Assemblée législative de l'Ontario

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

CONTENTS

Monday 16 August 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:

Abel, Donald (Wentworth North/-Nord ND) for Mr North

Callahan, Robert V. (Brampton South/-Sud L) for Mrs Caplan

Dadamo, George (Windsor-Sandwich ND) for Mr Jamison

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

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

McClelland, Carman (Brampton North/-Nord L) for Mr Phillips

Mills, Gordon (Durham East/-Est ND) for Mrs Mathyssen

Also taking part / Autres participants et participantes:

Drainville, Dennis (Victoria-Haliburton ND)

Kormos, Peter (Welland-Thorold ND)

Ministry of Consumer and Commercial Relations:

Churley, Hon Marilyn, minister

Wolfson, Judith, deputy minister

Alfieri, Domenic, assistant deputy minister responsible for Ontario casino project

Uppal, Atam, senior economist, Ontario casino project

Clerk / Greffière: Grannum, Tonia

Staff / Personnel: Murray, Paul, research officer, Legislative Research Service

The committee met at 1402 in Cleary International Centre, Windsor.

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 Johnson): I'm bringing the standing committee on finance and economic affairs to order. The order of business, as I'm sure most of you know, is 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. This is the very first day of a number of days over four weeks that we're going to have public hearings with regard to Bill 8.

Today our agenda calls on the Honourable Marilyn Churley, MPP and Minister of Consumer and Commercial Relations, to make a presentation with regard to Bill 8. I want to say it's a pleasure to be here in Windsor, the first venue for these hearings, and I certainly welcome all the committee members on behalf of the committee as the Chair. I know there are many interested members of the public here today.

Mr Wayne Lessard (Windsor-Walkerville): Mr Chair, I just want, on behalf of the community of the city of Windsor, to welcome yourself and the members of the committee and also the minister here to the city, as well as the support staff from the ministry and also the staff from the Legislative Assembly: the researcher, people from Hansard and the clerk and the translation services. Of course, when I mention Hansard, I just want people here to know that everything that's being presented to the committee is going to be recorded and will be available to people.

I'm happy that the committee made the decision to spend four days here in the city of Windsor, because this gives committee members one of those rare opportunities to actually see what Windsor has to offer with respect to tourism amenities. I hope that committee members take an opportunity to do that. I've asked the convention and visitors bureau to make sure that a package is available to committee members so that they can do that.

My wife appreciates that fact as well, because this is the first opportunity since being elected in 1990 that I'm going to be able to walk to work every day. With that, I once again want to welcome the committee and hope we have an enjoyable week here in Windsor.

The Chair: We have before us, committee members, our agenda over the next short while, and certainly we know that today the minister is going to be making a presentation. Did any of the committee members have anything they wanted to offer before I turn the floor over to the minister?

Mr Carman McClelland (Brampton North): Briefly, will there be an opportunity for some brief response from opposition, or are we going strictly with the technical briefing up front this afternoon?

The Chair: I'm certainly in the hands of the committee, but I understand that the minister does have a presentation that's somewhere in the neighbourhood of 30 to 40 minutes. We could at that point entertain some questions. We could also continue to hear the technical briefing, which may be of considerable value to the members because it may answer some of their questions, and therefore it would be more convenient and maybe more efficient to hear both the minister and then the technical briefing in that order and then open the floor to questions.

Mr McClelland: I agree, Mr Chair, that it may in fact pre-empt some of the questions, but I'd appreciate the opportunity to at least have a brief discussion with the minister following proceedings.

Mr Monte Kwinter (Wilson Heights): May I suggest that we have two issues here: One is a political one and one is a technical one. Once the political decision has been made, the technical aspects of it are going to illustrate how this thing is going to work and answer some of the concerns that someone may have of the actual workings. I would appreciate, between the minister's briefing and the technical briefing, a chance to question the minister on the political implications of this particular initiative.

The Chair: Again we're very flexible, and I'm in the hands of the committee. If that's what the committee members wish, then certainly that's something we could entertain.

Mr Noel Duignan (Halton North): We're quite flexible if that's what the members of the opposition wish to do. Maybe we can allocate a particular amount of time. Roughly an idea, what would be the time? A half-hour?

Mr McClelland: No more than an hour, Mr Duignan, for each party.

Mr Duignan: Considering that the technical briefing is going to take about an hour --

Mr McClelland: Three parties.

Mr Duignan: Yes, so I think if we looked at a half-hour divided between the three parties to ask some questions, then they should --

Mr Gary Carr (Oakville South): My question was just the total amount of time that the minister is prepared to stay.

The Chair: How long are you prepared to stay here this afternoon?

Hon Marilyn Churley (Minister of Consumer and Commercial Relations): I'll be here for the entire afternoon.

The Chair: I understand the minister would like to take a break, and that probably would be following her presentation and questions. We started just shortly after 2 and we're scheduled to be here till 5. We can stay longer if that's necessary.

I'll now turn the floor over to the minister.

Hon Ms Churley: First of all, I'd like to welcome the members of the finance and economic affairs committee to the beautiful city of Windsor and say how happy I am to be here once again enjoying the fine restaurants in Windsor. I also thank you very much for the opportunity to speak to you today.

I want to begin by saying how pleased I am that these hearings are beginning in Windsor rather than at the traditional starting point of Toronto, even though I'm from Toronto. During this week, you will meet a good number of Windsor residents, the vast majority of whom I believe are very enthusiastic about the casino coming here. They are enthusiastic for good reason. The casino will be a great tonic for a community very hard hit by the economic recession.

Let me summarize the good news that is coming Windsor's way.

-- The casino will directly and indirectly create about 8,000 permanent jobs.

-- The casino will create hundreds of temporary construction jobs.

-- The casino will create millions of dollars in increased revenue for local area governments.

-- The casino will spur revitalization of the central business district.

-- The casino will inject hundreds of millions of dollars of new tourism spending.

-- The casino will help diversify the area economy.

These are just some of the benefits that will occur. I think that you will all agree with me that they're rather dramatic.

Before I discuss the Windsor casino in greater detail, I'd like to make two observations. First, on the Coopers and Lybrand report that we released this morning, I'm sure we're all looking forward to reading it, as I am myself.

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When we announced the Windsor casino pilot project, many people, including the opposition, asked us to proceed cautiously and consult fully with the community. You also asked us for an economic impact study of casino gambling.

We have done all that you asked and more. I think you are aware of how extensive our consultations have been with Windsor and with provincial organizations, so I won't list them here.

The comprehensive economic impact study you requested is now complete. I am confident the Coopers and Lybrand report will provide a great deal of information and perhaps lay to rest many myths that have grown up around the issue of casino gaming.

I should also note that my ministry is currently discussing with aboriginal groups their participation in the gaming industry. We are currently negotiating self-regulatory agreements with a number of first nations with respect to charitable gaming. This includes bingos and charitable casinos, also, as people here know them, known as Monte Carlo nights.

Some first nations are also enthusiastic about casino gaming for exactly the same reasons as many municipalities are excited. Everyone appreciates the job creation and good economic news that accompany casinos.

We believe first nations should benefit from casino gaming just like everybody else. We are currently discussing with first nations the best approach we should take to discussing their involvement. We want to resolve this issue through negotiation and cooperation, and I'm sure members of this committee share that view. I will keep you posted as we progress in this area.

As you conduct this week's hearings in Windsor, I am confident that you will find on the whole enormous support for this project, as I have found. People recognize the good news that is coming their way in the next year or two. However, before I discuss the future, I would like to briefly recount the past. I would like to explain the sound reasoning that led to the Windsor casino announcement.

I did not campaign in the Toronto riding of Riverdale, where I come from, during the last election on the promise of bringing a casino to Windsor. As far as I know, no one made such a promise. Nor do I know of any MPP who campaigned on the promise that they would oppose a casino in Windsor. Simply put, to the best of my knowledge, in the 1990 election the issue wasn't discussed at all.

Based on these simple facts, some people argue that the government has no right to act in this area. Because casinos were not discussed, the subject of casinos, or for that matter lotteries or bingos or any other form of gaming, is somehow beyond the legitimate reach of the Legislature, which should remain frozen in time.

The people who make this argument pretend that it doesn't matter how circumstances change. It doesn't matter, for example, about the growth in gaming in other jurisdictions, or how bad our unemployment figures, or how high is the budgetary deficit or balance of payments deficit, or how tastes are changing in today's entertainment and tourism market. I have trouble understanding politicians who preach political paralysis. I think they are shirking their responsibility and I think that most voters share my view about that.

I can think of a host of issues on which this government is acting appropriately that were not discussed in the campaign. I can also think of a host of issues on which the opposition is demanding action which were not discussed in the campaign. One can only imagine the hoots of derision in question period were ministers to routinely reply, "I'm sorry, we can't act on that issue because it didn't come up during the last election." The

criticism we would receive would be well deserved.

"Ah, but," some claim, "casinos are different." My response is simple: They are not different.

Casinos are a widely accepted form of entertainment that most people, myself included, see as just another variation of Ontario's existing gaming industry. This industry already includes charitable casinos, lotteries, bingos and horse racing. Some $4 billion is circulated in our province each year from these activities. A significant portion of this money is reinvested here in the form of salaries, consumer and government spending and support for charitable activity. Ontario charities earn more than $1 billion each year from bingo alone, while the lion's share of provincial lottery revenues goes to hospitals.

In principle and in practice, there is very little difference between casinos and the many forms of gaming we already know in Ontario. People place wagers in the hope that they will win, and while not everybody claims a prize, almost everyone will agree that they enjoy the activity.

Legal gambling has been with us for decades, and it was within this context that the government chose to bring a casino to Windsor.

The introduction of a permanent, year-round casino to Windsor makes good sense for a number of reasons.

First, the government chose Windsor because it is the largest of Ontario's hard-hit border communities. These communities require special attention. They have suffered a great deal because of their closeness to the American marketplace. The GST and free trade have hammered these cities and towns. Because of the casino, Windsor will now benefit from its border location instead of suffering. The city is well positioned to attract American tourists to a year-round casino. These new dollars will help create new jobs and stimulate economic growth, especially in the tourism and hospitality industries. It will be a great pleasure to see many of these dollars coming home.

Second, our province is haemorrhaging an increasing amount of money to other provinces and American states that already have casinos. To the east, west, north and south, we are effectively surrounded by casinos, or soon will be. Casinos are a common feature of the western Canadian landscape. Winnipeg now has three casinos. BC has more than a dozen permanent charity casinos. Alberta, Saskatchewan and the Yukon have them. Montreal will soon open a casino, and the rumours are rife that Hull will soon have a casino as well. Nova Scotia is discussing two pilot casinos. Of the 50 American states, close to 20 now have casinos.

I listened with interest when the leader of the third party read out in the Legislature a catalogue of American states that held referendums before introducing casinos. My honourable friend thought that this was a good argument as to why Ontario should have a referendum as well. I pointed out that none of the Canadian provinces with casinos had referendums beforehand, and I remain unconvinced by the member's somewhat flailing response that casinos are equal in importance to constitutional amendments or conscription.

However, I am glad that the question was asked. With his enumerating the American states with casinos and my listing all the Canadian provinces, every member in that Legislature must have concluded the same thing: Casinos are nothing new, and, if anything, Ontario is behind the times.

No one can deny that casinos are already an economically potent force in our province, a force we cannot afford to ignore. Hundreds of millions of dollars flow out of Ontario each year to Atlantic City and Las Vegas. With this money, of course, go tens of thousands of jobs. One federal study showed that 20% of Canadians who are in the US for more than two days are there to gamble.

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Third, the Windsor casino will be a tremendous boost to Ontario tourism. We have a beautiful province that attracts millions of tourists every year, but we should welcome more tourists. They arrive with new dollars and they arrive with new jobs. If we are going to remain competitive as a tourist destination, we must be able to offer the forms of entertainment that tourists want.

I don't pretend the Windsor casino will rival Las Vegas or Atlantic City, nor do we want it to. But to conclude that it therefore will not help bring new tourists to our province is really foolish.

I don't think anyone would suggest that Toronto's live theatre is equal in scale to Broadway -- quality, yes; quantity, no. Nevertheless, our excellent productions of Cats or Phantom or whatever have brought tens of thousands of American tourists to Toronto.

The comparison of casinos to live theatre is in this case very apt. Both are a form of entertainment, and just because Ontario cannot offer the scale of New York or London theatre does not mean we cannot be a contender. In fact, we are a contender.

Do I think some Ontario residents still visit Broadway? Yes. Do I think some Ontario residents who might visit Broadway are just as happy to stay at home with our own theatre? Yes. Do I think Americans from Buffalo or Detroit who might otherwise go to Broadway come to Ontario instead? Yes. Do I think live theatre makes a positive contribution to our economy? Yes, I do.

All these questions can be posed about the Windsor casino and the same positive answer can be given to each one, for just the same reasons.

I noted a recent story in the Globe and Mail that dealt with Canada's travel deficit. Every year more and more dollars are taken out of the country by Canadians travelling abroad than are brought here by foreign tourists visiting us. Each year the problem only gets worse.

Running a profitable business in Canadian tourism is hard work. In some areas we cannot hope to offer the same product. It is hard to find -- I guess I would say it's impossible to find a warm Canadian beach in January or December. Yet that does not mean we should throw in the tourism towel. It means that we compete where we can with what we have and offer alternatives where we cannot.

The Windsor casino will illustrate that we can compete with the best. It will tap into a form of entertainment that is in huge demand. In 1992 more than $330 billion was wagered in the US. That is five times larger than the American movie industry. The market for this casino is enormous. More than 30 million Americans live a short drive away.

I have no doubt you will hear from Windsor hotel and restaurant owners who will tell you that the planned casino is the key to their economic health and welfare. I know from newspaper reports and from talking to people here that some restaurants would be closed today if it had not been for the proposed casino. Instead of closing their doors, these owners are now planning on expansion.

These are some of the circumstances which prompted us to make the Windsor casino decision. It will bring thousands of new jobs to this province in general and Windsor in particular, and it will stem the huge tide of money leaving our province for casinos elsewhere and will bring new money into the province from the American market.

Windsorites understand this. I don't know how many of you have visited Windsor recently; I have a few times. I would encourage you to come here often. I would encourage you to get out of the cynical atmosphere of Queen's Park from time to time and breathe the fresh air of optimism in Windsor that the casino has brought, which I've experienced myself many times lately.

As I mentioned at the beginning of my remarks, not all of Windsor is unanimous about the casino coming to town. Some people do object to the casino for a variety of reasons. These sentiments are not unique to Windsor; I think you'd find similar sentiments elsewhere in the province. I would like to take the time now to discuss some of these objections. I feel that the government has been exceptionally sensitive to the feelings of Windsor residents on this project. To the greatest extent possible, we have tried to accommodate these concerns in our plans.

Let me deal first with the issue of crime, which I will divide into two areas. One is the integrity of the casino itself and the possibility of criminals, organized or otherwise, becoming involved with the casino or its suppliers. The second area is the safety and security of the neighbourhood outside the casino.

Overall responsibility for internal security and enforcement will lie with the Gaming Control Commission which Bill 8 establishes. As this is a provincial initiative, the government has obtained invaluable advice and assistance from the Ontario Provincial Police on internal security and law enforcement issues. Consultations have also been undertaken with a number of other law enforcement and gaming regulating agencies.

The concerns of law enforcement agencies have been woven throughout the work of the casino team. Since its inception last summer, members of the OPP have been part of the casino project, and fully one third of the current casino project staff are members of the OPP. Under the direction of Commissioner T.B. O'Grady, the OPP has assigned a number of experts from its anti-rackets and intelligence branches.

Internal security planning covers such details as architectural requirements, internal surveillance systems, money handling, audit structure and background checks on anyone involved directly or indirectly with the casino. Thorough security checks will be done not only on those employed by the casino but also on anyone wishing to be a supplier of anything, from playing cards to laundry services.

These will be very tough measures. Nevertheless, there are some people who feel that casinos and organized crime go hand in hand. They claim that you cannot have one without the other. I hope that everybody at this table knows this assertion to be false. If you do not, then I ask you to engage in some firsthand research. Pick up the phone and call Premier Filmon of Manitoba. Tell him that the three casinos his government owns are fronts for the mob. Tell Premier Bourassa that he is about to become some undercover ringleader, or Mike Harcourt or Ralph Klein or Roy Romanow.

I know what you will say to this observation: Windsor is not Winnipeg or Montreal or Vancouver. If you're going to tell me that the Windsor casino will be different because it is privately operated, I remind you that BC's casinos are privately owned and operated, much like our bingo halls here are.

I believe that private sector involvement in the Windsor casino will bring needed expertise without jeopardizing safety. I have good reason to believe this, because of the safe conduct of the private sector in other areas of Ontario's gaming industry. Private industry maintains the lead role in such areas as horse racing and bingo, which generate the bulk of current gaming activity here in Ontario.

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In lotteries, the government is fully responsible for operations and regulation, but with the private sector supplying all retail services. The blend of private/public sector involvement works. It delivers a good product while ensuring the integrity of the gaming environment, and it will work for this casino.

I used to wonder why certain members of the Legislature were so deathly afraid of looking to the casinos we already have in the country for an indication of what is in store for Windsor. However, recently I went to Winnipeg to visit two of their three casinos. I now know why some of you are so afraid. I saw people having fun. I saw effective security systems. I did not see a wave of prostitutes or organized crime, and if you look at Winnipeg's crime rate, you won't see these problems either.

Regardless of your preconceptions or your creative imaginations, the Canadian experience shows that casinos and organized crime are not linked. Nevertheless, some people do not accept these facts and insist we do look to the United States. I'm sorry to say that this included some members of the opposition, who constantly cast about for whatever bad American views and news they could find.

This obsession with the United States has exposed certain contradictions in the arguments of casino opponents. After endless harping about the effects of casinos in some American jurisdictions, a couple of weeks ago the leader of the third party condemned this government for using the services of an American criminologist. On the one hand we are being criticized for listening to an American criminologist talk about American casinos, yet on the other hand you don't want us to talk to Canadians about Canadian casinos. Now, Mr Harris and others cannot have it both ways. He cannot continually recount American crime figures and then damn us for consulting an American criminologist.

I do encourage committee members to look at all of the evidence, just as we have. When you do, I think you'll end up agreeing with me that the most useful guide is the experience of other provinces.

I just want to talk for a few minutes about the effect of the casino on crime in the community. As I noted before, there has been no increase in crime in Winnipeg attributable to the casinos, nor has this happened in British Columbia or in any other province that has introduced casinos.

Obviously, provision should be made for the fact that the Windsor casino will draw more tourists than the other Canadian casinos do. Naturally, this will increase the need for further policing, as is the case with any large tourist attraction. There are bound to be problems with increased traffic and so on.

However, I'm very proud to say that the province made it clear from the start that any necessary increase in local police services would be paid for by the casino itself; for example, that Windsor Police Services will soon have 10 new officers, paid for by the casino, to help deal with the casino's boost to tourism. This is just the first step. We will pay for any more officers that are shown to be necessary.

Some people suggest that Windsor is different from Winnipeg because so many of the customers will be American. I don't agree with this. The annual Freedom Festival brings tens of thousands of American citizens across the border to Windsor. Certainly this requires increased policing, but that is to be expected. It is no different from Toronto's annual Caribana, which also attracts thousands of American visitors. Obviously, more police than normal are needed then on the streets, but no one suggests for that reason that Caribana should therefore not take place at all.

