ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
REGIONAL MUNICIPALITY
OF NIAGARA
NIAGARA FALLS ECONOMIC DEVELOPMENT AGENCY
SOCIAL PLANNING COUNCIL OF NIAGARA FALLS
ONTARIO HOTEL AND MOTEL ASSOCIATION, GREATER NIAGARA
FIRST BAPTIST CHURCH,
BRANTFORD
BAPTIST CONVENTION OF ONTARIO AND QUEBEC
CHAMBER OF COMMERCE,
NIAGARA FALLS, CANADA
NIAGARA FALLS, CANADA, VISITOR AND CONVENTION BUREAU
NIAGARA FALLS AND DISTRICT LABOUR COUNCIL
ONTARIO RESTAURANT ASSOCIATION, NIAGARA REGION
JOHN HAYES STABLE
LTD
ESCARPMENT FARMS LTD
CONTENTS
Thursday 2 September 1993
Ontario Casino Corporation Act, 1993, Bill 8
City of Niagara Falls
Wayne Thomson, mayor
Regional Municipality of Niagara
Brian E. Merrett, chairman
Niagara Falls Economic Development Agency
Gabriel Mallouk, chairman
Charles Baltjes-Chataway, director
Team Niagara Tourism
Norm Puttick, chairman
Social Planning Council of Niagara Falls
William Meredith, president
Karen Stern, board member
Rhonda Lambert, researcher
Julie Darnay, executive director
Ontario Hotel and Motel Association, Greater Niagara
Margaret C. Mingle, president
First Baptist Church, Brantford
Douglas K. Summerhayes, deacon
Baptist Convention of Ontario and Quebec
Rev Owen Burey, co-chair, social concerns committee
Chamber of Commerce, Niagara Falls, Canada
Allen Gandell, board member
Niagara Falls, Canada, Visitor and Convention Bureau
Amy Bignucolo, president
Niagara Falls and District Labour Council
Kim G. Craitor, president
Janice Bishop, recording secretary
Ontario Restaurant Association, Niagara region
David Hagarty, president
James Roberto, past president
John Hayes Stable Ltd
John Hayes, co-owner
Escarpment Farms Ltd
Linda Lockey, co-owner
Bourne Leisure Group Ltd
Ian Wilbraham, director, North American operations
Wilbert Dick, director, Sherkston Shores resort
J. Tothfaluse and Associates
Joseph Tothfaluse, president
Try Another Way Committee
Rev Harvey Murphy, president, Greater Niagara Evangelical Ministerial
Rev Lillian Porter, secretary, Greater Niagara Evangelical Ministerial
Judith MacCarthy, coordinator
Rev Dan Sheffield, president, Niagara Falls Evangelical Ministerial
Continued overleaf
Continued from overleaf
STANDING COMMITTEE ON FINANCE AND ECONOMIC AFFAIRS
*Chair / Président: Johnson, Paul R. (Prince Edward-Lennox-South Hastings/
Prince Edward-Lennox-Hastings-Sud ND)
Vice-Chair / Vice-Président: Wiseman, Jim (Durham West/-Ouest ND)
Caplan, Elinor (Oriole L)
*Carr, Gary (Oakville South/-Sud PC)
Cousens, W. Donald (Markham PC)
Jamison, Norm (Norfolk ND)
*Kwinter, Monte (Wilson Heights L)
*Lessard, Wayne (Windsor-Walkerville ND)
Mathyssen, Irene (Middlesex ND)
North, Peter (Elgin ND)
*Phillips, Gerry (Scarborough-Agincourt L)
*Sutherland, Kimble (Oxford ND)
*In attendance / présents
Substitutions present / Membres remplaçants présents:
Duignan, Noel (Halton North/-Nord ND) for Mr Jamison
Harrington, Margaret H. (Niagara Falls ND) for Mr Wiseman
Martin, Tony (Sault Ste Marie ND) for Mrs Mathyssen
McClelland, Carman (Brampton North/-Nord L) for Mrs Caplan
Sterling, Norman W. (Carleton PC) for Mr Cousens
Also taking part / Autres participants et participantes:
Kormos, Peter (Welland-Thorold ND)
Clerk / Greffière: Grannum, Tonia
Staff / Personnel: Luski, Lorraine, research officer, Legislative Research Service
The committee met at 1003 in the Sheraton Fallsview Hotel, Niagara Falls.
ONTARIO CASINO CORPORATION ACT, 1993 / LOI DE 1993 SUR LA SOCIÉTÉ DES CASINOS DE L'ONTARIO
Consideration of Bill 8, An Act to provide for the control of casinos through the establishment of the Ontario Casino Corporation and to provide for certain other matters related to casinos / Loi prévoyant la réglementation des casinos par la création de la Société des casinos de l'Ontario et traitant de certaines autres questions relatives aux casinos.
The Chair (Mr Paul R. Johnson): This is the final day for hearings for this committee concerning 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.
Before we start, I recognize Margaret Harrington.
Ms Margaret H. Harrington (Niagara Falls): First of all, I'd like to welcome the committee to Niagara Falls. As you can see, we have a wonderful place here, and there's much more to see. In fact, we were to be in the Hennepin room; that's named after Father Hennepin, who was the first non-native to actually even see the falls, and he was probably right at this spot here. I invite you to go outside and have a look around when you can.
To the people here, I'm very pleased to have the finance and economics committee of the Legislature here, and I hope you will get to know them during the day. Unfortunately, I have to leave briefly at 11:15 to be with the Minister of Housing here in Niagara Falls for an announcement, but I certainly want to hear everyone possible. I have a copy of a press release I would like to have available for anyone who wishes one, and I'll pass them around the table.
CITY OF NIAGARA FALLS
The Chair: Our first presenter this morning is Mayor Wayne Thomson, city of Niagara Falls. Good morning, Mayor. You have 30 minutes to make your presentation and field questions from the members.
Mr Wayne Thomson: Thank you very much. First of all, let me welcome you to Niagara Falls. Thank you for the opportunity to come here and listen to a very important issue for this community.
It is a privilege to have been granted an opportunity to present the position of the city of Niagara Falls regarding Bill 8 and the establishment of casinos in the province of Ontario. I am speaking to you today on behalf of 12 aldermen who, along with myself, form the council of the city of Niagara Falls.
The city has a population in excess of 75,000 and an annual tourist population of over 12 million. City council has expressed publicly on many occasions its support for a casino, culminating with the passing of the resolution which is attached to this submission. The council of the city of Niagara Falls supports the establishment of a casino in the city because it will stimulate development of a viable new industry, improve economic development and generate revenue, create jobs and promote tourism development.
Further, Niagara Falls believes that its family image and its position as a tourist destination, together with an existing infrastructure, puts the city in a superior position to enhance the provincial economy.
I would like to commend the province on the foresight to introduce legislation which will allow casinos to establish. Casinos and recreational gaming have been gaining in popularity in recent times as a leisure activity. The move to recognize this trend represents an opportunity to recognize substantial economic benefits. According to the recently released Coopers and Lybrand report, the possibility exists to establish seven casinos in major market areas, including Niagara Falls.
Bill 8 as drafted does not go far enough to recognize the various opportunities which exist in the province for casinos. As drafted, Bill 8 provides only for the establishment of a casino in Windsor; thus, the proposed legislation is shortsighted. The language of part II of Bill 8 must be expanded to allow for the development of further casinos throughout the province.
Without such a change, an amendment to the provincial act would be required each time a new facility is planned. I am not suggesting an open-door approach but believe the communities identified in the Coopers and Lybrand report to the Ontario casino project should be recognized in the legislation before final reading. The Coopers and Lybrand study is a careful examination of the viability of casinos in Ontario which supports the opportunity to establish a number of casinos in the province.
The economic recovery of Ontario rests with the financial wellbeing of the local municipalities, which contribute to the general health of the province. Overall, the Coopers and Lybrand report indicates tax revenues to the province in excess of $850 million. Locally, the development of a casino in Niagara Falls will stimulate the economy at a time when we have been crippled by the recent recession and a slow recovery which depends on an even smaller industrial base.
The last few years have been financially troubling for business, both those directly tied to tourism and those indirectly linked. As such, the city of Niagara Falls is experiencing property tax arrears totalling approximately $48 million -- that figure is about four times greater than it was in 1989 -- of which $24 million is from the tourist industry alone. This places a hardship on the city, which must bear the costs of carrying the debt. The addition of a casino to Niagara Falls would create a draw which would in turn fill the hotel rooms and restaurants and attractions and thus increase the economic viability of business.
Businesses which are financially solvent would be better able to pay taxes and reduce municipal debt loads. The overall health of the community would be improved to a point where an economically stable market would allow consumer confidence to flourish. The good health of the local and regional municipalities will enhance the general wellbeing of the province.
During the last few years, more than 1,300 traditional manufacturing jobs have been lost locally. The development of a casino in Niagara Falls will help significantly in providing new work opportunities for the unemployed. The creation of jobs locally is documented as having a positive effect on jobs generated elsewhere in the province.
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Consider for a moment the findings of the economic impact study for Niagara Falls prepared by the economic planning group in 1988: For every direct job created in the tourism industry in Niagara Falls, another one and a half jobs are created in the province by industries indirectly related to tourism. With these kinds of statistics, Niagara Falls will have a positive impact on the economy of the province because of the number of jobs created. It is the responsibility of society to make sure there is full employment. Consider too the creation of jobs in the construction trades and their suppliers should such a facility develop locally. This will prove important over the short term for the regional economy. I am sure that you will hear more from other speakers on this topic.
As a city which attracts more than 12 million tourists per year, the potential benefits to the province are enormous. In order to be the most effective player, the city needs to be in the position to offer additional attractions which will increase the length of stay of its visitors. The tourism economic study identified the need for demand-generator attractions; these are facilities which attract visitors because of the total overall experience provided. A casino in Niagara Falls would be such a facility.
By creating demand-generator facilities, it is possible to capture additional tourist spending because the visitor would stay longer. By increasing the length of stay for the average visitor, it is possible to influence spending patterns which will necessitate additional amenities and attractions. The spinoff benefit of development of such facilities in a city which already has a reputation as a tourist destination will have unmatched multiplier effects on tourism development in the region and province.
Efforts to increase the length of stay for tourists has been an ongoing goal of the Niagara Falls Visitor and Convention Bureau and the city for many years. Further, new tourist dollars could be attracted in the off-season if a casino facility were developed in Niagara Falls. Niagara Falls already receives 24% of its visitation from October to March each year. There is significant potential to expand this off-season market further, as the social characteristics change to include an increasing number of retired people and those who are not tied to the school vacation period.
Niagara Falls has a reputation of being a family-oriented destination. The city council is most interested in having this image continue. A casino facility will attract two kinds of people. Some will be dedicated casino gamer types, but many visitors to the casino will be there for the recreational aspect of the game of chance. In this regard, it is not unlike the Monte Carlo night activities which already occur every weekend in this municipality.
Successful marketing could build on the integrity of the community. The establishment of a casino therefore would complement the already existing tourist-serving facilities. Management of casinos through the Ontario Casino Corp, as outlined in Bill 8, provides for public regulation of the operation and a comprehensive approach to supervising and directing casino activities across the province. This type of control would be supported to ensure that the family atmosphere present in Niagara Falls prevails.
The city of Niagara Falls has an existing infrastructure available to accommodate casino development. The city handles large volumes of tourists regularly and has available public and private parking lots, transportation facilities and accommodations to serve the visitor to a casino facility. The city is served by the regional Niagara police services and has the Niagara Parks Commission police force operating within the municipal boundaries; not every community can boast of such local protection. The workforce in this city is oriented to serving the tourist and catering to his or her needs. Therefore, the establishment of a casino in Niagara Falls could be quickly accommodated.
In summary, the city supports the introduction of casinos in the province, as provided by Bill 8. However, the city believes the provisions are too narrow and that the bill should provide the opportunity for additional casinos to establish without further amendment once the bill has received final reading. The opportunity to establish further casinos in Ontario will help with the economic recovery of the province and the health of local municipalities.
Niagara Falls has much to offer in the provincial recovery, as one and a half jobs are created throughout the province for every one job created in the city's tourism industry. The city has been hard hit because of the loss of jobs in the traditional manufacturing industry. The opportunity to create year-round employment and extend tourism to the off-season will have an important spinoff effect for the community.
Niagara Falls is a family destination; therefore, the bill must provide sufficient control to regulate the operation of casinos to provincial standards in order to maintain the image of the city and the province. Niagara Fall is well poised with an adequate infrastructure to support a casino operation. Recreational gaming has been adopted in one form or another across the country. Niagara Falls is ready to start generating the substantial economic benefits which will be recognized through job creation and tourism development.
Niagara Falls is significantly different from Windsor and should be considered for casino gaming now in order to truly test the tourist market and stimulate the provincial economy.
Thank you very much, Mr Chairman and members, for the opportunity to submit the brief, and we'd welcome any questions with respect to gaming in the city.
Mr Carman McClelland (Brampton North): Thank you for the welcome and hospitality of your city. I just want to touch base on one brief point and ask for your comment. You referred twice to the loss of manufacturing jobs. I'm not taking away for one moment your comments with respect to the opportunity for job creation and the potential you see; I'd just be interested in your comment in terms of the manufacturing jobs vis-à-vis the replacement factor. It seems to me, and correct me if I'm wrong, that the jobs we're talking about wouldn't necessarily replace those 1,300 jobs that are lost. There may in fact be some overlap and some of those individuals would be picked up, but am I right or wrong in presuming that the vast majority of those 1,300 people who have lost those particular jobs would really not be at issue in terms of job re-creation for them? It would be a different set of individuals you would be drawing on for the most part. I'd appreciate your comment on that.
Mr Thomson: That very well could be, and I think the figure of 1,300 which was mentioned in the brief is probably very light. Mr Chairman and members, I'm here today representing the municipality, and if you read the statistics in the paper about the unemployment situation in the Niagara region -- we like to be first in a lot of things but that's one area where we don't like to be first, and we've been consistently first in the province at having the highest unemployment record.
Because we're in tourism and because we have 12 million visitors who come and stay a couple of hours, look at the falls and pass on, we have an opportunity to fill these rooms and to fill the attractions and the restaurants. It's going to create jobs.
That is not to say that we are not actively pursuing the industrial aspect. Industry located here 100 years ago because of the inexpensive hydro power. You're probably all aware of the problems with Ontario Hydro, and we have lost substantial industry in the last two or three years because of the hydro cost; these are high power users and they just could not continue. Granted, somebody who is working on a furnace in an abrasives industry may not end up working in the tourist industry, but there is always that possibility. I think people have to be flexible, have to accept what opportunities are available.
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I keep hearing the argument that the jobs that are going to be created are not the same jobs and the same-paying jobs for the head of the family. There are substantial well-paying jobs in the tourist industry. Certainly there is going to be a spinoff to the electricians and the plumbers and the construction people and all of the management people and supervisory and marketing people generated as a result of tourism, a spinoff that is going to take up the slack of these 1,300 jobs, probably far in excess of that, in my opinion. We're working on both. We're just trying to survive.
When we talk about $48 million in arrears in taxes, that is not insignificant. The debt load we are allowed according to the provincial standards is about $32 million for this municipality. I've been around since 1969 in local politics, and this is the first time I have experienced where we have not been able to go ahead with our public works, roads and sewers until we found out if the tourist people were going to be able to pay some of their taxes. Most of the tourist industry in this community is three years in arrears in their taxes; we have not registered those properties because we'd have to register almost all the facilities in the tourist industry in this community.
This is a situation where we're in desperate straits. This is not something we've given very little thought to. We are asking for this opportunity because we want this community to survive. That's the state of affairs we find ourselves in.
We know there are people who are in strong opposition, for valid reasons, to a casino. In fact, in 1981 I was mayor and we had the opportunity to discuss casino gambling. I was opposed to it at that particular time with all the studies and the information I received, because we were talking about casinos and proliferation of casinos throughout the community. I'm supporting this because we're talking about one casino, and that's all we're interested in in this community. We're talking about the stimulation of jobs. We're talking about giving the opportunity to people in business already to survive.
I have to look at gaming and what it has done in the last 10 years in Ontario. All of a sudden, we have bingos on every other corner, which is a form of gaming. The provincial and federal government now have lotteries where you can bet on sporting events. We have the racetrack just outside of Fort Erie. We have off-track betting being discussed. If anybody is naïve enough to think there isn't gaming in Ontario, we have casino nights in this hotel and others every weekend.
All we're saying is: Let's go one step further. Let's control it. Let's give us an opportunity to have one more attraction in this community to help us survive.
Mr Norman W. Sterling (Carleton): We've heard, at some of the previous hearings, some very negative aspects to bringing a casino to a community: increased police costs, increased crime. The Ontario Restaurant Association is against Bill 8 on the basis that there aren't enough guarantees in it that restrict casinos from providing food; the experience in other municipalities like Atlantic City is that the restaurateurs didn't benefit at all by the introduction of casinos because everybody stayed in the casinos to eat and get their other services.
A very thoughtful suggestion came to our ears yesterday, that before a casino is introduced in a community that community be required to have a referendum to ask what the people want. Would you favour a referendum in Niagara Falls before the government gave a right to have a casino in Niagara Falls?
Mr Thomson: If that were the will and that were the only opportunity we had to have a casino here, we would have to accept that. I'm even concerned about waiting for the Windsor experience to be evaluated. I'm not here talking in favour of this without a great deal of soul-searching and a great deal of thought. This community is in very difficult straits, and if we wait for two or three years down the road, many of the people who are in business here today are not going to be able to survive and they won't be around. I would like to get on with it as quickly as possible. If you're suggesting that's the only way to do it, then we don't have any choice, but many of the businesses in this community will not be around at that time.
Mr Sterling: So if in fact the decision was not made by the next municipal elections, you'd be in favour of putting that on the next municipal ballot?
Mr Thomson: I have no problem with that.
Mr Sterling: We've heard that another part that comes forth when you introduce a casino is that there are increased costs associated with policing in particular. Who do you think should be responsible for these costs: the municipality which hosts the casino and presumably has the benefits? You're coming to the provincial government and saying, "We want one here." That's says to me, as a future government member, perhaps, that you're then willing to bear the costs associated with hosting that casino.
Mr Thomson: Our impression is that there would be sufficient financial benefit to the municipality that policing and other costs, which even for traffic control and other things would have to be increased -- I think the benefits to the community, people paying their taxes, would certain offset that.
The other situation is that you said "the individual municipality." Every time we talk about tourism, every time we talk about the benefits to the community, we're encouraged to and are always talking on a regional basis; the province encourages that, the federal government encourages that. So you're not talking in isolation: We're talking about the regional municipality of Niagara when we're talking of the benefits of this.
Every municipality within this region would benefit from a casino in the city of Niagara Falls. The objective is to keep people here longer, to encourage them to go to Niagara-on-the-Lake, to encourage them to go to Fort Erie, to St Catharines and the other tourist activities that exist in this region. That's the objective, to try and keep them here for at least a week enjoying all of the tourism amenities we have throughout the region.
Mr Sterling: In Bill 8 there are very, very restrictive measures associated with the casino: You can't smoke, you can't have a drink. I'm one of the greatest advocates on the non-smoker's side; notwithstanding that, I believe people go into a casino, into a tourist environment wanting to relax and enjoy themselves. Do you agree with the very strict regulations surrounding casinos which this government has put forward?
Mr Thomson: I have no problem. We're actively involved in our municipality now in strengthening our no-smoking regulations with respect to public places. I'm a non-smoker and I support that and I have no problem with that. As for the drinking aspect of it, if it's within the area, I think we can live with that.
Mr Noel Duignan (Halton North): I want to set the record straight on a couple of points. On the question of drinking in the casino, drinking will be allowed in the casino but not at the tables; that's the difference.
In regard to Bill 8, this is not a Windsor-specific bill. Section 2 quite clearly sets out and does not limit casinos to Windsor only. Subsection 2(1) establishes the corporation to conduct and manage casinos and makes it an agent of the province, and under clause 4(c) states very clearly, "The objects of the corporation are...to provide for the operation of casinos."
Section 2, I understand, which you have some concerns about, basically deals with the city of Windsor area, and all this does is it defines the Windsor casino site, provides an assessment date, fixes the date of value for the casino lands and allows the city the authority to deal with the site. But I have noted your concerns and I thank you for bringing your concerns around that section of the bill to us.
Mr Thomson: Our only concern there was basically, if you're going to do this, make it so we don't have to go through this exercise again each time you want to create another location for a casino.
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Mr Duignan: Our advice at this time is that the bill does not need to be amended to allow for casinos anywhere else in the province, but I have noted your concern around section 2 of the bill.
Ms Harrington: Mr Mayor, it's a pleasure to hear your submission. I want it clarified that Bill 8 is enabling legislation for a further casino or casinos. That has to be very clear.
Mr Thomson: We had a legal opinion on that, and if that's the case, fine, but we want to make sure that is brought to your attention.
Ms Harrington: Our parliamentary assistant has stated that that's the government's position, and we will certainly check that if you would like.
I found in our travelling with the committee this week that gaming and casinos certainly are a reality. In fact, casinos are all around Ontario, whether it's south of here -- we went to Michigan -- or whether it's east -- in Quebec, I understood yesterday from the Ottawa radio station that there is a casino opening in Montreal on October 1 -- and certainly in Winnipeg, west of here. They're all around Ontario, and that is a drain on our economy. Many people feel that this is a real form of entertainment and that as such, it can be a legitimate part of tourism.
One concern we all have is the other things that come along with casinos, and there are studies that have been done and that we are still doing to address these: first of all, the job benefits -- the direct jobs, the indirect jobs -- the policing and crime, the effect on charities and the horse racing industry, and of course gambling addiction, this kind of thing. That's the reason we have a pilot project, to make sure that the introduction of a casino in Ontario has taken into account all those factors.
I think it would be irresponsible of me or this government to be advocating, if it is shown that the existence of a casino in a community invites problems that we are unable to cope with, so that's why we are doing the pilot project. I'd like to hear your response to that.
Mr Thomson: My response is the same as it was to the previous question. We have some severe problems. We're trying to deal with them in any way we can, and if we're talking about 1997 before we have the opportunity to have a casino, maybe that solves the problem, because I don't think we'll get one.
Ms Harrington: Do you believe a pilot project is needed to evaluate these factors?
Mr Thomson: I don't think you can compare Windsor with the city of Niagara Falls whatsoever. We have 12 million visitors coming here. We're trying to keep them here. Windsor is not in that situation. We have 11,000 rooms here. Windsor does not have that situation. We have all the other amenities to go along with it. Windsor does not have a tourist community, and in my opinion, if you do something in Windsor, it isn't going to have any bearing on what happens in the city of Niagara Falls. It's totally different. In fact, if you had a pilot project, you probably should have two or three of them just to determine exactly the situation.
The Chair: Thank you very much, Mayor Thomson, for presenting before the committee this morning.
Mr Thomson: Thank you for the opportunity, and again, we appreciate your coming here and giving the whole community the opportunity to make submissions.
Mr Peter Kormos (Welland-Thorold): The mayor just wishes you were staying overnight.
The Chair: Well, maybe I do too.
REGIONAL MUNICIPALITY OF NIAGARA
NIAGARA FALLS ECONOMIC DEVELOPMENT AGENCY
The Chair: The next presenter is Brian Merrett, chairman of Niagara region.
Mr Kormos: Mr Chair, I'm not a member of the committee, but I saw there were a few empty seats on the government side and perhaps reinforcements would be appropriate, so I felt that I'd be accommodated.
The Chair: Thank you very much, Mr Kormos.
Please proceed when you're ready.
Mr Brian E. Merrett: Welcome, members of the committee, to the city of Niagara Falls and welcome to the beautiful region of Niagara. I appreciate the opportunity to be here to make some comments about the region's feeling on Bill 8 and the proposed casinos.
Commitment by the council of the regional municipality of Niagara to support a casino project in the Niagara region has been confirmed by the passing of a resolution on January 21, 1993. That resolution stated:
"That the province of Ontario be requested to establish a second trial casino within the Niagara Peninsula to assist in the economic development initiatives of the region and the area municipalities, and
"That the region of Niagara support the resolution of the city of Niagara Falls of June 8, 1992."
It is the expectation of regional council that a casino project within the Niagara region will be a stimulus that is needed to jump-start the region's economy.
The region's economy has been stalled at best by the effects of the prolonged recession. Niagara's unemployment rate for the first half of 1993 averaged 14.1% compared to the national average of 11.7%. As the mayor said, that's not a statistic we're proud of being first place in.
The number of unemployed in Niagara climbed to over 22,000 for this same period, giving support to the reports of local bankruptcies and corporate downsizing, resulting in layoffs, reduced operations, and at the extreme, complete closures. I don't have to remind you of the announcements from General Motors, Ford and others as they impact our region.
This in turn has exerted pressure on the region's already overburdened social services system. This is clearly evidenced by the soaring welfare rolls. On a year-to-date basis, monthly caseloads are averaging 13,700. When this is compared to average caseloads of 4,700 at the start of the recession about three years ago, it's a 200% increase. There's no question we need jobs for these people.
These statistics are a measure of the region's ailing economy, and while lower interest rates were expected to stimulate growth, building permit activity reveals just the opposite. The latest building permit reports identify a continuing downward trend, especially in the residential sector.
Another area of growing concern within the region is the willingness and the ability of our taxpayers to carry their burden and to pay their share of the taxes. The combined tax levy and collection experience of the area municipalities shows that the 1992 tax levy increase was 4.8% over 1991, whereas the total tax arrears position increased 33.9%. The mayor has touched on the significant tax arrears problem specifically in the city of Niagara Falls.
While these statistics have the makings of a fiscal dilemma, the region has positioned itself to handle the deteriorating economy by engaging in fiscal restraint and preparing for the economic recovery that will allow Niagara to further diversify its economic base. A major initiative is now under way as a result of the chairman's economic summit in developing a strategic plan to rebuild the region's economy and to build on the strengths of the Niagara region. There is no question that a growing and expanding regional tourism industry is essential to the economic renewal in Niagara.
As such, the region both needs and is prepared for the challenge of casino gambling. The region's current infrastructure is well suited to meet the increased demands expected from a casino project. The four international bridges, in addition to continual improvements on our regional highway system, will ensure traffic volume is adequately dealt with.
The present tourism services base, especially in Niagara Falls, is well equipped to handle an increase in tourism volume. Both upscale and budget accommodations are available throughout the region of Niagara. Research relating to a proposed casino in Niagara Falls concluded that the actual number of tourists visiting the area may not increase significantly from the 12 million who already visit annually, but that the length of stay would increase. It was mentioned by the mayor that all the studies that have been done in the past point to that need to increase the length of stay of our existing visitors.
It's also anticipated that this would be a major stimulant to our bus tour industry. A casino project would constitute one more welcome attraction that will allow Niagara to build on its already solid tourism foundation.
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Concern has been raised as to the influx of crime that is commonly associated with gambling facilities. The Niagara Regional Police Force has formed a committee to study the impact of casino gambling on local police and emergency services. I'd like to just note that we have with us in the audience the chief of the Niagara Regional Police, Grant Waddell, and members of his committee who are following this issue and providing input to members of the police services board. I meant to mention at the beginning that, besides chairman, I am also a member of the police services board in Niagara.
The Niagara Regional Police are committed to the safety and wellbeing of the residents of the Niagara Region and should a casino project -- I shouldn't say should, I should say when -- be initiated in Niagara, law enforcement will adapt and meet the policing needs of the community.
Of great interest to all levels of government, to all of you sitting here, is the issue of taxes resulting from a gambling facility. All levels, federal, provincial, regional and municipal, will benefit. The federal and provincial levels will not only benefit significantly from the sales taxes that will be generated, but also from personal income taxes as a result of the 20,000-plus jobs that could be created. The regional and municipal governments will benefit from an increased property tax base. As well, the overall regional economy would benefit greatly by sharing in the hundreds of millions of projected revenue generated annually by the casino.
Perhaps more important will be the spinoff effects that will help push the region's economy out of these current doldrums. Specifically, residential activity will be expected to grow, increasing housing starts, which would increase create a market for building products. The resulting commercial capital investment in entertainment, shopping, night life and other potential investments will all contribute to the badly needed revival of our economy.
The benefits of a proposed casino project are many. However, procrastination on this issue can mean the difference between millions of dollars generated for Canadians or those same dollars in the pockets of our neighbours to the south. We know that many American cities are very aggressive in their attempts at entering the gaming market. Should we delay in coming forward with another site, we may soon be saturated by American casinos within close proximity to the border, thus taking away any advantage Windsor or Niagara Falls would have in having a casino put forward quickly.
I appreciate the opportunity to be here. I would just urge you to please consider Niagara for a second trial site. I think it's important for you to have the comparison between what is happening in Windsor and what can be provided in Niagara. Thank you very much. I will be pleased to answer any questions.
The Chair: I just want to clarify for the members that we have this 30 minutes shared by the Niagara Falls Economic Development Agency and the chairman of the Niagara region. That means that if we're going to share the time equally, we have five minutes for all the members to pose questions to Mr Merrett at this point in time; that's not a lot of time.
Mr Merrett: I can answer them quickly.
The Chair: Or we can call in the Niagara Falls Economic Development Agency and maybe have more time to share at the end. I think that might be more appropriate. Mr Mallouk, please begin your presentation immediately and we'll take questions at the end of that.
Mr Gabriel Mallouk: My name is Gabriel Mallouk and I am before you in my capacity as chairman of the Niagara Falls Economic Development Agency. The economic development agency is wholly in support of one government-regulated casino to be located in our city, and this brief will present the rationale for taking this position.
We recognize that this hearing was convened to discuss the merits of Bill 8, the Ontario Casino Corporation Act, 1993. Our criticism of the proposed legislation is that it restricts the establishment of a casino in Ontario to a geographic area in the city of Windsor; therefore, my presentation will be directed to providing a rationale which should be considered to amend Bill 8 in order to permit one government-regulated casino in the city of Niagara Falls.
The request for proposals for the Windsor casino complex specifically identified various ministry objectives, which are as follows: to act as a catalyst for community economic development; to create jobs; to promote tourism and hospitality industries; to establish a new, viable industry in the province; to provide revenues for the province.
I submit to you that the city of Niagara Falls, as a community, meets all of the objectives stated above. Over 50% of the economy of Niagara Falls is directly dependent on tourism, and for the last few years tourism has been on a decline, causing great hardship for our local economy.
During the late 1980s, a tourism economic impact study was completed for the city of Niagara Falls. This joint effort by Tourism Canada, the Niagara Falls Visitor and Convention Bureau and the city of Niagara Falls tabled a 10-volume report in March 1988. I would like to detail some of the findings of this most comprehensive study:
"While tourism has always been recognized as a major sector of the Ontario economy, its economic impact on local communities and economies has received only partial attention. In some of these economies, such as Niagara Falls, tourism is the leading local economic sector, and the economic health and prosperity of the region are critically linked to development in this sector."
