INTENDED
APPOINTMENTS
GARY REINBLATT
CONTENTS
Wednesday 4 November 1998
Subcommittee report
Intended appointments
Mr Gary Reinblatt
STANDING COMMITTEE ON GOVERNMENT AGENCIES
Chair / Présidente
Ms Frances Lankin (Beaches-Woodbine ND)
Vice-Chair / Vice-Président
Mr Rosario Marchese (Fort York ND)
Mr John Gerretsen (Kingston and The Islands / Kingston et Les Îles L)
Mr Michael Gravelle (Port Arthur L)
Mr Bill Grimmett (Muskoka-Georgian Bay / Muskoka-Baie-Georgienne PC)
Mr Bert Johnson (Perth PC)
Ms Frances Lankin (Beaches-Woodbine ND)
Mr Rosario Marchese (Fort York ND)
Mr Dan Newman (Scarborough Centre / -Centre PC)
Mr Joseph Spina (Brampton North / -Nord PC)
Mr R. Gary Stewart (Peterborough PC)
Substitutions / Membres remplaçants
Mr Dave Boushy (Sarnia PC)
Clerk / Greffier
Mr Tom Prins
Staff / Personnel
Mr David Pond, research officer, Legislative Research Service
The committee met at 1010 in room 228.
SUBCOMMITTEE REPORT
The Vice-Chair (Mr Rosario Marchese): We'll call the meeting to order. We've got a report of the subcommittee on committee business dated Thursday, October 29, 1998. Do we have aF mover for that report?
Mr Bill Grimmett (Muskoka-Georgian Bay): So moved.
The Vice-Chair: Any discussion on that report? Carried? Carried.
INTENDED APPOINTMENTS
GARY REINBLATT
Review of intended appointment, selected by official opposition party: Gary Reinblatt, intended appointee as member, Ontario Casino Corp board of directors.
Mr Gary Reinblatt: I'd like to make about a minute of opening statements.
First of all, it's my pleasure to be here and to be considered for appointment to the Ontario Casino Corp. I really believe that I could make a very positive contribution. I'd also like to thank the committee because I understand they granted a special extension for me and I appreciate that.
I really feel I have the qualifications to sit on this board. For about 23 years I was head of the marketing department of McDonald's Restaurants of Canada. When we started, it was a very small company and it turned into a very large and very successful company.
About eight and a half years ago I had a very severe spinal cord injury in a skiing accident, and I'm actually a medical miracle. When I started, all I could do was shrug my shoulders. I spent just over a year at Lyndhurst Hospital and, frankly, that got me to where I am today. I could have made millions of dollars betting the doctors on where I would be.
When I got back to McDonald's I realized what I could and what I couldn't do, and what I couldn't do is work 55 hours a week and go and travel the world. For the last four years I've worked as a marketing consultant -- thankfully, it has worked out very well -- working for companies such as the Sports Network, Nestlé, Canadian Tire, the Santa Claus Parade, International Management Group etc. My modus operandi is a different set of eyes. I go into companies and work on strategic marketing plans.
Throughout my whole business life I've always believed in keeping my life in perspective and I've always put myself on various boards. Sometimes they're community service boards such as the United Way, sometimes they're professional boards like the Association of Canadian Advertisers, sometimes they're boards that are completely outside the realm of my expertise. For about five years I was on the board of the Metropolitan Toronto Convention and Visitors' Association. Presently, I'm on the board of the North York General Hospital, and I've served on other boards.
There's one final thing I'd like to say, and I'll never have a chance to say it anywhere else but here. I have been credited by the late Jack Ackroyd, who was at that time the head of the LCBO, with being the catalyst for bringing the LCBO into the 20th century. As I said, I'll never have another chance to say that. If you want to ask further questions about that, you can.
On a personal note, I just celebrated my 25th wedding anniversary. I'm married with two children, ages 24 and 21. I'd love to answer any questions you may have.
The Chair (Ms Frances Lankin): Thank you very much, Mr Reinblatt. My apologies to the committee for my lateness. We're going to begin questioning with the third party. You have about eight minutes.
