Thursday, December 18th2.7°C
24563
23980

Auditor calls OLG's modernization plan too ambitious, predicts gaming job losses

TORONTO - Ontario's Lottery and Gaming Corp. failed to adequately consult municipalities before promising to increase revenues by building new casinos that it turned out cities don't want, auditor general Bonnie Lysyk reported Monday.

"OLG included projected profits from those casinos without first confirming that new casinos would be accepted, would be considered, in certain municipalities," said Lysyk. "In fact, large Ontario cities such as Toronto and Ottawa rejected OLG's proposals for constructing new casinos."

Lysyk issued a special report on OLG's modernization plan that also criticized the agency and the Liberal government for the "abrupt cancellation" of a program that gave $347 million a year from slot machine revenues to horse racetracks.

"The profit estimates should have been more realistic, and the abrupt impact on the horse racing industry could have been mitigated had more people been consulted beforehand," she said in the report.

OLG originally projected it could bring in an additional $4.6 billion in gaming profits between 2013 and 2018 through new casinos and other modernization efforts, a figure it has since revised downward by nearly half to $2.2 billion. However, that's still too optimistic for the financial watchdog, who puts the figure at $1.8 billion, or about 60 per cent less than the forecast.

The Progressive Conservatives said that means the Liberal government faces an even larger problem trying to eliminate an $11.3-billion deficit and balance the books on schedule by 2017-18.

"There's a huge hole in the Liberals' accounting due to OLG revenues," said PC finance critic Vic Fedeli.

But Finance Minister Charles Sousa said he'd already taken the lower-than-expected revenue hike from OLG into consideration in last year's budget, and then lowered the figure even more in last fall's economic statement.

The agency is expected to turn over $2 billion to the province this year, and had hoped to increase that by $1.3 billion more each year by 2018, but Sousa put a much lower revenue figure in his budget.

"In the provisions of the budget at the time, we lowered them — we didn't make it as high in what we put forward in our budget projections, and since then we've revised them again, and I've since revised them even lower to $600 million," he said.

OLG also overstated the number of jobs that would come from its modernization plan by projecting 2,300 new positions would be created, said Lysyk, who warned there would likely be job losses in the end.

"OLG projected that all of this expansion was to have created 2,300 net new gaming jobs in the province," she said. "With the cancellation of a GTA casino factored out of this projection, there may be a loss of 1,000 net new gaming jobs."

In addition, OLG's hopes of attracting $3.2 billion in private sector capital investment has been reduced to only $940 million, "most of which would be realized from the sale of OLG's existing gaming assets," said Lysyk.

The auditor also said part of the problem may be changing leadership at OLG, noting it has had five different board chairs and seven different CEOs since 2005, and is now reporting to the fifth cabinet minister to be responsible for the lottery agency.

"One wonders if stable leadership and governance could have benefited OLG and the gaming industry in Ontario," wrote Lysyk. "In our opinion, the government and OLG did not do enough preparation and planning before launching an ambitious 'best-case scenario' modernization plan."

Follow @CPnewsboy on Twitter

The Canadian Press


Read more Business News

21297


Recent Trending




Today's Market
S&P TSX14346.75+133.36
S&P CDNX665.50+6.47
DJIA17778.15421.28
Nasdaq4748.396+104.085
S&P 5002061.23+48.34
CDN Dollar0.8633+0.0045
Gold1198.00+3.70
Oil54.89-1.58
Lumber335.90+1.70
Natural Gas3.658-0.044

 
Okanagan Companies
Pacific Safety0.13+0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.28+0.01
Cantex0.03-0.005
Anavex Life Sciences0.17+0.0041
Metalex Ventures0.055+0.005
Russel Metals26.00-1.18
Copper Mountain Mining1.57+0.03
Colorado Resources0.12+0.015
ReliaBrand Inc0.011-0.0089
Sunrise Resources Ltd0.055+0.005
Mission Ready Services0.225+0.005

 
23744


21297

FEATURED Property
20583821047 Cascade Placce
5 bedrooms 3 baths
$665,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Parenthood: Estates, insurance & taxes

It is now even more important to ensure your loved ones are well looked if anything should happen to you. Here are a few topics to consider helping you prepare for some of the unexpected events that c...


Managing your sales team

Managing a sales team can be quite a challenge. Harnessing individual personality preferences and getting everyone focused on the same goals, moving at the same pace, and working in collaboration to d...


Working under the table

They say there are only two things that are certain in life: death and taxes. Not exactly an uplifting thought, but true nonetheless. Some people try to avoid paying tax by “working under the ta...

_





24476


Member of BC Press Council


24433