The economic indicators of tourism as it affects Niagara Falls and the province of Ontario were measured in accurate detail with this study, and these numbers are so significant that it is incumbent upon me to present them to your committee:
"Tourism expenditures in Niagara Falls are estimated to have exceeded $504 million in 1987. This expenditure by Ontario visitors, other Canadians, US visitors and overseas visitors for food, lodging, transportation, amusement and other travel items generated a substantial amount of income and employment in Niagara Falls, surrounding regions and the provincial economy.
"Exhibit 1 summarizes the economic impact of year-round expenditures by tourists in Niagara Falls. More than 27,900 person-years of employment in the province were associated with these expenditures, of which 11,828 were directly generated; thus for every direct job, almost another job and a half were created in the province by industries indirectly related to tourism. Of the total jobs created, only 14,807 were sustained in Niagara Falls, with the remaining jobs scattered all over Ontario.
"A substantial amount of income was created in response to the tourism expenditures in Niagara Falls, both in Ontario and in the local economy. The total Ontario income increased by $681.7 million, with the local economy's income increasing by $307.7 million. The overall income multiplier is 1.35; thus for every dollar spent by tourists in activities directly serving tourism (ie, accommodation, transportation etc) in Niagara Falls, about 35 cents more was generated in indirectly related activities throughout the province. Only 61 cents, however, was retained in Niagara Falls.
"In the case of both employment and income, Metro Toronto, other Festival Country areas and southwestern Ontario account for most of the impacts outside of Niagara Falls, Ontario.
"A total of $1.2 billion worth of sales in the province were sustained by the tourism expenditures in Niagara Falls. Of this, about $411 million came from outside Ontario: $215 million from other provinces and $196 million from other countries."
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Expenditures of $504 million and direct employment of approximately 15,000 people cannot be ignored, nor can tax contributions representing $186 million be considered to be insignificant to the economy of Niagara Falls or that of the province of Ontario. I underscore these numbers for two reasons: first, the tourism economy is in decline, and second, your committee can help the community of Niagara Falls, its citizens and the citizens of the province of Ontario by positively recommending the establishment of a second government-regulated casino for our municipality.
The study continues, demonstrating that the continued health of the tourism economy in Niagara Falls is directly correlated to the development of new tourism products to retain visitors for an increased length of stay. Again, I quote from the study:
"The large volume of tourist activity in Niagara Falls indicates that the city has significant appeal as a tourist destination. However, the survey results report that 79% of spring visitors and 66% of summer visitors are staying in the city for one day or less. These results suggest that there are insufficient attractions and amenities in Niagara Falls to keep the visitors in the city for more than a maximum of six to seven hours. In order to increase the length of stay of visitors and the number of overnight trips and, as a result, of spending levels, it would be necessary to provide more things for visitors in Niagara Falls to do." However, "in other destinations, an attraction which is the demand generator of the trip generally receives the benefits of the greater part of the length of stay and associated spending. This is not happening in Niagara Falls, probably because people are not being given enough reasons to stay for more than a limited time period."
The aforementioned is the rationale behind the Niagara Falls Economic Development Agency providing its wholehearted endorsement. The board of directors has discussed the casino project at its meetings on a number of occasions and has unanimously supported the project.
During the earlier part of 1993, the economic development agency coordinated a petition supporting a government-regulated casino in Niagara Falls. This petition was signed by 3,200 residents from all sectors of the community and has been tabled in the Legislature by our provincial member, Margaret Harrington.
One of the reasons that the economic development agency has unanimously supported a casino project for this city is the extreme decline in other sectors of our economy. The manufacturing sector, which historically generated wealth and prosperity for its citizens, is in a state of decline. It has been buffeted by the effects of global competitive pressures, and approximately 8,000 jobs have been lost in the last two years in the manufacturing sector in the region of Niagara. These jobs will not be easily replaced, as they were caused through the rationalization of fixed costs from many multinational enterprises.
The amendment of Bill 8 to include Niagara Falls as a casino project community would provide a very positive catalyst for the economic environment of the community. Informally, we are aware of the increased investment and development activity in the city of Windsor subsequent to the announcement of the casino project, and we desperately need similar good news.
It is difficult to accurately predict the economic impact of a casino project in Niagara Falls. However, we believe that a world-class facility meeting the criteria of your ministry would provide for a capital investment in the order of $150 million to $250 million. It is believed that 1,500 person-years of employment would be directly associated with the construction of the project over the 18-month period and that there would be an additional 1,400 indirect jobs through spinoffs on our local economy.
The provincial government recently tabled Coopers and Lybrand's report on the economic impact of tourism, which suggests that 8,720 direct jobs would be created with the establishment of a casino. Indirectly, 10,305 job opportunities would be provided to the community. We desperately need these 19,000 jobs in the city of Niagara Falls.
In conclusion, I strongly urge you to amend Bill 8 to allow one government-regulated casino in the city of Niagara Falls. Our economy is in dire straits and we need a casino project to revitalize our tourist industry. I have attempted to provide you with the significant economic factors that have led us to the conclusion of unanimous support for the project. As part of my submission, I would like to table copies of the main report and executive summary of the tourism economic impact study that was conducted for our community.
Thank you for allowing the Niagara Falls Economic Development Agency to make this presentation. I urge you to amend Bill 8 to include Niagara Falls. Our future as a community and that of the tourism industry are resting in your hands. Thank you.
Mr Gary Carr (Oakville South): Thank you for your presentation, Brian. I know you've been into Queen's Park on numerous occasions, representing Niagara on many issues, and we appreciate it.
I'm interested in the job figures you come up with on page 8. Do you believe that number of jobs is what we're going to be looking at in terms of a casino here? Maybe you can give us an idea of the size of the casino and the number of people you see being employed directly as well as the spinoff jobs and, if I could ask just quickly because I won't probably get another chance, what the total in terms of millions will be to the community in Niagara. Could you maybe fill in some detail?
Mr Mallouk: I would ask our director to answer that.
Mr Charles Baltjes-Chataway: The numbers we've included in the economic development agency's submission have been extracted from the Coopers and Lybrand report, which was tabled, I believe, at the commencement of the hearings in Windsor.
Mr Carr: Have you done some of your own, though? Have you done your own to back up the studies?
Mr Baltjes-Chataway: Yes. Actually, surprisingly, our economic generators were approximately half those that were determined or projected by the government's consultants in the Coopers and Lybrand report.
Mr Carr: I appreciate that. Anybody would say any number of jobs would be good because of the terrible economic impact --
Mr Baltjes-Chataway: I think that's the position we're taking; that's very fair to say. If we're out by the order of 100, we're still talking about 10,000 jobs, and they're desperately needed in the city of Niagara Falls.
Mr Carr: Some people would say even if it's 10, it's better than nothing. On the downside, though, there's some concern in rural Ontario regarding the horse racing industry, that they will lose jobs. What's your feeling here in Niagara about the concern of rural Ontario that it's going to lose in terms of horse racing? Do you see any downside? Do you think casinos will compete with the horse racing industry in Ontario?
Mr Merrett: The feeling, in discussions we've been part of here in Niagara, is that the two can complement one another. It's another form of gaming, another attraction that can be marketed to benefit tourism here in Niagara.
Ms Harrington: I have to leave soon and my colleague wants to speak, so I just wanted to reply to a comment you made on page 7. You said, "We desperately need similar good news." I would like to put on the record that this government takes the interests of this city and the concerns of this city very seriously. For instance, as you know, this summer the strategic studies are going on in the tourism industry in Ontario and how we can plan for the future of tourism. Part of that is the Gateway project, which is an absolutely novel and astounding investment in this city that our government is very seriously doing over the next few months, with your help and of course with the private sector. We're doing the preliminary work on it between now and December, and that will have implications for many years down the road. Also, I just want to remind you of the move of the Ministry of Tourism and Recreation.
We are taking this city's concerns extremely seriously and doing whatever we can, which of course doesn't manufacture jobs in the industrial sector immediately, but we're also looking at the long-range infrastructure for new technology-type jobs as well. Of course, we're working with the chairman in his economic study as well.
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Mr Kimble Sutherland (Oxford): It's obviously very good that the community is looking at diversifying; both you and the mayor talked about diversifying. As Margaret has just pointed out, the provincial government, by maintaining its commitment for the relocation projects, both the one here and the Ministry of Transportation in St Catharines, has demonstrated that commitment to support the region in diversifying.
You've talked this morning about casinos and how that supports the tourism industry. I'm wondering what some of the economic development agency's plans with diversification outside the tourism area.
Mr Merrett: As Margaret mentioned, through my office there was an economic summit held at the end of May, in which we did an analysis of not only our manufacturing sector and the problems it's been experiencing but also developing a strategic plan to look at other areas of our economy that are growing.
We are very proud of our wine industry, and you are all very aware of the success it is achieving not only within this country but internationally. They are growing in leaps and bounds, and we see that as a plus for the agricultural industry and tourism, because they are becoming a very important component of our tourism marketing.
We see our horticultural industry, cut flowers. I refer to it as our sleeping giant. As you come down the Queen Elizabeth Way and see the greenhouses along the escarpment, it has become a tremendous industry in Niagara, and growing. We shipped over a million poinsettias to New York City last Christmas, a 747 full.
We are diversifying in those areas, but certainly the tourism economy is the backbone, along with the auto industry. We all know what's happening in manufacturing and the auto sector specifically, so we are looking at our strengths and building on those, and of course you don't have to look very far; you can just hear it from here. Niagara Falls is the backbone of the tourist industry of the region.
Mr Monte Kwinter (Wilson Heights): I don't want to talk about the morality of casinos; I don't want to talk about the social impact. That decision has already been made by the government, obviously.
What I do want to talk about is the economics. I want to be upfront and say to you that if casinos are going to happen, I think Niagara Falls is the absolute perfect place to put one. Where I have some very serious problems, and I question a lot of the assumptions, is the economic benefits that are going to accrue as a result of it. In your last statement, on page 9, you say, "Our future as a community and that of the tourism industry is resting in your hands." If that is the idea, that the casino is going to save Niagara Falls, you're going to be in for a horrible disappointment.
Let's take a look at the figures. Right now, you have 12 million visitors a year. The projections for Windsor, where they hope to build a whole tourist industry, is for 4.3 million and some-odd: 12,000 a day times 365. The infrastructure you have in place is there, but the spinoffs are not going to be there. What you're going to get from a casino in Niagara Falls is the construction value, the man-hours of work to build it, which will be comparable to building the hotel we're in, one hotel for one time. That will be it: That's the benefit, which is a plus, and I say that's great. You're going to get the actual jobs in the casino and very little else, because all these other jobs that are supposed to go to Windsor are already here: All of the support, all of the restaurants, all of the hotels, all of the tourism attractions, are here. They're not going to increase because there is a casino.
In your presentation, you say you don't expect the numbers to increase very much, that the 12 million visitors will stay at about 12 million, so your hope is that people will come and stay longer and you will get some benefit if they do. But you also have to understand that this isn't going to be unique: They're proposing three for Toronto, one for Windsor, one for Sault Ste Marie, one for Ottawa.
You're going to get some residual spinoff, but to think that this is going to suddenly solve the problems of Niagara Falls and this region I think is naïve and almost irresponsible. It's just not going to happen. You're going to get people coming in, they're going to gamble and the bulk of the revenue, other than what you get from the jobs, is going to the consolidated revenue fund of the province, and most of that will be going to service the debt hat the province has.
I'm all in favour that if casinos are going to happen, have them here. But to suggest that this is going to somehow or other change the character and save the tourism industry in Niagara Falls is naïve and just doesn't stand up to scrutiny. I'd like to hear some of your comments on that.
Mr Merrett: I appreciate the opportunity to answer. With respect, I regret that the member said the position we've put forward is irresponsible. If the member would spend some time in the region of Niagara and the city of Niagara Falls, I suggest he would see the tremendous economic difficulty we are having, the tremendous economic difficulty our tourism industry is having.
All of the tourism studies that have been done over a number of years, and there's volumes of them, point to the need for increasing the length of stay of the existing visitor. Some statistics show that the average visitor stays four hours, spends $27 and then heads up the road to Toronto or whatever. All of those studies point to us needing another attraction. I suggest that this is that other attraction we need to increase the length of stay. If it attracts additional visitors, so be it, and that's the gravy, but we need that incentive to have those tourists stay here.
We have already seen and had an opportunity to measure the Monte Carlo nights, some that have been held in this room, and the tremendous number of people they are drawing who are staying in the city of Niagara Falls. We've had comments from the bridge commission about how it's seen the numbers increase tremendously in bridge traffic the night those large Monte Carlo nights were being held. I think I'll stop right there.
The Chair: Actually, we're past the time. I do want to thank the three of you for presenting before the committee this morning.
Mr Merrett: Thank you for your indulgence in having us here. We hope you'll stay over the weekend in Niagara.
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TEAM NIAGARA TOURISM
The Chair: Our next presenter is Norm Puttick, chair of the Team Niagara Tourism casino task force.
Mr Norm Puttick: I believe you all know Murray Johnston, the executive director of TNT. I too, as an alderman, would like to welcome you to the city of Niagara Falls. As you read through the brief, which will only take about 10 minutes, I may insert the odd line to explain a little bit better; I took another look at this at 6 o'clock this morning.
My name is Norm Puttick. I am the chairman of the Team Niagara Tourism gaming casino task force. TNT is an organization comprised of volunteers from business, government -- local, provincial and federal -- and the tourism industry in the city and region who are working together as a team to continue to make Niagara Falls a world-class destination. We are therefore united in this presentation to secure a gaming casino as an added destination attraction for the visitors to our city. We know a casino, possibly in conjunction with a convention complex, will without a doubt give Niagara Falls the ability to truly function as a year-round destination.
On behalf of TNT, I take this opportunity to congratulate Mr Rae and his government for initiating Bill 8. This city has been waiting at least 30 years for some initiative to allow the province of Ontario, and more particularly Niagara Falls, to participate on a level field with other tourist areas in the USA and North America which have proven that a casino will work as a tourist attraction while creating much-needed jobs and spinoff benefits.
I am not here today because we have to compete with Windsor, Toronto and Ottawa. I am not here because of the recession; others will speak to that. I am here on behalf of TNT to tell you that Niagara Falls is the best place in the province for a casino.
Something is terribly wrong that our city would have to wait for a casino while Windsor is studied. I received just a week ago a copy of the Coopers and Lybrand report prepared for the Ontario casino project, which certainly shows that a casino in the Niagara Falls area could start immediately. I interject here that I am an alderman, first elected on December 2, 1966. I also chair the city of Niagara Falls conference and convention committee. I know how the political process works and the necessity of studies to demonstrate need. However, there is no need to wait until Windsor is studied. I submit that the province's own study prepared by Coopers and Lybrand addressed the economic benefit and opportunities to enhance tourism through the establishment of a casino. It also addressed issues surrounding social concerns.
The city of Niagara Falls, with 12 million visitors annually, has been the subject of numerous tourism studies. The 1988 tourism economic impact study completed for Niagara Falls concluded that the full benefit associated with its position as a visitor destination has not been realized. The development of a facility in the city which would act as a demand generator would ensure that Niagara Falls, the region and in turn the province receive the full benefit of visitor spending by extending the stay of tourists. The development of a casino in Niagara Falls is a demand-generator facility which meets the intent of the tourism economic impact study, which, by the way, I think was partly paid for by the province.
The Coopers and Lybrand report identifies job creation as one of the goals of establishing casinos in the province. It is a documented fact in the tourism economic impact study that one and a half additional jobs are created in the province for every one job created in tourism in Niagara Falls. What better way to develop a job creation program in the province than to open a casino in the city?
I might interject to one of the questions that you asked another member that our industrial people are losing jobs. You could use some of your Jobs Ontario money and turn these people into first-class workers in tourism.
Niagara Falls has a well-established tourist market with a full range of secondary attractions. This is not the case in Windsor, which must establish secondary tourist attractions. I have a computerized list of all motor coach destinations in the province of Ontario prepared by Sea Tourism Travel Research. Of the 30 destination attractions in our province, the top 10 attractions are located in the city of Niagara Falls, and seven other attractions are listed further down; thus we have 17 of the top attractions in Niagara Falls out of 30 in the province. I might mention that Windsor isn't even mentioned. Ottawa has two, Toronto has six and so on. Therefore, Niagara Falls holds an important position in the province to generate spinoff visitor expenditures. Who could deny we are the number one attraction city in Ontario?
Niagara Falls is striving very hard to enhance its attractions in the off-season. The winter Festival of Lights is one such major annual event. Last year we joined forces with the Disney Corp which has increased the appeal of the festival which generates $40 to $60 million in spending during the course of the event. This event expands annually and now includes a major New Year's Eve show which was televised last year.
A section in the Coopers and Lbrand report refers to the 1988 Niagara Falls tourism strategy which suggested a major new attraction would help improve our hotels and infrastructure.
The bottom line on this point is that the person who authored the section for the Niagara Falls report did not visit this city to bring up to date the 1988 report, but I was told he lived here some 10 years ago and he used him as an authority.
This hotel where you're sitting, for example, has been completed in the last few years and is a full-facility hotel which has developed since the 1988 study. Approximately 18% of the current hotel inventory has been added since 1987. Many of these hotels are affiliated with North American chains which provide a recognized level of comfort. As only 24% of Niagara Falls visitors arrive between October and March, there is additional capacity in the accommodation and restaurant infrastructure to support a much larger tourist market. Changing social characteristics mean that there are more retired and childless couples who can be attracted during the non-summer seasons.
Niagara Falls is served by the Queen Elizabeth Way, which is currently being widened to three lanes in each direction. There are three international bridges which serve the city. The Niagara Falls Bridge Commission has adopted a 30-year plan to upgrade these facilities and is proceeding with implementing changes at the Rainbow Bridge. The region of Niagara holds lands in reserve for a possible freeway. If needed, a highway connection could be developed parallel to Stanley Avenue to connect Highway 420 with the Niagara Parkway to the south. That freeway, by the way, is a stone's throw away if you look out the window of this building.
The city has a municipal transit system and tourist shuttle link to move visitors through the city. This is in addition to the Niagara Parks Commission people-mover system which serves the tourist population. The Niagara Falls tourism master plan completed in 1992 concluded that further expansion of local and regional roads is not necessary. It did nevertheless recommend an operational review of the transit and people-mover systems, and that review is now under way. Once again I say this is a city well equipped to serve the tourist.
I might insert here that we have the St Catharines airport and the Niagara Falls, New York, airport. I have talked to the people in Niagara Falls, NY, and we could bring the people in here so fast on airplanes that it would make your head swim.
The city's position could n be further improved if a conference centre were to be established. I have excerpts from studies completed between 1965 and 1992 which highlight this fact. A casino would be a great enhancement to a conference centre and could bring the number of visitors to the city on a yearly basis to 28 million persons. I have that report here; I asked several people in government if they knew about that, and they said they'd never read it.
The Coopers and Lybrand report indicates that a casino in Niagara Falls could generate cash flows of over $166 million. I believe that's low. This will generate millions of dollars in spinoff benefits for the local, regional and provincial governments. I recently talked to my friend Councillor Howard Moscoe of Metro Toronto, who chairs the Toronto-area convention committee. He agreed that the draw of tourists to Niagara Falls has a spinoff effect for Toronto. We are to meet, along with our mayor, hopefully in a few weeks, to discuss our mutual appreciation of a casino and tourism.
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Atlantic City has now embarked on a massive program for a 460,000-square-foot convention centre on one floor to further entice visitors and to enhance its casino facilities. To make sure it is successful, they just bought a small airport to ensure that visitors can reach Atlantic City directly. I have those reports here if you wish to see them later.
When Atlantic City was contemplating a casino and convention centre, one New Jersey official was asked, "Are you not taking a risk with Philadelphia and adjacent states building casinos and conference centres?" The answer was, "The risks are much greater if we do not take the risk."
This also applies to Niagara Falls. If we want to enhance our attractions and infrastructure, with a casino the risk is great that we will lose our position if we are second to Buffalo, Syracuse or Niagara Falls, New York. I was just told last week at a conference in Hamilton that Syracuse is now open.
In closing, let me add a personal note. I want for my family and my three grandchildren a vibrant, healthy city and province. A casino in Niagara Falls will do much to ensure this. I would not be here today if I thought a casino would harm this city and province in any way. To those who are opposed to a casino, I say that TNT members understand your concern, but we are talking about one world-class casino, not a row of 12 or so one strip. We require a tourist enhancement facility, and we believe in the evidence of all the studies done for our city, that this casino will be the catalyst for solid growth and prosperity.
We have the visiting bus tours. We have 11,000 hotel and motel rooms. We have the attractions. We have the one and only falls. This is a city familiar with serving visitors. We have the supported land uses and a ready labour force, willing to work in the industry if given the chance. Niagara Falls is ready now.
As Ross Perot said of President Clinton's budget: "You don't build a bridge two thirds of the way across the Mississippi. He hasn't gone far enough." Similarly, Bob Rae and his government have not gone far enough. Bill 8 provides only one casino in the province at this time. This is the same as building only part of the bridge. If the full economic recovery of the province is to be achieved, we must all do our part to complete the bridge. Well, TNT members sincerely believe that Bill 8 must be expanded to allow a casino in Niagara Falls. This will finally allow us to complete our bridge with all the plans from 1965 and let us get on with running our city prosperously for the benefit of its residents and the province of Ontario.
I do wish to advise you that I compiled most of the notes for this brief, but I want to acknowledge our planning department and Murray Johnston at city hall who added some of the facts and rearranged the paragraphs so I wouldn't get carried away too far. But this is sincerely submitted, and any further dialogue TNT may have before you leave today or in the next few weeks would be very much appreciated.
Mr Sutherland: Thank you, Mr Puttick, for coming on behalf of Team Niagara Tourism. I just want to repeat, as Mr Duignan the parliamentary assistant said, that it is certainly our interpretation that the legislation being an enabling piece of legislation, in the way it's worded now with some references to specifics of Windsor, does not limit the ability for new casinos to be established without having to change the legislation.
That said, the parliamentary assistant has also pointed out, as have others, that at this stage of the game we are just looking at the Windsor project and using that as a pilot project and testing that. I know from the presentations this morning that there seems to be a great deal of eagerness and support in this community, and some have said, "Why don't you just go ahead?" But we are dealing with a new area, we are dealing with a new industry coming to this province, and by allowing the regulatory agency to do its function with just one rather than having to deal with four or five casinos at once, I think there's great benefits to doing it that way. It's just like our successful franchise businesses didn't build them all at once; they started with one and kept building and going from there and learning from what occurred.
The question I wanted to ask you is that we've heard throughout these hearings that some people view casino gambling as a different type of gambling from other types, whether that be bingos or lotteries or betting at the horse races; some people see this as a more evil form of gambling. How do you respond to that? How do you think people develop a view that one form of gaming is worse than another form of gaming?
Mr Puttick: The only proper answer I can give is that you're saying "some people." If you were a little more specific -- but if you're talking about the general population of Ontario, I'd have to say that they don't do their research. You always have the malcontents; they get up and they want to show in a community. Whether it be church or some other organization, they're against everything. I can remember when I first got on council we never had liquor here.
Interjections.
Mr Puttick: Did you ask me to answer the question? I'm trying to do it as honestly as I can. The only way I can answer it in a broad text is because we do have representation from the church. What I'm saying to you is that nobody has proven this. If you look at gambling, at prostitution, at crime, I can give you my answer to that if I were here this afternoon to respond to any brief against casinos: The problem starts in the family. The church are the people who are supposed to bring the families together. Our problem isn't casinos. If casinos were the problem throughout the world, why do we have wars? Casinos didn't start it. I'll leave it at that; I could go on for an hour about that. I mentioned my grandchildren; my grandchildren are brought up properly. That's the problem.
I'm an elected person and I'm going to be very blunt about it. I'm elected and I was asked to help bring a casino here and I'm going to do it. Anybody who wants to oppose that has a democratic right.
I could go on. In fact, you can't answer your question very simply. If I worried about getting elected in this town because of opposition, I wouldn't have been around for 27 years, okay? Let me answer it that way.
Mr Gerry Phillips (Scarborough-Agincourt): Our experience on the committee on the casino thing is that -- I've used the expression -- it's a bit like a gold rush. Every community we go to has stars in their eyes about it and see it as a cash cow. I don't think it's unique to Ontario; I think virtually every community in North America now sees this as an enormous cash cow, so I suspect there'll be incredible pressure to proceed with them everywhere. I think our native community will see quite a few of them. It probably will not be a debate around whether to have them or not, because everybody's going to want them.
My question really is around the form you are advocating. The proposal is for a $250-million investment, roughly; the Windsor proposal is about $100 million. Therefore, the casino that I seem to see you visualizing seems to be much larger. I would like you, as the chair of the committee, to spell out for us the facility that you visualize here, the funding for it; I gather it's private sector funding for the $250 million. I think you called it a world-class facility in your brief. Do you see it having a hotel attached to it and large restaurants and entertainment, that sort of thing?
Mr Puttick: What I envisioned: In 1989, long before we were into hearings or the present government was in power, I wrote a letter to a very influential person in the United States, Atlantic City, who has casinos, and I suggested to him, on my own, without council authority, that he build a casino in Niagara Falls, New York. At that time, my theory was that no government in Ontario would even think of casinos. The response I had was, number one, a letter to the effect that because of other expansions, they weren't going out of their certain area.
I'm answering your question, by the way.
Mr Phillips: Good.
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Mr Puttick: To come up to date, when the government announced casinos and also the first one in Windsor, I wrote another letter and sent two letters back that I had from these very reputable people, and I received a phone call about two and a half months ago. That point came up. I can tell you right now that I had a phone call yesterday from the chap I am talking to, hoping to bring, as the government has asked, private money. He phoned me yesterday. He was in Tokyo; they're thinking of going there with this type of business. I said: "Look, I have to give a presentation tomorrow. I will of course not use your name, but can we meet with our mayor and our CAO and those people involved, and would you still say you would not build rooms with your casino?" He said yes, except that maybe they would have 100 or 200 for those people who wish to come in and pay $1,000 a suite.
So in answer to your question, what I envision is that this casino would be built in cooperation, obviously, with the government restrictions. If it's 70,000 square feet, we'd leave one wall we can take out and make it larger in the future. I envision a convention centre attached to this. As I mention here, I'm chairman of our local conferencing committee. With every convention I go to, people want to come here, but we need that one facility to get people in. I envision a convention centre in line with what you're thinking.
I don't gamble. I'm also chairman of our non-smoking committee; I don't smoke. So I'm looking at this as an attraction, that if people come here they'll stay overnight and spend a little money there, maybe stay two nights and on they go.
We want something in line with what you have in mind, and we want it now. If you want it now and if you'll tell me within the next week -- and don't worry about the seven or eight people who aren't going to win in Windsor, to get that job -- I can bring a first-class operation here. I can have a meeting with the Ontario government next Monday, and it would just knock this town and this province on its ears and you'll have all the money you want. That's no problem.
Can I observe something else? I have a report here from Atlantic City. Do you know the problem they had in Atlantic City? It wasn't the casinos. It was the politicians.
Mr Sterling: Given the monopolistic nature of casinos and the ability to have one or to have one of two or one of three, I think it is not hard to attract a great deal of money if the government is willing to give enough in terms of the monopoly and of the take in order to attract that kind of investment.
My concern is that I represent an area in eastern Ontario, the city of Kanata, which because of the nature of the high-tech industry is being able to survive fairly strongly in this recession and isn't doing all that bad, but I also know that in eastern Ontario there are some areas that are doing much worse than Niagara Falls. I refer to the community of Cornwall, which has been devastated in terms of the losses which it has incurred in its manufacturing sector, has no tourist industry to speak of etc, and it is asking for a casino as well. How do we as politicians in Ontario say yes to Niagara Falls, yes to Windsor, yes to Ottawa, which was in to see us yesterday, and say no to Cornwall?
Mr Puttick: That's easy: Don't say no. But I can tell you this, on my way to a conference last year in Pembroke I heard about Cornwall, and I don't share your view. That's a very beautiful area.
Mr Sterling: I didn't say it wasn't beautiful, sir. I said it was devastated.
Mr Puttick: No, I'm just saying it's beautiful, but let me tell you what I think you should do. I stopped at Trenton on my way to Pembroke, and when I checked into the hotel, about 10 minutes later this chap came out, I believe from the Rotary Club. He saw the registration from Niagara Falls and we got talking. I learned that eastern Ontario, from Pembroke down to Trenton, has special consideration by the Ontario government. They receive moneys there, as I understand it, to hold conventions, for accommodations, a convention centre and arena, and your mayor was the one who pushed that in Cornwall to get this.
However, my point is this: You held a conference there of 2,500 Rotarians, I believe -- I can be corrected on the number -- and you housed those people miles away from your conference centre, and the information I had on a follow-up was that they loved it. I have no argument with you giving a casino down there. If you had a casino there, you'd have them coming in by boat.
What I'm trying to say to you is, don't study it for two or three years. We all know the answer: We need casinos. Cornwall needs one, Niagara Falls needs one, if they can prove they can handle it. We can handle it. Give Cornwall one. That doesn't bother me at all. In fact, I wouldn't gamble, but I'd go down there and have a look at it.
Mr Carr: You seem to be well on your way in terms of planning. As somebody who grew up in Toronto and has been coming down to the Niagara region for many years, as a matter of fact probably before you got elected, where exactly do you see it being planned? As a follow-up to the question that was asked earlier, where would you like to see the casino in Niagara Falls? Have you gone that far? Where would you put it?
Mr Puttick: I'm speaking for myself, and I think it's no secret. I sat on the Niagara Parks Commission for three years, 1979 and 1980, and we talked a little bit about it, and in 1990 I was on for a year. In answer to your question, I would like to see the Ontario government get the Hydro land on the corner of Murray and Buchanan that has probably been studied to death. The last suggestion I heard was to put a first-class casino in there, along with a convention centre, rehabilitate the bus depot we have, buy it out, get the buses in there and build a parking garage and get on with it. Hydro's got lots of money. Give us some money. Let us build it right there. We could start that thing in six months. The plans have been made, not so much for a casino. I was on the parks commission, as I say, in 1979. It's studied to death.
Mr Carr: Then we're all zoned and ready to go in that particular site?
Mr Puttick: Speaking for myself and as the chairman, I'm going to tell you something. If you were to see me afterwards over lunch and said, "Look, I think this committee's going to approve a casino," the mayor of this city and Murray Johnston and all those people who have a little more effect on planning than I do would have this thing built so fast it would make your head swim.
The Chair: Mr Puttick, Mr Johnston, thank you very much for presenting before the committee this morning.
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SOCIAL PLANNING COUNCIL OF NIAGARA FALLS
The Chair: Our next presenter is Julie Darnay, the Social Planning Council of Niagara Falls.
