SINS Committee Meeting

SUB-COMMITTEE ON THE STUDY OF SPORT IN CANADA OF THE STANDING COMMITTEE ON CANADIAN HERITAGE

SOUS-COMITÉ SUR L'ÉTUDE DU SPORT AU CANADA DU COMITÉ PERMANENT DU PATRIMOINE CANADIEN

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 29, 1998

• 1540

[English]

The Chairman (Mr. Dennis J. Mills Broadview—Greenwood, Lib.): This morning our special guests are Carol Anne Letheren and Michael Chambers from the Canadian Olympic Association.

As you know, the Canadian Olympic Association is one of the most exciting and most important components in the realm of sport in this country, because it puts it on the world stage, and Carol Anne and Michael will be talking with us today about what they've been doing and what their plans are for the future.

Carol Anne and Michael, welcome. I'll turn the floor over to you.

Ms. Carol Anne Letheren (Chief Executive Officer, Canadian Olympic Association): Thank you very much, Mr. Mills, and members of the committee.

This is the second time for me, having met you through the eye of a camera the last time, which was quite an unusual experience and the first time I'd done a videoconference. We're delighted to come back and attempt to provide some additional information and answer any questions you might have.

Before I start with some information, let me introduce Michael Chambers. Mike is actually an A director of the Canadian Olympic Association and also a vice president on the executive committee. He has been on the executive committee since 1990 and actually on the board of the association since 1984. This he does as a volunteer. His sport is canoe/kayak, and he's been quite involved here in the city of Ottawa, working at a club level and all the way up to the international level in his sport. He comes to our board of directors as their A director, so he is one of our sport connections. In his spare time, he is a partner in Maclaren Corlett here in the city of Ottawa, but we like to use as much of his time as we can.

Mike and I are going to share the presentation, and then we're at your disposal for any questions.

• 1545

We have kind of an opening statement. As we understood from some discussions we had with Mr. Mills, you were attempting to focus a little bit on the economic/business side of sport, but we needed to put it into a little bit of a context before we got into that side, from our perspective.

So we have a little bit of an opening thought here around the notion of competition, which is the central notion in which sport exists.

Competition is one of the fundamental elements in the make-up of the human spirit. The desire to excel, to test ourselves against others, to be the best in something, seems to pervade almost every human activity. It can lead to the strengthening of a society, to the enhancement of social bonds and morals, to the improvement of a people's health, and to the growth of peace and understanding between countries.

The urge to compete drives business in the free marketplace, and it drives academic research, but it finds one of its most universal outlets and appeals in sport. Because modern high-performance sport embraces so many disciplines—engineering and construction, marketing, economics, high technology, environmental assessment and education, to name only a few—its global impact is far broader than the playing field.

Sport can play a role in global trade. It can play a role in the transfer of technology and human resource skills between developed and less-developed nations, and it can contribute to the raising of social awareness in many disparate fields, including the rights of women, the rights of the disabled, and the rights of the economically disadvantaged.

At rock bottom, the value of sport remains that which propelled prehistoric man to see who could run the fastest, jump the highest, and lift the heaviest burden. It gives pleasure in human achievement at its most fundamental. It celebrates the health and strength of the human spirit in the human body, and it brings people together on a common ground and amidst shared values.

What we want to do today, actually, is talk a little bit about the Canadian Olympic Association, about the concept of Olympism in Canadian society, and then some of what we believe to be the social and economic benefits of sport generally.

To put that into a little bit of a context, as you mentioned, Mr. Mills, we operate in an international arena. There are two prongs, basically. The one prong is the International Olympic Committee, and therefore the field of Olympic play, the Olympic Games and the concept of Olympism. The parallel stream to that is the field of sport, which operates within international federations, and indeed then within national federations, provincial federations, and local activity.

The Olympic movement, the Olympic side of the ledger, is based on the ideals of the ancient Olympic Games, and it was revived in the early 1890s under the guidance of a Frenchman, Pierre de Coubertin. The first modern Olympic Games were celebrated in 1896, and they have been continuously every four years since then, except for the war years of 1916, 1940 and 1944. Since 1992, summer and winter games have been held alternately every two years.