Mr Rosario Marchese (Fort York): Welcome, Mr Reinblatt. It's good to have you here in this committee. I was particularly impressed by the quotations that are at the bottom of your CV. One of them says, "Never be afraid of life," and the other one is, "I could have made millions of dollars betting the doctors on my recovery." From the second one it appears to me that you're a gambling man and that's why you're here. Is that it?
Mr Reinblatt: No. I made a decision about two days after I had this accident. You have to understand, all I could was shrug my shoulders. My father never made a lot of money but he did teach me one thing: Never be afraid of life, just go get it and make the most out of life, and that's what I've done. Frankly, it's why I'm where I am today. I've always been one to speak my mind, to make a point and so on. I'm not a gambling man. What I am is someone who weighs the possibilities and makes decisions. I guess that's the way to put it.
Mr Marchese: I appreciate that. I just think that quotation seems to typify your life and, in my view, that's a good characteristic of you as a person and it should be a quotation that typifies most of us, but it's never the case for everyone.
Your marketing skills in your CV are notable and you plan to bring some of those marketing skills to the corporation. What do you think you might be able to do or want to do vis-à-vis your skills and the corporation?
Mr Reinblatt: The fact is that if the Ontario government has decided to be in the casino business, then the idea is that they should go out and maximize the possibilities. Very shortly, in southwestern Ontario, Windsor, we're about to be in a share battle, which is typical of any business. We have to go out there and maximize the share, maximize the investment to the province of Ontario and therefore to the people of Ontario. I believe I could be helpful with that. I don't have to tell you that in the quick service restaurant business it's a share battle every single day.
Mr Marchese: I believe that, except, for me, gambling isn't a typical type of business. It is there, obviously. We are engaged in it as a government and the population is engaged in this discussion as well: for or against. I was one who supported a project casino, just to experiment, see how it goes, manage it as best we can, test that out for a couple of years, and based on that experience, see whether we should be going further. Obviously we are moving in the direction of having further additional casinos, and that worries me a great deal.
It worries me because, as a government, we are using this as a form of raising a whole lot of money, but it comes from somewhere, it comes from people, and there are a whole lot of people who believe that maybe they can be the lucky ones, that they can make the millions through these games. By giving up some of the money they've got, they can do it. I think it's a losing strategy. You basically lose money when you go to casinos; that's why they are there. So it's not so typical for me in terms of the kind of business I think we should be in. What do you think about that?
Mr Reinblatt: The fact is that if you decide you're in the business, you have to make the decision that you're, in essence, in the business. What you're doing is listening to the people, and the people obviously are very responsive to the casinos; they go to the casinos. The net result is that we have a great, very favourable balance of trade in the casino business, meaning that we're pulling more money from outside of the province than we are gaining inside the province. Any time you can do that, we are in great shape.
It's like when people come and stay at a hotel, they pay provincial sales tax. You want to make sure that we're receiving more provincial sales tax from people outside of Ontario than people going to Florida and paying in the state of Florida for taxes. That's also, in the tourism business, an example of a share battle. The fact is that we are doing nothing but responding to people's needs and wants, and we should do it.
The Chair: Last question, Mr Marchese.
Mr Marchese: Obviously, the US -- sorry, I'm just trying to catch up here with the problem that we're going to have in Windsor. There's going to be great competition from Detroit. They're probably going to be building several casinos. We get 80% of the people from the US, clearly, and so Mr Barbaro, the president, is saying we need to expand our own casino operations and perhaps have one more. I'm a bit wary of that, but I guess from the things you've been saying, we may have to do that. As far as you're concerned, that's OK?
Mr Reinblatt: The answer is that we might. I do not know whether we have to build a second casino. The one thing I do know from the restaurant business is that there's a little thing called impact, and you don't want to turn one winner into two losers.
Mr Marchese: Good luck, Mr Reinblatt.
1020
Mr Grimmett: Welcome, Mr Reinblatt. You certainly have a very impressive background that you bring to this position and I want to ask you about the business that you currently operate. You're in a consulting business and I take it that you're no longer affiliated with McDonald's?
