Hedging His Bets

May 20, 2012

To give the mayor his due: during Monday’s debate on the prospect of building a casino in Toronto, he executed what would not be considered a typical Fordian manoeuvre. Instead of just blustering through, acting impulsively on gut instinct or what he believes some mythical taxpayer wants, Ford introduced a motion calling for further study and fact-finding before asking his colleagues to make a decision about whether to give a thumbs-up to the OLG and allow a casino in Toronto.

What’s that you say? A reasoned debate? A little of the old rational discourse? Well, I do declare.

Of course, the mayor made it clear what he personally thinks about casinos. For him, they are all upside. A hundred million delicious, lilac-smelling dollars would flow into our coffers—a number that, like many of the mayor’s boasts, is of uncertain origins. (Perhaps he simply multiplies 100 by 5 cents and arrives at the amount he needs to back a claim?) It’s never the same number, but it always works in the mayor’s favour. Call it the new math.

While we’d like to think this call for careful deliberation and evidence-based decision-making heralds a new approach from our chief magistrate, that might just be wishful thinking. After all, during this very same executive committee meeting, he led the charge to try and rescind the 5 cent plastic bag fee in order to … what? Eliminate any evidence that David Miller was once mayor? Generate some sort of political issue with it?

Respecting Toronto Taxpayers One Nickel At A Time.

Far more likely: what’s giving the mayor pause on the casino issue isn’t a new-found desire for informed debate, but rather the thorny matter of its location. Jane Holmes, Woodbine Entertainment Group’s vice president of corporate affairs, told the committee that a new casino anywhere else in Toronto would jeopardize Woodbine’s existing business—and by extension, the mayor’s much ballyhooed Woodbine Live complex. For Ford, the decision of where a casino might go clearly comes with much larger implications. How could he be seen championing a waterfront casino to the detriment of a business in his own backyard? Don’t us downtowners already get everything without leaving even so much as crumbs for the suburbs? The optics of that—not only for the mayor but for every pro-casino suburban councillor—are ugly.

It’s unfortunate that’s the direction it seems the casino debate will take: not if, but where. Because there’s a much larger conversation we need to have, one that bubbled up at Monday’s meeting: What is the net benefit of building a casino in Toronto?

Note the word net. Anybody who’s pro-casino can read off the reasons having one would be good by rote. Jobs, jobs, jobs. Added revenue to plug budget holes or build much-needed infrastructure. The zazz of a shiny new edifice dedicated to the pleasure of vice and a palace to watch Howie Mandel perform. Why would anybody be against that?

Besides, if we don’t build a casino, Mississauga will. And if Mississauga builds a casino then, well… Yes. What does happen to Toronto if Mississauga has a casino and we don’t? Do we get economic spin-offs, and do they mitigate massive traffic jams? That’s where the question of net benefits—gains minus the costs in receiving those benefits—enters in. The pros minus the cons. Just because the project comes with some advantages doesn’t mean we end up in positive territory.

It’s too soon to say what realistic revenue projections look like, but they won’t be nearly the amount Ford declared. It’s pretty well established that municipalities in Ontario with casinos get the short end of the stick, the slightest slices of financial pie. And the notion of our mayor marching into the premier’s office and striking a better casino deal for Toronto is delusional even by the hyper-delusional measure of this mayor. He’s missed no opportunity to alienate our current premier, regularly threatening him with electoral pain at the hands of Ford Nation. Not to mention that little bit of debt the province is wrestling with. Yeah, they’ll want to hand over more cash to us.

Oh wait, we can parlay the highly desirable waterfront location the likes of MGM wants in order to secure a better deal for the city. This is the flip side of the Woodbine situation for Ford: he’s got reasons to keep it local, but the city stands to make a lot more if we put the casino near the waterfront. As pointed out by MGM’s representative to reporters, the biggest source of revenue for the city would occur by putting the casino on city-owned landed and raking in lease payments—and it’s a fair bet the waterfront would command a good price. (MGM has gone so far as to say it wouldn’t be interested in building at Woodbine at all.) We’ll pimp ourselves out, sure. But we won’t come cheap; it’s high-class hooking all the way.

Aside from a whiff of desperation, this interest in putting a casino by the waterfront also reveals a fundamental lack of understanding about the nature of downtown Toronto. The last thing it needs is the glitz, glamour, and showy spectacle that some sort of resort-y hotel/casino might deliver. Aside from the gambling, we already have all of that—just see our restaurants, theatres, shopping, hotels, and convention spaces. It might come as a bit of a surprise to some councillors who just come downtown to work or see the Leafs, but it already is a bit of a destination.

