LAKE OF THE WOODS COMMUNITY DEVELOPMENT INC LAKE OF THE WOODS BUSINESS INCENTIVE CORP
LAKE OF THE WOODS ADDICTION SERVICES
KENORA AND DISTRICT CHAMBER OF COMMERCE
COMMUNITY COUNSELLING SERVICES
BEST WESTERN MOTOR INN, DRYDEN
CONTENTS
Friday 9 August 1996
Alcohol, Gaming and Charity Funding Public Interest Act, 1996, Bill 75, Mr Sterling /
Loi de 1996 régissant les alcools, les jeux et le financement des organismes de bienfaisance
dans l'intérêt public, projet de loi 75, M. Sterling
GamAnon
Ms Judy Adamson, founder
Lake of the Woods Community Development Inc: Lake of the Woods Business Incentive Corp
Mr David Treusch, general manager
Lake of the Woods Addiction Services
Mr David Novak, director
Rat Portage Indian Reserve
Chief George Kakeway
Mr Dave Palubeski, community planning adviser
Town of Kenora
Ms Joyce Chevrier, mayor
Kenora and District Chamber of Commerce
Mr David Dungey, president
Community Counselling Services
Mr Gary Norris, director
Best Western Motor Inn, Dryden
Mr Pat Skillen, co-owner
Lake-of-the-Woods Hotel
Mr Allan Van Belleghem, owner
Lakeshore Hotel
Mr Doug Stemkoski, owner
Mr Gordon Elder
Ms Jeraldine Bjornson
STANDING COMMITTEE ON ADMINISTRATION OF JUSTICE
Chair / Président: Mr Gerry Martiniuk (Cambridge PC)
Vice-Chair / Vice-Président: Mr Ron Johnson (Brantford PC)
Mrs MarionBoyd (London Centre / -Centre ND)
Mr RobertChiarelli (Ottawa West / -Ouest L)
Mr Sean G. Conway (Renfrew North / -Nord L)
Mr EdDoyle (Wentworth East / -Est PC)
*Mr Garry J. Guzzo (Ottawa-Rideau PC)
Mr HowardHampton (Rainy River ND)
*Mr TimHudak (Niagara South / -Sud PC)
*Mr RonJohnson (Brantford PC)
*Mr FrankKlees (York-Mackenzie PC)
Mr Gary L. Leadston (Kitchener-Wilmot PC)
*Mr GerryMartiniuk (Cambridge PC)
Mr John L. Parker (York East / -Est PC)
Mr DavidRamsay (Timiskaming L)
Mr DavidTilson (Dufferin-Peel PC)
*In attendance /présents
Substitutions present /Membres remplaçants présents:
Ms IsabelBassett (St Andrew-St Patrick PC) for Mr Doyle
Mr BruceCrozier (Essex South / -Sud L) for Mr Chiarelli
Mr JimFlaherty (Durham Centre / -Centre PC) for Mr Tilson
Mr Douglas B. Ford (Etobicoke-Humber PC) for Mr Leadston
Mr GerardKennedy (York South / -Sud L) for Mr Conway
Mr PeterKormos (Welland-Thorold ND) for Mr Hampton
Mr FrankMiclash (Kenora L) for Mr Ramsay
Mr Terence H. Young (Halton Centre / -Centre PC) for Mr Parker
Clerk / Greffière: Ms Donna Bryce
Staff / Personnel: Mr Andrew McNaught, research officer, Legislative Research Service
J-1051
The committee met at 0820 in the Travelodge, Kenora.
ALCOHOL, GAMING AND CHARITY FUNDING PUBLIC INTEREST ACT, 1996 / LOI DE 1996 RÉGISSANT LES ALCOOLS, LES JEUX ET LE FINANCEMENT DES ORGANISMES DE BIENFAISANCE DANS L'INTÉRÊT PUBLIC
Consideration of Bill 75, An Act to regulate alcohol and gaming in the public interest, to fund charities through the responsible management of video lotteries and to amend certain statutes related to liquor and gaming / Projet de loi 75, Loi réglementant les alcools et les jeux dans l'intérêt public, prévoyant le financement des organismes de bienfaisance grâce à la gestion responsable des loteries vidéo et modifiant des lois en ce qui a trait aux alcools et aux jeux.
The Chair (Mr Gerry Martiniuk): Good morning, ladies and gentlemen and members, to the continuation of the hearings of the standing committee on the administration of justice, considering Bill 75. The committee welcomes the local member, Frank Miclash. Could you say a few words, Mr Miclash?
Mr Frank Miclash (Kenora): Thank you very much, Mr Chair. First of all, I would like to extend my greetings to the members of the committee and the staff of the Legislature. As members will know, I pushed to ensure that the committee did get to Kenora, and I'm extremely pleased they've chosen Kenora as one of their locations.
I must remind the committee members who are in Kenora for the first time that we have a number of uniquenesses. We are the closest riding to Manitoba, as you will know -- I share that provincial boundary -- and also a riding which shares a boundary with the US to the south. I would ask you to consider some of the uniquenesses we have here in Kenora, and I just hope your stay in the community is a good one and that you come back. I'm happy that the committee is here and I certainly welcome you to the area.
Mr Bruce Crozier (Essex South): Chair, very briefly, we have with us today the mayor of Kenora, Joyce Chevrier. She's not listed as a delegation. I ask that the committee, through unanimous consent, see if we can, as a courtesy, find a spot somewhere on the program this morning for the mayor.
The Chair: Perhaps we can consider that as we proceed in the event that there are individuals who may not show up.
Mr Crozier: If we could at least get that consent so the mayor knows she might have an opportunity of getting on later.
The Chair: We also have a reeve of one of the townships present, to whom I spoke earlier. The difficulty is, ladies and gentlemen, that the list was prepared on a first come, first served basis. A number of individuals and organizations and representatives of municipalities unfortunately were not listed as a result of people phoning ahead of time. We did that hopefully to get a true representation, but many people have been disappointed. We have cut the presentations down from one half-hour to 20 minutes in order to hear more people. It has led to certain difficulties, with some people not being able to be heard or represent their organizations or municipalities.
Mr Crozier has made a request that this committee consider. We are leaving on a charter plane, so we have some small degree of flexibility. Is there any objection to perhaps setting 10 minutes aside somewhere during the morning to hear the mayor of the municipality in which this hearing is being held? I see no objection, and therefore I take it we have unanimous consent for that purpose. We'll arrange that some time during this morning.
GAMANON
The Chair: If we may proceed, because I'm five minutes behind already, I welcome Judy Adamson, who represents GamAnon.
Ms Judy Adamson: As you know, my name is Judy Adamson. I'm from GamAnon, which is the support group of the families and friends of gamblers. The calls I've received in the last six months have increased from one every couple of months to one every couple of weeks. How many times have you heard, "I won $100," "I won $200," or "I won $300"? I'm sure many times. But how often did you hear of the hundreds or thousands it took to get that amount? Did you ever hear how often their families were blamed and screamed at because they were angry at themselves for losing the mortgage money, the food money, the gas money? Did you hear the children quietly sobbing because they didn't understand why Mom and Dad were arguing again? Did you hear or see the frantic desperation, the terror of losing their family, the low self-esteem that brings on the thoughts of suicide?
How could it hurt to buy just one ticket or one bingo card or one pull on a machine? Most people say it's just one time, but for an addict it starts with one time. Who can eat one potato chip?
Instead of rejuvenating a city, a casino can actually kill other businesses by taking the money out of the economy. In Atlantic City, the poverty is still high, the population has shrunk and new jobs are mostly low-end service positions. Casinos prey upon the economically disadvantaged and cause higher-income-bracket people to become economically irresponsible. Many jobs created at a casino are an offset of jobs lost from other businesses. A casino must draw at least 50% of its wages from tourists, otherwise it is simply a redistribution of money from the local economy. Some 75% of Winnipeg's casino patrons are local; 85% of Montreal's are from within the province. Do the owners of the casinos keep and invest all their money back into our towns, as our local businesses do?
Is government putting all its emphasis on the revenue grab while time and geography permit? Anyone who has been personally involved in a gambler's life would feel that government is also playing a fool's game and placing a bad bet. Thank you for listening. If anyone has any questions, I'll be glad to answer them.
The Chair: We will start with Mr Kormos this morning. You have five minutes.
Mr Peter Kormos (Welland-Thorold): Ms Adamson, thank you kindly, because obviously some of us on this committee have been attempting very much to focus on, among other things, the addictive quality of gambling and, more specifically, the highly addictive nature of slots.
Bill 75 isn't about casinos. I wasn't overly enthusiastic, by any stretch of the imagination, about the 1993 casino legislation. Casinos are a done deal now; they're status quo in the province of Ontario. This bill is about putting 20,000 slot machines, one for every 550 population, in the province of Ontario in every place but casinos, thus increasing the accessibility to them.
I just ask you to reflect on this. John Scarne, who's a long-time American expert on gambling, identifies three types of gamblers:
The occasional gambler who gambles from time to time on any number of games -- and we've witnessed the growth of gambling; the last time the Tories were in power we saw the introduction of lottery tickets; so be it -- and for whom it isn't any great attraction. Obviously, we don't have to be overly concerned about that type of person.
The professional or skilled gambler, who isn't going to bet slots because it's a sucker's game. It isn't a game; it's a pure game of chance. It's not like shooting craps or playing poker or even betting the horses. There are no winners in slots, there are only losers.
Then the pathological gambler, the addictive gambler or the potentially addictive gambler, for whom slots are ideal: They're fast, when they're in every place but a casino, as is proposed here, they're accessible, and by God, they could even be democratic, because you can have nickel slots, quarter slots, loonie slots. They have been identified -- and we've heard opposition from, of course, the government -- by any number of sources, UK, American and increasingly Canadian, as having the greatest potential for addictiveness.
Do you share that concern about slots in contrast to other, traditional forms of gambling?
Ms Adamson: I definitely do. A gambler will start out with the large-amount slots and when they know they're running low on money, they'll go to the nickel ones. It doesn't stop. It starts with a penny. A flip of a coin is a bet. People don't realize that. I'm sure everyone here has made a bet, "I'll bet it's going to rain today." A bet is a bet.
0830
Mr Kormos: I suppose the real addiction here, the addiction as has been noted by several observers, is on the part of governments across North America, the addiction of governments to gambling as a means of raising revenue. Do you have programs for governments?
Ms Adamson: I wish I did.
Mr Kormos: I wish there was a quick fix.
Another consideration is that we have here a huge interest, and that is the great profits to be made in slots, not by the players but by the owners of the machines. It is an incredible multibillion-dollar industry in North America and indeed elsewhere in the world. I'm concerned because the same industry has been attempting to develop an image of playing the slots that it's entertainment, that it ranks with bowling or ice skating or tobogganing or visiting the theatre or watching a movie or listening to music or dancing, that it ranks with those things as entertainment. Part of me can't help but reflect on the fact that the gambling industry is doing the same thing now that the tobacco industry has done for decades, that is, trying to convince people that, "Oh no, it's not addictive, because nobody's telling you you have to smoke two packs a day" --
The Chair: Mr Kormos, I don't want to interrupt you. Because of the low ceilings, I find it very difficult to hear. If you must talk, please keep it right down, if you could.
Mr Kormos: Keep it down or up?
The Chair: Down.
Mr Kormos: I thought I was being sotto voce, Chair.
The Chair: No, I'm not talking about you; I'm talking about individuals who were talking while you were talking.
Mr Kormos: I thought I was being relatively moderate in my style.
Can you reflect on that at all for us?
Ms Adamson: All I can say is that with any type of gambling, whether it's VLTs, anything, if a gambler is going to gamble, they're going to gamble at any time anyplace, but as you say, these VLTs are just too easy to get at. On the way to work they can stop and gamble. They can run across the street while they're at work and gamble. It makes it too accessible.
Mr Kormos: And that's why the slot business wants those machines in places other than casinos.
Ms Adamson: Definitely.
Mr Kormos: They want it convenient, so as you're walking by it's in your face: the flashing lights, the razzle-dazzle. Probably some of the government members are going to say, "Do we underestimate the capacity of Ontarians to make choices?" No, I don't think we do.
Ms Adamson: I would like to say one thing. I don't know if the government is aware of the problems it's caused. There are too many agencies now that have to be involved because of the gamblers, because the families are the ones who are bumped. If you don't have any money, where do you go? If you can't get a job, where do you go? In other words, all these agencies that are already taking care of alcoholics, people who are economically disadvantaged, are going to have to take over the gamblers' families.
Mr Jim Flaherty (Durham Centre): Good morning. It's a pleasure for all of us who are government members to be in Kenora today and to have been in Thunder Bay yesterday.
If I may address, first of all, the question about the addictive quality of VLs as opposed to any other form of gambling, we heard in Thunder Bay and we've heard elsewhere that there are numerous video lotteries available in the province of Ontario today. Legally they are in eight other provinces of Canada and have been for some time, but the estimate is 15,000 to 25,000 illegal machines operating in the province of Ontario today.
I say that so we have in context what we're discussing. This is not a new phenomenon in the province of Ontario; it's there now and the money is going to illegal people. None of it is going to charities, none of it is going to the province of Ontario, none of it is going to help the 1% to 2% which Canadian research shows of the people who are participating in gaming activities who will experience some sort of addiction difficulty. I say that so we have the discussion in a context.
Given the existence of the machines and given that many people in Canada and Ontario, despite the views of those who would tell them how to live, do find that gaming and purchasing lotteries and playing video lotteries are an acceptable form of entertainment, of fun for them, given those realities, would you agree that the government should take the approach that Bill 75 contemplates? That approach is this: that the government would move carefully and cautiously and prudently; that we would have the lowest number of legal video lottery machines per capita in this country, and that's even after reductions by other provinces of the number of video lotteries they have; that we would take a phased approach, that is, that after the introduction of video lotteries in the racetracks and permanent charity gaming halls, there would be reflection and pause and an assessment of the situation before proceeding into licensed premises; that the operators of licensed premises would be responsible for making sure that the video lotteries were in a separate area not accessible to those under the age of 19 and that if they didn't they could lose not only their video lottery benefit but their liquor licence under the new Alcohol and Gaming Commission; that the fines would be $50,000 and $250,000, depending on whether one's an individual or a corporation; and also that there would be a five-year review of the entire situation in the province of Ontario. All of that is in Bill 75.
Finally, dealing specifically with the addiction problem that the research shows 1% or 2% will have with any sort of gaming where gaming is readily available in a jurisdiction, do you think it would be a significant benefit to organizations such as yours to have the commitment you have from the government of 2% of the gross revenues going towards funding teaching and education and assistance to those who do unfortunately suffer from the addiction, which I may add is something no previous government has done, including the NDP government, which put casinos in the province of Ontario and did not make allowance for people who unfortunately suffer addiction difficulties? I'm asking for your comments on that approach.
Ms Adamson: You're saying that 2% is going to be allowed. Where's the rest of the money going?
Mr Flaherty: It is 2% of the gross, which would be a substantial sum, of course, because right now, as you know, your funding is nowhere near that for your organization and other organizations in the province. This is a very serious commitment. The 2% comes from the reality that the research shows in Canada that the degree of addiction is somewhere from 1% to 2% -- 1.5% -- somewhere in there. That consistently is where the figure comes from.
Ms Adamson: Do you mean of the people you actually know about?
Mr Flaherty: All of the studies. I'm sure you're familiar with them. We had the vice-chair of the Addiction Research Foundation before us the other day who said that people can get into all kinds of trouble with all kinds of gambling, but the probability of addiction does not necessarily increase with the video terminals where gambling is readily available.
Ms Adamson: It does, though, because it makes it too accessible.
Ms Isabel Bassett (St Andrew-St Patrick): I just wanted to follow up on what Mr Flaherty was asking you and ask what services you're offering right now -- you never quite said what you were doing -- and could you benefit from additional funds? The studies do show that a lot of the people who gamble are cross-addicted, so you already, I would presume from my work in those fields, are working with that type of person with an addictive personality. Could you answer that?
Ms Adamson: In actual fact, GamAnon has no funds at all.
Ms Bassett: No funds?
Ms Adamson: No funds at all. We have never been supported by any group at all.
Ms Bassett: So you could benefit.
Ms Adamson: Definitely.
Ms Bassett: What would you do with that money?
Mr Kormos: She'd rather not be in business.
Ms Adamson: Right. First of all, we can't even get information out to the community. The only reason my name is in the paper is that the paper has graciously not charged me to put in my notice saying that we could have meetings at any time. We can't get people to help. We can't get a meeting room because none of us has the money to be able to pay out for it, whether it's once a week or once a month.
Ms Bassett: Knowing then that you're dealing with personalities who tend to be addictive, could you not be helping those people already, because they're likely to --
Ms Adamson: We definitely are, yes. But I do it through my own home, because people are very reluctant to come forward. First of all, the families and friends of these people, they're enablers; they keep it going by not telling other people that they have a gambler in their family.
0840
Mr Miclash: Judy, thank you very much for your presentation. I want to follow up on what the two previous members have indicated and get some ideas from you as to what you would see as a comfortable level of funding for your organization and where you see that funding coming from.
Ms Adamson: Well, put it this way: If we could get funding now to help people now, possibly the community would realize how big a problem we have, because as I said before, my calls have increased drastically. I am getting people who are suicidal now. I used to get calls where people were just concerned and wondered whether they had a problem, so I would refer them to Gamblers Anonymous, but now I'm getting families that are very worried. I've had three calls in the last month. Their families are worried that these people are suicidal. They have lost their homes, they've lost their businesses and they are on the verge of losing their families. These are three different ones; this is not the same person who is calling. These people are drastically out of control.
Mr Miclash: In terms of your group, how many people would you actually say you would service in the community over the period of a month?
Ms Adamson: Well, put it this way: The last call I had there is an entire group of family and friends who are trying to help one gambler. My understanding is that there are 30 people trying to help one person; that's just an example. This is one family, and there are many families in this town that aren't even aware there is a problem. They don't realize how bad it can get. They say, "Oh well, if I just give them money to buy food...." They don't realize they're enabling them to go on. "If I just babysit their children while they're in gambling...." They don't realize that's enabling. They think if they give them money for rent, that will just help them over, but it's a never-ending thing, because gamblers are manipulators and they will take everything they can. There is one lady, 80 years old, who gave me a call. Her son has taken every bit of her savings and she's on the verge of losing her house.
Mr Miclash: Judy, are you aware of the program set up around the Windsor casino that offered a fund to community organizations such as yours? Are you aware of that funding?
Ms Adamson: No. We don't get any information. I have tried desperately with all the agencies here in town and they're sending me whatever they're getting.
The Chair: Ms Adamson, thank you very much for bringing the plight of those who have this addiction to the attention of this committee.
LAKE OF THE WOODS COMMUNITY DEVELOPMENT INC LAKE OF THE WOODS BUSINESS INCENTIVE CORP
The Chair: Our next presenter is Lake of the Woods Community Development Inc, David Treusch, general manager. Good morning and welcome, sir.
Mr David Treusch: Let me welcome you all to Kenora. When I get back to the office, I'll see if I can arrange for a little better weather for you.
I am David Treusch and I appear before you this morning as general manager of two organizations: Lake of the Woods Community Development Inc and Lake of the Woods Business Incentive Corp. By way of introduction, Lake of the Woods Community Development Inc and Lake of the Woods Business Incentive Corp are allies in community economic development. Acting on behalf of the towns of Kenora, Keewatin and Jaffray Melick, the former organization delivers the provincial municipal economic development agency program and works with other public and private sector community partners; the latter organization delivers the federal Community Futures program. Both are community-based, non-profit corporations served by volunteers who direct a core staff.
