Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 6 - Evidence for April 21, 2004
OTTAWA, April 21, 2004
The Standing Senate Committee on Legal and Constitutional Affairs met this day at 4:10 p.m. to consider Bill S-6, to amend the Criminal Code (lottery schemes).
Senator George J. Furey (Chairman) presiding.
[Translation]
The Chairman: Honourable senators, today we continue our study of Bill S-6, to amend the Criminal Code (lottery schemes).
[English]
Our witness today is Mr. Hal Pruden, Department of Justice.
Mr. Pruden will make a short presentation that will be followed by some questions from the senators.
Mr. Hal Pruden, Counsel, Department of Justice: The general scheme of the gambling provisions in the Criminal Code is to prohibit all forms of gambling except those that are specifically permitted by the code. Section 204 permits private bets between individuals who are not engaged in the business of betting. It also permits pari-mutuel betting on horse races, where the federal Minister of Agriculture regulates the betting.
Section 207 permits a broad range of "lottery schemes," defined to include various forms of lotteries, gaming and pool betting that are conducted by a province or territory, including those operated on or through a video device, slot machine, computer or dice game. Section 207 also permits a smaller range of lottery or gaming schemes that are licensed by a province or territory, for example, to charities, but not those that are conducted on a video device, slot machine, computer or dice game. Section 207.1 permits, under certain conditions, a broad range of lottery or gaming schemes operated on cruise ships that are on an international voyage.
Prior to 1969, legal gambling in Canada was primarily limited to pari-mutuel betting on horse races and some low- stakes charity gambling. A joint parliamentary committee had considered the possibility of expanding legalized gambling in the 1950s. The legalization of a state lottery in New Hampshire in 1964 reawakened interest in lotteries throughout North America.
That led to the 1969 Criminal Code amendments in Canada that permitted lottery schemes being conducted by the federal government or provincial/territorial governments and those being licensed by provincial/territorial governments. There has never been Criminal Code permission for a lottery scheme that is licensed by the federal government. Clearly, Parliament chose to expand permitted gambling on the basis that the proceeds would benefit "public good causes," including governments, rather than private, commercial interests.
In 1979, a federal-provincial-territorial agreement on gambling was signed, whereby Canada agreed not to conduct lottery schemes, and in return it would receive what now amounts to some $50 million annually. In 1983, Parliament amended the Criminal Code to permit pool betting operations conducted by the federal government.
Litigation ensued, with some provinces complaining that the federal government was really conducting a lottery scheme and with the federal government complaining that Quebec was operating a pool betting operation. The Canadian and provincial/territorial governments resolved all outstanding litigation by signing a 1985 agreement on gaming. Under the agreement, the federal government agreed to place legislation before Parliament that would remove the authority for federal lottery schemes and pool betting operations and explicitly permit the province and territories to conduct lotteries, pool betting and other games of chance.
The 1985 amendment also clarified that provinces could conduct lottery schemes or other gaming activities operated on or through a video device, slot machine or computer, but they could not license others to do so. Provinces and territories agreed to give the federal government $100 million for the 1988 Calgary Olympics and to continue the annual payments under the 1979 agreement. A 1999 amendment to the Criminal Code permitted lotteries or gaming schemes that are operated by a province or territory through a dice game.
The lottery scheme provisions in section 207 express the current federal government policy. Provincial and territorial governments are free to make local decisions regarding the kinds of lottery or gaming schemes that they may conduct or license within the limits set by the Criminal Code.
Some provinces choose to operate casinos and others do not. Provinces and territories determine the types of games or lotteries that can be operated in each province. To this point, only the Northwest Territories and Nunavut have decided not to offer any slot machine gambling, which includes VLTs. British Columbia, Ontario and Yukon have chosen not to offer any VLT gambling in bars, but do offer slot machine gaming in casinos.
