Legislative Assembly of Ontario

ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO

CONTENTS

Thursday 9 September 1993

Ontario Casino Corporation Act, 1993, Bill 8

STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS

*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/

Prince Edward-Lennox-Hastings-Sud ND)

Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)

Caplan, Elinor (Oriole L)

*Carr, Gary (Oakville South/-Sud PC)

Cousens, W. Donald (Markham PC)

Jamison, Norm (Norfolk ND)

*Kwinter, Monte (Wilson Heights L)

*Lessard, Wayne (Windsor-Walkerville ND)

*Mathyssen, Irene (Middlesex ND)

North, Peter (Elgin ND)

*Phillips, Gerry (Scarborough-Agincourt L)

*Sutherland, Kimble (Oxford ND)

*In attendance / présents

Substitutions present / Membres remplaçants présents:

Duignan, Noel (Halton North/-Nord ND) for Mr Wiseman

Eves, Ernie L. (Parry Sound PC) for Mr Cousens

Martin, Tony (Sault Ste Marie ND) for Mr Jamison

McClelland, Carman (Brampton North/-Nord L) for Mrs Caplan

Also taking part / Autres participants et participantes:

Ministry of Consumer and Commercial Relations:

Wolfson, Judith, deputy minister

Alfieri, Dominic, assistant deputy minister

Korey, Audrey, counsel, casino project

Mundy, Jim, project team officer, casino project

Gillies, Bill, director of communications, casino project

Ministry of Municipal Affairs:

Perron, Linda, counsel

Clerk / Greffière: Grannum, Tonia

Staff / Personnel: Wood, Michael, legislative counsel

he committee met at 1010 in the Huron Room, Macdonald Block, Toronto.

ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO

Consideration of Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos / Loi prévoyant la réglementation des casinos par la création de la Société des casinos de l'Ontario et traitant de certaines autres questions relatives aux casinos.

The Chair (Mr Paul R. Johnson): The standing committee on finance and economic affairs will come to order. We continue today with clause-by-clause of Bill 8. We left off yesterday at section 11 of Bill 8.

Mr Noel Duignan (Halton North): Mr Chair, while we're waiting to settle down, Mr Carr asked about polling data yesterday. As required after six months, we have tabled the polls. The last one was done in February 1993, basically around the Windsor area; at that point, it showed 60% in favour of casinos and 40% against. But those polling data have been tabled as required.

Mr Gary Carr (Oakville South): I'm sorry, tabled where?

Mr Duignan: With the Legislature.

Mr Carr: Was it requested by one of the parties, do you know?

Mr Duignan: No, the polling data are requested to be filed after every six months. You have to file it once you reach the six-month point.

Mr Carr: Just to clarify, the last poll was February 1993, and it showed that in the Windsor area -- was that Windsor proper or southwest Ontario, do you know?

Mr Duignan: Primarily the Windsor area, I understand Windsor and Essex county.

Mr Carr: And it was 60% in favour and 40% opposed. I take it, because there wasn't any Ontario data given, that there wasn't a province-wide poll.

Mr Duignan: As far as I'm aware, there's no province-wide polling.

Mr Carr: Just one last quick question. Do you know if any other polling is going to be done province-wide, with this specific question asked about the casinos?

Mr Duignan: I will endeavour to find that out.

The Chair: Thank you. We will continue now with any debate or discussion on section 11 of Bill 8 where we left off yesterday when we adjourned. Is there any discussion on section 11?

Mr Carr: I was going through here trying to get the update. I don't see any amendments from anybody.

The Chair: No, there are no amendments to section 11; it's as it reads in the bill.

If there is no debate on section 11, shall section 11 carry? Carried.

Moving on to section 12 of the bill, Mr Duignan, do you have any comments on section 12?

Mr Duignan: No comments.

The Chair: Any discussion or debate on section 12 of the bill? Seeing none, shall section 12 of the bill carry? Carried.

We have some amendments to section 13 of the bill. The first amendment is a PC motion, paragraph 13(1)1.3.

Mr Carr: I move that subsection 13(1) of the bill be amended by adding the following paragraph:

"1.3 Payments that the regulations made under this act require the corporation to make to the consolidated revenue fund for the purpose of establishing and funding gambling addiction treatment centres."

Just an explanation: Obviously, it's pretty self-explanatory. The feeling is, and I think the government has given through the parliamentary assistant assurances, that funding will be made available, but this would put it into the legislation and ensure that gambling addiction treatment centres are funded to deal with the problems that may arise as a result of casinos coming in.

It's part of what some of the discussion was yesterday. The public, I think, and certainly we in the opposition, take the parliamentary assistant's statements and appreciate that the government is committed to establishing some funds for this area, but with the economic conditions we're facing now, we would like to make sure it's entrenched in the legislation. This amendment would do that and protect the people who may be affected as a result of gambling addictions and some of the other problems that will arise.

The Chair: Further discussion or debate on this amendment?

Mr Duignan: Just briefly, as we've gone over this area quite a number of times: This government is committed to dealing with the whole question of problem gambling. It's not just with casinos alone; it has existed in this province for many, many years. Problem gambling also exists in the racing situation and the lotteries and within the bingo situation. This government is committed to dealing with this problem at the same time as we're dealing with the casino situation, and very shortly I understand there's a package of recommendations dealing with this problem going to cabinet.

Why should the casino complex itself be paying for the cost of this? It should be coming from all forms of gambling. But I have made the commitment that we will be dealing with this issue. Any funds necessary to deal with this problem should in fact be coming from the consolidated revenue fund, and that's where the money will be coming from.

Mr Carman McClelland (Brampton North): I'll make reference back to our comments in what we proposed as a preamble, which was subsequently, on the advice of counsel, moved into the purpose section of the bill. You'll recall that the portion of that purpose section of the bill that we had proposed was rejected by the government; specifically stated, what we had numbered as subsection 3(2), a payment to the treatment of pathological gamblers, credit counselling, the cost of policing and so forth. I think our purpose was fairly consistent, if not identical, with the intent of the amendment of our friends in the Conservative caucus. Obviously, inasmuch as we have the same intent there, I'd be pleased to support, and we'll be doing so, the PC amendment.

Mr Carr: I just had one question. The parliamentary assistant said that something is going before cabinet. Do you have any date when an announcement will be made regarding any programs the government might be doing? Are we looking at when the Legislature returns? As it hasn't been approved, you obviously don't know what's going to come out, but maybe you could give us a better idea of what your recommendations are in terms of how much and which ministry is going to minister it. Maybe you could just give us some idea of what you'd like to see. As I suspect from your comments, this motion will probably be defeated, and I'd like to get some sense of what the government intends to do. If it right now isn't cabinet's decision, I'd like to have the parliamentary assistant's vision of what he'd like to see.

Mr Duignan: Mr Carr is very well aware of the fact that we can't disclose what, if any, advice we give the cabinet around that whole area, but if you're talking about my personal preference, you're talking about the whole area of education, prevention and treatment. That's what I would like to see happen and what I would suspect may happen.

Mr Carr: I guess the critical thing is the amount. Let's not talk about what you're going to put before cabinet. What do you, as the parliamentary assistant, think would be needed in terms of dollars? What are we talking: a couple hundred thousand, a couple million? What do you think would be sufficient to deal with the problem?

Mr Duignan: The amount necessary to do the job.

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Mr Carr: How about putting figures to that? I guess you obviously don't have a figure.

Mr Duignan: The amount necessary to do the job, around the whole area of education, treatment and prevention.

Mr Carr: How about ranges? Over a million? Under a million? Can we get into that game? Okay, I appreciate you don't want to get involved in that. We know the casino is going ahead. It would be logical to assume that would come before our casino in Windsor opens up, and I encourage the government to do that. I'm sure they want to get it done as quickly as possible too. I know the constraints that happen going before cabinet, but I think politically it would be better for the people in this province to know what's going to happen before the first casino comes due. I hope the members would support this motion, because I think it's a good one and it, for want of a better word, forces the government to do what it said it will do. Failing that, I hope you will take it on your own to do it through other means.

The Chair: Further discussion on the motion? Seeing none, shall --

Mr Carr: Recorded vote.

The Chair: A recorded vote has been requested. All those in favour of the motion?

Ayes

Carr, Kwinter, McClelland, Phillips (Scarborough-Agincourt).

The Chair: All those opposed?

Nays

Duignan, Lessard, Martin, Mathyssen, Sutherland.

The Chair: The motion is lost.

That brings us to PC motion, paragraph 13(1)3.1, Mr Carr.

Mr Carr: I move that subsection 13(1) of the bill be amended by adding the following paragraph:

"3.1 The corporation shall make payable to charitable institutions on a rotating basis, as defined in the regulations, payment of revenue received from those games of chance specified in the regulations."

Very briefly, the reason for this is of course the concern of the charitable institutions. I know a lot of the charitable organizations aren't aware of what the impact will be, because I think a lot of them believe the government when it says it will only be Windsor. In my area, a lot of the charitable organizations don't see that as a threat to the various bingos that are held and so on, but I think as we get down the road, when Toronto opens up with three, there's going to be a dramatic impact on the charitable organizations. This would make it such that the government would give some of the money to those organizations that otherwise may find themselves out of business. As we know, a lot of these groups are doing fine work. So this would put it into the bill, that the government would compensate those groups.

Mr McClelland: I want to make reference back to what became the purpose section of the bill and the portion of that particular amendment that was rejected by the government. We had indicated in that proposal that all costs associated with the operation of the casino would be covered from the revenues generated by the casino. Part and parcel of that, our intent, was clearly to include the impact on charities. You will recall that we heard from social planning councils, a variety of organizations that said that there were some grave concerns with respect to the impact casinos may have on revenues.

The response has been that in Windsor, the lion's share of revenues generated by charities come from bingos, and accordingly there is a feeling that it won't have a dramatic impact, that it may be fairly minimal in terms of percentages of revenues raised for charities.

I can tell you that across the province, and I think we heard that in second reading debate -- by way of example, my colleague from St Catharines, Jim Bradley, expressed concerns from minor sports organizations in the Niagara Peninsula that are gravely concerned about the impact of casino gambling on their revenues as they generate them through charities, whether it be tear-off tickets or casinos or whatever they use to raise funds.

We certainly heard from B'nai Brith and other organizations. They put forward a very succinct and cogent argument with respect to the concerns they have. I think of the March of Dimes and the coalition of some 32 charitable organizations that came to me, I believe to the parliamentary assistant and to the minister and asked for an opportunity to speak with representatives of the government and certainly opposition members expressing their concerns.

I think it fair to say that there was no unanimity from those 32 organizations, the coalition of charitable organizations. I forget the name; maybe the parliamentary assistant can help me with the name of the umbrella organization that was pulled together, but I think you know the organization of which I speak. Some 32 organizations said: "We're not really sure. We don't have a consensus in terms of what the impact may be, but suffice it to say, we do have concerns and we want to make sure they're studied. In the event that there is a negative impact, we want to have some kind of assurance, an indication from the government, that it will address the shortfall, should there be any, that can be shown or demonstrated to be a direct result of the casinos."

The government has said -- and again, I say this with greatest respect to my friend the parliamentary assistant, an honourable man whose word I take at face value and have absolute confidence in his integrity. The fact of the matter is, though, that governments change and their policies change, and regardless of who we are as individuals, there's a collective process in government; whether we sit at the executive council table or not, whether it be in our caucus or around cabinet table, there's a dynamic that takes place, and generally, at the end of the day, whatever the leader of the government says goes. That's just the reality, I think, of government presently.

Mr Kimble Sutherland (Oxford): Is that how you operate?

Mr McClelland: To my friend Mr Sutherland who interjects, "Is that how we operate?" I'm saying that's the way the government apparently currently operates. A decision is made in the southeast corner and marching orders are given, and decisions are made in accordance with the wishes emanating from the southeast corner and the minions in the Premier's office.

Some of your colleagues would certainly attest to that. Some of them you've heard before this committee, Mr Sutherland. I think of the member for Welland-Thorold and your former caucus colleague from Haliburton, to name but two. I could name others, but I consider them my friends and I don't want to embarrass them, who have spoken with me and said they were really quite gravely concerned about the way this thing has evolved.

Having said that, the point is that notwithstanding the parliamentary assistant's best intentions and best wishes, he has very carefully, in terms of protecting his own integrity, said that's the policy of the day. I want to note and highlight the fact that the parliamentary assistant frequently says, "Today this is our policy." I don't think he's trying to be cute. I think he's just trying to be honest and, as I said, cover his integrity, if I can use that. I think's that's parliamentary language, Mr Johnson. I'm not sure exactly what other people might substitute, but let's be candid about it. That's what the parliamentary assistant is trying to do.

The reality is that there is no confidence -- I'm just being very candid -- in the charitable organizations that you're going to fulfil what I think is a well-intended commitment. The suggestion we had in terms of the purposes of the bill I think would have spoken to it directly, embodied it in the legislation, and certainly the amendment as put forward by the third party very specifically speaks to the issue of charitable institutions and tries to provide a mechanism that would, with the flexibility of regulation, provide a scheme of payment to those organizations.

As I said, the concerns are different depending on where you go in the province. Again, I use by way of example the concerns emphasized by Mr Bradley from the Niagara region. I think other members on all sides of the House will have heard from organizations and representatives in their particular communities.

I think this proposal by the Conservative caucus speaks very directly and provides the government with ample opportunity for flexibility: It provides a regulatory scheme to do what the government says; it does not embody it in the legislation, does not tie their hands. It says in effect, "We're going to put some substance to our rhetoric." That's what the PC caucus is asking the government to do: Show us your good faith and embody in the legislation what you say you're going to do. At the same time, it gives to the government, I say to my friends in the government caucus, it gives you as government, in your minister, in your cabinet colleagues, total flexibility in terms of the implementation of the intent. The section says, "Set up a regulatory scheme," and you know how regulations are promulgated. You do it in cabinet, you do it on the advice of counsel and staff out of the ministry.

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I think it's a win-win situation. It's a win for the government by that flexibility, it's a win for the charities, and I think it's a win, in a sense, for the people of this province who said, "Yes, this government is prepared to stand by what they've said they're going to do."

I would urge you to strongly reconsider. I think your sentiment has been, I say to the parliamentary assistant, that you're not going to support this. Reconsider it in terms of the fact, if you would, sir, that it provides you with tremendous flexibility on how you would implement it, very well-thought-out by the third party, giving you that win-win situation.

Mr Ernie L. Eves (Parry Sound): I think Mr McClelland has outlined very well what the substance of the amendment is. I note that when the B'nai Brith Foundation was appearing before us, as well as other charitable organizations, a couple of weeks ago, they are very concerned about what their future is in the light of an Ontario-owned casino, or casinos, as the case may be in the future, in the province of Ontario.

As has already been stated, this provides a great deal of flexibility to the government to make sure those charitable organizations that have relied upon charitable casinos from time to time are given some measure of protection. I think, as Mr McClelland and Mr Carr have also stated, this would also allow you to recognize charitable organizations that have been already in the field for a great number of years. As a matter of fact, I was quite surprised about how long the B'nai Brith Foundation has been in the field of charitable fund-raising and charitable casinos.

I would ask the government to take a very serious look at this amendment. If this amendment in particular, the way it's drafted, isn't exactly what they would like to see, I would urge them to draft something and improve upon it and come back with something that will protect these charitable groups.

Mr Duignan: First of all, I thank my good friend Carman McClelland for all the kind words he has spoken here this morning about me.

Interjection: You're an honest guy, Noel.

Mr McClelland: For an Irishman, you're particularly honest.

Interjections.

Mr Carr: However.

Mr Duignan: However, as the honourable members know, the government remains committed to maintaining and increasing the profitability of charitable gaming. When we look at where the dollar comes from in relation to charitable gaming, out of every $100 earned by charities, $99 comes from bingos, break-open tickets and raffles, so about $1 comes out of the whole area of charitable casinos. As the bingo association in the Windsor area has very rightly pointed out to us, these people are very loyal to their game and we have made a commitment that there will be no bingos in the casino. They believe that the vast majority of their people will remain loyal to their game and continue to play bingo.

Again, over the course of the last several months, the ministry has introduced a number of new licensing policies which has made charitable gaming even more profitable for charities and they are, I believe, already enjoying increased revenues as a result of those changes.

Again, as I said in Windsor, I believe further that a charitable gaming advisory committee was formed to help regulators to ensure that licensing policies continue to reflect a changing marketplace in the whole area of gaming, and members of that committee include charities, service clubs, commercial operators and municipal authorities. We are continuing to dialogue with all the charitable gaming people to make sure that the policies remain constant with a changing marketplace.

Mr McClelland: I don't want to beat this to death, but I just want to walk through those three points very quickly and ask the parliamentary assistant to consider this. I find it interesting that I'm fighting so rigorously on behalf of a third-party amendment, but I really believe it's a good amendment.

I say to the parliamentary assistant, you're talking about 1% of the money. Let's just suppose in the worst-case scenario that it flips over to 2%. It's not a great deal of money, so your policy, as I hear you state it, is to take care of that, that you want to address the issue. If it's 2%, you're not talking about a whole lot of money; you're talking about a scheme for dealing with it. So it certainly isn't for fear, if what you say is true, of having some dramatic economic impact on the project or on the cash flow associated with the casino.

You say you've changed your licensing policies. It would seem to me that as part and parcel of the 1% issue you raised, the licensing policy, the government has adopted, at least fundamentally, a policy that says, "We want to ensure the viability of charities." I think any government, regardless of its philosophical disposition, would be hard pressed to say anything but that. It would be ludicrous in terms of the multiplication of dollars invested through charities, through the volunteer network that multiplies the dollars that are invested.

You've recognized that: You say you have a licensing policy that wants to be flexible and provide for charity; you then say you want to enter into a dialogue and ensure. What this amendment does is provide a mechanism for you to implement that dialogue: It provides a regulatory framework; it says in the legislation, "We will set up a regulatory framework." That regulatory framework presumably would be impacted by the dialogue.

Ultimately, it's a decision of government, and at the end of the day, your hands aren't tied. What you're doing is adding a mechanism to actualize the very points you've raised. I think your policy is indicated by the fact that you are taking some initiatives in licensing. As to the 1% issue, even if you double it up, as I said, you're still not talking a whole lot of money, and "dialogue" says you want to work with them. This amendment provides you with a mechanism to effect that dialogue.

From a logical point of view, I don't think it takes anything away from the government, it gives a sense of assurance to the charities, and I think it's consistent. Far be it for me to speak about your government's policies, but I think it's consistent, based on your own statements, with the policy and the intent of your government.

Mr Gerry Phillips (Scarborough-Agincourt): I'll just continue to beat on it a little, although there's obviously no chance it's going to carry because the government's got the vote. But let's face it: The government is heading into the business of competing with the charities and will have all the clout of the government behind it, including legislation, and will hook up with some of the best gambling operators in North America to compete with them. If I were involved in a charitable organization involved in gaming, I'd be darned worried, because here it is: The government's looking for $850 million a year out of this, and it views it as the big cash cow and will use everything in its power to do it.

I think the proposed amendment is to try to provide some assistance to the charities that are going to be dramatically impacted by this. Make no mistake about it. As I've said many times, this is the gold rush, and the government has bought this thing lock, stock and barrel. I support the amendment as one small assistance to the charities that are going to find the full weight of the big US gambling operations and the government lined up against them, with a huge vested interest in maximizing their profits.

Mr Sutherland: Some of the arguments put forward to support this amendment I have trouble with. Let's remember, when we're talking about the Windsor casino, the marketing effort is for 80% new tourists from the US, people who are not going to the bingos or the charity casinos.

The other point is, if you accept your argument here and take that one step further, we've had many representatives of the horse racing industry who said the charity casinos are eating into their market. So do we have a further amendment whereby some of the moneys from the casinos go to the charities, and then the people making money off the charity casinos put money into the horse racing industry because they're eating into its business? Then where do you go? It doesn't make logical sense to do that. We heard evidence to that effect, that they felt the charity casinos were eating into the horse racing industry market, but you haven't put forward any proposal here.

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The charities are doing very well. They're going to continue to do well. The other thing is that all good charities don't rely on one source of income for their fund-raising activities either. But if you accept this amendment, then the next logical thing is that those who are running charity casinos should take some of their profits and hand that over to the horse racing industry because allegedly they're eating into its market.

Mr Monte Kwinter (Wilson Heights): Just by coincidence, I was out to dinner last night and I happened to be sitting beside the president of the CNE. I asked him how the exhibition had gone and he said, "Fine." I said, "How's the casino?" He said: "It's fabulous. It's great. As a matter of fact, have you ever seen it?" I said no, and he's invited me to visit it tomorrow afternoon.

The Chair: Do they give out VIP passes, Mr Kwinter?

Mr Kwinter: As a matter of fact, anyone who wants to join me is more than welcome. But he says it's absolutely spectacular. The building, he said, is really something, and it's something you should see.

But he did say something that I think is interesting and absolutely germane to this discussion. He says, "As busy as we are this year, we are not as busy as we were last year." I said, "What do you attribute that to?" He said: "I attribute it to the competition from other charity casinos. Last year we had it virtually to ourselves and this year there's all kinds of these things, and we have definitely felt the impact." What you have is charities sort of detracting from other charities. This is a huge facility, and it has felt the impact.

