Playing Better Odds: Let’s Fold Toronto Casino’s Losing Hand

I don’t want to think about casinos any more, but I don’t know how to avoid the issue.  The rolling barrage of OLG advertisements cannot be ignored.

Now that we have a Premier and a Mayor again, it might be hoped that the OLG can be reined in, but that hasn’t happened yet.

A joint letter from past mayors, may restore some sanity to the debate.  It expresses deep skepticism about the economic claims being made by casino proponents.  At least my own sanity feels slightly restored.

Although the OLG’s campaign is unrelenting, the central argument gets a little weaker each day.   When the public meetings concluded last week, Paul Godfrey revealed that the financial benefit to Toronto isn’t known and probably won’t be known by the time City Council votes on the casino proposal in March.

How has this come to dominate the City’s agenda, when so little is known about the direct financial benefit, the social costs, or the net economic impact?

The mayors’ letter warns of social costs arising from the elevated levels of gambling that are stimulated by a big casino.  There’s no disputing this.  Given that most of the traffic through a lone casino in a metropolitan area is local, the OLG’s forecasts of windfall profits are contingent on Torontonians gambling more or winning less than they do now.  Yet the diffusion of harm radiating out from each incident of excess, and the many ways society and government must pay to mitigate this harm, has never been factored fully into this debate.

If there is no consensus on the full social cost AND no agreement on the financial return to the City of Toronto, what exactly has the public been consulted about, and what will City Council base its decision on in March?  I really want to know.  What could possibly validate an economic argument in which neither side of the cost/benefit equation is known?

This uninformed debate degrades us all.  It results from a hotwired decision-making process that seeks to minimize opposition.  An arm’s length corporation of the Province shouldn’t be able to spend millions of dollars pressuring a City to deform its future.  It would be more appropriate for an elected official like the Finance Minister to press the economic case on behalf of the OLG than it is for the OLG to carry the fight on behalf of the Ministry.  It is, after all, the Ministry’s mandate to manage the economy, not the OLG’s.

And if the Liberal minority government supports the OLG’s campaign for a Toronto casino, why aren’t local MPPs publicly championing the proposal?  The OLG is their agency, so they own this initiative.  They must either support or oppose it –the government cannot stand idly by.

The longer this goes on, the more it starts to stink.  The economic rationale for the casino is too sketchy for the proposal to have progressed this far.

When neither the cost nor the benefit is known, it’s as hard to oppose a proposal as it is to support it.  Maybe this is why the majority of surveyed Torontonians are still “somewhat” supportive or “somewhat” opposed after months of consciousness raising by the OLG.

To oppose the casino proposal, it shouldn’t be necessary to prove that a casino won’t make a net contribution of some kind, but only that there are more certain and legitimate routes to prosperity for citizens of Toronto and the Province.

I’m not the right person to provide the list of alternatives, but here are a couple of examples of serious economic development measures that should bump casino construction down the priority list and off the public agenda:

  1. Skills training: Small investments that reduce the 360,000 skilled workers shortage, predicted for Ontario by the Conference Board of Canada, guarantee huge ROI.  A great example is the $40 million Downsview Aerospace campus that will train 3,000 workers over 10 years for jobs that pay twice the national average.  Their cumulative earnings will be at least $1.2 billion in by 2024, and they will have contributed at least $309 million in income tax.  Add in the construction jobs and various other spin off benefits, and this looks like a no-brainer.  Yet, despite a public announcement of the project at City Hall nine months ago, and an April deadline for ground breaking, the project still awaits funding commitments.
  2.  Transit:  With annual GDP losses of $3-4 billion due to traffic congestion, every reduction in average travel time is worth tens of millions of dollars to Toronto’s economy.  The Province was prepared to put billions of dollars into a transit plan that was completed before Rob Ford took office, but he has confounded every effort to implement that plan.  He has also dismissed Adam Vaughan’s suggestion of privatizing the Gardiner Expressway.  Vaughan’s idea had the benefit of using profits from expressway tolls to help finance additional transit capacity, which would reduce surface congestion.  These improvements come with their own sources of funds and have measurable economic benefits.  Every 1% improvement in GDP loss due to time lost in transit is worth $30-40 million dollars per year.

These are just two examples of the many obvious things the City or Province might do to help their economies instead of rolling the dice on a mega casino.  Other people could come up with long lists of opportunities to generate even greater return on investment than these two examples of mine.  So why does it seem as if casino construction is the best idea the Province and the Mayor’s team have to offer us?

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