What downtown Toronto needs—especially along its waterfront—are more vibrant public spaces. Real, tangible, lived-in ones, not those manufactured by corporate entities catering to some projected desire we have to get away from it all. How much is it worth to us as a city to bargain away a chunk of our prime real estate in return for a whack of service jobs and an uncertain revenue stream that will invariably fall short of expectations?

The only certainty, gained from the experiences elsewhere: a casino is never the economic saviour it’s played up to be for a city of our size, with an economy as diverse as ours. At best, it’s a gap filler, a provider of some of those nice-to-haves the mayor could easily have us do without. Hardly what you would cede choice property over for, on the very likely losing end of what’s shaping up to be a “steal.”

This is unfamiliar territory for Mayor Ford with no easy division to exploit. The big boys in the private sector are calling for a prime waterfront location. If he acquiesces it might mean putting the final nail in a pet project he’s long been claiming as his own, right in his neck of the woods. Either one probably won’t be the windfall he’s proclaimed. In gambling parlance, the mayor needs to throw a hard eight and a staff report may just help him hedge his bets.

repurposedly submitted by Cityslikr


Niagara Falls Ontario Wonderful Place For You To Go

March 23, 2010

Unexpectedly finding ourselves in the middle of a casino in Niagara Falls one night last week (tell me that hasn’t happened to you), we pondered on the notion of government sanctioned gambling. What had once been a highly controversial topic less than 20 years ago was now simply a given. A not-quite-Vegas-more-like-Reno-or-maybe-Atlantic-City given where cheese and bad food rules although the drinks are made in Ontario expensive.

We are not gamblers. Or, after our Niagara Falls experience, I should say, two of us aren’t gamblers. (Acaphelgmic went missing and has still not turned up days later.) It’s not owing to any moralistic bent. To our mind, we just don’t see the point of it. Money does burn a hole in our pockets but we can think of much more interesting ways to piss it away.

Like with so many other things though, we are face first into the prevailing winds of our time. Large swaths of the public, who otherwise rail against handing over their hard earned cash to the government in the form of taxes, happily do just that at a slot machine or card table. It’s a matter of personal choice, I guess, although for some that is highly debatable. Gambling, once the scourge of decent society, is now an acceptable pastime, wealth distributor and government income generator.

Last fiscal year, the Ontario Gaming and Lottery Corp. pumped nearly $4 billion into the Ontario economy, half of it directly into provincial coffers. It is a major employer and corporate sponsor of charities and cultural events. The 10 casinos it owns and/or operates have brought a pulse back into the ailing municipalities that have embraced them. This is a service sector largely resistant to economic cycles.

“If gambling, why not drug decriminalization?” my non-gambling colleague asks over sparkly cocktails at a glittery bar. “Or prostitution. Let’s accept the fact that there are distasteful habits that we just can’t legislate or regulate out of practice, and get in on the action.” Own it to rule it.

Maybe mayoral candidate Giorgio Mammoliti isn’t so out there after all. OK. He is but as governments on all levels grapple with mounting fiscal imbalances why are we ignoring potentially huge revenue streams that are swirling around us, untouched in the underground economy? Not so long ago, we as a society didn’t abide gambling. We seem to have overcome our qualms about that. Why not legalized (and taxed) prostitution or drug use?

I would probably be an even stronger advocate of such ideas if I truly thought moneys made from such non-traditional enterprises were properly plowed back into the public sphere. A meander off the beaten track of the city of Niagara Falls doesn’t fill me with hope however. My childhood memory of the place is that of a somewhat tacky, down-at-heel vacation destination. Posed on the veritable precipice of a truly astounding natural wonder, the town was as equally awash in chintzy souvenir shops, carnival attractions and all the other markings of low rent consumerism.

Despite the boost to the local economy that the government run casinos claim to have provided, Niagara Falls still feels somewhat shabby. Dilapidated houses sit in the shadows of high rise hotels on somewhat derelict feeling streets just off the main drags. Actual residential areas are few and far between. Try finding a bank when you’re in need of some cash (no, I don’t have a problem) and are absolutely unwilling to hand over exorbitant fees to ATMs that you’re pretty sure are directly linked into the casinos.