I believe time will show that the Windsor casino will be no different from other casinos elsewhere in Canada. It will make a positive contribution to the community and will have the same effect on local policing as any other large tourist attraction.

I want to talk for a moment about the Windsor casino and some of the moral arguments that some people are advancing. Do I think people should go to casinos? Frankly, I don't think my opinion here is relevant. For the record, I think it should be left up to the individual. I believe the public thinks the same way. I think the public believes that the decision about whether or not somebody goes to a casino should be left up to the individual and not the government. The Windsor casino will simply join the vast array of entertainment options available to today's adult population, who are free to pick and choose what they want to do.

I don't think it's credible to suggest that our society is not ready to accept such an option in its midst. Gaming is clearly well entrenched here. As I said before, more than $4 billion is wagered annually in our province. You would be hard pressed to find many citizens who have not bought a lottery ticket, or at least a raffle ticket for their local hockey team.

It is interesting to note that during the discussion about the Windsor casino, one did not hear the suggestion from the casino critics that existing gambling should be abolished. One wonders why. Surely gambling is gambling, one would have thought, but apparently some don't think this way. I do think that some people are anxious about the Windsor casino because it is something new, but I do believe that this will change. When the Windsor casino is up and running, people will see that it is not the ogre that some critics would have us believe. I predict that you will see support for the casino go up.

Some people may accept lotteries or bingos because the profits go to good causes. If this is the case, then where do they find fault with the Windsor casino? Injecting millions of dollars into the provincial treasury to help sustain vital programs such as education or health care is also a good cause.

Some people maintain that the government's ownership of the casino suggests that this is an activity we want to promote. That is simply not the case. We feel government ownership is simply prudent given the public's concern about safety and security. The option, of course, is to have the casino privately owned and operated, and we did look at that. I don't know, however, that this arrangement would somehow make casino gaming more morally acceptable to its critics. Of course, we could continue to try to suppress casino gaming, but as I said earlier, this would be the government continuing to make a value judgement that I believe most people would rather make for themselves, and do many times when they go off to the States to gamble.

Some fear that the Windsor casino will increase problem gambling. I think this is a legitimate concern. I recognize that there are people who are unable to resist the allure of gaming, whether it takes the legal form of bingos, lotteries, horse racing or casinos, or illegal forms.

We are already doing a great deal of work in this area. Recently, I released a study by Ernst and Young that assessed the programs in place to deal with problem gambling. Currently, there are few. I think this is a sad comment on previous governments, that virtually no research has been done in this province despite the billions of dollars these governments collected from gaming.

But I'm pleased to say that we are not ducking this responsibility. In the near future, I will be taking to cabinet proposals to deal with this issue once and for all. While it would be premature to outline the planned initiatives today, I will say that the emphasis will be on public education and prevention.

We also recognize that this government cannot solve the problem alone. The Windsor casino request for proposal asks the potential casino operators to outline the types of problem gambling prevention strategies they would implement through public education and for their employees.

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Problem gambling is an issue which predates casinos by centuries. I believe that rather than compounding the difficulty of problem gambling, the government's decision to introduce casino gambling has served as a catalyst to seriously address this long-standing issue.

Some critics suggest that Windsor may see a climb in demand for social services because of problems other than problem gambling. We are also aware of this concern and a study is under way to take stock of the services currently available in Windsor. We will monitor any changes in demand and take the appropriate steps if changes do occur. Of course, since the casino is creating some 8,000 jobs in the Windsor area, we may very well see a decline in the need for some of these services.

The other thing I want to talk to you briefly about today is the horse racing industry. There are people who object to the Windsor casino because of the effects they fear it may have on the horse racing industry.

Let there be no mistake. This government is fully committed to horse racing remaining a full player in the gaming industry. Since taking office, this government has brought forward a number of proposals to help the industry cope with competition in the entertainment market.

We must realize that the competition to horse racing is not just from lotteries or bingos or the proposed casino. Horse racing is a form of entertainment. As such, its competition comes from a host of areas, including other professional sports such as football, hockey and baseball, and some of the horse racing industry's own studies mention that.

With no offence to Tigers fans -- I know there must be some here in this room -- let us look at the World Series champion Blue Jays. Please don't be offended, but it did happen; maybe it will be Detroit this year. I am personally very proud of that. Baseball is not the same game it was two or three decades ago. Fancy stadiums and huge instant replay screens are just some of the improvements they have made. It is a sport that has steadily improved its marketing in order to stay competitive.

The horse racing industry must make similar efforts to remain competitive. Studies suggest that perhaps as many as 28,000 Ontario residents have full- or part-time jobs attributable to horse racing. Industry officials and the government have an obligation to these employees.

But that does not mean that the only course of action is to keep casinos out of Ontario. Pretending competition doesn't exist will not solve the problem. As I noted earlier, casinos are a growing reality in North America. Just because there isn't a casino in Ontario doesn't stop Ontario residents from spending hundreds of millions of dollars on slot machines or blackjack or illegal gambling. Today's consumer is very mobile, and banishing casinos from Ontario won't solve the horse racing industry's problems. Good marketing will.

I also note that prophets of gloom and doom say that racing and casinos can't exist in the same place. They say: "Look at this province or that state. Look how racing suffered when casinos arrived on the scene." In part, that might be true. However, it is equally true that one can also find provinces and states where racing suffered and casinos were not introduced.

Moreover, in examples that critics provide where casinos and horse racing have operated in the same jurisdiction, the two industries competed head to head. That is not what we plan to do here in Windsor, and it's not going to happen here if everyone acts responsibly. When the province asked private sector companies to submit their bids for the Windsor casino, everyone was asked to clearly outline how they would work with, not harm, the Windsor Raceway. Other jurisdictions have not done this, and that is why the gloom-and-doom studies that casino opponents will trot out are not going to be relevant to Ontario.

Let me read from an interview of a racetrack owner who is going to open a track in Louisiana because of all the casinos coming to the area. He was asked why his track will succeed when other tracks are hurting. His response was this:

"Simple. You bring in new blood. A lot of times people don't go to the track because they don't know how to bet and they don't want to eat fast food. We'll offer the best food and drinks, give them seminars on how to wager. With hundreds of tour buses rolling into the area...part of the key is to get the tourist agencies to get these buses to stop at the track for an afternoon or an evening. Food? Family entertainment? Horse people think I'm crazy, but they don't understand what has happened to their own industry. People already come to Louisiana because of gaming. We just need to attract our share, and we will."

I really believe that a win-win option can be found for the Windsor Raceway and casino. We want the two to work together and find the creative solutions. That way the ultimate winner will be the Ontario consumer, who will have a greater choice of entertainment options. I repeat: The increased entertainment options will also benefit the Ontario tourism industry, and that will benefit anyone and everyone in the province through new dollars and new jobs.

The spirit of cooperation that the casino project is showing to the horse racing industry is also being applied to the existing charitable gaming industry.

We recently made changes to the Gaming Services Act to make charitable fund-raising much more effective.

With respect to the Windsor casino, the government consulted with dozens of Windsor area charitable organizations that rely on charitable funds to support their programs. Their message was clear: They felt the casino would benefit Windsor. However, they were concerned about the effects the casino might have on their fund-raising efforts, and that is a legitimate concern.

Again, I'm pleased to say that the government has acted responsibly. The vast majority of charitable fund-raising in Windsor is done through bingos. Accordingly, the government has adopted the sensible policy that the Windsor casino will not offer bingo. This is the right thing to do, and many charities have told us they are delighted with this decision. Indeed, there are some people in the Windsor bingo business who feel their market might actually increase because of the casino's presence.

In order to keep an eye on the casino's impact on charitable gaming, the government has asked Windsor-area charities to take stock of their current fund-raising totals. If it is clear in a few years that the casino has hurt these efforts, we have pledged to them to work with the charities to correct these effects.

I think that you will appreciate from my remarks that this issue has been approached with great care and caution, and from the issues I have discussed you can see that the introduction of a casino is an intricate subject. I know that over the next few weeks you will hear many views. Some I know will be held with great passion. I encourage you to listen to all those perspectives with an open mind, and I wish you the very best in your deliberations. I look forward very much to your findings.

As your Chairman said, my casino project officials will be speaking to give you more technical details at your pleasure and will provide more information on some of the issues that I have discussed. Before I wrap up I would like to introduce Judith Wolfson, to my left here, who is the deputy minister at CCR. That concludes my remarks, Mr Chairman.

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The Chair: Thank you, Minister. We have an opportunity now for some questions, and first on my list is Mr Kwinter.

Mr Kwinter: Mr Chairman, have we decided how much time we have?

The Chair: No, we haven't. That's something that we should decide before we continue so we can determine how to divide the time up. I understand technical briefing will take approximately an hour; is that correct?

Ms Judith Wolfson: Approximately an hour.

The Chair: And you would like to have some time certainly for questions following that, I'm sure.

Mr Duignan: Could we take a five-minute recess and come to an agreement with the subcommittee?

The Chair: I'm in the hands of the committee. We have until 5 o'clock scheduled.

Mr Duignan: May I make a suggestion of 15 to 20 minutes from each side in relation to questions and answers?

The Chair: Is that agreeable, 20 minutes each? Okay. If we run out of time, then we'll get on to the technical briefing more quickly, I suspect.

Mr Kwinter: I'd like to just comment on the minister's remarks. To treat it kindly, a lot of what she had to say I could only really categorize as drivel. The rationale behind this initiative according to the minister just makes no sense. She refers to the fact that they didn't campaign on it but that they didn't campaign on a lot of other things. The irony is that most of the things that they did campaign on they haven't carried through; they've done a complete about-face. The one issue they didn't campaign on, not only didn't they campaign on it but they have been traditionally and consistently opposed to casino gambling.

What I'd like to find out is -- and I think this is important, and then I'd like to ask a supplementary as a result of that answer -- given that the NDP has traditionally and consistently been opposed to casino gambling, what was the genesis of this initiative? Was there a crying demand for casinos from Ontarians, was there a crying demand for revenue from the Treasurer, was there a crying demand for economic stimulation from the city of Windsor or was there any other major sort of impetus to bring forward this particular initiative? Could you answer that? Then I'd like to ask you a supplementary based on that answer.

The Chair: Minister, before you answer that, I'd just like to bring some order to the room, please. If those people at the back of the room who are carrying on private conversations could kindly go outside, it would allow us to hear much more clearly here at the front. Thank you very much.

Hon Ms Churley: I think Mr Kwinter and I disagree on the contents of my speech. I wouldn't call it drivel at all. I think it was quite good and to the point. After all, he is the opposition, and what can you expect? But I'm hoping, and it may be silly of me, that we can try to be as non-partisan as we can in terms of the discussion of the benefit this will be to Windsor.

Directly in answer to your question, first of all, believe it or not, despite various people within the party who have opinions on gaming and gambling, the NDP's policy book doesn't have a policy on gambling. It's probably the only thing in the world that the NDP doesn't have a policy on in its book, but it actually doesn't have a policy on this.

I would say that in terms of the issue around why the government decided to proceed, it is based on a number of facts, and you mentioned them. I mentioned in my speech that times have changed. The fact is that casinos are starting to sprout up all over the place, all around us, and the fact is that since I've come to this ministry I've found out that $4 billion a year is already being spent in Ontario on gambling and that many hundreds of millions of dollars are being spent outside the country and on illegal gambling, illegal gambling which people get no benefit at all from. It's all underground economy.

With casinos sprouting up all around us, the choice was one of burying our heads in the sand and letting more and more tourist dollars slip away, now not only to the United States but to other provinces. That was a factor that we had to look at very seriously when we heard news that other provinces were moving full steam ahead and planning casinos. We now know that Quebec in fact is almost there, and the fact that Windsor did approach the government -- Windsor, as you know, has been very, very hard hit by the recession and cross-border shopping, and other municipalities approached the government.

I believe the idea possibly came up even when, Mr Kwinter, your government was in power. It's not a new idea. It's just that the situation now has changed and the reality as well is that yes, of course the government was looking at its revenues, and because there were requests from municipalities to allow casinos the government of course looked at the possibility of extra revenue from the running of casinos. All those factors were taken into consideration when the decision was made.

But I do want to be very clear that when we decided to go ahead with a pilot project, we said that we would not put a casino in any location, in any municipality, in any region where it was not wanted. Windsor had already been talking about and planning a casino before we ever announced that we were moving in that direction.

Mr Kwinter: I didn't get a really definitive answer; I got a broad answer. The point I'm trying to make is that if it is supposed to benefit Windsor, we have a situation where most of the profits are not going to go to the city of Windsor; they're going to go to the province, to the consolidated revenue fund.

Earlier in your remarks, and I think this is interesting -- I don't think you have an understanding of the horse racing industry and you certainly don't have an understanding of the baseball industry, because if you look at what's happening to baseball you will find that in the minor markets they are in serious trouble, and the meetings that were being held recently in Wisconsin were held to address the major problems that are facing baseball. To say blanketly that this is going to be the panacea -- and just for the record, I have no problem with casinos. What I have a problem with is the rationale and what it is that it's supposed to do.

I really feel that it hasn't been thought through. I think the benefits you are attributing to what the casinos are going to generate are not going to materialize, and you've downplayed the problems. My concern is that this decision was made on the fly, it was announced without really thinking it through and then you've been playing catch-up trying to justify the decision that you have made. That is why it's very interesting to me to find out what triggered this, because surely, even though a casino might be a great thing, it is not going to be the saviour of Windsor. For anyone to think that it is is being naïve.

So the question is, why are you doing it, what is the impact going to be on charitable gaming -- and I don't think you've thought that through -- and what is going to be your overall strategy? Today you announced that this is a pilot project and you have no intention of having this go throughout the rest of Ontario. You're either naïve or uninformed to think that this initiative would happen in Windsor alone and only in Windsor, and that you would be able to resist putting it into other areas. So you either have thought this thing through or you haven't. The evidence seems to appear that you haven't, and that all you're really doing is making policy on the fly, responding to things that may happen.

All the way through your speech you talked about some of the things that may happen and, if they do, "We're going to have to deal with it, and we'll deal with it as we go along." That is what creates the problem for me. As I say, I have no problem with a casino per se. It's certainly like shutting the barn door after the horses are gone. All you have to do is take a look at the Toronto Sun every single day and you'll see pages of ads run for Las Vegas-type casinos all over Metropolitan Toronto and other areas.

Surely it isn't casinos that are the problem; the problem is the benefits that you are ascribing to this one casino, that it's going to do all of these wonderful things when, by your own admission, the profits are going to go to the province, you haven't thought through the cost -- the social cost, the criminal cost, the policing cost -- and whether or not these 12,000 tourists you've projected are not going to come in by buses, do their gambling and leave. What are you going to get out of it? The province is going to make some money and the people in Windsor are going to be like kids at the candy store with their noses pressed up against the glass looking and saying, "What have we got here?" That is my concern.

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Hon Ms Churley: There were a lot of questions and concerns expressed there, and I'll deal with a few of them. First of all, on the issue of profits going to the government, that's quite true. As I said in my speech, that's not something to sneer at or dismiss. The fact that the profits are coming to the government means that will be money going to all of the people of Ontario for various programs. I don't think we should sneer at that and pretend that isn't important, that all the people of Ontario will benefit from those profits.

Do keep in mind that in the process of opening up a casino here in Windsor, the figure of about 30,000 people a day, the predictions are that about 20% of those people will stay overnight in Windsor.

Now if you look at that figure and assume that, say, somewhere between 75% and 80% of people do just come for four or five hours and then go back home, the rest of them, when they're here, have to eat. They will go shopping, they will take part in various activities in the city of Windsor. The other 20% or so who stay here, and that's a great number of people, will be staying in the hotels, will be shopping, will be eating, will be taking part in other activities.

That is quite a spinoff -- not even spinoff -- a direct benefit to the people of Windsor. It'll increase their tax base significantly. There are restaurants and stores now in the process of planning to expand instead of closing down, which they were a very, very short time ago thinking of doing. There will be about 8,000 jobs created here, either direct or indirect, which will increase the tax benefits for the city. It will take some people off welfare, off unemployment insurance. There are incredible benefits to the city.

With all due respect, you talk about what I said was drivel. I have to say that what you just said was drivel. It doesn't make any sense. I clearly outlined the benefits that will come to Windsor. We have worked directly and closely, Mr Kwinter, from day one with the city of Windsor: the mayor and the business folks from the city; the tourism folks; St Clair College of Applied Arts and Technology, which is training local people to work in the casino; the police. We have worked from day one with them and they firmly believe -- go talk to them and hear what they have to say. The benefits which will come to Windsor are enormous and immense. It's a great tourist attraction.

On baseball, well, I think I do have a fairly good understanding of baseball. Just ask some of my colleagues and they'll tell you about that.

I think when we're talking about horse racing in the context in which I mentioned it, it's a professional sport activity that has fallen behind the times in terms of marketing itself and it's something that they readily admit. Even though I tell people I grew up in Labrador and there aren't any horses there, I have learned a lot about the horse racing industry over the past few years, believe me.

I have met personally with every single component, individually, of the horse racing industry time and time again, and the minister who brought in this new taxsharing arrangement over the next four years with the industry in order to keep Fort Erie open, which incidentally was in trouble before a casino was ever mentioned, and other tracks.

We have been working very closely with them, and they themselves admit that they've got to help themselves in terms of their marketing. It has been a problem. I think the fact that we have committed to work closely with them here in Windsor to try and draw tourists to the track is significant, and that's something I'm personally very committed to.

We are not coming up with policy on the fly. We have a tremendous project team, and some of them are with us today, that has been working sometimes night and day over the weekend to gather as much information as it can. We've been consulting with experts in this field from all across the world. We have a special arrangement right now, for instance, with New Jersey to trade information in the so-called black book of people banned from casinos.

We've been working very, very extensively with many, many people over the last couple of years getting information, and I think we're very, very ready to go. We do know what we're doing and we've been complimented in newspapers directly from experts from around the world in terms of our approach to this, our careful approach from day one, getting the police involved, getting the local community involved, listening to the concerns of the community, listening to their concerns because they are the people here in Windsor who know what's needed.

So I thoroughly disagree with your analysis of the situation. I think it's dead wrong.

The Chair: Mr McClelland, you have about six minutes.

Mr McClelland: Madam Minister, I wanted to touch base on a couple of points that have been alluded to by my colleague Mr Kwinter. I wonder if you might briefly comment on what evidence has been brought to your attention that changed your mind, to offset those things that compelled you to vote against a casino in Metro Toronto when in fact you sat on Metro council and opposed a casino at that point in time. I'm sure there must be something that compelled you to make that significant change.

You talk about the costs and benefits associated with a casino, and Mr Kwinter certainly talked about the burden. I think it's interesting to note that one of the things you talk about is the police. You indicate that they're very supportive. I suggest to you that we may hear a somewhat different opinion, and on examination tomorrow, I'm sure that will be qualified somewhat.

I would suspect that the Windsor police, both professional staff and the police services board, will certainly be cooperative in every respect. After all, they will operate under the golden rule inasmuch as you have the gold; you will help make the rules. They'll want to keep, if you will, in your good graces.

One of the things that concerns me is that you indicate in your brief today and you've indicated from time to time that you will be prepared as the government of the province of Ontario to ensure that necessary policing is provided. The question that I have is, who makes that determination?

I know right at the outset there's a difference and a dispute, quite frankly -- and I'll put it in that way and maybe you'd like to comment -- in terms of the adequacy of the police services that are going to be provided. At the end of the day, as Mr Kwinter said, you reap the benefits and leave it upon the city to come to you asking for the opportunity or the funds to provide the services it wants.