Mr Reinblatt: I'm officially on a leave of absence from McDonald's. Yes, that is correct. The only direct affiliation I have is that I sit on the board of Ronald McDonald Children's Charities.
Mr Grimmett: Do you consult to the restaurant and food business at all?
Mr Reinblatt: No, I do not consult to that business. That's one thing I've stayed completely out of.
Mr Grimmett: I see. What kind of businesses are you typically consulting with, then?
Mr Reinblatt: My clients right now are the Bank of Montreal. The project we're working on right now is the merger with the Royal Bank. I'm working on the strategic planning to help get the merger through. I worked with the Santa Claus Parade two years ago. The Santa Claus Parade, which goes right by the front door here in two weeks, was in a little trouble; it only had 15 sponsors. They brought me in to help work with the sponsors. Today, we have 22 sponsors. The parade is sold out for the next two years, and then the contracts come up for renewal. It has never been in better shape.
I also work with a company called International Management Group to help sell sponsorships for various events. I work with Canadian Tire. Actually, I'm helping them form the Canadian Tire child foundation, to help with good work. I've worked with Nestlé's a little bit in their food service area. Bell Mobility is another. I'm working with them on their strategic marketing planning.
Getting back to the answer, I have made a decision that I will not work for anything in the restaurant business. I have too much loyalty.
Mr Grimmett: In the operation of the casino corporation, I take it you've had an opportunity to speak to someone at that corporation about the type of things you might be doing on the board?
Mr Reinblatt: Not really. I had one conversation with Mr Barbaro. I know that they want me on there for my marketing expertise, and that's what I --
Mr Grimmett: Could you comment on the potential conflict that might arise in regard to your own business and how you might deal with that?
Mr Reinblatt: I do not foresee any conflict. Through my whole business life I've been very, very cognizant of my reputation and I want to keep it that way. I do not see any conflict at all, and I've thought about this.
Mr Joseph Spina (Brampton North): Mr Reinblatt, thank you for coming. I have great admiration for not just your business but also your personal achievement and congratulate you for that. There are many people who have tried and not succeeded and others who have tried and succeeded, and it's the motivation that people like you can provide that helps other people succeed.
I want to ask you about, along similar lines to Mr Grimmett, when you talk about your consulting clients, it appears as if you have focused more on assisting the corporate community in developing their charitable side, or charitable projects. Is that just circumstance?
Mr Reinblatt: How do I say it? If you take a company like Canadian Tire, they asked me to come in and work on their charitable organization and that's just where I went into the niche. In the case of Bank of Montreal, I don't do anything with regard to their charitable organization. That just happened to be the project that I was called in on.
Mr Grimmett: I thought you were a charitable organization.
Mr Reinblatt: They don't think so.
Mr Spina: Along that line, then, do you feel it's a high level of importance for the casino corporation to be concerned, shall we say, with the impact on the community and perhaps look at how proceeds might be able to assist some of the social development needs of the community?
Mr Reinblatt: Absolutely. The fact is that this money belongs to the people of Ontario. It has come in and it should be spent in the best way possible, and if some of that includes the social needs, especially in the local communities, then I'm all in favour of that.
Mr Spina: Mr Reinblatt, thank you very much. I wish you every success.
Mr Michael Gravelle (Port Arthur): Good morning, Mr Reinblatt. It certainly is a very impressive story in terms of your personal life and a remarkable recovery, as you said, a miracle in many ways. Mr Reinblatt, I am curious, did you seek out the position or were you approached by someone to take this position?
Mr Reinblatt: Mr Barbaro did call me and did speak out, but let's just say that it was a conversation that was of mutual interest, not a huge arm-twist.
Mr Gravelle: As you said earlier, it was because of your marketing expertise and in essence because of the challenges you face.
If I may move into another area, I want to ask you what you think of the involvement of the private sector in terms of running casinos. We do have the report that was just leaked recently in terms of the Ontario Lottery Corp lawyers who spoke of the fact that Ontario was breaking the law by allowing private operators to run the casinos -- I would like to have your thoughts on that -- in essence contravening the Criminal Code by having somebody other than charities and the government having the benefits. What are your thoughts on that?
