minutes per caucus.

Mr Flaherty: Thank you, Mr Piché, for coming this morning. This committee is in the 10th day of hearings now. We've travelled, since starting in Queen's Park, to Thunder Bay, Kenora, Fort Erie, Sarnia, Ottawa and now Sudbury. It's good to have an opportunity to hear the views of yourself and other people in this community and in this area.

The vast majority of the people of the province of Ontario, in the government's view, are reasonable, moderate people. They have demonstrated that in their spending on things like the legalized gaming in Ontario now, the bingos and Nevada tickets that you've talked about, and roving casinos, and the government accepts that with respect to video lotteries. We know from the experience of eight other Canadian provinces that the average video lottery player plays twice a week, spends $10 at a time, uses a predetermined budget and acts very reasonably. That's the vast majority of people.

The government at the same time acknowledges that 1% to 2% of persons who engage in gaming, and the studies are consistent on that, will demonstrate some form of addictive behaviour. How our government is different from the previous NDP government, which legalized casinos, and the previous Liberal government, which legalized Monte Carlo nights in Ontario, is that we are actually going to put some money to the problem. We are going to address the problem realistically, and 2% of the gross revenues from video lotteries will go to research and training and education with respect to addiction problems. We're not sweeping the problem under the rug; we're recognizing the problem.

Having said that, the government also is committed to a very measured, controlled, phased introduction of video lotteries in Ontario, that is, starting with racetracks and permanent charity gaming halls, which are created by this legislation, Bill 75, and then a review process and then an introduction into licensed premises. The total number of machines to be introduced is 20,000, which will give the province of Ontario the lowest number of machines per capita in the nine provinces in Canada which at that point will have video lottery machines.

But I do want to address your specific concern about Nevada tickets or break-open tickets. I read the statement in your submission about a reduction in sales of those. I'd suggest, with respect, that the evidence we have so far concerning gaming habits in the province is that the clientele is different for different types of attractions, different types of gaming amusements like bingo and break-open tickets and that sort of thing, and that after an initial slowing-down period, as in Windsor, Ontario, where we have experience, this gaming activity bounces back to close to its original share of the market. So I think we'll have to wait and see on that.

On the question of actual studies that have been done with respect to gaming conduct, there is an actual study done in Ontario by Professor Frisch of the University of Windsor and the Canadian Foundation on Compulsive Gambling which said that the addicted population of gamblers remains stable at between 1% and 2% and does not increase even with a major new form of gambling such as video lotteries. This is based on the experience of the introduction by the NDP government of more than 2,500 slot machines at the Windsor casino. Also, he noted that the spending ranges between $10 and $11 per week, both before and after opening the casino in Windsor.

I know one of your concerns is with respect to charities. Charities will receive 10% of the gross revenues from the video lotteries, so it's a substantial amount of money. The increase to charities will be up to $180 million more than charities are receiving today in the province. It's a very substantial sum of money and we are going to have an implementation consultation following this enabling legislation, Bill 75. I would hope that organizations such as yours would want to participate in that consultation process, particularly with respect to what charities qualify, where permanent charity gaming halls should be located, the regulation of them and that sort of thing. Is that something that you intend to participate in, I hope?

Mr Piché: Yes, I would, if you had a process like that. The only thing that concerns me is you say you're going to give $180 million to charities --

Mr Flaherty: More. An increase in the current funding. For example, Monte Carlo nights bring in $10 million to $15 million and we're going to increase that funding. But the amount available to charities -- not to charity operators, not the people making money on it; to charities -- is going to increase by up to $180 million. The people who need the money, not the operators.

Mr Bruce Crozier (Essex South): And the government's included.

Mr Flaherty: The taxpayers of Ontario, yes. The people who pay the taxes in the province. That's right. The Liberals raised that point. Thank you.

Mr Piché: My only concern is that right now you have agencies who have their own fund-raising; they make their own money. Now Nevada sales, let's say, drop 50%. That money is being spent on local economies. If we put in VLTs, that money is now going to go to the provincial government. The money's going to get sucked out of the local economy. You say you're going to give it back to the charities, but more than likely it's not going to be in the same proportion. Like the money that's being spent in Sudbury now --

Ms Shelley Martel (Sudbury East): Twenty-seven million.

Mr Piché: -- part of that money may not come back to Sudbury. It could go to Toronto, Ottawa.

Mr Flaherty: That's right, and I think the operative words you're using are "may" and "could." Again, that's why in the further consultation about local input concerning implementation, location of permanent charity gaming halls, it's absolutely important that local organizations such as your own, in addition to the input we're getting from you today -- and we're listening; we were here to listen -- that you participate in that process as well. Thank you for your submission today.

Mr Ramsay: Mr Piché, thank you very much for your presentation today. I'd like to continue in this vein because I'm very concerned, with the same concerns you have, that you as a non-profit organization that does good work in the city of Sudbury today by past governments have the tools to raise your own money and to mobilize your supporters, your volunteers, to work the malls, sell the Nevada tickets. I'm really surprised at a Conservative government who I would think would like to see Ontarians more self-reliant possibly like we have been today in our charities go back to a system of going to government cap in hand begging for some money and filling out application forms and that when we've got our people mobilized in our communities selling Nevadas.

Interjection.

Mr Ramsay: One of the Tory members has just said, well, Nevada sales won't drop, and we've had evidence to the contrary; evidence to the contrary has been presented to this committee that Nevada sales do drop in other jurisdictions when you introduce VLTs. But also when you say to the government members that the introduction of VLTs will overall increase the amount of gambling, they say, "No, it cannibalizes other forms of gambling." So the government members can't have it both ways. Either there's going to be more gambling taking place in Ontario or, if it's the same pool of money, then there's going to be less to Nevada tickets, and that's your concern.

I'd like to ask you why you think the government's going to take this tool away from you in the Nevada ticket sales and put you back dependent upon government for a handout.

Mr Piché: The only reason they're doing it is to balance the budget. That's the bottom line.

Mr Ramsay: The other thing I would like to ask you, and this really gets very fundamental to this whole issue in that you've talked about your concerns of the possible harm that the further expansion of gambling would bring to your community and the people you serve specifically: The government accepts that there is going to be harm because, as you know, they're going to dedicate 2% of the revenues to people who find themselves in problems with gambling. Why do you think a government would knowingly put a percentage of their population at harm?

Interjection: And your government didn't.

Mr Piché: It's a Band-Aid solution. They know it's probably going to happen. That's why they're going to put 2%, but by not introducing VLTs, we wouldn't have to worry about those potential problems. That's the way I look at it.

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Mr Crozier: Thank you for your presentation. I wanted to support your conclusion where you quoted Mike Harris's comments regarding the Windsor casino and not needing the money. As a matter of fact, he was going to close the Windsor casino the day he made those comments, but his spin doctors got to him the next day and said: "My God, you're throwing this thing away. You've got to change your mind."

But to support your contention, I have here 58 pages of Hansard where Ernie Eves, now Treasurer and Deputy Premier, and the Premier railed against gaming, literally railed against it. Ernie Eves says, "When a government turns its back on the very principles and reasons it was elected to power, should not that government give the public an opportunity to express its opinion?"checked online for both Eves and Harris quotes. In the context of what he was saying, he was saying a referendum, not just to invite you out here today, because today, sir, we're going to lay some resolutions on some amendments to this bill on the table. I'm not a gambling person, but five will get anybody 10 that the resolutions we put on the table will be turned down.

So I appreciate what you're saying. We say in this business that occasionally governments have to rise above their principles, and that's what we're asking this government to do. But thanks for coming.

M^me Martel : Merci, Monsieur Piché, pour être venu ce matin. C'est une discussion très, très importante pour toute la communauté.

But I want to begin by dealing with Mr Flaherty's approach or recitation where he said that their approach to gambling is going to be so much better and so much different than the approach taken by either the New Democrats or the Liberals when they were in government. I think I want to just point out what Mr Harris said about gambling in this province. This goes back to Hansard on May 13, 1993. He said:

"As Donald Trump says, gaming doesn't come cheap. I have to agree with a lot of the critics on that. It brings crime, it brings prostitution, it brings a lot of the things that maybe areas didn't have before. There is a big cost to pay."

It's amazing on the road to Damascus the conversion we have seen by the Conservative Party as we approach this issue.

Maybe you can enlighten the committee about the important services you provide to this community and to residents of northeastern Ontario and describe to us again why you feel those services will be put at risk if the money that you have to raise through charities is also put at risk because of electronic slot machines.

Mr Piché: We provide counselling services to the Sudbury community, whether it be marital problems -- we provide counselling for a whole variety of problems. So a lot of people do need our services.

Based on the results of our evaluations of our counselling, we are helping families in this community, and if our source of revenue suddenly drops, that means we have to lay staff off; that means waiting listings will increase and people may not get services. That's why I'm here today, because I feel our source of revenue is threatened to provide these services to the community and I'm trying to do something about it.

Ms Martel: Do you think that not only will the services that you currently provide be put at risk, but that the introduction of VLTs in the community is going to result in an increased need for services because of people who therefore have addictions?

Mr Piché: Yes.

Ms Martel: So you're going to get hit two ways: One, you put at risk the services you currently provide, and two, you're going to see an even greater demand in a community that doesn't have a lot of services like yours already.

Mr Piché: That's right.

Ms Martel: Can you give us a clearer sense of just how much revenue comes into your social service agency from the sale of tickets?

Mr Piché: From the sale of tickets? It's our second-highest source of revenue, so we're probably looking at over $200,000.

Ms Martel: Does the agency have a clear sense of just how many people might be lost if that second major source of revenue coming into your agency is lost or severely reduced?

Mr Piché: You're probably looking at four staff, which would be half our agency.

The Chair: Mr Kormos, two minutes.

Mr Kormos: Thank you, Chair. That's what I thought I had, two minutes. It's interesting, because the data provided me by the Ontario Lottery Corp is that it bleeds over $27 million a year in everything from 649s down to bingo and keno tickets out of the Sudbury region alone. When I hear these guys talking about putting money back into the community, I wonder how much of the $27 million that the Ontario Lottery Corp bled out of this region got its way back into Sudbury.

My fear is that you and agencies like you are not going to be at the top of the list because you aren't in bed with Harris and his gang, but you're out there combating evils that they're perpetrating with some of their policies. My concern is that you're going to be at the end of the list when it comes to sharing in any of the proceeds, because what they've done is they've been buying people off. This is how corrupting the whole slot industry is.

They've been buying off the Addiction Research Foundation in Toronto, which refuses to acknowledge now that electronic slots are the most addictive form of gambling, even though Addiction Research Foundation services in Lake of the Woods, Lake of the Woods Addiction Services, says about video gambling machines that it's very addictive and "the trend is towards developing faster and faster games." The Addiction Research Foundation itself in northern Ontario, in Thunder Bay, says video lottery terminals are considered to be the most addictive form of gambling. But what happens? The corruption is permeated.

Mind you, if I were the VP of ARF in Toronto and I had to rely on these guys for funding -- right? -- and knowing that they're cutting and chopping funding left and right, would I suck up and toe the line?

Mr Flaherty: That's a terrible thing to say about the VP of the Addiction Research Foundation.

Mr Kormos: I might be inclined to as well, but that just illustrates how corrupting this multibillion-dollar, mob-directed industry has been in short order already in this province and will continue to be. I appreciate it. I have sympathy for you. God bless. Thank you, Mr Piché.

The Chair: I'd like to thank you, sir, for attending here today and your presentation.

Mrs Marland: Mr Chairman, on a point of privilege: I would like to suggest to Mr Kormos -- I know we're not going to get anywhere with him today, I can tell, but I would like to suggest to him that he might be absolutely right about mob-controlled VLTs in this province, because we already have 18,000 to 20,000 that are operating in this province illegally. We don't know where they are --

Mr Kormos: You do know where they are. They're in the very locations that you want to put slots in. You do know where they are.

Mrs Marland: Excuse me. The OPP have identified that number that are operating today, and on that number you may well be correct about who operates them.

The Chair: Mrs Marland, that is not a proper point of privilege. I must overrule it.

Mr Kormos: You do know where they are and your government won't dedicate --

The Chair: Excuse me, Mr Kormos. If we have these interruptions, it could be that we will not be able to hear all of our guests who have waited patiently. We struggle to hear them and it's important that we hear all of them that we have scheduled to hear. So if we could have some consideration for our guests.

SUDBURY BOARD OF EDUCATION SECONDARY SCHOOL PRINCIPALS' ASSOCIATION

The Chair: We will move on to the Sudbury Board of Education Secondary School Principals' Association: Patrick O'Malley, member. Good morning to the administration of justice committee, Mr O'Malley. You have 20 minutes, which would include any questions the committee members have of you, and I'd ask you to proceed.

Mr Pat O'Malley: I want to thank the committee for giving me these few minutes this morning to express my views about Bill 75. My name is Pat O'Malley. I'm a principal of a public secondary school. I speak for many, many secondary and elementary school principals and I believe on behalf of thousands of students in the Sudbury region who I believe will be adversely affected if this bill is passed. From my perspective this morning, for this reason, I certainly do not support the passage of Bill 75.

The question is, how would this bill impinge on schools and students? As non-profit organizations, schools are eligible to receive moneys through the charitable portion of the funds from the sale of Nevada tickets. Many schools use these funds, which may range from several hundred dollars to several thousands of dollars, to good advantage for students in both curricula and co-curricula programs.

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In fact, in these times when provincial educational cutbacks have been so pronounced, especially over the last few years with the social contract and with the present government -- and it's a certainty that these cutbacks are going to continue into the immediate future -- the financial support from Nevada tickets has been significant in allowing schools to maintain programs and purchase equipment that present school budgets simply do not allow. For example, in my own school, moneys from Nevada tickets have allowed us to continue to offer a full program of over 30 co-curricula and athletic activities. We would definitely not have been able to do this without the financial assistance from our business Nevada partners.

We know there are a number of our physical, co-curricula activities that we would have to have cancelled, and I think that would diminish in a significant way what as schools we can offer our students in the way of learning and development in social, physical areas. For example, if you look at just the cost of transportation in the schools for our school teams, if I send one team to another school to play a game, depending on the distance to that school, it could cost me anywhere from $65 to $100. Multiply that by the number of games in the schedule that are played away from the school, add to that involvement in such things as city championships, NOSSA championships, OSSFA championships, and then multiply all of that by the number of teams that you want to offer to your students in the school, and perhaps it's clear why schools have welcomed, and I believe used to such good advantage, funds from Nevada tickets.

I think that same significance holds true in many curricula programs. For instance, we know that we're sort of in the foothills of the information age and there are still some mountains that we have to climb, and the schools in order to do that, to present what we should be in terms of learning situations to students, need equipment to help climb those mountains. If we look at the purchase, for example, of one computer package -- when we know that schools should be making access to computers available for every student, the package of one computer system is a major item in any school budget -- a major item.

Again, it has been through our business of Nevada partnership that significant help has been forthcoming to help us make these purchases, and I'm convinced that if VLTs are introduced into the Sudbury community, the consequences are inevitable. The revenues from Nevada tickets will definitely be cut by a significant percentage, and I think that's true because VLTs, as I see them, are targeted directly against Nevada tickets. It is exactly the same kind of gaming.

It has been estimated that one VLT can take up to as much as $25,000 out of a community. What this means of course is that many of the local charities and non-profit organizations will lose some of that financial support that currently comes from Nevada tickets, because there just won't be the money available in the community. I think a further consequence will be that there are many small businesses right now that are working with Nevada tickets that after the introduction of VLTs will no longer be working with Nevada tickets. In a sense it just won't be worth their while. There is a certain expense that they incur. There is a certain kind of responsibility that they take. They do interfere with their primary business in terms of selling Nevada tickets and if there isn't a certain traffic there, it's not going to be worth their while. I think that would affect many small charitable organizations that are perhaps only looking for the help of $300 or $500. This would be lost, because I don't believe this money is coming from the provincial government by making an application.

I think it also means, at least for the educational system, that there are many great opportunities to form meaningful partnerships in the community that will be lost. In education, the provincial ministry has been pushing these partnerships and Nevada tickets have made it possible for businesses -- and, again, even the very small businesses like the corner store -- to share in a very important way, and in a real way, in the life of a school. I believe that if Bill 75 is passed and Nevada ticket sales are diminished, so too would these partnership opportunities be diminished.

The negative effects of passage of Bill 75, in my view, on local charities and non-profit organizations such as schools is a certainty because of the way in which the elements of the economic system that surrounds them operates. Right now, the way I see it, and I am no expert here, in the community of Sudbury there is a certain percentage of money earned in the community that is spent, for example, on Nevada tickets. Now we look at how that money, at least from the municipal licensing, is apportioned. Well, the municipal government in Sudbury gets part of it, the businesses and outlets get part of that money, and the rest of it goes to charities. In turn, that money is reinvested in the community by the people who are in the community, and the cycle begins again.

If VLTs are introduced, I think we have a whole new system. We diminish the variety of outlets that are going to be selling Nevada tickets, for the reason I stated earlier. We have new partners, if you want, in the sharing of this money, and the partner who's going to get the lion's share is not even a partner right now. So 80-plus is going to go to the government and then the rest will be divided among businesses -- and again, I think many small businesses will lose out here -- and some charities. I think the variety of charitable organizations now receiving money from Nevada tickets will be greatly diminished. Someone looking for a couple of hundred dollars, $300, $500, probably is not going to go through the bureaucratic system. And even if they did, the chances of those charities getting their $200 or $500 I don't believe is a very good bet.

Again, I think just as partner to the system that we have now, we have a kind of one-on-one system. It's face to face. We're talking to the people we're dealing with. We're reaching agreements and real partnerships with these people in our own community. What happens in the new system? Everything is done at long range. Again, there is a whole bureaucracy we would have to wade through. There's loss of all of that personal contact; there's loss of control. I just don't think it's a very good situation.

In summary, I suppose I would say the introduction of VLTs into the community is a negative economic factor, and that has negative consequences for many charitable and non-profit organizations presently receiving moneys from sales of Nevada tickets. Specifically, as a school principal, and for the reasons I have put forward, I do not support the passage of Bill 75 because I believe it will negatively impact on the schools by ultimately diminishing many important curricular and co-curricular learning opportunities we are presently able to offer to our students through the sale of Nevada tickets. Thank you.

The Chair: We have three minutes a caucus.

Mr Ramsay: Thank you very much, Mr O'Malley, for your presentation. I share all the concerns that you've brought forward to this committee today. I think one that the government members should listen to is that basically schools haven't been looked upon as being traditional charities. In the good old days of big government spending when there was money there, schools didn't have to rely on the work that you have to do today to supplement your revenue so that you can still provide those extracurricular activities for the school children. So you have to do this, and that's sort of the reality, but you do have some tools at your disposal and you've talked about those and Nevada is one of the main tools.

In this case, we know from other jurisdictions that the introduction of VLTs will eat into those revenues and I think we should be putting the government members on notice to say, "Why doesn't the government build an amendment into the bill that would guarantee?" Then charities that would lose their revenue from the sale of Nevadas would at least guarantee that revenue then would be supplemented, equalized by the money they're going to be raking in and taking out of the community, literally sucking out of the communities, that $120 million or whatever would go back to you so that you could continue those sports programs for the children. Maybe that's the type of thing we should be looking at. Would that give you any more comfort if you knew that money would be there?

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Mr O'Malley: There certainly, as far as I know, haven't been any definitive plans. I don't even know if there have been any definitive studies. I certainly have not seen them. I know there has been talk about enabling legislation, but this always scares me because all that means is it enables the government to do what they want. It's enabling, but for whom?

I suppose just at this point I don't have a lot of confidence in something that is going to be at such a distance from me because in a way, when it's face to face, you have some control over those things that are happening and you have some control over, in a sense, the moneys that you would be able to raise by talking to people and going to see people. I don't believe that would be possible with having to make application through some form to a government, someone who doesn't know me and it's only a piece of paper and who knows what kind of mood that person is in who is reading my application on that morning.

Mr Ramsay: I appreciate that, and I just hope the government members get that message, that you who with other organizations do a lot of good in your own communities, are now crying out to the government to say: "Don't take these tools away from us. Let us carry on the way we are." At first it was a struggle, but now you have developed a system where you can get the revenues you need to provide the services for the people you care for -- in this case, it's school children.

I think on our end we're going to have to think about doing something to give you some sort of comfort there because I understand your fear that these tools are taken out of your hands, therefore you don't have direct control and will be dependent on a handout in the future. Hopefully, you'll get a handout so that the kids can go to these sporting events. Thank you very much.

Ms Martel: Thank you, Pat, for coming in this morning and for giving the committee members a perspective from those who are involved on the educational side. Let me go back to your comments with respect to what is provided as a consequence of the partnership that you have with some of the charities and the revenues that then come from Nevada sales. You told this committee that some 30 athletic, co-curricular activities are provided at your school right now because of the revenue that comes from your partnership with the charities. Is that correct?

Mr O'Malley: We definitely would be able to offer a co-curricular program in the phys-ed area, but we would not be able to offer the number. If I look at the moneys we have spent, for example, last year in our phys-ed co-curricular program, there may have been three, four or five teams that we would not have been able to maintain because we would not have had the budget without moneys from Nevada sales.

Ms Martel: How many students do you think benefit directly because of that partnership and because of the funds that are raised that are given to you to allow them to participate in this way?

Mr O'Malley: Just in the extracurricular program, we're looking at five teams. It could be anywhere up to 120 to 150 kids whom we are directly working with over a period of anywhere from six weeks to two and a half months.

Ms Martel: Why do you think that kind of participation in those activities for students is important?

Mr O'Malley: It's extremely important. One of the things I would say is that in all of the studies we have looked at and read and the kinds of things that we attempt to offer to our kids and other schools in the province, every school that has been identified as an effective school has had an extensive and active co-curricular program -- every school. What I am saying is there is not one school that has been designated an effective school that has not had an effective co-curricular program. It's an absolute must in terms of the holistic look at where kids are and how we want them to grow. It's absolutely essential.

Ms Martel: Mr O'Malley, I think you're quite right that once this scheme is introduced, because the government will no doubt have its way, then your students are going to suffer because I don't think there's going to be anyone who's going to be able to fill in the gap and I certainly don't think you can expect more education funding from this government, despite the election promise they made around education. I think you're quite correct. So what happens to the students at your school? What happens to the teachers who take part of their time and do this over and above all the other good work they do in the community? What do you think's going to happen to all those programs and all of the benefits that we have seen so far because of this partnership?

Mr O'Malley: I think the bottom line is they're going to disappear. For example, last year there are those four or five teams that simply would not have existed. There are all kinds of other costs including perhaps uniforms and equipment and all of those other peripheral costs, but I was just looking at transportation. We would not have been able to afford to call a bus to take our kids to another school to play a game.

Ms Martel: Do you think it's worth it, Mr O'Malley, in what the government's trying to do, which is really to bring in the revenue, to rake it in from the communities -- because 80% is going to go back to them, whereas the majority is now spent in the community -- is the social cost and the cost to your kids who participate now really worth it?

Mr O'Malley: Certainly from my perspective as a member of this community, no, it's definitely not. I think any municipality would be foolish if there were any way in which they could keep these machines out. I believe in some provinces the municipalities have passed bylaws that do not allow machines into the community. That would be the road I'd be looking at.

Mr Ron Johnson (Brantford): Thank you, Mr O'Malley, for your presentation. You made some good points that I know we're going to take under some very serious consideration. I do have a couple of questions, though.

Your big concern, at least what I'm getting as your big concern and what seemed to be the gist of the conversation you just had with Ms Martel, is that the drop in revenue from your Nevada tickets will in some way affect extracurricular activities at your school. My question is, and I know that Mr Piché before you had the same concern about drops in revenue for Nevada sales: What information or what studies or what is it that you have read that I haven't that would indicate that you will see a drop in revenue from Nevada sales? There is extremely hard, concrete evidence to suggest that will not happen.

Mr O'Malley: I have read that in Alberta the sales from this kind of ticket have meant a drop in revenues. As I indicated, I'm no expert at this and I have not read a lot of the studies, because I haven't seen them; at least they haven't been made available, or at least easily made available, that I've been able to see them.

It seems to me that the logic is there. If you have a community that is now in an economic system, working with 100% of the revenues, suddenly changed to an economic system where it is now working with 10% or 15% of the revenues, how can it possibly be doing the same thing?

Mr Ron Johnson: It's interesting that you brought up the Alberta example, because that's the one I was going to bring up to you. In fact, studies in Alberta clearly show that Nevada sales did not drop as a result of the introduction of VLTs, not one dime. I think it's very important for you to understand that. For those who have concerns about Nevada sales dropping, there's concrete evidence to suggest that will not happen.

Your other concern was that it seemed that everything now was going to be at arm's length, that you somehow had to made application to the province for funding, that charities would no longer be able to do the kind of good work in terms of fund-raising that they do today. Again, I don't understand that concern, because as it stands right now this bill does nothing to take away from the work that charities are doing to raise money. They can still use Nevada sales to raise money; they can still use their bingos to raise money. They can still do all the other things that they're currently doing to continue to raise funds.

This really is just one small addition -- that's all it is, a small addition -- to the gaming market that will ultimately allow charities to generate even more revenue, ie, 10 times the amount of revenue generated for charities under the charitable gaming casinos. They will generate 10 times what they get now. That's a significant impact on charities.

The Chair: Sorry, Mr Flaherty, we have run out of time. Mr O'Malley, I thank you very much for taking the trouble to come before us this morning. You've been most valuable.

Mr O'Malley: Thank you, sir.

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SUDBURY DOWNS

The Chair: Our next presentation is Sudbury Downs, Mr Ken Le Drew, manager. Welcome. Good morning to you. You have 20 minutes, including questions. I'd ask you to proceed with your presentation.

Mr Ken Le Drew: Good morning, Mr Chairman and committee members. My name is Ken Le Drew. I am general manager of Sudbury Downs, a privately owned division of MacIsaac Industries Ltd. On behalf of my company we would like to thank you for this opportunity to present to you today the position of Sudbury Downs and our concerns with respect to the introduction of video lottery terminals in northern Ontario.

First, Sudbury Downs is supportive of Bill 75 as it provides for the legalization of video lotteries at racetracks. We feel that gaming is a socially acceptable form of entertainment.

I also believe that video lottery terminals at racetracks will provide a legal alternative to grey market activity and that revenues, as with other legalized gaming sectors, will then be funnelled to the proper destinations: the government, legal taxpaying business, charities, and educational programs to offset the effects of compulsive gambling.

In addition, we think that video lotteries at Sudbury Downs are a natural venue. Our customers will have the opportunity to enjoy a variety of gaming/sport entertainment activities.

Sudbury Downs has had a long-standing record of integrity in the community as well as with every level of government. We especially feel that existing regulation of Sudbury Downs by the Ontario Racing Commission provides a useful mechanism to check on the background of employees associated with video lotteries, ensuring that the same integrity is maintained.

We are confident that charity events will congregate at Sudbury Downs. We have already received a number of requests from charity groups seeking revenue sharing. To ensure that everyone benefits, the horse racing industry is reaching out to established charities to create permanent charity halls at racetracks across the province, and Sudbury Downs is enthusiastic about being a part of that program. We are confident that the government will see the wisdom in this and assist the industry in that implementation.

Twenty three years ago here in Sudbury the late J.C. MacIsaac, an avid horse racing enthusiast, a well-known and respected citizen in the community and a successful mining and tunnelling contractor, was approached by local horsemen with an idea that he invest a sum of money into the construction of a modest grandstand that would house a limited number of racing fans at the old Trottier Park. He responded not with that but with a vision, and that vision included a first-class racing facility which was to include a modern, glass-enclosed, climate- controlled grandstand complete with a formal dining room and a licensed lounge.

He coupled that with the construction of a stabling area with large, well-ventilated barns that accommodated 350 horses in what is still considered in the industry today to be among the very best facilities in all of North America. Many newspaper and trade magazine articles document the showcase facility that was built in the small northern Ontario community of Chelmsford that, on the day it opened, included a large, well-stocked tack shop, two farrier shops, a complete veterinary clinic with modern, up-to-date operating facilities, and a therapeutic swimming pool for horses.

Obviously the hobbyists in the local horse racing industry were delighted. The municipal government of Rayside-Balfour was ecstatic with this new job creation industry delivered on their doorstep which was to produce revenue from taxes that would exceed $2.5 million over the next 22 years. It held out great promise for success, and this new racing venture attracted horsemen and horsewomen from all across the country, many of whom stayed in the Sudbury region and made their homes here.

The horse racing industry, in particular Sudbury Downs, has long felt the need of opportunities to expand its gaming entertainment market. During the past 25 years, bingos grew out of one night a week in church halls into a seven-day-a-week, 12-hours-a-day operation, in our case against a twice-weekly, four-hours-a-night racing presentation. Mind-boggling, multimillion-dollar lotteries, scratch tickets, rip-open tickets and the like dealt crippling blows to the local horse racing industry already challenged with the competition for disposable entertainment dollars by adversities such as major mining employment reductions, resulting in record numbers of unemploymed in our area and the depletion of available disposable incomes.

It's interesting to note that many of these new forms of gambling entertainment required very little or no commitment at all, and in many cases nothing more than large rented halls, signage or counterspace with little or no long-term investment. Significant too was the fact that the horse racing industry saw its share of the gaming dollar shrink from 87% to 11%.

We would like to point out to the committee that Sudbury Downs was constructed 23 years ago at a cost of several million dollars. That was a major commitment to the community and the local horse racing industry. In addition, these rising new forms of competition witnessed Sudbury Downs experiencing substantial losses over the next 23 years, but we remained committed to the community and to the local horse racing industry. We were and are committed and we allow our reputation to speak for us. We have a clearly visible and considerable investment at stake.

In addition to the 15,000 to 25,000 illegal video lottery terminals in this province, there are other forms of illegal gambling. For example, Internet now offers numerous and varied online wagering activities for anyone willing to play. These operators are often based offshore and the money flows out of the country instead of being retained in Ontario. Illegal operators are not subject to the regulatory controls to which the Ontario horse racing industry and other established legal gaming operations are subjected. All of these have seriously challenged Sudbury Downs's marketing opportunities.

Bringing us back to focus, Sudbury Downs is a gaming entertainment facility and as such embraces the pending video lottery opportunity to revive our on-track horse racing activity. We envision new life into our horse racing operation, more live racing dates and increased purses, and that will encourage more local ownership and attract other horsemen to our community.

