More Response To AG Report

Published: April 29, 2014 11:43 am EDT

On Tuesday, April 29, response to the Auditor General’s special report on the OLG Modernization Plan and cancellation of the Slots-at-Racetracks program continued.

On Monday, Auditor General Bonnie Lysyk released her report which, among many other things, determined that the Ontario Liberal Government’s 2012 plan to modernize the OLG and generate higher profits for the province was “overly ambitious” and “overly optimistic.” To read the Auditor General’s report in its entirety, click here.

Response was swift Monday afternoon, as the OLG, the Ontario PC Party and the Ontario NDP each issued responses to the report. Those responses can be read by clicking here.

Response continued Tuesday, as a group of Ontario Standardbred breeders – which has also issued statements of claim against each the OLG and the Province of Ontario – issued a release in regard to the Auditor General’s report.

The breeders’ release has quoted Walter Parkinson of Seelster Farms as saying that, “The Auditor General’s report confirms everything we have said in our claims against Ontario and OLG.” (The contents of the breeders’ response to the Auditor General’s report appear further down in this story.)

An article by The Windsor Star contains quoted from Brian Tropea, the general manager of the Ontario Harness Horse Association, who has said that the Auditor General’s report echoes what OHHA has been saying since the OLG’s modernization plan was announced two years ago.

“It’s what we’ve been saying for the past two years,” Tropea was quoted as saying, adding that, “The modernization strategy has been an abysmal failure.”

Tropea was also quoted as saying that the Ontario Liberal Government “knew the devastating impact it (the OLG’s gaming modernization plans) would have [had], and they continued on that path anyway.”

Doug Martin, Mayor of the Town of Fort Erie, has also provided his comments on the Auditor General’s report in an article by Niagara This Week. Under its modernization plan, the OLG opted to remove slot-machine gaming from the Fort Erie Race Track, which has been a devastating blow to the viability of the historic Thoroughbred border oval.

“This report clearly show that the OLG and the province basically worked hand-in-hand to mislead or deceive the people within the (horse racing) industry,” Mayor Martin was quoted as saying after reading the report.

Auditor General Report Confirms Harm Caused to Standardbred Breeders by Abrupt and Unfair Cancellation of Slots at Racetrack Program Revenue Sharing Partnership

A group of Standardbred breeders from across the province who have sued Ontario and OLG welcomed the special report of the Auditor General released yesterday afternoon.

“The Auditor General’s report confirms everything we have said in our claims against Ontario and OLG,” said Walter Parkinson of Seelster Farms, a Standardbred breeding operation based in Lucan, Ontario and one of the plaintiffs in the lawsuits.

Auditor General Bonnie Lysyk affirmed what horse breeders across the province already knew: that the decision to cancel the slots revenue-sharing partnership was “abrupt” and “can hardly be considered to have been open and transparent.” The report cites figures indicating that 9,000 jobs located “primarily in rural Ontario” have been lost, and that breeders’ activities have “dropped by about 60 per cent”. The report also confirmed that Ontario and OLG’s modernization program vastly overstated anticipated revenue and job creation.

This devastating impact could have been avoided. The Auditor General says that Ontario and OLG were “fully aware” that cancelling the revenue sharing arrangement “would have a significant negative impact on the horse-racing industry,” and that the negative impact would disproportionally fall on “rural communities where horse people (horse owners, trainers and breeders) live and work,” particularly in the Standardbred sector.

The report also concludes that Ontario and OLG failed to properly consult with the horse racing industry prior to the termination of the slots revenue sharing partnership. The Auditor General confirmed that “at no time” during the strategic review that culminated in the decision to terminate the program was the possibility of termination even discussed with industry stakeholders.

Despite the Auditor General’s observation that racetrack owners have been “less affected by the ending of the Slots at Racetracks Program,” OLG has paid out more that $80.6 million dollars to racetracks, and are paying an additional $113 million per year to racetracks where slot machines continue to be located. But the Liberal government has refused to pay a single dollar to Standardbred breeders, even though they have suffered the greatest harm from the termination and have the least ability to recover. “I guess this government just isn’t interested in compensating people in rural Ontario because our vote isn’t important to it,” said Parkinson.

Randy Pettapiece, the Ontario PC Party’s critic for Rural Affairs and the Horse Racing Industry, questioned Premier Kathleen Wynne in the Provincial Legislature on Tuesday.

Pettapiece stated that “The government’s ‘modernization plan’ depended on the construction of new casinos in Toronto and Ottawa, which obviously didn’t happen.”

