Justice Committee on March 23rd, 2021

[Voices]

Oh, oh!

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Thank you.

[The Chair, Liberal, Iqra Khalid]

Mr. Masse, please go ahead, sir. It's your turn for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

In the next round, you can have my two and a half minutes. I have to be back in the House a little bit before that.

Thank you very much to our witnesses for being here.

Chief Deer, thank you for being here. Principally, you're concerned that you will be left outside of the offshore and considered illegal. Those are the primary concerns: to make sure that this is not the case and that you could continue the operations that you have right now in a fully binding way and a recognized way. Is that correct?

[Chief Gina Deer]

Yes, and actually, we can refer to our legal counsel, who has supplied us with some of the terminology that would be used in the amendment of the bill.

Renée, would you like to speak to that, please?

[Renée Pelletier, Lawyer and Managing Partner, Olthuis Kleer Townshend, Mohawk Council of Kahnawake]

Thank you, Chief Deer.

Thank you for the question.

As is contained in the written submissions from the Mohawk Council of Kahnawake, the proposed amendment is quite simple. It would be an addition to subsection 207(1). That subsection reads in part:

Notwithstanding any of the provisions of this Part relating to gaming and betting, it is lawful

—and this is where the province has its carve-out. What the Mohawk Council of Kahnawake would propose is the addition of the words “for an Indigenous governing body to conduct and manage a lottery scheme pursuant to the terms of an agreement with the Government of Canada”.

[Brian Masse, NDP, Windsor West, ON]

We'll have to get some more on this, in terms of whether there are other repercussions, but essentially you're just looking to be made whole through this process so that you can continue your operations as you're currently doing right now. Is that a good summary?

[Chief Gina Deer]

That's correct.

[Brian Masse, NDP, Windsor West, ON]

Okay. Thank you, Chief Deer.

I'm going to quickly move over to the Central Ontario Standardbred Association, to Mr. O'Donnell or Mr. Drew, whoever wants to respond to this.

I agree with the first amendment. I thought the government's legislation was better than what we had drafted originally in this. I've been public on that. In fact, I have defended the government's legislation from attempts made in the House of Commons to repeal it, because I think it adds a value part for the horse racing industry.

However, I am having a little difficulty with regard to the historical betting, because it's fantasy betting, and it's done probably through some algorithms and other types of work, which are probably quite comprehensive, to ensure that there's proper management of it, and it's done on the basis of a couple of states in the U.S. It seems to me that it's premature for us to do that in this context.

Can you comment on that? Why should we change all of our Canadian laws when even in the United States there are only two states doing this kind of fantasy betting?

[Bill O’Donnell]

I think I can answer that.

First of all, the historical betting is pari-mutuel, so we contend that it was part of our racetrack industry.

This is a simple slot machine. They take races from the past, as far back as when Sandy Hawley was riding, as he said, or even me. You put your quarter in the machine and it just runs an eighth of a mile, say, and it contributes...that part would go to operations—racing or whatever. The integrity part goes with all the rest of the regulations, I would think.

[Brian Masse, NDP, Windsor West, ON]

What you're doing is confirming the process of how you play it. That's one thing, but right now, this would be a big departure from real-time and real sports betting. This is a fantasy bet that you could apply to just about anything.

Why would we change our national and provincial models based upon something that two states have just started to experiment with? I understand that in one of the states it's actually been a little bit difficult to define whether it's betting or it's a slot machine. You've referred to that.

At any rate, why should we do it right now in this bill, or delay or complicate this bill for something that two states are experimenting with?

[Bill O’Donnell]

Go ahead, Dave.

[Dave Drew]

We support the issue of single-event sports wagering from many aspects. One big aspect is that there is a lot of black market wagering in single sport wagering and also on horse racing. The implementation of this bill, with the integration of betting on single sports events, most likely will reduce the amount of wagering that takes place on horse racing.

We are in fact looking for some offset, and this is one methodology that has been used and used successfully whereby it can be integrated into a pari-mutuel platform. We would integrate it with the existing platforms of racetracks and put those events in as specific pari-mutuel wagering events, which are currently regulated.

The CPMA has agreed that they would regulate the use of historical horse racing. They have given us that commitment.

[Brian Masse, NDP, Windsor West, ON]

My question was why should we complicate the current situation by two experimental states on this issue, which is a fantasy. It's not based upon any reality whatsoever. It's a mixture of things. It's a concoction of several things that took place in the past. It's an interpretation of those metrics and then put on a slot machine, versus what you're asking for, which I think is very reasonable in terms of the amendment that was made from the government legislation, which is very real.

It would seem to be that this is a stretch for the current law right now to experiment...this entire process. It would seem that it's only being done as a way to compensate for revenue from an industry that's struggling for a variety of reasons. This is very important and.... I support supporting this industry for many reasons, but it's not happening right now. I don't even know if historical gaming on horses or any other type of thing is taking place in the black market, the illegal market or the organized crime market. It seems to me that this is a stretch to include for a problem that's outside of this, whereas the first part of it is actually a value-added amendment that actually helps the industry. Also, what you're asking through historical can also eventually, once researched properly, be done provincially anyways.

[The Chair, Liberal, Iqra Khalid]

Thank you very much. My apologies, but we won't have time for an answer. Mr. O'Donnell, if you would like to provide a written response afterwards, we'd be happy to receive that.

We'll now go into our second round of questions for five minutes each. I don't know which member from the Conservative Party would like to go.

Is it you, Mr. Moore?

[Rob Moore, Conservative, Fundy Royal, NB]

It's me. Thank you, Madam Chair.