In full consultation with the community, the organizations developed a vision and strategic plan for the operating area. This vision states:
"Our communities shall be a model of healthy, sustainable and planned development united in their vision through effective leadership, partnerships, and alliances. Sustained by a vibrant and diversified economy, all residents shall enjoy equal and cohesive participation in employment, social, recreational, and cultural opportunities."
This presentation is given in the context of our operating parameters. We will also speak in terms of general principles rather than attempt to deal with the specific language or technicalities of the bill. Given this framework, we would state our support for the general directions anticipated by Bill 75.
More specifically, we are pleased to see support to charities, which are assuming an ever-increasing burden as governments downsize. Similarly, liquor and gaming have a profound effect on the hospitality industry, and we welcome any measure designed to enhance this economic sector.
We believe the separation of retailing interests from regulating interests for the liquor industry to be well-founded. At the same time, we would hope that equal weight within the system would be given the two interests so that a balance is achieved.
One of the goals within our strategic plan calls for the reduction of needless regulation and bureaucratic red tape, all of which serve as a serious impediment to business. We are therefore grateful that this legislation will attempt to remove some of the current inefficiencies of the subject system.
It is reasonable that a percentage of gaming revenues be dedicated to problem gambling. Presumably at least two avenues would be supported: prevention and treatment. We are not in a position to suggest what percentage is appropriate, but presumably some process of annual review including caregivers would be a prudent measure.
While we support gaming provided that on the whole a greater community good is being served, we do so on the basis that the activity will be ordered and lawful. There should therefore be no tolerance in the bill for a criminal element. The question arises, will a percentage of gaming revenues also be directed to provincial and municipal police forces to enforce the legislation when and as appropriate?
Having made these general reflections, we would now like to touch on three specific aspects of liquor and gaming which are close to our community.
First is the matter of obtaining an occasional liquor permit. According to the LCBO, as we understand it, an individual cannot be granted a permit because he or she cannot hold a function, in the board's view. The permit must bear the name of an organization, company or similar entity. However, the permit will not be issued unless one specific individual signs his or her name to the application, assumes full personal responsibility and agrees to be present during the full time that liquor is being served. This is done on the basis that one person must be held accountable should minors or intoxicated persons be served. Presumably the LCBO feels the entity holding the function cannot be responsible.
One of the ways organizations such as ours attempt to attract and retain tourists is through the staging of special events and festivals. During their startup years these activities are not financially strong. Many organizations have therefore relied upon liquor sales to produce some of the revenue while alternative revenue streams are being developed. In our case, a volunteer, freely giving their time to serve a non-profit community organization for the betterment of their community, is required by the board to assume the full liability of their organization. That unfortunate person is then required to be in continual attendance for, say, in the case of our Canada Day celebrations, three days. To us, this arrangement does not seem reasonable or equitable. Either the volunteer would be so irresponsible as to not care about the possible consequences of their signature, in which case the board's purpose would seem to be defeated, or the volunteer is fully aware of the consequences and is obliged to act against their lawyer's advice and undergo extreme anxiety for the duration of the event.
We will not take time here to establish the importance of volunteers to the economy of the province of Ontario. We think the committee is well aware of the facts. Having those facts would lead one to conclude that volunteering should be made as pleasant and rewarding as possible. Surely then another method of issuing occasional liquor permits under these conditions could be found, one that would guarantee reasonable standards by which minors or intoxicated persons would not be served liquor while at the same time not being oppressive upon Ontario's volunteers.
For the remaining two issues some background is in order. Tourism is our single largest industry, attracting approximately one million visitors per year who spend about $230 million, which in turn employs a significant portion of our workforce. Three quarters of this income is "export dollars," so it is good for the province and it is good for the community. In comparison to other communities, we are somewhat unique given the relative importance of this industry to other industry sectors. This becomes evident in certain data where, for example, we have twice the square footage of gift store space as the provincial norm. As significant as the industry is, much can yet be done. One of our goals is that tourism shall be a diversified four-season industry well known in target markets. Obviously we naturally take great interest in anything that affects this industry.
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As has been said, liquor and gaming bear great impact on the hospitality industry. Measures which enhance the competitive nature of the industry are highly desirable. With the downward trend in liquor consumption, many hotels are experiencing financial hardship. Permitting them the off sale of beer and video lotteries would accomplish two worthwhile objectives: troubled properties would enjoy a new and proven source of revenue, and greater convenience would be offered our visitors. As it is, Brewers Retail hours are not always compatible with the arrival times of the travelling public, who frequently proceed to remote areas when transferring through our community. Also, we would be better positioned to meet the expectations of our American visitors.
Finally, we come to the matter of the Golden Eagle, which is currently licensed as a charitable casino. This is a project of the Wauzhushk Onigum First Nation. Since 1984, the trimunicipal area has sought a major attraction and in so doing undertook a number of studies, none of which bore fruit. In 1993, the Lake of the Woods Community Development group and Wauzhushk Onigum joint-ventured a project assessment for an Anishinabe theatre attraction. This had positive predictions but the capital cost seemed to be a barrier at the time.
Almost concurrently, Wauzhushk Onigum attracted Gaming World to the area. The operator recognized a competitive advantage in bringing together the family entertainment element, represented by the theatre attraction and outdoor events, along with gaming, all in our internationally established destination resort location. Community support was gained as a result of the obvious merits of the scheme. The trimunicipalities would enjoy a major attraction which would be a major employer. Tourism would be diversified and, for the first time, established on a year-round basis.
Due to the high seasonality of the hospitality industry as it now stands, a systemic flaw in the local economy would be largely corrected and costly transfer grants in the form of welfare or unemployment insurance moneys would be substantially reduced. Reference to the strategic plan quickly demonstrates the contribution this project would make to the community's goals.
With investment capital available and resources at hand, consent from the provincial government was all that was needed to launch the megaproject. Unfortunately, in granting such consent the previous government saw fit to so restrict the gaming operations that they are unable to meet the stakeholders' objectives. Limited hours of operation, low betting limits, limited number of games, denial of VLs, restricted marketing and more all served to frustrate ultimate success. For example, the Golden Eagle is prohibited from joining in co-op tourism marketing programs with our organization and other local businesses. It cannot even be a good corporate citizen in this sense, and it is difficult for our organization to coordinate community marketing. We watch bus tours remove people from our jurisdiction to gaming establishments in the US in frustration because the Golden Eagle cannot promote bus tours to bring Manitobans and Minnesotans to Ontario.
Through this committee, we strongly urge the present government to correct the situation by amending the restrictions. Granting a full complement of VLs would be another valuable contribution. What is of particular importance is that the Golden Eagle be of sufficient critical mass so as to effectively compete in Manitoba and the midwest US, and this point we underscore.
In summary, we express our deep appreciation for this valued opportunity to share our views and respectfully submit three issues for the committee's consideration:
(1) The nurturing of Ontario's volunteers by amending the method of issuing occasional liquor permits.
(2) The provision of relief to Ontario's hotel properties by permitting the off sale of beer and installation of video lotteries.
(3) The relief from inhibiting restrictions and the granting of critical mass to the Golden Eagle charitable casino so that it might effectively compete in external markets.
The Chair: Thank you, sir. We have two minutes per caucus. Mr Flaherty and Mr Klees.
Mr Flaherty: I'll be as quick as I can so my colleague Mr Klees can ask a question.
As the parliamentary assistant in the Ministry of Consumer and Commercial Relations, I've taken note, of course, of your comments about liquor licensing and so on and certainly will undertake to respond to those concerns. But dealing specifically with Bill 75 and the hospitality industry and employment and job creation, we had evidence previously from the hotel and restaurant association that this Bill 75 would result in the creation of about 10,000 jobs in the hospitality industry, particularly in rural Ontario. Is it your anticipation that there would be substantial job creation in the hospitality industry and tourism industry in Kenora and area?
Mr Treusch: We had projections of from 1,200 to 1,800 new job positions created for our trimunicipal area here. That would also include some of the general operating area. So we would be looking at transporting some of the underemployed and underutilized workforce in the neighbouring region into the area.
Mr Flaherty: With respect to the Golden Eagle charitable casino, a number of the government members had an opportunity to visit the casino last night, and the Ministry of Consumer and Commercial Relations has had discussions previously with the casino and will certainly undertake to continue those with respect to the concerns that you've raised.
I'm going to stop now because Mr Klees has a question.
Mr Frank Klees (York-Mackenzie): Just one very quick question for you with regard to the Golden Eagle, an issue that you raised. Do you feel that there may be a negative effect on that casino if, in fact, the VLs, the video lotteries, were extended to other premises within the community?
Mr Treusch: I don't think so. I don't believe so. I say that on the basis that none of the others would have the quantity or the mass of gaming that would be represented by Golden Eagle. I think properly handled it could be complementary, in other words, that visitors coming to the community -- and hopefully that's what we all want to achieve -- who would be staying here in the accommodation would be exposed to gaming and would get that sense of that recreational pursuit at the place of accommodation, which would sort of set a pace or a tone when they come here for that purpose. When they want to engage in it in greater depth, then of course they would presumably use the Golden Eagle facility. I think they could be complementary.
Mr Miclash: Thank you very much for your presentation. David, you actually bring forth a good combination of the aspect of prevention and treatment along with the ordered and lawful running of this industry. You do a good job of mixing that with the importance of it to the area. You talk about 1,200 to 1,800 jobs in the actual expansion of that particular gaming centre. What kind of spinoffs do you see for the trimunicipal area besides the 1,200 or 1,800 jobs that we're talking about that would be brought to the area through the expansion?
Mr Treusch: Well, of course, there's always the usual ripple effect or indirect job creation. That could take up to five to seven years to take full impact. The impact would reach into every sector of the community, be it the construction industry, which of course would be immediate, but education, various service industries, business services, personal services, retailing. So it would go throughout the community. The wealth generation, a certain amount of that obviously would be directed towards municipal infrastructures so it would improve the quality of life for the area. The effects are quite profound and quite deep.
Mr Miclash: You talked about bus tours, and in my opening comments I mentioned the uniqueness that we have here in northwestern Ontario being the closest ride and the closest area of the province to Manitoba. Can you maybe just expand a little bit more on what you know in terms of bus tours that would possibly come into the area and that are avoiding the area today because of the lack of VLTs in the region?
Mr Treusch: Tour operators require sufficient attraction to justify a length of stay, and the difficulty we've had here is putting together sufficient attractions for the type of people who would go on a tour bus. Historically, our tourism product has been hunting and fishing, and that's why we're trying to diversify that so greatly and get into other family activities and that type of thing.
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I believe there are a number of tour operators in the Winnipeg market particularly who would be interested in engineering tours, bringing people into the trimunicipal area. One of the things, though, that I did not mention is that we were successful in gaining Northwest Airlines air service starting next year into our airport. This will bring the Minneapolis, St Paul and Chicago markets directly in to us. These tours, to me, would not be restricted to bus tours, but I see airline packages as well being marketed in the midwest US.
Mr Kormos: You speak of the job creation, and I understand that. Casinos like Windsor, and now Orillia and Niagara Falls, have demonstrated themselves to be somewhat high-labour component. Slots out in the community are not high-labour component, in contrast. I'm aware of the Golden Eagle charity casino. I'm also aware that there's some talk here in the community of the potential for Minaki Lodge, for instance -- and I know some of my Conservative colleagues will be more than prepared to take credit for Minaki Lodge; Lord knows they invested enough of your money in it; well, not them, their predecessors -- but the potential of Minaki Lodge for a permanent casino site.
What does that do, then, to Golden Eagle, with Minaki Lodge within, I'm told, a short distance, a short car drive, from it? Just how much can be sustained here? Aren't you concerned? You talk about sustainability and somebody who spoke with us yesterday in Thunder Bay spoke about how gambling, if it's overly community based, is not sustainable, because once you suck every last nickel and dime out of the community, there's simply nothing left, you've used it all up. There's a finite capacity.
Mr Treusch: Yes. I hope my presentation was clear. Our intent is not to market the local community for the Golden Eagle. What we require and what we really desire is the ability to market this casino to non-Ontario markets and non-regional markets.
You bring up the matter of Minaki. I'm not aware that they have been granted a gaming licence. My understanding from the news release and any information I've had surrounding Bill 75 is that it's going to be approaching its application in a businesslike manner. I would then assume, if the government was speaking about granting licences, that they would look upon a market area and they would look upon the relative proximity of Minaki to the trimunicipal area. Presumably, on a business decision, one may well not entertain two casinos within that operating area. I happen to have a summer camp at Minaki. I just came from Minaki this morning. To my knowledge, most of the residents of the community of Minaki are not in favour of a casino at that community.
Having said that, though, it's known that some casinos do operate in remote locations and the public commute. The fundamental difference, however, and I think this is of prime interest, is that the trimunicipal area has the infrastructure to support a full casino operation, which Minaki does not. The food and beverage service is here, the accommodation is here, the public expense and investment in infrastructure is here. It would seem to be a strange decision to locate a casino in Minaki and then have to relocate all that infrastructure to support a casino.
The Chair: Thank you, sir, for your presentation.
LAKE OF THE WOODS ADDICTION SERVICES
The Chair: We are proceeding to the Lake of the Woods Addiction Services, Mr David Novak, director. Welcome. You have 20 minutes, sir.
Mr David Novak: Thank you and good morning. The Lake of the Woods Addiction Services incorporates a variety of programs such as detoxification, short-term residential treatment, as well as assessment/referral and outpatient counselling. Our detox centre is one of the busiest in the province, while our assessment/referral unit receives an average of 40 to 50 new referrals per month. Our programs are sponsored by the Lake of the Woods District Hospital and funded through the substance abuse bureau of the Ministry of Health.
The primary objective of this presentation is to highlight several concerns and recommend certain actions with respect to the introduction of VLT gambling.
People choose to gamble for many reasons, including the purely social recreation it provides. It has had a cyclical history of prevalence in different societies over time. We appear to be at a crest in the public acceptance of this pastime. Unfortunately, the widespread expansion of the many forms of legalized gambling brings with it those casualties who become apparent after a brief period of time. Video lottery terminals appear to be the most virulent form of present-day gambling. Our experience to date has been limited, although clients report problems with some other types of gambling.
What is the experience of other provinces? A 1994 study showed that "about 88% of adult Albertans are social non-problem gamblers. Seven per cent do not gamble at all. The remaining 5% of adult Albertans have some problems related to their gambling. This group consists of 4% of Albertans who have mild to moderate gambling-related problems and the 1% who have a more severe problem."
If we transpose these figures to our province, it would mean that some 500,000 persons would have problems related to their gambling. The province of Ontario could be looking at 100,000 individuals with more severe gambling problems. Even these numbers expand greatly when one considers the effects on family members, business associates and others directly or indirectly connected to the compulsive gambler.
It should be noted that recently in Alberta video lottery terminals were the most frequent type of gambling, followed by bingo -- VLTs at 56.5%. Of all the admissions for gambling in the reported year, that is, admissions for treatment to the alcohol and drug abuse commission, almost 69% stated that they had used VLTs in the past year.
Our neighbouring province of Manitoba commissioned a well-known specialist in gambling research to complete a prevalence study in gambling in Manitoba. Again the results were very similar to Alberta's. I think there were four-point-some percentage, very similar to the 5% noted in Alberta. It should be noted that when VLTs were introduced in Winnipeg bars and lounges in September 1993, the Addictions Foundation of Manitoba's 24-hour help line opened for gamblers and their families. So for the one fiscal year, April 1, 1994, to March 1995, the line received almost 3,600 calls, half of them being cries for help.
An AFM publication cites the original intention of beginning with prevention and education programs before offering the counselling segment. This plan was revised because they found the demand for counselling was immediate. There was a big rush to get treatment programs into place as quickly as possible. One of their gambling counsellors is quoted as saying that most clients come for help with coaxing from family members or co-workers. As she states, "The majority of people who come to us are facing serious financial debt." As a result of their gambling, these individuals admit to jeopardizing the basic necessities of life, such as their ability to pay for food and shelter.
These experiences and findings are very close to home. As one US authority, Dr Richard Rosenthal, is quoted as saying: "Gambling caters to our need for immediate relief and gratification, our preoccupation with material success, and a kind of action without involvement. Video games add another dimension." He refers to these games as "a seductive form of escape" and he states: "The newer machines even pay off not in coins but in credits. You win time instead of money, and in effect, play in order to keep on playing."
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Video gambling machines may offer gambling in its purest form and, in his words: "There's an immediate stimulus response. It is very addictive and the trend is towards developing faster and faster games."
We in the addiction field hope our response becomes faster and faster as well. We require the appropriate resources to educate young people as well as educate and treat the adult community. Let's begin by ensuring that the programs are in place before we become overwhelmed with that select group of gamblers who require specialized help. Thank you.
Mr Miclash: David, I just want to pick up on your final point in terms of resources and would like to know if you feel that the resources you're getting from government today are adequate, and maybe give us an idea of what they are and where they come from.
Mr Novak: I think the resources, if we see an increase in the gambling problem, will not be sufficient. For one example, we've been asked to do some presentations in schools. Of course this is time-consuming because you take a counsellor for an afternoon to travel to a small nearby community, spend the time and come back, and these are basically counsellors. I think we would like to see an additional number of counsellors, as they do in Manitoba, specifically assigned to gambling counselling. In Manitoba, including large rural Manitoba, I think there are 17 counsellors specifically doing gambling counselling.
Mr Miclash: In terms of your actual funding at the present time, can you give us an idea as to where that funding comes from?
Mr Novak: Our funding is entirely from the province of Ontario, the substance abuse bureau.
Mr Miclash: There was a $1-million fund that I mentioned earlier, when Judy did her presentation, developed around the Windsor casino. It was developed for organizations such as yours to develop services and programs for problem gamblers. Are you aware of that program or the fund that was set up and do you have any comments regarding it?
Mr Novak: It's not well advertised in our area. I haven't certainly been given access to it.
Mr Crozier: Thank you, Mr Novak. This is one area that I'm inclined to agree with you is woefully underfunded. I think we tend to forget, and it's interesting that you've pointed this out, that although the percentages seem low, when you talk in terms of half a million people who will be dumped on to your system with its limited resources, it is something that we have to consider very seriously. I, with you and with others, encourage the government to look at that 2%. I've termed it to other presenters as the cost of doing business and I think they're willing to write that off and say: "So be it. We're going to throw some money to you folks." You're going to be happy to receive whatever you can get, I'm sure, but if you need more in the way of resources, I stand by you and others to encourage the government that when they're taking 70% -- and they talk about low taxes; that's probably the highest-taxed area in the province -- when they take 70% they really should give consideration to giving you more resources. Thank you.
Mr Kormos: I'm pleased that you're here. Just as the tobacco industry has spent billions and decades trying to refute research and the tobacco industry has insisted that cigarettes are neither carcinogenic nor addictive, the gambling industry -- especially the slots, which have the potential to be the biggest single moneymaker in all of the gaming industry because of the very things you and others have spoken about -- wants to present it as mere entertainment, as if it ranked with bowling or ice skating or any other number of things, as I mentioned earlier. The corruption, though, has already commenced because of the big bucks involved here.
The government to date has made a commitment of 2% of revenues to funding for gambling addictions. Some estimate that to be some $33 million, and in the course of that, people who otherwise one would have thought to be vigorously opposed to slots have relaxed their position somewhat. To say they've been bought off might be a little extreme.
I note that when we were in Thunder Bay, your colleague from the Addiction Research Foundation who made a presentation there said in his submission, "VLTs are considered to be the most addictive form of gambling." You here in Kenora in your submission make reference today to one US authority, Dr Rosenthal, video gambling machines, these video electronic slots, "It is very addictive and the trend is towards developing faster and faster games," which is part of the addictive nature of it.
