People from rural and urban centres are still dealing with the fallout of the March 27 provincial budget and what harm it might cause as the government walks away from its partnership with the horse racing industry.
The Liberal government, looking for any extra cash it can obtain in the face of a huge deficit and large debt, decided to end its 14-year agreement with 17 Ontario race tracks. That deal is estimated by some as being worth about $345 million a year to the horse industry.
The industry has used the money to increase purses, which spurred interest in breeding horses and all the spin-offs that engendered, from more training facilities, barns, veterinarian work, feed supplies and right down to horse trailer manufacturing.
A few months ago, the government, including Finance Minister Dwight Duncan, was touting its “partnership” with the industry. On budget day, partnership suddenly became a “subsidy” and a what officials called a hidden benefit for horse owners and breeders.
The breakdown of slots profits has been: 75 per cent to the provincial government; 5% to the host municipality and 20% shared equally by the track operator and horse racing industry. The racetrack uses its 10% to cover expenses and the other half goes to the people who breed and race horses, through race purses.
The fallout from the new policy, as well as the cry from the horse industry, was immediate.
The government closed three slots facilities in Fort Erie, Sarnia and Windsor at a cost of over 500 jobs. The horse industry said as many as a dozen racetracks could go out of business. With 60,000 people working in the horse industry, there could be a massive loss of jobs in rural Ontario.
Grand River Raceway
In a trophy case in the upstairs hall at the race track in Elora are photos and citations about what the Grand River Agricultural Society (GRAS) has meant to the area since it began operations with the opening of the slots in 2003.
The headlines include; GRAS donates $125,000 for park development; and 2008 Scholarship/Bursary award recipients, and Equine Guelph and 4-H [receive] $10,000 October 19, 2009 [from GRAS].
Grand River Raceway general manager Ted Clarke said if the slots cash disappears, the tracks “may not be viable.”
He explained, “This track was built dependent on both activities. If racing has to support the site maintenance and all those other things … then we have a problem whether or not we survive. It’s probably more acute when you are a horse person dependent on purse income.”
Clarke has been through the downside of horse racing before. Before the track moved to Elora it was in Elmira when attendance dwindled, purses dropped and more stayed away because good horses raced elsewhere.
He revitalized that operation by making it the first to telecast races from as far away as the United States. That allowed it to generate a small amount of cash other than just on 50 racing dates. When slots came to tracks, Woolwich Township rejected a slots facility, and the track moved to Elora.
For the horse industry, Clarke said of income, “There is no other source. The horse people are absolutely challenged – but the track may be challenged, too.”
And, he said a little sadly, “We had an ally in the government. In this case, we don’t.”
Research spin-offs
More than just suppliers could be affected if the industry suddenly collapses.
Clarke believes the horse industry itself will survive in some form, and not all horses in Wellington County are bred for racing. But, the track has, over the years, been the centrepiece of a growing industry in Wellington.
Gayle Ecker, the director of Equine Guelph at the University of Guelph, said of the cuts, “It’s going to have a negative impact on the whole horse industry – and not just on racing. It’s going to have a domino effect a lot of people are not aware of.”
She gave a simple example. A farmer plants lots of hay to supply the industry. The number of horses drops, so the farmer, like any other retailer, looks for something else to supply – and cuts his hay production. Ecker said, “Less hay increases the price for the horse industry.”
She said the same thing will hit ferriers and the number of veterinarians. “If you have 60% of your clients in the racing industry … Some have 100%.”
Eventually, the cuts could even affect programs at the university. Ecker said Grand River Raceway and a number of companies servicing the horse industry support Equine Guelph and its equine research.
“It can trickle down and have an effect on research.”
One researcher at Equine Guelph is working with Denmark on stem cell research from umbilical cord blood from horses that could have implications for human health.
Equine Guelph also runs the popular and internationally-recognized EquiMania, which provides education programs on safety, riding and horsemanship for youths.
When asked if that could be affected, Ecker said, “That remains to be seen. We have sponsorships from companies that specialize in horses. Yes, it has the potential to impact all our education programs.”
Ecker, like others in the horse industry, is puzzled at the province’s approach.
“I’m having a hard time understanding them,” she said.
Local government steps up
Wellington County and Centre Wellington Township are lobbying to change the government’s mind.
The county has the largest horse population of any region in Ontario, and both municipalities have shared slots revenue for eight years, collecting about $15 million.
Township Mayor Joanne Ross-Zuj has been in contact with the 21 mayors of municipalities with race tracks.
She said they must speak with one voice to make an impact, and she is learning more and more about the devastating effects the cuts could have. She has seen many changes in the township in the past several years as people got into the industry and made major investments.
“People have changed their farm processes to accommodate the industry,” Ross-Zuj said. “This is just devastating News.” She talked to a farmer who grows hay for race horse owners, and “the race horse industry is his client.”
She said young people joined the industry and it is tough work that requires education and long hours.
“This would be devastating for employment,” she said.
Ross-Zuj added if horses have little value, there is a good chance many could end up at slaughter houses.
“If there’s no market and no purse money, a lot of horses won’t be needed,” Ross-Zuj said. “They [owners] are quite worried about the horses they’ll have to take care of.”
County Warden Chris White has been planning to write to Premier Dalton McGuinty to explain the devastation if the cuts proceed as of March 31, 2013. Last week, he announced a change in strategy.
“I’m holding off,” he said.
Instead, White has the support of the Rural Ontario Municipal Association, an arm of the Association of Municipalities of Ontario, and he has also obtained support from the Western Wardens Association.
He convinced both groups Wellington County should take the lead in lobbying the province. White planned a meeting in mid-May to determine the best approach. He said county economic development officer Jana Reichert is preparing an overview of the horse industry and the effects of the cuts.
White said there might, as some supporters of the cuts have stated, be “some rich horse owners” involved, but he wants to show they are a small part of a pyramid that includes suppliers and the work force in the horse industry.
“The ripple effects of this are deep and wide,” he said.
White has since learned Chatham Mayor Randy Hope is organizing a meeting in Milton of chief administrative officers and mayors who have racetracks in their jurisdictions, and he hopes to join it (he was waiting for a reply from Hope as this issue went to press).
“I think they’re looking at it from a municipal perspective,” White said. “For me, it’s, ‘See where we are and how we approach this’.”
He has talked to politicians in Duncan’s riding and to other Liberal supporters.
“This has got to be fixed,” White said. “There’s got to be some Liberals who see this for what it is.”
Clarke noted that he, too, has had hearings with Liberal MPPs who were sympathetic.
White noted the lobby approach to date has been scattered, with lobbies and protests and he believes those fighting for the industry are going to have one opportunity to convince the government to drop its cuts.
“We need to get everybody pushing the same way,” he said.
White added he, too, is puzzled why the government is hitting the industry.
“He [Duncan] is getting $1.1 billion a year with zero outlay … If they think there’s $1 billion out there in [increased casino] gambling, I don’t see that.”
He said the Don Drummond report to study the provincial deficit considered only spending and not revenue, and White said that might be why the horse group became a target.
Drummond saw money going out, but did not consider the return, he opined.
“We’ve got to say, ‘This is really what you’re going to do if you proceed with this’,” said White.
“You kill a bunch of rural jobs to create 2,500 jobs in Toronto. It’s strange.”
