Legislative Assembly of Ontario

MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS

CONTENTS

Wednesday 28 October 1992

Ministry of Consumer and Commercial Relations

Hon Marilyn Churley, minister

Domenic Alfieri, assistant deputy minister, Ontario casino project

Whipple Steinkrauss, assistant deputy minister, business practices division

Judith Wolfson, deputy minister

Susan Allair, manager, planning and budgeting services

Andy Brandt, chair, Liquor Control Board of Ontario

Andromache Karakatsanis, chair, Liquor Licence Board of Ontario

Eleanor Meslin, assistant deputy minister, corporate services division

STANDING COMMITTEE ON ESTIMATES

*Chair / Président: Jackson, Cameron (Burlington South/-Sud PC)

*Acting Chair / Président suppléant: Carr, Gary (Oakville South/-Sud PC)

*Vice-Chair / Vice-Présidente: Marland, Margaret (Mississauga South/-Sud PC)

*Bisson, Giles (Cochrane South/-Sud ND)

Eddy, Ron (Brant-Haldimand L)

Ferguson, Will, (Kitchener ND)

*Frankford, Robert (Scarborough East/-Est ND)

*Lessard, Wayne (Windsor-Walkerville ND)

O'Connor, Larry (Durham-York ND)

Perruzza, Anthony (Downsview ND)

Ramsay, David (Timiskaming L)

Sorbara, Gregory S. (York Centre L)

Substitutions / Membres remplaçants:

*Cordiano, Joseph (Lawrence L) for Mr Sorbara

*Fletcher, Derek (Guelph ND) for Mr O'Connor

*Haeck, Christel (St Catharines-Brock ND) for Mr Ferguson

*Rizzo, Tony (Oakwood ND) for Mr Perruzza

*In attendance / présents

Also taking part / Autres participants et participantes:

Tilson, David (Dufferin-Peel PC)

Clerk / Greffier: Decker, Todd

The committee met at 1534 in committee room 2.

MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS

The Chair (Mr Cameron Jackson): Welcome. I'd like to call to order the standing committee on estimates. We're here to complete the six hours and 40 minutes remaining for the estimates of the Ministry of Consumer and Commercial Relations. When we left off yesterday, Mr Tilson had the floor. Minister, the Chair doesn't have responses to any of the questions. If you have any now, we could circulate those; if not, that's fine. No? Mr Tilson, please proceed.

Mr David Tilson (Dufferin-Peel): I would like to continue questioning Mr Alfieri and Ms Steinkrauss.

The Chair: Please come forward. I believe you've been introduced on the record.

Mr Tilson: I have a couple of questions. Mr Alfieri, I believe that yesterday you made some comments that in your meetings you had proposed in Windsor -- I'm speaking with respect to the gambling casino issue, of course -- you would be considering raceway collaboration. Is it a possibility that you're saying the raceway at Windsor could be, would be, part of -- what did you mean by that?

Mr Domenic Alfieri: I cannot deal with the specifics of it because we haven't met with them yet. I will be meeting with Mr Joy and Mr Millson tomorrow at 1 o'clock. Basically what I wish to say to them is that we understand and appreciate the concerns they have raised, that all the surveys and all the previous history of the problems that were identified in the casinos versus raceway competition was taken from the perspective of a competing set of organizations; that we have an opportunity in Windsor to work with the raceway from a collaborative standpoint. Exactly what that means will have to be worked out, but what we want to do is to make sure that as we develop the casino we do it in a way that as much as possible does not hurt the local raceway. We have to sit down and develop strategies and ways and means of doing this, but at this point I really don't have the details as to how that collaboration would unfold, other than to say that we intend to pursue it as much as we can.

Mr Tilson: So that comment really meant that you plan to consult with them, as opposed to develop the gambling casino through the raceway at Windsor.

Mr Alfieri: Yes. My understanding from what I've read is that they're not interested in that in any event. Their concern is primarily one of, "How will the casino impact on us?" There's all kinds of concern about the negative impact, and I'm saying, "Hey, let's look at some potential for positive impact."

Mr Tilson: This could be to either you or Ms Steinkrauss. I think you indicated that you had looked at gambling casinos in this country and in the United States. If you look at the studies involved in those particular jurisdictions, all of them say that the horse racing industry will be adversely affected by the institution of gambling casinos. Having said that, what are the government's proposals to ensure that the horse racing business, at the very least in Windsor, will not collapse while this Windsor experiment is going on?

Hon Marilyn Churley (Minister of Consumer and Commercial Relations): Mr Chair, if I could take the floor here and answer that question, I believe you asked if -- the Chair interrupted me for a good reason there for a moment. Could you just rephrase your question quickly so I can be clear?

The Chair: Madam Minister, I was about to allow you to jump in and answer the question, but not to re-ask it and restate it. That's only fair. Mr Tilson, do you wish the minister to hear the question again and respond, or were you about to get your answer from Mr Alfieri?

Mr Tilson: I think I'm about to get my answer here.

The Chair: Fine. I apologize if there's a problem at this end. Please proceed.

Ms Whipple Steinkrauss: First of all, we can provide you with a list of any number of reports that have been done on this subject and would be happy to do so. The reports on the impact of casino gaming on racetracks are all over the map. That was one of the challenges we faced and it's one of the reasons we felt we needed to do primary research on it. Certainly the consultation with the Windsor track, as we're developing this proposal, will look very carefully at that and, if there are adverse impacts, how we can deal with it.

Mr Tilson: That's exactly what I'm looking for. Obviously you're getting into the gambling casino business in the city of Windsor; that decision has been taken. My question is, knowing that these reports are out there, that the horse racing industry could be adversely affected by gambling casinos, how will you be reassuring the owners of this track that you don't feel this casino will adversely affect them?

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Hon Ms Churley: Mr Chair, could I just jump in and answer that?

The Chair: Yes.

Hon Ms Churley: One of the things that was also announced -- I'll give you a couple of examples -- at the time the announcement was made to look at casino gaming in Ontario was the intertrack and simulcast wagering, to be put in place around the same time. We have started that process. The Ontario Racing Commission is now working with the Ontario Jockey Club and other racetracks to put that in place, and we believe that is going to go a long way in terms of helping and levelling the playing field. Mr Frank Drea, from the racing commission, will be here to give further information on that, because he has some interesting numbers I'm sure you'll be interested in.

The other aspect of this question is that we did consult with the racetracks overall, not Windsor in the first stages of this, but the various members, stakeholders, within the horse racing industry, and I have a list if you'd like to see it.

Mr Tilson: The stakeholders I've been talking to say you haven't. However.

Hon Ms Churley: Well, I have, and I have a list here; if somebody can find it for me, that would be great. Right here. Thank you, Judith. The other issue is that the racetracks in Ontario have been hard hit, like most every other sector, by the recession, and my ministry worked along with the Ministry of Agriculture --

Mr Tilson: My question was, what assurances we are giving to the Windsor racetrack that this casino will not have a detrimental effect on that racetrack?

Hon Ms Churley: That's the second part to my answer, that we have been working --

Mr Tilson: You're working?

Hon Ms Churley: Could you please hear my answer, and then perhaps you could get on to your supplementary. It's difficult for me to answer when I'm interrupted after every two words.

The Chair: Minister, you worry about being the minister; I'll worry about being the Chair. It is Mr Tilson's time to ask questions, and we are giving you latitude to jump in. So please stay focused with your answers, and the questions, and we'll proceed fine.

Hon Ms Churley: The second part of my answer to you is that we have recently, in consultation with all the racetracks and the jockey club and the horse racing commission, come up with a new tax-sharing plan: To help the industry right now, at this time, this new tax-sharing arrangement has come into effect, and it's there for five years.

We've been looking at the horse racing industry from the point of view that it's in trouble because of the recession. In terms of the impact right now of a casino on the Windsor track, as has already been stated, we are working with, will be talking to, consulting with, the track to find out if there are ways it can work together with the casino team in Windsor and find ways that they can complement each other.

I'll give you an example. With the wine industry in Ontario, which was really in a lot of trouble some years ago and everybody said, "It'll never make it; it'll never make it," what this government did --

Mr Joseph Cordiano (Lawrence): Whoa, whoa. Mr Chairman, this is going to get partisan very fast.

Hon Ms Churley: That government started it and we continued with it. I do give credit to all levels of government, both the federal government and the Ontario government. They got together with the wine industry and the grape industry and said, "The only way we're going to be able to save both industries is to work together and come up with a plan so that we can complement each other." That is exactly what happened. Everybody said it couldn't be done.

Mr Tilson: So you're going to work together. Okay, that's fine.

Hon Ms Churley: In fact, the wine industry, as you know, is a huge success story. So yes, we're optimistic that we can work with the Windsor track and be able to find ways in which they can perhaps complement each other.

Mr Tilson: The question to Ms Wolfson -- I think it was you yesterday who made a comment that had to do with the budgeted item. Is it $2.5 million that's budgeted for the project? While you're at it, maybe you can point to where in the estimates that is.

The Chair: Is there someone who can identify that item?

Ms Judith Wolfson: The numbers are $2,507,700.

Mr Tilson: What page is that?

Ms Wolfson: Mr Chair, I'm advised this was an in-year approval and it's not included in the estimates document.

Mr Tilson: That's an in-year what?

Ms Wolfson: In-year approval from the treasury board and is therefore not included in the estimates.

Mr Tilson: What does that mean, "in-year approval"?

Ms Wolfson: If you'd like, I can ask one of our assistants to assist you.

The Chair: Please come forward and make space. Ms Susan Allair.

Ms Wolfson: And our assistant deputy minister of corporate services, Eleanor Meslin, perhaps is going to assist us.

The Chair: Please identify yourself. I believe you heard the question.

Ms Susan Allair: I'm Susan Allair. I'm manager of planning and budgeting services. We're given our original estimates funding at the beginning of the year by treasury board but, during the year, if there are needs for additional funding identified, we can go forward and make an additional request. That's what we did in this case. The funding was approved in June.

Mr Tilson: Two point five million dollars. How much of that has been spent?

Ms Allair: I'm sorry, I don't know.

Mr Tilson: My question was, how much of the $2.5 million has been spent since June?

Mr Alfieri: I don't have a calendarized amount as to how much has been spent to date. I can perhaps provide some indication as to the kind of allocation. That may give you an idea.

We project spending this year $621,000 with respect to salaries and wages, $130,000 for employee benefits, $169,000 for transportation and communications, and $1.269 million was allocated to services and supplies and equipment, for a total of $2.507 million.

Mr Tilson: So these are new staff?