Some provinces, including Alberta, Manitoba and New Brunswick, have held provincial or municipal referenda relating to the removal of VLTs from bars. In provincial referenda, no province has chosen to remove slot machines from all bars. However, in provinces with municipal referenda, a few municipalities have chosen to have VLTs removed from bars. Some provinces have chosen to cap the number of VLTs that will be placed within the province, as is the case with Quebec. Clearly, the issue of problem gambling as balanced against individual choice and provincial revenues has arisen in the context of provincial or municipal referenda relating to machine gambling.
Bill S-6 would bring a fundamental change to the existing federal government policy on lottery schemes, as currently expressed in the provisions of the Criminal Code. Bill S-6 could be expected to have an economic impact upon the provinces and territories and upon federal-provincial-territorial relations, given the 1979 and 1985 federal-provincial- territorial agreements on gaming.
It is the legal opinion of the Department of Justice that Bill S-6 would mean that provinces would no longer be able to conduct lottery schemes on video lottery terminals, or VLTs — these are a form of slot machine — at locations other than a racecourse and premises dedicated to gaming activity. The bill gives no definition for "premises dedicated to gaming activity" and sets no limit on the size of the premises or the number of VLTs.
Under Bill S-6, provinces could continue to place VLTs at racetracks or casinos, and they could place VLTs in any other "premises dedicated to gambling." Conceivably, a small shop in a shopping mall could be dedicated to VLTs. Multi-use premises, such as bars, could not be a location for provincial government VLTs.
Also, as currently drafted, the bill would not permit computerized gambling or dice games other than in dedicated gambling premises.
While provinces and territories do not currently conduct the sale of lottery tickets, pool betting, or cyber casino games via the Internet, the bill would take that option or possibility away. Arguably, Bill S-6 would also make it illegal to conduct the sale of computer-generated "quick pick" lottery tickets at kiosks in shopping malls.
Senator Nolin: I have one constitutional question. Is the agreement that occurred after 1991 respectful or not of the decision of the Supreme Court in Furtney?
Mr. Pruden: I am not sure that the agreement has any difficulty with the Supreme Court's decision in Furtney. In that, they said the federal Parliament may appropriately legislate in the gambling field using its criminal law power; and provinces can legislate in the gambling field using their property and civil rights power.
With the 1985 agreement, the federal government simply said that it would put a bill into Parliament, which passed, that took away the permission that had existed from 1969 for the federal government to conduct a lottery scheme. As lottery schemes conducted by the provinces were permitted under the Criminal Code since 1969, they continued to occupy that area.
I really do not see any constitutional problem with the 1979 agreement by which they said the federal government could be operating lottery schemes, but it would not operate lottery schemes.
Senator Andreychuk: Like some other senators, I remember a time when there was only the Irish Sweepstakes, which were whispered about in corners and not acknowledged in public. We have changed the landscape of Canada with casinos, VLTs and lottery tickets.
I have a couple of questions. Given the agreements, what is the present state of resources? Do you have any figures for what the provinces make from VLTs that would be excluded by this bill? We know it is an issue of individual choice and provincial revenues. If we passed this bill, what would be the effect on provincial revenues? That is the first part of my question.
Second, what does the federal government gain overall under this provincial arrangement?
On that topic also, the federal-provincial system, when it works, works well in Canada, and we are respectful of provincial authorities and rights, and hopefully it is the same for the federal jurisdiction.
Has there been any discussion with provincial authorities on the federal government removing any of their authority, as Bill S-6 would do? How would you handle this in light of this delicate balance that we have in Canada, if this bill were to pass?
Mr. Pruden: Perhaps I should start first with the federal government. As I noted, approximately $50 million per year is paid under the 1978 agreement by the provinces to the federal government. It is approximately $50 million in modern dollars rather than 1978 dollars.
Senator Nolin: What do you mean?
Mr. Pruden: It is more than $50 million. It was fixed to an earlier year, 1979 or 1980 dollars.
Senator Banks: Is this a percentage?
