Murray McConnell says neither he nor his fellow standardbred breeders wanted to end up in court, but they have no choice but to sue the Ontario Lottery and Gaming Corp. over the way the racetrack-slots revenue sharing program was cancelled.
“People cannot make a living at it,” said McConnell, who owns Casimir Farm in Hagar, west of Greater Sudbury. “It was a thriving industry in Northern Ontario.
“We may not win it. But we’re also going to go broke the other way.”
McConnell, a 40-year veteran of the business, is one of more than 35 breeders from across the province named as plaintiffs in a notice of action filed in a Guelph courtroom on Monday.
The breeders are seeking $65 million in damages.
None of the allegations have been proven in court.
“These standardbred breeders really believe they were left with no choice,” said Ian Matthews, a Toronto-based lawyer representing the breeders. “And it’s a practical problem, because if you want to start a lawsuit, you have two years from which the event occurs to do so.”
That event would be then-finance minister Dwight Duncan’s announcement, on March 12, 2012, that the province would end the slots-at-racetracks revenue-sharing program, which provided the horseracing industry with a 20% cut of slots money — $345 million in the year before the agreement ended.
“These standardbred breeders have implored the government over the past two years to sit down and have a discussion with them, to try and repair some of the damage that’s been done to their business, and did not want to have to file a lawsuit,” Matthews said. “But with the limitation period expiring, and the government not wanting to have that conversation, they had to take steps to preserve their rights.”
Before the end of the slots program, the horseracing industry generated $2 billion in economic spinoffs for Ontario, employed about 55,000 people and had 17 racetracks in the province.
Now 11 racetracks are left, and the industry estimates it lost more than 9,000 jobs and 3,000 horse owners have left the industry, taking more than $1 billion in investment with them.
Many tracks ran reduced seasons last year. Sudbury Downs hosted 20 race dates, down from 40.
“A lot of jobs are being lost,” said McConnell, whose own operation includes some 60 horses, including 30 brood mares, but once had twice that number. “A lot of horses are being sold into the States or being sold other places, people are fleeing the business like it’s unimaginable and basically, the government is responsible for that.”
The notice of action says in October 2011, both the OLG and the province, through the Ontario Racing Commission, represented to standardbred horse breeders that the revenue-sharing program would continue on a long-term basis, despite the parties knowing otherwise.
Only a few months later, OLG and the province announced the termination of the program.
“So the reason that we basically have a lawsuit against them is basically they have broken the contract, because they assured us that, ‘Oh no, this is a long-range contract, don’t worry about it,’ ” McConnell said. “And three months later, they broke it.”
One year’s notice was given when the program was cancelled, but businesses such as McConnell’s operate on a five-year plan.
Broodmares must be purchased and bred, then carry their offspring for 11 months. Foals must be raised for a year and a half before being sold, then it takes another two years before those horses start racing and the true value of the mare is known.
“We were merrily going along, investing in the business,” McConnell said. “And we got the rug pulled out from under us.”
“For the government to just announce that a revenue sharing program is done – these people had five years worth of investment in the pipeline,” Matthews said. “And the value of that investment immediately plummetted.”
McConnell buys all his feed from farmers in the nearby Verner area and said he was contributing $100,000 per year into the local economy before the end of the revenue-sharing program.
That figure has fallen to $40,000, he said, and he has laid off two people.
Now that the notice of action has been issued, the breeders have 30 days to file a statement of claim.
The OLG will then have 20 days to file a statement of defence.
Earlier this week, spokespeople for both Premier Kathleen Wynne and finance minister Charles Sousa said they declined to comment because the matter was before the courts.
— With files from QMI Agency