By God, here are two qualified regional people. You certainly have qualifications. You certainly have made reference to research. However, the vice-president of the Addiction Research Foundation, Robin Room, in Toronto declined to describe slots as more addictive than other forms of gaming. He wanted to downplay the distinctiveness of slots as compared to other types of gambling.
I suggest to you that there is, as you've indicated, not just Dr Rosenthal, whom you quoted, but a plethora of research, including Mark Griffiths's from the University of Exeter in Great Britain, including a growing number of Canadian sources, including other American sources in addition to Dr Rosenthal, including the observation that among the general population to date the level of addictive gambling may be in the range of 2%. Among VLT players in Manitoba, according to Gfellner, among the electronic slot players in Manitoba the pathological gambling rate is 9.3%, significantly higher than what we have understood to be the national average. Frisch, from the University of Windsor, identifies 17% of adolescents who either have a confirmed pathological gambling problem or a high potential to acquire one, and it's evenly split. He suggests that we have a generational phenomenon here, a generation of young people, because the other data are that slots tend to be played by younger gamblers -- not only, but tend to be -- and that's universal across Canada and certainly in Britain.
We have the potential here for a crisis in gambling addiction. Just as Bugsy Siegel and the mob had to buy off various people when they wanted to move into Vegas or the mob had to buy off people when they wanted to move into Atlantic City, these guys are prepared to pay off people when they want to move into Ontario.
Mr Tim Hudak (Niagara South): I just had some thoughts while listening to Mr Novak. It has been interesting, working with this committee, as to the nature of the addictive beast. It has been pretty consistent that it's the thrill, that it gives somebody the edge. They feel like the big shot when they're throwing the dice or making a bet with the bookie. We've heard testimony that it could be anything. Scratch and win and lotto seem to be the choice of that 1% of pathological gamblers.
The point I try to make is that it is unique to this program that we're setting aside the 2% that you spoke about to fund addictive treatment and research, unlike previous governments that went into the gaming business and didn't set that aside. I think this program is unique in North America as well. The question I'd like to ask you, Mr Novak, is about this substantial sum of money that's being put aside to fight gambling addiction across the board, whether it's calling the bookie, throwing the dice, the break-open tickets. There is some concern here. Which is the best area to fund? What kinds of services should the money be set aside for? Should it be education, prevention, treatment? What would be the most effective use of those funds?
Mr Novak: I think a well-rounded combination of all those. I think we should look to provide the best services, better than Alberta, better than Manitoba. I think we've got to be creative and say, "Look, we're going to take the best preventive approach, we're going to plan it out, we're going to do it really better than anybody else, and we're going to have a treatment system that means that any casualties from any form of gambling are going to get access."
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The problems that Manitoba has in ADAC, the Alcohol and Drug Abuse Commission, is in their primary mandate, in their goals and objectives; their mission statement has "and gambling." I think we need to say the same thing in Ontario.
The Chair: You have 60 seconds, Mr Klees.
Mr Klees: Mr Novak, the fact that you are here shows that there are addiction problems now currently in the province. You make reference to preventive measures. With regard to the young people in this province, we're very concerned, obviously, that we do the right thing and, as you indicate, that we implement appropriately. Do you feel that there's something that we could do in our school curriculum to incorporate some preventive education on these issues?
Mr Novak: I'm not an expert in education by a long shot, but I do know how well received presentations have been that we've done as an outside agency. So if the curriculum can foster a broader preventive nature, so much the better. But I do know there are kids that ask questions about gambling and are concerned about their own family members. So I know that we have to do a lot more about that.
The Chair: Mr Novak, thank you very much for your presentation here this morning.
RAT PORTAGE INDIAN RESERVE
The Chair: Our next presenter is the Rat Portage Indian Reserve, Chief George Kakeway. Welcome.
Chief George Kakeway: Good morning. First of all, I would like to take this opportunity to be able to speak to you, and I certainly thank the committee. I have here with me Dave Palubeski, who is our adviser and planner for the community.
I have been a councillor for eight years and the chief for the last 20 years, so I've been around in terms of politics in the region for quite a bit of time. I represent the Wauzhushk Onigum Nation; it's just about five miles down the road from here. Certainly I've been involved or at least have participated somewhat in Ontario politics. I started off with Mr Davis when he was the Premier and then Peterson and Bob Rae and now Mike Harris. So I've completed a circle in terms of the people I've been talking to.
Rather than speaking from a written presentation, I thought I'd speak basically from experience and talking to people and the knowledge that I've gained throughout the years on this whole gaming issue.
First of all, we do have a common boundary with Jaffray and Melick and the town of Kenora. As I said earlier, we're just down the road from here. Generally, we have the same aspirations, the same objectives, as the trimunicipal area in trying to bring gaming to our region.
As you know, as the previous speaker Mr Treusch said, this is a destination area, and certainly we hope that through gaming we can increase the flow of visitors and have Lake of the Woods as a destination where we could have visitors, whether from abroad or overseas or from Manitoba. I think generally we'd like to increase the capacity of visitors that would come and certainly would like to see that in the very near future.
I think we do speak in favour of Bill 75, Golden Eagle being the site, hopefully, that could be chosen for the VLTs. As I said earlier, we've been pursuing gaming since 1985. Through our latest discussions with the last government, the NDP, there certainly was quite an interest in providing that kind of facility in our discussions with cabinet ministers like Hampton and Wildman and some of the ministers that were responsible in those areas.
We support, as I said, Bill 75. In our community, in Rat Portage, we did have a referendum to support gaming in our community, so we do have that in place and certainly the people in our community fully support that. Some of the reasons that they support it is that it does provide an economic stimulant in our community, opportunities, and also in the whole area of providing a better quality of life in terms of housing developments or renovations or improving the road infrastructure and so on. Certainly we will use those moneys for our youth, for our elders and for various programs that lack support and funding from governments, because in our community in Rat Portage we're not tax structured to provide these kinds of programs and services. Whatever is available from government, I try to really work with, but I think in this case it will provide us the opportunity to do some more of this kind of work to help our people.
Also, at the same time, we are trying to pursue self-sufficiency. I think that is a commonsense idea, and that's the approach we're trying to take at all times, without having to rely too much or a lot on the government to provide services.
From another point of view, we do also support the initiatives of the town and trimunicipal area in terms of what they're trying to do in economic development, and certainly we think this would complement some of those things they're trying to do.
In terms of a brief history, we signed an agreement with the last government that tried to give us the ability or enhancement in terms of an agreement with the province. That's what we managed to accomplish with the last government. Basically it's a partnership arrangement that we finally achieved. Basically what it is, in their legislation they recognize our gaming code. Of course, there are amendments that need to be made within that gaming code so that we have the ability to compete in the market, in terms of as already indicated by Mr Treusch, again, with Minnesota and Manitoba, because as far as we can see, the playing field is not level and we just don't have the opportunity and the ability to compete with them at this point in time.
We opened Golden Eagle two years ago, and again it's a situation where the ability and the capacity is not there to compete. Hopefully, with this presentation, we would be able to accomplish just that.
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I think, overall, in our responsibilities as a community, we take this very seriously in terms of gaming and pursuing it for the last 10 years. Throughout our discussions and deliberations with the local charities we've managed to have some common understanding, and hopefully if this thing comes about we are going to sit down and discuss thoroughly how we're going to deal with the revenues that may exist with the local charities.
I think what we're basically looking at is bringing in people. Being Lake of the Woods, the local area has a destination point for getting bus services for bringing people in rather than trying to exhaust the local market. I think our whole objective is to bring people in and I think with these amendments to our gaming code we have accomplished that. Certainly a lot of people from the area are being taken out of the community and through bus tours or other means of travel they go into Minnesota and Manitoba, of course, and other areas where gaming is available.
With that, I could maybe get Dave to make brief comments because he's been involved in it with us for a period of time.
Mr Dave Palubeski: Thank you. I've been the community planning adviser to the Wauzhushk Onigum or Rat Portage community since 1984 and have been working with them in regard to the discussions that they've had with Ontario's government related to gaming. I think one of the reasons that this legislation is being supported by the reserve is that there is an expectation that the existing partnership that is in place between Ontario and this reserve, which recognizes a sharing of responsibilities in terms of the administration of gaming on the reserve, will continue when this legislation is adopted. In other words, the desire to examine the possibility of charitable casinos in the province in terms of permanent site locations will also include the consideration of the Golden Eagle charitable casino as a permanent site for gaming.
It's important that the committee understand that the current code arrangements that have been agreed upon by Ontario and the charitable casino at Rat Portage were done so with the idea that it would be examined and reviewed in time as we gained experience with it. It's very clear that the restrictions with respect to the operation of the facility as in its present place has to give consideration to the local marketplace in terms of not upsetting the local marketplace gaming environment, because other charities and organizations rely upon gaming as a fund-raising measure. But the restrictions that are placed upon it that you can't bus people in, you can't advertise in other jurisdictions, you can't co-op with existing businesses within the community to promote this as a destination location, you have restricted hours of operation and you have reduced betting limits -- $25 betting limits -- all put a drag on the possibility that this facility can compete effectively with what's available in the United States and in Manitoba.
The consideration of permanent charitable casinos would be an extension of an existing partnership where there's a sharing between Ontario and this reserve on the administration of a gaming code and in compliance with the acts of Ontario and Canada, and consideration that this area, in consultation with the reserve, can establish gaming as one of the attractions for year-round visitors to the Kenora region.
The other thing I'd like to point out is that gaming has been taken very seriously within the reserve. They have had a referendum. There's been full community consultation within the reserve over these past five years before they entered into the agreement with Ontario. In terms of implementing that agreement opening Golden Eagle, there also has been broad communication and consultation with the communities of Kenora, Keewatin and Jaffray Melick, as well as the chamber of commerce, as well as the economic development organizations within this region.
Lastly, there's also a recognition by the Golden Eagle that there should be inclusion and consideration and sensitivity to the local charities within the area.
Last year, in 1995, a letter of intent was entered into between the Golden Eagle charitable foundation and 26 charities and service organizations within the Kenora-Jaffray-Melick area for revenue-sharing.
The Chair: We have one minute per caucus.
I'm pleased to be able to support Chief Kakeway and respond to the committee and will be happy to answer any questions.
Mr Kormos: Chief Kakeway, one minute isn't a whole lot of time. Sometimes it takes me that long just to inhale before I start one of these spiels, and I acknowledge that.
One of the concerns I think a whole lot of us have is, first of all, this government's track record with Casino Rama in Orillia, in terms of agreements that had been made and were known to all the parties, isn't particularly good. Collect every little scrap of paper or every signed document, every memorandum of any meeting you ever had with the last government so as to cover your interests, because these guys will -- quite frankly, it's my view that casino operations like yours are certainly at risk because this government wants to redesign the nature of charity casinos.
Mr Flaherty over there is the person closest to the Premier in this whole room. He's a parliamentary assistant and I'd advise you to get him on record right here and now that your charity casino operation is going to remain untouched, because they're proposing a mere 50 fixed charitable casino sites. There's going to be an incredible amount of competition for those from some very powerful interests, quite frankly, including domination by southern ones. I wish you well, but I also have some grave concern. Talk to Mr Flaherty. You might be able to get him committed here and today.
Mr Terence H. Young (Halton Centre): I've been encouraged to hear this morning from the Liberal caucus, the first time in these hearings, that they recognize there is a problem and some money should be going to help agencies in the communities to deal with the problem with the small percentage of people who are problem gamblers.
I want to refer to this Gfellner report and tell you what it says in summary about VLTs. The average person gambles once a week for 32.5 minutes. Most players -- over 90% of the players -- have a budget. Whether they win or lose, they stick to it. The budget, the mean, is $5.
I went across the street to a store this morning to pick something up. I found these for lottery tickets. There were six of them, including a book; if you forget to play you can mail in and your numbers are automatically played. Talking about problem gambling, it doesn't appear to me that VLTs are much different than anything else. It's that 1% to 2% we have to try and help.
As a matter of fact, in the Gfellner report it says, "Problem gamblers indicated more frequent involvement for every other type of gambling activity." It would indicate to me the problem is not VLTs; the problem is the gambler. What I wanted to ask --
The Chair: Thank you, Mr Young. Your one minute is up. We'll move on to Mr Miclash.
Mr Miclash: Chief Kakeway and Dave, I thank you for your presentation as well. I think what you've done here is you've reinforced the uniqueness of the area. You talked a little bit about us being a destination, a tourist area. You talked a little bit about our competition with Manitoba and Minnesota. I think these are facts the committee must take a look at as well as it deliberates over the hearings.
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In terms of the actual securing of VLTs at Golden Eagle and the job creation, what are some of the figures you're looking at in terms of the expansion of that particular facility and the jobs it may create throughout the community?
Mr Palubeski: Mr Miclash, in terms of establishing the Golden Eagle with what Mr Treusch has identified as the critical mass, that's a very accurate observation in terms of what is not there now. We don't have a critical mass. We have 14 tables operating in a temporary facility which used to be an arena, where there's a strong desire in the community to return it to an arena. Under the current operating arrangements, that can't be done, because the facility just breaks even. It hasn't made any significant money for its intended charitable purposes because of the drag placed upon it.
In terms of competing with the surrounding region, VLTs will certainly assist in creating the casino experience. In terms of numbers, the competition with respect to Minnesota and Manitoba, basically we would need about 1,000 VLTs. With 1,000 VLTs and gaming limits comparable to the casinos in our immediate area, there would probably be a creation of about 800 jobs at the facility direct. In addition to that, there would be substantive revenue that would be invested within the area. The difference between the Golden Eagle perhaps and other VLTs or other casinos in the area is that it's local, the interest that owns and operates it is local and the money is spent in the local area. It's not taken out of the province.
The Chair: Thank you very much for your presentation, gentlemen.
If members of the audience are wondering, each person or each presenter is to receive 20 minutes and I have to be a little arbitrary in limiting. To be fair, so that we don't favour one presenter over another, each gets their allotted time and no more.
Perhaps we can then proceed to Women's Place Kenora, Ms Bobby Harrington. Not here?
TOWN OF KENORA
The Chair: In that case, I take it we can proceed with the mayor of Kenora, Ms Joyce Chevrier. Good morning and welcome, your worship.
Ms Joyce Chevrier: Good morning. I've got a couple of copies here to make it easier for you to follow.
The Chair: We will have these reproduced, ladies and gentlemen, and handed out to you in Toronto. The clerk will presently distribute one per caucus.
Ms Chevrier: Welcome to Kenora. As the province of Ontario discusses and contemplates the introduction of VLTs in various establishments licensed to serve alcohol, I would like to offer my thoughts on the matter.
The Golden Eagle Casino, which is located on the Rat Portage reserve, has been for a number of months requesting the province to permit them to install VLTs in order for them to have a viable operation. When the casino first opened, at least 200 jobs and millions of dollars were pumped into the local economy. With the addition of the VLTs and full casino status, the casino would be able to provide more jobs, while at the same time assure job security for those presently working.
The native community of Rat Portage was relying on the casino being more stable and profitable so that revenues could be pumped back into their economy, providing them with the important amenities required for a well-serviced community.
This past Sunday, the casino held a charity function in cooperation with the Kenora Rotary Club, raising $21,000, which will assist the club in many community projects.
The location at the casino is the most logical for the installation of VLTs. The installation of VLTs should proceed slowly to gauge what is best for the community. If no problems arise, additions can always be made later. It would be much easier to increase the number of machines than to remove them.
The VLTs would be an enhancement to the local economy and the community, due to their added attraction to the tourist industry.
There are some concerns which come with the installation of VLTs or any other gambling equipment. The main concern, and one that has been and will be the most reiterated during your committee sessions is the fact that VLTs would add to the addiction of gambling. There should be a program in place whereby a certain percentage of the dollars derived from gambling is set aside for the treatment of addiction to gambling. There would be much less opposition to the introduction of VLTs if communities were assured that a program for gambling addiction was put into place.
There must be a portion of the revenues returned to local communities. At present, the town of Kenora has no idea what ramifications there would be for their police services, who work presently with a budget of $2.5 million and who already have the responsibility of policing the many people who frequent the area. The town of Kenora's population is approximately 10,000, but we police all who come into Kenora from the surrounding area. In the summer, the numbers could increase to as many as 25,000 people. Municipalities need to be assured that there will be some revenues available in order to deal with any problems which may arise in direct response to the installation of gambling machines.
A cooperative program and a portion of the revenues should be designated to the local charitable groups that will suffer from the installation of the machines. In this area, we have already seen a drop in the attendance and support for local charities. When this happens, less money is available for community projects and the various organizations come back to the town of Kenora municipal council and the taxpayers for financial support.
Members of council are in favour of the introduction of the VLTs at this time, but we need to keep in mind that the generation of revenues in this manner can and will lead to other problems within the community, and it is important that the provincial government make sure that strict rules and regulations are set in place and that a support program encompassing public education, prevention and treatment services is in place to assist those in need.
Respectfully submitted. Thank you.
The Chair: Thank you, your worship, for that presentation. We have about three and a half minutes per caucus for some questions, if you don't mind, starting with the Conservative caucus. I've got Young, Hudak and Klees, so we'll start with Mr Young.
Mr Young: If it's all right, we'll start with Mr Klees.
Mr Klees: Madam Mayor, we appreciate your being able to share your thoughts, and I want to just commend you on the last paragraph of your presentation, because I haven't heard it said more succinctly and more to the point than you have put it here, because that is precisely what the intent of our government is.
I'm particularly encouraged by the fact that you're here in the presence of your sitting member, Mr Miclash, for whom we all have a high regard. I would ask you to provide some moral support to him over the next few weeks, because he faces a major challenge in his caucus. I know that one of the leadership candidates, who is also here today, Mr Kennedy, is strongly opposed to this, and I believe the other leadership candidate, in Windsor, is also opposed to it. So he's got a big challenge. I encourage you and the constituents here to provide moral support to him as we seek to bring what we believe is a very balanced position forward.
Mr Hudak: I actually wanted to say the same thing as Mr Klees, your worship, so that your leadership on this issue, like members on this side of the committee -- we're taking, as you said, a very reasonable, sound approach to this, beginning with the charity event sites and racetracks, although there's no track here. I think you're right, and we heard the same thing in Thunder Bay, that it's a tremendous amount of drain on the community, the people going to other areas.
Considering the number of Manitobans and Americans who would come up here in the summertime, I think it would be a substantial economic boost. I see that kind of thinking in Mr Miclash's questions as well, and as to how he votes on the issue, I encourage him to be strong about this and to look out for the concerns of a community like Kenora and as we saw in Thunder Bay yesterday.
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Mr Young: Your worship, could you give us an estimate -- I realize it might be a ballpark estimate -- of how much economic activity, how much money is leaving the community to go to other casinos in Manitoba or the United States or whatever? Or in reverse, how much could be here in this community, including all the spinoffs?
Ms Chevrier: I can't tell you that precisely. I would expect that maybe the Golden Eagle itself would have that financial information for you. I can tell you that our native communities bring $50 million into the local business area. Kenora is the business centre for the total of the 25,000 population that we receive here in the summertime. There's no doubt in my mind that there's a major impact. If we don't have the proper facility and equipment here to bring people in to spend their money, then obviously there's definitely going to be an enormous drain on the community at large.
Mr Gerard Kennedy (York South): Thank you for your very balanced presentation. It is really important to recognize the unique situation of Kenora, with the cross-border competition that it does have and also with the base that it has already in terms of tourism. I'm wondering what consideration council might have given or might be willing to give to the idea that VLTs should be restricted to casino operations, that this might be the best way to take the economic advantage and use it where it can really be put to use. You have an operation under way here already; we've heard from the operators that they need that boost.
