Proceedings of the Standing Senate Committee on
Legal and Constitutional Affairs
Issue 4 - Evidence
OTTAWA, Wednesday, December 8, 2004
The Standing Senate Committee on Legal and Constitutional Affairs, to which was referred Bill S-11, to amend the Criminal Code (lottery schemes), met this day at 4:15 p.m. to give consideration to the bill.
Senator Lise Bacon (Chairman) in the chair.
[English]
The Chairman: Honourable senators, we are dealing today with Bill S-11, to amend the Criminal Code, lottery schemes.
[Translation]
Our witness is Mr. André Morin, Vice-President of the Association des travailleurs et des travailleuses de la restauration et de l'hôtellerie du Québec [Association of restaurant and hotel workers of Quebec]. Welcome to our committee. Given that you are used to appearing before committees, we will hear you out and then questions will follow.
Mr. André Morin, Vice-President, Association des travailleurs et des travailleuses de la restauration et de l'hôtellerie du Québec: I would like to take this opportunity to thank you, Madam Chair and committee members. Your invitation was highly appreciated by the association I represent. When I told the membership that I was coming to meet with you today, it made a very good impression.
I would like to make a quick side comment. I had promised to bring a server with me who has worked in illegal bars, with illegal VLTs and legal VLTs since the beginning. She has witnessed all of the problems and the development of the network, and she has been responsible for these machines. Unfortunately, for other reasons, she had to be in court today. But I will answer your questions, Madam Chair.
I would like to start by thanking the committee for inviting us to talk about Bill S-11. As the only representative of non-unionized hotel and restaurant workers recognized by the Quebec government, the ATTRHQ has been critical, for the past five years, of the lack of guidelines for bar workers working in bars with VLTs.
Let me give you the background to our involvement in this issue. When our organization was invited to participate in the forum on problem gambling in Montreal on November 8 and 9, 2001, we wanted to make it clear to the Minister for Health and Social Services, Ms. Agnès Maltais, that tens of thousands of workers are directly affected by this problem. In addition, we were anxious to explain to the minister that their work is now closely related to the operation of VLTs and that as a result, they are required to manage and solve many problems for which they have received no training.
Finally, we made the minister aware that since the arrival of VLTs on a massive scale in the workplace, workers have never had a straightforward way of getting the information they need.
One of the important points we raised was the lack of information about regulations governing the operation of these machines. Employees have not received this information. However, they are on the front lines. We also asked for mandatory basic training on problem gambling for bar workers and owners.
One of the examples we gave the minister was the abuse that workers suffer when the machines are shut down. We also asked how a worker was supposed to react when players became distraught. So we asked that the Department of Health and Social Services do an in-depth study of the influence of video lottery terminals on emotional and physical employee burn-out. We also asked that the department make some resources available to them.
By the way, it is ironic that these workers, paid less than minimum wage and without training on problem gambling, should be asked to handle huge amounts of money, while Loto-Québec and bar owners sit back and rake in huge profits. What is more, it bears mentioning that when a prize is mistakenly paid out, the employee has to pay out of his or her own pocket to make up for the difference.
In response to the forum and to our requests, Loto-Québec decided to that all VLTs would as a rule be shut down at 3 a.m. The establishment can close later, but the machine has to be shut down at 3 a.m.
In late 2002 and early 2003, new slower and supposedly less enticing machines were installed. Since 2003, Loto-Québec's profits have been increasing, despite the fact that the Minister of Finance, Pauline Marois, reduced the number of machines by 1,500.
Another result of the forum was the creation of a task force in early 2002, which was in operation for ten months. The task force brought together the following stakeholders: the Régie des loteries et courses [Lotteries and Races Commission], the Société des appareils de loterie vidéo, [the VLT Association], Loto-Québec, the Corporation des bars, brasseries et tavernes du Québec [the Association of Bars, Pubs and Taverns of Quebec], the Corporation des hommes d'affaires de Québec [the Association of Quebec Businessmen], the Ministère de la Santé et des Services sociaux [the Department of Health and Social Services] and ATTRHQ. Upon the creation of this task force, we immediately called for training to be given to bar workers. In the material distributed to committee members, you will find our submission to the task force. In fact, we were the first group to make a formal presentation.
One of the suggestions we made was that a minimum amount of training be provided and that reference material be made available to bar owners and workers. The task force wrapped up it work with the creation of a training program to be administered by the Department of Health and Social Services and developed by Laval University in cooperation with our association. We also designed, together will all of the stakeholders on the task force, a voluntary exclusion program. The second document we distributed to you describes this particular program. The implementation of these new measures is part of the Quebec government's 2002-2005 government action plan on problem gambling. Unfortunately, that plan has never seen the light of day. No one on the task force was willing to put any money into the training program for workers. And then there was the April 2003 election, and the new government that took office ignored the action plan.