Mr William Meredith: Good morning. My name is Bill Meredith. I'm the president of the Social Planning Council of Niagara Falls. With me is Karen Stern, one of our board members, Rhonda Lambert, a researcher, and Julie Darnay, our executive director. Karen will be presenting our report and I will be bringing a brief summary at the end.
Ms Karen Stern: Ladies and gentlemen, the following is a presentation of facts derived from reports, news articles and studies regarding the issue of casino gambling. Highlighted sections reflect possible impacts as indicated by a summary of those facts. The findings of the literature search should allow our community to proactively plan for the potential development of casinos in Niagara Falls.
The development of a casino in Niagara Falls will generate the beginning of an economic renewal of this city and the surrounding communities. Research indicates that casinos have the ability to affect unemployment rates and as a result lead to the potential reduction of social assistance cases and food bank usage, as well as other social conditions. The establishment of a city-directed casino committee displays our council's dedication to proactively plan for an economic renewal. The outcome would be the development of a responsible industry which would ensure optimum benefits and preventive plans.
No one can ignore the potential benefits to the tourist industry, nor should they not recognize the effects on spinoff industries. Although negative social impacts are possible, recognition of those impacts will allow our council and community to plan preventive measures guaranteeing an industry which is not only beneficial in the long run but also responsible. Should a casino be developed in Niagara Falls, the city of Niagara Falls should strike a standing committee to monitor over time the impact of casino gambling, to prepare strategies to prevent or minimize negative impacts and have the power and the resources to enforce those strategies.
I will now present to you a summary of the literature search findings. Those findings are detailed for you in the paper provided. Each section will have research highlights, what the research indicates and questions for consideration.
Through the research it was discovered that $9.5 billion is spent in Canada on gambling and gaming; 1.3% of the provincial revenue is derived from gambling and gaming. Windsor is predicted to produce $140 million in revenues. If casinos are opened in the seven suggested areas, consumer revenue would be about $1.4 billion, with another $850 million in tax revenues. It is estimated that $166 million could be generated in Niagara Falls alone.
The research indicates, therefore, that casino gambling will produce high revenues, but questions we must consider are: Where will the profits and the taxes derived from these casinos go? With the number of casinos proposed and existing, are the potential revenues too high for what we've produced in this area?
Through the research it was discovered that in Deadwood, South Dakota, land values have increased 10 times their amount since the inception of casinos. Taxes on local businesses increased sevenfold within three years and property assessment tripled. In Atlantic City, dramatic increases in land costs and taxes forced small business out. This research indicates, therefore, that land prices in casino communities have the potential to increase, as well as taxes and assessments for businesses in casino areas.
We need to consider: Are there proposed strategies in place to prevent taxes from skyrocketing around the casino areas and thus preventing those experiences of Deadwood and Atlantic City?
It was also discovered that most casinos are all-inclusive entertainment centres, each casino a self-contained economic tool. Casinos in areas of tourism could increase tourism revenue if complementary services are provided. Therefore, the research indicates that to positively affect other community businesses, a casino should be just one of many entertainment activities available to attract tourists.
We need to consider: Is the government prepared to allow for casinos which are responsive and reflective of the communities in which they are based, or is it using a cookie-cutter approach with the same type and style? Since Niagara Falls has an established tourist economy, a different type of casino from the one proposed in Windsor may be best.
The employment impact was discovered through the research. If casinos open in seven suggested communities, 97,000 jobs could result: in Niagara Falls, 950 construction jobs, 8,700 full-time staff and 10,300 indirect staff. In Quebec, the Montreal casino will create 700 casino jobs and 1,100 indirect jobs. In Atlantic City, 12 casinos caused the development of 40,000 jobs. There was more construction, less unemployment and a higher annual income.
However, casinos did nothing for the chronically unemployed. In Deadwood, a university study found that casinos affected unemployment rates, dropping them down to a pre-recession level.
The research indicates that job opportunities may result. However, casinos should not be considered the cure-all to high or chronic unemployment.
The questions we need to consider are: Are there any assurances that Niagara Falls residents will be employed if the casinos open in Niagara Falls? Are there training programs available to those who are unemployed, especially those who are chronically unemployed, to learn the necessary skills to be employed by a casino?
Through research it was discovered that crime may increase because the population to be policed on a daily basis will increase. Reports by the Solicitor General of Canada indicate that wherever casinos are found, organized crime is sure to follow. Canada lacks strict anti-laundering laws.
In Deadwood, crime has jumped 63% since gambling was introduced. In Atlantic City, there was a 2,000% increase in police calls and 171% in crime related to casinos. In Winnipeg, crime involving money-laundering and scams have taken place. However, the impact was not as dramatic as expected. Specific crimes reported as increasing are street crimes, traffic and parking, robbery, domestic violence, prostitution, alcohol-related, fraud and forgery.
The research indicates that increased population due to casinos has the potential to increase criminal activities in a community; additionally, casino-related crimes may appear.
Questions we need to consider are: Are there strategies in place to deal with casino crimes, such as legislation to deal with money-laundering? Will there be funds allocated from gambling proceeds to expand police services and training? Does our province have suitable legislation and law enforcement teams to deal with organized crime? Will our police forces receive specialized training to deal with and detect possible casino crimes?
Addiction: Through the research, it was discovered that 3% of the population is thought to be compulsive gamblers. This calculates to about 2,000 residents of Niagara Falls. In Manitoba, $500,000 a year will be spent to treat pathological gamblers. The research indicates therefore that casinos have the potential to increase the number of those needing counselling for gambling addiction. We need to find out, will there be funds earmarked for addiction centres in the communities hosting a casino?
Other social impacts, through research, were discovered. In Deadwood, the small-town atmosphere was destroyed. In Atlantic City, there was a large increase in the transient population and homelessness. Little rejuvenation to the central business area happened. Research has indicated that there's a potential loss of a sense of community. We need to know, are there strategies in place to deal with negative impacts to the community, especially our vulnerable population, those prone to homelessness?
The impact of commercial casinos on charitable casino revenues will be dramatic, causing significant losses; 41 charitable organizations have applied for casino licences in Niagara Falls in 1993. The research indicates loss of revenue for local charitable casinos and other gaming fund-raisers once the commercial casino opens.
As both municipal and provincial funding have been reduced, many non-profit, charitable organizations have had to turn to fund-raising. Charitable casinos have offered non-profit organizations a simple and effective way to raise funds. What strategies are in place to eliminate the impact of commercial casinos on fund-raising efforts? What means will be put into place to provide for those lost revenues to non-profits due to commercial casinos?
We also need to concern ourselves with some other questions. In Windsor, why did the government decide to contract out a commercial operator rather than let the casino be totally government-run and -staffed? Is there potential to open more than one casino in our community? Does the Ontario government plan to develop a gaming commission to oversee all aspects of gambling? Finally, the issue of casino gambling in Ontario has never been put to the vote, and why not?
Mr Meredith: In summary, the social planning council is neither supporting or obstructing casino gambling. We are simply presenting the pros and the cons. We would ask that you weigh each one very carefully, and you make the final decision. Casino gambling is a very emotionally charged issue. I personally do not support casino gambling. Karen, who presented the report, personally is in favour of casino gambling. I believe that the pros have been and will be presented quite properly and quite thoroughly today. However, please do not ignore, minimize or underestimate the negatives. They are substantial. Thank you.
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Mr McClelland: I simply want, without anything specific, to make a general comment. It's interesting that Karen, who is generally in favour, presented a number of the real issues and concerns. At the crux of this whole issue in the debate is understanding, to the extent we can, those issues as they relate to each community with the particular makeup of communities and putting in place the mechanisms to deal with it.
I think it wise, putting aside the debate for a moment and putting aside my own personal views, to recognize that the government has made a decision; therefore, it becomes a task for those of us charged with this responsibility to put those questions forward, to re-articulate them. But you have done such a good job in such a succinct manner, and I want to thank you for that. Those are the real issues that are driving this committee, in my view right now, to saying, "How can we minimize the downside, given the fact that the decisions has been made?"
I asked a question earlier about the jobs. It's not going to replace the manufacturing jobs; it's a different kind of job. One of the gentlemen suggested, "Use Jobs Ontario to train those people." The points you make are so very valid. Oft-times the jobs aren't replaced in the community; they're imported from elsewhere. By way of example, I wanted to touch on those.
Again, thank you for a very well-thought-out and very well- presented brief and presentation. I thank you for it.
Ms Stern: The staff has to take credit for that.
Mr Kwinter: Niagara Falls is absolutely unique almost in the world. Some of the things that the study refers to about the rise in property values will not happen in Niagara Falls. The reason for that is that Niagara Falls is the major tourist attraction in Canada. The values that have been attributed are there now because of that attraction, so if the casino goes in and we're talking whatever size it is, it's not going to affect property values because there's not going to be any benefit to being next to the casino with all that's going on in Niagara Falls now.
As I say, if the casino has to go anywhere, I really believe Niagara Falls is the perfect location for it because it has everything going for it. My only concern is that the spinoff benefits that are being attributed to this facility I think are unrealistic. I just want to explore that a little more. The Coopers and Lybrand report recommends that a facility the same size as that in Windsor be put here, and the people just before you said they were looking at about a 70,000-square-foot facility. The Coopers and Lybrand report calls for a 75,000-square-foot facility.
In Windsor, they projected there are going to be 12,000 people a day, which on a yearly basis, 365 days a year, is just over 4 million. If you assume that every single person who came to the casino came independently of coming to see Niagara Falls -- which isn't true; it wouldn't happen, because the people who come here anyway will go to the casino -- you would only have an increment of that 4 million people, which means you take it from 12 million to 16 million. I don't know where they figure they're going to get these 20-odd-million people coming as a result of the casino. That presupposes that every single person who comes to the casino is a new person who would not come to Niagara Falls, and I can tell you that with 12 million people a year in Niagara Falls, a good portion of those will come to the casino.
The report of the development commission says it doesn't really expect to see any change in that 12 million but that it will be an additional incentive, and I agree; I agree that there will be economic activity that will be enhanced; I agree with all of these things. My only concern is that there are financial benefits that are going to be attributed to this casino facility that are not going to be realized, particularly when you think of other casinos going in all over the place across the river and everywhere else.
What is your feeling about that? Do you feel that in your studies there is going to be this huge influx of additional people as a result of the casino?
Ms Rhonda Lambert: I'll answer that question. Actually, what we presented for you are facts, what we've seen from other reports and articles. We don't know whether that will happen; we have not studied it in Niagara Falls; we are not sure what will happen. We're saying that through the research it has the potential to happen.
Mr Sterling: You outline a lot of questions about what will happen as a result of casinos coming into the Niagara area. If the casinos are restricted in area in this province, this government and future provincial governments face a dilemma.
First of all, the community is saying, "We want this for economic renewal." The problem is that if there are negative effects on the social fabric, welfare, policing etc, who should pay those costs? Should the rest of the province kick in or should it just be the communities that are asking the province for this economic benefit? In other words, in representing another area, if Ottawa asks for and gets a casino, in my view Ottawa should pay for the increased costs. Do you agree that Niagara Falls should pay for the increased costs if it is asking for a casino to be here?
Ms Julie Darnay: I think it's going to be a matter of what the issue is. There are certain jurisdictions the province has to its authority and which the municipality has to its. I think we're posing it back as a question to both the municipality and the province, have outlined very clearly what the considerations and the questions are, and I think that is something that we are recommending should be worked out, possibly in advance.
We feel that if many of these issues we have outlined are addressed in advance in a very proactive fashion, we are attempting to eliminate the problems when the casino does arrive. What we are very much, if anything, requesting in our presentation is some proactive planning so that many of the experiences that negatively influence in other communities can actually be eliminated from happening in Niagara Falls, in advance.
Mr Sterling: Listen, you people have been involved in social work and you're not naïve. Anyone who has read anything about casinos knows that there are additional problems to be dealt with. You've outlined them by posing the questions. The big problem in government is that we're creating a problem by creating casinos, in effect. Your community is saying: "The economic benefits are great. It's going to be the answer to revitalizing our community." What do we say to the rest of the Ontario taxpayers? Do they pay to resolve those problems? Or do the areas like Niagara, like Ottawa, like Windsor pay to solve those problems themselves? What's fairest?
Ms Darnay: I don't really know if the social planning council is the best body to answer that question or whether that is something that has to be negotiated between the municipality and the province. A cost-sharing and, as I had suggested, probably examining the jurisdiction of the issue and what has typically taken place in the past as to who has financially undertaken that area is probably where I would begin. I think it has to be something that's negotiated between those two levels of government.
Mr Wayne Lessard (Windsor-Walkerville): I want to thank you very much for your presentation. I think the research is excellent and the canvassing of the issues is very exhaustive and concise and the most detailed of any of the briefs we've received since we've begun on this committee.
Usually, this is an opportunity for us to ask you questions, but you've posed a number of questions in your brief and I just wanted to respond to a couple of them.
You talked about land speculation in areas where casinos might be located, and I just wanted to indicate to you that one of the provisions of the bill, in the Windsor area, is to set the land value in the area of the casino specifically as at January 1, so that's something that's addressed that's in there.
You also talk about what happened in Deadwood and Atlantic City. I think part of the reason the land speculation took place is because there was an expectation that more casinos would be built. That's another question you posed: Could there be a possibility of further casinos in one city? The bill sets up a provincial corporation to run the casino, so for further casinos to be set up in one city it would mean that the corporation would be competing against itself, and that doesn't seem as though it would make a lot of sense to me.
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You also ask about making sure that local residents would be employed. That's another issue we've dealt with in the city of Windsor. There are training programs that have been established at St Clair College for dealing and for machine repair as well, and people are going through that training now so that there are people trained in our community who can take advantage of this opportunity.
You've raised a number of issues. They're issues we've been trying to deal with in Windsor and on this committee as well, but there are some that I think we still need to give some consideration to. I want to thank you for your presentation.
Mr Tony Martin (Sault Ste Marie): As everybody else has thanked you, I certainly want to do the same. It's very appropriate that you're here today. It's actually the first time we've had a social planning council come forward, and your views and understanding of the context within which this has to be situated in the community are very valuable.
We've made, very consciously, a decision to move forward with one pilot project, study it and to do that in a cautious and careful manner over a period of time so that we do the right things. I think Margaret initiated it in this city and I've done the same thing in Sault Ste Marie: The involvement of the social planning council in looking at the larger question of the impact it will have in the community is really important in this. The information you will gather will certainly be valuable as we look at making decisions down the line as to where else we might want to initiate these projects. Certainly in my own community, we're wanting to do that and will.
As I looked at the lineup for today for Niagara Falls, I was saying to Margaret on the bus on the way in how impressed I was at the variety of people who were coming forward. We have the business community, which is very excited about this, and is in most of the communities we've been in. In this community, we have the labour council, which can speak to the questions of what kinds of jobs, how many jobs, how we can protect the interests of the worker, how we can retrain people. We have you coming forward, the social planning council, talking about the context. We have the church groups coming forward, obviously speaking about the moral issues that are certainly at stake here. All of that will be very valuable to all of us, and I think that's good.
I just wanted to ask you, in light of all of that and in light of the fact that certainly Niagara Falls has been very clearly targeted in a number of statements that first the government made and then Coopers and Lybrand made, of this community being a good location for a casino down the line, what plans do you have in mind for this community re the consultation process so that in the end you will be able to answer some of these questions and give to us the information we need to make good decisions?
Ms Darnay: I don't know if the report was designed so that these questions necessarily come back to the social planning council for our continued investigation. I think we've kind of posed them for a number of different parties to consider in the proactive planning of the casino for this area, but not necessarily that the social planning council would continue intensive research into this matter.
Mr Martin: Have you ever been involved in the issue of a new industry being set up in your area, to look at the social and environmental ramifications of that?
Ms Darnay: No, not typically.
Mr Martin: So this is a unique experience. I would suggest it's one that communities should look at more often. One of the planks in my platform when I ran for this job was that we should combine the social and the economic on more occasions so that we can see the full impact. You're saying, though, that in this instance you're not planning to be involved further, or would you like to be involved further?
Ms Darnay: Possibly Bill would like to address this, but I don't think the board has really been discussed or confirmed that issue in any fashion.
Mr Meredith: That is correct. We actually have never discussed casino gambling per se as an agenda item. If we were asked by the appropriate body, we would have to consider whether we would give input.
The Chair: I thank the group representing the Social Planning Council of Niagara Falls for its presentation. The committee is recessed until 1 pm this afternoon.
The committee recessed from 1205 to 1307.
ONTARIO HOTEL AND MOTEL ASSOCIATION, GREATER NIAGARA
The Chair: Our first presenter this afternoon is Margaret Mingle from Inn By The Falls Motel, representing Inn by the Falls and also the Ontario Hotel and Motel Association. You have 30 minutes to make your presentation and field questions from the committee.
Ms Margaret C. Mingle: Thank you very much. I have several hats I'm wearing, but right at the moment I'm representing the Ontario Hotel and Motel Association, greater Niagara, and the tourism and hospitality industry. Our family is in many aspects of the tourism and hospitality industry, including Inn By The Falls and Maple Leaf Village etc.
Thank you for giving me this opportunity to speak on behalf of the Ontario Hotel and Motel Association of greater Niagara and the hospitality and tourism industry on this important issues. We are a hospitality and tourism association with members in accommodation and food and beverage service throughout greater Niagara. The majority of these firms are small to medium-sized businesses that offer products, services and hospitality to the tourist.
Our association, along with all of the hospitality and tourism industry, strongly supports the establishment of fully operational casinos in Niagara that should offer a complete range of gaming activities including cards, dice, wheels and video lottery terminals.
Niagara Falls has the distinction of being a leader as a hospitality centre, with a name and reputation which is known worldwide. This well-established industry has operated continuously since long before Canada's Confederation. Our city has the largest and most well-established tourism market of any other community in Ontario. Tens of millions of inhabitants are in our target market area with a radius of at least 300 to 500 miles. Over 14 million persons per year enter Canada at the four border points along the Niagara River -- one of the highest volumes of immigration points in Canada.
Niagara Falls is the best choice in Ontario to establish gaming casinos, as there are already established facilities in place and it has the experience that is necessary to host tens of thousands of visitors to our area. The accommodation sector in Niagara Falls has over 10,000 bedrooms available, which represents the largest percentage of rooms offered by a single community in Ontario. The total throughout the province is 60,000 rooms. The number of bedrooms we have to offer far outnumbers those available in Toronto. Accommodations are available in all price ranges, with a wide selection of rooms. We offer full-service luxury hotels, charming and comfortable motels, and well-appointed campgrounds. Our numerous restaurants cater to a wide variety of tastes and price ranges. There are several interesting activities to keep visitors entertained which are provided by the amusement sector. A wide range of entertainment and recreation is available for all age groups and interests. We also have well-established facilities already suited to be casinos.
The hospitality and tourism industry has been especially devastated by the recession and competition in the world market. The cost of doing business has increased substantially, partly due to increases in wages and all types of taxes, yet revenues have decreased dramatically.
This industry is extremely labour-intensive and has traditionally been the largest employer in Niagara Falls. The community, along with the rest of the Niagara region, is in the unfortunate position of having one of the highest unemployment rates in Canada. This, of course, has had a severe impact on the local economy. The Niagara region has permanently lost a significant number of manufacturing positions due to high costs of labour, taxes and a poor economy. This leaves the hospitality and tourism industry with the responsibility of picking up the slack in order for the economy to recover in the region.
The vast majority of property taxes generated in Niagara Falls is derived from the tourist industry. The city also has the distinction of having one of the highest rates of arrears in property taxes in Ontario. Certainly, the amount of unpaid taxes is incomparable to other years in the city. The majority of tax arrears is from our industry, due to reduced revenue in tourism and thus an inability to pay. Niagara Falls is on market value assessment, which results in our being charged more than our fair share compared to other communities in the region. This also adds to our tax burden. In recent years the number of bankruptcies in tourism locally has been astoundingly high. This not only has had a tremendous impact on the local economy but has resulted in considerable amounts of unpaid taxes.
Tourism and hospitality, which is a service industry, is unable to stockpile its inventory to be sold at a later date, as is the case in manufacturing. When a bedroom is not sold or a meal not served, the revenue is for ever lost. When the incidence of these vacancies continues and the rate of them increases, the resulting loss of business can lead to more bankruptcies. Since many of these businesses are family-owned and -operated, this can result in a family losing a lifetime savings and investment.
Some people say that casino gambling will create a climate for growth of organized crime. There is no reason why this should occur. These types are only interested when there are high-stakes gambling, which attracts high rollers. I understand that the government does not intend to allow high-stakes gambling. We do, after all, have in place excellent laws. If our court system would exercise the laws that already exist, there would be no problem. Illegal gambling does exist in all societies, including our own. These situations provide a climate for organized crime.
There are also those who claim that legalized gambling would create addictions to gambling and cause numerous problems in our society. We already have lotteries, bingo and horse racing, which are legal, yet we do not see huge increases in this type of addiction. Addictions can take numerous forms and are not created by availability but occur when a person has an addictive personality and therefore can develop many addictions to situations or substances.
Casino gambling will provide a climate which will create thousands of jobs -- not only jobs directly related to hospitality and tourism, but also in support and supply services in Niagara Falls and throughout the Niagara region. This would provide a tremendous economic benefit to the whole community.
We encourage the government to make plans immediately to allow casinos in Niagara Falls in order to help pull us out of this current economic quagmire.
Respectfully submitted, Margaret Mingle. Do you have any questions?
Mr Carr: Thank you for the presentation. I was interested, in your particular field, in the occupancy rate. Do you know what it is for Niagara Falls in the hotels, and what do you anticipate it being after the casino comes in?
Ms Mingle: I don't have any figures on occupancy rates. I know that they're down drastically. Last year, I heard quotes that they were down at least 40%. This year, the season's not finished, so you can't really do a correct statistical gathering in the middle of your season. You'll only know when the season is over as to how successful we've been or not been.
Mr Carr: In terms of the percentage, do you have any thoughts, if you get a casino, what percentage increase you will see, whether you'll see a 10% increase or 20%?
Ms Mingle: I expect to see an overwhelming increase, and I don't think anyone can truly predict anything like that because we don't really have any statistical basis to be able to make an accurate prediction, so I think it's almost anybody's guess. I do believe that it will stimulate business tremendously, and I do believe that that will certainly stimulate occupancy rates.
Mr Carr: The problem is, as you know, that one of the reasons governments sell communities is because of the jobs. I agree with some of the other members of the committee who say that governments are often optimistic in order to help sell it. You've heard some of the figures that have been bandied about in terms of increased jobs here in the community. Do you think that to be correct? Do you think it will be higher or lower?
Ms Mingle: I've read a lot of statistics, some of which have contradicted one another, and I don't have a great deal of faith in them, to be perfectly honest with you. I don't really have a great deal of confidence in those who are gathering these statistics. In terms of how many jobs will be generated, at this end of the game I really don't think anyone can accurately assess that.
Mr Carr: That's why I asked you, because I sometimes have more faith in people who have been involved in business and their statistics. So I appreciate your being honest and not saying --
Ms Mingle: I find that sometimes people who are involved in statistics can manipulate statistics incredibly, so I don't really have a great deal of faith in them. They're all right as a bit of a guideline but not as a basis for an argument, I don't think.
Mr Carr: The other question, and I'll just try to explain it very simply because I know there's not much time, is that in Windsor they say they're not going to put a hotel in, or they are but they're going to limit the amount of occupancy. One of the problems is that a lot of people in the casino industry say that unless you do it properly, have liquor at the tables, have a hotel where they can stay and have plenty of restaurants and real full service, you won't get the people to come back.
Ms Mingle: I agree with that.
Mr Carr: So you agree with that? How do you, then, help the local community? Do you still think that there'll be enough increase in the vacancy rate for people in the hotel industry, for example, to make it worthwhile if in fact the person who would benefit the greatest will be the person who gets the casino and the hotel complex? Do you still see enough spinoff jobs that people like where we are here today and yourself will be able to increase the occupancy rates?
Ms Mingle: I think so, because a community that I'm quite familiar with is the Bahamas, specifically Grand Bahama island and the Freeport Lucaya. It's a population of 45,000 people, and they have two casinos. It has certainly enhanced the entire economy of the community. They have very strict regulations in terms of who is able to gamble and the hours and so forth; very, very strict. But they do allow liquor to be served, and at no time have I ever seen anyone that's even the slightest bit inebriated. I have to tell you that honestly, and I've spent a great deal of time down there.
Will it enhance the entire community in terms of occupancy? I don't see how it can help but do it, if you've done the right marketing, naturally. I mean, you have to look at the whole picture. You've got to look at the marketing that goes along with it, and you have to look at the kind of regulations that are going to be in place.
I don't wish to criticize Windsor, but they are not able to handle a city as a casino town. They have no means in place to accommodate people. We already have all of those things in place; Windsor does not have those things in place. If they don't get those things in place in a real hurry, they're going to end up with day-trippers. When they end up with day-trippers, they're going to burn their market out in less than a year, and then they're going to be crying the blues.
If you'll pardon me being frank about this, but it is my honest opinion, and I know I'm not the only one that has this opinion, I think that having the casinos in Windsor is a tremendous mistake because of the fact that Windsor is not equipped to serve tourists or people coming in; Niagara Falls is.
Mr Carr: Then why do you think the government would put it in Windsor, if it isn't set up?
Ms Mingle: How many stars are there in the sky? There are numerous reasons, aren't there? I think most of them have been political.
Mr Carr: Thank you very much, and good luck.
Ms Mingle: Thank you.
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Mr Sutherland: One of the presentations this morning said you get about 12 million tourists a year. With a casino, they weren't expecting a large increase in tourists but they were expecting some of those who come to stay longer, using as a basis a 1988 survey that indicated that most of the tourists here are day-trippers and don't stay more than seven hours.
I'm under the impression that most people, when they decide to go on a holiday or vacation, set aside a certain amount of money they're going to spend on their vacation, so how do you see a casino increasing the overall amount of money spent here? If they're going to be gambling in the casino, does that mean they're not going to be spending the money somewhere else in the community where they might be spending it now?
Ms Mingle: I don't think so. You said that when people go on a vacation they budget and say, "We have x number of dollars for a vacation," and they have lots of choices as to where the vacation's going to be. It is quite correct that most of our visitors at the present time are day-tripping, and day-trippers leave very little money in the community compared to what the potential is. Those people who have a desire to come to Niagara Falls will understand, through our promotion and their experience, that there are a lot of things to do here, so when they are budgeting for holidays, instead of going to several other places perhaps what they will do is spend a little more time in Niagara Falls.
Mr Sutherland: By spending more time, they're going to spend more money, so you don't think the casino is simply going to be a shift of money here.
Ms Mingle: They have to eat, they have to sleep, they may buy a few souvenirs, they may take in the numerous attractions we have. There are lots of things for them to do while they're here.
Ms Harrington: Hello, Ms Mingle; good to have you here. I have two questions. The first is sort of a technical question. On page 1 you've said, "The number of bedrooms we have far outnumbers even those available in Toronto." I do spend some time in Toronto, and I have --
Ms Mingle: I know it sounds strange, but the statistics I have had through my hotel association is that Toronto has roughly 8,000 rooms and we have in excess of 10,000 rooms.
Ms Harrington: I'd like to check that out, because I certainly am always saying that Niagara Falls is the place for accommodation, for various things, and I have been told that no, there are a lot more hotels in Toronto.
Ms Mingle: I was surprised myself; I have to be honest with you. I assumed that because Toronto's such a large city and there are so many things going on that indeed it would have more rooms than we have, but that's not the case, apparently. They also have much more violence and crime in their community than we do.
Ms Harrington: People who come before this committee say there are various downsides of casino gambling, and we all know there are, that it can be addictive and can cause some bad influences. You and I are here in this community and believe in this community and want the best for this community. What would you say to those people who are very worried about downsides, that it will somehow change our way of life?
Ms Mingle: Could you be specific as to what downsides you're speaking of?
Ms Harrington: That it will have a negative influence on the people who are actually living here and raising a family.
Ms Mingle: If we assume that gambling casinos will have a negative influence, in what way do you mean? I'm not quite clear on your question.
Ms Harrington: There are people who will come before this committee who will say that this is not a good idea for a community, that it will have bad effects. I'm wondering what your reply would be to them.
Ms Mingle: I would say, "First, tell me what you think, where the pitfalls are, where the barriers are, where the problems are," and when you know what the problems are you can address them. But if people just say, "I don't think it's going to be good for Niagara Falls to have casino gambling," that's not very specific. I would need them to tell me what areas they think we'll have problems in and then that could be addressed.
Ms Harrington: What you're saying is probably similar to what our government is saying, that there may be problems, so let's find out what they are and let's deal with them.
Ms Mingle: Absolutely. You must know the problem first.
Ms Harrington: One other question: You're on the tourism strategy committee that is meeting all summer and bringing in a report in September for the future of tourism across this province, and you're also aware that our government is now beginning the process of a huge gateway project for Niagara Falls. How do you see a casino fitting in with the gateway project?
Ms Mingle: Even though I've attended all the meetings available, I haven't seen the true picture yet in the gateway project; it's still at the idea stage. Where I'm attending the meetings, there's nothing structured yet, so to be able to see how casino gambling fits in --
Failure of sound system.
The Chair: It looks like we're back with power, so we'll just continue.
Ms Harrington: We left off with the future you're envisaging for Niagara Falls in your tourism strategy and with the gateway project.
Ms Mingle: The way our meetings are going, at this point in time there isn't a vision per se, in the strictest sense of the word. We are brainstorming, we're putting a lot of ideas together, and it won't be until some later point down the road that we will likely see where this is taking us all. At this point, none of us on the committee has a picture of the plans the government will have in place in terms of tourism and dealing with it.
In terms of Niagara Falls having gambling casinos, I really don't see why that should interfere in any way with whatever plans could be made in tourism. If you're going to make plans in tourism it's, how are we going to improve the market? We have moved down the market drastically. We used to be right on top and we're below 10th now, and economically that's very severe for us, as this town is tourism; there is no other industry.
In terms of how it could fit in with the plans the government is going to be putting in place, we'll just have to wait and see what happens in terms of those plans. We don't know yet what those plans will be; we don't have a structure yet.
Mr Kormos: I'm a little troubled, I suppose, by the very singular approach that's so often taken, not only by this government but classically by all governments. Isn't really a whole lot of the problem not just the fact that there isn't legalized gambling but that, for instance, in the hospitality industry we still have an archaic approach to the way that distillers and breweries can market their product to taverns? Our beverage servers can never compete with stateside beverage servers because somehow we refuse to tolerate the phenomenon of wholesaling of liquor. We somehow refuse to bring ourselves into a modern era by permitting even, for instance, the oh-so-modest prospect of buying a bottle of wine and taking it to a restaurant and having it uncorked at the table.