We have a vision of prosperity for local business, a vision of prosperity for our local feed and tack suppliers. We envision new jobs, perhaps as many as 12 full-time and maybe 100 part-time employees, not to mention the additional stable help that might be required from an additional horse population. We picture Sudbury Downs as a gaming entertainment showplace featuring more horse racing, either live or via teletheatre, seven days a week. I would like to emphasize that horse racing is our primary business and it is our major focus of revitalization. We see a full-time charity hall, video lotteries, all in a controlled, government-supervised and licensed environment where patrons have made a conscious decision to go to an established gaming amusement centre. We sense a whole new dimension of community involvement through association with various bona fide charities, but our vision stops short, halting with some very real concerns.

Sudbury Downs is quite unique with respect to the Ontario horse racing industry. Although the allocation of video lottery terminals to our racetrack facilities would provide excellent support for the racing industry in our local surroundings, this type of limited distribution may not provide effective coverage to locations beyond our track community. We are the only racetrack in northern Ontario, and the obvious distances across the vast north prohibit access to Sudbury Downs to a great majority of northerners. Markstay, Marathon, North Bay, Kenora, Thunder Bay, Parry Sound and numerous others would not benefit from the opportunity to play VLTs and the government would not benefit from effective provincial coverage.

Sudbury Downs has a system of teletheatres strategically located throughout northern Ontario which would bring horse racing to communities that otherwise would not have it. They are, through federal regulation, a full extension of our Sudbury Downs racetrack, complete with mandatory Ontario-government-licensed personnel and subject to the very same laws and regulations of the Ontario Racing Commission and the Canadian parimutuel agency division of the federal government as the onsite racetrack.

We feel that for all northern communities to benefit from this type of entertainment within a limited and secure environment the distribution of video lottery terminals into our extended arm teletheatres is a must. This would provide effective support for our horse racing activity while maintaining the gaming activity in each community within central, controlled, limited locations. Thereby the novelty of playing VLTs would remain a conscious decision, addressing the concern of impulse play, and remain an added feature to those visiting a location for horse racing and VLT gaming entertainment.

Capital and other operational setup costs have limited our teletheatres to major northern Ontario communities. However, the allocation of VLTs to offtrack wagering locations will provide Sudbury Downs with the opportunity to expand to numerous other communities throughout our northern region. Patrons wishing to play the VLTs would be required to attend the teletheatres, and that would ensure that they are also exposed to horse racing. Gaming thereby would remain a form of entertainment in the province, rather than an imposed habit through massive distribution and exposure.

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We feel that because of the unique geographical circumstances of servicing the vast northern Ontario region, VLTs introduced onsite at Sudbury Downs and into our extended teletheatre arms would be beneficial to the future of northern Ontario horse racing, while at the same time avoiding the potential adverse socioeconomic consequences of massive VLT distribution. We hold as a serious concern the irreparable damage suffered to our northern Ontario horse racing industry should VLTs be deployed on a massive scale at non-teletheatre sites. This situation has been documented in several other jurisdictions, including most recently the province of Manitoba.

We are also concerned that a massive distribution of VLTs into a multitude of sites across the province could lead to the creation of serious, adverse socioeconomic consequences that have been experienced in some other jurisdictions. We believe the government has shown great wisdom and patience by adopting a staged implementation program that would evaluate results before proceeding to the next step. Sudbury Downs and its teletheatre network in northern Ontario can provide complete coverage of our part of the province in controlled, regulated and limited venues, without risking the creation of negative social consequences.

We respectfully ask of the committee that these concerns be thoroughly considered and addressed when drawing your conclusions and making subsequent recommendations to the government. I hope that our position, which may very well be unique within the industry, is more clearly understood.

I wish to thank the committee once again for giving Sudbury Downs the opportunity to air our concerns.

The Chair: Thank you, Mr Le Drew. We have two minutes per caucus. What is a farrier shop? I'm unfamiliar with the term.

Mr Le Drew: Blacksmith shop.

The Chair: Thank you. Each caucus has two minutes and we start off with Ms Martel.

Ms Martel: Thank you, Mr Le Drew, for attending this morning. If I recall, during the discussion on casinos, Sudbury Downs was very much opposed to the introduction of casinos in the province. Is that correct?

Mr Le Drew: No, I wouldn't stand that as being correct. In fact, if I may add to that, the initial response to casinos by the entire horse racing industry was negative, yes. In the very first instance, and I would call it a knee-jerk reaction, I would say yes. But it didn't take very long for the horse racing industry to come to the conclusion -- and Sudbury Downs, I think, is on record as being the first racetrack in the province to realize that the benefits of casinos in the province would be at racetracks. We felt it was inevitable that the situation was going to transpire, and I believe that subsequently the entire horse racing industry had come to that conclusion.

Ms Martel: So the casinos were okay as long as they were located at racetracks, but if they were not located at racetracks and somewhere else in the community, that was not on. Is that correct?

Mr Le Drew: Not exactly in the terms that you're referring to. I would clarify it this way. We felt, as we do incidentally with the VLTs -- I'm not sure that we agree nor any of the racetracks agree that just a rampant distribution of VLTs would serve anybody, let alone the communities, and we're a small northern community. But more important was that if these things were going to come, we believed they should be in a controlled environment. We also believe that because the racetracks have a long-standing history of regulation with the government, we felt that certainly the racetracks would be an ideal venue.

Mr Flaherty: Thank you, sir, for coming this morning. We are in the 10th day of these hearings and we have heard a number of quite serious and helpful presentations, including yours this morning, from community groups, from racetracks, from the hospitality and tourism industry.

I know the committee is listening to the representations. I would hope that Mr Kormos is also. Because of the antics that we heard earlier this morning, I have my doubts, particularly when he attacks the credibility of a witness who gave evidence 10 days ago, with which I gather he disagrees, and he does it behind his back. This is the vice-president of the Addiction Research Foundation, Dr Robin Room, who disagreed with Mr Kormos and who said, "I don't think it is an appropriate term"; that is, the term used by Mr Kormos publicly about "the crack cocaine of gambling." He disagreed with him. Now Mr Kormos attacks him 10 days later behind his back and attacks his credibility.

Mr Kormos: I've been attacking him for the last 10 days, Flaherty. Listen. Perk up.

Mr Flaherty: It is a cowardly thing to do, to attack a witness not when they're before the committee but later.

Mr Kormos: Victimize poor people, working people, with the slots --

Mr Flaherty: We take this seriously. I know Mr Kormos is concerned about working people, so let's talk about work and let's talk about unemployment in Sudbury.

Mr Kormos: Let's talk about job creation. Be honest about that.

Mr Flaherty: Let's talk about how many people work at Sudbury Downs.

Mr Kormos: Tell them what Ivan Sack had to say.

The Chair: Mr Kormos, you are taking time from the people who will be --

Mr Kormos: I'm prepared to stay here till 8, Chair, aren't you?

Mr Le Drew: Thank you very much, Mr Flaherty. At present, if we take a look at the structured employees at Sudbury Downs, we have in our employ some 45 employees. That does not take into consideration the 250 to 300 people who are involved in backstretch activity at the racetrack. It's worth pointing out, as I had attempted to do in the presentation, that prior to the implementation of many of the other forms of competition in gaming that have surfaced over the last 25 years, Sudbury Downs' staff was entirely different in its structure. We at that time employed 20 full-time people. We employed 125 part-time people. We employed on the backstretch facility at Sudbury Downs nearly 400 people in various positions working with the horses. At that time in fact, it's worth pointing out as well, our barns were full at Sudbury Downs. We had 350 horses. Today we're lucky to draw on a horse population of 125. We have a large facility worth developing.

Interjections.

Mr Crozier: Thank you, Mr Le Drew, for your attendance this morning. I'll try and speak above the din. I was interested in your comments, sir, where you use the words, and I think appropriately, that you didn't want the province to impose a habit "through massive distribution and exposure," and you use later the word "rampant" to describe it. I think both of those descriptions are appropriate because to the extent that we support the agricultural industry, the employment that racetracks provide, the security they can provide, on the implementation of VLTs, if they're going to be anywhere in the province, that's one of the places we would support that they be placed. I would like to know if you've given consideration, for our information, to what effect they may have on your live handle, though.

Mr Le Drew: You're referring to having VLTs at the racetracks and how much money would be channelled through what I think has been commonly referred to in the industry as cannibalization.

Mr Crozier: Cannibalization, yes.

Mr Le Drew: We really don't have a clear understanding. We have nothing to go by. We've heard figures that have been expressed in terms of 25%; other people have said 40%; some other people have said 15% to 20%, but we really don't have anything to go by. What we do have is a vision. We have a vision that in the total picture of our expansion, the revenues that would be generated through that would offset -- and that's an important thing for us. We're not sure, and at the present time our group, the Ontario horse racing industry, is still into debate, if you like, or consultation with the government with respect to the percentages that are put forth in Bill 75.

The Chair: I thank you very much, sir, for your attendance here today.

KEN LILLEY

The Chair: Our next presentation is made by the distributors of open tickets, OLC retailers, Mr Ken Lilley, president. Good morning, Mr Lilley. Please proceed with your presentation.

Mr Ken Lilley: Good morning. Thank you for inviting me. My name is Ken Lilley and I thank you for providing the opportunity to express my thoughts on Bill 75 as it relates to my industry.

Interruption.

The Chair: Fine, thank you. Could we increase the volume slightly?

Mr Lilley: I've been employed in the Ontario gaming industry since July 1975, 21 years. I remember Marshall Pollock as the first CEO of the Ontario Lottery Corp back in 1975. Wintario and Super Loto were the only games in town back then and we in the distribution business received a memo from his offices directing us that under no circumstances could we open liquor-licensed accounts. That means no bars were allowed to sell Wintario tickets. Combining alcohol and gambling was never to be condoned by the Tory government or the OLC in 1975, and yet here we are today to consider Bill 75, which would marry alcohol and gambling into one large and fetid family. Drinking, smoking, gambling, bars, restaurants -- those words all seem to flow together nicely, but so do substance abuse, addiction, child neglect and family breakdown.

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As we can see from Casino Rama's debut, Ontario children could well be the fallout of gambling in Ontario. Governments should act as heads as families. They should set good examples for the whole family and they should not just please themselves. Bill 75 must not pass third reading. Godfather Mike promised before the election that he would not -- clearly not -- introduce VLTs if given a mandate. I was one of many who helped give him that mandate for this very reason.

Minister Sterling, who it seems has already moved on to greener pastures, informed Charities First Ontario in writing shortly before the budget speech that VLTs would not -- repeat not -- be considered without study and consultation in the budget speech. These are words, but the minister's and Premier's actions were the exact opposite. This is a broken promise, and before Bill 75 is passed, I want a referendum so that the people of this province can redirect the Premier. Maybe he and his government don't care if his kids hang around parking lots while he gambles, or perhaps he just doesn't care if yours or mine do, as long as he and the restaurant business are making money.

No sociological impact study has been trotted out by the government to show positive impacts of this legislation, because there are none. Bill 75 must not pass, because this type of gambling preys on young people. A new generation weaned on false hope will breed cynicism and despair, and this will be Mike Harris's legacy. People will not remember that they got a $100 tax rebate, but they will surely remember that their son or daughter lost their house or family due to slot addiction.

Lack of competition in any industry is unhealthy. In the first years, the feds and provinces battled for lottery market share before, and before capitulating the feds tried to come back with an instant ticket, a baseball scratch game. The Blue Jays were new at that time. The OLC had a new scratch game too, and they were going to pay 5% to retailers, but with the threat of competition they hurriedly agreed to meet the competition and pay 8%. Even back then they threatened retailers and told them to choose between the feds' products and their own; we could not sell both. I wonder how many retailers know that they owe a debt of gratitude to the federal government.

Two other games sprang up. Pot of Gold and Cash for Life both fared well, but the province chose not to renew their licences. These strong initiatives were treated as disposable by the Tory government. Competition was again eliminated, and so it stayed until break-open tickets sprang upon the scene. Charities and retailers in the north, and eventually all over Ontario, combined to offer a starved public an alternative to OLC products. In five years this industry, which was mostly unadvertised and under attack by lottery personnel immediately and continuously, managed to grow to its present level of sales, which is $1.4 billion in 1995. I believe in Alberta in 1995 they did $61 million in sales. They don't even deserve to be spoken of in the same breath as our industry.

The OLC boasts sales of $1.9 billion in its 1995 fiscal results, and these figures were achieved over 20 years using big-bucks advertising and million-dollar jackpots. So why would a product offering only $100 prizes be so popular and frighten the government-OLC? There are two reasons, as I see it: A total prize payout of 73.6%, which the OLC can't match, and the fact that retailers pay out approximately 500 break-open ticket prizes of $100 for every one $100 prize paid out on the Instant scratch games of the OLC. This may not seem realistic to those people who are not consumers of our products, but I can tell you that our customers figure this out quickly and sales reflect the realities of the marketplace.

What appeals to people to play Nevada tickets? I think it's the fact that you're a player. You approach a seller, size up each box of tickets visually and then try and determine how many winners are left in the box. This helps the player to determine just where they will get their best bang for their buck. With VLTs or slots, the odds are randomized every millisecond, but most people don't comprehend this. It's human nature to feel that if you invest in something you should be rewarded. When we open a box of break-open tickets, we can guarantee our customers that there are 224 winning tickets in the box, there are $800 in prizes in the box, and there are five $100 winners in the box.

Recent changes by the gaming commission prohibit us from advertising these facts. But we are encouraged at the same time by OLC reps who post large jackpot alert signs showing guesstimated, not guaranteed, jackpots for 6/49, Super 7, Lottario and any other products they have to offer.

When you consider the odds and the number of terminals in the province, we will sell a jackpot winner for the OLC about every 200 years. Often OLC jackpot signs are left inaccurately on major Ontario highways for up to a week. Retailers are sick of the pretentious double standards offered by the gaming commission. We who have had a large hand in building this industry are portrayed as less than honest and yet the government-OLC is given a free hand to do as it pleases.

Bill 75 will make it a crime for us to post the number 5 on a box of Nevada tickets. It's not a criminal offence to display completely inaccurate information on the jackpot alert sign above us. Is this what we call Ontario justice? Did you know that losing government-OLC scratch ticket symbols are the same as those on major prize winners? It wasn't always that way. Remember, only one in two million wins the grand prize, and although all prize money is supposed to be paid out eventually, the OLC has a vested interest in encouraging customers to throw away winning tickets because they get to keep the interest earned in the two years the people have to claim these prizes.

As retailers in the lottery business, we have supported both government-OLC and charitable gaming. Government-OLC products have remained strong despite competition and yet they still continue to lobby to pass bills like Bill 75 which are designed to destroy competition and provide low-quality products for the consumer. It's no surprise that so many people in Ontario and even on this panel have dissociated themselves from the Ontario gaming industry products. By creating a monopoly in this province and using the gaming commission to suffocate new ideas from entrepreneurial minds, the government-OLC continues to trot out boring, tepid reruns and inferior new products. In this way, it tries to herd the captive Ontario market to the slaughterhouse of its choice.

If Bill 75 passes, the government-OLC will expect the Ontario public to embrace VLTs and give up the old games it has gone out of its way to deflate. Do you remember the OLC ads that for years claimed that all Instant odds were better than one in four? Well, the odds went up. After years of providing a continuous message, much like a promise or guarantee, they quietly change the odds in their favour, and you can bet that the same thing will happen with VLTs. No warnings will be given. It's buyer beware.

It's quite evident that the decision was made in concert with a master plan for Bill 75 as they have not provided any bonus games in 1996 nor are any planned. The government-OLC will gladly sacrifice this small part of the business if they can capture most of the break-open market and the many new players who will be attracted to the excitement of the world of electronics.

Let us look at who will win. The provincial government will capture the revenues currently generated by break-open tickets. Under current regulations, the government does not receive any money at all for municipally licensed sales. Ninety percent of this money would now flow through government VLTs to provincial coffers. Bar and restaurant owners would initially receive 10% for allowing the government-OLC to set up this lucrative network.

Please always keep in mind that Bill 75 is enabling legislation. Once this bill passes third reading the government-OLC is free to place these machines anywhere they see fit and at any time they choose. It's been said by the finance minister that VLTs will be implemented in stages: first, racetracks -- racetracks think that's a great idea -- then permanent-site charitable casinos -- racetracks don't mind that too much either, a lot of people agree with that. Finally, after careful evaluation, he says, they may activate stage 3 and put them in licensed establishments or even bingo halls. Yeah, right. Where does it say that in Bill 75?

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Parry Sound, home of the finance minister, does not want VLTs. This to me is a very significant point. Many municipalities have shown clearly and strongly that they, like Parry Sound, oppose this bill, but the government itself smells the money and is prepared to disregard people and override their wishes.

I'm sure that the hotel association could provide no end of important studies, much like Marshall Pollock's Alberta graph, to extol the virtues of "smerging" steps 1, 2 and 3 into one stage. Remember, the government-OLC has already said to expect 20,000 VLTs to roll out in October of this year. Where are they going to go? The charitable casinos have not been determined and in some cases may even have to be built. These machines would come straight into our communities and each one will drain at least $25,000 from the local economy.

Ivan Sack, editor of Canadian Casino News, says that in Alberta the provincial return is $61,000 per machine. Any way you look at, we're talking billions. Let there be no mistake about numbers of machines destined for this province. New Brunswick has 3,714 machines as of March 31, 1996, to serve a population of about 700,000. It will not take long for the government-OLC to roll out 60,000 VLTs in our province to disservice our population of about 12 million people. That's right: I said 60,000; 20,000 is only a start. The government-OLC takes pride in being a leader in their industry.

In case you haven't noticed, the government always needs more money. Don't be fooled by politicians' words. Bill 75 places no limitations on the number of machines allowed in the province, nor does it govern the speed at which the machines are set to extract the patrons' cash. These details would all be worked out over time, once the storm of public opinion blows over. I guess you call it fine-tuning.

On a smaller scale, let me explain how Bill 75 would affect my retail business and many of the other 17,000 retail lottery outlets in the province. We, as lottery kiosk operators, face extinction. All our leases and wage expenses are predicated on past sales results. Unlike most businesses, we are unable to bring in new products to replace revenues legislated away by the government. We're only allowed to sell products authorized by the OLC or Ontario gaming commission, although many competitive break-open tickets exist with much more attractive prize structures. Just ask the first nations people.

We're stonewalled by the gaming commission in order to protect OLC market share. Our hands are always being tied. We never have a level playing field. Although our business operates in other parts of Ontario, Sudbury represents an important foundation for us. Let me review some of the losses that passage of Bill 75 would offer the city of Sudbury: 732 licensed Sudbury charities and non-profit organizations will be seeking new ways to fund-raise; a Sudbury pie of $8,300,000 will be slashed in half, if we're lucky; the rich fabric of volunteer services will become tattered and torn as frustration at losing autonomy sinks into the community organizations.

Who are these people we're talking about? I'll tell you, they are schoolteachers, members of the YMCA, canvassers for Heart and Stroke and your local little league coaches. These people will be thrilled to know that Godfather Mike would be one step to creating Las Vegas North if Bill 75 were passed. These people would have to line up in Toronto to fill out forms to apply for the annual provincial lottery to see which not-for-profits qualify for a Harris handout. By the way, if you lucked out last year or the year before, you would not be eligible to apply. That's the scenario we are going to face if Bill 75 passes.

Two hundred and seventeen provincially licensed break-open ticket outlets in the city of Sudbury alone out of 9,520 in the province will see their revenues snuffed. In our case, 35 local jobs will be at risk. We've been an employer in this community since 1986 and we do not want Bill 75 to steal our business and decimate our community where we raise our families.

Bill 75 makes it a criminal offence to break any of the terms and conditions laid out by the Ontario gaming commission. This means that most sellers will risk being in violation almost every day and therefore face potential criminal charges daily. How so, you might ask? One of their rules states that when half a box of break-open tickets is sold, the vendor must -- and "must" is the key word in this sentence -- add another box of tickets to the container holding the tickets. If the vendor forgets or is busy doing something else in the business at the time, then they run the risk of being fined up to $250,000 if they're a corporation.

In case you think this only applies to break-open tickets, I'll read you an undated letter recently received from the friendly Ontario Lottery Corp:

"This is to advise that on June 13, 1996, the Ontario government introduced legislation that will make it a provincial offence to sell a lottery ticket to anyone under the age of 18. We anticipate that it will receive final approval this fall when the Legislature resumes. Individuals convicted of an offence would face a maximum fine of $50,000 and corporations a fine not to exceed $250,000. Police agencies throughout the province will be responsible for investigation and enforcement of reported violations. Currently, the OLC act prohibits the sale of lottery tickets to individuals under the age of 19.

"The OLC will continue to assist police by providing them with information about reported incidents. We are taking this opportunity to ensure that all our retailers are aware of the government's commitment to punish those who do not adhere to this proposed law. The OLC is confident all retailers will strictly observe this proposed law."

That's the end of the responsibility as far as the OLC is concerned.

As one of the 17,000 lottery retailers in this province, I would like to point out that we do our best to avoid selling to minors. We make 5 cents on each 6/49 ticket or Pro Line that we sell. Obviously, we need to make thousands of transactions daily just to pay our bills and as a father who is blessed with a six-foot-tall, 17-year-old son who has a passion for sports, I can tell you that it is not easy to comply with these rules 100% of the time. It seems unfair that the government OLC can dump this responsibility on vendors and walk away scot-free themselves.

Bill 75 has the potential to make 17,000 lottery vendors into criminals and we want Bill 75 to be defeated. Any bill which asks its citizens to live in fear and face entrapment is bad legislation and should not be passed.

Mr Marshall Pollock, on behalf of the Ontario Video Gaming Corp, told the government what it wants to hear. He says you have to be predisposed to become addicted to VLTs or slots. This man is an expert on impulse sales and has spent many years honing these skills.

VLTs are like coffee outlets or fast food locations. Very rarely are these locations final destinations, but when we see one we often stop and spend a little time and money. For those people he describes as predisposed to be addicted, it will not be much fun to live in Ontario. We will no doubt be surprised to find out that these people have been living among us for a long time and did not even know it. Perhaps they're friends and neighbours or even members of our own family.

Las Vegas North brings many negatives to our province; crime will continue to accelerate, grey machines will not go away. The government has chosen to reward the Ontario Hotel and Motel Association for admittedly breaking current provincial law. Perhaps that's because Godfather Mike and his government have found that there's more money in gambling partnership than there is in enforcement of current law, especially when you have a 90-10 split.

There's nothing in the bill which guarantees the 10% to the hospitality sector either. As I said before, Ontario lottery retailers have built the OLC for the government on 5% revenues and will not accept having our business legislated away and seeing the government slash OLC and pay twice as much to our competitors. The hotel association and racetracks which are excited by today's prospects may think very differently in the future if they find a new government chooses to reduce their revenues arbitrarily after they have their electronic systems in place. The OLC has a record of dealing with its distribution system in this manner: Start high and then whittle them down when the revenue taps are flowing.

I have one other question too. If the OLC is not going to own these machines, who will? Marshall Pollock fronts for a group that wants this opportunity. Who are his partners and who really stands to make big bucks in this carefully orchestrated sequence of events? Why would any citizen want to accept Bill 75 when we have no answers to these important questions? Minister Sterling, when asked about this decision, said it will be determined by an order in council. That is reason alone to kill this bill.

But to summarize, Bill 75 should be defeated because the Premier reversed his campaign promise and his minister did not tell the truth. Clearly a referendum is required to give new direction to this government. Bill 75 should be defeated because it will rot and decay our social structures by promoting false hope to our youth. Bill 75 should be killed because it only offers rewards to the hotel and motel association who have proven through their actions that they're not law-abiding, nor do they have any roots in the charitable gaming or lottery business. Bill 75 should be quashed because as it stands it will potentially make criminals out of honest citizens.

To disregard these factors would indicate that provincial government greed is an overriding factor which makes a mockery of Mike Harris and his Common Sense Revolution.

The Chair: Mr Lilley, your time has elapsed and therefore, there's no time for questions. I thank you very much for your presentation.

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SUDBURY AND DISTRICT LABOUR COUNCIL

The Chair: We'll move on to the next presentation, by the Sudbury and District Labour Council, John Filo, president. The committee welcomes the member for Renfrew North, Mr Conway.

Good morning, Mr Filo. You are to be congratulated. I believe you are the only labour representative who has attended before this committee on this particular subject and the committee welcomes your attendance.

Mr Kormos: OPSEU was here damning the government for its failure to consult with the workers.

The Chair: I'm sorry, they were not dealing with this bill. They were dealing with another matter. In any event, please proceed, sir.

Mr Ron Johnson: Aren't they on strike?

The Chair: Excuse me, Mr Johnson. Please proceed, sir.

Mr John Filo: I'd like to take this opportunity to thank you for having me at this hearing and to welcome you to Sudbury. I see other people who have been here before -- Tim and other people who are vitally interested in what's happening in our society -- and although I'm here presenting as the president of the Sudbury and District Labour Council, I have to make it clear that my presentation focuses on the fact that I'm a parent, a citizen, an educator and vitally concerned about the direction in which our society is heading.

I've sat here for a few presentations and I've been really upset by the focus on funding, on money, as though money were the solution to our ills and our problems, particularly in this province. This province is an extremely wealthy province, it has tremendous natural resources, and as I go through my presentation you will see that in many ways it's a very retrograde and regressive way of raising revenues by the introduction of VLTs.

I want to start out by saying that I've had a considerable amount of experience in a variety of different countries, particularly developing countries, although I've had much experience in the United States, which can't be characterized as a developing country -- or maybe developing into something we do not want. I want to point out to you that in all my international travels the countries worth living in you can count on the fingers of both hands. Canada is one of these countries, and the UN has consistently rated it as the best in the world.

What makes Canada so special? It's not our natural resources. Other countries have mineral deposits, for example, that are richer and many times larger in size. Canada is favoured because it is politically stable, has a highly educated workforce with a strong work ethic and has a social system which has in place mechanisms for a reasonably broad distribution of wealth because we have recognized that although most of us are physically, emotionally and fiscally healthy, large numbers of our fellow citizens are not.

We've fashioned a compassionate and caring society by subscribing to the notion that we indeed are our brothers' keepers. The social safety net includes welfare assistance, employment insurance, workers' compensation benefits, Canada pension plan and OHIP, which incidentally contributed insignificantly to our province's and our country's debt and deficit. The high real interest rates created that.

Most of you are aware of Mimoto's work with Statistics Canada. I think the academic paper and the academic community agree that these things were not the cause of our debt. The social safety net is accompanied by enlightened legislation which in many ways acknowledges the imperfections of some of the members of our society. I wonder, however, whether we are adopting policies that will maintain or improve our quality of life, or if the current love affair with the free market will make us into a second-grade version of our neighbours to the south.

We do not allow individuals to drive at any speed they wish and without using seatbelts and to operate motorcycles without helmets. Drugs, firearms, alcohol, tobacco are all controlled to some degree. Gambling, however, seems to be less and less restricted because governments have abandoned the notion of running their business with progressive revenue-raising instruments, such as a graduated income tax and taxes on luxury items including luxury homes, and have instituted regressive measures, such as sales or consumption taxes, reducing benefits to the most needy and vulnerable and creating a whole spectrum of voluntary taxes through a variety of gambling games.

In the most recent United Nations development report, we learn that the total wealth of the world's 358 billionaires equals the combined incomes of the poorest 45% of the world's population, 2.3 billion people. On the average, the income of the population of two Torontos would equal the wealth of one of these billionaires. From 1960 to 1991, the richest 20% of the world's population increased their share of the total global wealth from 70% to 85%, while the poorest 20% saw their global share fall from a meagre 2.3% to a disgraceful 1.4%. By 1991, more than 85% of the world's population received only 15% of its income. In Canada, the increase in the share of the wealth of the top 20% over the 1980s to the present is as large as the amount of money required to eliminate poverty totally in Canada. Implementing the Harris government plans to increase the availability of gambling will further exacerbate the wealth distribution in our province.

That a lottery is a tax on fools is aptly illustrated when we recognize that if all the 14 million possible combinations of Lotto 6/49 were printed on one continuous ticket, the ticket would be 70 kilometres long; it would stretch from Toronto to Hamilton. Picking the winning number would be equivalent to dropping a dart from an imaginary satellite orbiting the earth to land on this very long ticket, on the number you've selected. Winning is most improbable.

My personal exposure to gambling goes back to 1963 when I was engaged in mineral exploration in the state of Nevada. I suppose the first thing that struck me was that these high-rise, luxurious casinos were not built with the winnings of the patrons of the casinos. The second axiom that occurred to me is that all the games are straight, that is, honest. The odds so favour the house that cheating is not required. How many people who will play VLTs understand odds and how many in Ontario will know, for example, that on a poker machine a royal flush is dealt only once in 649,740 times, or that a full house or tight -- three of a kind and a pair -- occurs only once in 694 deals? To gain an increased edge on the patrons, the casinos supply free alcoholic beverages. Do patrons make proper decisions as to their participation rates in the gambling events as their level of intoxication rises?

Does anyone recognize the irony of the situation? A government that says we have no choice but to cut social spending and that we are living beyond our means and our children will reap the consequences is now contemplating the expansion of gambling. What material wealth is created? Nothing. No product, no widgets, just a reallocation of existing resources with the sponsor, the government of Ontario, taking its share off the top. Why isn't the government encouraging the practice of fiscal restraint and spending less on non-essentials instead of creating additional opportunities for non-productive activities?

What are the problems that will result from such ready access to gambling? This has been historically documented. I have here a clipping from the Toronto Sunday Star dated October 7, 1984. Tibor Barsony, executive director of the Canadian Foundation on Compulsive Gambling, is quoted as saying:

"It's a proven fact that the increased availability of gambling will increase the number of people affected. Large chunks of welfare and unemployment insurance cheques are going to lotteries. Those whose expenses are $500 a week and whose income is $400, they say, `My only hope is to get it some other way,' so they spend $300 on lottery tickets. We're taking away money from the poorest by building up an unrealistic hope that they can make it this way."

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This same article quotes McCormack Smyth, a York University social science professor, as saying:

"Lotteries are not just a regressive form of taxation, they're exploitive and a form of political violence. Lotteries are not an opportunity for the less fortunate because it is one they can't afford. In a free society, citizens are free from exploitation by the state. But lotteries are consciously exploiting the weaknesses of people."

In today's context, read video lottery terminals for lotteries.

What sophistry is attendant on the argument that VLTs must be introduced to counter illegal gaming activity because of the existence of apparently thousands of illegal VLTs in place in Ontario, some controlled by organized crime. What a sound philosophical basis to enacting legislation and reducing criminal activity of any sort: Take the easy way out. Just make it legal. The opportunities for generating statistics that would indicate a crime-free society are endless.

