ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
SAULT STE MARIE ECONOMIC DEVELOPMENT CORP
SAULT STE MARIE CHAMBER OF COMMERCE
LONDON CONFERENCE OF THE UNITED CHURCH OF CANADA
RAMADA INN AND CONVENTION CENTRE
CONTENTS
Monday 30 August 1993
Ontario Casino Corporation Act, 1993, Bill 8
City of Sault Ste Marie
Joseph Fratesi, mayor
Bob Kates, superintendent, administrative division, city police service
Sault Ste Marie Economic Development Corp
Bruce Strapp, executive director
Sault Ste Marie Chamber of Commerce
Barry Magill, president
Anglican Diocese of Algoma
Archdeacon Rodney Andrews
William Kidd, lay secretary, Ontario synod, Anglican Church of Canada
Archdeacon William Stadnyk
London Conference of the United Church of Canada
Rev Phyllis Dietrich, minister
Station Mall merchants
Hans Geneen, manager
Caren Cares Gardening Service
Caren Kernaghan, owner
Major Contracting Algoma Ltd
Robert Paciacco, legal counsel
Antonio Ruscio, president
Elizabeth Rajnovich
Ramada Inn and Convention Centre
Tony Gallagher, general manager
Cambrian Bowling Lanes
Toni McDonald, representative
Garden River First Nation
Chris Belleau, councillor
Dennis Jones, chief
Continued overleaf
Continued from overleaf
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/
Prince Edward-Lennox-Hastings-Sud ND)
*Acting Chair / Président suppléant: Sutherland, Kimble (Oxford ND)
Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)
Caplan, Elinor (Oriole L)
*Carr, Gary (Oakville South/-Sud PC)
Cousens, W. Donald (Markham PC)
Jamison, Norm (Norfolk ND)
*Kwinter, Monte (Wilson Heights L)
*Lessard, Wayne (Windsor-Walkerville ND)
Mathyssen, Irene (Middlesex ND)
North, Peter (Elgin ND)
*Phillips, Gerry (Scarborough-Agincourt L)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Dadamo, George (Windsor-Sandwich ND) for Mr Jamison
Harrington, Margaret H. (Niagara Falls ND) for Mr Wiseman
Marland, Margaret (Mississauga South/-Sud PC) for Mr Cousens
Martin, Tony (Sault Ste Marie ND) for Mrs Mathyssen
McClelland, Carman (Brampton North/-Nord L) for Mrs Caplan
Also taking part / Autres participants et participantes:
Duignan, Noel, paliamentary assistant to the Minister of Consumer and Commercial Relations
Clerk / Greffière: Grannum, Tonia
Staff / Personnel: Luski, Lorraine, research officer, Legislative Research Service
The committee met at 0904 at the Water Tower Inn, Sault Ste Marie.
ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
Consideration of Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos / Loi prévoyant la réglementation des casinos par la création de la Société des casinos de l'Ontario et traitant de certaines autres questions relatives aux casinos.
The Chair (Mr Paul R. Johnson): The standing committee on finance and economic affairs will come to order. This is our first and only day in Sault Ste Marie and it's a pleasure to be here. It's nice to be in your home town, Mr Martin.
Mr Tony Martin (Sault Ste Marie): Yes, it is, and thanks for recognizing the fact that it is my town. I'd like to -- although the mayor's going to do this more officially in a minute, I'm sure -- welcome you to Sault Ste Marie and thank you for coming.
It's always great to have members of the Legislature in the Sault to see what a wonderful community we have and to hear, from people like the group you're going to hear from in a minute, how excited we are about some of the initiatives that are out there now, that we perhaps will be able to take advantage of in the not too distant future to better our economic position.
Welcome to everybody. Thanks, Paul, for allowing me to do that.
CITY OF SAULT STE MARIE
The Chair: Our first presenter is Mayor Joseph Fratesi. Obviously you've brought some other individuals with you. I'll ask you all to identify yourselves for the purpose of the committee members and for Hansard. You have 30 minutes within which you can make your presentation and maybe leave some time for questions from the committee members.
Mr Joseph Fratesi: Mr Chairman, accompanying me this morning are Mr Lorie Bottos, who is the city solicitor, Mr Bruce Strapp, who is from our economic development corporation and who will do a further presentation, and Mr Robert Kates, who is superintendent with the city's police department.
To pick up where Tony left off, on behalf of the citizens and the council I welcome the standing committee to our community to discuss an issue which has been the talk of this town for at least 18 months. I appreciate the opportunity to make a presentation to someone from government who's prepared to listen to what Sault Ste Marie wants to say about casinos and the possibility of one in our community.
You no doubt know that this is an issue which requires much thought and consideration, and this is something that has already been done in Sault Ste Marie over the last 18 months. The corporation of the city of Sault Ste Marie has experienced the impact of a serious cross-border shopping problem, but more important than that, cross-border gaming activity for quite some time, more than 10 years as a matter of fact.
While we have seen the benefits of this activity go to our sister city of Sault Ste Marie, Michigan, we continue to have some difficulty in having a casino located in our community, even though all the good that we see already happens in Sault Ste Marie, Michigan, and any negative that some might suggest flows happens in our community as well.
We know that not 100% of this community supports the notion of a casino for our community, but I would suggest to you that 80% of this community is certainly behind the efforts of city council to have one established here. Shortly after government announced the issue of casinos in the 1992 budget, Sault Ste Marie publicly supported the move by the government and requested that we be considered as one of the first sites, if not the first site.
We have full knowledge of how a casino works and what impacts there were for communities because, as I indicated earlier, we have one that operates in our community. It just happens to be three miles away on the other side of the bridge, but very accessible to all of our community.
On May 4, 1992, our community passed a resolution which indicated that while the province was planning to go ahead with the establishment of casinos in designated areas of the province, and whereas Sault Ste Marie, at that point in time, was rumoured to be one of the designated communities, city council was asking our solicitor to contact provincial officials so that we could get further information so that council might consider creating a committee that would liaise with the provincial government and the community at large to ensure that the proposed casino meets the expectations of the community and the citizens of this community as well.
What we wanted to do was to put our own casino team together and we wanted to do our own assessment of the good and the bad of a casino in our community. The resolution went on to request that the city solicitor contact provincial officials so that we would get enough information to create this committee that would both do the investigation and liaise with the provincial government to ensure that a proposed casino in our community met with what we expected it might.
On May 11, the city solicitor wrote to the Honourable Marilyn Churley and the minister responded to the city solicitor with a letter on June 11.
On June 16, 1992, Frank Sarlo, the then chairman of the Sault Ste Marie Economic Development Corp, wrote to the same minister proposing Sault Ste Marie as a pilot site, because what was coming out of government, at least in an informal way, was suggesting that maybe there would be pilots -- I stress the plural pilots -- and we were suggesting that Sault Ste Marie would be a good location for one of the pilots. That letter also suggested that the economic development corporation might operate that pilot, being a crown corporation already in place that had the confidence of all Ontarians, we believed.
On July 23, the minister responded to the proposal, and you've got that attachment -- not very good news. On September 29, 1992, the same minister held a municipal consultation process and invited just about all of the province to attend. We felt one of a number of people and we felt that Sault Ste Marie, which was a cross-border shopping city with a cross-border shopping problem, one that had been touted as perhaps one of the pilots, was being lost with just about everyone else in this process. Mr Strapp attended on behalf of the city and the economic development corporation and came back somewhat disappointed and disillusioned.
In October 1992 I wrote to the Premier concerning the process and expressing our concern and expressing concern about the criteria that the ministry had initially established.
On October 6, 1992, the only reply I've received from Marilyn Churley, even though I've been asking for meetings with her to get a handle -- I know Tony's been attempting to assist to get this meeting so we can establish some ground rules. The only response we received from Marilyn Churley was a copy of the press release announcing Windsor as the site for the province of Ontario. I'm sure you can imagine what we felt like in Sault Ste Marie. I used the expression at a council meeting and I'll use it again: We felt somewhat like the jilted boyfriend.
On May 5, 1993, Bill 8 to establish the casino corporation was presented to provide the control of casino operations throughout the province. First reading was held, and it's this reason that the committee is now travelling, to see whether or not improvements can be made to the bill.
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The council of this city has supported the idea of casino development in our community right from day one. We now have the negative impacts because of the easy access that our residents have to Vegas Kewadin, which is located on the first nation territory as part of the city of Sault Ste Marie, but we only gain minimal tourism spinoffs.
Sault Ste Marie's tourism industry employs about 7,000 people out of our total population of 81,500. Our tourism infrastructure consists of several attractions, including the ACR tour train, which attracts more than 100,000 visitors per year, and there are 1,300 motel and hotel rooms in our community, numerous restaurants and a large inventory of retail space with high vacancy rates as a result of cross-border shopping activity. You can compare this to Sault Ste Marie, Michigan, a city of only 14,700, having the same 1,300 hotel rooms.
The Straits of Mackinac area has a small native gaming facility as well. The Straits of Mackinac area is just south of the city of Sault Ste Marie, about 50 to 60 miles. It has 1,750 rooms in St Ignace and 1,200 rooms on Mackinac Island. There's very little population surrounding those hotel rooms.
The city believes that a casino can have a positive tourism impact in our community and it will provide additional activities for tourists while they're here in Sault Ste Marie.
The Sault, Michigan, casino has had positive increased employment and decreased unemployment. Revenues from the casino have provided housing and medical facilities on the reserve. These revenues have also aided in economic diversification efforts outside of the casino gaming operations.
Ontario's restrictive position on casino development creates a situation where the flow of Canadian dollars from gambling and cross-border shopping goes right into Sault Ste Marie, Michigan, on the American side.
The profits of the casino gaming operation in Sault Ste Marie, Michigan, are estimated to be anywhere from $30 million to $80 million US annually. These are the profits we're talking about. This means gross gaming revenues of anywhere between $150 million and $1.6 billion US annually, depending on whether the profit margin is 5% or 20%, as indicated in the Forbes magazine issue of March 1, 1993, attached.
The number of jobs created by gaming activities in Sault Ste Marie, Michigan, is reported to be 1,500. Let's not forget we're talking about a community of 14,700 people that employs 1,500 in its casino. As we speak, not only do the walls expand but so does the employment expand in that casino. Spending on goods and services could range between $30 million and $1.07 billion US in this casino.
No matter how you cut it, the Vegas Kewadin casino in Sault Ste Marie, Michigan, has added jobs and profits to the economy of Sault Ste Marie, Michigan, and has enabled it to cut its unemployment rate in half. The economy of Sault Ste Marie, Michigan, has flourished with gaming and cross-border shopping revenues, while the economy of Sault Ste Marie, Ontario, has continued to languish with increased unemployment and a decline in the commercial tax base.
Why does Bill 8 set up a separate casino corporation when other provinces, namely, Manitoba and Quebec, designated their lottery corporations to regulate and operate gaming in these provinces, which is something that we have been promoting for some time? We already have a crown corporation. It's already in the biggest game in this country. It already has the respect of Ontarians. It already has the head office in Sault Ste Marie. Why can't it just have another administrative branch?
The city wants to join with the province to provide a well-regulated gaming environment that diversifies the tourism industry and provides revenues for the province of Ontario. That's initially why the notion of casinos was first announced: revenues for the province of Ontario and assistance for communities like Sault Ste Marie that had significant cross-border shopping problems. The city believes that the casino gaming development can be controlled and well-managed. The gaming industry can provide a positive force, provided that a regulated environment is a priority along with gaming profits.
The city believes that Bill 8 should be amended to provide for the Ontario Lottery Corp, or a subsidiary, to manage and regulate gaming operations in the province. The benefits of having the Ontario Lottery Corp operate the casino in Ontario are as follows:
-- You can minimize the potential for criminal involvement. The Ontario Lottery Corp would reduce that possibility.
-- Acceptance by the general public: The Ontario Lottery Corp has a highly regarded public reputation. It has a good reputation throughout the whole of the world. This reputation and goodwill are commodities that would ensure high levels of public trust and confidence that a new corporation would have to build from scratch.
-- Administrative and operational efficiencies: The Ontario Lottery Corp has marketing, security and administrative resources that can be adjusted to suit a casino gaming operation. In addition, administrative support services and a province-wide network of support services to provide an expanding base of casinos make it even more ideal. This is of even greater importance if the province moves into video gaming operations, similar to other jurisdictions at some future time.
-- The Ontario Lottery Corp has experience in gaming operations and security. It has a province-wide network of facilities that are well-suited to expansion to gaming facilities.
-- A new corporation would add administrative overhead, and that reduces government profits from any casino operation. The Ontario Lottery Corp could run the operation because it is secure and it has experience. It would also be impacted by loss of revenue when casino gaming is permitted within the province, if the US experience is any guide.
There's been an interest in the first nations gaming operation in Sault Ste Marie. The Garden River Band has done some preliminary investigation of a gaming facility. The city is interested in cooperating with the local first nations. We are prepared to cooperate because initially there would not appear to be a market for two casinos in Sault Ste Marie, Ontario.
A first nation/province/city venture might provide a model for other communities and prevent first nation groups from going it alone and avoid a constitutional challenge to provincial regulation of gaming on first nations territories. A three-way arrangement might provide a means of the city funding extra police and social services costs which would be required to service the influx of visitors and employees.
Sault Ste Marie is a border community that is very interested in a site for a casino. Our municipal council was the first council in Ontario to pass a resolution supporting this initiative, the very first council in all of Ontario.
Six hundred thousand American tourists visit the Sault Ste Marie, Michigan, area and do not cross over into Canada. A first-class casino in Sault Ste Marie, Ontario, would promote tourism and would attract American tourists across the border into Ontario.
We've recently been provided with a copy of the report to the Ontario casino project that was prepared by Coopers and Lybrand. The conclusions of this study are particularly disturbing to me, for several reasons. First of all, it seems that northern Ontario should have several casinos, very small casinos.
The whole notion of casino gambling was announced in the budget -- and I happened to be sitting in the Legislature during that budget -- in the same breath as cross-border shopping problem solutions. I can't see that Thunder Bay has the cross-border shopping problem that Sault Ste Marie has and I can't see that the city of Sudbury is anywhere near an American border. Secondly, casinos that are so small as to not be able to compete with casinos in the American city might not exist at all to be beneficial.
The conclusions of this study are particularly disturbing for those reasons. I am given cause to wonder why the Sault is now lumped in with Sudbury and Thunder Bay. The study seems to have operated from the premise that Thunder Bay and Sudbury would have a casino as opposed to coming to that conclusion, and that disturbs me.
If the purpose of casinos is to tap local gambling revenue alone, there is minimal impact on the local economy with a small casino. The original proposal to have a casino in Sault Ste Marie for all of northern Ontario and parts of the Midwest United States makes sense. A small casino of 10,000 square feet cannot compete with a casino that is already 75,000 square feet in Sault Ste Marie, Michigan, and continuing to expand, as I indicated earlier.
A casino in Ontario must have a full range of gaming activities including slot machines, video poker and craps tables in order to compete with unregulated gaming on the American Indian reserves. A series of casinos throughout northern Ontario would marginalise gaming activity and reduce the strategic impact that one large casino could have. If the casino were built in Sault Ste Marie, the potential market population would be increased significantly. The tourist market in Sault Ste Marie is twice the size of Thunder Bay's and three times the size of Sudbury's, as is evidenced by the same consultants' report on page 12.
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The potential growth in Sault Ste Marie is significant because of our existing tourism base, the existing casino in Sault Ste Marie and the ease of access to northern Ontario and Midwest United States tourism markets. As I indicated earlier, I was in the Legislature when mayors from border communities sat and listened to the Treasurer announce casino gaming, sports lotteries and teletheatre betting, the purpose of which was to boost tourism and employment and to deal with cross-border shopping problems. Please stick to your word and work with us to implement the promise of jobs and increased tourism in Sault Ste Marie.
In conclusion, the city of Sault Ste Marie wants to join with the province to provide a well-regulated gaming environment that diversifies the tourism industry and provides revenues to the province. The city believes that casino gaming development can be controlled and well managed. The gaming industry can provide a positive force, provided that a regulated environment is a priority along with the gaming profits. We have consistently stated that the city did not want a piece of the action and that we would fund all of the responsibilities through increases in our assessment and commercial tax base. There is a broad level of public support for the stand taken by our municipality. This support is not unanimous, as I indicated earlier, but we believe that we can handle the positive and negative effects of casino gaming operations in our community.
The city believes that Bill 8 should be amended to provide for the Ontario Lottery Corp or a subsidiary to manage and regulate gaming operations throughout the province. It has an experience in gaming operations and security. It has a province-wide network of facilities that are well suited to expansion of gaming facilities.
The estimates of cross-border shopping losses in 1989 in our community were $104 million, resulting in lost income of $141 million and job losses of over 1,000. Since that time, major retail expansions in Sault Ste Marie, Michigan, have occurred and the job picture in Sault Ste Marie has gotten worse. The economy has been battered by economic restructuring, cross-border shopping and gaming and now the social contract and provincial government downsizing.
I've provided to you tables which compare the unemployment rate for July and the percentage on general welfare assistance for May in some of the communities suggested for gaming operations. You'll note that in Thunder Bay the unemployment rate is 12.2%, in Sudbury it's 9.7%, Windsor 12.1%, Toronto 12.5%, the city of Sault Ste Marie 16.9%. Those on general welfare assistance: Thunder Bay 4.3%, Sudbury 7.08%, Windsor 6.52%, Toronto 9.42%, the city of Sault Ste Marie 10.18%.
I don't know that I have to convince anyone more than providing those stats of the need to provide employment in this community and to talk about opportunities that do that.
Sault Ste Marie wants to see the positive tourism impacts of casino gaming added to our strong tourism industry. Because of the presence of the Ontario Lottery Corp and the different physical and social circumstances, we don't think we should have to wait for the completion of the Windsor experiment to implement a casino gaming operation in our community. We don't think you're going to learn much from what happens in Windsor, based on the fact that it relies on the big city of Detroit and all that stands for, for anything that would be of any benefit to any other gaming operation throughout the province of Ontario.
The city of Sault Ste Marie is ready, the city of Sault Ste Marie is able, the city of Sault Ste Marie is willing, and we would like those who run this province to consider Sault Ste Marie now for a casino operation. Thank you for your attention.
Mr Carman McClelland (Brampton North): Mayor and delegation, thank you for your hospitality, your fine city. It's always a pleasure to be here.
Mayor, right at the start I want to say thank you for your suggestion with respect to first nations. It has obviously been an issue that has come up. There have been a lot of questions asked, and to my recollection this is the first time we've had a suggestion, and it's an intriguing suggestion in terms of a joint venture type of model. I want to thank you for that. It's something we can certainly turn our minds to and give it some further thought and consideration. I just want to express my appreciation for a positive suggestion.
I'm intrigued and somewhat interested in two points. You say the city is willing, and that's certainly in terms of your responsibility as the leader of the town council. How would you respond to a suggestion that cities and communities across the province that are interested should or would be advised to include a referendum in the election coming in 1994 so that there is a sense of certainty community to community?
Secondly, the other point you raise by way of conclusion is that the city is not necessarily interested in a piece of the action. Your friends and counterparts from Windsor certainly are interested. It was noted that there is no jurisdiction anywhere in North America that we are aware of where the city doesn't get some direct benefit to offset --
Failure of sound system.
Mr Fratesi: The city of Sault Ste Marie has established right off the bat that if employment were provided and assessments were provided to our community, unlike our counterparts in Windsor, we are not looking for a piece of the action. We are satisfied that the importance to employment and the importance to assessment and the taxes that are generated would very handsomely offset some of the other things that we have to deal with. We think we are dealing with them now, in any event, because there is a casino, as I indicated, a 75,000-square-foot casino, operating in Sault, Michigan. So we don't know that there will be much more to deal with. Certainly unemployment brings with it the kinds of things you have to deal with, and we think it would offset that as well some of the other things.
So we're not so much concerned about getting a piece of the action. If the province wants to give us a percentage, that's fine. We're not insisting on it, and that has to be an attraction to the province if revenues are what this is all about.
Secondly, with respect to the issue of referendum, I started off by saying that the notion of casinos has been the talk of the town. We've had several council meetings and we've had several groups come forward. As I indicated, I would be lying to you if I said everybody in this community favours the casino. We know there are groups that don't favour casinos and we know there are groups that won't come forward, because of political considerations, to do either.
I'm convinced and prepared to risk my political neck. I've been the mayor for eight years and I'm prepared to risk my political neck, without a referendum, and have the next municipal election ride on this notion that I've been harping about for the last 18 months. But I would be quite prepared to put the issue of casinos on a referendum, because I'm convinced that 80% of this community would be quite prepared to take on the good and the bad that comes with a casino, because we're convinced that if there is bad it's already at work here, and there's lots of good because we see it happening right now in the Michigan Sault. We're not at all concerned about what our public thinks and we're prepared to put it to a referendum if the province thinks that's the way it should go.
Mrs Margaret Marland (Mississauga South): It's a very comprehensive brief and I congratulate you on it.
I'm interested in the comments you had about dealing with the current government, from the perspective that you mentioned letters you had sent to the minister, Ms Churley. Also, in reading your attachments, I see you've written to the Premier as well. Have you actually asked for meetings and you haven't been given that opportunity? Are you still waiting for even acknowledgements to your letters?
Mr Fratesi: Yes, I've been waiting for acknowledgements from Ms Churley. I've been waiting for a meeting. Tony has been trying his hardest to get a meeting. What I really wanted was to get her here to show her how the one in Sault, Michigan, operates so that she can see how a properly regulated casino can boost a community. To date, and I've said this publicly, we have not had the courtesy of a reply or the courtesy of a meeting.
This notion of a joint venture with the first nations is something that we want to pursue, but we're not going to spend all sorts of time coming to an arrangement that might not get the blessing of the government anyway. We wanted to sit down with Ms Churley and try to get a feel for whether or not that would improve or enhance Sault Ste Marie's chances at getting its casino operating sooner as opposed to later. But to date, we have not had a reply, and we've not had the meeting that we've been asking for. I can't understand why.
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Mrs Marland: It's rather surprising that your municipality is being considered and you're not even able to get a meeting with the minister. It's also interesting, I think, that the minister isn't interested in your invitation to the one in Sault, Michigan, because I know that I have heard the minister say that she'd never been in a casino. I don't know whether that's changed in the last six months, but I certainly recall the minister saying that in the House in answer to one of my colleagues' questions, maybe even Mr Carr as our critic for Finance.
What leads from my question is the fact that if you were selected as a location, in the absence of any meetings with the people at Queen's Park, one of the things you might be interested in is having some input into the selection of the proponent for the operation of that facility in your municipality.
Mr Fratesi: Absolutely. I go back, though, to the proposal of the city, which is to allow an already existing crown corporation to operate it so that we can get beyond assessment of a proponent. But if the province is not interested in having an existing crown corporation operate it, certainly the city of Sault Ste Marie would want to be very much a part of the assessment of proposals.
Mrs Marland: Good luck with your contact with the government.
Mr Martin: Thank you for a well-developed and well presented presentation. I certainly have made efforts with you to get a meeting with the minister. Although I know that responses have been made to letters, we haven't been successful in a meeting, and the reason I'm getting is not to give communities any false sense of hope until the pilot project is sufficiently analysed, and then we can move forward with the plan; that we have to do this cautiously and carefully. I'm sometimes as frustrated as you are, but I think it's important as well, in light of the concern that is out there in the province around us introducing this initiative, that we do it cautiously and carefully.
I've been travelling with the committee since it began, and certainly on every occasion that I get have reminded people wherever that Sault Ste Marie is interested in a casino and have made our case as much as I can.
Also, I asked one of the officials on the casino project team if, given the context within which the casinos will move forward in this legislation, there could be something done that was sort of made in Sault Ste Marie if we decided to go ahead here. You mentioned this morning, and so did I earlier, the idea of a cooperative venture with the native community, which I think has some tremendous potential. Other than the suggestion that you made re the lottery corporation being the operator, what would you see as the pieces that would fall into place here that we would use to have that happen, Joe?
Mr Fratesi: If it weren't a crown corporation?
Mr Martin: Yes. What would be unique about Sault Ste Marie? Is there anything different that we would bring to it, that we would do differently here as opposed to what you're seeing happening in Windsor?
Mr Fratesi: Again, I don't know that anyone should compare Detroit, which has the reputation of being Crime City, USA, being the market for Windsor, with a casino operating in the city of Sault Ste Marie, which relies on tourism and gains people from all over. Your typical gambler from Detroit going into Windsor will not be your typical gambler travelling on a bus with a bunch of other folks up to Sault Ste Marie for several days of casino on both sides of the river. I don't know that Windsor and all of the safeguards that probably will have to be built into that one is what would apply here. That's why I have a problem waiting to see what happens in Windsor, because what happens there will have no bearing on any other casino anywhere in Ontario.
The city of Sault Ste Marie is the only community of any significant size -- the only community at all, I should say -- in all of Ontario that has a casino operating in a sister American city that's two or three miles away.
I come back to a crown corporation. If this is all being done in the name of revenue for the provincial government, the province should run the game. Take away any notion about their being organized crime involvement and abuse. If it's not the Ontario Lottery Corp, it perhaps should be another crown agency, but it should be regulated by the provincial government. The private sector should be involved in terms of providing the facility, maybe being the landlord, maybe being an operator or contractor, but the provincial government remaining responsible as the operator.
The Chair: Mayor Fratesi, thank you very much. We're well past our allotted time, Mr Martin.
Interjections.
The Chair: We have agreement from the other committee members, Mr Martin, so you've got the time.
Mr Fratesi: You're a tough Chair.
Mrs Marland: Just get the minister to acknowledge their letters.
Mr Martin: I appreciate the time.
The Chair: I just remind you that we have other people waiting to present, that's all.
Mr Martin: Yes. Joe, the issue of crime and that kind of thing is one that was raised over and over again in Windsor and in Toronto. We know from across the river what that scenario's been like because we hear, we're close, we see the media and all that. I'd like you to respond to that and to share with the folks your understanding of what's happening.
The other thing is, before I lose my opportunity --
Mr Fratesi: It's okay. We're used to Tony in town here.
Mr Martin: The mayor and I and the chief of Garden River and the economic development corporation have extended an invitation to all members personally to come over and have a look at the community of Sault, Michigan, and what the casino has done for it, and the casino itself this evening. I hope you will positively respond to that so you can see that.
Mr Fratesi: Some 75,000 square feet, 1,500 employees, attracting people from all over the upper United States.
You can talk to the chief of police of the Michigan Sault, you can talk to the mayor of the Michigan Sault. Absolutely no concerns whatsoever aside from an activity -- and it could be a church gathering of 1,500 people in one location every day of the week that would bring probably no more problems to that community. It's well run, it's well regulated; no concern.
We've got Mr Kates from our police department who can probably confirm to you that you're not getting the horror stories that you might expect to hear coming out of Sault Ste Marie, Michigan, because of how they operate it. Bob?
Mr Bob Kates: Certainly with the number of people coming into the community, if there's a casino established in Sault Ste Marie, we're going to experience the normal increased traffic flow, increased accidents, minor thefts. But from the experience across in Sault, Michigan, they haven't experienced anything of organized crime. They have a security force there in place to ensure that things don't happen.
As the mayor did indicate, it's primarily tourists who are coming from across Michigan and the upper United States, and their big problem over there is traffic problems and parking-type things.
Mr Fratesi: We don't think that's going to happen in Windsor. We think the market's different. We don't want to wait for Windsor, because we don't think it has any application to a casino in Sault Ste Marie or a casino in perhaps Toronto or a casino in Sarnia or a casino in Fort Erie or Niagara Falls. We don't think there's application from that experiment to any other potential site in Ontario.