Mr. Pruden: No, it is fixed.
Senator Banks: What moves it?
Mr. Pruden: What moves it is the value, for argument's sake, of the 1978 dollars, when the agreement was signed.
As that value increases, so increases the annual payment to Canada. It is now approximately $50 million that Canada receives.
In terms of the provincial dollars received, I do not have a total figure. I know that Statistics Canada from time to time publishes data, and also the Interprovincial Lottery Corporation and the other lottery corporations would keep tabs on it. It is considerable. It is much more than $50 million.
Senator Joyal: It is close to $1 billion for VLTs alone. That is on the record. We had witnesses —
Senator Andreychuk: I wanted more of a global figure, and you are saying that perhaps Statistics Canada could provide that?
Mr. Pruden: Yes, or the Interprovincial Lottery Corporation should have that figure.
I should also respond to the question relating to provinces contacting the federal government on Bill S-6. I had two inquiries from provinces on this bill. They were file officers who were calling, not political officials. They were simply interested in noting the effect it would have on the provincial ability to have VLTs in bars, which many provinces now do.
Senator Andreychuk: You are saying you have had some information discussions?
Mr. Pruden: Yes.
Senator Andreychuk: If we pass this bill, how would the Department of Justice or the government handle the negotiations with the provincial governments?
Mr. Pruden: This question, I believe, arose in 1985 when the bill was before the Senate committee. There was a witness from the University of Ottawa, a professor I believe, who was asked by the Senate committee to look into the legalities of the agreements themselves and whether there would be litigation, or whether it was constitutionally possible for Parliament to amend the Criminal Code in light of those agreements. His view was that yes, of course Parliament is free to amend the Criminal Code if it wants to, even if that agreement exists, and litigation might ensue. It is very speculative to say what the effect of that litigation might be, either in the court of public opinion or in the courts themselves. It might be that they would not be able to proceed to litigation in the courts.
Senator Andreychuk: I understand that you are giving me a legal answer and I was talking about the political reality, but I appreciate that perhaps you cannot answer that.
Mr. Pruden: I would not want to speculate, but certainly I think it could be anticipated there would be a reaction from the provinces and territories, especially those that have VLTs in bars currently. Perhaps there would also be a response from those that do not yet have them but have the ability presently, if they chose, to place them in a bar.
Senator Nolin: Is it possible for the staff of the committee to find that testimony and to be in touch with the witness to see if we can elaborate on what we have just heard?
The Chairman: Absolutely.
Senator Nolin: You are suggesting that there could be litigation but not in court? I cannot imagine —
Mr. Pruden: Legal opinion may be of the view that the provinces would not be able to bring litigation. The principal focus of the opinion given in 1985 to the Senate was that Parliament certainly is not —
Senator Nolin: Subject to litigation?
Mr. Pruden: — is not precluded from making this kind of legislation by some agreement.
Senator Nolin: I hope.
Senator Andreychuk: There are two areas upon which I wish to touch. You have touched on something that concerned premises dedicated to gaming activity. That is not fully explained. Obviously, you could take a portion of somewhere and say this is the dedicated space. Would we get into that kind of intrigue, if I can call it that, like with cigarettes? If you put them behind a counter then you complied. "Dedicated space" may be an anteroom to a hotel or something. In other words, if we do not properly address what dedicated premises are, then there will be a lot of innovative, creative interpretations to circumvent this law?
Mr. Pruden: I have some difficulty in saying that the provinces would be circumventing the law. They might say that as it is written, the law would permit them to do certain things, so it would be their interpretation of the law. Some might say they are permitted to place provincial VLTs in dedicated premises in a shopping mall, and I think immediately of the West Edmonton Mall, which currently has casino premises. There are provincial government slot machines within casino premises within a shopping mall. They might decide they want very small, dedicated premises within a shopping mall.