There is no jurisdiction in North America that I am aware of where there's not a licensing arrangement or a fee arrangement, where costs associated with the city don't accrue directly to the city. I'd appreciate your comment on that. I think it naïve at best to suggest that secondary spinoffs will be sufficient to offset the burdens to this community.

I do not doubt for a moment there will be benefit, but I do think as well -- I think it's been very evidenced by the fact that your economic impact study was released on Saturday, this weekend past, when you were well into it, well beyond second reading. The draft proposal or the request for proposal had already been put forward, and it has been substantially completed, I would suspect, at this point in time.

The other questions that I think flow from this, and I'll be interested to hear them over the course of time, are how many casinos, and when? There's little doubt that you're looking at the Niagara region. There's little doubt that you're looking at Ottawa, possibly two in Toronto and probably secondary casinos or secondary markets in Sudbury, Sault Ste Marie and Thunder Bay. Each of those communities will have particular dynamics that will require specific needs to be met.

When we get to six, seven, eight or however many casinos we have in the province of Ontario, Minister, how do you hope in any reasonable way to interface with the native casinos that will inevitably be a reality? How do you propose to respond to them when they come to you with a constitutional issue and say, "It is our jurisdiction and we will do it the way that we want to, regardless of what you are doing elsewhere in the province"?

I want to mention very briefly as well that notwithstanding your assertion, it is contrary to your government's policy. I think that there are others who would speak very, very plainly with the contrary opinion. I will not bore you. You've heard them time and time again, quotes made by none other than Bob Rae and Mr Laughren over the course of time.

Those are not issues, I think, that can be responded to very briefly and, quite frankly, in a superficial manner by saying that things change. Certainly things change; that's a fundamental policy. I think the words and the quotes that have so often been shared with you by members of the opposition, and indeed members of your own party in terms of what your Premier and your Minister of Finance said in the past, quite frankly call for some explanation.

I think it perhaps comes back to my opening comment: What are the things that have compelled you to change your mind, to vote, if you will, contrary to what you voted not too, too long ago when you sat on council?

The last comment I'll make and ask for some brief reflection on -- they are numerous. I want to get into the horse racing industry. To say that it is not relevant to Ontario is, I think, and I say this with respect, a little bit offhand, Minister. I think it may require some modification and some adjustment.

But I'll tell you this: Next week, when we hear from the people in the horse racing industry, they will suggest to you with much more, I'm sure, passion and vigour than I could, that their studies and their concerns are indeed relevant, and they're significantly relevant. The casinos potentially across the province will have a major economic impact on their industry. Don't dismiss it, Minister, I would urge you, by simply saying it's not relevant.

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I want to talk about the timing of your studies and, again, draw to evidence the fact that you say there are studies in place. You talk about the consultative process. The fact of the matter is that the city of Windsor did not have anybody sitting directly on the team. They were talked to from time to time. Yet they wanted to have a presence, and I think that was a reasonable request, and as you contemplate going elsewhere in the province, I'd be interested in that.

The last thing I want to talk about is the integrity of the process. There are groups out there that have responded to the request for proposals and you know very well what happened with the interim site. You will say it is an apples-and-oranges comparison and I will grant you that. To a certain extent it is somewhat different. There are two different products, if you will, being considered.

The fact of the matter is that at the end of the day the member for Windsor-Riverside, the Minister of Education, made a call and made a political judgement that he wanted it downtown and effectively told you, as minister, that that's where it would be.

I question your leadership in this regard. I question who really has their hand on the till of the ship. As I said in the House, I think the good ship Casino left port and you had no idea what course you were charting. As Mr Kwinter has said, you have begun to put it together after the fact.

In terms of that interim site, you have now nine organizations that have put substantial investment into development of the proposal. They have no doubt spent literally tens if not hundreds of thousands of dollars, and the question I have to you is in terms of the integrity of the process. What kind of assurance can they have that there won't be the same kind of political interference that was so evident in the interim site?

Minister, I think you're patching this up as you go. I have no particular qualms about a casino per se. I share your sentiment that I think we should all have fun and probably enjoy ourselves a lot more than we do. I hope we're able to do that throughout the course of these hearings.

But I think what we want to see, and members of the opposition and indeed more importantly people across the province want to know, as you contemplate going to six, seven or perhaps eight other locations in the province, is we want to ensure that the cost benefit with the burden has been dealt with adequately, that the economic impact studies have not been done after the fact to effectively justify a decision already made, that the terms of reference --

The Chair: Mr McClelland, I have been very, very lenient. You're about three minutes over your time, and the minister still has to respond on the Liberal members' time.

Mr McClelland: I will conclude with this sentence then.

The Chair: I understand that the minister indicated at the very beginning she wanted to take a break after her presentation. I unfortunately got ready for questioning.

Hon Ms Churley: I can wait till the end of questions.

Mr McClelland: Let me just conclude with this sentence then. Minister, the study you did -- you talked about the US study -- I think we'll notice that the terms of reference were effectively saying to develop a study that will offset or contradict the Windsor Police Services Board. I want to make sure as we go throughout this process -- the questioning that we will be pursuing will be in part to ensure that this is being done and was done in fact in a thoughtful manner and with a lot of foresight and not an after-the-fact proposition.

The Chair: Thanks to the generosity of the minister, we'll hear no doubt a lengthy response to all those questions Mr McClelland has put forward.

Hon Ms Churley: I'll try and compete with him and see if I can be faster and be more accurate. It should be no problem.

Mr McClelland: Was that faster than Marilyn?

Hon Ms Churley: It must be that beard.

You mentioned a number of really important points here and I'm going to start with a couple that I think are most important.

First of all, in regard to the study which was released today, the government has no plans to move further right now. We said at the time that we listened to people from the very beginning, and there was certainly a sense that we should move slowly and cautiously and carefully.

There are lots of people out there, some in Windsor in fact, who think we're moving far too slowly. I think we're being cautious and I think we're being very thorough, and we've had the Windsor citizens involved from the beginning. We have no plans to make decisions at this point on further casinos.

The study was commissioned partly because the opposition, I think with a very valid point, asked us to do it. There had been no economic study, and should the government decide to go further and allow more casinos, it certainly will be a help in any decision-making. It's a good study to have.

But at this point, there's just no decision to go further. We want to have the Windsor casino up and running. We want to have some experience with that. We want to look at how it works and to be able to solve any of the problems that may come up. That will give us a better idea. That's what we've said from the beginning and that still is the fact.

Another very important point I want to address that you brought up is the integrity of the process. This process has been, from the very beginning, and I think you know this, handled with the utmost integrity. The allegation that Dave Cooke is really running the show: It's not so. I think my consultations with people here in Windsor, directly with the mayor and directly with business people in this community where I've come to talk to them myself and those who have written to me, made it very clear from day one that they wanted the permanent casino to be in the downtown. That's one of the areas where we listened to the citizens and to the business people and to the municipality of Windsor.

In a way, it would be easier for the government and easier for the police if we just said, "No, no, no," to people who live in Windsor, "we're just going to put it on the outskirts somewhere, self-contained, lots of restaurants and everything right there within that one building, draw people into there." It would be a lot easier and would make more money for the province, but it wouldn't help revitalize the downtown of Windsor, which is partly what this is all about, a very large part. So we chose to listen to the people of Windsor about where to put that casino.

Now, what happened is that the government made a decision, in consultation with the city council, to go with an interim casino. At that time, there was not consensus in the city as to whether it should be downtown or not. People were concerned about infrastructure, and clearly people weren't sure. So we felt it was responsible to put out a request for proposal at that time for locations in and around the downtown core. It turned out that there was only one, and that was the art gallery from the downtown core. After the proponents submitted their bids on that, the city council assured us, they made a unanimous decision that they wanted that interim casino downtown, after the fact. The business people -- I got, I think, hundreds of letters in my office on the same subject, saying they knew we were working with the city council and the police, that they could deal with the infrastructure problems. There was a big demonstration with over 600 people here.

We had always said from the beginning that in terms of the location, we wanted to listen to the city of Windsor, that it had to live with it, and the whole plan was to help revitalize the downtown, so when the city of Windsor made it clear to us that's what it wanted, we exercised our right to withdraw from that process and to choose the downtown location, and that's what we did.

In terms of the nine proponents who are waiting for the short list and the final result for the operator: a whole different process. We have never said to Windsor, and never would, that it would have any say whatsoever in the operator of that casino. That's where the difference lies. In fact, I personally have no input into that. There is a deputy minister's committee set up which will review the proponents' documents and will make decisions based on all the criteria and how best they will interview them and talk to them directly and will make that decision. It is not in any way related to Windsor; it's a totally different process. So the important point to understand here is that we wanted and asked the city to be involved in the location of the casino.

The horse racing industry: I certainly don't dismiss its concerns. I do have some argument with some of their statements around this. I do believe that further work has to be done with them to help the industry. The industry has been having some trouble for some years, albeit that in North America I think it still comes third. It's doing very well, but it needs a shot in the arm and it needs some help and it needs to do some work on its own to do better promotion. But I certainly don't dismiss the fact that we have to work with them very closely to keep them viable, and that's what we're doing.

I want to come back to your apples and oranges, and in the House didn't you also refer to it as a baby raccoon, this casino?

Mr McClelland: No, a different story, minister.

Hon Ms Churley: That's a different story, is it?

First of all, I was a member of city council, not Metro council, in Toronto. The situation with that casino -- there was a request that there be a temporary casino at the Exhibition grounds for charities. It was very clear at that time that the community was opposed to it. There's no conflict in my position here. I still say exactly the same thing: I would not support a casino in any community where it is very clear that the citizens are opposed to it. In this case, I have been totally reassured in many, many ways that the community supports the casino in this community.

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Lastly, because I think the Chair would probably like me to hurry up here -- although you raised a lot of issues, I'm sure over time some more answers will become available -- I'd like to speak to you a bit about the native, aboriginal aspect of casinos. We are in the process of discussing with them how they can be involved. They will be involved. The study that was just released, even though it names particular cities, I think those were just used as a reference point for actual broader regional locations which would be in its view appropriate for casinos, were we to expand. If the government decides to go ahead with further casinos at some point, it doesn't preclude at all, if the government were to choose any one or however many of those locations, that aboriginal communities couldn't be involved in that in some way. So that wouldn't create any problems.

In terms of the studies that we've done, some we've completed and others are ongoing. For instance, there'll be more information about the social services which are available right now within Windsor. We don't have the final results of that but we'll be looking very closely at what is available and what may need to be supplied at a later date, once the casino is up and running. We didn't ask people from the city of Windsor to sit on the project team; however, we have worked very, very closely, the project team itself, with the mayor of the city, with various bureaucrats from the city, with the police, on all kinds of issues related to Windsor on infrastructure, policing, safety, all those sorts of things. They've been involved directly from the very beginning. The project team, in a sense, offers expertise but also has been a coordinating body in bringing all these other people who have a direct interest into the process at times when their advice is necessary. So they have in no way been left out of the process.

The Chair: Thank you, Minister. I'm sure all members of the committee have not minded the extensive question-and-answer period that just took place.

Mr Carr: I will try to get right down to the questions very quickly because we don't often get a chance to have the minister and ask her this many questions, so I'll do that and save some of my speeches for the House, which may make some in the gallery happy. They can tune in when I speak in the House.

I want to get down very quickly to what I believe, and I agree with Mr Kwinter that a lot of this is revenue-driven. I notice on page 9 you say, "Injecting millions of dollars into the provincial treasury to help sustain...." Taking out the costs of policing, the 10 new police officers, taking out the cost that you're going to take out for helping charitable organizations that may be affected, after all is said and done, how much is the provincial treasury going to get from the Windsor casino?

Hon Ms Churley: The answer to that is not clear at this point because we're not absolutely clear in terms of the interim casino, the number of patrons it will draw. So we haven't come to a full, clear number of how much money the government will actually derive from that.

Mr Carr: How about ballpark, then?

Hon Ms Churley: We've already said that we will be paying for police costs, for instance, out of the proceeds of the operation, and there could be other costs associated which would come out of the revenue, but we expect somewhere between $100 million and $140 million. That's ballpark. I can't be --

Mr Carr: And that's just out of Windsor, just out of the project?

Hon Ms Churley: Yes.

Mr Carr: So that's what the province can take in with --

Hon Ms Churley: That's ballpark what we think we would derive from that.

Mr Carr: So that goes right on the bottom line to the province, what we can expect?

Hon Ms Churley: Yes.

Mr Carr: Okay. On page 3 you talk about the haemorrhaging, the increasing amount of money going south, right at the bottom of the page there. How much is that?

Hon Ms Churley: Sorry. Can you --

Mr Carr: On the bottom you say, "Our province is haemorrhaging an increasing amount of money to other provinces" that have casinos. How much is going to the other states and other jurisdictions, people from Ontario spending at casinos?

Hon Ms Churley: I don't have the figure. I'm hoping that --

Mr Carr: The question is, how much is haemorrhaging?

Hon Ms Churley: Yes. But that's not directly to other provinces. Isn't that also into the United States and other provinces, about $600 million, correct?

Mr Carr: You say $600 million is what Ontarians are spending at casinos?

Hon Ms Churley: Yes, outside of the province.

Mr Carr: In the US.

Hon Ms Churley: And the rest of Canada.

Mr Carr: That's going to Vegas. That's all the other ones.

Hon Ms Churley: Yes.

Mr Carr: And how much do you think -- and let's be specific about the Windsor casino -- you are going to keep here as a result of having a casino here?

Hon Ms Churley: My deputy is telling me here these are questions that perhaps it might be better to wait for the more technical, instead of them whispering to me and then me --

Mr Carr: Actually, I wanted to see how much the minister knew, but I guess we've found out.

Hon Ms Churley: I don't think that's a very fair comment at all.

Mr Carr: No, it is, because it's revenue-driven.

Hon Ms Churley: I don't have the figures, the numbers, in front of me.

Mr Carr: Certainly you should be able to know basically, when you're putting this project on the hot seat, how much revenue is expected. I mean, these aren't that difficult questions, I would think. They're the average questions I would ask as a minister. So I don't mean to put you on the spot. But go ahead; you were going to say something.

Hon Ms Churley: No, I don't in any way feel put on the spot. I don't have a list of numbers directly in front of me.

Mr Carr: I don't even mind if they come forward with some of them. We might run out of time, but these are some of the questions that I think I'd like to put to you.

The other one, which is a political one, is the job losses. Don Abel may know this too. I picked up the Burlington Spectator, and Flamboro Downs, in his riding, was very concerned about the job losses, in the big headlines. I guess Don may tell us a little bit. I guess he had a little bit of a tour. But the people in the horse racing industry are very fearful of the jobs.

You say on page 1 that you're going to create 8,000 jobs. How many job losses do you think will be there in the horse racing industry as a result of the casino coming into Windsor?

Hon Ms Churley: Into the Windsor area in particular?

Mr Carr: Yes. Just let's talk about this one specifically, because you don't have any other plans for other casinos, you just told me.

Hon Ms Churley: Yes, exactly. The situation now with the Windsor Raceway is that, as you may know, they've been having some difficulties for a number of years. We're hoping in fact that because we've outlined so categorically that the operator must work with the Windsor Raceway, what will happen will improve the situation at the Windsor Raceway, because right now for a number of years that track has been in serious enough difficulties at times where it's come close to closing down, and that was before a casino was ever mentioned. So our plan is to work directly with the Windsor Raceway and have some cross-marketing between both the casino and the track and see if we can improve things there.

Mr Carr: Okay. The other question relates to the charities. As you know, a lot of them do fund-raising. I think you mentioned some of the figures of how much they raise.

On the last page, page 12, you say that you're going to keep an eye on it and that whatever amount is taken out of the Windsor area charities, "If it is clear...the casino has hurt...we have pledged to work with the charities to correct these effects."

Does that mean that if, the total bottom line, the Windsor charities say "We've lost" -- and just pick a figure -- "$100,000 this year," the province will write a cheque out to these charities for $100,000? That is the first part of the question. Number two, how long do you plan on doing that? And if the answer to the first one is no, what exactly do you mean specifically for the charities? How are you going to help them, other than being sympathetic, if they do lose a lot of money? What are you doing to do for those people specifically, since you raised it on page 12 there?

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Hon Ms Churley: Yes, as I said, we have worked closely with them and consulted with the charities here, and the first thing we did was to agree to not allow bingo to be played in the casino, and many casinos do, of course, allow bingo. Usually studies show that it's a different clientele that tends to go to these charitable bingos. The organizations here felt quite comfortable with that agreement at this point.

As to the answer to your question about the cheque, no, we haven't determined that if the charities come forward and say, "We've lost $100,000," we would just write out a cheque for that. New rules under the new act that, as you know, we just brought through the House, have in fact helped charitable organizations raise more money, for all kinds of reasons. I guess what I'm saying is that in some cases it's going to be difficult to determine what is directly related to the casino and what may be related to other factors. That's something we will have to continue to work out a solution for and some kind of formula as to how and where the problems lie within that sector.

At this point, I can't tell you exactly how we would deal with it, but I think the fact that we have sat down with charities and discussed with them our concerns about that -- and obviously it's important to the government as well to make sure that the charitable organizations continue to thrive, because the money that they make through their activities goes to very worthwhile causes that the government might have to fund if they were not raising that money. So we will be looking very closely at that.

Mr Carr: One other question: On page 8 you say, "For the record, I think it should be left up to the individual." I know one of the other members mentioned that in the past you'd voted against the Toronto casino. I understand you were also opposed, when you were on Toronto council, to such things as beauty contests. I wonder if you've changed your opinion of things like that and if that should be left up to individuals as well.

Hon Ms Churley: That's a trick question for you. No, I haven't.

Mr Carr: So beauty contests are different, as opposed to casinos.

Hon Ms Churley: Absolutely.

Mr Carr: Mr Chairman, if I might, and I guess I've got a little bit of time, I will give some time to Mr Drainville to ask some questions.

Mr Dennis Drainville (Victoria-Haliburton): Madam Minister, I have a few comments here. I believe I have 10 minutes by this clock that I started when Mr Carr began his comments.

I'd like to begin with the comments that the minister opened up with, and they were comments that basically were sort of repudiating the view that there was ever a policy of the New Democratic Party or the CCF against it. I will only repudiate it by saying that indeed in terms of our policy manual, the minister is probably correct, but is there not also a tradition that was subscribed to by people like J.S. Woodsworth, people like Tommy Douglas, people like M.J. Coldwell, people like Floyd Laughren? Floyd Laughren spoke against the use of such funds from gambling for state important programs four months before the election took place in 1990. So we see a rather quick change of mind, not just a change of time.

Mr Gordon Mills (Durham East): That was then.

Mr Drainville: That's right. That was then, this is now. In other words, principles are as flexible as the winds of change. I leave that to the honourable member to think about.

I might say, Madam Minister, that it seems to me that in terms of the issues that have been delineated by you, you said, "Is it not the right of the government to put forth legislation or put forth it's policy as it wishes?" Of course it's up to the government to do that, and despite the fact that it has not been part of the tradition of the New Democratic Party doesn't mean that the government can't put forth a policy. Absolutely right. Nobody has ever argued that, though, and that's the thing the minister is missing.

What was argued was that the principle is different from any other government up to now, different certainly from the tradition that was held by members of the NDP and the CCF before. Would it not have been fair to have afforded the people of the province of Ontario the opportunity to discuss the principle of establishing expanded gambling opportunities, including casinos, giving them the opportunity, by putting forth a white paper or a green paper or involving them in some kind of consultation that would say to the people of Ontario, "Yes, indeed, we do care about what you have to say about the principle"?

