‘The chances are slim’ for a Toronto casino, councillors suggest

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After Premier Kathleen Wynne directed the Ontario Lottery and Gaming Corp. to offer a deal on a casino "the same for all municipalities," Toronto councillors indicated the change in policy puts a Toronto casino in serious doubt.

Toronto Mayor Rob Ford said a new revenue sharing deal does not mean the push for a downtown Toronto casino is over, and continued to argue the city should be treated differently than smaller cities such as Ottawa or Hamilton. "A new funding formula doesn't necessarily mean it is going to be bad. We just have to review it," he told reporters Wednesday. "To look at a new funding formula, I have no problem with that – it could benefit."

Mayor Ford, asked if Toronto should get a special deal, said the city deserves it because of its size. "We're huge. We are the biggest city. I think we should, absolutely. " he said.

The Premier called Ontario Lottery and Gaming corporation chairman Paul Godfrey and CEO Rod Phillips to her office Wednesday after The Globe and Mail reported their agency was looking to cut Toronto a special deal for accepting a casino.

The OLG had said a casino could net Toronto between $50-million and $100-million annually, more than double what the city would be entitled to under the standard hosting fee formula. On Wednesday, Mr. Godfrey backed away from that figure.

Using the usual formula, which is a percentage of a casino's net revenue, Toronto would receive about $20-million in hosting fees. Government sources, however, had indicated last week that the formula for Toronto would include other factors, such as infrastructure.

If the formula sees the city receive less than the $100-million previously floated, however, it might not be enough to sell the nation's largest city on a casino.

One outspoken critic of the Toronto waterfront casino was quick to see the change as the death knell for plans to put the mega-resort in the downtown. "I think it kills the casino," Councillor Adam Vaughan said.

"Hopefully this puts an end to these ridiculous numbers," he added, predicting the city will likely see a revenue deal closer to the $20-million it would see under the formula offered to other municipalities.

Joe Pennachetti, Toronto's city manager, told reporters he does not know when his highly anticipated casino report will be released. The report was supposed to be delivered earlier this month, but was delayed while the city waited for additional information from OLG.

The casino plan has only a handful of strong supporters on council, among them the mayor and his councillor brother Doug Ford.

Deputy Mayor Doug Holyday on Wednesday said that it will be difficult for the city to decide on a casino until it is clear what revenues the city will receive.

"We can't rely on newspaper stories or other reports in the news on what we could or could not get from a casino," he said. "We need to have legal, binding proposals that we can compare, and maybe take a look at other proposals that are going to other municipalities, to take a look at the whole picture, to make a proper decision."

Many undecided councillors have said the city would need to gain $100-million or higher annually from a casino for a complex to get their support.

Councillor David Shiner said if he was to support a casino Toronto would need to receive a hosting fee of more than $100-million.

"If their revenues are small, the chances are slim that Toronto's ever going to support a casino," Mr. Shiner said. He added that a hosting fee of $20-million to $30-million would, for him, take the issue off the table.

Councillor Mike Layton, who is opposed to the casino, said the gambling facility would take money out of the pockets of Torontonians while offering very little in return.

When asked if this meant the death of a casino in Toronto, Mr. Layton said, "It's been slowly dying over the course of the debate."

Councillor Norm Kelly, who supports a Toronto casino, said a lower hosting fee isn't a dealbreaker, "though you'd certainly like it to be bigger and you would fight as hard as you can to maximize it."

"There are three revenue streams," he said. "One is a cut of the action. The second are the taxes you get once the complex is built. And the third is, if you're the landlord, you get rent. And that's what makes the Exhibition Place proposal, in my eyes, a very strong one."

Councillor Kelly added that a Toronto casino should be in a special category.

"Maybe what the province could do, or OLG could do, is create different categories and put us in the one that gets the highest percentage of the take," he said.

The suggestion last week that Toronto would get a different deal than other municipalities rankled the mayors of other cities that already host casinos. Ottawa Mayor Jim Watson, meanwhile, sent a letter to the OLG saying his city would refuse to accept a new casino unless it got the same deal as Toronto.

It also rankled Ms. Wynne, who has made strenuous efforts to reach out to other parts of the province that turned their backs on the Liberals in the last election.

Finance Minister Charles Sousa, whose department oversees the OLG, sounded nonplussed when asked if, absent a special deal, Toronto would be likely to reject a casino. Mr. Sousa said the city would receive economic benefits over and above the hosting fee through the new jobs a casino would bring.

"The formula's going to be laid out. The revenues that would be shared with the municipalities, including Toronto, will be dictated and it will be up to the municipalities now to decide, and up to Toronto to decide, if they want to proceed," he said.

"We're talking billions of dollars of infrastructure as well. We're also talking about a huge convention centre in the city of Toronto, and a lot of jobs to boot."

He said there had been a "miscommunication" on the casino file and the government had spent the last several days trying to iron it out.

"The Premier has been very consistent and adamant about her desire to see fairness throughout the system," he said, " that no municipality be given a special deal."

He said the government would forge ahead with its plan to modernize the OLG in hopes of generating nearly a billion dollars more in desperately needed revenue to close the province's yawning budget gap.