Some of the concern about VLTs is when they're in the local bars. There is no guarantee on the part of this government that it will commit money to addiction. There is a proposal in the legislation that they may; it's possible, but it is not guaranteed, just as it's not guaranteed that the number of VLTs might multiply, to become many thousands of them, in bars and restaurants, especially given the revenue projections. I'm wondering if council has discussed that distinction, because the economic development -- if we're going to do a certain level of gambling in the public interest, in the casino, a controlled environment, where it's compatible with the very significant tourist infrastructure that already exists here, how does council look at that possibility?
Ms Chevrier: Council is very much in favour at this point in time of encouraging the machines to go into a casino that is already established. As I've stated, this could be gauged over a period of time to see what the effect is going to be. I hope the province of Ontario will put enough money aside that there will be an addiction program that will be suitable for the needs that will be required. I also see, though, in the future that if the machines being in the casino are favourable and are received favourably, then obviously they could branch out to other businesses, such as hotels.
Mr Kennedy: I guess there's a concern that it could be undercut if they happen at the same time.
Ms Chevrier: I would expect that there might be a bit of a problem if it was implemented right across the board at this point in time. We do have an establishment that's here already. As I stated, they did start off with a large staff, and that staff has been considerably reduced over the last few months because the machines and the other amenities are not there in that particular building. If you're going to do anything, then obviously it should take place there first. That's my personal feeling.
Mr Flaherty: On a point of order, Mr Chair: Mr Kennedy had indicated to the witness that there was no commitment by the government on 2%. That's not accurate and the witness should not be misled by a member of this committee in that way. In the budget document the Minister of Finance committed that "2% of the total terminal revenues will be set aside to establish a comprehensive problem gambling strategy that will include public awareness, prevention, treatment and research components." That is in May 1996 and the members should know about that.
The Vice-Chair (Mr Ron Johnson): Mr Flaherty, that's not a point of order, but thank you for the information.
Mr Crozier: On a point of order, Mr Chair: If you're going to rule on a point of order, I don't think you should wait until the person giving the point of order has, completely out of order, made his speech. I would appreciate it if the Chair would rule a little more quickly on it, because you knew from the outset he didn't have a point of order.
The Vice-Chair: Mr Crozier, I cannot rule on a point of order until I have heard that point of order.
Mr Crozier: Then, Chair, you better take up parliamentary procedure, because you know what a point of order is and you knew that he did not have a point of order the minute he started into it. You're being biased.
The Vice-Chair: What I do know, Mr Crozier, is that you're out of order.
Mr Crozier: I'm asking you to be fair.
The Vice-Chair: You are chewing up your member's time.
Mr Crozier: No, my point of order is legitimate, because it actually goes to the point of how the process of this committee works. You're showing your bias.
The Vice-Chair: Mr Crozier, I will continue to give your member one minute to ask the witness a question.
Mr Miclash: Thank you very much, Mayor, for your comments. I go back to one of the main points that you have brought out -- and you've done a great job of bringing it out -- the proper balance. This is what we will certainly be looking for. My friends talk about me and what I'm going to do in terms of this bill. I'm certainly looking forward to what their reaction to some of your concerns will be.
You talk about extra money flowing from the province to take care of local problems that may come with the increase in the VLTs across the province. This is something they're going to have to take a look at. From my understanding, there's nothing mentioned in the bill in terms of looking at those problems. Again, a very balanced approach is going to be needed. I look forward to the amendments. As my colleagues have mentioned, this is not the final draft yet. They're listening to folks like yourself, folks we've heard from today in terms of the uniqueness of this area. There's certainly going to have to be that balanced approach.
Just one --
The Vice-Chair: Sorry, we do have to move on now.
Mr Kormos: Mayor Chevrier, by God, who are you to believe? Like Chief Kakeway, in my political career, now I'm in my third successive government: Liberal, New Democrat, now Tory. During my experience, I've learned perhaps the world's greatest lie is the one that comes from government members, and I base this on my experience, who come forward and say, "Hi, I'm here from the government and I'm here to help."
Who are we to believe? Because in May 1993, Mike Harris had this to say about gambling -- and I'm quoting from Hansard -- "As Donald Trump says, `Gaming doesn't come cheap.' I have to agree with a lot of the critics on that. It brings crime, it brings prostitution, it brings a lot of the things that maybe areas didn't have before. There is a big cost to pay." A month later -- once again, Hansard -- Mike Harris said, "Every officer and every policing dollar that goes towards casino crime or that kind of criminal activity is a dollar that's taken away from fighting the crime that currently exists on our streets." As recently as March 1996, the Minister of Finance, Ernie Eves, said: "VLTs" -- that's really slot machines -- "could create a lot of social problems in society. Lots of other provinces have introduced VLTs and lots of other provinces have had social problems as a result of VLTs." By God, there's been a metamorphosis, a conversion, a transformation.
Casinos became the status quo; I acknowledge that. I wasn't a fan of casinos. I opposed the casino legislation when it was introduced in 1993; I acknowledge that. But they are now the status quo and have become part of the reality. I still have concerns about how effective they are at regional economic development, but that remains to be seen. I hope my concerns are alleviated. But I do have concerns about the preponderance of slots, 20,000 of them, because that's what Bill 75, among other things, is about -- 20,000 slots in every place but casinos.
Look at the history of government involvement in gaming, government endorsement of gaming. The Tories have some credit there, because they introduced official lotteries, government lotteries. It was described as going to be constrained and tempered and controlled, and before you knew it, governments became so hungry -- Tories and then Liberals and New Democrats. Liberals introduced new lottery schemes during the Peterson government; the Rae years provided casinos for Ontario. Governments became so addicted to the proceeds that OLC is promoting lotteries left and right, as has been referred to. Nobody 25 years ago would have anticipated that the Ontario Lottery Corp and the 6/49s would have reached the scale of promotion they have. This is a one-way street. I appreciate now the government saying, "Oh, we're going to proceed in a constrained and concerned and moderate way." Well, the Tory government said that decades ago when it introduced the Ontario Lottery Corp and government lotteries.
I fear that if slots are not restricted to casino sites, to gambling sites, to destination sites, we are going to witness in short order, because of the government's addiction to gambling and the great revenues, the money it siphons out of people's pockets, slots in corner stores and beyond.
The Vice-Chair: Mr Kormos, your time has expired; I apologize. Madam worship, I'd like to thank you very much for your presentation.
Ms Chevrier: I'd like to just make one final comment. I feel that if the province is setting aside 2% and the 2% is not enough, then obviously it should rethink and continue to review what it's doing in the way of pulling percentages out of the revenues to cope with the various problem programs.
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KENORA AND DISTRICT CHAMBER OF COMMERCE
The Vice-Chair: Our next presenter is David Dungey from the Kenora and District Chamber of Commerce. Good morning, sir. Mr Dungey, you'll have 20 minutes for your presentation and you may like to leave some time for questions.
Mr David Dungey: That's more than enough. Thank you.
I'd just like to let you know that I represent the 200 businesses that are members of the Kenora and District Chamber of Commerce and that recognize primarily that tourism is our area's number one employer. Our two operating mills in our area employ less than 1,000 people. Our government jobs in Kenora as a regional government centre: In 1991 we had 920 government jobs; we're down to fewer than 480. That's before current provincial government layoffs, while appropriate perhaps.
Currently we need tourism in our area. Tourism is our most important resource. We are a tourist destination primarily. We rely on tourism year-round to support our local economy. One of the things our members recognize is that we need to be a full-service tourism destination to compete with our neighbours to the west and to the south for vacationers' dollars. With all our neighbours having VLTs, eight out of the 10 provinces in Canada as well as our American border state of Minnesota, we need a level playing field to be able to compete with them as a tourist destination. We have the natural resources, we have the workforce and we have the infrastructure. What we need is for this government to give us that competitive tool to draw and hold visitors to our area.
In particular, our casino can be a destination attraction. It's a strong, promotable item that we can market to carry us not only in our strong summer season but to continue in the shoulder seasons of fall and winter. Snowmobile tourism is becoming a bigger and bigger part of our local marketing plan to draw tourists to our area. That type of traveller is primarily adult. They're looking for avenues to spend their money in the evening. They're looking for entertainment value. Casinos are one of those venues. VLTs in bars would be another opportunity. They're an important part of being that full-service destination.
A very important part to the Kenora and District Chamber of Commerce is that the VLT implementation is simultaneous to bars as well as charitable casinos. Again, that's to keep the playing field level. It would be unfair to give VLTs to the charitable casinos in our area or any area without making them available to licensed establishments. Small-town hotels and bars are teetering on the brink as it is. They need this secondary source of income to compete for today's entertainment dollar.
A secondary part of that, which I'm not sure has been addressed to this committee yet today and which I know is part of the mandate in this structuring with alcohol and gaming, is off-sale beer sales. Again, as a tourist destination area, there's nothing more frustrating for our American and western visitors who come to our area to be unable to purchase beer and alcohol on a Friday evening, Saturday evening, Sunday or statutory holiday. When they come into our area to spend thousands of dollars over the course of a long weekend, to be unable to purchase beer on two of those three days in today's age strikes them as ludicrous. You have to wonder what their opinion is of our area as a tourism destination spot with an archaic alcohol policy like that.
Our area receives visitors, as I said, not just in the summertime but year-round. The last figures that were given to us were that we draw a million visitors to our area a year. So it's critical to our economy to be able to satisfy those people, to hold those people in today's competitive marketplace and to hopefully draw more people.
The offshoot of all this to our area is obviously job creation, and more importantly the economic self-sufficiency that comes with that. We're looking at the addition of bar staff, hotel staff; as Chief Kakeway indicated, casino staff up to possibly 800, they're figuring, if they got their 1,000 VLTs and were able to promote it as the destination spot that we foresee it as. That's obviously a huge impact to our area.
The ability to market our casino as well as offer VLT entertainment to our area's visitors is just the start of a much larger area economic plan that's foreseen by our economic development council and CDI. It's the cornerstone of growth for tourism in our section, and as the northwest Ontario anchor, Kenora is a very important hub in that tourism destination spot.
The Vice-Chair: Thank you, Mr Dungey. We have approximately four minutes per caucus for some questions, starting with the Liberal caucus.
Mr Miclash: David, thank you very much for your presentation. I think you've indicated very clearly the thoughts of the 200 businesses that you represent. I've certainly heard a good number of those views in terms of our destination tourism, in terms of the increase in the four seasons tourism and what the increase will bring to the area. I think you've made that point very clearly.
In terms of the chamber's views on the charitable casino as it is today and as it might be, can you maybe expand a little bit as to how they feel it's produced in the area?
Mr Dungey: Obviously at the moment, with the restrictive legislation in place, they aren't able to compete and it has not lived up to its expectation. Having watched it develop, having seen their training program and the number of people they hired initially -- 150-plus -- and the money that was spent to renovate it through contracting friends, it's a beautiful facility that is so underutilized that you feel very sorry for the band when you go that they aren't able to do more with it. The ability to market that out of our area, to draw in bus tours, to make it that destination spot, which it just can't be now -- it just cannot compete; it isn't a destination spot. The marketing manager for the casino, I would dare say, would be embarrassed to go to outside markets to try and draw bus tours to our casino in trying to compete with casinos in the northern United States and western Canada, because they just don't have anything to compete with them. Gaming tables and bingo and minor keno is not something you can offer as a destination entertainment stop.
Mr Miclash: Another point that you made, and I think a very, very important one, is how hard the region has been hit in terms of the loss of jobs. We all in the room from the region know of a good number of government employees who have received their walking papers in the last few months. It's a great concern, so thank you for bringing that forth.
I would just like to seek a little bit more your views as the president of the chamber as to what this will do in terms of not only jobs within the establishments, which you mentioned, but beyond that as well. Could you just give us an overview of how the chamber would feel about the increases and how that will affect the entire region?
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Mr Dungey: Spinoff jobs are very important. One of the things that we as a chamber try to make a point of to local people who may not be, they think, directly involved in tourism is that often they are directly involved. Whether you're a plumber, a contractor or a hairdresser, the people you service are people who are earning their income through tourism dollars. As the largest employer in the area, tourism is providing all those secondary jobs. Without it, those people don't have the income or the income level they're used to.
So if we are creating jobs through increased jobs in bars and licensed establishments, through an increase at the casino, either more hotel rooms or more occupied hotel rooms, it's creating -- I'm sure David Treusch could give you a better number in terms of what one new job creates for spinoff jobs. You're probably well aware of that anyway.
Mr Miclash: Just one final point?
The Vice-Chair: Sorry, Mr Miclash. Time has expired.
Mr Kormos: Please tell your members who are advocates of slots: The fix is in. It's no problem; it's going to happen. I can assure you of that. The government needs the money. The government made a commitment to a 30% tax break and it needs this revenue, not to reduce a provincial deficit, but it needs the revenue along with a whole lot of other sources as yet untapped.
The remarkable thing is -- and it's happened throughout the course of these hearings, this concept of the level playing field. You used the phrase several times, as have so many other presenters. The last time I heard that phrase used that often was when Canadians elected Brian Mulroney and got the free trade act.
Where does it end? Right now in the United States, craps are not illegal, a dice game. In terms of ranking of casino gambling, in the United States craps is the first preferred game, the most played game; blackjack, 21, is second; and slots are third.
Mr Dungey: That would seem odd given the table space devoted to them when you go to casinos. Table space definitely would not rank that way.
Mr Kormos: I'm telling you what the volume of money spent on the three respective games is. We don't have craps. I'm telling you what John Scarne, in his book on gambling, says is the preference. He was a major consultant in the gaming industry in the United States for literally decades.
It was suggested to us, predicted by a journalist from a Canadian casino magazine, that in one year craps will be legal in Canada, which of course takes Allan Rock and the federal government to legalize it. What if the next jurisdiction starts low-balling the price of liquor? Where does that put Ontario? What I'm talking about is the fact that we have this checkerboarding.
Mr Dungey: Similar to the NDP with cigarettes?
Mr Kormos: New Democrats cut the price of cigarettes in half. I quit for three weeks. By God, I thought I had made it, but then I walked into the corner store and there they were at $3.25 and I thought, by God, how can I resist that? It was like I was a kid again. I bought two packs.
It remains that we're checkerboarded across Canada and in terms of the border communities. Where do we stop the competition? This level playing field is forever elusive. It's like chasing a piece of mercury. Where do we stop it when we low-ball liquor prices, when we introduce craps? In the United States, the payoff on slots is as high as 95% of every dollar spent, and trust me, the Tories haven't got that in mind because there ain't going to be enough left for the government if we pay off 95%. So where does that game stop?
Mr Dungey: I have no idea.
Mr Flaherty: Neither does he.
Mr Kormos: You guys are the ones whose minister couldn't answer the questions on Tuesday, pal, not me.
The Chair: We are now going to the Conservative caucus.
Mr Hudak: I'll ask some quick questions that can be answered. I heard some figures bounced around: 800 or so jobs associated with the casino if the VLTs go through, and I think Mr Treusch mentioned 1,000 to 1,200 jobs. I guess that's the total spinoff. My understanding is that Kenora has a population of about 10,000 people.
Mr Dungey: The trimunicipal area is more like 18,000. It's a unique area. The border is you cross the street and you're in Keewatin; you cross the street and you're in Jaffray Melick.
Mr Hudak: What's the current unemployment rate in this area?
Mr Dungey: Approximately 10%.
Mr Hudak: So about the Canadian average?
Mr Dungey: Yes.
Mr Hudak: So this is substantial, 1,000 to 1,200 jobs in an area population of 18,000 people who certainly need the jobs.
Mr Dungey: Yes, and that would just be in our trimunicipal area. That wouldn't count rural. There are a lot of unorganized territories.
Mr Hudak: I certainly appreciate the strength of your presentation then in terms of creating jobs for the trimunicipal area. Excellent. And over a million people a year come to this area as well?
Mr Dungey: In terms of visitor days, yes.
Mr Hudak: I think about 85% to 90% of Americans, for example, from what I have seen, enjoy an occasional social occasion of gaming, so I think that's substantial revenue as well.
Mr Dungey: Yes.
Mr Young: Do you have any idea how your members are going to prevent minors from playing these games?
Mr Dungey: I would presume the licensed establishment would use the same enforcement technique that they would as far as underage drinking. We're looking at exactly the same age, 19. They card people, ID people, now to come into their establishments. They would use the same technique.
Mr Young: Because I believe this is a critical part of, if they're introduced, how they're introduced, and managing it locally is critical.
Mr Dungey: I would agree. It falls right in that same mandate, alcohol consumption and use of VLTs. It's the same procedure.
The Vice-Chair: Mr Klees, you have about one minute.
Mr Klees: No doubt your members are as concerned with the social impact of public policy as they are with economic impacts. I'm just wondering to what degree any discussions have taken place within your membership about the social impact of a policy such as this and what the mitigating issues are.
Mr Dungey: I think it's like discussing religion to a certain extent. Members are divided. Families are divided. My own family is divided on whether gambling in general is a good or bad thing, and I don't think you can separate VLTs from any other form of gambling: Whether it be lottery tickets, gaming tables, hockey pools in the office, it's the same thing. I think people's views are very strong and aren't easily swayed. I think the idea of 2% of revenues going towards counselling is excellent. I think it's something that's needed, that should have been in place when the first casino went in in Windsor and wasn't. It's good that your government's doing it. It's good to know that you'll keep it under review, that if more is necessary, it would be available.
I would also like to see some of that revenue stay locally to address some of the issues that Mayor Chevrier brought forward, which are the costs to the communities, because there will be a cost increase. To what level, who knows? But seeing some of the revenues from gambling operations directed back to municipalities or regions as opposed to general Ontario provincial coffers would be appreciated as well.
The Vice-Chair: Thank you, Mr Dungey. Time has expired. On behalf of the committee, I want to thank you for your presentation.
COMMUNITY COUNSELLING SERVICES
The Vice-Chair: The next presentation will be Gary Norris, community mental health services. Good morning, sir. You'll have 20 minutes for your presentation. You may wish to leave a little bit of time for some questions at the end. You can begin at any time.
Mr Gary Norris: Thank you. I would just like to at the onset say that as an ex-municipal councillor of 11 years, I realize the political difficulty all of you ladies and gentlemen are in in making a decision. I'm not going to reiterate many of the things which have been said, but I would like to express my concerns and perhaps bring some recommendations to you for consideration.
With the legalization of VLTs, there will be an increased number of gamblers, and therefore problem gamblers, as it is estimated that 4% to 5% of all gamblers become problem gamblers. Provinces that have legalized VLTs show a major increase in gambling revenues, and VLTs account for the highest percentage of the revenue.
The province of Ontario expends a very small percentage of its gambling revenue on prevention, education and treatment for those affected by gambling. Although the Ministry of Health provided $1 million during the 1995-96 fiscal year for education and treatment in relation to compulsive gambling, the net income of the Ontario Lottery Corp for the fiscal year ending March 31, 1995, was $626,573,000. It is therefore quite obvious that a very small percentage of OLC's net income is now being expended on education and treatment programs.
According to the Ontario Addiction Research Foundation, the province of Ontario has one of the lowest per capita expenditures in Canada to address problem gambling. There is a chart in the presentation which I've given you, but to give you an example, Saskatchewan expends $1.52 per capita; Ontario spends 10 cents. It is one of the lowest in the country.
There is a severe lack of available treatment services for problem gamblers and their families.
There is a significant overlap between problem gambling and substance abuse. Studies have shown that up to 50% of pathological gamblers have substance abuse problems. In Kenora, this could mean a major increase in problem gamblers due to the number of substance abusers in our district.
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Problem gamblers have a major impact on the lives of their families and significant others. A recent study by GamAnon did show that 88% of the spouses felt it did cause major emotional problems in their families; 43% stated they were verbally, emotionally or physically abused; 99% had major financial problems; and 12% had attempted suicide.