I'm very enthusiastic about the hospitality industry in Niagara Falls because basically what's good for Niagara Falls is good for Welland-Thorold, St Catharines, Fort Erie, what have you. What I'm questioning, though, is to approach it merely by saying: "Somehow we're going to create a casino. We don't know how and why." It bothers me that the only surveying that's been done is of Ontario residents. I'm not interested in having the woman or man who works hard at GM taking their $400 or $500 paycheque to a casino and blowing it at the tables. I don't want recycled money from my neighbours in my community. If you want to bring me rich tourists from Europe, from Japan, from the United States, who are indeed capable, with that type of excess income, of blowing it at the table, well, my views might be a little different.
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My impression is that in view of the fact that the only studies that have been done are of Ontario consumers and not a single surveyor poll or focus group has been done of Europeans, of Americans or of Japanese, three large markets for Niagara Falls, to determine what they would want out of a casino operation, I'm a little bit troubled. I don't want to see my neighbour who's a factory worker or the neighbour over from him who's an unemployed factory worker grabbed by the ankles and have every last nickel and dime shaken out of him with the modest and false prospect of that grab at the brass ring, making it big at the table. Casinos are all about losing money, aren't they? They're not about winning money; they're all about losing money. What do you say to that? That's a pretty broad comment.
Ms Mingle: I have to agree with a great deal of what you've said. As far as surveys are concerned, I would say yes, I think we need worldwide surveys. I'm amazed that we stopped at simply surveying the people in Ontario, because that's not our market, That's never been the market of Niagara Falls, and it will not be the market for the gambling casinos. Like yourself, I don't want to see my neighbours burned out financially, because that's what could happen. It's not necessary and it's not economically feasible.
Surveys need to be done, of course, in the markets you're suggesting. Because of our years in the hospitality industry, Niagara Falls knows where our markets are and we already have networks in place to reach out to those markets, so when we are doing our marketing we naturally would be adding casinos as a complement, as another service we have to offer. I dare say there will be a big thrust in that particular direction, but we already have a market in place and it's a matter of plugging into that market.
Our market is not Ontario; our market's not Canada. Our biggest market is 500 miles from where we're sitting right now in the US. That's our market, primarily. That's the market we will be patching into. We're not going to be patching into the guy who works at GM or Thorold Paper or what have you, because that's not going to make any money for anybody, including the government.
Mr Kormos: I tell you, the design that's been developed to date is to solicit specifically our local market.
Ms Mingle: I disagree. It shouldn't be that way.
Mr Kwinter: You are the president of the Greater Niagara Ontario Hotel and Motel Association. I think if you're going to put a casino anywhere in Canada, Niagara Falls is the best location; I believe that because of all of the things you've talked about. Where I have some concerns is what the economic benefits are going to be. In your capacity, could you tell me, do you anticipate any new hotels, motels or restaurants being built as a result of this casino initiative?
Ms Mingle: I would say probably yes. Not initially, not in the beginning; we'd have to feel our way. We already have huge vacancies so I don't think anyone's going to run out build a hotel tomorrow, but I think down the road very likely we could see an expansion in the industry here. It's quite possible.
Mr Kwinter: I discussed this earlier today. I just want to look at the numbers, because Niagara Falls is unique. It is the premier tourist destination in Canada. You get 12 million people a year. The casino, according to the studies that were done, is going to service 12,000 people a day. That works out to four million people a year, and of that four million, many of those will be in the 12 million that you're already getting; it's not an incremental number. I just can't understand, considering -- what is the vacancy rate here now, approximately?
Ms Mingle: I don't know the current statistics because it's too early to tell, but I know that last year people felt the business was down 40%. In terms of occupancy, I can't give you a figure on that off the top of my head; I don't have a figure on occupancy rates.
Mr Kwinter: Would it be 50% occupancy? Is that too low?
Ms Mingle: I really am not prepared to say right now because I can't give you an accurate figure. I know it's down drastically.
Mr Kwinter: It would seem to me that it's got to be maximum 60%; if it's down 40% and if it was 100%, it would be 60%, and I don't believe it was 100%. I don't know what the number is; it doesn't matter. I'm just saying that there's probably a 50% vacancy rate in Niagara Falls. In order to double that occupancy, you'd require another 12 million visitors to get the right proportion of people who are going to stay overnight, because a lot of those are just day visitors. I don't know where those numbers are going to come from, because even if every single visitor to the casino was an incremental visitor, someone who wouldn't be here anyway, the max that you could get would be four million. But it's not going to be because a lot of those 12 million people who come here are going to frequent the casino.
My only concern is that projections are being made and anticipation is out there that this is going to be this huge bonanza, and I think it's going to be a bonanza for Niagara Falls. I think it's going to create employment, I think it's going to be an incremental adjunct to a tourist package, I think it's going to do all of those wonderful things, hopefully. But I don't think that it's going to have the economic impact that is being portrayed, that it's suddenly going to totally revitalize the Niagara Peninsula, it's going to be all of these wonderful things and it's going to create all of these jobs.
Another question I'd like to ask you, given that you're very much involved in the hospitality industry, it would seem to me that a premier tourist destination like Niagara Falls has got all of the infrastructure in place to service the tourist industry. You must pride yourself on the fact that you have that when you're selling this as a destination resort. What are you lacking in service?
Ms Mingle: That's a huge question.
Mr Kwinter: No, no. What I'm saying is what are you lacking to service a casino that you don't have now, that you would have to add in the way of infrastructure?
Ms Mingle: I'm not exactly sure if I quite understand that question. You mean, given that we have casinos, okay, then what would we need to do to be able to operate? Is that what you're saying?
Mr Kwinter: The operator will operate it. This will be given to an operator who will operate it, but one of the big benefits that is supposed to accrue to Windsor is that when this casino get into place, we're going to have all of these spinoff service industries to service that casino.
It would seem to me that Niagara Falls must have all of that, whatever it requires other than the operation of the casino itself, but whatever it requires to service that particular facility, foodservices, whatever, linen, all of those things that you use to service your industry now must be in place, and this thing isn't going to be millions of feet, it's going to 75,000 square feet and it's going to have, according to the guidelines set out in Windsor, fairly modest hotel and restaurant facilities. The point I'm trying to get at is, does not Niagara Falls have all of the support services in place now to service a casino facility other than the actual running of it?
Ms Mingle: Absolutely, yes.
Mr Kwinter: So there's not going to be any benefit from that point of view, other than you're going to give employment to the people who are there.
Ms Mingle: Yes, we do have the services and the facilities in place, but because of the economic difficulties that we find not only in the industry but in the community at large and what have you, a lot of those places are not operating at 100% capacity, even the suppliers and the services and the related businesses, people we purchase from and what have you.
If casinos were established, demands would increase, and therefore we would then be calling upon more demands. We would require more staff, we'd require more sheets and pillowcases and meals and whatever, so we're going to be making a lot more demands on those related industries than we are right this minute. A lot of them have gone out of business or are just barely getting by because of the fact that the business has really evaporated.
Mr Kwinter: I think that's one of the pluses, that it's going to utilize the infrastructure that is here and is going to bring it up to a point where some of these may become viable when they're not viable now.
Ms Mingle: Absolutely, yes, so it can be operating at full capacity. We don't have to reinvent the wheel. We've got the facilities, we've got the system in place. We're just going to be able to make it better.
The Chair: Ms Mingle, thank you very much for presenting before the committee this afternoon.
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FIRST BAPTIST CHURCH, BRANTFORD
BAPTIST CONVENTION OF ONTARIO AND QUEBEC
The Chair: Our next presenter is Douglas K. Summerhayes. Welcome to the committee, Mr Summerhayes and Rev Owen Burey. You have 30 minutes to make your presentation and field questions from the committee members.
Mr Douglas K. Summerhayes: Thank you very much for the opportunity to appear before this committee. Rev Burey has joined me. Originally this was to be a personal presentation because of my concerns on the moral, ethical and social issues involved with casino gambling and in fact all gambling. When I started to prepare my presentation, Rev Burey and the Baptist Convention of Ontario and Quebec supplied much information and chose to participate with me. Rev Burey is co-chair of the social concerns committee of the Baptist Convention.
My brief has been presented in two parts. The first part deals with the concerns of the Baptist denomination and the Christian community. The second part I think deals directly with the concerns that I have out of a letter received from the Premier of Ontario, the Honourable Bob Rae.
In the first part, the Baptist Convention of Ontario and Quebec meeting in annual assembly at Niagara Falls, Ontario, in June of this year passed the following resolution:
"Whereas casino gambling can be a regressive tax on the poor and almost always is a magnet, attracting and abetting an increase in crime; and
"Whereas the delegates, meeting in the annual Assembly of the Baptist Convention of Ontario and Quebec, this year (1993) in Niagara Falls" -- in this room -- "deeply regret the decision of the provincial government both to permit casino gambling in Ontario and to locate such a gambling outlet in Windsor;
"Therefore, be it resolved that we, the delegates, strongly urge the government of Ontario to rescind its decision to permit casino gambling in this province."
The gambling resolution was occasioned by the plans of the Ontario government to locate a gambling casino in Windsor. Social concerns chair Neil Hunter of Ottawa described gambling and the crime that accompanies it as "pervasive, insidious and destructive to individuals and family life." Committee member and Windsor pastor Owen Burey cited his own consultation with the Windsor police who, Mr Burey said, told him that the size of the planned casino meant that there is no way they can control the crime and violence that will come with gambling. I will allow time for Rev Burey to address this issue when I complete my presentation.
We believe that gambling is a parasite on public morals. I personally believe that it is a corruption of public morals. Games of chance seem to pervade every society and intrigue all. The idea of taking a chance and getting something for nothing has universal appeal. Human potential can never be realized without risk. I recognize this and I'm a good example. I'm probably one of the biggest gamblers there is in this country, but all my gambles have been to do with businesses, many of which have not been as successful as I would've liked. At least I was trying to provide employment for others. Business risk provides opportunity and jobs for others, not just personal gain. Casino gambling only provides personal gain, if you happen to be one of the very small percentage of lucky persons who makes the big score.
In gambling, casino or lottery gambling -- and I also put in bingos there -- the willingness to take risk is twisted by the desire to get something for nothing. Gambling is then a sin of perverted stewardship of your personal income. It is a parasitic approach, producing no personal growth, achieving no social good. Even the strongest advocates of gambling agree that gambling is a non-productive human activity. It must be justified either by its entertainment value or by the use of its revenues for worthy purposes. But can the latter even be morally or ethically justified for a government to use gambling for revenue purposes?
Social gambling emphasizes the entertainment value of games of chance. By legal definition, this means that the participants enter the game on equal terms. There is neither a professional operator nor a house cut against which the participants have to compete. Well, this is not the case in casino gambling. Casino gambling is a business and it's run by professionals and therefore, I feel, is not really a social activity.
Gambling in charitable and non-profit institutions is indefensible. Advocates of church bingo oppose lotteries on the ground that government should not use gambling as a substitute for responsible tax reforms. We maintain that it is even less defensible for the church or other charities to use gambling as a substitute for responsible stewardship and fund-raising.
Professional gambling is a step up from social gambling. This kind of gambling is big business and worth the risk of gambling speculators and the Mafia, organized crime.
Should the government create a gambling climate? I say the answer is emphatically no. The implications are far-reaching. Public morality, public safety and respect for the law suddenly become issues that cannot be avoided. A gambling attitude does affect the quality of life.
What conclusions can be drawn to guide the position of a Christian or someone with moral values on gambling? First, gambling is a vice that violates the principle of Christian stewardship. I think we have to examine our own views on whether we want to support that type of vice.
Second, if social gambling is inevitable, controls should be demanded to limit crime, corruption and cheating and also family social upheaval.
Third, professional gambling should be vigorously opposed by practical as well as moral arguments and, I think, ethical arguments as well. No system of controls can cope with the efficiency and subtlety of organized crime or with its daring. All we have to do is look at the fact that Canada, the United States and, as a matter of fact, all countries in the world, are losing the war against drugs and the drug problem.
Ontario and Canada cannot control cigarette smuggling, yet there supposedly are controls through the borders and the police. I think a prime example is what happened during Prohibition. The smuggling of booze across the lakes and the rivers to the United States was so pervasive that they ultimately had to give up Prohibition. I think we should look at these things.
Fourth, government lotteries are a questionable means for controlling crime or producing state revenue. I do not believe governments can in any way control or regulate casinos adequately.
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I have lost my timidity about speaking from my convictions as a citizen and as a Christian, and I used to be timid. Many people seem to be waiting for someone to speak with moral conviction. I decided to try. I hope right-thinking Christian members of the Legislature will do the same.
In April 1992, when the government of Ontario first proposed gambling in its white paper, the board of deacons of the First Baptist Church sent a letter to the Honourable Bob Rae, Premier of Ontario, and to Mr Brad Ward, MPP for Brantford. We received a reply from Mr Rae. In the reply he made this statement:
"Casinos will help border communities stimulate tourism and create jobs and generate new government revenues to address pressing social needs. The decision to establish casinos is being followed up by a task group within the Ministry of Consumer and Commercial Relations. The ministry is also talking to first nations, charitable organizations, members of the province's horse breeding and racing industry and to the public to ensure that all concerns are addressed. By careful planning we are confident we can balance the risks with the direct social benefits of this activity."
This is a direct quote from his letter, and I would like to examine this in four sections.
"Casinos will help border communities stimulate tourism and create jobs." Will it? How many jobs, in real terms, will be created by the introduction of casinos? I've heard here today 1.3 jobs for every casino job. Well, this pales in comparison to the fact that if the same amounts of money, whether they be public or private, were spent on development of industrial and commercial operations, the ratio is four to six jobs to every job created in industry. That comes from the CMA. To me, this is not the best means of creating jobs, by providing casinos.
The majority of people attending the casinos will come, I contend, from a radius not exceeding 100 miles of the community in which they are located. Therefore, if my assumption is correct, most of the gamblers will be making same-day trips to gamble. Where is the benefit to the community if this is the case? The hotels aren't going to be filled. The casinos will likely have their own food and drink facilities, so the bars and the restaurants won't benefit. Certainly there won't be any time, let alone money, for those visitors to visit the stores. I think it's very questionable how many would be employed from the existing pool of local unemployed workers. I think the majority of the jobs, particularly the higher-paying jobs, the dealers and so on, would be brought in, especially if you're going with private operators. Therefore, the only benefits would accrue to the casino operators.
A good analogy: The cities proposing this or looking for casinos are saying, "This is going to be the salvation of our unemployment problem and our tax problems"; a cash cow was the term used here today. All I ask you to do is look at what has happened to communities where 15 or 20 years ago everybody was saying, "If we could only build the shopping malls that are being built on the outskirts of the cities, it will be the salvation of our merchants." Brantford did this 10 to 12 years ago. Do you know what the result is? Today our main street is virtually a ghost town; there are more vacant stores today than there have been in the history of the city of Brantford. I think it's a very good analogy.
Second, is there a better way of creating tourism that will appeal to families, providing for longer visits to the community? I believe there is. I contend that money spent on educational tourist attractions that are family-oriented will provide a greater potential for employment of students and those on local unemployment rolls and greater business for the hotels and restaurants and stores than will gambling, because the people who bring families do come for sightseeing and they do go shopping.
I think the gentleman from TNT, although he didn't know it and I can't quote it chapter and verse, made a statement this morning -- I wish I had the Hansard read-back right now -- that justified this. He gave figures of income to Niagara Falls right now. I don't think those are going to substantially change for the local business.
In the absence of hard, provable statistics, I contend that the moneys paid into the gambling casinos compared to what's going to come out the other end to the government or to the charities is going to be an unacceptable ratio. I have not been able to get any bingo hall people to tell me, of the dollars spent in the bingo hall, what percentage actually goes directly to the charities. I have not been able to get any statistics on what percentage of the lottery dollars actually goes towards the infrastructure for the community that supposedly benefits. But based on some information I had when I was involved with the Canadian Cystic Fibrosis Foundation and we were looking at various ways of raising money and went to bingos and so on, we reached the conclusion that less than 25% of the dollars spent by the patron is returned to the charity or to the government. That means that over 75% goes to operations and prizes. I believe this is an unacceptable ratio, and I think it would be even more out of balance with casinos.
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Regarding the "pressing social needs," we suggest that any increase in compulsive gambling will increase the social need through increased reliance on social assistance by the gamblers and their families for addiction treatment and welfare support for families. Addictive personalities have been proven to be cross-addictive. We believe those addicted to alcohol and drugs will turn to gambling for the quick score in order to support this addiction. Moreover, the patrons at the casinos are more likely to indulge in consuming alcoholic beverages and turn to drugs such as amphetamines or uppers to keep them awake and for stimulation, to stay awake to gamble a longer period of time; therefore, we believe they will become more prone to addiction. Therefore, any moneys raised by the government or most of the moneys raised by the government, ultimately, over the long term, will be a reducing benefit to the government.
"The decision to establish casinos is being followed up by a task group within the Ministry of Consumer and Commercial Relations. The ministry is also talking to first nations, charitable organizations, members of the horse breeding and racing industry and to the public to ensure that all possible concerns are addressed."
A question arises from this statement: Is less than 12 months adequate time to properly study all of the social, financial, legal and policing ramifications related to casino gambling?
It appears from the newspaper reports that discussions with the first nations people, charitable organizations and others interested, as stated above, including the general public, have been sparse. What has been held has been less than fruitful because it would appear that most of the organizations either have not been contacted or their concerns have been dismissed as irrelevant. I refer to an article in the Brantford Expositor that was reporting on Windsor where the first nations people were stating that they had not had very many meetings and that what they had had were most unsatisfactory.
"By careful planning we are confident we can balance the risks with the direct social benefits." That's what Premier Rae said. The question arises: Should the government mandate be balancing the risk of increasing social misery by introducing a highly addictive form of gambling against any questionable social benefit that may result?
We believe it is morally reprehensible that our government would purposely inflict financial, mental and social misery on any of its citizens for the sole purpose of increasing the income of the provincial treasury. This is particularly true when the amount of gain to the province is questionable when related to the financial and social costs to the individual. The vast amounts of money that the operators of the casinos will receive make the value and moral correctness of this venture even more questionable.
It seems strange that the hearings of this standing committee are being held in only five communities across Ontario. These happen to be communities considered as prime tourist areas and/or border communities most often mentioned as sites or possible sites for casinos. This has substantially reduced or eliminated the opportunity for a very large segment of the population of Ontario making their views known through personal submissions or input into the public process. Many of us have had to travel long distances in order to make presentations if we chose to, and I think that's a deterrent.
In closing, we ask every member of the Legislature to search his or her conscience and ask themselves if this is the legacy they wish to leave for their children and the children who will become the future adult citizens of this province. Will you be proud of the probability that they will be saddled with increased social and financial responsibilities if this goes through, brought on by your decision to support casino gambling as an expedient method to solve your government's short-term financial problems today?
If your decision is to support the implementation of casino gambling, then we implore you to take more time in doing so in order that reasonable precautionary protections against the negative impact on the future citizens of Ontario may be fully considered. The burgeoning social and financial problems that will surely evolve as increasing numbers of casinos are opened in more communities across the province is an ethically abhorrent legacy to leave our children. This is my belief, my belief as a Christian, and I think other religious denominations will share this belief.
I respectfully submit this for your consideration, and I would ask, if I might, whether Reverend Burey might just speak to the issue of policing, which I did not touch on, because he has had a direct conversation with the Windsor police.
The Chair: I just want to let you know that you have less than five minutes left in your presentation.
Rev Owen Burey: All I wanted to say is that I think this committee was in Windsor last week and heard the presentation by Chief Adkin. I am in constant consultation with him, as one who has worked in the area of corrections, with respect to what effect it will have on our city. I do not need to repeat what the chief has said, except that the size of the casino they thought of in the beginning is about double, and unless we have the police services and the personnel that are necessary, we are in serious problems with this casino in the city of Windsor.
My task down there is to say to the churches that I'm hearing from a lot of people that this is a done deal. That might be so, but we have to look at both sides of the coin to see what the benefits are that are coming to the city of Windsor and indeed to the citizens of Canada in this casino.
As a father of six children, I often told my children, "Count the cost, and if it's too expensive, don't buy it." I really feel that this is becoming too expensive for not only the city of Windsor but for the citizens of Ontario. We should look at both sides of the coin, what we have to gain and what we have to suffer from crime and the other things that come with the casino that will come to the city of Windsor. I would just ask that we don't put on blinders and say, "These are the benefits we are going to gain," but look at the other side as well and prepare ourselves, as a church community and as citizens of Windsor and Canada; I think I heard Mr Sterling mention that this morning. Take a realistic look. Forget the partisan thing and take a realistic look at what we have before us. That is all I ask.
The Chair: Thank you very much, Mr Summerhayes and Reverend Burey.
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CHAMBER OF COMMERCE, NIAGARA FALLS, CANADA
NIAGARA FALLS, CANADA, VISITOR AND CONVENTION BUREAU
The Chair: Our next presenters are Allen Gandell, representing the Niagara Falls Chamber of Commerce, and Amy Bignucolo, president of the visitor and convention bureau.
Mr Allen Gandell: Do you want to take a break first?
The Chair: Actually, we're a little behind schedule right now, so whenever you're comfortable, please proceed.
Mr Gandell: Thank you very much; we appreciate the opportunity. We had a little poll at the chamber and figured that the odds that our cogent and lucid argument is going to absolutely make your mind up for you were 357 to 1, but there was absolutely no betting that went on, I assure you.
I'm here representing the chamber, and I have the pleasure also of having with me Ms Amy Bignucolo, president of the Niagara Falls, Canada, Convention and Visitor Bureau which, as you know, is responsible for the tourism aspect of Niagara Falls. The tourism industry is an integral and important part of the chamber, and we have been very pleased to have Amy present with us and she is going to make the first presentation. I'd like to present Amy Bignucolo to you.
Ms Amy Bignucolo: I will be brief. I just want to welcome you all to -- I wrote it down -- the world's most famous address, Niagara Falls. The Niagara Falls, Canada, Visitor and Convention Bureau welcomes the opportunity of giving input to Bill 8, the Ontario Casino Corporation Act, 1993.
It is our position that the existing legislation of Bill 8 is too narrow and binding in focus. As it presently stands, the legislation restricts the establishment of a casino in Ontario to the city of Windsor. The rationale used by this government is that Windsor will be used as a pilot project for casino gambling and that this experience will guide future growth and development of casinos in Ontario.
The bureau disagrees with this reasoning. We in Niagara have great reason to believe that the Windsor experience will vary greatly from one that would be experienced in Niagara Falls.
My colleagues today will expertly expand on the economic impact and job creation value of such a project, and the recent report of August 12, 1993, done by your consultants further reinforces this theme.
The bureau's intent is to assist you in recognizing that Niagara Falls already has a well-established market position which attracts 10.9 million visitors annually. It already has an infrastructure in place to handle and facilitate large volumes of visitors.
In a recent background report released by the government, called An Overview of North American and Canadian Context, and this is in relation to the casinos, it stated:
"The government has planned a casino that will encourage visitors to enjoy all that Canada's most southerly city has to offer." This is referring to Windsor. "By this I mean fine restaurants, hotels, entertainment and shopping, its culture and heritage, its scenic riverfront and parklands, its many events and attractions."
It sounds so familiar.
Our city of 74,000 people already has 9,500 hotel and motel rooms, 2,000 campsites, 15,000 restaurant seats, 50 various attractions, of which five are major, 200 taxicabs, 50 sightseeing buses, 65 specialty gift shops, 10 currency exchanges and 17 banks that offer money services. We also have a transit system in place that shuttles people throughout the city and the Niagara parks and we are also home to Niagara College, which trains and offers courses in hospitality and tourism. Furthermore, we have the Niagara region, which offers equally diverse and exceptional tourism experiences. As you can see, the tourism plant in Niagara is already geared to accept new developments, and Niagara Falls does require a stimulant, such as casino gambling, to revitalize the existing infrastructure.
To further emphasize the market appeal of Niagara Falls, I quote from the economic impact study of 1988, which states:
"Niagara Falls is one of the most substantial tourist attractions in North America. As indicated, a total of 10.9 million person-trips forecast for Niagara Falls is similar to that experienced by Orlando, Florida, the home of Disney World, which receives some 10 million overnight person-trips per year. The major difference between Orlando and Niagara Falls is the length of stay of visitors. In Orlando, some 90% of visitors stay overnight and the average length of stay of overnight visitors is just under six nights. In Niagara Falls, only 30% of visitors stay overnight and the average length of stay of overnight visitors is 1.5 nights. The level of development and economic activity generated by tourist activity in Orlando is, consequently, far greater than that generated by a similar number of visitors to Niagara Falls."
It is the contention of the bureau that the addition of a casino would complement and enhance the existing infrastructure by furthering the goals stated in the economic impact study: to increase length of visitation, which will consequently create an increased economic impact.
Therefore, the Niagara Falls, Canada, Visitor and Convention Bureau respectfully requests that consideration be given in amending Bill 8 to allow one government-regulated casino in the city of Niagara Falls. Thank you for allowing me the opportunity of speaking.
Mr Gandell: We have handed out to you the official position of the chamber, which is before you. I'm not going to read from it except to summarize it as briefly as possible, in that it recognizes the potential effects and ramifications of casino gambling, which must be addressed, but recognizes and notes that they are things we can deal with, that we can plan for and that we can adapt our services to cope with and still recognize that there will be an overwhelming positive economic benefit and a revenue-positive result, even in the most draconian of circumstances. I suspect our position is probably fairly similar to that of the Ontario chamber and thus will not go into that in detail. I also suspect you've heard enough arguments and have your own studies which deal with the specific economic impacts, and I don't think there are many people today who are suggesting that the revenue possibilities are not quite enormous or that that is a point of debate at this point in time.
What I'd really rather do at this point is reflect the point of view of our particular chamber in Niagara Falls, in that I've tried to gather together some of the thoughts I've heard around our discussion table during all the meetings we've held to discuss casino gambling, some of which are perhaps a little different from what's been heard to date.
First of all, I think there is probably universal familiarity with the old fairy tale about the emperor's new clothes, where everybody was convinced that the emperor had new clothes when indeed he had none, and until somebody had the courage to note that was not indeed the case, everybody else went along with it.
I think we have two bifurcated opinions where a lot of that is happening. There are some pros who don't recognize that we will indeed have to deal with some potential problems, and the cons are also I think similarly sticking their head in the sand and not recognizing today's realities despite the fact that it sits right in front of them, including in their own bingo halls. I don't believe one can draw that kind of fine distinctive line between one type of gambling and another.
I also wish to state that the chamber does not believe, as some people have purported, that this is any solution to short-term financial problems. First, it's not the solution but perhaps a contributing factor, and second, anyone who believes that our financial problems in the province of Ontario or in Niagara Falls are short-term is in for a rude surprise, because they are indeed not short-term and we must do everything we can to handle them in the long term, and this is one positive contributing factor because it simply expands what already exists.
You can select examples of good and bad in any industry. I can take you to places and show you manufacturing industries that pollute the environment, that are bad corporate citizens, and you would thus have to conclude that you do not want manufacturing industries in your province. Obviously, that's a specious argument. I can also show you good corporate manufacturing citizens who indicate that that's all you might want. There is not a service industry or manufacturing industry anywhere of which you cannot garner good and bad examples, and casino gambling is no different.
Therefore, the obvious conclusion is that it depends who does it, how you do it, under what circumstances you do it and, in many cases, where you do it. These are all important factors in what you are doing.
As far as the moral turpitude and decay of values, again, that in itself is a specious and self-defeating argument, for the same reasons of being able to show the same things with any type of gambling and with many types of different activities unrelated to gambling.
What we're really talking about is that I can go any weekend and sometimes during the week and I can play blackjack and gamble in Niagara Falls. I can do that today, we've been able to do that for some time now, it's been there, and the facts do not bear out that there have been any ill or adverse effects to that to date.
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But what we're really talking about also is Niagara Falls. You'll forgive us, but I think that's our main interest, more important than the general principle, because we believe it to be a fait accompli and I don't think it's very productive for anybody to sit down at this point and argue about something that's been decided to at least be run as a trial or a pilot project.
Amy has done a terrific job of describing why we are so prepared to handle it. Let me assure you that there are no people in Niagara Falls who think this is the salvation of our problems: This is one more attraction, one more way to keep people in town longer, to have them spend more money. The important thing to realize about the entire pointed effort in Niagara Falls is that we are after foreign dollars, more so than any location you could name in the entire country, never mind in the province of Ontario. It was extremely gratifying to see that the casinos that have been running to date have been dominated by participants from outside the province and that the dollars that have been garnered have been primarily coming from outside the province.
A lot of people will say, "Gee, you're going to destroy those casinos and you're going to destroy some of the other fund-raising efforts." Personally, I think you'll find that the casinos that have been running were a fabulous mini-experiment, perhaps, and gave a lot of people experience in what has been happening, but I also think the facts will bear out that a very select few have benefited from this type of casino. These types of activities essentially are not all that different from the Monte Carlo nights that most people have been offering to date, which they can still do under the existing legislation, as I understand.
As far as the service clubs are concerned, they have not been benefiting extraordinarily from the money from these casinos. That is a fact. Many of them, as a matter of fact, have backed away from even running them because of the phenomenon, as I've described, that the select few who run them professionally make the money and the others don't. That's the thing that is going to cause you to make the jump from that type of system to one where the people who run it ensure that the dollars go to the province of Ontario and not to a certain limited few.
One thing this is, is to raise money. Nobody would dare argue with that. I hope nobody would argue with the fact that if you're involved in an endeavour to raise money it's a business, and if it's a business you're going to run it like a business. I've tried very hard to imagine any type of cogent argument to belie that simple statement and I've been unable to do it. Therefore, if you accept that you're going to be running a business, you'd better do it the right way; you'd better put it in the right place. Everybody knows the old joke about property. "What are the three most important things when you buy property?: Location, location, location." It's the same thing with a business that has a particular market niche, and the market niche we have is foreign dollars. There is no better place to put it, there is no place that will get it so quickly and there is no place where the market is at your doorstep waiting for the product to arrive. If there ever was a golden opportunity, this is it.
Another thing Amy did was to describe beautifully not only the infrastructure we have but the reputation and repute that this city has worldwide. If any of you care to just take a stroll, at lunchtime or in the evening, around some of our tourist attractions, you will see visitors from all over the world. You'll see an ever-increasing, growing and wonderful influx of visitors from the Far East and from Europe. Those are our potential clients as much as anybody.
But the other thing you must realize is that a business competes. You know there will be casinos across the border eventually. The examples that the native Americans have been setting in New York state are well established. They're there, they exist, they're going to continue to proliferate, and therefore you have to be ready to compete and take advantage of every competitive advantage we have, and this is where the competitive advantage is. It's simply adding another piece to the puzzle which is already forming the most beautiful picture in North America. If you throw that opportunity away, it is criminal. It is, in the business parlance, criminal negligence. It's too damned obvious.