Again, if you take a look at the article I distributed to you, there is only so much money out there available for gambling. It is not infinite; it's a finite number. There's only so much money that's there, and what is happening is that the more you dilute the product, the less money each one is going to get, and then it becomes very competitive. That's when you start getting these various incentives and you start getting all of the things. The article talks about the competition that has forced them to give away 95% of the amount wagered. That is going to be another very serious deterrent to what we are contemplating, because the amount of money that is going to be given back to the people who are wagering is not going to be anywhere near 95%, so you then get into the same kind of competitive problem.

But the main point I want to make is that the charities are already in competition, and that competition is going to affect some of them. If the intent of this government is to try to keep the charitable casinos whole so that the charities will not suffer, then it will not be able to unless there's a fail-safe provision where some of the moneys that go into the government-run casino find their way back to those charities.

Mr Eves: Responding to a few of the things Mr Sutherland said, the government has the opportunity under this amendment to do whatever it wants by regulation. If it feels in the Windsor area that charitable casinos have not been a big factor in the gaming dollar, then it has the ability to administer that by regulation.

The fact is, though, that Bill 8 will apply not only to the city of Windsor, but if there are other casinos that eventually find their way into the province of Ontario -- for example, to talk about B'nai Brith, which presented, that foundation raises $4 million a year right now with charitable casinos, and there is no doubt it will be severely adversely impacted by the growth of the casino industry by the province in the city of Toronto if a casino happens to find its way here.

Coopers and Lybrand I thought were very upfront when posed with this question when they made their presentation. They said undoubtedly charitable casinos will be out of business if the government doesn't take some steps to do something to protect their interests.

This is simply, as Monte says, a fail-safe mechanism to permit the government to at least do something in the statute, rather than relying upon good faith, to directly assist charitable groups.

The Chair: Mr McClelland?

Mr McClelland: I thought I was done, until my friend Mr Sutherland made a comment. I think, Mr Sutherland, you should be very careful. I'm sure you didn't mean it in a flippant manner when you said that charities are doing very well and will continue to do well. Perhaps you should talk to the leader of your government and some of your caucus colleagues and colleagues in cabinet, who have certainly received visitations and presentations from a number of charities, who will tell you quite the contrary: There are a number of charities that have been impacted extremely severely, in large measure a result of the recession, in large measure a sense of uncertainty in terms of what's going to happen.

As I said, I was ready to lay this to rest; I thought I'd made my points. But there are some in the charitable organizations who would suggest that an NDP socialist government has a philosophical concept that says the government can do everything better. They've seen it in business; They've seen that kind of philosophy being brought forward. I would simply say, Mr Sutherland, if in fact that's your position, that charities are doing very well and are going to continue to do well, then you should talk to some charities. They don't have any confidence. They're worried. They're worried because of the realities of the economic situation that we're all in, but they're also worried because of the sense that the government doesn't understand or doesn't perceive or, secondly, perhaps thinks it can do a better job.

I think you should perhaps consider that and maybe dispel that if that's -- you're shaking your head. If you don't believe that, say so, because a lot of charities will say: "That's exactly why we want an amendment like this, because then we can come back to you in government, or to whoever else is in government, and say there is a mechanism in place. You've given acknowledgement to it."

I think their fear is that they would come to you, Mr Sutherland, and say, "We have some concerns," and you'd say: "Look, you're all doing well. We know you're doing well." "How do you know that?" "We just have a sense you're doing well." They would then say, "Can you help us?" and you'd say, "There's nothing we can do." The charities could then say: "There must be something you can do, because you've established a regulatory framework to look at this. There's a mechanism. Can we make submissions to the appropriate officials to review the regulatory scheme?"

To make a sweeping statement that says that they're doing well -- that's absolutely not true. I'll be attending and speaking at a conference in late September that will have some 240 organizations, charities, that will be present, and they are very, very concerned. Some of them are saying, "We may not be in the business of doing the charities that we set out to do a number of years ago." Part of that is natural evolution; I recognize that. Part of that is a function of the economy. But what they're saying is, "Many of us are on the edge." It's literally month to month.

Just last Friday I had a charity that's been operating for five years in my community that is now two months in arrears in their rent. It's the first time in 58 months that they've been behind in their rent. They can't make the rental payment. They asked if I would speak to Mr Silipo on their behalf, because they're in trouble.

So please don't say that all charities are doing well. Many of them are in serious, serious trouble, and it's because of that that they're saying, "Give us some assurance."

The parliamentary assistant I think has said very well that that's the policy of the government, that you want to support them. I'm telling you that some charities think you don't. Some charities believe that you want to put them out of business because you have a philosophical predisposition that says government can do better. I'm not saying that; I don't buy that. I know enough of you personally, and many of you -- your colleague sitting to your right devoted a huge amount of time in his life to charitable work. You believe in charities, but I'm telling you that the fear is out there, so please don't say they're all doing well.

Mr Sutherland: I should take that comment back. They're not all doing well. They are impacted by the recession. But some of them are doing well.

The point I want to come back to, though, is that this amendment is saying the charities should be protected. We've heard from the B'nai Brith how it's doing very well with the charity casino, and all power to it that it's doing very well. But how do we know that the B'nai Brith isn't doing well at its charity casinos at the expense of other charities? Do we go to the B'nai Brith and say, "Because you're doing so well, some of your money should go the other charities, because they're not doing as well because you've got a very successful charity casino operation"?

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Mr McClelland: Sounds too much like socialism. I wouldn't put it that way.

Mr Sutherland: But that's the argument you're making here. That's the argument you're making with this amendment in terms of casino gambling, which is charity casinos. I mean, how are you going to be able to tell? How are you going to be able to identify specifically that a charity has lost revenue due to the casino when it's maybe to another form of gaming, period? That's the situation that could be going on now. Other charities could be suffering because B'nai Brith is running a very successful operation, but you're not saying B'nai Brith needs to give some of its funds to these other charities that are suffering. Therefore, I don't see why you say the casino revenues should give money to the charities as well.

Mr McClelland: I think your government has acknowledged that it will set up a mechanism to study the impact. In fact, you'll recall that we had a bit of a fly in the ointment yesterday with respect to section 6 and a series of amendments numbered (5) through (8). Those amendments, which the government supported, say: "Yes, there will be an impact. We acknowledge there will be an impact, and we're setting up a mechanism to monitor it." How will you know? To answer your question, you'll use the mechanism that you've established in recognition of the fact that there will be an impact. I answer your question with your own amendment, your government-supported amendment, that there will be an impact. You acknowledge it, and now you'll measure it, and that's how you'll know the quantity.

Mr Kwinter: I'd like to respond in part to Mr Sutherland. The difference we have between the competitive aspects of charity casinos and the casinos as contemplated under the Ontario Casino Corp is that the government is the regulator. In a free market, where everybody goes out and competes, I would agree with you, but we don't have a free market. We have a situation where the government is in fact playing both ends against the middle. They are regulating the charity casinos, they're determining how and when they can operate and under what conditions, and they are setting up a competitive organization to compete for exactly the same dollars.

Now, you may argue, "No, the people in the charity casinos are after the local market and our casinos are going after the tourist market." I don't know how you differentiate that. It's true there may be a skewing at the border communities but, without question, and it has been spelled out by independent observers, charity casinos will have to suffer if in their same market a government-run casino of the type contemplated under this act is set up.

The issue isn't whether all charities are going to suffer and whether the government has a responsibility, because then you'll say, "Well, some of the money may be diverted from lotteries and may be diverted from horse racing," and of course the horse racing industry is asking exactly that the government at least contemplate a level playing field, where it doesn't tax them at a rate much higher than it taxes every other type of gambling.

I think the difference and the reason your argument really doesn't hold up is that you have this situation where there is a potential monopoly by the government and it's going to impact on those very people it regulates. If they were to say to the charities, "You will not fall under our regulations; you go out and do what you can," that's one thing. It's another to say, "We are going to restrict and restrain your ability to use this particular vehicle to raise money, but we should also tell you that we're going to set up a parallel operation that's going to compete for those dollars." When you do that, I think there's an obligation to say: "Understand that the reason we're doing this is that there's an untapped tourist market we're trying to capture, but don't worry. Notwithstanding that we're going to do this, we will work out some scheme where you will be not severely or financially impacted by it by having some sort of revenue sharing."

I think that is the issue. I don't think it's an issue of, "Do we have to look after every other person?" I'm saying we have a unique situation where the government has control of both aspects of casinos: charity casinos and a casino as contemplated under this act. By virtue of that, I think there's an obligation to at least look after the problems this act is going to create, and that is the point. There are going to be problems without this act, but this act by itself is going to create a problem that is of the government's doing. The people who are regulated under another aspect of the basic Gaming Act are going to be impacted and have no recourse, and that is the issue.

Mr Duignan: Again, to state the government's position, we remain committed to increasing the profitability of charitable gaming. B'nai Brith, which appeared in front of this committee, was talking about a level playing field, looking for a permanent charitable casino, for example. As I said earlier, that is something we've said neither yes or no to at this point, and it will be all part of this interim study of what happens in the Windsor area.

Also, when we talk about dealing with charitable institutions on a rotating basis, we've got some 50,000 gaming licences for charitable organizations in this province right now, and that doesn't include the ones that don't hold gaming licences, so it would take one heck of a long time, even if we did one a day, to move through that amount of charities when you consider some 50,000 of them hold gaming licences in this province.

It's something the government will continue to monitor and, as the minister has said, if the permanent casino is having an impact on the charitable casinos, she will look at that situation and deal with it. The reason the advisory committee was formed was to keep a watch on what happens in regard to the changing gaming market. I'm sure that committee will be making many recommendations to the minister on how to make sure that the charitable gaming part of the market remains competitive and is returning a fair profit to the charities.

Mr McClelland: Last comment: I just wonder what would happen if a parliamentary committee went back to a minister and said: "You know, we heard something that we actually thought was pretty good and was consistent with what we were saying. I know we didn't agree to do it ahead of time, but we're actually going to do it because it makes sense." Wouldn't it be interesting to see what would happen instead of just going back to the minister and saying: "We read your answer, Minister, and we read what your policy people told you to say, but do you know what the third party suggested? It's pretty consistent with what you're talking about. In spite of the marching orders we had, we're coming back to you with the recommendations in support of that." That might be a novel direction in government. I just throw it out. It's a bit of a rhetorical question and statement.

The Chair: Any further discussion on this motion? I'm sure everyone would appreciate a recorded vote.

Mr McClelland: How insightful of you.

The Chair: All those in favour of the motion?

Ayes

Carr, Eves, Kwinter, McClelland, Phillips (Scarborough-Agincourt).

The Chair: All those opposed?

Nays

Duignan, Lessard, Martin, Mathyssen, Sutherland.

The Chair: The motion is lost, which brings us to Liberal motion subsection 13(1). Which member of the Liberal caucus would like to read this?

Mr McClelland: Actually, as printed, there's an error. I want to delete the words "city" and "or region" so that it would read as follows:

"I move that section 13(1) of the bill be amended by adding new paragraph 5 which reads as follows:

"5. Payment to any municipality in which the corporation operates a casino pursuant to this act."

I think it's -- I don't know if "redundant" is the perfect word, but perhaps out of order, inasmuch as the latter part of what are now the purposes of the bill makes this effectively a nullity. We've rejected the concept that payment should be made, so it's sort of --

The Chair: Do you want to not include this --

Mr McClelland: I don't want to withdraw it. To be very candid with you, we feel very strongly that there should be a mechanism to set aside funds to pay the costs associated, the direct costs. I know it's another kick at the can, that we've already lost the issue, and I know my friend Mr Eves wants to make some comment about it.

You understand the intent of the section. The intent of the section is to set aside funds to cover off the costs. It's part and parcel of the debate we just had, and I think it's consistent with the philosophy we have.

Mr Eves: Actually, I'm supportive of this amendment. We have a later amendment in section 18, I believe it is, that will request that there be provision made for municipalities to share directly in a certain percentage of the money raised by the province by way of tax. We've already had this debate earlier on, actually, in section 6. We just feel strongly that there should be some mechanism for the municipality in which a casino is situate to share directly in the revenue from that casino.

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The Chair: Further discussion? Comments? We'll have a recorded vote. Indeed, I think it would be appropriate that, to assist the Chair through these voting deliberations, we record every vote just so I'm certain where I stand.

Mr McClelland: It probably makes sense, unless you're getting nods around the table that everybody's in agreement.

Mr Chairman, just in the interest of time, as we get to later in the afternoon, if we're still here, there are many I could generally term housekeeping measures with respect to Bill 26, and I suggest that we may be able to go through that in a fairly pro forma fashion.

The Chair: That would be wonderful.

Mr McClelland: Otherwise, a recorded vote is probably better presumed.

The Chair: So we'll have a recorded vote then. All those in favour of the motion?

Ayes

Carr, Eves, Kwinter, McClelland.

The Chair: All those opposed?

Nays

Duignan, Lessard, Martin, Mathyssen, Sutherland.

The Chair: The motion is lost. The next motion is a PC motion, section 13(3).

Mr Eves: I'll withdraw that one, in light of the fact that Mr McClelland has a 13(3) amendment which perhaps more properly addresses the same points.

The Chair: Very well. That brings us to the Liberal motion subsection 13(3). Mr McClelland.

Mr McClelland: I'm happy to move it, but I'm wondering if out of courtesy we can wait just a moment and see if Mr Phillips -- I just want to advise the committee that this is really a product of Mr Phillips's concerns. I know Mr Kwinter also feels very strongly about it. I'll be happy to move it, and I wonder if the Chair would just make sure that Mr Phillips has an opportunity to speak to it. Let me then move it on behalf of Mr Phillips.

I move that section 13(3) of the bill be amended by adding the following:

"13(3) All contracts entered into between the corporation and any operator of a casino shall contain a provision stipulating that the operator shall be solely responsible for any operating deficit, and furthermore that the corporation shall not assume any debt or liability resulting from the operation of any casino."

Mr Chairman, I'll allow Mr Kwinter to make the opening comments on that, with your permission.

Mr Kwinter: This is an issue that I think is absolutely critical in the negotiations and in the final agreement with whoever the successful proponent is.

In several of the conversations we have had with the staff of the ministry, when I have alluded to the fact that there is no guarantee that just because you have a casino you're going to make money, their feeling is that this is silly, that casinos are guaranteed to make money by their very nature.

I would respectfully submit that all you have to do is look at the history of casinos and you will know that many casinos in Las Vegas have gone into receivership and in fact have gone bankrupt, that casinos in Atlantic City have gone bankrupt, casinos in other jurisdictions in the United States have gone bankrupt, and I assume this same situation holds true everywhere in the world. These are businesses. These are businesses that have to be run and there is no guarantee that they will be successful, notwithstanding the fact that on the surface it seems to be.

Again, if you refer to the article I circulated this morning, it appeared in this week's Business Week and is written by Gary Becker, who was a 1992 Nobel laureate and teaches at the University of Chicago and is a fellow of the Hoover Institution. Here is someone who's received the Nobel prize and I assume has no axe to grind, is not biased one way or the other, and he gives his view of the situation pertaining to government involvement in gambling.

If you take a look at the very last paragraph, he says, "But governments have been no more successful at these activities than they are at providing other services: New York's OTB offices are among the few unprofitable gaming establishments in the world."

When you consider that it is a competitive business, where in Las Vegas and other venues they give 95% of the money back to the bettors, and by the very structure of the Ontario Casino Corp and its mandate they will not be able to do that, you're going to be in a competitive situation.

The concern I have is that any proponent who has any kind of business acumen, and I would assume that every one of them must have or they wouldn't be where they are, is walking into a situation where the government is saying: "You build this facility, you operate it, and we will pay you a fee. When we pay you that fee, we will then take all of the profits and we will also take 20% of the win in the form of a tax."

I can tell you, if I were a proponent I would insist that if I'm coming into this deal, I would want a guarantee that I'm going to get a reasonable return on my investment. I'm going to have to go to the banks, to private individuals, to lending companies, maybe to the public through a stock offering, to build this many-hundred-million-dollar facility. No one is going to take their own personal money and put into it; that's not the way it works. They've got to go out and borrow this money, and in order to borrow the money, they've got to be able to assure those people who are either lending or investing that they are going to get some security and at least a fair return on their investment. Any proponent is going to insist on that.

The deal is going to have to be structured that at no time will the return to the proponent be less than x, whatever that amount is. Otherwise, nobody will go into it. It isn't as if you build this and you're unfettered and you take your chances. They are coming into an operation where they are severely restricted as to their ability to run a casino in the way that casinos are normally run.

We then have a situation where they are also going to insist -- again, I haven't seen the proposals, and I'm hoping that either the Legislature as a whole or this committee as a minimum will get a chance to see the terms of that proposal, because I will predict again that any astute businessman who makes a proposal will say: "We also want to have some sort of guarantee that if this thing doesn't work, if it loses money, that is not going to be our problem, because you're the owner. You are the beneficiary of the bulk of the revenues. We are going to be getting a management fee plus." I predict they will try to negotiate some sort of incentive profit-sharing scheme that the better they do, the more money they make.

But there is always the downside. There is always the possibility that after the initial interest and the initial flurry of people coming to see what it's like, this thing could fail. I'm not saying it should and I'm not saying that I hope it does; I'm just saying it is a possibility that it could fail.

Somewhere along the line, there has to be a provision as to who picks up the shortfall. In our motion, we are suggesting that this be a part of the obligation of the operator. That's going to create some problems for the operator, and I suggest to you that's going to have to be dealt with in the negotiations. But surely if this is an initiative of the government, the government has only two choices: It says either that it will indemnify anybody who loses money or the operator will. We are suggesting that it be the operator, and that is the purpose of this amendment.

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Mr Phillips: Of all the things in the bill, this is probably the one that's most important to me and I think to the public. Let's understand what we're getting into here, in my opinion. There's no doubt, based on everything I've heard and seen, that we're going to have seven, eight, nine communities in the province just banging at the door. This is the salvation of these communities, in their minds, and they're going to want these $250-million facilities built and these 3,000, 4,000, 5,000, 6,000 jobs created, and anybody who stands in their road, woe betide them.

At the same time, in my judgement, every community in North America is facing the same thing, and we're going to see a proliferation of these things. As I say, everybody thinks this is the great golden goose or cash cow. It's the latest gold rush, and I see it everywhere. In my opinion, people have lost perspective about this thing. They have their views on it, and it seems that in some respects, in my opinion, they're blinded by all the money and jobs this thing's going to throw off.

The problem is, I don't want to be sitting around here five years from now when two or three of these things can't cover the enormous overhead that's going to be put on them, and the overhead is going to be a $250-million debt. The bill itself says the province gets its rakeoff even before the expenses are paid, so if the expenses start getting bad, tough luck; the province is going to get its rakeoff before the expenses are paid.

As that article says, the competition in Vegas now indicates that the win pool is 5%. All of our documents on the financial viability say the win pool is going to be 17% or 18%. I predict that bettors aren't stupid and they're going to be going where the odds are the best, and if they can get dramatically better odds in Detroit than they can in Windsor, they'll know that and they'll head across the river for that. I think the only way to protect the public in this is, if the private sector is so keen on this thing, to get it sharing in the rewards and, if it doesn't fly, in the problems associated with it.

I go back to SkyDome. Sure, I think the public is very angry having now to -- well, the government's written off the $330 million three years ago on the SkyDome; it's completely written off now. But surely we don't want to have four or five of the seven or eight with the public on the hook. Believe me, if in the end we are responsible for it, it's like six or seven huge factories, with all of the debt──and, frankly, with all the jobs, because you try and close one of these things when there are 2,000 jobs attached to it. Everybody knows the political pain associated with that.

As I say, I think we have an obligation on behalf of the public, when we're entering what has to be regarded as a high-risk venture, almost an out-of-control high-risk venture, that the public are protected from the possibility of their hard-earned dollars going to cover the liabilities of this thing. Keep the Hansard, because I predict if we don't have this in there, five or six years from now we're going to be sitting around here with two or three or four of these casinos in enormous difficulty, unable to compete, carrying a huge debt, and the private sector saying: "Well, goodbye, because all I'm doing is managing this thing for you. You're the owner. I've decided I'm not going to continue to manage this thing any longer." Goodbye, and the public will be picking up not only the debt, which is bad enough, but the ongoing operating losses of the thing.

Mr Eves: I won't belabour the point; I think the point has been made. We had a similar amendment, but I actually prefer this amendment that Mr Phillips has drafted because it calls for the fact that when contracts are entered into between the corporation and the operator of a casino, this provision shall be in there.

I think the public and the Ontario taxpayer have to be protected, as does the casino corporation. I think we would all agree, at least I hope all of us sitting around the table would agree, that we don't expect the province of Ontario or its taxpayers or the Ontario Casino Corp to be liable for any debt or liability resulting in the operation of a casino. It may be easy to say, if you're only looking at one casino, that this isn't going to happen, but I can't see any downside, from the government's point of view, of wanting to protect itself in negotiating with whomever the operator of the casino is going to be, and I would hope that the government would seriously consider this amendment.

The Chair: Any further discussion?

Mr Sutherland: I would just point out that there is more than one way of achieving this objective. It can be negotiated through a legally binding contract. It doesn't necessarily have to be in the legislation either.

Mr McClelland: That's what it says --

Mr Sutherland: But it can be done without legislation, is what I'm saying.

Mr Eves: Why would you disagree with this if you can do it anyway?