Mr Alfieri: These are not new staff. The great majority are secondments from other ministries, like myself. I come from the Solicitor General's ministry. The special allocation was made that when I come here, of course, my salary would have to be reimbursed to that ministry. I would think that about 75% of the 18 or 19 staff are secondments from other ministries. We have some new staff, mostly two or three who are on contract; maybe four or five.

Mr Tilson: How many are on contract? Four or five are on contract?

Mr Alfieri: I would think it's about four or five, I'm not totally sure.

Mr Tilson: What are they doing?

Mr Alfieri: Communications consultation. One is assisting us with putting in place our computer system. We're going to need all kinds of databases as we proceed with the project, so they're assisting us with that program support in general.

Mr Tilson: All right. Mr Chairman, I must confess I don't understand the procedure. So these moneys are not in these estimates.

The Chair: They are in these estimates. They're not before you. I guess as Chair I should have asked if there were any supplementary estimates that could be helpful to the committee, if they could be tabled and we could then circulate them. It's not uncommon for the government to make decisions it wasn't prepared to make a year ago and then make a decision to spend. That's not uncommon. It would be a technical question from the Chair to support the member. Were these included in the supplementary estimates?

Ms Allair: We've had no supplementary estimates this year. It was approved by minute of treasury board.

The Chair: Correct, but you did not routinely issue supplementary estimates?

Ms Allair: That's not at the behest of the ministry; that's at the behest of treasury board.

The Chair: Correct. So it is subject for your discussion, which is why we're discussing it. Perhaps we might ask: Are there any other items that are not before us that have been approved by treasury board? That represents the sum and total of any additional approvals your ministry received.

Ms Allair: That's right.

The Chair: Fine. Is that helpful, Mr Tilson?

Mr Tilson: Yes. Are there any other items in this estimate book that have to do with casino gambling?

Ms Allair: No. It's purely this since April 1.

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Mr Tilson: All right. Are all staff hired that are planned to be hired?

Mr Alfieri: Yes. We don't anticipate requiring any more staff. As the project proceeds, there will be some need for specialized consulting services and the money for that is already in this $2.5 million, but we don't see any additional staff resources or civil service resources at this time.

Mr Tilson: Mr Chairman, I wonder if we could have tabled the details of the $2.5 million. I know you've read off breakdowns, but can we get further details of that?

The Chair: I'm sure staff could provide something that can be circulated before the next meeting.

Mr Tilson: Could we get that by next week?

Mr Alfieri: Yes.

Mr Tilson: I have a question of the minister. I would like you to tell me again, with respect to comments that you've made in the past -- these were made during your press conferences and I certainly can remember in a press conference at least -- that there would be large spinoff revenues to the city of Windsor. What will the city of Windsor get out of casino gambling?

Hon Ms Churley: First of all -- you've asked this question before as well -- we don't know exactly how much revenue the casino itself will generate yet for a number of reasons, and I'm sure we can get into that later.

Mr Tilson: No, that wasn't my question.

Hon Ms Churley: No, I understand.

Mr Tilson: I'm not interested in the quantum. I understand you don't know, because it has been emphasized that there's no specific plan. My question is, what percentage, if any, will the city of Windsor get out of the revenues that come out of casino gambling?

Hon Ms Churley: Right. The nature of the benefits that we expect will be seen by Windsor, by the municipality, will be increased tax revenue, increased tourism, enhanced hospitality industry, job creation and overall economic development. Those are the areas where we can see that Windsor will benefit greatly.

Mr Tilson: There'll be no direct revenue received from casino gambling to the city of Windsor?

Hon Ms Churley: No. I've had one meeting with them, and the project team will be working very closely with them on a number of issues. There will be discussions around policing, for instance, which was brought to my attention, and I certainly said that we will have discussions around those kinds of areas where there will in fact be increased policing, because all of our goals are to make sure that the casino is crime-free. But in terms of actual revenue-sharing, the position of the government is that the municipality gets the spinoff benefits and the revenue comes to the provincial government.

Mr Tilson: Mr Alfieri, with respect to this bill that will be introduced to the House in due course with respect to the Windsor experiment -- you've also talked about consultations that you'll be proceeding with tomorrow with the municipal officials and the racetrack officials -- can you tell us what provincial-wide consultations that your -- what do you call your group?

Mr Alfieri: Casino project team.

Mr Tilson: The casino project team. Can you tell us what provincial-wide consultations you'll be undertaking, if any?

Mr Alfieri: I will defer to Ms Steinkrauss, in as much as she's been actively involved with that. We will be continuing to do that, but in the one week I've been here I've been concentrating primarily on the Windsor situation, so I want to make sure that we provide you with the appropriate information, and I'd prefer her to answer.

Ms Steinkrauss: As I mentioned yesterday, there was a lot of preliminary consultation done in preparing cabinet submissions on this issue. Most of that was based on secondary research and direct personal contacts with a variety of organizations. We would be pleased to table with you a list of all of those organizations and we would be pleased to table with you a bibliography of the materials that formed the basis of our information base. That is the kind of work that was done leading up to the cabinet submissions.

The decision has been taken to target consultation, at this point in time, not province-wide but in the area where we are piloting and also to do research there rather than on a province-wide basis.

Mr Tilson: I understand that your task group and/or members of the ministry have been communicating with operators of casino gambling at Atlantic City. Can you tell us about that at all?

Ms Steinkrauss: We have talked to casino gambling and industry experts at the University of Nevada, Harrah's, Caesar's, Mirage, the Great Canadian Casino Co, Crystal Casino, Mystic Casino in Minnesota, Casino ABS of Edmonton, Palace Casino of Edmonton --

Mr Tilson: Specifically, Atlantic City was what I was referring to. I guess my question was more direct as to those operators attending to the city of Toronto with the prospect of possibly operating these casinos.

Ms Steinkrauss: Of course, as soon as the announcement was made all those kinds of organizations contacted us. As I say, we have met with them, as we have with all of the other Canadian operators in Canada. I can assure you that no commitments have been made. They were simply information-gathering sessions.

Mr Tilson: Have you had any consultations with anyone at the racing commission?

Ms Steinkrauss: Certainly our own ministry regulates that industry. We've not met formally with the commission on this, but we have certainly talked to a number of people within the industry itself and staff and so on on this point.

Mr Tilson: Do you plan to have any discussions with anyone at the racing commission?

Ms Steinkrauss: I'll leave that to Mr Alfieri.

Mr Alfieri: Yes, the deputy and I will be meeting with Mr Drea at the initial stages to discuss that, and there will be further consultations beyond that.

Mr Tilson: There was a presentation made to the Ministry of Agriculture and Food on September 4 by the New York consulting firm of Christiansen Cummings Associates Inc. Have the Ministry of Agriculture and Food people made that report available to you?

Ms Steinkrauss: Yes, they have.

Mr Tilson: And what are your thoughts about that report?

Ms Steinkrauss: It is one of any number of reports that we have reviewed. As I say, one of our thoughts on it is that we can learn some things from it. There are, however, questions we would have about the causal relationship, as I mentioned at the end of my remarks yesterday, between casinos and horse racing. In other words, there are conclusions drawn about the impact on horse racing by casinos, and given the whole range of gaming in Ontario, given the nature of our population, we feel that we can learn some things from it but we need to do our own research; we cannot simply accept some of those conclusions.

Mr Tilson: I guess the concern that I have is Mr Alfieri's comment that you hope to have the draft bill before the cabinet by the end of this year. My concern is that this report indicates -- and I'm saying this with all due respect -- that the people in the ministry simply are not informed enough on this subject to proceed at such a fast rate and that indeed they are moving too fast on this project.

The Chair: The minister would like to respond briefly to that.

Hon Ms Churley: Yes, I think it's appropriate. This was of course a political decision to introduce casinos in Ontario and a political decision to start slowly and carefully in a controlled way with one pilot project in Windsor. We are hoping to have that casino open in Windsor some time in 1993.

We have to bear in mind that this is a pilot project. The Windsor area municipal council passed a motion and, as everybody here is quite aware, is very anxious to have the pilot project in Windsor. They will be with us. We will be analysing and critiquing, and at the end of the day we will have more information for the rest of Ontario on casinos. But this is a project that Windsor is quite interested in having in its own town. We are anxious and they are anxious to do it in a careful and controlled way, and to do it the right way, but to get it up and running in 1993.

Mr Tilson: I believe it's a fair question to ask the task force whether -- I appreciate that it's a political decision. I understand that.

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The Chair: Mr Alfieri's ready to respond, and you have about two minutes, Mr Tilson.

Mr Tilson: My question is whether, listening to these types of reports -- again, I'm trying to say this with due respect -- is it not within your ability to tell the minister that perhaps the staff need to spend more time on this and that December or 1993 is too fast to proceed with this?

Mr Alfieri: I think I should clarify that yesterday I indicated that by the end of the year we would be in a position to provide the minister with advice as to the content of a bill. It's up to the minister and cabinet beyond that, and the Legislature, to deal with the bills themselves. We hope to do the workup and deal with and address the issues that would assist in framing the content of a piece of legislation; not to have the bill itself, just to go forward with recommendations.

Mr Tilson: How long will this Windsor experiment last?

Mr Alfieri: As I indicated also yesterday, we need to sit down and work out in advance of the casino's opening what kind of evaluation criteria will be established to deal with it. The government has indicated that it wishes to set it up and evaluate it, and we need to articulate those evaluation criteria. The length of the experiment will depend on what it will take to evaluate it, and the criteria for that are to be developed yet.

Mr Tilson: How will you determine that?

The Chair: Mr Tilson, that was your final question. I have Ms Haeck and Mr Lessard, in that order.

Ms Christel Haeck (St Catharines-Brock): I welcome the fact that Mr Brandt is sitting in the audience, because my wine industry in Niagara-on-the-Lake particularly is extremely pleased with the kind of work he has been doing.

The Chair: He's drinking as much of it as he can.

Ms Haeck: As much as I would love to get into the repartee, I won't, because I'm not sure exactly what his particular predilections in that area are.

The Chair: Coffee, at the moment.

Ms Haeck: Well, it's all that's offered, so what can I say?

The issue the grape growers and the wineries in my area are concerned with is the fact that there have been some very good marketing programs put in place by the LCBO. They've obviously had some excellent results, and their question, and I will be happy to take your answer back, is to what degree we can expect this kind of continued support to maintain market share and possibly improve it. If you'd like me to repeat it, I'll be happy to.

Interjection.

The Chair: I believe the minister wants to formally welcome you here, Mr Brandt, on my behalf.

Hon Ms Churley: Yes.

Mr Andy Brandt: I'd love to be formally welcomed after your welcome, Mr Chairman, which I appreciate deeply.

Hon Ms Churley: Perhaps the Chair wanted to formally recognize him first, but I am happy to introduce him. I believe everybody knows Mr Brandt, but I'm very pleased that Mr Brandt is available today. Welcome. If you would like to go ahead and proceed, subject to the Chair, of course, please do.