We must compete, as a city, with other cities. You compete for industry; you compete to attract people. That's a fact of life we deal with. We also have to compete in tourism. Niagara Falls is no longer the place where you just hang up the shingle and people arrive. Our marketing concepts are no longer to turn on the "No Vacancy" sign. That doesn't work any more; we all wish it did, perhaps, but it doesn't. We're fighting for our lives and competing as strongly and as heavily as any other industry in the world, and every single government study of tourism has shown that to be the fact. This is another tool we need to compete on an even playing field. Your own studies have been remarkably astute in outlining not only all the tourist areas where casinos are being put in and it's already been decided but the others where it's a fait accompli and it's just a matter of time before it comes. We need that additional tool to compete.
Finally, if you're going to compete in running that business, remember something: You can get on a plane here and fly to Atlantic City for $98. You can drive to Atlantic City for what it costs to fill up a tank and a half of gas. Let nobody think that the person who wants to gamble does not have affordable selection. There is not a wage earner who does not have it within his means to travel to three, four or five locations that exist today to gamble, and believe me, a tank of gas or a $96 air fare is not going to stop the inveterate or incorrigible or social gambler in any way.
But study your market. Just as tourism realizes that we can't have tourism without shopping because that's an important consideration, Las Vegas, Reno and Tahoe realize you can't have gambling now without family atmosphere; it's become a family activity. Those of you who have been there have seen them constructing massive theme parks and amusement parks because they can't even get by on gambling alone any more. Everything is a synergistic combination of elements that is modernizing itself to meet today's popular demand.
In short, the opportunity is there, the selection and the location are begging you to recognize the obvious. As to the unemployed and the social service money you need, here's another way to deal with it. We issue a challenge to the naysayers to look at Winnipeg, to look at all the locations. Don't be selective; as I said, you can find good and bad in any industry, including even the service industries. Don't be selective; look at the actual facts. As I heard a gentleman say before, if it costs too much, don't buy it. You can't afford not to buy this one; you cannot afford it and neither can the people of Niagara Falls.
We know that sooner or later you're going to make the right decision and we look forward to that. On behalf of the city, please accept our thanks for listening so attentively. Thank you very much.
Mr Duignan: Thank you for making your presentation in front of the committee this afternoon. I just want to clarify the situation around Bill 8. I know I did it this morning, but there are a lot of people here this afternoon so I'll repeat what I said this morning, that Bill 8 is not a Windsor casino bill; Bill 8 is an enabling piece of legislation that allows the Ontario Casino Corp to establish casinos in the province of Ontario. That's set out in section 2, which establishes the corporation, and the objects of the corporation in section 4, especially clause (c), states, "To provide for the operation of casinos."
I know the mayor raised some issues around part II of the bill. I understand he's going to share his legal opinion with us, and we'll take a look at that. But rest assured that this is an enabling piece of legislation to establish casinos in the province of Ontario.
Mr Gandell: Understood. Thank you for the correction.
Ms Harrington: Thank you very much. I'm really glad you got on, Amy. I know you were on the waiting list, and thank you, Allen, for accommodating the VCB.
First of all, we were talking about adverse effects there for a while. When I visited a casino, and that was just this past Monday, I saw people, who would have been unemployed, there working and really contributing, some people who had never had jobs before. So you're actually helping the community, solving social problems by giving people jobs, in some cases anyway.
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But you are right on when you talk about foreign currency and that Niagara Falls is an obvious choice. The way I see it, and I think everyone should, Niagara Falls is not the same as any other place in Ontario. It is unquestionably an international destination, and we have the foreign visitors right here. What I don't want to see is that, if there are saturation casinos all across Ontario, we are only recycling Ontario dollars which could be going to some other business. I would like to see those dollars coming from outside Ontario, and I think that's the way it works best.
To really make this happen and to work well I think we've got to have two things. First of all, we've got to have the backing of most of the citizens of this city, and I'd like to ask you how you might envisage doing that. Secondly, this government believes it must do it right, and to do that you must have a pilot project and evaluate it. Those are the two things, that we have got to do right and that we've got to have the people with us. How do we get our Niagara Falls people with us?
Mr Gandell: I'll have to be really mean and say that I don't believe the presumption that you have to have a pilot project in Windsor; let's just say we beg to differ on that, strictly because of location. You can't compare a non-infrastructure location with an infrastructure location of this type. Windsor doesn't have the foreign visitation; Niagara Falls does. I think the best way to answer your question generally, from our point of view, is simply that a business that does not offer what the market wants is not long for this world.
I don't think there is serious difficulty in seeing where the successful locations are and what types of services and setups they have. We acknowledge 100% that controls by the government must be fairly stiff; nobody wants to allow the slightest possibility of any non-desirable elements finding their way into this. Some people say it's inevitable; we think only incompetence will make it inevitable and we don't think that's a given at all.
Basically, just compete with the types of services and the type of setup they have. If you're going to have a single casino, make sure it's first-class and make sure it operates the same way that successful casinos operate.
Ms Harrington: How do we get our folks with us on this?
The Chair: I'm sorry, we have to stop there and go on to the Liberal caucus; time is running short.
Mr McClelland: I want to refer very quickly to a letter you've provided us with, dated February 2, 1993. It was to the Honourable Marilyn Churley. In that letter you asked the question in paragraph 2 about why the city of Niagara Falls was not selected as the best area to test such a project. You then set out in a very cogent fashion the rationale. Your concluding paragraph is, "The city looks forward to a favourable response." I'm wondering what response you received, if any. If not, maybe our good friends in government can tell us why not. Did you receive a response to the February 2 letter?
Mr Gandell: It's my understanding that we did receive a letter. I wish Mr Gandy were here; his memory would certainly serve to refresh mine. I do not totally recollect the details of the response, but I think I can safely categorize it as evasive.
Mr McClelland: Have you asked for or received the opportunity to meet with the minister or representatives of the minister or ministry?
Mr Gandell: It is my understanding that we have met through the Ontario chamber only, not through the Niagara Falls chamber. I stand to be corrected, Margaret, if you know something that I'm not aware of.
Interjection.
Mr Kwinter: Thank you very much for your presentation. I agree with a lot of what you said. One of the concerns that I have, particularly in the presentation of the visitor and convention bureau, is the comparison between Orlando and Niagara Falls. The numbers are the same, but the situation is totally different. The people who go to Orlando go to Orlando because there's nothing else there other than Disney World, unless you're into oranges. That is really the reason you go to Orlando, and it costs you money to get there, and the people plan a vacation. They take all the kids, and they say, "We're going to go to Disney World and we're going to spend four, five, six days," and they do that.
The people who come to Niagara Falls come primarily to see Niagara Falls. I would say that's the only reason they come to Niagara Falls, other than people who are in the area. It's a destination, and it's the most popular destination in Canada.
The minute you add the casino component, then you're going against your argument that you're saying that people can go anywhere they want to go, and if they're going just to gamble, why would they pick Niagara Falls to gamble? This is an adjunct if you are coming to Niagara Falls. I think it's a plus, I think it's great, and I think it's the best place to put it; I've said it all along.
But where I have the problem is when you suggest that the person who can hop on the plane to go to Las Vegas or go to these other places is going to decide that they're going to gamble in Niagara Falls, particularly, and this is the point that you made, that if it's going to be a casino, it's got to be first class.
The casino in Niagara Falls, I have no hesitation, will have a first-class building, but by its very nature will not be a first-class casino. Number one, there will be no crap tables. Casino operators will tell you that 30% of their revenue comes from crap tables, and the real gamblers, the guys who really want the action, that's what they want to play.
There are going to be other restrictions. For example, you can't have drinks at the gaming tables. That may not be a big thing, but it's an irritation to someone who has the ability, and you're not looking for the local person, to go somewhere: "Why would I go there when I can't even have a drink, which is what I'd like to do?"
I agree with your point that if you're going to do it, do it right. Unfortunately, the way this is structured, as I say, it may be a first-class building but it's not going to be a first-class casino. Do you have any comments on that?
Mr Gandell: I do. You've made some very cogent points. Number one, you're totally correct. When I made the point about people can go for 98 bucks to gamble, it was to indeed reinforce the point that you're not creating a gambling problem here. People are not going to come here just to gamble. That's entirely correct.
As I said, it's one more part of the synergistic atmosphere of the falls to support the surrounding activities. People don't come any more, by the way, just to see the falls. There is a park system here, there are attractions here, there's a myriad of activities now that people come for. We know some people who come back here for atmosphere, for activities, for biking, for hiking. The third, fourth time they come back, they sometimes don't even go to see the falls, so you're quite correct; it's an additional plus. And you are quite correct that under the existing terminology, there will be some irritants which cause people who want to only gamble to probably go somewhere else. I have no doubt of that.
But people who are here enjoying Niagara Falls certainly, there will be a high capture rate of people who have one more activity, who will go, who will use the casino. I don't think we are in disagreement at all, and I think your comments are reassuring to me because I think it means you've understood a lot of what we said.
Mr Carr: Great. Some of the people who come here for honeymoons never even see the falls, as I understand it. I wouldn't know about that.
When you first stepped up to the microphone, you said that you'd done a poll of the members. Did you actually poll all your members?
Mr Gandell: The members of the board of the chamber of commerce.
Mr Carr: And it was 357 to 1.
Mr Gandell: No, those were the odds that I was going to change your opinion.
Mr Carr: I'm sorry, that's what I thought.
Mr Gandell: Niagara Falls does not have a very well-developed sense of humour. You have to appreciate that.
Mr Carr: What was the vote then of the members?
Mr Gandell: If you were talking about casino gambling in general, I think you'd find it's 100%.
Mr Carr: The next question is, I think you're right, a casino in addition will be another product to have, from a marketing standpoint, with the falls being the obvious number one. I understand you're also, as you mentioned, getting a lot of people from the Far East, the Japanese and many Americans come here. But isn't it true that the value of the yen and the US dollar will have more to do with whether US and Japanese people come to Niagara Falls than will having a casino?
Mr Gandell: I can perhaps speak to that a little more knowledgably than others because I also happen to be connected with the bridge commission and keep some pretty accurate statistics on who crosses and comes and whatever. The only effect the value of the dollar has done that we can remark on is that it's just about killed the cross-border shopping, which nobody is going to cry about.
The area as a destination most certainly becomes more attractive, and we are getting many more Americans coming here, period. The effect of the dollar is pronounced, it's positive and it's exceptionally beneficial to us in all respects for foreign visitation. Of that there's no doubt.
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But as Amy quite correctly stated to you, our problem in Niagara Falls is not to get more people on a yearly basis to come here. When you're dealing with 12 million, 14 million, 15 million people, you've got the traffic to make big money and support a lot of businesses. Our problem is to put together the type of package that will make them stay here for more than 1.5 nights.
That's the crux of our particular problem. It's what's called "capture rate." People coming through your stores -- you all know the story of Canadian Tire and its expansion to the US. They had the cherry-pickers who basically came in for the steals and then left. That's what we're getting. We're getting the daily visitor and the people who come for some of the free stuff. If we can expand our package, we can sell it as a multi-night package, and therein lies our particular opportunity. But certainly the dollar doesn't hurt at all.
Mr Carr: I understand you've been able to attract a lot of people from the Far East and Japan in particular. What impact do you think a casino will have? Would it be dramatic in terms of attracting people from the Far East?
Ms Bignucolo: It's like everything else: I think it's a focus on entertainment. Again, I'll have to add what Allen said: It's the package that you could put together. I think it's going to be very positive, yes.
Mr Carr: Okay, thank you. Good luck.
Mr McClelland: Just as a point of information or a point of order, Mr Johnson: I just wanted to indicate Mr Carr's reference to honeymooners. My parents began their honeymoon here 50 years ago tomorrow. Now that I've matured somewhat, I feel comfortable to ask them if indeed they did see the falls. I'll advise Mr Carr accordingly, but I just thought I'd just share that little piece of personal anecdotal information.
Mr Gandell: We should share our experiences, because my father came here for his honeymoon in 1942, just before being shipped overseas, and he doesn't remember seeing anything.
Mr McClelland: There you go. We'll compare notes. Thank you and thanks for your hospitality.
The Chair: Thank you very much for presenting before the committee today.
NIAGARA FALLS AND DISTRICT LABOUR COUNCIL
The Chair: Next is Kim Craitor, president of the Niagara Falls and District Labour Council.
Interruption.
The Chair: Yes, indeed, people are having difficulty hearing. I would ask that the members and the people making the presentations be cognizant of the fact that some people are having some difficulty hearing. Just move a little closer to the mike, please.
Make yourselves comfortable. You have 30 minutes to make your presentation and field questions from the committee members.
Mr Kim G. Craitor: Thank you, Mr Chairman. First of all, I'd like to welcome the committee here to Niagara Falls on behalf of the Niagara Falls and District Labour Council. My name is Kim Craitor. I've been president of the labour council for the past six years and currently I'm a member of the Niagara Falls city council.
With me today I have our recording secretary for the labour council and a commissioner for the Niagara Parks Commission; to my right, sister Janice Bishop and to my left I have our sergeant at arms -- I think you can tell by his size -- for our labour council, brother James Whyte, who is also the president and business agent for Local 442 of the Hotel Employees and Restaurant Employees International Union.
Our labour council is comprised of 26 locals and geographically we cover Niagara Falls, Fort Erie and Niagara-on-the-Lake. It's ironic, because it wasn't that long ago that our labour council consisted of anywhere from 35 to 40 locals, and that tells you what's happened in the last three or four years in terms of plant closures and downsizing within the Niagara Peninsula.
In my introduction, I'd like to start out by saying that since this government's decision to establish casino gambling in Ontario, specifically the Windsor project, there's been much public debate centring on the moral and social implications of further expanding Ontario's gaming industries, while additional issues have arisen around the impact of casinos on existing gaming sectors, specifically bingos in the charitable sector and horse racing in the private sector. Here in the Niagara Peninsula, both of those sectors are very predominant, so we strongly urge the government, when you're reviewing the Windsor project, to look at the impact that that casino operation has on those two specific industries.
Now, our concerns and comments today will focus on the social effects of casino gambling and the optimal distribution of casino revenues. First of all, in terms of criminal activities, and I think that always comes to the forefront when you talk about casinos, casinos in the United States are linked irrevocably both in perception and in fact to organized crime. Many of those who opposed casinos do so on this basis, and while we believe that government ownership with private management may not entirely eliminate this problem, it does, in our opinion, offer the strictest financial controls and supervision for the least amount of criminal activity through the establishment of your Ontario Casino Corp Act bill. So we're pleased that you are taking that approach.
In respect to revenues, it's obvious that under section 13 of the bill the government intends to transfer all casino profits into the consolidated revenue fund. We believe in doing so that this will invite the perception that this is simply another money grab on the part of the government. The connection with social spending becomes tenuous in the absence of any accountability mechanisms, and claims to the contrary would only be met with cynicism from the public.
What we're proposing as an alternative is that the government choose to flow a significant portion of casino revenues, and we're suggesting 65%, into a human service fund, with explicit funding criteria to ensure every dollar spent is strategically targeted to address priority needs, jointly determined by government policies and by front-line expertise from the human sector. In fact, we suggest that in order to enhance the effectiveness of casino revenues, the distribution should be further dovetailed with key initiatives as follows: (1) to use the revenues to reduce the number of long-term unemployed; (2) to provide opportunities for youth; (3) to maintain the elderly and disabled in the community; and (4) to ensure equity for disadvantaged groups.
Those are simply suggestions that we are making as part of our proposal. Certainly, those can be refined, but the point we're trying to make in terms of revenues is that we don't want it to become similar to the GST where it just got put into the consolidated fund by the federal government and sort of just got spent. There was a perception out there that that type of money was going to be used to reduce the deficit; it never has. So we would like to see some direct focus with casino revenues, and we feel it's important for this government, any future government, if casinos are in fact the way that we're going to go, that there are some mechanisms in place to ensure that those moneys are well spent for the benefit of the people of Ontario.
Under the age requirement, subsection 6(3) of the bill, it allows for individuals 19 years of age and older to play in casinos. Our labour council believes the age limit should be 21. We understand the government is of the opinion that an age limit higher than 19 would not have withstood a challenge from the courts under the Human Rights Code or the Charter of Rights and Freedoms. We disagree and we feel strongly that 21 is more an appropriate age, especially with the initial startup of casinos in Ontario.
Casino location: I'm not going to go into a lot of detail with that. I'm sure you've heard since 10 o'clock this morning a lot of rationale and justification with respect to Niagara Falls being the ideal location. I'm going to touch on just a couple of things from our perspective.
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There's no question, in our opinion, that Niagara Falls is an ideal location for a casino. Niagara Falls is a border town. It's strategically located in a catchment area of over 40 million people within a six-hour drive. Niagara Falls is a destination point, and as such there already exists a tourism infrastructure and an established tourism market.
Certainly the impact of a casino operation is needed in the city of Niagara Falls, which has been heavily hit with plant closures and downsizing, to the point where the unemployment rate has continuously remained over 14% for the last two or three years. As you know, many of our economic problems have been caused by federal government policies -- the GST, free trade -- as well as cross-border shopping.
In conclusion, while our labour council generally supports, and I say generally supports, the concept of casino gambling, we believe that it's imperative and prudent for this government to act very cautiously and carefully before it considers moving on to further projects, to develop four areas that we're suggesting: (1) stringent gaming policies and procedures, (2) a strong social network, (3) an effective regulatory and law enforcement framework, and (4) compatibility of casinos to the local community's environment.
I submit this presentation on behalf of the Niagara Falls and District Labour Council. We're certainly open to any questions from the committee.
The Chair: We have up to eight minutes per caucus.
Mr Kwinter: I have it all to myself; wonderful. I have a couple of questions I want to discuss with you. The issue of the ages, 19 and 21, has come up quite often. The problem is that there is a perception, not only in gambling but also in alcohol, that somehow or other liquor is more damaging than beer and that casino gambling is more damaging than bingo and charity gambling and horse racing and lottery tickets. It's all gambling.
Are you suggesting that casinos be restricted to those who are 21 but that people who are 19 can continue to buy lottery tickets, can continue to play bingo, can continue to go to charity casinos but that they can't go to this particular casino? If that is what you are suggesting, how do you feel you can justify that?
Mr Craitor: Obviously that is what we're suggesting because we are in favour of having an age limit of 21. With respect to giving a rationale that totally justifies our opinion of 21, this particular subject was discussed in detail with the council. There are reservations with respect to casinos to begin with, and our concern is to ensure that they're done properly, that they're done equitably. In terms of 21, it's our understanding that in the States, Las Vegas for example, that's the age limit and it's been successful.
Mr Kwinter: It's also the age limit for drinking.
Mr Craitor: Okay, but they've been successful with that age limit. The bottom line was that we felt initially, for starting up, that would be a more appropriate age to deal with. If it was found that 19 was more appropriate, it's always easier to move down than it might be to move up. That was our rationale for it. We understand what you're saying. Those things were put forth by the council, by some of our members who thought in terms of 21.
Mr Kwinter: The other area I'd like to discuss with you is your proposal that there be a human service fund and that the moneys, rather than going to the consolidated revenue fund, be used for worthwhile purposes.
I'm sure you know that when lotteries were first proposed, in order to make them palatable -- lotteries were a far greater controversy than casinos in the sense that the idea of having lotteries was a real quantum leap in what was happening in Ontario. This is kind of an extension of it because the groundwork has already been laid by the fact that people are already gambling on lotteries.
The rationale at the time was that all of the proceeds from the lotteries were to go to athletics, sporting and cultural pursuits. Well, by the time the government finished putting roofs on all the arenas in Ontario and some of the other things, it just ran out of projects and has now diverted lottery money to the consolidated revenue fund.
It is certainly the intention under Bill 8 that the moneys that come out of casino gambling are to go the consolidated revenue fund. I would be interested in hearing from you about what representations you've made other than to this committee. What kind of support have you been able to marshal about having the government take a look at your proposal to have the funds earmarked to specific social projects?
Mr Craitor: First of all, with respect to whether we have lobbied elsewhere, the answer is no. We reviewed Bill 8 and realized that was the intent through the bill on where these revenues were going to go.
With respect to setting up a human service fund, and that's just a term we used, the council felt it was appropriate that those types of revenue have some very specific and positive direction that they would be used for, rather than just being amalgamated with other sources of income for the government.
We don't have concern over this particular government's positive use of revenues, which we think you will use them for, but our concern is that in the future they may be used for other things which we don't think are appropriate.
In relation to where they should be spent, those were suggestions, but we just felt strongly that there have to be some criteria set up so that the money is used for specific things to benefit the people of Ontario. Obviously, unemployment is one, and obviously the government is doing that. If there's an opportunity to use these funds to enhance that, then there's nothing wrong with that. But if there are no mechanisms in place, then our concern is that the money will just be spent and not spent the way we think it should be in terms of where the money is coming from, and that's from casino gambling.
Mr Kwinter: I think it would be a fair political comment, and my colleagues may disagree with me, that almost the sole motivation for this initiative was revenue enhancement. I don't think there were people picketing in the streets saying they wanted casinos. It was obvious, when the ministry responsible was not even aware of the initiative until it was announced in the budget, that the main purpose of this particular initiative was revenue enhancement, which is a euphemism for getting more money for the government.
It would seem to me that the revenues generated by casinos, no matter which government is in power and for the foreseeable future, will not be available to use in a discretionary manner, for example for specific projects, just because of the financial status of the province. The government is desperate to get revenues to service the debt, to look after those kinds of things that will enable it to function. I'm just wondering again how practical your suggestion is that these funds be earmarked, given the whole rationale for this exercise.
Mr Craitor: With respect to being practical, it's possible that it may not be. In terms of how our council feels, that's the issue we've put forward. If our labour council had its druthers, we'd rather see a major industry, or three or four, come into this community -- that's really what we would want -- to replace a number that have closed up. It appears that's not happening, and we have to look at other options that are available.
I would suggest to you that if you had talked about casino gambling four or five years ago you may have had a different point of view. Under the economic times we're going through, it has come to the forefront and now is being looked at as an alternative.
I'm getting off-track in terms of what you've asked me, and I really don't have a clear-cut answer. It's just important that the revenues serve some very useful and positive purposes rather than just being lumped into the general consolidated fund. That's the point we were making. If there are other mechanisms that can be worked out to fine-tune that -- it doesn't actually have to be the one we're suggesting -- they can be considered. I understand what you're saying. I mean, the whole concept of this was to generate revenues, and we said that in our presentation. We don't want it to be perceived that this is strictly another money grab. We want it perceived that if we're going to go ahead with them, there's a useful purpose for them, that "Here's what the money is being used for," and it is in fact for the betterment of the people of Ontario. That's the point we were trying to get across on that issue.
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Mr Carr: My question -- actually, Monte took it -- was along the same lines, so rather than beating a dead horse --
Interruption.
The Chair: If you're having difficulty hearing, I might suggest that you sit a little closer to the speakers which you see at either side of the room. That might assist somewhat. Mr Carr, please go ahead.
Mr Carr: I'll make sure you can hear. How many jobs do you think are going to be created because of the casinos? How's that? Sorry, Mr Craitor. It sounds like I'm yelling at you in anger.
Mr Craitor: It sounds like we're at a demonstration. We don't have specific figures. It depends on the type of casino that's set up, the size of it. We've seen the reports that have come out, just as you have.
Mr Carr: But do you think those reports are realistic, or are they optimistic? What are your thoughts?
Mr Craitor: What's more important from that perspective for us as a labour council is the quality of jobs it produces, and that's what we're after. If this is the way to go, then it's got to create jobs that are quality, jobs that provide the kind of wages that a person is going to be able to live on, raise a family, buy a home. That's what we're after. We're not after the creation of just more part-time employment. There is some importance there.
Mr Carr: Do you think the casino will give you that?
Mr Craitor: We think it could, but in terms of numbers, we do not know. We don't have that type of expertise. We've just seen the figures, the same as yourselves.
Mr Carr: Just so you know, and you can probably comment on this, the government is saying that the average income is going to be $25,000 to $30,000. There is a big range because there will be some lower and some higher, but that's the average number, the average income. I was just wondering whether the $25,000 to $30,000 would that be the type of jobs you'd be looking at? If the government is successful in getting that range for whatever number of people are employed, would that be acceptable to you?
Mr Craitor: We'd like to see them earn more, but in this economic climate, considering that you have 14%, 15%, 16% unemployed people, $25,000 to $30,000 is certainly a reasonable income.
Mr Kormos: Are you supporting the unionization of these workers?
Mr Carr: There was a lady up in the Sault, when you weren't there, who worked in Europe, and she said you should actually pay them more. She said that in Europe it's higher, about $50,000.
Mr Kormos: She was probably unionized.
Mr Carr: She didn't say. She sounded like she was part owner, the way she was talking.
Mr Craitor: Peter is quite right. I think we are under the supposition, and maybe we're wrong, that this will be an organized location and certainly there will be a union in place and there will be a collective agreement in place. We're also under the supposition that you'll have some policies in place that'll be buy Ontario only or buy Canada only, that we'll spend the money here within our province or within the country. We assume those are all policies that go with casinos, that we're not going to have someone come in and then spend outside the country, that we'll use our own people and our own resources.
Mr Carr: What about the feeling that if a casino opens up, a lot of the jobs, because they are skilled jobs, may be filled by people who are already working in casinos in Manitoba or wherever? A lot of the people here want the jobs and the reason they support casinos is for the jobs here. How do you limit it so that the people here get the jobs? How do you propose that somebody do that? If you're talking about a blackjack dealer or somebody, how do you make sure the people in Niagara get the jobs?
Mr Craitor: We would certainly suggest that if casinos are a go here, there's got to be criteria in place. For example, we have Niagara College here. Anyone working in a casino should have a certain field of expertise, have to receive certain training, have to have certain qualifications that are met and have to go through that process. I don't think we want people hired who haven't had the proper training on how to work within a casino environment. That would be number one, that there should be a training program in place and they should have to go through that before they become employed in a casino operation, and that it be standardized right across Ontario so that they're all operating in the same manner, employees know what they should do, what their responsibilities are etc.
In regard to, are they all going to be strictly from the Niagara Peninsula, that's what we would like to see. I think that'll have to be discussed at the time. I can't give you something specific, how we can arrange for that, but obviously that's the whole intent of this project. If we're able to go ahead with casinos, that'll create jobs for the unemployed people we have here.
You're suggesting that they may come in mass droves from Manitoba or other provinces that have casinos. Is that what you're suggesting?
Mr Carr: No, what I'm saying is when somebody opens up and they get a casino and they're told they've got the licence, they hire people coming through the door and a guy from Manitoba comes and the person --
Mr Craitor: What I was saying is that you have a training structure in place, you have a criterion that has to be met and you can't just hire someone off the street. They have to have gone through a training program and have some type of certificate that's a requirement.
Mr Carr: Experience.
Mr Craitor: Or experience, yes.
Mr Carr: That's what I'm looking at, people coming in and these high-skilled jobs that are needed. All of a sudden, as soon as the casino opens in Niagara Falls, I think a lot of people think they're going to get the jobs. What I'm saying to you is, there needs to be some mechanism -- and you may want to think about this -- because when they get it opened up, what's going to happen is they'll have applications and if somebody comes from Manitoba and says, "I've been dealing out there for three years," that person may get the job and want to come to Niagara Falls because it's such a great spot to live. That isn't really a question, it's just something to be aware of.
Ms Janice Bishop: I'm assuming that once these casinos are up and running in the province of Ontario, our employment equity legislation will be in place. It's not going to bar people from working in the province certainly, but when these casinos are opening, certainly the casinos are going to have to reflect the community which they're drawing from. It's not going to bar people, but the casinos will be reflecting the communities they're drawing from and employment equity should in fact help that kind of issue.
Mr Kormos: What's he's telling me is that I have to do this very, very quickly. Look, it's clear that when lotteries were introduced, now for some decades, that their sole motive was to raise money. There were no two ways about it. Nobody was talking about leisure activity. Nobody was talking about entertainment. People were talking about separating people from their money, bottom line.
It's interesting that the genesis of casino gambling as articulated was initially for the express purpose of raising money for a cash-strapped government -- there's no debate about that -- however, in a very schizophrenic way, it soon became rationalized by many other arguments, again the leisure activity, the entertainment aspect of it, and then of course the big mom-and-apple-pie hit, economic rejuvenation, especially for border communities. So one has to be a little sceptical about that because now it's being marketed.
Look, the bottom line is that casinos are not about winning money, they're about losing money. The purpose of a casino is to empty people's pockets as thoroughly and as quickly as is possible, giving them nothing in return or as little as possible in return. They're very much like insurance companies in that regard.
In view of the fact that you're not providing a product, you're not providing a service, your purpose is to empty people's pockets and pay out as little as possible, how do we protect the woman or man in this community who works hard for the smaller and smaller paycheque, especially if you work in the public service, that you take home? How do we protect the woman or man who's not earning an income because she or he is unemployed and who wants to grab at that brass ring?
And I understand that. You see it now where gambling is permitted, at the racetrack or what have you, people who are desperate and who strive to make up for their previous losses. How do we protect those people and ensure that this truly is a casino that's going to attract the wealthy who can afford to gamble as compared to the working and working poor who can't afford to?
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Mr Craitor: A hell of a good question. You can't. Obviously, it's no different than your bingo operations. No one stands at the door and does a credit rating, saying, "Do you have the income to be able to play bingo?" You have to leave it up to the individuals.
We realize there are social implications to that. I understand what you're saying. Obviously, you want people who participate in casino gambling to be the ones who can afford it, who have the money, and they're not going to find themselves going home and not be able to pay the rent and buy food for the kids. We know that; those things have been discussed by our labour council. The reality is that there is that possibility. Those are the side-effects of a casino, but no different from your bingo or your horse racing. The same thing happens there. There's no clear-cut way that you can monitor who comes in to play casinos. There just isn't.
Your point is exactly right. Even for our labour council, the whole reason that we're supporting this is because of the economic climate. You know, that's what we find ourselves in. We've got to come up with solutions to create jobs. This at this point seems to be one of them.
Also, for our community here in Niagara Falls, it's a unique community, and there's no question that if it's done properly and doesn't have the side-effects that we're all concerned about that it could have for our community, it will add that one more feature that we feel would keep people here a little longer, maybe spend a little more money or add as an incentive for them to consider coming to Niagara Falls as part of their holiday. There's the horse track up there, there are casinos, there's Niagara Falls, there's the family entertainment that we have here, so all of those features are incorporated as part of our selling package.
Ms Harrington: I think we all understand that a casino is certainly not the answer to all our economic woes. It is only a part -- we can't put too high expectations on this -- of our economic stimulus, a part of our tourism. It fits well with tourism.