Mr Sutherland: Mr Chairman, could I ask for a five-minute recess, please?

The Chair: Sure. We'll recess for five minutes.

The committee recessed from 1116 to 1128.

The Chair: I call the committee to order. We were concluding discussion on Liberal motion 13(3). I believe we concluded our discussion but I'll ask, is there any further discussion on that motion?

Mr Phillips: I've heard nothing from the government on its comments on it.

The Chair: We'll ask Mr Duignan if he'd like to make a comment on this.

Mr Duignan: I'm wondering if the Liberals would be able to stand down the motion for 5 or 10 minutes. I understand the deputy minister is in a meeting with one of the proponents at this point in time, but Domenic wants to come over and address the issue raised in the Liberal motion.

Mr McClelland: We'd be happy to do that, I believe.

The Chair: We'll stand down this motion till another time when it's more appropriate. That brings us to a PC motion, section 13.1, and I'd like to advise the members of the Progressive Conservative caucus that your motion is out of order as it imposes a tax, which only a minister can do.

Mr Carr: Only Floyd can. He's good at that.

The Chair: The motion is also beyond the scope of the bill, as it refers to the Race Tracks Tax Act.

Mr Eves: Tell me it isn't so, Mr Chair. We had a slight inkling that you might find this amendment out of order.

Even Coopers and Lybrand stated when they were here that they feel it is time the provincial government looked at the rate of tax in the Race Tracks Tax Act. The only point of trying to make such an amendment is that we hope the government will take this matter under consideration. We realize the Race Tracks Tax Act itself would have to be amended by the government.

The Chair: Mr McClelland, would you like to make a comment?

Mr McClelland: Very briefly, we support the concept. I suspect we're going to get the same ruling a little later on when we get to our amendment numbered 18.1, I believe, that is similar in terms of its intent. Obviously, we would be supportive of the general principle of the motion as proposed by the Conservative caucus.

Mr Duignan: On that same amendment --

The Chair: You want to speak to this out-of-order motion?

Mr Duignan: Yes, very briefly. The points raised by the horse racing industry, indeed by a number of other people appearing before this committee, have been noted. I too have a concern and I too will, as I said, be bringing these and have brought these concerns to the attention of the department of Finance. The parliamentary assistant of that minister is a member of this committee as well.

The Chair: Because we have stood down an amendment, it will be necessary to deal with section 13 of the bill at a later time.

Mr Duignan: I wonder if we could go back and deal with section 1 of the bill. We stood down an amendment on section 1.

The Chair: If it's agreeable to the committee members, we can certainly go back to that at this point in time.

Government motion, subsection 1(2), Mr Duignan.

Mr Duignan: I move that section 1 of the bill be amended by adding the following subsection:

"Minister

"(2) The minister responsible for the administration of this act and the minister responsible for the administration of the Gaming Control Act, 1992, shall be different ministers."

The Chair: I recognize that we had considerable discussion about this and similar motions earlier.

Mr Duignan, I've been informed by the clerk that you will have to withdraw the previous motion that you stood down.

Mr Duignan: I will certainly do that, Mr Chair. I'll withdraw our original motion.

The Chair: Thank you very much, Mr Duignan. As I was saying, we've had considerable discussion about the content of this motion. I'll ask the committee if it would like to discuss this further.

Mr Kwinter: I just wanted to thank the parliamentary assistant for reacting to my comments and to tell him that I am certainly more pleased with this particular provision.

The only other part that still creates some concern for me is that I feel it should be a separate section of the act. Section 1 talks about "casino," the definition; it talks about "corporation," the definition; it talks about "game of chance" and a definition. When you talk about "minister," it doesn't talk about a definition of what the minister is; it just talks about who has responsibility. It would seem to me that it would be more appropriate to have it as a separate item, because it just doesn't fit into that particular section, which lists definitions.

This doesn't define "minister" as someone who is appointed by the Premier to sit on the executive council or whatever it is; it isn't a description of a minister. It just makes a provision for the administration of the act to be someone who is other than the person responsible for the administration of the Gaming Control Act. As a result, I think it should be in a different place; I don't see another place it could fit into, so it would seem to me that the simplest way to handle it would be to make it a section by itself. Just give it a number and that's it.

The Chair: I understand that legislative counsel, Michael Wood, would like to respond.

Mr Michael Wood: I'd like to respond to the concern that Mr Kwinter raised. I appreciate what he is saying; however, I would like to draw to his attention the fact that in many of the statutes of the province we have proceeded in this fashion. What this subsection would do would provide an interpretation of what is meant by "minister" in the whole act. The definitions in subsection 1(1) similarly apply to the whole act.

I can show Mr Kwinter a few examples of other statutes where the same thing has been done. Subsection 1(1) sets out definitions and other subsections of section 1 set out interpretative guidelines. Even though they are not, strictly speaking, definitions, they do provide guides to interpretation that apply to the whole act. In so far as they apply to the whole act, I would submit that it's more usual to find them in the first section dealing with definitions and matters that apply to the whole act.

Mr Kwinter: I stand to be corrected, but I can't recall in the years I've been in government any act that has a provision that the act excludes a particular minister from having responsibility and that it must be two separate ministries. It would seem to me that this is relatively unique, but again, I stand to be corrected. There may be some other situation where there is a provision that one minister cannot have responsibility for both acts.

Without trying to belabour it, section 1 deals with definitions. This is not a definition. This is a statement of fact that under the provisions of this act there must be a minister who is different from the minister responsible for the Gaming Control Act.

It's not a big thing that it's going to be in there. I'm just saying that as a matter of form, if section 1 deals with definitions, given the uniqueness of this situation where we have enacted in a piece of legislation a provision that there must be two ministers responsible for two different aspects of a similar kind of administration, I don't see what the big problem is to just have it there by itself. I don't think there is a precedent for this particular arrangement. As I say, I don't think this act is going to rise or fall on it. I just think it's a matter of form, and it would seem to me that would be the proper form.

Mr Duignan: We were totally flexible when we went into this and a new section was created. We solely relied on the advice of legislative counsel, and the legislative counsel's advice is to include this in subsection 1.

The Chair: Any further discussion?

Mr Eves: I want to affirm our support for the amendment as it's redrafted. I guess I'll have to rely upon the advice of legislative counsel as to where it should go, but it's a much more positive amendment now than it previously was.

The Chair: Any further discussion? Seeing none, shall the government motion carry? Carried.

Shall section 1, as amended, carry? Carried.

We now move to section 14 of the bill. Any discussion? Seeing none, shall section 14 carry? Carried.

That brings us to section 15 of the bill. Any discussion on section 15? Seeing none, shall section 15 of the bill carry? Carried.

The clerk has asked for five minutes to deal with some administrative work.

Mr Eves: That's my fault. I just gave the clerk a copy of an amendment a few minutes ago.

The Chair: I understand the photocopying won't take too long. I guess we should just recess.

The committee recessed from 1140 to 1151.

The Chair: The committee will come to order. Mr Duignan.

Mr Duignan: We have the deputy minister and the assistant deputy minister here with us at this point. They're really stuck for time: The deputy minister had to leave a meeting and the meeting is on hold at this point. Maybe we could revert back to that particular amendment, subsection 13(3)? It seems to be agreed.

The Chair: We've brought Liberal motion 13(3) forward. How do we wish to proceed with this? The deputy minister may wish to address some of the concerns raised in that particular amendment. Ms Wolfson.

Ms Judith Wolfson: Thank you for allowing us the opportunity to shoot over. Of course, with me is Domenic Alfieri, the assistant deputy minister.

We were requested to perhaps give some assistance to the committee in terms of other considerations that might be helpful to consider in looking at this amendment. You'll appreciate that we haven't had an opportunity to put before you any material, but I do want to explain, and I will ask Mr Alfieri to assist me, some of the conceptual framework we've had around the corporation and operators and how that would work for future investment, not just the specific casino we're thinking about in Windsor, because obviously as we're looking at a legislative framework, regardless of the government of the day, we want to think about the kind of system that would accommodate various models.

The particular model in question for the casino in Windsor does not contemplate in any way an indemnification for the company by the government of any losses. Frankly, I am in some difficulty explaining detail, because the meeting I'm conducting today is that I am the chair of the selection panel and I have been spending the last two days reviewing requests for proposals. I am looking at models, and those are all of course not subject to disclosure, so the specific models I'm not privy to discuss.

There is absolutely no requirement or there is no contemplation of having any partner indemnified; very different, for instance, from the Dome situation. I don't know whether that's come up before the committee as an analogy.

Mr Wayne Lessard (Windsor-Walkerville): We never thought of it.

Ms Wolfson: You didn't think of it? It's very, very different from the SkyDome or very different from, for instance, a situation like Algoma. It's very different from any of those particular company-specific situations, because here what you're doing is creating a legislative framework that allows contracts to be entered into, and there would of course be provision in any contract with any operator that would protect all government investment.

The difficulty with enshrining in legislation specific indemnification, I would suggest, is that really one doesn't know the kinds of partnerships that one could envisage for a very major industry, and the casino industry is indeed that: a major economic development tool. Frankly, the more Ontario and its public servants learn about this industry, the more I am convinced that it is a major potential driving force for economic development should a government wish to do so.

There are many models for operation. There are partnerships. There are models where the government could be the operator totally, and one would think, frankly, that when the government develops the expertise and when Ontarians develop expertise, we may want to be in a position to operate casinos ourselves in the future. I don't know what a government will decide at that point. We may want different forms of partnerships.

What we are seeing as you look at the international arena on casino gambling is that many different models are coming up right now. It's a burgeoning industry. For instance, in native gaming across the United States, there are very different, interesting models. There's ownership. There are management contracts that decline over a period of years and people take over and, through contract, protections are built in.

The difficulty is that, number one, we don't yet know what all the possibilities are for partnerships in their best sense. Right now, the model we're looking at will be that the government will not be operating the casino. It is the view of the government that we don't have the expertise to operate a casino right now, but there will be partnerships and there will be opportunities to do things, should a government decide to do so, in different ways.

I'm spending a wee bit of time talking about that because I do think it's important to understand that the legislation, in my view, should incorporate the ability to form different kinds of partnerships in different ways, without sending a signal to the business community that we're going to put barriers. Frankly -- I speak now wearing a lawyer's hat; I shouldn't, because that's not the role I'm in -- we know we can put up in contract any kind of protection that one would want. We want to send a signal, I would suggest, with our legislation that says every integrity of the system will be built in, but barriers to doing business in Ontario are not there.

It's our view, and I'm going to ask Domenic to expand on this from knowing more specifically the modelling, that it would send a signal, if we're requiring indemnification of an operator, that there's a negativity, that Ontario's expecting a negativity, and that we're not building in any protection that we couldn't have otherwise. I am concerned about that.

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Mr Domenic Alfieri: All I wish to do is to echo what Ms Wolfson has indicated, that throughout our interfaces with all the potential bidders, the question of losses and our covering their losses has never come up, in the sense that in the dialogue and in the bids themselves that we have reviewed, there's absolutely no question that any contractual arrangement we will be entering into will not result in the corporation or the province being responsible for any losses. The operator is responsible for financing, designing, building, equipping, furnishing and operating the casino, and we receive revenue through the up to 20% tax and through the net profits. Beyond that, the contractual arrangement we're going to enter into, as evidenced by their own submissions to us in response to our RFP, will assert that principle and that premise.

In terms of what needs to be done from a sound business perspective, I think we are very much in concurrence with the proposed amendment. The difficulty we have is to enshrine in legislation and engrave in stone something which -- depending on how one wishes to use a casino, and, as Ms Wolfson has indicated, this can be a first-class instrument if one wants for an economic development tool -- does it in a way that sends to not only this industry but perhaps other industries a message that will say, "Don't bother looking at Ontario," and discourages them from looking at Ontario as an investment opportunity. I think we can proceed to put in place the necessary protection -- as I've indicated we intend to do at least for Windsor because that's what we're involved with now -- without sending this very, very negative message.

The Chair: Mr Kwinter, to start.

Mr Kwinter: I appreciate that you've taken the time to come and address the committee. I've just shared with the minister an article that appeared in this week's Business Week in which a Nobel Prize winner states that governments have been no more successful at these activities, referring to gambling activities, than they have in other services they provide and that New York's off-track betting offices are among the few unprofitable gaming establishments in the world.

If you take a look at the very last line, where because of competitive situations the casinos in Las Vegas have had to return 95% of the amount wagered to the bettors, it would seem to me that we are getting into a highly competitive business. It's an industry that could be very, very successful but, like all industries, it could be an industry that could be very, very unsuccessful. This happens in every single sector of our economy. There are companies that are the largest in the world that go bankrupt, and there are companies that survive.

My concern is that the model we now see -- and I'm not saying it's going to be the final model -- is really a hybrid model that is relatively unique. It's something where, by the admission of the minister, we don't really know where we're going on this thing because it's evolving, really evolving as we go along, and we may have to enter into a different kind of a relationship; we may wind up running them ourselves. We're sort of feeling our way because we don't have the experience, and I accept that.

But by that very admission, what you are really saying is that we are entering uncharted waters -- as a sailor, I can use the analogy -- and when you enter uncharted waters there are reefs out there, and it's quite possible that you're going to find yourself on one of those reefs.

The problem I have is that you're asking a proponent to come forward to be a manager of a government facility. You're asking them to invest in this facility. They're going to have to invest in the magnitude of at least, from the figures that have been released, $250 million. They're going to have go out and borrow it from the banks, borrow it from their shareholders or borrow it from the private sector, and there's going to have to be some guarantees.

There's nobody who is going to build this thing and say, "We're going to do it on the speculation that it's going to be successful," if they can't operate in a free market and run it the way it can be successful. "If you want us to play by your rules, we have to have some assurances as well." I'm sure you're finding this.

I'm not asking you to divulge any of the information that is confidential in your negotiations, but I can tell you that if I were one of the proponents I'd want to make sure that at the very least I got a fair return on the amount of money I'm investing; and not only do I get that return but, given the fact that I'm kind of hamstrung in the way I operate by your rules and you're the guy that's setting the rules, I would want to have some kind of assurance that that's going to happen.

The problem I have is that even under the best of circumstances -- and we've heard of casinos in Las Vegas going bankrupt and we've heard of them in Atlantic City going bankrupt -- there is a potential for a negative result. Nobody wishes that. Everybody is going into this with the expectation that it's going to be great.

Without trying to rethrash old straw, I'm convinced that at every committee in the past that looked at the buying of Suncor shares, that looked at investing in Minaki, or looked at doing all of these other things, there were consultants' reports and there were enthusiastic ministry officials who said, "This is great, it's going to be terrific, and we think we should go ahead with it." I don't think any government goes into these things thinking it's going to be bad. As a result, these decisions are taken.

My concern is that somewhere along the line, particularly given the constraints that are particularly attributable to this model, the fact that we have this hybrid situation where the manager is expected to make the investment -- that's rather unique, when you say to someone: "You're going to manage it. It's going to be ours eventually, but you put in the investment and you manage it. But I should also tell you that there are some limitations: We're taking 20% off the win and you can't have liquor and you can't play craps and you can't do all of these things. Go ahead and good luck to you, but make sure we get what we're getting."

Somewhere along the line, for a responsible government, never mind a prudent investor, there has to be a provision that says, "What if?" What if all of our great projections don't come to pass? What if there is a loss? What if this thing turns out to be a white elephant and we're losing money? Who is responsible?

Whether you're going to say, "That is not a concern, because we don't want to dissuade proponents; we as a government are going to be responsible, and if this thing doesn't work that's a risk we're taking and we as a government are going to do it," or "The proponents are coming into this thing with their eyes open and if there are any losses they are responsible for it," that is the issue.

I have a concern for the taxpayers. I don't think the taxpayers would be thrilled to know they're going into a venture that could again turn out to be a SkyDome or a Minaki Lodge or a Suncor, whatever it is. I think there has to be a provision and an absolute enshrinement in the legislation that says: "If there is a problem, this is who's responsible. We're not going to go to court and fight about it afterwards." Up front we're saying that if there is a negative result, as I said, from a political point of view, I certainly don't want it to be the people of Ontario who pay. I think there has to be a realistic approach that yes, this could be wildly successful, but it could also be a bomb. There has to be a provision for that.

The Chair: Thank you. Mr Phillips.

Mr Phillips: All the deputy's presentation and the assistant deputy's presentation did was reinforce the need for this, in my mind.

First, the deputy called this a major economic tool, that it's going to be a great industry. I have another view that says that in every jurisdiction in North America there's a similar meeting going on, each of which thinks it will be a big economic tool. We're going to have, in my view, around North America a whole bunch of these things, with great expectations that aren't delivered on. That's what we have to protect the public from.

Secondly, if it is the intent of the government to live up to the spirit of what's proposed here, but your only concern is that it may sound a little off-putting to potential investors, I say that's too bad. They should know what the intent is. This is what I think the intent should be, to avoid -- inevitably I think there will be eight or nine of these things built at $200 million each, and several of them will fail, in my view. I don't want the public on the hook when the operator says: "Well, sorry about this thing. It's over to you now, government. You find somebody else to manage this and take on the responsibility."

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I just think we have an obligation to the public. There's no litmus test quite as good as the private sector being ultimately on the hook, knowing full well what it's going to do for the full responsibility of this thing, in terms of proving whether in fact this is a good idea or not. As I've said at committee, this seems like a gold rush. People think it's going to throw money out, that it's going to create 97,000 jobs, $850 million to the province, all these wonderful things, and when we get that environment, everywhere I go, in my view, people are mesmerized by it.

I think this protection has to be in the legislation. If it runs the risk of offending some of the potential investors, so be it, but I think that's the only way to spell out that in the end the public isn't going to be on the hook for these things, either the debt or, frankly, their operation, because just try to see one of these things that isn't operating. With 2,000 jobs at stake in a small community, it's a very tough thing if it's the government running these things.

The third point you made was that we're not sure what these things will be in the future, that maybe the government would love to be owning and operating these things. I don't think that's what's intended, that the government will own these things and invest $250 million of public money to build them. If it is, then I think we should tell the public, "Listen, this is where this thing's heading and you, the taxpayers, are going to have a few of these casinos on your hands."

Everything you've said merely reinforces, in my opinion, the need for this to be in the legislation.

Ms Wolfson: I hope I haven't been unclear on where I'm coming from, if I'm convincing people with my own arguments. Let me try and address those specifically.

Let me take the last one first, Mr Phillips. The issue of whether the government of the day will wish to have more casinos or not is really not something we are addressing. Only through legislation is there a potential, that one is able to do so, and therefore you look through legislation at what is possible so you're not rewriting legislation unnecessarily.

The government, according to our understanding of the Criminal Code, is required to own the casinos, to conduct and manage casino gaming in Ontario.

Mr Phillips: To own the casinos?

Ms Wolfson: Well, to conduct and manage, to own the operation, to operate a licence of a casino. Government can never, in Ontario, say: "You, someone over there, can take the whole thing. We won't be involved." Our Criminal Code requires the government to conduct and manage casino gaming in Ontario. It does not require ownership of the building. It requires an involvement in conduct and manage, which we interpret as licensing, conduct and manage, and having a very strong stake in the integrity of the casino management.

I think the ownership of the particular facility is really what is in question, and a liability to the province. I accept and I understand and concur with the fact that in a burgeoning industry one wants to be prudent and one wants to be very careful. Indeed, the decision of the government has been to approach this in a very cautious, prudent way and do one and evaluate it. I think that was the premise behind that decision.

My difficulty is that I think all those protections can and should be considered in any casino. I don't think, and I hope I wasn't misinterpreted to say, that as we look at this as a burgeoning industry, we should assume we're going to have a strip of casinos. I certainly don't have any reason to believe that would be in anyone's interest at this point, that one would open up, like a gold rush, thousands of casinos in Ontario. I don't think we're talking about a hysteria or a frenzy of building. I certainly didn't intend that.

But I am saying that one can incorporate all those concerns in the arrangements one is making to build and different forms of partnership; and that if the government decides to expand casino operations, if one wanted to establish a partnership, if one wanted to operate -- and I don't know that a government of the day wouldn't decide that in some circumstances it might be useful for the government itself to be involved in operation of a casino; there's nothing to preclude a government of the day from deciding that -- an indemnification clause may not be appropriate.

That's really what I'm addressing my comment to. Indeed, the signal is not just on casinos. If we are saying to companies coming in to make major capital investments in the province, "If anything goes wrong, you're responsible," would one want to do that for any capital investment? Perhaps you'd say yes, but would you want to ensure that in all legislation we're looking at, that every time there's some involvement with the private sector you would want indemnification clauses in legislation? I think that's really what my concern is. Whether or not you want that in your individual dealings in contractual terms is one thing; to enshrine it in legislation may be another.

The Chair: Mr McClelland, you had indicated you wanted to --

Mr McClelland: Just a brief comment. It seems to me, in reflection on what the deputy is saying, that I think it would be entirely appropriate, if there was a major policy shift of a government to get into the business of operating, at that point in time to introduce a legislative amendment that would effectively change an indemnification clause in light of the fact that the government had a major policy shift.

In light of the stated policy of the government, the plans as set out, I don't accept that by introducing an indemnification clause in one particular bill -- I think the specifics of this bill and the circumstances it relates to are focused enough that you are not effectively opening up a precedent with respect to all other contractual obligations entered into with the government.

