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Tuesday's Lawsuit Proceedings Recap

Published: December 4, 2018 11:33 am ET

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The civil case between a group of Standardbred breeders in Ontario against the province and the Ontario Lottery and Gaming Corp. resumed in Brampton, Ont. on Tuesday (Dec. 4).

Lisa La Horey continued to present evidence on behalf of the province, recapping her submissions from September that the termination of SARP – a government program designed to earn revenue for the province and provide support for racing – was a policy decision, and that the siteholder agreements were the only legal obligations. The plaintiffs, according to the defense, were indirect beneficiaries.

The Sadinsky Report was referred to, and how it contained the information that the 270-day termination clause was public knowledge and thus should not have come as a blindside to anyone. The defense then referred to the strategic business review and how ending SARP came as part of public policy to support the province and that the "austerity budget" of 2012 involved a number of difficult choices.

La Horey stated that the task of the court is not to grade these choices. They are reviewable not in court, but at the ballot box.

Further, the defense continued its assertion that the decision was made in cabinet and not before the February 8 cabinet meeting as claimed by the plaintiffs.

The defense then noted that the discontent expressed by Kathleen Wynne and Ted McMeekin at the decision to end SARP was based more on the transition funding than the decision. And these decisions, according to defense, were made in cabinet (including by McMeekin and Wynne) and that cabinet speaks with one common and united voice.

Justice Emery asked La Horey how that changed based on the discontent voiced by both McMeekin and Wynne, with the defense implying that the leadership race and conference played a role in that shift presented publicly.

During Tuesday’s second session, the defense continued to provide support for its argument that the decision to end the slots-at-racetracks program was a decision made by government and not in bad faith.

An email from Ted McMeekin was presented, stating to some of his OMAFRA staff that the decision was made by the Ministry of Finance. His transcript, according to the defense, showed that he recognized that it was a cabinet decision recommended by the Ministry of Finance. This claim was also supported by Kathleen Wynne in her transcript. Thus, the defense stated the decision was made in cabinet and not by Shortill and Duncan – as claimed by the plaintiffs. The defense asserted that Shortill in his role advised Duncan, who made the recommendation to cabinet and the decision to end SARP was made there.

The defense then presented the speech made by Dwight Duncan to the Economic Club of Canada, which was what's referred to as a "pre-conditioning speech" to signal what was coming in the budget. This speech, a common practice, referred to the money Ontario provided horse racing through SARP. According to the defense, the horse racing industry began its lobbying efforts after this speech. These efforts show that the industry understood this shift as a policy decision with no contractual obligation to the plaintiffs.

A number of emails from industry participants and organizations regarding lobbying were then referenced and highlighted to reinforce, according to the defense, the industry's need to lobby government.

In the third session, the Crown continued to show there's no evidence of bad faith on the Province's behalf in making the decision to end SARP. In referring to comments previously highlighted by McMeekin and Wynne regarding the decision, the defense categorized those assessments as an overall post-mortem analysis, but asserted that's no indication of bad faith.

In fact, under cross-examination Wynne stated that she agreed with ending SARP – a decision later confirmed by the government's Horse Racing Transition Panel – but felt that more industry support was needed. She stated, according to the defense, that there were good reasons not to reinstate SARP.

The defense also noted that McMeekin didn't agree with a number of cuts in the 2012 "austerity budget" along with SARP, further indication of how these were policy decisions and not made in bad faith.

Justice Emery then asked the Crown to present studies to suggest the cancellation of SARP. The defense references an internal economic analysis, but replied that it's not an issue since it's not up to the court to grade the decision. It's a policy decision, stated La Horey, and that provides immunization from negligence. Emery then asked how it's a policy decision, to which the defense referenced the Sadinsky Report and the austerity budget that included many cuts.

Emery then delved into the subsidy categorization, asking if it's still a subsidy even though the SARP revenue generated at racetracks never went to the province and then back to the tracks. The Crown stated its reasons for why it's still a subsidy in their opinion. Justice Emery noted that he'll asking the same questions of the OLG's team.

The Crown concluded the first part of its case on Tuesday afternoon during the fourth session. La Horey referenced the Horse Racing Industry Transitional Panel's report and the characterization that SARP fed a "culture of entitlement" with public money and without accountability. The panel's report went on to say, according to the defense, that if it was a partnership it was one-sided. Their view was that continuing the program would be "poor public policy" and that reducing the share sent to horse racing through a modification of the program would not solve the problems.

Justice Emery asked the defense what evidentiary value the court should place on the Sadinsky and HRTP reports, to which the Crown replied that it is evidence as to why the decision was not irrational.

Emery then asked, hypothetically, if it would be irrational to cancel SARP for a modernization strategy that expanded gaming to centers where plebiscites were in place against expanded gaming. The defense argued that such a decision wouldn't be, in their opinion, termed as irrational.

The province discussed the radio ads presented by the plaintiffs. According to the province, those ads were not ads from the Government, those were Liberal Party ads and the Liberals are not on trial.

Finally, the defense referenced how the Standardbred breeders were not included in the revised HIP program when the other breeds were. According to the defense, the breeders had started legal action at that time and they had to right to government money.

The Crown will continue its case on Thursday, December 6.

For further information on the lawsuit, click here.


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