Mr Brandt: As was indicated earlier, the amount of money that was provided by both federal and provincial governments was about $42 million in a cooperative undertaking to reinforce and support the Ontario wine industry. Any additional moneys that will continue on in what they call OWAP, which is the Ontario wine assistance program, will be continued only as a result of further discussions between the government of Ontario and the government of Canada.

You're correct in saying that the Ontario wine industry is continuing to increase its market share. It's slowed a little bit in the past year because of difficult economic conditions, but it's still doing very well.

There will be an adjustment period for the wine industry relative to the free trade agreement. Once that has continued on to its point of expiration, which is, in effect, an interim subsidy for the Ontario wine industry, then that industry will be on a level playing field with our international competition.

Any further subsidization of the industry that would take place would be a political decision, and I can't give you any indication of any assistance that would be available, because the LCBO does not provide such assistance.

Ms Haeck: You've given me the opportunity to reinforce with the minister that in fact it's of concern to my growers, but they were definitely anxious that I let you know this was something they were very strongly in support of and I thank you for your answer.

Mr Wayne Lessard (Windsor-Walkerville): Seeing that the Chair is here, I'll start asking questions of Mr Brandt. I do have some questions for Mr Alfieri and Ms Steinkrauss about the casino in Windsor as well.

I have some concerns that have been expressed to me by workers at the liquor control board stores in Windsor. They result from the potential closing of one of the stores, which is located on Wyandotte Street East. I know that I've communicated with you in writing about that. Of course, they would like to see that store remain open, and they presented me with a petition with probably about 2,000 names that I presented in the Legislature last week, requesting that the store remain open as well.

I would like to have your comments about that possible store closing, if you're familiar with that one, and perhaps you could comment as well about possible job losses at the liquor control board stores in the Windsor area and how that might be influenced by cross-border shopping.

I'm sure there is some impact on the market in Windsor. That may be alleviated by successful negotiations with the federal government to collect some of the provincial sales tax at the border, and I hope that's something that happens. But maybe you could provide me with some of your comments that can address the concerns of the liquor control board workers in Windsor.

Mr Brandt: Well, you raised a number of questions. One related to cross-border shopping, and there's no question whatever that the stores which we have identified as being within the market area impacted most immediately by cross-border shopping, which represents about 10% of our total chain of over 600 stores, therefore some 60 stores in that catchment area, are very negatively impacted by cross-border shopping, by smuggling and a number of other conditions.

The sales in those stores are slower and they have deteriorated more rapidly in the Sarnias, Windsors, Niagara Falls of the province of Ontario than areas that are further inland and therefore further removed from the border. So we are feeling market pressures in those particular areas which impact on the number of stores that we're going to retain, as well as the number of staff that we're going to retain, far more so than we would elsewhere in the province.

As an example, at the selfsame time that we had some staff positions removed as a result, which we determined to be excess staff positions at the LCBO, we actually had some open positions in the Toronto area, where there were some positions that were removed from our roster of available positions in places like Windsor. The staff in those areas had an opportunity to transfer, but there are some economic hardships, which I recognize, for someone transferring from Windsor to Toronto, as an example. But the conditions are not the same across the province in a uniform way.

Throughout the discussions that I've heard here relative to casinos and economic conditions, impact on horse racing and all of those things, one of the constants, I guess, is that we're going through an extremely difficult economic period. We're not isolated from that. Albeit some people think that we have a monopolistic position in the marketplace, we have a great deal of competition which is impacting on our sales as well. So in a specific answer to your question, we do market studies of areas to determine, as a result of the activity in those areas, sales and leader throughput, which is the volume of merchandise that we actually sell in an area, and then we determine the number of stores that we need and the staffing.

That's reviewed constantly. Probably every 30 days, we're doing a continuing monitoring of those particular conditions in a market-driven analysis to determine whether or not we could justify the staff and the stores, depending on the conditions of those areas.

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There is a possibility of a store closing in Windsor. To the best of my knowledge, there's only one that is being looked at at the moment. I don't believe that will necessarily affect staff, because there will be some adjustments to staff within the area. But there is one store that is being looked at in that area.

Mr Lessard: I'm happy to hear that it may not affect staff, because the uncertainty of staff is something that causes them a great deal of concern. One of the things they have suggested to me is that perhaps there is more than an appropriate share of expenses that are being allocated to improvements of stores. They suggest that those improvements are unnecessary because if somebody is going into a liquor store, it really doesn't matter what it looks like or how nice it might be inside, he or she is only going in there to buy a bottle of wine or Canadian Club whisky or something like that. Because the store might look nice, it's not going to cause them to buy more or spend more time in the store.

I heard in the minister's remarks yesterday, however, that some of the capital improvements that were being made to liquor stores did go farther than just cosmetic improvements. However, you talked about marketing in your response and I wondered if you've done some market analysis to indicate that cosmetic improvements to stores might improve sales.

Mr Brandt: The cosmetic improvements that you refer to are a very minor part of the average $80,000 per store that we spend when we do a retrofit of the store. Keep in mind that we provide access for the handicapped, we remove asbestos in some of the stores, and we upgrade heating and air-conditioning where it's required. We do a number of safety things to bring us into compliance with occupational health and safety requirements. There's a host of things that we do, including fixing leaky roofs, straight maintenance items that have to be done.

We look at a package of improvements which admittedly also includes some cosmetic things like paint, signage etc. That only amounts to about 25% of the total of $80,000 in a given store. Relative to a comparison between an upgraded store, a store that has been retrofitted, or in the lingo of the LCBO, that's under our image program, and stores that are not image program stores -- the minister also mentioned this in her speech, because I shared these figures with her -- there are two or three elements that give us an extremely rapid payback, which I think makes sense from a business standpoint.

One is that our sales, in a direct comparison basis, are up 3.5% on those items. Secondly, we sell advertising space which averages between $20,000 and $30,000 per year per store. Thirdly, the availability of products is enhanced very substantially for the customers as a direct result of the renewal of the store. We think it's a good business case.

If I may, with your agreement, Mr Chairman, one last comment: I want to assure you that in no way is the image program and the capital improvements of a chain of stores which is 65 years old -- this is not a young chain; it's been around for a lot of years -- in any way, shape or form connected with any staff positions. They are not one and the same.

Mr Lessard: My final question has to do with liquor licences and people who may be in the bar or restaurant business. I know that if there are contraventions of the licence, suspensions are imposed. Is there a provision for the imposition of fines or some other penalties?

Mr Brandt: If I may interject, the minister may wish to welcome the new chair.

The Chair: As long as someone will put it on Hansard, I'll be real happy.

Hon Ms Churley: Andromache Karakatsanis is the chair of the LLBO, who would be the appropriate person to answer a question on licensing.

The Chair: Welcome.

Ms Andromache Karakatsanis: Thank you. It's the Liquor Licence Board of Ontario which licenses establishments for the on-premise consumption of alcoholic beverages. What we do is we can issue licences and we can suspend them, revoke them or attach conditions to the licences. We do not have the power to fine under our legislation. However, a police officer who goes into a licensed establishment can choose two routes to proceed if he finds an infraction of the Liquor Licence Act. He or she can lay a charge in provincial court, a cross-criminal charge which can result in fine or imprisonment or -- and often both -- he or she can send the report to the Liquor Licence Board and then we will proceed with our disciplinary proceedings.

Mr Lessard: Has there ever been --

The Chair: Mr Lessard, your time is just about completed. Is there a very brief question and brief response? If not, I'd like to move to Mr Cordiano.

Mr Lessard: Okay. I just have a point, trying to determine who is going to be able to return here next week, whether, if there are other questions for Mr Brandt or other persons, they're going to be here or whether we should finish the questioning for them today.

Hon Ms Churley: No, I'll make sure that people will be here as required. Except for the two who were pointed out by the Chair yesterday who have specific problems, everybody else will be available at all times.

Mr Gilles Bisson (Cochrane South): Mr Brandt will be here on Monday or Tuesday?

Hon Ms Churley: Yes.

The Chair: I want to share with the committee that there is some effort for us to complete the estimates by Tuesday at 6 pm. In that I have some guidance from the committee in order to achieve that, that's why I'd like to move to Mr Cordiano at this time. Mr Cordiano, please take the next half-hour.

Mr Cordiano: Out of respect for the chair of the LCBO, whom I welcome formally here to the committee, I want to say first of all that you're doing, in my opinion, a very good job indeed of directing affairs at the LCBO. I would like to commend you on that. So I hope you won't take what I'm about to say as a personal indication of your role as chair of the LCBO. My comments will pertain to other matters, probably more to do with policy initiatives. It goes back to the minister. There may be a couple of things I will direct to your attention, if you will bear with me over the next little while.

Mr Brandt: Certainly. I'll take the easy questions.

Mr Cordiano: Okay, you'll take the easy questions. That's good.

Mr Bisson: You didn't have that luxury in the past.

Mr Cordiano: Speaking of the past, and someone mentioned that, I'm going to refer to the minister. Perhaps she will not be as familiar with this, but looking back at the Hansards, Mr Farnan, who was the critic for Consumer and Commercial Relations for your party when you were in opposition, was quite concerned at the time -- this was around 1989 -- with the lack of communication that had taken place between LCBO employees and the ministry. The friction was caused as a result of great uncertainty about the plans that were about to be initiated in respect of agency stores and the whole direction that the LCBO was taking. I believe he saw that it was important to include union representatives to be part of the development plans in respect of the changes that were taking place at the LCBO.

I bring this up because the same concerns that were raised by the then critic of the opposition party, Mr Farnan, I think still apply today. We see that in Hamilton and in Brantford. Last month it was reported that employees of the LCBO union were threatening to walk off the job to protest staff cuts. We see that there are a number of other problems that they were concerned about, mostly to do with what were rumoured to be plans to privatize certain LCBO stores.

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The reason I bring this up is to make this point: It is essential now for you to clarify for everyone concerned what in fact are the intentions of this government. If it is to move in the direction of privatization with respect to certain LCBO stores, in addition to increasing the opportunity for agency stores, then I think it is important and incumbent upon you to make that clear, to bring forward initiatives that your government would undertake to bring that about and do it in an open way.

If we're going to continue to have agency stores and an increase in that, then I think it's important we clarify that. It's also important to bring people on side. The very people who make up the union should not be left by the wayside.

It's interesting that the opposition parties, at this point, should have to raise that with the government, with the party that has been so closely affiliated with the labour movement. I find that quite ironic. You can respond to that if you like.