The Chair: Mayor Fratesi and company, again, thank you very much for presenting before the committee.
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SAULT STE MARIE ECONOMIC DEVELOPMENT CORP
The Chair: Our next presenter is the Sault Ste Marie Economic Development Corp.
Mr Bruce Strapp: Good morning, ladies and gentlemen. My name is Bruce Strapp. I'm the executive director with the Sault Ste Marie Economic Development Corp. With me today is my economic development officer, Jake Pastore, who has helped with putting together some of the background material and booking our appointment today.
Certainly it's an opportunity to see our political leader, Mayor Joe Fratesi, have an opportunity to talk to players. We certainly don't want to cut into any of his time, and actually support and enhance any time he can have discussions with the people from Queen's Park.
First of all, on behalf of the economic development corporation, I'd like to welcome you to Sault Ste Marie. The casino opportunity for Sault Ste Marie is still certainly a gamble. I understand that you've had a very busy schedule and have become experts on casino gaming. I've heard presentations from whether placing a bet is recreational or the first step to credit counselling. Today, the Sault Ste Marie Economic Development Corp would like to lay its cards on the table, and there will be no bluffing.
The economic development corporation has celebrated a decade of developing opportunities ultimately resulting in the creation of jobs. It has certainly gone through many changes, many people and many socioeconomic times. Certainly nothing has moved as quickly as the expansion of casino gambling in North America.
Just to give you a little background on our corporation, the corporation's activities have been restructured to involve the tourism component of this community. Previous to 1992, there were two organizations, the EDC, which was industrial-development-driven, and HATS, Hospitality and Tourism Sault Ste Marie, which had the mandate to promote tourism and Sault Ste Marie to external markets.
Several years ago, the city of Sault Ste Marie established rightsizing measures to reduce expenditures and to maximize services to this community. The city entered into an agreement with the province and the federal government to complete a strategic plan for the city of Sault Ste Marie, RAPIDS, which stands for research, action, promote, infrastructure, delegate and support. This was a process in which the community was involved in determining its destiny. It established a mandate:
"Sault Ste Marie is a community that provides for its citizens through: the preserving and promotion of a superior quality of life; creative and diversified economic development which relies on but does not exploit a unique natural environment and cultural heritage; social programs that meet the needs of our citizens."
This is a community that is proud of itself and the accomplishments of its citizens, a community that can act as a model to others, showing how to come together in adversity and build a common future.
It identified goals, objectives and strategies, with the key goals for the economic development being its quality of life and improving economic development. In particular, there are six components: open for business, the focus on forestry and forest product opportunities, the focus on Algoma and opportunities in the steel industry, to increase tourism, to support higher education and to target external investment.
This has led to the establishment of a new board, new roles and new actions for the economic development corporation, which still is focused on the creation of jobs, but in a much broader sense. It has brought new people into the process and has found a new wave of opportunities. From the assistance to small business through the business self-help centre to the promotion of Sault Ste Marie to conference and convention doers in Detroit and Chicago, the EDC is starting to build much more success in a more integrated and strategic way.
A little bit of history: To speak briefly on the history of Sault Ste Marie, it has been a meeting place for centuries with the natives; the coming of the fur trader; the war and peace between our nations, the United States and Canada; the start of business with Mr Francis Clergue building hydro power plants, steel and paper mills and railways to ore reserves further north, and finally to the maturity of a city split between two nations. The city of Sault Ste Marie has a phenomenal history. It could be a best-selling movie.
Like many communities, it has its issues, its ups and downs, its economic cycles. Yes, we saw a recession too. We have and are restructuring. Don Tapscot refers to this time as a paradigm shift, and to many of us, there is a land of opportunity.
Sault Ste Marie does have population stagnation. It has a high unemployment figure. Tourism is slightly up. However, wealth creation is down because competition has kept prices down. Major employers have downsized their labour force to get into the profit, versus the foreclosure, margins. Cross-border shopping nailed Sault Ste Marie, Ontario. It seems there is more mall retail space on the Sault, Michigan, side than the Sault Canadian side. Their population is approximately 13,000 or 14,000 and ours is 81,000.
Cross-border travel is up. July 30 this year was a record for traffic crossings over the bridge. Recent sales of American dollars in Canadian banks in the Sault are way up. It continues.
I noted some articles in Windsor, that the only reason cross-border shopping did not escalate was because the congestion at the border discouraged Canada-to-US crossings and therefore they had to look for convenience stores within Ontario. Sault Ste Marie has a tremendous capacity for traffic flow and therefore it is very easy for shoppers to move back and forth. It has become habitual.
The Partners in Excellence program certainly opened our eyes to the problem and worked very hard to make businesses more competitive. However, they were up against an unlevel playing field with different rules for taxation and market pricing: GST, PST, gas taxes, milk marketing boards etc. In some cases, you can't compete. Gas right now, apparently, on the other side is US$1.05 a gallon.
Higher unemployment has resulted in more social problems in the Sault, and the cost to this community and the province is increasing. The cost of this social net must be phenomenal.
I hate talking about issues, since it brings down your level of optimism. I tend to dwell in the area of opportunity since that is what economic development is all about. Let's talk about opportunity. Certainly one can understand the opportunities that a casino can bring to Sault Ste Marie if it is best worked with the community and the province. I'll elaborate on this a little bit later, but let's assume the best scenario.
Job creation: Certainly a casino would bring direct and indirect jobs to Sault Ste Marie. It is anticipated that 9,260 direct jobs would be created and 10,848 indirect jobs, for a total of 20,144 jobs that would be created in Windsor. Imagine that number for Sault Ste Marie. The Coopers and Lybrand study identified, based on a small 10,000-square-footage, that it would be direct jobs of 602 and indirect of 712 jobs, a total of 1,314 jobs.
Tourism growth: New tourists spending more money in hotels, restaurants, attractions, retail and so on.
Retail and business revitalization: Depending upon its location, it could be used as an opportunity to revitalize a business core and breathe new life into the business community.
Again depending upon its location, it could support and promote our tourism and recreational waterfront development.
More visitation to our attractions, such as the Agawa tour train: Imagine the numbers going from 100,000 to 200,000 visitors on this attraction. Maybe even a gaming car would be added to make the tour more attractive.
The Old Stone House, the art gallery, our museum, the Ontario Bushplane Heritage Centre, our amusement parks, golf courses and so on: Imagine the support for our arts and culture, and that is even more important.
There would be increased business for our car rental agencies, airport and air service, bus and rail service, taxi businesses, city bus system and so on.
How about our manufacturing companies such as Michigan Maple, our local manufacturer here who has already made gaming tables? They might even sell a few of their products to Windsor. It's a fantastic product. Right now they're looking at negotiating with Vegas Kewadin on the other side.
Our food processing industry, such as Good Old Dad's, could provide the Italian specialties for this casino. The Sault is noted for its fine Italian cuisine; it's part of our rich heritage.
Maybe a certain professional theatre group might accelerate its plans for finding a home to cater to increased visitors to our community. Maybe even more spectacular live entertainment would occur.
Wouldn't hotel occupancy back around the 75% occupancy rate be great? We would have increased activity for our professional services, accounting, legal, engineering, marketing firms, printers and so on.
How about new opportunities in warehousing, wholesaling, security services, our police force, social support jobs etc? These are all valuable jobs to our community.
Our Searchmont Resort would increase its number of downhill skiers and have another opportunity for co-op marketing.
How about casino projects maybe being the catalyst to bring back cruise shipping to the Great Lakes? The EDC has certainly invested in this opportunity and the casino promotes a big lure.
How about training opportunities? It's happening in Windsor; it'll happen in the Sault. Our Sault college, Algoma University and our neighbour's Lake State University in Michigan have worked closely together and can certainly find an opportunity in this.
I can keep going, and certainly a quality casino in Sault would be a tremendous boon. I don't have to tell you that gambling has evolved in North America; it's growing in Canada and it is here in Ontario. Certainly, we feel its presence here in Sault Ste Marie, Canada, with our close proximity to Vegas Kewadin. Casinos will be rolling up to border communities in the United States and Canada and in many cases developing critical mass attractions, if done properly.
I believe you've heard the numbers: $4 billion in wagering in Ontario per annum; from the Ontario Lottery Corp, $1.6 billion in 1992-93. This year's been a momentous occasion with reaching the $5-billion mark in revenues for the province. Sault Ste Marie has opened its doors to teletheatre horse racing. We have our bingos and charitable gaming events also.
Sault Ste Marie does have a gaming culture just like Ontario. It would rather use the words "entertainment" and "recreation" because that is what it is. So you can see why Sault Ste Marie was the first community off the mark in supporting the casino and especially to have one in Sault Ste Marie.
I hope you can also understand our sinking feeling when we are told, "It's not your turn for a casino, and we might put casinos in a whole bunch of other places too." Certainly they were not impressed with a study commissioned by the province which suggested the Sault could support a casino with only 10,000 square feet. How can this compete with a 50,000- to 75,000-square-foot casino next door?
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Sault Ste Marie, Michigan, has a casino. The Chippewa tribe has worked very hard in attaining a goal that has led to phenomenal economic development and sustainability for that community and Sault Ste Marie, Michigan. Here are some notes on that:
It has completed a major second expansion and is approximately 50,000 square feet or bigger. The future growth of this casino is inevitable.
The Chippewa tribe employs approximately 1,200 direct jobs with the casino operations and another 500 indirect support jobs. It has become the largest employer on the Sault, Michigan, side.
The casino's net profits last year were $84 million. That's net, after expenses.
In its lobby with the state to maintain the slot machines, it has agreed to pay a state fee and also a percentage to Sault Ste Marie, Michigan, of 2.5% of profits -- not bad for economic development.
I have lost count of new hotels being built. The last count of hotel rooms for that community was the same as Sault Ste Marie, Canada, and there's a population difference of approximately 70,000 people. The growth in convention and conference facilities has been unbelievable. You have to see it.
The Chippewa band has recently announced the location of a new casino, if approved, in Detroit. Many concerns are now arising from the Windsor project on bringing that huge market to Windsor if a first-class casino is operating in Detroit. Sault Ste Marie and Windsor are now, or will be, in the same boat.
Sault Ste Marie, Michigan, has always spoken positively about the impact. Certainly there has been some concern, but the anticipated negatives did not happen. Sault, Michigan, traditionally had a very high unemployment rate. The casino has flipped this around and is now having difficulty hiring and is trying to hire people from Sault Ste Marie, Canada.
Of course, Ontarians love this place because the hotels are running at 100% occupancy over there. We on the Sault Ste Marie, Canada, side do get some small bus tours on this side. We are taking advantage of this, but the white-and-blue licence plates still dominate the parking facilities at Vegas Kewadin.
Many of our meeting and conference participants who stay in Sault Ste Marie, Canada, visit the casino because of its attractiveness. It's difficult to stay away from the lure. It promotes top entertainers and the service is excellent.
In regard to Windsor, certainly we were happy in Sault Ste Marie that another cross-border community hard hit by cross-border shopping and the recession is receiving a casino project. We can understand their jubilation. We certainly would express the same anticipation and hope as that community. This community has a history of celebration too, and recently we've been celebrating the Memorial Cup victory by our beloved Soo Greyhounds. The streets were lined and the party went on for a week. We've had new businesses, the Ontario Lottery Corp, BABN Technology and the Lake Superior cogeneration plant.
The Sault Ste Marie Economic Development Corp is concerned with the direction the province is going, investigating the startup of regional casinos. This will water down the casinos being used to promote tourism and economic development. It also deviates from the concept of casinos to mitigate cross-border commercial leakage.
The EDC supported, by resolution, a casino project in Sault Ste Marie when it was first announced. The corporation believes its role will be a leadership role, in working with the province and partners in putting together the best casino project for Sault Ste Marie. We have participated on a city casino project team which has until only recently been collecting information, meeting with representatives of the Ontario casino project team, liaising with other casinos and communities that are looking for or have an operating casino.
We have met with representatives from the Garden River first nation to talk about the opportunities of a city-native-provincial project. We still are waiting for our political leaders to decide upon the casino for Sault Ste Marie. We certainly do not want to spin our wheels until the economic development corporation has commitment that this project will eventually come to Sault Ste Marie.
In regard to Bill 8, certainly one of the questions that the EDC would like to reiterate with the ministry is why, in these times of fiscal restraint, strike a new crown corporation when there is a crown corporation established that has the credibility, integrity and ability to take on the casino projects in this province? The Ontario Lottery Corp has certainly done great things for Sault Ste Marie in sparking community development and pride, and has provided the province with over $5 billion in revenue. If you proceed with this separate crown corporation, the EDC certainly reiterates many of the things brought up by the community of Windsor:
Certainly there are zoning implications, demolition of buildings and land acquisition if the city is playing a lead role in putting the project together. Legislation should be put in place that would support this process.
The casino project has to be done in cooperation with the community. Mr Dominic Alfieri, the assistant deputy minister and team leader for the Ontario casino project, hit it right on the head: Probably much of the success of the Windsor project to date was because of the provincial approach to work with the city.
The minimum age for entry into the casino should be raised from 19 to 21. We agree with some of the points made on this from Windsor.
Municipalities in which casino projects are planned or are operating should have representation on the Gaming Control Commission. This would give a community a voice in regard to activities on that.
The Sault Ste Marie Economic Development Corp has a strong position on a casino project:
(1) The casino project has to be a net economic development to Sault Ste Marie and the province before it is a grab for revenues. This can be obtained by the promotion of this project as an out-of-province visitor and benefit generator.
(2) The casino project has to be done in concert with the community to achieve and maximize the best possible project. Roles and responsibilities have to be clearly defined.
(3) The casino project has to have guarantees that it has the highest level of integrity and mitigates and ensures social responsibility and accountability.
(4) It has to be competitive with our neighbour in Sault, Michigan, so that it has the ability to attract people across the border. There are six million people a year visiting Mackinac, a million in Sault Ste Marie, Michigan, and we have to draw those across the bridge.
If these broad principles can be met, the economic development corporation would promote and work hard on a casino project that would have negative impacts on this community.
In conclusion, I hope we have been helpful in giving you some direction. We certainly have not had the opportunity to do much consultation with the Ontario casino project team and the ministry; Windsor and Toronto are such a distance away. We hope you will encourage Queen's Park to hurry up on the decision for Sault Ste Marie, and the EDC is anxious to roll up its sleeves and get to work.
Again, thank you for visiting Sault Ste Marie and listening to our comments.
Mr Gary Carr (Oakville South): I appreciate the opportunity to be in the Sault. As a matter of fact, I was interested in you winning the Memorial Cup. I was on the 1975 Memorial Cup Toronto Marlboros, and we came up here to play the Sault back in the good old days. You said the party went on for a week. I seem to remember that myself, the party going on for a week when we won it in 1975, so some things don't change.
On page 6 of the presentation you talk about 20,000 jobs for Windsor. When we were in Windsor, the figures we heard were about 2,500 direct and 6,000 indirect for a total of about 8,500, so I'd be careful. That's directly from the ministry.
One of the concerns I have is that some of the numbers are being based on having one casino now in Sault, Michigan, and then Windsor opening up. The concern is that what's going to happen, of course, is that Detroit won't sit by while Windsor has it. They'll open one. If you people get one here in the Sault, we're going to have four casinos that'll be taking from the same market. People seem to be taking the same job figures from the one casino, but what's going to happen is that it's going to be divided up.
Do you really believe that the number of jobs you mention on page 6 are going to created if we include Windsor and then maybe Detroit getting one? How are we going to attract the people to come across when we have all this competition? Do you really think that Sault, Ontario, is going to get all these jobs that have been predicted?
Mr Strapp: It's very difficult when you get into the numbers game on economic modelling. These numbers were some of the best numbers that came out of Windsor in the earlier times. They're much smaller with the size of the casino being established and the square footage, but one of the things we can see as an opportunity for Sault Ste Marie is that many of the American visitors coming up to the Sault, Michigan, casino might want to take a look at a Canadian experience.
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One of our biggest challenges is to get people to come across the bridge, as the bridge is a deterrent to a certain degree because people are very afraid to enter a foreign country. In regard to casino gaming, if there is an alternative on the other side, maybe those players would be interested to see how the Canadians do their gaming also. We could see it being very much in competition with the Vegas Kewadin, but it also could be very complementary, because many of the Americans might want to take advantage of coming over to the Canadian side and taking advantage of staying in a hotel room maybe $30 to $40 cheaper a night than what it is right now.
Mr Carr: Good luck. I hope you win the Memorial Cup again.
Ms Margaret H. Harrington (Niagara Falls): I couldn't help noticing during your presentation and the previous one the similarities between your community and my community of Niagara Falls. They're about the same size, around 70,000; we each have a sister community across the border; you've had economic problems with cross-border shopping. With the unemployment figures, you don't have them listed here but in our area I believe the unemployment is around 16% and the welfare over 10%, so we certainly face that together, but we have 12 million visitors a year to Niagara Falls. I just wanted to get on the record, would your community have a position with regard to a casino in the city of Niagara Falls or would you have a problem with it?
Mr Strapp: Well, I think after the one in Sault Ste Marie is established --
Interjections.
Mr Strapp: I think the mayor's reiterated that casinos were a solution for cross-border shopping. I believe we will see a proliferation of casinos set up along the border communities just in response to their attracting Ontario visitors to come across, and I'm quite sure you're going to see at the border communities these casinos being established on both the Canadian and the American sides.
Ms Harrington: Would you think it would be a good idea in Niagara Falls? You know what the situation is, very similar to yours.
Mr Strapp: Yes. We're certainly very aggressive for Sault Ste Marie, but for the cross-border issue, certainly.
Mrs Marland: I didn't ask about it being useful in Mississauga.
Mr Martin: You referred, Bruce, to 10,000 square feet. We had Coopers and Lybrand in to see us on Thursday, and my understanding of it was that 10,000 was a minimum; that was what they were looking at. They based that on their visit to Sault, Michigan, in part, and at that time the Michigan operation wasn't nearly as big as it is now. I believe the next expansion will give it 75,000 square feet. Is that correct?
Mr Strapp: That's right. Right now I think it's just a little over 50,000, but they seem to be growing in leaps and bounds as we speak. I think they're growing.
Mr Martin: Would you care to comment briefly on the proposal that is being put forward that we do a cooperative venture with the native community?
Mr Strapp: I sit on the city casino project team, and there has been some discussion between the native project team and ours and certainly some discussions from the provincial players that this might be an opportunity for a number of things to be dealt with, especially near our community because Garden River is very proactive in going after a casino for its community.
We certainly don't see two casinos being able to support themselves here, and we might be able to solve the problem of two with a joint venture in which the native community and the city and the province could come together. I think the EDC has always reiterated that we would be very much involved in promoting working together, doing a feasibility study or trying to find the best project for Sault Ste Marie.
Mr McClelland: It seems to me that you've hit on a couple of points that are really salient to the whole discussion with respect to casinos. You mentioned it twice and the mayor in his brief mentioned it as well, and that's the issue of competition and the competitive element. Mr Carr was going to pursue the line of reasoning that said that if there's x number of dollars being gambled in the Sault, you're probably going to be competing for, more or less, that same pool of money.
It seems to me that the government has a bit of a dilemma here and I would be interested in your reflection on it. They want government control, and I understand, for political reasons and the optics at the same time, some of those restrictions and the restraint in terms of operating a casino that would be there, should one come to pass in Sault Ste Marie. I'd be interested in your comments with respect to, first, limitation of size and the constraint the government is bringing. They're saying that they want the private sector to operate it, but there's a list of dos and don'ts and it's limited. I understand some of the rationale for that, but I also see it as counterproductive.
One of the gentlemen in Windsor -- I believe it is Al Brenner -- was very, very forthright when he said: "Let's be realistic about this. What we're contemplating getting is not what we're going end up with. We're going to end up eventually with a full-scale, no-holds-barred casino in Windsor, if we want to compete, in terms of floor shows and everything else."
I see that as very, very problematic. Putting aside all the arguments, putting them on the shelf for a minute, presuming we're going ahead with it, what do you say in terms of the private sector being fully competitive if you're going to run it and have the government stay out, save and except for the control from the security issues? It seems to me, from a business point of view, that if you're going to compete you've got to be able to compete. You're only going after so many dollars and so many gamblers. I see that as problematic, that the bubble will burst at some point in time; you're going to go head to head with full-scale, unrestrained US competition. I'd be interested in your comment and reflections on that.
Mr Strapp: I think you're certainly going to have to take a look at the motivation for what the province -- because right now its involvement with the private sector is more of a contract services approach, having the city involved in regard to the property with the model they've set up in Windsor. If you're looking at a head-to-head competition, you can offer different things. You don't have to necessarily do exactly the same things as what they were doing on the American side with Sault, Michigan.
Mr McClelland: You have to do it as well or better.
Mr Strapp: That's right. In the legislation there are some games that are not allowed that they do allow on the American side. I don't necessarily mean you have to duplicate exactly what they have on the other side, but there might be some sort of Canadian spin you could put to it that could be attractive in itself, where you can run into some specialities. The province wants to get its revenues out of this and, to give the private sector the motivation, you're probably going to say it's going to have to have a piece of the take also. We could get into some real scary ground.
In Ontario you're probably going to have a very well- regulated situation. It's going to be a services thing. I've been speculating how you're going to do that down in Windsor. If the casino has any opportunity for growth and you're sitting down negotiating with the city and the private sector, saying, "We need more police services, we need more social support services," those sorts of things, and you've ironed out a contract and all of a sudden you're hit with a growth thing, what are you going to do: a percentage of take or whatever?
I think you have to look at that and have some flexibility. With every bill you introduce, you're going to have to review that and take a look at it down the road. I still see that you can find something that will fit. If you have the community involved with the players, I think your guarantee of success will be much further. I think Windsor has alluded to that also.
The Chair: Thank you, Mr Strapp and Mr Pastore.
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SAULT STE MARIE CHAMBER OF COMMERCE
Mr Barry Magill: My name is Barry Magill. I'm president of the Sault Ste Marie Chamber of Commerce. I have with me Gail Logan, who is the general manager of the Sault Ste Marie Chamber of Commerce.
We're very pleased to be here this morning. It's always a positive day in Sault Ste Marie when we can sit with a group like this and talk about something that's going to provide a real opportunity for Sault Ste Marie.
First of all, I'd like to extend a friendly Sault Ste Marie welcome to the committee. For those who haven't been here, I'm sure you'll have an opportunity, although it will be quite short, to experience some of the hospitality here. In addition, we'd like to thank you for accepting our request to appear before you.
I will begin briefly talking about the people I represent. The Sault Ste Marie Chamber of Commerce represents approximately 700 businesses in Sault Ste Marie. Our membership, of course, provides us with the funding and the human resources, both paid staff and volunteers, to carry out the endeavours which are beneficial to the economic wellbeing of Sault Ste Marie. As such, we are in support of a casino in our city.
As you've heard, cross-border shopping exists today in full force. In Sault Ste Marie, $104 million is lost annually to cross-border shopping. This represents a tremendous loss in revenue to the provincial government as well as job losses and business closures in the community. Millions of dollars are spent on gas, groceries, restaurants and entertainment such as bars, concerts and, as you've heard earlier, the Vegas Kewadin casino in Sault Ste Marie, Michigan. A casino in Sault Ste Marie, Ontario, would be a way to counter the leakage of revenue and its damaging effects. It would strengthen our local tourism industry by providing our infrastructure with a major tourist attraction and, of course, the city with a viable income generator. Revenue generated from a casino would greatly revive the city's business community. The tourism multiplier used by the Ministry of Culture, Tourism and Recreation is 1.7. In other words, for every $1 million spent at a tourist attraction the size of a casino, an additional $1.7 million is spent in the local economy.
A casino would fit our rapidly developing tourism infrastructure. Sault Ste Marie is already a popular tourism destination, but a casino would provide the anchor that would attract more visitors and keep them in the city for a longer period of time, during which time they will spend more money on meals, accommodation and shopping. This would greatly revitalize the business community and, in turn, the city's economy. There would be endless possibilities for dynamic marketing of a casino in our community. We have a wide array of tourist activities that would complement a casino. As a year-round tourist destination, exciting tourism packages could be easily coordinated for every season satisfying the global trend towards packaged vacations.
Again, as you've heard earlier, Sault Ste Marie's major tourism generators include the Agawa Canyon tour train which draws approximately 100,000 people a year. In addition, other attractions: the Lock Tours Canada, approximately 17,000 people; Hiawathaland Tours, 14,000 people, and our vast array of museums and art galleries attracting an additional 50,000 people annually. One of the benefits of living in Sault Ste Marie is the snow and, accordingly, our winter attractions include Ontario's Winter Carnival-Bon Soo, Canada's third-largest winter carnival; additionally, Searchmont Valley Ski Resort, with the highest peaks in the Midwest, and our extensive snowmobile trail system which supports the area outfitters. We also have numerous cross-country ski facilities. Similarly, Sault Ste Marie, Michigan, is host to approximately 1.3 million tourists a year. Within a 260-kilometre radius of Sault Ste Marie, Mackinac Island is host to six million tourists a year. Ideally situated at the heart of the Great Lakes, Sault Ste Marie is the site of tourism activity year-round.
A great deal of effort and money has been invested into the future of tourism in Sault Ste Marie, not only by our community but also by the provincial government. We recently completed, in conjunction with the economic development corp and other key players in the industry, an extensive tourism strategy for our city demonstrating our commitment to the city's future in tourism. Similarly, the Ontario government is currently investing a significant sum of money developing a similar strategy for the province as a whole. A casino would strengthen and ensure the viability of those funds already invested.
Just as a casino fits into our infrastructure, so does Sault Ste Marie as a casino site fit into the provincial government's proposed tourism strategy for Ontario. By strategically establishing Sault Ste Marie as a northern tourist destination, it will facilitate widespread travel throughout Ontario, generating wealth across the province through increased transportation, accommodation and incidental spending en route. The more area tourists must cover, the more money they will spend. This amounts to greater revenue for the province as tourists cover more area and greater revenue for Sault Ste Marie as tourism visitation increases.
The chamber of commerce and our members have played a significant role in the expansion of tourism in Sault Ste Marie. The chamber hosts semiannual tourism awareness programs which are designed to increase tourism awareness at a community level, resulting in a well-informed, service-oriented populace. The chamber is committed to the development of tourism in Sault Ste Marie and we will continue to pursue development opportunities to increase and protect the success of our investment in tourism.
We believe our developing tourism infrastructure and strong business community can accommodate a large casino. The Coopers and Lybrand study was very informative and certainly general in its scope. Sault Ste Marie is in a very unique situation, and we believe that this must be taken into consideration.
As we hope you have the opportunity this evening, you will have a chance to see a large, 50,000-square-foot-plus casino located in Sault Ste Marie, Michigan, in close proximity to Sault, Ontario. We at the chamber regard this as an advantage to locating a casino in our community. It is not one casino that attracts people to Las Vegas and Atlantic City, but rather it's the exciting diversification that offers tourists many choices. We don't see this as drawing a line between our two cities; we see it as drawing a circle around the two communities, providing very much a critical mass.
The casinos, however, must remain very competitive to exist in this environment. Designating a small casino in Sault Ste Marie, Ontario, underestimates the tremendous capacity we have because of our geographical location. A 10,000-square-foot casino would fall short of capitalizing on the true potential of our situation. We believe a large casino in Sault, Ontario, would flourish, given that the market opportunity is already established. A Canadian casino would be attractive to Americans due to the increased play value of their dollar. In addition, it would help to encourage Canadians to spend their money at home.