Is there a net benefit to our Ontario society with the increase in gambling activity? What presently flourishing businesses will lose out? The amount of money at any given time is a constant. If this money is being gambled away, what goods and services will it not be buying? The jobs that will be created by this non-productive activity may balance out the jobs that are lost when the money is redirected from the creation of new, real wealth. The province may in fact experience a mild increase in its revenue in the short term at the cost of limiting more appropriate and long-term expansion of its real economic base.

What about the social problems? Is this a justifiable method of raising revenue? Are the increase in the number of dysfunctional families because of the addiction to VLTs -- which have been characterized by others are the "crack cocaine of gambling" -- and an increased crime rate plus the other morally offensive ways of obtaining money to salve the addiction worth it?

The problems have long been identified and dealt with both anecdotally and statistically. In proceeding with its legislation, the government of Ontario will be saying that despite the tragedy that will result to certain individuals, despite the fundamentally flawed economics involved -- no new material wealth created -- despite the promotion of dubious values, the money raised in this manner will make it all worthwhile.

Sudbury and District Labour Council urges this committee to act in a non-partisan way. Make a positive contribution to our Ontario society. Recommend against the introduction of VLTs. Recommend to the government that it seek treatment for its addiction to games of chance as revenue raisers. Do we want children left in parking lots while their parents gamble? Roll back the gambling activity in this province. Don't increase it. Thanks very much.

Mrs Marland: No, we definitely do not want children left in parking lots by parents, even if they're shopping, let alone gambling, so that's my direct personal answer to your direct question.

Mr Filo: Are you speaking on behalf of the government?

Mrs Marland: I'm a member of the government. You asked if we wanted children left in parking lots and I'm saying that --

Mr Filo: Okay, the next time I read an article that says children are left in parking lots, Mrs Marland, I will phone you and tell you that the government is in default on the commitment that you've just made here.

Mrs Marland: In parking lots for any reason is what I said. That's fine.

Mr Filo: For any reason, yes. Protect our children, please.

Mrs Marland: I would be very happy to do that because that's what our government believes in.

I'm just wondering if you made a presentation to the NDP government, the former government, when it introduced the legislation to permit casinos in the province?

Mr Filo: Why would that be of concern to you? I thought we were dealing with Bill 75. Were we dealing with some historical fact? I'll tell you the truth: I was against casino gambling and I spoke against it to my colleagues in the NDP. I'm definitely against it.

Mrs Marland: Thank you for that answer.

Mr Crozier: Sir, thank you. As you're no doubt aware, because you seem to be well informed, this government over the next four or five years is going to spend about $20 billion in a tax cut. They're going to borrow every red cent of that $20 billion, and consequently they have to seek methods of revenue that you and I don't like, because I think in this presentation, sir, you've clearly explained your position and I appreciate and support much of that position. Thank you for coming.

Mr Filo: Thank you very much. I just want to make a comment on that $20 billion in income tax. That money is going to the people who are the most well-off in our society and it's being taken from the mouths of our children and from the most vulnerable: the needy and the people on welfare and the people who most need assistance. I'd like to say to this committee that it's a disgrace that we have a government in place that would handicap the handicapped in our society even more.

Mr Kormos: Thank you, Mr Filo. Here it is: Mike Harris promised 725,000 jobs. What do we get? Twenty thousand slots. It doesn't quite work out.

I want to refer you to what Ivan Sack -- he's the editor of Canadian Casino News, so he's not an enemy of this type of gaming -- had to say, because the government's also talked about job creation as it relates to 20,000 slots. Ivan Sack, who appears to have some familiarity with the business, says:

"It is too early to say how many jobs would be created by placing VLTs in bars and at racetracks, as the racing industry has yet to completely weigh the tradeoffs in the decrease in its handle against its gains from the VLTs. However, given that the racing industry already has cashiers, the job gains here would be limited primarily to service attendants and repair people for the VLTs. The same would apply to bars, where on the assumption that each licence is restricted to four VLTs, it would mean no additional bar staff, though additional attendants and roving repair people. The management control system would have to be staffed up and, depending upon the configuration used, additional jobs would be created here."

In Quebec, with 14,500 slot machines throughout the province, the jobs that are being talked about, the service attendants and repair people for the whole province of Quebec, for 14,500 slots, equals 300 people. Ivan Sack, the editor of Canadian Casino News, indicates that these are not labour-intensive. We're not talking about a blackjack table that has to be staffed by personnel. We're not talking about a roulette table. We're talking about automated technology that frees the owner of that machine from having to apply any labour component.

The Chair: Thank you, Mr Kormos.

Mr Kormos: There's no job creation here.

The Chair: Mr Filo, I'm sorry. The time has elapsed for your presentation. I thank you very much for your thoughtful presentation. It gave us a new perspective on this matter and I thank you.

Mr Filo: I think the point that Mr Kormos made, though, about labour-intensive is extremely important, because we see it in the banks. The banks have switched to ATMs. The VLTs are the ATMs of the gambling industry.

Thank you for having me and good luck in your deliberations. I want to say to you that I think this committee is supposed to perform a very serious and an appropriate service to our society. I think you'd be remiss if you didn't take into account more than just the revenue aspects of VLTs.

BINGO PRO INC

The Chair: Our next presentation is by the president of Bingo Pro Inc, Mr Doug Burke. Good morning, Mr Burke.

Mr Doug Burke: Good morning. Before I start, I just wanted to address a comment towards a gentleman. I think it was maybe Mr Johnson; he's not here at the moment. A couple of times this morning he mentioned that he was bringing up statistics forthcoming from Alberta that indicated that there was not a drop in Nevada ticket sales after the introduction of VLTs. I just happen to have faxed information right from the Alberta Gaming Commission's finance office that says exactly the opposite. I'll address that in here.

My name is Doug Burke. I'm president of Bingo Pro Inc of Sudbury. We are a small business that supplies Nevada tickets and bingo products to charitable and non-profit groups throughout Ontario. This business is registered by the Ontario Gaming Control Commission, to which we must pay thousands of dollars each year to be reinvestigated and re-registered.

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I started working when I was eight years old. In the early days, I was taught that if you worked hard and if you could supply a product and service that was in demand and do it to the best of your ability, you had a good chance to be successful and create a decent living for yourself and your employees.

Then somewhere along the line governments got the idea that they could do a better job and started doing things like artificially intervening and skewing the natural forces of the marketplace, or better yet, going into direct competition with entrepreneurs. Perhaps politicians and bureaucrats felt they could experience the thrill of being in the marketplace while only having to risk taxpayers' money rather than their own. The upshot of 25 years of this meddling has resulted in an economy that is in rough shape and a future for our children that is in grave doubt.

Once again we see an attempt by a government -- this time a PC government, no less -- that wants to meddle in an existing marketplace, that of the private charitable gaming industry, which happens to generate about 50% more sales than the government's own Ontario Lottery Corp. This is witnessed by the fact that last year the OLC did $1.9 billion in sales while the charitable gaming sector did approximately $3 billion in sales.

It is important to note that Ontario's gaming industry is actually larger in terms of gross sales than is its hospitality industry at well over $10 billion per year. So now the government wants to get into the privately run charitable side and mess it up.

Mr Harris and Mr Eves, please note that we do the $3 billion with very little advertising, and you do the $1.9 billion with a pile of lifestyle advertising that cigarette companies are prohibited from using. You don't have anything to teach us.

The hospitality industry has lobbied hard for several years, attempting to swap their deep-fryers for VLTs. There are several things wrong with this picture. If the hospitality industry in Ontario is in trouble, I can see why in my travels throughout the province: (a) too often their service is mediocre to poor; (b) food is rarely of consistent good quality; (c) often staff do not present themselves as working in a career but rather as being in temporary employment until they can find themselves a real job; (d) the hospitality industry was overbuilt in the boom years of the 1980s and no longer has the economy to support it; (e) as society moves away from drinking and driving, as well as from smoking, the demand for this old style of hospitality is naturally shrinking.

These problems will not be cured by VLTs, but rather worsened by them. If a tavern or restaurant owner can suddenly make fast dollars simply handing coins out to VLT players, there will be no incentive to upgrade the food and service focus of their business. Tourists seeking true hospitality will stay away in droves. Why do many Canadians fly to other parts of the world to experience high-quality hospitality? I suggest that a major re-education effort for this entire industry is the answer, not VLTs.

In spite of the above symptoms, why would our government go into partnership with people who are publicly admitting to being involved in criminal activity with grey machines? To further make their motives suspect, only yesterday Minister Leach told municipalities that as economic times have worsened, it is unrealistic to expect that all of Ontario's 815 municipalities should stay in business, yet Ernie Eves is not willing to let nature take its course in the free market of the hospitality industry.

Another reason it is wrong for the hospitality industry in Ontario to demand VLTs is simply this: It's none of their business. They are not in the business of gaming; we are. Other governments have gotten into bed with tavern and hotel owners in order to jointly reap cash from VLTs, but those provinces do not have charities dominating gaming anywhere close to what occurs in Ontario. For instance, Alberta's sales for Nevada tickets are less than 5% of those for Ontario.

How would the hospitality industry like it if the 20,000 charities and 17,000 Nevada ticket retailers in Ontario suddenly lobbied their municipalities to ban smoking in all licensed establishments in the province? The hospitality industry would be outraged at us for sticking our noses in their business, and rightfully so. Likewise, we are outraged at them for sticking their noses in our business. But perhaps because we in our charities are generally quiet about our work, the hospitality trade did not realize how large and organized we actually are.

I voted for Mike Harris for one simple reason: He said he was not in favour of VLTs and certainly not without a full and fair study of the effects on existing stakeholders. Mike lied to me and I will not forget this. He was the last politician I thought I could trust. Norm Sterling, in writing, told Charities First that no new gaming activity would be introduced into Ontario until a full assessment of the social and economic impacts was completed -- lie number two. Two weeks later, the budget announced that VLTs were on the way before any consultation, much less a full assessment, was done.

Contrary to what Norm Sterling would have us believe about his discussion with Alberta's minister Steve West, the Sault Star quoted Mr West as follows: "Alberta may have erred by allowing video lottery terminals to spread across the province in bars and taverns."

Tell me why any charity or business in our industry should believe anything else these people have to say about the so-called benefits of VLTs.

To me, it all boils down to greed. The government sees nearly $3 billion of charitable revenue earned each year versus only $1.9 billion earned by its agency, the Ontario Lottery Corp. It wants the bigger charitable pie. It's as simple as that.

Bill 75 changes the power structure over gaming in a dramatic way. It should be clearly recognized that if this so-called enabling legislation is passed, it will enable the government to do anything it damn well pleases, as most majority governments are prone to do. This bill in itself guarantees nothing to charities and puts no limits on VLTs or anything else. We could see tens of thousands of VLTs in the province. The only indication of limitation is the words of the politicians who have proven to be untrustworthy in this matter.

This bill paves the way for the government and its OLC to out-compete charities for limited dollars. It will discourage volunteers from being self-reliant and motivated to help strengthen our social fabric.

I believe this government is boldly going where no other Ontario government has gone before in terms of the logic used by its leaders. They would have us believe that to eliminate illegal activities, you just simply legalize and expand them. Following this logic, one could assume that it won't be long before we'll see the legalization of prostitution and heroin as well. In the year 2006, will we be debating the merits of Bill 175, the poppy extract and escort service bill?

I was surprised to notice in the Ontario Restaurant Association's submission the high moral standard that group took on behalf of "protecting the consumers from the LCBO." Yet these same people want the government to unleash the most lethal weapon -- VLTs -- against the consumers of Ontario. Better yet, these self-admitted participants in criminal activity would have all consumers believe they are best suited to be the standard bearers of consumer protection.

Ask some of the charities that have dared to have taverns or restaurants sell Nevada tickets on their behalf about the problems many experience when attempting to collect all the proceeds owing to them.

Bill 75 has been too cleverly crafted to allow a morally sane person to take it at face value. Even these very hearings have been perfectly timed to move on through the summer when most municipalities seldom meet and all charity boards take a summer recess. Great. Few people to complain about it.

Remember Mr Pollock's claim that VLTs did not hurt break-open ticket sales in Alberta? The figures of the Alberta Gaming and Liquor Commission show otherwise. Within three years after the introduction of VLTs, break-open ticket sales dropped by 40% to $61 million. In the five years previous to VLTs, Nevada ticket sales fluctuated slightly but still averaged $101 million. So that went from $101 million to $61 million in three years after VLTs.

There has also been a suggestion that since the Legions in Alberta represent 50% of that province's break-open ticket sales, the decline in sales there was seriously affected by a decrease in Legion membership due to deaths etc. As recently as yesterday, I spoke to the person in charge of both memberships and break-open ticket sales for Alberta's provincial command of the Legion. He told me that Legion membership in Alberta has not experienced an unusual decline and clearly stated that VLTs have by far had the largest impact on their Nevada ticket profits. Those profits have dropped by 48% since VLTs were introduced. He further quoted that many people who used to socialize at the Legion now walk across the street to play VLTs by themselves.

No one knows more about the effects of VLTs on Nevada ticket sales than the manufacturers themselves, and every VLT manufacturer we've spoken to in North America echoes these dramatic sales drops. And remember, this means a big drop to charitable funding in Ontario.

The hospitality trade claims that many jobs were created in other provinces due to VLTs. Perhaps, perhaps not. At this point that's anecdotal information. However, other provinces have a small charitable gaming sector. Let us not forget that Ontario's gaming sector generates as much sales or more than its hospitality sector at over $10 billion. For every job that is liable to be created by VLTs in the hospitality sector, one will surely be lost in the gaming sector. So where's the win in terms of jobs?

Jobs and dollars lost in the charitable sector mean a far greater loss in the number of volunteers who are willing to work for free. These people are an essential part of the backbone of our society. No government could hope to fund the value to society that these hundreds of thousands of volunteers represent. When our government kicks the wind out of those people, we're in big trouble. Will our children even know the definition of "volunteer"?

In summary, I will conclude with these points:

(1) The hospitality industry has no more business in our affairs than we do in theirs.

(2) Someone with a lot of influence has caused a few of our top politicians to lose their stated path in a very short period of time.

(3) Charities have learned to survive on the street after being thrown out by successive governments. They don't ask for, nor do they want, your so-called help, nor do they trust its offer.

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(4) Part of Bill 75 has the sweeping power to change both the moral and volunteer fibre of our society. The inclusion of VLTs along with the amalgamation of the two major regulatory commissions in Ontario is wrong. These are two separate issues that are mutually exclusive and should be dealt with in separate bills. Amalgamation may have some net benefits, but VLTs have few or none.

(5) Yes, I come from the viewpoint of having a vested financial interest in this issue, but I'm not joining with the government to come after their business or customers; they're coming after mine.

That's the end of my comments.

The Chair: We have three minutes per caucus.

Mr Ramsay: Thank you, Mr Burke, for your presentation. I just want to say the quality of the presentations this morning has been excellent. I've been to most of the venues that we've been at across the province and these are tremendous presentations. I congratulate you and the other presenters.

Thank you very much too for getting those Alberta figures for us, because we had some that were presented by the break-open ticket people in Toronto, and as you heard this morning they had been refuted by Ron Johnson of the government party. I'm very pleased to get that up-to-date information. If you could make that available to the clerk of the committee for reproduction and distribution to all the members, I know I would find it and I'm sure all the members of the committee would find that valuable.

I wanted to ask you, because I think what's important here and what's kind of surprising -- because of course the Tory party over the years has always prided itself as somehow being the managers, that somehow Liberals and New Democrats can't manage things but they can manage things -- they said even before they would look at any expansion in gambling that they would do a full assessment, that they would do a study, and that would be the prudent way to go. Why do you think they're not making that sort of comprehensive study of gambling in Ontario before they put their foot forward with this expansion?

Mr Burke: That has got a lot of us puzzled, because we were led to believe for the last few years that VLTs, at our own charitable gaming conventions in Niagara Falls, which Mr Kormos was present for this year -- we were led to believe for the last several years by government people that although there was a cry for VLTs from the private sector, it was a non-issue as far as government people were concerned and not to worry about it. Then we started to see a few changes happening within the bureaucracy.

For instance, the registrar of the gaming commission was suddenly moved -- and he was the top guy -- to the racing commission. We should have clued into it a year and a half ago when that happened, when Mr Major moved there, that something major was happening, because he had a big job, a task already. Then in November 1995, all of a sudden Mr Clare Lewis was made joint chair of the two most powerful commissions in the province.

It wasn't until we got to the convention that many of us even heard about this. Then all of a sudden the bells and whistles started going off that something's cooking here, and although statements were coming out this winter from Mr Eves and others that VLTs were not on the front burner, that was on the back burner, all of a sudden we're presented, with about five days' notice, that we have until July 15 to rally the troops and get out for this hearing. We had four or five days to try to notify people when we found out about this and we know that to put a bill together like this doesn't happen in two or three weeks; this has been going on for some time. So somebody in the background, and we'd sure like to know who it is, has something to benefit here, but it's not apparent.

Ms Martel: Thank you, Mr Burke, for coming out today, particularly for providing us with some of the information you did with respect to Alberta, not only with respect to the loss in revenue, but frankly with respect to the Legion's position as well.

Because you've talked about Mr Eves, maybe it's worth pointing out to you and to other folks who are here just what the finance minister did say about this particular issue. As recently as March 1996 he said this to the Toronto Sun: "VLTs could create a lot of social problems in our society. Lots of other provinces have introduced VLTs and lots of other provinces have had social problems as a result of VLTs."

It's interesting that in a short two months he then went on to say -- this is in the Globe and Mail, May 8 -- "Right now, the province of Ontario has very little or no control at all over those machines. We at least would like to be able to control and limit and restrict the amount of that activity and make sure it's done in a legal and upfront and fair fashion."

So all the social concerns got swept under the table, all the concerns about getting tough on crime got swept under the table, and here we are in August now dealing with legislation that's going to legalize some 20,000 machines and, as you've already said, how many more, we don't know, before this is over.

Let me ask you about the charities that you are in a partnership with. Can you tell the committee the numbers of people you work with, what kind of charities, what kind of revenue is generated that then helps them do the important work that they have to do in this community?

Mr Burke: We deal with somewhere around 1,000 non-profit charitable groups throughout the province. I have never calculated what their total revenues would be, but it would be well up in the millions. Many of them are small charities that have two or three volunteers who do an immense amount of work. The real concern we have is that right now there's no way for them to access funds through the government. I just had another call yesterday afternoon from another charity, the Sudbury Meals on Wheels, that just found out that their funding has been cut off. "What can we do to get on to Nevada tickets?" It's a saturated marketplace for that now and it's really tough for them.

So when the government's telling you that it's going to help charities, there's nothing in the bill that says they are. I didn't see it mentioned once. That's got a lot of charities concerned, because they've learned how to survive on their own thanks to other governments throwing them out on the street to do that, but they don't trust and they don't want to have to go back to the government toll. I'm sure other people here will speak about what the OLC promised in the past and delivers now. It all sounds nice, but nobody believes it. I'm sorry.

The Chair: Mr Hudak, you have three minutes.

Mr Tim Hudak (Niagara South): Thank you for your presentation, sir. I especially enjoyed your opening remarks, because I think we have a lot in common in the faith in entrepreneurship as the engine of growth in the economy; that a capitalist society will produce products and generate the wealth so that we can help those who fall between the cracks, those who can't keep up with the rest of society. I think your quote was, "By working hard and putting out a product that people want, you can be successful in life and then the consumers can choose among the different options for that entertainment dollar." Whatever is the product most closely aligned with tastes will be the product that brings that dollar in, will expand and then make that hardworking individual and their family well-off.

Then there's the darker side of capitalism, where an existing group in the market will lobby the government to ban its competitors or to handicap its competitors. Certainly, this area -- I'm going to ask you, if the private sector then, an entrepreneur, maybe myself, were to bring VLTs into the marketplace, as you yourself brought break-opens into a marketplace that already had raffles and bingos -- the government cleared the way for you to do so, and I bet the bingos and the raffles and the lotteries lobbied against break-opens -- what's the difference here? Why not allow VLTs into the marketplace if you have that fundamental faith in the capitalist system, in entrepreneurship, in offering consumers what they want?

Mr Burke: I would say that it has been addressed in several ways. First of all, where the money's going. The money's going out of our towns and communities, and although I'm an entrepreneur, I believe strongly in the backbone of keeping the community solid in that regard. That's a major issue for a lot of people.

Secondly, and our associations have taken this viewpoint: Keep gaming where gaming is. If some VLTs are going to be coming into the province no matter how many people scream and yell about it, then at least keep them in controlled gaming venues. That is our business; that is our industry. Bringing them into the hospitality trade to me would be similar to E.B. Eddy asking the government that they want to get into the mining business and now they want Inco to be left with the shovels and picks and they want the scoop trams.

Mr Hudak: Certainly. You would know that the Conservative government would be against any kind of that type of nationalization, and previous governments were into that in a big way. You know we don't think that's a good way. So it's not really an argument about competition or entrepreneurship; it's more about how you distribute the funds that the consumers spend. I'd certainly agree with you. Coming from a town that has a strong charity gaming industry, I would like to see that as much as possible redirected to those communities that created the wealth.

The Chair: Time for this presentation has elapsed. Mr Burke, I thank you very much for making your presentation here today.

I should announce that your 11:40 presenter has cancelled today. I would imagine she would be at the AMO convention, but I'm not certain of that.

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CASSIO'S MOTOR HOTEL AMBASSADOR HOTEL

The Chair: Our next presenters are the Casino Hotel, Mrs Melinda Dozzi, manager, and the Ambassador Hotel, Mr Richard Clement. Good morning.

Mrs Melinda Dozzi: Good morning. I just want to clarify one thing with you. It's not Casino Hotel, it's Cassio's. I don't want you to start saying "casino," it's much too early.

The Chair: I'm very sorry, I did say "casino." I have that on my mind these days. I'm very sorry, ma'am.

Mrs Dozzi: I was previously told by the former government that if one asked for something often enough, one might achieve their goal. Our business is a people-related business and we want to continue to employ many people in the province of Ontario.

Mr Chairman, members of the committee, ladies and gentlemen, my name is Melinda Dozzi and I am the owner-manager of Cassio's Motor Hotel located in Sudbury. I want to thank you and your committee members for the opportunity to appear here today. I want to begin today by stating up front that I am very supportive of Bill 75 as it relates to video lottery terminals and urge the government to implement them into the hospitality sector as soon as possible.

We as an industry are in serious economic situations and I can tell you from a personal perspective the urgency of the situation. Our industry is in trouble. Sales are down 20% across the industry, we have lost about 100,000 jobs and there have been about 1,400 bankruptcies since 1992.

The Minister of Finance in his budget on May 8 said the government was going to allow VLTs to help our industry. Specifically, he said, "We believe that VLTs, if implemented within tight regulatory controls and in limited-access environments, can meet a legitimate entertainment demand and provide a significant stimulus to the hospitality industry."

Just a little bit of history. I have been associated with the Ontario Hotel and Motel Association for a number of years. Going back a few years ago, I was the president of the Ontario Hotel and Motel Association and I have been lobbying for the introduction of VLTs into the province of Ontario. This is not new for the Ontario Hotel and Motel Association. At all times, we had no intentions other than good intentions. We wanted licensed establishments with the age of majority to have VLTs on their premises. The previous government knows that this is a fact, as we went to them on many occasions to discuss the implementation of VLTs.

We have see Manitoba benefit from the introduction of VLTs; first, rural Manitoba, with proceeds going to agriculture and future development of rural Manitoba, and then they were introduced into the city of Winnipeg. Our peers in northwestern Ontario look with envy as they see their peers prosper and their businesses decline. We know for a fact that at present there are at least 15,000 to 20,000 VLTs that are in the province of Ontario illegally. Perhaps there are many more now, since gambling has been introduced into Quebec and there are VLTs also present in the state of New York. No proceeds from these go anywhere except into the underground economy. The treasury of Ontario has no benefit from these machines.

The greater Toronto area especially has felt their impact, according to their police chiefs, and it has become a problem for the policing in such areas of such machines introduced into the greater Toronto area.

Ladies and gentlemen, we are an industry and have been an industry for the last few years that has been struggling. I realize that in the 1980s in many areas we become too ambitious and overdeveloped many of our hotels and taverns and bars, which today are finding that they are struggling. To tell you the truth, any hotel, restaurant or tavern in the whole province of Ontario is for sale.

We fought many years ago long and hard to introduce Nevada tickets or break-open tickets into the bars of Ontario so that they could benefit hockey teams, baseball, ringette etc. The Ontario Hotel and Motel Association's chief charity is the Variety Club. The Variety Club has been using break-open tickets for many years. We are totally in favour of the Variety Club. They are, as I say, our favourite charity. We talked long ago with their chief barker, Mr Gord Josie, and talked about the introduction of video lottery terminals into the province of Ontario. He felt that one day they would come and why not put them in an industry where everything was totally legal and we were looking at an age of majority being involved.

We at all times wanted to be involved with the Ontario Lottery Corp, which we met with on many occasions. We also suggested that the guidelines and supervision should be connected with the Liquor Licence Board of Ontario. We wanted everything to be done in a first-class fashion. We suggested that the profits the province would collect would go for health care in Ontario.

This industry has struggled for a long time. We were the ones who encouraged the introduction of offtrack betting in many of our establishments. We also fought long and hard for Sunday shopping so that in the tourist areas especially the whole area would prosper and develop. We struggled long and hard for the introduction of an item that is dear and near to the people in northern Ontario, and that is for the introduction of northern Ontario draft beer so that we could compete on a level playing field and those in northern Ontario would feel they are just as good as their sister associations in the whole province of Ontario.

This association and industry has had to fight for all it has received. VLTs are an important issue for us. The above areas I have mentioned are a fact and to date everyone has benefited from the introduction of some of these different items that we have fought so long for.

Mr Chairman, on behalf of myself and the employees I still have and for those I would love to be able to re-employ, I urge you and your committee to recommend to the government quick passage of Bill 75. I would also suggest that your recommendations include a request to move implementation of VLTs for our industry on to the fast track. Our situation is desperate. We have all been hoping and praying the government would take this progressive step and we are grateful that it has. We need the stimulus of this new form of entertainment. We don't have to speculate as to the outcome. The positive results are there already, as amply demonstrated in Manitoba. Then you have to let the consumers decide in which way they are going to proceed.

Mr Richard Clement from our industry, the president of the local hotel association in Sudbury, will continue with the presentation.

Mr Richard Clement: I am owner-operator of the Ambassador Hotel. I'm also the president of zone 22 of the Ontario Hotel and Motel Association, which travels from French River to Chapleau, to Hagar, to Elliot Lake, including Manitoulin Island. I have a very large zone. We as a group have been lobbying for VLTs for many years.

The benefits from the VLTs, as we see it from the trenches, would certainly help the government with $1 billion a year in revenues. The charities would get an estimated $180 million in extra funding from their 10% share of the revenues of the VLTs. This is on top of the $2 billion a year that is already spent in Ontario on charity gaming.

I don't know if people think that by getting into VLTs in bars you're going to have casino-like bars and restaurants. I don't see that vision. I see it as an entertainment in our bars and restaurants. People who come out to enjoy themselves at night -- we are entertainers in our hotel business. We have rooms, we have food, we have accommodations -- this room, for instance -- and we have nightclubs for people to go out and enjoy themselves. I've been in this business, myself personally, for 29 years in this particular building.

I don't see why everyone is getting so up in arms. People in Sudbury, in this area, must be very charitable. You go into a corner store; you see these break-open tickets. They're called Nevada tickets, same as ours are called VLT machines. They're not slot machines; they're VLT machines, video lottery terminals. The money we would be taking in would be astronomical for the charities. We would help them and we would increase the sales of break-open tickets, as far as I'm concerned.

The addiction to gambling: I have many things to read here, but I'd like to speak from my heart and say that we need the VLTs. We have them, we're going to get them and I would wish that you would pass this Bill 75 quickly so we can get them as fast as we can, because we need the assistance. We would create a lot of jobs; it would help us employ people. Right now a lot of us in the mom-and-pop operations are doing the work ourselves. We can only do that so long. Thank you.

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Ms Martel: May I say to Melinda that I am pleased to see her here. It looks like you're recovering well. Thank you for appearing before the committee.

Mrs Dozzi: Thank you. Other than I'm speaking with a bit of a lisp, it's all right.

Ms Martel: That's all right. Having said that, let me say that on at least three occasions during the time we were in government you lobbied me directly about supporting VLTs and on each of those three occasions I said I was opposed, and I continue to be. So we will continue to have our different points of view on this issue.

I want to focus on the job creation, because in front of us right now we have a copy of a press release, which has obviously been put out today, that says, "Video lottery terminals", which are in essence electronic slot machines, "will create 10,000 new jobs for our industry." I want to compare that with a presentation that was made by Ivan Sack from the Canadian Casino News, who I'm sure, Melinda, you would know is no stranger to gaming and is not opposed to gaming, who said before this committee on August 7:

"It is too early to say how many jobs would be created by placing VLTs in bars and at racetracks, as the racing industry has yet to completely weigh the tradeoffs in the decrease in its handle against its gains from the VLTs. However, given that the racing industry already has cashiers, the job gains here would be limited primarily to service attendants and repair people for the VLTs. The same would also apply to bars, where on the assumption that each licence is restricted to four VLTs, it would mean no additional bar staff, though additional attendants and roving repair people. The management control system would have to be staffed up and, depending upon the configuration used, additional jobs would be created here."

In Quebec, I understand he told the committee, with 14,500 slots, they were looking at 300 jobs to be created. So if we're talking about 20,000 machines that are illegal in Ontario that would be legalized, we're not looking at much more than 400 jobs at best. I have to ask you, where are those jobs going to come from? We have a big difference from maybe 400 that they looked at in Quebec to 10,000 being created here that you're talking about in the press release.

Mrs Dozzi: A survey conducted by the Manitoba Hotel Association indicated:

"As a result of the introduction of VLTs in the province, the rate of bankruptcies dramatically decreased by over 85%. Each location has reported that as a result of VLTs it hired almost one full-time person and added almost another part-time person. Based on these results, Ontario can expect to create many more jobs in the hospitality industry."

What I sometimes wonder when we speak to the general public is: Does everyone realize what a video lottery terminal is? Have you seen one? Do you know what they are? Do you know what they look like? They're not slot machines like they operate in Las Vegas. They don't act like that at all. They are a video lottery terminal.