Now, we have heard from the government that there's been so much consultation. Ah, but Madam Minister, not about the principle, only about the decision to go ahead. "Where will it be? We'll talk to the people of Windsor. You're it, folks, whether you like it or not. We're coming to town. We're going to sit down with you. We're going to talk to all the partners, and we're going to see where we are at the end of the day." That's not what I call consultation, Minister.

The second point I'd like to make is the possibility of plebiscites as raised by the honourable leader of the third party in the House. The point that I think the member was making in that discussion in question period was that it has been seen in most jurisdictions -- yes, through the United States and not in Canada -- that plebiscites and referenda have been helpful in ascertaining the openness of the citizens towards moving in that direction of establishing new gambling opportunities.

I would say to you, Madam Minister, that as a basic premise, asking the people is not a bad thing. You don't have to do it through the provincial government. You can do it by working with the municipal governments to see that such a plebiscite is put forward. The fact that you haven't thought of that indicates that consultation, again, is not a priority of your government nor of you.

The third point I'd like to make is comparisons. On the comparisons that you make throughout this paper, I wouldn't go as far as the honourable member for Wilson Heights when he says that this is drivel. I would say, though, that some of your assertions are silly. Some of them have to do with the comparisons that you make. Witness the fact you make comparisons in many different areas between Winnipeg and Windsor. In fact, to compare the two is really not even like apples and oranges; it's like a cat and a clothes-pin. The two are so different that they cannot be compared.

What do we have? What's the size of the Crystal Casino, Madam Minister, in Winnipeg? I believe it's about 17,000 square feet?

Hon Ms Churley: Sorry.

Mr Drainville: I think it's about 17,000 square feet, something like that.

Hon Ms Churley: Oh, the size of the Crystal.

Mr Drainville: The size of the casino in Winnipeg.

Hon Ms Churley: Yes, about 17,000.

Mr Drainville: The size of the casino that we're talking about here in Windsor is 75,000 square feet; considerably different. As to the basic rules on how that casino is going to be run, the size of the operation is totally different from that which is envisioned here in Windsor. Different geography: We are across from one of the crime capitals of the United States of America; Winnipeg isn't.

Anyway, those kinds of comparisons really are very silly. I don't know why they're made to begin with. The comparison between live theatre and casinos: What we have with casinos is the establishment by the government of a plan for a regressive tax. This is nothing more than the politics of desperation on the part of the government. You don't want to give people fun; you want to bilk them of money. Let's be straightforward here. You want to grab them by their heels, give them a good shake and get as much money as you can, because people don't win at gambling, they lose. Live theatre is private enterprise bringing culture to people. What we have with the establishment of casinos is the government becoming a friend of the mob. These are different approaches. I just want to bring that to the minister.

You say in your remarks, Madam Minister, that the government does not want to promote gambling. Wrong. You spend scores of millions of dollars every year on advertising on the TV for the Ontario Lottery Corp which says to people: "Freedom. You can have freedom. You can have everything you ever wanted in your life. You want to help Ontario grow and be a wonderful place? Just buy your lottery ticket."

Well, Madam Minister, you do want to promote gambling. You do want people to spend their money. You do want people to give that money to the government. So don't say you're not promoting it, because it's not true.

Crime: You say that what comparisons have been made between the crime, let's say, in Winnipeg and other jurisdictions -- let me say this, and I'm not going to look for a moment at New Jersey, and I'm not going to look for a moment at Nevada, but I am going to look at South Dakota, Louisiana, Colorado, and a number of other jurisdictions that speak to you, and they're right here in press reports from those cities that talk about the spiral down of their downtown core, the raising of the real estate values, the increase in crime, the increase in social problems.

It's on public record. You may not be being told this or maybe you're trying to sell the people of Ontario and Windsor a bill of goods. I don't know. But I'm telling you it's on public record, and if you want chapter and verse, I'm glad to give it to you any day of the week.

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The Chair: Mr Drainville, I just want to remind you that you have a minute to go.

Mr Drainville: I have three minutes and --

The Chair: I'm the timekeeper, Mr Drainville, and I didn't dispute what you said. I just want to let you know that --

Mr Drainville: That's fine, Mr Johnson. I'll pass my last minute to Mr Kormos then.

Mr Peter Kormos (Welland-Thorold): I'm going to talk real fast in these 30 seconds because it's something that's really important, because this Coopers and Lybrand report undoubtedly cost a whole lot of money. I've been dealing with these people ever since I was sitting on a small-town city council back in Welland. They charge by the pound sometimes, and if not by the pound, by the word.

My problem is that not a single survey or focus group was done with out-of-Ontario casino consumers. If you take a look at the appendix of this report and take a look at the conclusions, all of the surveys and focus groups were done with in-Ontario consumers.

In addition, if you take a look at tab 6 and look at the premises, the "Summary of Major Assumptions," it indicates that, "The actual impacts experienced may be materially less," if the reality of casinos do not coincide with what the major assumptions are here. We're talking about things like food; I won't say booze:

"Food and beverage outlets and entertainment facilities normally associated with a full-service casino will be developed.

"The casinos will be open 24 hours per day, 365 days per year.

"The Ontario casinos will be operated similarly to those in Atlantic City, including credit, complimentary and advertising policies."

My problem is, how valid is this? If you're really talking about tourism, you're not talking about recycling Ontario dollars. How come there were no focus groups or surveys of rich Americans, rich Japanese, rich Germans, rich Europeans? How come the only people who were surveyed with a view to what they want as casino consumers were Ontarians whose money is earned here and who do not, in my view, I respectfully submit to you, constitute bona fide tourists, nor would they constitute a major boost to any community's major tourist industry.

We're talking about made-in-Ontario money being spent in Ontario casinos. We're not talking about a single effort to seek out-of-Ontario consumers for these casinos. That troubles me a great deal, especially in conjunction with the revelation, a week and a half to two weeks ago, that the premise used by the American criminologists is that the people who are going to consumers of the Windsor casino are people who are going to be bused to the front door. A bus is going to sit there, undoubtedly dieseling on, doing whatever that does to the environment, and then cart those people back home to Leamington, Chatham, Lord knows perhaps even back to Welland-Thorold -- God bless.

The Chair: Thank you, Mr Kormos.

Mr Kormos: You can imagine I wish I had more time.

Hon Ms Churley: I'll start with Mr Drainville for a moment. In listening to him, I can't decide whether it's a moral problem he has, or just like a lot of other people here, he is saying, "No problem with the concept, but I don't like the way we're doing it." In his comments that wasn't quite clear.

He did go on at great length about the type of casino that we're building and the fact that we shouldn't be comparing it to Manitoba. Let me tell him that most of the comparisons, although he didn't do that today, have been with Atlantic City. It's to the opposition's benefit to try and compare what we're trying to do here in Windsor in close consultation with the city, to do something different that works for this city, to pick out the worst example it can find in the United States, and that's Atlantic City, a town of 35,000 people with 12 casinos on a strip that were all built to bring people in, no benefits going to the rest of the community in any way.

The whole idea is to get people in there to spend their money and to not go out and spend money in the hotels and the restaurants downtown, very different from what we're trying to do here in Windsor, and I think that should be acknowledged up front once and for all.

In terms of the lack of consultation, there were a lot of communities that came to the government wanting, in some cases begging, to have a casino in their municipality, and it was a very hard decision for the government to make, once it decided to move cautiously and slowly, about where the pilot project should be. One of the reasons we chose Windsor, besides the fact that it is the largest border town hard hit by the recession etc, was the readiness of this city to have a casino. The municipality, the city council had already passed a unanimous motion. They wanted a casino here. There had been consultation with citizens, there had been quite a lot of involvement, and people here understood. A lot of the myths that have been talked about around this table today were already debunked here.

I think it's really important when we're discussing the problems associated with casinos -- and yes, there are some and we're addressing those -- that we don't exaggerate to the point where it sounds like we're -- bringing up the mob, for instance. That's such a myth, that the casinos these days are run by the mob and controlled by the mob. I think it's irresponsible to be bringing up those kinds of concepts, because it isn't so.

In terms of the government's position on casinos, I can only speak for myself on this. I think I've said very clearly that since I've come to government and since I've been in this ministry I've been very involved with the gaming industry in Ontario. We can't ignore it. I already said we can't be hiding our heads in the sand, which I think some people would have us do. There are bingos, for heaven's sake, in church basements.

As far as I'm concerned, gaming is gaming, gambling is gambling. There are some people who say to me, "I go to the horse races, but a casino is morally wrong, bad." I say to them, "I like horse racing, I've been to the tracks before, but to me gambling is gambling." You can't say that a casino is somehow different and more morally wrong somehow than other forms of gambling, including bingos in church basements, which I have nothing against, all the way up to horse racing and charitable gaming.

Gambling is gambling, and I think the approach has got to be the one we're taking, and that is proper consultation, making sure the community is well informed of what's going on and involved, making sure that the policing is dealt with up front, making sure that charities are dealt with; in fact, all of the kinds of things that we're doing to make sure that this casino is made for Windsor and works in Windsor are being done. I think those are the important questions to ask as we sit here and discuss this bill that's before us today.

The Chair: Thank you. Does that include your comments from the questions from Mr Kormos and Mr Drainville?

Hon Ms Churley: Yes.

The Chair: We have some questions from the government members.

Mr Kormos: Excuse me, Chair. I suggested the Coopers and Lybrand study wasn't worth the paper it was written on because --

The Chair: Yes, you said that, Mr Kormos.

Mr Kormos: I was hoping that the minister -- are we going to get our money back from Coopers and Lybrand?

The Chair: Apparently, Mr Kormos, the minister --

Mr Kormos: I was hoping that the minister would address that.

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Mr Robert V. Callahan (Brampton South): I think they're handling the receivership of the government.

The Chair: Mr Duignan.

Mr Duignan: Thank you, Mr Chairman. We would like to maybe just use five minutes of our 20 minutes. I know the minister's anxious to take a break; we would devote 15 minutes of our 20 minutes to the break for the minister.

I just want to make a couple of comments. You know, there are a lot of traditions in the New Democratic Party. One of the traditions in the New Democratic Party, if you look at the manual, is to nationalize one of the banks. I don't think that's an active consideration at this point, whether at the national level or indeed at the provincial level.

Also there is the fact too that when I look across and look at Mr Drainville, he's wearing a "Casino No" button issued, I understand, by the horse racing industry. Am I correct in that assumption?

Mr Drainville: Actually, I have no idea. Margaret Marland from the Conservative caucus gave it to me. I thanked her very much. I like the button.

Mr Mills: I wouldn't wear it if she gave it to me.

Mr Drainville: I think it looks really good with a black tie.

Mr Duignan: Here's a button issued by the horse racing industry. There's some paradox, there's some double standard here. It's wrong to have casino gambling but it's okay for the horse racing industry. It's okay to have bingos, it's okay to have lotteries. To me that's a double standard.

Also, the opposition over the last number of years has hammered us in relation to cross-border shopping. Well, $600 million a year flows south from this province to the casinos down south. Why shouldn't we recoup some of that money back in here from some of the people who actually go south or some of the American tourists, estimated at 12,000 a day, who will come to Windsor? We have a right to that and we are in that area addressing the deficit and the tourism dollar going south.

Also, I want to very briefly -- and we will be getting into this as the weeks go on in relation to the back and forth on the numbers of people laid off in the horse racing industry. A number of studies indicate -- and I notice one by a professor of economics from the Institute for Policy Analysis in the University of Toronto takes issue at the fact of the Price Waterhouse study done by the Ontario Jockey Club in 1992 that estimates that only some 25,000 to 27,000 jobs are in that particular industry. It also argues that the impact of casino gambling on horse racing handle will be considerably more modest than indicated in the Price Waterhouse study and decreases in wagering in the order of some 5% or 10%. I think that's also borne out, and the Coopers and Lybrand study also indicates on that particular issue as well.

But also the horse racing industry has trouble itself, and that has been emphasized to us by the number of people who have come forward from the horse racing industry over the last number of months. In fact, look at a newspaper article from the London Free Press, where the general manager of the Woodstock racetrack indicates that he is going to plan to market Woodstock Raceway differently. "Fleming says the Woodstock Agricultural Society, which owns the raceway, is making programs more user-friendly to make handicapping easier for newcomers to harness racing. He said, `It used to be easier to scratch numbers than to pick a horse. We want to change that.'

"He also has done a number of studies studying the market and has led the society to realize that there must be a change in the horse racing industry to be competitive for the entertainment dollar." That's what we're talking about: the entertainment dollar.

Those are the only remarks I want to make at this time. I'm sure we will have an opportunity over the coming weeks to discuss some of these issues in depth.

The Chair: Any comments?

Hon Ms Churley: No, I think I concur.

The Chair: Mr Mills, you had --

Mr Mills: Just a quick comment, Mr Chair, if I may, in reference to a comment that my colleague the member for Victoria-Haliburton made about crime. Everyone's preoccupied with the crime that a so-called casino would bring into an area. I can tell you, Mr Chairman, that I live and spend most of my working days in a block in Toronto off Jarvis Street where just recently there have been four people murdered and the building that I live in -- I was told one day not to put any garbage in the dumpster because there was a body in there the night before.

I'd just like to say that crime doesn't necessarily follow on the heels of casinos. It's everywhere, and I refute the allegations that have been made that because we've got a casino in the vicinity, somehow suddenly crime descends.

I'll just tell you, Mr Chairman, that this past Sunday, as my habit is, I was in church and I spoke to one of the congregation and I told her that I was coming here today. She said: "You know, Gord, whenever I go to Las Vegas I feel perfectly safe. In fact, I feel safer there than I do in downtown Toronto." This is an upright, Christian member of the United Church of Canada.

The Chair: Mr Duignan, you had something further you wanted to say.

Mr Duignan: It's a brief comment I forgot. The member for Haliburton indicated the crime in South Dakota. Recently, in November 1992, there was an initiative on the ballot at that time asking the voters of South Dakota whether they wished to repeal the video lottery terminals. Sixty-three per cent of the people who voted said no, they wished to keep the VLTs.

Mr Callahan: They wanted to get their money back. That's why they didn't want to vote. Are you kidding?

Mr Duignan: I've always favoured that the winner got at least 60% --

Interjections.

The Chair: Order.

Mr Duignan: Mr Chair, I've always favoured that the winner here at this point got at least 60% of the vote. At this point I would move that we take the remainder of our time and devote it to a break. I understand the minister at this point wants to take a break.

Mr Callahan: Can I ask just two small ones?

The Chair: Mr Callahan, let me tell you what's happened so far. We had 20 minutes per caucus, and 20 and 20 equals 40, but somehow that turned out to be 60 minutes. You know why you didn't ask a question. I won't say it, but you know --

Mr Callahan: I wasn't here.

The Chair: That's right, Mr Callahan: You weren't here.

Mr Callahan: But I got here. I've come all the way from Toronto and I'm not going to --

The Chair: That's right, but the media did want to scrum the minister and the minister asked for a break.

Mr Callahan: It's a very small question.

The Chair: If we have unanimous consent, we'll do it. If we don't -- no. I don't hear unanimous consent, Mr Callahan. We're going to have a 15-minute recess.

The committee recessed from 1555 to 1612.

The Chair: The committee will come to order. We'll resume the proceedings this afternoon. We're at that point in time where we are about to be presented with a technical briefing by Judith Wolfson, deputy minister, and Domenic Alfieri, assistant deputy minister of the Ontario casino project. Welcome before the committee today. I will open the floor to you to make your presentation.

Ms Wolfson: First, I would like to thank the members of the standing committee on finance and economic affairs for its invitation to appear at the public hearings on Bill 8.

You have introduced Domenic Alfieri, the assistant deputy minister responsible for the Ontario casino project, and indeed we have other members of the project here. Our intention is to attempt to assist the committee in any way we can with information about the project, casino gaming, what we've learned about it, specifically how it relates to the legislative framework that we've put in place.

The presentation we intend to give you, should it be the committee's pleasure, would be to give a brief overview -- the minister has covered some of the overview -- of the casino initiative and gaming activities and the casino industry in particular.

We would then intend to deal with an overarching framework which has been developed for casinos in Ontario, which would include some background information on the decision, the ownership model and the organizational framework that forms the legislative context, namely Bill 8.

The third part of the presentation would discuss some key considerations that have been part of this initiative from the beginning, that being the economic impact of casinos, the impact of casinos on horse racing and charitable gaming, some of which has already been referred to today, the issue of law enforcement, policing and social costs of casino gaming.

We really don't intend to speak in any great detail about any of those, or else we would be in front of you for months, as it has taken months and months to learn and put into context this formulation. But we will try and give an overview and would be pleased to answer any questions the committee would have. If it's your pleasure for us to go ahead, I'll ask Mr Alfieri to --

The Chair: Yes, if you would just please proceed with your presentation, and we'll deal with question difficulties later.

Mr Domenic Alfieri: Before I get into my presentation, I know the minister has been corrected two or three times already this afternoon, and it's not usually appropriate for a civil servant to do so, but there are some times when even a civil servant must. Minister, the casino project doesn't just work some weekends; the casino project has been working every weekend.

I understand I have about an hour. Each member, I understand, has received a copy of the files regarding the presentation, and basically I'll be following that format.

The announcement with respect to casinos was contained in the spring budget of 1992 as an economic development initiative for border communities. The section of the budget paper specifically said: "Border communities: Many communities, especially those in border areas, have expressed interest in expanding gambling as a way of promoting tourism. The government will establish casinos by working with interested communities and in consultation with charitable and other organizations."

This statement led to the subsequent establishment of the casino project team, which occurred in June 1992, and it was assigned to this ministry, reporting to the Deputy Minister of Consumer and Commercial Relations.

The initial tasks of the project were multifold. One was to establish the initial phases of casino implementation, which consisted primarily of consultation, program development, policy development and implementation. In this connection, one of the first things the project team did was to develop the objectives of casinos in the province.

We took the budget statement and the Treasurer's intentions and from that we developed a number of objectives, which were to act as a catalyst for community economic development, to create jobs; to promote the tourism and hospitality industries; to establish a viable new industry in the province, and to provide revenues to the province.

As an aside, subsequently when Windsor was chosen, we also added some objectives specific to the city of Windsor. Those were to assist in the revitalization of the central business district, act as a stimulus to commercial development and act as a catalyst for economic diversification in the city.

From that point, we undertook a series of consultations. We reviewed the various existing management models across the world. We looked at government-owned operations like you find in Manitoba, Greece and Holland, mixed operations like you find in Puerto Rico and private operations like Nevada and New Jersey. From those, we developed recommendations regarding the appropriate organizational structure to regulate and operate casinos. At the same time, we undertook negotiations with first nation communities on all aspects of all gaming initiatives.

With respect to the consultation process, the casino project has met with large numbers of stakeholders from across the province. The consultations began soon after the project was formed, and numerous meetings were held in September with various stakeholders from across the province, even before the Windsor announcement. These included municipalities, charitable organizations, the horse racing and breeding industry, law enforcement agencies, other regulatory bodies both in Canada and the US, first nation communities and the tourism and hospitality industry.

Following the October 6 announcement whereby Windsor was chosen as the site for Ontario's casino, we held extensive Windsor-specific consultation, which included two all-day events with members of the Windsor community and a separate event with representatives of charitable organizations. On November 17 and 18, more than 60 people from across Windsor met in workshops to share and build on with the project staff their visions of a Windsor casino.