Recently, the new Finance minister, Mr. Yves Séguin, decided to restrict access to VLTs by reducing the number of places where they can be found. The decision affected establishments with fewer than four machines, or a total of 2,500 machines in 702 sites. In our view, this is a step in the right direction. We would have preferred that he go a bit further by setting the limit at five machines or less. We would have also liked him to indicate clearly to bar owners that they are responsible for maintaining order on their premises. In addition, it was to be hoped that the minister would implement the preceding government's action plan as quickly as possible.
Clearly, we know that if Bill S-11 is enacted, that will lead to bar closures and job losses, thereby penalizing the handful of bar owners who have already raised awareness among their employees of problem gambling.
In conclusion, we would like to make the following point to the committee. Taking VLTs out of bars and concentrating them at racetracks and other gambling venues will merely shift the gambling addict's problem if there is no training provided for industry workers.
The Chairman: Thank you for your presentation. Given that you represent people whose employment depends on the restaurant and hotel industry's economic vitality, I am going to address the truly economic side of VLTs.
The bill, as it stands, if it were passed, would result in a total ban on VLTs in bars, pubs, taverns and other places identified by the legislation. As a general rule, only casinos and racetracks could continue to operate the machines. A number of establishments with VLTs depend on VLT revenue to balance their books.
Are you concerned about the financial impact this legislation could have on the industry you represent, from the perspective of bar owners as well as workers?
In 2003-2004, license holders reaped total profits of $276 million. That is a rather outstanding sum of money. Do you think that the disappearance of VLTs could affect workers in the industry you represent?
Mr. Morin: My answer is yes, definitely. However, when people talk about 14,000 jobs lost, we disagree with that figure.
In the worst case scenario, I do not think that more than 2,000 jobs would be lost. When people speculate about 14,000 or 15,000 jobs lost, I doubt that would happen. There are approximately 4,900 sites in Quebec where there are VLTs. If those machines were taken way, that would affect, on average, four to five employees per establishment, which brings the number to 20,000. When bar owners throw out these figures, it is a little like saying that all bars will shut down overnight. That is not a realistic scenario. However, a number of bar owners and Mr. Poulin maintained that the legislation will result in the loss of 14,000 to 15,000 jobs.
Quite often, no extra staff is hired and assigned to those machines. In most establishments, the worker who pays out the prizes also manages the operation of the machines and serves the drinks. There may be exceptions to this rule in the large chains like La Cage aux Sports, where staff is assigned specifically to pay out prizes. However, in most of the 4,900 hotels in Quebec, the person who serves the drinks also pays out the prizes.
The Chairman: The bill attempts to tackle the problem of VLTs by proposing a solution that is based on the following idea: you have to limit access to VLTs and restrict their visibility in order to stop people who could become problem gamblers from taking up gambling in the first place.
Do you think that by restricting VLTs to casinos and racetracks, we will succeed in reducing the number of people who become addicted to this type of gambling?
Mr. Morin: Madam Chair, for the past three years, we have retained the services of a consultant who is an expert on gambling. He gives training courses. The people from Dollard Cormier in Montreal are trained by the consultant we have retained.
If VLTs are taken out of bars, the impact will definitely be noticeable. There will definitely be a visible benefit. I am confident of that.
The Chairman: Do you have any data on the effects of VLTs on staff in establishments centered around VLTs? Do employees exposed to gambling in the workplace play VLTs more than others? Have you looked into that?
Mr. Morin: We have looked into that. When I served on the task force to which I referred during my presentation, I asked the Minister of Health to do a study. People did not seem to believe what we were telling them, namely that it was emotionally draining for workers and that they were victims as well. We told them to do their own study. They hired Acti-Menu, a consulting firm that the Department of Health and Social Services has used in recent years. They asked me to give them 50 names at random, in the greater Montreal area, not just downtown, but in Châteauguay, Boucherville and elsewhere. They selected 20 names and held two forums. The result was as follows: nine out of ten workers contacted asked that VLTs be removed from bars.
The Chairman: Because they themselves are affected by them?
Mr. Morin: Yes, when Céline Falardeau, of Acti-Menu, presented that request to the task force, she was almost asked to leave. She was never heard from again. The outcome of the forums was never again discussed. It was completely ignored. However, we were not the ones who set up the forum, it was the Department of Health, through Acti-Menu. And nine out of ten workers asked to have VLTs removed from bars.
Madam Chair, there are many bars in Montreal and it would be hard to give you an accurate count. You question is timely indeed. But unfortunately, I cannot give you an exact figure. I can, however, give you an example. Many establishments in Montreal house a restaurant at ground level and a bar upstairs, both of which are owned by the same person. I would say that such establishments represent the worst cases encountered by the association. Workers downstairs finish their regular shift and then go upstairs. What they earn in the afternoon they spend upstairs in the evening on VLTs.