You say in your brief here that it has to be done cautiously and carefully. You are worried about any adverse effects on the community. I'm sure you are concerned about that, because you represent a lot of people in this community who are raising families and are very much part of this community. Do you feel that, to make sure we don't have any of the downsides in this community, a pilot project evaluation is a good idea?
Mr Craitor: We felt it was a good idea. There were those of us, the majority of us, who tended to feel Niagara Falls might have been the better location of the two, but a decision has been made and Windsor is the location.
We said in our report, and we agree with it, that it has to be looked at very carefully and cautiously. We've indicated four areas that we feel the government should look at before you proceed further. Now that you've made a determination that Windsor is the project, we want it to be looked at specifically, at least in the four areas that we've suggested.
Ms Harrington: If anything bad happens, it can happen in Windsor, but not here.
Mr Craitor: Well, if there are problems in Windsor, then you have the opportunity to correct them, so that when it comes to the Falls we won't reinvent the wheel over again.
Mr Sutherland: I guess I differ from Mr Kormos in that I have faith in the ability of working people to make decisions, being empowered to make decisions, that they'll make the correct decisions and act responsibly in how they conduct themselves in different areas.
My question was, I just wanted to get a general feel from you in terms of what you are hearing from your different membership out there and what they think about casino gambling in general, rather than specifics about whether Niagara Falls should be -- what is the reflection of your membership from what you hear in talking to them on a regular basis?
Mr Craitor: Let me answer that as president of the labour council. Let me tell you also that I've worked for 23 years at an unemployment insurance office. I see the unemployed day in and day out, and the last four years have just been the toughest four years that I've been there, looking at the quality of people out of work, the number of people out of work.
For the average person out there asking that question, are casinos the end-all and the be-all? -- for the average person out there, there is hesitation. I mean, they want it but there's that hesitation of the social and the side-effects of it. There's that concern because the people you're asking are in fact people who have families, who have kids, and are going to raise them.
I was talking with a gentleman today, and that's exactly what he was saying, and I've heard it over and over. We do have children and we have a very unique and a hell of a good community to live in. It just has so many things to offer. There is that concern, even for those who are unemployed. I've asked a number of people coming through the unemployment office, and we're sitting there just talking about things. I say: "What do you think? What do you think about a casino? Is that going to help us? Is that going to make the difference?" Even some of them who are unemployed and are looking for jobs express some of the same concerns, and that is the social aspect of it.
That's why in our brief we've emphasized it, and I say it over again: You've got to be sure it's done properly, that you address some of the major concerns that we've suggested, and that those are looked at before you move on.
The Chair: I thank the Niagara Falls and District Labour Council for presenting this afternoon.
ONTARIO RESTAURANT ASSOCIATION, NIAGARA REGION
The Chair: Our next presenter is David Hagarty, president of the Niagara region Ontario Restaurant Association.
Mr David Hagarty: Good afternoon, and welcome to Niagara, the world's most famous address and the gateway to Ontario.
At the outset, and on behalf of the Ontario Restaurant Association in the Niagara region, please let me extend my sincere appreciation for this opportunity to address you with respect to Bill 8, the casino legislation.
My name is David Hagarty and I am president of the Ontario Restaurant Association in this area. In addition, I am pleased to introduce two of my colleagues, Mr James Roberto, who is sitting at my right and is past president of the Ontario Restaurant Association, Niagara region, and Mr James Curran, who is sitting on my left and is the association's membership representative in this area.
As a backdrop to our presentation, allow me to provide a brief résumé for the association. The Ontario Restaurant Association has represented the foodservice industry in Ontario for in excess of 60 years. It is the largest provincial foodservice association in Canada, with a roster of over 4,000 members who operate thousands of establishments, employing several hundred thousand people in the hospitality industry. In our community alone, we have over 100 members operating several hundred establishments, employing several thousand people.
The association's mission is empowered by its dedication to the growth of a thriving, responsible, competitive and superior foodservice industry which will emulate its credo of a commitment to excellence.
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Notwithstanding the positive spirit of our mission and of our commitment to excellence, you need to know that our industry has been severely damaged by the inclement climate which has plagued all of us during the past several years. Admittedly, ours is not the only industry which has been affected. However, permit me to suggest that the number of closures, bankruptcies, layoffs and lost jobs in the food service sector clearly award the industry first place on the nation's casualty list.
On Thursday 30 April 1992, the Minister of Finance, the Honourable Floyd Laughren, announced that the government of Ontario would open casinos in the province. The rationale supporting this announcement was simple and based on the following premises: (1) Casinos will create jobs, (2) casinos will encourage the development of tourism, (3) casinos will contribute to the economic development of the community, (4) casinos will represent the start of a viable new industry, and (5) casinos will generate revenue.
Our industry in Niagara was elated by the announcement and concurred positively with the casino rationale and its objectives. Specifically, we were encouraged by the notion that perhaps a casino in Niagara could be the direly needed catalyst which would resurrect the economy of our community and the health of the industry. Almost 500 days have passed since that announcement. In the meantime, on October 6, 1992, the Minister of Consumer and Commercial Relations, Marilyn Churley, proclaimed that Ontario's first casino would be placed in Windsor. The Windsor decision was supported in part by the rationale that "by starting on a small scale, the most effective regulatory and law enforcement systems could be put into place."
Naturally, the plurality of the members here and a commanding segment of this community were extremely disappointed with the government's casino decision. We're not sore losers; we applaud Windsor's good fortune and we appreciate the importance of synergy which needs to be in place in order to achieve results which will benefit the greatest number. None the less, the question still lingers: Why not Niagara?
Putting aside our concern for the validity of a casino placement criteria which overlooked this particular community and with your kind indulgence, I would briefly like to reaffirm Niagara's unique attributes as an exclusive casino site and share with you a condensed summary of the social and economic needs which such an enterprise would satisfy here.
Tourist visitation to Niagara Falls averages approximately 12 million people each year. With the exception of Toronto, there is no other city in the province which attracts this volume of traffic. On the average, and given normal circumstances, these visitors will spend approximately $700 million a year here. The notable decline in this revenue over the past few years accounts for the serious financial problems challenging our community and our industry.
The falls at Niagara, one of the wonders of the world, are an international attraction. They are the most photographed, painted, written-about, talked-about and sung-about Canadian attraction. The magnificence of their scenic beauty has been conveyed to all four corners of the earth by literally billions and billions of postcards which have been sent from here. It is reported, in fact, that in Japan the receipt of a postcard from Niagara represents a significant honour. You must admit, we do have something over the Detroit skyline.
An inventory of accommodation facilities which is in place at this very moment approximates 9,600 rooms capable of hosting over 20,000 people a night. It is of interest to note that on the average this huge resource is only utilized about 46% of the time.
A galaxy of attractions includes a famous theme park, Marineland, a variety of interesting museums, several observation towers and one of the most incredible boat rides in existence, the Maid of the Mist. By and large, Niagara offers an exciting diversity of amusing, entertaining and educational experiences for the whole family.
It is of interest to note that this enviable component of tourism currently existing in Niagara is being feverishly developed in Las Vegas in order to bring that city up to speed in this regard, as well as to appeal to the family market which such attractions draw.
One of the most revered and lauded recreational facilities in the world, Ontario's Niagara Parks, includes several unique scenic attractions and the parks' showcase, Queen Victoria Park. It is this section of the park that frames the falls at Niagara in a spectacular and very exquisite manner.
An international complement of food service establishments which includes every style and every type of dining category imaginable is equalled by a large and diversified retail-commercial base which offers a broad selection of Canadian souvenirs, gifts and novelties.
An attribute which is clearly exclusive to Niagara involves the presence of four law enforcement agencies, including the Royal Canadian Mounted Police detachment at St Catharines, the Ontario Provincial Police department at Niagara Falls, the Niagara Regional Police department and the Niagara Parks Police. Every one of these agencies is versed and experienced in dealing with the special requirements of policing a community that hosts 12 million tourists a year.
While on the subject of law and order and in addressing what impact a casino will have on crime in our community, we concur that this concern needs to be given appropriate and proper consideration. In addition, however, we'd like to share the essence of some research which we've undertaken in this respect.
Lest the emphasis of law enforcement be misplaced in addressing the casino development process, we need to take note of the lessons provided by the casino experience elsewhere. In our view, one of the most important observations provided on the subject was offered recently by Mr Michael Rose, chairman of the Promus Corp. Mr Rose suggests that crime per se is not propagated by the presence of a casino; crime increases in direct proportion to the number of people who are attracted to a casino.
To illustrate his point, Rose reports that when casinos started to operate in Atlantic City, over 30 million people were attracted to that city and naturally there was an increase in crime. Rose also observes that when Disney World opened in Orlando, Florida, approximately 30 million people were attracted to that community as well. Rose adds that in fact crime in Orlando increased more than it did in Atlantic City as a result of this new attraction. We must be careful, therefore, to avoid the misconception that gaming causes an increase in crime. It doesn't. Whatever the attraction, an increase in the number of people who will visit an attraction will increase the probability of crime there.
In light of the confusion created by the notable differences between the Windsor Police Department report on casino crime and the Albanese report on the same subject, it would appear that this aspect of the casino development process needs to be examined far more thoroughly by a combination of academic, law enforcement and casino administration professionals in order to avoid the creation of an enforcement posture which could abort the success of the project.
As we sit here today, 4,600 delegates of the United Brotherhood of Carpenters and Joiners of America are concluding their four-day convention in Las Vegas. This August just past, over 140,000 convention and trade show delegates chose Las Vegas as their convention site. The Vegas Convention Authority reports to us that each of these delegates spends approximately $800 on each visit and, further, that expenditure does not include gaming revenue. That means the convention delegates in Las Vegas spent $112 million in Las Vegas this past August, and not on gaming.
Surprisingly, the convention authority reports that gaming is not a primary factor in determining a convention organizer's choice. Rooms, recreation, entertainment and shopping all rank as important factors which influence a convention organizer's choice of Las Vegas as a convention site.
As mentioned previously, not including campgrounds or rooming houses, we have approximately 9,600 rooms in Niagara Falls, and half of the time they're empty. We appreciate that although we are capable of accommodating 20,000 people nightly, we do not have a convention facility which will host an event of that magnitude. Notwithstanding this, however, we do have facilities capable of hosting up to 2,500 and we have hosted sports and service organization gatherings which have attracted in excess of 5,000 delegates.
Once a convention centre is added to the complement of existing facilities in Niagara, this community will be capable of hosting the super conventions. We need to stress the fact, however, that with the exception of the convention centre, Niagara already features the components which attract conventions: rooms, accommodations, recreation, entertainment and shopping.
We agree that the establishment of a casino can never be the end-all of the social and economic strife which is being suffered by the province and every community in Ontario during the past several years. We do contend, however, that the remarkable financial performance inherent in this enterprise, responsibly harnessed, will deliver a great many of the solutions we need.
Niagara Falls, Ontario, is persistently on the unemployment hit parade, ranking consistently as one of the top 10 communities in Canada, let alone Ontario. Several months ago, our welfare roll topped the 12,000 mark. Such statistics, however, are but the tip of the iceberg, for below the surface of this stormy sea there lies an immense and dismal aggregate of failed businesses, lost jobs, broken homes, lost savings and a city that's virtually stressed-out in its effort to collect in excess of $20 million in outstanding tax revenues needed to provide the essential services it provides for its residents.
It's ironic. We're almost paranoiacally concerned about the impact of casinos on crime, while around us our community has been thrown into a disadvantaged social and economic condition that has been historically responsible for breeding crime.
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There is a legal terminology which is often used, and it states that time is of the essence. We do not advocate that anything of this magnitude should be rushed into without considering every possible contingency. We do suggest, however, that it is completely within the realm of possibility to establish a casino at Niagara much sooner than has been suggested and that time is indeed of the essence.
We need to focus on the fact that our social and economic concerns are in critical need of an immediate and remedial solution. In addition, we need also to be concerned about the fact that there is a likelihood that competitive casinos will be developed in New York and Michigan, and yes, we do believe that the early bird gets the worm.
A casino is a casino is a casino. The suggestion which has been advanced that Ontario's casinos will be unlike any others and for that reason we must be very, very careful and move very slowly and cautiously may need to be reviewed. There are literally hundreds of working models around the world which can offer the template to the superior casino the province is aspiring to build. The commitment to being the best is a worthy one; being best, however, doesn't necessarily mean it has to take a long time.
It is with respect, therefore, that we encourage an acceleration of the casino development process and ask you to reconsider the present position on the placement of a casino at the world's most famous address, Niagara Falls. Your close scrutiny will indicate that we match each and every one of the April 30 announcement criteria to a T.
Finally, I realize that the Ontario Restaurant Association in both Windsor and Ottawa has addressed this committee, therefore I will not take up any more of your time addressing the issues presented to you at those hearings. Of specific relevance to our association in Niagara, and in summary here, however, I do need to apprise you of the following:
(1) The Niagara region echoes Windsor's and Ottawa's concern on the service of food and beverages within the casinos. The prospective analysis of cash flow provided by the Coopers and Lybrand report which was commissioned by the government lists two items of serious concern to our industry in this area. Specifically, analysis indicates that a Niagara Falls casino will realize over $43 million in revenue for food and beverages in the first year; an additional $54 million is provided as a complementary expense. Food and beverage giveaways used to promote the casino is what we interpret that to mean.
Together, these two items total an expenditure of $97 million in food and beverage service at the casino in Niagara. All of the restaurants on Clifton Hill in this city combined could not achieve this level of income in a year.
We need an assurance that our industry will not be critically disadvantaged by that kind of competition. Unless we can have the assurance that we won't be disadvantaged by that kind of competition, it will be difficult for us to support Bill 8.
(2) We echo Windsor's and Ottawa's concerns about the accommodation sector as well. Those, I understand, were outlined quite completely for you.
(3) We encourage consideration of extended hours of liquor service patterned on the resolution passed by the city of Niagara Falls recently, which grants an optional extension to licensed establishments that would allow service to 3 am. Ontario is the only province in the country that still has 1 o'clock closing.
Please accept our sincere gratitude for your very kind attention this afternoon and for the courtesy of your time and effort on our behalf. Should you have any questions, we'd be more than pleased to answer them.
Mr Carr: Thank you very much for the presentation. Looking specifically at the restaurants in the Niagara region, if you get a casino what percentage increase do you anticipate having here for your members?
Mr James Roberto: In terms of revenue as compared to right now, we're busy in July and August, and with a casino being in the Falls I think we would be busy at least 10 months of the year.
Mr Carr: Maybe you could fill me in on the percentage, and I'll tell you why. In Windsor, when I talk to business people, I trust their figures better than I do the government's. The government has a reason for being biased because it wants to get a casino in, so it puts figures up. Every business person I asked who's come through said, yes, it's a great thing, but if you ask a simple question about the percentage increase, nobody can tell you, "We think one will increase us 2%, 3%, 5%," which means I'm a little leery.
This morning we heard people saying 10 jobs would be better than nothing, which I guess is true, but the figures being used I believe are very optimistic. That's why I would like to see whether you have some idea of the percentage, something people can understand very simply. Obviously, there's going to some impact on restaurants and the amount of revenue's going to increase. If they know it's going to be a 35% increase, the people of Niagara can say, "That's great and will help the restaurants," but if it's only going to be 5%, then they might say it's not worth all these other problems.
I hate to pin you down and I appreciate that you don't just throw numbers out like governments do if you can't answer it. But let's assume a casino comes in and you get everything you want, that they don't have a big hotel in there with a lot of restaurants, that everythings the way you'd like to see it: What percentage increase, as a total, do you think your membership could see in its revenue?
Mr Roberto: It's very hard for me to give you a percentage, but I would not hesitate to guess anywhere from 15% to 20% guaranteed.
Mr Hagarty: I might add that perhaps the only formula you could use to speculate on that -- and that's what it is, speculation -- is to relate it to the increased traffic that we might expect due to the existence of a casino. If that advances from a position of 12 million people a year to some 18 million people a year, then we could use that percentage increase and just apply it as a template to the restaurant.
Mr Carr: One of the guys who came in in Windsor said, "You give more traffic and I will give you" -- and of course in retailing, traffic is the important thing.
Mr Hagarty: That's exactly the case.
Mr Carr: I'm glad there is some type of figure because, as I said, I trust your figures more than I do the government's. I think it's important for the people of Niagara to say, "The restaurant people think it will increase maybe 15% to 20%," knowing it's a guesstimate, but I think that's helpful for the people of Niagara.
The other question is --
The Chair: Mr Carr, I'm sorry --
Mr Carr: Oops, no other question. Good luck.
Mr Kormos: On a point of order, Mr Chair: In responding to Mr Carr, you should know that Mr Roberto's restaurant, the Casa d'Oro, probably attracts more people now than most casinos ever would because of the food that's served.
The Chair: Mr Kormos, that's not a point of order, but it's interesting. Mr Duignan.
Mr Duignan: Addressing your concerns about the food and beverage part of the industry, as you know, the only casino we're talking about right now is the one in Windsor. The figures used by Coopers and Lybrand are based on the Atlantic City model of a casino, where it has unlimited food and beverage services. We have distinctly said that the restaurant size, for example, in the Windsor complex will not exceed 10%.
If you look at the figures for Windsor, Coopers and Lybrand say that based on the Atlantic model, it would generate some $174 million for the government, but based on our figures, because of limiting it to 10%, we're only estimating a return of some $140 million. The difference of that $34 million is because of the limit on the food and beverage services available in the casino complex; it gives people an opportunity to get out of the community and spend that $34 million. But you have our assurance again that the food and beverage services in the Windsor casino will be strictly limited to 10%.
Mr Hagarty: We appreciate that and thank you. To move one step further, if we could have that included in the legislation so that the assurance is solid, we'd be very comfortable.
Mr Duignan: Your point is well noted. Your request to extend the liquor service until 3 am is outside of the scope of this particular piece of legislation. This particular piece of legislation will have to comply with the existing liquor regulations, which say service ends at 1; however, that could be subject to change as well, but it can't be addressed in this particular bill.
Mr Hagarty: Just to keep you apprised in that regard, we have met with the chairman, and we're advancing through those channels, but we understand we're going to end up with the Ministry of Consumer and Commercial Relations.
Ms Harrington: Thank you, Mr Hagarty, for your brief. I know you've done a lot of work on it. I can tell you wrote it personally; I know your style here. I like this line: "It's ironic that we're almost paranoiacally concerned with the impact of casinos on crime, while around us our community has been thrown into a disadvantaged social and economic condition that has been historically responsible for breeding crime." It's a very interesting comment.
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I just want to tell you that yesterday in Ottawa we were presented with a presentation from two people from your association, Paul Oliver and Phil Waserman, that differs somewhat from your point of view.
Mr Hagarty: I think the position we've taken is that we're more involved with the community than with the provincial picture. We didn't think you wanted to hear that all again anyway.
Ms Harrington: I know you're very good at organizing events. A year ago last February you organized about 250 or so people on an anti-labour rally that you held here in Niagara Falls. My question to you is, how do we reach out to this community to have it say very clearly what its opinion is on this?
Mr Hagarty: Incidentally, thank you so much for the very positive comments. I'm so glad I came this afternoon. I was frightened to death at the outset, but you've completely relieved every concern I've got with your compliments.
My background is marketing. Of course, the standard answer to that kind of challenge is research, and it would involve the design of a very simple questionnaire that addresses the problem you want to solve, which in this instance is really simple: Do you or don't you want a casino?
Ms Harrington: People have to know to know what they're getting. They have to have an idea of what they're voting on or responding to.
The Chair: Ms Harrington, we have to move on. I'm sorry.
Mr McClelland: Actually, the question I was going to ask has somewhat been addressed. I was interested in knowing what kind of assurances you were looking for, particularly as you turn to page 13. I suppose it's partly a characteristic of the beast we call this political machine of whatever persuasion in the province of Ontario, and indeed perhaps all democracies in the world.
You have had assurances stated by the parliamentary assistant. I have said to him on many occasions -- you may or may not want to comment on this -- that his assurance that Windsor will be the only pilot project and that it'll be studied is the policy of today, but then again, tomorrow I suspect they'll be a little bit different.
In the context of the 10% assurance that you've been given -- and this is my fear for your industry; you say without that you can't support the bill -- my suspicion is that, just as the government says we are only going to do Windsor, the pressures will be such that some time before the 1995 election, there will be five or six other locations announced in this province. I think that's virtually inevitable.
Likewise, I suspect that as the casino gets up and running in Windsor, the pressures to produce a profit will be such that they will say: "We've got to be competitive. They're going to have one in Detroit; we've got to be competitive. We're going to change the rules with respect to alcohol on the floor. We're going to go full scale in terms of doing the attraction, the type of entertainment and the buffets at $3.95 for all you can eat, as they have in Vegas." Those pressures are going to be there.
There's a gentleman who came before the committee in Windsor. He was in retail and he said: "Let's be realistic about it. Let's not pretend we're going halfway. If you're going to go, go all the way." Indeed, you had a gentleman here this morning from your community, representing the chamber of commerce, who said that if you're going to do it, do it full scale and professional, that you've got to do it a little bit better than the competition stateside.
In that context, I ask you, how can you realistically rely on assurances? I suggest and I firmly believe -- not to be negative, just that the pressure's going to be so great -- that you're going to see that those assurances given today in all good faith -- my friend is an honourable man -- will change and that you'll see the numbers change drastically.
What kind of assurance do you want? I guess in a sense you've already answered it. I just raise that partly as a personal opinion and perhaps it'll elicit some sort of comment in response from you.
Mr Hagarty: Thank you for the concern.
Mr McClelland: I don't know if you want to comment.
Mr Hagarty: I wish Paul Oliver were here. I understand he's --
The Chair: Our time has expired. Thank you for making your presentation this afternoon.
JOHN HAYES STABLE LTD
ESCARPMENT FARMS LTD
The Chair: Our next presenter is John Hayes, for John Hayes Stable.
Mr John Hayes: I want to thank the committee for allowing me the opportunity to address the subject of Bill 8. My name is John Hayes. I'm an equine veterinarian and standardbred horse trainer. I live in Beamsville, Ontario. To my right is Linda Lockey. Linda is a member of the Ontario Federation of Agriculture and co-owner of an agriculture establishment in Niagara concerned about the impact of casino gambling on the future of their agriculture endeavour and lots like hers.
Welcome to the wake. We are gathered here today to pay respects to a dearly departed friend. When a heart stops beating, we can only have remorse for the insensitivity that brought us here and mourn the vitality lost for ever. Having been intimately acquainted with the deceased since childhood and as a business associate in my adult years, this eulogy is tempered by disbelief and bitterness, realizing that it never had to be.
For those of you who didn't know the victim, allow me to elaborate. Optimism, the soul of horse racing, has been bludgeoned to death by a cold, calculating and cruel assailant, the incumbent provincial government and its casino gambling plans. Horse racing, by nature, is predicated upon looking forward. Winners are anxious to repeat, and losers can hardly wait to change strategy and try again. The chance for an opportunity tomorrow is the lifeline of the competition business. What makes this execution particularly galling is that thousands of lives are being upturned and rerooted in pessimism. The structure for a buoyant tomorrow has been regulated to death. When your regulator is your competitor and uses this unfair leverage to your disadvantage, optimism dies.
John Hayes Stable Ltd is a small business located on a farm at Beamsville. We presently employ thirteen people, nine full-time and five part-time. Our business is training and racing standardbred horses. The racing mainly involves day trips from our farm to Ontario racetracks. Our client list numbers approximately 16, and these people come from as far away as Montreal and New York City but mostly are Ontario residents.
Allow me to characterize our small business as defined by payroll records and 12-month expenditures from our last financial statement. Data to that effect are in front of you; I submit figures spent by our small business. In an orderly fashion, we have listed expenditures for feedstuffs of $21,500; farrier services, $20,000; bedding materials, $25,000; harness supplies, $34,000; our total payroll in this period, $266,000; our total expenditures, including purchase of trucks, trailers, fuel, service etc, on and on, $675,000. These numbers definitely support the contention that our community is impacted by our business's existence. When you multiply these figures by the number of small business racing entities across Ontario that are equally imperilled by the NDP's recent gambling initiatives, many communities are going to pay for the heralded benefits of a few.
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Further, let's open the casket and view the real victims of this plunder and pillage, my full-time employees. The pessimism engendered in my horse-owning, bill-paying clients is resulting in declining interest. Need I explain that fewer horses trained because of government-created pessimism means fewer employees?
A brief description as follows defines that these people are vulnerable if their employer and the industry in which they've invested their training aren't financially viable. Believe me, any reduction in current purse levels makes racing financially questionable.
Anticipated declines in wagering of 30%-plus, and these are declines that have been experienced in every other jurisdiction where casino gambling has been introduced, don't bode well for my employees. Again, you have data in front of you that briefly outline some characteristics on the age, sex, length of employment, previous employment and education of my full-time employees. As you can see, a lot of them are not easily transferable.
Although my presentation has been satirical in tone, my message is brief but deadly serious. I'm fighting for my business life. I've invested 20 years of time -- make that 40 years if you include my father, a co-owner of John Hayes Stable Ltd -- and significant dollars in land, horses, equipment and people, only to find myself being legislated out of existence. Fiscal mismanagement, a trained-seal mentality and vested-interest tub-thumping are resulting in a "my way or the highway" government. But, I suppose, what else can I expect from a government that doesn't know which of its employees is coming to work tomorrow?
I respectfully submit my submission. Linda and I would be happy to entertain questions on this subject.
The Chair: We have about 22 minutes left. That would be about seven minutes per caucus to ask questions. But I did have an opportunity to read over Ms Lockey's written submission, and if you would like to quickly read that into the record, that's quite acceptable.
Ms Linda Lockey: Thank you. My name is Linda Lockey. I am the co-owner of Escarpment Farms Ltd. I am also the second vice-president of the Niagara South Federation of Agriculture. We are very disappointed that the efforts of our local OFA field representative to book a timeslot for a verbal presentation to the hearing committee was not successful.
Escarpment Farms Ltd works 500 acres in the town of Pelham. Approximately 25% of our gross income is derived directly from the horse racing industry. Government policy appears to be heading towards the preservation of agricultural lands, yet the casino policy is one more nail in the agricultural coffin.
We are trying to provide a decent standard of living for our families and, in the process, are preserving the family farm. If we lose another 25% of our income, our family farm is in real danger of becoming another bankruptcy statistic. We have just had another family-owned feed mill declare bankruptcy due to a sagging agricultural economy, so the threat of bankruptcy is real.
There appears to be an attitude among some local urban MPPs that this is a rural issue. If our farm goes under, we take with it 35 acres of high-quality juice grapes, 200 acres of milling grain and 75 head of beef cattle, all of which end up on the dinner plates of the residents of the Niagara Peninsula. It is our respectful submission that this is not only a rural issue but one that affects every resident of Ontario who eats.
Escarpment Farms is just one of the many farming operations in the Niagara Peninsula which rely on the horse racing industry for their family income. I have not even touched on the economic spinoffs this farm creates in the local community. Tractor dealerships, tire repair businesses, insurance companies, both vehicle and buildings, and veterinary clinics are just a few that are impacted by Escarpment Farms.
I urge you to please support the agricultural community in opposing the casino gambling issue. Thank you for your attention to my submission.
Mr Martin: Thank you very much for a very dramatic presentation to highlight what you feel, and others in your industry who have come before us over the last three weeks have presented in a very eloquent way the challenge that's out there for you as the government moves forward with this initiative.
I daresay the reason we take our time in this and do it, as we've said so often, cautiously and carefully is that we know it's not a simple thing we do and that it will have ramifications for different communities, yours in particular.
We are doing what we can, although I'm sure in the end it probably won't be as much as you would hope. But we will do what we can to try to minimize the impact on your industry, because we certainly have people within our caucus who speak very eloquently re the concerns of rural Ontario and the farmer. We are for ever, as late as last night, into discussion with each other around how we might do things that would be in the best interests of your industry.
However, having said all that, we find ourselves in some very difficult times, and various industries, your own included, are certainly experiencing some difficulties. Yes, we're introducing a new kid on the block here that will be part of the industry of gaming, that will be seen as your competition. I would ask you, knowing that you and probably others realize that this is coming sooner or later -- the pilot project is going ahead in Windsor, and if that's successful we'll be looking at other opportunities -- is there anything we could do to put your industry in a better position re the whole economic climate out there and this in particular?
Mr John Hayes: If I could answer that, I feel very positively that one giant step is to tax horse racing at the same level you're going to tax casino gambling. It's anticipated that casino gambling is going to be taxed half of what you're already taxing horse racing. Also, I suggest that you tax horse racing in the same structure as the one jurisdiction where racing bottomed out and showed some evidence of revival, that is, in the state of New Jersey, and the reason is that racing is taxed at half a per cent. They are taxing it minimally compared to Ontario. In Ontario, horse racing is taxed to death.
The bottom line is that I think there are two choices. There's the choice of not having casino gambling, which is the first choice. The second choice is that if we have to have casino gambling, at least let us compete, and by competing you have to have a tax structure on our industry that is favourable compared to the competition and not overtax us and undertax them. In New Jersey, they're taxed at half a per cent and they show signs of being able to live with it.
I sincerely hope you can examine this and realize that when the taxation was initiated on horse racing, horse racing was a monopoly in the gambling business, but the same pressures have continued to be applied to horse racing as our legislators have gone into competition with us and brought in all forms of lotteries and then added to that casino gambling and taxed them less than they're taxing us. In other endeavours of life you would call that immoral or unethical, but in the practical business world maybe we'll tone that down and suggest that you consider the ramifications.
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Mr Sutherland: We had the Coopers and Lybrand consulting group in to the committee last week to talk about the report that they had done, and one of the issues they were to examine was the horse racing industry. They looked at the situation in New Jersey and, based on the information there, their reports were about 40% impact in New Jersey. Of course, they have 12 casinos in a very concentrated, limited geographical area, so if you look at it the way they did, as each casino came on, it was roughly about 3% impact of an individual casino.
Given that information, given the fact that we've heard today that the proposal for one in this area is to go after all the tourists who come to this community, some 12 million, and use them as the target group -- and we've heard about making it even more particular than just tourists, but the foreign tourists who are coming here -- do you really think that casino gambling is going to have the type of impact that some people have been suggesting on horse racing, when you look at the fact that you're only going to have one in this area and the fact that the market we've heard from the proponents in this area is to go after foreign tourists?
Mr John Hayes: It's a statistical fact that in every jurisdiction where casinos have been introduced, they have impacted on racing 30%-plus in terms of decline in business. It's not my opinion; it's the experiences that have preceded us. End of story.
Mr Sutherland: If I may, you've said that the government has not done anything for the industry. The government certainly supported the Ontario Jockey Club in its bid to bring the Breeders Cup, in terms of the money it's putting into the racetrack improvement program. The government has been aware of the concerns of the industry and has been trying to respond to those concerns of supporting it.