At the chamber we pride ourselves in our ability to work together with other groups, including government, for the common good of the community. We are truly an active city when it comes to improving the quality of life in Sault Ste Marie. A good example of this is the Partners in Excellence program, which was comprised of members of the Sault Ste Marie and District Labour Council, the economic development corporation, the Sault Ste Marie Chamber of Commerce and the provincial government. These groups have worked very hard to create public awareness and to try and find solutions which will minimize the cross-border shopping habit. The Partners in Excellence program has been completed. However, to date these groups are in frequent contact and continue to maintain good working relationships.
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In conclusion, I would like to highlight the top 10 reasons for establishing a casino in Sault Ste Marie.
(1) The province has plans to expand tourism into northern Ontario in order to make the entire province marketable. In order to succeed in expanding tourism into northern Ontario, a solid anchor, such as a casino, must be established. Strategically, Sault Ste Marie, Ontario, makes the most sense in terms of the province trying to achieve this goal.
(2) A casino will provide jobs, investment and revenues for both this community and the province.
(3) Sault Ste Marie has upsized its second-largest industry, that being tourism. As a result, the infrastructure necessary to establish a casino already exists here.
(4) The Ontario government has already invested in Sault Ste Marie and a casino would protect this investment. Like the province, Sault Ste Marie has invested a great deal of money and effort into tourism. A casino would protect our investment as well.
(5) Dynamic partnerships already exist within this community, as I outlined earlier, and we are committed to working together to ensure the success of a casino project.
(6) A unique situation exists in the Sault which lends tremendous potential to a casino. A closely located American casino has already established the market opportunity. Strategically, we are in an excellent position to capitalize.
(7) Just as gasoline acts as a catalyst to cross-border shopping, a casino will act as a catalyst to create traffic flow north.
(8) Our resilient business community has survived through the cross-border shopping trend and the recession. We are very ambitious and we welcome the positive challenge a casino would bring.
(9) Locating a casino in our unique area, where there already exists a market, would provide an opportunity to benefit from the established critical mass. In addition, the value of the Canadian dollar gives Americans a good reason to cross the border to gain in Canada.
(10) We are prepared to participate in providing the ultimate entertainment centre, including concerts and other attractions, to promote the casino. Unlike many other Ontario cities where tourism is seasonal, Sault Ste Marie offers year-round tourist attractions and events which would complement a casino attraction.
Now I'd like to provide some comments and recommendations regarding Bill 8.
In order to increase the casino's potential, the chamber of commerce believes that the maximum private sector involvement is required. The private sector, as we all know, is very effective at running business.
We also suggest that there be only minor regulations and restrictions enforced in casinos so that we can be competitive. This relates specifically to any regulation which would restrict alcohol consumption while gaming and the outlawing of certain other games. A full-service casino featuring gaming, dining and entertainment will provide maximum return on the investment. Also, we believe that procedures necessary to become a registered supplier to a project of this nature must be easily accessible to small business.
Further, we suggest that the procedures and criteria for choosing appointees to the board of the corporation be in keeping with good business practices. We recommend that short tenures of two to three years be established to ensure good judgement, fairness and a healthy input of new ideas. We would recommend business representation on the board.
Finally, we believe the net profit that the corporation receives should be designated for a specific purpose or purposes, that is, provincial debt reduction, and this fact should be included in Bill 8.
Finally, on behalf of the Sault Ste Marie Chamber of Commerce I would like to congratulate the Ontario government on this very positive initiative and thank you for choosing Sault Ste Marie as a site to gather some of your opinions.
Mr Kimble Sutherland (Oxford): Thank you very much for your presentation in support of Bill 8. I guess I would like to have you respond to what some of the critics are suggesting about communities that are going after casinos in terms of the fact that casinos are not a legitimate form of tourism, that it's not a legitimate industry, that communities are getting caught up in kind of the glamour of casinos and that they're going after casinos; that they see it as an economic panacea. How would you respond to those critics who suggest those comments about casinos?
Mr Magill: Certainly I'm not an expert on casinos. I would gather that there are not many of us in this room who are experts, because it is very much an emerging industry. The way I would respond of course is to tie the casino in with the other kinds of critical masses particular to a certain area that I mentioned in my comments. In fact in Sault Ste Marie we see a casino being very much a part of some of the other attractions that we have here to form the critical mass that's necessary.
I think a properly run casino, with the operation carried out by a private operator with proper and prudent government regulation, would take care of any potential downside that might exist. I think we're all aware of the kinds of comments you make. I think in part it's some of the anxiety being experienced as we move through this thing. But if we've got a proper process with the government regulation, certainly from a business perspective I see this being run similarly to any other kind of tourism attraction venue.
Mr Sutherland: Some critics have suggested that there's a big difference between the charitable gaming, bingos, and casinos. In your view, do you see a significant difference from one type of gaming activity to another?
Mr Magill: At the risk of repeating myself, the major difference would be to tie what we're talking about here today into other kinds of activities. Typically, when one goes to a bingo, they tend not to look for a swimming pool at the side, they tend not to look for a ski hill in the same location. I think what we're talking about here is something very different.
Mr Martin: I was in Windsor for a week with this committee and certainly felt the excitement and the energy that was generated there because this was happening for them. There were people who came who, for example, were telling us they were investing $2 million in expanding their business because they expected that they would be able to compensate for that over the period of time the casino was there. Have you done much? I guess you've done some; you referred to it here. But for the business community in this city, would this be the kind of thing that would energize it in that way and do that kind of uplifting in Sault Ste Marie?
Mr Magill: We haven't at this point been able to carry out anything thorough in terms of the kind of thing you're talking about, but what I can tell you very strongly is that the business community in this city, as indicated by a survey we carried out among our members, has very strong support for a casino. As you've heard in presentations by the mayor and the economic development officer, the city is certainly looking for opportunities for additional investment. The business community is looking very much for the same kind of thing. As you may all be aware, we're trying to move out of the primary industry sector, and certainly tourism now is very much a big one.
The business community is ready. We have the infrastructure. We have the tools. We're ready to go, and there is a groundswell developing. I'm sure as this thing unfolds you will continue to see the kinds of partnerships that we in the Sault have formed. I'm talking about the business community in concert with the economic development corporation and the Sault and district labour council to make sure that these kinds of initiatives come to fruition. So certainly there's very much positive support at this point, and I only see it increasing.
Mr McClelland: Thank you for your presentation. I just want to throw out a challenge, not in a pejorative sense but just something for consideration, if you will. In your brief, you make a point that I raised, if you were here for the earlier ones, in terms of the private sector involvement and the dilemma that would exist. If you have maximum private sector involvement, the intent would be to hold people in the casino. Then on your first page, you indicate the 1.7-to-1 multiplier used by the Ministry of Culture, Tourism and Recreation. I see that quite frankly as a real dilemma inasmuch as you would have competing interests. If you and I were to engage in the running of a casino, we would want to make sure that people stayed in that casino.
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In fact, that has been the experience. The empirical data suggest that in cities such as Atlantic City, with the typical bus tour, the average gambler will spend six hours in the community, and he or she will indeed use five hours and 40 minutes of that time gaming, leaving some 20 minutes left over for secondary economic activity. I just see that as a bit of a dilemma.
I'm not sure there is an answer, but in terms of the projections and the anticipated secondary economic benefit, quite frankly, I have some questions about it. I don't have an easy answer, but I'm not sure, just having that model of Atlantic City as an example, that it's going to generate the kind of secondary economic impact we'd expect, and I'm not sure that the 1.7 would hold. As I say, I just throw that out for consideration, because I think we have a dilemma here and the dilemma is private sector maximizing versus getting that secondary benefit to the community. If we have time, my colleague wanted to follow up with that.
Mr Magill: Just very quickly on that, I'm not sure how staledated your information is, but it's certainly my understanding that a lot of the participants at gaming establishments or, more broadly, the communities where gaming establishments are, are very much moving more to a family orientation as opposed to what we all might think would be the "hard core" gambler who spends most of his time in the casino. It's my understanding that it's starting to flush out. A lot of these communities have gone to the broader-based tourism attraction, tying it in with other modes of entertainment, whether that be, as I mentioned in reference to Sault Ste Marie, the train tour that we have, the carnivals that we have in the winter, the ski attractions that we have.
We see that not presenting any particular dilemma. I see it as being an opportunity for entrepreneurs. We're doing that right now. I see it as a real opportunity for business across the board to expand its operations as opposed to just trying to centre on what you make reference to.
Mr Gerry Phillips (Scarborough-Agincourt): Thank you for the brief. You mention a minimum of regulations. I think that's one of your recommendations to us. How important is that in terms of the chamber's study of this? How important are things like the ability to sell alcohol at the facility and to offer a variety of games and entertainment?
Mr Magill: Of paramount importance. Certainly, from a business perspective, one understands that in order to be competitive, you have to be able to offer what the site is offering across the road. In fact, you're hopeful that you can offer maybe something a little different. To provide very prohibitive regulations to a casino in Sault Ste Marie would kill the site before we got started. The facility in Sault, Michigan, which would be the competition, certainly is fairly wide open with respect to consumption of alcohol, with respect to the kinds of gaming that can be carried out. So in order to be on a level playing field, we would encourage this group to bring recommendations that would provide an opportunity for an operator to be very much in a competitive, level-playing-field environment.
Mr Carr: Thank you very much for your presentation. I was interested that on page 2 you talk about the 1.3 million tourists a year who come to Sault Ste Marie, Michigan. Let's assume for a minute that the casino you get will be the way you want. As you know, the one in Windsor won't have alcohol. One of the concerns is that they're hoping to attract a lot of US tourists, and when they come across and see what it's really like, they won't come back. But let's assume for a minute that you get everything you want: you get the square footage, you get a great company running it in the private sector. Let's talk in percentage terms. What percentage of those 1.3 million tourists do you think will come across to Sault Ste Marie, Ontario, because we have a casino?
Mr Magill: Right now I can tell you that of the approximately 1.3 million, we have somewhere in the order of magnitude of 100,000 of them come across to Sault, Canada, most of them to ride the Agawa train tour. To give you an off-the-cuff increase in percentage, I wouldn't want to say at this point, other than I don't think you have to be a Harvard graduate to figure that there's a real opportunity there to move those people across, and we're doing some of that right now. Our waterfront is starting to develop. We do have some visual kinds of lures. This one, certainly, depending on where it's located and how it's marketed, would provide that kind of lure. But if we can get 50% of the 1.3 million, it'll be a hell of a lot better than what we've got right now.
Mr Carr: I guess my feeling is that I trust your statistics more than I do government's, for a lot of different reasons, and the same when we were in Windsor, on the direct job creation. So I just wanted to see if you had a sense.
On that same issue, the number of jobs being created, again I trust your figures because I know in business you have to not be as political as some; and I say that all parties, politically, would add to the numbers to make them look good. If the Sault gets a casino, how many jobs do you think would be created here in terms of direct and indirect? Because one of the problems that we have is that in Windsor they see more indirect. They see 2,500 direct jobs and 6,000 indirect jobs. Some of the presentations here today have talked about more direct jobs in Sault, Michigan, than there are indirect jobs. So maybe you could give us an idea of what ratio you see with a casino, what percentage of the jobs would be indirect, if you can give us some idea of the numbers, because I think that's what the people in the community want. They're saying, "If we get a casino, how many new jobs?" Quite frankly, I trust your stats better than any government's, so do you have any thoughts on that?
Mr Magill: Certainly, again, indicating that we have carried out extensive research is not the case. What I can tell you, and you've heard it already, is that in Sault Ste Marie, Michigan, the casino there employs somewhat in the order of 1,200 to 1,800 direct jobs, depending on what kinds of economic models you use in terms of multipliers from there. But at this point I think it would be premature to speculate on actual employment other than to say quite clearly that we would see direct jobs in that order of magnitude if we're allowed to compete on the same basis.
I can also tell you that in Sault Ste Marie, Ontario, we've experienced business closures with respect to the kinds of activity that would support a casino, and a lot of those jobs would certainly be retained. There would be additional jobs created because of the very unique nature of a casino. But we'd be happy to provide some numbers to you if we can get our hands on them, but I don't have them right now; nothing specific.
Mr Carr: Thank you. Good luck.
The Chair: Mr Duignan, the minister's parliamentary assistant, wanted to ask you a question in order to clarify something.
Mr Noel Duignan (Halton North): It's been mentioned by certain other presenters here this morning too. When you're talking of outlawing of certain games, what types of games are you talking about there?
Mr Magill: What we're indicating is that in order to maintain the level playing field with the Sault Ste Marie, Michigan, casino, where, for example, craps are allowed, that kind of activity certainly should be considered. With reference to the alcohol question, that's the other thing that we would want taken into consideration.
Mr Duignan: Of course you're aware that the federal Criminal Code outlaws games of dice, so unless the Criminal Code was changed, we couldn't operate a game of dice anyway in the casino.
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Mr Magill: I think the point is that to be very restrictive and allow only certain kinds of activity in a Sault, Ontario, casino would not provide the level playing field that we're talking about. So I think quite clearly the message is, you folks are the experts in terms of regulation. What we're talking about from a business perspective is that you've got to look at providing an operator with the opportunity to compete with an already existing casino.
Mr Duignan: Within the law.
Mr Magill: Within the law.
The Chair: Thank you very much for presenting before the committee this morning.
ANGLICAN DIOCESE OF ALGOMA
The Chair: The Anglican Diocese of Algoma is next. It would be very much appreciated by the Chair if you would please come forward and make your presentation on behalf of the Right Reverend Leslie Peterson, Bishop of the Anglican Diocese of Algoma.
Archdeacon Rodney Andrews: Good morning, Mr Johnson and members of the committee. Thank you very much for making time available to the Anglican Diocese of Algoma to speak on this issue which concerns the people, the members of the diocese, very much.
Bishop Leslie Peterson, who was scheduled to speak here and very much wanted to come here, has a very strong personal interest in this and a strong commitment to justice and to making Ontario a better province. He regrets that he's unable to be here due to a death in the family and a requirement to attend a funeral in North Bay today.
I'm Archdeacon Rodney Andrews. I'm his executive assistant. I would like to tell you how we would like to use these few minutes that we have your attention, which we appreciate.
First of all, I would present a motion which was passed by the Canadian Council of Churches and a motion by the diocese of Toronto. I would then move over to Mr Bill Kidd, the gentleman sitting on my left. Mr Kidd is the lay secretary of the provincial synod of Ontario. Our church is organized into six dioceses in the province of Ontario and they meet as a provincial synod, with an archbishop. In that synod, Mr Kidd is one of the officials. He is also the secretary of the program commission, with particular responsibility to deal with the question of legalized gambling.
On my right, Archdeacon William Stadnyk, who is a long-time resident of Sault Ste Marie, is a senior clergyperson with the diocese of Algoma and has many years of experience as a prison chaplain working for justice issues and working with those persons who feel the effects of all kinds of problems in society.
Very quickly, then, the resolution of the Canadian Council of Churches on gambling, which I believe you have before you, is a motion presented by all of the churches of Canada which are part of the council of churches -- and you would think here of the United Church of Canada, the Presbyterian church, the Lutheran church, the Baptist church, most major denominations -- speaking of gambling as taking advantage of other persons, profiting by the loss of others, and the result of this being grave moral, social and economic evils. The motion does not go into the history but points out that the whole history of legalized gambling shows that once the state sets up gambling activities, these very quickly degenerate into vicious examples of personal corruption and personal exploitation and are very quickly taken over by organized criminal activities. As a result, gambling becomes an enemy of personal integrity, of family welfare and of business honesty.
The second resolution on the second page I would like you to glance at before we begin was a motion presented by the Anglican Diocese of Toronto, a very large portion of the Anglican community in the province of Ontario, in which they remind the government of the province of Ontario that their own poll taken in the summer of 1992 indicated that 42% of the people in Ontario strongly disagreed with the government's plan to introduce casino gambling and 14% somewhat disagreed, indicating that more than 50% of the people in Ontario are not in favour of casino gambling.
In paragraph 3, "Whereas gambling for many people is an addictive behaviour, causing family and economic problems," the synod strongly urges the government of Ontario not to proceed with the plan to introduce casino gambling.
I present those two motions which have the authority of large constituencies within the Christian church, both on the Canadian scene and in the province of Ontario.
I move very quickly then to Mr Bill Kidd.
Mr William Kidd: I'd like to ask you, what is gambling? It's been a long struggle in the church.
In 1938, Canon Peter Green, an Anglican priest, wrote a definition. He said that gambling is "an agreement between two parties whereby the transfer of something of value is made dependent on an uncertain event, in such a way that the whole gain of one party is the whole loss of the other."
It's very tempting to enter into a theological discussion on gambling within the church, but it's not our intent. But as I said before, it's been a long attack of the church.
In May 1993, in an editorial which appeared in our national church publication, the Anglican Journal, they wrote, "For almost 100 years, the Anglican Church of Canada's stand on gambling and betting has been unequivocal: It is opposed. Now that view is in conflict with another strongly held belief: the right of native people to self-government."
The church finds itself in a quandary because native people are using casino gambling to generate much-needed revenues, and they are justifying it on the grounds of self-government.
It states further on that in 1987 the church put itself on record as stating that gambling and betting are unmitigated evils which are detrimental to the moral, social and economic wellbeing of Canadians.
These discussions have come out as we have gone through various stages of economic conditions in Canada and as recorded in a number of publications issued through the church. They are stressing that gambling is morally bad: its "irrational principle," its "wrong impulse," its "evil consequences" and its "vitiated character."
There are many philosophical views that are mentioned in our paper, and one of the ones that disturbs us is the very obvious switch in direction that was taken by the present government of Ontario. It's a switch that has been mentioned so many times in Hansard of our province. Statements have been issued by Mr Peter Kormos, by Mr Drainville, by Mr Bradley.
One of the big issues that comes out, and a concern that the church has, is the matter of crime. As the archdeacon has mentioned, our present bishop is very interested in social issues in this province. Crime has been noted by many officials in many documents that have come out of the province, and more recently by the chief of police of the city of Windsor claiming that he requires an additional 33 uniformed police officers and 7 non-uniformed, and being told by the minister of the province that they will guarantee payment for 10 positions.
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Gambling attacks the very fabric of our province. There are some who state, "Well, it's only for the rich," but I would ask this committee to spend a few minutes and go down into one of the shopping malls, into the lottery outlets and see who's buying the tickets. Spend 20 minutes there and find out.
Economic panacea in Ontario: It can't be found in gambling. The fabric of our province will be greatly affected. Mr John Engles, the governor of Michigan, has just signed over an act in which he states that in aboriginal casinos, they are required to give 2% of the profits to the local governments.
Economic peace: We find that there are picket lines getting ready to go up in the Michigan casinos, so we urge this committee to recommend to the present government that it withdraw its shocking legislation for the good of the province and the good of the people of this province.
Archdeacon William Stadnyk: There's been a lot written about the benefits of full-fledged gambling casinos in selected localities in the province of Ontario. There has been less written about the adverse effects of casinos on the quality of life in our provinces. Most of the negative comments about casinos seem to dwell on the possibility of organized crime becoming involved and the extra cost of policing in the communities where the casinos will be established.
However, I would like to draw the attention of the committee to the social costs, which are not as obvious as extra policing but which are real and costly just the same. Some would say that allowing a gambling casino would be no different than allowing people to buy lottery tickets or allowing charitable organizations to use gaming proceeds to finance part of their operations. I wonder if any realistic study has been done of the cost to our society of what is already in place?
Let me give you a few examples from my own experience in this community. First, a young couple with two children had been saving to buy their own home. The male partner had been buying lottery tickets. He'd won a few times so he thought he was on to a good thing. He spent all their accumulated savings for their new home, plus a few thousand dollars in cash advances on his credit card that he hadn't told his wife about.
Each time he didn't win, he kept on buying lottery tickets, telling himself that he would make her happy and he'd pay it off when he won. Now their savings are all gone and they're trying to pay off the accumulated debt on their credit card, which has reached its limit.
Second example: A young couple I know of with one child were living on a disability pension. They began playing bingo as entertainment and with the hope, of course, of winning. They won a few times, including winning a thousand-dollar jackpot, and they were hooked. Because of their growing debt load to finance their bingo habit, the pressure built up. They began to argue, the husband turned to drink and that marriage broke up.
Thirdly, a mature young woman, divorced, with a responsible job, began to go to the casino across the river for entertainment. Soon she was losing more than she could afford to and she began to borrow money from funds she was handling for her employer. She had the best of intentions, intending to pay it all back as soon as she began to win. Needless to say -- and gambling is structured that way -- her winnings did not keep up with her losses. When a business audit was done, she was found out and she lost her job. That woman is now on the local welfare roll.
At a visit to the casino across the river, a local patron who had been losing heavily was seen to sign over the ownership to his almost-new car for additional funds to continue his gambling. When his luck turned, he would get it all back. But his luck didn't turn and he didn't get his car back. I'm not sure how he got home that night.
I could go on with more examples from my own experience of what the gambling fever has done to residents of our community. But I've just given you a cross-section of situations known to me that have occurred without a casino in our fair city. Does anyone seriously believe that the problems and social cost would be any less with legalized, government-supervised gambling casinos in our province?
Also, the argument has been advanced that if we had a casino in Sault Ste Marie, Ontario, local people would gamble here and keep their money in Canada, and we'd attract people from across the river. The casino across the river already provides free liquor to all patrons. You empty your glass; there's another one at your elbow, no charge. We are told there will be no liquor allowed in government-approved and government-supervised casinos in our province. Does anyone seriously believe that most, if not all, the gamblers would pass up the free drinks across the river to support our own local casino? Or will the government no-alcohol policy be modified once it is learned that the people prefer the casino with the free drinks?
The previous speaker said that in order to have a level playing field, you have to offer as much or more than the competition. What are our casinos going to offer to compete with what they're offering across the river now?
Has anyone calculated the impact, the loss of revenue to those who are already engaged in legal forms of gambling already permitted in our province? What will happen to the income of the lottery funds like Lottario and to the income from the racetracks -- there were some pretty devastating statistics being offered in the paper last week about that -- to say nothing of the losses that charitable organizations would suffer which presently depend to some degree upon charitable gaming for some of the revenue? If these charitable organizations don't get the revenue they are presently getting from the presently existing gaming situations, who would take up the slack and replace their much-needed and valuable community services? Would our provincial government be prepared to do this out of their share of the proceeds of a gambling casino?
I'm deeply concerned that our provincial government would officially sponsor anything that fosters a something-for-nothing attitude. The senior representatives of our government on the federal and the provincial levels are telling us repeatedly that we cannot get something for nothing, that there is no free lunch. Then, by endorsing legal gambling casinos in our province, our provincial government is fostering a state of mind that it, the provincial government, says does not work. You can't have it both ways. If it doesn't work in one place, it's not going to work in the other. A democracy, as I understand it, is based on a concern for the wellbeing of others around us, instead of profiting at the expense of others, which is what gambling of any sort is based on.
Finally, there is no new money being generated by gambling. It is simply the recycling of money that is already there, in some cases by people who can afford to do so but in many cases by people who cannot afford to do so but who feel their only hope of making it is through the something-for-nothing dream.
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Our nation was not built on such dreams. It was built by people who were willing to give of themselves sacrificially to build a better life for themselves and for those who came after them. The same principles of hard work, self-sacrifice, concern for others and entrepreneurship are necessary ingredients of any economic recovery and for the building of a stable and caring society.
Thank you, Mr Johnson, that concludes our presentation. We wanted to emphasize, and I'm sure if Bishop Peterson were here he would say that the economic problems of the province of Ontario are so massive, and I think that is something that your government is dealing with every day. We're all very aware of the incredible difficulties that we have as a province, and to assume that we would be able to alleviate those economic difficulties through organized casinos, which Bill 8 proposes to do, is really a very simplistic solution to an extremely complex problem. We know that politicians are dealing with this, that economists are dealing with it, and the church is prepared to do its part. We just don't see that this is really the solution to the difficulties we're in.
Mr Phillips: I want to thank the church for being here and presenting. I'll follow up on what you almost said at the end, and that is that I think in some respects we're on the horns of a dilemma.
You've heard this morning from various groups who are very supportive of this because they face unemployment, business challenges, risks of losing business to the US and all of those things; much, by the way, as the church points out the challenge of conflict between your position with the native community and this. I think we've heard a very articulate view of some of the problems that will be presented, but I think what we're faced with is the other side of it: that there appears to be some economic benefit in proceeding with this.
Has the church got any advice for the committee in terms of, if we weren't to proceed with this, how might one find economic activity to offset what I think many people believe is an economic generator?
Archdeacon Andrews: The Dominion of Canada was built, and Ontario was one of the leaders, in terms of developing our resources, producing goods and services that people all over the world need and are willing to pay for, and that is really the only hope, I believe, of economic security for our country: that we are competing in an international marketplace to provide, as I said, goods and services from the resources we have, and that's the real secret. It's a massive job for government, but we will support whatever can be done. We just don't see that to set up casinos is going to solve this very, very complicated problem.
Mrs Marland: Thank you for a very impressive presentation this morning. It's very difficult, when you listen to some of the earlier presenters representing a different perspective from yours, obviously, elected people, the mayor and the voluntary people with the chamber and so forth, and I look at the 16.9% unemployment mentioned in the mayor's brief and I listen to what they're saying. Of course they're not really saying anything different from you on the subject of gambling; they're not here saying that they're in favour of gambling. They're not saying that a casino is an alternative to other kinds of employment opportunities that they would like to see for their people.
What I did hear them saying was that they're here because at the moment it's an opportunity they see to have a remedy for almost 17% unemployment. If they're looking at these employment opportunities and you're opposing them, for some very valid reasons, in my opinion -- I mean, you can't really blame the city fathers and mothers for trying to find a solution for their people in very, very difficult times and in a location that's far more difficult than most of the rest of this province.
I want to ask you, as people who live here -- which we don't, except for Mr Martin -- how do you argue the location aspect? Is it going to make any difference if there's a casino here as well as a casino across the bridge in terms of those people who feel compelled to gamble? You see it, as we do, as a taxation on the poor, obviously. Those people are going to go across the bridge without any difficulty anyway, so the argument the city makes is that it wants to have a market share. As to the examples you gave, Father, of those families, are they not going to access it whether it's in Sault, Michigan, or Sault, Canada?
Archdeacon Andrews: Probably they would, yes.
Archdeacon Stadnyk: One of the questions I raised is that if they're going to offer free liquor across the river and we don't, where are those people going to go? I think it's almost a simplistic answer, but human nature being what it is, unless we can compete on an even playing field we're not going to get the clientele. If someone is giving away free booze and we're not, the customers are going to go to where they get the best deal.
Archdeacon Andrews: I suppose if you visit a city where there are rows and rows of bars, you'd only see more degenerate activity because there's more opportunity. Maybe that's one way of thinking of it. Two casinos will increase the opportunities for social undesirables, social failures.
Mr Sutherland: Throughout this whole debate about casino gambling, the problem I'm having is that somehow casino gambling is seen as a lesser form of gambling compared to other forms. In the presentation, you cite what's going to happen to income from racetracks, from lotteries, from charitable organizations. I don't see how bingo, which is basically a form of gambling, is any different from casino gambling, or how placing a bet at a racetrack is any different from casino gambling. Mr Drainville has said the same thing. He's concerned about the racing industry. What is really the difference? Why is one more legitimate than the other one? They're still all forms of gambling.