The Chairman: Does that happen regularly?
Mr. Morin: Absolutely.
The Chairman: Did you consult with restaurant and hotel workers about the presence of VLTs in bars and pubs? Have hotel workers ever been asked to express their views on the subject?
Mr. Morin: We did a survey in 2001 that agreed with the Acti-Menu finding. Acti-Menu found that nine out of ten workers wanted the machines removed, while we found that seven out of ten workers wanted the same thing. You have to understand the Quebec example. In Quebec, of the 52 hotel industry institutes, until the forum on problem gambling was held, none of them was discussing VLTs with future industry workers.
The Chairman: Hotel industry institutes?
Mr. Morin: Yes. These people received training, went to work in a bar as a server, and were forced to manage VLTs. They knew nothing at all about operating VLTs. They had no clue about how to deal with distraught players. Along with my consultant, I toured the bars in the greater Montreal area, on both the south shore and the north shore.
The Chairman: Did you go to Laval?
Mr. Morin: Yes, and what struck us was that it was almost always the same people who played the VLTs. We could visit a bar in Laval, return ten days later and oddly enough, the same two ladies and the same three gentlemen would be playing the machines.
The Chair: The regular customers?
Mr. Morin: Yes. When I hear Professor Ladouceur say that only a minute proportion of gamblers are in fact problem gamblers, I am not questioning his expertise. However, it is no secret that his research is funded by Loto-Québec. We see the problem up close and we have our doubts about these findings. But my name is not Dr. Morin.
The Chairman: There is a comparison with Ontario that I would like to discuss with you. The data we have requires some attention. According to an article that appeared in the Ottawa Citizen on May 20, 2000 and according to data gathered by Loto-Québec, there are more opportunities for people to gamble in Ontario than in Quebec. That is what the study found. According to Ontario law enforcement officials, there are apparently over 20,000 illegal electronic gambling machines in Ontario. That number is alarming if it is accurate. Do you think that the passage of the bill before us might lead to illegal machines springing up in Quebec in the same way they have in Ontario?
Mr. Morin: No, I am not calling into question the OPP figures. But I do not believe that there has been a substantial increase in the number of illegal machines.
The Chairman: If they were banned from bars...
Mr. Morin: I do not believe it. Consider the following example. Since 2001, Quebec has reduced the number of VLTs in bars from 15,000 to 13,500. And, as far as I know, illegal machines have not appeared. I have made the rounds of the bars since 2001 and even with 1,500 fewer machines in operation, illegal VLTs have not suddenly, to my knowledge, appeared.
The Chairman: That is what I wanted to know.
Senator Rivest: You talked about lost jobs. Are the 2,000 or 3,000 lost jobs perhaps due to the fact that some people went into the bar industry not because they had any particular talent for the business but basically because there were VLTs? In other words, serving alcohol was merely a sideline. In the past, patrons had to order a sandwich in order to be served an alcoholic beverage. Food was complementary to alcohol consumption. I have the impression that some bar owners are in the business more for to manage the VLTs than to serve alcohol. They quote pretty amazing numbers. I imagine that you work in the hotel industry. Your association and your members know the industry well. Do you understand my question?
Mr. Morin: I would like to take a few moments to give you some background. Back when Loto-Québec set up machines in bars and banned illegal machines, there were 25,000 illegal machines in Quebec. We have heard other figures — up to 40,000 — but in fact there were 25,000 machines. I will try to put everything simply because the answer to your question is in fact complex.
The Régie des loteries et courses, which is supposed to ensure compliance with regulations and grants licenses, circumvented its own regulations. That's how the situations you cited could happen, for example some guy buying a bar with five machines. Suppose he actually wanted ten machines. All he had to do was throw up some drywall and put in a door to make two separate rooms. Then he would go to the Régie des loteries et courses and ask for a license. That way, he would get five additional machines.
Senator Rivest: Another more general concern is this: is alcohol served in off-track betting centers?
Mr. Morin: Yes, it is.
Senator Rivest: I suppose that is why you were asking that these people receive training, since they generally do not have any more training than hotel staff. Secondly, these off-track betting centers are licensed premises. Does the government control the number and location of these centers? If we remove VLTs from the bars, we do not want to see these machines cropping up in off-track betting centers. How many such places are there in Quebec at present?
Mr. Morin: I am glad that you are asking me this, and I would like to caution you if this bill goes forward. That is one of the fears I have. At present, there are 18 clubs of this nature.
Senator Rivest: In the province?
Mr. Morin: Yes. There were nineteen, but one recently closed. These places sell alcohol, and have VLTs. I reviewed each business plan submitted by SONAC to the Department of Finance.