Thank you to all the witnesses. It's good to see my colleague, Kevin Waugh, here who has championed this private member's bill.

There certainly does seem to be a lot of agreement on this bill. I want to speak to one of the proposed amendments that's been put forward, which is the carve-out for horse racing. We've heard testimony both from this panel and the previous panel on the importance of this.

What we didn't hear today was the economic importance in the communities of ensuring that this carve-out exists. Would Mr. O'Donnell or Mr. Drew like to expand on that?

[Bill O’Donnell]

Go ahead, Dave.

[Dave Drew]

The impact of horse racing is wide ranging in the communities in which we operate. It's very much agricultural-based and includes breeding farms for people who are breeding horses to be raced. It includes the purchase, raising and training of these horses by qualified trainers. It includes drivers who drive horses, jockeys who are a part of that and all the backstretch workers who work with horses day in and day out.

On average, there are more than two people employed within our industry for every horse that is involved in racing. Many of the communities where the racetracks are located—London, Elora, Dresden, Ontario, and so on—are agricultural-based societies with all of the things that make racing happen and with all the contributors such as feed companies, veterinarians and blacksmiths. It is very wide-ranging in terms of the economic impact and we want to sustain that to the best of our abilities.

[Rob Moore, Conservative, Fundy Royal, NB]

Thank you for that answer.

As someone from a riding that has a great deal of agriculture and a lot of horse owners in the area, I know the economic impact that this can have in our communities.

Mr. Levy, you mentioned the grey market. We didn't really expand on that. I think we all have an idea of the black market on things and also what we're trying to do here. Can you expand a bit on the grey market, when you use that terminology?

[John Levy]

Thank you for the question.

We consider anything that is currently undertaken in terms of sports betting that's occurring in Canada today, whether you call it grey market or black market in the U.S., or whether you call it illegal, in the Criminal Code, single-event wagering is not permitted, period, end of story. This bill is about amending that.

To date, in the non-legal and the safe and legal environment that this bill will foster, the Canadian Gaming Association estimates that $14 billion has been wagered outside of the legal regulatory framework. Deloitte has said that by 2025 that number could be as high as $25 billion. That's money that's not going to help companies like ours create jobs, like we're doing, and create innovation. From a political standpoint, that's money that's not being taxed and redistributed for the benefit of all Canadians.

We think this law will level the playing field. We can all apply. It's going to be a competitive environment. That's what we look forward to.

[Rob Moore, Conservative, Fundy Royal, NB]

I only have 30 seconds.

I'm from New Brunswick in Atlantic Canada. The Atlantic Lottery Corporation has already submitted a brief supporting this.

Could you just quickly tell me, Mr. Levy, what you think the impact will be on the illegal market with the passage of this legislation?

[John Levy]

I think it will be dramatic. We have millions of customers coast to coast on our app. They love the app. They love our brand. They are getting news and content from us. Our research is saying that they're waiting for something like this to occur. Make it easy for them. Make it efficient for them and do it in a safe and trusted environment. That's what this bill will do.

We're not talking about generating new revenues. We're talking about bringing them out of the cold and into a regulated environment, which I think is so important. It's been hurtful for the last number of years. I can't imagine how bad it will be if we don't get this passed today.

[The Chair, Liberal, Iqra Khalid]

Thank you.

Thanks very much, Mr. Moore.

We'll now go to Mr. Kelloway for five minutes.

Go ahead, sir.

[Mike Kelloway, Liberal, Cape Breton—Canso, NS]

Thank you, Chair.

Hello to my colleagues. I want to thank the witnesses for being here today.

My questions will be for Chief Deer and Chief Delisle. I hope I pronounced your name correctly, Chief Delisle.

I'm actually coming to you from Unama’ki, Mi’kma’ki. It's an honour to speak to both of you.

Both of you mentioned that there are agreements between most provincial governments and indigenous governments with respect to indigenous participation in gaming, where gaming revenues are shared with the indigenous communities within the province. However, as you stated, it's not the case in your community.

As others were asking you questions around this, I changed the structure of my question. I'm wondering if you could answer my question and go into some detail. If you had that revenue source coming, what would the priorities be in your community? I'm really curious about that, to show cause and effect.

[Chief Gina Deer]

The priorities are to fill in the gaps. That's one of the things we're doing. Again, language and culture are integral to who we are as a people. We're trying to revive them. There has been some movement with the Canadian government around reviving the language and supporting that. So much has been lost and so much work needs to be done.

Also, looking at the infrastructure, we still have people with water issues. In this community specifically, we've had a lot of illegal dumping over the years. Going way back to the 1950s and 1960s, there were dump sites that were created. We don't even know what's in that land. Not all of our land has become usable. There's a lot of testing that needs to be done before we utilize lands. It's very concerning when people have private land and they want to build. What is there?

We have the highest rates of scleroderma, autoimmune diseases and cancer, you name it, within this community. The rates are outrageous for a community as small as ours.

We also do a lot of servicing and helping when it comes to health. The older population sometimes has to choose between medicine, food and hydro. As the Mohawk Council of Kahnawake, there are so many areas that we need to fill in. Things are brought to us on a regular basis.

Just this week a man came forward who needs assistance in his home—a ramp, an elevator or something. Every evening he's dragging himself from his wheelchair down to his bedroom in the basement. He'll go down in that manner.

The needs in this community are from the little to the large. Again, it's an endless list for us. The government does not fund all of the needs in indigenous communities, as we have seen. There are many holes.

When it comes to education, we've been fighting so hard for secondary education. We try to promote people to further their education in this community but there's not enough funding for that. There are many challenges. The list goes on and on.