Senator Andreychuk: When these agreements were discussed they were obviously discussed in terms of jurisdiction and revenue, if I recall correctly. Now the prevailing issue is — and I believe this is what Senator Lapointe was coming to — we are beginning to realize the harmful effects on society, although we do not know all of those, from gambling addictions. Has this ever come up as an issue in federal-provincial relations, as to whose burden is the cost of addiction counselling, addiction help?
Mr. Pruden: My understanding is that several provinces have dedicated a portion of gambling revenues to gambling treatment, and through their health care systems generally they will bear the costs for people who seek counselling through their medical advisers.
Senator Andreychuk: I am from a province that has said it is dedicating more money to help with addictions, and gambling addiction has been identified. Are you aware of the health care negotiations, which is a prime issue? Are the provinces requesting further funding because this is an expanding area of need within the health system?
Mr. Pruden: I am not aware of that. Perhaps someone from Health Canada may better know about that.
The Chairman: Mr. Pruden, in your opening statement, you indicated that it was the opinion of the Department of Justice that Bill S-6 would mean that provinces would no longer be able to conduct VLT schemes at locations other than racecourses or premises dedicated to gaming activities. You said the bill gives no definition of "premises dedicated to gaming." In your opinion, is this a substantive problem with the bill, or is it a drafting problem that could be fixed by way of an amendment?
Mr. Pruden: Certainly the committee, or Parliament, would be free to amend the bill as it is currently drafted to tighten up, if it wished, the meaning of "dedicated gambling premises."
The Chairman: It is not an issue that you think would be substantively fatal to the bill as it is presently drafted; it is one that could be corrected by way of amendment?
Mr. Pruden: If Parliament chose to pass the bill as it is drafted, there might be more litigation on the particular point of what constitutes dedicated premises. That is all I pointed out with that comment.
The Chairman: Thank you.
Senator Joyal: Mr. Pruden, Senator Nolin will remember that in the 1970s, when the Olympics Games were held in Montreal, the then mayor of Montreal came to the federal government to ask for an amendment to the Criminal Code to allow for the establishment of a lottery to fund the Olympics. The government came up with Loto Canada. It became a nightmare to operate because members of Parliament were recommending people to receive concessions to sell the loto tickets. It went wild, because Loto-Québec was already in the field, and there was competition between the Loto-Québec stands at one end of the shopping mall and the Loto Canada stands at the other end of the shopping mall. They were all after the same customers, the gamblers.
In many instances, the person who got the concession for Loto Canada tried to sign an agreement with the person operating Loto-Québec to keep a share of the sales of the Loto Canada tickets on the basis of a concession received from the federal government. After a while, the province came forward with the fact that they were operating the lottery systems and the federal government did not have the infrastructure for that, and that is how the agreement came about in which the federal government "rented" its power to allow lotteries to provincial governments in exchange for some kind of compensation.
Today, the compensation, as you said, is minimal — $50 million. I happen to have in front of me the figures given to us by our previous witness. In Quebec, the revenue to the province on all lottery games is $1.3 billion, and we have the statistics for all the other provinces. In other words, there was a political agreement that the federal government would leave that field to the provinces, and the provinces would pay renting fees. Through the years it has been a very good deal for the provinces if we view the issue only in terms of dollars, because the curve of increase of the income to provinces has soared, while the federal government's share, at the starting point, was limited to the value of the dollars in constant terms.
The revenue that the federal government receives is very limited in comparison with the social costs, which now seem to be higher and higher, for the very reason that there is more gambling and more people buying. Just looking at the income statistics, the money is there. The provinces have received billions of dollars of revenue on the whole gambling industry. We could total what the provinces receive from the lottery system versus what the feds get from it.