I feel that if you have increased traffic in your bar -- and I know for a fact, speaking to those in Alberta, and you talked about Alberta before, that drinking has declined in all areas in Canada, but the introduction of video lottery terminals into their bars in Alberta has caused additional traffic and therefore the bar operator can still have a little bit of extra revenue coming in. Whether they're spending it on drinking alcohol or video lottery terminals, at least there are people and people mingling.

Mrs Marland: I wanted actually to ask Mr Clement to say something about addiction because he was getting into that. I guess the problem with being around so long -- and Mr Conway knows more about that than I do -- is that you get to hear the same lines over and over again, depending what the issue is and where you sit in the Legislature. I remember when I sat in opposition and I argued against the expansion of lotteries to the hospitals by the Liberal government because it was a tax on the poor. The reason I'm putting that on the table is that we seem to have had some researchers do some wonderful background and I'm kind of hurt that they didn't find my quotes back there in Hansard when I said it was a tax on the poor. Certainly, the opposition argued the same thing about the introduction of casinos. Yet today we now have really our lines being used by the opposition parties in opposition to this legislation.

The position I find myself in is quite interesting because although I've used those lines in the past myself against both your governments, frankly, what I said didn't come to fruition. It didn't become a tax on the poor. That's why I would like Mr Clement to talk about the addiction aspect, because I think that's the biggest public concern, that we will have more addiction to gambling than we have now or than we have to alcohol or drugs, that this is going to be the major problem. We haven't solved addiction to alcohol and drugs so I'm just wondering what the comments would be as it pertains to gambling.

Mr Clement: As far as the government is concerned, the government will set aside $9 million a year from VLT profits to fund the best treatment program in North America. The Addiction Research Foundation told the justice committee that VLTs are not the crack cocaine of gambling as is stated in the popular press and by the Liberal opposition. A recent study at the University of Windsor shows no increase in gambling addiction since the casino opened there with more than 2,500 slot machines and VLTs. ARF and the Canadian Foundation on Compulsive Gambling say that 95% of Ontarians do not have a problem with gambling. Treatment and education programs are needed for 1% or 2% at risk.

Mrs Marland: So would you agree that some form of gambling is always going to exist and what we're talking about here is a matter of choice for people as to how they spend their money and that at least our government is committed to putting in the returns from the profits to treating addiction, which no previous government has done?

Mr Clement: That's right.

Mr Crozier: Thank you, folks, for coming and taking the time to present your feelings to us this morning.

For Mrs Marland's information, I have about 58 pages of Hansard here and included in it is where Mr Eves and Mr Harris railed against gaming.

We've heard the concerns of the hospitality industry in northern Ontario and southern Ontario, across the province. I appreciate those concerns. I think it's a broader issue that needs to be addressed than just these magic little machines. I suggest that if you get them, they won't be the answer, because it seems to me from presentations that albeit the price of wholesale booze -- and I use the term "booze" on purpose because people understand that booze is wine, liquor, beer, distilled spirits, the same as people realize that a slot machine is anything that sucks up your money and doesn't give you an awful lot back. But I appreciate your concern and we're going to help as we can within the terms of what we feel is right in this province to assist the hospitality industry.

The Chair: I'd like to thank you both for your presentation here this morning.

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JACQUELINE MORVAN

The Chair: Our next presentation scheduled is the community of Kapuskasing, Jacqueline Morvan, chair, recreation committee. Good morning, Ms Morvan. We have changed it from the town of Kapuskasing to the community of Kapuskasing. Perhaps you might educate the committee as to the legal status of Kapuskasing.

Mrs Jacqueline Morvan: It's because I am involved in all the sports and recreation in Kapuskasing. I am involved with everybody but I don't represent the council of Kapuskasing. I am not a member of the council.

My name is Jacqueline Morvan. I am a mother of four children. I have been involved in volunteer work for 22 years almost. I believe in recreation and sport. I believe in the children. Going through my four children, I wanted to help the community of Kapuskasing and the area to develop children and develop sports for them.

I am not here attacking any government -- past, future or present. I am a volunteer person and I am not a paid person. I believe in what I am doing. I am going to try to explain the best I can in English, although I am French.

The Chair: You can speak in French, if you wish. We've got translation.

Mrs Morvan: Yes, but in the room the people who are English won't understand.

The lottery in Ontario was created to help sport and recreation -- you all remember that -- hockey and all kinds of sport. When they wanted some help they went to the government and asked for help. For example, for teams that are travelling, Kapuskasing is very far from the south. They were allowed to have half of one trip in a bus every winter. We were allowed to have some money for equipment. That means all those associations were helping the poor people, the people who didn't have the money, to get involved. In fact, we had quite a lot of kids in minor hockey. We helped soccer, we helped minor baseball, every sport, and that's why our I represent the community, because I am involved in those things.

One day the government decided that it would send the money from the lottery to schools and hospitals. Fine. We said: "It's okay, they need it. We're going to find another way to get organized." Then came the Nevada. The Nevada is a very beautiful tool because the tickets are bought by people in the community and the money stays in the community to help the people in that community. That's why those Nevadas are very important.

I heard all those presentations this morning. Mine won't be scientific because I am not a pro; I am just a volunteer. I think that in Canada lots and lots of things are completed by volunteer people who have the heart and use their hearts and their minds together. Those Nevadas came up and we helped minor hockey; we helped everybody doing things with the kids, with the children who are our future. They are very important. Whether they are rich or poor, it doesn't matter.

By being involved with that community, I helped some other people. For example, there is one paraplegic whose wheelchair is not wide enough for him. The parents applied through the drugstore man to have another chair. It was refused. They waited for two years and said: "You have to fix it. You have to do this. You have to do that." That person was full of blisters everywhere because that chair was too narrow. Finally, we succeeded, we got some money. The chair is $3,000 and something, but the government gave only $2,000 and something. Who is going to pay the difference? That person doesn't have any money. The Nevada gave the money; the Nevada gave the difference.

I don't criticize the system. They need the money. They have to be fixed. They have to look out for everybody. I agree with that. But why destroy the Nevada business, which is helping so many people through the province, which is doing so many things through the province? Everybody is getting help.

There is one person who had an accident or whatever. He couldn't walk, so he was swimming distance. Suddenly he is not coming to the pool any more, and he had improved so much by swimming. We asked him why. He said, "The government, the system, whatever it is, cut my money so I cannot pay the $36 a month to come back." So with that Nevada we helped.

I could give you hundreds and hundreds of situations like that. That's not only in Kapuskasing; it's like that everywhere in Ontario, but especially in the north. We gave money to the minor soccer, which went from 200 members to 800 members. That little money we gave helped to buy balls and to buy a little bit of equipment because there is nothing in the government any more for them.

Last September we had the swimming pool. One guy was on the ceiling and accidentally went through the ceiling. So the ceiling is finished, the roof is finished. The pool closed. You know the municipality doesn't have the money because the government got it. I don't blame the government. Please, don't get me wrong. I don't know how to organize the government. If I would like to be in politics, I would be with them. I don't. I believe in what I am doing. I found with my groups $32,000 to fix the roof. It was $110,000. Again, that comes from the Nevada. Those Nevadas were bought by the people from Kapuskasing and went back into the community in Kapuskasing.

We are trying to improve our arena. Again, seven or eight or nine years ago we could go and get $500,000 for the project, $400,000 from the government. It doesn't exist any more. We are going to provide it. We are going to work around and we are going to do it. We didn't criticize. We didn't come to the table like that to be mad at the government when it did it. They did it because they had a reason to do it. But today, please don't take from us the tools we have to help our population and indirectly, to help our children, because that's what you are doing, not counting those VLTs which are -- Bill 75 is definitely a joke because it's not clear enough. Everybody knows that the day they are going to start it they are going to put it everywhere, because it's good money and easy money.

Don't you think it's a little bit aberrant, or whatever it is in English, to see the government going with gambling to make money to save the deficit when they are going to destroy the population? What kind of population are they going to destroy? The poor, the small ones. We are going to have the rich and the big ones and we are going to have the rest of us. Whatever they are going to do, it doesn't matter. We won't be able to help anybody any more.

I am involved with minor hockey. I became a director of the Northern Ontario Hockey Association because I want to develop hockey and I want to help, again, the youngest. Last year, Kap minor hockey got $30,000 with the Nevada. That $30,000 for 600 kids is not bad, you know. If we lose half of it, next year we're going to lose 200 kids. What are they going to do? They are going to be in the street, they are going to be doing whatever, going to the bars, because -- like I told you, I have four children. My youngest one, who was the most undisciplined one, was 18 years old when he was in the bars and nobody ever threw him out. I was waiting for the police to do something or for somebody to do something. Nobody threw him out. So those kids who are 16, 17 or 18, going to the bars, are going to play with those VLTs and they are going to do things. I am against that. That's another thing.

The gambling with those machines, the way it's presented today, is destroying our population. My comments come from my heart. I had my experience with volunteers. Please look at it. You said the presentations this morning were fantastic. I agree with you. It was absolutely incredible. I came here on my own money. I am not paid by anybody to do that, I do it because I believe in what I am doing, but I learned lots today. I learned there are lots more people against it than for it, so definitely you'd better -- I don't know who you are because I am not involved in politics. I just respect everybody who want to do it instead of me. But please, think about it.

That gambling stuff is absolutely ridiculous and you are going to kill all the associations, the voluntary work, because don't forget, the voluntary business is big in Canada. Yes, Canada is a very nice country, Canada is a fantastic country, but my gosh, we are going to destroy it and it won't be long. If you don't look at it seriously before you do something like that, you're going to regret it. The only thing is, you won't be in politics any more. It's going to be somebody else who's going to pay for it and suffer for it.

I think that's approximately everything I have to say today. I thank you very much for giving me the opportunity to come and say it.

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The Chair: Thank you very much, Mrs Morvan. We have some questions. We have approximately three minutes per caucus, and it's Mr Flaherty and Mrs Marland for the government.

Mr Flaherty: Thank you, madam, for your presentation this morning. We have in the course of our deliberations -- some of the members have been here throughout -- in the past 10 days travelled in northwestern Ontario, in Thunder Bay and Kenora, where there was substantial support for Bill 75 and what we're proposing to enable by that legislation; similarly in Fort Erie and in Sarnia as well as in Toronto. I had an opportunity to spend two days in Kapuskasing in May, so I'm familiar with the efforts the town is making there and the strides that have been made there.

Part of the concern is charities and what happens to charities under Bill 75. As I've said, the Monte Carlo night revenues will be increased by more than 10 times what they are now. There will be permanent charity gaming halls around the province of Ontario, and I hope those who are interested would apply for them. There will be funds for charities from that. There will be an increase in revenues to charitable causes in the province of Ontario of $180 million. That's new money. That's a tremendous increase to charities.

Much of what you've said about recreation -- we've heard about different extracurricular activities this morning -- has to do with what's a charity, what isn't, what qualifies, what doesn't, where the permanent charity gaming halls are going to be, are the hockey teams going to be treated the same as the cancer society and so on. One book of charities that I have has 188 pages full of charities, so there's a lot of consulting to be done after Bill 75, the enabling legislation, to determine which charities of which sort, including recreation, would qualify. That's very important, and that government is committed to conducting those further consultations, and I hope you will participate in those.

But let me confirm to you that 10% of the revenues from video lotteries that are away from the racetracks are going to charities, and if our concern is really with charities and with people in need and not with the commercial operators of such enterprises making profits from them, then this legislation accomplishes a very substantial increase in funding for charities.

The other part of it, and this was felt to be very important in Kenora with respect to tourism and hospitality, is granting some sort of encouragement to the hospitality and tourism industry, which is the fourth-largest industry in this province in terms of job creation. The evidence before this commission from that industry is that more than 10,000 jobs will be created in the province of Ontario by providing video lotteries to racetracks, permanent charity gaming halls and licensed premises.

Mrs Marland: Madame Morvan, I just wanted to congratulate you on your presentation. I can't help but think that the town of Kapuskasing must be a better place because you're there -- I mean, your passion and your dynamism. I can believe that you can persuade all these organizations to support the causes that you go after on behalf of the people you support, and it's just amazing to have someone like that. I personally appreciate it and I know our members do, your presentation, about the needs. We do recognize those needs.

The Chair: Thank you --

Mrs Morvan: If I may answer, please. I appreciate your comment, but I need more than that. I need you to remember what we represent, because I believe in health things, you know. And if you don't realize, the «survie» of our children is there with those voluntary people, with those little associations, and it's very important that we don't destroy that. Whether it's the school -- I heard this morning the principal; what he was saying is exactly true, because we are helping schools too.

To answer Monsieur Flaherty, you are probably sincere in what you are saying, but you will forgive me if I don't believe you. Because, you see, in the past, even if I am not involved in politics, I follow policies closely and I follow the lottery, the Lottario and everything, the way the funds are given. When I see everybody cutting away everywhere -- the school cutting, the hospital cutting -- I don't think the money is going where you think it is going.

I don't blame you, you have to be a part of the whole system, but you will forgive me if I don't believe that those big figures, those big amounts of money, are going to be given. Your key word is who you are going to decide needs the help. I don't believe in that. In my little community I help who needs, and that's it.

If I can give you --

The Chair: Thank you, ma'am. We have to give the other caucuses a chance.

Mrs Morvan: Okay, I'm sorry.

The Chair: No, not at all. I let you go on because I wanted you to have an opportunity. Mr Crozier.

Mr Kormos: Mr Chair, she can use part of our time to finish her response.

The Chair: When we get there. Mr Crozier.

Mr Crozier: Madame Morvan, I thank you for your presentation. I think you speak on behalf of hundreds of thousands of people in this province who haven't had the opportunity to come before the committee.

Mrs Morvan: Definitely.

Mr Crozier: We appreciate your comments and we will be listening.

Mrs Morvan: Thank you.

Mr Crozier: And if you have any comments, you can use the balance of the time.

Mrs Morvan: I would like just to mention another example. There was a guy, a young man, 27 years old. He is -- how you call that? -- mentally retarded. I am not sure about the new words we use now. He's not completely normal anyway. He had a problem in his mouth. He has a sickness in his mouth and he lost his teeth. The representative of Parliament in our little town went everywhere to get some money. The dentist was asking only $600 to put two «palais», two --

Mrs Marland: Denture plates.

Mrs Morvan: Dentures. Nobody wants to give $10. Nobody, whether it's the Liberal, NDP, whatever, I don't care. Nobody. Through our little organization we paid the dentist the $600 for that guy to have proper teeth in his mouth and be able to eat regularly.

Now, I don't blame the system. They have to cut everywhere. But who's going to decide who merits having that $600 or not? You in Toronto. Do you really care about our little problems in the little town far away? No. And the people over there won't have the money to go down and defend themselves. That's why that Nevada business is our whole saviour.

The Chair: Thank you. Ms Martel.

M^me Martel : Merci, Madame Morvan, pour être ici ce matin. Vous habitez à Kapuskasing, alors vous avez voyagé très loin ce matin pour présenter ici. Je dois dire, sans diminuer l'importance de toutes les autres présentations de ce matin, que vous avez parlé du coeur. Vous avez parlé simplement, clairement, mais vous avez vraiment parlé du coeur à propos du problème et à propos de ce qui vous concerne en ce qui concerne ce projet de loi. Je voudrais de la part de mes collègues et de moi-même vous remercier.

Just to translate, I thank Mrs Morvan for coming so far today, because Kapuskasing is very far away, and without diminishing the presentations of everyone else, I do believe that she has spoken most strongly from the heart here this morning. The presentation was very clear, it was very simple but it was very important because it so expressed the concerns that she wanted to express. If you want to use any of our time to add anything else, I would certainly like you to do that. Thank you.

Mrs Morvan: Well, on finishing, maybe it's not completely wrong to have something like Bill 75 but they had better look at it, rewrite it and make sure they don't destroy our little association. There is a way, there must be a way to do it differently. Those people are pros, they go to school to do what they are doing and they have people who are very educated for that. I am sure they could find a way to do it differently and not destroy our little association, our little organization, our kids, because lots of it goes around our children. Thank you.

The Chair: Thank you very much. That is the end of our presentations this morning.

Number one: amendments. We have, I believe, the third party amendments and the opposition amendments. Oh, they're on their way. Do we have the government's amendments?

Mr Flaherty: Not yet.

Mr Crozier: They've got a ton of staff here with them and they can't provide amendments.

The Chair: I think it's only fair that none of the amendments be distributed until we have it. Hopefully we can get it during the lunch-hour.

Mr Kormos: With scarce resources, the Liberals and New Democrats can deliver. This government just can't.

The Chair: Thank you for your comments, Mr Kormos. In any event.

Mr Flaherty: He's always helpful.

The Chair: Right, as always, very helpful. We are adjourning until 1:20 sharp this afternoon.

The committee recessed from 1151 to 1322.

CITY OF SUDBURY

The Chair: Good afternoon, ladies and gentlemen. We have Mr Thom Mowry, city clerk of Sudbury. I welcome you, sir. I apologize that not all our members are here, but no doubt they will be coming in. However, due to a flight that we must catch, I prefer to start now.

I compliment you on your excellent brief, which I just had an opportunity to glance over, and I ask that you proceed.

Mr Thom Mowry: I would first like to thank you for your time this afternoon. As indicated, my name is Thom Mowry. I'm the city clerk for the city of Sudbury and have administered the city's licensing and lottery program since 1984.

This brief is actually the basis of a background report that has been requested by the area mayors of the regional municipality of Sudbury on the financial and social impact that the introduction of video lottery terminals may have locally. This report will not be delivered to the mayors until some time in September, therefore my submission should not be considered to be official policy of any area municipal council in the Sudbury region. However, the committee's presence in Sudbury does offer a unique opportunity to share with you this afternoon and bring to your attention some of my findings and the recommendations I will be making to the mayors of the Sudbury region.

For the convenience of the committee a summary of the recommendations is attached in the brief. I would now like to highlight some of the reasons for these recommendations.

Ontario has come a long way in its approach to legalized gambling. In 1967 the Ontario Committee on Taxation, known as the Smith report, concluded that "the dominant factor in our view is that this type of revenue source lacks any of the grounds of equity which we think should form the basis of a good tax system. ...as a taxation committee we cannot recommend that a lottery be used...to raise revenue for the province of Ontario."

Clearly that was then and this is now. Why the change? Is it better marketing or better games? Not according to noted demographer Dr David K. Foot. In his recent book, Boom, Bust & Echo, Dr Foot maintains that an aging population is good news for the future of lotteries because the front half of the baby boom is now in its 40s, which he describes as the beginning of its gambling years. However, Dr Foot also notes a caution. He writes, "In the decades ahead, as gambling becomes ever more prevalent, our law enforcement agencies will need to develop greater expertise in combating gambling-related crime.... This presents a challenge to our police forces, because they are not well prepared for what is going to happen."

Why should government concern itself if people choose to spend their money to gamble? The answer is simple. The provincial governments are not passive players in this game. Governments are not simply satisfying a demand for gambling. The province of Ontario, particularly through its lottery corporation, is creating demand. The statement of operations for the Ontario Lottery Corp shows that the expenditure for what they term brand marketing in 1995 was approximately $27.5 million, which was an increase of $4.8 million over the same period in 1994, or about an 18% increase. If the experience of Alberta and other provinces and states are considered, governments have not only underestimated the revenue potential of VLTs; they've also underestimated the problems associated with them.

Knowing all this and taking into account the experience of other jurisdictions in North America, the government of Ontario must consider the questions of cost and benefits. Governments, including local governments, must not only be concerned with getting their cut of the profits. The potential problems that may result from the introduction of local fixed casinos and VLTs in the province of Ontario must be clearly identified, assessed and addressed.

As part of the report for area mayors I wrote letters to the chiefs of police in every province that currently allows VLTs, to survey their experience with this form of gambling. Copies of their correspondence are attached to the printed copy of this brief. I encourage you to review their correspondence.

Generally speaking, VLTs do not appear to be particularly popular with police forces in those provinces that permit them. However, the majority of crimes appear to be by employees who defraud employers to support their gambling habit. Indeed one police officer from the Maritimes in a telephone conversation referred to VLTs as the crack cocaine of gambling.

As the popularity of VLTs increased among Edmonton's thieves, Alan Wood, regional vice-president of the Insurance Bureau of Canada, speculated that Albertan bars could be facing insurance premium increases and, in addition, finding insurance harder to get for VLT operators.

Police forces, however, are not required to keep or maintain statistics involving crimes related to VLTs and to other forms of provincial gaming. According to the journal of the Colorado Police Protective Association: "The introduction of gambling means the police generally are busier than normal. It means a rise in crime due to the transient type of population that gambling attracts: more burglary, more drunk driving and more crime in general."

Generally police forces outside large metropolitan areas are not well prepared to meet the challenges of VLTs and casino gambling. The new commission, as part of its mandate, should consider how police forces will be educated about provincial gaming laws and how their efforts will be coordinated. More to the point, police forces will need the education, training and equipment necessary to combat the crimes and social problems associated with increased gambling activities. The benefits cannot accrue to a government that for most of us in the north is often perceived as a distant and foggy entity. At a time when local budgets and resources are being squeezed to the limit, local taxpayers should not be left with the bill for a problem they did not create.

A transition period of perhaps five years, during which the province will provide funds from lottery profits, should be considered to provide the proper skills and equipment for local police forces. In addition, the committee should consider recommending that crime statistics relating to video lottery terminals be maintained by police forces in Ontario and reported annually to the Alcohol and Gaming Commission.

Provinces such as Saskatchewan, and most recently Nova Scotia, due in large part to public pressure, have begun to view compulsive gambling as a public health issue and have introduced publicly funded treatment and counselling programs for both problem gamblers and their families.

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The generally accepted rate of problem gambling in the adult population is estimated to be between 3% and 6%. In the Sudbury region, that translates into a figure of between 3,500 to 7,000 problem gamblers 20 years of age and older. This figure does not include under-age problem gamblers, and despite best intentions, under-age gambling will become a greater problem with the introduction of video lottery terminals. To provide some deterrent effect, these devices should not be allowed in any establishment that is within 300 metres of an educational facility and should be prohibited from university and community college pubs. In addition, the employees of establishments where video lottery terminals are located should be specifically prohibited from using lottery terminals in the establishments where they are employed.

I do not know how much the province of Ontario currently spends for treating addicted gamblers or to educate the public on the dangers of compulsive gambling, but I respectfully suggest it should not be an amount less than what is spent by the Ontario Lottery Corp in promoting its wares. Two per cent of anticipated revenues of $460 million for VLTs amounts to only $9.2 million.

Public health issues such as gambling should not be dependent on a percentage of the take. The province should put in place a clear and distinct policy and guidelines on how it intends to deal with the problem, including reliable and long-term funding. The problems associated with gambling are long-term, whereas the anticipated profits from VLTs may not be.

The recipients of earmarked funds often find themselves having to fight a political battle to retain adequate program funding when profits decline or successive governments perceive more worthy uses for these funds.

What is going to be the effect on local charities and local governments?

Local charities and volunteer organizations are going to be devastated and local municipalities will be left with demands for greater funding for various programs previously funded by profits generated by local gaming and licence fees.

Moreover, the government's proposal to allocate 10% of profits to charitable groups undermines the concept of the community volunteer. Inevitably, the moneys will go to those organizations that are able to make the best pitch because they have the best full-time and the best high-paid professional staff.

There is considerable benefit to allowing non-profit and volunteer groups to raise their own funds through their own efforts rather than simply relying on what is just another form of provincial handout. Because of the considerable degree of organization and volunteer effort involved, community groups have a degree of control over revenues raised locally. This control would be lost if local groups were to be dependent on grants from VLTs.

It must be appreciated that from the perspective of each non-profit group attempting to raise revenue, it is the profit per licence that matters, not the overall profits.

The best way, in my opinion, to resolve this issue would be for the province to withdraw completely from issuing licences for all bingo, raffle and Nevada events. Some on the committee may be aware that in the past the Ontario Lottery Corp has considered running a province-wide Nevada game or break-open ticket game and then quietly withdrew the proposal. However, I question if subsection 4(2) of Bill 75 reawakens the possibility of the lottery corporation entering into such areas as province-wide raffles, bingos and Nevada events. In any event, it is recommended that Bill 75 be amended in such a manner that the Ontario Lottery Corp is specifically prohibited from entering into any of these games, and further, that they be reserved exclusively for local charities and volunteer groups and administered by local municipalities.

Fixed-location casinos are often touted as an economic development tool for attracting tourists and creating a wealth of jobs and new businesses. There are, however, substantially different economic impacts between local urban casinos and destination resort casinos, and the reason is the nature of the customer. In urban casinos most of the customer base will be drawn from the local or regional market. If the very large majority of casino patrons is made up of the local population, then the local economic benefits will not be very great. They may even be negative as spending is diverted from existing businesses such as movies, restaurants, shops and, yes, bingo halls.

If the decision to permit local casinos is considered to be a done deal, then there is an obligation on the province to ensure that there is a level playing field for local bingo halls, particularly commercial bingo halls. They should be permitted to promote and advertise their services in the same manner as casinos. I urge you to allow them to compete as equals.

Finally, there is one economic asset that we as citizens all value: our community's image. It is more than mere pride or jingoism. "The most visible return on the asset," it was pointed out in the City of Vancouver Casino Review, "is money we make on tourism, but it shows on" the "`balance sheet' in other ways as well, including who moves here, who stays here, whether businesses locate here, and so on."

The image that citizens have of their community or would like others to have of their community may not necessarily include casinos or video lottery terminals. The introduction of these two forms of gambling well may not be part of the image for many Ontarians. They should have the right to debate the choice and make their own views known.

The question of whether to permit local fixed casinos and video lottery terminals, including their number, should be a matter of local choice and should be decided in a similar manner as a local option question under the Liquor Licence Act.

In conclusion, I believe this legislation represents a defining point in legalized gambling in Ontario. This committee represents the first legislative review of gambling in Ontario since its legalization in 1969 and, as such, it represents a start. Over and above this important first step taken by you as legislators to go throughout the province of Ontario and receive public input, Ontario has a unique opportunity to learn from the errors and problems that have confronted other jurisdictions in North America and perhaps avoid them. This committee hearing represents the start of a worthwhile review and debate. It should not, however, be considered the final word.

Please accept my thanks and appreciation for your time this afternoon. I would be pleased to attempt to answer any questions members of the committee may have, though I have it on good authority that appearing before such committees is not unlike being at the wrong end of the food chain.

Mr Crozier: Mr Mowry, I appreciate your last comment. I share that frustration.

You have given to us today one of the most complete reports we've seen in the three weeks on our journey. I hope we have the opportunity to review this in its entirety. I look at the section under the video gambling issue in Fredericton put together by Tim Kelly, a corporal with the Fredericton Police Force, 10 years in major crime investigation, certified in criminology. You're familiar with that part of it, I assume, because you put this together.

He says, very quickly, as part of his conclusion that this is only Fredericton he's looking at -- it may or may not apply to other cities -- but he's had the opportunity to view video gambling:

"The norm appears that most players are of the lower, middle-class portion of society. Many are unemployed and many are recipients of income assistance. Players spend many hours at the terminals and some, where the location permits, play throughout the night.

"Gambling in the city of Fredericton has taken on a new dimension with video lottery gambling. Prior to December 1991, the act was illegal and therefore a policing issue. Today gambling is a societal problem with many citizens being injured."

I am pretending that I am the mayor of one of the municipalities you're reporting to. I review the report, I look at your recommendation and I say, "Well, based on this, I think we should stay as far away from video lottery terminals as we possibly can." Would you concur with that?

Mr Mowry: I think that's why it's important that municipalities be directly involved in deciding about video lottery terminals and fixed casinos. That's why I put in the suggestion regarding a local option question.

Mr Crozier: Exactly. As a municipal representative, you suggest that the municipalities should have, least of all, the option to opt out.

Mr Mowry: It should be an option that they should be allowed to consider.

Mr Crozier: If enough municipalities in this province opted out, I suggest it would be tantamount to telling the government, "Let's stay away from it."

I thank you for your presentation. It's very complete and it'll be interesting for us to read it all in depth.

Mr Ramsay: It sounds like a good amendment.

Mr Kormos: Mr Mowry, I thank you kindly. My office has tabled with the Clerk's office in Toronto several amendments which reflect some of these recommendations. I have confidence similar amendments have come from my colleagues in the Liberal Party as a result of what we've been told.

I want to tell you something, sir, and I want to tell you something, Chair. Mr Mowry, on behalf of local communities, has done more research into the social problems and the community problems that are going to be confronting communities in this province than this government has over the course of a year while it was planning and formed a commitment to 20,000 slot machines.

This government and its committee members have attempted on every single day of these hearings to belittle research data about the high level of addictions and the unique nature of video slot machines and their addictiveness. They've attempted to laugh off and trivialize the concerns that have been raised. Well, let them read the letters from chiefs of police from across the province.

This government and these government members have attempted to belittle concerns about the involvement of organized crime. Well, let them read the report from a Fredericton police officer who's involved in investigation of organized crime, criminal intelligence unit, who confirms that the source of slot machines, one-arm bandits and poker machines has historically been from organized crime in the United States. This same police officer, notwithstanding that he's been assured by the management of the lotteries commission that they screen the sources, indicates that the issue remains topical for police.

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The fact is, these machines are made by the mob. Anybody who doesn't understand that is living in another world. If this government doesn't understand and isn't prepared to acknowledge the research that's available to it -- and this confirms everything the opposition parties have been saying for three weeks now about getting into bed with the mob -- then they'd better wake up, because they're being had. Damn it, the people of this province deserve far better than a government that's prepared to work arm in arm with organized crime to fleece the little people of this province.

Mr Flaherty: Not only have we the opportunity now to read this report, but we've had the opportunity to review voluminous reports for the past several weeks at this committee, and I thank you, sir, for the presentation.

We know from the Canadian Foundation on Compulsive Gambling that they appreciate the need for a measured, phased introduction of video lotteries. They've said that and they appreciate that the 2% of revenue pledged for research and education and treatment of gambling is a welcome commitment from our government. We're the first government to face up to the reality that there is an addiction problem associated with gaming and to fund work on that problem in a committed way.

I hear Mr Kormos again. He's wrong again. The evidence we have from the Addiction Research Foundation before this committee on the first day of our hearings with them was, "I don't think it's an appropriate term," referring to the crack cocaine of gambling. People can get into all kinds of trouble with all kinds of gambling, but the probability of addiction doesn't necessarily increase with the video terminals. That's what the expert said. Now, Mr Kormos is an expert, I suppose, in his own mind, but this is from the Addiction Research Foundation and we need to rely on it.

With respect to the Atlantic provinces, sir, we had the benefit last Wednesday morning, and Mr Kormos was there, of a one-hour teleconference with the chair of the Atlantic Lottery Corp and another member of that commission. They have not had a significant crime problem. They told us the way they operated, not only in that province, but in three of the other Atlantic provinces.