You talk about charitable gaming. If a charitable organization decides to open up a casino, does that make casino gambling legitimate because it's going to a charitable purpose, or bingos legitimate because it's going to a charitable purpose? What makes one more legitimate than the other?
Archdeacon Stadnyk: I don't think anything makes them more legitimate than the other. I tried to point out in my brief that we've got problems with social costs now that are only going to be compounded if we add to the opportunities for gambling. We're not dealing effectively with the problems we have now with things as simple as bingos.
Ms Harrington: We certainly are not trying to alleviate all the economic problems with casinos, and we understand that it is recycled money, that it's not productive money.
I want to ask about your position with regard to the jobs that will be created. We've heard from previous presenters that it will be a healthy economic stimulus to this community, which badly needs it. What would you say about the thousand or more jobs that would be created directly? That will benefit people here.
Archdeacon Andrews: Certainly we would be in favour of employment, but we would want that employment to be based on something that contributes to the overall wellbeing of society and we are not convinced that casino gambling is leading in that direction.
Ms Harrington: But you agree it will produce some jobs, which would be a benefit.
Archdeacon Andrews: I've read some of the studies which say that this will produce jobs. We're just not sure this is the way that jobs should be produced in Sault Ste Marie at this time. We would prefer that there would be an environmentally friendly industry which would produce products which would be purchased by other persons in Ontario, across Canada and around the world and that would produce employment. This would be much more beneficial, as far as we are concerned, to the city of Sault Ste Marie. As far as employment is concerned, we are very much in favour of that, of course.
The Chair: Gentlemen, thank you very much for presenting before the committee today.
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LONDON CONFERENCE OF THE UNITED CHURCH OF CANADA
The Chair: I call on Reverend Phyllis Dietrich, the United Church of Canada. You weren't scheduled, but I know you've been waiting patiently and you certainly do have an opportunity now because of a couple of cancellations.
Rev Phyllis Dietrich: First of all, let me say to the committee that I am very thankful to have been found a spot to present this morning. This kind of presentation is not unfamiliar to me. When I lived in Saskatchewan I presented a paper to the bingo commission that was going around the province at that time and seemed to speak in a different sort of tone from others who were presenting. Today I am speaking on behalf of the London conference of the United Church of Canada. I believe you have my paper.
I would like to take this opportunity to thank the casino gambling committee for allowing me to voice my opinion on the matter of casino gambling in Ontario.
I feel that it's important to make it clear to you from the beginning that I am opposed to the establishing of such operations. I am an ordained minister and speak today on behalf of the London Conference of the United Church of Canada. I would like to voice the following information.
A definition of gambling: Gambling is a contract whereby loss or gain or exchange or something of value -- property, money or money's worth -- is staked on the issue or outcome of an artificially created chance or uncertain event, without reference to or determination by value or service or goodwill, with consciousness of risk and hope of gain and with the gain of the winners being at the expense of the losers.
I believe that not only should this inquiry be concerned with the revenue aspects of casino gambling or the locations of said establishments but should also be concerned with the moral and ethical implications of gambling, taking into consideration (1) the character expressed in the moral act, (2) the principle involved in the moral act and its application, and (3) that the consequences resulting from the moral act and judgements arrived at would have to be applied to those who gamble, those who promote gambling and those affected by the gambling.
The United Church of Canada and the gambling question: The policies adopted by the general council of the United Church of Canada are clear:
-- Governments should withdraw support from organized gambling and opposed it within Canada.
-- It is immoral to offer gambling as a source of economic security to people on low incomes, poor communities and poorly financed sectors of life such as culture and sports.
-- Members of the church should refrain from gambling.
-- Church courts and formally constituted groups should abstain from applying for grants for lottery-generated funds.
These policies, which remain in place to date, were adopted by our general council in 1980 and 1986. As well, at our annual meeting of London Conference we passed another motion ratifying these motions.
Why we should not have casino gambling of any kind:
(1) If you are a Christian, and I am speaking first from that premise, there's no ethic of gambling. Gambling destroys the act of Christian stewardship, of how one gains and how one uses or spends it. As Christians, if we live by the ethic that all that we have belongs to God, are we justified in claiming the right to do just as we please with our disposable income, as if a token payment to God were quite adequate?
(2) Often it's heard that people need this, that "It's their only form of entertainment." Gambling has a deplorable effect on the senior citizen as well as others of low income. Low-income earners' savings are quickly dissipated, for a quick, possible euphoric thrill on gambling. Money for essentials is often used to engage in this activity, because, "My neighbour won $1,000; maybe I'll be lucky too."
(3) This form of gambling distorts a person's whole understanding of relationship with others, because it's based on selfish gain, that is, one gains at the expense of others' losses.
(4) Who gains? When Canadians have been questioned in the past as to why they gamble, they have pointed to the benevolent cause which will benefit from their playing. They also spin dreams about what they'll do with all their winnings, and these fantasies usually include plans for being generous to others. Yet marketing and advertising base their strategy on greed. They believe that most people play because they want to win, not because they want to help a cause. They clearly want to win.
Before I go on, I want to say that Gamblers Anonymous is a group that I have worked with in the past, before going into ministry. I've worked in a hospital in Windsor, Ontario, where back in the 1970s we sent people to Gamblers Anonymous groups that were taking place in Detroit.
(5) Gamblers Anonymous, a group with a similar philosophy to Alcoholics Anonymous, maintains that people gamble because of an inability and an unwillingness to accept reality, because of their own insecurity and because of an immaturity that makes them wish to escape responsibility. It, gambling, becomes a symptom of human fumbling attempts to improve, especially materially, a desire to find meaning and purpose, a need to have a full perception of being emotionally as well as nominally alive. The increased number of people involved in gambling can no more be treated successfully in isolation, that is, by prohibition, than could excessive use of alcohol.
The case against gambling as economic development: We who oppose gambling as economic development make these points:
(a) Casinos or any other type of gambling are financially unsound and a wasteful means of raising revenue for public or private purposes.
(b) In this high-tech era, the product created by casinos and other forms of gambling relies on machinery rather than on the creativity and inventiveness of the employees. The investment in the community does nothing to mobilize people's productive and creative potential or to help the employees learn skills for more sophisticated jobs down the road.
(c) Gambling is a regressive form of taxation that is unrelated to income or property. The money is drawn disproportionately from low-income people.
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(d) The gambling product is high-priced, has low payout ratios and is promoted by advertising that seldom makes clear how small the prizes actually are compared to what people pay for the activity.
The social impact assessment: The onus for demonstrating the social impact of a particular type of economic development ought to be on the party planning the project and, I make it clear, not the political party. This means that proposals presented to city councils and other political authorities would need to indicate why the proposal will have a positive effect on human development in the community. City councils and other political authorities should then examine the proposal and answer for the public these questions:
(1) How will the proposal allow this community to invest in the formation of human capabilities that we need for the future?
(2) How will the proposal help the community mobilize and use its members' productive and creative potential?
(3) How will the proposal help the community provide the social security arrangements required for its members who cannot help themselves, especially the unemployed, the elderly and the disabled?
(4) Will the proposal create productive, remunerative and satisfying employment for the long term?
(5) Will the jobs produced engage people in the activities of the community, making them agents of participation and change for the good of the entire community?
(6) What social injuries will the proposal create? Who will be negatively affected by the proposal, and how? Will it increase inequalities or tensions between people?
Moral responsibility and government action: In preparing such an assessment, governments are attempting to be clear in drawing conclusions about two things: (1) the merits of particular economic projects; and (2) whether the social good outweighs the negative impact. This is an exercise in discernment in which moral standards are brought to bear on the facts of a particular case.
The literature on corporate responsibility offers three basic moral standards that are non-sectarian yet common to democratic countries. They have been applied by enlightened corporations in the private sector carrying out such exercises. They are:
(1) Does the action as far as possible maximize social benefits and minimize social injuries?
(2) Is the action consistent with the moral rights of those whom it will affect?
(3) Will the action lead to a just distribution of benefits and burdens?
In the past, religious communities have been seen as being concerned only for personal morality when they have called on governments to restrict or prohibit the spread of gambling. It is true that churches have tried to discourage their members from participating in gambling. It is also true that this concern for the welfare of individuals has often arisen out of a pastoral concern with the tragedies of human lives. This is especially true where gambling has become an overwhelming force in a family where people have been left with so little economic security within our society that taking a chance on the big win appears to be their only hope.
Churches are well aware that ours is a pluralistic society in which no particular group could or should impose the ethical code for its members on all of society. Nevertheless, religious communities have something to offer to the debate on matters of public morality. Churches therefore approach this issue as a matter of ethics and corporate responsibility on the part of individuals, institutions and, in this case, governments to whom they, like other Canadians, give power and authority to act in the interests and wellbeing of all of us and our neighbours.
We enter the public arena because in the Christian community we draw on Jesus's call to love God completely and fully and to love our neighbour as we love ourselves. It is a matter of basic Christian discipleship to live in that way in so far as we are able. It is also a matter of discipleship to be alert, to watch, as the prophet Habakkuk put it, because there will be many times when our neighbours suffer or are neglected. Our Christian faith requires us to be sensitive to their needs and to make our love for others and for God concrete in life. Where communities suffer, they challenge us to love our neighbours on a large scale.
As Christians, we are not alone in our belief in the dignity and value of all people as well as in our responsibility to one another. Nor are we alone in thinking that what happens in human history matters to God or that people and nature matter to God. Nor are we alone in believing that people are accountable to God, the source of goodness and compassion, for everything they touch with their human power. God's goal for all of humanity is that all of creation will flourish. We are responsible for living before God in ways that spur creation towards that goal. We are at least responsible for not obstructing it. People of other faiths and ethicists of no faith have come to similar conclusions.
On many occasions, governments too have come to similar conclusions. The entire body of international law, as well as much of our domestic law, reflects a moral consensus about what is good for the community and therefore what we will ask our civil authority, our governments, to do to help us collectively pursue the good society. Engaging the public debate on ethics and corporate social responsibility of this particular form of economic development is something we owe our neighbours and our children as well as God.
Thank you for allowing me this time this morning.
The Acting Chair (Mr Kimble Sutherland): Thank you, Ms Dietrich. We do have some time for questions.
Mrs Marland: Reverend Dietrich, I think you were in the room when the member who's now in the chair, Mr Sutherland, asked the previous deputation where the difference is, because churches do have bingos and certainly we're all aware that churches have their own forms of lotteries. I've bought enough tickets on quilts and stuff in raffles, which we all have. I'm looking for you to give us the answer to that challenge, which is, churches are in a form of gambling, all denominations --
Rev Ms Dietrich: I beg to differ with you on that, Ms Marland. The United Church of Canada is opposed to all forms of gambling. We do not participate in quilt raffles, and if we do, it does go against our grain. The United Church of Canada has been and is known in Canada for not participating in that kind of activity. Our members become creative then in the whole issue of raffling.
I will give you an example, and I am not speaking today on the churches that I serve here in Sault Ste Marie, but I know they would be happy for me to use their example.
East Korah United Church has a quilting group that has met for years and years, and they do excellent quilting for people in this community. They have been confronted many, many times on the basis of, "We could sell this quilt for $1,000 if we did a raffle," but they know in their hearts that this is not right and that they would be going against the principles of the United Church of Canada. So they sell their quilts for less, at times, than a quarter of what they could be making at a raffle. So they come up with different ways of doing things. It may not create the income, but I can tell you that they live in peace a lot more so because of that.
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Mrs Marland: You actually jumped in before I asked you my question. I'm not saying that I'm opposed to what you've said here this morning, but what I'm looking for is the counter to the kinds of examples Mr Sutherland gave.
What I wanted to ask you, regardless of just the United Church position, because I certainly have supported fund-raising efforts which involve raffle tickets and things at United churches in some parts of this province, but is the answer really between "gambling" in terms of what we're discussing in Bill 8, which is casino gambling -- is the real difference between that and other fund-raising efforts of other community groups, be they churches or other community service organizations, the fact that when people go to a casino, there's no upper limit? There are some stages of what tables you sit at and so forth, but overall, you can sit at a machine for 30 hours straight, feeding it coins, if you wish, whereas these other forms of fund-raising for service and church organizations are controlled by the fact that people have to sell you a ticket. There just isn't the open-endedness of sitting in front of an idiot machine, throwing coins in it. Do you think that has any influence on it, or are your just opposed to everything?
Rev Ms Dietrich: We are opposed to gambling, and casino gambling falls into this category and so bingos fall into the category as well. I'm trying to glean what your question was. As a result of this here --
Mrs Marland: Is your concern greater for casinos because it's almost open-ended for that individual?
Rev Ms Dietrich: I think my concern is for all forms of gambling. Specifically now in the province of Ontario; I've seen what the sale of lottery tickets can do to a person, I've seen the results of what the sale of raffle tickets can do to a person from having worked with low-income folk. It's all the same, as far as I'm concerned.
Mrs Marland: You actually see people as compelled to buy a raffle ticket on small prize opportunities compared to even lottery tickets with multimillion-dollar prizes or continuous casino gambling?
Rev Ms Dietrich: I think the fact is that if we think we're going to win and if there is some compulsion there that is growing, it doesn't matter. We can buy quilt tickets until they're coming out of our ears and there's still that compulsion that is being built up, like, "I am going to win." Whether it's in casino gambling, whether it is in the purchase of lottery tickets, whether it's in what some people would call, "Well, it's just a friendly raffle ticket, it's just a local, friendly raffle ticket," gambling is gambling.
Mr Martin: Phyllis, you and I are certainly kindred spirits on a whole lot of things, but on this one we differ. I just wanted to share some thoughts with you and let you know that there are people within our caucus who have struggled with this and have come to their decision based on some, I think, good thought and based on some of their own experience.
My own experience -- I'm a practising Roman Catholic, and you and I spent a bit of last Thursday at the soup kitchen with a concern for justice and the poor. I come out of a Christian denomination that for years bingo was part of what we did. It was almost part of the culture, and certainly in this diocese we ran our high schools for a number of years on the proceeds of the Pot of Gold lottery.
So that's my history, my experience, and I bring that to the larger question of gambling in society and those kinds of things. I know that over the years our ethics in terms of the economy -- it used to be that you didn't buy anything unless you had the money to pay for it; now we're into credit in a major way. I gambled a year ago: I bought a new house, not knowing if I would have a job in two years that would allow me to pay for it. I dare say that the folks who came to our country many, many years ago, many of them strong, practising Christians, gambled on free land and many of them died because of that gamble, and so we continue.
The other day I asked the chief of the Ontario native folks, the Indians, Joe Miskokomon, why he could so strongly support gambling in his communities. He said that the level of poverty was so great in his communities that the hierarchy of principles for him was to get his people jobs, and this was one opportunity for him to do that. That adds to my thought process.
The other thing is that there's some reference to the fact that the poor gamble more than any other level of our society. Certainly, the figures that come out of the lottery corporation say that they don't. They certainly have their percentage, but it's no different than any other strata or level, according to their figures. So, having said all that, Phyllis, I guess we'd like some response.
Rev Ms Dietrich: As Mr Martin said, you know, we're kindred spirits in a lot of aspects, and I don't deny that at all. I guess what I'm saying is to take what I have said into consideration before moving ahead on any more reform to Bill 8. I guess I understand that because there are so many things in life that are a gamble, if I'm going to use that word, and I understand that a lot of the good things in life that I could have would be dependent on because somebody has gambled.
For example, because of another group that I have connections with, let's say I need good equipment for mammography and let's say a group has raised money and it has been matched because of gambling revenue. Is that going to stop me from using that equipment? Probably not. I'd want to use whatever was available. Will I participate in that kind of activity in order to have a particular piece of equipment that can be health-saving or life-giving? I probably would not participate in the activity. I may make a contribution to the purchase of that, but I would not participate in that. So for us it's constantly -- we have questions we need to ask all the time about this. So that's where I'm at on this.
Mr McClelland: I would invite your comment with respect to the fact that I have asked the parliamentary assistant if the government has commissioned any studies that would indicate the downside effect, the impact on the potential compulsive gambler -- data show that between 5% and 7% of the population are potentially compulsive gamblers -- anything with contingency plans that are well established and thought out. We were told last week that there is a plan to develop a strategy to deal with the problems, and we're not sure what "a plan to develop a strategy" means.
When Coopers and Lybrand, the organization that you all know was commissioned and paid a quarter of a million dollars to put together a study, were questioned, they responded to me that any of the downside social effects or socioeconomic impacts on the negative side of the ledger were out of the purview of the terms of reference that they were given. I simply say that in terms of your comment earlier on about responsibility to measure the consequences.
I wonder if you would like to comment any further on that, and with respect to the need that, in the apparent reality that casino gambling is coming to the province of Ontario, given the agenda of the current government, there are going to be some problems. We need to have, it seems to me, a commitment to have the attendant support systems in place, and what we have now is a plan to develop the strategy. Any comment?
Rev Ms Dietrich: I'm glad there is some sort of plan. I'd like to see the plan myself --
Mr McClelland: So would we. We've asked for it.
Rev Ms Dietrich: -- because I know that not just myself, but through the London conference of the United Church of Canada as well as our church and society of the United Church of Canada, we'll want to see this so that we can make some sort of input as to what is the contingency plan for the compulsiveness as a result of this.
Mr McClelland: I note that the plan is being developed and the studies are coming after the fact, after the decision's been made, which is I think an interesting chronology.
The Chair: Thank you for presenting today.
This committee is recessed until 1 pm sharp.
The committee recessed from 1142 to 1301.
STATION MALL MERCHANTS
The Chair: Our first presenter this afternoon, representing Station Mall merchants, is Hans Geenen. You have 30 minutes within which to make your presentation and field some questions.
Mr Hans Geenen: I can guarantee you I won't be taking up 30 minutes. My presentation is short, concise and to the point, and hopefully I can entertain some questions after that, if you have some.
First of all, thank you for providing us with the opportunity to voice our support of your efforts in bringing casino gambling to Ontario. While I strongly feel that Sault Ste Marie would have been a far superior setting for initiating the project, I applaud your efforts in coming to the consensus that the gaming industry is here to stay, and that as an economic stimulus, it's imperative that communities such as ours come to accept and capitalize on its growth.
My name is Hans Geenen. I manage a shopping centre here in Sault Ste Marie, consisting of over 130 stores and services and located right in the downtown area. Our centre consists of about half a million square feet of gross leasable area and generates spending of close to $100 million each year. We pride ourselves in maintaining a pretty low vacancy rate. As I'm sure you can imagine, we've struggled through some very difficult times lately but still managed to maintain a fairly low vacancy rate.
Considering that cross-border shopping has drained upwards of $130 million from this community on an annual basis, and our sales being about $100 million a year, you can see the magnitude of the impact that competition in a border city can have. I don't know if you're very familiar with Sault Ste Marie, but if you can imagine, if that $130 million was not going over on the other side, Wellington Square would not have a vacancy, Queenstown would not have a vacancy, we would be completely full, and Cambrian Mall wouldn't have a vacancy. So that just gives you an idea of the number of sales it takes to support a shopping centre of our size and the number of retail establishments that it can support. So that's a fairly sizable number of dollars going over to the other side. Add to that the fact that Sault Ste Marie, Michigan, boasts only a fraction of the population, and you come to understand that it relies heavily on the Canadian resident for its livelihood and is limited in providing a reciprocal trade to offset the significant drain on the community.
The cross-border issue is still here. It's not gone away and it will not go away until we learn to compete as well as our US counterparts. When considering a gaming industry, it's absolutely necessary that the issue of cross-border competitiveness remain the focus of any of your efforts.
In large part, a shopping centre such as ours relies heavily on customer traffic and a very vibrant tourism trade. Being located in the downtown area, being located next to the Agawa Canyon tour train, which you've all heard of before, it's imperative that that tourism trade remain and that we can capitalize on it.
We feel a casino can form a stimulus for tourism traffic, enhancing hotel occupancy and in turn creating additional traffic for stores and services. The many positive effects that such an attraction can have are witnessed by the growth of this industry in our sister city, Sault Ste Marie, Michigan. I trust all of you who are visiting here today appreciate what it's done for Sault, Michigan, what it's done for their economy, and if you haven't been there, I urge you to take a visit over there, because that will tell the story in itself.
The decision on locating a casino downtown is commendable since you obviously understand the need for spinoffs from such an attraction. We at Station Mall also want to capitalize on such an attraction. We anticipate that with its introduction into this community, we will see a significant increase in traffic which results in an increase in sales and results in an increase in employment within the mall.
However, my only fear with the introduction of gaming in this province is that we don't forget one very important thing, that being that the gaming industry can't be restricted to bricks and mortars within the confines of four walls. The industry must flourish within the infrastructure that already exists in many communities. It must be competitive and every bit as attractive to a prospective visitor or customer as our competitors. Your legislation must reflect this competitiveness and ambiance that other communities that use gaming facilities -- ie, Sault, Michigan -- use for their lure, and how they use it.
Your acceptance of the gaming industry as an economic stimulus is encouraging. However, we can't inhibit its growth within the marketplace we find ourselves in. We absolutely must be better, we must be more accessible, we must be more attractive and certainly more customer-oriented, as our competition is. Thank you.
Mr Sutherland: You talked about a casino being a stimulus. You don't think the casino will solve all the economic woes of Sault Ste Marie?
Mr Geenen: It will not save us, okay? It's a key for generating more economic growth in this community. We certainly have the attractions that have the ability to attract traffic from as far away as eight hours' drive; ie, the Agawa Canyon tour. I think the casino can certainly complement that. I don't think it can replace it.
Mr Sutherland: So it's just one part of an overall strategy.
Mr Geenen: It's part of our tourism strategy. I think it complements it. We've got a pretty vibrant tourism business already and I think it can enhance it. It can make it that much more special.
Mr Sutherland: Do you have any concern about any negative side-effects?
Mr Geenen: From a shopping centre perspective, no. I see it as a real plus, the fact that we are heavily reliant on traffic. I can't say that I would dwell on the negatives. It has worked in other communities. It's certainly worked across the river on the other side. From the things that I've seen happening there, and especially with the province being involved, with the amount of legislation and the regulation that's associated with this type of industry, I'm sure it will be well thought out; I'm sure it will be well policed. I read the executive summary that was prepared for you, and obviously a lot of the things that have been concerns in other communities have been addressed. There will be some negative impacts, ie, from a social standpoint, but I'm sure they will be dealt with, just like everything else.
Mr Martin: Good to see you again. I'm really happy that you came forward to make your submission.
I was in Windsor two weeks ago for a week as part of this process and certainly was caught up somewhat in the excitement and the energy that's been generated down there by this casino coming. However, there was a continual raising of the issue of crime and the impact of that on the downtown: "Will it make it an unsafe place to wander around?" and all that kind of thing.
I don't go across to Sault, Michigan, much any more, for obvious reasons -- politically, not a wise thing for me to be doing.
Mr Geenen: They don't like to see me over there either any more, Tony.
Mr Martin: Yes. But you, I'm sure, as a businessman, are cognizant of the impact this has had on the community of Sault, Michigan. What has it been, from your experience, re the whole question of a rise in crime or a change in the atmosphere of the downtown of Sault, Michigan?
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Mr Geenen: The way I see it right now, Tony, as far as the crime rate within Sault, Ontario, is that with the increase in unemployment and with the increase of people on social assistance, we in the shopping centre have seen a drastic increase in the number of shoplifting cases, the number of evictions within the mall, people who have nothing to do and usually end up in trouble because of that. I see the casino as a stimulus. It creates employment. It creates traffic. It creates increased visitorship to Sault Ste Marie.
As far as the Sault, Michigan, side, I'd be interested to know how many people have been over there, because the clientele it attracts is totally contrary to what some people may think. As far as the people who are over there in terms of the tourists, they are average-income individuals. They are not -- I don't know how you'd categorize them, but it's a well-to-do clientele. It's people like you and me who end up spending time over there. It's entertainment.
I feel very strongly about the fact that the gaming industry as I perceive it and as I see it flourishing is an entertainment industry. It isn't just playing blackjack and it isn't just pulling on a slot machine. It's the restaurants that go with it. It's the ambience. It's the entertainment. It's the big-name shows. If you go over to the other side, to Sault, Michigan, you can appreciate what's happened over there. What started off as a small room, you know, maybe three times the size of this one, has developed into an attraction.
I was involved with the Agawa Canyon tour train for a number of years. I did the marketing for that tour train for eight years. Sault Ste Marie, Michigan, used to capitalize on our tour train as far as the accommodations industry is concerned. There wasn't a motel operator in Sault Ste Marie, Michigan, who didn't utilize our attraction to generate traffic to his or her place. They used to advertise their motels and the fact that they could get Agawa Canyon tour train tickets in order to grab people and bring them up to Sault, Michigan. You don't see that any more. They all offer Vegas Kewadin packages. You don't even see the tour train mentioned. At one time, you would swear that tour train left from Sault, Michigan, as opposed to Sault, Ontario. That's how they were able to utilize it to generate traffic. They have done the same with Vegas Kewadin. It has literally taken over as far as the packaging end for motel operators on the other side. It's affected our traffic at the same time.
Mr Martin: What has it done, Hans, in terms of other investment in the city of Sault, Michigan?
Mr Geenen: All you need to do is go over there. Wal-Mart, Harvey's, Wendy's: all the economic spinoff that you see there has a lot to do with the renewed stimulus that they have in the community. The cross-border shopping issue had a lot to do with it too, by generating the amount of dollars that it did, but at the same time, Sault Ste Marie, Michigan, now has an attraction of its own which they never had before. They used to utilize the tour train as their attraction. Now they have a casino and they're making full use of it.
You have to give them credit for what's happened over there. It's developed fairly well. Like I say, I've had the opportunity to go over there a number of times and I'm impressed. I really am.
Mr Monte Kwinter (Wilson Heights): Mr Geenen, I apologize. I wasn't here earlier this morning, so the mayor or the development corporation or the chamber of commerce may have covered this, but something you said was interesting to me. The impression I got, and correct me if I'm wrong, is that the bulk of the people who go to Sault Ste Marie, Michigan -- that their economy is really based on Canadian tourism, Canadian cross-border shopping. Would you say that is also true of the people who are using the casino?
Mr Geenen: No. I think it started off that way, okay? However, they in time have realized the potential of that particular industry and they've reached out as far as Detroit down south. They've reached out, and by working with tour wholesalers, they've managed to put packages together. They've become very aggressive in marketing the casino and realize that it had the potential of attracting people as far as eight hours' drive away.
Once they realized the attractiveness of what they were offering, they obviously enhanced it a little bit by expanding, by creating new games, by adding a hotel, by adding a restaurant, a lounge or the big-name entertainment which started about six months ago maybe. It's been allowed to grow in that two- or three-year period to what it is right now and I think now has become the stimulus that has helped their economy.
As of December 1, when the dollar changed significantly as far as its relationship to the US dollar, the cross-border phenomenon dropped substantially. It just wasn't there any more because it became that much more expensive to shop over there. It was our saving grace come Christmas time. We had an extremely good Christmas, mainly because we challenged them head on in terms of the marketing we did, but at the same time the dollar had a lot to do with it too.
I believe the casino over there can't rely on the cross-border thing all the time, okay? They have to reach out to other areas. They just can't rely on the Sault Ste Marie traffic, depending on where the dollar is. They've reached out and they realize they need x amount of people to keep that thing going, managed to make deals with wholesalers, managed to make deals with motel, hotel operators on the other side in order to get their message out.
Mr Kwinter: You also estimated you were losing about $130 million a year to cross-border shopping.
Mr Geenen: That was the study commissioned by the chamber of commerce.