Senator Rivest: Are there any such off-track betting clubs in other Canadian provinces?
Mr. Morin: I cannot answer that question. I can talk to you about Quebec, which I know well. In the last business plan, SONAC told then Finance minister Marois that it had plans for the number of off-track betting centres to increase from 18 to 55 by 2005. I do not know who will be managing the race tracks and the off-track better facilities. I cannot say. What worries me is that VLTs will be removed from bars and responsibility for managing them will be given over to a private contractor who will manage all of these facilities. That contractor, that businessman, will want to expand and open other off-track betting clubs. So when it comes to sensitive areas like Trois-Rivières, if there were machines at the Trois-Rivières race track, I could not anything to prevent that. But I would have a problem if two off-track betting centres were to open in downtown Trois-Rivières.
Senator Rivest: Who will control these operations? The government, by issuing licenses? Do we need political will?
Mr. Morin: Decision-makers will have to set limits. When I read your bill, I saw that the limits were specified, as well as the places. So these things will have to be set out clearly.
Senator Ringuette: Thank you for your presentation, which gives us a more realistic perspective on things. Earlier, you said that 2,000 jobs might be lost.
I confess that I am a smoker. In most of the provinces where smoking in public places has been banned, we heard restaurant owners say the same thing, namely that if customers could no longer smoke in their bars and restaurants, they would be forced to close down. Legislation was enacted in New Brunswick in early summer. As far as I know, not a single establishments has closed down yet. In the Ottawa region, the regulations have been in place for several years now. I am wondering about your estimate of a possible 2,000 jobs lost.
On the basis of these figures, I have been making some comparisons. I agree with Senator Rivest: if VLTs are removed from bars and this leads to the proliferation of specialized betting centers, what do we actually gain?
Mr. Morin: Let me elaborate on these jobs losses. Your question is in line with that of Senator Rivest. Why am I saying that at least 2,000 jobs will be lost? Because many bars opened because of the machines, and the bar areas where the machines are located have created jobs. A single bar may obtain five additional machines because of a second license. So it is very likely that people will lose their jobs. The person who works in the VLT section stands a good chance of losing his or her job. You claim that job losses were minimal in New Brunswick, but I am telling you that many jobs will indeed be lost in Quebec.
Senator Ringuette: How many workers do you represent?
Mr. Morin: We represent 4,200 workers, including the staff of the Cage aux Sports chain.
[English]
Senator Milne: I am a little puzzled as to where you stand. You talked about 61 per cent of the 4,000 people you represent not wanting VLTs in the bars, yet if the machines were taken out of the bars, those people would lose their jobs. Perhaps you could help me with this. You think that if the government were to proceed by following your recommendations, properly trained staff would reduce the incidence of problem gambling. How and why would that be?
[Translation]
Mr. Morin: It is very simple. At the outset, I talked about regulations in my presentation. Until the forum on gambling, and in fact even as we speak, workers are still not familiar with the regulations. Let me give you an example of a regulation: a player cannot bet on two machines. That is prohibited. You are not allowed to serve alcohol to someone who is playing the VLTs and who happens to be inebriated as well. However, these regulations are not enforced, according to a study conducted among our members.
Many of our workers and their bosses were quite surprised when we apprised them of the régie's regulations.
[English]
Senator Milne: In Ontario, the machines are somewhere between 10 and 150 kilometres away from where the people are living. If you want to gamble in Ontario on these things, you have to either drive or get on a bus and travel a long distance to get there. It is not like walking down to the corner bar and stepping inside.
Senator Eyton: There are people who live in Niagara Falls.
Senator Milne: Some live around Lake Simcoe as well.
You talked about less than 5 per cent of players being problem gamblers. Fifty per cent of provincial revenues from these machines come from those 5 per cent of the gamblers. The provinces are really addicted to it, too.
[Translation]
Mr. Morin: You are quite right. This comes back to what I was saying earlier, namely that according to our studies, it is always the same people who play these machines.
Senator Milne: Is this true?
Mr. Morin: It is absolutely true. I do not want to bad mouth anyone, but these machines encourage compulsive gamblers, that is the people ready to lose their shirt to win $500. I have talked to gambling addicts — both men and women — through our consultant.
The last gambler I met had started to play at 8 o'clock in the morning. When I arrived at about 8:30 a.m., she had just lost $2,800. ATMs can be found in virtually every bar and cash is just a swipe of a card away. Do you know how this girl finally came to her senses? When she went to the ATM, there was no money left in her account. She was crying. This kind of thing is very painful to watch.
You may not often find yourselves in bars like I do because of my job. I am not exaggerating when I tell you that. I could give you many examples of this type. Do you know how many tokens or medals I have from Gamblers Anonymous at the association office? Nine. Do you know what I am talking about? They are tokens for people who attend meetings of Gamblers Anonymous. In a moment of weakness, they go into a bar and the token is found on the floor by employees who pick them up and send them to me. I even have a watch. These people are desperate.