They also have a difference in New Brunswick and Prince Edward Island which Ontario does not share; that is, they introduced video lottery terminals in corner stores. We intentionally are not doing that. We're restricting them to licensed premises, to racetracks and charity gaming halls, so I think we need to compare apples with apples. I'm sure the opposition parties, including the NDP, want to be accurate in their assessment of the problem, rather than political in that regard.

I would ask you about employment opportunities, Sudbury and region --

Interjections.

Mr Flaherty: The 10,000 jobs that will be created --

The Chair: Mr Flaherty, our time has elapsed, in any event. Mr Mowry, I'd like to really thank you for the professional presentation you have made today. I'm sure you've done the city of Sudbury proud in the amount of work and research you've provided this committee, and I thank you very much for that.

PREVENT A LITTER SUDBURY

The Chair: Our next presentation is Albert Nesseth, director and president, Prevent A Litter Sudbury.

Mr Albert Nesseth: Good afternoon. My name is Albert Nesseth. I reside in Copper Cliff, a small community which is geographically located just to the west of Sudbury proper and which politically has been amalgamated into the city. As your agenda indicates, I am a director and the president of Prevent A Litter Sudbury, an animal care organization which proudly claims to serve the entire regional municipality of Sudbury.

I would like to commend the committee for coming to Sudbury to hear our opinions, and to thank you in particular for hearing the concerns of PALS. We are grateful to Donna Bryce and Grace Griffith, who were quite helpful in accommodating our request to appear before the hearing.

I am speaking on behalf of a modest, non-profit charity, with the intention of lending our voices to what I trust has become a chorus of reminders; that is, to ask you to please keep in mind that the primary motivation of Bill 75 should be to further facilitate the financing of the important work of numerous Ontario charities. My thesis, then, is quite straightforward and I have chosen not to supplement it with a written submission.

Prevent A Litter Sudbury, PALS, needs continued access to the money generated by gaming in our community. Our valuable work depends largely on the funds that we raise in cooperation with our operator, Klondike Casino. We fully endorse the proposed improvements of Bill 75 as they apply to charity casinos. Prevent A Litter Sudbury has a mandate to educate the Sudbury public to the benefits of sterilizing their family pets. We are also addressing the cat overpopulation crisis by sponsoring a spay/neuter coupon program through which we make cat sterilization affordable for needy owners. We help with feral colonies, as resources allow. We do not receive funding from any source.

Perhaps I could impress upon you, the members of the committee, just how critical these gaming assets are to our operation by quoting from our financial statement for the fiscal year 1995. In that year, PALS spent $28,800 in pursuit of the goals that I have outlined. Some $13,100 of this was raised at seven three-day charity casino events, so 45.5% of our 1995 expenses was earned in this way, at an average rate of approximately $1,870 per three-day session. I might add that each of these sessions required 150 volunteer hours.

Klondike Casino has earned our trust. They have the expertise and are most professional in co-hosting our events, and they monitor the status of gaming in Ontario for our mutual benefit. Because we rely heavily on charity casino earnings to finance our valuable work, we are anticipating the natural progression of the local gaming industry.

This is what we are anxious to see and therefore appear before you to encourage:

Firstly, the approval of a permanent location for charity casinos in Sudbury. This decision is important if we are to overcome many of the hurdles that the nomadic nature of casinos has previously set in our way.

Secondly, we look forward to the approval of the installation of video lottery terminals at this permanent casino location. This surely is the key to allowing charity casinos to compete successfully with commercial casinos.

Changes, then, should have the purpose of directing money that is initially payrolled here in Sudbury towards our own local charities. Presently, much of this money is catching a ride to facilities in northern Michigan or, more recently, to Casino Rama. I am of the opinion that the introduction of VLTs could rejuvenate the charity casino cause locally but that without the presence of VLTs, even a permanent location will not have enough appeal. We will not be able to retain the locals, who will drive three hours to a glitzier commercial location, nor attract the tourists, who will pass through on their way to another gambling venue.

We have little doubt that once these changes are approved and enhanced earning power of charity casinos is confirmed, additional charities will be lining up for a piece of the action. The onus will be on PALS and other casino-experienced charities to take the government up on its offer to have direct input to the design of a mechanism to coordinate the financing of the needs of all of the charities. We welcome the reassurance made just this morning in this room that this mechanism can remain local. We do not want to have to line up with our hands extended towards Toronto.

I predict that some revenue-sharing plan will be agreed to, and it will help to secure the earnings that a particular charity can expect in a given period of time. Under this improved scenario, the potential certainly exists for a given charity to finance more charitable endeavours while actually holding fewer casino events.

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I've been advised to leave some time for questions from members of the committee, but please allow me to quickly summarize: Gaming has become an accepted means of financing charitable work in Ontario. For PALS, charity casino earnings represent a significant resource and we feel that inaction at a time when rivals continue to advance would jeopardize that resource. We request that this committee's recommendations provide for our modest earnings from this source to continue. In fact, we see these changes as having a win-win potential and dare to hope that we can expect revenues to be slightly augmented. We certainly will put the money to good use.

Ms Martel: Thank you, Mr Nesseth, for your presentation here this afternoon. I want to ask you about the VLTs and the location of the same. If the VLTs were put into bars too, and there certainly was a presentation this morning urging the government to do just the same, would your position still be the same?

Mr Nesseth: I regret that I missed that particular presentation after having been here early in the morning. I don't have an opinion with respect to the VLTs in bars. I'm just specifying that we need them in our charity casino to be an attraction.

Ms Martel: So if the government opens this up -- and if there are 20,000 illegal VLTs operating in the province now, I suspect some of those might be in bars right now -- if the government allows that to happen, would you be concerned that it might draw on the very same people you're hoping will come to your casino night and result in a loss of revenue for your particular organization?

Mr Nesseth: My concern with respect to the licensing is that we always ensure we have security on the premises. I'm confident that anyone who is in the casino gaming is of age, 19 years or older. That's the extent of my concern at this point.

Ms Martel: I would assume that people who work in the hotel and motel industry would have a similar concern and want to be sure that the people they are serving are of age, because they don't want to be hit by a fine, and that there is security. I really believe there are only so many gaming/gambling dollars in the community and it's a question of how people are going to choose to spend them and where. If you have VLTs widespread in the community you're just not going to be able to support the same kind of charitable organizations you once did and other charitable organizations are going to see a significant drop in revenues at the same time their provincial funding is being cut. I understand in your case you don't get provincial funding, but surely there's only so much money to go around, and if it's that extensive everyone's going to suffer.

Mr Flaherty: With respect to the casino nights, are you familiar with the frequency of casino nights now in the province of Ontario, the Monte Carlo nights?

Mr Nesseth: In Sudbury, for example, there is a maximum of two three-night casinos in the entire city in a given week.

Mr Flaherty: What I wanted to allude to is what has happened in Ontario and in the province generally since roving Monte Carlo nights were introduced under the previous Liberal government. The reality today in 1996 is that we have 9,000 casino days a year in the province of Ontario -- and yes, I know there are 365 days in a year, so you can see how many are going on -- 3,000 events a year in the province of Ontario, 240 operators. We've got these casinos roving around, moving every day or two or three, extremely difficult to regulate, extremely difficult to have appropriate surveillance of. I'd ask you about your experience with respect to that. How important is it that there be adequate regulation and surveillance of roving Monte Carlo nights?

Mr Nesseth: I would concur. I have a listing here of three areas of concern in terms of the roving nature of the casino. It creates problems for us with respect to advertising and licensing. The wear and tear on the equipment has to be a concern for the host casino; less-than-ideal facilities for their staff and for us as well. The bottom line is that the regulation will be facilitated once that location is specified.

Mr Ramsay: Thank you, Mr Nesseth, for your presentation. Because I understand how your group really relies on the casino gambling and I know how important that is, I'd like to get back to a line of questioning that was started before. In the Sudbury region here what's the potential of the gambling pot? How much more money do you think there is available that people would use as discretionary spending into gambling?

Mr Nesseth: You used the expression "more money." In my presentation I alluded to the fact that we feel that a lot of the money is in fact leaving the community right now. They're going to Sault, Michigan; they're going to Casino Rama. The additional revenue I'm anticipating would be that created because these people would stay in Sudbury to spend their money, and we would also hopefully have that additional element of the tourist.

Mr Ramsay: If we carry on with your line of logic then, that because there are alternatives outside of this community where people can go -- and you mentioned one of the new ones, Casino Rama -- that are competition, shouldn't you be equally concerned about competition within your own municipality, the new VLT system that's going to put in one machine for every 550 people, which -- I don't know all my math for the Sudbury population, this region -- is a lot of machines? At about $50,000 a machine, that's in direct competition to your casino nights that you derive your revenue from. Isn't that a concern to you?

Mr Nesseth: Again, the people are going to come. The two games that we have right now, blackjack and poker, are what are attracting them there. The VLTs I see as necessary to maintain that competitiveness and I don't consider it to be competition with establishments that are solely there for the purpose of serving alcohol. We are in the game of entertaining, so we have to draw that crowd.

Mr Ramsay: But once you get these sexy machines in over at Don Cherry's and here at the Ambassador and over at Cassio's and all over Sudbury region, they really won't have to come out to your casino nights that often because I can go in at 11 o'clock in the morning and start throwing my money away in these things. Your nights that are kind of special now won't be so special any longer. Right here in Sudbury people who want to get involved in this activity can do it just about any time of day or night and won't be going to where you derive your revenues from. If I were you, I'd be concerned about that.

The Chair: Mr Nesseth, thank you very much for your presentation here today. Our time has elapsed.

Mr Nesseth: My pleasure.

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LAURENTIAN UNIVERSITY

VOLLEYBALL CLUB

The Chair: We will proceed to the next presentation, Dr Kit LeFroy, Laurentian University Volleyball Club. Good afternoon, Dr LeFroy.

Dr Kit LeFroy: Good afternoon. I'll get right to it. I have a number of points I wanted to make to begin. There's no question in my mind from the information I have, and also from some conversations with friends in other provinces, that if VLTs are introduced on a widespread basis there's going to be a significant loss of revenue to local charities. It's almost inevitable. There's also going to be a loss of revenue to municipal governments. I understand this could be as much as 50% of some $700,000 which the city of Sudbury currently gets from the Nevada licences. In effect, this amounts to a hidden tax on charities and local government. Also, obviously there's a possibility of loss of jobs in the Nevada industry and all the suppliers of the tickets and things of that nature.

Something that really concerns me is the loss of local autonomy in that control over a significant amount of funding is going to be shifting to the provincial bureaucracies, and that in spite of this promise of 10% revenue to charities. It's my understanding, for example, that in Alberta, at least until very recently, no funds have been released yet in spite of the province's promises.

My experience in dealing with provincial bureaucracies for some 30 years now is that they move very slowly, extremely slowly. I don't think Ontario's bureaucracy is any different from any other province's in that regard, particularly now we have so many cutbacks in terms of the civil service. Provincial bureaucracies are also sensitive to the political needs of the government of the day; they're not particularly sensitive to local needs. That's just the nature of the beast, not a criticism of the provincial government; it's just the way it is. They make the funding process, when you have to go through provincial bureaucracies, very lengthy, complicated and time-consuming.

For example, the Wintario process now is unbelievably complex and it's virtually impossible for all but the largest organizations to access those funds, as limited as they are. I want to take a couple of moments to give you some history, as I see it anyhow, in terms of Wintario, for example.

In the early 1970s, the Davis government promised that Wintario would be a sport lottery, and those of us involved in sport were extremely happy because this was seen to be a way of solving the sport and fitness and recreation funding problems. Indeed, for a while it was a seemingly bottomless pit of funding, but the reality is that the government became sensitive to other groups and expanded it to include culture. The government also quickly recognized that there was a lot of money there. So they used the tactic of taking unexpended funds and turning them back to general revenues, as required by law, at the end of the year, in spite of the fact that there were many unfulfilled requests out there.

This history, by the way, has carried on through the Peterson government, through the Rae government, all the way through. It's never changed. So that in a period since the early or mid-1970s that process has been pretty consistent.

The problem is a very complex process. The government bureaucrats often didn't even know themselves how to access the funds because criteria changed, if not annually, certainly every other year. You never got to know how to get that money for the programs you wanted to run. The whole process was chaotic, time-consuming and very discouraging, to say the least. This process has continued, as I've said.

The bottom line is that control of a fairly significant source of revenue is going to shift away from local government to the provincial government. This current government has indicated that it's concerned about increasing local control and putting things into the local community. I'm wondering if this is in keeping with that philosophy. Certainly, a major local source of revenue will decrease; I mentioned that point before. It's going to have a negative effect on local organizations and charities.

No doubt, the organizations I represent, which are small and have difficulty raising funds, will be affected negatively, and that means fewer kids being served by the organizations I'm representing. Even if -- and it's a big "if" -- the 10% promise is fulfilled, given the history of the Wintario situation, I think the bulk of the revenue will go to the larger, well-organized organizations, and local organizations will be left out in the cold. History tells us certainly that's what happens.

I'm going to be very blunt about another point, and that is, given the history of provincial governments everywhere and over a long period of time, why should we trust this government to behave any differently than previous governments? I don't think we can see much of a change. It just stretches my credibility in my mind to believe that a government will willingly forego the VLT cash cow, or what it perceives to be a cash cow. At least one government minister has indicated that the government needs this revenue; I might add, so does local government and so do local charities. We all need the revenue.

The question that has to be asked is, how would this funding be replaced at the local level. Raising taxes? That remains to be seen.

One of the reasons for this was that provincial licensing of VLTs would legalize and control a situation where there are illegal VLTs. From a moral perspective I find that repugnant, but from a practical point of view it won't make them go away. People have these illegal VLTs because it makes a lot of money for them. By legalizing it, it's not going to discourage people who would engage in that kind of activity. Really, if we're going to carry that argument to its logical conclusion, why not legalize the use of marijuana, cocaine, prostitution, because they're there and there's a lot of money to be made from them. I don't think this government, indeed any responsible provincial government would want to do that at this point in time, maybe ever.

I've two recommendations. Ideally, outlaw VLTs flat, putting aside all the moral reasons, and clamp down on illegal operations. If that can't be done or there's not the political willingness to do that, then minimally restrict VLTs to existing gambling establishments such as casinos, racetracks, offtrack betting establishments. You may have noticed I've excluded bingo halls from this. Given that VLTs will probably be under provincial control, it would be better to keep them out of bingo halls and allow bingo halls to run Nevadas, as they currently do. If we're going to disturb the situation, let's do it as little as possible.

That, Mr Chairman, is the substance of my remarks and I'd certainly be willing to answer any questions.

Mr Hudak: Just a quick comment on the idea of logical conclusions to arguments about legalization or government control of different kinds of activities: There are a certain number of criteria an issue would have to pass, a number of qualifications before any sensible government would legalize and try to control that. I think that would be that the government could do a better job in terms of benefiting the community by controlling and monitoring than letting the black market run it. But also, you have to have a good deal of public support for these issues, and other qualifications as well. I just find the argument a little specious to say that you would legalize marijuana and heroin and all that sort of thing. Certainly not. They don't meet the criteria that are necessary for when the government should step in, and gambling has passed that.

If you want to go along that line of argument, if you want to talk about logical conclusions to arguments, if you wanted to ban all government involvement with any kind of vice, so to speak, then you would get rid of all types of gambling, and alcohol and tobacco. I think it's a little simple to make that argument, with respect, because there are a number of criteria that have to be passed. In my opinion, the VLTs do pass those criteria I speak of.

Dr LeFroy: May I just have a quick response to that? I don't disagree with the general line of your argument: Then why would the provincial government not control directly all kinds of gambling -- bingo halls, raffles, things of that nature? So I think your point is well taken, that there's that test of public acceptance, and I accept that as a valid argument. I was merely raising that particular point. In fact, there's probably a significant portion of the population, albeit a minority, which would suggest that some of those other vices ought to be legalized and controlled. I suspect it's not a huge group, but there's a significant, probably very vocal group that would want to do that. You're quite right; it's public acceptance. I don't disagree with that. But I really think the bottom line on the VLT thing is it's potentially a huge source of revenue for whatever level of government is involved in it and that really is the thing which is the strongest motivator.

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Mr Flaherty: Funding will increase for charities in Ontario as a result of this legislation of up to $180 million. The commitment of 10% of total terminal revenues being provided to charitable organizations is in writing. It's in the budget document. Here it is. We've had it since May 1996. It's done. This is a government that keeps its promises.

Ms Martel: You said they wouldn't do VLTs in opposition, though.

Mr Flaherty: And Mr Kormos was against casinos. Yes, we know what your party's got to say.

The real question here, sir, and I think your concern is well put, and that is, if I may synopsize it, which charity gets what, and when and who decides? I think your concerns in that regard are very important. We are going to have implementation consultations. I share your concern about local communities and local groups in communities having a lot to say about how these important questions are decided. You're here on behalf of a volleyball club. The cancer society has an interest. The multiple sclerosis society has an interest, all kinds of charities. There are thousands of charities and important causes in Canada, and I hope your organization and other organizations that view themselves genuinely as entitled to participate in this large amount of money, this 10% of revenues --

The Chair: Thank you, Mr Flaherty. Your time has elapsed. We proceed to Mr Ramsay.

Mr Ramsay: Thank you very much for your presentation.

In your presentation you mentioned the Honourable Bill Davis. I'd like to take this time to ask legislative research if they would ask if there's any connection with the past Premier, the Honourable William Davis, with Marshall Pollock and the Ontario Video Gaming Corp. It would be nice to have that information over the next couple of days. I'm wondering why this is being pushed so hard by this government.

I share your concern, and even the government members are saying you should be concerned about this. Why are we taking this leap of faith, "Don't worry, you're going to get some revenues down the road; don't worry about your organization, we'll take care of you," when we're not addressing that first? We're going to take the leap of faith first: "Let's put the VLTs in. We're going to rake in a lot of money centrally. Don't worry. You just apply to us. Put your cap in your hand and come to us and we'll give you some money. Don't worry about it. Yes, your bingo's been ruined and your Nevadas have been ruined, but we've got lots of money. We've got more money now, $180 million. Don't worry about it." Do you think we should be proceeding this way without some sort of comprehensive plan as to how we'll fund you?

Dr LeFroy: I think you've encapsulated my concerns which are the result of my experience over 27 years in Ontario and a couple of years before that in Alberta in dealing with provincial governments. They're well-intentioned. They intend to do good. The problem is that the hardest people to deal with are people who want to do good, because they see their cause as righteous and often have blinkers on as a result. The problem is that in a province as huge as Ontario -- I just yesterday did some nine hours' driving coming out of southern Ontario. It's a huge place and the needs in Chesley are different than the needs in London or in Sudbury or in Thunder Bay or wherever. I defy the wisest provincial minister, the wisest provincial bureaucrat to be able to make all those decisions in an enlightened, albeit very well-intentioned manner. It's beyond comprehension for me to believe that could happen.

Mr Ramsay: I understand what you'd like to at least see happen, if this is the way the government's going to go, is some sort of local mechanism that would make those decisions as to which charity in the Sudbury region, for example, would be able to receive some of these revenues.

Dr LeFroy: Absolutely.

Ms Martel: Thank you, Kit, for making the presentation here today. You hit the nail on the head when you said the biggest part of the problem here is that the control of how money is spent is going to shift from the local level, where people can deal with local needs right now, and shift to Toronto. At that point in time the government is going to make some decision about who's a charity, who's a legitimate charity, who is worthy of funding, and God knows how it's going to put some criteria together about that.

How do you think your volleyball club is going to stack up against the Canadian Cancer Society, for example? Because there's no doubt in my mind that the big charities that have a big name that can strike an emotional cord for people are the folks that are going to get the money here, and the people like yourself and other people we heard from this morning, like Madame Morvan from Kapuskasing, are going to get lost in the shuffle, are going to get snuffed out, aren't going to get a penny to still do the good work you do now in the community. That's the reality. That's what's going to happen.

Dr LeFroy: I agree totally. It's not that this government or any other government's got bad intentions. They don't. But how do they stand up to the kind of pressure which can be put forward by these large, often relatively well-funded organizations? It's just impossible.

Ms Martel: Maybe you can tell the committee at this point about the charities you're here representing, what they do, what the money is used to fund.

Dr LeFroy: I represent three volleyball clubs and the Ontario Volleyball Association, region 2. There's the Voyageur Volleyball Club, the Laurentian University Volleyball Club. We deal directly with some 70-plus athletes, and indirectly hundreds in a given year. These range in age from, I guess the youngest would be 13, up to about 19. We don't deal with adults; it's strictly youth. The impact of this could well be that we'll curtail our programs because we just don't have the funding. I'm not going to have kids going out on the streets selling chocolate bars. That doesn't do enough and, let's face it, I don't think it's safe for kids to do that kind of stuff.

Ms Martel: My concern about what's happening is the government has repeatedly told organizations they will have a chance to apply, and I think at the end of the day the ability to get money from that process for a number of charities will be the biggest crap shoot of all. It really will, because it's going to be impossible for a government in Toronto to sit and determine what are legitimate and valid and proper charities in this community or in many others right across northern Ontario. It's just not on. The local needs that are now being met are not going to be met under the new structure, and people who really are deserving and really do need money are not going to get it. That's what I'm concerned about.

The Chair: Dr LeFroy, thank you very much for attending and for your presentation. We appreciate it.

NORTHERN ONTARIO FIBROMYALGIA NETWORK INC

The Chair: Carol Nesbitt, treasurer of the Northern Ontario Fibromyalgia Network Inc. Ms Nesbitt, welcome. Each member should have received a presentation. Please proceed.

Ms Carol Nesbitt: My name is Carol Nesbitt and I am here today representing close to 1,000 people afflicted with fibromyalgia. The majority of us are disabled and unable to work outside our homes.

Fibromyalgia is a term meaning pain in muscles, ligaments, tendons, the fibrous tissues of our body. This condition of widespread pain and intense fatigue has no known causes or cure. It is diagnosed by widespread pain in the four quadrants of the body together with pain in at least 11 of 18 tender points when pressed. It is an invisible and individual condition.

Other symptoms include non-restorative sleep; stiffness throughout the body; irritable bowel; digestive problems; vision changes; swollen glands; migraine headaches; skin rashes; problems with balance; clumsiness, dropping things; cognitive impairment or difficulties; thyroid imbalance; panic disorder; premenstrual syndrome; weather sensitivity; and irritable bladder.

Who are we? The Northern Ontario Fibromyalgia Network Inc is a non-profit association of volunteers who were brought together by a common interest in living better despite the chronic pain and disabling fatigue, as well as the many other disabling symptoms of the fibromyalgia and chronic fatigue syndromes. Our mission is to improve the quality of life for those directly or indirectly affected by fibromyalgia and chronic fatigue.

Why are we supporting Bill 75? Simply stated, the network would not exist without fund-raising. There would not be a quarterly newsletter, which I have handed out to all of you, which is some members only link to what is happening with their disease. The advocacy and counselling would no longer be happening. As a group we are not strong enough to participate in other forms of fund-raising. We have found that casinos are the perfect venue for us to raise funds.

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I would like to speak first on the proposal to have permanent halls. The network supports this venture, as it will help put more money in the charities' coffers. At present the operator must pay to have all the equipment set up in a new hall every three days, incurring labour costs, moving costs and wear and tear on the equipment. This cost, of course, is shared with the charity. A permanent site would allow the administration offices to be in close proximity to the casino, which would be beneficial to both the owner and the charity. It would also mean greater security, as proper surveillance equipment could be set up to monitor the events.

As you are all aware, casinos are big business in Ontario and Canada, and it seems to be the only growing industry. Sudbury needs this economic growth, as it has seen a lot of jobs disappear recently. If there was a permanent site, with additional gaming tables, this would create more job opportunities not only in the dealer-management-administration area but for the service industry as well, as cooks, wait staff, cleaners and security would need to be hired. This would amount to greater than 400 jobs. Can this boost to our economy be ignored?

If this permanent casino site is administered and promoted properly, and knowing Mr Ohlgren of Klondike Casino, it will be, this will be beneficial to the city. By attracting tourists to the area, the hotels, restaurants, Science North and the stores can only benefit from it. If the permanent site could be situated in the downtown core, it would help revive an area that is not currently being utilized to capacity.

As a charity that does not receive any government funding, we are concerned about losing our revenue to Vegas Kewadin in Sault Ste Marie, Michigan, and Casino Rama, both of which are within easy driving time from Sudbury. This revenue is absolutely necessary for our network to continue to operate a toll-free hotline for members having trouble with their medications, advocacy and lobbying. As well, this revenue is used to produce a very professional quarterly newsletter that goes to each and every member, his or her physician and other health care professionals. The network is also able to provide free of charge packages, films and books to the self-help groups around the province. The network hopes to have enough revenue soon to embark on an awareness program for children with fibromyalgia.

I would like to see buses coming into the city, bringing tourists, instead of the other way around, which is what I see happening now. A permanent site would also give charities a set rate for the rental of the site. At the present time the amount of rent paid for a hall is atrocious and drains our profits, which could be put to better use, such as having every physician in Ontario have a doctor's information kit to enable him or her to understand our disease better.

At this time I would like to speak to the matter of video lottery terminals. Not being knowledgeable in this area, I have had to do some research. My findings are that they will be beneficial to the charities, and this should be all-important, as most charities have lost their government funding and must rely solely on fund-raising to keep operating.

We understand there will be some opponents to VLTs, just as there is opposition to gambling in general. It seems in our society that there will always be an opposing faction to whatever is being proposed. I am sure that after all the previous hearings, you have been exposed to every reason why there shouldn't be VLTs. I would like to share with you why there should be VLTs.

They're fun. They're user-friendly. Users are unable to cheat, like card counters try to do. They're no different than buying lottery tickets; the price is about the same. They attract more people; someone who doesn't wish to play poker or blackjack will come to the casino with a spouse or friends, be content to play the VLTs, and they will have spent a fun evening together. They will provide a harmless interactive venue of entertainment for people who are not into the bar scene and shows.

The vast majority want to play video lottery terminals. They enjoy playing video lottery terminals. They do not suffer an affliction playing video lottery terminals. Why not give the majority what they want?

On behalf of the members of the network I want to thank you for allowing me to appear before this committee today. Knowing that you will spend many agonizing hours coming to a decision on these issues, I can only wish you the best of luck. Hopefully you will remember that a lot of very sick people are depending on you to make the best decision for them.

Mr Crozier: Thank you, Ms Nesbitt, for your time. I'm a member of the Liberal caucus, so I will try to determine on its behalf -- I see where you've done your own homework. My attempt is not to change your mind. You've drawn some conclusions at this point.

I would suggest to you, particularly in light of some of the comments you've made like, "They do not suffer an affliction playing video lottery terminals," things like that, that you attempt to get a report when it's made public, beyond this committee, of the city of Sudbury, since it's in your area. I think you will find in that some information that will help you further define your conclusions when it comes to video lottery terminals.

Your comments seem to centre specifically on VLTs being in permanent charitable gaming sites.

Ms Nesbitt: That's right.

Mr Crozier: So you're not making any comment with respect to their placement in bars and restaurants -- licensed establishments.

Ms Nesbitt: No, I'm not.

Mr Crozier: Or at racetracks.

Ms Nesbitt: No, I'm not.

Mr Crozier: I have to admit, notwithstanding the fact that my wife is a nurse, that I have not heard of your organization before, so I would have to say that in the grand scheme of things it shares that lack of broad knowledge across the province. Would that be correct? Is it a relatively small organization?

Ms Nesbitt: Yes. It's beginning. As I said, we have nearly 1,000 people now. We're growing by a couple of hundred every year. We've just recently branched out into southern Ontario. It was started in Sudbury. The head office is in Sudbury. We are trying to educate the public and the doctors, as you'll see by the newsletter that we present. We started off with a one-page newsletter, front and back, and we've come to this professional -- but it's only through our charity. We can't fund-raise. Most of us can't even get out of our homes. It is something we can do with help.

Mr Crozier: How do you raise most of your funding now?

Ms Nesbitt: Our membership fees come to about $2,000 a year. We need about $30,000 to run and the rest comes from fund-raising.

Mr Crozier: At charitable gaming casinos?

Ms Nesbitt: Yes, and other, smaller fund-raising things.

Mr Crozier: Selling tickets?

Ms Nesbitt: Yes, that type of thing.

Mr Crozier: It's become a concern of ours over these past few weeks and it's been expressed today that, notwithstanding the fact that the government is going to increase, they say, the total revenue that's available for charity, the ability of a group like yours to access that, I think, if you look into it, is going to be extremely difficult. You're going to be competing against some big players.

I'm inclined to agree with you that if VLTs are going to be introduced to the province, they should be only in those areas where people are licensed for gaming, ie, at racetracks or charitable gaming sites. So when you look further into this, I would ask that you consider what your problems are going to be in accessing this vast sum of money that the government is promising. Then you may want to comment further when we come to establishing regulations on this type of gaming. You may want to have some further comment.

I wish you well, and certainly your organization, which at this time may be little known, and that you're able to present your face to the public in a broader scope.

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Ms Martel: Thank you, Ms Nesbitt, for coming to the committee today. I want to focus first on your ability as an organization to raise money. You made it very clear to the committee members today that there are not government transfers involved in the operation of the organization and that you really are depending on the money that's raised, in this case you hope through the permanent casino process. You have also argued that VLTs, I suspect, should be in those establishments, so that would provide even more of an attraction for people to come, spend money, hence you get some money.

The government has not made it completely clear where some of these things are going to be located -- that will be done by regulation -- but I suspect that you will see them not only in permanent casinos, not only at the track, but probably in restaurants and hotels as well.

I need to ask you, given the obvious concern you must have around the ability to raise funds: What do you think will be the likelihood of your continuing ability to raise funds if there are VLTs at the racetrack at Sudbury Downs, if there are VLTs in restaurants, in bars and also at the permanent casino that you're hoping people will come to?

Ms Nesbitt: As I alluded to in my presentation, I hope there will be more people staying here instead of going in a busload. A bus leaves every day for one casino or another. I would hope we could attract them to stay and spend their money here instead of in Sault, Michigan.

Ms Martel: Do you think those people might not also be attracted, for example, to Sudbury Downs? Then they would have the benefit of not only horse racing but would be able to play the electronic slot machines while they are also betting on the horses.

Ms Nesbitt: Certainly.

