Monday, October 5th3.2°C

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


Recent Trending

Today's Market
S&P TSX13339.74+97.85
S&P CDNX525.56-0.33
S&P 5001951.36+27.54
CDN Dollar0.7653+0.0051
Natural Gas2.461+0.010

Okanagan Companies
Pacific Safety0.215+0.000
QHR Technologies Inc1.19+0.01
Metalex Ventures0.06+0.00
Russel Metals21.48-0.07
Copper Mountain Mining0.42+0.03
Colorado Resources0.08+0.01
ReliaBrand Inc0.004-0.000
Sunrise Resources Ltd0.02+0.00
Mission Ready Services0.095+0.005
Decisive Dividend Corp3.49+0.45
Diamcor Mining0.90+0.02


24216382828 Dunster road
10095837 bedrooms
more details
Click here to feature your property
Please wait... loading

Living beyond 100

Photo: ContributedThere was a time most careers involved an apprenticeship of one sort another. Some official, others involving years of servitude, and others time simply spent watching and emulating ...

Collateral mortgage

Photo: Thinkstock.comMost of the time I recommend that my clients not take a collateral type mortgage product, as it locks you in with the current lender and at maturity the mortgage is costly to tran...

5 Claim misconceptions

Photo: Thinkstock.comIf you have been hurt in an accident or as a result of medical negligence you will likely look to your friends and family for some advice on how to deal with the situation. These ...




Member of BC Press Council