Now we are faced with the proposal put forward by Senator Lapointe, and it is more a public policy issue than a constitutional issue. The federal government could amend the Criminal Code and decide there will be no more gambling in Canada, period. We would have the capacity as a Parliament to do that. We do not want to do that for various reasons, and I may share some of them, but at this point we have to look at the broad picture of policy objective. There is no question that the social costs of gambling have increased tremendously all over the country, and as Senator Andreychuk has mentioned, provinces recognize they have to spend more money on alleviating the social, personal and health damage caused by gambling, because it has grown exponentially.
Senator Andreychuk: Including the justice system.
Senator Joyal: Exactly. When you measure the social costs of this phenomenon, they are great. Senator Lapointe is asking us to limit that.
What would be the impact of an agreement that the federal government signed? If we signed an agreement, we would have to inform them that we would be changing the rules of the game, if I can use that expression. They may want to renegotiate with the federal government, but the share of the federal government as a percentage is so minimal that, if I were in their shoes, I would not ask to negotiate, because they might find the bill is much higher. However, there are social problems that we have to recognize and that Senator Lapointe is trying to address. Is it sound public policy to approach this issue with this bill, or should we try to tackle it on other terms? That is the problem raised with this bill.
Mr. Pruden: I agree with you that this issue has been raised, and I agree it is a policy issue. The difficult position I am in is that while I may tell the committee what the legal impacts are, only the Minister of Justice can comment on policy aspects. I am not in a position to be able to address the question of policy.
Senator Joyal: However, you confirm the conclusion I draw, that if the federal Parliament wanted to ban all kinds of gambling, it could do so through the Criminal Code?
Mr. Pruden: Yes.
Senator Joyal: If the federal Parliament decided to limit some kinds of gambling to some kinds of circumstances and some kinds of location, it could do so, too?
Mr. Pruden: Yes.
Senator Joyal: One could do more or one could do less in terms of legal principles.
Mr. Pruden: It is clear that the Parliament can, using the criminal law power, legislate in the gambling field.
Senator Joyal: If we want to have a clear picture of this, since it does not seem to have been discussed at the federal- provincial conference or raised by the federal government, either through the attorneys general or ministers of health annual conferences, it would be for the federal government to decide if it is appropriate to take the initiative to revisit the agreement?
Mr. Pruden: This bill is before Parliament. It is for Parliament to determine whether this bill should pass. It is a private senator's bill that is before the Parliament of Canada.
Senator Nolin: As a follow-up, let us look at the past instead of trying to find out what is in the mind of the minister in terms of policy.
Have you tried to analyze the guiding principles that have influenced governments to move from total prohibition to wide-open systems in return for money? What was the raison d'être of that major shift from total prohibition to a regulated operation?
Mr. Pruden: The 1969 change was perhaps motivated by the fact that in the United States, at least one state had moved to the use of a state lottery as a funding-raising mechanism.
Senator Nolin: Funding raising was a driving force behind the change?
Mr. Pruden: Yes. The difference in Canada compared to the United States, to some degree, is that many U.S. states have private commercial casinos. Whereas in Canada, the vast majority of gambling that takes place will benefit either charitable organizations through licensed lotteries or a government of a province or territory.
In some cases there have been agreements between provinces and First Nations under which First Nations may benefit from casinos or other lottery schemes.
Senator Nolin: Funding raising for good reasons was the driving impetus to adopt a new guiding principle?
Mr. Pruden: Yes. Also, people had noted as early as the 1950s that there were very limited low-stakes gambling opportunities available. Bingo and pari-mutuel betting on horse races were legal for decades.
Senator Nolin: Parliament, in its analysis of the bill, could revisit the shift in the guiding principle. We could determine that we do not want to go back to total prohibition, but limit the availability of service. We want to send a signal that prevention through limiting access is preferable to a totally open service, or even offering regulated gambling?
Mr. Pruden: These are certainly issues that parliamentarians face.
Senator Nolin: That is the kind of question that Senator Joyal was asking.
Mr. Pruden: Parliamentarians can, of course, address these kinds of issues.
Senator Nolin: To what extent are we limited? I do not want to entertain the idea that we are limited by agreements between governments.