Once we knew that Windsor had been selected and the casino was going to be here, one of the first things we did was to meet with various members of the community in Windsor, from all sides of the issue, I might say, and just worked with them to build a vision for Windsor's casino. On December 7, we met with some 24 charitable organizations in a workshop to look at the impact of the casino on Windsor charities.

A lot has been said about the gaming marketplace in Ontario and I will be saying a few things too, perhaps just to add another level of detail or two. Basically what we have is horse racing, charitable gaming and lotteries. So the casino, once established, will really round out what's already there and in existence.

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With respect to horse racing, horse racing has the longest history of all legalized gambling in Ontario. It provides $53 million annually in net parimutuel tax to the treasury and is a mature industry. As lotteries and charitable gaming have grown, racing's once monopoly presence in the gambling market has been eroded.

You've got the charitable gaming. As you know, the Criminal Code permits a charitable or religious organization to conduct and manage a lottery scheme by licence, and the proceeds must be used for a charitable or religious object or purpose. Charitable gaming revenues in 1992 exceeded $1.5 billion and the growth in charitable gaming has been over 1,000% in the past decade. This is largely the result of the emergence of a growing commercial sector which provides charities with facilities, equipment, supplies, services and expertise.

Moving to lotteries, again the Ontario Lottery Corp profits have been relatively stable during the past five years. Gross sales during fiscal 1992-93 reached $1.6 billion, and in excess of $450 million is distributed annually to various social service agencies and charities.

With respect to gaming by aboriginal communities, of the 149 bands, 127 first nations in Ontario, a large proportion conduct gambling activities. Small-scale bingo is the most common game on reserves, but since the mid-1980s higher-stake bingos and other games aimed at markets beyond the reserve have been introduced.

Lastly, there is also illegal gaming in the province. So far, I've talked about the legalized gaming. Illegal gaming activities include bookmaking, gambling houses, pyramid schemes, illegal lotteries and the illegal use of video gambling devices or VLTs. Police in Ontario estimate that there are between 50,000 and 75,000 illegal gaming machines operating in Ontario. The actual value of revenue generated by illegal gambling of course is unknown.

That gives you a bit of an appreciation of the size and scope of gambling already existing in the province.

We've also included a chart which gives you a bit of a pictorial analysis of the $4 billion which is currently wagered in Ontario. Again, in 1992, the lottery wagers were $1.678 billion, of which the provincial revenues consisted of $538 million. Horse racing wagers were $1,070 million and again brought in net revenues of $53.4 million. This represents 5%. The normal tax is 7%, but 2% is rebated to the industry to assist them with various programs.

Bingos are also a major contributor to wagering, and as much as $900 million were wagered last year. Again, this goes mostly to charities, so the provincial revenues are only 1%, which is to cover the cost of licensing and registering etc.

Then we have break-open raffles, for which there's an estimate of $500 million. The reason the last two are estimated is because many of the licences are issued by municipalities and we don't get our numbers in a timely fashion. Therefore we just thought it was best to make those, but they are fairly accurate.

I mentioned earlier that one of the mandates of the casino project was to address the issue of aboriginal gaming. In March of last year, the ministry was given authority to negotiate agreements with first nations with respect to the self-regulation of charitable gaming activities on reserve. Negotiations are currently under way with a number of first nations. I believe the first agreement was signed at the end of June and others are currently in the making. The purpose and intent of that is to provide them a greater opportunity for self-regulation with respect to charitable gaming events.

We have made a distinction between charitable gaming and casinos in respect of first nations. Again, charitable gaming is currently administered and licensed either by the province or through municipalities. The extent to which first nations wish to become involved in a more direct fashion, as long as that is done within the parameters of the policies and regulations, is something that the government has encouraged us to get involved with and, as I said, a number of negotiations are under way.

With respect to casinos, again we have to look at the casino market as being a very finite market. Whether one agrees with this, agrees with Coopers and Lybrand -- they have indicated what the market potential is and therefore any future developments of casinos have to be done conjointly. It cannot just be done by way of you license a first nation and they can set up a casino, because there are 800 and some odd municipalities in Ontario, 127 first nations, and obviously Ontario cannot have 1,000 casinos. So any development or negotiations in respect of casinos will have to be done from a broader perspective, taking into consideration the market conditions.

Looking at casino gaming in Canada, British Columbia and Alberta have permanent charitable casinos, Saskatchewan and the Yukon have temporary charitable casinos, and commercial casinos are currently found only in Manitoba. They started with one, the Crystal Casino, and in the last few months they have opened two more. Quebec is in the process of implementing one in Montreal, which is scheduled to open on October 1. They have announced a second one in Charlevoix; no further details are known by us in respect of that. Ontario's of course is in progress, as that is the reason why we're here. You may have heard or read that casinos are also being very seriously considered in Nova Scotia.

If you look at the map of casinos and devices in Canada you will see that it is quite full, with the exception of Ontario and Quebec, and even as we are speaking, that map should be starting to get coloured because Quebec will be having casino gambling within a month and a half or so, and we do propose to start Ontario in January.

Looking at the North American scene, five years ago, pre-1988, in the US only Nevada and New Jersey had legalized gaming by way of casinos. In the last five years, Colorado, South Dakota, Iowa, Illinois, Louisiana, Mississippi and Missouri have riverboat gambling or permanent land-based casinos. Connecticut, Michigan, New York -- by the way, these notes say "approval in principle"; New York now has a native casino which just opened near Syracuse -- Minnesota, Washington, Wisconsin and North Dakota have on-reserve gaming that includes casinos.

Under consideration, we know of New Hampshire and Massachusetts, and I understand seven or eight additional states are looking at that. If one looks at the map again, the pre-1988 map, you will see that it's very white, just Nevada and New Jersey are coloured, and if you flip the page, you will see that in the last five years that map has also been filled to a very large extent.

There are some trends in the gaming industry that we have had to consider and I think should be considered in looking at the situation. Casinos have gone from a relative degree of geographic isolation. Again, prior to 1982 they were only located in Nevada, the middle of the desert, and people had to go there. It was destination gaming. If you wanted to gamble, you had to go there.

But now they have moved and they are moving to much more densely populated urban areas, and even native casinos are located close to within two- or three-hour drives. If you look at the one in Connecticut, some 24,000 people drive there on a daily basis to gamble. They come from between one and four hours just to go there and gamble.

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They have moved from a pure gambling experience to a more complete, family-oriented entertainment package, especially those in Las Vegas. With the proliferation of casinos throughout North America, the Nevada casinos are becoming more of the nature of offering entertainment packages, and hence you see family entertainment: You see volcanoes, tigers, dolphins, aquaria and a variety of other types of entertainment included with the casino.

We have moved from very limited opportunities in two locations to many locations and different varieties: riverboats, on-reserve, urban etc.

So this is the same. This is what we are facing in respect of that.

Many questions were asked about the location and number of casinos, the ownership and management and how it's going to be organized. The next section of our presentation addresses that.

Again, on October 6, Windsor was announced as the site of the province's first casino. The reason for having one casino was primarily the result of stakeholder consultations that were undertaken prior to October.

What we heard from communities, not only in Windsor but throughout the province, was that we should proceed cautiously, that even though casinos may be beneficial we should limit their numbers, that people did not want to see another Nevada or another Las Vegas.

The government thus committed itself to proceeding cautiously inasmuch as this was a new venture. There was a need that we develop a made-in-Ontario model which reflected our conditions and our values. It was necessary to enable us to develop an appropriate regulatory framework before any expansion. Again, it was announced as a pilot and it was felt that, "Let's try one and let's see how the regulatory framework works before we proceed." It was necessary to develop a working model for us to be able to understand the nature and impact of casinos in an Ontario context.

The minister has already indicated why Windsor. Again, the budget statement indicated that it was in response to the conditions of border communities. Windsor is the largest of Ontario's border communities. Windsor had widespread community support. Community support in Windsor started even before the budget announcement. Windsor had the suitable infrastructure to deal with the type of casino we wanted to see, and Windsor was very close to a large urban population. Again, with current casinos you have to be close to the urban population for them to be successful. Within 100 miles of Windsor there are 7.5 million adults -- 7 million in the US and half a million in Canada -- and within 200 miles of Windsor there are 18 million adults -- 15 million in the US and 3 million in Canada. This is considered by industry standards a very hot market. Of all the available markets currently, New Orleans may rate as perhaps a better market, but beyond that Windsor is the kind of market that would make the casino and the objectives of a casino extremely successful.

We also looked at the ownership, management and operation of casinos. Who should own them? Who should operate them? Who should run them? How should the profits be derived?

We did look at a number of options. The four that we short-listed, if you will, consisted of a 100% government-owned and -operated model like Manitoba, a 100% government-owned but privately operated model with a private operator as agent to the crown, a joint venture where we would enter into partnership with a private operator on an equity basis and operate the casino jointly and, lastly, we looked at the 100% private model à la Nevada or New Jersey.

We very quickly discounted the last one, 100% private, because we didn't feel it could withstand the requirements of the Criminal Code. The Criminal Code indicates that in any place where you have slot machines the province must conduct and manage the games. However liberally one wants to interpret "conduct and manage," we at the project felt that "conduct and manage" does not extend to a total system of private operation, that the province needed to be involved in the policy development and the overseeing of the operation as a minimum.

The decision that the government made was for a government-owned, government-controlled regulation of all management aspects, but the operation will be done by the private sector as an agent of government. The rationale for that is that we learned through our consultation process that the casino industry is a very, very competitive one. As you saw from the map, it's getting more and more so all the time. Public servants, however good they may be at regulating and doing other wonderful things, are not that great at running private enterprise systems, especially those that are subject to a lot of competition.

There was a feeling that if we wanted the competitive kind of casino that would have to compete with the potential casinos in Detroit and across North America, we needed the kind of marketing and management expertise that only the private sector has built up. When one looks at Winnipeg, Winnipeg's initial casino and the two new ones cater primarily to local people. The most telling thing about Winnipeg -- and this may be good for Manitoba -- is that many Manitobans go down to Minnesota to gamble in the native casinos, because they are operated differently perhaps. I don't know the reason for it.

Obviously, the casino we wanted in Windsor was one that would not only fulfil the objectives in the short run but would be competitive in the long run. To do that, we felt that a mix of government ownership and regulation with private sector expertise was the best way to approach it, as far as we were concerned.

Basically, what we have is private sector involvement and 100% government ownership. We developed the model in a way that optimizes revenues to government. We felt originally, in the RFP, and the proposals have confirmed that, that we could own a casino without a penny of government investment. As you know, we have received nine proposals that speak to the private sector being involved in the financing, designing, constructing, furnishing, equipping and operating, but the casino itself, the gambling business, the licence, will be held by government.

When we looked at the organizational framework, how should the government's involvement in the casino unfold, we looked at two options: One was a single casino crown agency, a model similar to the lottery, whereby both the regulatory aspect and the business aspect are carried out by the same organization. The second was a model whereby a commission would be set up with regulatory, adjudicative, investigative and audit functions, and a corporation would be set up with operational and business functions; in other words, separating the business from the regulation. The decision was for the latter, a bifurcated system, as we call it, whereby one agency will be responsible for carrying out the overseeing of the honesty and the integrity of the games and another agency will be responsible for the actual business.

The rationale was that this separation of functions ensures the impartiality and independence of regulatory decision-makers and that dual entities create the checks and balances between revenue generation and other social and economic objectives. In other words, we felt that it would not be appropriate to be a referee and a player in the same game. We don't know how appropriate that may be for the lottery -- obviously, it must be working well -- but we felt that for this kind of commercial enterprise a bifurcated system would be better.

Bill 8 does a number of things, one of which is to set up the Ontario Casino Corp. As you know, it was introduced in the Legislature on May 5 and received second reading on August 3. This bill establishes the Ontario Casino Corp and, as set out in the legislation, the objects of the corporation relate to the conducting and managing of lottery schemes and casinos on behalf of the government. As I said earlier, the corporation will be responsible for the business and operating aspects of the casino.

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We envision the corporation to be a schedule 2 agency which covers agencies with a revenue-generating commercial orientation. The agency will be funded out of casino revenues.

The fundamental principle used in developing the OCC will be to develop an entrepreneurial organization which hopefully will be efficient, effective and unbureaucratic.

The premier responsibility of the OCC will be to establish casinos in Ontario as directed by government and to manage and conduct casino gaming in Ontario, ensuring that the requirements of the Criminal Code are satisfied.

The corporation will ensure that games of chance played in casinos are conducted and managed in accordance with the proposed Ontario Casino Corporation Act and with the proposed Gaming Control Act and regulations made under those acts.

The OCC will consist of a relatively small staff to enable it to be proactive in the marketplace and to have the ability and flexibility to adapt to future changes in government policy and in the international gaming market. We hope to design it in a way that will be highly effective and efficient.

The corporation will develop and administer the operating policies of casinos in Ontario in partnership with the private sector operator and subject to requirements of the Gaming Control Commission. The OCC will also have overall control of any related businesses that offer goods or services to persons who play games of chance in a casino.

It will also be the responsibility of the Ontario Casino Corp -- and this resulted early from the Windsor consultations -- to foster and maintain good community relations and to work with any community advisory committees that may be established in areas with casinos. We've already committed in Windsor to the setting up of an advisory committee from the community.

Next we have the commission, and again Bill 8 amends the Gaming Services Act by extending coverage to those who supply goods and services to casinos as well as to charitable gaming events.

As I'm sure you will recall, the Gaming Services Act was just proclaimed last February and went through extensive consultations and debate, and we looked at all the options for presenting a bill. The decision was to build on it and add casinos to the overall context of the Gaming Services Act.

The February amendments have also done something. They have increased considerably the size and scope of charitable gaming. Moving betting limits from $2 to $10 and the number of tables from 20 to 30 in a normal event has resulted in a 750% increase in the size and scope of the charitable gaming. So when you see these Monte Carlo nights or charitable casinos going on throughout the province currently, you can bet up to $10 a pop there so that it's become more or less a moving casino, if you will, minus slot machines of course. It's only table games, but we felt, in reviewing all that and given the changes, that that particular process itself should be subject to a tighter regulatory framework. This is why we married the casinos and charitable gaming and made the commission responsible for both, so now you have the Gaming Control Act and the Gaming Service Act and the Gaming Control Commission will be responsible for both casinos and charitable gaming.

The act requires the appointment of a minimum of five commissioners and the commission will be made up of three sections: registration, enforcement and audit.

The registration branch will be responsible for receiving and reviewing all applications for registration under the act and to determine whether registration should be granted, denied or suspended.

The enforcement branch will be responsible for conducting investigations and applicants seeking registration; conducting undercover investigations on gaming activities; investigating violations of the act and regulations; investigating post-registration problems such as hidden ownerships and any other aspect that may involve any type of cheating or any type of criminal involvement.

The audit section will be responsible for conducting scheduled and unscheduled audits of casinos and charitable gaming operations; auditing financial records submitted by applicants for registration; and reviewing and evaluating registrants' internal control systems for compliance with the regulations, and again I want to stress both for the casino and for all forms of charitable gaming.

There will be opportunity for the commission to conduct hearings into any aspect that they feel may be required in the discharge of the commission's responsibilities. I should stress that the commission, in addition to these three operative sections, will also have a policy and legal function to assist it.

On the next page we have a chart of really the basic sections that I have currently described, and I also want to stress that there will be many regulation-making powers provided in the legislation. As examples, we have indicated that the rules of play of games offered in the casino will be subject to regulations; rules governing the granting of credit to casino patrons; money-handling procedures in the casino; security and surveillance plans and standards etc. In addition, there will be a gaming control hearing tribunal which will be established as a special panel of the Commercial Registration Appeal Tribunal. The purpose of the tribunal will be to conduct hearings under the act and hear appeals respecting the denial, suspension or revocation of a registration.

Now, we did not want to establish yet another agency, but we felt very strongly that this particular aspect was somewhat different from the normal activities of the Commercial Registration Appeal Tribunal's functions, and the legislation provides for a special panel to be created under that tribunal to deal exclusively with the Gaming Control Act.

The next section deals with the economic impact of casinos; the policing and law enforcement aspect, which has been discussed at length both here this afternoon and in the Legislature; the social impact; impact on the horse racing industry; and impact on charities. In developing our approach to this, initially we started from a provincial context. When Windsor was announced, we focused on the Windsor situation for the purpose of developing the Windsor casino, but in doing that we also kept the provincial picture in mind throughout our deliberations.

I'm going to go over some ground which has already been discussed, and please bear with me on that, but I may be able to provide a little more detail.

When Windsor was announced as the site, we immediately set up a number of task groups between the Ontario casino project and the city administration. One of those task groups dealt with the development of an impact study of the Windsor casino, and this is where the numbers that have been discussed come from. We did solicit the assistance of two professors, one from the University of Windsor and one from McMaster, to assist us, but the numbers you see are numbers that were developed jointly with expert assistance, but they were developed by the project team and the city of Windsor.

I wish to stress that these numbers are very conservative. We started by taking the approach that eventually we will have competition from across the river, that Detroit will eventually have casinos, so again we started with the premise that anything we put in place had to withstand that kind of competition. We had no problem in forecasting 12,000 daily visitors. Again, this casino being close to an urban market, 80% of them will be day-trippers. They will come by bus -- about 100 or 150 buses a day will be coming here -- and they will drive, and 80% of the 12,000 will come, spend four or five hours, spend between $50 and $80, and go home. The other 20% will stay at least one night; 10% will stay two nights. Those small numbers alone will be enough to fill all the hotels in Windsor and to really provide an economic boost to the downtown and the rest of the city.

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We anticipate that fully 80% of casino patrons will be from outside Ontario and that they will be bringing new dollars to the province.

The casino -- and these are minimum numbers, they are very, very low-ball numbers because we didn't want to create any undue expectations; we wanted to make sure that we took a very realistic approach -- will create at least 2,500 direct jobs in the casino complex and at least 5,500 in the rest of the city and surroundings, for a total of 8,000 jobs.

New provincial revenues will be in excess of $140 million annually, and these will consist primarily of a tax on gross revenue which the Treasurer will take off the top, plus the profits that will be left once the expenditures of the casino are paid for.

The 12,000 people who will be coming here every day will bring in excess of $300 million of tourism-related expenditures. This will be $69 million for accommodation; $27 million for auto-related servicing; $18 million for transportation-related, buses and trains etc; $117 million on meals alone; $53 million for entertainment and recreation and $36 million for shopping.

Now, these numbers do not square off completely with Coopers and Lybrand; Coopers and Lybrand projects even better numbers. But as I said, we took a very reserved approach. We felt that it was our first experience, and even though we were pretty comfortable with our numbers, we purposely took a more reserved approach.

The Coopers and Lybrand study was received by us Friday and copies will be made available to each of you. I'm not going to go into a lot of detail. Coopers and Lybrand, I understand, has been asked to appear before the committee and make a presentation in Toronto, so you will have an opportunity to grill them on their findings. But we did feel it was necessary to conduct that study. We felt it was important to determine the potential market for casino gambling in Ontario and to identify and quantify to the extent possible the benefits and costs, such as job creation, revenue generation, growth of tourism and other social and economic impacts.

I recall very clearly that there was a need to do this from the beginning, but that we needed to proceed with caution. There was need for that kind of study and the necessary data to be obtained and analysed before any further decisions were made with respect to casinos in the province. This was done at a time when many municipalities were writing and lined up with requests that since Windsor had the casino, they also wanted one, and first nations were doing the same thing. I think there were at least 25 municipalities that made either formal or very overt expressions of interest for a casino, and in our negotiations with first nation communities on charitable gaming some 25 had expressed a different degree of interest in casino operations.