I simply wanted to respond to that one point, that I would not see that as an impediment, in my view, and that's all it is, my opinion, to putting into the legislation an indemnification clause as proposed; with the very real possibility, if it should come to pass, of changing that, addressing it at that point in time with a relatively straightforward amendment. I'd rather err on the side of caution in this one.

The Chair: Mr Eves, did you want to make a comment?

Mr Eves: Am I hearing that if there was such an operational loss, it's your view that the province of Ontario and the taxpayers of Ontario pick up the loss?

Ms Wolfson: Absolutely not; absolutely not.

Mr Eves: Then who would be picking up the loss?

Ms Wolfson: The operator, absolutely.

Mr Eves: Then what's the problem with putting it in the legislation?

Ms Wolfson: I don't want to repeat myself, but --

Mr Eves: No, I heard what you had to say.

Ms Wolfson: -- I think in certain partnerships, I don't know that the government wouldn't want to operate in a different way, that there might be a different form. In the way we're envisaging it at this point of time, there'd be no question that in contractual terms any loss would be covered.

Indeed, in response to whether or not companies want to come and, under those very, very strict terms, put, to use your number, $250 million down to build an operator casino, I can tell you, they certainly do. They understand very clearly about that operating loss. No, Mr Eves, indeed I do not see the government taking that responsibility on itself.

Mr Eves: Fine.

The Chair: Mr Phillips, you wanted to speak?

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Mr Phillips: I'm having trouble communicating with the deputy, because I never said thousands. I said I visualize what the government has said, and that's eight or nine of these casinos, $250 million, and I believe that several of them will be white elephants. I cannot for the life of me understand why the government has a problem enshrining in the legislation this principle, because the last thing I think the public wants -- they have enough trouble with casinos anyway. They accept that the government wants to proceed with it and views it as a gold mine, but I think the public wants to protect itself from being on the hook for the white elephants that come down the road.

We're going to set up an arm's-length corporation that will have the responsibility for approving these things out of the reach of legislation; I don't think there's any agreement that we're even going to see the contracts right now. If this is a principle, which I think it should be, that the public's not on the hook for the losses of these things, I think it should be clearly in the legislation so we don't have to be constantly looking over our shoulders to find out what's the latest contract schedule the crown corporation has entered into that may violate the spirit of what we're trying to do.

Mr Carr: Mine is more a statement rather than a question. What you seem to be saying -- maybe you can confirm it, and if not, I'll ask it as a question -- is that if this passes, that will then affect the negotiations, from our standpoint, negatively. In other words, if this motion goes through, you seem to be saying that the people who are coming in to bid on this would look at it negatively and that it may affect how well we do in the negotiations. I'm saying "we" from the Ontario government side. If this passes, do you see this affecting the negotiations negatively from our standpoint?

Mr Alfieri: No. I think everything that is reflected in this amendment has reflected our approach to the existing Windsor development. All the dialogue we have carried out before and during the RFP information process and our review of the various bids reflect exactly this kind of approach. Whichever partner we select, the responsibility of that entity will be to finance, design, construct, operate etc. We will receive the tax of the revenue and they're fully, completely responsible for everything. They'll be required to put up 25% of their own equity towards the physical plant construction. By the way, in all the bids we have received there is absolutely no suggestion that the government in any way, shape or form participate in any losses; many of them are taking the completely reverse approach. This does reflect everything we have been moving towards from the RFP onward.

I think what concerns us is not for Windsor. It's just the optics of the message it sends not only to the casino industry but perhaps to other industries. There are many ways to conduct good business practices. One is to enshrine it in legislation; another one is just to do it. The fact that we have done it in Windsor would tell me that our intent would be to continue to do that.

But one cannot quarrel or argue with the intent of the amendment. As I said, it's very much in keeping with our practice. As to whether it's a good thing to enshrine in law or a bad thing, all we can do is comment on it and it's up to you as legislators to really address that.

Mr Carr: What I get out of this is that if all the bidders know they're going to be responsible and that doesn't seem to be a problem, the reason you're looking at doing this is because at some point in time you want to leave the option open for the government to run it. Quite frankly, that scares me more than anything else. I know Mr Upshaw came through here and said that's the way it should be done.

I know you're anxious to reply, but very briefly, it appears to me they will have contractual agreements saying they'll pick up the debt anyway, but you want to keep it open and you don't want to have anything in the legislation that would prevent you, once these get up and running, from turning them completely over to government-run and at some point in time you taking it over. Is that the major concern, that this will block any government from running the casino itself?

Ms Wolfson: Two major concerns: I am not concerned about Windsor casino and the government having any liability, because it's built into that arrangement and there has been no indication from any of the proponents that they would pursue anything other than that. I am looking at the legislation as a document that could incorporate other projects should the government of the day decide to do so; we don't know all the models that would be available. I think one can accomplish exactly what the concern is in the way we are doing it and not preclude other models which might in fact be limited because of it.

I appreciate Mr McClelland's comment that you could always amend legislation. Indeed you could, that's an option, but I am suggesting, as we look at legislation and try and build in the kind of checks and balances, that they are there without a legislative amendment. That is really my only concern about it. I don't think it hampers any prospective bidder now.

The second issue is the message. If we are asking people who are coming in and investing $250 million, let's say, if we are sending a message about building a casino and saying, "And if it goes wrong, you're responsible," I'm not sure I see that differently from other investments in the province.

Mr Carr: But you've just said you're giving them that message anyway, because you said you're going to build into it the fact that they're going to be responsible.

Ms Wolfson: To these operators, but I'm saying the message that goes out in terms of "Come to do business in Ontario."

Mr Carr: Well, the same message goes out to the rest of the people──

Ms Wolfson: No, that's the casino. Enshrining in legislation I think is sending a message about doing business generally in Ontario, as opposed to an operator who's coming in to do a contract with you, "You are going to be responsible."

Mr Carr: One last point, and this is just a comment. As Mr Phillips said, I know your intent was to try to come here and alleviate fears. You made comment that you didn't want to come here and talk, but you essentially have made me even more reluctant, and I think this motion is something that should be passed more than ever. I'll obviously be supporting it.

The Chair: I just thought I'd let everyone know that at some point in time we will take an hour for lunch; there is fresh tea and coffee here if anybody would like some.

Mr Kwinter: I have to say that we are not only getting a mixed message from both the assistant deputy and the deputy, we are getting a mixed-up message. On the one hand you say it's not a problem, that all the proponents are certainly aware, and there's no intent whatsoever to have the government or the people of Ontario pick up any of the downside, that proponents are coming forward and volunteering to pick up any downside; there's no problem at all. However, the other side is that if we put this in the legislation, we are concerned about the optics, we're concerned about the message that is going to go out.

Let's start worrying about the optics and message that's going out to the taxpayers. If you say this isn't a problem and you say you totally endorse everything in it except the optics and the message it's going to send about Ontario, that doesn't make any sense; it absolutely doesn't make any sense. It's either a problem or it isn't a problem. It can't be no problem but a problem. It can't be, "There's absolutely no problem, we agree with it, absolutely that is going to be the policy of this government, but the optics that it sends out are negative."

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I don't understand that. I would love to have some explanation of why it is a negative perception. I again suggest to you that without it, and the mere fact that it has been raised, it will send a very negative perception to the taxpayers of Ontario that somehow or other there is the possibility of a loss, a shortfall. Everybody acknowledges that, but we can't talk about it because of the optics. It just doesn't make any sense. Either this is a valid argument -- and you admit it is; you admit that this is a governing principle behind your negotiations, that under no circumstances will the government and the taxpayers of Ontario be subject to any shortfall if it occurs. On the other hand, you don't want it in the legislation because the optics are such that it could have a negative impact on the proponents who are coming forward. It just doesn't make any sense and I would welcome an explanation of this two-sided point of view.

Ms Wolfson: I'm sorry if I'm being convoluted. Let me try again. I am not concerned about our being able to build into the model that we have now proper protections. I am concerned that there may be models -- the partnership model: It may be that the government wishes to enter into a partnership where an operator isn't seizable for an operator to indemnify the government, that they don't wish to enter into a partnership but it makes sense to enter into a partnership. I'm thinking as well potentially of partnerships with first nations. I'm thinking that we may have situations where to enshrine in legislation a specific liability on the operator may not allow for those kinds of partnerships and sends a kind of message that we're not interested in various other types of partnerships.

My lack of concern about this one is that I think we can build in the same protections, and we acknowledge their import and we will build them in.

The difficulty is, do you preclude and do you send a message that we're not interested in any other kind of partnership, where an onus in legislation that says the operator will be responsible for all losses may not reflect the wishes of the government at that point? Indeed, this comment about sending a message, that's one part.

The second message is, I'm not sure I understand why with casinos and this kind of investment it would be that much different from sending the same message to the business community that is going to come in and invest another $250 million on another project. We don't say in other legislation, "You'll be responsible for all losses." We allow contracts with those investors to deal with who should bear responsibility for losses.

I don't know if I'm being any clearer, Mr Kwinter, but that's what I'm trying to address.

Mr Kwinter: What we have here is a situation, if I could put it in the vernacular, where the government is gambling on casinos. We went to Windsor and people are walking around saying, "We're gambling on casinos." This is what you're doing. You're gambling on casinos.

Usually, when you go into a gambling establishment, the odds are in favour of the house. The more people gamble, the more money the house makes. It's just a mathematical certainty; the only problem you have is that they make it in that particular pot, but they may be losing it in several other pots in the operation of the facility and the taxes they pull out and everything else. But there is no question in my mind, and it's proven mathematically, that in any gambling game where there's at least a minimum amount of volume, the house will always win. The odds are set up that way; they can't lose. The more you play, the more money you lose. It's as simple as that. You get winners, but overall, where do you think this $128 million or $140 million of your 20% win is coming from? It's coming from the losers; otherwise, you wouldn't get your money. You get your money that way, so you are in fact gambling. You're gambling that this is going to be a successful operation.

It would seem to me that you have an obligation to the taxpayers of Ontario once you embark on this gamble that, "This is something we are going to support because we feel it's going to create jobs, it's going to create a new industry, it's going to create economic activity," all of these wonderful things that all of us hope will happen. But in the real world, it's possible that it won't happen.

I really don't quite understand. I don't care what kind of arrangement you have in the future. Whether you get involved in first nations, whether you get involved with the government running it, somewhere along the line, if it's going to fail, it will fail regardless of who the participants are, and it doesn't make any difference what that relationship is. The only thing that will make a difference is that in your relationship you may have to enter into an additional contractual agreement, for example, to use your analysis of the first nation, to say, "We're going to work on this arrangement, but don't worry; we will indemnify you if there are any losses," which has nothing to do with the fact that the operator shall indemnify the government.

You may make that decision as the government that you are going to be the operator and you're going to make the political decision that you will also provide that indemnification, but I can't foresee any possible model or combination where there isn't going to be an operator. I don't care whether it's the government, I don't care whether it's an amalgamation of charities, I don't care whether it's the first nations; somewhere along the line there is going to be an operator, and when that operator takes responsibility for the operation it is at risk that maybe this operation will lose money, and somebody is going to have to pick up that shortfall. It could be the charities themselves, it could be the first nations or it could be the government.

But considering the fact that you have acknowledged that you have no problem with what is stated in the amendment other than that you don't want to see it in the legislation because of the optics -- that is exactly what Mr Alfieri said, and I challenge you to take a look at Hansard to see that that is what he said.

I'm saying to you that I am more concerned about the optics for the taxpayer than I am for the optics of the proponents or the potential investors. What I would like to suggest is that if you have no problem with the intent of the amendment and if it's exactly what the intent of your particular initiative is, I still don't see how you can have it both ways, to say, "There is no problem, all the proponents understand that, but we don't want it in the legislation because of the negative message it's sending out" or the optics. I would like an explanation on that.

Ms Wolfson: The only thing I want to clarify, Mr Kwinter, is the issue of optics. As the deputy minister, I am not concerned, and I don't think Mr Alfieri is concerned, about the optics of not having the people of Ontario understand what's in the legislation, and we're not avoiding having the people understand exactly what the industry is there for.

I just think there is a better way of doing it, that we can accomplish it without enshrining in legislation what might be very cumbersome. I think you've set it out quite well, Mr Kwinter, that there might be situations where the government would have to indemnify an operator that had indemnified through legislation the government, and there may be situations indeed that are exactly like that. I just think it's cumbersome and difficult to manage conceptually, but it's not a question of the optics of trying to convince the public about casino operations. That's clearly not what the civil service would be putting forth as a reason for our view on legislation.

The Chair: At this point, I'd like to let you know that there are two more people who would like to make some comments, and I sure appreciate you being here. Mr Sutherland is one; Mr McClelland is the other.

Mr Sutherland: If we look at the actual amendment and then at a hypothetical situation, let's say in the future the government wants to get into a 50-50 partnership in operating some type of casino. Let's say, though, that it's not going to make money in the first year because of startup costs. If you read what you have in the amendment, it says, "and furthermore that the corporation shall not assume any debt or liability resulting from the operation of any casino." You're trying to be in a 50-50 partnership, yet if in the first year the casino did lose money because of startup costs, you'd be saying the government wouldn't assume any of those debts or liability. Well, who would go into a partnership in that way? I can't see anyone who'd go into partnership saying, "Okay, in the first year I'm going to assume all the liability for any of that." When you look at it that way, it would seem that that's where this amendment limits those types of opportunities over the long term, whereas you may want to negotiate certain things to protect them.

Mr McClelland: One comment and one question. I'm going to ask the parliamentary assistant this; I think it's only fair, as the political level. If the government has made a decision or is contemplating moving towards government-run casinos, in light of the submissions made by his good friend Mr Upshaw and others, I would ask him to come forward and say so right now, say that's part and parcel of the plan and that the government is contemplating doing so some time in the future. That's by way of question to the parliamentary assistant.

By way of question to the parliamentary assistant and/or deputy and assistant deputy, I'm wondering, and I'm going to be very candid about this, whether you have entered into negotiations with first nations representatives and have suggested to them or implied in any way that they will be given some latitude and that they will not be held responsible for operating deficits, so that that has become an impediment for your proceeding with this particular amendment.

Ms Wolfson: I can answer the second part. No.

Mr Duignan: And to the first question, no.

Mr McClelland: Well, in light of those answers, I would again say, as has been very well said by everybody on this side, then wherein lies the problem with this amendment?

The Chair: If there's no further discussion, I want to thank Ms Wolfson and Mr Alfieri for coming before the committee today.

Mr McClelland: Can we vote on this, Mr Chairman, please, before we adjourn?

Interjection.

The Chair: Mr Duignan has asked for a five-minute recess. I was going to suggest that we have the vote when we come back from lunch, but if you want to vote now, we're going to have a recess because it's been requested by the government.

Mr McClelland: Two o'clock's fine.

The Chair: You want to come back at 2? Fair enough. If no one's in disagreement with that, the committee will resume at 2 pm this afternoon.

The committee recessed from 1244 to 1413.

The Chair: The committee will come to order. We were, just prior to leaving for lunch, about to vote on the Liberal motion, subsection 13(3).

Mr McClelland: Mr Chairman, with your indulgence, I'd like to withdraw my previous amendment and enter another amendment. I want to indicate that legislative counsel, Mr Wood, made some suggestions that bring the amendment more in keeping with proper draftsmanship, and I therefore would withdraw the bill --

Mr Duignan: The motion.

Mr Sutherland: You can't withdraw the bill.

Mr McClelland: Withdraw the bill? Actually, that's not a bad idea. Do the rules allow that? All in favour of withdrawing the bill? Sorry, Mr Chairman, that's your job.

Having withdrawn my previous amendment, I move that the bill be amended by adding the following section:

"Liability for casino operation

"6.1 All contracts entered into between the corporation and an operator of a casino shall be deemed to contain provisions stipulating that,

"(a) the operator shall be solely responsible for an operating deficit; and

"(b) the corporation shall not assume any debt or liability resulting from the operation of the casino."

Mr Chairman, I'll table a copy of that with you.

The Chair: The clerk has one, Mr McClelland. Does this require further explanation?

Mr McClelland: No. As I said, Mr Wood very kindly cleaned up my drafting, and I appreciate that very much.

Mr Kwinter: Mr Chairman, could the record show that Mr McClelland is cleaning up his act?

The Chair: The record can certainly show that he's trying to change it.

Understanding that Mr McClelland has withdrawn the motion we were debating prior to lunch, that means we will be dealing with section 13, unamended, of the bill. Is there any discussion on section 13 at this point in time? Seeing none, shall section 13 of the bill carry? Carried.

Mr McClelland: I think there's some confusion, Mr Chairman; I went through that hastily. In terms of where it fits in the bill, it's a different numbering sequence. We had drafted it as an addendum to section 13, but legislative counsel's advice is that it fits more appropriately in terms of just the numbering sequence, and we'd then revert back, as an addendum section 6.1.

The Chair: We need unanimous consent in order to go back.

Mr Sutherland: Mr Chair, just for clarification, did you just ask whether section 13 carried?

The Chair: Yes.

Mr Sutherland: And that was section 13, unamended, carried?

The Chair: Yes.

At this point in time we need unanimous consent --

Clerk of the Committee (Ms Tonia Grannum): No. This is not an old section; it's a new section.

The Chair: Oh, we don't need unanimous consent. This is a new section of the bill but will be titled 6.1.

We will deal with that forthwith. Is there any discussion with regard to this new section that Mr McClelland has entered as Liberal motion 6.1?

Mr McClelland: Certainly from our point of view, the discussion preceding the adjournment at lunch covered the waterfront on that matter. I think Mr Kwinter and Mr Phillips have more than adequately and very ably articulated our position with respect to the amendment.

The Chair: Does every member of the committee have a copy of section 6.1?

Clerk of the Committee: It's being copied.

The Chair: I would suggest, because this is being copied at this time, that we continue at this point and revisit your motion, Mr McClelland, when we have copies of that motion for all the members to see.

Mr McClelland: Might I ask that we deal with it as expeditiously as possible? I think we should do it as quickly as we can following the discussion.

The Chair: We are dealing with a new section, PC motion section 15.1 of the bill; this is an amendment to create section 15.1.

Mr Carr: I believe copies have been distributed.

I move that the bill be amended by adding the following section:

"Investigation by Provincial Auditor

"15.1 Upon the request of the Provincial Auditor, the corporation or any business established by the corporation pursuant to section 4(d) shall ensure that any person with whom it has entered into a contract to provide for the operation of a casino or business shall make available immediately to the auditor all reports, accounts, records and other documents in respect of the operation of the casino or business that the auditor requests."

It's fairly simple. It is ensuring that the Provincial Auditor has access to the casino operation and that all the records and documents be available to the auditor and that the auditor would be able to request it.

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Mr McClelland: I might add, parenthetically, that I appreciate the forthrightness of the parliamentary assistant and the opportunity to meet with him privately to discuss in candour some of the possibilities with respect to amendments. At that time it was indicated by staff that in fact the auditor has jurisdiction. I hope Mr Eves will return shortly; I'm always reluctant to pass on information secondhand. Mr Eves advises me that from a discussion with the auditor this morning, the auditor does not share that opinion and that, absent legislative provision, he does not have the access and latitude that staff indicated.

I say that not to be contentious but simply to indicate that it is an issue. I regret that I'm in the position of trying to pass it on on behalf of Mr Eves, simply because I don't feel I can give full hearing to his information. I trust he may be here shortly, but I did want to indicate that. I think it's important. The parliamentary assistant, I note, wants to respond. In fact, there is a significant difference of opinion.

Mr Duignan: As you know, the Provincial Auditor can't go to private businesses. However, with some slight change to the wording of the motion, it could be acceptable. I will get Ms Korey, legal counsel, to address some questions around the Audit Act.

For example, if the motion read, "The corporation shall ensure that any person with whom it has entered into a contract to provide for the operation of a casino or related businesses shall make available immediately to the corporation all reports, accounts, records and other documents in respect of the operation of a casino or related businesses that the corporation requests," in that way, the auditor has full access to the corporation.

Mr Carr: As I read it, it's essentially the same. It's just some of the wording.

Ms Audrey Korey: If I might address that for clarification, the reason for that is that under the Audit Act, the Provincial Auditor has jurisdiction to watchdog, if you like, all ministries, crown corporations, agencies, boards, commissions etc. If it's in the hands of private operators, he can't swoop down on a private operator and take all kinds of documents. However, he can do this with respect to the corporation and has in fact very broad powers: He can do investigation audits; he can examine people under oath; he can do all kinds of things under the Audit Act. By ensuring that the corporation holds all these records, I think, and I'm certainly happy to give you a copy of the Audit Act with the highlighted portions of it, it will achieve what you're suggesting, that the Provincial Auditor is able to have access to all these records and to make sure that everything is correct in the operation of the casino, which I take to be your objective.

Of course, the corporation would intend to do this under contract, in any case, but if you wish to have it in legislation -- I'm only providing some clarification.

Mr Kwinter: Mr Chairman, I have a couple of concerns. One is just a matter of form. If this motion is in order and there isn't a provision now for the auditor to do it, it would seem to me it would be a more appropriate place to put it in section 14 rather than in section 15, because if you take a look at section 14, you'll see:

"The corporation shall establish and maintain an accounting system satisfactory to the Minister of Finance.