Pettapiece went on to say, “Tragically, they (the Ontario Government) were prepared to sacrifice thousands of horse-racing jobs and the interests of rural Ontario.”

The contents of a release sent out by the Ontario PC Party – which includes video from Tuesday in the Legislature – appears below.

AG Report Shows Liberals Knew They Were Trampling Horse Racing

Ontario’s auditor general confirmed what critics, led by the Ontario PC caucus, have said all along: that the government knew that cancelling the Slots at Racetracks Program (SARP) would harm the province’s horse racing industry.

“This report confirms what we have said from the beginning,” Perth-Wellington MPP Randy Pettapiece said in today’s question period. “The Liberal-NDP move to terminate SARP was done with no consultation or consideration of the enormous damage it would do to people in the industry.”

Pettapiece, who serves as the PC critic for rural affairs and the horse racing industry, took Premier Kathleen Wynne to task over the auditor’s findings:

“Why did the government deliberately and heartlessly sacrifice the horse racing industry in favour of a pie-in-the-sky scheme to build glittering casinos in Toronto, the Premier’s backyard?” he asked.

Yesterday, the Auditor General released her scathing report on the OLG’s “modernization plan”. The PCs requested the report to assess the impacts that the government’s plan would have on the gaming industry. The report confirms that the government knew that cancelling SARP would mean fewer race dates, less breeding, less employment and fewer economic benefits to the agricultural industry.

Even though the auditor’s report was clear that the government’s decision to cancel SARP was neither open nor transparent, the Premier claimed that she was “proud of the work” her government has done.

Pettapiece responded: “We now have racetracks closed, lawsuits against the province and thousands of jobs destroyed. Does that even bother the Premier?”

The auditor’s report describes the government’s financial projections as “overly optimistic,” noting that the province originally anticipated $1.128 billion from cancelling the SARP program.

Pettapiece noted that the Liberals decimated the industry, costing thousands of jobs, all for a savings of $326 million – 71% less than they anticipated.

“The government’s ‘modernization plan’ depended on the construction of new casinos in Toronto and Ottawa, which obviously didn’t happen,” stated Pettapiece. “Tragically, they were prepared to sacrifice thousands of horse-racing jobs and the interests of rural Ontario.”



This report is no surprise to the horse racing industry but what the report did not take into consideration is the amount of capital investment that left the Province as a result of the Liberal gov't's decision to end the SARP. Millions of dollars exited the Provincial economy and went to other jurisdictions where racing and breeding conditions were more favourable. Some of the best breeding stock in Canada either went stateside or were sold. Small commercial breeders dispersed their stock to mitigate their losses and unfortunately, this is still happening today. I am a classic example of this as I have left the Province and now reside and breed horses in the US. Now, thanks to the Liberal gov't, the industry is not only a SUBSIDY but also a LIABILITY to the gov't treasury and to the taxpayers of the Province. The only way that the industry can rejuvenate and survive is through a REVENUE SHARING AGREEMENT. Ms. Wynne has the power to re-instate the SARP via an executive order and she should stop wasting more money on this so called "modernization" program which is destined to fail.

It's incredulous that a government and one of it's crown company's could submit a modernization plan that is so riddled with error's half truth's and misleading information. For instance they said that terminating SARP saved the province 1.2 billion $ over 5 years but failed to factor in the cost of rent or property taxes at what would of been the new locations.
Interestingly the Libs had a (P 53. of report )draft plan to transcend the industry with 250 Million $ till 2014, 150 M $ till 2015 and then straight line funding of 100 Million $ per year every year thereafter. Yet it was never submitted to cabinet whom approved cancellation of SARP on feb 7th 2012.
According to this report the Liberals were informed that the industry had 32,000 jobs. 26,000 licensed jockeys, trainers drivers....and 5885 racetrack employees not including slot employees. If you factor in secondary ones like feed man...a 45,000 estimate on the industry would be realistic. But most importantly the Liberals were aware of the damage that would be caused by terminating SARP. Very sad indeed.

This confirms that malice toward horseracing was intended. I believe if we do not get a clear revenue sharing agreement with the government going forward , this 5 year plan will be just a 5 year plan to cripple us beyond repair. OLG is not our friend no matter who tells them they have to be. They have absorbed our facilities and have now put us in a bread line with our hands out.

Is anyone shocked by the report, I hope not.
NDP in conjunction with the PC could have defeated the Liberal gov. earlier when the
damage would have been less.
NDP chose to sleep with the enemy.
Not that I'm a PC fan but is there a better alternative currently?