Originally, all gambling revenue was directed to non-essential good works such as the arts and recreation. This is no longer the case, as a greater proportion of revenue is now directed to essential services, for example, health, social services and education, and the gambling revenue is now indispensable for financing essential government services and balancing budgets. Government has become as dependent upon gambling as the addicts.
I'd like to now offer some recommendations for consideration.
Prevention: Preventive programs should be established and focus on developing people's awareness and skills to avoid gambling-related problems.
Responsibility to minimize the risk of problem gambling must be shared among all those who benefit from gambling: the gaming industry, community organizations and the government of Ontario.
The government of Ontario should designate a specific percentage of all expenditures expended to market gambling to produce educational material that increases one's awareness of gambling problems, for example, posters, pamphlets, stickers, audio and video ads.
It should be noted that according to the Ontario Lottery Corp's statement of expenditures for the 1994-95 fiscal year, they show that in 1995, the OLC spent over $27 million on brand marketing for its various lottery games and approximately $5 million in promotional advertising for OLC.
Treatment: Individuals and families whose health and wellbeing have been negatively affected by gambling and who seek treatment should be able to receive effective and relevant assistance. A range of treatment options should be available, reflecting current knowledge and skills.
This will require the development of a range of integrated and accessible services providing education, prevention and treatment related to problem gambling. To achieve this goal, financial resources must be provided to community agencies to hire additional therapists etc.
It is suggested that a pre-designated percentage of all profits from the gaming industry be allocated to the development of required treatment resources and the education of therapists; for example, 24-hour help line, outpatient treatment and training programs for counsellors.
If 5% of the province's present net income from gambling was allocated for treatment, this would translate into an expenditure of a little over $3 million per year, which far exceeds the present expenditure.
Research: Research into the prevalence, causes, prevention and treatment of problem gambling should be conducted on an ongoing basis. The results of this research should be communicated to advance public and professional knowledge and to improve services.
General concerns: The government of Ontario should give consideration to the utilization of some of the excellent material that has already been developed in other political jurisdictions. There is no need to reinvent wheels, expend large amounts of money developing material or delay implementation of proposed plans, as relevant printed, audio and visual material is now available.
I have an example here. Of course Ontario has no information, so these are some of the things that some of the other provinces use. They're basically posters on gambling. We have here, from other provinces next to us, some of the things they do. Again, because there's no money -- we have a coalition of agencies in Kenora -- we've had to develop our own, borrowing information from other provinces. It's not nice, it's not glossy, but Ontario has no money for this.
The total profit and expenditures for all types of casinos should be public knowledge and not require individuals to seek this information through a freedom of information request, which is an expensive and time-consuming task. I should mention that I could not as an individual, as a director of an adult community mental health agency, gather a lot of this information without the help of our local MPP, Mr Frank Miclash. I was able to get some of this information; unfortunately, for some of the information I wanted, we would have had to go the route, as I mentioned, of the freedom of information act, and that to me is wrong.
Just to complete my presentation, I would like to mention that I've been talking profits here of only certain types of gaming. I'm not including in here the income received by the province of Ontario from casinos, racing or other gaming events. If one were to add just the Windsor Casino and the Ontario Lottery Corp profits, we're talking almost $1 billion last year. They spent less than 1% of that money on education and treatment, and of that $1 million allocated last year, the province clawed some back. So some of the training programs, which I should mention and I do appreciate, because I had the opportunity of attending one of them with some of my staff, some of those training programs in parts of our province were cancelled. For those that were not cancelled, some of the expenditures which were previously covered for those attending were cancelled.
Again I express concern that the province's track record for treatment and prevention is not great. While I can appreciate and I hear this 2%, I seriously hope the government becomes serious, because they're not a rookie in this game. They've been in gambling for a long time. This is VLTs, but we in Ontario -- you mentioned you went to the corner store and bought all these tickets. I could pick --
Mr Young: I just got a few pamphlets.
Mr Norris: You just got a few.
Mr Young: No, pamphlets.
Mr Norris: The reality is that Ontario has a lot of revenue from gambling but it has not been expending it on treatment, prevention and education. You heard from Mr Dave Novak, who works with me as a colleague at the hospital, some of the statistical information. I could give you stats. I'm not going to get into that kind of issue, but we have to keep in mind these latest statistics from Alberta: In less than four years with VLTs, 55% of their income has now shifted to VLTs from other forms of gambling. So let's be quite serious when we look at VLTs. I'm not opposed to VLTs and I'm not 100% for VLTs, but the province has to accept some responsibility, which it has not done, and I'm sorry.
Basically, the community agencies dealing with a lot of the fallout of this -- keep in mind that our mental health budgets have been cut also. Two months ago I received from the ministry which funds us indication that our budget is cut this year and next year. That's not only our agency; that's every adult mental community health agency across the province. On the one hand we're being asked to pick up these things; on the other hand we're being asked to decrease our budget.
The Vice-Chair: Thank you, Mr Norris, for your presentation. Mr Kormos, about three minutes.
Mr Kormos: You note, as have others, that the government has become as dependent upon gambling as the addicts or, I submit, other addicts. Perhaps they should be investigating treatment programs for their particular addiction problem.
Mr Norris: It's not only the government now; it's governments for several years.
Mr Kormos: You've got it.
Let's talk about the Ontario Lottery Corp, introduced by the Tories. The total area sales for Kenora -- and I have to assume that's Kenora region, because this information came from the Ontario Lottery Corp, fiscal year 1995-96 -- are $3,164,000 spent on lottery tickets, everything from Lotto 6/49 down to bingo and keno. Granted, there was a commission paid on that to local merchants, but that's $3,164,000 that wasn't spent on food, on household goods, at car dealerships, at bowling alleys, at any other number of locations in Kenora city and Kenora area which provide goods and services to the Kenora community, that was siphoned out.
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You're involved in counselling and treatment. Here's just a brief anecdotal review of some of the Alberta headlines for the year 1995. Lac La Biche, Alberta: A truck driver killed his wife and himself after an argument over his use of slots. Another one: A 40-year-old female accounts clerk at an engineering firm enlisted the help of her teenage daughter to steal $170,000 from her boss to feed her slot habit. The woman, who had no criminal record before being convicted and sentenced to 30 months in jail, was on the verge of suicide when she sought help. Another news item, Alberta: A 47-year-old female insurance adjuster bilked $19,000 from her employer to support her slot habit. Another woman wagered away her entire divorce settlement. Another news item: A man who lost his wife and home because of his slot habit cashed an entire paycheque into loonies and fed it all into a lottery terminal. Another item: One well-heeled Calgary gambler blew a million bucks on slots before seeking help. Another item: An Alberta bankruptcy trustee urged the government to reconsider its policy on slots after he received calls from seniors who had lost their life savings to the gambling machines.
When you speak of the reduction in funding for, among other things, mental health care -- and it's not unique to the north, let me tell you, sir -- and now you're being told that you're going to have to rely upon the proceeds from gambling, this commitment of 2% of gross proceeds, and when you reflect on the fact that Mike Harris and the Tories promised 725,000 jobs but we get instead 20,000 slots -- not much of a comparison -- do you have concerns about community health in view of the addiction of government to gambling?
Mr Norris: It's not a new concern; I've had that concern before, and I think Mr Miclash will corroborate that, because we've had regular meetings and correspondence. It related to, not only my concern, but the concern of the coalition of agencies within our community that were able to take advantage of the free training offered during the past year, I should mention, as I did, by the ministry about gambling. Yes, we're concerned, because there's going to be an increased number of gamblers. There's going to be, therefore, an increased number of problem gamblers. The problem gamblers are already there; we've heard that. They're out there and we're dealing with them now, but not successfully, not in the way we would like to. But I don't believe this has been acknowledged by any existing government in Ontario over the last 20 years. The money has been generated from gambling but it has not been turned back into taking a good, hard look at treatment, prevention and education.
Mr Flaherty: Thank you, Mr Norris. I can assure you that regardless of the inadequate funding previously, this government is committed to the 2%-of-gross figure. It's in the budget statement; it's at page 26 in the first paragraph, for anybody who wants to read it.
Mr Kormos: Mike Harris said there would be no slots, Jim.
The Vice-Chair: Mr Kormos --
Mr Flaherty: What the finance minister said is, "Two percent of total terminal revenues" -- that's 2% of gross; no ambiguity here; 2% of total terminal revenues" -- that's 2% of gross; no ambiguity here; 2% of total terminal revenues, a very substantial sum of money -- "will be set aside to establish a comprehensive problem gambling strategy that will include public awareness, prevention, treatment and research components."
Certainly I agree with you about the seriousness of the problem. Any addictive behaviour, be it alcohol or drugs or gambling or whatever, is devastating for the individual and for the family and friends and business associates of the individual.
I question, to some extent, in looking at the research -- and I have read the research -- whether introduction of VLTs in Ontario will necessarily result in an increased number of gamblers. The studies indicate that one has to look at the degree of readily available gambling already in any jurisdiction, and if there is a significant degree of availability of gaming already in a jurisdiction, then, as the Addiction Research Foundation vice-president said, people can get into all kinds of trouble with all kinds of gambling, but the probability of addiction doesn't necessarily increase with the introduction of video terminals. So that's a question.
The important point, though, is to deal with the addiction problem, and our government is dealing with it and is committed. What I'd like to ask you about is, since this is your area of expertise, obviously, and your life experience and training and education, what sorts of programs should the government be looking at funding in order to deal with the problem?
Mr Norris: I did mention generally in the recommendation some of the things, but basically one initial thing I think the government should be doing, and began to do last year, is to train the therapists who are in the communities throughout our province. There is a lack of sufficiently trained therapists in this problem area. We received some training and then there were some courses which were offered by teleconference.
I've asked on several occasions recently what the Ontario government's plans are for training this year. I keep getting told they don't have any, that they're being developed. The year is almost half over, so I question whether there's going to be a continuation of this. I also mentioned previously that some of the money that had been allocated last year for training was cut back, therefore limiting the number of people who could be trained in the province.
Mr Crozier: Mr Norris, you and I know, and Mr Flaherty should know, that page 26 of the budget, where it mentions the money that will flow to those organizations that are dealing with this problem, isn't worth the paper it's written on. A budget is merely intent --
Mr Flaherty: You're talking about your government, not about ours.
Mr Crozier: -- it is not an obligation. I would say what we have to do, you and I and others, is to keep after the government to make this into an obligation, not just intent. We have to keep after them for funds and programs to support you. In view of the fact that they're going to borrow $20 billion over the next four years --
Interjections.
The Vice-Chair: Mr Crozier, excuse me, please. Could I have the other members of this committee remain somewhat quiet while we have somebody speaking, please.
Mr Crozier: Because they're going to borrow $20 billion over the next four years to give a tax cut, we'd better be sure that you get your hand on a cheque. That is what we really should be doing.
Mr Miclash: Gary, thank you for your presentation. As Mr Kormos was saying earlier, you have the person closest to the Premier in the room, setting next to you on your left: Mr Flaherty. I hope Mr Flaherty abides by his comments, in seeing your dedication and your recognition of the problems that are going to be faced. You've indicated that we've talked about a lot of these.
Not reinventing the wheel is something that you've indicated to me a good number of times. I know that you've received information from other jurisdictions on the problems that are faced now and the problems that are going to be faced. I think the thing you mentioned as well that we've talked about before was the cancellation of the workshops, if you might just elaborate a little bit more on the workshops, what they did for you and where you saw them going for other people.
Mr Norris: Last year the Ontario Addiction Research Foundation did receive some of that $1 million which was designated by the provincial government for training. They in effect established training workshops and held them through various locations throughout the province. An invitation went out from the Ontario Addiction Research Foundation for folks to attend those training conferences.
Approximately six people from the immediate area attended, of which some were my staff, some were Mr Novak's staff and some were staff of other local community agencies. We took a course in Thunder Bay which really consisted of three days of basic training. That was followed up by an advanced course held in Kenora which we did appreciate, and subsequent to that there have been opportunities to take teleconference programs through the Ontario Addiction Research Foundation. They were also well received within the community.
Unfortunately all training ceased this year, and as I mentioned previously, some of the training courses that previously had been established in some other parts of the province were cancelled because of a lack of funding or some of that $1 million being taken back.
The Vice-Chair: Thank you, Mr Norris. I'm sorry, your time has expired and we have to move on. On behalf of the committee, thank you for your presentation.
Mr Norris: Thank you for your attention.
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BEST WESTERN MOTOR INN, DRYDEN
The Vice-Chair: Our next presenter will be Patrick Skillen, Best Western Motor Inn. Good morning, Mr Skillen. You'll have 20 minutes for your presentation and you may wish to leave some time for questions at the end.
Mr Pat Skillen: Mr Chairman and members of the committee, my name is Pat Skillen. I'm co-owner of the Best Western Motor Inn in Dryden. Just for the record, Dryden is located 90 miles east of Kenora and about two hours north of the Minnesota border. We are known as the hub of northwestern Ontario, servicing many communities, including Ignace, Sioux Lockout, Ear Falls to some extent, in an area of approximately 30,000 people.
I want to thank you for the opportunity to appear here today. I have been affiliated with the hotel industry since 1974 and have served as a director, the president and the chairman of the board of our hotel. At our peak we employed approximately 75 workers. In 1994 I served as the president of the Ontario Hotel and Motel Association and in 1995 I served as the chairman of the board of that association.
Let me begin by congratulating this government for its commitment to introduce video lottery terminals in this province, and specifically to our industry. It is very interesting to note the misinformation being put forth by some to discredit the government on this issue and as a means to promote their own interests.
Ontario's hospitality industry is one of the province's largest and most important industries. The recession has hit it very hard, with sales down at least 20% and no real turnaround in sight. At least three local hotels in this community alone, that I'm aware of, have gone into bankruptcy in the last three years.
Collectively in Ontario we directly employ some 232,000 people, with another 85,000 employees indirectly, for a total of 357,000. This represents a decrease of over 90,000 people from pre-recession days. The total sales for this industry is $10 billion annually, which equates to 3.8% of the province's GDP. We are also an important component of Ontario's tourism sector, which accounts for more than $3 billion to Ontario annually, and are a major purchaser of Ontario agricultural products and a primary source of off-farm income in rural Ontario.
As I indicated earlier, the recession has hit this industry very hard and shows no signs that we can see of easing. Bankruptcies continue very high, which continue to threaten jobs. Since 1992 there have been more than 1,400 bankruptcies in our industry in Ontario. Many businesses continue to struggle to survive and costs continue to escalate, with revenues still in decline. On May 8 this government gave us all a hope for better days ahead with the announcement of video lottery machines.
I am here today to ask you not only to support the commitment made by the Minister of Finance on May 8 but to ask the government to commence implementation as soon as possible for our industry. I am also here today to put before you substantial facts and information on VLTs, not exaggerated misinformation that we have seen and heard recently in the press.
First of all the government is not introducing VLTs to this province, and you should be aware of that. They are already here. According to Ontario Provincial Police estimates, the numbers range from a low of 15,000 to 20,000. These illegal grey machines are now costing this government approximately $400 million annually in untaxed revenue. Furthermore, by ignoring their presence, some businesses are forced to operate illegally just to try and remain competitive.
VLTs are an acceptable form of adult entertainment. They are not an insidious gaming device, nor any more addictive than any other gambling available in Ontario, as some would have you believe. Moreover, about two thirds of all Ontarians want them in adult licensed bars and restaurants, according to surveys. Interestingly enough, poll results show that Liberal and NDP voters are slightly more favourable to them than PC supporters.
Studies conducted by Brandon University in Manitoba indicate that video lottery players see video gambling as part of an evening's entertainment. It is planned as part of going out and hence is part of their budget planning process. VLT players play about one to two times per week and spend on average about $10. Dr Barbara Gfellner from Brandon University, who conducted the study, found that most people who played VLTs did so to socialize, not gamble, and that it is viewed as a recreational activity. I draw your attention to the excerpts from her study which are attached to my presentation.
I also want to commend this government on its forethought to dedicating funding towards the development of programs for those with gambling problems. There already are in the marketplace today many forms of gambling. VLTs, it should be noted, according to research, are not any more addictive then any other forms that are available, be they horse racing, bingos, casinos or pool tickets.
Data indicate that there is a small component of the population susceptible to compulsive gambling. There is no question about that. Compulsive gambling, like compulsive drinking, is not a cumulative problem which grows with the introduction of new brands and new types. Gamblers transfer their attention from one form of gambling to another. For example, horse racing revenues have declined substantially from the days when they were the only legal game in town.
Tibor Barsony, executive director of the Canadian Foundation on Compulsive Gambling, has said, "Prohibition is not the answer; education and treatment are." Dr Durard Jacobs, vice-president of the US National Council on Problem Gambling, when in Canada said: "The majority of the population has no problem with gambling. For most folks, gambling is just fun and games, but for the small minority who have a problem, it can be devastating, and we have to develop programs to help them."
It is interesting to note that research shows less than 2% of the population exhibits the potential to become problem compulsive gamblers. This compares to 6% for alcohol. However, we all recognize that for some, no matter what the product is, a problem can develop and we commend the government in recognizing this fact and moving towards it.
Despite what you may have heard or been led to believe, the introduction of VLTs in other provinces has proven to be a job creator and a major stimulus in the industry. Only in Nova Scotia, where originally they were allowed in corner stores, was there a problem. Now that they are restricted in locations as per the proposed Bill 75, we are not aware of any problems contrary to what some may want you to believe.
I should also point out that VLTs and the casinos in Nova Scotia coexist very well. A study conducted Professor Marfels of Dalhousie University has concluded no negative impacts. There are two different audiences: One is a destination and the other is a drop-in. Based on the experience in other provinces, VLTs have created thousands of new jobs in Ontario's hospitality industry as well as providing a new source of funds for the industry and for government. In Manitoba, for example, the introduction of VLTs has resulted in the creation of almost one full-time job and one part-time job per business location. Overlay those numbers into Ontario and you are looking at well over 10,000 jobs. These, it should be noted, are direct jobs.
Prior to the introduction of VLTs in Manitoba, the Manitoba Hotel Association reported that its members were going bankrupt at the rate of about 14 per year. With the introduction of VLTs, that number has dropped to 2 per year, a drop of over 85%. A recent survey conducted by the association just recently revealed that 65% of its members credited VLTs as playing a critical role in averting financial disaster.
Another positive spinoff is that on the local economy as it relates to the purchase of capital investments. Construction projects and the purchase of goods and services relative to the operation of VLTs resulted in a boost to the local economy. Each operator spent on average about $20,000 to install the machines. That figure translates into well over $100 million in capital expenditures across the province of Ontario.
In terms of an implementation schedule, we urge you to recommend to the government to moving the hospitality industry on line as soon as possible. The minister, in the budget on May 8, said VLTs were being introduced to stimulate the hospitality industry. This measure is clearly indicated to help the industry, but undue delay could in fact exacerbate the shift in business that will accrue to those who will receive VLTs in the earlier implementation schedule. This will make an already serious economic situation in northwestern Ontario even more urgent. It would also delay the fight against the illegal grey machines, including bringing the $400 million-plus of new, non-tax revenue into government accounts.
VLTs are important to our industry for a number of reasons. Obviously they provide an important new source of revenue for businesses. The proposed 10% fee is low in comparison to other jurisdictions, which on average is 16% to 30%, but one can live with that because VLTs are viewed by the public as a desirable form of entertainment that increases the traffic flow. They bring in customers. Customers eat and drink, which creates more economic activity. A byproduct of this new activity is our agricultural sector, as our industry is one of the largest purchasers of Ontario farm products as well as off-farm employment.