"The board of directors of the corporation shall appoint one or more auditors licensed under the Public Accountancy Act to audit the accounts and financial transactions of the corporation annually."

Mr Duignan: We agree, Monte.

Mr Kwinter: Why give up so easily? I'm just getting into it. Okay, so you agree with that; that's fine.

The second point: I'm not a proponent of the motion so I don't know the intent, but reading it and reading what I think is between the lines, it would seem to me, and I would ask that my colleagues who proposed it maybe expand on it, that the purpose of this amendment is to make sure that the proponent, as it relates to the casino, is subject to the public auditor's jurisdiction. Not the corporation; I think that's a given, that under the Audit Act the corporation can be audited.

I think the purpose is that if there are allegations that the successful proponent, whoever that may be, is somehow or other doing things that are inappropriate, they may file with the corporation documents that the auditor has access to, but they also may not file documents with the corporation that the public auditor may have some interest in, and it would seem to me that the purpose of this motion is to provide in the act that the public auditor has access to the proponent and the businesses related to the casino, notwithstanding that he normally might not have access to them. Is that a fair evaluation of what you're contemplating?

Mr Eves: Yes. If I may expand on that, we had discussions with the auditor's office and with the auditor himself. He indicates that he does not, and gives two examples where he has been prevented from auditing a joint venture corporation, one being Teranet and one being IDEA Corp. I don't want to put words in his mouth, but the gist of what he's saying is that he has been prevented from auditing both of those joint venture enterprises before. In the government's opinion -- whichever government it happens to be; I'm not blaming the current government. I'm just saying that he has been told he does not have the authority under the Audit Act to audit joint venture corporations such as Teranet and IDEA Corp.

If you want the ability to audit a corporation that's operating a casino as a joint venture with the province of Ontario, you need to enshrine that in a particular piece of legislation. I think that's what Mr Kwinter is also alluding to. That is the purpose and the intent of the amendment. This is my poor draftsmanship, not anybody else's, and if counsel or anybody else can assist us in achieving what we want to achieve, that is the intent. I think Mr Kwinter's hit it right on the head.

Mr Duignan: I had actually made a suggestion to Mr Carr about changing some of the words of the motion.

Mr Carr: Do you want to read it back?

Mr Eves: I'd like to ask counsel if, in the opinion of counsel, the wording that is now being suggested would give the Provincial Auditor the authority to do what Mr Kwinter and I have enunciated.

The Chair: Then at this point it would be necessary to withdraw the motion as it was introduced and for Mr Eves to reintroduce the motion with the appropriate language. We need unanimous consent to open section 14, to introduce it into that section of the bill.

Mr Eves: I'd first like to get the opinion from counsel about how the section should be worded to achieve what we want to achieve. If it would please the committee, I would ask that we stand this one down, if we haven't got the language right now, until such time as we can arrive at that.

The Chair: I don't think that presents a great problem. We can have that looked after, I suspect, and go back and deal with Mr McClelland's motion which he has previously introduced.

Mr Sutherland: Mr Chair, as Mr Eves wasn't here, maybe Mr Duignan could repeat the wording he had put forward before. That may help.

The Chair: Have you seen the wording, Mr Eves?

Mr Eves: I have.

The Chair: Maybe Mr Duignan can repeat it one more time for the record so that Mr Eves will be clear as to what the new language is.

Mr Duignan: It would still be the heading "Investigation by Provincial Auditor."

"The corporation shall ensure that any person with whom it has entered into a contract to provide for the operation of a casino or related businesses shall make available to the corporation all reports, accounts, records and other documents in respect of the operation of the casino or related businesses that the corporation requests."

That way, the auditor has full access to those records, to the crown corporation, because normally the public auditor has no access to the records of a private company.

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Mr Eves: That says "shall make available to the corporation." It doesn't say "shall make available to the auditor." I'm not saying it's the wrong language; I'm asking counsel for an opinion on whether this will enable the Provincial Auditor to do his or her job, if he or she requests.

The Chair: Mr Wood or Ms Korey?

Mr Michael Wood: I assume, in asking the question, Mr Eves is directing it to me as legislative counsel and counsel to the opposition parties for motion purposes. I'd have to say initially that certainly the motion, as it is worded, only allows the corporation to get access to the reports, accounts, records and other documents. I would then have to take a while to look at the Audit Act, which I don't have with me here, to see whether those records would form part of the records that the Provincial Auditor can have access to when they're in the hands of the corporation.

I do know that the Provincial Auditor has access to the books, records etc of the corporation itself. I wouldn't want to give a firm opinion as to whether the Provincial Auditor has access to the records etc of any contractor, if those documents happen to be in the hands of the corporation, till I had a chance to look at the Audit Act provisions.

Mr Carr: I'd like to ask the parliamentary assistant his intention. Is that why you worded it like that, so the auditor --

Mr Duignan: So the auditor could have access to that information.

Mr Carr: That's the legal opinion, then?

Mr Duignan: That's the opinion of our counsel. Maybe Audrey would like to elaborate on that.

Mr Carr: You're going to be in great shape. You won't need fitness classes after this.

Ms Korey: I missed the last part.

Mr Carr: Is it the government's understanding that the auditor can request and get all the information he or she needs? We're just asking why you worded it that way.

Ms Korey: I am just looking at the Audit Act to get the actual section or subsection for you on it. Once it's in the hands of a crown corporation, where the accounts and financial transactions of a crown corporation are audited by another auditor than the Provincial Auditor, the audit, according to the Audit Act, shall be performed under the direction of the Provincial Auditor and such other auditors shall report to the Provincial Auditor. Then there's a variety of ways that the Provincial Auditor can get the information out of the crown corporation. I'd be happy to make this act available to you, Mr Eves or Mr Carr.

Mr Eves: What I'm very directly asking is whether or not this amendment, worded that way, is going to get the auditor around the problem that he says the Provincial Auditor's had in the past with Teranet corporation and with Idea Corp, both of which the Provincial Auditor, according to him, was prevented from doing his audit on. Because they were joint venture companies, it was decided they did not fall within the parameters of his scope of investigation.

Ms Korey: No, Mr Eves, I don't believe the amendment as proposed by your wording would do so either.

Mr Eves: That is what I'm asking; I don't profess to be counsel so I am asking counsel.

Mr McClelland: That's why he ran for office.

Mr Eves: Maybe I should have had the Provincial Auditor draft the amendment.

The Chair: Do you want to stand this down till we can get some clarifications?

Mr Eves: That would be more appropriate, I would suggest.

The Chair: Consider this motion stood down. I just remind the committee that we have to have unanimous consent to re-enter this section of the bill. The appropriate section, as Mr Kwinter has indicated, is section 14, so we'll have to have unanimous consent from the committee to do that, but we'll do that at that point in time.

We should move back now to Mr McClelland's motion, which he introduced a short time ago, subsection 6(1). He's introduced it and given an explanation. At this point in time, I suspect we should probably hear from Mr Duignan with regard to this.

Mr Duignan: I think everything that's to be said has been said on this.

The Chair: If there are no further comments with regard to this, then we can vote on this motion.

Mr McClelland: Recorded vote.

The Chair: Yes, a recorded vote. All those in favour of the motion?

Ayes

Carr, Eves, Kwinter, McClelland, Phillips (Scarborough-Agincourt).

The Chair: All those opposed?

Nays

Duignan, Lessard, Martin, Mathyssen, Sutherland.

The Chair: The motion is lost.

That brings us to section 16 of the bill. Our first motion is a PC motion, subsection 16(1). Mr Carr or Mr Eves, would you care to introduce this motion?

Mr Eves: I move that subsection 16(1) of the bill be amended by striking out "nineteen" in the first line and substituting "twenty-one".

This is the other section in the bill, of course, that provides for an offence with respect to age. We've already had the debate with respect to age at one point in time. You may or may not choose to rule this out of order, Mr Chair, but we still feel strongly about the age issue and we're moving this amendment.

The Chair: It would be out of order because we've already dealt with the issue earlier in the bill, so it would be inconsistent with what's already taken place.

Mr Eves: Mr Lessard wouldn't like to reconsider his opinion?

Mr Lessard: No, I support it for the same good reasons as the last time.

Mr Kwinter: Are we still discussing section 16?

The Chair: Yes, we are.

Mr Duignan: Subsection 16(1).

Mr Kwinter: Subsection 16(1) or 16(2), it all pertains to my same concern. Having regard for some of the comments that were made by legislative counsel, it would seem to me that there should be an additional expansion of the definition of a casino.

When I look at section 16, and subsections 16(1), 16(2), 16(3) and 16(4), which we haven't gotten to, it talks about "Every individual under nineteen years of age who plays a game of chance in a casino is guilty of an offence." It keeps talking about the things that you can do in a casino, but it doesn't define that the casino is not the casino complex. It would seem to me that there may be some problems in the enforcement and in the interpretation of this act unless it is clearly spelled out that a casino and a casino complex are not the same thing.

Let me give you an example of what I'm talking about. This came up in our discussions yesterday. This facility is going to be built, and it will have a hotel, it will have restaurants, it will have bars, all of these things that will, to all intents and purposes, be one building. Within that building, there will be a casino, as we understand it.

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It would seem to me that the provisions as contemplated under this particular section deal only with that particular room that is a casino, but there are other areas that are under regulation by the liquor board and things of that kind, and when you get involved in determining whether someone is in breach of whatever regulations are in place, you may have the problem that people will define, "You are not in the casino; you are in the casino complex," or, "You are in the casino complex and you're not in the casino."

I think there should be some explanation of that to save a lot of hassles, because someone is going to take a look at the act and is going to say, "It says here that I can't do this in a casino, but I'm not in the casino; I'm in the casino complex." But there's only going to be one door to both the casino complex and the casino. Someone is going to enter on those premises and is going to be able to do certain things in part of that building and certain things in another part of the building, but he cannot do everything in all parts of the building. There is no reference to that at all, and it would seem to me that could create a problem in the future.

Mr Duignan: Under section 1 of the act, "casino" is defined as "a place which is kept for the purpose of playing games of chance." The Legislature is sometimes referred to as the pink palace that's across the road, but we all know that it's the chamber that's the Legislature.

Mr Kwinter: The legislative precinct is the whole building.

Mr Duignan: Actually, part of the Whitney Block as well.

Under the purpose of this act, "casino" means a place where people are actually playing the games of chance.

Mr Kwinter: You've actually just made the point for me. You're interpretation is that the Legislature is only that chamber in which we sit, but in effect the legislative precinct is the whole building and the immunity that you have as a member extends to your offices in the Whitney Block and extends to the offices in the so-called pink palace. That is exactly the point I'm making. In your mind, you think that the Legislature is only that part where we sit, when in fact it isn't. I'm saying that people are going to have exactly the same interpretation when they walk into this casino.

You're going to split hairs and say: "You're in the casino complex, but you're not really in the casino. The casino is only that room where they have the gaming taking place." You're going to have people who will fall under two or maybe more regulations, depending where they are in that building, and there is no definition in this act to spell that out.

Mr Duignan: We're saying, "Every individual under 19 years of age who plays a game of chance in a casino is guilty of an offence," but what we're talking about here is the gaming area in the casino. That's where the games of chance are played. What we're saying is that if someone is caught under the age playing a game of blackjack in the gaming area, he or she will be committing an offence.

Mr Kwinter: That will apply to subsection 16(1), but there are other provisions under 16 where that would not apply, and that is the concern I have. Not just looking at 16(1), but if you look at some of the other provisions, there are references to the casino and what you may or may not do, without reference to the fact of playing. Just by being in a place or just by being there, you have a problem.

Mr Jim Mundy: The bill defines "casino" as "a place which is kept for the purpose of playing games of chance." People may refer to that building, that complex, as the casino, but at law the casino is that gaming floor, not the hotel, not the bar and not the restaurant. While there may be confusion, as we just heard, in people's minds about what is the casino and what isn't, it's fairly clear in the act that the casino is the gaming floor, the "place which is kept for the purpose of playing games of chance."

Mr Kwinter: With respect, let me just repeat one more problem I have and the reason I feel there should be a clarification.

You say that the bill, under section 1, defines that "`casino' means a place which is kept for the purpose of playing games of chance," and we've just heard what that is supposed to mean. The average person walking in off the street, the average employee, the average security guard who may be hired on an interim basis -- the rent a cop kind of thing -- the minute they enter those premises, in their minds they are in a casino. They are not going to differentiate, "Well, you're not really in the casino yet until you walk into the gaming room." The minute you walk into the building, the Windsor casino, you walk in the doors and you say, "I'm in a casino." A security guard is there and he's been put in there for the day and he's been given instructions. There are provisions of things that cannot be done in the casino but they can be done in the hotel, they can be done in the restaurant, they can be done in the things that are in that casino complex. My contention is that a reasonable person would not know there's a difference when they walk into the Windsor casino, that you're not really in the casino until you enter the gaming rooms.

I think there should be a provision in the act so that this doesn't have to be fought out at a later date as to, what is a casino? You say, "Well, you go to the act and it says it means a place which is kept for the purpose of playing games of chance." I contend that there could be an interesting legal discussion as to whether or not that is the whole complex, because that is a place where there are games of chance. You can say: "Oh no, only in this room. We've got a surveyor and the surveyor has said, `This is the spot only.'"

When people walk into a casino they think they're in a casino, and to suggest that they have to know they're not really in the casino until they walk into that room that has the games of chance is asking a reasonable person to do more than I think is reasonable. Given the fact that it is quite possible for somebody to be able to do things in the casino complex that they can't do in the casino, I feel there has to be a provision somewhere in the act, without going to a judge to get their adjudication, that spells that out.

The Chair: I'll just remind committee members that we are dealing with section 16 of the bill. Mr Kwinter has undertaken to open the debate on this section.

Mr Kwinter: I'm dealing with section 16.

Mr Duignan: I thought we were dealing with an amendment.

The Chair: No, the amendment was ruled out of order. We are dealing with section 16. Mr Kwinter indeed asked me, "Are we dealing with section 16?" and I said yes. I just wasn't sure that everybody caught that, actually.

Mr Duignan: The lawyers are conferring again.

Mr Kwinter: Can I give you an example? This is not a hypothetical case; it's a probable case. If we take a look at subsection 16(3), "Every individual who enters or remains in a casino during the playing of games of chance in the casino, is guilty of an offence if, in accordance with the regulations made under this act, the corporation has served a direction on the individual to leave or not to enter the casino." So some guy walks in and, for whatever reason, he's told he must leave the casino. He walks outside the casino facility as defined, supposedly, under this act, and he's standing outside the door of the casino. But he's still in the complex. He won't know this, but in theory he'll say: "You can't throw me out. You can throw me out of the casino, but you can't throw me out of this building because I'm not in the casino. I'm in the casino complex."

It may be the absolute intent of the operators that they don't want him in the building, period. They want him out because of whatever; he may be drunk and disorderly. They want him out of there, and he says: "Listen, I've read my act. I've got it in my back pocket. I know this thing really, really well and I am no longer in the casino."

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All I am suggesting is that it would seem to me that there should be a definition, given the fact that what is contemplated is a casino complex that is going to have things that will fall under the jurisdiction of the corporation, but it will not fall under the jurisdiction of the Gaming Act and these various things. It would seem to me that there should be some definition of what the casino complex is and defines how the casino relates to it, just so you'll save some problems. I thank you very much for your indulgence.

The Chair: Any other discussion with regard to all or part of section 16 of the bill?

Mr Duignan: I think the lawyers are having a discussion.

Mr Michael Wood: I'd like to offer some information to Mr Kwinter in my role as counsel to the opposition parties. In my legal opinion, I really believe that it is clear in the definition of "casino" in section 1 that "casino" is limited to the place where the games of chance are played and does not include any other place which in popular parlance is associated with the casino because a related business is carried on in that place, such as a hotel or a restaurant which is connected with the casino.

There is one difficulty I would see to opening up this issue; that is, when defined terms are set at the beginning of an act, the whole of the rest of the act is drafted with that defined term in mind. If we try to fix something in section 16, we have the problem of being consistent with the whole of the rest of the act.

However, I'd offer just one further detail of information. If Mr Kwinter does want to do something to clarify the issue, my recommendation would be not to try to do every section where the word "casino" appears and run the risk of being inconsistent, but rather to put some wording into the definitions section in section 1 to make it absolutely clear that "casino," as the defined term is used in this act, includes the place just where the games of chance are intended to be played and does not include areas which are used for the operation of businesses related to the casino.

Mr Kwinter: That would satisfy me perfectly.

Mr Michael Wood: If the committee intends to deal with this, I would be prepared, given a short amount of time, to draft some wording which could form the basis of a motion. The clerk would have to rule on what the requirements would be. I imagine unanimous consent would be required to reopen section 1.

The Chair: Indeed, unanimous consent would be required to reopen section 1, but if it's agreeable with the members of the committee to do that and if it's in the interest of better defining what a casino is, then I will put that question to the committee members.

Mr Duignan: If it's in the interest of plain language, I think we could agree to that, Mr Chair.

The Chair: Mr Wood, would you like to bring back to us a draft of the proper wording and how that might be entered into the bill?

Mr Michael Wood: Yes, given a short amount of time, I would be prepared to propose the wording.

The Chair: We'll leave that for now and we can continue to deal with section 16. Is there any further discussion with all or part of section 16 at this point in time? If there isn't, then we'll have a vote.

All those in favour of section 16 of the bill? Agreed. Section 16 passes.

Now we have a Liberal motion to create a new section, section 16.1 of the bill.

Mr McClelland: That was substantially, if I recall the numbering, subsections (5) through (8), and accordingly I would withdraw that amendment.

The Chair: Thank you. That brings us to section 17 of the bill. Any discussion on section 17 of the bill?

Shall section 17 of the bill carry? Carried.

That brings us to section 18 of the bill. We have a Liberal motion, subsection 18(1).

Mr McClelland: Before I get into it, just by way of explanation, I will be withdrawing (g). I think that's been dealt with on --

The Chair: Wait a second, Mr McClelland, I'm not sure I'm following you.

Mr McClelland: I want to express my thanks to Ms Grannum for her assistance. I'm advised that virtually all of the proposed amendment has been ruled out of order, those clauses dealing specifically with the prescribing of formulas with respect to alcohol prices and occupancy in hotels and seating capacity and so forth. As you will recall, the Ontario Restaurant Association, on both the province-wide and local levels, had some grave concerns, but I'm advised that given the scope of the bill and the limitations, we can't effect those changes.

Clerk of the Committee: You had an alternate motion, the Liberal motion --

Mr McClelland: Yes, there is an alternate Liberal motion counsel has drafted that effectively ties into some of the items that were at least picked up under subsection 6(5). I'd move that now just to give effect to it, recognizing with some consternation that we can't address the I think very legitimate concerns brought to us by the restaurateurs.

I would move that subsection 18(1) of the bill be amended by adding the following clause:

"(a.1) prescribing the method of appointing members to each committee described in subsection 6(5);"

Mr Duignan: That's something we had agreed to.

The Chair: Previously agreed to by the government and the Liberal caucus, and the PC caucus as well? Okay. Shall the amendment carry? Carried.

We have a PC motion, 18(1)(c) and 2(a). Mr Carr or Mr Eves?

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Mr Eves: I would like to withdraw the amendment I have submitted, but I would like to replace it with the following, because I don't think it makes any sense the way it is right now.

The Chair: Do you have it already written out, Mr Eves?

Mr Eves: I just have scribbled it out with my own little hand.

The Chair: Would you be so kind as to read it?

Mr Eves: I can make an attempt.

Clause 18(1)(b.1). I've created an additional clause for 18(1)(b).

I would move clause 18(1)(b.1), which reads as follows:

"Requiring the corporation to pay to municipalities in which a casino is located a specified percentage of the revenue to be paid into the consolidated revenue fund as stipulated in clause 18(1)(b)."

Then clause (2)(a), my amendment would now read:

"The percentage of revenue prescribed for the purposes of clause 18(1)(b.1) shall not exceed 10% of the revenues to be paid into the consolidated revenue fund."

The Chair: I think it would be appropriate at this time to have those copied, Mr Eves, for all the members of the committee. While that is being taken care of, I would suggest that because it is part of section 18 of the bill we move to Liberal motion, section 18.1. I've been advised that it is out of order, because it's restricting taxes and it's beyond the scope of the bill.

Mr Eves: You just saved me a lot of writing, Mr Chairman. If I may offer a comment with respect to the intent of the proposed amendment, it was to ensure that municipalities in which a casino is located, be it Windsor or any other future municipality, would share in the revenue that the province would receive, in some small way. My small way was going to be "not exceeding 10% of the moneys" the province would get, as is done in a lot of other jurisdictions in North America.

The Chair: Well, that motion too is out of order. That brings us wholly to section 18 of the bill, as amended.

Mr McClelland: On a point of order, Mr Chairman: I just wanted to have some brief discussion with respect to the proposed amendment, section 18.1. That amendment would have read:

"(18.1) The cumulative rate of all taxes charged on horse racing in Ontario, including but not limited to parimutuel taxation, shall not exceed, in the aggregate, the rate being charged on casino wagering."

In the wisdom of the clerk and the advice you've been given, that's been ruled out of order. I would therefore only ask that the government members would, through the appropriate channels, submit under the appropriate legislation a like amendment to bring effect to the intent of this legislation, which in short is to put the horse racing industry at least on a level playing field and hopefully give it an opportunity to remain viable and competitive.