Mr Kwinter: Okay. The point I want to make is that under the proposal and the projections that were made by the Ministry of Consumer and Commercial Relations -- and it's using the test casino in Windsor -- the feeling is that the government of Ontario will take 20% of the net profits. Their estimate is that the 20% is going to be somewhere between $120 million and $140 million a year. That's the government's share, which implies that the total net profit of the casino that's projected for Windsor is going to be in the $600-million range.
That is money that is going to come out of the economy and is going to go to the consolidated revenue fund. It's not going to the city of Windsor. I shouldn't say that; the $110 million to $140 million is going to go to the consolidated fund. The other $400-some-odd million is going to go to the investors.
I have two questions: One, if a casino was to operate here and take that amount of money out of the economy where you're not going to see it -- you're going to see some of the peripheral benefits of people coming in and gambling but, still, there isn't a bottomless pit of money. There's going to be $600 million, give or take, depending on the size of the casino, if there was one in Sault Ste Marie, that is going to be taken out of the economy.
Secondly, you're going to have a situation where you have a casino in Sault Ste Marie, Michigan, you will have one in Sault Ste Marie, Ontario, and they will be competing with each other. The one in Ontario will not have craps; it will not allow drinking in the casino; it will probably, if it uses the same model as they use in Windsor, have limited accommodation and restaurant facilities; and it will be right across the border from Sault Ste Marie, Michigan, which is not going to see its golden goose threatened and it will just keep upping the ante with the freedom it has that we're not going to have here. How do you feel that's going to impact on what is projected?
Mr Geenen: Negatively, and this is why I mentioned we have to compete at their level. We have to do things just like they're doing, okay? I don't totally agree with some of the proposals that are being made, ie, no drinking at the tables, limited restaurant, dining facilities within the casino. I think I look at that from a personal perspective more than anything else, okay? Anything that will enhance traffic to this community will be of benefit to the merchants that operate within our premise.
However, I feel that, unless we're prepared to look at the cross-border issue, unless we're -- we can't draw that line any more. There are no more borders. It's a line on a map, okay? We must compete with our counterparts on the other side of the bridge in retail, in the restaurant business, in the hotel business, and very much so in the casino business. We will have to compete with them. Yes, I do have some problems that we must be competitive and we can't restrict ourselves on certain things. That's the game we're looking at getting into, okay? In order to win, we have to be the best. Does that answer your question or am I skirting around it?
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Mr Kwinter: No, no, it does. It also begs the other question. You're talking about you now draw people from eight hours away. In terms of the proposal, although it is contemplated initially that there will only be one in Windsor, I for one believe that is not a practical sort of a policy. You either are going to allow casinos or you're not. You may have a pilot to try to iron out some of the problems but, before you know it, it would seem to me -- why are we here in Sault Ste Marie if it isn't something that is being contemplated? -- there'd be one in Sault Ste Marie. The city of Detroit is not going to sit back, the same way the city of Sault Ste Marie, Michigan, isn't going to sit back and just let it happen, so Detroit will have a casino. Invariably, Toronto will have a casino. Some Indian bands will get together and start running some casinos and, before you know it, the casino will not be the unique thing that it is right now.
Then you're in the same kind of cross-border, competitive marketing of any other tourist attraction and any other wealth generator. It neutralizes itself because: "What's the big deal? You've got a casino. We've got a casino. We'll do a better job than you will because of" -- whatever. "We have more resources. We have less stringent regulations, things of that kind." Do you have any comments on that?
Mr Geenen: Yes. The other thing I noticed was Sudbury and North Bay were being considered also as far as casinos go. I know from personal experience that I've had people come here from North Bay on regular visits to visit their stores or whatever, and while they used to visit once a month, they increased that to two times a month because they like to go over to Sault Ste Marie, Michigan, and try their hand at blackjack. No, seriously. It's an attraction that we have for them, to make their visits obviously a little more timely and certainly on the increase.
Mr Dadamo (Windsor-Sandwich): More exciting.
Mr Geenen: And more exciting, yes. I think I look at it from a tourism perspective that same way, that we need to have something fairly unique that complements the tourism traffic that we have already and complements the tourism attractions that we have already, but it still has to be sort of unique.
Mr Kwinter: That's my point: What happens if it loses its uniqueness?
Mr Geenen: I don't know. I really don't have an answer for you, okay? Right now, I look at it as --
Mr Kwinter: I mean, your North Bay businessman who comes here twice as often because --
Mr Geenen: If he's offered the same thing in North Bay, no, I'm sorry, he'll reduce his visits to once a month. I think we have to be very selective as far as the sites are concerned in order to generate that tourism dollar. If 10 years down the road there's a casino on every street corner in every city in Canada, obviously there's no uniqueness any more and I'd be a fool to even suggest that. But I'm talking about today and I'm talking about immediately, or at least around the corner; there's an opportunity there. I look at casino gaming as an opportunity that people on the other side of the border have seized on and obviously it's worked to their benefit. If we strongly feel that we want to get into that type of business, then it's imperative that we look at what they've done over there and we basically do better than what they've done.
Mr Carr: Thank you very much for your presentation. I was interested -- maybe you could give us an idea of what your vacancy rate is now and if you were to get a casino. Let's make a big assumption that they're going to do it properly. You talked about some of the things, the liquor and the restaurants. If they do it and set it up so it's a fine, well-run casino with lots of people coming -- what is your vacancy rate now and, if you get a casino, what do you think it'll go to?
Mr Geenen: We're very fortunate. We've just finalized a couple of deals and we only have one vacant store out of 130, so we've been very fortunate.
Mr Carr: You are a good marketer.
Mr Geenen: Yes, we have been. I agree. Some of the other shopping centres in --
Mr Carr: What about the Sault in general?
Mr Geenen: The Sault in general, depending on what kind of traffic they generate, depending on how well we do what we're going to do in terms of establishing a casino here, how well it's marketed, who will be involved -- are the hotels prepared to offer packages as far as the casino? What do they see in increases in terms of room nights? Then I can give you a good appreciation of how it will affect us. We're totally reliant on traffic in a shopping centre. I'm sure you're all familiar with the shopping centre philosophy and how it works, and we are totally reliant on traffic.
So if we generate 20,000 people a day, which is what we're looking at right now -- this is what we do on a normal day. We generate about 18,000 to 20,000 people a day, which generates sales of close to $100 million a year. If I can increase that traffic to 25,000 people a day, I can guarantee you that those sales will increase proportionately to the number of people who come through the centre. It's just part of the business and how it works.
By increasing our visitorship to Sault Ste Marie by use of a casino or having a casino as a key component of the tourism business, if it attracts an additional 100,000 visitors to the Sault over a three-month period, then I would anticipate that I'm going to get a portion of that traffic in the mall, whether it be to go and buy a toothbrush in between games or whatever. But I anticipate additional traffic into the shopping centre. Again, if I see the increased traffic into the centre, it will increase sales.
Mr Carr: With only one store vacant in a tough market in retail, I think maybe we should have you involved in the marketing if the casino gets up.
Mr Geenen: I keep telling my boss that, too.
Mr Carr: In addition to your job, too. That would just be extra.
I was interested in one of the problems we've got in hearing the people in Windsor, and I'll just give you an idea. In order to sell it to the people of Windsor, what they said was: "We're going to limit the restaurants so there'll be a lot of spinoff, people going out to restaurants. We won't have liquor in there either." One of the problems is, and I think you hit it in a nutshell, they haven't asked the consumers and from a marketing standpoint, what do the gamblers who are going to come across the border want?
One of the concerns is they're going to set it up so that the first time somebody comes from Detroit to Windsor, for example, and finds out they can't have liquor, the restaurant's packed and they're told, "You have to go down the street," they're going to say, "This is Mickey Mouse and I'm never coming back."
If they don't do it properly in Windsor and the Sault, if you get it, and don't set it up with the things that attract, like the liquor and the restaurants, do you think then, with the increased competition, that the casinos have a potential to be a failure if they aren't set up properly from a marketing standpoint?
Mr Geenen: Yes, I do.
Mr Carr: One last question relates to the traffic, and I really appreciate what you've said about the traffic. The one thing I would caution you -- and I say this not to be political about this government, but any government -- watch the figures they give you in terms of increased traffic. In Windsor, they've said that 80% of the visitors will be from the US and they're anticipating, with their size, 12,000 new visitors a day. If we look at it proportionately, can you see people who are coming over, again from a marketing standpoint, that people who are gambling will be spending a lot of money in retail, or do you think it will be just the restaurants where they need to eat? Do you think, with the dollar and all these other factors, they will be going out to buy a shirt or a new pair of shoes and so on?
In other words, what I'm getting at is that we think there'll be some economic benefit, but with the dollars and the cost and everything else, we may not. They may have come over to gamble and leave their money in the restaurants, but do you think retail will really take a good hit? I don't know what exact numbers, but do you think we can really attract retail spenders from the US?
Mr Geenen: First of all, the tourism traffic that we generate to Sault Ste Marie -- and I'm not going to pinpoint exact figures, but it's probably a 75-25 split: 75% of our traffic that comes to Sault Ste Marie is US-based; only 25% is domestic traffic that we get here in Sault Ste Marie.
One of the things we've found over the years was that, in a lot of cases, it's usually the female of the family, the wife of the family or the mother, who plans the vacation and makes the final decision as far as, "Where are we going for the summer, dear?"
The way I see it happening is that we have one pretty good attraction already which has generated a fair amount of visitors to this community, ie, the tour train. Once the decision is made to come to Sault Ste Marie to take in an attraction, ie, the Agawa Canyon tour, the father is usually the difficult one to convince that he wants to go and ride on a train for eight hours. But if the casino is located in close proximity to the tour train, it makes decision-making on his part that much simpler.
Mr Carr: The wife does marketing on the husband, in other words.
Mr Geenen: You got that right. Who's to say that one-day trip to take the Agawa Canyon tour will not result in a three-day stay whereby father can go and sit in the casino and play some games for the day. They may go up on the tour train one day. He may go to the casino the next day, and mom goes and buys the kids back-to-school clothes, for that matter.
They all complement each other and they all thrive on each other, and I think we have to look at the makeup of the gaming industry. You have to look at the mentality that's out there right now in terms of planning a holiday or planning some time away and letting loose, and I think gaming or a gambling casino, call it what you may, is now a component of going away for a weekend. I've seen it happen too many times.
Mr Duignan: Mr Chair, a point of clarification for all committee members: Mr Kwinter raised the point that the government was saying 20% of net revenue. It's in fact 20% of gross revenue and all of the net revenue. That's the government take on the casino issue. It's 20% of gross and all of the net profit.
The Chair: Thank you for that clarification.
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CAREN CARES GARDENING SERVICE
The Chair: Our next presenter is Caren Kernaghan. You have 30 minutes to make your presentation and field some questions from the committee members.
Ms Caren Kernaghan: It will never take that long. I speak much faster than that.
Ms Kernaghan: Thank you for the opportunity to speak before this committee. I've changed this in a few places, so you'll have to bear with me.
I'm definitely in favour of having a casino in Sault Ste Marie. I've lived here all my life and I feel that because of this, I'm a better judge as to whether or not we should have a casino here, mainly due to the fact that I've been able to watch day to day how the casino has changed Sault Ste Marie, Michigan. It revitalized a city that was facing economic crisis, just as Sault Ste Marie is now.
This story now takes you across the International Bridge and 20 minutes down the road to Vegas Kewadin, a tremendous success story in itself, but also the salvation of the city. I'm referring to Vegas Kewadin. This casino has had two expansions from its main building since it opened in 1984.
It presently employs over 2,200 people, many Canadians, native and non-native, but has created over 3,000 jobs within the city in its hotel, motel and restaurant industries. What kind of dollar figure are we talking? When I asked them for some figures, only early, lean-year figures were allowed to be given. A lean year was $90 million. I'd like to be that lean in my business.
But to put $90 million in perspective, I obtained records from Algoma Steel Corp, its net profits for the past 15 years. Just five years ago, Algoma Steel had a net profit of $81 million and employed 9,000 people. In 1978, its net profit was $77 million and it employed 11,000 people. This is slightly unfair, as I compared gross revenue to net profit. Algoma Steel now employs 5,000 people after restructuring, and a net loss of $161 million. We need help.
The lean-year figure was used, but an ambiguous and unconfirmed figure of a more recent gross figure is that of $200-million-plus as their gross revenue. Not bad for a business only nine years old. Bear in mind, 60% to 75% -- and that is their figure -- of the gross revenue comes out of Canadian pockets. We're talking here about a number one industry, with the possibility of generating as many jobs as Algoma Steel once had and an opportunity to give our city a second chance for life. Keep Canadians working in Canada and take many of them off the welfare roll. Make them taxpayers, not tax users.
Our three main employers: Algoma Steel, St Marys Paper and the ACR, the Algoma Central Railway, are all going for a royal flush, and I don't mean in poker. We need a tourism industry like a casino as another drawing card to Sault Ste Marie to complement what we already have to offer. It would give us a fighting chance.
You know what the irony of Vegas Kewadin being such a success really is? I quote my reserve source: "To market our casino successfully, we use Sault Ste Marie, Ontario, in all of our brochures as a promotional aid to bring people to the casino. We promote Searchmont, the tour train and your close proximity to the natural resources of the north, fishing and hunting etc." He said, "All we have is the casino."
Our economic development corporation is always looking for investors. Sault Ste Marie, Michigan, wasn't even looking for any and now they have a gold mine -- pardon me, I mean a casino -- and they have them beating down their doors. Their biggest problem is who to let in first.
To allow Sault Ste Marie to have a casino would open the door to total economic recovery -- well, just about. The government would also have a chance to recoup some of its lost tax dollars that our number one industry was able to provide for so long.
Choice of towns for a casino: Let's keep in mind the basic philosophy I know most people live by. You give to those who have not before you give to those who have. That kind of puts Sault Ste Marie, Ontario, at the top of the list. After all, Sudbury has its piece of the gambling action with Sudbury Downs. Besides, that's a billion-dollar industry, not a million-dollar industry. You don't want to mess with that.
Toronto: To quote the recent newspaper, "Let's put three there." You don't have to be a genius to know that they have the largest population base to draw from, but do they need it as much as we do? I think Sault Ste Marie, Michigan, has already proven for us that the money in the multi-million dollar figure is available to us right here, because we both have the same market. Only a bad gambler would put one where the market hasn't been proven.
The race for a casino: There will be a casino here. The question is, who will have that pie? I know the native population will put a casino up, just like the Chippewa in Sault, Michigan, did. The Sault, Michigan, natives have offered to help put one up, organize it. They even want to work with the Canadian government. They told me that. I said, "How are you intimidated by us having a casino?" "We're not. The more people Sault Ste Marie, Ontario, can draw to Sault Ste Marie, the more business we'll have." That was a direct quote from one of the reservation officers who runs the reserve.
How much is the government's cut of the pie on a reserve-run casino? If the government isn't willing to take the gamble, then at least make it legal and designate Sault Ste Marie as a number one proven location for a casino and let private enterprise run with it. In this community, we can't hold off much longer for a decision on what to do with our unskilled labour force and unemployed. We keep sending them back to school and training them for high-tech positions that will never be available in this city.
My summary: We have a proven area where we know casinos work. We have an economically depressed city that needs to be revitalized. We have an opportunity to replace lost tax dollars and put people back to work. Opportunity is knocking. Are you going to answer the door?
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Mr Phillips: I'll start off with your presentation and I'll just follow up with a question that my colleagues asked an earlier presenter. I gather from comments made earlier that somewhere between 20% and 30% of the revenue from this will go to the province and it will take a fair chunk of disposable income out of people's hands. Is there any concern at all that it's money that will not be spent in the other businesses in Sault Ste Marie? Has that been an issue that's been raised?
Ms Kernaghan: I don't think it will really directly affect the fact that it won't be spent -- there will be so much more spent than what is spent now. Anything will make a difference, will help.
Mr Phillips: I'm always curious that if people don't have disposable income now, because we look at retail sales and all those sorts of things, how will they have incremental disposable income? It seems to me this is the place where you will spend your disposable income, here, or you'll spend it on clothes or you'll spend it on something else. Your recommendation is that this is a good place to spend disposable income, in the gaming area.
Ms Kernaghan: I can't say whether or not it's good, but it's good for me. I enjoy it. It's entertainment to me. My husband calls it my diet. If I kept that $40 that I spend over there over here, I'd eat it, and he doesn't like me being fat. But besides that, you make your choices in life. You know, we all sacrifice something somewhere along the line.
Mr Phillips: Yes. I'm trying to figure this one out in my own mind, because I gather we're talking about hundreds of millions of dollars of disposable income going here rather than potentially in other business areas. As you look at this proposal, this is a better place for disposable income to be handled than in a --
Ms Kernaghan: Right.
Mr Phillips: I don't know what the alternatives would be; other tourist attractions, I guess.
Ms Kernaghan: To think that they use us totally to market themselves, and they are willing to admit that, I think tells us something. We are all drawing on the same market. They got people in from Sudbury and from Detroit and all over the place, because I sit with them, I talk to them. They have all walks of life. They have everybody from the poor to the rich, but it's a social gathering.
Casinos seem to upset everybody so bad, and yet who hasn't played cards with somebody, even if you played cribbage? You go to the legion, you go to a cribbage tournament. As soon as you put a dime down, we're gambling again. There's nothing bad about it. I see it not just as a casino and a gambling place; I see it as an entertainment place. In this city, we have no place for my age group to go. We can't afford to bring in entertainment, and I see a casino as being able to do it all.
Mr Phillips: There's been some discussion about the casinos perhaps not having the right to sell alcoholic beverages or to have entertainment, and to have some limitations on the games that can be played. Do you have a view on whether that's a good idea?
Ms Kernaghan: Yes. I think it's a rotten idea, real rotten. If we don't compete with them every step of the way -- as a matter of fact, because I go there so often, I could tell you how to better the place. Really, I could.
The Chair: Can you give us any pointers?
Ms Kernaghan: I could think of at least six different spinoff businesses that I would like to start myself if I had the money.
Mr Phillips: I'll bet you'll be successful at it.
Ms Kernaghan: We've got to compete with them every step of the way. That includes drinking, that includes craps.
Mr Phillips: Is entertainment an important function?
Ms Kernaghan: I think entertainment alleviates that total gambling place issue. You can take your wife out to dinner to a really nice place, have dinner and also go and see the entertainment. If you wanted to go to the casino area, that's your option too, but you don't have to do that terrible thing.
Mr Phillips: The concern that some have is that by permitting a casino to do all of those things, you are cutting off the opportunities for the other businesses in the area, the restaurant businesses, the bar businesses, the entertainment businesses.
Ms Kernaghan: I don't think so. When you have a drawing card like a casino, it's not that big that it can accommodate -- it's a growth industry. Everything grows. I mean, it cannot accommodate the number of people who would be interested in coming here. Let's turn the tables on the United States and tell them, "Thanks, but we'll market our own but we'll also have a casino too."
Mr Kwinter: May I have a minute?
The Chair: Actually, you've used a couple of minutes more than you should have. I'm sorry. Mr Carr.
Mr Carr: Take a little of my time.
Mr Kwinter: As someone who admits to gambling -- and I'm not saying it in a negative way; I mean, you go over and you enjoy it and you say this is your diet -- tell me this: If a casino is established in Sault Ste Marie, Ontario, and the one in Sault Ste Marie, Michigan, continued and the one in Ontario did not have craps, did not allow you to drink, as somebody who lives in Sault Ste Marie, would you frequent the one here or would you go there?
Ms Kernaghan: I would go here because it wouldn't make any difference to me. I don't play craps and I don't drink and it would save me bridge fare.
Mr Kwinter: Yet you say we have to compete.
Ms Kernaghan: Yes, I'm a non-drinker and I don't play craps, but there are a whole lot of people in this city who do, because I see them over there.
Mr Carr: Thank you very much for a good presentation. Just so you know, I think one of the reasons they help sell the people of Windsor is by saying that by not having any liquor in restaurants, people will go out and spend in the community. I think you'll see them being allowed, and I think the parliamentary assistant may be able to clarify, but I think through the regulations they can do that. They can decide tomorrow that they will allow it, so I think they will. But I appreciate your comments and being honest in saying this is what you need to do and if you don't, it will be rotten.
I was interested, on page 3, where you talk about Toronto and you seem to be saying, not in the actual presentation but in the ad lib with the horse racing and so on -- and I have some of the concerns, as Monte did -- that the more we have, the less people will come to the Sault, because the people in Toronto won't if they've got three to come from. Do you think the government should restrict the number and include the Sault so that we can get the economic impact in an area that's had some problems economically, but we shouldn't water it down by putting one in Ottawa and Toronto and --
Ms Kernaghan: Most definitely. You should give to the have-nots before you give to the haves, and Toronto isn't suffering like Sault Ste Marie is. Like I said, with three major industries going down the tubes really fast here and cross-border shopping, I mean, we've got to put something here. We've got to do something.
Mr Carr: That may also help because, as you know if you've been following, one of the big concerns in rural Ontario is the horse racing industry, and in Toronto that could potentially damage Woodbine and so on. That wouldn't be the case here.
Ms Kernaghan: Definitely.
Mr Carr: It's kind of tough with somebody from Niagara Falls here, but what about a situation like Niagara Falls which is in the same boat economically, cross-border too? If you were the government, where would you put them? And the number: How many would be an ideal number and where would you put them in the province?
Ms Kernaghan: Really, I would take the figures from their welfare rolls, their unemployment rolls and how badly industry is suffering in each place, which one is really going to hit bottom first.
Mr Carr: So if we had like a Windsor, which is a border town, and Niagara Falls and the Sault, say, and got rid of the Toronto and Ottawa, that would probably be the best situation for the people in the Sault?
Ms Kernaghan: Right.
Mr Carr: Okay. Good. Just in your own business in gardening --
Ms Kernaghan: I didn't mean to do that.
Mr Carr: No, that's fine. We're going to give you a little bit of publicity here, the gardening services. Hopefully, with the ability you've shown here, I'm sure you're doing very well because obviously you can market things very well.
Having an economy that is thriving is obviously beneficial to you; the more people who are employed, the better.
Ms Kernaghan: Yes, because they buy homes.
Mr Carr: Sure.
Ms Kernaghan: That's right, or they want to sell homes. When the market is good, they want to sell them but they want them to look good first. That's right.
Mr Carr: So you see the spinoff.
Ms Kernaghan: Oh, definitely.
Mr Carr: Industries like yourself, which most people will think were not related, will be spun off?
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Ms Kernaghan: I can think of half a dozen businesses that could start immediately that would bring more people here. You could actually go and get them and bring them here.
Mr Carr: Being, as you say, somebody who is sort of an expert in it, if we set it up and marketed it well -- you said you'd probably stay here because you don't drink and it's probably closer than the bridge -- do you think we would be able to draw some of the Americans who are now presently going to Sault, Michigan?
Ms Kernaghan: Certainly. I talk to them all the time. I'm an ambassador for Sault Ste Marie constantly, and they always ask me what else is available, like: "I'm tired of this place. We were here for three days and we've done this all day and all night. Now where can we go? What can we do?" So then you sell Sault Ste Marie, but then there's only so much you can sell them. There's still more. We have the potential. They have the casino, but we have got the drawing cards.
Mr Carr: We do have so much more to offer, and so what you're saying is, "Just give us the equal footing of the casino and then the rest will take care of itself."
Ms Kernaghan: Right.
Mr Carr: Okay. Thank you very much.
Ms Harrington: Can you stay with us for another --
Ms Kernaghan: Thank you. Oh, I'm sorry.
The Chair: Thought you were done, eh?
Ms Kernaghan: Yes, I did.
Ms Harrington: Caren, thank you very much for coming. Tony tells me you have a very good business and it's an environmentally friendly lawn service?
Ms Kernaghan: Yes.
Ms Harrington: Sounds good to me. I wanted to ask you a bit more about your basic economic issues. You feel that it is going to be a major economic boon for this city?
Ms Kernaghan: Definitely helpful.
Ms Harrington: I've heard this morning from another person that gambling and casinos are financially an unsound way of raising revenue for public or private purposes, so I'd like to say that I realize that casinos do not generate new money; that is, we're not actually producing anything. What it is is a service and it's part of the entertainment industry, the service industry, the tourism industry.
What we are doing is taking the available cash that people had saved up and basically we're looking at tourism, and I feel that's where this is going to be a real boon for this area. As you say, putting things together -- the presenters this morning were talking about that -- enhancing what you already have, I can understand that argument.
What I want you to try to clarify for me is, you've got local people who will be involved and you've got tourists coming from other places. Do you feel that if the local people spend their money in gambling, this will take money away from other businesses here? I think someone previously said that, that this money would be going somewhere else in the economy, and we're putting it into gambling.
Ms Kernaghan: No, I think people still take care of what they have to take care of, but gambling is a different type of thing. It's a real luxury.
Ms Harrington: So you're not worried about it taking away from other areas of the economy locally?
Ms Kernaghan: No, not at all.
Mr Martin: Caren, I'm really interested in the conversation you had with the folks across the river. Did you go further and talk to them at all about what they're doing with the money that they're now making? Where are they investing it? What's happening to it?
Ms Kernaghan: As a matter of fact, I tried to get one gentleman to show up today to be part of this. He was unavailable because the people from Detroit and all the money people are in right now; they are investing. But they donate to charities. They put their students through school. They support Gamblers Anonymous. They keep people out of the casino if those people have asked for help and they have identified a problem. These people keep them out of the casino. They will help them.
They're having a problem right now with the rate that they pay. The people want more, but people always do. But they are putting their money into education and into charitable organizations even though the diocese didn't agree, that these charitable organizations were going to be suffering. Not according to Vegas Kewadin. He was one of the reserve chiefs I was speaking with. They don't directly run the casino, but they were directly involved in getting it there and supervising it all this time. You just ask to be left anonymous, and I do that so that I can always have a source to go to.
Mr Martin: He knew you were coming and was talking to you --
Ms Kernaghan: He knew I was coming here and I asked him, "Are you intimidated at all about Sault, Canada, getting a casino?" He said: "None whatsoever. Please do, because if you don't get it, we're going to help the native population of Sault, Ontario, to get it and we'll make sure they do. The fact is, if we can bring more people to Sault Ste Marie, Ontario, the nature of the beast of tourism is, `We're going to go to another country to visit,' so the more people you bring in the more people we'll have at our casino."
Mr Wayne Lessard (Windsor-Walkerville): Mr Dadamo and myself are both representatives from Windsor where, as you know, the casino initiative is now under way, and of course we're both interested in making sure that it's done right and it becomes successful. I was intrigued by your suggestion that you knew of some other business activities that could complement the casino. I wanted to make sure we weren't missing anything and see if you could give me a few pointers.
Ms Kernaghan: No, they're ones I'm saving for Sault Ste Marie. I'll start them myself.
The Chair: Thank you, Ms Kernaghan, for presenting before the committee. We won't call you back.
MAJOR CONTRACTING ALGOMA LTD
The Chair: Our next presenter is Robert Paciacco, legal counsel for Major Contracting Algoma Ltd.
Mr Robert Paciacco: My name is Bob Paciacco, I'm representing Mr Ruscio, who is sitting to my right. Mr Ruscio is the owner of Major Contracting Algoma Ltd. It's a Sault Ste Marie-based development company with substantial real estate assets in Sault Ste Marie, including several apartment buildings, a major bowling centre and a convention hospitality centre.
Mr Ruscio is presently constructing a nine-hole golf course in the east end of this city with single-family lots abutting the golf course. As well, Major Contracting has acquired a vacant 80,000-square-foot building in downtown Sault Ste Marie. This building was formerly occupied by a local department store and that's the primary focus of our presentation today.