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It is also important to comment on the supposed impact on charitable gaming. Contrary to what you may have been told, VLTs have not had any negative impact on charitable gaming. For example, in Alberta the drop in charitable gaming occurred with the introduction of casinos over half a year before VLTs were introduced into that province. The numbers in every province indicate no negative impact.
VLTs will help to save our industry. This is the clear and loud voice of myself and my peers across this province. The facts support that belief. We are already licensed and, as such, are proven to be responsible, professional people trained and thoroughly familiar with all the results from the operations of activities for adults.
A healthy hospitality sector through VLTs means a healthier local economy. A strong and viable business reinvests in its business, hires more people, purchases more goods and services, sponsors more local charitable organizations and sporting events, and pays taxes.
Before closing, I'd also like to comment on a number of other aspects contained in Bill 75. Combining the Liquor Licence Board of Ontario with the Gaming Control Commission into the Alcohol and Gaming Commission of Ontario appears to be a very logical move. Combining these operations should not only improve efficiencies, but should also mean less confusion arising over the regulatory enforcement side once the hospitality industry begins to operate the VLTs. It should also assist the government in dealing with illegal "grey" machines.
I would also say we want to ensure that bad operators are not allowed the privilege of a licence. The provision to revoke a licence to a problem location on the outlined grounds of prostitution, drugs, illegal gambling or physical threats to persons is well-meaning and good. Before any final action is taken, it should require a public hearing so as to protect the rights of the owners. Interpretation is subjective and we need to ensure that fairness to all the parties is maintained.
We commend the government for taking this initiative. It will stimulate our industry without government funding. It will eliminate the illegal machines, the grey machines I've talked about, and bring the untaxed revenue into the mainstream economy, and in the process help the government reduce its deficit.
The Chair: Mr Guzzo, unfortunately, there's only one minute per caucus. Please proceed.
Mr Garry J. Guzzo (Ottawa-Rideau): Let me be quick. Thank you, sir, for your presentation. I'd like to tell you it's my second trip to your area in the last 30 days, and while I've been well treated and I wish it were a longer stay this time, coming from Ottawa and living in Toronto part of the year, I'm cognizant of the number of grey machines and I have to tell you, sir, that I've noted more in this area than in many other areas of the province. In Ottawa, the grey machine money goes to Quebec; it's a Quebec organization. In Toronto we hear that a lot of it goes to Buffalo. Where's the money going on those grey machines from your area? Any idea?
Mr Skillen: No, I don't.
Mr Guzzo: None whatsoever?
Mr Skillen: No, I don't. I know they're here; I know they're in the area.
Mr Guzzo: Let me assure you that from my observations travelling around this province, and particularly in downtown Toronto, the estimate of the Ontario Provincial Police in numbers and in revenue is low.
Mr Miclash: Thanks very much for your presentation. You've certainly pointed out some of the economic benefits that VLTs would bring to the province and to the area. I'm just wondering: You are the past president of the Ontario Hotel and Motel Association. What kinds of discussions have they had in terms of what they may see in the area of treatment and prevention of abuse of the machines?
Mr Skillen: Basically, they want to see a program set up with a percentage of the gross revenues, or however the final formula comes down, helping the people who have problems. I don't think it's just with gambling; it's with alcoholics, with all of those things. There's going to be that segment of people who are always going to have problems, but they want a program in place to help those people out.
Mr Miclash: Is the association happy with what they're seeing today in terms of what the government is willing to provide for funding for those kinds of programs?
Mr Skillen: I can't answer that.
Mr Kormos: Thank you kindly. Again, it's certainly not your fault, but obviously the very same presentation you gave today was presented by Rod Seiling on August 7. We already had a copy of it. It was presented several times already by other members of your association. Again, I don't fault you, but I certainly would expect your association to have tailored the presentation to the respective area.
But I should ask you to consider, because I'm aware that you make reference to the Brandon University study by Gfellner, and again there's some reference to it, but what Mr Seiling's speech fails to identify is that while there may well be in the range of 2% of the gross population with gambling addictions, 9.3% -- this is the same Brandon study -- of VLT slot players are pathological gamblers. The same report also says that "As shown elsewhere, more people gamble when opportunities to gamble are more readily available. Thus, the accessibility of VLTs places more people at risk for gambling addiction and for some this will include involvement in criminal behaviour."
I understand your industry's interest, and you're not unique here in the north across the province. Your industry has been hard hit by the recession and by changes or reductions in travel both by Canadians and by Americans coming into Canada, although Lord knows that with the 40% discount they get they should be coming here more often.
I have no hesitation in telling you that you are going to get slots. Start designing the space right now. You will use them to your advantage, I'm sure, but the reason for the government giving you slots isn't a benign interest in your industry. It's because they need the money; they need the cash.
The Chair: Thank you very much, Mr Kormos.
Mr Kormos: They made a commitment to provide a 30% tax break for the rich. That's what they need them for.
The Chair: Thank you, Mr Skillen, for your presentation here today. We appreciate your attending.
LAKE-OF-THE-WOODS HOTEL
The Chair: Our next presenter will be Lake-of-the-Woods Hotel, Mr Allan Van Belleghem. Welcome, sir. You have 20 minutes. I'd request that you proceed.
Mr Allan Van Belleghem: My name is Allan Van Belleghem. I am the owner of the Lake-of-the-Woods Hotel in Kenora, Ontario. I am also director of the northwestern zone of the Ontario Hotel and Motel Association. I would like to thank you and the committee for the opportunity to speak to you today.
I am here today to lend my support to the introduction of VLTs into the hospitality industry. In general terms, I would like to plead the economic need of small establishments in the alcohol beverage industry such as mine. In the past two decades, governments have not realized, or do not care, what the unreasonably high hikes in alcohol taxes have done to the people in our industry. It has led to a major decline in employment, lack of funds for reinvestment in the business, and inhibited reasonable wage escalations.
In the case of the Lake-of-the-Woods Hotel, employment has dropped from 42 employees in the mid-1970s to 15 employees today. Our industry needs new avenues of income. I feel the establishment of VLTs in licensed premises is the only answer at this time, as I cannot imagine the government of Ontario would consider a reduction of alcohol taxes or the discriminatory 10% retail tax now or in the immediate future. We need new avenues of income. We also have to diversify our businesses to keep up with the changing economic environments and social attitudes.
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The economic impact of video lottery moneys in Manitoba has had a considerable effect on job creation and investment into the Manitoba economy. I personally have benefited from lottery revenues, as I am involved in the establishment of a new boat manufacturing plant in Steinbach, Manitoba. This plant has been developed partly through the use of the REDI program. The REDI program is funded by lottery revenues. This program works with new businesses to develop strong business plans and then guarantees loans to banks. This creates a better lending environment for new businesses. The government has to become more pro-business development, and VLT revenues could not only help the hospitality industry but other sectors of the economy of Ontario as well.
If you accept the proposition that VLTs should be legalized in the province of Ontario, I suggest that it is logical and prudent that such machines be installed in licensed premises. Licensed premises are already strictly regulated by a government agency. Regulations and inspection services as they relate to gaming could, I am sure, be easily integrated into the liquor licence board services.
Liquor licences, as in other provinces, have proven to be a natural market outlet for VLTs. Furthermore, machines could be allocated to licensed establishments based on seating capacity, devoid of any political influence or favouritism.
I do not feel liquor licensees should have exclusive rights with respect to VLTs in Ontario. Consequently, I have no objection to their establishment in charitable casinos and racetracks. However, as all liquor establishments, as well as racetracks and charitable casinos, are in pursuit of the entertainment dollar, equal opportunity should prevail. In other words, access to the machinery should be provided simultaneously, with no so-called test period. In certain areas the entertainment industry should be given preferential treatment. I feel it would be a shame to have a testing period for VLTs in view of the experiences of the other province which experts of the government can draw on.
I might also add that a figure of 10% representing the video outlet's share of VLT revenue has been bandied about in the press. This percentage would certainly not create the impact required in our industry, nor is it comparable to the percentages allocated in other jurisdictions. This unfairness would be further compounded if the government sharply restricts the number of machines in each establishment as has been reported by the press.
In conclusion, I feel it is imperative for the government to implement VLTs throughout the hospitality industry in the province. It should be done swiftly and fairly so that the benefits can be seen in the near future.
The Chair: Thank you very much, Mr Van Belleghem. Mr Miclash, you have four minutes.
Mr Miclash: Allan, thank you. As probably one of the youngest hotel owners in the province, I think it's important that we get your views on where the industry is today and where it's going in the future. I'm familiar with your establishment, and you've indicated, and I've certainly seen, the employee reduction from 42 in the mid-1970s to 15 today. If you were to go ahead with the installation of the VLTs in the establishment, how many machines would you be looking for or looking at installing, and what impact would that have on your employee numbers?
Mr Van Belleghem: As far as numbers, I'm familiar with the Manitoba system's being so close and I have friends in the industry there. From what I see, their allocation of machines is a fair system. It allows for growth. It allows for hiring new people because of the amount of machines they have. If the government goes ahead with the 10% they're talking about, it is half what Manitoba is receiving. So cutting our amount compared to theirs doesn't make any sense. It's not a true benefit like the Manitoba industry is getting right now.
As far as jobs, I know many of the establishments in Manitoba are crediting as many as three or four in their establishments because of VLTs. I think that isn't far off if we have the numbers and we have the revenues. The money coming in allows you to look at new avenues. It takes off your emphasis on a total reliance on liquor sales and you can look to new avenues to growth, renovations. Our hotel has 40 hotel rooms that aren't open. There's no capital there to renovate and maybe make apartments. The jobs, with the extra money it will create, I think it will be enormous just in my establishment.
Mr Miclash: Something you didn't touch on, and it's been touched on in other presentations, is the availability of off-sale. I'd be interested in your comments to allow the committee to hear how you feel about off-sell.
Mr Van Belleghem: I believe in it. I would estimate that every weekend I have between 20 and 30 people coming into my establishment. They are 99% tourists coming into my establishment, looking for beer, and this is after hours. They cannot understand why they can't get it. It's pretty obvious in this area that it's needed because we don't have the hours they have in southern Ontario, I don't believe. I believe they have longer hours, but the beer store here closes early and so does the liquor store, and people from other provinces aren't used to that.
Mr Crozier: Mr Van Belleghem, welcome this morning. You've given us some evidence about the concern over the reduction in tourist spending in your industry. I think we all want to search for ways to assist you in that. What's led to it? Can you just very quickly tell us when this began and what you feel is the reason for the reduction?
Mr Van Belleghem: I will talk about my place specifically.
Mr Crozier: Sure.
Mr Van Belleghem: It's a matter of economics now for myself. Basically, I have two bars, a lounge and a big bar, and it's just a matter of acceptability, socially and price-wise.
Mr Crozier: People have stopped spending money, in other words, or somebody has stopped, or they've reduced it.
Mr Van Belleghem: Yes.
Mr Crozier: Have you got some idea what's led to that?
Mr Van Belleghem: I would just say the economics of our province right now. You see it everywhere, cutbacks --
Mr Crozier: What I'm trying to relate then is, if they don't have the money to spend now, if they're concerned about job security, those kinds of things, are they going to have that money to spend on gambling? I just throw the question out.
Mr Van Belleghem: I think they do. It's pretty evident in what's happened in Manitoba. People have the money to spend on entertainment. I'm relying on liquor sales. That is moving away. I need a new form of entertainment in my establishment; otherwise I won't be here in two years.
Mr Crozier: But if they don't have the money, what difference --
Mr Van Belleghem: They seem to have the money in Manitoba. Why wouldn't they have it here?
Mr Crozier: I don't know. That's what I'm trying to get at.
Mr Van Belleghem: It could have been the government before the present one right now kind of caused this, but I'm not sure.
The Chair: Thank you, Mr Crozier. I'm sorry, Mr Kennedy, time has elapsed. Mr Kormos, you have five minutes.
Mr Kormos: Once again, as with other hoteliers, I understand why you want slots in your hotel, because they can generate fantastic revenues. I understand that. Quite frankly, there are going to be others in the lineup. The racetrack industry wants them in the racetrack industry, but most of the racetrack industry doesn't think they should go outside of the racetracks, because again they want to protect their self-interest, right? They think slots are fine as long as they're making the bucks. Here you are, the hotel industry -- I'm not saying you specifically, but I'm speaking in generalities -- saying, "Racetracks are fine and hotels are fine, but don't move on into" -- let's say -- "unlicensed establishments."
Well, the fact is corner store people are interested in them too. The 7 Elevens, the Avondales, the Beckers, they sell most of the $3 million of lottery sales that are sold here in Kenora, and they consider themselves perfectly capable of monitoring the usage of a slot machine.
Interestingly, you talked about the percentage take that the tavern owner or hotelier should have, and you dismissed -- because we haven't had hard data on what it will be, the take by the hotelier. You talked about the need to be in excess of 10%, and you talked more in the range of 20%. In your planning, what would you expect to generate in revenue, for you as the hotelier, the host of a machine, of a slot, over the course of a year? Have you reflected on this? What's your anticipated take for a year as the host of a machine, per machine?
Mr Van Belleghem: From what I understand -- I'm going from Manitoba once again -- the last I heard each machine averages for an establishment approximately $5,000 a year.
Mr Kormos: And that's at 20% of the gross amount bet?
Mr Van Belleghem: That is 20% of the moneys made after payouts.
Mr Kormos: Okay. So it's 20% of the net revenues?
Mr Van Belleghem: Right.
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Mr Kormos: The other problem -- we were speaking earlier with the chamber of commerce about it -- is the problem of payouts, because American casino-type slots adjacent to our borders here advertise payouts as high as 95%. I read in gambling journals that that's how casinos compete with one another, that's how one slot location competes with another, by offering a higher payout.
What type of payout would we have to have in Ontario, especially in border communities like we're in right now, to be competitive with American slots?
Mr Van Belleghem: I honestly couldn't answer that. As far as the American slots, that's the first I've ever heard of the payouts. I don't think it's a matter of competing against them. I think we're trying to create income; we're trying to create jobs. I don't understand what the problem is with introducing money into this province to help the economy. It's mind-boggling that we sit here and we get the screws put to us every day by the government of Ontario. It's time to take the screws out and let us do business. Business pays for social programs. It's tiring to hear you people tell me to stop doing business.
Mr Kormos: Then why not go hell-bent for election and legalize slots, and anybody who wants to host a slot can have one? Why not do that?
Mr Van Belleghem: That's your opinion. I just --
Mr Kormos: No, I'm asking you, why not? Let's go. Anybody who wants a slot, have one, if you can pass the requirements.
Mr Van Belleghem: I think it has to be regulated. I think we have the place where it can be regulated properly. We have the age restrictions. We're doing it already. It's the perfect solution. We don't want it out there everywhere. We want it restricted.
Mr Kormos: So you don't want to share that end of it with the other of the business community --
Mr Van Belleghem: It's not just us. In my speech I talked about programs set up in Manitoba with lottery revenues. It helps the economy. We're not talking about one industry; we're talking about an entire economy.
Mr Kormos: We shall see.
The Chair: Thank you very much, Mr Kormos. We have Mr Hudak, Mr Johnson and Mr Klees, and a total of five minutes.
Mr Hudak: Thank you, Mr Van Belleghem, for your presentation. The opposition was playing a little politics there in asking you to solve questions involving the whole political sphere. Your area of expertise is business. You care about the Lake-of-the Woods Hotel and what this means for your business in the community.
I have a follow-up on Mr Crozier's questioning. Where are the jobs going to come from? I've been listening to the mayor of Kenora who wants to make Kenora a tourist destination and increase tourism here. We also heard from Mr Treusch, who has estimated another 1,200 jobs coming into the area, and certainly the chamber of commerce thinks a similar number of jobs will come into the area, and millions of Americans coming in in a year. So we're not talking just about your current customer base; we're talking about making Kenora a potential destination to attract all kinds of new customers. If the government proceeds with Bill 75 and we're successful with this for Kenora, what does that mean for increasing your 15 employees to more, and what does that mean for those 40 rooms you had to close under previous governments?
Mr Van Belleghem: If it has the impact, which I think it will, I know that personally I have it in my plans to renovate. I think there's a need for more hotel rooms in Kenora as it is. I would love to renovate. It's great for the economy. In Manitoba, like I say, I have friends there, I do business there, it's pro-business in that province, things are happening, people are renovating. As an example, there's a small hotel in Ste Anne, Manitoba. It is a very small establishment; it was run-down. A person took it over and he got the off-sales and he's got lottery machines. He's going to pay it off and he's going to reinvest. It's obvious what it's going to go for the local economy just for himself and the province. It's a good thing right now, that I can see.
Mr Hudak: For you as a businessman this means good things for Lake-of-the-Woods Hotel?
Mr Van Belleghem: It's great. We need to invest money. We need to create jobs.
Mr Ron Johnson (Brantford): I want to thank you for your presentation, Allan. I think one of the key things you said -- at least what I picked up -- was that this is going to stimulate the entire economy in this area, not just your particular industry. That's a very important point, and I've got to tell you, we got the same message in Thunder Bay when we were there. We had a number of people in the small business community there saying to us, "Look, we're talking about an incredible number of jobs that will be created as a result of this initiative," mainly because of the fact that you're a border town and a lot of your tourism dollars are going there and you're not able to compete, as with the local casino here, properly in the US market. I think I agree with you on that, that we have to rectify that.
I don't think they understand it, though, quite frankly. I don't believe they for one minute can understand the challenges that small businesses are facing in this province. I think we do.
Mr Crozier: I was in small business before you were born.
Mr Ron Johnson: Well, you're an old guy.
Mr Guzzo: Maybe it's senility.
Mr Ron Johnson: If it's true that he has been in small business, then maybe he does see the light and maybe he is going to help the community of Kenora, and hopefully your local member will do the same, because they're in a position where they can help execute this bill and make this area viable and a tremendous tourism attraction in a number of ways. I think this community is going to be watching your local member very closely --
Mr Van Belleghem: You got that right.
Mr Ron Johnson: -- to see if he's actually going to represent the business interests and the 1,800 jobs that will come here as a result of this legislation.
The Chair: Mr Klees, you have one and a half minutes.
Mr Klees: As is typical, Mr Johnson's taken most of my time. Mr Chair, if I don't have the time to really deal with this issue, I'd like to be first on the next list, please.
With regard to implementation of VLTs and the economic impact, one issue we haven't discussed yet in these hearings is the impact it has on the stability of your business from the standpoint of financing. In your view, I'd like to hear from you what you feel your banker, your lending institution would feel if you now have a new dimension to your business strategy.
Mr Van Belleghem: That's true. I've just recently bought the hotel from my family. Four years ago, after 20 years of being with a bank, we had a little tough time. We went for a line of credit and the bank, after 20 years of never missing a payment, wanted a personal guarantee from our family, just to get a line of credit to operate. If we have money, if we have cash flow, the banks are going to start liking us again. Banks do not like business right now.
Mr Klees: As a result, you'll be able to enter into a capital expansion, and that in turn has its trickle-down effect into the rest of the economy.
Mr Belleghem: Like I mentioned, in Manitoba, when I first started my boat business, I wanted to be in Ontario, but the NDP was in power so why would I be in Ontario?
The Chair: Thank you very much for attending today. We appreciate your comments.
LAKESHORE HOTEL
The Chair: We are moving on to the Lakeshore Hotel, Mr Douglas Stemkoski.
Mr Kormos: On a point of order, Mr Chair: In response to Mr Flaherty from yesterday when Mr Flaherty, on a point of order, refuted the proposition that a request for proposal had been issued for the purchase of slot machines, and the Chair permitted that point of order on the part of Mr Flaherty, I have a July 12, 1996, article in the Kenora Daily Miner and News written by Fred Rinne indicating that Ingrid Thompson, communications assistant to Norm Sterling, confirmed an RFP, a request for proposal, has been issued for the video lottery terminals.