In light of the ruling of the Chair and the advice of the clerk, which I accept regretfully, I can only urge my friends in government to do everything they possibly can to ask their cabinet colleagues to move expeditiously to ensure that the horse racing industry is not in jeopardy.

The Chair: I'm sure that's duly noted.

Mr Phillips: On another matter, Mr Chair, just to help me out a little on the percentage of the revenue, 18(2). I assume we haven't yet voted on 18. "The percentage of revenue prescribed for the purposes...shall not exceed 20 per cent." Can someone describe to me what that means? Let me tell you what I think it means and then you help me out. The model that Coopers and Lybrand used was that the win would be 17% or 18% of the bet, if I'm using the right language, and then the government's rakeoff on the win is 20%.

The reason I ask the question is that if down the road we do get into a situation like the one I gather Vegas is in, where the win pot is down to 5% of the bet, you then are looking at the province's take as 1% of the bet. I'd like confirmation of whether I'm right or wrong on those numbers, and then some assurance that the government really wants to get itself in this position here.

Mr Duignan: Clarifying 18(b), this basically allows regulations to be made specifying the amount of win tax to be paid into the CRF, but (2) ensures that it's held to a maximum of 20%, that it's up to 20%. The regulation must be passed before the win tax is due, so it allows the government to go anywhere up to 20% but not exceeding 20%.

Mr Phillips: I understand all of that. My point is, were the numbers I used correct? Does anybody know?

Mr Duignan: I don't think so.

Mr Phillips: Then what were the right numbers?

Mr Mundy: As to this article that everybody's referring to that deals with 95%, with all due respect, there's obviously something missing here. If they're paying back 95% of what's bet, then I'd like to know how the employees are getting paid, how the rent is being paid and how the taxes are being paid. I don't think the suggestion that there's only a 5% win in Las Vegas is what this article is saying, but I'd obviously have to talk to the author on that.

The tax is 20% of the total win. If the win goes down, then it's 20% of a smaller pot. If the win goes up --

Mr Duignan: It's still 20% of whatever the pot is. If the pot's $100 million --

Mr Phillips: I understand completely. I gather that's what the government wants to do, but if, over time, things occur as we think they will, that is, that the win percentage is going to drop -- right now you've got the grandiose scheme of, what, 17% or 18% win, am I right?

Mr Duignan: No.

Mr Phillips: Then what is the number?

Mr Mundy: The win is what's left after the players are paid out. The tax is --

Mr Phillips: I know that. What per cent is the win?

Mr Mundy: The tax is a percentage of that win, whatever it --

Mr Phillips: I know that, but what's the win percentage? What's the plan? Is it 17% or 18%? In the Coopers and Lybrand report, I think 17% or 18% was the number they used. Is that right? Everybody shakes their head. What is the number they used?

The Chair: If you want to participate, you'll have to come to the mike.

Mr Phillips: Who's the expert on this?

Mr Bill Gillies: My name is Bill Gillies, director of communications for the casino project. The win on a given game depends on the game itself. With respect to slots, for example, you have paybacks in the high 90 percents in Las Vegas, 95%, 96%, 97%, the low 90s in other jurisdictions and the high 80s in some other jurisdictions, depending on the competitive pressures. The win on blackjack, offhand, I think is somewhere around 2%; it's very modest. That is the amount in favour of the house.

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The reason the figures are so formidable is that in the course of an evening, obviously, the same amount will be bet repeatedly. Just by way of helping you out, you don't have a number, for example, that you can compare in a casino against the handle at a racetrack. You know how much is bet at a racetrack, but you will never know how much is bet at a casino; you simply can't track the ebb and flow at a given blackjack table back and forth. I offer that as an aside by way of trying to put it in context.

Mr Phillips: The reason I get at it is this: What did the Coopers and Lybrand study, which was funded by the government and designed to give us some economic modelling, use as its win percentage on average for the games? Do you know?

Mr Gillies: I'd have to check the study, but 17% is a new number to me; I'd want to read the study. It strikes me as not correct, but I don't have it in front of me.

Mr Phillips: Does anybody know?

Mr Gillies: If anyone has a Coopers, I'll read it.

Mr Phillips: Okay, I give up.

Mr Duignan: But for the purpose of this act, we're talking about in relation to 20% of the win. Whatever that win is, $100 million or $200 million or $50 million, the province can take up to 20% of that win regardless of what that amount is.

Mr Phillips: Let me give you an example. How does the province determine its take on a horse race?

Mr Duignan: It's 5% of what's wagered.

Mr Phillips: Exactly. Not of what the win pot is, but of what's wagered. Here you are not taking your break on the 20% of the wager; you're taking 20% of the win. I'm just asking, is that a model you want to build into legislation? I gather it is. But if the win pot drifts down -- you guys are the experts, I assume, on what the economic model is, but my memory is that Coopers and Lybrand used something like 17%. That's how they got to the $850 million take by the province.

You've determined that you will be taking the government's share of it not on what's wagered but on what the win pot is. I'm just saying if the win pot drops, like apparently the Las Vegas article says it's dropped, then you are limited to what the province can take by the dropping win pot. That's all.

Mr McClelland: I think the question was asked, how much is it, and somebody said nobody knows. That's the point. I think Mr Phillips raises a very good point, that there is an assumption made that it would be 17%, and I think if Mr Alfieri were here, he would confirm that, that 83% would roll back in, as a point of departure.

But he hastens to add that this number can be changed. The way you do that, because blackjack and others are subject to a fair degree of chance, is that you can statistically, scientifically control the payout on the slot machines. So what happens is that you look at the payout to make it competitive. That's the whole point I think Mr Phillips is raising, that it's 20% of a number, which number is subject to change, which change will be predicated on the competitiveness of the casino in the draw.

In the event of a casino being built stateside and if it offers a greater return to the gambling public, the win pot for the casino will, in all probability, on the evidence submitted, be lowered. The numbers projected are based on -- I don't want to say a best-case scenario, but a scenario that anticipates a 17% win pot. To the extent that that fluctuates, as may or may not happen, the point is that this section says it's 20% of an unknown variable number. That variation, as I understand it, is predicated essentially on the control of slot machines.

I think it's important that the public understand that. Mr Phillips has said, as has Mr Kwinter particularly and others, that this number is thrown out on a scenario predicated on 17%. In fact, it may not be that. My recollection is that we've heard very direct testimony that says that number will change to make the people come and keep rolling the dollars down.

Mr Kwinter: I just wanted to respond to counsel's comment. Before I do that, I just want to state a disclaimer. The article by Gary Becker, who I know by reputation only, was something I happened to come across yesterday by accident. It was in this week's Business Week. I found it interesting and thought it might be interesting to members of the committee.

I have no reason to doubt that a man who has received the Nobel prize is probably not stupid and has probably done his research. I also have no reason to believe that Business Week, a highly respected publication, has checked out its facts. Having said that, it's quite possible that next week there's a letter to the editor from somebody saying, "With all due respect to Mr Becker, he has made a mistake."

The point I am trying to make is this. There are two very significant figures in his article. One is that in Las Vegas, competition has forced them to pay out 95% of the amount wagered. The question has been raised that that can't be the right figure, because how do you pay for everything else out of the 5%? The way you pay for everything out of the other 5% is quite simple.

Go back to the beginning of the article. Just for comparison's sake, under the model as proposed by the government for the Windsor casino, they say that 20% of the win is going to be somewhere between $110 million and $140 million; those are the figures given in the economic projections by the government. If you look at this article, and again I can only take it at face value, Mr Becker states that Nevada receives or earns or collects $200 million a year from its casinos.

When you compare Nevada to the projected casino in Windsor, I would say it would be on a magnitude of 1 to 100. Las Vegas has got to have a gambling facility that is at least 100 times bigger than what is contemplated in Windsor, and the total take by the state is $200 million a year.

When you go to Atlantic City, and the article talks about New Jersey, its take is $314 million a year. Again, compare that with the projections the government of Ontario is anticipating, that its 20% share of the win is going to be between $110 million and $140 million, and that is where the difference lies.

The 5% we're talking about in Las Vegas is a huge number. It's a huge number because there is relatively little being taken out of the total pot by the state. Again, I can only take it at face value: It states in the article that it's $200 million.

That is the issue, and it just keeps piling up the concerns I have about this particular model. They're carving up a pie that hasn't been baked and has every possibility of not even getting the ingredients to be able to start to cook it. It just doesn't make any economic sense because you're in a competitive environment, and if you think you can operate in isolation, if you think we can do it our way because this is the way we want it and not deal with the reality of what the competitive situation is out there, then we have some real problems.

The Chair: Is there any further discussion on section 18 of the bill?

Shall section 18 of the bill, as amended, carry? Carried.

That brings us to section 19 of the bill. The government has some motions with regard to section 19 of the bill. Mr Duignan.

Mr Duignan: I move that section 19 of the bill be amended by adding the following subsection:

"Acquisition of land

"(1.1.) The corporation of the city of Windsor may acquire lands in the casino area for a casino and related businesses."

Basically, the purpose of this amendment is to give the city of Windsor greater certainty in its power to acquire in the casino area. It is the position of the government that Windsor already has the authority to acquire such lands, but this gives it the necessary legislative certainty.

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Mr McClelland: Let's cut to the chase on this one quickly. I've had some discussion with officials from the city of Windsor as a result of my expression of concern on this particular amendment. I might add that word got back to them very quickly that I was concerned about this amendment.

The parliamentary assistant says it gives greater certainty to the city for power it already has. I'll tell you the flip side of that, and I want to state very, very clearly on the record my impression of what the flip side is.

The flip side to me is that it removes the potential remedy of an individual and it effectively bars, takes away from pleading a point of reference for a potential litigant. I think it's unwise to get into too many specifics, but I have to ask. It gives a specific power to the city of Windsor for this project to effectively, and I may not be precise in terms of my language, challenge with greater certainty a remedy that an individual may put forward. If the city already has the authority, I would say to the parliamentary assistant, let the city proceed accordingly under the law as it exists.

I'm not passing judgement, and I want to make that abundantly clear. Regardless of how frivolous or vexatious any claim may be or any defence to an undertaking by a city, the power of the state is significant. It seems to me that of all governments, this government would never, in the past, have considered using the heavy hand of government to override a legal remedy potentially available to an individual.

I understand, or I think I do, the potential downside consequences. I don't say this lightly, but when a government starts to say that rights in law of individuals, because they happen to stand in the way, are to be put aside, I think we are on a very slippery slope. I will say to you that philosophically, I cannot in good conscience support this amendment. Apart from the practical implementation and impact that it may or may not have in the city of Windsor, I want to make it abundantly clear that I think the traditions and the rights that individuals have acquired over the evolution of common law, statutory rights that have been given individuals, thoughtfully and carefully and that have evolved, cannot be put aside for the sake of a project with -- I say this candidly -- the stroke of a pen and the raising of hands my friends in government would seek to do today.

I think it is a very serious matter when a government says, "The citizens of Ontario be damned because we don't agree with you or you may cause us some difficulty." As I said, if it's frivolous or vexatious, allow the court to so determine and exercise the remedy of costs, as appropriately rendered by a competent court or tribunal, to exercise that authority vested in them to deal with those kinds of claims.

I'm not speaking on behalf of my colleagues, but I personally will not support an amendment, notwithstanding the fact that my Liberal friends in Windsor, and I'm saying this candidly, have urged me, because the government saw fit to advise them that I would be opposing this.

I don't think you can put expediency on the scale with fundamental rights and allow expediency to win. I can't say it any more plainly than that. It may be an issue that causes some difficulty, and yes, it may cost some money, and yes, it may cause some delays, but I want to say that's a small price to pay for democracy. I am not trying to raise this to some sort of esoteric rhetoric. I feel very, very strongly that the power of the state against an individual in a specific case has to be -- I don't even want to say "cautiously." I just think you're on such a dangerous, dangerous slippery slope when you begin to do that. The rhetoric that I think would appropriately describe it would I'm sure be seen as being confrontational or inflammatory, so I hesitate to really expand on it because I'm sure it would be seen in that light.

You don't have to look too far, either historically or geographically, to see where governments say, "Well, it's okay, because this situation requires drastic measures," and then it becomes easier and easier for governments to justify the overriding of fundamental legal rights.

Again I say, apart from the practicality of it, that the principle involved herein is of such significance, in my view, that I will vote against this, and I will do my best to make it an issue both in terms of this committee and subsequently in the House, as required.

I'm somewhat constrained, I think, because of the specifics of the case, or the potential case, involved, and the circumstances. I'm trying to be careful and circumspect in my comments because of that. I think it's incumbent on us not to delve into that too specifically. I think most members of this committee know of what I speak; certainly the government members. I know the parliamentary assistant knows exactly of what I speak. The day we begin to do that is a day I will sorely regret.

I can tell you this: I can say with virtual assurance that every member of the government party would have been outraged and screaming, and the leader of this government, who would chain himself to a tree because he believed in people's rights, I think would be outraged and extremely indignant if this had been done at any other time or place. I think this is a sleeper, if you will, in this particular bill because of the principle involved.

Mr Lessard: On behalf of the interests of the city of Windsor, I think this amendment is crucial towards the city having the ability to take advantage of this opportunity. I feel that without this amendment it really could scuttle the ability of the city and the province and the bidders we've entered into negotiations with to operate the casino to actually have a place in which to operate the business. I would like to hear from someone from Municipal Affairs, if there's somebody here, who could speak to a municipality's ability to expropriate lands, because they already have the ability, as far as I understand, to expropriate lands, and that is an infringement of the rights of an individual, which is Mr McClelland's concern. However, municipalities do have that ability to expropriate lands, and the price is determined at a hearing if there's some dispute about what the value may be.

The legislation sets the value of the properties in the casino area at January 1, 1993. I think this amendment really gives the municipality the ability to expropriate lands for this particular purpose -- that is, a casino -- which may not be clear in any other legislation with respect to municipal powers.

If there's somebody here from Municipal Affairs who might be able to explain the rights of municipalities to expropriate --

Mr Duignan: I understand legal counsel from Municipal Affairs is here, Linda Perron. She can speak in general in relation to that, but not to Windsor specifically.

The Chair: Please go ahead.

Mr Linda Perron: My name is Linda Perron and I'm counsel with Municipal Affairs. To specifically respond to Mr Lessard's question, there is a provision in the Municipal Act which says that any power that's conferred on a municipality to acquire land, either in the Municipal Act or in any other act, includes the power to acquire by purchase or by expropriation. I realize it's a very narrow technical point I'm raising, but I think it goes some distance in answering your question about the power to expropriate. This provision refers to the power to acquire, but that in itself would refer back to section 5 of the Municipal Act and include the power to expropriate.

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Mr McClelland: As a point of information, I believe what Ms Perron just provided for that is section 5 of the act, just for future reference?

Ms Perron: Of the Municipal Act.

Mr McClelland: Thank you kindly, Ms Perron.

The Chair: Do you have further questions, Mr McClelland?

Mr McClelland: Yes, there is one comment that my colleague Mr Lessard raised. I'll put this in my own vernacular, Mr Lessard, with your indulgence.

I think what Mr Lessard said was that his understanding is, and it has been confirmed by counsel, that there's a provision under the Municipal Act for a city to proceed, so we're really just doing again what we already have.

I guess it's like saying, "I think I'm going to win this one, but in case I don't, I want to change the rules to make sure I'm going to win." That's putting it in very vernacular street language. It's like walking into a venture saying: "Let's do two out of three, and if I lose, let's make it three out of five, or let's make it four out of seven, until the numbers come my way or the results come out my way. We'll go into extra innings and we'll add on another inning, and we'll finish when my team is ahead. We'll change the rules to ensure that happens and that we win. Just in case we don't win, let's make sure we have a provision in the rules, but let's just carry on until we win."

Boy, oh, boy, when a government starts doing that, that tells me an awful lot about where the government's at in terms of its priorities: people and fundamental rights as opposed to their agenda. In my view, no government, I don't care whether it's Conservative, Liberal, New Democrat or whatever, has the right to make that kind of decision.

I say this: People literally fought and died to make sure that governments are very, very circumspect in terms of using the power of the state to override the rights of the individual. If we have embodied rights for the individual and if it doesn't go our way, so be it. If we have the confidence, the strength of our arguments, the strength of our case and the appropriateness of it and an independent quasi-judicial body to make the ruling, let them make the ruling. Let the games begin, if you will, or the war begin, but let it be fair.

Mr Kwinter: Although I'm in danger of being seen to be beating a dead horse, this particular section, section 19, brings forward even more dramatically the concerns I had under section 16. It talks about, "In this section, `casino area' means the land in the city of Windsor bounded by Riverside Drive East, McDougall Avenue, University Avenue East and Glengarry Avenue."

When we talk about "casino area," that defines the geographic location; it does not define the terms. So in order to define the term, you've got to go back to section 1, and it says what a casino is. A casino means "a place which is kept for the purpose of playing games of chance," and under this particular provision, it describes the area as being those four streets. I don't know how large an area that is, but it is very much larger than the casino area in the casino.

As a result, it is quite conceivable that the interpretation of the casino area is as provided under section 19 is that the casino area is that section bounded by those four streets in Windsor. It would seem to me that if the position of the government is -- as it obviously is, because my suggestion was not taken up -- that the casino is adequately defined under the act, then I would suggest that "casino area" has to be changed, because how you are going to say, "Well, the casino area in the casino is this, but the casino area outside the casino area is this"? The casino area cannot be the casino area that is defined by the streets if it's also defining the casino area inside the casino complex. It would seem to me that there would have to be an amendment either that it's the "casino project area" -- there has to be some clear definition of what we are talking about, because all you're talking about is "casino area," and the only definition for that casino area --

Interjection.

Mr Kwinter: No, no. I'm talking about subsection 19(1). Subsection 19(1) says that "`casino area' means the land in the city of Windsor" defined by those particular streets. My question is, how do you differentiate between the casino area in the casino complex and the casino area as outlined by the geographic streets? There has to be some clarification so that one is not interchanged with the other. Otherwise, a casino is whatever is bounded by those streets, because it has been defined in the act as the casino area.

The Chair: I would just like to add that we at this point in time have asked Mr Wood, counsel, to draft a definition that we would deal with later. I don't know if that's going to solve your concerns, Mr Kwinter.

Mr Duignan: No, I don't think so, Mr Chair. This is part II of the act and it reads: "In this section" -- we're referring to part II of the bill -- "`casino area' means the land in the city of Windsor" etc. It refers only to this particular section, part II of the act.

The Chair: Does that, Mr Kwinter, help you in any way with regard to the casino area being in the bill only in part II, in section 19? As I read it, "casino area" has a specific definition in this part of the bill that isn't applicable to the rest of the bill. Would that not be correct?

Ms Korey: That certainly was our intention, according to legislative counsel, and I believe this to be true, that it is clear that it is only in section 19 that "casino area" is defined in the way you've read out, Mr Kwinter. In fact, the definition of "casino" isn't imported into the definition of "casino area" specifically designated for section 19.

The Chair: In the very beginning, Mr Kwinter, if I may, you did suggest you didn't want to beat a dead horse. Is that satisfactory at this point in time?

Mr Kwinter: If I may just make one final comment, I'd be a lot happier if it was called the "project area" as opposed to the "casino area," but be it as it may, I take your point.

The Chair: Thank you. We are dealing with a government motion, subsection 19(1.1). Mr McClelland.

Mr McClelland: A question to the parliamentary assistant, if I might. Mr Duignan, I recall, and correct me if I'm wrong -- and this is tough; I don't have the record in front of me. I recall an individual appearing before the committee in Windsor. I think he was a proponent of bicycles and had an issue with respect to a heritage building and so forth. I believe that at that time you were asked a question -- and I'll check the record; as I say, this is just in a speculative nature; I'm not saying this is so. But my recollection is that you were asked by that individual, or somebody asked, would people still have the normal rights and remedies, opportunities, under the Municipal Act, Planning Act and so forth? You responded in the affirmative. You said: "Absolutely. There's no intent of the government to change any of that or take anything away."

I'd ask you if that in fact is correct, and maybe you'll want to search your mind for the answer to that, because it seems to me that what you're doing now is in complete contravention of that response given to that individual, if I recall correctly. I think what you're doing here is you're saying, "We want to, if necessary, circumvent the Municipal Act and circumvent the Planning Act." It seems to me very clearly that that was a question put to you and you answered, "No, that won't happen," and in fact said in the affirmative, "You will still have all remedies available to you." I have to ask you: Do you think that commitment made by you on behalf of the government stands, in light of your proposed amendment?

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I'd ask this last question of government members. If it was in your own particular riding, regardless of the advisability of a project, just suppose it was a large developer, people who aren't necessarily the allies of your particular government -- I think I can say that -- and they were trying to assemble property. We've had the classic case, and it does happen, where there's one property owner who's holding out. He or she says, "This is my family home, my kids were born here and I want to die here." It's the classic scenario you see on ABC Sunday night movies, where some elderly woman or widow farm person, farm wife --

Mr Duignan: The Waltons.

Mr McClelland: Yes, that's the kind of drama that's often involved. But let's talk about that realistically. Those kinds of things happen. You know what happens? Developers tough it out. They wait and negotiate. They deal with it through the courts or they go to city council and city council deals with it. They make those political decisions.

