If the provincial government decides to tear away the profits from slots at raceways, he could kill an entire industry.
That was the message that Wellington County Warden Chris White gave Premier Dalton McGuinty when they met at the Rural Ontario Municipal Association conference earlier this week.
McGuinty hired economist Don Drummond to make recommendations on how to get control of the provincial debt and deficit.
The report targets the limiting of slot machine profits to horse racing tracks.
Drummond wrote, “OLG would make much more money if slots were permitted elsewhere, as they should be.”
Currently, there is a slots at racetracks program, and track owners and horse breeders get a share of the slot proceeds that totalled $334 million last year. The province is now saying that is not sustainable and will be up for review after current contracts expire next year.
Municipalities like Centre Wellington and Wellington County that host racetracks also get a share, which came to $78 million last year. To date, Centre Wellington has received more than $15.1 million, with the county receiving about a 20 per cent share of that total.
White said he is hearing a lot at the conference about severing slots from racetracks and he is not happy about it.
“It [the revenue] is very important in rural areas,” he said.
White said besides the huge employment factor, the racing and gambling industry is probably one of the top two employers in Wellington County.
In order to make the move politically palatable, White said the province is calling the payments to racetracks and the municipalities “a subsidy.”
He said, “It’s not a subsidy.”
Municipalities were offered a share of the profits for hosting the slots. Racetracks willing to host the slots were also offered a share of the profits. It was a business agreement.
The result of the Grand River Raceway and slots in Centre Wellington has been an explosion in the horse industry. Wellington County has the largest number of horses per capita in Canada.
White said, “If they’re going to play with that, they’d better know the impact.”
He said he is working with Centre Wellington Mayor Joanne Ross-Zuj to collect data to let the provincial government see just how important the revenue is in a number of areas.
The township has dedicated its share of the profits to replacing aging infrastructure – something that is pressing municipalities financially across Canada.
Other issues
Minimum maintenance standards were developed in Ontario to provide municipalities with a defence against liability from actions arising about levels of care on roads and bridges.
They set the level of care and maintenance on several different classes of roads, depending on traffic counts and other factors. Supposedly, if municipalities met the level of care, such as plowing within a certain time when snow reaches a set accumulation, they would not be liable for accidents.
That system came into effect in 2002, but there are problems brewing. The Regional Municipality of Halton and the Town of Milton recently lost a court battle over those standards.
The case was heard in November.
White said the issue has implications not only for the municipalities but also the province, which has its own roads system.
He said the issue is currently going to the Supreme Court, and if the decision is upheld, the province will have to consider its own legislation to protect itself and municipalities.
Government support
White said another issue he spoke to McGuinty about was the Ontario Municipal Partnership Fund. It was set up during the amalgamations at the turn of the century to help pay costs of downloading onto municipalities.
While that funding has been flowing ever since, some municipalities are seeing smaller amounts arriving.
White noted that counties and regions are having some services uploaded again to the provinces, but lower tier municipalities are not. He said it is becoming a concern because when that payment is reduced, taxpayers have to make up the difference.
In some places in Wellington County, there have been some increases, but others, like Centre Wellington Township, have been seeing cuts as deep as 10% over the last few years.
