Monthly Archives: February 2012

Further Suggestion to Drummond Report on Locale of Slot Machines

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The Drummond Report has really got folks upset – especially the horsepeople of Ontario.  They’ve had ten plus years of slot machine revenue and obviously they like that – and what’s not to like?  So when someone talks about altering that equation, blood pressures rise, anxiety builds and efforts to stop the alterations are planned. 

 Some of the folks who have the high blood pressure asked me for my advice as I was actively involved in the establishment of Grand River Raceway and Slots in Elora, Ontario back in the early 2000’s.  As a result of that experience, I can empathize with the horsepeople who have become addicted, oops – I mean accustomed to this revenue stream.  Maybe there’s a change that could be implemented that would provide the Province with some ‘overlooked’ revenue – better known as taxes.  Here’s a brief summary.    

 Currently there are 17 racetracks across Ontario who have profited from slot machine revenue.  Six of these operations are classified as ‘not for profit’, including Woodbine, Mohawk, Grand River Raceway, Western Fair Raceway, Hanover Raceway and Clinton Raceway.  As a result of these six operations business status, no provincial or federal income tax is paid on their ‘profits’.  Doing a quick calculation  on how much slot machine revenue was attributed to these six operations shows that there are over 4000 (yes, that’s four thousand!) slot machines at these six operations.  Painting a general brush over all six of them and applying Grand River Raceway’s revenue numbers  ($4 million/year for 200 machines – 10% of overall slot revenues for the facility) to them all, there would be a revenue stream of $80 million dollars from these six racetracks – quite a revenue stream, especially when it produces absolutely no tax dollars!  There is also some confusion as to whether these six operations pay property taxes on their land.  Seems the jury is still out on that area of taxation.  So where can I sign up to start my own ‘not for profit’ and get a piece of this action?  I could buy a horse – if I had to.

Surely the intent of a ‘not for profit’ status was not this.  It didn’t take a great deal of thought to see this ‘hole’.  There’s bound to be hundreds of others.  The province should be looking at their tax codes/legislation and correcting these loopholes to ‘find’ some money for health care, education and social services.  As I recall in our southern neighbour’s, State of the Union Address, Obama stated that one of the places they would be looking to find some cash was their outdated tax code.  Maybe Dalton and Stephen should join that search party and see what they can find.  How about the shareholder agreement differentiating between not-for-profit locations and for-profit locations?  A different percentage of the take or an ‘in lieu of tax’ payment would at least level the playing field between the two business classifications. 

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Preparing to Remove Secrecy Veil at EFO

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Recently I was given a report about the events of a recent neighbouring zone meeting for Egg Farmers of Ontario (EFO).  Surprisingly there seemed to be a contradiction regarding an answer to a question that was brought forward by one of the attending egg producers.  The question involved whether or not EFO members were entitled to minutes of the Board meetings.  The immediate response from the General Manager, Harry Pelissero was that producers are not entitled to the minutes.  He even elaborated that the governing body of EFO didn’t receive minutes either.  Then reluctantly a past Board of Director Member, who also happens to be a lawyer (for what that’s worth?) stated that producers could get the minutes but they had to ask – kinda like a first grader having to ask to use the washroom?  How ridiculous!

First of all, I know that’s crap.  When I was a producer I asked and was told I was not entitled to minutes.  And it was during this former Board member’s term in which I asked.  Where was she when I asked?  Why didn’t she step up and say that I was entitled at that time?  Was there something to hide?  If the statement of claim for the existing lawsuit is accurate, there is a heck of a lot of information hidden.    

Secondly, I want somebody to tell me how it is that the governing body (Ontario Farm Products Marketing Commission) can regulate if they aren’t even aware of the decisions that are being made at the EFO Board table?  Based on this information, how can anyone say that supply management is working?  There’s no accountability for EFO.  There should be no one wondering why there’s a huge lawsuit in which EFO is right in the centre. 

Based on the question being raised at the zone meeting, it is obvious there is at least one producer who would like to get minutes – and I’m sure there are more who won’t speak up.  So if one of them asked for my advice, this is what I would tell them.  YOU ARE IN CHARGE OF THE MEETING!  Just because Harry and all of the other ‘suits’ are up at the front, the egg producers are still picking up the tab for this meeting, paying all the salaries, all the honorariums, all the costs for the rooms, food, etc. 

The last time I attended, there was a pseudo-Robert’s Rules of Order process to the meeting.  That means that any producer can make a motion for an action to be done.  For instance, someone should make a motion that minutes are to be taken at each Board meeting and made available to all egg producers.  Make sure that there’s another egg producer ready to second the motion – otherwise Harry will try to keep producers silent.  Having a rogue producer making unexpected motions makes his job a whole lot harder.  But he makes the big bucks (that number is buried somewhere in those elusive financial statements!), paid completely by your levy dollars, so get your money’s worth.  Be prepared for the Board to be confused.  They won’t know what hit them and won’t know how to proceed.  Insist that there is a motion on the floor and needs to be dealt with and voted on by the attending members.  And make sure that there are some producers who will vote in favour of the motion.  It’s not hard, just takes some time. 

Maybe there are other motions that should be raised such as:

–        An analysis of the reasons that EFO is in this legal battle, conducted by an outside consultant in order that EFO avoids this kind of mess in the future

–        Changing the ‘quota-holder’ session to include industry representatives.  This decision was made exclusively by the Board, not the producers.  If producers want the industry reps there, make a motion to include them – even if they’re given attendance-only status, with no right to speak and/or vote.

–        A review of the EFO employee behavioural policy, including a review of the process for dismissing employees who are insubordinate.  This may be needed if Harry loses it and tells producers that they can’t make motions at their own annual meeting.  I think that could constitute insubordination, eh?     

 

Take back your industry.  Be aware of what’s going on within it – starting off by receiving and reading the minutes.  Then you can hold your Board member accountable by asking questions about what’s going on at the Board level.    If any producer needs help to prepare for the meeting, contact me – I’m prepared to suggest possible options.

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Broken Eggs, Broken Rules, and Broken System at EFO

At the Zone 6 EFO annual meeting, Carolynne Griffith, retiring EFO Chairperson, quoted Federal Agricultural Minister, Gerry Ritz as follows with respect to their defense of supply management:  “If it ain’t broke, don’t fix it”.  So is it broken – at least in the egg sector of supply management?  Decide for yourself.  Just check Jim Romahn’s  February 5, 2012 blog posting (www.agri007.blogspot.com) and anyone can quickly see that there are numerous ‘breaks’ (or should I say cracks or even rotten eggs?) in the egg sector of supply management.  Every egg producer should read this – especially since producers are denied access to minutes of their own Board’s meetings and your questions regarding this whole ‘break’ in the system is being hidden as much as possible.    The entire statement of claim is in Jim’s blog posting, stating what alleged events occurred that led to the current legal battle involving the two largest egg graders in Ontario (L.H. Gray and Son and Burnbrae Farms), EFO (Egg Farmers of Ontario) and Harry Pelissero (General Manager of EFO).   Maybe Ritz will see that the system is broken and the government’s defense of it isn’t warranted.  Just because customers still have eggs to buy and egg producers are getting paid handsomely doesn’t mean the system isn’t broken.

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