An individual may, from our perspective and our judgemental point of view, be being silly. You might say, "That's crazy." If it was me, they might say: "McClelland, you're being offered millions of dollars for a house that's worth a quarter of that so the developer can proceed. You're absolutely insane. You got mad and you're holding out."

You know what? We tend to sometimes hold those people up as heroes, in a sense. We say: "Good for you. You're not going to be sold out. You're holding out. I think you're nuts, but you're doing it." They become folk heroes in their own particular way. I'm telling you that most of you and most of your colleagues would fight like hell for those individuals. The principle is the same. It's the same principle.

Mr Duignan: In response to your first question, I would have to check Hansard. I believe the answer was correct, but I'm not too sure about the question. I will indeed check Hansard on that.

Mr McClelland: Thank you.

Mr Carr: I have a question for Ms Perron. I should let her know, because she probably doesn't know, that I'm not a lawyer. You said under the Municipal Act you essentially have the same powers as here. Would I be wrong in assuming that in terms of time, though, to take it through the process of the Municipal Act, it would take longer than it would to have it in this act, the various, how shall I say, checks and balances that are there to go through? What I'm getting at, is this really just an issue of timing? The authority is there but you want to rush it because we want a casino quickly, as opposed to having to wait to go through. Would I be wrong in making that assumption?

Ms Perron: Going back to my earlier answer, I referred to section 5 to make it clear that a provision such as we have in this bill, which would give the authority to acquire, would include the authority to expropriate. But it does not in any way modify the expropriation process itself under the Expropriations Act.

Mr Carr: Forgive me, but what you've just said is that this makes the timing easier, if this motion is passed, in terms of negotiations. What it really comes down to, in my mind, is timing. You can go through the process the regular Municipal Act, but the time it would take would be longer.

Forgive me for cutting through. I'm talking more like an ordinary citizen than a lawyer, but I see this motion as basically allowing them to do it quickly because they want to get the casino running, so they're prepared to override the normal process to get it done quickly because they want it by January of this year.

Ms Perron: The purpose of the provision is to give the authority to acquire. It's not changing the acquisition process, which would include the regulated timing for the process that the process has to follow. It's a matter of authority and not timing.

Mr Carr: But you know what I'm getting at in terms of authority, the timing with the checks and balances and the amount of time on appeals and so on. It is the timing issue, essentially. I know you're talking from a legal standpoint, so you don't talk about time.

Ms Perron: But I do want to make it clear that it's not altering the expropriation process itself in any way, the authority that's being given for that purpose.

Mr Carr: To cut through what this amendment basically does, it allows allow them to speed up the process and to have a bigger --

Mr Lessard: She didn't say that. She said we still have to go through the expropriation process.

Ms Perron: What the provision is doing is making it very clear that the city of Windsor is given the authority to acquire the lands. In the absence of that provision, the city of Windsor would be relying on a redevelopment plan which covers the subject lands, and that authority in part exists through transition provisions in the Planning Act that carry forward provisions from the old Planning Act that pre-dates the 1983 legislation. This is the question, of the authority being specific in this bill so that you don't have to rely on the Planning Act provisions.

Mr Carr: Are there more appeal processes through the Planning Act provisions?

Ms Perron: No, there isn't.

Mr Carr: Then taking it back, having this in the legislation will not make it any faster for Windsor to acquire land, in your opinion.

Ms Perron: That's correct.

Mr Carr: Not being a lawyer, I thought it was that process. What this does, though, in terms of negotiations with any potential people who acquire land, is that it now gives you two remedies, one through the original, plus through this motion. You now have two ways --

Ms Perron: Two defences.

Mr Carr: Defences in legal terms. Let's put this bluntly: In terms of winning, this tips the scales. From the legal standpoint, this makes it more favourable for Windsor than it would be without, right?

Ms Perron: I'm not familiar with the details of the case you're referring to, and it's impossible for me to assess the relative weight of the arguments.

Mr Carr: Lawyers sometimes are more evasive than even politicians, and I don't say that negatively, because I know how they think; they think logically.

Mr Sutherland: Where do you think Ernie and Carman got their start?

Mr Carr: If you wanted to put it in my background, in hockey, basically what you've said to the other team is, "The score is five to nothing and there's three minutes left in the game." You give them a big advantage. I appreciate your answer; you were helpful, by the way, for going through that.

Let's make this perfectly clear. This amendment gives them more weight in dealing with the people. I suspect the government on numerous occasions would talk about defending the rights of individuals. To stack it like this, I certainly can never support it, although I'm not surprised. When it comes to other areas of property rights entrenched in the Constitution, to be political for a minute, it has always been the NDP that has fought that because of the belief that expropriating for the better good is always important. I appreciate the clarification from a legal sense, but I won't be supporting this motion.

Mr Lessard: I just want to address Mr Carr's comments, because the answer he got from the lawyer was that it doesn't speed up the process; the expropriation process has to be followed. The way I understand it, this really just clarifies that the city is able to expropriate this property for the purpose that's in that section, ie, for a casino to be operated in that area.

You're talking about the Planning Act as it existed before, and in fact any legislation we've had before in any legal cases would never have referred to expropriating lands for casinos as a municipal purpose. We've never had them here, so this really just provides some clarity that, in this case, expropriating lands for the purposes of having a casino located in there could be a municipal purpose, because municipalities do have the right to expropriate property for municipal purposes as it stands now. If that is correct, you can let me know; if it's not, you can clarify whatever misunderstanding I might have.

Ms Perron: You are correct in stating that a municipality can only expropriate land for municipal purposes, but as I mentioned earlier, we are dealing with lands that are within a redevelopment area. Within that context, a municipality is not limited in its acquisitions or expropriations to deals with lands that pertain only to municipal purposes; it opens it up considerably, so that the objects of the redevelopment plan can be pursued and hopefully achieved. The normal limitations that you have on the municipal acquisition of land do not operate in a redevelopment context. That's why they're given the authority to acquire the lands, to redevelop, reconstruct, demolish, sell or lease lands. It's all to achieve the purposes that are set out in a redevelopment plan.

Mr Lessard: So this is actually providing more restrictions on the city in the redevelopment area. This says they can only do it in this redevelopment area for casino purposes and for no other purpose.

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Ms Perron: The two provisions would be working parallel. One does not necessarily override the other, but what it does do, once the municipality establishes a plan approved by the minister, is to broaden its powers for that position.

Mr Carr: I wanted to make two points. First, I think you said that under the Municipal Act it has words to the effect of "may acquire and expropriate." We have "acquire" and not "expropriate" in this motion. What's the reason?

Ms Perron: Section 5, and I can provide you with copies, specifically reads as follows:

"Where power to acquire land is conferred upon a municipal corporation by this or any other act," this would be another piece of legislation, "unless otherwise expressly provided, it includes the power to acquire by purchase or otherwise and to enter on and expropriate." Unless our legislation exempted the municipality or took away the power to expropriate, that would be the only way to override section 5. Section 5 makes it clear you have the power to acquire; you have the power to expropriate unless the subsequent legislation takes away the power to expropriate.

Mr Carr: If somebody owned land in there, would one of the arguments of the lawyers be that without this in here, under the Municipal Act they wouldn't be able to expropriate because it wasn't for municipal purposes?

Ms Perron: That's correct, and that's why --

Mr Carr: And there is a good legal argument for that, right?

Ms Perron: That this is not a municipal purpose? That's correct, but it is permitted in a redevelopment plan context. This is what we're dealing with with those lands.

Mr Carr: Let me ask you something else. Again, my background isn't even in municipal politics so I'm an absolute rookie in that area as well. In municipal politics, you learn a little about a lot of the laws that pertain to it, so I'm not familiar. In other words, the city is going to have to potentially do it under a redevelopment.

Ms Perron: There is a redevelopment plan in place.

Mr Carr: It's already been approved?

Ms Perron: Oh yes, a long-standing one.

Mr Carr: Do you know if there are any challenges to that right now?

Ms Perron: To the redevelopment plan? I'm not aware of any.

Mr Carr: So things haven't gone to the OMB?

Ms Perron: No. This redevelopment plan actually predates the 1983 Planning Act, and that is why the city is putting some reliance on the transition provisions of the Planning Act to carry forward the plan to the new legislation.

Mr Carr: In your legal opinion, not from the political, then why does the government need this motion?

Ms Perron: I think that is something the parliamentary assistant should be responding to.

Mr Carr: Okay, because he's a better lawyer than you are. That's why I said "legal," but I think I understand the answer: There is no legal, and ask the parliamentary assistant. But you get what I'm getting at. Actually, I watch Perry Mason, and I wouldn't be a bad lawyer; I think I got to the bottom of that pretty good. Now you know what I do at 12:30 at night, watch the Perry Mason reruns.

Coming here, I know you do get put on the spot, but I appreciate your help in getting through this.

Mr Parliamentary Assistant, what's your legal opinion for this? I know you're not a lawyer either.

Mr Duignan: That's why we have high-priced legal help.

Mr Carr: Essentially, that's the question, and forgive me if I'm putting words in her mouth, because she didn't, she just passed it over. But I asked her a very simple question, "Legally, why do we need to do this?" and she said to ask the parliamentary assistant. That, to me, means there is no legal reason. I guess it falls back to the political side of it, because we don't want to keep Ms Perron on the hot seat. Why is this being introduced then, Mr Parliamentary Assistant, if through the legal process it's already there to do it?

The Chair: Mr Lessard is anxious to respond to what you've said, Mr Carr, then we'll come to Mr Duignan.

Mr Lessard: I just want to respond to that and indicate that the city of Windsor does have a very competent legal staff and the provisions of Bill 8 were considered by the legal staff and by the city council at the city of Windsor. I'm referring to a letter that's dated May 27 that came from the city administrator, Hilary Payne, which indicates that council did consider a draft of Bill 8 and, in its comments to the draft, it points out:

"Part 2, subsection 3 of the bill deals with the powers provided to the city of Windsor in regard to the casino site. The section does not provide the city with the power to acquire the lands and it would be desirable if this power was included in the legislation. This would strengthen the city's hand in any litigation regarding the acquisition to the property."

If you ask why it is that the government is proposing this amendment, it is to deal with the request of the council of the city of Windsor.

The Chair: Mr Duignan, you wanted to add something.

Mr Duignan: I think Mr Lessard has said what I was going to say. But it also gives the city of Windsor greater certainty in its power to acquire land and also gives us legislative certainty as well.

Mr McClelland: Well, the parliamentary assistant has just said it. What happened here in a scenario like this: "Can we win this? Probably. Can you guarantee it? No. Well, let's strengthen our hand to make sure we've got to win."

Again, parliamentary assistant and my friends opposite, you cannot escape the principle involved here. You're saying, "If it might not go our way, let's make damned sure it will go our way, and the casino is more important than people's rights." That's the bottom line. You can try and dance out of it any way you want but at the end of the day, if you support this, you're saying that this project is more important than people and people's rights and more important than the legal remedies that those individuals have. You'll circumvent the law, the Municipal Act, the Planning Act or the Ontario Heritage Act or whatever you need to do to get your way, and as to consultation processes, "If you don't agree us, get out of our way because we'll blow you out of the way."

Mr Sutherland: One minute you're complaining we're not doing what the city asks and the next minute you're complaining when we are.

The Chair: Any further debate or comments on government motion subsection 19(1.1)? Seeing none, I suspect that a recorded vote will be requested.

All those in favour of the government motion, subsection 19(1.1)?

Ayes

Duignan, Lessard, Martin, Mathyssen, Sutherland.

The Chair: All those opposed?

Nays

Carr, Eves, Kwinter, McClelland, Phillips (Scarborough-Agincourt).

The Chair: The motion is lost.

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Mr Duignan: I was wondering on what grounds the motion is lost, Mr Chair.

The Chair: Because the Chair did not support the motion, Mr Duignan. It's not debatable. Would you like the Chair to give you an explanation?

Mr Duignan: No. I accept the ruling of the Chair.

The Chair: That brings us to government motion, clause 19(3)(a).

Mr Duignan: I wish to stand this clause down.

The Chair: That brings us to government motion, subsection 19(4).

Mr Duignan: I wish to stand down this subsection.

The Chair: You must first move the motion.

Mr Duignan: I was just wondering, Mr Chair, I notice that we have new wording in subsection 14(1). I wonder if we can go back to that.

The Chair: Sure we can. We will return to PC motion, section 14, but I must ask Mr Eves to withdraw PC motion, section 15.1.

Mr Eves: I'll be pleased to withdraw my proposed motion to introduce section 15.1.

The Chair: Do we have unanimous consent to go back to section 14 of the bill? It would appear so. Mr Eves, would you read your motion on section 14 into the record, please.

Mr Eves: I would like to thank both counsel for the ministry and especially counsel to the committee for redrafting and expressing this in far better legalese than I could ever have dreamt of drafting.

I move that section 14 of the bill be amended by adding the following subsections:

"Access to other records

"(5) The corporation shall ensure that any person with whom it has entered into a contract to provide for the operation of a casino or a related business shall make available immediately to the corporation all reports, accounts, records and other documents in respect of the operation of the casino and the related business.

"Provincial Auditor

"(6) The reports, accounts, records and other documents described in subsection (5) shall be deemed to form part of the accounts of the corporation for the purpose of the Audit Act."

The Chair: I understand that we did have some discussion about this amendment. Is there any further discussion at this point?

Mr Eves: Just very briefly. As I said before when we were talking about the other section, which I've withdrawn, the purpose of this is just simply to make sure that the Provincial Auditor has the same access to the records of the company or individual operating the casino or a related business that he would have with a crown agency, so that the Provincial Auditor will be able to look into the affairs of the operation of the casino and such related businesses. That was the purpose. It wasn't very well stated in my original proposal, but I'm advised now that we've probably achieved that goal.

The Chair: Any further discussion?

Ms Korey: Just for clarification, I believe I heard you say that it would be that the Provincial Auditor had the same rights to look into the transactions or accounts of a business with whom the Ontario Casino Corp does business. I just want to clarify that it's with respect to the operation of the casino or any other business.

Mr Eves: Absolutely.

Ms Korey: It's just that you didn't say that.

Mr Eves: You're quite correct.

The Chair: Seeing that there's no further discussion, shall the PC motion, section 14, carry? Carried.

Shall section 14, as amended, carry? Carried.

We are back now to government motion, clause 19(3)(a). As I was explaining to Mr Duignan, he must move the motion first before he can stand it down, if that's what he chooses to do, or not deal with it at all, for that matter.

Mr Duignan: I wonder if we could deal with the Progressive Conservative motion under section 19.1.

The Chair: Okay. We're going to move then to PC motion, section 19.1.

Mr Eves: The government is not proceeding at this time with the other 19 amendment?

The Chair: That's right.

Mr Eves: The parliamentary assistant may or may not want to answer, but with respect to section 19.1 that the government was going to propose about the interim casino, could somebody explain to me, in as simple terms as possible, what that amendment does or purports to do, because it may or may not have the support of opposition members.

Mr Duignan: Basically, section 19.1 defines the interim casino areas; it basically is the legal description of the Windsor art gallery location. It also provides for proper zoning for a casino in that area in the same manner as for the casino area. It also provides that the minister responsible for the administration of the Ontario Casino Corporation Act can set a final date for the zoning exemption for the interim casino area.

The Chair: Mr Eves, any further comments?

Mr Eves: Perhaps we should continue on without the government's amendments at this point in time.

The Chair: When Mr Duignan returns, I'll get confirmation from him as to what he would like to do with the rest of the government amendments.

Mr Eves: I gather that the problem is that obviously the city of Windsor hasn't preplanned an interim casino and thus its zoning, as it currently exists, would not permit -- am I correct or incorrect? -- an interim casino site or a casino site of any kind.

Ms Korey: That is my understanding, though I haven't seen their zoning bylaw.

Mr Eves: So they find themselves in a bit of a quandary, especially with respect to the interim casino, if they want to proceed with it in fairly rapid order.

Ms Korey: That's correct.

Mr Sutherland: Mr Chair, I suggest a short recess.

The Chair: I think that's probably not a bad idea at this point in time.

Mr Sutherland: We'll say up to 10 minutes, maybe sooner.

The Chair: Mr McClelland, you had something to say before we recess?

Mr McClelland: Yes, briefly. It seems to me that of the remainder of the government motions, and I may be getting a little bit ahead of myself here, none of them -- I'll speak for ourselves -- are particularly contentious. They are things that, if I understand them, basically harmonize Bill 26 with Bill 8. There may be one or two comments only on two of the amendments. I just want to indicate, if it's of some help, that from our point of view I think that will go through relatively smoothly. I see only one or two brief comments, just by way of clarification, and I think it's just a matter of harmonizing Bill 26 with the casino.

The Chair: That information is appreciated by all the committee members.

Mr McClelland: I think that might be worthwhile, just as we anticipate -- I'm sure we all have personal lives and other things on our agendas.

Mr Eves: I would agree, Mr Chairman. I think that once we get past any proposed amendments to section 19 -- or additional 19 sections, I should say -- I think it's relatively clear sailing from there on in, so to speak.

The Chair: The Chair appreciates that information.

We will take a recess for 10 minutes, and then we will proceed expeditiously, no doubt.

The committee recessed from 1611 to 1630.

The Chair: The committee will come to order. At this point, we're going to move back to section 1 of the bill, but before we can do that, we need unanimous consent. Do we have that? Agreed.

Actually, we've had considerable discussion about this section of the bill. It's a Liberal motion to section 1. Mr Kwinter, are you going to deal with this? This is your baby.

Mr Kwinter: Yes. I move that section 1 of the bill be amended by striking out the definition of "casino" and substituting the following:

"`casino' means a place which is kept for the purpose of playing or operating games of chance, but does not include those parts of a facility where games of chance are played that are not used for the purposes of playing or operating games of chance; (`casino')"

The Chair: I may be presumptuous in saying this, but I understand we've had considerable discussion about this and I think all the members of the committee are in agreement with this amendment. If I'm not correct, I stand to be corrected at this point in time. Therefore, I will ask, shall the motion carry? Carried.

Shall section 1, as further amended, carry? Carried.

Mr Kwinter: May I just thank both counsel for the opposition and counsel for the government for their help in drafting this agreement?

The Chair: Indeed; thank you, Mr Kwinter. I would like to ask Mr Duignan what his intentions are with regard to section 19.

Mr Duignan: I'd like to stand down section 19 at this time.

The Chair: You'd like to postpone further consideration of section 19 of the bill?

Mr Duignan: That's correct.

The Chair: In that case, we will move directly to Mr Eves. I believe just before we took our recess we were dealing with PC motion 19.1.

Mr Eves: I move that the bill be amended by adding the following section:

"Police report

"19.1(1) Within sixty days following each year of operation of a casino in the casino area, the police services board of the city of Windsor shall complete a report on the effect of the operation of the casino on policing and crime in the city and file the report with the Solicitor General and Minister of Correctional Services.

"(2) The Solicitor General and Minister of Correctional Services shall lay the report before the assembly, which shall refer it to a standing committee of the assembly."

The Chair: An explanation, Mr Eves?

Mr Eves: Basically, I think we've heard quite demonstratively from the chief of police in the city of Windsor, and other witnesses as well, there is a great deal of uncertainty, depending on who you listen to, about what the impact on law enforcement is going to be in the city of Windsor. We just thought that if there was some mechanism whereby the police services board could make this report available on an annual basis to the Legislative Assembly, then at least we'd have the opportunity to look at it and be aware of the situation, I guess is the best way of putting it.

The Chair: Any discussion?

Mr Duignan: Very briefly, we can't support this motion. I thought we had an agreement that one of the reasons we amended 6(5), (6), (7) and (8) was that the independent committee would be reviewing the social, economic and law enforcement consequences of the operation of the casino in Windsor.

Mr McClelland: I understand exactly what Mr Eves is suggesting, that there be a specific and focused look at policing impact, because that was certainly one of the more consistent concerns raised. Accordingly, I understand full well and support the rationale and the intent of Mr Eves's amendment.

Mr Eves: I understand what the parliamentary assistant is saying. The only difficulty I have with section 6 as it's now amended is that it's rather a permissive piece of legislation as opposed to one that ensures that there is a report filed with the assembly every year.

Mr McClelland: It's very general.

Mr Eves: It's an advisory committee, and the powers of the committee in subsection (7) as I read it are quite generalized, as Mr McClelland points out.

The Chair: Any further discussion?

Mr Sutherland: I may be wrong. It's my understanding that most police services boards have to file an annual report anyway. Obviously, in Windsor the police services board will comment on the law enforcement issues with that, and if any member of the Legislature wanted, I'm sure the Windsor Police Services Board would give you a copy of its annual report outlining any concerns it has.

I don't see why we need to add an extra reporting mechanism here and put this extra onus on the Windsor Police Services Board. I'm sure they'll be issuing lots of reports that will be public anyway.

Mr Eves: Actually, I'm glad Mr Sutherland has pointed that out, because it highlights the difficulty that the opposition had obtaining a copy of a report of the Windsor Police Services Board. It's one of the reasons why the Legislature sat until August 3, until finally the minister and the police services board in Windsor acquiesced to the request that a copy of a certain report be made available to the Legislative Assembly. It's exactly the point that this amendment addresses.

Mr McClelland: If one were very cynical, one would speculate that if things didn't exactly go as the government had hoped, if in fact they're worse even than predicted, in fear of being told, "I told you so," by people such as the police chief, that report may not be approved for distribution and for circulation.