Senator Lapointe: There is a lot of suffering.
Senator Joyal: How many illegal video lottery machines are there in Quebec at the present time?
Mr. Morin: For the entire province I would be surprised if there were a thousand of them. I have certainly seen a lot in my time. I should not mention specific neighbourhoods but since we are talking about this, there are quite a few in the Saint-Léonard district in Montreal in small cafés. There is often an adjoining room where you can find two or three illegal machines.
Senator Joyal: Usually this gambling is quite public, quite accessible. If the market does not feel the need to increase the number of terminals, it is because they are very accessible everywhere. Illegality results from scarcity. During Prohibition, there were illegal stills all over the place because people were not allowed to consume alcohol. Once it was authorized, then illegal operations dropped off considerably.
In your documents, reference is made to the voluntary exclusion program for VLTs. If we did not pass this bill, would the present assistance programs be sufficient to reduce the problem of compulsive gambling among the four to five per cent of gamblers affected in this way?
Mr. Morin: Let us assume that tomorrow morning the Quebec government decides to provide training to workers and to apply the voluntary exclusion program. First of all let me explain how this voluntary exclusion program works. The basic level is the regional board of health. We found a solution with the Department of Health.
There are 18 regional boards of health in Quebec. Each regional board was to have an agent available 24 hours a day to respond to any distress calls brought to their attention by employees. The agent or worker would be responsible for looking after the gambler. We consider that the responsibilities of such workers were enormous. We did not want to have to take on the additional responsibility of turning them in to specialized gambling therapists. We insisted on this point. We are willing, however, to provide them with training so that they have some idea of how a compulsive gambler behaves. The employee would be the intermediary between the gambler in difficulty and the responder.
We are convinced that this approach would have worked and that we would have seen results. We are talking about the best case scenario but that is not how things work in real life.
That is why I said in my presentation that it would require self-discipline on the part of bar owners.
Let me tell you briefly about the case of the waitress who is supposed to be with me today, because her case is typical. She was fired because she played by the rules. She refused to serve a drunk person sitting in front of a terminal, offering that person coffee instead. Even when he was not sitting in front of the machine, she refused to keep on serving him alcohol and she was fired. Who is protecting this woman's rights today? She filed a complaint with the labour standards board. The process has taken ten months and this morning she is in court. That is the sort of situation one faces.
I am neither in favour of nor against Mr. Séguin. Mr. Séguin did display courage but he should have shown even more of it. He decided he would remove four machines or less. I would have set the figure at five, because most establishments have five VLTs. Furthermore, I would have required bar owners to discipline themselves, that is to set up self-exclusion programs managed through the regional boards and give workers the proper training. In this way, we would have seen the removal of five machines or less and I am convinced that we would not be here discussing Bill S-11 with the committee.
Senator Joyal: How many places are there with five machines or less as compared to places where there were four? You say that they removed 2,500 terminals or 702 sites. If the minister had removed the terminals from sites with five and fewer , how many additional sites would we talking about?
Mr. Morin: Approximately 1,800.
Senator Joyal: I believe that when the minister announced his decision to remove the VLTs, he compensated the owners of the sites with an amount equivalent to a year of revenue. Do you consider this compensation was sufficient to allow them to maintain their operations, to make adjustments for the fact that they would not have the same type of revenue stream in the coming years?
Mr. Morin: In Quebec, each VLT generates an average of $19,000 in revenue per year. Of course, that figures does not apply to every one of the 702 sites now affected. At the outset, Loto-Québec did have quotas which bar owners were required to meet. If they did not meet these quotas , then their machines were taken away. One should not imagine that the 2,500 machines that were removed generated the highest revenues of any VLTs. That is why I said that Mr. Séguin did show courage but he could have been more courageous and decided to go to five. With five we would have seen tangible results.
Senator Joyal: Knowing human nature as you do, you talk about self-discipline and the implementation of a series of programs and interventions. Based on your experience, should the bill we are now considering be passed if nothing further is done to change the situation?
Mr. Morin: I am going to be tough with the bar owners. We cannot just generalize and say that they should shut down. Let us look at things rationally. I do know some bar owners who have made investments and who are stuck with 10 or 12-year leases. It is not easy. From one day to the next they are told that the machines have to be taken out. We may agree or disagree with the bar owners. But they have sent me their application that they are preparing to present to the court. I saw the document. They refer to an acquired right. They maintain that they have an acquired right. In fact, that is not far from the truth. I am not here to defend them, I represent the employees. I am saying that we are faced with a certain situation and if the bill goes ahead, there will be problems for the provinces. There will be legal action.