But as I say, the information coming out of the Coopers and Lybrand study indicated that the impact per casino was about 3% to 4% in New Jersey, and that's why their estimate in the study comes up at roughly around maybe a 5% impact on that industry.
What is the industry doing to attract new people to come out to the industry? We know what the demographics are. We know that it has not attracted a lot of younger people into coming out to its facilities. What do you see the industry doing to respond to increased competition overall, let alone outside of casinos?
Mr John Hayes: I think you're trying to turn the table and tell me that it's my fault, but what I'm suggesting to you is that through this climate, our competitor has been our legislator. The government is our competitor. The government is in the gambling business through continuing added forms of lotteries and now adding casinos. So what are we trying to do? We're trying to prevail upon the government to use common sense. I mean, they are just continuous added forms of gambling in a limited environment.
I'm not sure what you're trying to get me to say, but, for instance, when the government added Pro Line sports betting last fall, that immediately impacted, depending on whose numbers you're using, 6% to 8% on Toronto wagering. Immediately. So what do you want me to say?
The obvious answer is, let the government get out of the gambling business, but it's not going to, so at least treat us fairly. I mean, you can't tax us twice as much as casinos and say you're treating us fairly. I'm not sure what answer you're trying to derive of me, but it's obvious that in every jurisdiction where casino gambling has been introduced, the impact has been large. We only have to go to the one Canadian example, in Manitoba, and it's very obvious how devastating it's been there. Correct?
Mr Sutherland: But in Manitoba they introduced video slot machines at the same time, and we're not at this time going to do that. That makes a big difference.
Mr John Hayes: Of course, but what you're trying to do is separate the hairs and define how much width of which hair contributes to what. The point is that it is the government-sponsored gambling business that we're competing with, and that's what happened there and it destroyed them. Exhibit A.
Mr McClelland: Mr Hayes, I wanted to just comment on my friend Mrs Sullivan's suggestion and logic. It seems to me that the Coopers and Lybrand study was predicated in large measure, particularly with respect to the square footage of a casino, to maximize the potential for the market. So how one can draw some sort of quantum leap of logic and say that there's a percentage linked to the number of casinos is totally absurd, quite frankly. I mean, it's absolutely absurd to say that you develop a casino to maximize market and then say that the erosion, in terms of the horse racing industry, is a function of the number of casinos. That just doesn't wash and it's the most absurd logic, quite frankly, I've heard in the past number of weeks in this hearing.
What I wanted to ask you was a comment with respect to the Coopers and Lybrand report that talks about the impact and the numbers that the government is relying on, numbers that impact the horse racing industry that did not look at the indirect and support jobs. I'd like your comment on that. They have said it will cost 5% to 10% in terms of the marketplace in the horse racing industry, but did not delve into the secondary support behind your industry.
Also, I think you already got into it, quite frankly, the broad range of discrepancy between what your industry has said, the experience, and the government's numbers, but I think we've already begun to touch on that.
So essentially, the indirect jobs, and from your own experience, the impact that this will have on your suppliers and the people that you work with and the people that you indirectly support. If you want to amplify some comments on that, I think that it's important that we understand the total impact and not just within the direct, if you will, ownership and horse owner.
Mr John Hayes: I think that Linda's presentation is the singular example of where the spinoffs from the direct horse racing end up and part of the spinoff direction. Linda and I are not here as representatives of every statistical analysis of the industry; we're small business people. If you're trying to be very critical of me because I can't stand here and take a Coopers and Lybrand report and defend for, against or around it, I think you're being a little harsh. I'm a small business person. I know how it affects John Hayes Stable. I know what it costs me to operate, I know how many people I employ, and Linda has given you a perfect example of a farm operation that sells to me and what it means to her. Of course, if she can't operate her --
Mr McClelland: I'm not being critical of you. What I'm suggesting is that the numbers you are suggesting --
Mr John Hayes: You called me absurd a little while ago; that's a critical term.
Mr McClelland: No, I didn't. I did not say that. I said that the logic over here is absurd. You missed it altogether, with respect. I said that the logic I've heard here is absurd, and it says that the number of casinos is prorated. In fact, quite the contrary: I'm saying I look at your numbers and they're much, much more realistic, that the horse racing industry numbers that you've put forward are borne out of your experience and the reality of the marketplace day to day, and to take some sort of abstract reference to percentages as a function of casino I think is absurd.
Mr John Hayes: My apology.
Mr McClelland: Quite the opposite; I'm saying that I buy your numbers and I'm asking you to elucidate on that because I think that we've got to look at the second layer, the impact right down the pyramid, that it's not just the direct job, and I think you're making the point very well. I was asking you to elucidate on that because I think we're being too narrow in terms of the downside impact. I think the impact will be greater than what the government is giving credence to. In fact, it will not be 5% or 10%. I'd take much, much more confidence in the numbers that you're bringing forward and the economic negative impact that you're suggesting. I wanted you to elucidate on that somewhat and underscore that argument if you will.
Mr John Hayes: Thank you for clarifying that for me.
The Ontario Federation of Agriculture and its affiliated coalition membership represents 40,000 to 50,000 people, depending upon who is interpreting the membership numbers, and all of these people are impacted by the next level above or around them. Linda is the example, my truck dealership is an example etc.
So we're talking about a lot of people potentially down the line. Not all of them are getting directly broad-sided. The first layer gets directly broadsided, but after that, there is impact, and these are numbers that the Ontario Federation of Agriculture and the Coalition of Horse Racing Against Casino Gambling have generated, and those are the numbers that I'm presenting to you.
So yes, it's multilayered in its impact. It's one thing to project what might be as far as generating something; it's another thing to see what actually is existent right now and where it is going, because we have the examples before us of what each increment layer of lottery input has done to racing in their gambling forms, and added increment layers are just going to project the same way they have in other jurisdictions. I hope that has touched on that.
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Mr Carr: Monte, you can have it.
Mr Kwinter: Mr Carr has gracefully allowed me to just make an observation. Mr Hayes, I take your point and I'm very supportive of the idea of at least giving you a level playing field in terms of the taxation, but just to put it in its terms so we know what we're talking about, the total wagering in Ontario is $1.85 billion a year. The takeout by the provincial government is 7%, of which 2% goes to the Breeders Stakes, so it's 5% that the government actually gets. The 2% is rebated.
What that means in real dollars is about $54 million, and if they were to have the same tax as, say, New Jersey, it would be about $5 million, which means that $50 million would be left in the industry, which would make the difference, you would still be probably impacted by casinos, but it would certainly go a long way to keeping you somewhat competitive.
When you consider that the casino in Windsor is projected to net for the government between $110 and $140 million, if they just took a portion of that one casino, they would go a long way in keeping the racing industry whole and your industry whole. I think it's important that that knowledge be in the record.
Mr Carr: I appreciate your coming, particularly on such an emotional issue. You said you're fighting for your survival. Just to clarify, Carman was talking about the absurd figures from the government, not your own, because we appreciate your coming forward.
The problem people have, as you've probably heard today, is that the people in Niagara are looking to this for jobs. What they don't realize, what the OFA and the various horse racing people have come forward to tell us, is that we're going to lose jobs. The numbers are 20,000, whether it's one for one, but we're going to have a tremendous impact on rural Ontario where we're already having problems because of the agriculture. If the casinos come in in Sault Ste Marie and one in Niagara, everything in the Coopers and Lybrand report, do you think these people you've listed here will be employed?
Mr John Hayes: My suggestion is that these people will have a difficult time finding employment readily in the casino business if there's special training required.
Mr Carr: You feel it will put you out of business?
Mr John Hayes: Definitely. Why the tone of my presentation is on the edge is because, as I said, I'm fighting for my business life. I can't take any more abuse and stay in business. John Hayes Stable is dead in five years if the projections that have been put forward for casinos in the future come to fruition.
Mr Carr: I appreciate that because I think it's important for the people of Niagara to know that. Of course the Niagara region encompasses other areas, and I don't think the people in Niagara Falls have had an opportunity to hear that. We in this committee have, having sat in Toronto. The people in this city are looking forward to casinos, and you heard the mayor and everybody, but it is interesting to note that there will be job losses as a result of the casinos coming in. I think what we're going to see is a shift from some of the rural jobs in horse racing to the urban area, and hopefully the people in all the cities and towns that want it will reflect on what it's doing to an industry, and probably not just an industry but a tradition in this province going way back.
Again, I want to thank you for coming forward. I know it's an emotional issue and it's tough to do, and hopefully the government will take that message, particularly some of the interesting points you made about the tax, and do something to assist you. Again, thank you very much.
Mr John Hayes: Thank you to the committee.
The Chair: Ms Lockey, Mr Hayes, thank you very much for presenting before the committee today.
BOURNE LEISURE GROUP LTD
The Chair: Next we have Ian Wilbraham, divisional director, and Wilbert Dick, director, representing Sherkston Shores.
Mr Ian Wilbraham: Good afternoon, Mr Chairman and committee members. Along with our presentation, we do have some visual aids as well, which are displayed over there. My name is Ian Wilbraham and I'm going to make a presentation on behalf of the Bourne Leisure Group Ltd.
Bourne Leisure Group are the owners and operators of Sherkston Shores, a 550-acre lakefront resort in Port Colborne, illustrated on the map. Bourne Leisure is a British company and I am Bourne Leisure's divisional director responsible for our North American operations, which include Sherkston Shores as well as a large recreational vehicle resort in Sarasota, Florida.
I'm assisted in this presentation by Wilbert Dick. Wilbert is a director of Sherkston Resorts Inc, our Ontario operating company, and Wilbert, as the former Niagara regional chairman and former mayor of Niagara-on-the-Lake, has over the past two years brought to our board considerable insight and assistance in developing the tourism goals for our resort within the peninsula.
Bourne Leisure Group Ltd is one of the world's largest privately held recreational vehicle resort owners and operators. The company was formed in the 1960s and maintains its head office in a new office complex in Hemel Hempstead, England. Bourne owns and operates 30 resorts including Sherkston Shores and Sun-n-Fun in Sarasota, Florida. In the UK, the resorts are all in coastal holiday regions and vary in size from resorts with 1,600 sites to smaller 350-to-400-site resorts.
Bourne is a family business, selling holiday homes and catering for family holidays. The company's annual sales exceed C$150 million and the company has a net worth valued at $200 million. It employs 2,000 people, plus almost twice that number seasonally.
British Holidays, Bourne's operating company, will sell in 1993 almost three million holiday-bed-nights including approximately 72,000 at Sherkston. The resorts mainly provide seven-day and 14-day holidays, although some shorter packages are available. In total, the company controls over 22,500 caravan or RV sites within its resorts. Approximately 1,500 of these sites hold caravans or RVs owned and operated by Bourne. The remainder are privately owned and rented by Bourne on an agency basis.
In the UK, the UK resorts earn their profits from a combination of caravan sales, rental income, retail sales, food, family venues with licensed facilities and amusements. Family amusement arcades account for approximately 24% of the out-of-pocket spend by the average holiday-maker at a Bourne UK site and produce approximately 22% of Bourne's total annual profits.
In the UK, the gaming legislation under the Gaming Act of 1968 permits two levels of gaming machines within a controlled environment, not associated with a casino facility. At the higher level, gaming machines are permitted within membership-controlled facilities. These machines operate on a 40-cent stake with a maximum cash payout of $400 per play. The UK legislation also limits the number of machines in each venue and an age restriction of 18 years of age is in place.
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At the lower level, AWP machines, amusement with prizes machines, are permitted in unlimited numbers within more conventional amusement arcades, as we have here in Ontario with video machines etc. These machines operate on a 4-cent, 10-cent or 20-cent stake, and the maximum payout is $6 in cash or $12 in tokens. Tokens cannot be redeemed for cash, only prizes or further plays. The minimum allowed payout for these machines is set at 72%. All venues for either type of machine must be licensed in the UK by the Gaming Board, which includes personal investigation by the Gaming Board of all individual licence holders.
This aspect of gaming has not been addressed by Bill 8 or by the Coopers and Lybrand report and we feel should be considered by your committee.
The remaining 76% of holiday-makers' spending money is spent in family venues, licensed bars and on food and shopping. These profitable operations allow state-of-the-art holiday facilities, landscaping and environmental programs to progress more speedily.
Looking at income and profit ratios: Of the profits made after dividends of our group, approximately 30% goes to the government in taxation. The majority of the remaining 70% is reinvested in the properties and in acquiring new development opportunities. Although caravan sales account for the biggest share of our profits, this income stream is susceptible to economic influences because of the high-ticket items involved. The amusement arcade revenues, however, have consistently risen year on year, echoing cultural trends towards small indulgences in place of larger capital expenditure.
The Bourne Leisure Group started business with one resort, grew organically, acquired a small group of resorts in 1979 and has continued to acquire sites ever since. Currently, their sites number 30, with five-year development plans in place at the majority of the sites. The family holiday business has grown exponentially in the last 10 years and looks set for healthy growth of 20%-plus per annum.
Holiday home sales have been hit, as have all businesses, by UK and world recession; however, Bourne have probably sold more caravans and RVs than any other resort operating company in the world.
Of our recent developments, Bourne's profitability, and in particular the holiday business, is based on investment in the provision of facilities in attractive settings operated by friendly staff.
During 1992-93 at Haggerston Castle in Northumberland, England, Bourne built a tower complex, a family venue providing over 30,000 square feet of amusements, clubrooms and indoor pools at a cost of approximately $4.5 million.
At Sherkston, the total expenditure to date exceeds $8 million. This has provided a swimming pool, a miniature golf course, a baseball diamond plus park home and RV sites and an extensive landscaping program. In the UK, these investments are all funded from cash flow. However, at Sherkston, this has all been new cash injected into the business.
Bourne Leisure was started as a family business and remains so. The founders, the three principal stockholders, continue as executive directors. The foundations of the business lie in the concept of family resorts, family holidays and holiday home ownership.
Sherkston Shores follows this philosophy and will continue to do so, and in so doing, it ensures long-term commercial success. Since Bourne acquired Sherkston in 1988 for $8.5 million, the money to guarantee future success has been poured in at the rate of almost $2 million per year. The park now has zoning for over 3,000 sites as well as increased leisure facilities.
In the next seven years, with or without the casino project, Bourne expects to invest at the same or increased levels. Profitability is obviously the key to this continuing investment program. There is no doubt that permission for a resort hotel casino and/or an amusement arcade would positively affect this investment program.
Sherkston Shores was originally set up in the early 1960s as a camping and RV site. When Bourne Leisure acquired the business, it was rundown, holiday-makers were a rarity and the reputation of the resort was deteriorating rapidly. In the past five years of Bourne ownership, holiday bookings have doubled year on year, the goodwill has been restored and break-even has been achieved. The future success will depend on Sherkston's ability to reinvest in profit-making facilities while improving the holiday home sales figures. The projected target of one million holiday nights, if achieved, will be the measure, not the engine, of profitability.
It's taken us almost five years to obtain the zoning necessary for the redevelopment of the Sherkston site. During this time, Bourne has gained experience of Sherkston and the Canadian and the USA market. This has allowed the latest concept development plan to be produced in the confident knowledge of the needs and demands of the business. The casino project and the potential of including family amusements in the plans opens up further exciting possibilities for Bourne Leisure, for Sherkston, for the whole peninsula area and for long-stay tourism generally.
Sherkston, as I said, is working on a phased investment plan, and as soon as permissions are finalized, Sherkston will begin work on a new sewage treatment plant. This will be introduced in phases with a total cost in the region of $4 million. The landscape development is a rolling program. More than 1,000 saplings and many thousands of shrubs and flowers have been and will continue to be planted, with expenditure counted in the millions of dollars. In addition, plans for a nine-hole golf course are being developed with specialist consultants. Total expenditure on these projects will exceed $5 million. The major program under way relates to the creation of park homes, RV and tenting sites. To complete the sites for which permissions exist will cost almost $11 million.
Mr Wilbert Dick: I've been asked to cover some of the aspects directly in Sherkston as they affect the Port Colborne and the Niagara communities.
Since Bourne acquired Sherkston, direct and indirect employment amounts to 250-plus persons with an annual payroll of $1 million; also, representing a local expenditure, including realty taxes of $2.5 million.
Green Sherkston: We have not overlooked the aspects of the environment. In the UK, most Bourne resorts adjoin nature reserves, coastal protection zones or sites of special scientific importance. At Sherkston, the company has begun a $2 million rolling landscape program, has spent $250,000 improving the shoreline defences and committed a further $500,000 to protection of sand dunes and the environmental protection zones.
Sherkston's current marketing expenditures: Sherkston's core business is selling park homes and recreation vehicles. In order to increase this business, almost $600,000 was spent in 1992 on press and radio advertising and other forms of promotion.
The resort as a whole spends a further $300,000 on brochures etc, and in addition, support marketing from the UK accounts for at least a further $400,000. This marketing spend heavily emphasizes not only Sherkston, Lake Erie and Port Colborne, but also the wider pleasures of Ontario. Local facilities such as the Sugar Loaf Harbour Marina, recently built in Port Colborne, and tourist destinations such as Lake Erie and Niagara Falls are also heavily promoted.
Tourism: Sherkston is a major tourist destination in its own right with, research confirms, a very high recall rate. It currently attracts approximately 100,000 long-stay visitors and 50,000 day visitors each year.
Sherkston recently played host to the National Jet-Ski Championship, an international volleyball tournament and many other large-scale events. The largest sandcastle ever built in Canada, the Gulliver figure on the Sherkston shoreline, attracted over 20,000 visitors. The spinoff business is incalculable, but significant for all the Ontario tourist attractions.
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Mr Wilbraham: Sherkston income shortfall: Despite injecting capital at the rate of almost $2 million per year, to date the investors in Sherkston have drawn no dividend. The resort at the moment has not reached critical mass. It does not have sufficient developed sites with park homes and RVs in situ. It does not have the wide range of leisure facilities in place yet, although these are in progress. Critically, it does not have the highly profitable family amusements and licensed venues of an equivalent UK site. As a result, the average income per site in one of our UK parks is $4,146. That is almost double what is achieved at Sherkston of $2,375.
Amusement machine statistics: The amusement machine and arcade business earned the UK government approximately $450 million in taxes in 1992. This figure is expected to increase to at least $500 million and possibly $600 million in 1993. Accurate figures are unavailable, but based on an average tax percentage of 10%, this would extrapolate to a total estimated gross revenue of approximately $5 billion. This tax is in the form of individual machine licences, and in addition to these fees, value added tax of 17.5% is levied on all machine revenues.
Many holiday destinations and individual resorts rely on the profit from these facilities to underpin their businesses. Currently, this cash boost to the Canadian economy and the tourism and resort business is denied by restrictive statutes. Relaxation of the gaming laws will benefit jobs, tourism and the economy.
Sherkston as a potential casino site: Sherkston, should it be selected as a site for a casino and resort hotel, can offer many unique advantages. Foremost is the Wyldwood beach site of approximately 50 acres, with more than a mile of beach frontage, next door to an established long- and medium-stay holiday business. Access via highways and local roads is excellent, and the proximity to the US border and airports is a further advantage. Add to this the controls available through developing a greenfield site managed by a vastly experienced resort landlord which holds more than 50 UK gaming licences controlling a specialist operator, and Sherkston can offer a winning combination.
It is our opinion that a casino located within the Niagara Peninsula will generate revenue almost wherever it is located. Sherkston Shores is already established as a long- and medium-stay tourism resort destination rather than a day-visitor resort, and therefore a casino complex adjacent to such an established long-stay resort will have tremendous economic benefits for the whole peninsula.
In summary: Why a casino at Sherkston? An unsurpassable location on Lake Erie; up to 50 acres of development land available; proposed site has over a mile of beach frontage; an established long-stay holiday business with resort facilities; planning a greenfield site will allow proper controls; Bourne as landlord will ensure a respectable business environment; improved employment opportunities for the Port Colborne and Fort Erie labour pool; a politically non-sensitive site away from an urban environment; excellent access to site, highways, US border and airport; resort hotel will spread tourist spend throughout the peninsula; spinoff day visits to Niagara and Fort Erie will increase; it will attract further UK investment into Canada.
Sherkston has a bright future, with or without the casino project. However, a gaming permission to site a family amusement arcade on the resort is fundamental to profitability and our ability to speed up our development. The Coopers and Lybrand report to the Ontario casino project eloquently makes clear the enormous potential benefits for job creation, tourism development, community economic development, the creation of new viable industry and revenue generation.
The Bourne Leisure Group Ltd trusts that this presentation showing the real and potential effect on Sherkston Shores, by relaxation of gaming controls, has been helpful in its consultation process.
Mr Kwinter: Mr Wilbraham, I'm a little confused. Under the proposal by the government, if they go ahead and expand beyond Windsor, they would designate Niagara Falls as a site. Are you proposing that site be at your location, or are you saying you would like to have a site in addition to that?
Mr Wilbraham: There are two points we're trying to make. One point we're making is the question of the amusement arcades, which would be independent of a casino. We felt that this was the right forum to address that issue, as it doesn't seem to have been addressed. Within our existing facilities, it will be of considerable benefit to have a family amusement arcade. That was one issue. The second issue is that we would like to propose Sherkston as a venue for the Niagara Falls casino. We're putting forward our site as a venue for the casino in the Niagara region.
Mr Kwinter: Just a point of clarification for you: The reason we haven't discussed the VLTs, which are the gambling machines that you're talking about, is that we're discussing Bill 8, which is the enabling legislation to provide for the establishment of casinos. There's no mention of VLTs in that particular legislation, and that was the reason it hasn't been discussed. It's certainly an area that people have talked about informally, but that's the reason why it isn't being addressed.
The other thing, I think it's important so that there's no misunderstanding when you look at the criteria, and I'm not trying to speak for the government, but when you look at its statement of intent, it is to go into a community like Niagara Falls, which doesn't mean on the shores of Lake Erie, but in Niagara Falls for all of the benefits that are supposed to accrue. Just so that there isn't misunderstanding that the sites in this part of Ontario are up for grabs, it's just a matter of Niagara Falls and where it is in the city of Niagara Falls.
Mr Dick: It was not our understanding that the city of Niagara Falls particularly has been approved or is the only location in Niagara under consideration. The Niagara regional presentation talked about a presentation in Niagara.
I think the government has sufficient information to prove that where you put a major facility, a magnet attraction, the larger the metropolitan area, the less benefits spread out into the province, to other areas of the province. In other words, the dilution factor of putting this in a major urban centre like Niagara Falls is not as great as if you put it in a more rural area. It spreads the benefit to a larger area than putting it in an urban area.
Also, I think we're quite aware of the dangers and the concerns regarding some of the social impacts. We feel that a place like Sherkston lends itself more to dialogue with the community in achieving certain controls which would be easier to control in such an environment than they would in a more urban centre like Niagara Falls, and a little bit removed from the border.
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Mr Kwinter: Just as a further comment, I think it would be fair to say that even the most ardent proponents of casinos in Niagara Falls or any other community, if they had their druthers, if they had their choice and things were booming, would not accept the casino. I think that's a fair statement.
I think what is happening is that those who sort of bit their tongue and said, "Well, if casinos have to be, they have to be," but the only thing that's driving that is that they want to be able to maximize what is here. They're looking for it as a catalyst to get the restaurants and get the tourism business and everything going to help the city of Niagara Falls. I think that is what's driving this thing. Without that, I don't think you'd have any support, I really don't.
Mr Carr: Thank you very much for a very interesting presentation. Do you see if in fact the casino does come to Niagara Falls, you getting a spinoff benefit anyway just by the close proximity?
Mr Wilbraham: I'm sure there would be spinoff benefits, yes. I think the one other point that we have tried to stress is that what we do have to offer at our Sherkston resort is a relatively long-stay destination. In other words, most of our customers stay at our resort for a week to two weeks; probably our average stay length is five nights. We feel that by drawing those type of people into the community who are going to stay for a medium- to long-term stay, the benefits for the whole region will be greater than people coming to a facility, say, like Niagara Falls, which is more into the day-tripper market.
Mr Carr: Do you see, if Niagara Falls gets a casino, your being able to put amusement machines in and getting some of the spinoff in that regard as well and in making it almost another attraction to the entire area where people would come down and go there and then maybe come over for some of your activities? Do you see that happening as well?
Mr Wilbraham: I think that definitely would happen. That would be very positive for us, yes.
Mr Carr: So the best case is to have a casino in your area. The second best is, though, to have it in Niagara Falls.
Mr Wilbraham: That's probably fair to say, yes.
Mr Carr: Thank you and good luck -- a very good presentation.
The Chair: I want to thank Mr Wilbraham and Mr Dick for making the presentation this afternoon.
J. TOTHFALUSE AND ASSOCIATES
The Chair: Next is Joseph Tothfaluse, president of J. Tothfaluse and Associates, tourism consultant.
Mr Joseph Tothfaluse: Thank you, Mr Chairman, for allowing me to speak on this matter. First, may I say that I will not get into any of the economic background of Niagara because it has been covered fully. I will also not get into the comparison of one city to another because I believe personally, myself, that Niagara Falls cannot be compared with any other. Also, before I start, there will be, I'm sure, in my presentation, one point that some people may take exception to. May I just point out right now that I respect the Good Book and I'm also a realist. I only state it as I hear it.
To go on, tourism is the largest employer in the world. Niagara Falls is the heart of Canada's tourism. Niagara Falls is unique. It has the potential to draw visitors from the vast world market. In order to maintain its uniqueness, Niagara Falls needs a total new image. Beautiful cities can be found in every country in the world, but not another Niagara Falls.
Niagara Falls, being one of the world's natural wonders, possesses magnetic powers recognized and accepted around the world. These powers control the tourism industry in the Niagara area. Niagara Falls is a priceless jewel in Canada, and Ontario is very fortunate in having this jewel in this province. The magnetic power of this famous jewel must be capitalized upon. By so doing, we can change the image of the whole tourist industry for the next century. The potential to achieve this is as great as the imagination of the mind.
The key to success is to respond to the changing needs of the tourism market. This wonderful tourist engine is obsolete and totally worn out. It has faithfully served its purpose. Now, drastic measures must be taken to create a state-of-the-art rocket to propel the tourist industry into the future.
Having a vested interest in the community's affairs, I have undertaken this study to provide views pertaining to a change of image for a new direction for the tourist industry of the future.
The TCC image: Tourism, conventions and casino image. Its purpose is to encourage and strengthen the economic base of the Niagara region.
Niagara Falls must meet the needs of older travellers, families, youth and children, the well educated, the prosperous and the increasing number of international tourists who have the choice of attractions worldwide and are demanding higher-quality goods, accommodations and services.
The challenge for Niagara Falls is to establish a suitable year-round, world-class destination responding to the needs of a wide range of visitors. To achieve this, a new theme must be developed that will create images of Niagara Falls as a destination for visitors from all market segments -- a theme renewal that ensures a unique and fresh experience for both the first-time and repeat visitors.
To extend the length of stay, Niagara Falls and the parks system will continue to attract a large volume of tourists, including repeats. The expectations of these existing visitors challenge the city and region to fully service their needs for several days, and they will come during the shoulder and winter seasons.
The TCC image will entice upgrading services and facilities, including world-class accommodations, restaurants, shopping, new attractions, entertainment -- above all, offer good value.
A quote from the economic impact study:
"A total of 10.9 million person-trips to Niagara Falls are forecast for 1987. To our knowledge, this makes Niagara Falls one of the most substantial tourist attractions in North America.
"The total number of person-trips forecast for Niagara Falls is similar to that experienced by Orlando, Florida, the home of Disney World, which receives some 10 million overnight person-trips per year.
"The major difference between Orlando and Niagara Falls is the length of stay of visitors.
"In Orlando, some 90% of visitors stay overnight and the average length of stay of overnight visitors is just under six nights.
"In Niagara Falls, only 30% of visitors stay overnight and the average length of stay of overnight visitors is 1.5 nights.
"The level of development and economic activity generated by tourist activity in Orlando is consequently far greater than that generated by a similar number of visitors to Niagara Falls."
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A quote from the Tourism Tomorrow government study:
"The international convention and meetings trade is highly competitive. It is not uncommon for some US cities to spend as much as $6 million to land a major convention. Canada will have to be clever to protect its investment and market share from cut-throat competition.
"An aggressive marking strategy aimed at the $35-billion-a-year US market is essential. As noted earlier, Canada already attracts about half of all US conventions held outside that country, and even a modest increase in that share would add millions of dollars to our total travel receipts."
Statistics tell us Canadians spend 17 times more tourist dollars per capita in the US than US tourists spend in Canada. These statistics are widening annually. I believe these statistics tell us something very important. The future tourist expectations for entertainment enjoyment are becoming very sophisticated. We do have a major challenge, from not just the US but all countries of the world. They are all making tourism their number one priority for growth in their economy.
For example, Hungary, with a population of approximately 11 million, half the size of Ontario, saw tourism as a strong vehicle in their economy a few years ago. Tourism at that time attracted some 3 million visitors annually. Since their upgrade in tourism, awareness of tours of the country, accommodations, conventions, conferences and nine major casinos in Budapest, the latest opened in December 1992 by investor Sylvester Stallone, have increased tourism dramatically to over 36 million last year. They expect increases to over 50 million in a year or two.
We must tap deeper into the obvious potential, the US market of over 250 million persons and the vast world market. This can easily be achieved by Ontario's advantage of no tax on winnings and 30% currency exchange, especially on US dollars, which would add to the obvious visitors increase by convention and casino business, coupled by the magnetic powers of Niagara Falls.
The federal, provincial, regional and municipal governments are drastically seeking job creation programs and new tax dollars. The following, I believe, will be strongly considered by them.
Niagara region, through legislation, can be designated as a self-governed, legalized open gambling status, a Canadian Las Vegas. This is only sound business sense. Centralizing all efforts into one area would create an oil-gusher type of revenue source for the provincial, regional and municipal governments, which is very much needed at this time. New casino-style hotels would spring up immediately, each with a distinct theme, as an attraction by themselves, creating thousands of jobs immediately and long range, thereby attracting many more millions of tourists and visitors.
Tourism, conventions and casinos are attracted to each other. Las Vegas, the most famous casino region in the USA, is the only region not affected in this recession. They are now realizing that tourism, conventions and casinos go hand in hand. Las Vegas is now building hotels especially for family-type entertainment, theme parks to be open 24 hours a day. In fact, visitors are spending as much time sightseeing and at stage shows, shopping and theme parks as they do gambling.
Niagara Falls is already a family entertainment destination recognized around the world. Therefore, by expanding into conventions and casinos, the city is only completing what is truly needed to satisfy the future visitors' sophisticated needs.
Making the Niagara Falls region a mini-Las Vegas would localize all the operations of the gambling industry. Licensing and protections are much more easily controlled in one area. This could also allow stronger control between casino operators and local and provincial government, minimizing any problem.
The location of Niagara Falls is also very important in this project. It offers four international bridges, two major airports, an excellent highway system and rail and water transportation.