The Chair: Thank you, Mr Kormos. That is not a point of order, as you know.
Mr Kormos: Why would Mr Flaherty lie to the committee?
Mr Flaherty: I didn't and it's a misquote. There you go, Mr Kormos. It never was accurate. I've given you the official --
Interjection.
Mr Flaherty: My name's not there. I have the accurate information. I gave it to you yesterday, Mr Kormos. If you don't believe me, that's your problem.
The Chair: Mr Kormos, again you used a word which is not parliamentary. You know that.
Mr Stemkoski, they're using up your time.
Mr Doug Stemkoski: Thank you very much for allowing me to make a presentation today. My name is Doug Stemkoski. I'm the owner of the Lakeshore Hotel in Keewatin and I'm the past director of the Ontario Hotel and Motel Association.
I have with me a presentation to make and I'm going to make it. I had it written on paper, but rather than do that, my colleagues did such a wonderful job, I think I'm going to give you my story without the written presentation.
I have 30 years in the hotel industry. I started in 1964. Actually, I've had 32 years. I moved to Ontario in 1978 and in 1978 it was a pleasure to do business in this province. As the years went on, instead of things getting better, they started getting worse. Taxation started to come in, drinking and driving laws got stiffer -- I'm not saying that I condone drinking and driving, but I'm just saying that everything piled together to hurt the small rural hotel owners. I can tell you that there are many rural hotels in this province right now that are suffering greatly, that are behind in their taxes. I know some hotels that are behind three years and are going to lose their hotels. They're going to go bankrupt. So the point I'm trying to make is that we have to have some added value in this business in order to survive, in order to renovate, like Mr Van Belleghem said, in order to do business in this province and hire people, so we can exist. In my particular business, when I started in 1978, I had six employees working for me. Right now, we are a ma and pa operation, because we can't afford to pay out the wages to run the business as a viable business.
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Another thing which I must say, besides the VLTs, we very strongly recommend that this government look at off-sale beer, which definitely helps the Manitoba system too. I am from Manitoba originally and I know the system in Manitoba. I have family in the hotel business in Manitoba. I asked some of my colleagues in Manitoba last year, at the Manitoba hotel convention, what would happen in a small, rural hotel if they took away the VLTs and off-sale beer. The answer I got: "We'd go bankrupt." This is what's happening in the province of Ontario at this time.
This is where I make my case to this government. I'm asking this government to look at small, rural hotels and when you're implementing the VLTs in this province, I'm saying to you, bring them in at the same time as you're bringing them into racetracks and charitable casinos. Why should we always take second seat? I can't understand why this is the case. So I'm pleading with this government to give us the VLTs at the same time that the other establishments get them.
As far as off-sale beer is concerned, I just want to touch on that a bit because it hasn't been mentioned too often, and I'm a very strong advocate of off-sale beer. I was a representative for Northwestern Ontario Associated Chambers of Commerce when we met with the former NDP government, to no avail. Nobody would ever listen to us. Small business was going down. All we got is the cold shoulder.
I'm very happy to say at this time that I am pleased that this government that's in power at least is looking at our business. All I can say is I have nothing but praise, and because this government is in power, I've already started some renovations on my hotel and I hope to go further with them. This is my presentation. Thank you.
The Chair: Thank you, sir. We have approximately five minutes per caucus.
Mr Kormos: I had a feeling you were going to say that, but I've got to tell you something: Rest assured, relax, it's a done deal. We've got these committee hearings. The House has even returned yet, we haven't had third reading on Bill 75, but Ingrid Thompson, communications assistant to the Minister of Consumer and Commercial Relations, confirmed with Fred Rinne, the managing editor of the Kenora Daily Miner and News, that a request for proposal has been issued for the video lottery terminals. We're speaking of --
Interjections.
Mr Kormos: It was up here --
Mr Flaherty: Again, on a point of order, Chair: That is not accurate information. The member knows it's not accurate and he persists in repeating it in a public meeting. That's typical, misleading someone before a public --
The Chair: Mr Flaherty, I'm sure you're aware that it's not a point of order.
Mr Kormos: Quite frankly, Fred Rinne, who is the editor, I have a lot more confidence in his credibility than in Jim Flaherty, based on my experience with newspaper editors and their disinclination to misquote people. So here we are. The request for proposal is there. The deal is done and I have no doubt that racetracks are going to get their slots. I'm concerned about the charity casinos as they exist now, because the government, as you know, is going to revamp the system of charity casinos, and I don't know where Golden Eagle's going to stand in that process. There's going to have to be a lot of work done in that regard for Golden Eagle to maintain its status quo. The hotel and motel association has been I think effective and successful in making sure that they're going to get their slots.
Mr Stemkoski: You'll notice I didn't use their presentation.
Mr Kormos: Quite right, and I appreciate that, you can't believe how much, and the same with the person prior to you, Mr Van Belleghem, who brought personal and individualized experience.
You talk about beer and wine. That's an interesting thing because right now the corner store industry is pressuring, lobbying this government for beer and wine in the corner stores. That issue goes back to 1954 in this province when the Tories were in power again. It goes back to 1954. The reason I know that is because I read a 1954 newspaper just a little while ago and came across it in a Queen's Park report. Do you propose to share the beer and wine business in terms of off-premise sales? Are you satisfied that corner stores have the same opportunity?
Mr Stemkoski: No, I don't think they should. And you want to know why?
Mr Kormos: Yes.
Mr Stemkoski: Because we already are licensed and we could lose our licence if we sell to minors and people who are intoxicated. How are you going to put those controls in corner stores?
Mr Kormos: 7 Eleven says they're prepared to have to be licensed too. They're prepared to have to comply with all the requirements. They do it in the United States. They indicate --
Mr Stemkoski: We're not the United States. This is Canada.
Mr Kormos: We will be soon with these slots. They do it in the United States --
Mr Stemkoski: By the way, they're not slots, they're called VLs.
Mr Kormos: Where I come from, you put money in and the buzzers buzz, they're slots.
Mr Stemkoski: I've been listening to you say that all day today.
Mr Kormos: Yes, I know. Of course. That's what they're called, slots.
Mr Stemkoski: Okay.
Mr Kormos: That's what they're called. You see, this government wants to call them VLTs because that's got a nice spin to it. Gambling experts call them slots. Right?
Interjection.
Mr Kormos: In the 1930s they called them one-armed bandits. But the beer and wine sales in corner stores, the 7 Elevens, Becker's and Mac's milk are going to argue that they are now restricted to selling cigarettes only to people over 19. They point out that they've never been busted for that. They card people on a regular basis. They point to the Quebec experience where corner stores sell beer and wine.
What I find interesting is that you come here, you're going to get your slots. Okay? The corner stores are going to have to wait for theirs. That's a couple of years down the road, but I'm convinced it'll happen.
Mr Stemkoski: I don't think they will.
Mr Kormos: The government says it won't, which persuades me all the more that it will because the government already uses corner stores as their primary distribution centre for lottery tickets; $3.164 million here in the Kenora area alone, most sold through corner stores. Why don't you want to share --
The Chair: Thank you, Mr Kormos. If we can proceed to the next caucus. We have Mr Klees, Mr Hudak and Ms Bassett. Five minutes.
Mr Klees: Thank you, Mr Stemkoski, for your presentation. What I particularly appreciated about it is that you speak from practical experience and you're hitting at the heart of what we're trying to deal with in this bill.
I have to say that I regret that our colleague Mr Kormos persists in using this forum to propagate misinformation. However, I do believe also that the people in this province are watching this process very carefully and I believe that they are more than ever assured that they made the right decision last June 8.
Mr Stemkoski: Absolutely.
Mr Klees: Because it's this kind of misinformation that they were subjected to for five years.
Mr Kormos: Be specific. Call me on it.
Mr Klees: Well, Mr Kormos, you have the ability to put the minimum amount of information into a maximum amount of words, and misinformation at that.
Mr Kormos: Read the research, Klees. Be specific.
Mr Klees: What I would like to do, Mr Stemkoski, I'd like to just follow up with you on the economic issue of this and that is the value of your business. There are two components to a business. One is the revenue. If you don't have enough of that, you're out of business.
Mr Stemkoski: That's right.
Mr Klees: The other is what no doubt you and many others like you over years have done and that is, you've invested your time, your money, your energy into building a business and that's the asset value. At some point, you want to have an asset that you can either sell or you can pass on, and that's the other component of business.
I'd like to get a sense from you, first of all, of what you feel has happened over the last few years to the asset value of your business, and second, what will happen to the asset value of that business with the implementation of this bill?
Mr Stemkoski: In the last number of years, I would say over the last 10 years in fact, the hotel industry has really gone downhill. I think it's because of overtaxation and the laws that have been implemented against small business actually that have really deterred small business from flourishing. I know myself in my business, in my little hotel in Keewatin, which is mainly a tavern business. We're mainly alcohol, is that it's gone on a gradual downhill and there is no way that we can turn it around with just alcohol; it's impossible. I'm relating back. When I came in, in 1978, to 1996, the business isn't even viable any more. We have a hard time paying our taxes, by the way. Now what's going to happen if we don't get some changes, such as Bill 75, there will be no hotel in Keewatin, Ontario. It will be closed, locked and my family will have to do something else. So when you talk about assets, if nothing is done with Bill 75, which I'm sure is going to be, we're in serious trouble.
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Mr Hudak: Thank you, Mr Stemkoski, for your presentation. I also appreciate very much your stalwart defence of the small businessperson and how difficult it's been over the last 10 years to try to get ahead.
Mr Stemkoski: It has.
Mr Hudak: This will give you a tool to attract more customers, not just in this area but from the States and the other provinces as well. So I salute that defence. It was interesting to see the reaction you get from somebody with a different viewpoint in a five-minute speech and no questions directed back to you, talking about everything from slot machines to corner stores but not talking about Bill 75 or VLTs.
My question's the same as to Mr Van Belleghem. I asked him the same thing. What's this mean directly for jobs in your business and for other types of businesses in the area?
Mr Stemkoski: I know for sure that if we get VLTs -- and I'm also going to put in off-sale beer once again because they're both very important -- I would say that we're going to be hiring more staff. I might be able to get back to the original staff I had when I first started in business. We will create some jobs and these jobs which we create as one hotel -- and I'm saying many businesses are going to do that -- are going to be a spinoff to the community, which is going to make the community grow. You're going to have less welfare. We're going to be more self-sufficient. We hope to bring in more tourism, which we will. So it's a win-win situation.
Ms Bassett: Thanks so much for your presentation. You mentioned that you as a licensee of alcohol were controlled to prevent selling to minors. I wondered, do you feel the same responsibility if you were to have VLs, that you would be responsible to prevent and protect their use by minors?
Mr Stemkoski: Yes, we would do the same as we do with alcohol.
Ms Bassett: Do you have any plans of how you would do that?
Mr Stemkoski: We would card people as they come in. If they looked young, we would definitely card them, and definitely we wouldn't allow any people into our establishment under the age of 19 years old. That's how we'd monitor the VLTs, the same as we do the liquor.
Mr Kennedy: I want to thank you also for your presentation. It's genuinely helpful to hear the situation that you're in, and we certainly heard from numerous members of the hospitality industry about the genuine problems that have been faced as a result of the economic downturn.
I just want to focus on how valuable the VLTs could really be to addressing the situation, which should be addressed. The VLTs for this area might be in the order of -- there have been 5,000 minimum committed to charity gaming halls of the 20,000, perhaps 10,000, depending on what sliding scale the government chooses to use. Another 2,000 have been committed to racetracks and half of those to the four major racetracks. That leaves a number for Kenora, which has 36 licensed establishments, of between 10 and 20 VLTs. This government has already indicated at different times it's only permitting 10% revenue. I was just wondering, do you think those kinds of terms will have the kind of impact that you so clearly indicated is needed for different establishments?
Mr Stemkoski: What I'm trying to tell you right now is I think that this government is capable of looking after the situation. I think they'll do the best in their ability and I'm not going to start getting into numbers at this time. I'm sure they know what business is all about and they will handle it appropriately.
Mr Kennedy: I just want to point that out. I appreciate that faith, but this government has proposed, compared to governments across the country, to take more money for itself and give less money to the establishments and to the charities than any other government that has used these. That's fine, but for the business establishments it should be clear that this isn't going to have that economic impact unless you prevail on them to change that.
Mr Stemkoski: I'm not getting into that right now.
Mr Miclash: Doug, we've actually spoken a good number of times about the things that you've presented here. As a former director of the Ontario Hotel and Motel Association, I know your involvement with them as well and your points of view. Something that I asked Pat Skillen earlier on was, what involvement do you personally see or do you see that association having in terms of treatment and prevention when it comes to problem gamblers in the province?
Mr Stemkoski: We're like anybody else; we're going to do the best we can to cure any problems there might be in society. I think once again the government will do the right things according to what it sees fit. This is what I see. I'm not a professional on this particular matter, but I'm sure there are people out there whom the government has who are professionals.
Mr Miclash: Do you see any kind of commitment that you could get from the association towards implementation of a program?
Mr Stemkoski: I could talk to the association and see if I can get one. I don't have one at this time.
The Chair: Thank you, sir, for your presentation.
For the purposes of Hansard, there were a number of people who could not make presentations here today, but I believe we have with us Mr Pearson, who is the mayor of Keewatin. Welcome, your worship. I'm sorry if you did try to make a presentation and weren't able to. We also have Reeve Motlong. Welcome again. I spoke to you earlier and explained to you the problem in time pressures.
GORDON ELDER
The Chair: We now have an individual speaking to us, Mr Gordon Elder. Please proceed. You have 20 minutes.
Mr Gordon Elder: I am here as a retired citizen. I would like to make a statement at the beginning of this submission: There is no plausible reason whatever for the expansion of gambling activities in the province of Ontario at this time, that is, other than to satisfy the greed of the Harris government to further the taking of money from those who in many cases are living below the poverty level, are on welfare, and giving that money to the supporters of his Tory-Reform government who don't need it. The Harris government promised a 30% cut in Ontario's income tax, which obviously would benefit the wealthiest segment of the population, and now they intend to implement a poor tax, because basically that is what VLTs are.
To talk of Common Sense Revolution is sheer hypocrisy. They are bent on undoing programs that even previous Conservative governments instituted. Their election campaign was very similar to the "big lie" technique used so successfully by the Fascists in Germany back in the 1930s. The media in Canada today are firmly in the hands of the wealthy, who manipulate ideas and shape public opinion. Let's not kid ourselves. These reactionaries have already wreaked great damage on the fabric of a decent life in Ontario.
What possible reason could there be for the Ontario government to introduce video lottery terminals into the province at this time? The largest group supporting the installation of VLTs in Ontario, besides the Harris government and its supporters, is the hotel and liquor industry. They would have us believe that this would attract more tourists and create an atmosphere where hotel bars would be as acceptable as local community centres. Tourists, Canadian and from the US and other countries, are looking for enjoyment of a lifestyle that is entirely different from their own. The installation of VLTs will not make this country any more attractive to tourism. This can be backed up by interviewing foreign visitors. I know because any I have asked for their opinion said it is definitely not what they are looking for when vacationing in Canada.
During the last Ontario elections, candidates who supported or told these enterprises that they would support the introduction of VLTs were told they would receive financial help in their election campaigns. This government has stated that the provincial debt must be reduced, as they considered it to be the main problem facing the Ontario economy. In order to attempt to achieve this, the Harris government has launched what can only be described as an insane attack against the living standards of the people of Ontario, especially those who are the have-nots. In its first year in power it has embarked on a policy of slashing the health, education and welfare benefits that had only been achieved since the end of the Second World War.
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This idea, the VLTs, is certainly not for the betterment of the general population. It is solely to make the rich richer. The gambling revenue of course would help to partly make up for reduced income taxes from the wealthy being introduced as part of the nonsensical revolution.
It is the responsibility of parties in opposition to oppose, amend and/or attempt to prevent the passage of legislation which is detrimental to the majority of our residents. I would expect that all the opposition parties and MPPs, including the Kenora representative, Frank Miclash, will do everything in their power to inform the public as to the damage that will be done to the economy and to the way of life we enjoy in Ontario if VLTs are installed in our province. These machines do not create wealth. Their installation must be opposed by all citizens who are interested in improving the Ontario standard of life that we have had up to now.
It is unfortunate that there are only two provinces left that do not have VLTs: British Columbia and Ontario. They constitute almost 12 million people. For this province to install these machines would be a step backward and would further strengthen the right-wing Harris government.
The economics of video lottery terminals, or as they are more commonly referred to, VLTs, must be examined in the overall picture as to what actually takes place in this process dealing with the transfer of funds from the poor to the rich.
It is interesting to note that many of the gambling lotteries and machines were at one time part of the structure of organized crime. Organized crime is still big business in Canada, and there appears to be a fine line between that which is legal and that which is criminal. If the government endorses this kind of business it may be legal, but it certainly isn't morally right.
The removal of cigarette taxes, together with the resumption of tobacco advertising, has resulted in an increase in the sale of tobacco products and a further assault on the living standards of young Canadians especially. These government policies favour the corporations, including of course those that support the Harris government. The installation of VLTs will also benefit the corporate crowd, which makes up the most ardent supporters of right-wing policies.
The most misunderstood function in this form of gambling machine system is that the only cash flow is from the players to the owners of the machines. It is the most lucrative method of all forms of gambling, and I must emphasize that eventually it takes virtually all the cash put into the machines. There are two machines in the local casino that dispense money: They are Bank of Montreal ATMs, which are not equipped to receive money for deposit, only to remove money from your account. The VLTs are rigidly programmed so as to operate in a fixed selection method so as to give the impression that they are randomly operating and that there is a chance for the players to win. These machines are adjustable as to the rate of payouts.
They are successful in that people taken in by VLTs actually believe they are going to get their money back or even more. The machines are designed and programmed to accomplish one thing, and that is to fleece the customers. Among the players there are no winners. There are times when there are payouts, but winnings will find their way back into the machines. This especially is the case of machines that are placed in hotels and bars, because there is no accumulation jackpot that could amount to a large sum of money.
In the case of a casino where there are machines that are part of an accumulation jackpot, it operates on a fraction of a percentage of the money that is being played automatically being put aside for a larger payout. These machines that are grouped together to create a large jackpot are of course even further adjusted so as not to operate in a free, random, mathematical program, as they are programmed to extend the time even further for the winning combination to appear on one of the VLTs. You can be sure that in order to pay out a prize, for example, of $250,000 at a casino, millions of dollars will be taken in by all the machines that are part of that accumulation jackpot.
Dealing with the scattering of machines throughout hotels and bars produces a clientele that becomes addicted to this form of gambling, and any temporary gain will be recycled into the VLTs and will accumulate to be divided at, say, 20% to the licensed operators and 80% to the government. That's the case in Manitoba.
The placing of this equipment in bars is a further enticement to increase the consumption of alcohol. Society as it is cannot cope with the problems created by alcoholism and the cost in human lives. As well, the health and social programs stemming from it is a great burden on a large percentage of the population. It must be remembered that many innocent people die or are crippled for life and their families suffer in anguish as a result of drunken drivers.
Any policy which increases gambling and the use of alcohol and tobacco is counterproductive to the health of Canadians.
Locally, one only has to read the list of organizations in the Kenora area that deal with all the social and health problems we already have. We are not able at the present time to overcome the suffering that already exists, let alone get legislation that increases many of the problem areas.
Further to this, it should be noted that in dealing with health problems in this province, Mr Harris has unilaterally decided that Canada is to become part of the "plutonium club." This can only lead to more catastrophic life-and-death situations.