Hon Ms Churley: Thank you. First of all, I want to answer your last question first, because I think it's very important. Let me say very clearly that there are no plans whatsoever to privatize the LCBO. The speculation, which I believe was in the Toronto Star article, is purely that; it's speculation. No studies have been commissioned. This is speculation. There are no plans.

Having said that, I want to make it very clear that if there was ever a time for good relations between management and unions, it's now. With the downturn in the economy and the layoffs that are going on in all sectors of our society, I agree with you it is crucial.

To that end, I personally have met on frequent occasions with the chair of the union on a number of issues you raised and I have met together with the chair of the board and the union to discuss these issues quite frequently. I dare go so far as to say this is perhaps unprecedented in terms of my meetings with the president of the union. That doesn't mean we've always agreed on everything.

Mr Cordiano: How recently were these meetings held?

Hon Ms Churley: What I'd like to do now is turn the question over to the chair, because I think it's very important that he address some of the issues around the relationship between management and workers at this time.

Mr Brandt: Mr Cordiano, I appreciate the question, because it is a sensitive question. You're dealing with people, and one tries to the best possible to bring about an amicable kind of relationship.

First of all, I want to say without any equivocation whatever that the minister and I have not talked nor do we intend to, to the best of my knowledge, about privatization. It was a speculative story that was written by someone in the media who did extensive interviews with other people who said: "It's a possibility. It might happen. It's a thought."

I believe it came about as a result of earlier speculation when there was some talk about possible conversion of government assets into cash in order to look after certain immediate problems. It had absolutely nothing to do with the realities that were on the table between the minister and myself at the LCBO. We haven't talked about any of that issue relative to privatization.

Second, in regard to union relations, you asked a question of the minister, "When was the last such meeting?" Within the last seven days, I have met with John Coones, who is the president of the union. I have tried to bring Mr Coones up to date to the best of my ability, as I believe the minister has in her meetings with him, to indicate some of the economic conditions we're facing.

I do not expect, nor would you, that Mr Coones would accept gracefully, as a representative heading up a union, that there may have to be some staff cutbacks. The immediate problem we have at the moment with the members of the Ontario Liquor Boards Employees' Union is that we've just gone through some downsizing of the organization, which is specifically related to market conditions and sales. I wish it wasn't necessary. I would much rather be in a position where I was hiring people rather than having to cut people. But it is a difficult time, and I can tell you that none of it's related to privatization relative to our relationships at the moment.

Mr Cordiano: Let me move on then to the issue of agency stores. What are your plans with respect to agency stores? Are you going to expand those locations throughout southern Ontario? I know there are a variety of locations in northern and eastern Ontario, but very few in southern Ontario.

Hon Ms Churley: Again, Mr Chair -- oh, it's a new Chair. Hello. I wondered why it was so quiet next to me.

The Acting Chair (Mr Carr): I think I scared her.

Hon Ms Churley: Yes, I was really shocked.

I have met with the chair of the LCBO and the president of the union as well to discuss this on frequent occasions, and I think perhaps it's discussions of agency stores that sometimes lead to speculation about privatization. In fact, as you know, there's no connection. An agency store is simply that. The policy centres around giving people in remote areas, particularly in the north where it exists now, an opportunity to be able to purchase their alcohol beverages within a reasonable distance. There's no change in the policy at this time in terms of expanding it to the south. We will be introducing a few more agency stores in the north, and perhaps Mr Brandt would also like to add to that, but essentially that's where things are at right now with the agency store policy.

Mr Brandt: The program of agency stores started in the late 1970s. It has expanded to some 75 stores, I believe, at the moment. You're correct in that there are nine by definition in the south, immediately around the Ottawa area. That was started as a pilot project by a former government. Those stores are still in place, still operating. One licence was withdrawn as a result of difficulties with an operator in the Ottawa Valley region, so that effectively we had 10 stores; we now have nine stores in that region.

All of the balance of the stores are north of Highway 17, which by definition is the demarcation point for agency stores in terms of current government policy. The minister recently approved four additional stores which, I hope, will come into being some time towards the end of this year or the early part of next year. The program is continuing to expand.

I want to give you the assurance, however, that in no instance is the expansion of the agency store program costing jobs for full-time union staff. They are in areas, as the minister indicated, that are remote. They are separate from any of the stores in which we now operate. In fact, there are instances where the existing LCBO outlet serves as a warehouse to the agency store and creates even more economic activity within the LCBO store that is in relatively close proximity to an agency store.

It's a positive program, in my view. I endorse it. It's one that is very good for the government and for the citizens of Ontario in that it generates a lot of revenue at very little cost.

Mr Cordiano: One final question about agency stores: I just want to get some better understanding of the viability of agency stores. You must have some kind of measurement quotient for this on a per-square-foot basis in terms of sales relative to your other LCBO retail outlets. How do they compare? Are they doing as well on whatever measurement you use to assess that? Are they doing better? Is it a generator of revenue? Give me some better understanding.

Mr Brandt: We cannot lose money on an agency store because we have absolutely no costs associated with it. All of the costs are covered by the existing operator. We go into an area and call for proposals from these very small communities. I want to point out that these communities are usually 300, 400 or 500 people. We're not talking about a metropolis where there would be a whole host of outlets.

Mr Cordiano: No, I realize that.

Mr Brandt: We're talking about a small restaurant or a general store and the service we are able to provide in a community that normally would require the citizens to drive 30 or 40 or 50 kilometres to purchase any alcohol products.

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The way the program works, very simply, is that the agent who is acting on our behalf in a given area, once having received approval for a licence to handle our products, receives a 6% commission. We pay that agent a commission to handle the products, and all of the balance, which I can tell you is a substantial difference between the 6% we pay in commission and the amount that goes to the government, is all profit. We have no overhead whatever. Everything is paid for by the existing operator who's there.

Mr Cordiano: So what you're telling me is that they're extremely profitable and great generators of revenue.

Mr Brandt: Yes, which is why I went to the minister --

Mr Cordiano: It's something we knew, but I just wanted to confirm that we're still on target with that. So when the minister takes a real look at this, she's going to say agency stores are quite profitable, and when the Treasurer looks at it, he's going to be even more interested. Anyway, that's that. I'll leave it at that. Thank you, Mr Brandt.

I'm going to shift gears a little bit. Can you tell me how much time I have?

The Acting Chair: Until 4:50.

Mr Cordiano: Okay, another 20 minutes. We're going to move back into the whole question of casino gambling, just to forewarn you. With respect to impact studies, a lot has been said about them or the lack of them. It's pretty clear at this point that there really aren't impact studies.

Hon Ms Churley: Mr Chair, if I may, as the minister here, it's important that we have a better idea of what you mean by impact studies. Can you describe what it is you're looking for here?

Mr Cordiano: Let me make this very clear. I would at this point be very interested --

Mr Bisson: The kind of impact studies they want on labour reform.

Mr Cordiano: Excuse me, I have the floor. I'd be very interested in any information -- let's make it as broad as possible -- information on paper that has been gathered by your ministry, by the task force or whomever else, to assist you in making this momentous decision you've made. I'm not interested in the conclusions you've drawn from that or the submissions that have been made to cabinet. I'm only interested in the actual information that would be contained in those studies, not the information you would have submitted to cabinet. It may be that it overlaps, but I want the separate information that led up to that decision.

Hon Ms Churley: Okay. With your permission, Mr Chair, I'll turn it over to Ms Steinkrauss.

Ms Steinkrauss: If I can go back to this. We did a preliminary assessment and preparation for cabinet submission, and we based that primarily on secondary research. I would be pleased to table with this committee a list of articles and publications which form the basis of information; it is here and it will be available. I would also be pleased to table a list of organizations we consulted with or from whom we got information.

So that will form an information base, and it was an information base used, along with an enormous amount of personal discussion back and forth with people from the organizations identified, to form the basis of the cabinet submission.

In looking at that information, without speaking specifically to recommendations, we did conclude that Ontario was quite unique and that while we could learn from other jurisdictions we needed to do our own primary research, and that's the reason for a pilot project, if I can speak again to that.

Why unique? The charitable gaming sector, as I mentioned yesterday, is the largest in North America. It's relatively sophisticated because of the major involvement of the commercial sector. It has a staggering rate of growth, from $80 million to $1.5 billion in a dozen years. Of that, the largest share clearly is bingo; things like casino nights are relatively small.

Secondly, despite a decline in the industry across North America in racing -- and that issue has been before us already -- Ontario is the third-largest horse racing jurisdiction on the continent. That's really been the result of close collaboration with government to ensure the strength of the industry. That's a historic thing. It goes back to things like the racetrack assistance program, tax rebates, simulcasting. That's a betting handle of over $1 billion.

Thirdly, we have lotteries, with gross wagering of $1.3 billion. So we have a very different marketplace.

Other factors: There's been incredible pressure on the government to increase gaming, particularly by charities -- we have 40-plus outstanding applications for new bingo halls; by tourist operators, who pushed for gaming because gaming is happening around us and pushed very hard -- all those kinds of things.

Mr Cordiano: I don't mean to cut you off. Those are all very relevant facts and figures supporting the contention that I've made, that because there are so many organizations that depend on this revenue now, they are quite vulnerable by the decision this government has taken to move forward with casino gambling, leaving them exposed.

In fact, you can't stand here today and answer this question: Will they be impacted? Will these organizations be impacted negatively in respect of the revenues they're generating at the present time by casino gambling? That's a legitimate question, a reasonable question to ask oneself before entering into this process, and I can't believe we're sitting here today discussing this without really having projections or estimates or an understanding, a real good understanding, of what your initiatives will do to that entire sector, those organizations which depend on this revenue.

There may not be a precise model or example or experience to look at, but that's certainly something that can be delved into, projected, concerns raised, in a legitimate way, without having to move forward to a pilot project initially. I'm not suggesting that you not do that, but what I'm saying here is that there seems to be a real lack of information, a real lack of projections about where we're going.

Hon Ms Churley: Mr Chair, if I may, the reality, what we have to bear in mind here, is that that's what our pilot project will tell us. Second, the charities, some of the main umbrella charitable organizations, are involved and have been involved in the process.

The start of our pilot project is not the end of our research. We've done some work as well, so it's not quite the beginning, but in a large part we're going to learn from this pilot project, and we've made that very clear. There's only a certain amount of information you can have when you've never had a project, in this case a casino, in Ontario before. It is going to be useful for us all to make sure that this one is started carefully, that we have strict regulatory controls and working with the community and with the charitable organizations, with the horse racing industry, to make sure that the casino itself is viable and that the charities and the horse racing industry don't get hurt.

But the reality is that you could go out and do studies for ever, for years and years and years, and we've gathered a lot of material. But the kind of impact studies it seems to me you're talking about right now would be very hard to do, because we don't have the project there.