Mr. Pruden: That was the legal opinion in 1985 that the Senate received from the professor at the University of Ottawa, that Parliament could pass criminal law.
Senator Nolin: Thank you. We will try to govern by guiding principles, without forgetting about the fundraising aspect.
Senator Joyal: Can we get a copy of the federal-provincial agreement that was signed so that we can see the terms, if it is not a confidential document, and because it relates to federal-provincial relationships, it should not be according to the Access to Information Act?
Mr. Pruden: Are you talking about 1978 or 1985?
Senator Nolin: Both.
Mr. Pruden: Both of those may already be with the Senate committee from the 1985 hearings. Certainly they were deposited with the Supreme Court of Canada in some cases during the 1990s. That document is public. It has been in the court already. It is before the public already.
The Chairman: We will make an effort, Senator Joyal, to obtain copies for the committee.
[Translation]
Senator Lapointe: I have a rather awkward question to ask you. I am not certain whether it is the right time for it, but I sent you a document that the young messenger has just now delivered to you. Are you the author of this document?
Mr. Pruden: I am.
Senator Lapointe: Are you aware that I met with Minister Cotler less than a week after receiving this document which, as I understand it, was forwarded to the Senate caucus. I questioned Mr. Cotler and he said that he was not aware of its existence.
Mr. Pruden: This is the first time that I am hearing of a discussion between yourself and Minister Cotler.
Senator Lapointe: I met him when Minister Pettigrew was sworn in. I was livid — I have nothing against you personally, you are answering questions nicely — but this document is full of falsehoods. When I asked Minister Cotler if he was aware of the situation and why he was not supporting this bill, his answer was: "I do not know what you are talking about."
Senator Rompkey has since come up with a solution: from now on, regardless of where a document originates within a department, the minister must sign off on it. I want to bring some of these falsehoods to your attention. I do not know if you are the sole author of this paper, or whether you collaborated with other people, but as Senator Nolin was saying earlier, we are not asking that these video lottery terminals be destroyed, only that they be moved to another location. And there is a very simple reason for this. Vulnerable people get caught up playing video lottery terminals. They are not gamblers, but they become gamblers because they do not need to take the bus to the casino or a taxi to the racetrack. The terminals are located right in their neighbourhood.
You may not be aware of the statistics, but more and more studies are showing that the social costs of these terminals are enormous, in terms of rising crime rates, thefts and minors who gamble. A woman called me to say that her 17-year-old son had committed suicide. He had never set foot in a casino because he would not have been allowed in. However, he was allowed into bars. He committed suicide in the Ottawa area at the age of 17 because he had racked up $2,300 in debt playing video poker. He owed this sum of money to a loan shark.
The use of video lottery terminals can have terrible repercussions, including suicide, absenteeism, theft, commercial bankruptcy, lost lives and depression. The attendant social costs are so enormous that every effort must be made to remove these terminals. I do not object to the terminals as such, although I do not have much faith in them. I think it is abhorrent to expose Canadians to this despicable form of gambling.
I do not know if you are aware of this fact, but according to a recent survey conducted by the Canadian West Foundation, 71 per cent of Canadians would like video lottery terminals to be removed from bars and restaurants.
I am not sure whether, from a legal standpoint, it makes a difference to you to know that you have the support of 29 per cent of the population, while 71 per cent of the people support our position. I am not a legal expert or a lawyer, and I am not qualified to discuss federal and provincial relations.
A referendum was held several years ago in New Brunswick and this type of lottery scheme was approved. I traveled to this province a year or two ago, and put the question to at least 40 people, because this issue is near and dear to me. Every last person I spoke to admitted that the proposal would be soundly defeated if the same referendum were held today. People realize the social costs involved.
I am a staunch supporter of this amendment because I know this form of gambling causes suffering. Contrary to provinces' claims that these terminals generate revenues, or $1.3 million in Quebec's case, studies show that the social costs total anywhere from $3 billion to $6 billion.