Mr Reinblatt: I cannot comment on the legal ramifications because I'm not familiar with the law and what's happening. However, I am in favour of having a private organization manage the casino because I believe that will bring in the maximum return to the province. They have incredible expertise and really know how to run the casino both internally, the operation of the casino, and externally, the marketing of the casino. As far as the legal end is concerned I can't comment because -- the good news is I'm not a lawyer.
Mr Gravelle: It was a startling report to be seen, though. I take it you were as startled as most of us were to have this report become public.
Mr Reinblatt: Again, I can't comment.
Mr Gravelle: Can we talk a little bit about what your thoughts are on the expansion of gambling in the province. We have gone through quite a process and we are now at the stage where four other casinos will be opened, all things being equal, in the province and will be run by the Ontario Lottery Corp which, in some ways, flies in the face of the government saying, "We don't think we have the expertise to do it which is why we think there should be private operators involved." That strikes me as a looming contradiction. I'm curious about your thoughts on that.
Mr Reinblatt: Like you say, it's an incongruity, I would agree. The expansion has to make economic sense, and I really believe that if all we're doing is taking money from ourselves, I would look at it very carefully. On the other hand, for example, there's a casino in Hull. I know the size of the market in Hull and that's only some of their market; their big market sits in Nepean, Ottawa, Stittsville. That's where their market is and they're taking money from us, the citizens of Ontario. If it makes economic sense and there's at least a net import effect, then I would look at it carefully. As for the vagaries of the Ontario Lottery Corp running four casinos and the OCC, that is something that has to be worked out. Let's just say it's an incongruity.
Mr Gravelle: I appreciate your opinion very much. I know that in my home town of Thunder Bay that's one of the locations that has been chosen by the government. There was a plebiscite or referendum on it and the community agreed that they would support a charity casino as opposed to a commercial casino, which brings us into another strange part of the reality that these charity casinos are, in essence, licensed as commercial casinos and aren't charity casinos, and that causes more concern. It should cause concern among all members of the public, I think, and I take it you share that concern.
Mr Reinblatt: As a member of the Ontario Casino Corp board, I would like to see consistency across the province; yes, I would.
Mr Gravelle: Again, if that whole concept of the cannibalization of the local economy becomes a factor, if indeed it's an operation that's set up, that takes money from within, as you say, does not have much activity imported from outside, more than anything else it's just a way for the government to gain revenues, I guess, is our position.
Mr Reinblatt: You have to look at the entire economics of it. I know for a fact that a casino is not a gimme. I mean, I was in New Orleans about a year and a half ago and there was this huge building that was never opened. It was supposed to be the world's largest casino. It never opened. It's not a gimme. I do not know but I believe the Great Blue Heron -- is that the name of it? -- Casino is not a money-maker. I believe that. I don't know this. I've never been there, in Port Perry. It is not, to use the vernacular, a slam dunk. You have to think it out and make it happen.
Mr Gravelle: Can I take from your remarks then the fact that the government has decided that the Ontario Lottery Corp itself will be running these four locations is something that you don't think is probably a good idea?
Mr Reinblatt: I don't know if it's a good idea, I just stand by my statement that it's incongruous and perhaps should be looked at.
The Chair: Thank you for joining us today, Mr Reinblatt. That's the end of the official process and we'll be moving with the committee to voting on a motion with respect to your intended appointment.
Mr Grimmett: I move a motion of concurrence, Madam Chair.
The Chair: We have a motion of concurrence in the intended appointment of Gary Reinblatt as a member of the Ontario Casino Corp board of directors.
Mr Bert Johnson (Perth): I would like a recorded vote, please.
The Chair: All those in favour please signify.
Ayes
Boushy, Gravelle, Grimmett, Bert Johnson, Marchese, Newman, Spina.
The Chair: It's a unanimous recommendation, concurrent. Thank you again for joining us today.
Seeing no other items of business, the meeting is adjourned.
The committee adjourned at 1032.