We're not here to reiterate all the things that were said this morning, although we haven't been present. We trust the economic impact and so forth were well discussed by our mayor and previous presenters.
Mr Ruscio's building is situated on Queen Street, the main downtown artery for Sault Ste Marie in an area now known as Queenstown. It is immediately north of the Station Mall, which is a major regional shopping centre, and northwest of the Ontario Lottery Corp, which recently opened in Sault Ste Marie.
A substantial investment has been made in downtown Sault Ste Marie over the past couple of years, in the form of new underground servicing and the restructuring of the streets and sidewalks. Planter boxes, trees and benches etc have been installed along both sides of Queen Street, on interlocking paving-stone sidewalks, in an effort to make this a people place.
The waterfront of Sault Ste Marie has also undergone a major reconstruction, with a boardwalk stretching from the west end of the Station Mall to the civic centre. Work is nearing completion on the Roberta Bondar Park, which houses a marina for visiting boaters and a large amphitheatre for special events, and if any of you have been down there or flew in, you probably saw the large white tent that has recently been completed, covering the amphitheatre. As I've mentioned, the Ontario Lottery Corp building has been recently completed across from this park.
The province of Ontario has contributed millions of dollars to these projects in an effort to revitalize Sault Ste Marie and to promote Sault Ste Marie as a tourist destination. What is missing in all of these proposals is a link to unify Queenstown, the waterfront and Station Mall. It has always been a fundamental planning objective of city council to create such a link. The planning staff reports would probably fill half of this room with all of the studies and so forth that have been done showing the necessity to link all these items. A major casino in Mr Ruscio's building would accomplish this end. Mr Ruscio has initiated discussions with the city, Station Mall and other interested parties to create a series of overhead walkways connecting these various components. This type of development cannot occur without a major attraction such as a casino.
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The location of Mr Ruscio's building is unique. There is no other structure in Queenstown that can accomplish what is being proposed by Mr Ruscio. This building can be retrofitted into a first-class casino almost immediately. The property has already been rezoned to allow a casino as a permitted use.
The policy objectives for casinos in Ontario as outlined by the province were fivefold: (1) job creation; (2) tourism development; (3) community economic development; (4) the start of a viable new industry; and (5) revenue generation.
There was an article on the front page of the Sault Star on this past Friday indicating that in order to maximize revenues three huge casinos should be established in Toronto. There's no reference in there about the other four policy objectives. Does Toronto really need additional economic incentive? Certainly not to the degree required by Sault Ste Marie and northern Ontario.
What else is unique about Sault Ste Marie to distinguish it from other locations? There was some discussion by the previous speaker, but the fact is that there is already in operation a major casino in Sault Ste Marie, Michigan. The people are already here. This doesn't appear to be addressed anywhere in these studies. Sault Ste Marie, Ontario, only needs to provide a facility to attract these tourists to our side of the border. This will not be accomplished with a 10,000-square-foot casino, as proposed in the Coopers and Lybrand report.
If the provincial government is serious about meeting its policy objectives, then I would suggest the province should rethink its situation about Sault Ste Marie. As well as protecting its substantial investment in downtown Sault Ste Marie as I've already outlined, the province has an opportunity to help Sault Ste Marie become a major tourism centre in Ontario. A casino in Sault Ste Marie will meet all five policy objectives set forth by the provincial government.
Mr Ruscio stands ready to implement his plans to create a major casino centre in downtown Sault Ste Marie which will unify Queenstown, the waterfront, Station Mall, Bondar Park and the other matters I've addressed, as well as allowing Sault Ste Marie to compete for tourism dollars on an equal footing with our American neighbours.
Mr Ruscio is present with me, as I've indicated, and either one of us would be pleased to answer any questions the committee would like to address.
Mrs Marland: The name is not the same name that is on here. It is still Major Contracting Algoma Ltd?
Mr Paciacco: Yes.
Mrs Marland: And Mr Ruscio is the principal?
Mr Paciacco: Mr Ruscio is the president and owner of Major Contracting.
Mrs Marland: And your client is the owner of the K-mart or the Woolco building?
Mr Paciacco: It was formerly occupied by Woolco. As a result of economic circumstances in Sault Ste Marie over the years, a couple of years ago Woolco -- it's a large store. It was a centre, a focal point in downtown Sault Ste Marie. The store closed, creating a large vacancy and a big void in downtown Sault Ste Marie.
Mrs Marland: How long has Mr Ruscio owned that building now?
Mr Paciacco: He purchased the building shortly after the Woolco building closed. I guess it closed about one year ago.
Mrs Marland: Are you formerly an applicant for a location? Have you talked to the government about being a proponent for a location?
Mr Paciacco: Yes.
Mrs Marland: I'm interested that you are a proponent and you're here before the committee, because I thought the government was making it a requirement that if you were a proponent you were not to speak to people about it. Am I wrong on that?
Mr Martin: That's for Windsor. There's no project happening here.
Mrs Marland: I think the deputation can answer the question, Mr Martin.
Mr Paciacco: Thank you, Mr Martin, but I was not aware nor have we ever been advised that that was the circumstance. We've never been advised of that.
Mrs Marland: But you've been meeting with ministry officials?
Mr Paciacco: No, it's never gone that far. We've had the property rezoned, but there's been no formal submission to the government.
The Chair: The Chair should just clarify, I hope for Mrs Marland and Mr Paciacco: As I understand it, you've haven't made a formal bid on anything, so in a sense, you haven't violated anything at this point.
Mr Paciacco: In terms of what we've done, we've made an application to the city of Sault Ste Marie for rezoning. That request was processed, went through a rezoning application and the bylaw was approved and so forth, and that's where it sits at this point in time.
Mrs Marland: I just want to advise the Chair that I wasn't suggesting a violation. That's an unfortunate word. I was trying to be clear about where you were, as someone who was interested on behalf of your client to be the host location should a casino go into Sault Ste Marie, Canada.
Mr Paciacco: That's the extent of it. We've been dealing at the local level with the municipality.
Mrs Marland: Obviously, from the support that is now on the record from this morning's deputations on behalf of the municipality, I guess you're very encouraged and excited, Mr Ruscio, about the fact that you do have the municipality supporting you through the elected officials?
Mr Antonio Ruscio: Yes.
Mrs Marland: I don't know if you live in the municipality, but do you have any personal concerns about any adverse impacts of what a casino might bring to Sault Ste Marie, Canada, in terms of some of the things we've asked other deputations about: encouraging gambling addiction and a relative increase in certain types of crime?
Mr Ruscio: I have no guilt for anything. I think the casino would create so many jobs in Sault Ste Marie, it would revitalize the downtown area and would be a hell of a good thing for Sault Ste Marie. I can't see any other things that come to my mind to create a problem or anything like that. It will create jobs.
Mrs Marland: I can understand the need to create jobs in this community. I understand that very well. Has there been a lot of discussion or concern among the people who are involved, whether it's you as an individual or other people who are involved in this proposal, about the fact that it would be a different kind of casino? The point that was raised this morning was that the casino in Sault, Michigan, is operating under an entirely different set of rules than a casino here would be. One of the points that was raised that I wasn't familiar with is that they offer free liquor to their clients. I don't know if that's true; one of the deputations this morning said that was true. But if the rules are different, do you see that as a problem, that people will still just drive over the bridge because there are things in the Sault, Michigan, casino they can do that they're not able to do in an Ontario casino?
Mr Paciacco: Mr Ruscio, as I indicated, does have a convention and hospitality centre in Sault Ste Marie; he is in the tourist business now. This is still northern Ontario and this is still Canada. It's all very exciting for tourists, particularly Americans, if we have something to attract them, especially if it is different. I think that would enhance the situation.
If there was an opportunity to gamble on both sides of the border, I think we'd have a unique opportunity. Those people are here. They're just not coming to our side of the border. If we have something to bring those tourists over here, and we're making efforts in other areas, as I say, with the Roberta Bondar Park and so forth to provide attractions, if we had an opportunity to compete with a casino, even under different rules -- and incidentally, I'm not aware that they serve free liquor, but it's an interesting comment; I've never received a free drink there. In any event, even if the rules are different, I think the opportunity to take a journey into northern Michigan and into northern Ontario and to gamble on both sides of the border is going to be an irresistible temptation for tourists and we will do very, very well with that type of situation.
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Mrs Marland: Do you think that if it isn't competitive because it's a different kind of facility -- the whole idea behind casinos in Ontario obviously is that the casino will raise money for the Bob Rae government. That's what this bill is about; it's about money going to the government from the casino itself.
Mr Paciacco: Well, that's not my understanding of it. I thought the purpose was fivefold, the fifth one of which was the generation of revenue. I didn't write the guidelines and I don't know that they were listed in order of priority, but it struck me that they were and it strikes me that the policy objectives of the Ontario government were fivefold, the fifth one being revenue generation.
Mrs Marland: I'm talking about the money that comes across the counters in the casino itself. Something like 20% off the top of the gross is to go into the general revenue fund of the provincial government; plus, I suppose, it'll get a licensing fee as well.
Do you have concerns about the fact that this will be something that the government is going to have control of in terms of the money it takes out of it? Are you looking for the financial generation in the Sault to be around the people who are going to be employed in those jobs who are presently not employed and by spinoffs into other facilities in the city like restaurants and hotels? Can you see that as a balance of --
Mr Paciacco: I think that's the key factor. If the casino never made a penny, I think the spinoffs from it would far outweigh whatever possible money can be made by the casino operation itself. Certainly the people running the casino are going to want to make money, but I think Mr Ruscio filling his convention centre, his hotel, his restaurants and so forth is a big boon. I work downtown in Sault Ste Marie, and have so all my working life. To have people come back downtown and to have some excitement and to see people walking up and down this beautiful, brand-new boardwalk we have and utilizing the facilities down there -- I don't know how you put a pricetag on that.
Mrs Marland: I saw the beautiful boardwalk last night. I hadn't been in this town for three or four years, and I agree that there are facilities here that need to be enhanced by additional use. I do see the city evolving and it's changed a tremendous amount, and I think a lot of that credit must go to the local business people like Mr Ruscio and obviously the municipal council. I congratulate them for the improvements in this city also.
Mr Martin: Thanks for coming before the committee. I certainly appreciate some of your comments and your support for this initiative. I sometimes find myself, as I sit here, wondering if I've got this picture wrong, because so often we as New Democrats sit defending the business people who come forward as the folks across the table try to tell us that this isn't a good opportunity or that there's something wrong with it, and that's interesting.
Mrs Marland: Did I say that?
Mr Martin: I hope what's happening is that the business community is beginning to realize that we do support business, particularly businesses such as yours, and that we want to enhance the opportunity for you to do business in Ontario, and that's what this is all about.
My question is re the legislation itself, the enabling legislation. Have you had a chance to have a look at it? In what you have put together by way of proposal, being the astute businessman that Mr Ruscio is and getting a head start on others, is there anything in there that you see that would be detrimental in any way to you being able to take advantage of this opportunity?
Mr Paciacco: I have to be quite honest with you, Mr Martin. We haven't had an opportunity to analyze this bill in the kind of detail I think you're asking us, but just in general terms, as I've said, I don't think there can be anything that detrimental. If we have a casino operation in Sault Ste Marie, even if the casino never made a dime for the casino and the money was all paid to the government, the extra benefits to be generated by having all the people downtown are quite sufficient. I think that's been our primary focus.
As to the nitty-gritty of the legislation, I guess it would be our expectation that it's going to work. If there are some snags, I'm sure they'd be worked out over a period of time and it would all come to pass. As long as we get the thing built, the people will come. And this will work, no doubt about it.
Mr Martin: Just a little aside from that: Do you see it as absolutely appropriate that the Ontario government would in fact spend money on things like the waterfront because it enhances the tourism potential of this area?
Mr Paciacco: I think we have an absolutely wonderful opportunity, unique from any situation in Ontario. I did go to school in Windsor. I got my law degree in Windsor, so I'm pretty familiar with that city. But in Sault Ste Marie, because of the circumstances here -- we have an existing casino that is thriving. It's a very large operation. People are coming here from all over Michigan. We have an opportunity to exploit that situation that's been built by somebody else if we can just get off the ground.
I think timing is critical. Mr Ruscio's ready to go. We can react immediately. We can have a casino up and running before the shovels hit the ground in Windsor, with no disrespect to Windsor; they're under way. But certainly before anything we can have that building up and running and renovated, and it's in an ideal location. We can have it all done and ready to go almost immediately. I think that's a key point that has been overlooked.
Mr Martin: So you'd have no difficulty then with the Bob Rae socialist government taking the money that's generated through revenues and reinvesting them in waterfront and other infrastructure types of things?
Mrs Marland: I've trained him. It's taken me three years for him to identify his government.
Mr Martin: I had to say socialist, eh? People forget these things.
Mr Paciacco: We have no problem. We're not trying to take a political side on any of this, whichever government chooses to do this. We're pretty self-centred and pretty selfish, I guess, here today. We're looking at Sault Ste Marie. We both make our home here. I was born and raised here. We're pretty selfish, I guess. We're looking at this as Sault Ste Marie, but in a broader sense I think for the province.
We have a wonderful situation up here. All the money that the province has invested in Sault Ste Marie -- as Mrs Marland said, they've done a marvellous job. City council's done a marvellous job. We've got a wonderful opportunity here.
Ms Harrington: From Tony Martin.
Mr Paciacco: And from Tony Martin, yes.
But it's like, you know, we're this close; we just need that extra push. There's something missing, because we're that close. We have all the infrastructure; we have everything there. We have that bridge there, and it's like those millions of tourists that stop in Sault, Michigan, are right there now, if we can only bring -- I don't know the numbers, but there were statistics that I'm sure you're familiar with, Mr Martin. If we even brought 10% of those people over here, we've got a thriving community.
We've got a marvellous ski facility here that is just waiting to be expanded and so forth. We've got things that Toronto and other centres don't have. We've got northern Ontario. Nobody else has that, just us. We're right there. Those tourists are right there at that bridge and we need that one thing to draw them the rest of the way. Right now the best thing we can see that can happen immediately is that casino. To me it would be a shame if we don't act on it, like, right now.
Mr Lessard: I just wanted to tell you how much of a great law school I think the University of Windsor has as well.
Mr Paciacco: We started it.
Mr Lessard: Some of the people who are produced from it, their reputation is known throughout the province. It's good to see that influence even in Sault Ste Marie.
Mr Paciacco: I see you had a number of them on your study from Windsor. You had Dr Ianni and a few others. He's from Sault Ste Marie, by the way.
Mr Sutherland: Mr Lessard himself.
Mr Lessard: Mr Ruscio, I understand from your submission you have a location that you'd like to see a casino established in, and I wonder whether that means you're interested in actually running a casino as well or whether you're just interested in having that real estate used for that purpose.
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Mr Ruscio: It's the real estate use for it, and then I'm sure that we'd get a professional to manage the casino. I'm sure that the government is interested in that.
Mr Lessard: I wanted to ask you whether you had an opportunity to look at the request for proposals that was sent out with respect to the Windsor project and whether you had any comments about any of the specifics that are contained in there.
Mr Paciacco: We haven't seen that.
Mr Lessard: One of the things that is within there is some protection or possible benefit for restaurants and hotels within the city of Windsor. One of the requirements is that the restaurants that are within the casino are fairly small and that the hotel occupancy within the city had to be 75% before a hotel could actually be built on the casino site. I wondered whether you had any feelings about the importance of restaurants and hotel rooms connected with or within the casino itself.
Mr Paciacco: He wants to know how that will affect your restaurants and your hotels.
Mr Ruscio: In the beginning?
Mr Paciacco: If there's a restaurant and a hotel built in the casino.
Mr Ruscio: That does not affect us at all.
Mr Paciacco: You're not concerned?
Mr Ruscio: No.
Mr Lessard: You don't think that would be a problem with having a successful casino then.
Mr Ruscio: I think we should have a restaurant in the casino. The people who gamble or whatever like to stay there for a while and then they go other places. As a matter of fact, there should be a hotel also in the casino, as far as I'm concerned, talking about Windsor now. I think it's a good thing to have.
Mr Paciacco: What's the occupancy of your hotel?
Mr Ruscio: Right now?
Mr Paciacco: No, all year round.
Mr Ruscio: About 45%, 50%.
Mrs Marland: Mr Chair, I just want to correct on the record something that Mr Martin said, because this is the first day that I've had the opportunity to sit on this committee hearing for Bill 8. You said that "those people opposite" are speaking against a casino in Sault Ste Marie. I have asked a lot of questions this morning, and some of the questions have been devil's advocate questions like, "Give me an answer to Mr Sutherland's point about churches and bingos or other forms of gambling." I have not taken a position one way or the other on a casino in Sault Ste Marie, Canada, and I want to make that very clear, that all of my questions are based on the fact that I need to have answers to those questions, and I have that opportunity as a member of this committee today.
Mr Kwinter: I enjoyed your presentation extolling the virtues of northern Ontario. It would be nice if Gerry Caplan, the spokesperson for the NDP, had the same feeling.
The interesting thing about your presentation is that if you look at the request for proposals for Windsor, the city has determined the site, both the temporary interim site and the permanent site, and they are now calling for proposals from operators. These operators are going to build the facility, they're going to run the facility and they're going to operate it on behalf of the government. There are various proposals as to how the government will participate and the options the government has and the options the proponent has. To my knowledge, that is the only framework that is in place.
So notwithstanding that the municipality may have determined that this is a great place to have a casino and it may have designated and rezoned it, it would seem to me there would have to be exactly the same kind of proposal call. So just because you happen to own the property, you don't say: "We're up and ready to go. Just give us the okay and we'll build it for you." The people who have expressed interest in Windsor, whether it be Canadian American operators or operators from anywhere else in the world, would look at it and then would make a proposal based on the government criteria as to how this thing was going to work.
My question to you is, how is that going to impact on your particular situation? You are here representing your client on a specific property, with a specific proposal. How does that fit into the format that has been adopted to date? It may change as a result of their interim casino and say, "This isn't working properly and we have to come up with a new structure," but how does that fit in with the only thing we have to compare now, and that's a request for a proposal for the city of Windsor?
Mr Paciacco: Well, I would suppose if that request for a proposal came out, a proposal, however structured, for Mr Ruscio's building would be successful. Now, if it isn't in the proposal, if it was a proposal called to build a casino from scratch on the waterfront in one of the vacant pieces of land, then so be it. Certainly I guess we're speaking directly about our building, but as I've indicated, Mr Ruscio also has substantial holdings in Sault Ste Marie in the tourism-related business.
The important thing is to get a casino built. However, as we've said, to react immediately, if that were possible and the proposal were structured that way, we can act immediately.
It depends, as you've said, how the proposal call came out. If they follow the Windsor guideline, if timing was a crucial element, then I suppose we might have a lead. If the proposal defined the limits to be something in the Queenstown area to provide a link to the areas, as has been expounded by city council as a planning criterion, not specifically for casinos but generally what they want as something to unify the downtown area, then again I guess we'd have a head start. It depends how the proposal call comes forward. So it's a difficult question to answer.
Mr Kwinter: There's another aspect to it. The minister has been quite emphatic in saying that there is no plan to expand casinos into Ontario other than this one pilot project and they're going to watch it very carefully and they will then decide as to what the next step will be.
The interim casino, certainly as contemplated, will run at least two years. It may run longer, depending on how long it takes to develop the permanent casino. How do you, as a proponent or a resident of Sault Ste Marie, react to that, that we're talking about, it seemed to me, a minimum of two years plus?
Mr Paciacco: We would hope that through the efforts of our mayor, at least in my understanding, his lobbying efforts and where he's going from is to have the government change that policy and to make a decision immediately on Sault Ste Marie. I guess the rest of the municipalities, I don't know what their position is, but certainly it's my understanding that the lobbying efforts at this time would be to get the government to change that policy and get something going in Sault Ste Marie immediately.
Mr Phillips: I assume you've kind of looked at other models around North America on casinos. It looks like there's a range of possibilities for Sault Ste Marie, from a potentially comparatively small casino, 10,000 square feet, up to something substantially larger. My understanding is that right now it's contemplated there would not be alcohol sold in the facility or entertainment. Have you a view on the model you think would be right and successful?
Mr Paciacco: Are you asking my personal opinion?
Mr Phillips: I'm asking your opinion. You can speak as the lawyer for your client or --
Mr Paciacco: We've discussed various matters over the past year. Something is better than nothing, but if we were able to compete on an equal footing, with entertainment and liquor and so forth, I think that would be the preference, if Mr Ruscio had an opportunity to do what he wanted. But that's not to say that if those things aren't present, we couldn't make a success of it. I don't know if that answers your question.
Mr Phillips: Earlier in your presentation you were saying we need to have something unique and different to drag them across the bridge. If the competitor has all of these other things, what would be the uniqueness in a small facility without alcohol, entertainment or --
Mr Paciacco: As I've said, I don't think that will work. A 10,000-square-foot facility isn't going to do anything in the nature -- we're talking about Sault Ste Marie. A 10,000-square-foot casino will benefit the location that it's at. For instance, if it's in this hotel or if it's in Mr Ruscio's hotel, you'll have a 10,000-square-foot casino that will benefit that location and perhaps a couple of the restaurants in the area, but it's not going to provide the drawing card that a major casino in downtown Sault Ste Marie is going to provide.
Again, if we're going to get nothing, we'd rather have a 10,000-square-foot casino somewhere because at least some business is going to benefit, but the bottom line is we'd like to have -- and I don't know what the magic in 60,000 square feet is either. I think the one in Sault, Michigan, is about 75,000 square feet and still growing, so I don't know what these guidelines are.
The Chair: Mr Paciacco and Mr Ruscio, thank you for presenting before the committee this afternoon.
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ELIZABETH RAJNOVICH
The Chair: Elizabeth Rajnovich, you have 30 minutes to make your presentation and field questions.
Ms Elizabeth Rajnovich: Good afternoon. My name is Elizabeth Rajnovich and I have a been a resident of Sault Ste Marie for 22 years. I must inform you that I am here today as a private citizen of this community and my words and opinions expressed do not necessarily reflect those of my employer. Some people may know who I work for.
My main point today is to let you know that almost everyone I worked with in my five years as a roulette dealer in London, England, and in Athens, Greece, were good people earning an honest living in an exciting environment somewhat different from the normal 9 to 5 position.
I am totally in favour of a casino being approved for this community. My words today from personal experience, even though gained over 22 years ago, I believe could still be valid today. My position as a roulette dealer was the most exciting job I have ever had, and I would probably still be in that field but for two reasons. First, I met my husband. And the second reason: If former prime minister Pierre Trudeau had been a futurist and had seriously considered my request to legalize gaming across Canada in 1972, I would still be doing that work.
I realize some people believe gaming employees are dishonest people who are sometimes in cahoots with racketeers. I hope my presence here today dispels that myth. In my five years in the gaming industry, of the 400 to 500 people that I worked with, only three turned out to be dishonest. These three were caught, were charged and were imprisoned.
I considered my job in the gaming industry a profession and was very proud to have had the experience and opportunity to meet many interesting people from all walks of life, including sports celebrities, big screen stars and even princes, and, most important, to watch them interact with the other players at the tables.
Gaming takes place in many countries of the world. It is entertainment for the wealthy, and can be just as exciting for the not-so-wealthy because even watching can be fun.
Casinos offer a very large variety of positions such as managers, dealers, pit bosses, cashiers, cleaning and cloakroom staff, chefs and kitchen staff, bartenders, waiters, waitresses, security, secretaries, payroll clerks -- the list is endless, and every one of these positions could be filled by members of this community. What a boost to our economy.
In approximately 1968, gaming in Britain became government- regulated. Some casinos closed and others relocated as regulation dictated what cities and areas of cities were legal for operation. Hours of operation were also regulated and people seeking positions directly involved in casino operations were required to have a police licence. Approval or disapproval of this licence was after a rigorous screening process by the police department. Entry into a casino in England was by membership only. Visitors were accepted upon presentation of a valid out-of-country passport and management had the right to refuse entry to any non-member.
Training is important in almost all we do in the workforce, and gaming is no exception. But croupier training not only involves learning to deal cards or spin the wheel, but also good concentration, math, and to some degree behavioural science. Being aware of potential problems with cheating clients is an art, and a well-trained dealer has the skills to prevent problems from arising.
I understand schools are popping up in southern Ontario. In my opinion, they teach only the game. It is the employer who provides continuous training that will provide a high calibre of employees.
As dealing requires considerable concentration, breaks were frequent. We worked half an hour on and half an hour off, and our shifts were usually eight hours in length. As revenues generated were considerable, all casino employees earned above-average salaries.
Regulation by the British government saw the introduction of a gaming table tax. These taxes, which I believe were quite hefty, were paid directly to the department of revenue. Players were not taxed on their winnings. Regulation is, in my opinion, a good thing for all parties involved, but I strongly suggest ownership of casinos should be left totally to the private sector.
To summarize, I have seven points that I would like to make:
(1) Most people like to gamble.
(2) Gaming does not necessarily mean crime.
(3) Employees could be honest, hardworking members of this community.
(4) Tax revenues generated could reduce the deficit.
(5) Regulation in some form is acceptable.
(6) Private enterprise is a must.
(7) Time is of the essence.
It's taken us 22 years to get this far. I thank you for this opportunity and hope you, the panel, are all futurists who realize that gaming is just like any other business: It provides a service, it creates employment, and it generates taxes for the government.
Ladies and gentlemen, thank you very much.
Mr Martin: Thanks for coming forward. It's great. This is the first time we've had a presentation of this sort in our three weeks, and it provides us with an excellent opportunity, I think, to ask some really pertinent questions that relate to some of what we've been discussing over the last couple of weeks: the issue of what kind of employment and, actually, what kind of people frequent casinos.
There's this sort of image out there that it's the poor who are flocking in in great hordes and spending all their welfare money and this kind of thing. There's also a sense I get that some people have a perception of people who work in casinos as, I guess, similar to the folks you see running the carnivals that come to town, who tend to be probably in most instances very hardworking people but perhaps not as trained with the kind of training that you've just mentioned.
What would be, in your mind, the minimal entry qualification for this kind of work? What kind of person in this community could look forward to working in this kind of an operation?
Ms Rajnovich: I think that almost anyone in this community could find a position. I, myself -- I have to tell you this was a long time ago -- was working in an office. It was not the kind of work that I enjoyed. I preferred a little more excitement, and casinos did offer a lot of excitement for me. I was very fortunate in that the company I applied to is a very well-known company in Britain. They actually do all their training in-house, so it means that from the day you walk in there, there are members of the staff who do the training.
For myself, because I am strictly a roulette dealer, a lot of the payouts etc that you have are basically memory, learning the bets that are placed on the table, learning how to visualize what certain payouts are. I think we have a lot of people out there who can do that.
I still believe the way that the British government went, with a police licence, was important. It does allow people who are honest and hardworking and who are there strictly to earn a salary, to keep their families -- it actually would keep away the people who were somewhat dubious by approval or disapproval of the police licence.
You don't need to be a rocket scientist.
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Mr Martin: The other question I would have as well for you, having had the experience that you had, is this question of it being a tax on the poor and these places being inundated by folks on social assistance spending their cheques. Could you perhaps expand a bit on that?
Ms Rajnovich: I can only provide you with my own personal experience. The company that I worked for in Britain had a number of clubs across London, and I did have the opportunity to work at most of them, from the less exclusive to the most exclusive, where there was a variation in the clientele -- only financially.