The discussion will be brief if I have an opportunity to speak to the responsible Quebec minister, Mr. Séguin. This situation must be clarified as quickly as possible. I have some backing and some support from sensible people. I am not a lawyer and I am not blaming you for sending the letter to senators' offices. However, I maintain that some of what is stated in the letter is erroneous. I can sit down with you and point out exactly the passages to which I am referring. I have to tell you that I found the letter quite insulting. However, I am not laying blame. That is not the issue here.
[English]
The Chairman: Would you care to comment on the document? It was only recently passed around. You may need some time.
Mr. Pruden: It certainly would not be sent from the official side. If it is sent, it is from the minister's side of the department. As you may be aware, officials who report to the deputy minister might prepare materials for the minister. The political staff who work with the minister will decide what they do with materials prepared for them.
I can comment on the legal aspects, but I cannot comment on the policy aspects. It is for the Minister of Justice to comment.
The Chairman: Thank you very much, Mr. Pruden.
Senator Cools: Chairman, we are speaking about a letter on the record. If we are raising this, then a copy should be in all of our hands. I am not familiar with the letter to which Senator Lapointe is referring. Senator Lapointe said that the letter contained many falsehoods.
Senator Lapointe: Senator Cools, you received one at precisely the same time that I did. You were there. I saw you there. We all received it in the Senate caucus.
Senator Cools: Chairman, this is the problem. You cannot refer to a letter. Either it is before us or it is not.
Senator Nolin: It is a letter written by you, Mr. Pruden?
Mr. Pruden: No.
The Chairman: It is not Mr. Pruden's letter. We will get the copy that was distributed.
Mr. Pruden: I wish to clarify that the document in front of me is not in a letter form. It is in a briefing form.
The Chairman: You are not the author of it?
Mr. Pruden: I would have worked on it with other officials.
Senator Cools: That document should be tabled here. It is unfortunate in a way, but to the extent —
Senator Andreychuk: Point of information. Senator Cools is talking about a document Mr. Pruden just passed around. Is that the same document to which Senator Lapointe refers? Are we talking about speaking notes that Mr. Pruden referenced?
He was shown the letter. We are talking about Senator Lapointe's letter.
Senator Banks: Point of order. Is it appropriate that we distribute a document that was distributed in a Liberal caucus meeting?
Senator Cools: If it has been made public here, yes. It is now public. It cannot be non-public and public at the same time. I did not realize what you were talking about. That document has to be circulated to all present at this table, because Senator Lapointe made some pretty strong statements.
The Chairman: We are in the process of having the letter copied. I am told that a copy was handed to the witness without the knowledge of the clerk. The fact is that the Mr. Pruden had the letter. He did indicate that he did have some input.
Mr. Pruden: For clarification, it is not a letter. It is a briefing document.
The Chairman: It is a briefing document into which he did have some input. A copy of it will be distributed to colleagues who do not have one. The issue of whether it should have been distributed will be discussed at another date.
Colleagues, we have about 5 to 10 minutes. Senator Banks wanted to ask a question.
Senator Cools: Returning to that document, I do not think we have settled this. Senator Lapointe referred to falsehoods.
The Chairman: We will come back to that. No one has a copy of it yet.
Senator Cools: We always seem to be short of time. We should reserve some time for Mr. Pruden to respond to the statement about falsehoods. Otherwise, the record will say that the document states many falsehoods. There must be an opportunity to respond.
The Chairman: Senator Cools, I had just said, if we do not get to it today we will come back to it at another meeting.
Senator Cools: There are many times you have said that we will come back to something, and we never do.
Senator Banks: I want to return to the possible impact of the bill. I hate to admit it, but I remember the 1978 and 1985 changes because I was involved in the programs when Loto Canada was operating them. They were called "Mission Million...Possible." They were giving away a million dollars, and it was remarkable.