We felt an economic market study was necessary before one did any further work in that regard. It was the week after I was appointed to this, but during the debates of the estimates of the ministry, I think all sides in the committee strongly recommended that some market study be conducted.

By way of quick summary, Coopers and Lybrand indicate that there are four market areas that could sustain casinos in excess of 60,000 square feet. The reason for 60,000 is that this is what's normally called the critical mass in casino operations for large-scale casinos. They identify -- and these are only centroids. We asked them to only identify regions, but they felt that saying region A, region B and region C would not really be helpful to anyone, so when we mention cities and towns, it's only for the purpose of identifying the region, because otherwise it would be difficult to follow the trend.

But the Niagara Falls region, the Ottawa region and the Toronto region could stand casinos of that size, and they estimate that Toronto could stand 175,000 square feet of gaming, which could be two or three casinos. There are three market areas that could stand something between 10,000 and 60,000, and that's the Sault, Sudbury-North Bay and Thunder Bay. They recommend that if any further development has to take place, these seven market areas be the ones that one concentrates on first. Beyond that, if further development is contemplated, then they identify Cornwall, Huntsville, Kingston, Sarnia and London-Kitchener as potential markets.

Their main findings, based on these assumptions, are that there is a significant latent demand for casino gambling in Ontario; that 24 million new tourist visitations would come annually to the province; that this would bring an estimated $2.3 billion in gross revenues annually; that the construction alone would create 13,000 person-years of employment; that the seven market areas would create in excess of 97,000 full-time, permanent jobs.

As you know, there is a whole chapter dedicated to the social impacts, and they conclude that the attendance and wagering at racetracks in Ontario may not be seriously affected and they recommend measures to mitigate any negative social impact.

Dealing with the policing situation, we were always told from the beginning that safety and security would be a priority and that any additional costs relating to law enforcement would have to come out of casino operations.

At the beginning, there was a committee set up which was chaired by the casino project, which was a committee of law enforcement, and it developed the initial approaches, after its initial consideration, in consultation with the Windsor police, the Ontario Association of Chiefs of Police and the OPP, the casino project and these three agencies.

We divided law enforcement into three areas: internal security, which helped with surveillance of the gaming area, background checks etc, and the responsibility for this was assigned to the Ontario Provincial Police; external security, which dealt with the Windsor-related situation, like traffic and street crime, and the responsibility for that was assigned to the city of Windsor Police Services; beyond that, there will be intelligence, and the responsibility for any intelligence matter was assigned to the units of the various police forces operating in the province through a joint forces operation.

The Windsor law enforcement committee, by way of membership, includes the Windsor Police Service, the RCMP, the OPP, the Ontario Association of Chiefs of Police, the Criminal Intelligence Service Ontario, Canada Customs and the Ontario casino project. Chief Adkin brings in audits as required, depending on what's being discussed.

With respect to the issue regarding the difference in projections for additional officers to address the situation in Windsor, as you know, the chief of police produced a report which recommends 30 additional officers plus a number of additional civilian complement. We have been discussing this with his staff for a few months. In doing that, we also sought the assistance of Gail Walker, who's got experience in police services needs assessment throughout Canada and has done a lot of work for the Ontario Solicitor General. When it came to the point where it became necessary to have a review of the chief's report made, we contracted with Professor Albanese from Niagara University.

As you all know, the conclusions varied somewhat, all the way from 12, as Professor Albanese suggested, while Gail Walker suggested that 15 would more than suffice and the chief asked for 30. We have had two meetings with the chief in the last couple of weeks, and I'm pleased to report that we are well on the way to resolving our differences. I'm sure that it will not be long, perhaps as early as this week, where we'll be able to come up with some numbers we will all be comfortable and we will all be able to live with. I want to say that my instructions on this are very clear: "If you have to err, Domenic, err on the side of safety and security."

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A lot has been said in respect of benefits and costs, especially as it relates to horse racing. I understand that I have kind of taken all the time. I know that those two will be discussed both tomorrow, perhaps, and during the hearings in Toronto, so with your leave, Mr Chairman, I'll stop here, and if there are any questions in relation to anything that I have not yet addressed, I'll be happy to answer them.

The Chair: Thank you, Mr Alfieri. Again, I'm in the hands of the committee at this point in time. We are just shortly after 5 o'clock. I'm sure that many members of the committee would like to ask some questions. We have a couple of people who have certainly already indicated that. I was just wondering how long the committee would like to sit this afternoon, given that we were planning to be done about 5, but we can stay as long as the committee chooses --

Interjection.

The Chair: Until we're finished. That sounds like a good place to start.

Mr Duignan: At this point we suggest maybe 15 minutes for questions for each party.

The Chair: Is that agreeable?

Mr Drainville: Seeing as there are some members here who aren't aligned with the party, I would just like to say that I certainly have a few questions I'd like to put to the deputy minister and the assistant deputy minister, so whatever considerations are made, I would hope that I would have some time, Mr Chair. I leave that in your hands.

The Chair: That's up to the committee to decide. It's not my decision, but however the committee chooses to decide how the time will be appropriated among all members will be their decision. Right now we have agreed to 15 minutes per caucus, which is 45 minutes total.

Mr McClelland: I don't know that we have agreement on that, Mr Chair.

The Chair: Well, I don't know that we do either, but --

Mr McClelland: Let's proceed and do the job and get it done with. We're being paid to be here; we're being paid to do a job. Let's do it properly.

The Chair: I think that's very clear, Mr McClelland. If it's agreeable for 15 minutes, we'll start with that.

Mr Kormos: One moment, Chair, please. Is the Chair indicating that all that's going to be allowed is 15 minutes per caucus?

The Chair: I'm in the hands of the committee, Mr Kormos.

Mr Kormos: Is that what you just indicated?

The Chair: What I'm hearing is, that may be agreeable; it may not. If someone wants to offer me another suggestion, then we can entertain that; we can vote on it if we have to. But I'd certainly like to get on with the business of the committee as well.

Mr Carr: Can I make a suggestion? What I would suggest, since we have two members, is, why don't we start with 15 minutes for Liberals, 15 Conservative, 15 NDP and 15 for the other two members? That would then take us to an hour, so we'll round it off and then we can decide at around 6 o'clock whether there are enough questions to proceed or whether we want to end it there. That would be certainly fair, I would say.

The Chair: I'm in the hands of the committee. I want to let the committee know at this time that I also have some business that we have to deal with at the end of the day that might take probably 5 or 10 minutes.

Mr Duignan: Mr Chair, we can start with 15 minutes, but for each party. If the opposition party wished to concede some time to two of the non-members of this committee, that's fine, but we're just in favour of equal division between the three parties.

Mr McClelland: Let's not play games. Make it 20 minutes. I'm here to do a job. We spent 10 minutes arguing about this. Six o'clock is a long day. We had a long break. We started after 2 o'clock, so let's get on with it and stay here and do the job and get through it. If it runs us until 6:15 or 6:30 and it cuts into the government's cocktail hour, so be it.

The Chair: Am I hearing, then, 20 minutes per caucus?

Mr Carr: Round it off to an hour; 20 minutes per caucus.

The Chair: Okay, 20 minutes per caucus. Mr McClelland, you're up first.

Mr Kormos: On a point of order, please: I can tell you that I don't anticipate asking any questions of the deputy minister or the assistant deputy minister. However, you may recall, Chair, that when I spoke to this issue on second reading, I indicated, and I'm sure Mr Drainville indicated, that there would be members of the Legislature seeking to exercise their right to participate in committee process. I've done this before; you know that. You also know that non-members of the committee cannot vote. I understand that full well.

There is, however, by virtue of the standing orders, a right to participate in committee process. It is my submission that this right is an overriding right and that by dividing up time in such a way -- and as I say, I'm already indicating to you that I don't anticipate asking any questions. I'm confident, however, that Mr Drainville does. If there's to be a right for a member of the Legislative Assembly to attend at and participate in committee hearings, to abrogate that right by virtue of restricting the total amount of time to time that's merely distributed among three caucuses I submit to you is entirely out of order.

I submit that you have a very significant and residual power, notwithstanding that type of agreement, so that you can give effect to the standing orders to permit Mr Drainville to ask questions in his own right as is his right by the standing orders, notwithstanding an agreement by caucus members of the committee to distribute their time, be it 15 minutes per caucus or 20 minutes per caucus. I think that's a very important difference.

The Chair: I think at the end of the day Mr Drainville will find that he has had some time to ask questions. I think that will certainly recognize his rights as you've indicated. We'll start with Mr McClelland.

Mr McClelland: Assistant deputy, thank you for your presentation, and deputy, thank you for being here and helping us with the task we have before us. I wanted to pursue one issue for the time being, and then I'll leave the rest of the time to my colleagues. The concern I have basically turns on your assertions and statements in terms of the mandate or the genesis of the project to revitalize and stimulate the economic viability of this community, the rationale for choosing Windsor, and it starts with that.

It seems to me we have a bit of a problem here that I'd like you to help me with or flesh out somewhat. You have acknowledged, and quite frankly I'll confess I was surprised, that in your projection of numbers, both in terms of numbers of visitors, you had accounted for the probability of a Detroit-based casino. I'll tell you in all candour that I had presumed your numbers were in fact based on a Windsor casino standing alone in the prescribed market that you are attempting to tap into.

I'm curious, then, in part as to how you propose or you and your team came up with the numbers that you have, given the fact that in the marketplace of presenting a product you were going to compete with a casino that provides a broader range of attraction to potential tourists. In other words, you're going to go halfway. Just bear with me; you're shaking your head. You're putting in a casino. You're limiting a number of things, including the availability of alcohol, space and so forth.

I guess the question I have is, I'd like to ask you if you can make available to us the data that you used to extrapolate the projections that you have. I'd be very curious to see them. I think the committee members would want to see that. Quite frankly, I find it extremely optimistic. I'd be delighted to see those numbers that show that in the face of competition in Detroit that I think is probably inevitable and likewise probably inevitable with New York -- as you are all aware, New York has an option to purchase at this time 140,000 video lottery terminals with option to locate specifically in border communities. I'd like to see how those numbers figure into it. I'm asking you and asking the minister if you could make those data available to committee members.

Mr Alfieri: We have intentionally not made that data available yet because of the request proposals. We do intend to eventually make it available and make it public, but I'm not sure that could happen before we finish that particular process.

Mr McClelland: In short, what you're saying, then, is after the deed is done and after the legislative process is complete, it will be then appropriate for members of the legislative committee and ultimately members of the Legislative Assembly to be given the data after the fact; a curious way of doing business in a democracy, it seems to me, assistant deputy.

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Mr Alfieri: I do appreciate that, but the intent is not that, inasmuch as we hope to complete the process by October, mid-October some time, and I'm not sure that this process will have been completed by then.

We did require a request for proposals. Many of the proponents asked us for our data and we said: "No way. We want you to go and look at the market on your own. This is going to be part of our evaluation of whether or not you know what you're doing."

But I think I should indicate that the Windsor-Detroit market can take four casinos the size of what we are projecting to put in place here. We did our projections keeping in mind that Detroit would eventually have casinos. If you look at the market and you look at the access, if you look at the industry, they will tell you that Windsor could have as many as four of the same size. Of course they're not going to have that; (a) they don't want it, and (b) the government, again, is proceeding cautiously. If there are going to be more casinos, the assumption is that they would go elsewhere. We don't want strips of casinos like New Jersey etc. We don't want to do anything that overpowers a particular city.

But if and when Detroit gets a couple of casinos, industry experts will also tell you -- have told us, and we concur -- that the synergy this creates is good for both municipalities. We are not afraid of the competition from Detroit. The casino that we have requested proposals for will be a very classy operation. It will have all of the amenities that are required for it to be commercially competitive. We offer a more safe and secure environment here. We do not tax winnings directly here. We have a lower dollar, which means that for the same money you get 25% more play, and people do come to play, not necessarily to win, but they come to play.

I think that we have enough to offer here by way of amenities to be able to do that, but if Detroit gets a couple of casinos, and we are talking about this with the mayor and the mayor of Detroit too, I think that it will not be necessarily to Windsor's disadvantage.

Mr McClelland: I don't want to get into debating that issue at this point because of respect to the time, but I do want to say this and I want to put on the record we are as legislators charged with a fairly significant responsibility. Our concern from our party is in terms of the mandate of this committee. It's a finance and economic affairs committee.

We have no qualms with the casino per se. One of the concerns, as indicated by Mr Kwinter and myself, is that we want to make sure that if it's done it's done right for the benefit of this community and other communities where you're going to go. We have the ability, and you know that quite well, to receive documentation and to hear presentations made in camera.

We were sworn to a fairly high standard, sir, of accountability if any of that should be violated. I would put to you and I put on the record, Mr Chairman, that we have requested officially, the opposition, access to those documents. I'll leave that with you at this point and will not belabour it at this point, but I assure you we'll bring it up again. I think that it's imperative that the committee have access to that data to make a reasoned and intelligent decision. I remind you again it's the finance and economic committee, and I think it's a very crucial, in fact pivotal, issue in terms of the viability of the project as prescribed by the request for proposal for this community.

With that, Mr Chairman, I think I'd like to move because of respect to my time.

The Chair: I'm actually in charge, Mr McClelland, and Ms Wolfson would like to make a comment.

Mr McClelland: Mr Chairman, without your smart comment, I'm just saying I'm concluded and passing on to colleagues.

The Chair: And I want to tell you, Mr McClelland, that I'm in charge and I have a list of people here and your colleagues will indeed get a chance to speak. Ms Wolfson.

Ms Wolfson: As the committee may know, I am the chairperson of the selection committee for the operator, and indeed we are very cognizant of the concern not to compromise the commercial integrity of that proposal. I would see no difficulty with the members of the committee tabling in camera the work we have done with the city of Windsor that led us to those conclusions, but I am very conscious that we want to be extraordinarily careful not to compromise the commercial integrity of this selection process, which indeed is complex and highly competitive. So perhaps we can discuss with the clerk of the committee the kind of process that we could put into place to have that information available in camera to members of the three caucuses and for the committee's review.

The Chair: Thank you, Ms Wolfson. We'll deal with that as this information becomes available. Mr Kwinter.

Interjections.

The Chair: You're up next, Mr Callahan.

Mr Kwinter: To use the old cliché, I feel this is déjà vu all over again.

Interjection: Baseball again.

Mr Kwinter: I can have visions of bureaucrats sitting before a cabinet committee justifying the investment in Minaki Lodge and making all the arguments. One of the concerns I have -- well, not the concerns, a point of information. You talk about this bifurcated model going to two different ministries. What are the two ministries?

Ms Wolfson: The commission will report to the Ministry of Consumer and Commercial Relations. As to the corporation, there has not yet been a decision on which ministry it will report to. Under consideration would be the Ministry of Economic Development and Trade or the Ministry of Finance.

Mr Kwinter: I'm not being critical.

Ms Wolfson: No, no, no.

Mr Kwinter: I'm in support of that. I just want to know where it's going.

Ms Wolfson: A final decision, Mr Kwinter, has not been --

Mr Kwinter: I think that's something that should happen with liquor regulation, as well. I think it's absurd, and I say this will all due respect because I was minister of both --

Interjection: He was there.

Mr Kwinter: I was in both. I think it's absurd that the CCR is negotiating trade deals on beer when it's just a regulator, whereas there is an adequate ministry to do that.

One of the things I'm concerned about is, in your development of the economic model, when you talk about this $4 billion of gambling money, is that figure elastic or inelastic? Have you determined that?

Mr Alfieri: I'm sorry, elastic or inelastic?

Mr Kwinter: What I'm trying to say is, is there $4 billion out there that goes to gambling, and if it goes to casinos it's not going to go somewhere else, or is it new money that will come into it because now that there's a casino, people will say, "I've never gambled before but I'm going to go to this casino," and have new money?

Mr Alfieri: Again, for most of the new money for the Windsor casino, 80% of that would come from the US, so 20% will come from Ontario.

Mr Kwinter: No, I'm talking about the Ontario money.

Mr Alfieri: As to the elasticity part of that, I guess some would be elastic. There will be some seepage from some other place and people will say, "Look, instead of going to this Monte Carlo, I'm going to go to the casino." But again, with respect to the great majority of the similar kinds of things, we do not feel there is that much elasticity, assuming that elastic means it's going to seep into the casino.

The only concern that was expressed here was for bingos, and of course bingo is not going to be in the casino. We made a conscious decision at the initial stages that bingo would not be played in the casino because that would definitely have a detrimental effect. The only other aspect that lends itself to elasticity, we feel, is the Monte Carlos and we are going to be monitoring those extremely closely to see what the potential impact is.

Mr Kwinter: The last point I'd like to ask about builds on my colleague's comment about the market, as to what happens if a casino goes into the Renaissance Center. My concern is that when you show your maps, you show Las Vegas and Atlantic City, and that then suddenly there's a proliferation of casinos all over the place, everywhere.

I had this same argument, when I was the minister, about the West Edmonton Mall. They wanted to put one in Toronto and they kept saying that Edmonton was a destination resort because people took their vacations to go to the mall. It just boggled my mind that anybody would say: "I'm going for a vacation. I'm going to go visit a mall." But what happened is that that thing has now fallen on very hard times. It's literally on the verge of bankruptcy and has had lots and lots of problems.

My concern is that a lot of your modelling is done on a basis where it is a destination resort, where people are coming here because the raison d'être of their vacation is to gamble. I think that applies when you go to Las Vegas, without question. I'm just giving you my impressions, and I would like to know whether you've done any studies. I don't think that if there are lots of them around, people are going to suddenly say, unless there's a competitive situation, which is a whole other issue, "I'm going to go to Windsor to do my gambling," when I can go to downtown Detroit or I can go to Chicago or I can go here or Las Vegas or wherever. How does that impact on what you're doing?

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Mr Alfieri: Right now, 24,000 people a day go to a first nation community -- call it a tribe -- in Connecticut to gamble at a site which is located in the middle of a field. Again, 80% of all the people coming to any urban casino will be day-trippers. So the ones who take a vacation, the ones who are going to stay one night or more, as we had indicated, will represent about 20%.

We do intend to put in place a first-class operation. The complex that will be built on the river front here, Riverside Drive, is anticipated to be classy and expensive, and the fact that nine proposals representing primarily most of the major casino companies in North America and beyond does indicate that -- and they're going to invest there. Even though the government will own this casino, the investment will come from the private sector. They're prepared to do that and they have done their own market analysis and they are satisfied that it is a good investment for them. That tells us that our projections are accurate, and if anything, we have been told that we have low-balled it, which we did intentionally, by the way.

In February, if people have to choose a destination between Las Vegas and Windsor, they'll probably go to Las Vegas if the costs of getting there are the same, but those are not the kinds of people we see coming to Windsor. The people we see coming to Windsor are going to be people who come for one or two nights, and that's all we're saying. We are projecting that 10% will stay one night, 10% will stay two nights, but that 20% for a city this size will create 8,000 jobs, will bring in $300 million of tourism dollars. Those numbers are solid numbers and they have been confirmed to us by anyone we have spoken to in the industry. As a matter of fact, we are being told, and Coopers and Lybrand seems to confirm it, of the reserved approach we have taken to the situation.