Senator Joyal: What about suspending the proclamation of the bill for a period of three years, for example. We can adopt a bill and postpone its implementation by giving people time to make adjustments, knowing that the changes will take effect by a certain deadline. There is no doubt that if changes are brought in overnight, they can lead to huge problems in some cases.
Mr. Morin: For provincial governments as well.
Senator Joyal: If provision were made for a transitional period, then this could decrease the impact of such a bill if its provisions took effect immediately. That would be one day of dealing with the difficulty you describe.
Mr. Morin: At the risk of displeasing Senator Lapointe, I would tend to go along with you on that.
Senator Joyal: To provide for a transitional period.
Mr. Morin: To give everybody a chance. We are talking about pathological gambling. We are attempting to identify bar owners as the culprits. I am not quite ready to take pot shots at bar owners. Some of them may have gone overboard. But someone did create this situation and they are not necessarily to blame.
Senator Lapointe: I do not disagree with what you are saying. I think that Loto-Québec is responsible. I make no bones about it. If the bar owner is told that he will be getting ten machines, then he will be quick to say yes. My approach is more drastic than that of Senator Joyal, who, unlike me, has some legal training. One thing is clear. When a bar owner has two machines, each individual machine earns far less than if he had ten VLTs. I told Mr. Séguin that these are not the cases he needs to do something about. The man with two machines is not raking in millions. Go after the big owners and cut them down to two machines. If everyone is limited to two machines, then I will withdraw my bill and that will be the end of the story. We would no longer have a problem for a very simple reason: if there are only two machines, people will become impatient, I know how gamblers are, because I am one of them. People are impatient by nature and they will not wait around thirty or forty-give minutes. They will take their business elsewhere. It has been shown that the greater the number of machines, the greater the profits generated. People are smart, they know that the more rooms they have set up for VLTs, the more money they stand to make.
I have nothing against bar owners. I made my living from the fees paid to me by club owners. I'm not turning my nose up at these people, that is not what this is about.
There is another side to this story. Giving them a year's worth of compensation is excessive, in my view. It could be six months and another six months for those who are out on the streets. Take, for example, the case of Ms. Viel, or whatever her name is, whose husband blew $48,000 strictly on the VLTs. She now has to pay back $48,000 to Mastercard. I think that is terrible.
In the case of the illegal machines, if the federal or provincial governments reach a consensus or some sort of resolution, there is always a possibility of banding together on this. They will be saving even more money. They can seize the VLT and the bar owner will lose his licence if he breaks the law. Maybe this is an extreme example. That is how I am and I am not about to change. I've included racetracks in the bill because these are places where people gamble. I would not care in the least if they disappeared from the face of the earth. As a matter of fact, I would be happy about it.
I told the minister that you are attacking the little guys, the ones you are hurting the most. There is the underworld with their machines, small organizations whose names we will not mention. I do not want to end up with two broken legs. The fact is that there are organizations who own and operate a good percentage of the VLTs.
I know bar owners who are very honest and who apply the law to the letter. When someone is drunk, they know how to handle the person the right way. The figures given by Mr. Morin are not figures taken out of a hat. For the waiter who is responsible for managing all this, it is no easy feat.
Another thing about the machines, and I am sure you all share this opinion, but looking at it from the point of view of the bar owners, instead of getting a two-dollar tip on a beer, they will only get one dollar because the customer will be playing the other dollar in the VLT to increase his odds of winning.
Mr. Morin: A number of employees have even told me that there are some people who have the nerve to tell the waitress: get me a beer, if I win, I will give you a tip, if I do not win, you are not getting anything. She brings the beer and he does not leave a tip, he puts the remaining three or four dollars in the machine and if he wins, then the waitress gets something. This scene is played out all the time.
I was shocked by something that was said at the famous round-table set up by the government. I am telling you I was outraged, and today, a couple of years later, I try not to think about it because I still get angry. The person in question represented bar owners. He was not just anybody, not just a guy down the road who was not familiar with the issue. The person in question was the representative of 4,900 bar owners with VLTs in their bars. We were discussing pathological gambling and he said to me: I do not go looking for these customers in the street. That is how the round-table began. As you can see, we are still a long way from any form of self-discipline.
[English]
Senator Eyton: I want to tell a positive story, and then I have several questions I would like to put to you.
I am familiar with a medium-sized horse racing track in Ontario that made a little money. It probably had a running worth of something less than $10 million. If I had to guess, I would say $6 million or $7 million, including real estate. The race track was lucky enough to acquire a licence to operate a so-called casino but really an emporium for VLTs.
That race track that I say might have been worth $7 million or $8 million suddenly had exceptional value — happily for the owner. You may know him. I understand some of the senators around the table know people in the racing industry. I think that Senator Lapointe may know some of the people in the racing industry. The owner of that track was lucky enough to sell it for about $60 million Canadian.
