Scenes from the morning workout at Woodbine racetrack on June 27, 2013.MOE DOIRON/The Globe and Mail
A member of a panel of former cabinet ministers drafting a new funding deal for Ontario's horse-racing industry says the five-year plan will introduce greater transparency and accountability for public dollars.
John Snobelen, one of three members appointed by the Ontario government to the Horse Racing Transition Panel, met with officials from the Ministry of Agriculture and Food on Monday to discuss the panel's work. He expects a final report will be in the government's hands by week's end.
Questions about spending at Woodbine Entertainment Group, the province's largest racetrack and slot-machine operator, were raised in the Ontario legislature Monday after The Globe and Mail revealed on the weekend that the province's gambling regulator is investigating compensation and governance practices at the not-for-profit organization.
Through interviews and documents, The Globe found that Woodbine Entertainment paid $51-million in bonuses to employees over a 12-year period through two profit-sharing programs – one for the rank-and-file and a separate plan for management. Some managers were also eligible for further payouts under a long-term incentive plan. The cost of that plan is not known.
The profit-sharing programs were started the same year slot machines were installed at Woodbine's horse-racing track in Toronto in 2000. The government, then led by Progressive Conservative premier Mike Harris, introduced the slots revenue-sharing deal in 1998 to help revive horse racing and breeding and bolster the rural economy.
But many in the horse-racing industry contend Woodbine and other tracks did not dedicate enough slot revenue to promoting horse racing. Woodbine, which spent $430-million renovating and expanding its tracks, scrapped its employee incentive plans on March 31, a condition of receiving transition funds from government to replace the slots-at-racetracks program, cancelled by the Liberal government last year.
While the panel is not planning to make recommendations on executive compensation and profit-sharing programs at racetracks, Mr. Snobelen, a former PC cabinet minister, does not think exorbitant payouts will be an issue under the new funding deal because it will not turn over nearly as much government money to track operators as the slots-at-racetracks program.
"I think those days of excess are gone," Mr. Snobelen said. "That's all a result of having more funding than you need to have."
The slots-at-racetracks program had been lucrative for track operators and the government, generating $4-billion for tracks and just under $10-billion for provincial coffers since 1998. Its sudden cancellation in 2012 stunned the horse racing industry. The market for racehorses plunged and jobs at racetracks were reduced.
Opposition politicians have criticized the Liberal government for its decision to kill the slots program without warning.
On Monday, Progressive Conservative Leader Tim Hudak questioned why the Liberals "failed to keep their eye on the ball when it comes to these expenses" at Woodbine Entertainment, while NDP Leader Andrea Horwath suggested the government should consider capping executive salaries at the not-for-profit track.
"That [slots] program was one that kept many thousands of people employed in the racing industry, kept rural Ontario doing well, and they basically threw out the baby with the bathwater, if that's what they were attempting to do to deal with those exorbitant salaries," Ms. Horwath said.
But Premier Kathleen Wynne, who is also the Agriculture Minister, said the slots-at-racetracks program had to change.
"The situation within the gaming and certainly the horseracing industry has been that we have not had a transparent and sustainable system in place," Ms. Wynne said.
"That's why I've asked the panel to give me a five-year strategy for making sure that we can make the system sustainable."