The provincial government would be creating its own cash cow to satisfy financial needs, an important vehicle for the future.
What future is in sight for Niagara Falls in this proposal?
Las Vegas stats as of April 1993: 80,000 rooms, with 97% average occupancy annually; major hotels average 3,500 to 5,000 rooms each; 11,000 rooms under construction; 21,000 room permits issued, not yet started; in 1992, over 21 million persons flew in by plane, plus bus, train and car; all establishments and municipalities offer excellent security systems; cleanliness and hospitality with organized services; average home taxes $600 to $800 per year; no corporate taxes; no school taxes; all businesses pay 50% of net profit taxes; all construction jobs operate 24 hours a day; high sensitivity to industries relocating or starting up in the area.
MGM Hotel is planning a 24-hour-a-day theme park with a teenage hotel tower with special teenage entertainment.
Controlled gambling and free lessons; gamblers out of control are stopped and helped by counselling.
Las Vegas council sent letters to all the residents soliciting help to find 25,000 construction workers needed for projects. Also, 2,000 teachers are needed for new schools.
A hotel under construction is planned to open in October 1993 and is fully booked for 14 months in advance.
High-quality hospitality is experienced everywhere: casinos, malls, restaurants and on the streets.
Reasonably priced entertainment, meals and free drinks of your choice while gambling make tipping earnings very high.
I strongly believe that if local authorities approach this suggestion in a businesslike manner, pointing out the full benefits to all concerned, the presentation will get the full attention of the provincial government, which could consider it as a viable solution to a great part of its problems and a viable alternative to job-cutting and tax-raising to pay down the large deficit burdening everyone at this time. This could turn the economy of Ontario around in a very short time.
Locally, the advantages would be the greatest, a totally new image. With the coming of new establishments, new markets will open, adding to the family visitors, the large convention business and the ever-popular casinos.
The spinoffs can only be judged by the imagination and effort given to this concept, creating lower taxes and high employment. And yes, churches would also benefit from the millions of extra visitors who pack churches, as in Las Vegas, three to four times a Sunday, praying for good luck and giving generous donations.
In order to be the gateway to the rest of Ontario and Canada, as accepted by the provincial tourism study of 1985, Niagara must first be accepted by local, provincial and federal governments as the crown jewel of tourist destinations. In every aspect, this city is the essence of tourism and is incomparable anywhere in Canada. Niagara Falls is unequalled. Therefore, it is imperative that it not be grouped as one of seven Ontario cities bidding for a casino. Instead, immediate action must be taken to take full advantage of this opportunity Niagara Falls offers, the potential to support several casinos to world visitors.
With proper government-controlled legislation, Niagara Falls has the distinct potential to rival worldclass destinations such as Las Vegas and others. The commission here today has the duty to recognize Niagara Falls for its uniqueness and its wealth of potential. Niagara must not be seen as just another city in Ontario in the running for a casino.
My years of experience in all phases of the tourist industry allow me the expertise to express my vision of the future Niagara. It is my hope that these recommendations may contribute in some measure to the success of this endeavour. I will personally support and collaborate with interested minds to further this proposal, whether provincial, regional, municipal or private interests.
I realize that this is a vision, but remember, Walt Disney once said, "Vision is the art of seeing things invisible." This is my vision of world-class tourist-convention-casino destination facilities, the TCC image. Thank you.
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The Chair: Thank you very much for your presentation. I just wanted to advise you, sir, that this is not a commission, it's just a committee of the government. There is a considerable difference, I might add.
Mr Kwinter: I wanted to get a clarification of some of the assumptions you made. You talked about Hungary and you said that it has a population that's half the size. Is it the population that's half the size or land mass that's half the size?
Mr Tothfaluse: No, no, no. There are 11 million people. In terms of area, it is one half of Ontario: in square miles, it is approximately half of Ontario.
Mr Kwinter: You're the second person who has used the example of Orlando. What is the significance of Orlando to this discussion?
Mr Tothfaluse: It's nothing more than to show that Niagara Falls needs more than one pie. It needs a larger pie. It needs more people to stay more than one night. That's all I'm saying, that it can rival those places with convention-casino business coupled with it.
Mr Kwinter: You're also envisioning turning Niagara Falls into a mini-Las Vegas. In other words, you are not looking at just one casino but would like to have this as a miniature Las Vegas. Is that your view?
Mr Tothfaluse: I mean that should one be put into Niagara Falls, it will do what we're saying here, attract world-class high rollers, if you wish, or just world-class people from outside the country etc. If another one is needed, there should be another and another. That's really all I'm saying.
Mr Carr: Thank you very much for your presentation. You've presented a picture of Las Vegas when you talk about the hotels and the theme parks and the planning and so on. They're obviously years ahead. Do you really think that if Niagara Falls gets a casino, one casino, which is what the government has planned -- and I appreciate that you have a vision looking longer than that -- US gamblers are going to come to Niagara Falls to one casino when they have the Las Vegas, as you laid out on page 4 there, that just has so many gambling attractions and things that are geared to gamblers? Do you really think they're going to come to a city with only one casino?
Mr Tothfaluse: I personally believe that they would. The reason for that is, Las Vegas, what has it got? Sand. In order for them to go out and utilize some of their outside attractions, they even take you over 300 miles away. We don't have that in Niagara Falls. We have a Niagara Falls they'll come to see anyway. They're coming to see it. You've heard it all day today: 12-plus million are coming now, and they say 30% stay over. If we keep only a small portion over another night, that is a large portion of the industry.
Mr Carr: What you're talking about isn't necessarily attracting new customers. You said, "We get 12 million already." You want to keep them overnight to get more money spent here in restaurants and hotels and so on. In essence it's going to be tough, I would submit, and I'm certainly no expert, to compete with Las Vegas when you've just got one. We all know, and many of the presenters today have said, "We have many fine benefits here, not just the falls but in the whole Niagara area." But isn't it true that the real gamblers, the ones who go to Las Vegas and spend lots of money and go from casino to casino and really spend, with all the options, Atlantic City and the ones down in the States, we're probably not going to attract them. What we will do is hopefully keep some of the 12 million staying an extra day, but isn't it unrealistic to think that Niagara Falls is going to become the Las Vegas of the north?
Mr Tothfaluse: I would just say that, in time, if it does get to that point, and I'm also stressing, if you noticed in here, conventions -- if we get the three things working, I do believe that in a rotation-type fashion, we will get the high rollers. We will get the people from around the world, because people already want to come to Niagara. Give them more reasons to come and they will come.
Mr Carr: Thank you. Good luck.
Ms Harrington: Briefly, I just wanted to tell you that what this government has been looking at and studying in Windsor is certainly not Las Vegas and is not like the American model. I won't go into the details, but in the back of your presentation you have included a piece from a Niagara Falls review from July 24 with some quotes from our minister of tourism, Anne Swarbrick, about how she envisages Niagara Falls as a real gateway to the province and how important Niagara Falls can be. Certainly, that is not Las Vegas.
Some of what she thinks is that we utilize our city, upgrade this city as a family attraction. What we're talking about here when I say the gateway project is the Murray Hill site, which could be available for a tourist centre because it will likely be decommissioned as a hydro plant in the near future. "Swarbrick said the province is looking for ways to boost Ontario's $17-billion annual tourism to help offset the dramatic losses of jobs and plants in the hard-hit manufacturing sector."
We're working with people all across this province in the tourism business, the hands-on people who know, some from our region but people from all across this province, to have a vision and a strategy for tourism for the next decade or more. Niagara Falls is key to this, and it certainly is not a Las Vegas that we want.
My colleague has a question. Wayne, did you have a question?
Mr Lessard: Yes. This has been a very interesting presentation. I'm from Windsor and I can echo the comments that Margaret Harrington has made that we're not really planning to have a Las Vegas in Windsor either, notwithstanding the benefits that might have to church attendance in our city as well, that have experienced the same decline as they've had here, I bet.
You've dated your presentation May 14, which is long before committee hearings were planned. I wondered for what purpose you had prepared this in May. You must have made this presentation to other people and I wonder what the reception was then.
Mr Tothfaluse: It was supposed to be prepared for the city to work on. It was not done because this started up and I held it for this.
Also, if I may, on your casino situation, I'm merely using Las Vegas not in the perspective of the gambling part of it; I'm utilizing it as the potential of being a major tourist destination; comparable. As I say, with the casinos here, with the convention and the tourism, in popularity we will rival Las Vegas. I'll just say I don't believe we'll ever be a Las Vegas because I don't believe that we'll ever have the laws that they have. But as a tourist destination point, I do believe we could rival Las Vegas.
The Chair: Thank you, Mr Tothfaluse, for presenting before the committee this afternoon.
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TRY ANOTHER WAY COMMITTEE
The Chair: Our next presenters are Rev Harvey Murphy and Rev Lillian Porter.
Rev Harvey Murphy: We are the Try Another Way Committee, and we'll introduce the people present: Rev Dan Sheffield representing the Evangelical Fellowship Ministerial Association -- he is president of that group of evangelical churches; Judith MacCarthy is coordinator of the Try Another Way Committee; I'm Harvey Murphy of the Greater Niagara Ministerial Associations; and this is my colleague Rev Lillian Porter. We will be sharing the presentation on behalf of the committee and members.
First of all, we want to thank you for this opportunity to speak and to share our concerns, the right to express an opinion and to be heard by those who have been chosen to govern is a valuable and precious attribute of democracy and one which we value. It is our duty to speak out when given the opportunity to do so. It is also the duty of elected officials to hear and consider those views. For either of us to fail such duty is to be guilty of failing our civic and moral responsibility.
We are representing ordinary citizens, many of whom have met together, studied and considered the issue of gambling and specifically the proposed introduction of casino gambling in Ontario, most particularly the establishment of a casino in Niagara Falls. We speak on their behalf as well as our own behalf because as responsible citizens we hold opinions which we believe our elected representatives need to hear.
We begin by commending our government leaders at all levels for their urgent concern about the current levels of unemployment and the state of our economy. We share those concerns and many of us have been touched and affected by them.
We have misgivings, however, about some of the proposed solutions to these problems. Specifically, we find ourselves in strong disagreement with those who are advocating the introduction of casino gambling in the belief that such activity would alleviate the unemployment and/or economic ills of our time. We are even more certain such activity would prove harmful and quite possibly disastrous to the quality of life in our community. We are not convinced that our elected officials have attempted to try another way.
Rev Lillian Porter: One of the strongest arguments for the establishment of casinos is that it will create much-needed jobs. But what kind of jobs and for whom? In his book Temples of Chance, David Johnson, an investigative reporter, demonstrates that when casinos arrived in Atlantic City, they were supposed to revitalize a community that was experiencing recession, high unemployment and urban decay. More than a decade later Atlantic City still has the highest unemployment rate in the state. Crime remains endemic and the rate of crime has increased. A higher percentage of its residents live in public housing than in any other city in the United States. Casino gambling creates no new wealth and, instead of high-paying jobs, it generates low-paying ones.
We commend the governments who seek to create jobs for the unemployed. It is a worthy goal but we do not believe that worthy goals justify unworthy means.
While there is much speculation and no doubt exaggeration about the expected revenues from casino gambling, it is an uncertain base on which to build our economic future. Gambling is a recessive form of taxation that is unrelated to income or property. It is, in effect, a tax on the vulnerable. Governments that rely on gambling to make up budgets for social services can place these budgets at risk when gambling revenues fluctuate, and they do fluctuate. We note that while much publicity has been given to the report which speaks of potential revenues, little publicity has been given to the fact that $2.3 billion will be lost by gamblers. We shudder to think what that will mean financially to many families and communities.
The statistics from Atlantic City demonstrate that tourism not related to gambling has decreased significantly. The economic impact on retail has been staggering. In the 10 years following the introduction of casino gambling, only 58 of 178 garment retail shops still remain in business. Costs in policing have quadrupled. Social service costs rose by 300%, and these costs were borne by the taxpayers of the region.
Casino gambling does not bring spinoff trade to the established businesses in the wider community. Things like food, entertainment, shopping, are most likely to occur at the casino or those places immediately adjacent to the casino.
It should not be the role of elected officials to permit, much less promote, activities that prey on human weakness, especially when it is society as a whole that foots the bill. We experience deep apprehension about social costs related to casino gambling, including increased welfare rolls because of people who suffer financial loss, increased policing costs, and increased costs related to counselling those who become addicted or are addicted to gambling. We do not believe that ordinary citizens are willing, nor should they be asked, to bear the increased tax burden which will result from the introduction of casino gambling.
Also, we have identified three likely areas of major concern and major impact.
The rise of compulsive gambling: Maureen Kallick and her associates at the survey research centre at the University of Michigan have shown that where governments sponsor or provide official legitimacy to new gambling operations they significantly stimulate greater citizen participation in gambling.
The research indicates that the proportion of all gamblers who are compulsive is four times higher in those centres where there is casino gambling than in the rest of the United States. It is estimated that an average of 10 to 15 people suffer for every single compulsive gambler.
The province of Manitoba plans to spend $500,000 a year to treat pathological gamblers who need help with their addiction. The province of Nova Scotia has also a similar program and the province of New Brunswick has also studied the problem.
Among the social and domestic costs of pathological gambling are loss of work due to absenteeism, arrest for forgery, disrupted family or spousal relationships, and default on debts or other financial responsibilities.
We have heard government spokespersons assuring us that the proposed casinos would be carefully and strictly regulated so as to prevent criminal elements from becoming involved. We find this a hollow assurance. Evidence from Atlantic City and other centres where there is casino gambling demonstrates that although criminal elements aren't involved directly in the running of the casinos themselves, crime will follow the flow of the money.
It is interesting to note that while concerns over criminal activity have been called rubbish by government officials, the police chief of Windsor has testified that overtures from criminal elements have already taken place in Windsor. Virtually every police force concerned has spoken against the introduction of casinos because of the threat of increased criminal activity.
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It also appears that the much-heralded and -quoted Coopers and Lybrand report did not address itself to the problems casino gambling would bring. Surely the public deserves to know how much increased criminal activity there may be, how much extra policing will be necessary, how much prostitution will increase. Just in that line alone -- many of you may not be aware of this -- Niagara Falls is already known to be one of the major centres in North America for prostitution at this time. How much will that increase with casino gambling and more money being carried around on the streets to go and gamble? How much worse will drug and alcohol problems be? We have seen no study, heard no answers, and the hasty dismissal of such problems will do little to solve the problems or to put our people at ease, nor will it do anything to make our neighbourhoods safe.
Among the many reasons we oppose the introduction of casino gambling is the question of morality. While we as a group here are speaking from a Christian point of view, the moral questions we will raise are asked by all faith groups. For us as Christians, we are called by God to live in love with one another, to respect and uphold and upbuild one another. We believe gambling is wrong because it promotes a get-something-for-nothing attitude, which is immoral because it is false. There are no free lunches, as some politicians are fond of reminding us. Elected government officials, whom we have chosen to lead us, should not be in the business of building false hopes and promoting false dreams.
The truth about gambling is that for anyone to win something, many others must be losers. We remind our elected officials that we did not choose them to turn most of us into losers so that a few promoters could benefit. Governments should follow the lead of many corporations asking moral questions about their actions. Such questions might include the following: Does this action, the bringing in and establishing of casino gambling, as far as possible maximize social benefits and minimize social injury? Is this action consistent with the human rights of those whom it will affect? Will the action lead to a just distribution of benefits and burdens?
Clearly, the answer to all of the above is no. Therefore, we conclude the proposed introduction of casino gambling is immoral, economically unsound, a socially undesirable activity and should not be permitted.
Rev Harvey Murphy: We have one other concluding word about casinos specifically here in Niagara Falls. Niagara Falls is a world-famous city of great beauty. It is a wonderful place to live and one in which we are proud to live. It is a place where we invite family and friends with pride and to which we know they will want to return. Ours is a city for people of all ages. It is a place for children and families, for seniors, for visitors from around the world. It is a place known for its natural beauty, not neon beauty. We want it to stay that way.
Those who know our history know also that it was not always so. What we have today in Niagara is because of the vision of the few and the courage of many who struggled to persevere and to preserve Niagara Falls' beauty from crass commercial exploitation. In other times, shortsighted, profit-hungry promoters tried to shape this region in a different direction. We owe a great deal to those who persevered and held out for Niagara as a place of natural beauty, safety and family life as it is today. We have only to look across the river to see what our Niagara might have been if others before us had let profit for a few be considered the bottom line.
We believe that the true bottom line is not found on the financial page at all, but on the page entitled "quality of life." We are not willing to jeopardize what has been so hard won. We love our city too much. We share and understand the pain of unemployment and a government strapped for cash. We do not believe that casinos are the answer. We urge you, try another way.
Mr Carr: Thank you very much for a very powerful presentation and one done very well. As you know, there were some presenters who came today wanting the government to proceed very quickly: "Don't wait for the Windsor project." To the credit of the government, it hasn't jumped into the other areas even though the mayor here and the mayors in the Sault and Ottawa all came forward. Would your recommendation be to proceed the way it appears now, knowing that you probably won't be able to stop Windsor, but using that as a pilot project so you can slow this process down so we don't start off with them coming to, for example, Niagara before you've had a chance to look at what's happened in Windsor? I know it isn't the best case, but as a sort of a second-best case, would you like to see the government proceed slowly?
Rev Harvey Murphy: As slowly as possible if it must go ahead. One of the things I personally object to is the fact that when this was first suggested, we contacted governments at various levels and were assured that there'd be lots of opportunity for discussion before decisions were made. It appears to us now that decisions have already been made; this is in fact a fait accompli. The only question is where they're going to be. If they have to be, then I would urge that they be done as slowly as possible with every consideration given to the results and looking at all of the results, not just the profits.
Mr Carr: One of the things you mentioned and that the Coopers and Lybrand report talks about is the number of jobs. I think they're optimistic. You're saying that they are more than offset with all the other things that you so ably laid out.
Rev Harvey Murphy: Exactly.
Mr Carr: And you didn't even touch on one of the other industries which we heard from today, the horse racing industry, which believes we're going to lose almost an equal amount of jobs. We're really not going to have any job creation, but we're going to have all these other problems.
Rev Harvey Murphy: We didn't think they needed our help.
Rev Ms Porter: I think new jobs that will be created if a casino is built or happens here are short-term things initially: construction or whatever. It's interesting to note that not only in Atlantic City but in many centres where they have looked at the long-term range of unemployment, in fact the unemployment level had either increased or stayed the same to pre-casino levels. The casino did not increase employment in the long term in the area.
For me, the most surprising and perhaps the most disturbing impact in connection to Niagara Falls is that -- for example, the statistic I gave you about the retail was just one of maybe 30 different things I could have given you out of that report -- tourism not directly involved in terms of around the casino itself drops dramatically. It has been proven over and over again. Even if you get people who come here, the 12 million, and not any more, maybe a percentage of them will come and will gamble at the casino, but they will not spend money anywhere else. They will spend money in the casino. They will likely spend money for their food there even if they have to wait for it, so if you build a small restaurant, they're not likely to go out unless it's right next door or in places immediately adjacent.
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Mrs Judith MacCarthy: I noticed that when other people were making their presentations, you were very generous to some of them and allowed the time to go over. I would very much appreciate it if you would ask someone sitting around the table to ask us the most logical question, which is, what other ways do you suggest?
Mr Carr: Go ahead and answer that, if you would.
Mrs MacCarthy: Thank you, I would be delighted. The Try Another Way committee submits 11 suggestions as alternatives to casino gambling. They are:
(1) The continued preservation and further enhancement of Niagara Falls, the Niagara River, the parks and wetlands, the Niagara Escarpment. The 60 new trees being planted at the Peace Park in Fort Erie right now will freshen the air and delight the eye.
(2) A historical village depicting Niagara's past, including a Lundy's Lane battle enactment, a Laura Secord walk, a Laura Secord drama, local artisans, actors and musicians, special event days.
(3) A Great Lakes water restoration centre -- I don't mean just testing the water; I mean promoting it -- based on the premise that Canada's most polluted water flows past our doorstep. The urgent need to purify all waters is our opportunity to become the pure water capital of Canada.
(4) For all cities in Ontario, a clean city campaign. In the summer, hire youth to pick up litter, using colourful litter bins. Promote clean cities by visiting day camps and Bible schools.
(5) Develop the potential of the unemployed by extending Jobs Ontario, by making apprenticeship programs viable to industry, unions, small business, the civil service. York University's public policy and administration program is trying to expand an internship project of this nature. Encourage local initiatives: for example, Make Your Own Lunch, managed and run by the unemployed, or collective kitchens for women to cook together for their families.
(6) Select Niagara Falls as the comparison city. The executive summary to the Ontario casino project, distributed by Margaret Harrington's office, reads thus, on page 17: "Problems with existing data are that the collection process and scope are not currently designed to measure the specific impact of casinos. The provincial government may therefore find it appropriate to collect specific data on an ongoing basis to measure the specific impacts of casinos." Select Niagara Falls as the comparison city.
(7) A convention centre capable of hosting 2,000 people. Evangelical churches are especially interested.
(8) An August 1 community pig roast with pony rides for children, a rock concert for teens, a good old-fashioned dance for adults.
(9) Promote sharing. Advertise it for its value. Restructure the tax system even further so that the more we give the less tax we pay. You realize that if we share with one another, the government won't need to spend as much.
(10) Listen and think. Ask: Would I want to work in a casino? What do I want for my children? How can I help people feel worthy and fulfilled? The political science faculty at York University calls for a democratic administration. This casino hearing is democratic. You are allowing public participation. Will you allow us to assess your legislation and take part in improving or even cutting existing loss?
(11) Lead us by example. The strength of any government evolves from its members' thoughts, words and deeds. The NDP government encourages equality. Good for you. I challenge you to demonstrate equality as you speak courteously to one another, as you consider the needs of each constituent, as you wisely legislate on our behalf. Thank you very much.
Mr Carr: On a point of order, Mr Chair: Would it be possible -- it wasn't in the handout -- that we get a copy of the 11 points? I know it'll be in Hansard.
Mrs MacCarthy: I faxed it in on Monday but I brought additional copies.
The Chair: Thank you very much. The clerk will get those at the end of this presentation.
Mr Martin: I want to thank you for coming today and recognize the fact that you've brought with you so many who obviously support your position. Many of you have been here since early morning, and that indicates your degree of interest and concern re this subject. Not only that, but Margaret has shared with me her relationship with some of you and the fact that you are indeed sincerely and genuinely concerned and come to this not on some whim of the moment but having thought it out rather well.
I want you to know that there are also many of us in the government who have. We all come to this job from places where we have had lives before, and we represent constituencies and we belong to political organizations that have different values and platforms. So coming to decisions requires us to consider all of those things as we do that, and certainly the morality of it is important to me in particular. I come from an active Christian background. I'm an active Roman Catholic. I ran a soup kitchen in the basement of our church before I got this job, so have brought that thought to this particular exercise and have certainly learned a lot through the three weeks I've been on this committee.
You will have recognized today that about 13 groups came forward and out of those 13, only two were opposed to this particular initiative. Some of them were the leaders of your community. It's difficult to ignore, as you may imagine.
I myself come from, as I said, a Roman Catholic background where bingo was part of our tradition almost, it seemed at one time. In the diocese of Sault Ste Marie, we ran our high schools for a number of years on the proceeds of Pot o' Gold lottery. Many of us sold tickets to that end so that we might educate our children.
I asked the native leadership, when they came forward, the question re the morality of this. They'd obviously decided that this would be good for their community and they said that when you put a hierarchy -- they represent some of the most impoverished communities in this province, and giving their people jobs certainly was the first priority for them and that this certainly offered that opportunity.
We went across the river to Sault, Michigan, when we were in Sault Ste Marie and saw a casino over there run by the tribe of Sault Ste Marie, Michigan. They talked to us about the lack of crime now in their community because everybody's working. They talked about what the money generated through that initiative did for them re the further investment they do in their community and the fact that they can't find enough employees to fill the jobs any more. They're coming across the river to Sault, Canada, and within the next six months will hire another 300 people in their operation. In fact, the sense of that operation is that all 15,000 of the people who inhabit that community actually own the reserve and are the beneficiaries of the spinoff.
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It makes it a very challenging thing that we do here. We, in our attempt to be sensitive, have introduced a pilot project in Windsor, and we want to do it carefully and cautiously and move slowly. You mentioned some other ways in which we might stimulate the economy. Have you shared these other ways with the business community of Niagara Falls? Do they see them as things that would somehow give further momentum to the economy of this region, which is obviously struggling? I know that all of us must come together around this question, because the people we all represent are going to be affected one way or the other. We're always all ears for new ways, other ways. This was a way that somebody brought forward and we're trying it out. Have you put business plans to them? What will they cost us as a government versus the wealth that might be generated by them, which would then go back into the community of Niagara Falls and contribute to the economy in the ways we need if we're going to be able to pay for the things to really take care of people?
Mrs MacCarthy: Are you asking us to answer this?
Mr Martin: Yes.
Mrs MacCarthy: I have discovered that when one person has an idea, it seems to be that many other people have the same idea at the same time. As I look in the newspapers and listen to the news, I've discovered that the ideas that were presented here are already being done, that in our city some of these things have happened already and your government is doing some of these things. I'm promoting their value by mentioning them to you again. I don't how it works, but it often happens that many people have the same worthy ideas at the same time, and they're happening all around us. So no, we have not presented these; we've only just gotten together.
Ms Harrington: Mr Chairman, is it all right if we make a very brief response? Maybe the opposition will allow it.
The Chair: I want everyone to know that we've basically concluded our time, but the Chair, being a very generous individual, is going to allow a few more minutes for some interchange. If you'd like to respond, Mr Sheffield, and then Ms Harrington, and I believe the Liberals would like to pose a question or two.
Rev Dan Sheffield: Just continuing the response to Mr Martin on the issue of our local politicians and their great support this morning, I noticed the hesitation, as I'm sure you did, to the question put to the mayor about the possibility of a referendum. Does the mayor have some personal idea as to what the outcome of a referendum might be in the community? When we are dealing with some of these social and moral issues, I think there is responsibility for the elected politicians to consult their constituency in some type of referendum approach. That's my thought there.
Ms Harrington: Thank you very much for coming. You certainly have done a lot of research, probably in a very short time, from what I understand.
A first comment about what we've just been discussing: What I call community economic development is something that is very timely, because this is what our government now is bringing forward. In fact, I'm having a public meeting about it towards the end of September, and it is getting not just the public officials but the grass-roots people in every community to think, how can we economically develop our community? How can we work together?
I really don't think in Niagara Falls that we have worked together well as a community. I think we've been very divergent, and part of the reason I got involved in politics is to try to bring people together. I'd like you to keep that in mind, that you have some good ideas and that they probably will fit in with the process that our government is just starting now for economic development.
With regard to your comments here, you've said there's a "hasty dismissal of such problems," talking about things that go along with casinos. I'd like to say no, that is not true, there has not been any hasty dismissal of the problems. That is in fact why we have a pilot project. I just want to make sure this is very clear, that we must be able to show that a casino can be an economic stimulator without causing social problems. It would be irresponsible of me to support any additional casino beyond the pilot project if it is shown that the existence of a casino in a community invites problems that we as a whole, as a society, cannot cope with. I believe I speak for the majority of people in Niagara Falls when I say that.
Mr Kwinter: I'd just like to make a couple of comments. You should know, and I want to congratulate you on the work that you've done, that there was an allusion to the fact that government has really examined this carefully before it made its decision. I should tell you that I know from firsthand knowledge that the decision to go ahead with casino gambling was made by the Treasurer, without any consultation by the ministry that has responsibility for implementing it. The first they heard was when the Treasurer made his announcement. Then they were told: "We're doing it. You figure out how it could be done," and that is what's going on now. They're just staggering along, trying to figure out how it's going to happen, but they've already decided it's going to happen, and that is the concern I have.
There's another thing, and I think it's important. The member on the government side used Sault Ste Marie, Michigan, as an example of all of these great benefits that have accrued to that Indian tribe, and they have, but what is happening there has no relation at all as to what is going to happen here, and the reason is this. The Indian tribe pays no taxes, none. We visited them and I said, "Do you pay any taxes?" and they said, "We pay no taxes."
When you take a look at what is proposed for this casino, the government is going to take, by way of its percentage of the win, anywhere from $110 to $140 million. There's going to be municipal tax, provincial tax and federal tax, and the figures I've seen indicate that it could be in excess of another $100 million. The moneys that the Indian band receives at the casino is theirs. They all own it; they don't pay any taxes on it; they just use it as they want to. Of course, it's a wonderful thing for them, but that is not going to happen in Ontario.
The people who are going to make the money are the province and the operators, period. Everyone else is going to have to pay for that, which means everybody is going to have to contribute, but the benefits will be minimal to those few who win money. I think it's important that when a decision is made, all of these things are realized; otherwise, there is smoke and mirrors as to the benefits that are going to accrue.
The decision has been made that the casino is hap- pening, so I'm not debating that any more because it's a done deal. They've already picked the site in Windsor, they've set a deadline, they've taken proposals from the proponents. That is going to happen. My concern is that it was made without any research whatsoever, and I can tell you that the people who had the responsibility had no input at all. Now they're scrambling to do it, but they had none prior to the decision. My concern is that this is going ahead regardless of the benefits.
They're saying the reason for the pilot project is to find out what the problems are. Someone has already mentioned that casinos are not new. You can go out and canvass every casino in the world and find out what the problems are. You don't have to stick your hand in the fire to find out you're going get burned. All you have to do is look at it and know that it's going to happen to you. That is my concern, and I appreciate your comments.
Mr McClelland: My simple comment, and I think it follows somewhat on Mr Kwinter's statement, is that I asked the question of Coopers and Lybrand, and I refer specifically to your comment on page 4, whether there had been any study done or any look at the human cost element and some of the other attendant social costs and impact. The response was, "That was not within our mandate and not within our terms of reference." I think it's important that you understand that because, as Mr Kwinter has suggested, they were given a job to do. The ship has left harbour; now let's chart a course. That is an analogy or imagery that I've used in the House before.
Rev Ms Porter: Why wasn't that there along with the commissioning of the report? If you're going to look at an issue, then you look at the issue from all sides, not only from the possible positive sides.
Mr McClelland: I don't think you're going to find a great deal of assurance in the response I got from one of the government members. The government member said, and I quote, "There is a strategy in place to develop a plan" to look at how they will deal with the problems. Here we are, as Mr Kwinter said, it's well under way, the ship has left harbour and now we have a strategy to some time develop a plan to begin to deal with it. I think the concerns you raise are valid concerns, and I thank you again for doing so.
The Chair: I'd like to thank the ministerial group for presenting before the committee this afternoon.
I would advise members that the committee next meets at 2 pm Tuesday, and the clerk would like all caucuses to have their amendments to the clerk's office by 10 am on Tuesday, September 7, please.
The committee adjourned at 1750.