A considerable investment went into that race track. It added something like 1,500 jobs. The benefits of that activity included the addition of jobs and very much increased purses. It spread out to the horse racing industry itself. In general, it has been a transformative and positive development for the area where it is located. There is a positive side.
I do not say that restaurants and bars are equivalent to that because it was a bigger operation. I was trying to get the principle across.
I have several general questions that I want to address to you. We seem to be ignoring the law of economics. We have heard anecdotally that there are a few jobs to be lost, that business will carry on and that there will be very little in way of dislocation. I want to drill down on the economics of a model bar or an individual bar and talk about the economics of the machine in that bar as it relates to his business and to the jobs that he has to support.
Second, what governance would you favour to identify and deal with problem gamblers? Do you think that a local or neighbourhood bar with 20 or 30 patrons, mostly known to each other, may do a better job of supervising problem gamers than a casino? Casinos have 3,000 or 4,000 players, all of whom are unknown to the people who are operating the games.
Third, the principle is that if we eliminate more of the VLTs, somehow those people will stop gambling. Do you not think that those people will find other ways of gaming? I can leave this chamber and gamble in five minutes. I probably have 20 or 30 options for gaming. There are all sorts of options. It seems to me arbitrary in the extreme to pick on VLTs and say that these machines are monsters and they are very different.
In fact, gaming is prevalent. It is getting more prevalent by the day on the Internet. Of course, most of it is entirely unregulated.
Last, this has been, in terms of its administration, an area of provincial jurisdiction and the provinces are much engaged in it. They derive revenue from it. For the most part, they do a decent job. Do you not think that the provinces can and should deal with problem gamblers who, after all, represent 3 per cent or 4 per cent of the population?
I am a gamer. I like to gamble a little, but I am sick to death of the 95 or 96 per cent having to change their ways to accommodate the or 4 or 5 per cent who are a problem.
Local governance may be a better way of dealing with this issue. Do you not favour provincial intervention in this problem as opposed to federal intervention through this bill?
Coming back to number one, I will give you the example of a successful restaurant. Let us say that it has sales of $1 million, which is a pretty good number for a restaurant. Let us say that it has a cash flow of $100,000. You have said that they can have as little as four machines, so I will take the least number.
Mr. Morin: In Quebec, no restaurants have VLTs. They are only in bars.
Senator Eyton: Do not bars and restaurants operate in conjunction with each other?
Mr. Morin: No, there is a separation.
Senator Eyton: Then perhaps this bill should apply only to Quebec. If you said that you would restrict this application to Quebec, I would be for it because all of the witnesses we have heard to date are speaking from a Quebec experience.
The Chairman: We heard from witnesses from Alberta last week.
Senator Eyton: I want to look at the economics of a bar. I am not sure the numbers apply, but a bar might have less than half a million dollars in sales. It might have four machines and each of those machines might make, for the owner, about $50 per day.
Mr. Morin: The figure is $19,000 per year.
Senator Eyton: With four machines it totals $80,000 per year.
Mr. Morin: In some bars the figure per year can be over $22,000.
Senator Eyton: Roughly speaking, you would double the bar owner's income with the machines in place, at the minimum, if he has four machines. If he has more than four then, of course, he will do better than that.
Mr. Morin: Yes.
Senator Eyton: Is it correct to say that taking those machines away would not affect employment? If I am a bar owner and I have been making $150,000 per year and my profit is suddenly reduced to $75,000 per year, do you not think I would do something about the number of employees I have or consider the value of my investment or consider closing the bar because it does not make financial sense any longer?
[Translation]
Mr. Morin: You have asked me several questions. I will begin with your preamble. You were saying that in Ontario, VLTs are found at racetracks, that this is working well and that it is good for the horse racing industry. I am also a former owner of race horses. I am familiar with racetracks. There may be a few small racetracks in Ontario that I have never been to. One of the racetracks I visited over the past few years was the Rideau Carleton racetrack. When I go there, the casino located on the main floor is full. There are even security guards there. People are waiting in line. When I go upstairs, I can count the number of clients betting on horse races on my ten fingers. I think that the horse racing industry is currently living off VLTs. We should not be deluding ourselves. Go and make the rounds of the racetracks in Ontario and you will see that you can count the patrons on one hand. When I see a full casino, I say to myself this is a reality, the horse racing industry is living off VLTs. In any case, this is where they are getting their money. I am not talking about Woodbine or Mohawk racetracks, but about other ones. The majority of the other racetracks are surviving on the proceeds of VLTs.
To answer your second question, you were saying that bar jobs could be lost. Listen, we are aware of the fact that jobs will be lost. We are aware that some bars will close. I am telling you that it will not be the catastrophe that people think it will be.
[English]
Senator Eyton: Having your income in any year must be a catastrophe.