I believe most people are fully aware of how much they can afford to gamble and how much they can't afford to gamble. There's always the exception of somebody who totally loses control, but I think that most people would not just take their salary and just totally destroy it in a gambling club.
My personal opinion is that in this community, I doubt very much if we would get members of this community gambling in a club. I truly believe that you don't want people who are working in the casino to know how much you're losing, how much you're winning etc. I really don't believe that we will get a lot of people from this community here.
Mr Martin: It's interesting. I know all kinds of people from this community, friends of mine who go across the river, who go to Vegas on a regular basis as a vacation option, entertainment, and they're people that I sit beside in church on Sunday, people who coach the teams that my kids play ball on and all that kind of thing. This seamy underworld kind of picture that sometimes is painted of this kind of activity -- it sometimes boggles the mind to try to put it all together.
Ms Rajnovich: Well, probably back in the days of Bugsy Siegel and Al Capone, that did occur. I can't speak for Las Vegas. I do go there but I don't know any of the owners. But I believe that in Britain, gambling was a very honest business, and in the five years of the different clubs that I worked in, as I say, the only crime that I ever encountered were three employees who were cheating on the company. Crime just doesn't appear to be a factor.
Mr Sutherland: You talked about it being an industry, and we've heard from some of the other presenters. Certainly the horse racing industry has talked about theirs being an industry. The people who run charitable gaming operations have talked about theirs being an industry. But somehow, many of them have portrayed casino gambling as a less than legitimate type of activity, and yet you described it as an industry. How do you respond to those people who say that somehow a casino is not a legitimate type of economic activity or industry for people to be involved in or communities to be involved in?
Ms Rajnovich: I would honestly say that if the people are saying that, then they obviously have not been inside and totally taken a look at what goes on there. It's an industry; it creates employment for hundreds of people. It generates revenues not only for the owners but also, if the Ontario government was to do the same by imposing a table tax, for the government. I just think it's naïveté on people's part who are totally unwilling to be futuristic.
Mr Lessard: How long has England had casinos?
Ms Rajnovich: Years. I really could not say.
Mr Lessard: Did they have dice games?
Ms Rajnovich: The games that were dealt in the casino that I worked in were roulette, blackjack, dice, chemin de fer, baccarat. Slot machines were not a big item in England at the time. Please remember, I'm going back 22 years. There were maybe 10 slot machines at the most. The clubs that I worked in had an average of 60 to 70 tables per casino and, as I say, slot machines were not a big item.
Mr Kwinter: I don't think anybody I have heard has suggested that casinos are not an industry. It's a huge industry and I think everybody recognizes that.
I am curious, though, about your experience in England in that I have been to several clubs in London -- as I say, I certainly haven't seen all of them, but I've been to several -- and they're certainly different from the casinos in Las Vegas. Usually they're in a hotel. They're usually, just by the very nature of the hotels they are in, self-limiting in that you wouldn't get in the door, you wouldn't get past the doorman, unless he felt you were somebody they wanted in their hotel. Is that an accurate representation?
Ms Rajnovich: I'm speaking from 22 years ago, but as I mentioned in my presentation, you had to be a member to get into a gaming club in Britain; a visitor could come in under a passport. But by providing membership to people of the community, it allows the owners of the casino to, if they want to, do a little bit of investigation into the background of people who they possibly think have some unsavoury characteristics.
Mr Kwinter: That was the point I was going to make. It is a membership club --
Ms Rajnovich: It's membership only.
Mr Kwinter: -- and if you had a foreign passport and if they thought they'd like to have you, they'll let you in.
Ms Rajnovich: Yes.
Mr Kwinter: I've also been in them and, as you say, they might have 30, 40 tables, three or four roulette wheels, lots of blackjack tables, baccarat, chemin de fer, that kind of thing, and no slot machines. So your observations are absolutely accurate.
As you say, I don't think anybody, even in the casinos that are contemplated here, is suggesting that the employees would be thieves. You're going to get thieves in every line of work, including banks, where people abscond with money. But the situation is that there is the ancillary crime and there are the organized crime aspects of it that this committee has been spending a lot of its time on. I'd really like to get your experience as to -- you were a roulette dealer -- how that relates in the environment that you were in to the Las Vegas type of casino that we are talking about.
I'm looking forward to visiting Sault Ste Marie, Michigan, to see the kind of casino they have there, but certainly in the call for proposal you're talking about a 75,000-square-foot casino. It's not as big as some of the ones that you have down in Las Vegas that are 150,000 or 250,000 square feet, but that's still a substantial casino. It's a big operation and for that to work, they're going to have literally thousands of slot machines. As long as you meet the dress code and as long as you are not apparently going to be a problem, you're not only going to be allowed in, you're going to be encouraged to come in. That is where some of the concerns are and I think it's important that everyone understand that the government has made a decision about casinos. They've said it, they announced it, it's going ahead.
Our concern, certainly from our caucus, is not to fight the battle as to whether or not there are going to be casinos, because they've made that decision, they've got the numbers in the House, they will have it happen. Our concern is that in the zeal to have it happen, they don't just totally disregard some of the major concerns that are out there. That is what we're trying to do: make sure this legislation addresses those particular concerns. I think it's important that we have someone who has had the experience you've had, but I would like to relate it more to the kind of casino that is being contemplated by the government as opposed to the what I call a rather genteel club in London where, as I say, most people who go in are usually wearing black tie. It's a very civilized kind of thing. You're a member. You have to be a referral by somebody, and it's a totally different kind of experience.
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Ms Rajnovich: I may be kind of in opposition to some of the people who are here, but my personal feeling is that this group here could somehow create some kind of regulation in operation of casinos. Many things have taken place over the years and I know now there are a lot of things that you can and can't do to people. You can't discriminate, but I think somehow in order to keep casinos respectable and to dispel the image that there are racketeer types of services, I believe the government has a role in maintaining that we keep a very professional image to the public. I don't know if that answers your question.
Mr Carr: It's nice to have an expert who knows the industry. You've certainly been around it for a while.
There has been some feeling, and it was mentioned by Mr Kwinter, about Windsor not having liquor, and they're going to restrict the number of restaurants. My fear is that what's going to happen is that the Americans who come across, the first time they find out they can't get liquor, the restaurant is crowded and they can't eat, and when they're told they have to go out to eat, it's going to discourage them.
Some of the presenters who have come here have said basically -- I don't want to put words in their mouths -- "If you're going to do it, do it well." They've used words like "compete on an equal footing." When they do it here in the Sault and if you were going to do it in Windsor, do you think they should do it in terms of having liquor, full service and competing with the Americans, or should they try and do it the way they're anticipating to try and keep everybody happy?
Ms Rajnovich: I don't believe that liquor plays a very big part in people's gambling. I gamble myself and I have a drink or two. I think most people are responsible. Obviously, there are the junket types who come in in big groups and try to be macho and guzzle down drinks, but I never saw that when I worked in Athens and I never saw that when I worked in England. I don't think people are like that. I'm totally in favour of having alcohol served. Management is responsible.
Mr Carr: They don't want people in there who are drunk disturbing everybody else.
Ms Rajnovich: Common sense; use your judgement. A waitress can see if a guy's had a few too many.
Mr Carr: The big concern, of course, is that Michigan's drinking age being higher, they'll get a lot of the kids coming over if it's 19.
I was interested in your experience. The government is saying to us -- and this might be of interest to the people in the Sault in terms of getting the jobs they anticipate; this was when the minister was in, and I asked this of the minister and she was also saying she hoped they would eventually be unionized -- that the average salary would be $25,000 to $30,000. Do you think it would be that?
Ms Rajnovich: That's totally inadequate.
Mr Carr: That's too low?
Ms Rajnovich: Far too low. I'm going back now to around the late 1960s, 1970s. At the time I was earning £50 a week, which was way, way above the normal. The normal salary was usually between £8 and £10 a week and I was making £50 a week.
Mrs Marland: Was that in tips or salary?
Ms Rajnovich: No, that's strictly salary. When you're generating the kinds of revenue that come out of a casino, every employee in the casino should be paid.
Mr Carr: You know that the reason they might not be able to do that with this casino, of course, is the government is taking a bigger percentage of it than it would in Britain.
Ms Rajnovich: But what I'm saying, hopefully, is that you could relay to the government that taking a big whack off the top is not realistic; that, perhaps the same as Britain, some kind of table tax could be applied. Just to give you an example, I believe in Britain, the tax was £10,000 per table per month, and £10,000 per table per month at over 60 tables is a hell of a lot of money.
Mr Carr: Actually, the people here, if they think it's even going to be more money than that, would definitely want the jobs there.
Ms Rajnovich: I still believe the private citizen who has investment in the casino should also make a profit.
Mr Carr: Yes, because that's one of the concerns. What happens when you look at it is that a lot of the bidders are saying the reason they're doing Windsor is so they can get the access but, from a financial standpoint, it isn't going to be very advantageous to them. Maybe we can get an idea and you can probably piece the figures together by average salary and how much the government is going to take and so on. We know in Windsor they say there will be 12,000 a day coming in.
What has been the history? How much would you say the average person would lose in a casino when they come? Do they spend $200, $2,000? I guess there's a big range, so what do you anticipate here?
Ms Rajnovich: For me, it varied on the type of casino. Even though it was the same company, for the location that I was at --
Mr Carr: What do you see here? You know the type it's going to be. What do you think --
Ms Rajnovich: Again, it depends on who comes to the community. Most people usually come in and $100 is probably what they would spend. But in the past we've had people who have either won £200,000, £300,000 or lost £200,000 and £300,000 in one night. It depends on the financial stability of the person.
Mr Carr: Right. I agree with you on one thing, that the private sector needs to be involved in doing it. The way it is now, of course, you probably know it's a difficult situation. The government's sort of involved but it's not, and yet there is representation from OPSEU where they want it to be totally government-run. I quite frankly think that the experts who are coming and putting in bids know better what needs to be done.
The way it's being set up now with the corporation running it and the management and so on, do you think this is the best way to do it or should the government just say, "We will give you the licence"? The same thing with the bid: Anybody who comes in will be able to run it and do what they want. Which is best for the citizen?
Ms Rajnovich: I believe in private enterprise and I believe the tax-per-table system is best.
Mr Carr: I'll defer to Mrs Marland.
Mrs Marland: What would you think as a resident of Ontario if the operation -- obviously, right now we're looking at the casino bill being sponsored by the Minister of Consumer and Commercial Relations. Apart from what you referred to about police licensing of employees -- I'm not talking about establishing another bureaucracy at Queen's Park because we can't afford any more. What would you feel about another ministry being the supervisor or the overseer of the operation, so that if Consumer and Commercial Relations licensed casinos, in fact it was a separate ministry that would check on the operation of the casino, so it would be removed and more objective?
Ms Rajnovich: That did occur in England. There were people who did work for a particular governmental department who would come and inspect the equipment and check the licences of the employees and generally oversee the operation, whether it was once a week or once a month or once every six months, but that was done.
Mrs Marland: That wasn't one government department covering itself in its operation; it was totally objective supervision?
Ms Rajnovich: Yes.
The Chair: Thank you, Ms Rajnovich, for giving us a very interesting presentation this afternoon.
Ms Rajnovich: If I could just make one more comment that I would like the members to know: When I worked in Greece, entry into the casino was strictly by membership. At the time, the country was under a military regime and membership could only be obtained at a certain salary level.
Mrs Marland: Would you advocate that?
Ms Rajnovich: No. I just thought you'd like to know. Thank you very much for your time.
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RAMADA INN AND CONVENTION CENTRE
The Chair: Tony Gallagher, general manager of the Ramada Inn and Convention Centre, welcome. You have 30 minutes for your presentation and questions.
Mr Tony Gallagher: You won't have a problem if I don't use the whole 30 minutes?
The Chair: Absolutely not.
Mr Gallagher: Thank you for this opportunity to address your committee. So far, I've spent a fair amount of time talking with a lot of fellow residents of this community, with a number of my employees and with other business people. It seems obvious to me so far that the majority of this community is in support of the development of a casino here in our community.
Some people feel that we are experiencing negative aspects from our close proximity to Sault, Michigan, and in some ways this is very true. Cross-border shopping is a reality that we are having to deal with. We have lost a number of retail stores and there are other things we have lost here in our community due to it. We don't really seem able to deal with the cross-border shopping issue, and that's another area altogether, but the cross-border gaming issue seems like one we have an opportunity to deal with.
I know of tours that are coming from other parts of Ontario, crossing through Sault, Canada, and entering Sault, Michigan, spending their time, spending their money and gambling there. We have some opportunities possibly to keep them here on our side. I have personal experience of customers who stand in our hotel and ask where the casino is because they think the possibility is that it's already here on our side.
To some degree, I found a lot of people looking at Sault, Michigan, with negative eyes in regard to its gaming. I feel we have a great opportunity with that setting we have right now. For a long time Sault, Michigan, marketed itself as an access to us to their fellow people in Michigan. We here are now seeing them market themselves. We are no longer giving them the overflow of our occupancy; we are now taking the overflow from theirs. They are increasing their room nights, they are increasing the number of hotel rooms they have, their occupancy is higher now, their average daily rate is higher than our own, yet we continue to sit and just take the scraps that are coming from the other side now.
I think we should have the opportunity to put a casino here and then market and be able to spin off from all the work they've already done. This is a good opportunity, in that there's already people coming to this area to take part in casino gaming. I feel this gives us the opportunity to create employment for our citizens. We have about 1,300 rooms here in our community; they have about the same now. They have approximately 14,500 in their population; we have about 81,000. There do seem to be some inadequacies there in regard to the number of accommodations available.
There are a couple of things I'd like to address. To me, the two issues we have are the possibility of the development of the economy here locally and also, of course, the general cash flow for the province.
The government can get cash flow from a number of areas when it puts its casinos in different places, but in our community it has a great opportunity to do something for the development of our city. We're experiencing an unemployment rate of somewhere around 16%, and we have one of the highest welfare percentages now; I think it's somewhere around 10%. There is nothing we can do as citizens in our province that I think is greater than giving people the dignity of a job. I think we have a great opportunity to do that.
I really have not gone into a lot of other detail. I just feel that Sault Ste Marie does have the opportunity to be a very good location for a casino. It has the opportunities here because it can spin off from our counterparts in Sault, Michigan. We can work together. We can create a good environment.
Mr McClelland: I don't know if you said you're losing the war but certainly that you're engaged in a battle with respect to cross-border shopping and find it difficult to find some remedy. I would suggest, and correct me if I'm wrong, that gaming is another draw, another product. If I run a men's clothing store in Sault, Michigan, and my friend Mr Carr runs one here, we're competitors. In that context, a casino here and a casino stateside are competitors, so what do we need to do to get the advantage to win that cross-border war?
Mr Gallagher: Do you mean in the gaming field?
Mr McClelland: Yes.
Mr Gallagher: In terms of the restrictions the present government is looking at on its proposals?
Mr McClelland: Well, whatever. It was interesting that you said, if I heard you correctly -- I thought I heard you saying, and correct me if I'm wrong -- that we're having a difficult time and we're not really winning the battle on cross-border shopping.
Mr Gallagher: Certain aspects come into the cross-border shopping issue that we can't deal with today, I would presume. Let's face it.
Mr McClelland: But in that context a casino on either side is in effect a cross-border competition. How do you see us measuring head to head with that and winning at least a reasonable market share?
Mr Gallagher: First off, a 10,000-square-foot casino I don't think would be large enough. I feel it just doesn't have the viability and would need to be greater in size. Personally, I feel that the availability of entertainment, food and possibly drink would play a big part. People are looking for a total experience. Even from the tourist aspect today, people are looking more and more for packaging and less and less for themselves coming out and individually purchasing different features as they go along through their trip. If you have to have gaming in one area and no access to the other parts that fit into it, it could cause a problem. Is that the kind of thing you were looking for?
Mr McClelland: I guess that helps. One of the issues that remains is an issue that Mr Kwinter has often raised, that we still have the element of competition and we're still going to have to beat the competition at the game, so to speak, no pun intended.
Mr Gallagher: But if we're not allowed to get into the game --
Mr McClelland: Just as you have to beat the competition if you're marketing whatever; pick your product. You still have to beat them at the end of the day, going after a limited market, a limited dollar. The product we put forward has to compete both in terms of cost and service and all the amenities that go with it.
Mr Gallagher: I don't want to create an adversarial situation between Sault Ste Marie, Michigan, and Sault Ste Marie, Canada; I don't think there needs to be.
Mr McClelland: Nobody benefits in the long run.
Mr Gallagher: I think there are benefits on both sides and that we can help each other.
Mr Phillips: Have you had an opportunity to look at models that you think are ones, in your Ramada experience, we should be particularly supportive of?
Mr Gallagher: The little I know is what I've read through trade publications and so on. I do believe that a complete package is needed more. They are fulfilling that across in Sault, Michigan, now. They have entertainment, they have the gaming and they have restaurants. As I say, I don't have a lot of experience personally in gambling, but from what I've read in trade publications, whether it be upscale or not -- when I say "upscale," I mean possibly more like the European style or Las Vegas -- it needs to be seen as more than just gambling; it needs to be seen as a total entertainment package, from what I can see.
Mr Phillips: One of the concerns some have is that I don't think you can pick up a newspaper today or visit anyplace in North America that isn't considering casinos. It's seen as kind of the answer to everyone's problems. The challenge with that is that if everyone proceeds with them, there is the risk that one oversubscribes to it. That's fine, maybe, and you can say: "So what? We had our run at it."
The challenge then is if you've built that as an important element in your community and it doesn't work. You've invested some money in it -- that's fine; that's gone -- but also you've invested an awful lot of your future in that one when in theory there may have been an alternative. I'm not sure how Ramada works and whether the managers get together periodically and discuss the trends and what's going on. Is that a risk that we should be at all concerned about?
Mr Gallagher: An oversaturation of the market?
Mr Phillips: Yes, in the North American market, full casinos.
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Mr Gallagher: Obviously that's a risk. I think that's obvious to everyone, particularly if you look at what's proposed. The idea of a number of 10,000-square-foot casinos scattered throughout Ontario I don't think makes a lot of sense, personally. Las Vegas wouldn't be Las Vegas if it were in every community; it wouldn't exist.
That's why I see the opportunity for cross-border relationships being very good. We are experiencing particular pressures in our community -- all border cities are -- that other parts of the province don't. By that token, we would have an opportunity here to offset them that other parts of the province shouldn't, in my opinion. I'm not saying that they don't deserve as much as we do, but obviously we can give them their gambling, but we can give it here in our location to offset our pressures. Does that answer --
Mr Phillips: That's helpful, yes. Do you have a view that perhaps people who would be attracted to casinos would like a variety of casinos over a period of days to deal with?
Mr Gallagher: I think that's quite possible. From my experience, just dealing with customers, there are a lot of customers who would far prefer to stay on the Canadian side. They stay here for a major part of their entertainment and then they find out that there is only the casino on the American side and they travel over. I can't blame them for that. We can't fulfil that need. It has potential for convention business; it already has brought some convention business in. Unfortunately, they're dollars that could have been spent in our own province that are spent outside.
Mr Phillips: Judgementally, the government plans to take a fair rake-off or profit and the people who will put up the capital will want a fair return as well. That's going to take a fair bit of disposable income out of the economy. Is there any concern by the business community that that amount of disposable income going to that one source is risky, or is the belief that it's money that wouldn't have been spent here anyway so it's all out-of-town money that's coming in?
Mr Gallagher: Are you saying that disposable income that would have been spent on movies and fast food and so on is spent on gambling rather than in those other areas?
Mr Phillips: Yes.
Mr Gallagher: I don't really think that comes into play so much. I think people who are going to gamble are already taking advantage of the opportunity to cross in Sault, Michigan. I think we just have the potential of keeping more people within our own community to do that.
Mrs Marland: It's interesting when the discussion comes up about the competition. Obviously, we all know there's a reason why Harvey's locates opposite McDonald's and McDonald's locates opposite Wendy's. It speaks for itself, what happens with that kind of competition and why they do that. But for them it's a level playing field. I hate using that expression because it's so overused, but for them everything is equal: They have potentially the same product and they have the same draw from the same kinds of purchasers.
How do you feel when you're here supporting -- well, technically, we don't know what the government is saying it would support in the Sault, but it certainly seems to be following the Coopers and Lybrand recommendations in some areas and initially in Windsor. How does it make you feel when you think about the competition and you know the possibility is that we might be talking about 10,000 square feet in Sault Ste Marie, Canada, and already you're facing, what is it, 50,000 square feet in Vegas Kewadin and we're talking about 75,000 feet in Windsor? What is the difference between Windsor and Sault Ste Marie?
I have some ideas of what the answers are, but I'm asking these questions because I need to hear the answers from someone like you who lives and works here. If the government were really going to be fair about casinos in this province, is it possible that it might have been more fair for it to put a large casino in Sault Ste Marie, Canada, that at least had a chance to compete with what is already a large casino in Sault, Michigan, whereas in Windsor, the Windsor casino right now doesn't have any competition across the bridge in Detroit? How do you feel about that?
Mr Gallagher: It seems like you've answered your own question there, to some degree. Obviously, we would like a large casino here on our side to compete with the existing one. Windsor's experience will not be the same as Sault Ste Marie's experience. It has a large metropolitan community right across its border; we have a much smaller community right across our border. They don't have the competition of an existing casino; we do. I really don't see how we can compare. I also don't see how a study there can relate to the existence of a casino here. I don't know if that answers it.
Mrs Marland: Are you trying to convey these concerns, other than through the committee today? You've got seven government members sitting in this room today. Is the municipality? We heard this morning that the Minister of Consumer and Commercial Relations hasn't even acknowledged, let alone replied to, a letter from the mayor and the municipality. But what are other people in this community doing in terms of letting the provincial government in Ontario know that the way it's going is not fair to this municipality compared to what's going on in Windsor?
Mr Gallagher: We've met with our member of Parliament. I have met with Tony and talked on this issue before. We are here speaking to you today. I can't represent my municipality. I'm representing my hotel. I'm representing the employees who work with me. It's not just my responsibility to represent the investors. It's my responsibility to represent the people who work for me, and they see this as a positive. They see this as an opportunity to keep their jobs and create jobs for other members of their families.
It comes down basically to the costs involved in having a community that's experiencing a downturn in its economy. It hurts them, not just financially; it hurts you morally. As I say, there's nothing greater that you can give anyone than a job.
Mrs Marland: I understand why you're here. I understand what's going on with a 17% unemployment rate in the Sault. The reason I'm asking the questions is that, living in a municipality that has four MPPs, and we have half a million people in the city of Mississauga, I say to people, as somebody who's been at Queen's Park eight years, "Don't only deal with me." In your case, don't only deal with your local MPP. You should be getting the people who work for you to write to this government, to write to the Premier and to write to the minister directly.
You're with a very large hotel chain. It's in the interests of your hotel chain, so are the people above you for Ramada Inns in Canada and in Ontario doing anything to try to advocate on behalf of the people in the Sault with this government?
Mr Gallagher: We are a franchise operation and we deal independently. We are part of the chain, but it is not really the chain's responsibility to be taking my issues up. I don't feel that would be proper. I deal with the owner and with our investors and I deal with the people whom I work with on a regular basis.
Mrs Marland: Would you be willing to try to encourage everybody you know --
Mr Gallagher: Absolutely.
Mrs Marland: -- to become a direct voice to the government so that it's not all on the -- I'm sure that your local member would welcome support from other colleagues, especially in the cabinet, in terms of saying: "Look, what you're doing in Windsor isn't fair. They don't have any existing competition. We're asking for something for the Sault that's relative to an existing situation of 50,000 square feet of competition." Would you be willing to broaden that base?
Mr Gallagher: Obviously, yes.
Mr Carr: Speaking about your industry in particular, if a casino comes, taking a look at everything else, you mentioned, I think, that you can compete. The price of hotel rooms is cheaper. With the Canadian dollar and the high tax on liquor, cigarettes and all forms of booze and so on, from your standpoint in your industry, how do you compare in terms of percentage, including the dollar and everything else for a hotel room and a convention, say?
The reason I say this is that one of the concerns we've got in, for example, Metropolitan Toronto is that they have a big concern that we've got a great new Metropolitan Toronto Convention Centre and they say the problem in getting conventions coming is the price of food and the booze and so on with the high taxes on them. It prices them out. Of course, Toronto is high-priced anyway. But how do you compare with Sault, Michigan, in terms of your prices in your particular field, in your industry, in the hotels?
Mr Gallagher: Well, first off, in regard to alcohol we can't compete, okay? Their pricing is obviously a lot less. That's due to taxation. Their food is slightly less expensive, but that all comes down then to an opinion on quality. I feel that the food quality here in Sault, Canada, cannot be matched.
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Mr Carr: But you're close.
Mr Gallagher: It's competitive. If you really look at quality compared to dollar, I feel that Sault Ste Marie, Canada, can't be matched. In terms of accommodation we're extremely competitive on the pricing, if not better, in many cases.
Mr Carr: So all told, you are in the ballpark.
Mr Gallagher: I feel that in the tourism sector we can compete very effectively against Sault, Michigan.
Mr Carr: Is that based on the dollar being what it is now, or does it have a range which affects it more than anything else?
Mr Gallagher: That is a part of it, and also expectations on profit and so on I think are slightly different now from what they might have been at one time.
Mr Carr: Good. What is your vacancy rate now?
Mr Gallagher: It is around 45%. On an annual basis, you mean?
Mr Carr: Yes, on an annual basis.
Mr Gallagher: In the community, you're speaking, right?
Mr Carr: Yes.
Mr Gallagher: Yes.
Mr Carr: What do you anticipate with a casino? Do you have any idea what it would go to?
Mr Gallagher: I can't really make an assumption, but I would presume that it could climb somewhere up through the 70% mark. It would help balance off the slower season.
Mr Carr: Good luck.
Mr Lessard: Mr Gallagher, I'm not speaking on behalf of all the committee members, but I'm sure that I'd be more than happy to meet with you at any time to discuss the issues with respect to Ramada and your ambitions here in Sault Ste Marie. But I just want to point out to you the effective job that Tony Martin, the member for Sault Ste Marie, is doing in advocating the interests of the Sault with his other government members. He always makes sure that I'm well aware of what's going on in the Sault, and he has a big interest in what's happening in Windsor, in my area, as well.
Mr Gallagher: I've made no implication that he doesn't.
Mr Lessard: I know, but I appreciate Ms Marland's suggestions that maybe you should be doing more. I just wanted to let you know that Mr Martin is working well on your behalf.
I did want to ask you whether you had any feelings about whether there should be a hotel or restaurant complex connected to any casino facility, or whether you had thought about something like that.
Mr Gallagher: I think it has a great deal of opportunity. It doesn't have to be that way, but it depends on the size of the facility. If it's only 10,000 square feet, it would make sense to be directly linked to a hotel convention facility, let's say.
Mr Lessard: Part of the proposal in Windsor is that the facility is 75,000 square feet. A hotel with a maximum of 300 rooms could be constructed, but only after the rest of the hotels have 75% occupancy in them within the downtown area. We've heard from some people who say that if you want to have a successful casino, you really need a hotel connected to it right from the start.
Mr Gallagher: I don't have expertise in the field of casinos. I can't make that general comment.
Mr Martin: I just want to put on the record some information that was stated by Mrs Marland that in fact is incorrect. I corrected it this morning, but it still keeps coming out. The minister has in fact responded to this community's written request for information etc. There's a letter here to Lorie Bottos, the city solicitor, dated June 11, on this issue. There's another letter from the minister to Frank Sarlo, who was the then chairman of the Sault Ste Marie Economic Development Corp, responding to a letter that he wrote re the issue.