I guess ultimately once the casino's up and running, obviously it's going to work extremely well during the time that it enjoys a monopoly, and this is why we wanted to make sure that we put in place the kind of complex that would withstand long-term competition. This is why, when the city originally had selected a site which would not have done that, we insisted on a better site being found in the city, which it did, because we want to put in place the kind of place that people will want to come to and come back to. That's also very important.

It's not intended to compete with the Mirage of Las Vegas or the Circus Circus. It's intended to bring in people who are happy to come and spend the weekend here, or a couple of nights, and that alone will again create 8,000 jobs and contribute immensely to the revitalization of the city. It will not solve the problems of Windsor. No casino will ever solve the problems of any community. It should just be seen as a catalyst that can be used effectively if properly put in place. We have been trying to do that and we have done it in concert with the city fathers and in concert with the community.

I understand the mayor will be here tomorrow. All the projections we have brought forward were developed in consultation with the city, and it is also very satisfied that those numbers reflect what is likely going to turn out to be the case.

The Chair: Mr Callahan, you've got about three minutes.

Mr Callahan: First of all, I guess I'll get rid of my white leopards, since you're not going to turn it into the Mirage.

When they come across, you're saying 80% of the people will come from the US. Do you propose to change their money into Canadian funds or are you going to do what they do in I think it's the Sault, at one of the reserves, where they have different types of chips for US and Canadian money? Just a yes or no: Are you going to change it to Canadian money?

Mr Alfieri: I can't give you a yes or a no because the answer is that I don't know. We haven't got that far. That is something the operator and the casino corporation will have to address. Off the cuff, I would say the answer would be yes, because if you allow them to change their money they will be able to gamble 20% to 25% more at the casino.

Mr Callahan: I've got to move along very quickly here. I would suggest you not do that, because in some of the studies that have been done, that's exactly how money is laundered. You'd be able to launder big dollars in Canada that way.

The other thing is that I'd like to know whether or not Nevada tickets will be a thing of the past. The reason I say that is that Big Sisters, which I'm very closely related with, in its financial statements in my community, made $147,000 on Nevada tickets. If they're to be done away with, I hope the Treasurer's going to be very gracious with these people or they're going to starve to death. You don't have to answer whether Nevada tickets are gone or not. They may be as a practical matter, anyway.

The other thing I would ask you is -- and I don't try to raise this in any pejorative, political way; I hope members will believe that -- is that we had a question in the House, and this is directed to the deputy minister, about one of the applicants being a South African conglomerate. For some reason it was being interviewed and it got a little messy because the government of the day, and also previous governments, had a policy on South Africa.

If that in fact is the case, I'd like to know what kind of investigation you're doing in terms of investigating two things: first of all, the applicants and their background, and the money that they're putting up, because quite frankly, there is no mob any more, and this book says it clearly. The mob is now legitimate business. They've laundered their money through legitimate businesses.

I want to know what kind of checks are being done, how secure we know that this is not in fact going to be drug money or laundered drug money or laundered money from illegal activities. What have you got in place to ensure that doesn't happen, recognizing my premise at the outset that we heard, and I may be mistaken, that one of the groups that was looked at was a South African group? It boggles my mind that if there is this much investigation going on, and this much close concern, you could let that slip through the mesh. For God's sake, don't create opportunities for us to simply become the money laundering capital of the world.

Ms Wolfson: You didn't ask for a response, Mr Callahan, to your --

Mr Callahan: I'm finished on my questions so he can cut you off if he wants.

Ms Wolfson: Oh, I'm sorry.

Mr Callahan: No, no, that's all right. I've got my questions in.

Ms Wolfson: All right. Let me try and very quickly address some of it and I will ask the assistant deputy minister to do the rest.

In terms of the Nevada tickets, you didn't ask for a response, but indeed they will be sold at registered locations across the province. It's the view of those who are in the charitable gaming marketplace that there will be no direct competition between Nevada tickets across the province and the casino per se.

With respect to general scrutiny, part of the process is a high detail of scrutiny for the integrity of all, not only the operators but all suppliers etc. I'm going to ask Mr Alfieri to address specifically the question you raise.

Mr Alfieri: With respect to the company we met with from South Africa during the consultation phase, which occurred from about October to the time we issued the request for proposals, many casino companies worldwide came to Ontario following the announcement to review the situation and they asked to meet with us. We met with most of them, not all of them. This particular company in question is headquartered in England. As a matter of fact, we had three companies from Britain and we had companies from France, Spain, Austria and other places coming to Ontario to look at the operation.

Mr Callahan: Nothing from Colombia, I hope.

Mr Alfieri: No, none from Colombia. When we met with these people, they did indicate to us that they also had casino holdings and properties in South Africa and whether or not this would have an impact on their candidacy should they wish to pursue any option in Ontario. We told them that Ontario had one of the toughest sanctions programs in respect of South Africa and that they should check -- it was Industry and Trade at that time -- with respect to how this would impact upon them. Following two meetings with them, my understanding is that they elected not to pursue the situation in Ontario, primarily as a result of the fact that they had holdings in South Africa and because of Ontario's policies in regard to that.

We in no way encouraged them to come into our territory. When we were first approached, we were told that they were headquartered in England, and they are. They have holdings in England, France and elsewhere, and also in South Africa. I understand from the company that represented them that one of the primary reasons they elected not to pursue it was because of what we had told them told vis-à-vis this government's position with respect to the South African sanctions.

All companies that will be short-listed will be subject to all kinds of very intensive security checks and I have eight OPP officers already in place who have started to do that. Actually, there's an intelligence unit operating here in Windsor. It's been operating here since January to address the kinds of concerns you're speaking about, not only, again, for casinos and any employee in the casinos, but also all major suppliers to the casino will have to undergo the same kind of checks. I will also add that people involved in charitable gaming, because a lot of professional involvement is taking place there, will also be subject to the same very intensive security checks.

Again, the enforcement branch of the commission is currently being staffed, and we anticipate will continue to be staffed, by the Ontario Provincial Police. They have people both from anti-rackets and intelligence assigned to it.

1730

Mr Carr: My question is on some of your statistics, but it's to the minister. In the economic considerations you say there will be 12,000 daily visitors and 80% will be coming from other jurisdictions. Let's be conservative here in our figures. We're going to have anywhere from 8,000 to 9,000 people coming.

By the next election this casino is going to be up and running, and my question to the minister is, can you commit to the people of Windsor today that by the next time some of our Windsor members put their seats up for grabs Windsor will be having 8,000 to 9,000 people coming in to gamble? Will you commit to them today?

Hon Ms Churley: I'll repeat -- actually, I won't repeat what Mr Alfieri said. The projections are such that all these studies that we have commissioned and the projections that have been worked out for us say that there will be around 12,000 people a day coming to Windsor. Those are our projections. What I can say is that the background information that contributed to that number seems to me reasonable and well thought out and I expect there will be that number of people coming here.

Mr Carr: And this goes back, because it's more of a technical nature, to the -- you might not be able to answer this. What is the projection of how much those people are going to spend on a daily basis? We've got 12,000. How much are they going to spend each?

Ms Wolfson: We do have that information for you.

Mr Alfieri: The average will be about $75 per person.

Mr Carr: I'm going to keep track of some of the figures -- and I won't be able to do it right now -- just so I know. We've got an average of $75. The numbers should add up to get $140 million, and that's what I'm looking at doing. Presumably you've done that. I just want to check. We've got about 12,000 people coming in, of which 80% are from the US. That includes Americans; 80% of them will be from other jurisdictions. They will be spending $75?

Mr Alfieri: The answer is yes. The data that we will be giving you in camera will indicate all that to you, Mr Carr.

Mr Carr: Yes, because what you're going to be looking at now -- and if anybody is fairly smart, as I'm sure all the people who are doing the bidding are, they can probably work it back and do it even better than I am. But what I want to get at is the $140 million that's going to come into the provincial revenue, because quite frankly I think that's very optimistic and I think it's wrong, but we shall see.

Twenty-five hundred people will be employed in the casino complex?

Mr Alfieri: Yes.

Mr Carr: What do you anticipate is the average salary coming in for the employees?

Ms Wolfson: Mr Chairman, if you'll forgive us, we have --

Mr Carr: No, that's fine. I understand. You don't have it all in your head yet.

The Chair: If you would like to bring one your assistants forward so that you don't have to keep leaning back to ask questions, that's quite permissible.

Mr Alfieri: We have not specified what the salaries will be. Again, that is something where, once the operator is selected, the operator would be able to work with the corporation in making those determinations.

Mr Carr: So how are you doing it with the bidders then, if you don't know the amount?

Mr Alfieri: They are supposed to tell us.

Mr Carr: Yes, but you're already projecting -- this is what I'm getting at -- what the revenue will be for the province, and that all factors in. If you're getting $140 million, how did you get that then?

Mr Alfieri: In projecting $140 million, we are assuming a 20% tax on the winnings, the gross revenue, and then we assume the difference being the net profits after all expenses have been paid. In addition to that there is the provincial tax and the other tax.

The numbers that we have given you are numbers that are generally known and accepted in the industry. As I said, they are fairly low-ball. Coopers and Lybrand, which just published a study, has got its own set of numbers. I know several of the companies that have bid have done their own economic impact studies, and we have asked them to include those in their bids. We also suggested that they tell us what they see as being the wages being paid, the payroll etc. The bids will contain all that.

Mr Carr: You see, that's why I have some difficulty in that you're doing these projections based on that and yet you don't know. You're coming and you're saying, "We're going to have 2,500 people." You don't know that because you don't know how much each is going to make. You're projecting how much the standard is, but you have no idea.

Ms Wolfson: Excuse me.

Mr Carr: Go ahead.

Ms Wolfson: I'd like to introduce Atam Uppal, who's a person with the casino project. He's been of major assistance to the project on these issues. Perhaps he can help the member with his questions.

Mr Carr: Sure.

The Chair: Could you please state your name.

Mr Atam Uppal: My name is Atam Uppal.

Mr Carr: Just so I get it straight, if I could sum up, and you can correct me if I'm wrong, they're spending about $75 each, the 12,000 visitors coming through; we're going to have 2,500 people in the casino; we don't know what we're going to pay them. Basically, how do we get to the $140 million?

Mr Uppal: Before I go into all the details, what we are saying is that the 12,000 people coming on an average daily basis generate a certain amount of win. Win is different for Canadians and for Americans because Americans come in with American currency, Canadians come with Canadian currency. They see their dollars differently. All the details of that are worked out in the report that Professor Kubursi and Professor Chacko worked together on.

The $140 million that we've made publicly available is based on the win. The number I'd rather not say here; at an in camera session I'll be glad to go over the total detail of that. Part of that, as Mr Alfieri has already said, is the win, 20% tax on the win. Then we have profits from the operations of the casino, plus we have built in there PIT and CIT, which is based on generally accepted input/output model and technique.

There's a Professor Kubursi from McMaster University who is North America's most recognized professor on input/output methodology. He was retained for this project to work with Dr Chacko from the University of Windsor. Professor Kubursi will be in Toronto next week for your presentation, so he'll be able to give very detailed answers.

Mr Carr: Thank you very much. Sorry to cut you off. We don't have very much time and that's why we wanted to do it. If one were to look at the total revenue coming in to the city then -- it's pretty easy to do; the $75 times the 8,000 you project daily is what will be coming into the community from outside. I could say that to the people of Windsor, "This is how much is going to be coming in on a daily basis," and I wouldn't be wrong?

Mr Uppal: Does that take into consideration the spending outside of the casino?

Mr Carr: No, because they're going to go --

Mr Uppal: So that is a separate -- also when we release reports next week or whenever we make an in camera session available to you, at that stage we'll give you much more detail on that.

Mr Carr: But presumably the figures we're going to use for spending in restaurants are again going to be acceptable. What is the ballpark? This isn't confidential, what an average person spends. Let's say that the 20% who are here don't spend it; it's the other people coming in. What will they be spending on a daily basis coming into Windsor?

Mr Uppal: The way it works is that people who are coming just for gaming, the average person coming to a casino for gaming comes for about five hours. The assumption is that in five hours an average person also needs a drink and a meal. So for people who are coming, the 80% daily visitors, we call them day-trippers, they just spend their money only on drink and meal and then go away. They don't spend on gas, they don't spend on --

Mr Carr: So it'll be a fairly low number, even conservative, a good meal and so on.

Mr Uppal: That's right. It's well established. It's established in the Windsor community itself. That was done by a survey within the city of Windsor of tourists coming into the city of Windsor.

Mr Carr: Okay. I'm trying to get this so that we can clarify the numbers. Again, the people coming from outside, the 80% of the 12,000, will be spending even, let's say fairly conservatively, maybe around $20. So we'll have about 8,000 -- and again conservative because it's 80% of 12,000; it will be more. But we'll have about, minimum, 8,000 people coming in on a daily basis, spending about $20 at restaurants and the one drink. Is that correct?

1740

Mr Uppal: If you will allow us to wait till we give you in camera the complete details of this, I think that probably would be better. It's not a simple exercise of just taking that, because we have people in there now who are coming for one night and their spending pattern is different. People who are coming for two nights, their spending patterns are different. That's always built into our modelling, and we'll go over those models at great length with you, if you like.

Mr Carr: Okay, and with regard to how you're going to set it up with the people coming in, how are they going to pay for everything? How are they setting it up?

Mr Uppal: Pay for everything?

Mr Carr: Basically, when they come in and set it up and are running, you give them the licensing to run it the way they want. Is there any -- you're nodding your head no. Go ahead.

Mr Alfieri: There will be no licensing. The successful operator, once selected, will be an agent of the corporation and will also be an investor, if you will, inasmuch as he will construct the physical complex. But all the policies, the operating policies, human resources policies etc, will have to be worked out and agreed to in concert with the corporation.

In terms of what will be paid out, if I interpreted the question correctly, they will receive the revenue from two sources: the return on their capital investment and also a management fee for operating the casino on behalf of the crown corporation.

Mr Carr: That's what I was getting at, the management fee to do it. The deputy wanted to --

Ms Wolfson: Yes, Mr Carr. Just one question you raised before, if we can clarify the information now. You asked me about the average daily wages. Indeed, this is up to the operator to determine, but it's our information that registered croupiers who now are licensed at Monte Carlo events often earn at least $10 an hour, not including tips. So one can extrapolate what we would imagine the proponents will be suggesting.

Mr Carr: How I'm looking at it, just so you know, is somebody in Windsor saying: "It's coming into our community. What will it mean?" I think it's helpful for people to realize that what the government is saying -- and we can argue whether you're going to be right or wrong about it, and governments of all political stripes are often wrong when they make the projections, but that's another issue. Just so the people in Windsor know what the government of Ontario is saying to them, you're going to have about 2,500 permanent jobs at an average of about $10 per hour plus tips --

Ms Wolfson: No, I'm sorry. That's what croupiers make. You were asking -- I was saying --

Interjection: Charitable.

Ms Wolfson: In charitable gaming. I don't know what the average wage will be for all wage earners in a casino. The jobs range, of course, enormously.

Mr Carr: But, you know, that's the question the people in Windsor are asking, "What will it be?" and that's what they're going to say. Do you have any idea of a range? Obviously, you've got everybody in there. Let's take somebody who works spinning a wheel. I don't know. Any idea?

Ms Wolfson: We'll have to wait, indeed, for the operators to give --

Mr Carr: You have no idea what they make, say, in Vegas?

Mr Uppal: In Vegas, we have the rates. I can provide them. I have all the rates in my room upstairs.

Mr Carr: But that surely isn't confidential.

Interjection: No, it's not confidential.

Mr Carr: Okay, because one can --

Mr Uppal: It's minimum. The people who are on blackjack -- they are very basic dealers -- are the lowest-paid. Then, as they move into higher-skilled games their salaries increase dramatically. Also, their tips are based on the services.

Ms Wolfson: We can provide that information to the committee.

Mr Carr: Yes, but for the people in the Windsor community, if I said they made anywhere from $25,000 to $30,000 average, that would probably be in the ballpark?

Mr Uppal: It would be market-determined in some respects, you know, because many of the jobs, as $10 is set for a Monte Carlo event, in a proper casino it's a little higher-grade job. I would think that person gets a competitive wage.

Mr Carr: Okay, good. How much time do I have, Mr Chairman?

The Chair: You have about six minutes, just a little less.

Mr Carr: Okay, good. I had a couple more questions, but I promised to give Dennis some time because he has travelled so far and I know how important the issue is. I wish I had more time, but I know if I ask a question he'll go over a bit.

Ms Wolfson: If I can, Mr Chairman, I just want to comment. I would not want to leave an impression that an average wage is going to be $10 an hour plus tips. I think that would be unfair.

Mr Carr: Okay, yes. I misinterpreted what you said. You've said --

Ms Wolfson: The casino has restaurants, the casino has all services and we will have to look and see what the services are and the wages appropriate to them.

Mr Callahan: They've got to make at least $6. That's the minimum wage, isn't it?

The Chair: The minister would just like to make a comment to clarify something.

Hon Ms Churley: Just very quickly two things on the wages: Given the proud history of the labour movement here in Windsor, we expect that won't be long before the workers are unionized, which of course will have an impact on wages.

I wanted to clarify just for the record, because I know people understand it here, but the win tax applies to the gross casino revenues, not the winnings of individuals. The way it sounds, when they hear "win tax," people will think it's going to come off their winnings. That's so in the United States, but not here. So I really wanted to get that on the record.

Mr Carr: I'd assume, though, that the bidding isn't that you have to be unionized in order to win the bid, right?

Hon Ms Churley: Pardon me?

Mr Carr: The winning bidder does not have to say that they would become unionized to win the bid, though.

Hon Ms Churley: No, but that certainly will be taken into consideration, past labour history and that sort of thing. It's something that --

Mr Carr: And that will be a question asked -- "Are you unionized? Do you plan on being unionized?" -- in the discussions?

Hon Ms Churley: I won't personally be asking the questions, but certainly the proponents --

Mr Carr: Unionization will be a question asked of the bidders?

Ms Wolfson: One of the issues that we will be looking at will be labour-management practices and relations.

Mr Carr: How much weight will you put on that, since you're the chair?

Ms Wolfson: We have not weighted the criteria. All the criteria are very important.

Mr Carr: Have you had any direction from the government in that regard?

Ms Wolfson: No.

Mr Carr: So the bidding is up to you, no political -- it's all hands-off?

Ms Wolfson: The selection process is with four deputy ministers as part of the selection committee --

Mr Carr: With no guidelines given? You make the decision, you four, or --

Ms Wolfson: There have been no guidelines given to us by the government.

Mr Carr: No political?

Ms Wolfson: No political guidelines.

Mr Carr: I'll turn over my remaining time to Mr Drainville.

Mr Uppal: May I make a comment about unionization? The casino industry in Nevada also is very highly unionized. In some casinos they have as many as 60 unions, and I know of at least one casino where a strike has been going on for more than one year. So they are used to operating in an environment like we have.

Mr Carr: Okay, thank you. I'll pass the remaining time to Mr Drainville.

Mr Drainville: Mr Chair, you had said that you were going to give me five minutes. Is that with the three minutes?

The Chair: I also indicated I would probably do that at the end of all comments.

Mr Drainville: I can wait till the end.

The Chair: It's of no importance.

Mr Drainville: I'll do it very, very quickly. I just will direct the questions, if I can, to the assistant deputy minister. I'll just go through the questions and ask you to answer them at the end.

The issue that has been raised about government control is very important. The bifurcated system that's been set out by the province leads us to making a couple of questions and concerns. We know that, for instance, as far as the regulatory framework is concerned, the system that you've put forward is similar to other jurisdictions in the United States.