[Translation]
Mr. Morin: I will give you the figures compiled by Renaud Poulain, who is the President of the Corporation des bars, brasseries et tavernes du Québec. Last week, he said at a press conference that VLTs in bars account for 30 per cent of revenues generated. He was the one who said that. I know that 30 per cent is a significant share.
[English]
Senator Eyton: I would have said 50 or more.
[Translation]
Mr. Morin: I will repeat the figures compiled by Mr. Poulain, President of the Corporation des bars, brasseries et tavernes du Québec. He represents the majority of bar owners. He told us that on average, removing these machines would represent a loss of revenue of 30 per cent.
[English]
Senator Eyton: Perhaps you are talking about revenue and not profit. I was talking about profit — cash in the pocket — which is different.
[Translation]
Mr. Morin: You can include both. I explained earlier that usually the same employee serves beer and takes care of the VLTs. Furthermore, as I stated in my brief, the employee still earns less than minimum wage.
It does not cost the bar owner anything. All the bar owner pays for is the license and the electricity required to run the machines. That is all. The arrival of VLTs in bars has been a gold mine for these people. I do not blame them, they were lucky and they profited from them. The problem is that this has caused human misery and this human misery is catching up with us. Our association is not trying to play God. We are trying to find solutions that are fair for everyone. There is a problem and we need to find solutions. I find Senator Lapointe's bill somewhat radical, but perhaps we need to sound the alarm somehow to get a reaction.
[English]
Senator Eyton: Do you not prefer governance from a local bar as opposed to governance in a large casino? Do you not think gamers will find some other alternative if they can not play VLTs? Do you not prefer provincial jurisdiction over federal jurisdiction in dealing with this problem?
[Translation]
Mr. Morin: You are asking me questions that I am not in a position to answer. Personally, I think that each province should have that jurisdiction in order to have better control. If these operations are transferred to racetracks, then you have the answer to your question. However, if VLTs are left in the bars, then I would prefer to see the provinces assume responsibility for managing these operations.
There is another point I would like to raise. This is a point in favour of bar owners. In bars, there is a much more intimate relationship between employees and gamblers in distress; it is much more intimate than in a casino. A casino is very impersonal, as are racetracks. If VLTs are moved to racetracks, then perhaps some form of training should be provided to employees, as we suggested in our brief. At the Montreal racetrack, for example, there are 50 machines of one type and 50 of another and there is only one employee, so there is a problem. In a bar there may be 10 machines but the employee is nearby and therefore human contact is closer in bars than it currently is at racetracks. I am not saying that there is not a solution of some kind. More staff could be hired to work at racetracks. There could be training and better self-exclusion programs. At Quebec racetracks there is already a self-exclusion program based on the same principle as that of Loto-Québec. In reality, however, no one monitors the situation.
When we participated in the round table, I asked Mr. Bourdeau, who is responsible for security at Blue Bonnets, to tell me how many people were registered in the self-exclusion program for each racetrack. He shared the following numbers with me: 80 in Trois-Rivières, 35 in Quebec City and 3 in Montreal.
There are four times as many machines in Montreal and yet, only three gamblers have registered for the self-exclusion program. There are 80 enrolled in Trois-Rivières and 30 in Quebec City.
Senator Lapointe: There is one number that I find quite overwhelming. The 5 per cent of compulsive gamblers applies to gambling overall but I think the numbers associated with problem gambling would be much higher if this percentage applied strictly to VLTs. The numbers then are not the same. That is what I wanted to correct. If you include casinos, racetracks, et cetera, 5 per cent does not give you the same numbers if video poker is taken into account. I think VLTs are to gambling what crack is to drugs.
Mr. Morin: I sat down in bars with people who said to me: Look, that man over there has come to gamble with a diaper on. The first time I heard that I thought it was a joke. People come with diapers so that they do not lose their spot. And that is not a rare occurrence! Believe you me. That is why I would have liked to have Ms. Perras with us today. She could have told you about her experience. People who are sick, who are afraid of getting up and losing their spot, who vomit on the machines, these are not uncommon occurrences. People who urinate in their seat, that is not rare either.
When a waiter has to fetch his mop throughout the evening to clean the floor over and over again, I call this wretchedness. I have rarely seen this in a racetrack. I have seen it in bars in front of video-lottery terminals.
The Chairman Thank you, Mr. Morin, for your presentation and for the documents that you brought with you. This new information will be very helpful for the draft bill.
Mr. Morin: Thank you. I appreciate the invitation. This is the first invitation we have received since the forum on problem gambling was held, since the Government of Quebec brushed us aside. You have taken the time to invite us and to listen.
The Chairman: It has been a pleasure.
[English]
We are waiting for the provinces to send us witnesses for next week. As soon as we hear from them, we will let you know.
The committee adjourned.