Ms Martel: If that happens, if that becomes the attraction, do you not think there is the possibility of a drain of the very people you're hoping to keep in Sudbury and not on a bus tour to Sault, Michigan, not going to the permanent casino but deciding to go to Sudbury Downs instead or to come to this hotel, for example, or go to any other in the community?

Ms Nesbitt: It's going to depend on who can provide them with the most enjoyable place to play.

Ms Martel: Part of my concern has been that I think there's a fixed pool of gambling or gaming money in the community. When a number of organizations can offer that attraction, be it at the track or others, the likelihood of individual charities to continue to receive the same amount of revenue that they receive now is probably pretty unlikely, because people will be looking to go to other places. They won't be spending their money on Nevada tickets any more. They might well just be going to Sudbury Downs and playing the machines there.

Ms Nesbitt: I really can't comment on that.

Ms Martel: One other thing that you raised, and it's an important one, is how the money you get helps people who suffer from fibromyalgia. One thing you said that struck me when you were making your presentation was that one positive reason to have VLTs was, and I'm quoting, "They will provide a harmless interactive venue of entertainment for people who are not into the bar scene and shows."

The committee received information from a Toronto Star article, January 1, 1996, on the situation in Alberta, and some of the more negative consequences -- I think health consequences -- on people who are severely addicted to VLTs in Alberta. I would recommend it to you because there was very clearly well-documented evidence of the very serious health problems that people were suffering because of a gambling addiction that came through their ability to access VLTs at restaurants and other places.

What I'm concerned about is that while we try to spend money to provide for the health care needs of people in your organization, we're causing a problem on the other end by increasing the potential for gambling addictions for a whole host of people right across this province. That's very much my concern about what's going to happen if we have them in 20,000 establishments, which I think will not be 20,000 establishments but probably a heck of a lot more by the time we're finished.

Mr Ron Johnson: I want to thank you very much for your presentation. I can tell you that you probably represent some of the smaller charities, some of the smaller non-profit groups that the opposition wants to claim will be snuffed out because of this legislation. I happen to believe in what you say, in that this will enhance your ability to perform as a non-profit organization.

I'm looking here, and oddly enough it's somewhat ironic actually that you're appearing in front of the justice committee, because this is the same committee that dealt with Bill 19, which dealt with a lot of advocacy issues and that sort of thing. It was the same committee that dealt with that issue. I'm reading your newsletter, and in this newsletter what I'm seeing in large part is advocacy work. That's really what your organization does on behalf of its 1,000 members and those affiliated with fibromyalgia that don't necessarily belong to this group. You perform advocacy work on their behalf, the very type of work, I might add, that the people across the way here said would never happen, that they needed a huge, multimillion-dollar bureaucracy to do. But you're doing it at the local level. This is what we believed, in our caucus, is what would happen. I'm interested to see that that's the kind of work you do and I certainly congratulate you for that.

My question to you is this: Despite what Mr Crozier and the Liberal Party want to say, we're dealing now with the permanent location charity casinos, something that I know you're familiar with because that's where you get the bulk of your fund-raising money. You know, and I know you've done some research on this, the expenses that they have to incur because they relocate every three days and that money is coming directly out of the pockets of the charities. So what we're seeing now is 10 times the amount of money going to charities because we're fixing them in a permanent location. If you multiply by 10 the revenue that charities across this province are getting right now from charity casinos, do you really believe, as Mr Crozier would have you believe, that you're going to be snuffed out in terms of the funding, when we've got literally 10 times the amount more money to hand out to charities?

Mr Crozier: Not in the long term, snuffed out. I see difficulty accessing.

Mr Ron Johnson: Do you believe that you're going to have fair access to those funds, and what do you think it would mean to your organization?

Ms Nesbitt: As vulnerable people, we have to depend on the government we elect to do the best for us.

Mr Ron Johnson: I'm glad you said that, because I can tell you that something that's very important to us is to make sure the community-based organizations that in some cases are doing advocacy work are treated fairly. You have my word that we're going to do our best to make sure that happens. I know that we're dealing now with the type of fund-raising initiative for charities that is really going to increase opportunities for non-profit organizations and I believe this bill will do that.

I know Mr Hudak has a question, so I'll pass it on to him.

Mr Hudak: I'll be very quick with this. It's in support of Mr Johnson's remarks and I also support his commendation for the work you do with fibromyalgia. A lot of people in my office deal with this particular issue. It's certainly difficult to get attention to them, so I salute you as well in the work you do.

I just had some information here in terms of the impact of VLTs on charitable gaming. In Saskatchewan, with the introduction of VLTs and temporary casinos, total charitable gaming went up 8%. In PEI, the same thing happened; VLTs grew, but at the same time, charitable gaming revenues grew. In New Brunswick, VLT revenues went up 12% between 1993 and 1994; charitable gaming went up almost 4%. In Manitoba, a 96% increase in VLT revenues; at the same time, charitable gaming increased. So I think the fearmongering doesn't hold. I think it's a little irresponsible. It captures headlines.

Mr Ron Johnson: It's a good-news bill for charities.

Mr Hudak: In terms of a realistic look at gambling in the entertainment market, it seems like the pie is growing. It's been growing consistently for a long period, even over difficult years, and the evidence from the other provinces certainly suggests that even as VLTs grow, the amount of money to the charities like yourself that do the work in the communities has increased.

The Chair: Thank you, Ms Nesbitt, for your presentation before this committee.

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SILVER LAND BINGO

The Chair: Our next presentation is Ms Lou Calvert, representing the Silver Land Bingo.

Ms Lou Calvert: Good afternoon. I'd like to start by saying, not in my town. These VLTs are nothing but suicide to the local charities and to everybody in the community in whole. I think the only place VLTs should be allowed is in casinos, and people walking into them knowing what they're expecting. If you're walking into a restaurant, seeing one of these things sitting in the corner, you're not going to buy a cup of coffee, you're not going to buy a meal, you're going to go straight to these things hoping to get a bigger return.

I find that being not a local gambler, or any kind of gambler myself -- I do own a bingo hall, but I ain't making money. I've just started. I opened my bingo hall in June. I run three days a week and every penny earned in that bingo hall goes back into the community. I allow the people the right -- in playing the bingo, they know exactly where all of their money is going. One of my policies in running my bingo is to be responsible to the people playing and spending their money to know where the money is going to. Each charity that makes any money whatsoever is asked to bring a letter stating where the money is going.

The only one gaining from these VLTs as far as I can see is the government itself. They've already slashed everywhere they can slash. They've already taken as much as they can take from the citizens of Ontario, and now they want to take whatever is left, masking it as entertainment. Well, this is not entertainment. You might as well hand these people a razor blade and tell them to do themselves in and then find places to bury them. It's absolutely ridiculous.

You're supposed to be responsible people doing the best for the people you're working for, and you're not. I'm doing my best. All of my money, like I say, stays in my community. The municipality money stays in its community. The money the government is giving us is very, very little to survive on. We're a mining community. We have no mining any more. So I'd really love somebody to tell me who came up with this idea and how they're going to rectify the situation after these things have gotten through the market and there's no money to be found anywhere except for the government wearing nicer socks, nicer suits and flying God knows where on our money and furnishing their office buildings with furniture that I could never even possibly afford to look at, let alone buy myself.

That's all I have to say. Thank you.

Mr Kormos: We were down in Fort Erie, down in the Niagara region, and people from Delta Bingo spoke with us. Now, they're a pretty big operator in your business. They indicated several -- I don't know exactly how many -- bingo halls and some pretty big grosses, a lot of money coming in and out. They've been in business for a good chunk of time. There's the second generation involved in the operation. How long have you been operating your hall?

Ms Calvert: Since June.

Mr Kormos: How did you get into this? Was there a hall there before you became the owner, that you acquired?

Ms Calvert: Yes, there is a hall there. They run seven days a week, two bingos every day except for Saturday and Sunday, when they run three.

Mr Kormos: But you say you're running --

Ms Calvert: I run three.

Mr Kormos: You run three bingos out of this hall.

Ms Calvert: No, out of my own.

Mr Kormos: Oh, out of your own hall. So you're the second hall in the area, in the community.

Ms Calvert: That's right.

Mr Kormos: In effect, competing, if you will, with the other hall. Is that fair or unfair?

Ms Calvert: Actually, no, I'm not competing with him. There's no way I can compete with him. The services that he offers I just simply cannot offer, because my crowd is small.

Mr Kormos: So how do you do it? Why do people choose to come to your hall rather than the other hall, the seven-day-a-week hall?

Ms Calvert: Because it's only three days a week, it's a novelty, they know exactly where their money's going. I make it a policy, like I say, for every charity that goes in there, every dollar earned is documented, not only through your licensing, where you have to determine where this money is going, but the people themselves playing in the hall know exactly where the money is going. They're informed.

Mr Kormos: That's how you've tried to make your operation unique or distinct in terms of letting the players know where their losses are going.

Ms Calvert: That's right.

Mr Kormos: You've got to understand, Ms Martel and I share your position on these VLTs, which is just a slick new way of naming high-tech slot machines. These things will suck a loonie out of you every 1 1/2 seconds. That's fast play. Some people have called them, instead of VLTs, vulgar little thieves, which I think is not an inappropriate appellation. Some of the bingo parlours are scared, in places down in Fort Erie, where they're in the same vicinity as a racetrack, because the government has already made the deal. The fix is in.

Ms Calvert: I'm not afraid of them.

Mr Kormos: The government has committed itself to putting VLTs, slots, in the racetrack, and the bingo operators and the charities who are accommodated by them know that there is going to be some -- they call it cannibalization.

You're a small business person. You're here just like some other bingo operators were here earlier today, just like break-open ticket dealers have been here, telling the government to slow down.

Interruption.

Ms Calvert: I'm sorry.

Mr Kormos: I know. It's distracting.

Ms Calvert: It's distracting, yes.

Mr Kormos: You ought to be with these guys for three weeks in a row. Tell me about distractions.

So are you telling the government to slow down and cool its jets?

Ms Calvert: Yes, I am. I'm telling them just to keep them where they're supposed to be, in casinos. People will go to casinos if they want to go to casinos. People will go to restaurants if they want to go there. They know what to expect when they're walking into an establishment. When you're walking into a bar for entertainment, you're looking to go there for maybe a couple of drinks and some music for dancing. In a restaurant, you're going there for coffee and for food. In the bingo hall, you're going there to play bingo. In a casino, you know what you're expecting.

Mr Kormos: The slots are big business. It's a multibillion-dollar business, and what's remarkable, it's kind of interesting, the parallels, because they've spent a fortune trying to convince people that playing a slot machine is entertainment, the same way the tobacco industry has spent a fortune trying to convince people that cigarettes aren't addictive nor do they cause cancer, the same way the beer industry spends a fortune showing cool, nifty teenage kids in the Molson ads and in the Labatt's ads partying and drinking their beer. They're a very powerful industry, and I appreciate your comments here today.

There's just been report after report warning this government about the dangers inherent in a wide-open slot jurisdiction. By God, I hope they listen. They don't seem to have listened to folks in Kenora, in Thunder Bay, in Ottawa, in the Niagara region, in Toronto, folks who have expressed concern.

I understand why some people -- because there's big money to be made. God bless you.

Ms Calvert: Huge money.

Mr Kormos: Take care. Thanks for coming today.

Mr Flaherty: Thank you for your presentation today. How many days a week is your bingo hall open?

Ms Calvert: Three.

Mr Flaherty: Three. Do you have any information about how much money people game at your bingo hall?

Ms Calvert: How much money they spend, or how much they get back?

Mr Flaherty: How much they risk at bingo; how much money they spend, yes.

Ms Calvert: The average spent at my bingo hall is $32 per person per attendance.

Mr Flaherty: The $32 per person per attendance, do you consider that moderate and reasonable?

Ms Calvert: Actually, I find it quite high, because normally a bingo hall is averaging about $23 a person.

Mr Flaherty: So you wish it would be somewhat more modest. This business you mentioned about VLTs leading to slashed wrists and so on, do you have any idea how much the average VLT player in the eight provinces in Canada that have VLTs spends?

Ms Calvert: I have no idea. I have only heard rumours.

Mr Flaherty: We have eight provinces that have VLTs. Some of them have had them for years. The average spent is $10 each time --

Ms Calvert: I don't think so.

Mr Flaherty: Played once or twice a week, and also --

Mr Kormos: Why don't you study one province?

Mr Flaherty: I know that Mr Kormos doesn't like the facts because they confuse him, but I think we have to be careful that we don't look down our noses on the people of the province like Mr Kormos and be a neo-prohibitionist, and say if the majority of the people view it as a form of amusement, as the majority of people view bingo --

Ms Calvert: No, I don't think so.

Mr Flaherty: -- then we should not be judgemental about it. We should say all right, if we do it in a controlled way and if the figures are, as they are in the rest of Canada that has VLTs, $10 each time, and people stick to a predetermined gaming budget, then it's difficult to see how that is an economic threat when they're spending more on bingo today.

Ms Calvert: I believe that maybe you are understating exactly how much people spend.

Mr Flaherty: This is the study, if you'd like to look at it.

Ms Calvert: The study -- I could write a study myself.

Mr Flaherty: Well, no; we have them. See, this isn't academic. We have these machines in eight provinces in Canada. We've had them for several years. We've heard from the Atlantic provinces; we've heard from Quebec; we've heard from Alberta. Mr Kormos was present last week when we heard from them.

Mr Kormos: You heard today about the crime and the addiction.

Mr Flaherty: Unless we're going to be judgemental about gaming and say we like bingo but we don't like VLs, we like break-open tickets but we don't like casinos -- it's all gaming, and the concern has to be that there's moderate use and that people are being mature in their use of gaming. I'm sure that's what you want in your own gaming facility, your own bingo hall.

Ms Calvert: No. What I would like in my own gaming industry -- and I do it with an ultimate line of respect of the people going in and playing it, knowing exactly where the money is going. In this form, the VLTs -- you're saying you're going to collect $180 million and hand over some to charity. Being a betting person myself, I can almost guarantee that Happy Paws or the Bunker or the Kiwanis Club or any of the other 13 charities that are on my list will never see one stinking penny from this venture, none.

Mr Flaherty: What about the charities that are not on your list?

Ms Calvert: What, like the cancer that are going out and spending millions of dollars just in advertising?

Mr Flaherty: No. The reality is that there are many worthwhile organizations in every community -- in Sudbury, in Kenora, in Thunder Bay, in Toronto -- and not every one is on the list of charity bingo halls --

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Ms Calvert: We get it all from Nevadas and bingos and selling tarts and doing bake sales and craft sales.

Mr Flaherty: -- and that is why we're going to do a further consultation, so that every group that considers it worthwhile in the implementation phase can say, "Hey, I think my group is worthwhile and should have some funding," so that there is local input. This enabling legislation, Bill 75, doesn't say that any of your groups don't get money. What it does say is that there will be substantially more money for charities in the province of Ontario, and I'm sure you're concerned --

Ms Calvert: If they're put on a waiting list for three years. It takes three years now to get 6/49 funding, which was supposed to be set up for the same purpose, which isn't being used for this purpose any longer. You have a three-year waiting period before you can get a nickel from Lotto 6/49. What ever happened to that? Oh, it's brushed under the carpet. Everyone is used to it now; everybody tolerates it.

Mr Flaherty: I'm sure your concern is with the amount of money that goes to charities, not to bingo hall operators.

Ms Calvert: Exactly, since I don't have any money coming to me at this present time, nor do I see it in the future as well.

Mr Flaherty: I hope you'll participate in the discussions about which is a charity and which will qualify and how the money will be attributed in the province. I think your input is very valuable and we've heard what you've said today. Thank you for your presentation.

Mr Crozier: Thank you, Ms Calvert, for your presentation today. You mentioned that notwithstanding the fact you thought it was too high, the average spent in your bingo hall is $32. How long would it take me, if I were to go in and be the average bingo player, to spend that $32?

Ms Calvert: How long would it take you?

Mr Crozier: Yes. What's the length of a bingo session?

Ms Calvert: A bingo session is at least three hours long. That's the average spend. What they do is average that out through the population, as I'm sure this man here took 10 million people and averaged it out to $10. I mean, you could spend $10 in two minutes there. I went to casinos. I've seen people dump $2,000 into these things in less than a half-hour. What did they get back? Nothing. They go home broke. It's just a big problem.

Mr Crozier: That's my point, to illustrate that the $32 average they may spend at your bingo, which may take two or three hours, can be spent in 48 seconds on the VLTs. I support what you said at the outset, your very first comment.

One thing that I share with you, among others, is your concern about community and the fact that the money raised in the community stays in the community. I appreciate the fact that you wanted to make that point. You've said that clearly and you've said that simply, and we appreciate your taking the time to come here today. Thank you.

The Vice-Chair (Mr Ron Johnson): On behalf of the committee, I would like to thank you very much for your presentation.

ONTARIO METIS ABORIGINAL ASSOCIATION

The Vice-Chair: The next presenter will be the Ontario Metis Aboriginal Association, Harry Daniels and Mike McGuire. Good afternoon.

Mr Michael McGuire: I would like to introduce myself and my companion at this afternoon's presentation. I am Michael McGuire, president of the Ontario Metis Aboriginal Association. My friend is Harry Daniels, chief negotiator for our association and a veteran of a number of political and program developments at the national and provincial levels over the past number of years.

The Ontario Metis Aboriginal Association is celebrating its 25th anniversary this year. Our organization would like to extend an invitation to the members of this standing committee to attend a meeting of this association being held August 24 and 25 in Sault Ste Marie, at which time this milestone event will be celebrated. Not only will this quarter-century anniversary of service and accomplishment be recognized, but more importantly, major initiatives of the organization that will affect the entire constituency of the organization into the foreseeable future will be brought forward for discussion by representative of OMAA's communities from across all of Ontario.

The Ontario Metis Aboriginal Association is the representative body of the off-reserve aboriginal people in Ontario, a group comprising the Metis, Indians, Indian people without treaty and off-reserve Indian people. The association is organized geographically into five regional zones, as follows:

1. Wesawkwete; Leah Gardner, president.

2. The Northern Lake Superior Aboriginal Association; Tom O'Connor, president.

3. The Aboriginal Peoples Alliance of Northern Ontario; Howard Restoule, president.

4. Alliance for the Advancement of Nishnawbe of Central Ontario; Ed Belanger, president.

5. Southern Ontario Metis and Non-Status Indian Association; Sherry Hamelin, president.

In addition to these five zones, some 70 locals or community-level associations within the province are also part of OMAA's structure. Some of these local community organizations and their representatives have been members and fundamentally a part of the activities of this organization dating back to a time before the association itself was incorporated, such as the Lake Nipigon Metis Association, created in 1967, and the Armstrong Metis Association, established in 1968. These organizations, along with others, formed together into a provincial organization to create a single voice to speak on their behalf.

In appearing before you today, we wish to advise you and go on the record as stating that, in addition to the need of our provincial organization for at least one casino licence, each of the five zone corporations listed previously has requested that in our presentation to you we make clear their individual requests for a charitable licence for each of their separate corporate and geographic entities. We would like to bring to your attention and to the attention of this government that our organization does not want to stand in the way of progress. By applying for these licences it is crucial that our organization becomes a part of the developing casino and gaming trade on behalf of the constituents we represent across this great province.

Less than two weeks ago, at a similar presentation held in Thunder Bay on August 8, we made a presentation on the subject of operations of charity casinos and the role that organizations such as OMAA could play in the operation of such facilities, based on their extensive management track record; in OMAA's case, going back over a quarter of a century in developing and economically administering programs in a variety of areas. Rather than repeat that presentation today, we would simply remind you of our earlier presentation and append today's remarks to that earlier statement.

Concerns have been raised over the potential addictive nature of gambling, particularly with regard to the proposed thousands of video lottery terminals announced for replacement in the most recent provincial budget. Gambling addiction and the social impacts of such addiction on people and communities are concerns we share. Our response is to state that if this government has a concern with the potential cost of gambling addictions related to the placement of government-sponsored video lottery terminals across the province, we would ask the government to provide registered operators of VLTs with the amount of funding that is being provided by the province for the rehabilitation of other addictions.

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For example, how much is the Liquor Control Board of Ontario setting aside per dollar of revenue from sales of alcohol for the problem of alcoholic addictions? As another example, what amount does the government require from the tobacco industry and taxes raised on the sale of the tobacco products towards combatting tobacco addictions? Beyond these questions, who or what organizations have the requisite skills in terms of dealing with rehabilitation from addictions?

Over a number of years, our organization and a number of other aboriginal organizations have developed a strong network of support services designed to combat addictions among our people for substances and practices associated with the adoption of non-aboriginal pursuits. If any group requesting the provision of casino and VLT gambling licences knows the potential impacts of addictive behaviour and how to combat it, we are the experts.

We are prepared to accept both the costs and the benefits of this new initiative, however, and stand ready to meet the requirements of the province of Ontario in accessing these licences.

Mr Hudak: Thank you for your presentation, gentlemen. It's good to see you again. We ran into each other; was it at Thunder Bay?

Mr Harry Daniels: Right.

Mr Hudak: As part of the consultation in terms of the $180 million that the government believes will be raised through the actions in Bill 75 and through the budget, what's the best mechanism for ensuring that the charities in need, groups in need -- things like the hockey team or services you'd have for the Metis community -- what's the best mechanism for determining how these revenues should be divided up?

Mr McGuire: If and when we get our regional licences for our organization and one for OMAA, if you look across this great province and in some of the Metis communities in northern Ontario, you will find in their housing they have actual snakes in their buildings, because they live in little log shacks, and I'm sure the profits of this casino will be used to upgrade the housing in these Metis communities.

Mr Hudak: Coming from Niagara South, in the southern Niagara Peninsula, we have a very large off-reserve native population, mostly from the Six Nations. Given that maybe the aboriginal community has some special needs or some special circumstances in this area, how can you assist the off-reserve populations as well? We were talking about the Metis; we were talking about the reserve population in the northwest. How could we ensure that the people in southern Ontario, the off-reserve natives, can be assisted through these funds?

Mr McGuire: The Ontario Metis Aboriginal Association has local associations across Ontario, so it doesn't matter if the problems are in northern Ontario, southern Ontario or eastern Ontario. We are a provincial organization that deals with these people on a day-to-day basis. We will ensure that any funds raised from there -- as an example, the other day a young man died in the community of MacDermott. The father phoned me up at 7:30 in the morning and said: "My son drowned. You know, I haven't got a God-damned thing" -- excuse my langauge, but that's what he said -- "to bury him or anything like this. Can you go around the community and maybe take a collection so we can have some money to bury him?" This would be one example of how these funds could be used to help people across this province, if it's only for a burial fund, to get the snakes out of the buildings or to help put the homeless people in Red Lake into shelters. Even in Red Lake, where one of the richest gold mines of Ontario is, the aboriginal people walk around like a herd of cattle up there. Yet the town there burnt their buildings down, their little shacks that they went to every day. The same would apply into the different parts of Ontario, regardless of if it's Niagara region, London region or any other part of it.

Mr Hudak: Here's another question for you. It's a topic related to Bill 75. Does the Metis community or any other aboriginal community face special challenges because of socioeconomic conditions in terms of addiction from gambling? Does that currently exist? Is there a higher rate of gambling addiction on reserve among the Metis than among the general population or do you anticipate anything like that, or do you think we'll see the same sort of 1% or 2%?

Mr McGuire: I don't think there's any addictions that are not available right there today. For instance, you can go out and buy 100 6/49 tickets or you can go buy 50 $2 tickets or you can run to the church bingo or you can go to other establishments to spend your money and hope to win.

Mr Ramsay: I'd just like to thank you very much for your presentation. I just hope, like you, that the government members have listened, as they did in Thunder Bay, and will take note and hopefully would be open to amendments that would reflect some of your concerns.

Ms Martel: Thank you to our presenters today. I want to ask you a question about your participation in gaming and what the likelihood of that to be increased or to be stabilized might be.

I want to just go back to what I understand happened on the new casino just outside of Orillia. As I recall, our government entered into an agreement with the first nation that a certain portion of the proceeds would be returned directly to the community for economic development purposes, shelter purposes, whatever the first nation saw as a priority for the development of their people. Then what happened when the new government came to power is that the agreement was reneged on by this government. So the first nations who thought they were going to have a very specific share of the proceeds and the profit from the casino no longer have that to look forward to and no longer have the kind of money they thought they were going to have to do some of that important economic development work and housing work and other needs that had to be met.

Having that as the example we've had from the government around gaming, a casino and an agreement with a first nation, how confident are you that this government is interested in any kind of participation with the Metis people around gaming and use of profits from gaming for economic development of your people?

Mr Daniels: That's got to be done in the first instance. When you're developing the infrastructure and the process whereby you're going to deliver these kinds of institutions or make the legislation that is going to enable you to do those kinds of things, it has to be written down in the first instance how this is going to happen. What we're talking about here is a jurisdictional question. In the final analysis -- and let's not fool each other -- the province certainly has jurisdiction to enable itself to do some things through legislation, by the legislative branch.

The other problem we have then is, how do we influence the kind of change that sees us take control of that end of our lives? We asked a question and we'd like to have that answer at some point in time: How do you define charities here? Is the province of Ontario a charity to take 20% off the front end instead of taking the money off the back end after the charities have been serviced? That question has not been answered. I think in your deliberations, when you go into the next two days of amending what has happened so far, that has to be addressed. If it isn't, then you're being dishonest with the people of Ontario and you're being dishonest with the aboriginal people.

To be more direct, I'd like to direct myself to your statement. How confident are we? Well, we aren't very confident at all, because since 1850, when the treaties were signed, nothing has happened or transpired that is going to see anything real from the province of Ontario for the Metis people through Liberal, NDP or Progressive Conservative governments. That could be a sad commentary on the way that people treat aboriginal people, of course. But what we're talking about -- and I want to go back to it -- is jurisdiction and control. How much jurisdiction is going to be exercised by the charities? How much control do they have?

Then maybe I'd answer the question that you were directing yourself to, Mr Brown -- Mr Brown, is it? I've got the wrong one. Oh, there you are. Yes, of course; there's one guy missing.

Anyway, if you don't have jurisdiction and control and the management and the ability to deliver the kinds of services to your people with the funds you would receive and to build in those kinds of mechanisms to take care of the addictions -- it says here in an article from Ottawa that "money and not morality was the biggest preoccupation." Well, the morality is part of our preoccupation too, although we see that if this is a fait accompli, as I stated in Thunder Bay, then what you're dealing with is a government that is going to grab 20% off the top. We're going to get something near the end, whatever falls off the table. If we don't change that scenario, it seems the government has taken upon itself to define itself as a charity, the biggest charity.

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The Vice-Chair: I'm sorry. I'm going to have to stop you there. We are out of time. On behalf of the committee I want to thank you for your presentation.

Mr Daniels: I thought I had 20 minutes. Only 10 minutes?

The Vice-Chair: It was 20. I have the watch here.

Mr Daniels: Oh, it's your watch that rules. I'm sorry. If I had known that, I'd have been a little better prepared.

STANLEY HOTEL

The Vice-Chair: The next presenter on the agenda is Dave Morris, owner of the Stanley Hotel. Good afternoon.

Mr David Morris: I'm the owner of the Stanley Hotel in Matheson, Ontario, just 60 miles west of the Quebec border in the northeastern part of our province. As a zone director for the Ontario Hotel and Motel Association, my zone takes in the city of Timmins, the towns of Hearst, Kapuskasing, Smooth Rock Falls, Cochrane and Iroquois Falls, and the township of Black River-Matheson. These are all small communities with a population of 10,000 and less, except for the city of Timmins.

In my presentation today I am supported by all the members of my zone, plus a number who would like to be members but who just cannot afford to be members at this time. The majority of the licensees are small-town, rural Ontario businesses that have over the last 12 to 15 years been legislated beyond reason, taxed to death by the provincial and municipal governments, plus the fact that we have just come through a recession that has bankrupted more large and small businesses than any other recession we have seen.

Yes, we are supportive of Bill 75 as it relates to video lottery terminals and we urge the government to get VLTs online to the hospitality sector as quickly as possible. This industry has been beaten, stomped on and tortured to death in the past years. That is why we have lost over 100,000 jobs and seen 1,400 bankruptcies and sales have dropped over 20%, and much greater in other parts of the province.

To many, and I mean many, VLTs are going to be the umbilical cord to survival in the hospitality industry. It is time the provincial government climbed out of its ivory towers and got down to earth to find out what is going on in this great province and in this industry. There are more illegal VLT machines floating around than anyone can imagine. Finance Minister Ernie Eves estimates 15,000 illegal machines are operating in the province now. That means our government is losing $500 million-plus, the revenue on illegal machines that are operating in the underground economy, $500 million which could be used to support many government programs that we cannot afford to support now.

The controversy that VLTs will significantly increase the potential for compulsive gambling is like trying to hold water in a strainer. Government or anyone else is not going to dictate to people what they will do with their own money, or where. If people choose to go to Vegas for a week's holiday to gamble, that is their choice. The only one who loses is the provincial government and the people of Ontario because the politicians do not know when to take their heads out of the sand pile. The business people in the province of Ontario are sick and tired of being legislated, dictated to and taxed to death by government.

Some 80% of the new jobs created in the province of Ontario were created by small business. With the implementation of VLTs in the hospitality industry, hopefully we will be able to put a stop to licensees going bankrupt and maybe, just maybe, with the increased traffic in our business we'll be able to hire our staff back.

To summarize, if government's intention is to try to stimulate the economy of the province, then it is time we started to listen to the business people who are experts in their own field. They know what is good for them and what is not good for them. Government is meant to govern and listen to the people to create an atmosphere of investment, not to destroy it.

On behalf of myself, my zone and my employees, thank you for allotting me this time. I will be happy to answer any questions.

Mr Ramsay: Thank you, Mr Morris, for your presentation. I was wondering if you could give us some specifics as to what you believe would be the benefit to your business. How many machines would you envision? What do you think that would do as far as generating additional business is concerned, through the VLTs themselves and maybe through the food and beverage end of your business?

Mr Morris: I'm hoping the VLTs will create traffic in my establishment and the other establishments, I hope not only in the beverage business but in the food business. VLTs are no different than going out at night to a beverage room or to a bar and playing pool or playing a pinball machine, except for the fact that the VLTs pay off and the pool table doesn't, that you see. I know it's illegal to bet on a pool game, but I have pool players who have bet $50 and $100 a game that I don't see, but I know they're getting paid off.

Like I said, take your head out of the sand, people. VLTs are going to be there whether you want them or not. My concern is, where is this money going to go? Is it going to go to the charities it belongs to? Is it going to go to hospitals? Is it going to go to education? That's my concern. My concern is not VLTs. Let's get them in there. Let's get some money into the coffers.