Mr Cordiano: I disagree with you fundamentally, but that's not really the issue here, that I disagree with you. I just think it would be useful even to the people of the city of Windsor to begin to understand what they're dealing with and to have simulations about what can take place before you move to a pilot project which, once it's up and running, you've invested enough money in that will be sunk costs if things don't turn out.

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Anyway, let me ask you this next question: Having said that, what discussions have taken place with charitable organizations, what formal discussions have you had with respect to their role in casino gambling and what kind of revenues will they be sharing in, if any?

Ms Steinkrauss: First of all, the Gaming Services Act that's on the table at the moment is to deal with the charitable gaming sector.

Mr Cordiano: That's not what I'm asking about. Pardon me --

Ms Steinkrauss: Just a moment. First of all, on the issue of casinos, within the legislation that exists now and in the proposed new legislation there is a capacity for the charitable gaming sector to run casino nights or Monte Carlo nights; of course we had the CNE casino, which was a large example of that. But I want to give you some picture of the charitable gaming sector because I do think it is important.

Mr Cordiano: No, no. My question is very specific. What part, what role will the charities play in the revenue that's generated from the new casino project which is going to be initiated? Is there any kind of revenue-sharing agreement that has been made with charitable organizations in the Windsor pilot project or indeed any additional projects that are undertaken at new sites?

Hon Ms Churley: You're right. It's a clear question now, and I understand what you're saying. I already stated in an answer to I believe a question from Mr Tilson that the majority of the revenue will come back to the government of Ontario.

Mr Cordiano: A majority? What do you mean by a majority?

Hon Ms Churley: Let me be clear here. We'll be working with Windsor. As I expressed earlier, they have expressed some concerns about extra policing, for instance, so we'll be talking and negotiating with Windsor on that aspect of it. But in terms of the revenues, they will be coming back to the government of Ontario.

Mr Cordiano: So all the revenues will be going back to the treasury of Ontario?

Hon Ms Churley: Yes.

Mr Cordiano: No revenues will be split or shared with the local community of Windsor or other charitable organizations or indeed any other stakeholders?

Hon Ms Churley: Yes, you're right. I've said that the revenues will come back to the government. But many charities receive funding from government, and we mustn't forget that. Obviously, if a casino helps government's revenue, it's going to --

Mr Cordiano: Well, that's fine and good, but I'm talking --

Hon Ms Churley: No, we have to be fair here. It's going to help the charities.

Mr Cordiano: Yes, but I'm only interested in direct revenues, and you know that's what I'm talking about here. In terms of formal agreements with either charitable organizations or -- I think you've answered the question. You've said basically that the charities will be dealt out of the deal; they're not going to be included. The local community will not have any additional revenues apart from additional policing costs. They're not going to share in any of the revenues. The revenues are coming to the Treasurer of Ontario, 100%.

Hon Ms Churley: But don't forget that the city of Windsor is going to have huge spinoff benefits. We mustn't forget that in the final analysis.

Mr Cordiano: That remains to be seen, Madam Minister, and that is entirely one of those great unknowns which we're addressing here today. We have no way of knowing what the spinoffs will be from this. Some people doubt the spinoffs. I think the people of Windsor are indeed very concerned and want to have a share. From what I understood, some of the people on city council who have indicated this wanted to share directly in the funds that were generated specifically by the casino in Windsor. What you're saying today, unequivocally, is that they will not participate or have a share in those revenues that are generated. Let's be clear about this. I think it's unmistakable or undeniable what you're saying here today, and I think you want to be clear about that.

Hon Ms Churley: Yes, I do want to be clear about that, and if I can answer now, I think there are a couple of other things it's important to be clear about.

A recent federal tourism study showed that about 15% to 20% of Canadian tourists who travel to the United States travel to gamble. We're aware that gambling in Ontario is a multibillion-dollar industry at this point, on all levels: charitable gaming, horse racing. Indeed, we know that hundreds of millions of dollars are spent in illegal gambling. There is a logical reason why the Ontario government is moving in this direction. Other jurisdictions are now in the process of looking at casino gaming.

Mr Cordiano: That's all fine and good.

Hon Ms Churley: We are trying to bring those gambling dollars back into Ontario, to bring in some of the cross-border shopping that we're losing the other way.

Mr Cordiano: With all due respect, you have your reasons for the decision you've taken, and that I am not going to argue with. What I'm simply discussing here is with respect to the people of Windsor, city council and interested parties in the city of Windsor, who I think had an expectation that they were to share in direct revenues that were generated from the casino. And what you're telling them is that they're not going to do that. I think that has been made clear. Let me move on to the next question that I have.

Hon Ms Churley: To be very clear, since we're talking about being clear, there was never any indication given at any time that there would be revenue-sharing with the municipality, and I don't think Windsor is surprised to hear that.

Mr Cordiano: That's fine. I'm just saying that I just wanted to make it clear for those people who had an expectation that they were going to share in those revenues. I want to make it clear to them that they will not, according to your words that you've stated today. That's on the record now. I just want to move on to the next question.

If, in fact, you're consulting with the people of Windsor and a variety of interested parties with respect to a variety of areas that you're going to be covering and a number of criteria that you're using to move forward with consultation, you're going to discuss a whole host of issues, how to set the operation up, etc. If you're going to be as flexible with this initiative in Windsor, what you're telling me is that you have not established a guiding set of principles that will be used right across the province. You have no idea how you're going to carry this out in other locations.

Hon Ms Churley: First of all, we said when we announced that we'd be going ahead with the pilot project, that in fact it's quite true that different models may work differently in different locations. For instance -- just hear me out on this for a minute -- if you look at Winnipeg -- and some people have talked about that as a model, and we have looked carefully at that -- there's one casino in one city. It is operated completely by the government, the whole thing. They are not a tourist city so they get no revenue. They're not looking at tourism whatsoever. Their clients, or the people who come to play, are mostly from the area. They, in fact, have a very small revenue base.

Mr Cordiano: I don't mean to be rude, but I think --

Hon Ms Churley: It is very hard to say --

Mr Cordiano: I would check that again. I would go back and check what Winnipeg's anticipations and expectations were, and I think at the time when it was contemplating a casino, the whole question of tourism was not something it left by the wayside. They had some indication that -- tourism is always a factor in casinos. It may not have been a priority for them, but at the same time, I'm sure that it was somewhat considered in the overall decision, or at least explanations were given that this would help somewhat in increasing tourism. That's always a factor.

Hon Ms Churley: Yes, and I think I went a little bit off my point there. But just to demonstrate how you can't just come up with one specific model and say that if we expand and create more casinos in Ontario, this is the model, and you have to take it whether you like it or not: The reality is, once again, we are going to be working closely and are working closely with Windsor municipality --

Mr Cordiano: But surely you must have some kind of provincial view on this in terms of what's going to happen right across the province. I can't believe you're just simply going to Windsor and saying, "Look, we're going to work with you and we're going to develop some kind of casino that meets your requirements in Windsor, and then we're going to do it in Niagara Falls and we're going to use a different set of criteria and a different set of standards and a different set of guidelines to do it in Niagara Falls." I can't believe that, Minister. Tell me that that isn't so.

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Hon Ms Churley: I can tell you, that isn't so. The reality is --

Mr Cordiano: So give me what your provincial guidelines are at the present time.

Hon Ms Churley: First of all, the criteria are being established for the selection of specific sites; that's what's happening right now. We know, for instance, that no casino will be located in a residential area. We're going to invite interested parties in Windsor to be involved to submit proposals for the site. The site itself may have some impact on --

Mr Cordiano: Okay.

Hon Ms Churley: I know what you're getting at and I'd like to try to answer.

Mr Cordiano: Here's what I'm getting at: The model you're going to use -- you have not indicated -- you've said, "Now we're going to consult with the people of Windsor." But is it the people of Windsor who are going to decide on the type of casino this is going to be? For example, if Windsor wants a Las Vegas-style casino, you're going to give Windsor a Las Vegas-style casino; on the other hand, in Niagara Falls they don't want a Las Vegas-style casino, so you are going to give them a Winnipeg-style casino?

Hon Ms Churley: The management and operational model has not been finally determined by cabinet. We will be doing that in the near future.

Mr Cordiano: So it's a provincial decision; that's what you're telling me.

Hon Ms Churley: Of course. We'll be working with the community, but at the end of the day, yes, it will be a provincial decision. Let me say that we all agree there will have to be strict regulatory control by the government. That is a given. There are various models we can look at as to how to do that. As I mentioned, there's the --

Mr Cordiano: The consultation that's taking place with the people -- Windsor is really a secondary consultation. It's not to do with the model you're going to use; it's not to do with how much revenue is going to be generated. I mean, this is strictly a provincial concern.

The Acting Chair: Very quickly. Your time is up.

Hon Ms Churley: We will be discussing, of course, with people in Windsor. We'll be talking about those issues. However, at the end of the day it will be a provincial government decision. Again, we're working on that process. Of course, we have some ideas on different operational and management models, but we haven't come to the final decision yet as to what that will be.

The Acting Chair: Unfortunately, your time is up. In rotation now, Mr Tilson.

Mr Tilson: Yes, Mr Chairman. How much time do I have?

The Acting Chair: Around 30 minutes, I believe.

Mr Tilson: Thirty minutes. I'd like to leave gambling casinos, for a moment at least. We may return.

Hon Ms Churley: Mr Tilson, I would like to have read into the record that I admire your tie very much.

Mr Tilson: Thank you very much, and by it I'm not promoting gambling casinos.

Hon Ms Churley: I was going to ask that question: Are you promoting gambling here today?

Mr Tilson: Instead, Madam Minister, I'd like to get into the subject of -- we're losing my time here. I'd like to get into the subject of moving your head office. My question should be directed to Ms Wolfson, I believe.

Perhaps we could turn for a few minutes to page 14. Is that where that's all set out? Ms Wolfson, perhaps you could tell me all about moving the head office of the ministry.

Ms Wolfson: Indeed, I'll try and assist you, Mr Tilson. I'll request that the assistant deputy minister, Eleanor Meslin, assist us as well. Eleanor Meslin is the assistant deputy minister of corporate services for the ministry.

The ministry head office is located in two separate locations, at 555 Yonge Street and 10 Wellesley -- indeed, three locations -- and on Bloor Street. We intend to move and consolidate the head offices into new space in -- I understand -- the spring of 1994. For any specific questions on the relocation, I think I will ask that Eleanor assist us.

Mr Tilson: Before you get into that, perhaps you can tell me -- I understand what consolidation means: trying to have your operations in one place as opposed to a number of places.

Throughout your estimate package, there appears to be some downsizing of staff. Can you tell me, with respect to the head office, what the downsizing of staff will be, what it has been and what you propose it will be?