The gambling that was going on was not quite so small stakes. The same agricultural fairs that were permitted to operate legal gambling were also permitted to operate, on their premises, quite substantial raffles — for $1 million.
The point that Senator Joyal has made about the cheap rent being paid in return for having vacated the field is correct. It works both ways, because the provincial governments undertook to compensate the agricultural fairs that were being forced out of the lottery business when it was taken over by the provinces. They did so with what was thought to be a minuscule percentage, but which has turned into a gigantic amount. No one predicted the exponential increases in gambling of all kinds.
There has been an almost comparable reduction in pari-mutual betting. We know about that in the West. If you study the figures, you will find that Westerners gamble more than people in other parts of the country.
There are business premises, such as small hotels and restaurants, in rural Western Canada that would fail without gambling. This may also be true in rural Central Canada and Eastern Canada. These businesses have come to rely on gambling revenue to stay alive.
I was brought to this by the question of the premises dedicated to gaming activity. If I were the proprietor of such a place, I might just go out front and tear down the old sign that says "restaurant" and put one up that says "gambling room — and by the way, we also happen to serve food," which almost all of them do.
Have you thought about or has anyone raised the question of what the impact on those kinds of businesses would be if we removed from them VLTs in particular, not other kinds of gambling? Do you know of anyone having asked that question?
Mr. Pruden: I do not know that anyone has commented on that specifically. What I can say is that a number of Western provinces have pointed to their placement of VLT machines as having kept the rural hotel industry afloat. I am thinking of the Prairie provinces.
Senator Banks: In that research, has anyone noted that gamblers will migrate from one kind of gambling to another? Gamblers are gamblers, and if you shut down A, they will move to B. That seems to be a historical fact, as gamblers, for example, have vacated racetracks and gone to casinos.
Mr. Pruden: I really do not know. In Canada, it has really been the flip side of that, where there has not been so much a shutting-down as an expansion of opportunity to gamble. There would be some who would argue that the availability or the opportunity has increased the number of problem gamblers. It is not a situation of problem gamblers seeing something shut down so they have to go elsewhere, it is a case of new opportunities being created, and perhaps people who would not go to a particular venue now have another venue close by that they do go to.
Senator Andreychuk: You were talking about gaming opportunities. I do know that in our area there have been discussions about opening new casinos and whether in fact people from a particular area will move to another area, so your comments are in reply to Senator Banks. Do they move from one gambling activity to another? Do you have any research to show that if you shut down the local hotel, they would certainly drive 50 miles to the nearest casino, or something, and play the VLTs there?
Mr. Pruden: I really do not know whether they would follow the VLTs, or whether they would find some other gambling opportunity such as lottery tickets or bingos. I am sorry, but I do not know the answer to that question.
Senator Andreychuk: Certainly anecdotally, we know that the bingos are not doing well, but the casinos in my area are. The bingos declined when the opportunities for other gambling expanded.
Senator Lapointe: I want to say to Senator Banks that I am not against the permission for fairs to conduct gambling. I touched only and strictly on the VLTs.
One question I would like to ask you is what were those hotels doing before the introduction of VLTs?
Senator Banks: There is no simple answer, but part of it would be that they were in towns that had a population of 5,000 and now have a population of 2,000.
The Chairman: Mr. Pruden, thank you for being here today.
Obviously, if we are permitted the opportunity for further study in this session we will be calling you back to give you an opportunity to review that briefing note that was passed to you. I am sure we will have some further discussion on it, but for now, thank you very much for being here.
Colleagues, I have one small matter before we go. As you will recall, we commenced the study of Bill C-17 prior to the Easter break and heard from a number of officials. I know Senator Joyal specifically requested that we hear from two witnesses, Ms. Bougie and Ms. Arnold, and I am wondering whether, when we set this up, there are any other witnesses that colleagues would like to hear from? If not, we will proceed with the two as per the request of Senator Joyal.
The committee adjourned.