You people talk as if this thing is going to go away. It's not going to go away. Every day in my business I'm asked to buy illegal booze, illegal cigarettes, and to bring in the grey machines. It's not going away. It's been there for five or 10 years. Our concern should be, as government people, what are we going to do with this money and how can we control it?

Mr Ramsay: I'm very interested because of the riding I represent. It's just south of where you live, Timiskaming. How big a problem do you think these grey market VLTs are? Do you have any sense of how many there might be in our area, between Timmins, Matheson, Kirkland Lake and New Liskeard? How big a problem is it?

Mr Morris: I would say that between our area and the New Liskeard, Tri-town area, the Matheson, Kapuskasing and Hearst area, they are similar. I would say there's about 400 or 500 machines in the area.

Mr Ramsay: Wow.

Mr Morris: These machines move around because these people rent motel units, they supply a night of gambling, they rent hotels, they supply units there and they have a night of gambling, and some people even have backroom gambling bars, so you're not going to get rid of them.

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Mr Ramsay: Obviously this type of activity must cut into your business. You want to have them because you want to compete with this. Obviously people would go to these backroom operations instead of going to your legitimate place, so they're hurting you at the moment.

Mr Morris: I wouldn't say they're hurting me. The part that's hurting me is that the money is not going where it should go; the money is going into private and individual's pockets. That's where the money is going. Most of these machines, I would say 90% of them, are coming out of Quebec, or coming through Quebec. Whether they're coming out of Quebec or not I don't know, and that's where the money is going back to.

Mr Ramsay: Are any of the local people like you who are concerned laying any complaints to the police about this activity so we could stop it?

Mr Morris: Have you ever stood on the edge of the cliff and wanted to jump off? I don't want to jump off. I report this to the police and they're going to be patrolling my business more. I've got enough problems with them now.

Ms Martel: Thank you, Mr Morris, for taking the time to drive here today. That was a long haul for you to make a presentation in Sudbury, so we appreciate that you took the time to do that.

Let me begin by following up on comments you made which said basically: "Get your head out of the sand. This is happening and we have to get on with it." The problem I have is that this may be the case, but it's funny that even the finance minister earlier this year said that we should take a really serious look at this because it could cause a lot of social problems in our society, that lots of other provinces have had social problems as a result of VLTs. He said that in March. Then I guess he gave up two months later and decided it was too big to deal with that and said, "We have very little control or no control, so we might as well legalize this and allow restrictions and make sure it's done legally and up front."

It's hard for me to say if you want to do that on this one, why doesn't the government look at the same thing with respect to prostitution, with respect to marijuana? It's --

Mr Morris: Nevada tickets?

Ms Martel: After a certain point, there are lots of things people are doing that are illegal. It's curious to me that the government has decided this one is now okay and when they were in opposition it wasn't, and this is the one we're going to move forward on. At what point do we say it's a criminal activity and we're going to do something about it, or just throw our hands up in the air and say, "Let 'er rip"?

Mr Morris: At the time Mr Eves said that there were 15,000 illegal machines in the province of Ontario, if I'm not mistaken, I was in Toronto, and he also talked to the chief of police in the city of Toronto. The chief of police in the city of Toronto said that they really didn't care whether VLTs went into the bloody hotels or not, that they didn't care about the grey machines, that they didn't have enough people to police what they were doing now, let alone trying to police VLTs. So why aren't we controlling them through government? If the money is going to come in, then let's bring it in through government so we have some control so this money is going to go within the province to charities and organizations that need it instead of going out to somebody's pocket so a guy can take a trip to Hawaii.

Ms Martel: It's interesting that you talk about police. I'm not sure if you were here but one of the first presentations this afternoon came from the city clerk of the city of Sudbury, who as part of his research contacted police forces in communities that have VLTs across a number of jurisdictions and the information that was given back to us today from police forces was that this was now a serious problem for them to deal with; that is, the VLTs and theft that occurred with it. There were concerns raised by the Fredericton police force in particular about the mob being involved etc.

While I appreciate your concern about our inability perhaps now to police, it seems to me we've been given some very significant research here today that makes it very clear that police have some significant concerns about VLTs -- when they go in, how the crime rate increases and how to deal with that from there.

Mr Morris: I'm not saying they're not concerned about it. They just don't have the manpower to police it. The chief of police in the city of Toronto has said he does not have the manpower to police the grey VLTs that are there now. So why aren't we legalizing our own? That will force the grey machines out of the city of Toronto or out of the province of Ontario and at least the money will go into government coffers. I realize you have people out there who are addicted to VLTs, addicted to poker, addicted to bingo halls. God save us, these Nevada tickets are the ones that are wrecking everything. They're cleaning little old ladies' pockets right bone dry, and yet nobody's done anything about that. I know little old ladies who can't pay their rent because they've bought Nevada tickets till they're sticking out their ears.

Ms Martel: It's interesting you say that because one of the articles the committee saw from January 1 -- it was a Toronto Star article -- talked about some of the repercussions and consequences in Alberta, and the article made it clear that in Alberta a bankruptcy trustee urged the government to reconsider its policy on VLTs after he received calls from seniors who had lost their life savings in the gambling machines. I'm not sure that by legalizing VLTs we're going to make the situation any better in the province.

If the government goes ahead, and I assume they will because they have the numbers to do this, and we have VLTs, if you got one in your hotel, for example, can you tell the committee what kind of changes might be made? What do you see happening in your establishment that would be helpful to you if you got a machine, or a couple of them?

Mr Morris: I can see it drawing more people in. Probably more people will come out and have supper and dine for an evening. My type of clientele is a mixture of the blue collar worker and office people. They like a Thursday, Friday night out where they can go out and do something different. They're the type who will tour around, as I've noticed coming from North Bay through all these Kewadin signs that are coming into Sudbury here to go there to gamble. Why can't they come to Sudbury and gamble and leave the money in the province of Ontario, the city of Sudbury? My traffic people charter a bus. They go to Kewadin, 40, 50, 60 people at a time, spend a weekend there.

Mrs Marland: Mr Morris, you're a very straightforward, convincing individual and I want to thank you for your presentation because it's interesting how when people argue a point or debate a point, and we all do it, all three caucuses do this, we sometimes argue our own point around to where it gives the argument to the opposing side. When I listen to Ms Martel -- she talks about this report, by the way, with letters from police forces. I'm sure that Mr Mowry contacted police forces across Canada, and there are five responses here out of all the police forces across Canada. So obviously that's an indication that there isn't a tremendous concern across Canada, from five out of -- I have no idea how many police forces there are in Canada.

Mr Kormos: That means only five people replied?

Mrs Marland: I didn't interrupt you, Peter, so I'd appreciate it if you didn't interrupt me.

But also this argument about, "You might as well let it rip because it's illegal now," that kind of argument from Ms Martel is like saying, "We've got drunk drivers; we might as well let them drive drunk." But the point is, what this government is doing is the very opposite.

Ms Martel: It's exactly the opposite, Margaret. That's the Tory argument. That's the point I'm trying to make.

Mrs Marland: Well, you make it on your time.

The Vice-Chair: Excuse me, if we could quiet down on this side, please.

Mrs Marland: The point is that this government is doing something about drunk driving because it's concerned about it. This government, through this bill, is doing something about the illegal gambling that goes on in this province. The fact is that this bill is doing the very opposite. We're not letting it rip. We are bringing it under government control. Sure, there will still be, as you quote -- the term "grey machines" is very graphic to me, but there's still going to be these machines that we don't know where they are and they will be uncontrolled. But the point is, it will be less attractive to have a grey machine because there will be more machines available for people to do it legally and for people in business to use them for business purposes.

I just want to ask you, because I don't know if I missed it in your presentation, how big your hotel is.

Mr Morris: I have a seating capacity in my lounge for 140 people and I have a seating capacity in my dining lounge for 28.

Mrs Marland: Is your hotel also residential?

Mr Morris: It's in the downtown core but it's a population of 3,200 people. It's right in the middle of town. It's a residential community, a small community.

Mrs Marland: When you talk about all of the other illegal activities that have been going on and the fact that, as Ms Martel said, the mob is certainly running the illegal activities across the province, you must be pretty convinced from what you said this afternoon that the bill is going to give us as much protection as we can possibly have, knowing that the mob is involved in every illegal activity, whether it's drugs or alcohol and --

Mr Kormos: They're involved in the legal slots too, Maggie.

Mrs Marland: I don't do this to you, Peter, and I think it makes for very uninteresting debate when you debate other people --

Mr Kormos: You can't show up here for one day after we've spent about three weeks and try to talk intelligently --

The Vice-Chair: Mr Kormos, please.

Mrs Marland: I can show up for one day when a committee has sat all year and talk more intelligently than you do.

Interjections.

Mrs Marland: Thank you, Mr Morris. I appreciate your comments and you and I could perhaps discuss this in a better environment without the interruptions.

The Vice-Chair: Thank you, Mr Morris, on behalf of the committee for your presentation.

Mr Morris: Mr Chairman, could I make one more comment, please?

The Vice-Chair: Very briefly.

Mr Morris: I've been in the hotel industry for 36 years. I work along with the breweries of Ontario; we work around with the distilleries of Ontario. I'm in the hospitality industry. I am very proud of being in the hospitality industry. We, as a hospitality industry, and distillers and brewers do put one hell of a pile of taxes into this province and I would like to make note to Mr Kormos that we pay part of your salary and I have never met a more ignorant man than you.

Mr Kormos: Welcome to Welland-Thorold any time.

Mr Morris: Ignorance goes a long way but you're the most ignorant I've met.

Mr Kormos: Welcome to Welland-Thorold.

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ELLIOT LAKE VIKINGS

The Vice-Chair: Our next presenter is Elliot Lake Vikings, Don Primeau. Welcome, Mr Primeau. You'll have 20 minutes for your presentation and you may wish to leave some time for questions.

Mr Don Primeau: I'd like to thank the Chair and members of the committee for allowing me this time. I feel I must open on a lighter side. As a northern Ontario constituent, an Ontarian, I've never been to the Legislature and I feel like I'm there now, so it's kind of nice.

Mr Kormos: Without the plane ride.

Mr Primeau: You shouldn't mention planes. We have difficulty getting planes into our communities, sir.

Ms Martel: That's right -- talk about norOntair.

Mr Primeau: That would be another issue for another committee, I'm sure.

The purpose for our organization being here today is to make this standing committee aware of the devastating effect that video lottery terminals and other portions of Bill 75 will have in regard to our sports organization specifically, and generally the effect this type of lottery will have on our community.

It goes without saying that our sports organization has a certain degree of autonomy and is surviving through the present use of Nevadas. The residual effect of money spent in our community directly by us means that because of our presence businesses are able to hire workers who are in turn able to earn a living and continue the cycle of spending in our community.

Many different businesses benefit directly through our expenditures, and because we are a small community Nevadas provide our city with the opportunity to have a tier 2 hockey team. While this might not impress some people, it gives us great pride to offer our young athletes the opportunity to continue to play hockey at a higher level without having to leave town to do so.

Our hockey team is a vital component in the community and it has been established in our specific community. As an example, the local canteen concession at the arena could not be operated profitably by any private business person; the city has run the canteen at the local arena and has been successful in doing so. They have told us that without the impact of our sports organization in the arena facility, they could not operate the canteen in a profitable manner. This canteen operation is responsible for employment for several part-time employees, not to mention the added convenience for those who use this facility. This is only one example of how the use of Nevada moneys helps others in our community.

The additional hardships that will be felt by residents of our community are numerous. Many different businesses feel that our contribution to their livelihood is significant. Among those are the local bus company, the local sporting goods store, local residents who provide their homes as parents for hockey players, and as a result teams coming into our community are spending money at local restaurants and hotels.

Because we are a small community, the overall impact of video lottery terminals will be devastating. If this standing committee considers the effect of video lottery terminals in other provinces such as Alberta, where moneys promised to organizations have not been honoured, and some of these needed organizations have gone under as a result, then it should be easy to see that the same scenario is about to hit our province. The smaller communities face losing non-profit organizations and charitable organizations and will be placed in a position where these organizations will in all probability be lost for good.

Alberta's promise of money, and organizations in need not receiving money, will only be repeated in our community and others in this province. Our municipal governments also should feel threatened by the prospect of video lottery terminals coming to their communities. The onset of video lottery terminals will mean their overall revenue from Nevada licensing will be greatly reduced. In our specific circumstance, the hockey team feels that the loss of Nevada moneys will be our team's demise. As a result, a league that operates now with only five teams would in all probability fold, and there are four other communities that will eventually be affected. This would occur even if video lottery terminals would displace our Nevada moneys by 25%.

As a consequence of proposed video lottery terminals, the city of Elliot Lake will face losing a significant component of its revenue base, so much so that even minor changes in regard to video lottery terminals will have a huge impact on our city, which now relies on other lottery licence moneys, in addition to Nevada licence revenues. The end result will be that the taxpayer will ultimately be faced with a mill rate increase. Our city council passed a resolution in April 1996 supporting in principle the efforts of Charities First Ontario in regard to further investigating the impact of video lottery terminals in Ontario. In particular, the resolution supports the investigation on lottery licensing revenues for local charities on local governments.

In closing, I would like to ask this committee to recognize the potential economic, social and addiction implications that are inherent in this type of gambling form. I would also like to take this opportunity to thank you for your time and consideration in allowing me to speak on this matter.

Mr Kormos: You see, Mr Primeau, part of the spin on this bill is that there's going to be a percentage of the take distributed to charities. When we were down in Toronto, some of the big charities suggested that should be charities that have federal charitable designations. I appreciate you're from up here; I'm from down there. I think of minor hockey; I think of the Hungarian cultural centre; I think of the Welland Snowmobile Club, which all do their fund-raising like minor hockey does and other sports teams -- with break-opens, they did with Monte Carlo nights and now by attaching themselves to the charitable casinos, these roving ones, and to bingos. They're not in the same league as the big Toronto-based charities.

Would you like to see some assurance from any of these people -- the members who have been with the committee for three weeks or even the members who have been with the committee just for one day filling in an empty seat -- would you like to hear an assurance from any of them that the Hungarian cultural society, the Rose City Snow Seekers, the Elliot Lake Vikings, are going to be guaranteed to be included in the definition of "sharing." Would that be the beginning to make you feel a little better?

Mr Primeau: It would certainly help, but defining charitable organizations is going to be a problem, as we foresee it. Meeting criteria that could be a lengthy process will inevitably kill us in the water because we can't be waiting on a process that is taking moneys out of our pockets. We can't survive; there's just no way.

Mr Kormos: So maybe one of the solutions is to define people who are eligible -- mind you, I'm concerned about this pool of money too because, as you know, I mentioned earlier today Ontario Lottery Corp raises $27.25 million in the Sudbury area every year, from everything from 6/49 down to bingo and keno -- 27 million bucks out of the Sudbury area last year alone. I haven't got an impression that a whole lot of that money came back into Sudbury.

My concern is that this money -- it's all about making money. The government here is going to be under pressure to do the same thing Ontario Lottery Corp has done with its great revenues; and that is, to present a few big cheques but make the rest line up. Perhaps a definition of anybody who should be eligible should be any organization that could demonstrate that they raised funds using break-opens, bingo or Monte Carlos. Would that be a little fairer proposition than merely saying charities?

Mr Primeau: If they've met the need in the past to a certain type of licensing, then they probably should fall into the new regime if video lottery terminals become a reality, and it seems that is inevitable. It's a question of where that charitable dollar ends up for us in particular. I hate to sound selfish on it, because I'm the only person representing a group here today from our small community, but I could sit here and rattle off any number of other charitable organizations in our community that now rely on that income. They're all basically in the same boat. I don't want to belabour our position in that community, but I think you're all familiar with what's going on there in terms of the economics.

The Chair: Thank you, Mr Primeau. I'm sorry, I'm going to have to stop you there and move on to the Conservative caucus.

Mr Primeau: I'll continue it on this side.

Mr Flaherty: How much time do we have?

The Chair: Five minutes.

Mr Flaherty: Let me do one first. Thank you, sir. I appreciate what you've said on behalf of the Elliot Lake Vikings. You seem to make the assumption that Nevada sales will go down with the introduction of video lotteries.

Mr Primeau: I don't see any other alternative. I mentioned the 25% reduction would definitely kill our sports organization, and that's not an exaggeration.

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Mr Flaherty: Before you jump to that conclusion, let's look at what actually happened in Alberta, where we know --

Mr Primeau: I don't know if we'd want to do that.

Mr Flaherty: I think we want to look at facts rather than speculation, look at what actually has happened somewhere else where the same event has occurred. It was actually the introduction of charitable casinos that affected pull-tab tickets -- they call them pull-tag tickets as opposed to break-open tickets -- rather than the introduction of video lotteries. So there's that and then there's the question of the money from video lotteries and the sharing of that money. Seven other Canadian provinces have video lotteries. We heard from them last Wednesday, those members who were present, and not one of them shares any dedicated amount with charities.

This province, this government, is going to allocate 10% of the gross revenues to charities, which is a substantial sum of money that hasn't been there before. So in terms of your organization and any other organization here, I'd ask you to consider the following sources of revenue: (1) The money from the permanent charity gaming halls that are going to be established, and that includes table revenue and card games, not just --

Mr Primeau: You're talking permanent facilities?

Mr Flaherty: That's right. (2) The 10% from the video lotteries away from the racetracks; (3) We're still going to have Monte Carlo nights but they'll be scaled back to one night rather than three.

The overall increase in real money, and I'm going to talk about charities in a moment, is up to $180 million more than there is already, which is around $290 million -- very substantial sums of money.

The next question that I take from what you've said, which is really important is: "But what about my group? Do we get to participate?"

Mr Primeau: I want to make it clear that I'm not the only group I'm referring to here, I just am the only group which is presenting today. So you have to remember that you're not giving us any indication of defining that charitable organization, and there are quite a number of criteria that I believe you're going to end up coming up with.

Mr Flaherty: And the reason we're not is that Bill 75 does not, and we're studying that bill. But I can say this to you, that the government's committed to consulting on implementation, which means --

Mr Primeau: Are you going to consult through the same type of endeavour, with a standing committee?

Mr Flaherty: Through some sort of consultation committee. The whole idea of course is to address the questions you've been addressing; that is, which charities are considered, which groups are considered for funding --

Mr Primeau: The problem I have though is, when you start considering charitable organizations, many people would not consider a tier-2 junior A hockey team to be charitable, but they never get past the moniker of tier-2 hockey. They don't see us going out and doing things in the community that they find beneficial, but we're taking --

Mr Flaherty: You don't know how many older hockey players you've got --

Mr Primeau: I think I have a lot.

Mr Flaherty: -- along this row here. You've got quite a few old hockey players --

Mr Primeau: I believe that, but I'm speaking in general. A lot of people don't see us as being a charitable organization. So I feel that the criteria you might envision someday will negate us from ever being in the application process for any of these moneys that VLTs will have. We are surviving now through Nevada income, and that's not only for our hockey team; I'll bet you there's a whole lot of other hockey teams in this province that are doing the very same thing. It's just that VLTs scare us. There's no doubt about it.

Mr Flaherty: There's been no suggestion that any group would be excluded, but obviously there have to be priorities and there have to be discussions about that. I hope you'll participate in them, because --

Mr Primeau: I would be glad to speak in favour of the design of what a charitable organization should be. I've done economic impact studies for our hockey team, and in particular for our league in general, and the moneys that we generate are phenomenal. They shock the person when you look at them. So in a small community like ours I see us as a definite asset and I don't want to be speaking as a one-person item here. I want to speak for all our things in Elliott Lake.

Mr Flaherty: Absolutely.

Mr Primeau: I think we all understand where we're coming from there, but the moniker "charity" scares us, and how we fall into that criterion scares us.

Mr Flaherty: I appreciate your concerns and thank you for bringing them here so we can hear them.

Mr Primeau: And I thank you for your time.

Mr Ramsay: Mr Primeau, thank you very much for your presentation. Maybe the government members are starting to understand what people like you are presenting here today in Sudbury and other places -- the tremendous apprehension that the Mike Harris government has caused with the literally hundreds of thousands of people like you who do great work in your communities for those non-profit organizations that you believe in and work very hard for. The government today is still not prepared to give you any guarantee as to the funding mechanism you could apply to that would guarantee you the same revenues that you work for on your own with the tools that previous governments have given you today.

Mr Primeau: I think, just to interrupt for a moment, that the degree of autonomy we currently have because of where we are with our funding is going to be lost, and by losing that autonomy, we obviously lose our position as a player in our community.

Mr Ramsay: I agree with that autonomy, because what better gauge to gauge the worthiness of your particular cause than by the number of volunteers you're able to recruit in your community and the work that you do and therefore the subsequent revenues that you raise? That's a tremendous gauge as to the importance in your community of your particular organization.

Now what sort of proof are you going to have to give to Queen's Park that, "We actually need $60,000 to keep this team going, because that's maybe what we've been earning through Nevadas and charity bingos." "Are you kidding, giving $60,000 from the government to a hockey team in Elliot Lake? Get real. We're going to give you $10,000." "Yes, but this is what we've been earning." This is really a big concern and I think politically they don't understand the hundreds of thousands of people like you who are greatly apprehensive about what's going on here.

Mr Primeau: No, there's no doubt about it. Just to speak on that note a little bit, our revenues from Nevadas, just because of a general circumstance of economics in our community, have dropped by about 30% already. We've never stopped fund-raising; we've just started new ways of doing it, because we have to to survive. If we go through the loss of these Nevadas that we have now, there are just no other avenues. I've been out barbecuing, washing cars. I do anything I can to keep this thing going.

Mr Ramsay: I think you're going to have to be cooking hamburgers probably every day of the week for the next few years, because at one machine for every 550 people in Elliot Lake, with anywhere from $40,000 to $60,000 per machine being sucked out of the community of Elliot Lake, boy, there's going to be hardly any money left for the work that you are doing, and that's really what frightens me.

Mr Primeau: Yes, and I'm not really concerned overly about the guy who has to break open the Nevada ticket totally. That's a good thing to have. But he's not going to have the $5 to go down to the rink on Saturday night, because he just spent it at a VLT over at the bar on his way, and that hurts us just as much.

Mr Ramsay: Listen, good luck to you. We will be pushing this government for some sort of a commitment as to what the consultation is going to be like to make sure that existing non-profit groups are going to get their fair share of this pie, because I worry about groups like yours.

Mr Primeau: I appreciate the efforts of the opposition caucuses in that regard.

Mr Kormos: Dave Tsubouchi is now the minister in charge, so we hope to bring some tuna up here. You can sell that off.

The Vice-Chair: Thank you, sir. I want, on behalf of the committee, to thank you very much for your presentation.

SUDBURY WINTER TENNIS CLUB

The Vice-Chair: The next presenter is the Sudbury Winter Tennis Club junior program. I've got Paul Robert and Jim Richardson. Good afternoon, sir.

Mr Jim Richardson: Good day. My name is Jim Richardson. I'm the manager of the Sudbury Winter Tennis Club. I work there part-time. The Sudbury Winter Tennis Club is the only indoor tennis facility in Sudbury. It's a four-court air-supported structure that covers four courts. It's a user-pay facility. It was also a user-built facility; that is to say, the taxpayers did not have to ante up a dime to have this facility built and enjoyed by the people of Sudbury and visitors to Sudbury. We're proud of that fact.

It's a non-profit facility. We have 200 kids who take part in our junior programs here in Sudbury, and 38% of the club's revenue comes from those junior programs. All of that revenue comes from Nevada ticket sales -- 38%. If it were not for those ticket sales or if there was a substantial reduction in the amount of money that we gain from those ticket sales, the facility would not exist. The kids would not have it and the other tennis players in the community would not have it as well. As well as that, there'd be one full-time employee and 12 part-time employees without jobs.

It's our feeling that, as you've heard here many times, I'm sure, today -- I just got here -- the revenue we get from the sale of these tickets will be substantially reduced if people are able to use these lottery terminals here, there and everywhere. It's just about as simple as that: We're out of business if we have a substantial reduction in the amount of money that we gain from these ticket sales.

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The type of facility we're running is a facility that I'm sure Mike Harris likes. It's a non-profit facility and there's no taxpayer component there. It's user-pay. The kids of the community travel around the province as well, the better kids who get up into our competitive programs through our instructional programs. They travel around the province and they do this with some help from the revenue that we gain from Nevada as well. We host tournaments in the city where people come from all over the province and use our facility and use our hotel facilities and restaurant facilities in town as well, so having this facility in town is a huge benefit to the community. It is, as I say, the only indoor tennis facility in -- well, not in northern Ontario; there's one in Thunder Bay as well. Sault Ste Marie just got one, but it's the only one in Sudbury and we'd be out of business without the money that we gain from this.

That's all I have to say. If anyone has any questions about our facility, I'd be glad to talk about it.

Mr Flaherty: We've heard repeatedly about break-open tickets. They're called pull-tab tickets in different places, Nevada tickets, whatever. There's a question of what the effect would be on them with the introduction of video lotteries in racetracks and charity gaming halls and subsequently in some licensed premises. The indication we have from Alberta is that there's no cause-and-effect relationship there, and they've gone through the experience. We'll have to see what happens.

What I think is important is to make sure that funds are available for worthwhile community causes, and that, as I've indicated, so that you'll be aware of it, will be the subject of further consultation in the context of the implementation of Bill 75. But help me. If I can just ask you about your facility, you have user-pay and user-built, so there's no debt.

Mr Richardson: There is debt from the club. We have revenue that services this debt. The debt is to our members. Our members loaned us the money to build this facility. In fact, the city of Sudbury loaned us $50,000, which was half the original cost of the footings etc, wiring for the facility. We've been paying them for four years now, 7% interest plus the principal.

Mr Flaherty: I see. Did the users put up any capital?

Mr Richardson: The users, the members loaned us $50,000; the city loaned us $50,000. We pay them both back. We promised to pay them back 7% interest on those loans and we have every month since we've opened, for four years.

Mr Flaherty: How much of the operating costs are paid by the users?

Mr Richardson: All of the operating costs.

Mr Flaherty: So the Nevada tickets are used to pay the interest on the mortgage.

Mr Richardson: The Nevada tickets supply the Sudbury Winter Tennis Club with money to run junior programs.

Mr Flaherty: Oh.

Mr Richardson: Those junior programs use the courts and the courts are paid for by all members. The junior programs are run on our courts at the same price as we rent the courts to members.

Mr Flaherty: So it's really the junior athletic program that requires some sort of exterior funding from what the members themselves already pay?

Mr Richardson: It's the club that requires the money to be able to be there for use by the juniors. If the club wasn't there, the juniors wouldn't be able to take tennis lessons there. The revenue that comes from Nevada tickets gets used for the juniors and the juniors use that court time through instruction and just practice time as well. The club gains the revenue and, as such, is able to survive to offer those services.

Mr Flaherty: Good. I hope you and the other community organizations -- I'm sure you will participate in the further consultation that will take place.

Mr Ramsay: Mr Richardson, you and other representatives of non-profit groups have brought forward your concern today, and I really appreciate this because I have real concerns about how this scheme the government talks about that will happen some time after the introduction of VLTs where you'd be able to apply for some money, you know, like the good old days with your cap in your hand and ask for a grant -- we're going to get back to government grants where you have the tools --

Interjection.

Mr Ramsay: I see one of the members, Mr Ford over there, says you're going to earn it, but the thing is, you're earning it today. That's what I like about it.

Mr Douglas B. Ford (Etobicoke-Humber): You don't have to go with your cap in your hand.

The Vice-Chair: Mr Ford.

Mr Ramsay: You see, this is what we want to get clear, because I think the apprehension would be settled, if I could address Mr Flaherty for a second, if he could give Mr Richardson a guarantee that any revenues the Sudbury Winter Tennis Club would lose from the introduction of VLTs would be made up from the VLT revenues. I think that's what people want to hear.

They say: "We're working hard, but we don't mind that. You've given us the tools, but now you're going to really impinge upon the tools that we have." What they're looking for is some assurance. Can you give these clubs some assurance that, "Don't worry. The money will be there and we'll be able to get it to you if" -- because you said you're not sure either. We're all debating the Alberta figures, or whatever. If the introduction of VLTs hurts the revenue from Nevadas and other sources like charity bingos for these organizations, will you give the guarantee today that clubs such as this and the junior B hockey team in Elliot Lake will not be hurt and the money will be there from the VLT revenues? Mr Flaherty, can you give us that?

Mr Flaherty: The government has already guaranteed additional funding, more than 10 times what comes now from Monte Carlo nights, which is an increase of up to $180 million. There's going to be a lot more money available for these causes -- a lot more.

Mr Ramsay: In other words, there will be lots of money, then, for clubs such as this. This is what you're saying. You've got to look at the political aspect too. Quite frankly, I'd be embarrassed. I don't know if Ron Johnson here from Brantford, for instance, wants to put his name on a press release as a government member that, "I'm giving the Brantford curling club $10,000 to do this or that," when they used to have the tools in their own hands to earn it themselves. We're getting down to big, paternalistic government again; we're going to hand out money from Queen's Park down to clubs.

Mrs Marland: Where did they get the money before Nevadas?

Mr Ramsay: They're earning it today. That's the point, Margaret. I guess what I'm asking for is, I'd like today to get a guarantee from the government members that clubs and groups such as this will have the revenue if VLTs hurt their ability to raise their own money. That's what we want to hear.

The Vice-Chair: Do you want to respond to that?

Mr Richardson: I'd love to have a guarantee, of course, that we're going to be able to survive and continue to offer the kids tennis lessons and the community the bubble itself. If 10 times the revenue is going to be generated for the province and we're going to get -- certainly we don't need 10 times. We're a non-profit organization. We don't need any more money than what we're earning now from the Nevadas. Why change it?

Mr Kormos: How much a year do you make from Nevadas now? What did you make last year?

Mr Richardson: The three years, we've had between $60,000 and $70,000.

Mr Kormos: Per year?

Mr Richardson: Per year.

Mr Kormos: Okay. I know people are going to dive in here quick as a boo, but $60,000, and 10 times that much -- because Mr Flaherty says there will be 10 times as much available for charities, so that's $600,000. You go home today, tell your membership that the user fees are gone, that they're going to have free use of that tennis club because Mr Flaherty, the parliamentary assistant to David Tsubouchi, former Minister of Community and Social Services, the king of tuna here in the province of Ontario, is now the Minister of Consumer and Commercial Relations and his parliamentary assistant says 10 times as much. It's in the bag. You can call the city right now and tell them to fill up that discharge of mortgage because you're obviously in like flint. These guys said so.