It simply feels that little of the cash being thrown around town makes its way back into the lives of the people who live here. But hey, without the casino, do you think Gladys Knight and the Pips would give so much as a second thought to Niagara Falls as a tour stop? Where else would octogenarian funnyman Don Rickles ply his trade without our wealth of casinos?

And where else could our provincial government turn in order to divest its citizens of billions of dollars aside from the casinos and other gambling venues? It is the new reality, this uneasy truce between citizens and their elected representatives. The casino quid pro quo. I’ll give you my money although I want a little something in return. No, not services. But a chance to strike it rich under the flashing lights and faux grandeur of palaces dedicated to what we once considered nothing more than filthy vice.

sanctimoniously submitted by Urban Sophisticat


Selling The Crown Jewels

March 11, 2010

What’s with our politicians lately and their hell bent determination to sell off the proverbial farm? Is it something in the water (publicly owned, for now) they’re drinking? First, mayoral candidate Rocco Rossi made divesting the city of Toronto Hydro a major plank in his campaign platform. His main rival, George Smitherman, has slowly come round to a similar way of thinking.

Now the provincial government has been pondering aloud thoughts of unloading such assets as Hydro One, OLG and the LCBO. While putting nothing on the table in the immediate future, the government has hired a couple investment banks including — wait for it, wait for it — Goldman Sachs to assess the worth of a proposed super Crown corporation, bits of which could be sold off to private hands in an attempt to “monetize public assets” and “unleash” an economic jolt to the economy. Colour me unimpressed because I smell a big steaming pile of panic in this approach.

Didn’t we just undergo about 18 months or so of near economic calamity followed by a present recovery that is robust only in its anemia? All but the most hardcore Milton Friedmaniacs should have no trouble with governments carrying a debt load as result of keeping the economy and vulnerable citizens afloat during such harsh economic times. And frankly, why anybody would be listening to anyone touting Milton Friedman tinged views after their healthy contribution to the recent financial fiasco is beyond me. The acolytes of Milton Friedman should still be silent with embarrassment.

Maybe if I could find a single unqualified example of a government being well served by a one time sale of a public asset, I’d be more open to the concept. Proponents hail the leasing last February of Chicago parking meters for the $1.2 billion dollars it netted the city. Yet within a month, problems arose with price hikes, bad maintenance and no public accountability (read all about at theexpiredmeter.com) and for the next 75 years, the money paid for parking at meters in Chicago will go directly into private hands instead of the public purse.

And this is cited as an example of a good deal by pro-privateers. Let’s not even bring up our provincial government’s 99 year “lease” agreement of the 407 toll road back in 1999. For me, a public sale of assets inevitably amounts to nothing short of a public fleecing.

I’m no economist but the selling of public assets just doesn’t make in any sense. If an asset is worth something and by that I mean it generates revenue, why sell it? If an asset doesn’t generate revenue, who wants to buy it? And if the asset in question is a public utility? Well that’s a non-starter. Society cannot be well served by placing public utilities into private hands.

Yet here we are once more with a government in power, facing a looming election and an ugly looking bottom line. Short term thinking holds sway. Hawk the public wares, pay down the debt and declare your fiscal prudence. Pay no attention to the revenue stream that ceases to flow into government coffers. The next time a crisis arises (and in the boom and bust economy we embrace, there will always be another crisis), we’ll just auction off another asset. That is, of course, if there’s anything left to sell.

But just for a moment, how be we try thinking outside the privatization box? What about instead of selling off, say, the LCBO for a single cash grab that we’ll never have access to again, we impose a twenty-five cent tax on every bottle of intoxicant purchased and dedicate it solely to lowering the debt? Drink Down the Deficit®™©, we’ll call it. When things are back under control, we rescind the tax?

Fuck that. If things are so dire that we’re actually contemplating the sheer stupidity of selling off money making enterprises, levy a buck a bottle at the LCOB and two bucks a square at the Beer Store. Yes, it’s regressive and we’re piling the debt load onto the backs of those who can least afford it but if we’re being truthful about the matter, we’re doing the same thing by selling off cash cow Crown corporations. It just simply delays the inevitable.

As an imbibing enthusiast, I will happily pay more for the privilege of the tipple knowing that the money is going toward deficit reduction rather than into the pockets of the vultures who are greedily circling the body politic. In fact, I will consider it my patriotic duty to up my consumption of alcoholic beverages and do my part in slaying the deficit dragon. Let us raise multiple glasses to the health of the commonweal.

Chin, chin.

soberly submitted by Cityslikr