Ms Wolfson: I'm sorry. In terms of all the areas of the ministry that are located at those three locations?

Mr Tilson: Presumably you have a certain number of staff at these three locations, and you're downsizing your staff. I assume from your package that there will be less staff at the new facility.

Ms Wolfson: We have various divisions and branches that are located in those locations. We have the deputy and the minister's office; we have our policy group; we have our communications group; we have our corporate services; we have our audit group. We have various branches and divisions that happen to occupy that space. I could certainly go through each of those areas and ask Ms Meslin's assistance in our plans for each of those areas, but it's not one group that occupies that space; it's various groups within the ministry.

Mr Tilson: Looking at the number of staff you have at the three locations, and moving to the new location, will you have more or less staff?

Ms Wolfson: We are now in the process of looking at the organization of our ministry. At this time I do not project -- and I certainly stand to be assisted and corrected by our assistant deputy minister -- that there will be major changes in the staffing numbers from the people who now occupy space at those locations to the main office relocation. Most of our operations are not done through those locations, and it's indeed in the area of the operations of the ministry that we are trying to increase productivity and look at restructuring the ministry to meet our constraint targets.

Mr Tilson: I'm referring to page 14. Salaries appear to be going up. Why is that, when there is --

Ms Wolfson: On the financial administrative services?

Mr Tilson: Yes.

Ms Wolfson: Perhaps I can request Susan Allair again to join Eleanor Meslin. Susan, who is our manager, who was introduced before, is the best person to assist us in the specific numbers.

Ms Allair: The numbers where you see the increases there are due to two things really. One is the effect of salary revisions over time, the small increases that go through, but the other thing --

Mr Tilson: No, let's stop that, because it's 12.5% in one year, isn't it?

Ms Allair: Yes, but that does not represent an increase of 12.5% in people's salaries.

Mr Tilson: What does that mean? I assumed that.

Ms Allair: In this branch and in one or two other branches in the ministry, we have placed corporate funds that are at the disposal of the deputy minister. They are not available for this branch to spend on an administrative basis. They are corporate emergency funds the deputy minister has control over.

Mr Tilson: What is she doing with that? I want you to explain to me in detail what the 12.5% means.

Ms Wolfson: Mr Tilson, I think perhaps that should be addressed to me.

Mr Tilson: I'm sorry.

Ms Wolfson: In looking at our budgeting throughout the year, the ministry has set aside funds as we go through to deal with the considerable constraint that we have to deal with. As we have gone through that exercise, we have anticipated the kind of requirements we will have made on the ministry. Rather than putting it in a specific fund -- we do set aside specific funds for training for staff and retraining in the event of surplusing etc -- it was our decision to put those funds in the administration services across the ministry, and indeed the senior management then looks at those funds as we go through and we reallocate in-year. The specific numbers in administration, for instance, for financial administrative services, may indeed not be used by that branch but may be used by the registration division or the policy division, depending on what the needs are in-year.

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Mr Tilson: Why are you doing what you're doing on this particular item?

Ms Wolfson: Why are we doing what?

Mr Tilson: Well, I'm still trying to determine why we have a 12.5% increase.

Ms Wolfson: Indeed. What I'm saying is --

Mr Tilson: I've listened to your rationale but I'd like you to be more specific. It sounds like --

Ms Wolfson: I don't really understand what more I can assist you with other than that the Ministry of Consumer and Commercial Relations funding is more than 80% salary and wages. We are not a ministry of transfer payments and huge programs; we are a people ministry. That's how we operate, and indeed we have 59 statutes that we administer through staff.

Mr Tilson: I'm well aware of that. I guess I -- I'm sorry.

Ms Wolfson: So the way that we deal with our priorities is to see where the needs are at any one time. As I say, 12.5% might very well have been -- again, I will ask Susan Allair to please correct me if I am incorrect, but to the best of my knowledge it was a decision to take certain amounts at random, anything that was perhaps over what we knew was exactly allotted to the staffing in that area at any one time, and say, "This is how we're going to manage this ministry," and have our flex in different places in the ministry as we saw the need.

Indeed, we may transfer funds between and among divisions as the need occurs and as we see what our requirements are to downsize, to pay for training, whatever we have to do in order to have the ministry function at its best.

Mr Tilson: Can you tell us the ministry's plans for downsizing staff?

Ms Wolfson: The ministry is presently going through a process where we are looking at how we can best meet the constraints we have and how we are going to use vacancies and attrition and our staff in the most productive way. We do not have, as yet, a specific number of staff that we will be required to downsize. We are merely looking at that. We have had a vacancy management process in the ministry the whole year, so that as we look at our budgeting on a monthly basis, we have made decisions not to hire as necessary outside, for instance. We look very carefully at using the staff within the ministry in its most productive way. I do not have exact figures on what we will have to do in terms of surplusing to meet our budgetary requirements this year.

Mr Tilson: So you're going to be downsizing, but you don't know what. Is that what you're saying?

Ms Wolfson: I would think that we will have to in order to meet the constraints, with no new funds available to the ministry. I would think that we will have to have fewer staff to do that. What we are doing in light of that is working with the considerable expenditures that have been made in this ministry on technology to increase our productivity so that we can provide the service with fewer staff.

Mr Tilson: All right. I'd like to get back to the relocation of the head office. Your plan is to have that completed by what specific date?

Ms Wolfson: I would hope the spring of 1994. That's our target.

Mr Tilson: Can you tell us what your plans are for that, specifically with respect to furnishings, staff: additional expenses that are going to be required?

Ms Wolfson: I will defer to Ms Meslin.

Ms Eleanor Meslin: In terms of furnishings, it will depend on how many offices we need. We are trying to decrease the number of offices so that the arrangements we have made with the company -- the place we are leasing will give us additional funding if we do less renovation, and that funding can be utilized for any other furniture we might need, any new furniture.

Mr Tilson: You've made, really, no concrete plans at this stage, then?

Ms Meslin: We are just beginning our planning, as a matter of fact, mainly because we have just found the place with the Ministry of Government Services, the place where we will be relocating. Until we knew where that would be, the floor coverage etc, we were not able to begin planning. We have started it just now.

Mr Tilson: Can you provide a specific breakdown of increased expenditures relating to the head office relocation?

Ms Meslin: I don't understand what you mean by "increased expenditures."

Mr Tilson: Are there not going to be expenditures?

Ms Meslin: There will certainly be moving expenditures. A lot of the expenditures that you would have normally have been taken over because of the leasing situation being so poor in Toronto. The deals that are being made and have been made are to our benefit, as the ministry is paying for a lot of things that we would normally pay on our own.

Mr Tilson: Do you have a financial statement setting forth the details of the move that you can produce for the committee?

Ms Meslin: We don't have any particular ones, other than what the Ministry of Government Services, which details all of that leasing arrangement, has done.

Mr Tilson: Can you provide that for us?

Ms Wolfson: I suggest that's the prerogative of MGS. We don't get ourselves involved specifically with those leasing arrangements etc. The Ministry of Government Services has taken responsibility for our benefit in that arrangement. We do not, at this point, have any detailed information in that regard. There's nothing we could produce for you at this stage. Perhaps Ms Meslin has more information.

Ms Meslin: Just to expand the information, I should let you know that we are not moving by ourselves. We are moving with the Ministry of Financial Institutions. So the arrangement is for two ministries to move into the same location, and Government Services is handling the leasing.

Mr Tilson: Again, looking at page 14, where you have as your explanation for expenditure change from the 1991-92 estimates, "head office relocation project," I would like all details with respect to that.

Ms Meslin: Oh, the $220,000. We have put aside $220,000 for the head office relocation project. That is to utilize new information that we may have and for research that we may have to do in order to determine how we're going to move and in what manner.

Mr Tilson: Can you provide us with details of that?

Ms Meslin: Certainly. I'd be glad to.

Mr Tilson: When would you do that?

Ms Meslin: Next week.

Mr Tilson: Thank you. Are there any other expenditures with respect to this?

Ms Meslin: Not that we know of at this time.

Mr Tilson: I'm getting back to the question. I probably just don't understand your answer, but I don't understand a lot of things in this place. In any event, what relationship, if any, does this expenditure for the relocation have to the increased salary and benefit costs that are set forth in these estimates?

Ms Meslin: It has no relationship to that.

Mr Tilson: Okay. I would like to turn to the liquor licence board. I would like to ask a question of the chair. Is she still here?

Hon Ms Churley: She had to leave.

The Acting Chair: I understand, Mr Tilson, that she had to leave. But she'll be available on Tuesday, if you want to hold a question for her.

Mr Tilson: Okay. I guess we'll have to do that. Mrs Marland has some questions.

Mrs Margaret Marland (Mississauga South): Madam Minister, could you tell me what the profits were last year of the Ontario Lottery Corp?

Hon Ms Churley: I'm sorry, no. In fact, the Ontario Lottery Corp comes under the purview of the Minister of Tourism and Recreation.

Mrs Marland: Oh, I'm sorry.

Mr Tilson: We'll get them next.

Hon Ms Churley: Yes, right. I can see David in his tie there.

Mrs Marland: That certainly takes care of that question.

Hon Ms Churley: That takes care of that one. Next.

Mrs Marland: All right.

Mr Tilson: Do you want to give the floor back to me?

Mrs Marland: If you want it, but I do have a concern.

Mr Tilson: Go ahead.

Mrs Marland: You notice I'm wearing the white ribbon today, at a time when everyone else is wearing the blue ribbon.

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Hon Ms Churley: Yes.

Mrs Marland: My concern is that something isn't working in terms of what is being forwarded from the Ontario Film Review Board to our local cinemas and our living rooms in the form of entertainment. It's that simple as far as I'm concerned. It's not working in terms of community standards.

This is an issue that I personally have been involved with for a very long time as a city and regional councillor, long before I came to Queen's Park, and goodness knows, I feel like I've been here a long time.

I know you're aware of the fact that the House supported unanimously a resolution I introduced last spring dealing with the definition of "obscenity" and how some areas were difficult for us to deal with in the provincial government because of the Criminal Code being under the purview of the federal government.

Of course, we've had a judgement made by the appeal court which has established some further parameters for the subject of what is acceptable in terms of entertainment.

I'd like to know from you, Madam Minister, as the person representing the Ontario government, how you feel about the job the Ontario Film Review Board is doing in interpreting the community standards that exist today in Ontario.

Hon Ms Churley: First of all, I would like to take this opportunity to introduce Dorothy Christian. She's the new chair of the board and has taken on quite a big job. Thank you for it. I will answer this question, but perhaps you might like to be available for other possible questions.