Ms Martel: Mr Flaherty also said that we have not heard any evidence to prove there's a relationship between VLTs and reduced Nevada ticket sales in Alberta.

Mr Kormos: He simply lied about that.

Ms Martel: I was sitting here when I heard Mr Burke from Bingo Pro Inc give us some data that he just got yesterday, he told us, from the Alberta Gaming Commission which I understand he filed with the clerk, which directly showed a correlation and which showed there was a drop in Nevada ticket sales as soon as VLTs were introduced. That's what we got earlier, when you weren't here.

Having said that, can you tell the committee why you believe that once VLTs are introduced into the province of Ontario, that is going to directly hurt revenue from Nevada ticket sales that your organization depends upon.

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Mr Richardson: I've done some reading, probably the same statistics that you've seen just recently, on the reduction in revenues from Nevada ticket sales when VLTs have been -- and I've heard Mr Flaherty say the opposite here. I don't know what statistics he's using. All of the ones I've read have shown me that there is a reduction in revenue from Nevada tickets.

If there's extra revenue generated from these VLTs and there's a distribution of them to us that will, of course, come up equal to what we have now, that's fine. But why set up another bureaucracy to handle the distribution of those things when it's a very simple process now? We're doing it now, we gain this much revenue now, we use it all and it's well used. Why change it? It seems to be working for us, and it seems to be working for every other organization that I'm familiar with. If there's some guarantee that we could gain revenue from these VLTs to equal the amount we're getting now, that's fine, but no one has said that. We've asked for it, but no one has said we're going to be guaranteed that much.

Mr Kormos: Mr Flaherty did.

Mr Richardson: Well, he sort of hedged around it a bit, I think.

Mr Kormos: I'll take that as a guarantee.

Mr Richardson: All I can comment on are the statistics that I've seen. Everything I've seen has shown me that our ticket sales are going to suffer. There is only a certain number of dollars around for gambling, I presume, and people are going to spend it in all sorts of different ways, but one of the ways they'll be spending less is for the Nevada ticket sales where we sell them.

The Vice-Chair: Mr Richardson, on behalf of the committee, I want to thank you very much for your presentation.

HOUSING RESOURCE CENTRE (SUDBURY)

The Vice-Chair: The next presenter is the Housing Resource Centre (Sudbury), Barry Schmidl. Good afternoon, Mr Schmidl.

Mr Barry Schmidl: I don't think I'll need the whole 20 minutes to talk. I think you've all got a copy of what's written here, but I intend to go through it. One thing, before I start, to the government members of the committee, couldn't you find a shorter name for the bill? It took about half the title page with just the name of the bill.

Thank you for the opportunity to present the views of the Housing Resource Centre (Sudbury) to your committee. I've been informed there's a time limit on my presentation, and I'll attempt to be brief and to the point. Let me begin by introducing the organization I'm representing. Housing Resource Centre (Sudbury) is a non-profit organization which provides assistance to people in need of housing. From its beginnings in 1985 until a few months ago, the organization was called Crisis Housing Liaison (Sudbury).

The primary service currently offered by the agency is the housing registry program. This program consists of a computerized listing of all available rental units in the regional municipality of Sudbury. These listings are given to client families and singles who register with the program. In 1995, a total of 1,161 family and single clients looking for housing used this service. These households added up to 2,240 individuals who received services from the organization.

Housing Resource Centre (Sudbury) has also involved itself, largely through the efforts of volunteers, in advocating for improved affordable housing and tenant protection programs, as well as for the interests of lower-income earners in general. This latter concern, and a concern for the future of Ontario charities, is what brings us before the committee. Our concern with this legislation centres on its provisions for the legalization of video lottery terminals, VLTs, and my comments will focus entirely on that part of Bill 75.

VLTs have recently been compared by different people, with different opinions on the subject, to crack cocaine, by Mr Kormos over here; a new brand of beer, by Marshall Pollock from the Ontario Video Gaming Corp; and part of the entertainment industry, by Norm Sterling, who I understand is now recently former Minister of Consumer and Commercial Relations.

No matter what side you take on the issue, there are three facets that have to be dealt with: money, access and addiction. I'd like to deal with them here in turn.

Let's drop the niceties about the issue and get to the real point of it: money. The issue of VLT gambling rests on who makes money and who loses money and where the money goes. If I can be so bold as to lecture the committee for a moment, I can give you the answers to these three riddles, at least from my perspective.

Who loses money? The poor and especially the young, according to one Manitoba study, are the ones who will lose money. While more well-heeled individuals may go to casinos, where the minimum bet is $10, people with lower incomes will be attracted by the seemingly cheaper VLTs. Wealthy people don't gamble hoping to get out of their economic circumstances; poor people do.

Who makes money? Some charities may make some money from the VLTs under some circumstances. Exactly how the revenue is to be divided, under what arrangements charities would have access to VLT revenue and what cash impact the VLTs would have on other forms of fund-raising hasn't been defined nearly well enough.

The Housing Resource Centre (Sudbury) is not opposed to gambling. I'd like to make that clear. In fact, one of our concerns is how much money VLTs would take out of the amount people are able to spend on other fund-raising endeavours such as bingo, for example. Unfortunately the real answer to the question of who makes money is: the upper- and middle-income earners of Ontario. How do they make money off VLTs, you ask? This is part of the answer to where the money goes.

Where does the money go? It's hard to pin down, as many varying figures have been tossed out by the provincial government and others. However, one thing is certain: The government of Ontario will be the major single beneficiary of VLT profits.

Mike Harris told the Toronto Sun on May 4, 1995, "We don't have a revenue problem; we have a spending problem." During the election campaign that followed that interview he promised a 30% tax cut and measures to radically cut spending. The provincial government has announced the first stages of that tax cut and is well on the way to destroying the health and social service systems in the province in a bid to cut spending. Others have pointed out how ludicrous it is to make major cuts to revenues while a debt and deficit exists, and I won't get into that.

What the Harris government has done is to begin to cut what the well-off pay to maintain the state while cutting what the poor require from the state. In other words, VLT revenues to the province are essentially being transferred into the pockets of the well-off through VLT revenue replacing tax revenue. When Mike Harris's mother read him Robin Hood, she must have had the book upside down, because he seems to be robbing the poor to pay the rich.

The other factor in the money equation, which I briefly mentioned earlier, is the charities. Many charities, like Housing Resource Centre (Sudbury), do local fund-raising and receive proceeds from bingos and such. This has proven more and more important over the years as government funds have been cut. In our case it's now absolutely vital, as we were told a few days ago that we are receiving a 100% funding cut from the province effective October 31 of this year. As this funding is approximately 90% of our annual budget, it may well mean that we'll have to close; at best we'll be able to save a service that's a shadow of its former self. This government is not only attacking the health and social service sectors in this province with funding cuts, but with Bill 75 it is now likely going to cost organizations in these sectors funds from bingo and other fund-raising endeavours.

There is only so much money. The "new brand of beer" may get people to move to it from another brand, but it won't make many new people drink beer. The government slice of VLTs, at least, will reduce the amount of money going to charities out of the whole pot of money through diversion of money now spent on these activities to VLTs. There may be some increase in the amount of money going into the pot, but it will likely go to VLTs and be caused by gambling addictions.

Any discussion of VLTs must include a discussion of access by minors. The provisions in the legislation that restrict VLTs to bars, casinos and racetracks should prevent most minors from having access. However, this may not always be the case. It is a lot easier to have no VLTs than to restrict their locations effectively. Once VLTs are legal, there is no reason that people who see a profit in them would not lobby to have the range of locations expanded to corner stores and other spots. Prince Edward Island has only about one third of its VLTs in licensed premises. New Brunswick has VLTs in corner stores, restaurants and many other locations. Some provinces certainly have not restricted the locations of VLTs.

Once VLTs are where minors can get to them, the problems are magnified. Corner store clerks will not stop teenagers from using VLTs, and some teens will waste all their money hoping to hit it big. The Manitoba lottery policy review working group report states: "There is a striking correlation between age and VLT usage. A significant majority of 18- to 24-year-olds, 66%, have played VLTs in the past year. The frequency with which Manitobans play VLTs decreases with age." How different is an 18-year-old from a 16- or 17-year-old?

In a province where the government listens to business and basically does what it's told, how long will it be before the law is changed to allow VLTs to be placed outside of racetracks, bars and casinos? As for the illegal VLTs that already exist, the province has said it does not have the people to go out and find them. There were enough police officers hanging around doing nothing useful at Queen's Park when they became involved in the unfortunate incident during a peaceful demonstration there several months ago. Perhaps they could have better been assigned to find illegal VLTs.

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Provincial Finance Minister Ernie Eves told the Toronto Sun on March 24, 1996, "VLTs could create a lot of social problems in society.... Lots of other provinces have introduced VLTs and lots of other provinces have had social problems as a result of VLTs." He's right. I didn't think I would ever agree with him, but I have.

While VLTs may or may not be like crack cocaine, there is evidence that they do contribute to gambling addictions. The Manitoba lottery policy review working group report said, "A large majority of Addiction Foundation of Manitoba problem gambling clients (91.9%) and help line callers (67.5%) report VLTs to be their primary form of gambling." Even assuming that VLTs do not cause gambling addiction, and that's an assumption I'm not prepared to make, that at least is a type of gambling that is easy for problem gamblers to access and which can quickly empty their pockets.

Another Manitoba study, A Profile of VLT Gamblers in Brandon, states: "As shown elsewhere, more people gamble when opportunities to gamble are more readily available. Thus, the accessibility of VLTs places more people at risk for gambling addiction and for some this will include involvement in criminal behaviour."

One last quotation: The Globe and Mail, May 11, 1996, quoted gambling expert Dr Howard Schaffer of Harvard Medical School as saying that "not only would there be a substantial increase in all gambling, but many would probably turn to illegal gambling eventually, because the payoffs are always higher."

Gambling addiction can ruin lives. The government has stated that 2% of VLT revenues will go to programs to prevent or treat gambling addictions, but is that really the best way? Isn't creating the problem and then putting money aside raised from people who have the problem a backwards way of doing things? It is kind of like encouraging drug dealers to sell potentially addictive drugs to people and then taxing their profits to fund drug addiction treatment centres.

In conclusion, I'd like to say that British Columbia has not chosen to have VLTs, and that province has not slid into the Pacific Ocean yet. Ontario's choosing not to have VLTs would not even be a precedent. I strongly recommend that this committee remove the sections of Bill 75 that allow video lottery terminals.

I'd like to thank you once again for the opportunity to make my presentation to this committee. I look forward to your questions.

Mr Kormos: I understand what's happened to the housing help centre here in Sudbury; indeed the housing help centres which have played a crucial role in dealing with low-income people for whom it's been difficult to find housing have been under attack across the province. I certainly wish you well. I'm not sure there's very much I can tell you that's good in that regard, but it must have been very difficult, and I appreciate that, for you to come here facing that crisis and yet be prepared not to address that but to speak very candidly, frankly and honestly to the crisis that's being generated, in my view. You understand that's my view based on what I've read about the implementation of slots.

These are truly an insidious thing. They're far different from slot machines as anybody has known them. They incorporate the video game phenomenon with the near-virtual-reality phenomenon. The manager from the Windsor racetrack was up in Sarnia with us. They've got the machinery now with picture in picture, so you sit at your video, you bet your horse, you put your horse race down in the lower right-hand side picture in picture, then you play the slots, one and a half seconds between insertion. You pump the loonies in while your horse is still running and then you switch the picture in picture, bet your next horse and you've got 20 more minutes plus the minute and five seconds to play the slots. The people who build these things know what they're doing. As a matter of fact, some of the same manufacturers, Bally etc, have been very actively involved in developing the video game technology which has catered to adolescents.

You mentioned the research of Schaffer, among others; Derevensky, whom I spoke with this past week, a McGill University professor who's done a lot of research indicating double-digit levels of pathological gaming addiction on the part of adolescents and young people, including in CEGEPs and in universities -- double-digit, far higher than the numbers these people prefer to talk about.

Derevensky, who does his work at the Montreal casino, says that the proposition of restricting access to the casino to people under 18 is a fallacy. He has had no difficulty finding under-18 players in the Montreal casino to interview and he's documented those numbers. You refer to Schaffer, Derevensky; these people would rather you didn't. You could also have referred to Frisch at the University of Windsor, who talks about 17% of adolescents being either high-risk or pathological gamblers. These people could have referred to Mark Griffiths at the University of Exeter in Great Britain, who has spent a virtual career in studying adolescents and young people and slot machines and the enhanced levels of addictiveness.

I appreciate your candour and your frankness. I appreciate that you haven't wanted to speak of things whereof you do not know, compared to people like Ms Marland, who's come up here from Toronto for one day to fill an empty seat.

The Vice-Chair: Mr Kormos, I'm sorry, your time has expired.

Mrs Marland: I suppose Ms Martel is filling an empty seat because she's a sub for one day.

Mr Kormos: She's from Sudbury, and I'm glad she's here. I spent three hours on the phone briefing her last night.

The Vice-Chair: Mr Kormos, please. Thank you. Ms Marland.

Mrs Marland: You don't know whom I've talked to.

The Vice-Chair: Mr Flaherty, go ahead.

Mr Flaherty: I thank Mr Kormos for his question. There was a question in there somewhere, I'm sure. It's just we haven't heard it yet.

Mr Kormos: That was an acknowledgement that somebody had some candour.

Interjection: Now he leaves.

Mr Flaherty: No, don't leave. You might learn something.

Thank you for coming, Mr Schmidl, and making the presentation you've made. In the one Canadian study we have dealing with the reality of the Windsor casino, the introduction of over 100 table games and more than 2,500 slot machines and video lotteries, when studied, it was found that there was no significant change in the number of problem gamblers, nor any significant increase in the weekly expenditures on gambling, which ranged between $10 and $11 before and after the opening of the Windsor casino. That's a concrete study. It was done in Windsor. It was done by the Canadian Foundation on Compulsive Gambling by the professor of whom the member for Welland-Thorold makes mention.

That doesn't mean, of course, that is what will follow on video lotteries but it does give us some basis for anticipating that there ought not to be a significant variation from that 1% to 2% on addiction. This is premised on the assumption that gambling or gaming is already available in the community. Is gaming already available in Sudbury?

Mr Schmidl: Tat depends on how you characterize gaming. If you include things like bingo and Nevada tickets that previous presenters have been talking about, yes.

Mr Flaherty: There's bingo, Nevada tickets -- those are those break-out tickets, right?

Mr Schmidl: Yes.

Mr Flaherty: What about horse racing?

Mr Schmidl: There's Sudbury Downs, yes.

Mr Flaherty: Sudbury Downs, okay. What other forms of gambling are there here? We've heard about Monte Carlo nights here, roving Monte Carlo nights.

Mr Schmidl: Yes. There are charity casinos as well. These things are available pretty much everywhere in the province. I think that's what you're getting at.

Mr Flaherty: What I'm getting at is that if persons living in Sudbury or area wanted to gamble today, they could, legally.

Mr Schmidl: Yes, that's certainly true.

Mr Flaherty: Right, and they probably could illegally in some circumstances too, because we know there are 15,000 to 25,000 illegal video lottery machines in the province. Do you have a background in social science at all?

Mr Schmidl: I have two university degrees: one in political studies and one in social work.

Mr Flaherty: What I'm getting at in terms of studies and looking at situations is that it's unreliable, to try and use a neutral word, to draw a cause-and-effect relationship where one introduces a new variable where the situation is already readily available in the community. Do you follow me?

Mr Schmidl: Yes, I follow you. However, the fact that there have been studies elsewhere -- you're using a Canadian example, and obviously --

Mr Flaherty: An Ontario example.

Mr Schmidl: An Ontario example. There are examples elsewhere in not too dissimilar jurisdictions. I don't want to get into a game of tossing studies back and forth because I'm certain that for every study you could name or Mr Kormos could name you'd come up with one to balance his and he'd come up with one to balance yours.

Video lottery terminals are new. They're a different thing, as you say, although they do exist illegally in the province. So to some extent, yes, it's a new thing and therefore it's a new variable, but from the other studies that have been done in other jurisdictions, people in Ontario are not that much different from people in Alberta or people in Michigan across the river or whatever.

Mr Flaherty: I agree with you on that. Let me ask you this: Since those jurisdictions already have video lotteries, to what extent should the government interfere with the free choice of --

The Vice-Chair: I'm sorry, time has expired. Sir, on behalf of the committee, I'd like to thank you very much for your presentation.

Mr Kormos: Chair, if I may, I'd ask you to acknowledge a former MPP, Mel Swart, and his wife, Thelma, from Welland-Thorold. Mel of course is a long-time opponent of these types of frivolous and scandalous efforts on the part of governments to raise money by attacking and victimizing the poor. I'm sure Mel would be more than prepared to make a submission to this committee if we would allot him the 20 minutes, but I think you know where he stands.

The Vice-Chair: I think we do. Thank you, Mr Kormos. Good to see you, Mr and Mrs Swart.

Our next presenter is CD Warehouse, Mr Dene Holmes. Is he here? We'll move on then to Al Sizer from Sudbury Minor Baseball. Either one?

What we will do is recess until 4:40, which is the time that Mr Holmes is scheduled to appear. We're running a little ahead of schedule.

The committee recessed from 1622 to 1647.

CD WAREHOUSE

The Chair: We will proceed with our next scheduled presentation by CD Warehouse. Mr Dene Holmes will be speaking to the committee. Welcome, Mr Holmes. You represent CD Warehouse, which I take it is a retail shop.

Mr Dene Holmes: Yes, it's a mail order CD business, but it's an umbrella. Committee members, interest groups and fellow business people, I was in the RCMP for 10 years and I decided to start my own business. I left the RCMP and got into a business selling CDs and cassettes, and then moved on into the arcade business, which therefore puts me into line with VLTs, if you will.

As you know, starting up a business you have to follow all kinds of rules and regulations from many different acts, and it certainly is a struggle. As any good businessman will tell you, to run your own business nowadays is not an easy job, so you struggle. To this day, I still put more of my income into wages for the people I hire than I actually pay myself. Therefore, I have a second job. Unfortunately, I'm not powerful enough to change any of the laws to increase my revenues.

The way that I see the gaming legislation going, I have a real concern. It has allowed the government to make gains, big gains, but for the entrepreneur like myself hands are tied. I cannot move into the same business that the government now wants to proceed on. Therefore, I'm sitting back saying: It's supposed to be a free, democratic country. Why can I not get involved in business freely? Why should the government have different rules and regulations than I do referring to the Criminal Code? The Criminal Code states that you shall not have a machine that pays out tokens or money; section 106 or whatever. It's changed now; anyway, that's close enough.

Mr Kormos: It's 207.

Mr Holmes: Thank you very much. It's there. But yet in the gaming legislation the government has made provision for itself to be exempt.

I am not here against a certain party of the government. I am not here because of any other reason but my interest. It really seems to me to be a bit of a dictatorship -- I won't go as far as communism, but certainly a dictatorship -- in that one part of society can do one thing, and in the free trade, the free world that we have an entrepreneur can't do that same thing.

Yes, I am a little bit bitter in that the government does have such a power and that it sees itself different from the regular people in Ontario. As an entrepreneur and as a businessman, that really bothers me. I wish I could just swish the pen and, through those changes, erase the red ink that's in my business. I realize that the government today would like to erase the red ink it has, but I wish it was on a more even scale, a more even level.

I own machines similar to VLTs. I own them here in this city, but I can't pay out. Therefore, when and if VLTs are introduced into Ontario it will only be the government, whoever they might be, whatever party it might be, that will benefit from these things. It will obviously be a loss of revenue for myself, possible bankruptcy and, for sure, layoffs. I've got several of these machines around town. They do fairly well on an amusement basis. Trust me, the bars, tourist places and restaurants that have them enjoy that extra revenue, just as well as my people I have working for me enjoy their jobs -- being able to go around and fix these machines, collect the money, do their public relations, try to get a few more machines in a few other bars and try to build up the business so that we can have a better business and all enjoy the benefits that would come from that business.

Yet the way I see the VLT process going -- and I have spoken with the Ontario Lottery Corp, the director of the lottery corporation in Sault Ste Marie. I spoke with him two days after it came out in the budget. I phoned -- I was very concerned -- and he advised me at that time that there would be no jobs created; not one.

Where I was looking as an entrepreneur -- I said: "This is going to be a big thing, it's going to be big revenue, there's no question about it. Where can I get on the bandwagon? I have the potential of fixing these machines. I know how the machines work. I know the business very well; I've been at it for the last 13 years or more. I'm sitting in a very good position to be able to get a job out of this." "Good luck. There will be no jobs created." Definitely not any long-term jobs, but yet there will be substantial revenue coming in. Obviously, as I run an entrepreneurial business, if there's more revenue coming in there have to be more jobs. It just has to go that way in my business, because certain people do certain things. If my business increases, obviously there's room for more jobs. But I don't see that with the VLT proposal the way it is set out right now.

Yes, certain bars and hotels, fellow businessmen who sit behind me here, think it's a great idea, and I support their idea. If it's good entrepreneurial spirit and it can make them money, great, but unfortunately this will be very limited. Those people who want them are not going to get them; only a very limited number. That is the other problem I see. Who gets them? It's never, ever been stated to us. All they've told is that it will be very limited, and it leaves it there.

When that happens, obviously the small-time bar owner or lounge owner somewhere else is going to lose his revenue from these machines that already exist to the people who are going to have them. They don't have an opportunity to invest to buy one or to get involved in one, so they again are separated. They can't compete fairly on a scale to have their business run as successfully as somebody else's.

What I'm really saying is that I'm a firm believer that if VLTs are introduced and brought in, those who have them will do well. No question about it; they will do well. What about the other, little guy? We're forgetting about him. He's gone. He's going to end up probably losing his spinoff business from that, whatever it might be: the eating, the drinking, whatever comes along with that. There's obviously spinoff business to these. As far as I'm concerned, this would bring more layoffs, more bankruptcies etc.

One small point I want to make here before I sum up: I was coming back from a do today. That's why I was a little late, and I apologize. It's funny how I thought of this. I said, "It's funny, if we referred to the government as one player in a game, and the rules didn't allow for another player to play that game, then obviously only one team wins, doesn't it?"

Because of the rules and regulations that are set out, and the exemptions -- I'm referring now strictly to the exemptions that the government has in its favour here -- if you're playing a game of Monopoly and you're playing by yourself, it's kind of hard not to win, very hard not to win.

I want to get into that game. I'm an entrepreneur. This is what I thought we were trying to promote in this country and especially in this province: a good source of small business, a good base of entrepreneurship. I don't see that with this VLT legislation that's coming around.

I could go on, but the day is aging. Allow me to give you a solution. There's no use coming and bitching. Let me give you a solution to what I see could happen and to keep everybody happy. I'm not saying that I agree with the VLT proposal and the VLTs coming in. My personal opinion? No, I don't. But if it was to come in, get more people involved, not just have it government setting up, the clientele putting the money into the machines and the revenues being split up between those very limited people and the government.

1700

You're right, I see no jobs here. I see nothing. I see no mix. But if we got more people involved, open it up to entrepreneurs like myself or anyone else who wants to get in the business -- it is all very well monitored. I'm very familiar with the way the system works in Newfoundland and New Brunswick. I'm not so familiar with it out west; I don't know how they have it set up out there. But it's very well monitored. There's no hanky-panky with the books. The books are there. You pay your dues and that's it. That's the way the phone lines and everything work. Obviously the lottery corporation will look after that. I see no risk in getting other people involved. This would ensure that there would be no layoffs in my business. It would ensure that we could create more jobs and create a better attitude towards entrepreneurship than I see now.

Also, allow a schedule so that the VLTs could be moved around, since they are going to be limited. I realize that every single bar in every single community cannot have one; it's not going to work. But if there was a schedule set up, something similar to the casino type of operation we have here now, at least every bar, every organization that wants to have one, whether it be a lounge or -- I realize we're trying to hit the tourist portion -- if they were able to have a kick at the cat it would certainly keep them a lot happier. The people I deal with right now are not very happy with what is going on. "Oh, good, we're going to get one." "How do you know you're going to get one?" "Well, I know so and so and I know so and so." Unfortunately, it doesn't happen that way. But if everyone was at least, not guaranteed, but assured that somewhere down the road they'd get a two- or three- or four-month span at this thing, it might appease everybody.

My true feeling on the matter is: Leave it as it is. Don't get into the business. It's a tricky, risky business to be involved in. Trust me. Let the government run its casinos if it wishes. That is a tricky business as well. It takes lots of dollars and I am no Donald Trump. I have no intentions of getting involved in a big casino. These few machines will be very -- I'll use the same word I've heard over and over again -- limited. If these limited machines were spread out to entrepreneurs like myself, it would certainly help the situation. But the entrepreneurial spirit will not go in Ontario if it goes the way it is proposed to go.

In closing, let me paraphrase very quickly, a letter that I read in Maclean's magazine in February 1995. They had a few articles on VLTs. A bartender in Quebec says that he sees them come in and go out every day, day in and day out, all kinds of walks of life, from the three-piece suits to the people who are really having a hard time, hoping to make a little more money than they have. But guess what? Very seldom does that happen, so the poor are going to get poor if they get into the VLTs. It is a very addictive thing to get into. He ends his letter by stating: "It is not right for us to teach our children that sitting at a VLT, day in and day out, is a way to make an honest living."

Mr Kormos: I've got to do this quickly. You know, it's incredible because every hotel-motel person who's come here wants these machines. By God, they think this is going to be the panacea for all the ills of the recession. They talk, as does the government, about these 20,000 poker video games out there. You've talked about them today. I'm prepared to concede -- that's what I read too -- 20,000, maybe 25,000 of them. I understand any one of them could be used illegally if you wanted to, the same way back in 1963 down at Nero's Pool Hall if old man Nero wanted to pay off on a pinball score, you could pay off on a pinball score. Been there, done that, okay?

But the industry, the hotel-motel people, say: "Slots are going to be the salvation of our industry. We need the slots to survive." If there are already 20,000 of your machines out there and they're getting a far better percentage of the gross than they are ever going to get with slots, and if people are playing these grey market machines, as they call them, as much as we're told, I'm further ahead with what you've got than I am with the government-controlled slot, because you're giving me 50%.

Mr Holmes: But there's one thing you're missing.

Mr Ron Johnson: Missing a lot of things.

Mr Holmes: No, there's one thing they're missing. The government can do the sounds of the jingle-jangle coming out of those machines and I can't, and that's what attracts the people.

Mr Kormos: That more addictive quality.

Mr Holmes: Oh, yes.

The Chair: We'll move on to Mr Flaherty. You have a minute and a half, Mr Flaherty. There's no time for thought.

Mr Flaherty: I was in prayer for Mr Kormos. I wasn't really thinking that --

Interjection: Takes longer than a minute and a half.

Mr Holmes I hope you'll be in prayer for me later on, because I have a business I need to run.

Mr Flaherty: With respect to the video lotteries, I gather you're concerned. I was following that you were saying, and I hope I understood it correctly, that Bill 75 would allow video lotteries in licensed premises but not in non-licensed premises, and your premises are non-licensed. Is that right?

Mr Holmes: No, I'm not referring to that at all.

Mr Flaherty: Are your premises licensed?

Mr Holmes: Yes and no.

Mr Flaherty: Some are and some are not?

Mr Holmes: Yes.

Mr Flaherty: Is there anything that would prohibit you from applying when Bill 75 is law to have video lotteries in your licensed premises?

Mr Holmes: Certainly, because I can't run the same ones that the government is going to run.

Mr Flaherty: Oh, I see. I think you may misunderstand. The government is not going to run the machines in licensed premises; they're going to be put out into licensed premises for the proprietors of those premises to run and make a profit. I think there may be a misunderstanding of the concept here.

Mr Holmes: Sorry. You've covered the hotel part of it. Where does the other part of the revenue go?

Mr Flaherty: There's 10% to charities, 10% to the operators of the machines, 2% to addiction research and training and the balance to the taxpayers of Ontario.

Mr Holmes: I'm still in awe as to where myself as an entrepreneur can get involved. I'll certainly apply for every licence there is possible, but where do I cut in here?

The Chair: Thank you, Mr Flaherty. If we go to Mr Conway --

Interjections.

The Chair: Excuse me. Mr Conway has the floor.

Mr Kormos: I was just going to answer his question. You start with Conservative Party headquarters and your chequebook.

Mr Sean G. Conway (Renfrew North): You were introduced as someone who is now in business but who was once an RCMP person.

Mr Holmes: Yes.

Mr Conway: It's in that connection that I'd like to ask a question. I am, unlike other members of the committee, a complete neophyte in this business, but I'm interested to know, particularly from your past police work with the national force, how is it that in Her Majesty's loyal Ontario tens of thousands of these machines operate as illegally as they do and neither the provincial nor the national police force seems to be able to do much about it. Is it just something in the nature of the activity that makes it almost impossible to protect against? Mr Holmes: I'm sorry; I'm not aware of one machine that's run that's illegal.

Mr Conway: I hear and I read that there are 15,000 to 20,000 of these machines out there operating illegally. I'm not sure I understand what that means.

Mr Holmes: I'll certainly stand here and jump on the table there. In my business, there is none that is run illegally.

Mr Conway: No, I'm not accusing you, but I'm just saying you, as a former policeman, probably have pretty good connections.

Mr Holmes: Sure, there are lots of them there. The police go on their raids and they scoop them up whenever they can. Mine don't pay out. I don't have a crank or things, and the money doesn't ching, ching, ching, ching.

Mr Conway: I understand that about your machines. I'm more interested about the number of machines that you obviously have no personal investment with that operate quite illegally. How does that go on to such an extent and we don't seem to be able to do much about it? Is the market just that strong?

Mr Holmes: I don't say the market is strong at all; I say the market is struggling very much as it is. If I was doing very well in the business and had a clientele that was going to stick with me, then I wouldn't be sitting here today, but I'm afraid that I can't play on a level playing field when these VLTs come in.

Mr Conway: Part of the argument seems to be, and to a lot of laypeople it would be understandable, that it's going on, it's going on all over the place, so if you can't beat them, legalize them.

Mr Holmes: Sure, go ahead, legalize them, but to get back to my question, where do I get into the business? I can't get my foot in the door the way it's set up right now.

The Chair: Our time has elapsed for your presentation. I thank you for attending today.

We have one last presenter, Sudbury Minor Baseball, Al Sizer. Is Mr Sizer or anyone representing Sudbury Minor Baseball present? If not, it seems that the cabs are waiting outside, so you can have your baggage. We are adjourning to 10 am at Queen's Park, room 228, tomorrow.

The committee adjourned at 1710.