All the policies of this government are bent in one direction, and that is the destruction of democratic institutions and policies that benefit the vast majority of the residents of Ontario.
Dealing with VLTs, we have the Manitoba example. In their case, as a result of the scattering of machines throughout the rural area as well as the larger cities, there are a lot of poor people now, and the machines are programmed to ensure the players cannot beat the system. In Manitoba, it must be noted that in marketing this product when it was first introduced, the odds, according to many players, appeared to have been somewhat better than after the machines had become firmly established.
Historically, people who have been hooked on bingo, for example, have gone through the same process, winning usually small sums of money occasionally and eventually placing it back into the games. During the period that they participate they will dispose of a considerable amount of what would have been part of their life savings.
These games were sponsored to support charity. This is another difference between the two forms of gambling, as usually in the case of bingo anywhere from 40% to 60% of the gross amount will go to a charitable cause. This would not be the case with casino bingos, as the percentage would be much less, if at all.
In the case of VLTs that are not in the casinos, there are no winners among the players in terms of any net earnings. The other difference, of course, is that nothing will go to charities. In the case of Manitoba, the right-wing government is boasting about the amount of VLT money being used to pay down the provincial debt.
The example of what is taking place in Manitoba is an advantage in that we can examine the results of the VLT machines that were spread across Manitoba by the reactionary Conservatives. It has turned out to be a cash cow to the Tory government at the expense of Manitoban society as a whole.
In the Manitoba example there can be no debate as to how the money is split between winners and the government take after paying the hotel owners their cut from this racket. The reason, of course, is that when players cash in their payout slips -- they don't operate on coins -- they do one of several things: They may take a break and resume play without leaving the premises, they may simply move to a different machine and resume play immediately or they may leave and come back to play another day.
Adding up payout slips and declaring this as the winnings from VLTs would be considered fraud if peddled by criminals. So what's the difference? There is none. It's fraudulent no matter who is running this kind of racket.
Recently the Manitoba government announced that it was reducing the number of VLTs in the province by 650. The public relations here was that this was to due to their understanding of the problems being created by this form of gambling. How nice of them.
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This wasn't the truth. The real reason for the reduction was that they had too many machines distributed, and their marketing research indicated that they would even increase their returns by creating an artificial demand because of fewer machines being available. Further to this is that the patrons would spend more time in the establishments in order to get to play and would increase the amount of liquor consumed while waiting.
Health is another area of concern. The effect on the people who spend hours at the terminals, it must be realized that they are placing their eyes very close to a video screen, and there is already ample evidence proving that the radiation being emitted from such screens is detrimental to health. There is also an effect on the wrists of people who spend prolonged hours repeating the same motions of the hand operating VLTs.
While Mr Harris is busy shutting down hospitals and slashing the health programs that belong to the people of Ontario, he introduces policies that are going to make more people sick, both mentally and physically, from gambling, alcoholism and their associated social problems. Can Mr Harris be concerned about how many more children are going to go hungry because of his nonsensical policies? For one who had his share of bologna sandwiches, I guess he really isn't giving it any thought.
It must be understood that these machines are fixed in that the rates at which they will pay out any winnings are of such a proportion that VLT operations are a guaranteed method of extracting money from the people who can least afford it. What other lottery can take in hundreds of millions of dollars without there being any winners of a substantial amount, say, for example, an amount of even thousands of dollars let alone millionaire winners?
The 6/49 lottery, for example, has a guaranteed percentage after the GST is paid to the federal government and after the $10 prizes are deducted from the major jackpot pool; 45% of the net income from ticket sales is then set aside for prizes, of which, after the $10 prizes are allotted, the first prizes start at 50% of the remainder.
VLTs have no winning guarantees whatever. What they do have is a built-in losing guarantee, in that all who play these machines, the more they play them, the more they will lose. Why this government is intent on their installation is because it will take in well over $1 billion yearly from those who can least afford it, but of course, when you're attacking the living standards of the poor and the people whose jobs are being axed by the policies of the Harris Reform-Conservative coalition, this is just another weapon in the arsenal.
These machines are the latest product of electronic technology and are fantastically more sophisticated than the original one-armed bandit. They can analyse market strategies for the lottery industry as well as control the rate of payouts. They are sophisticated enough that they can keep a player interested enough to keep playing until the money is all in the machine. This is a time when market research is applied in any way possible to squeeze more revenue from the poor and the desperate.
Tens of thousands of citizens living below the poverty line are paying into these machines more than they pay into federal and provincial income taxes. If the taxes on the lowest-income citizens were raised, there would be a loud cry of "Unfair," and an even louder noise if it were the wealthy people and corporations that were being taxed at this rate.
The price for this racket is very high: hungry children, domestic violence, family breakups and an ever-increasing cost to society as a whole. People get into a debt situation that they cannot get out of and the results are many. Crime and violence in the streets increase, and there is a general breakdown of the lifestyles of many people, but mostly the poor.
To talk of any percentages of returns to players of VLTs is nonsense. The only winners in this racket are the Conservative government, the hotel keepers and the federal government. The federal government is directly involved in VLTs in that by getting provincial and municipal governments to extract money from the poor in order to make up for cutbacks to the provinces and the municipalities, they make it easier for the feds to slash the living standards of Canadians even further. The sooner Canada rids itself of this racketeering, the better off we'll all be. Rather than get sucked into this quagmire of VLTs, it's about time Canadians took action against both the Conservative-Reform government in Toronto and the right-wing Liberal government in Ottawa.
When we talk of VLTs we are talking taxes. The first fact that should be understood is the income tax situation in Canada. In 1950, individual income tax was 47.8% of the tax collected, whereas corporate income tax was 46.4% of the tax collected. Since that time there has been a drastic change as to who has been paying their income tax. By 1992, individual income tax had grown to 90.2% of the income tax paid, whereas corporate income tax had steadily declined and constituted only 7.6% of the income tax paid to Revenue Canada. The source of these statistics is Revenue Canada and is available to anyone at their public library.
Why talk about taxes? The introduction of VLTs into Ontario is simply another tax grab from the poor, and a very despicable one at that. It will constitute one of the biggest tax grabs of the Harris administration.
The mostly foreign corporations pay little or no income tax and they certainly won't be playing VLTs.
The corporations will always argue that their tax rate is too high, but the problem is that many corporations and wealthy individuals pay no income tax or very little income tax. The amount not collected from the wealthy over the last 50 years is in the hundreds of billions of dollars. The result of this unbalanced taxing, of course, has been deficits and growing debt at all levels of government.
The Canadian establishment and its senior partners, the large multinationals, decided long ago that it was far more profitable to lend money to governments than to pay taxes and it was far more profitable to receive government grants than to make charitable contributions to those who are in need.
The wealthy, the rich Canadian corporations and the foreign-owned transnationals have on their payroll thousands of tax specialists and corporate lawyers whose job it is to see to it that their masters pay little or no income tax in Canada. These economists know full well the sinkhole for the poor that VLTs represent.
Deferred taxes -- taxes that will never be paid -- tax breaks to the wealthy corporations, every trick in the book has been employed to avoid paying taxes. Forgivable loans, losses of previous years carried forward, tax incentives from all levels of government have been given to large corporations, which in many cases are now foreign-owned.
The Chair: Thank you, Mr Elder. I'm afraid your time has elapsed. I would thank you on behalf of the committee for your presentation.
Mr Elder: Thank you very much.
JERALDINE BJORNSON
The Chair: Our next presenter is Jeraldine Bjornson. I believe the list states that this was an organization, but I understand you're making a presentation just on your own behalf?
Ms Jeraldine Bjornson: I am.
The Chair: Thank you, if you would proceed. I've been mispronouncing names all day today and I apologize.
Mr Klees: Mr Chair, could we get clarification, please? The agenda indicates Knox United Church. Could I just have clarification if this is in fact --
The Chair: We just dealt with that. The presentation is a personal presentation only.
Mr Klees: Okay.
Ms Bjornson: I'm making the presentation as a private citizen but I can say that I also am reflecting the position of Knox United Church in Fort Frances as well as Cambrian Presbytery -- I believe you had a presentation from them yesterday -- and the Conference of Manitoba and Northwestern Ontario of the United Church of Canada.
My comments this morning will be general, related to gambling and VLTs. I'm afraid I haven't had an opportunity to read the legislation, which makes me feel a bit uneasy, but was on holidays for most of July so I didn't get to that and didn't get a copy.
I, among others, was taken by surprise as I listened to the budget speech and heard the Minister of Finance announce the proposal to expand access to VLTs in Ontario. I had actually believed this government's promise not to expand gambling and their seeming commitment to local option regarding gambling. I believed that they were as valid as the other promises which the government had begun to implement. Alas, I was wrong.
Based on the rhetoric regarding photo-radar that we're ridding this government of a cash cow, I believed the cash cows might in some way be something this government didn't support, but alas I was wrong again.
Even though one of the technical staff who appeared before this committee earlier this week stated that the nature of the activity is to play the game, I believe that the inclusion of VLTs in the budget speech is a clear indication that the primary reason for expansion of access to VLTs is a financial reason. VLTs are money-makers for governments. They're cash cows. One might praise the government for their honesty in the whys about VLTs, but I suspect that would be damning with faint praise.
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When one begins to look at the issue of VLTs, charity gambling and gambling as a whole, there are many issues which could be addressed. I've only chosen a few. On my way here, in the three hours as I drove through the rain, I thought about the number of briefs I could have written about the difficulties with using VLTs for community development or a whole list of signs of addiction that governments are showing towards gambling.
The proposal to expand access to VLTs has been couched in considerable altruistic rhetoric: We can stamp out illegal machines; people want to play the games; we're giving them what they want; we can save the horse racing industry; we can save the hospitality industry; we'll put more money into the hands of charities, or we'll jumpstart the entire economy. I'm of the opinion that this rhetoric is nothing more than an attempt to justify bad means by so-called good ends.
The rush by this government and other governments to raise revenue through the avails of gambling is, I believe, another sign of the breakdown of the social covenant in Ontario. We live in a political atmosphere which breeds anti-government and anti-tax feeling, and in the process, our belief in the collective good has been eroded. So in the midst of unravelling the social safety net on the grounds that we can't afford it, the touted solution is to gamble. This solution is seemingly supported by a belief that gambling or playing VLTs is voluntary, not coercive like taxes.
Fairfield University professor Lisa Newton says this of casino gambling: "There is an ironic justice in the fact that our eagerness to legalize casino gambling for the sake of the revenues follows directly from our unwillingness to assess ourselves a fair and adequate amount in taxes. The problems with our public character dovetail with the problems with our private character." I believe the same could be said for our eagerness to increase access to VLTs.
Our belief in an equitable society, where individuals who can contribute a fair share for the public good, is eroded by governments which do a slick job selling us VLTs and other forms of gambling as benign activities which contribute to the public good.
At the same time, we find ourselves in an economic climate marked by stress and instability. Individuals fear that the good life of which they dream cannot be theirs through work. "When people face hard times, they succumb to the idea of getting rich quick. Lotteries prey on their desperation."
The implied response of governments that encourage gambling is: "You don't need to take responsibility for your wellbeing, just play the game. Your dream might come true." Governments are crossing the line when they introduce video lotteries and run advertisements emphasizing how much you can win. They're appealing to a sense of greed.
As the United Church Conference of Manitoba and Northwestern Ontario stated in their brief to the Desjardin commission in Manitoba, "Part of the tragedy of state involvement in and encouragement of gambling is the sign that even our government seems to have given up on the virtues of working to achieve your dreams."
We sell this dream without being honest about the reality that few are going to hit the jackpot; few are going to get rich playing VLTs. It's more likely that they will lose than win. They must lose. If they didn't, VLTs and other forms of gambling would not be a lucrative source of revenue for governments and we wouldn't be here discussing this proposal this afternoon.
John Copley, in an article entitled "Gambling of Any Kind: Our Future is at Stake," says:
"Oh, yes, I know and understand that all profits from various venues available for gambling do not go to the government alone. And I suppose that this new-found industry does create some employment, but I think that it creates a lot more heartache and despair than most would like to admit. And what's it all about? Why have we chosen this particular path? Simply to raise money? Probably not, but somewhere along the line good intentions have gone astray and now it's just become a battle for your bucks.
"It's not difficult to see, if one decides to take a realistic look, that casinos, VLTs and a great many other games of chance (and I use the term chance lightly) are designed to ensure that only those who make the rules win. Everyone else, especially society, loses."
I am of the opinion that Mr Copley is correct.
We can argue about whether gambling is a tax on the poor. There are those who would argue that both rich and poor gamble; there is no means test to play a VLT. That may be true, but the statistics which are more important are those which indicate the percentage of income which is expended in gambling. There's little disagreement among researchers that the poor spend a larger percentage of their income on gambling. In most cases those who are not poor are using expendable income, income that would be used for other forms of entertainment. For many of the poor who gamble, it's income which is necessary for the essentials of life. They often gamble because they are the most desperate. They believe they just might win the game.
We could also argue about gambling problems and addictions related to VLTs. In most, if not all, jurisdictions in which VLTs have been introduced, those who work with problem gamblers are seeing more and more individuals who report problems with VLTs. Because VLTs are so new, at some level the jury is out on just how addictive they are, but some things are becoming clear. Women are more likely than men to rate VLTs as an exciting way to gamble. Harvard researchers have indicated that 10% to 14% of North American adolescents risk developing gambling problems and they're twice as likely as their parents to become potential gamblers. There are studies that indicate that youth are more likely to be addicted to VLTs. These youths will soon be of an age that they will be able to play VLTs legally in Ontario. What does that foreshadow for addictions in the future if VLTs are allowed to proliferate?
Larry Desjardin, the chair of the Manitoba lottery policy review committee, has said a few things about VLTs, and I'd like to quote him:
"I believe VLTs are responsible for the majority of gambling problems in this province. They are referred to as the `crack cocaine' of gambling.
"These machines are designed to entice the public to gamble, often large amounts, as well as what meagre winnings a player may have. No doubt VLTs bring in much revenue, but the benefits are exaggerated and few statistics exist for a true analysis of the net social and economic benefits from legalized gambling in Manitoba."
The concern is not only an individual's addiction to gambling; the greater concern is that governments have become addicted to gambling, and their addiction has been and will be forced upon charities and non-profit organizations.
This brings me back to my point about the breakdown of the social covenant and how we build a caring and equitable society. It should not be through an entire society becoming dependent on the avails of gambling; it should be through a covenant among the citizens of Ontario that we will work towards a fair and progressive tax system which allows those who can to contribute to the common wealth.
As a committee, I believe you have an opportunity to do what is right and recommend that Bill 75 be amended to withdraw the provisions regarding VLTs. The choice is yours: Do what is right and protect the wellbeing of Ontarians, or choose to do what is destructive to those whose wellbeing you have been mandated to protect.
The Chair: We have approximately two and a half minutes per caucus.
Mr Miclash: I would just like to take this opportunity to thank Ms Bjornson for travelling from Fort Frances. I know a number of the members from southern Ontario don't realize the distances that we do have to travel sometimes to present views to the committees and other groups travelling throughout the riding. I would just like to thank you for your views, as I would like to thank Mr Elder. I didn't have a chance; he was cut off. I really appreciate the views that you've put forward to the committee, and I'm sure that when they go back to their deliberations in Toronto, they will take these into consideration.
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Mr Crozier: Not to waste any time, but I too would like to thank you for coming this distance for many of the same reasons that my colleague has. And only to point out, Mr Chair, to some of the folks here how we are learning to appreciate some of the concerns of the north, I mentioned to Frank earlier this morning that I can drive back and forth through the longest part of my riding three times before Frank gets to his next community. So we do appreciate some of the logistics that you have and some of the problems you have in the north.
Mr Kormos: Ms Bjornson, again, I think all of us understand the desperation of a whole lot of facets in the community: working people and the unemployed as well as small business. You know and you've heard here today that there's more than a few people around who see slots as a quick fix for an unhealthy economy. People know full well they are more inclined to -- not more inclined. I share your view in contrast to those who readily embrace slots as quick fix.
There's a whole lot of research out there. You have canvassed it somewhat admirably in your submission, in a way that quite frankly the government to date hasn't. I'm merely hopeful, again, if I'm wrong about the -- because the sad thing is, the slots are going to happen. I've reiterated and reiterated the news report in the local newspaper written by Frank Rinne indicating that the request for proposals has already gone out. That was indicated to Mr Rinne by a senior member in the bureaucracy at the Minister of Consumer and Commercial Relations.
I'd love to be wrong in this instance about my fear of slots and the impact they have on communities and on individuals and on families. Government talks about 2% for gambling addiction. Who is going to pay the rent of the families where the paycheque or the social assistance cheque is blown on the slot? Who's going to pay for the destroyed lives of the inevitable family and spousal abuse that accompanies the devastation of gambling addiction? Who's going to pay to reconstruct the lives of children who suffer in the homes of people who become addicts?
You see, there's a suggestion that you're born an addict. I say no, no more so than you're born a cigarette addict or a booze addict or a drug addict. I suggest that any one of us in this room and beyond could become a cigarette addict -- I know the process: been there, done that -- could become a booze addict, an alcoholic, could become a drug addict, could become a gambling addict. To be somehow aloof and élitist, that it's only going to be somebody else who's going to become the addict and become the victim I think is a really unfortunate perspective, because it's ourselves, it's our parents, it's our sisters, brothers, it's our children who become addicts. I find this a terribly frightening proposition. I hope I'm wrong.
Ms Bjornson: Could I make a comment about something?
The Chair: Unfortunately, ma'am, we have limited time and that's not possible. We have Mr Young and Ms Bassett, two and a half minutes. Mr Young: I would just like to comment because I share some of your concerns in struggling with a difficult issue.
In society, 6% of people who drink have a problem with alcohol. We try to address it other ways. We don't ban alcohol. We know people are going to gamble one way or another. There are lots of other ways to gamble as well as VLTs. We know that we couldn't eradicate gambling. People would go to other provinces; people would go to the States. So we're struggling with how to get control of, in this case, what's already there. Because what we found out is there are 15,000 to 20,000 VLTs out there, and legitimate business operators who are abiding within the law are at a disadvantage. They're at a disadvantage competitively with operators in other provinces and states. So what we're trying to do, where we're heading with this, is to get control of this.
We're going to put 2%, which could be as much as $9 million, into programs to help problem gamblers -- never, ever been done before in the history of Ontario. I'm very proud of that plan. There will be up to $180 million of new money for charities and communities, and the rest to help pay the bills in the province. We're getting control of something and doing some positive things with it, but we're not introducing it because it's already there. Were you aware of that?
Ms Bjornson: I'm aware of that. And earlier this week one of the strong supporters from the horse racing industry, I believe it was -- it might have been the Barrie Raceway -- was very supportive of the legislation but also pointed out that there is a way to get rid of illegal VLTs, and that's a crackdown and to get rid of illegal VLTs.
Mr Young: You know what? I have talked to the police about this, and I'll tell you, a police officer has to go into an establishment and spend approximately two hours. They'd have to play a machine for a while, get a payout, get the person behind the counter to pay them, and do that twice to lay a charge. Then they'd have to spend courtroom time. It's extremely time-consuming for our police forces to go into the many, many, many places they are and try and enforce these laws. So that is a problem. I'll let Mrs Bassett speak.
Ms Bjornson: That's an administrative issue that I think could be addressed.
The Chair: I believe the time has elapsed. I'm sorry, Mrs Bassett.
I thank you very much for your presentation here today.
We have concluded our deliberations for today. The buses will be at the front door, so you can check out. There will be bag lunches available as we drive to the airport. This hearing is adjourned to Monday, August 12, 1996, at 9:20 am.
The committee adjourned at 1216.