What we do question, though: It is the creation of the Ontario Casino Corp and it's not clear how much additional control that retaining ownership will give the government. This is basically because the issue of how much control the government has will depend largely upon how the government contracts out the services. Do you follow me so far on that?

Mr Uppal: Yes.

Mr Drainville: If there are certain contractual obligations that are established with the people who are going to be managing the casino, that will have a direct impact on how much control the actual Ontario Casino Corp has. So we have questions about that, questions about how much control will actually be there for the government.

The next question I have is on the issue of financing and revenues. A note that has to be made is that the Ontario legislation specifies only an upper limit for the government: 20%, it says. It does not specify a lower limit for the government. So the government could set as low a figure as perhaps 1%. The failure to fix a lower limit means that Bill 8 does not guarantee a minimum to be received by the government before payment of the casino operator. The question is, that's very different from other jurisdictions. I'd be questioning about why that is.

A third point on that same issue surrounding finances and revenues is that in most US jurisdictions, the respective shares of the government and the private sector are clearly spelled out in the legislation. In Ontario, Bill 8 leaves these matters to be determined through a combination of regulations to be established and agreements to be reached between the casino corporation and casino operators: again, a very different approach. I'd appreciate some comments on that.

My fourth question is in regard to the number and locations of casinos, controls and expansion. In Ontario, one respect in which the regulatory scheme is not self-funding in the way some US jurisdictions are is that the startup costs are to be covered by appropriations from the consolidated revenue fund, with no express requirement that they be repaid. The question here I'd like to ask is, why is that express requirement not made?

The next issue is the targeting of funds. In Ontario, the funds paid over to the consolidated revenue fund are not targeted. They are in many jurisdictions. How was the decision made not to allow for that?

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That was the time allotted. I have just two more small questions, Mr Chair, if I may go on.

The next question is oversight and enforcement of gaming. In terms of the oversight and enforcement of gaming -- reporting procedures -- like regulatory bodies in most other jurisdictions in Ontario, the casino corporation and the Gaming Control Commission must provide an annual report of their activities. Bill 8, however, provides no direction as to the content of such reports. This is in contrast to many jurisdictions in the United States that are very clear about what has to be reported and when it has to be reported. I would like a response on that, if I could.

There's a lot there, so if I could just leave that to you.

Mr Alfieri: I'll try my best. I wrote very quickly, as you can appreciate, so if I didn't catch the gist, please correct me.

The first one dealt with the bifurcation. Similar to other jurisdictions in the US, and I always thought it was different, I think what we need to remember is that in this made-in-Ontario model, the government owns the casino, so when you have a bifurcated system in the US, for instance, you have the enforcement, you have the commission and you have the operator who goes and gets a licence and then he proceeds of his own volition, he does his business subject to this enforcement, just like police and the courts if you will.

The model we have developed here, not only do we have this bifurcated model whereby both within government -- because again this is government-owned. The licence is not owned by a private entrepreneur; the licence is owned by the Ontario government through the corporation. Notwithstanding the fact that we own the licence and therefore the government has direct control over the operational and business policies of this casino, we have also elected to bifurcate that, notwithstanding the fact it's all government-controlled. We're not going to do like the lottery or like Manitoba or like Quebec. We want the commission and the corporation to do that.

The agent, the operator, unlike operators in the US or elsewhere, is an agent of the corporation. He's there to provide a service and an investment, but a service for fee, which has to be determined, has to be packaged. Again that agent is not subject to doing like they do in the States, a licensee, whatever they want. The human resources policies, the business practices, the advertising practices, etc can be approved by the corporation and ergo by the government. The government has got the authority under the bill to pass all kinds of regulations governing both the gaming and the control features.

The only thing that is similar I would suggest to some of the more renowned US experience is the bifurcation, but we take it well beyond bifurcation because we exercise direct control, as necessary, over both aspects.

How much of that will happen, I don't know at this point.

Mr Drainville: The issue is the contract, though. I'd just like, because we've strayed a little bit -- how the government controls the situation will depend upon the contracts that are established with those who will manage the casino. The question was, what will prevent that contractual obligation from becoming a means by which the government lacks certain controls over the situation?

Mr Alfieri: I cannot envision any contract that we would be involved with that would abdicate or relinquish the primary responsibilities. Again I think if one looks at this contractual arrangement within the context of the framework that we have outlined this afternoon, that's not very likely to happen because we do see these people as being nothing but agents. We intend, as part of any negotiations we are involved with, to ensure that framework remains in place.

Besides, the Criminal Code requires that we "conduct and manage," which also puts an onus on us to do that. It depends on how well we can write our contracts, but we are ready for that when October comes.

The limit of 20%: There is no minimum. I think that was the other thing. Percentages range depending on the degree of competition. In a monopoly situation, usually between 15% and 20% is the norm. In some European situations you can have as high as 80%. In Nevada, I believe it's about 7% or 8%.

Mr Uppal: It's 8.25% effectively in New Jersey. Nevada has a little bit lesser rate. New Orleans's effective rate would be over 20%. Illinois has an effective rate of 20%. So in a monopolistic situation like we have, more or less, I don't think 20% is unreasonable.

Mr Alfieri: With respect to why not a minimum, the situation is that, again, when you have a single monopolistic situation, a rate of 20% is appropriate. This is our first venture into this, and I think the Minister of Finance will need some flexibility in looking at the market conditions and determining the rate in order to ensure the viability of this operation and potential future operations. If, for instance, all of a sudden you have six casinos in Detroit, then a 20% rate even for this one may not be appropriate. So you want the flexibility to adjust.

Conversely, potentially, one looks at a first nations community. If they want to develop a small casino and there's agreement with that and it's primarily for the purpose of creating jobs and stimulating tourism, a high tax rate may not make it a viable thing. So I think it is necessary, especially at the beginning stages, to set the maximum so that people who have to invest know exactly what the maximum potential is, but to be flexible on the minimum so that one can react to market conditions and future developments.

The Chair: We are now going to deal with questions from members of the government caucus. Mr Martin, you're up first.

Mr Tony Martin (Sault Ste Marie): I wanted to say that I certainly appreciate the work that's been done here. I want to ask you: I'm from Sault Ste Marie. There's a casino across the river that is doing quite well, that has grown according to its ability to manage and is quite responsible. We haven't seen up there the kind of criminal activity that people are projecting may come with the establishment of a casino in Windsor, and certainly the projected figures in terms of people who would come are quite positive and, in some sense, rather phenomenal.

I made my one and only visit to that casino back last November and since then it's expanded, I think, about three times.

Interjection: Because of your visit.

Mr Martin: Because of my visit, yes. So I think that enterprise in itself, for me, actually was part of the development of my thinking and in fact eventual support of the idea of a casino for my community.

I guess what I wanted to ask you was within the context of this work that's been done. Somewhat hypothetically, take this out of Windsor. How would a community like Sault Ste Marie fit in your thinking? What would be the pieces that would need to come together and how would that be done?

Mr Alfieri: First and foremost, there would have to be community support for the venture. Assuming that the government decides to consider additional venues, we have been told repeatedly that they would not want to go anywhere where there wasn't expressed community support, which means not only very solid resolutions by city council but also general support in the community, I would presume.

Some communities are going well beyond that. They are starting to make plans. They select a site. They start even looking for operators. That's very premature. Again, the made-in-Ontario model calls for a commission to regulate, a corporation to operate, and unless there are changes in the future and changes to the Criminal Code, any casino in Ontario will have to have a very strong direct involvement by the province.

I think any community that wishes to consider this as an opportunity should limit itself to looking at the potential benefits, looking at the potential consequences, weighing the factors, and if they are satisfied that it's something that they wish to pursue, then should ensure that there is adequate community support behind it and then approach the ministry or the government with the idea -- not take it much further because if you take it much further -- like in the Sault; I understand at one point somebody had selected an old store to convert. Here they also selected a site, that they would attach the casino to a sportsplex. Those are quantum leaps that don't lend themselves to proper development. So I think the most important thing is community support.

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Mr Martin: What you're saying to me, though, and I know about the community support piece, is that whatever is developed in a community like Sault Ste Marie would have to fit within the context of this legislation. This legislation is not designed primarily for Windsor, but it's what will be --

Mr Alfieri: Yes.

Mr Martin: Okay. The second question I have is related to the reference to native development. We have two communities of native people on our boundaries. One of them is particularly interested in development of a casino, the other is watching. There's certainly some interest in the community re the question of joint venture. Have you thought about that at all, and how would you do that in a way that would make it so that the native community saw a reason to do that?

Mr Alfieri: With respect to casinos, our negotiations and our dealings with native communities so far, as I've indicated before -- since the casino market is very finite, some principles have been developed and regardless of -- assuming that native casinos will be located in first nations communities or with the involvement of first nations communities, one can't just say, "That community gets it."

I think we have to address with the first nations how to deal with the overall issue of dividing the benefits among all first nations, because going by Coopers and Lybrand, the number of casinos the province can sustain is extremely limited. Even though joint ventures are a possibility, they would have to be done in the context of the overall revenue-sharing policies that will have to come about, because if a first nations community in the city of Sault Ste Marie goes into a joint venture and that first nations community becomes exclusively involved and no other first nations community has any opportunity, then very few communities, very few municipalities will be able to benefit from this, and we have to find a handle as to how to address it from a broader perspective.

Ms Wolfson: If I might just add something, the present negotiations for charitable gaming are ongoing and indeed, because the market has expanded so rapidly, those revenues and the ability to have joint ventures on the charitable gaming side are things that we are negotiating and looking at right now with aboriginal communities. I think what Mr Alfieri talked about is a marketplace. The marketplace is a gaming marketplace, so we're really looking and negotiating, I hope as we speak, to see what the best process is to follow to look at those kinds of decisions.

Mr Martin: Perhaps I might just explore that a little further because I'm looking at what the benefit would be for my community and for the native community. In Windsor, it seems, there are some outside groups bidding to be the operator and they obviously will take a piece of the action out of that. The province would get some of the action, Windsor will get the spinoff, I suppose, and the tax that would go with it. If a native community, if any community, decided to get into this as an investment, how would they do that?

Ms Wolfson: At this point the government has made a decision on one pilot project, one casino, in Windsor, and at this time there has been no decision from the government that it will expand to other casinos. What we are using is the charitable gaming ability to create those revenues. At this point in time, those joint ventures or those initiatives are not contemplated for casinos proper. I think it's premature for us, based on the decision of the government to date to have a casino in Windsor, to be looking at other casinos.

Mr Martin: Yes, it may be premature, but, you know --

Ms Wolfson: How would one go about doing that?

Mr Martin: Yes.

Ms Wolfson: The same process, I would suggest, Mr Martin, as we've done to date. Should a decision be taken for other casinos, we will have a casino corporation that will then look at the financial and business-industrial aspects of creating another casino.

Mr Martin: You've talked about made in Ontario. Is the possibility of, say, made in Sault Ste Marie something more unique to that particular --

Ms Wolfson: Sure.

Mr Martin: Within the realm of that corporation?

Ms Wolfson: I think what Mr Alfieri was saying before is exactly right: Each and every casino, should there be more than one, would have to be a made in whatever community there is. If it were in Sault Ste Marie and that involved some kind of partnership, it would be perhaps appropriate to that venue. I think each and every venue is unique and has to be looked at. But the structure and the legislative component in Bill 8 would apply equally as a legislative framework for casinos.

Mr Lessard: To my friend from Sault Ste Marie, I can say I understand his interest in a casino in the Sault and I know that one way he might be able to pursue that is to make sure the pilot project here in Windsor is successful. To do that is to encourage his constituents to come down here and take advantage of the facilities once they open.

Mr Martin: You can get to pass through Michigan.

Mr Lessard: Mr Alfieri, in your presentation you made reference to a number of impacts that casino gambling would have here in Windsor. One of those was the impact on charitable gaming. Charities have suffered an impact as a result of the recession. Their ability to generate revenues and receive charitable donations has decreased. Windsor's been known to give very generously to its charities, but notwithstanding that, revenues have gone down.

In my submission, I would think the best thing that could happen to charities here in the city of Windsor would be to get people back to work and therefore increase people's disposal income. However, I know there are individuals and groups that are concerned about the possible impact that casino gambling may have on charitable gaming, and especially on things like bingos, because bingo is a big business here in Windsor.

I wonder whether you've done some research or know of research that's been done to indicate whether people might tend to switch from bingos to gambling in casinos, or whether it would take away from things like Monte Carlo nights and other types of charitable gaming activities.

Ms Wolfson: Perhaps, Mr Chair, I'll --

Interjection.

Ms Wolfson: No, it's fine. I'll answer the member's question and then I'll pass it in terms of the research to the assistant deputy minister.

Out of every $100 earned by charities, $99 is derived from bingos, Nevada tickets and raffles, not Monte Carlo. This is a much newer type of event. The competition, therefore, posed by the government's casino is, in our view, going to impact on that very small component only.

Bingo players, by our research, are remarkably loyal to their game, and it is our research that they will not cross over to casinos unless bingos are in those casinos, and frankly that's the information we've received from our American counterparts, and indeed the fact is verified, corroborated, by the bingo hall owners themselves, who are not concerned about a crossover from this population. If the government had proposed a fleet of Ontario-owned bingo halls, that might have presented a direct challenge, but the government chose not to do that and indeed made a deliberate decision.

It's our view that charitable events will not, for the most part, in those major endeavours -- bingos, Nevada tickets and raffles -- be markedly adversely affected. Perhaps Mr Alfieri has something to add.

Mr Alfieri: In the Windsor situation, in 1991 the charities' net proceeds from bingo were $9 million and the net proceeds from Monte Carlo events was $122,000. We are satisfied, and so is the bingo industry in Windsor, that the casino will not have any negative impact on bingo. We are not satisfied that there will not be a negative impact on other charitable gaming like Monte Carlos and blackjack tournaments, because those games are much the same as the games offered in the casino.

What we have agreed to do with the Windsor charities that derive this $122,000 is to track their revenues, both before and after the casino opens. We've undertaken to track those with them and to recommend remedial measures should, in fact, that source of revenue be affected by the casino. I want to stress that it's very, very small: $9 million for bingo, $122,000 for Monte Carlo.

Mr Duignan: I think it was raised earlier: The question is that if there's a casino established in Detroit sooner or later, would Windsor be a viable market? I think the answer is quite clearly yes, because surely the proponents that have made the proposals have researched that and done their homework on that and if they felt it wasn't a viable market, they wouldn't be in the race to set up a complex here in Windsor.

Also, there are a couple of key factors. In the gambling business, people who want to gamble love an edge and there are a couple of edges here for Ontario: One is the fact that there's a discount on the dollar of about 25% or 30% plus the fact that there's no tax on the winnings here in Ontario, which is a good selling point.

Interjection: Well, we haven't at the moment.

Mr Duignan: Maybe down the road, but at this point in time there is no tax even though they may be subject to IRS rules going back to the United States, but I understand a lot of that actually goes by the board as well. When you're dealing with cash, people sometimes tend to not -- part of winnings.

The other thing is, again as mentioned earlier in the presentations, the relationship between the casino complex and the racing track here in Windsor. I wonder if you could expand a little bit on what you see as the relationship between the casino complex and the racetrack. How do you envision that relationship working and how we're going to keep the racetrack in Windsor alive and well and operating?

Mr Alfieri: Unfortunately, that was the part of the presentation I had to abort because I ran out of time.

In the request for proposals, the RFP is quite specific in requesting proponents to tell us how they're going to work collaboratively with the Windsor racetrack. Unlike most other jurisdictions, we have indicated from day one that we have to find a win-win situation between the casino and the Windsor Raceway.

I have personally met with Mr Joy and his staff on a number of occasions, and when the RFP came out and the 24 potential proponents came to an information session, we again stressed to them the need to make sure that was the case. Many of them, in preparing their bids, made pilgrimages to Mr Joy's office to speak, to discuss with him the various strategies that could be put in place to deal with that.

From the feedback I get from Mr Joy, he's unhappy about some other things, but in respect of the collaboration that he has received from us and from the potential bidders, he's quite satisfied that there are many opportunities that could be capitalized on to ensure that the racetrack continues, or improves in its operation once the casino comes into play. Some of these options range all the way from setting up teletheatres in the casino to certain joint ventures between potential proponents and the racetrack to deal with marketing and some other form of partnership that has been discussed with the potential proponents and will be definitely picked up on once we get to the short list.

I can't be specific as to the actual strategies that are going to develop, but we are quite confident that the casino will not hurt the track, that there are opportunities for the casino and the track to both work towards a win-win situation.

Mr Callahan: You can wrap up the hearings now.

The Chair: Mr Dadamo, you have between four and five minutes.

Mr George Dadamo (Windsor-Sandwich): Plenty of time, thank you very much, if Mr Callahan will allow.

I wanted to put on record, if I may, that the Windsor members have had many an in-depth conversation with Mr Tom Joy and the former Windsor mayor, John Millson, who is of course at the Windsor racetrack these days, on what was going to happen with their facility should a casino ever come to Windsor. Now let's go back. This was the early days when it was born; it was a germ of an idea.

Mr Joy always expressed to the Windsor members that they were going to work with us and that they were going to find a way, with us, not to succumb and to stay in business, and always expressed to us that there were 1,300 or 1,400 people who worked at the Windsor racetrack. He could have closed it a long time ago, but out of the kindness of his heart, he didn't do so.

What I want to say is that there has been talk for ever that Detroit would have casino gambling some day. I understand Governor Engler is not crazy about the idea, but I understand there is a movement afoot in the Greektown area, which is minutes away from Windsor, that they are at some point going to open a facility. If they do open up a facility in Greektown, being that we're so close, I've heard that we could work hand in hand, that somehow their casino facilities and the Windsor casino facility would complement each other. Where are the studies that show we can work together?

Mr Alfieri: I don't think we have made any specific study as to how we can work together. We know for a fact that this market can take, as I have indicated, at least four casinos the size of what we've projected in Windsor and they could all function successfully. We made our projections based on Detroit having casinos. We have been told throughout the piece that if you have more than one casino, the synergy it creates will not only attract the current market but will improve the market because people like to go and gamble in more than one place. They could go one night in Detroit, then go across to Windsor etc. You'll be able to attract more conventions because of the fact that you have more than one casino etc.

All our projections were based primarily with those assumptions in mind, that we were not going to enjoy a monopoly for ever and that it wasn't necessarily the best thing to have a monopoly for ever. As long as we are able to put in place the kind of product that will enable us to retain our share -- and our share is one casino in Windsor because we don't want to do anything which overpowers the community -- and achieve those objectives, then I think we will have achieved the objectives we set out to achieve.

Mr Kwinter: Mr Chairman, on a point of information: A couple of people have alluded to the fact that the exchange rate on the dollar is an advantage. All it allows you to do is lose longer. It doesn't allow you to win any more money. It just allows you to lose longer -- just as long as that's understood, because a couple of comments have been made that this is going to be an incentive to somebody, but really that's all it does.

Mr Alfieri: The only incentive I alluded to was that it takes longer to lose. Therefore, you play more with the same money.

The Chair: That concludes the technical briefing part of the committee hearings. On behalf of the committee, I want to thank Minister Churley, Ms Wolfson, Mr Alfieri and Mr Uppal for presenting today.

Hon Ms Churley: It was certainly our pleasure.

The Chair: To the rest of the committee, if we have about a minute for everybody to clear out who is leaving, we have some further business to do which I hope won't take more than five or 10 minutes.

The committee adjourned at 1818.