I'm satisfied that the policies of the OFRB relating to the classification of films and videos, particularly the type you're talking about, Mrs Marland, the adult set's films, are consistent with the decision of the Supreme Court of Canada.

You and I have communicated about this. I know it's a big concern of yours. You have written me letters and I've tried my best to clarify, and I will attempt to do that again today.

The OFRB has always refused to classify for distribution any films or videos containing scenes in which sex is coupled with violence, is degrading or dehumanizing or involves minors or the portrayal of minors. We have board members who are appointed from the community, from all walks of life, from all regions of the province, to bring their community standards to that board.

They also take court decisions into account. You mentioned the Criminal Code and you're quite right; this is where things get difficult from time to time. But the board does try to pay attention to court decisions. However, they operate under the Theatres Act and try to do their best to make sure they talk to their neighbours. They visit and talk to groups all over the province that have an interest in this issue, and bring those standards back to the board.

Mrs Marland: By the way, a few minutes ago, I said the appeal court. I meant the Supreme Court of Canada and its decision about the distinction of clarifying what is obscene.

I feel, as a minister of the crown, you have to be as concerned as I am and as large, large numbers of the public are. I'm young enough to remember the Judy LaMarsh commission, I think at a cost of $4 million, which looked into the effect of violence in television, movies and print media on society. I feel that the only handle we can make in our province is through the Ontario Film Review Board. From time to time, when I get really immersed in this subject -- and I've been to the Ontario Film Review Board, though I have not been for the last three or four years -- the answer that I get from that board is, "We respond to the community standards, and if we get phone calls and letters from members of the public based on what is showing in the local theatre or what they've been able to get at the local video store, then we accept that as a record of what is acceptable to the community."

But I simply say that this system is not working. We as legislators are not taking responsibility for the direction of what is going on out there in the community. We have to be pretty naïve not to accept the fact that entertainment is not what it used to be. I'm not talking about stag films, I'm not talking about explicit sex; I'm talking about what, by definition, is pornography. Pornography is available out there, regardless of what the community standards are that the Ontario Film Review Board has established.

The kind of stuff that's available today used to be available under the counter somewhere else, always, in the States. It's now available not even under the counter. We now have adult video stores which cost a lot of money in terms of the police forces around this province, to try to police what is available there. There is something wrong when the public keeps saying to us, "How is it that this stuff is permitted to be available, both retail and renting through video stores, and we go to the local cinema and we now see a whole lot of stuff that we would never have seen even five years ago, let alone 10 years ago?"

Something is wrong. Somebody is copping out on a responsibility, I think, to interpret community standards. Quite frankly, if we went out on the street here and stopped the first dozen people and said to them, "If you saw something that was really appalling, in your opinion, at the local cinema, would you know what to do about it," of course, none of them would. I doubt if one in 12 people would say, "Oh yes, I know all I have to do is phone the Ontario Film Review Board, or write to it, and it records that as a comment on that film and then interprets it from then on as a benchmark for community standards."

I'm suggesting to you that there must be more that we can do than to sit back and say, "If that's what the public wants for entertainment, it's okay with us." It's not okay with us, and the reason it's not okay with us is that this pornography, for the most part, falls in the hands of the age group between 14 and 18. Now, we can sit back again as legislators and say, "Oh yes, but that's the parents' responsibility." We have a responsibility to those people in society who don't have parents who look after them and decide what their entertainment will be or who are not there 24 hours a day. As a society, there are people whom we have to look after: the frail, the disabled, the elderly, the sick and so forth. There's also a whole other group of people who, in my opinion, we have to look after.

I really don't see a whole lot of things happening. I wrote to you as the minister responsible for the Ontario Film Review Board, I wrote to the Minister of Education, I wrote to both of you and the Minister of Culture and Communications, about a film that was shown at 9:30 at night on TVO about homosexual relations and how to go about it. Now, that film was shown on our own government-owned television network at 9:30 at night. I received real copout answers from all three of the ministers: yourself and Ms Haslam, the Minister of Culture and Communications; and even worse, the worst answer I got was from the Minister of Education, who I thought would be very interested to know that TVOntario was telling young people in this province at 9:30 at night how to develop homosexual relations.

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There is something radically wrong when this stuff is going on all around us and we don't face the responsibility that I think, frankly, we all share. But certainly, as far as I'm concerned, it is the absolute responsibility of the government of the day to do something about it.

I respect the fact that we have a new chair of the Ontario Film Review Board and I certainly welcome her to that position, but no matter how talented a person she or he is, it's not something that he or she can get a handle on unless the government shows some leadership in establishing, on behalf of the community, standards for entertainment that you will tolerate personally as a minister.

I'll just say one other thing. It's not something that's obviously happened in the last two years; it's something that's been escalating, I would suggest, over a decade. When I was a city councillor, the worst murder we had in Mississauga was of a 16-year-old female by a 14-year-old male. It was directly attributable to a pornographic film the 14-year-old male had been able to get at the local video store, which had been approved by the Ontario Film Review Board.

The police who investigated that murder said at the time that they were so sickened by what they had seen. Veteran members of the Peel Regional Police force had never seen such terrible things done to any human body. When they found the 14-year-old who was responsible and they went back to his home, in his bedroom they found pornography from a magazine pinned up all over the walls depicting some of the things he did to this 16-year-old female, plus this video which showed the rest of the things that he did to her before she died and after she died.

All I'm saying is, if we don't take control and assume our responsibility in this area, who will? Who does? The people who are elected, the legislators? If we don't assume responsibility, who will? I'm asking you, as the minister responsible for that part of what has now become a multimillion-dollar business in this province, what you're willing to do.

Hon Ms Churley: It's partly a question of what I'm willing to do and what I can do. Let me first say that you yourself, at the beginning of your question, brought up the reality that obscenity is defined by the Criminal Code. The province has no jurisdiction or ability to define obscenity. You're aware of that.

Having said that, I just want to say we all know that the topic of film classification and censorship is very complex and that it is both a moral and a political question. There are many different views on the question of --

Mrs Marland: How is it political?

Hon Ms Churley: As I'm just saying, you expressed an opinion yourself on the complexities of pornography, who defines it and how it's defined. The issue of censorship enters into that.

What the board attempts to do with its community members, and perhaps Dorothy as a new chair but who's also been a board member can add to this, is to make sure that it is aware and sensitive to the kinds of issues that you are talking about. For instance, it is not their responsibility to monitor access to these videos, which is another question I think you brought up, but in terms of their job in such a sensitive area, they are very clear about some of the kinds of depictions that I described to you earlier. They do not classify those kinds of films.

We know that there have been seizures by the police of some films. We also know that they have not been classified by our board, and that has been a problem in the past, with the underground ones.

I also have to tell you that the board is not responsible for television or magazines. In that case, you would have to talk to your federal brothers and sisters in Ottawa about those particular areas.

Mrs Marland: We're pretty responsible for TVO, I would suggest; your government is.

Hon Ms Churley: Through Culture and Communications, yes, but the film review board has no jurisdiction over that area whatsoever.

I have gone on record as being alarmed by, in particular, the violence that we're seeing not just in pornography but overall in films. I'm concerned about it. I'm concerned about violence against women and I think as legislators, we do have a responsibility to --

Mrs Marland: Have you sat down with the Ontario Film Review Board members and told them what your personal concerns are about the kind of material it is approving for distribution in our local cinemas?

Hon Ms Churley: I have gone on record in fact of having talked on more than one occasion to the board about my concerns. There are, as you know, many information pieces.

One of the things you may be interested in is that in some informal consultations and talks that I had with mostly groups in my own community about this issue, because it is one that I think we're all concerned about, I heard that people want information. That's what I heard time and time again: They want information.

There are some information pieces now. As you know, the board will classify a film but also will put out different kinds of information -- you'll see it in the newspaper and at theatres -- about what's in the film so that parents can make choices about what they'll let their kids see and adults can make choices about what they go to see.

I think, from what I've heard, people want us in fact to include more information. The more information they get so they can make informed choices, the better. I think that's an area in which we want to see more work done, and I would like to see perhaps some possibility of giving information about extreme violence against women, which is becoming quite dominant in mainstream films, as you know.

Those are the kinds of things we're looking at that I think it makes sense for us to pursue, and if you have any ideas about some of these information pieces --

Mrs Marland: The public doesn't want to see it.

The Acting Chair: Unfortunately, the time is up in rotation. We have to go to the Liberals again. Mr Cordiano.

Mr Cordiano: I'm just going to take the next 15 minutes and then I'm going to have to run, unfortunately.

The Acting Chair: There will be a vote anyway.

Mr Cordiano: Okay. We're going up to the House to vote. Perhaps I should just finish off with the questions where we left off. I know we're playing musical chairs here, but we'll go back to our favourite subject for just perhaps one last question or two.

This is a very specific question. I know you've indicated a dollar figure for the task force and I think it was $2.5 million, in that neighbourhood. Did that figure include the capital costs that would be required for the pilot project to be commenced?

Ms Wolfson: I think Whipple Steinkrauss would be the best person to answer questions.

Ms Steinkrauss: No, that figure is for the casino project team for preliminary research for all of the work in reviewing the pilot project. It is not capital costs, no.

Mr Cordiano: Okay, that's fairly obvious. What are the capital costs going to be?

Ms Steinkrauss: Until a decision is taken on the exact model and the nature of it, that's impossible to respond to at this time.

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Mr Cordiano: So you're working with an open-ended budget on this?

Ms Steinkrauss: No, of course not.

Mr Cordiano: That's what it sounds like. I don't mean that to the staff.

Hon Ms Churley: You mean that to me.

Mr Cordiano: I mean that to you, yes.

Hon Ms Churley: I know I'm the target here.

Mr Cordiano: No disrespect to the staff.

Hon Ms Churley: We are still in the process, as we've already said, of deciding on what model will be in place, and obviously the capital cost will depend very much on that model, the operating model.

Mr Cordiano: Why is that? Give me some reasoning behind that. You obviously have thought about this in some way, shape or form; therefore you would have some indication as to what parameters would be involved if you chose model A or B or C. Just enlighten me a little bit.

Hon Ms Churley: First of all, it will depend, for instance, whether the infrastructure is already there or if a new building has to be constructed. It will make a difference.

Mr Cordiano: So if the building's constructed, those costs will be borne entirely by the province?

Hon Ms Churley: No, that's not necessarily true either. We will have to decide in the process of deciding the site and what kind, if any, of partnership we will have with any of the private sector. Again, those are the areas where we will be making decisions fairly shortly.

Mr Cordiano: Are you entertaining proposals at the present time? Is there is a process in place? What are people to understand from the announcement now and the plans you have in place?

Hon Ms Churley: There was a meeting on October 20 and there were some principles determined at that time.

Mr Cordiano: Principles.