The other issue, though, that seems to be one of some difficulty, and I understand, is our inability to get a meeting between the mayor and the minister. I've been working on that. The difficulty is giving out signals and raising expectations that can't be fulfilled in the immediate future at this point.
We said initially when we introduced this initiative that we were going to go about it very cautiously and carefully so that we build the correct foundation, so that we don't make huge mistakes initially that would come back to haunt us after. You should appreciate that the minister has had probably 25 or 30 requests from communities across the province wanting to meet, wanting to talk about a casino in their community. We're just wanting to be careful at this point that we don't give anybody any false expectations.
However, I think it's important to note that the reason I'm so aggressively chasing this is that this was announced as a cross-border initiative. So I think we certainly are in line should there be room for more and should we decide in the future that we want to move forward after we've had a good look at the Windsor experience. However, that wasn't what I wanted to ask you questions about. I just wanted to put that on the record.
I wanted to talk to you about the 10,000-square-foot issue. I raised this with Coopers and Lybrand when they presented in Toronto last week. They did recommend 10,000 square feet for Sault Ste Marie, but on questioning they said minimum 10,000 square feet. That's what they were basing their study on. They said that when they drew a concentric circle around the Sault and the possible market we have, a 10,000-square-foot-minimum casino would probably do the trick, and based on that, they did some of their projections.
I asked them at that time if they had considered the fact that across the river they already had a casino of some 45,000 to 50,000 square feet. They said that when they were here, it wasn't that size, it was probably 10,000 to 15,000; it was in its early stages. So their study was based on that kind of setup. I'm sure if they came back and looked at it now, it would change their figures considerably.
The question I asked them that I wanted to ask you was, they didn't look beyond the concentric circle. We are able, I believe, and you can answer this for me, to attract a goodly number of folks to our area for skiing, particularly in the wintertime, from the Chicago area. The Chicago area was left out of their study.
Mr Gallagher: I consider that a major drawing area.
Mr Martin: They claim that folks would prefer to just shoot across to Windsor as opposed to coming up to the Sault. But I'm saying that the critical mass of skiing, the tour train, the snow train and gambling would in fact probably pull some people here. How many people are we getting now at this time from that area coming up this way and how many more do you think we would get if we had a casino as a piece of the attraction in this community?
Mr Gallagher: To give you a figure directly of how many are coming out of that particular area, I can't, but I could see a definite increase in that market. I've done many of the trade shows in those areas myself, and there is a high level of awareness about the Vegas Kewadin area. Much of the marketing we've done has helped draw people into their accommodations rather than over to ourselves, because of the access to the casino being right there. I think what would happen is that we would get a greater amount of the people who truly should be coming to this destination in the first place rather than stopping only three miles away.
Mr Martin: They drew a concentric circle that took in Thunder Bay and Sudbury, and of course they also said Thunder Bay could probably pull from the Minnesota-Winnipeg area.
Mr Gallagher: Absolutely.
Mr Martin: Sudbury, they figured, had an area of its own.
Mr Gallagher: Personally, I feel that Sudbury would be a feeder market for ourselves. We already are a tourist destination for Sudbury-North Bay. As I say, I know of casino tours that are travelling from North Bay to Sault, Michigan.
Mr Martin: Already.
Mr Gallagher: Already. That must be a feeder market, if they're coming from there.
The Chair: Our time has expired, unfortunately. Mr Gallagher, thank you very much for presenting before the committee this afternoon.
CAMBRIAN BOWLING LANES
The Chair: Toni McDonald, representing Cambrian bowling centre. You have 30 minutes to make your presentation and field some questions from members.
Ms Toni McDonald: I am representing Cambrian Bowling Lanes, but also just as a citizen of the city as well. When it was mentioned to me about the committee coming here to get feedback in regard to having a casino in Sault Ste Marie, of course my first thought was how it would improve our unemployment situation in this city greatly, because there's such a high rate of unemployment here right now due to the fact of the steel plant going down, the possibility of St Marys Paper going down and a lot of small businesses having to close up. The tourist trade has depleted a little bit over the last couple of years. So the possibility of a casino coming here and maybe creating some new jobs for a lot of people would benefit the whole city in the long run, where small businessmen would be able to start hiring maybe a few more employees to handle the increase in the traffic coming to the city, also the people who are now employed being able to spend more money on what they need to buy.
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I know also, from personal conversations around town, that there are a lot of local people who take their money and go over to Sault, Michigan, and spend their money there, where maybe the Sault would benefit by the local people staying here and going to the casino and spending their money there and keeping the dollar in Canada, keeping our money in Canada instead of the US -- not wanting to take away from the American trade, but there are also tourists who stay in the city and want to know what they can do for entertainment in the evening and hear about the casino, and we're literally sending them out of our city to spend their money over there instead of keeping them here with that kind of entertainment. That's what they're looking for.
I had someone tell me just the other day that they know of someone whose vacation is to travel up here and go and spend his money at the casino. That's his vacation. He comes and spends big money at the casino, and it would be nice to have him stay with us and spend his money here.
Also, just about a month ago, I was away at a convention in North Bay, and we were bidding on this convention coming to the Sault within the next year or two. They say: "Sure, we'd love to come back there. We even want to go back over to Vegas Kewadin." So some people are using that as their criterion in regard to booking a convention here, because of what they can do in the evening after the convention, after spending all day in meetings, going over to Vegas Kewadin and spending the evening with some entertainment.
As far as Cambrian Bowling Lanes is concerned, we're in the process of trying to secure a major bowling tournament which would run every year, except every third year we would sit out, so for two years straight we'd be attracting 5,000 bowlers to this city from northern Michigan. We're very excited about it because it's major income for the city as well as for the bowling centre. But this would be an added attraction that we could also put forward when we're bidding for this tournament because of the attraction with the casino. Bowlers, whether you know it or not, when they go away on tournaments, spend a lot of money when they're away, and not just the ladies; the men as well. They're looking for some nice entertainment in the evenings; they've bowled all day and they're away from home. So there is a lot of money for us as a city to be made out of achieving this tournament. Any way possible to help secure it would be great, and a casino would be one added advantage for us in securing that tournament.
There are also a lot of other tournaments that are held here, and again those bowlers are travelling across the border in the evening after they bowl and spending their money over there, and it would be nice to say: "Hey, just go down over here. We have a nice casino that would be more than happy to take your money." We do get a lot of bowlers from northern Michigan as well. They come to Sault Ste Marie, stay with us, they bowl here but then go back in the evening across the border.
All in all, I probably haven't used my whole 15 minutes and I probably didn't have enough prepared for the full 15 minutes, but I'm very much in favour of the casino coming here. I think it would be very beneficial to this city. We do need something to improve our employment situation, improve our tourist trade. We have a beautiful city; we have a lot to offer in terms of skiing and the tour trains and everything. But since Vegas Kewadin came in across the river, I notice we lose a lot of people, even our own people, over to the other side and it would be nice to keep them here. Personally, I do not cross the border to shop, get gas or anything. I'm a loyal Canadian, a loyal Sault-ite and my money stays here, so I'd like to see the other Sault-ites keep their money here as well. That's all I have to say.
Mr Carr: In terms of lost business because of the economy and the number of people unemployed in the community, how much again is your business down percentagewise?
Ms McDonald: Our centre used to be full every night of the week and now we're down, I'd say, about 35% to 40%. We have lots of open lanes in the evening now where we never used to.
Mr Carr: That's a direct result of the economy, or is that because there are so many other different things that people are doing now?
Ms McDonald: That's a direct result of the economy. People who normally would bowl maybe more than one night a week now can't afford to bowl more than one night a week; they've had to cut back. It has affected not only our centre; there are two other centres in town and we're all down since the last several years. I think it's been about three, four years since the plant initially went on strike. Since the last strike they had, things have really gone down as far as business is concerned.
Mr Carr: Obviously, during the period of the strike too the business went down substantially as well?
Ms McDonald: Most definitely.
Mr Carr: With the amount we heard this morning that can be expected -- the ministry says the jobs will be anywhere from $25,000 to $30,000. We heard from a lady in the industry today who says it'll probably be more than that. With the number of jobs, you can see how much is going to be pumped in. Do you anticipate now, with the casino -- you say you're down 35% -- do you see getting back to where you were before, just based on the casinos?
Ms McDonald: I think so. With a definite increase in employment, I think all the bowling centres would enjoy the pleasure of the increase in business because then our leagues would grow bigger, our open bowling would have more of a waiting list at night and hopefully it would be nice to be at the point where we would have a hard time accommodating everybody. But yes, I definitely see an increase in business and also, then we'd probably have to hire on a few more staff too, which is creating more jobs as well, with the increase.
Mr Carr: Good luck.
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Mr Sutherland: I get the sense from you that you don't see the casino as being the panacea for solving all the problems, but it may help as part of a broader package.
Ms McDonald: As a broader spectrum, yes, not the main solution, definitely not the main solution, but just maybe part of the solution to help develop, whether it's another industry coming into the city or not. If there was a totally separate industry besides the casino coming in that was going to create more jobs, that would have the same effect on the city as well.
The Chair: Does the Liberal caucus have any questions?
Mr Phillips: No. I appreciate your coming and sharing your view on the sense of optimism you have around the casinos. Have you had an opportunity to talk to any operators who may have been in cities where casinos came to that community and what happened as a result of a casino for an industry like yours?
Ms McDonald: No, I have not had that pleasure, but I probably will when I travel down to the United States this year. I haven't had that opportunity to talk to anybody in my field who didn't have a casino and then they did have a casino to see the difference or the increase of business. All I know is when we travel away to tournaments and there's a casino, our bowlers are gone. Once we're done bowling in the tournament, they're gone to the casino. They like the idea that there's that attraction when we go down there.
Mr Phillips: Do you have any 10-pin lanes?
Ms McDonald: We're all 10-pin here. There is no five-pin in this city any more.
Mr Phillips: Five-pin's gone, is it?
Ms McDonald: Up here it is. In Sudbury there's five-pin.
Mr Phillips: So you're all ready for the influx. Good.
The Chair: Thank you, Ms McDonald, for presenting before the committee today.
Ms McDonald: It's been a pleasure.
The Chair: I want to bring to the attention of the committee that we have 17 or 18 minutes left. Dennis Jones, representing the first nations Garden River band, is here and he'd like to make a presentation. I'm in the hands of the committee. If you'd like to fit him into the remaining time, he would appreciate it, most certainly. The sooner he gets here the better.
I'd like to inform the ministry people that we have another short presentation to go through and then we'll get to you.
I'd like to welcome Dennis Jones --
Interjection: That's not Dennis.
Mr Chris Belleau: The chief has taken a washroom break. My name is Chris Belleau. I'm a councillor with Garden River.
The Chair: I understand the chief will be making the presentation.
Mr Belleau: He'll be leading off with his statement.
The Chair: I guess it's an appropriate time for me to inform committee members who are travelling with the committee that tomorrow morning at 7:45 there will be two mini-vans outside the hotel in order to take us to the airport. That's a quarter to 8. I thought you might like to know that so that you don't get left behind.
GARDEN RIVER FIRST NATION
The Chair: Chief Dennis Jones, we have found some time for you, so if you would like to proceed with your presentation and hopefully there'll be some time for some questions from committee members.
Mr Dennis Jones: I thank you for the opportunity to be here. One of the things I'd like to say is, yes, we are interested in developing a casino. It seems like there is good cooperation in the area. I do realize how it could economically benefit all the people in the area. I sense that there is cooperation here and I'd like to have the opportunity explore all our options. I have one of my councillors here, Chris Belleau. He wants to outline some of the areas where we maybe can assist.
Mr Belleau: Basically, I've come here this morning to learn what the province's perspective is with regard to the whole casino activity enterprise or what its constraints are. One of the things I've learned today is that most governments, whether they're federal or provincial, seem to be kind of wary in terms of what their next move is going to be with regard to casinos, both on a Criminal Code federal jurisdiction basis and what is currently being administered by the provinces.
I wanted to communicate our perspective in terms of how we view gaming. Basically, we view gaming as an entertainment business, one where individuals go to these establishments responsibly to seek a different form of entertainment.
One of the questions we keep getting in our community is, when is the government going to get out of the business of protecting people from themselves? In a free and democratic society, people have responsibilities and it's incumbent upon each individual to manage themselves with these responsibilities and freedoms.
With regard to Criminal Code aspects that seem to be very much a concern and rightfully should be, because the Criminal Code basically reflects the views of society in terms of conduct it views as prohibited, whether the activity be carried out by any individual, one of our concerns always is what happens when you have a regulated activity that's prohibited under the Criminal Code? It strikes us as a bit of an anomaly, because Criminal Code activities are prohibited activities, as they should be. However, when one starts regulated activities in an approval sense, they definitely have no more place in the Criminal Code, much like the American experience when alcohol was prohibited from their citizens; it made criminals out of their citizens. Today we seem to have outgrown that social activity of prohibiting that conduct and it becomes a part of society.
We ourselves were prohibited until 1958 from possessing alcohol. I don't have to tell you that there's a direct relationship of the degree of prohibition to the degree of abuse. We kind of view that casino activity is along those lines: When one is prohibited and not regulated in the responsible conducts and one does not have these outlets, then the activity does become abused. I'm happy to say that the alcohol abuse we have seen as a population in our communities has levelled out to something that we see as manageable and something that we hope in the near future we'll be able to rid ourselves of, because it is no longer a prohibited activity in our territories. We have that same perspective in terms of how legislation impacts upon the social conduct in a community.
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One of the perspectives we hold with regard to gambling is that we're a little confused in terms of -- you've got to understand that we sometimes don't share the same global vision as the rest of maybe Ontario or the rest of Canada does. A lot of times we see the whole issue of gaming as one of control and authority and reaping of profit, because we don't see very much difference between bingos and gambling, horse races and casino activity or a very much respected and accepted form of gambling: stock market investment. I've put money in the investments and I've lost money, and I didn't see anybody say I was gambling; I just made a bad investment. That's a little confusing to us. It strikes us as one where the real issues are: Who's controlling? Who's getting the profit? Who's channelling the money where?
Our perspective with regard to this issue, and one of the reasons we didn't come so formally towards the committee, is that it was our understanding that this was with regard to site-specific issues. We weren't here with cap in hand looking for Garden River to be designated as a site. Sault Ste Marie has done its job, a very good job, to represent itself to its superior government, the province. We view ourselves with the province in a government-to-government relationship, as is reflected by the province in its Statement of Political Relationship with the aboriginal population here; that our relationship was going to be more defined in terms of negotiated agreements and mutual win-win situations with regard to any issue under self-government with the province.
One of our biggest concerns of course is our jurisdiction. When you're dealing with the city of Sault Ste Marie, you do not have that issue to deal with. Of course, when we talk about the issue of jurisdiction, we delve into the issue of self-government. We did not want to centre the issue of self-government around the running of gaming casinos because it's an issue that probably won't meet with favour within your society and, very much so, it would not meet much favour within our society.
The issue of governmental authorities to carry on regulated activities we think should go on in an environment based on respect, based on equality of governments, based on equity -- being one where Ontario is a large government and we're a very small government -- and one based on reciprocity. What one extends to the other, we're willing to extend back. What Ontario extends to us, we're willing to extend to Ontario. A government-to-government relationship fostered on those four premises should offer preservation and win-win situations for both governments.
We see our future relationship being one where, in an effort to protect our jurisdiction, we're willing to parallel legal frameworks by which each society can reap the benefit from an activity that is condoned by both societies. If it involves revenue-sharing, then we're willing to look at that. If it involves similar legislative or legal frameworks, then we're willing to look at that and entertain these issues.
We would like these issues to be dealt with in a political accord, in an agreement between the political aspects of both our plenipotentates so that each reap the benefit. Clearly, when we involve ourselves in an enterprise involving your population, we are involving ourselves in your market area. Clearly, when you involve yourself in an activity that involves our population, you involve yourselves in our market area. A sharing of that market area and a sharing of the resources and benefits of that market area is only right, and it's a reciprocal relationship that we extend to one another.
We are a little concerned that Bill 8 does not address these issues adequately. We would propose that there be an amendment to Bill 8 that includes the provision for your commission to be able to come to mutually beneficial agreement with our commission and government so that this activity can hopefully prosper and provide a destination source for this area.
We would like Bill 8 to be amended so that perhaps if there were a need -- and you will acknowledge that there is a need because the federal government is charged with the jurisdiction of the Criminal Code -- the limitations that are placed before you can be surmounted and we could together go to the federal government to see that certain limitations that presently you are now operating under, at the same time we are, can be dealt with beneficially for Canada, Ontario and first nation governments. If that relationship could be fostered, then we would definitely see positive signs for development into the future.
At present, the federal government seems to be very silent with regard to its participation and perhaps lifting of limitations on yourselves and ourselves. I believe we could potentially play a very positive role in ending that silence or stalemate.
We would be looking for these amendments of Bill 8 to facilitate (1) both our developments and (2) our development in our community at our own pace within our own jurisdiction.
With that, one of the benefits I'd like to talk to you about is based on our view of the American tribal experience with regard to gaming. I found out at a conference in Toronto last week that what had happened was really against the rules, but on a visit to a very large tribal casino in Minnesota, we were allowed to see the surveillance equipment to see how advanced technologically it was and how much technology had been assimilated into their organization with regard to gaming and how extensive it was.
I understand it's a violation, because for security reasons no one should be looking at surveillance except the people who run it, but it came as a surprise to us that the people in Las Vegas go to the tribal governments and ask for consultation with regard to the new technology and how it applies to casino surveillance and security. It's very expensive. The American Indian tribes are currently the most advanced in the world with regard to surveillance and offer that service at a high price, a price that Ontario would have to pay. They have made the commitment to us that if we were to request such surveillance expertise, they would offer that at very minimal cost in a process of sharing and commitment to one another, as we are the same people.
But I will caution that it is cutting-edge technology, one that we see as beneficial because it helps in our development because it's new technology that we can assimilate and hopefully use in the development of new technologies, much like NASA uses cutting-edge technology and shares with its own society. So we see that as being a positive development.
One of the misconceptions that seems to get out into the public is that first nation governments are non-taxable and that somehow this is all tax-free. One of the eye-openers that I had become cognizant of in my study of the American situation is that, quite to the contrary, American tribes tax their casino operations 100%. The reason I say that is the total amount of all net revenues goes right back into socially needed programs: It goes into education, it goes into housing, it goes into economic development.
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One of the biggest pieces of advice or information that they pass on to us is, "Don't view" -- and I know that a lot of people here today have looked to you and said: "This is a panacea of opportunity. This is a money-maker." They basically tell us: "Don't take that view. Look at casino operations as not an end but a means to economic development. It's an opportunity now to take needed cash, needed capital, capital that first nations do not have access to and apply it to medium-term and long-term diversification, economy strategies for your society. Use it as a benefit now, but realize that the actual object is to have lawyers, to have doctors, to have hospitals, to have proper housing, to have proper education. Use it for those ends."
There's many an experience that happens where a lot of people expand into casino operations, and I imagine they've had their minor experiences with that, and when the market fell out, there was no provision for tomorrow. So basically, they give us this recommendation, and we have to take it as good advice because we have seen communities that were completely on a welfare list now putting out lawyers, now putting out doctors, now having hospitals, now having adequate housing, now having proper service to their communities.
We take that experience and we're hoping to apply that, but at the same time responsibly apply that, because the operations that got going in the United States came out of confrontation, came out of non-cooperation with the state and many times, perhaps, with the federal government. We'd like to change that and we'd like to change a bit of colonial attitude that does exist in Canada that Indians aren't supposed to be in business, Indians aren't supposed to do this. We'd like to move ahead cooperatively, one where it's a win for the Ontario government, it's a win for first nation government and it's a win for Canadian government.
We don't need to carry on the history where Canada is willing to pay $200 to $300 a day for keeping an Indian incarcerated in a prison but is not willing to pay the minor amounts that it would take to educate that person and keep them out of that system. We'd like to see it done cooperatively. We'd like to see it done responsibly.
We're willing to parallel all the legislation that we have within our jurisdiction to make sure that this is run right, the integrity of our community is maintained and the benefits for our local communities, which includes Sault Ste Marie, which would have a very substantial benefit from any enterprise we go forward on, because it has the hotels, it has the infrastructure, it has that in place now, and to seek the immediate benefit. We have no trouble with going ahead with that cooperatively. Thank you.
The Chair: Thank you very much. If we are to allow you the full 30 minutes, that would give each caucus about three minutes to ask a question. I just want to let you know that some of the ministry staff who are here have to catch a plane, so it's essential that we get to them as quickly as possible.
Mrs Marland: I want to just acknowledge up front, this is the first day that I've had the opportunity to sit on this committee, and as far as I'm concerned, you've just made a very powerful presentation. I'm really impressed with what you've just had to say to this committee, speaking for myself.
I'm not sure whether, from what you've said -- and be sympathetic because I'm only from Mississauga; I'm not from northern Ontario, so I'm not current on everything that's going on in the Sault. But you're talking about -- I was trying to make notes as you were talking -- sharing a market area, and then you went on to address the fact that there are concerns that you have that Bill 8 doesn't address some of the issues, which I'll be able to re-read in printed Hansard. But are you looking at Garden River establishing a casino itself? Is that something that you're contemplating?
Mr Belleau: Okay then, I guess perhaps I'll let the chief -- because that was his very first statement, that Garden River is looking at establishing a casino.
Mrs Marland: I'm sorry, I didn't hear that.
Mr Jones: That might have been my fault, but yes, that's where we're looking.
Mrs Marland: Okay. When you spoke I asked them to turn the volume up over there, and I guess that's why I missed it. So what's the timing on what you want to do, and do you see that because you're self-governed that you don't need any permission from any other government to go ahead with a casino?
Mr Belleau: It's not our intention to introduce an environment of crisis management or conflict management between our two governments. It is responsible and proper that we sit down as governments within this nation called Canada to seek positive developments and processes for our mutual development. This is why you do not see construction of a casino in Garden River right now. We wish to have the cooperation and acknowledgement of the province with regard to what your concerns are, what our concerns are, and that these be resolved prior to the establishment.
Mrs Marland: I'm asking these questions out of sincere interest and total innocence as to what the background of this is. Would it be your choice, then, to have a location on your property and have the spinoff benefits to the commerce and tourism industry in the city of Sault Ste Marie, Canada, as a whole? Is that what you see happening, something similar to Sault, Michigan, or not?
Mr Jones: What we're seeking here, and I think it's here, is cooperation. We have to live just like the people in Sault Ste Marie, and we've always lived side by side here. We have an opportunity here now. If we can explore those opportunities, I think that once we explore these opportunities or have the opportunity to do that, then you can see -- it's pretty hard for me to say that right now, but that's the way we're coming from, yes.
Mrs Marland: Are you conversing now with the government and the city of Sault Ste Marie, Ontario?
Mr Jones: I've met with Tony, I've met with Bud Wildman and I've met with the mayor. That's the approach we'd like to take, yes. We want to sit down and discuss this, and I think that the options are there. Let's look at these options and see if we can go forward with them.
Mr Belleau: I think in my presentation what I did say is that if Garden River were to be a destination spot with regard to a casino, the immediate benefactor with regard to economic spinoff automatically becomes Sault Ste Marie. We do not have the population to hire the full complement of staff that would be required for such a casino. Those people obviously have to come from Sault Ste Marie or the surrounding communities. We do not have hotel complexes. That immediate benefit does go to Sault Ste Marie with regard to hotel vacancies and bookings.
The Chair: Mr Martin. I'm sorry, Mrs Marland, we've gone way beyond your time if we're going to be fair with everyone here.
Mr Martin: Go ahead.
Mrs Marland: Just on the surveillance technology, what you're saying is that because of the association with the American brotherhood you would be able to help get a deal on something as important as the surveillance technology.
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Mr Belleau: We realize that that technology would be important to the province because basically the province does not have that high degree of technology. I was very impressed on how extensive it is and the type of regulations and policy and legislative frameworks that have to be in place. Our government is just as caring with regard to its integrity, that a business is being run honestly and properly, as your government would be. It's very extensive, and it's one that has to be shared, and it's one that we'd be willing to share with Ontario.
Mr Martin: I just want, Chief and Chris, to say, as Mrs Marland did, how impressed I was with your presentation. We've had discussions, you've answered most of my questions, and we don't have any questions at this time because time is of the essence here. I just want to thank you for coming.
Mr McClelland: It seems to me, and you may want to comment or editorialize and qualify my statement, if I hear you correctly, sir, you're saying you want to proceed cooperatively. Implicit in that is a sense I have that you're going to proceed at some point in time. At what point do you feel compelled to make your move? If and when you make that move and move ahead, hopefully in a cooperative spirit with all the i's dotted and t's crossed and issues resolved, but failing that, at what point in time do you see yourself moving ahead?
The second question is how you see it operating: Borrow another model? Bring in a private operator to put up the capital? As you know there would be a substantial amount of capital involved. I'm curious in terms of your business plan, timing and source of capital.
Mr Belleau: Okay, basically, when one looks at our decisions, one has to look at the history we've been through. We operate within a very restrictive environment. Federal legislation actually prevents us from incorporating companies; it prevents us from licensing businesses. First nations, under the Indian Act, don't have licensing capacities.
So it answers a trend why in Canada first nations have to rely on their inherent right to government and to carry on these activities which are available to other citizens in Canada, because there is a piece of legislation that prevents us from doing that. That's detrimental. So you see us moving ahead on positive developments that are available to other citizens regardless.
That position would be crossed when Ontario definitely makes a position known to us that will act in our detriment. That's when Ontario advocates to the world that it does not take our development to heart, that indeed it only takes its own control over our people to heart. So that would be the milestone. It's not in years, it's not in days; it's in terms of conduct. That's correct.
Mr McClelland: But if you don't hear, how would you know?
Mr Belleau: That's right. If we don't hear, then of course our responsibility is always to knock on the door and to make sure that Ontario is informed of what our activities are. If we're going to do something, we have no intention of hiding what we do or when we do it. We want our actions to be known to the world, and the responsible conduct is to let all those that are affected have the opportunity to participate. I missed your last question.
Mr McClelland: Would you contemplate bringing in an outside operator? I won't throw out any names, but pick a list of 20 different experienced operators. Would that be your initial plan?
Mr Belleau: Basically what's happened in the American experience is that tribes start out not having capital available to develop, which is clear, because all our moneys are regulated, all our moneys are held in a trust account in Ottawa. Anything we spend, basically it's our money, but we have to ask somebody for it.
What the tribes have done in the United States is they've taken in management contractors and they've set time limits when that goes to a total collective effort, and 100% of the funds go back into their community for governmental services. But they try within a very rapid time to pay off the capital that was used to create the business. So I see that sort of situation being relevant there because we just don't have the capital unless Ontario is willing to hand us the capital.
The Chair: I'm pleased that we found the time to accommodate you this afternoon. Thank you very much for making your presentation before the committee.
Mrs Marland: The chief just had a final comment.
Mr Jones: I was going to make some comments to his answers there. If we had the opportunity to sit down and discuss this, like I said before, I think we can come up with some options here on that too.
With that, I'd like to thank the Chair and everybody around the table for the opportunity of being here and expressing our wish. Thank you.
The Chair: Thank you very much. Next we have a group of representatives from the Ministry of Consumer and Commercial Relations. This is a closed session, so I must ask the public to leave at this time. To all the public here, thank you very much for taking the time to attend the committee hearings.
The committee continued in closed session at 1615.