Mr Sutherland: Do you think I'm saying that? Give me a break.

Mr McClelland: Quite frankly, Mr Sutherland walked right into it and made the point exactly. That's exactly why that amendment was put forward, because if you people don't like what you see, I doubt if it's going to see the light of day until you're long gone.

Mr Kwinter: I'd like to speak in support of this motion. The interim casino is being advocated as a pilot project by the government to evaluate casinos and their impact on the community from every aspect: from the economics, the sociological, the crime statistics, things of that kind. As a result, everybody will be watching this with great interest.

It would seem to me that if we put into the legislation the requirement that the city of Windsor must file a report, not just in its general report of the police services board but a specific report on its experience with the casino, this would be a valuable document to be used, not only in evaluating the efficacy of having a casino, but also, if it is the opinion of the government that it's going to expand casinos to other areas of the province, then this would be a document that would be of great use to those other police forces in whatever municipality other casinos will be opened.

If in fact the intent of the interim casino is to evaluate the various aspects of the casino operation, it would seem incumbent upon us to make sure that a specific report on the impact on the criminal activity in Windsor be tabled in a separate report, that it be made available to -- under the provisions of the proposed amendment I think it's the Solicitor General and someone else.

Mr McClelland: The Minister of Correctional Services.

Mr Kwinter: The minister of corrections. I would strongly recommend that we support this particular amendment.

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The Chair: Any further discussion? Seeing none, presuming again that a recorded vote is requested here, all those in favour of the motion?

Ayes

Carr, Eves, Kwinter, McClelland, Phillips (Scarborough-Agincourt).

The Chair: All those opposed?

Nays

Duignan, Lessard, Martin, Sutherland, Mathyssen.

The Chair: The motion is lost. Mr Duignan has informed me that we also have a government motion, section 19.1, which he would like to read into the record.

Mr Duignan: I move that the bill be amended by adding the following section:

"Interim casino area

"19.1(1) In this section, `interim casino area' means the land in the city of Windsor designated as parts 1, 2, 3, 4, 5, 7 and 8 on plan 12R-2300 deposited in the land registry office for the registry division of Essex (No. 12).

"Permitted land use

"(2) Despite any official plan adopted under section 17 of the Planning Act, any zoning bylaw passed under section 34 of that act or any interim control bylaw passed under section 38 of that act, the operation of a casino is a permitted land use in the interim casino area until the date prescribed by the minister responsible for the administration of this act if the requirements prescribed by the minister are met."

At this time I would like to stand this down as well.

The Chair: We're going to move to government motion section 19.2.

Mr Duignan: I move that the bill be amended by adding the following section:

"Regulations

"19.2 The minister responsible for the administration of this act may by regulation,

"(a) prescribe the requirements mentioned in subsections 19(4) and 19.1(2); and

"(b) prescribe the date mentioned in subsection 19.1(2)."

At this point I wish to stand this down as well.

Mr Eves: On a point of order, Mr Chairman: It's probably irrelevant in view of the fact that the government wants to stand it down, but would this proposed amendment not in fact be out of order at this time, seeing that subsections 19(4) and 19.1(2) have not been passed or dealt with? They're not in the bill. There's not a subsection 19(4) or 19.1(2) in the bill.

The Chair: It's actually just a postponement, Mr Eves, and they will be dealt with, we expect, together at some time later, which brings us to PC motion section 19.2.

Mr Eves: I would like to withdraw this proposed motion. After our meeting with ministry officials the other day, it would appear that there are some problems with respect to the Criminal Code.

Mr McClelland: Mr Chairman, on a point of information: Is the parliamentary assistant able to comment on this? The amendment just withdrawn by Mr Eves, as I understand it, dealt with what is commonly referred to as VLTs. Is the government going to issue something fairly substantive or a directive, or is it simply that the policy statement with respect to VLTs will be the sum total of any initiative taken by the government on that matter? I think the concern has been expressed and has been acknowledged by the government as an issue. Are you going anywhere further with it, or do you anticipate something that may be embodied in this legislation or subsequently in Bill 26?

Mr Mundy: The Criminal Code provides that VLTs must be managed and conducted in accordance with the law passed by the Legislature of the province. This bill only allows for VLTs in a casino. It's our opinion that it would require new legislation in order to introduce VLTs anywhere but a casino.

Mr McClelland: This is, I suppose, a question of jurisdiction, and I only ask this hypothetically because I see it becoming an issue down the road: Would it therefore be possible for the government, through an amendment to either Bill 8 or, subsequently, to the Gaming Services Act, to allow for what we commonly refer to in the vernacular as charitable casinos to have VLTs? Is that within the jurisdictional authority of the province, under either Bill 8 or 26? Subsequently, after legal counsel, does the government have any position or policy with respect to that issue?

Mr Duignan: I will ask legal counsel to reply to that.

Ms Korey: I can reply to the first portion of your question, Mr McClelland, and that is that the Criminal Code, subsection 207(1), permits only the government of a province to conduct and manage a lottery scheme that has --

Mr McClelland: VLTs.

Ms Korey: Well, they call them contrivances that are operated on or through a computer, video device or slot machine, within the meaning of another subsection of the Criminal Code. Charitable licensees cannot in fact manage or conduct such devices under the Criminal Code. To answer your question, there could not be a provincial amendment that would address this question for charitable licensees.

Mr McClelland: A supplementary, if I may, Mr Chairman, to counsel: I'm not challenging your response. It has been considered as a possibility that down the road there could be some sort of deemed partnership or deemed arrangement venture with respect to charitable casinos that would allow them to fall within the umbrella of the province operating something that's, in short, effectively deemed charitable casinos to be agents of or operating on behalf of the government. Would that be stretching it beyond reason?

Ms Korey: One would have to see the actual business structure you're proposing, to know whether it would be managed and conducted, in order to be able to give a legal opinion on that.

Mr McClelland: I suppose that's more of a policy issue as well. Mr Duignan, I have this question from a policy point of view: Do you envisage the possibility of your government at least holding open consideration for accommodating charitable casinos to be more competitive by utilizing what are commonly referred to as VLTs?

Mr Duignan: All I can say is that it's the policy of the government at this time to limit the VLTs to casinos.

The Chair: This brings us to section 20 of the bill. Any comments on section 20? There are, under part III, complementary amendments to the Gaming Act. The Gaming Act and section 49 of the Gaming Services Act, 1992, are repealed. I think that's pretty straightforward. Any comments? Shall section 20 of the bill carry? Carried.

Section 21: Any comments on section 21? Shall section 21 of the bill carry? Carried.

Section 22 of the bill: Any comments or discussion on section 22?

Mr McClelland: I just want to cross-reference with what was commonly referred to as Bill 26 -- I'm just trying to find my place -- and correlate Bill 8 with Bill 26.

The Chair: You're okay with that?

Mr McClelland: Yes, thank you.

The Chair: Shall section 22 of the bill carry? Carried.

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Section 23 of the bill: Any comment or discussion? Shall section 23 of the bill carry? Carried.

Section 24 of the bill: Any comment or discussion? Shall section 24 of the bill carry? Carried.

Section 25: Any comment or discussion? Shall section 25 of the bill carry? Carried.

Section 26: We have a government motion on section 26 of the bill.

Mr Duignan: Section 26 of the bill, section 3.3.1 of the Gaming Services Act, 1992:

I move that the Gaming Services Act, 1992, as set out in section 26 of the bill, be amended by adding the following section:

"Advice to director or registrar

"3.3.1(1) The director or the registrar may refer matters to the commission for its advice.

"Hearings

"(2) In providing advice, the commission may hold such hearings as it considers necessary or advisable in the circumstances."

The Chair: Any discussion or comment on the government motion?

Mr McClelland: I just want to highlight for the record and the parliamentary assistant -- it may engender some comment from him -- that this sets up basically a review procedure. I don't suggest for one moment that the government is trying to sneak anything through, but I just want to note that this does not set up an appeal. I think it's important that we make that point, on behalf of the people who may be operating games of chance and the charitable contacts and so forth, who'd say, "Hey, we now have an appeal process." It's perhaps a fine distinction, but an important one, that it is a review process that can in fact bring recommendations and/or findings, judgements, back to the minister and ministry for consideration but does not necessarily provide a remedy per se for an organization or individual. Rather, it's a review as opposed to a remedy. I just wanted to make that point on the record for clarification.

Mr Duignan: That's correct.

The Chair: Shall government motion, section 26, section 3.3.1, carry? Carried.

It brings us to government motion, section 26, section 3.4.

Mr Duignan: Section 26 of the bill, section 3.4 of the Gaming Services Act, 1992:

I move that section 3.4 of the Gaming Services Act, 1992, as set out in section 26 of the bill, be amended by adding the following subsection:

"Procedure

"(2) The commission may make rules for the practice and procedure to be observed in hearings before it under this act."

The Chair: Any comment or discussion? Shall the motion carry? Carried.

Government motion, section 26, section 3.6.1.

Mr Duignan: Section 26 of the bill, section 3.6.1 of the Gaming Services Act, 1992:

I move that the Gaming Services Act, 1992, as set out in section 26 of the bill, be amended by adding the following section:

"Delegation of powers

"3.6.1(1) With the approval of the Lieutenant Governor in Council, the commission may delegate in writing any of its powers to the person or persons in the delegation.

"Conditions

"(2) A delegation is subject to the restrictions, conditions and requirements that are set out in it."

Mr McClelland: Just by way of a question, I'm wondering if, for the purposes of the committee, the parliamentary assistant might be able to give an example which would be illustrative of the intent and predicted use of such delegated authority. I think it might be instrumental and useful in helping us understand what the government is proposing and seeking to do, maybe a quick review. Perhaps research counsel could assist with the powers of which we speak and the contemplation of the government to delegate those powers. I don't particularly have any difficulty with them, but I think it's important that we just have a quick handle on the scope of those powers and the proposed delegation.

Mr Duignan: Maybe I'll get legal counsel to give you a couple examples of how this applies.

Ms Korey: Under the Gaming Services Act, the commission has certain powers; for example, exclusion orders and some registration powers if the proposed amendment is accepted. There's a proposed amendment on some transfers of powers between the registrar and the commission.

The bill provides that a majority constitutes a quorum of the commission. The commission has a minimum of five people on it and no maximum on it. It may be that the commission would want to delegate to a specific panel of commissioners, for example, or fewer commissioners, in some cases, something that it didn't consider that important, to have three or, if there's a larger commission, perhaps seven commissioners hearing something. This gives them the power to delegate, either to one of its officials or to a special panel of commissioners who had special expertise, for example. Without specific legislative authority, a body doesn't have any authority to delegate. That's why we were asking that it be put in the legislation.

Mr McClelland: Not to muddy the waters, I understand that with the possibility of the commission expanding in size and over time as you perhaps go from place to place, there may be, by way of example, a northern representative or a group of individuals from the north who may be dealing with some areas, if Mr Martin will permit me, with particular reference to Sault Ste Marie, or likewise Ottawa and so forth, and you'd want to delegate.

Mr Duignan: Or Niagara Falls.

The Chair: Shall the amendment carry? Carried.

Shall section 26, as amended, carry? Carried.

It brings us to section 27 of the bill, government motion subsection 27(2), subsection 4(1.1).

Mr Duignan: I move that section 4(1.1) of the Gaming Services Act, 1992, as set out in subsection 27(2) of the bill, be amended by striking out the portion before clause (a) and substituting the following:

"Same, casinos

"(1.1) Except as provided in this act and the regulations, no persons shall provide goods or services for a casino or any other businesses operated by, on behalf of or under contract with the Ontario Casino Corp or hold himself, herself or itself out as providing those goods or services unless."

The Chair: Any comments or discussion?

Mr Kwinter: Can I have an explanation as to the subtlety of the change? I see it's gone from "with respect to the operation" to just "goods or services for a casino."

Mr Duignan: This is really not a political issue. I'll ask legal counsel to give the rationale for this.

Ms Korey: I'm sorry, Mr Kwinter; I missed the last part of your question.

Mr Kwinter: If you take a look at subsection 27(2), subsection (1.1), the government motion is that it moves move that this be struck and instead a new wording. The only change in the wording is that in the original it says, "with respect to the operation of a casino" and in the amendment it says "for a casino." I'm just wondering what is the significance of the change and why was it made.

Ms Korey: There are actually two changes. The other change is that, "by, on behalf of or under contract with the corporation." The words "under contract with the corporation" did not appear in the original version. This was an attempt to make sure that anybody the commission feels ought to be registered and investigated as a supplier ought to be registered and investigated.

The problem we had with respect to the operation of a casino, Mr Kwinter, was, for example, if someone supplied carpeting to the gaming floor area, we didn't think that it would necessarily be caught. I don't know whether we might want to register that person as a supplier of carpeting if he did a lot of business with the casino.

It was just to ensure that the broadest possible catchall of registration, that people who supply to the casino be caught.

The Chair: Shall the amendment carry? Carried.

1700

That brings us to government motion subsection 27(2).

Mr Duignan: I move that section 4 of the Gaming Services Act, 1992, as set out in section 27(2) of the bill, be amended by adding the following subsection:

"Trade union

"(1.2) In addition to any provision of the Labour Relations Act, no trade union within the meaning of that act shall represent persons employed in a casino unless the trade union and such of its officers, officials and agents as are prescribed by the regulations are registered as suppliers."

The purpose is to provide for the registration as a supplier of any trade union which represents casino employees and for a regulation to spell out which union members should also be registered. This imposes the same requirements on the bargaining agent for casino employees as is imposed on all gaming assistants and suppliers. It is also in keeping with industry practice, in that the key American gaming restrictions require trade unions to be registered with their gaming commission.

The Chair: Shall the amendment carry? Carried.

That brings us to government motion subsection 27(4).

Mr Duignan: I move that section 27 of the bill be amended by adding the following subsection:

"(4) Subsection 4(4) of the act is amended by striking out `under subsection (1)' in the second line."

Basically, this is a housekeeping amendment.

Mr McClelland: Could I get a legal opinion on that?

The Chair: Shall the amendment carry? Carried.

Shall section 27 of the bill, as amended, carry? Carried.

That brings us to section 28. Any comment or discussion? Seeing none, shall section 28 of the bill carry? Does the silence mean it's automatic?

Interjections: Carried.

The Chair: Thank you. That brings us to section 29. We have a government motion, subsection 29(2).

Mr Duignan: I move that section 29 of the bill be amended by adding the following subsection:

"(2) Clause 10(b) of the act is amended by striking out `or' at the end of subclause (i) and by adding the following subclause:

"(iii) officers, officials or agents of the applicant, or such other persons as are prescribed by the regulations, in the case of an applicant that is a trade union within the meaning of the Labour Relations Act; or"

The purpose of this extends the grounds for a refusal to register trade unions to past conduct of trade union officials, agents and others specified by regulation. This amendment is necessary because the Gaming Services Act only anticipated registrations of individuals, corporations or partnerships, but not unincorporated associations such as trade unions.

The Chair: Any further comment or discussion? Seeing none, shall the amendment carry? Carried.

Shall section 29 of the bill, as amended, carry? Carried.

That brings us to section 30 of the bill and a government motion, section 30.1.

Mr Duignan: I move that the bill be amended by adding the following section:

"30.1 The act is amended by adding the following section:

"Transfer of registrar's powers

"16.1(1) The powers and duties of the registrar under this part in respect of the matters that are prescribed in the regulations are transferred to the commission.

"Interpretation

"(2) References to the registrar in this part in respect of a matter where the powers and duties of the registrar have been transferred to the commission shall be deemed to be to the commission."

The Chair: Is there any explanation?

Mr Duignan: No.

The Chair: It's just a housekeeping change. Shall section 30.1 of the bill carry? Carried.

Mr McClelland: It's getting late.

The Chair: Indeed, Mr McClelland, it is getting late, and I want to say that the Chair bypassed section 30 of the bill and we've got to go back to that now. Dealing with section 30 of the bill, any comment or discussion? Shall section 30 of the bill carry? Carried.

We come to section 31 of the bill. Any comment or discussion? Seeing none, shall section 31 carry? Carried.

Section 32 of the bill, any comment or discussion? Seeing none, shall section 32 of the bill carry? Carried.

Section 33 of the bill, any comment or discussion? Seeing none, shall section 33 of the bill carry? Carried.

Section 34 of the bill, any comment or discussion? Seeing none, shall section 34 of the bill carry? Carried.

Section 35 of the bill, any comment or discussion? Seeing none, shall section 35 of the bill carry? Carried.

Section 36 of the bill, any comment or discussion? Seeing none, shall section 36 of the bill carry? Carried.

Section 37 of the bill, any comment or discussion?

Mr Duignan: We have a motion.

The Chair: We do. I'm sorry, I hastened by that. Government motion to section 37 of the bill, section 47.1.

Mr Duignan: I move that section 47.1 of the Gaming Services Act, 1992, as set out in section 37 of the bill, be struck out and the following substituted:

"Gaming debt illegal

"47.1 No person may use civil proceedings to recover money owing to the person resulting from the participating in or betting on a lottery scheme within the meaning of section 207 of the Criminal Code (Canada) conducted in Ontario unless the lottery scheme is authorized under subsection 207(1) of the code."

The purpose of this is to clarify what might have been confusion in the bill as to what types of gaming debts could not be enforced civilly in Ontario. The proposed amendment makes it clear that this section only refers to debts incurred in illegal lottery schemes conducted in Ontario.

Mr Eves: Could I ask what the current state of the law could then be perceived to be in the province of Ontario, prior to this bill?

Mr Duignan: I'll refer that to legal counsel.

Mr Eves: Does that mean that civilly now you can collect on a bet or a lottery scheme that's not authorized by the Criminal Code?

Ms Korey: No. This particular section is meant to allow the casino corporation, for example, to enforce debts from legal gambling in Ontario, should this bill pass, but not from illegal gambling in Ontario. It does not change the law with respect to debts incurred in other jurisdictions.

The Chair: Any further comment or discussion? Shall the amendment carry? Carried.

Shall section 37 of the bill, as amended, carry? Carried.

We come now to section 38, government motion, subsection 38(1) of the bill.

Mr Duignan: I move that section 48 of the Gaming Services Act, 1992, as set out in subsection 38(1) of the bill, be amended by adding the following clause:

"(f.1) prescribe the matters in respect of which the powers and duties of the registrar under part II are transferred to the commission;"

This is to provide regulation-making power for the transfer of certain of the registrar's powers to the commission as discussed under subsection 16(1) of the act, which was carried.

The Chair: Any comment or discussion?

Shall the amendment carry? Carried.

Shall section 38, as amended, carry? Carried.

That brings us to section 39, government motion to section 39.

Mr Duignan: Before we proceed with section 39 of the act, could I have a three- or five-minute recess to consult with my colleagues in the Liberal Party?

The Chair: By all means. We'll have a five-minute recess.

The committee recessed from 1710 to 1718.

The Chair: Mr Duignan.

Mr Duignan: I move that section 39 of the bill be struck out and the following substituted:

"Commencement

"39(1) Subject to subsection (2), this act comes into force on a day to be named by proclamation of the Lieutenant Governor.

"(2) Subsection 19(1.1) shall be deemed to have come into force on January 1, 1993."

I'd like to stand this down.

The Chair: That brings us to section 40 of the bill, which is the short title of this act. Any comments or discussion on section 40? Shall section 40 of the bill carry? Carried.

At this point in time, we have completed the business that we can complete in this committee. Mr McClelland.

Mr McClelland: Before we go off the record, are you about to adjourn?

The Chair: Yes.

Mr McClelland: I just wanted to say thank you. These exercises sometimes get a little bit heated and sometimes we have some very significant differences of opinion. Overall, I think there's been a significant degree of cordiality, notwithstanding some significant disagreements.

I want to pay particular tribute and thanks to staff who have been with us from Hansard, legislative counsel, and the clerk. Tonia, thank you very much for your assistance in making this run smoothly for us. It's much appreciated. Mr Chairman, I appreciate the way you've handled it.

The Chair: Thank you, Mr McClelland. I too want to, not to be redundant -- Mr Duignan, would you like to add something?

Mr Duignan: I want to also echo the words of Mr McClelland. I appreciate all members of the committee on all sides. I think we've worked well together. Sometimes we did agree, sometimes we didn't agree, and that's the process of politics.

But I also would like to say thank you to the clerk and to Hansard and to all the other staff who've accompanied us over the last three and four weeks, and I also would like to pay tribute to the officials of the casino project team and other officials of the ministry, who were a great resource, and a valuable resource, to this committee. Thank you for all your work and dedication to this committee over the last four weeks.

Mr Eves: If I might, Mr Chairman, I would also like to echo the comments of my two colleagues. Also, I think we have effected some positive changes to the legislation, some agreed to, some not agreed to, and I think that's the whole purpose of the committee system.

The Chair: Thank you. I too would like to thank all those who have helped the Chair and certainly helped the committee get through the last four weeks. I can only reflect on one thing. From time to time we get corralled by the media and they want to ask us some questions. One thing that was asked of me in Windsor was, would there be any amendments to the legislation? At that point in time I said I had no doubt there would be, and I'm glad to see that my guess was accurate.

With that, I would just like to say thanks again. I want to remind the members of the committee, of course, that this committee is only adjourning and that we will meet again shortly after the Legislature sits again. This committee is adjourned.

The committee adjourned at 1722.