Hon Ms Churley: Yes. At this point, the answer to your question is --

Mr Cordiano: Ah, we at least have some principles now.

Hon Ms Churley: We do, yes.

The Acting Chair: The minister has the floor, please, Mr Cordiano.

Hon Ms Churley: That the bidding process will be a fair and open process; that the proposals already developed do not have an advantage over any other proposals that may be received; that all proposals must meet the criteria and comply with the conditions of the RFP to be considered, and that the final decision will be made by the government of Ontario. Those principles were agreed on at that meeting.

Mr Cordiano: I could say to you, being somewhat a cynic, that in your press conference -- I mean, you've pretty well mimicked what you said there, that the province would decide. Those aren't really guiding principles. Yes, they're vague, they're general. I was more interested in shedding some light on -- you know, you're going to bring in the private sector. What views do you have, if any, at this time?

It's probably that you don't have any views about the kind of proposals you're going to entertain because you haven't decided whether you're going to go private sector on this or a combination of that. I think it's reasonable to ask that we get some decisions made on this if you're going to move ahead in 1993. You haven't given us a specific date, but have you a date in mind? You said some time in 1993. What, mid-1993, the beginning of 1993? When will this be up and running?

Hon Ms Churley: First of all, the request for proposals will set out specifics for each bidder, and we will be making the decision on the model at that time.

Mr Cordiano: Based on what --

Hon Ms Churley: In terms of your question about -- I'm sorry, I must be getting tired, I'm --

Mr Tilson: Seeing double.

Hon Ms Churley: Seeing double, yes. It's your tie, Mr Tilson. I'm sorry, I --

Mr Cordiano: I wouldn't want you to answer when you're tired.

Hon Ms Churley: No, no, let's continue here, if you just remind me of the specific question you asked at the end.

Mr Cordiano: What I'm trying to say is that you're putting out proposals. But I quite frankly do not understand how you're proceeding if you don't have -- you're putting out proposals for what? You don't have a model selected, so how can you put out proposals? I'm having trouble understanding the way in which you're operating, the criteria you're using. What comes first? What comes second?

Hon Ms Churley: We're looking at the models now.

Mr Cordiano: I don't know how much more simply I can ask that question.

Hon Ms Churley: You're quite right, and the answer is quite simple. We're looking at the models now.

Mr Cordiano: So you're going to be making a decision on the type of model and then call for proposals.

Hon Ms Churley: That's correct, yes.

Mr Cordiano: How are you going about making this decision? Based on what parameters? What criteria are you using to determine the type of model?

Hon Ms Churley: I'm going to --

Mr Cordiano: Just let me finish here. What consultation process have you undertaken to make that very crucial and important decision about the type of model you're going to implement here?

Hon Ms Churley: Perhaps I can turn that over to Domenic.

Mr Alfieri: With respect to the prospective consultation, a lot of this will come out of our dialogue with the city of Windsor and with the various stakeholders in Windsor. Right now, again, we are looking at Windsor as a pilot, not only to develop the model for the pilot but also to develop the parameters for model selection. We propose to do this over the next couple of months, as was indicated earlier, at which time we can be coming forward with the various options of models, the pros and cons of the various options, which range all the way from government-owned and government-run to private and so forth, and with our advice to the minister as to how that should be -- beyond that, we will then need to develop the criteria for requesting proposals.

As you are probably aware, some proposals did come forward at the beginning of the year, primarily to Windsor. The city of Windsor was already in the process of looking at those, and when the minister met with the mayor and senior officials last week, this was where these principles came out, that any proposal that had already been provided, submitted and considered would have no advantage over any future proposals, that we could not get involved in assessing or evaluating proposals until we had developed the criteria for the request for proposals.

That will happen. The work-up will proceed in conjunction with the review and the analysis of the various models. But until the model for Windsor is chosen, it will not be possible to put out the request for proposals.

Mr Cordiano: Help me understand this. We're going to run out of time shortly, but -- if Windsor is not to share in any of the direct revenues that are generated, then can I ask what it is that you're consulting with it about with regard to the model that's going to be selected? You seem to be placing a great deal of emphasis on this consultation that's taking place with the stakeholders, as you put it, in Windsor, but I fail to understand how that will help the cabinet make a decision about which model, in the end, is to be used in Windsor, which inevitably will be the same model used, I would assume, throughout the whole province, unless you're going to have one type of casino in Windsor and a different type of casino anywhere else that we choose to have one.

Mr Alfieri: The assumption the project team is working under is that no decisions have been made with respect to any type of model, both management and operational. This is the type of decision and work-up that will be done over the next few months, and once we are ready to go to cabinet with the various options, the minister and cabinet will decide on that.

What we had to do with the city was that the city, through its own consideration of the casino project, had initially passed a number of resolutions which subsequently were rescinded in favour of other resolutions. What they have expressed already is the type of model they would like to see --

Mr Cordiano: What was that? Could you just reiterate for us here?

Mr Alfieri: The most recent resolution, which is about two weeks old, indicated that they rescinded the previous resolution, which had already predisposed who should operate it, who should manage it, who should run it, where it should be located, in favour of one that said that it should be government-owned and government-operated, that part of the revenue should accrue directly to the city; in other words, from the casino to the city as opposed to any other --

Mr Cordiano: As opposed to the province.

Mr Alfieri: And that it should be located downtown. Without pre-empting their resolution, the minister indicated to the mayor and staff that it was too early to make those kinds of decisions. Then, the principles that she has just recently articulated were developed to make sure that when we meet with the city -- you know, they're major stakeholders. The casino is going to be located in their municipality, so along with other stakeholders they are major ones we will want to consult and hear what they have to say in the process of the project team arriving at the development of the options, which we can then present to the minister for consideration.

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Mr Cordiano: With all due respect, this is precisely my point. You have a council resolution which has been passed and which I heard about. That's why my line of questioning. The expectations in Windsor have increased so much, to the point where you have resolutions now that indicate the city wants to have the revenues flow back to the city directly from the casino. Those are incredibly high expectations which, as I say, there is a failure to recognize in terms of the process you have in place. I can see that leading to a great deal of distress on behalf of the people in Windsor as to what they can reasonably expect from this government.

That's why I'm so pointed in asking my questions about what you've made clear to these people. There are all kinds of indications that they're going to receive a big bonanza at the end of the day, and I don't think that's very fair. I think the impression has been left, particularly with the average citizen in Windsor, that the city is going to benefit dramatically, directly, from the revenues generated by that pilot project, and that's not the case, as you've clearly indicated today.

Hon Ms Churley: First of all, the government has never given any indication that there would be revenue sharing. I am not surprised, having sat on a municipal council myself at one time, that the council and the town are going to do their best to get anything they can; that's the way it works. But they have not been given that impression by this minister. The reality is that I've been very clear about that, or I feel I've been very clear. But of course, they're going to try to negotiate and get even more than the spinoff benefits, which they know very well they will get.

Mr Cordiano: I can only say this: When you move ahead without a very clear idea, without a clear understanding, without a set of parameters, without a set of principles or guidelines indicating what's to take place, what else can you expect?

Hon Ms Churley: What I can tell you is that the people in Windsor and the council and the mayor of Windsor are very pleased with our decision, and in fact I have established a very good and clear working relationship with them.

Mr Cordiano: I have no doubt --

Hon Ms Churley: But wait a minute. I think we have to be very careful here. We have a common goal here, and that is the controlled and careful implementation of a casino in Windsor. We both agree, both sides agree, that that is the common goal: that it is well-regulated, that it is crime-free and that it will work for the city. We are not --

Mr Cordiano: But the city has a tremendous expectation. After suffering through a terrible recession, after losing terrible amounts of revenue to cross-border shopping, after suffering all that Windsor has suffered and the number of layoffs that have occurred there, you know as well as I do that they're looking for economic answers.

This government made commitments along those lines. Part of the reason you've announced this is as an answer to the economic woes of Windsor. That's fine and good, but the fact is that the people have been left with an impression there. As you say, at no time did you indicate those revenues would be shared, but the fact remains that people have a definite impression, a definite expectation, that revenues will be flowing to the local community directly, as a result of the gambling casino that's been set up. That is entirely the opposite of what I'm hearing. The expectations are not going to be met, and that's what I'm saying here today.

Hon Ms Churley: Again, I want to remind you that this is only a small part of the economic agenda. Windsor is very clear, as we're very clear, that one casino in Windsor is, unfortunately, not going to answer all the economic woes in the area.

However, having said that, Windsor, the municipality and the mayor and I think the people of Windsor, are happy to see that the casino is coming there and that they can enjoy the spinoff benefits. They have hotels there that are half empty. They have restaurants there --

Mr Cordiano: But we're not talking about the spinoff --

Hon Ms Churley: Oh, yes, we are.

Mr Cordiano: We're talking about direct revenues which they now --

Hon Ms Churley: Yes, I understand.

Mr Cordiano: -- as a result of what you've said --

The Acting Chair: Let the minister finish, please, Mr Cordiano.

Hon Ms Churley: I think this is an important point. Mr Cordiano: I think it's important to clarify.

Hon Ms Churley: We both feel this is an important point. I understand what you're saying, but I think it is very clear to Windsor, and Windsor understands, that the major benefits they will reap from the casino in their town are the spinoffs, which they are anxiously waiting to have happen. We agreed that we would like to get it up and running in 1993, for that reason.

But our bottom line, on both ends, is that we do it carefully, we work together and do it right so it works for the community. That is what we're working on right now. Of course we haven't gone into Windsor and plunked down a model: "This is it. This is what you have to have because we say so." We have some ideas, and we're putting ideas on the table. We want to make sure it's properly enforced and properly regulated, and so does Windsor. On the whole, we're agreeing on things, but we don't have the right to come in and just plunk down a model on that town, so we're working with them to make sure that we can reach consensus, hopefully, on some of these issues.

Mr Cordiano: That's very fine and good. Obviously you want to have the type of arrangement which satisfies people there, but I just want people there to be clear that in fact the revenues you generate will not be shared with the people in the local community directly; that there are a number of things which you still have to consider which are provincial decisions; and in the end, this government is making the decision about the type of model, if I understood correctly, that will be implemented, which also has revenue implications and implications with respect to impacts on the local community: increased policing, social ills, you name it.

Hon Ms Churley: Right, and I believe you're raising some interesting and important questions. But the bottom line is that Windsor is very, very happy about this decision.

Mr Cordiano: We'll leave it at that.

Hon Ms Churley: We can leave it at that. Windsor is very happy about this decision.

The Acting Chair: As I understand it, there is going to be a vote at quarter to, so what we will do is adjourn the committee for today and reconvene on Tuesday afternoon.

The committee adjourned at 1747.