The Olympic movement is governed by the International Olympic Committee, which is a private, non-governmental international organization based in Lausanne, Switzerland. It establishes and manages the rules for organization of, and participation in, the Olympic Games. It also partakes in or undertakes programs designed to spread the Olympic values of competition and fair play. It does this through several mediums.

It operates an international Olympic academy at the ancient site of Olympia in Greece for young people worldwide. Through Olympic solidarity programs, it undertakes sport technology transfer between richer and poorer nations in the Olympic family. Indeed, it provides a fair amount of funding to support the cause of those in the refugee camps in Africa, bringing the joy of sport and competition to them.

It has also operated in recent years in broader humanitarian causes, notably through encouragement of the ideal of the Olympic truce. This ideal has shown its value at Sarajevo in 1992, and in Iraq in 1998.

• 1550

The IOC appoints one or two members to represent it in selected countries. Generally it's one member, but if a country has hosted the Olympic Games, then it's often two members. These individuals are private citizens of the country to which they are appointed. They generally represent the interests of the IOC in that country.

So let me stop there in terms of the international situation. I'll turn it over to Mike to give you a sense of how the national system then relates to that.

Mr. Michael Chambers (Vice-President, Canadian Olympic Association): The COA, Canadian Olympic Association, is Canada's national Olympic committee. Although it's not strictly a committee in the sense of this committee of Parliament, it does derive its existence from the existence of the International Olympic Committee. That's where the committees overlap. That's the committee connection.

There are 197 member nations of the IOC. In fact, at the Atlanta Olympics, it was the first time ever that all member countries of the International Olympic Committee had athletes competing at an Olympic Games.

Each country, then, that is a member of the IOC has its own national Olympic committee, and each country's national Olympic committee represents the Olympic sport bodies in that given country.

In Canada the COA, Canada's NOC, not only represents the Olympic sport bodies, but it also has representation for the Pan-American sport bodies. There are some sports that are just competed at the Pan-American Games, such as water skiing, squash, and karate, and those sports have representatives in our association as well.

Interestingly for you people, the Olympic charter prescribes that representatives of governments and public authorities are not permitted to be designated members of a national Olympic committee. There is the desire to separate sport from the state, but to work in cooperation with the state. If a person through the normal course of things is elected to a position in a national Olympic committee, it does not disqualify him or her from being on its board or executive committee because he or she happens to be a government official, but there cannot be any government-reserved seats on the executive organs of national Olympic committees.

The fundamental duty of each national Olympic committee, of course, is to promote the Olympic ideals of the Olympic movement in its country and, of course, to present at the Olympic Games its best athletes to compete against the athletes of other countries every four years at either the winter or summer games. In addition, each national Olympic committee is charged with the responsibility of sending athletes to regional or continental games, such as the Pan-American Games.

The COA itself is structured in a very accountable fashion back to the sports themselves. It's a creation of national sport-governing bodies, national sport federations, in Canada. It has actual offices in Toronto, Ottawa, and Montreal. Its registered office, i.e. its head office, is considered to be in Montreal. As mentioned, it has representatives of each of the Olympic and Pan-American sport federations.

In addition to representatives of the sport federations themselves, most, but not all, of whom are volunteers from the sports themselves, it has, as an integral part of its governance structure, an athletes council, which is made up of an athlete representative of each of the Olympic and Pan-American sports that are members of the association.

Then these athletes who are part of that athletes council are themselves elected. It's required in our bylaws. We made that change a couple of years ago. It's required that they be elected by their peers; they can't be appointees only. They have to be there as a result of a democratic election in their organization among the athletes only.

Then, from the athletes council, the entire athletes council executive, which is made up of six persons, has a seat at our board table. Our board table then is made up of those six members of the athletes council, together with a representative of each of the sports, most of whom again are volunteers, and twelve persons who are elected by the membership at large from across the country. They come onto the floor for election through a usual nomination process.

Among those members, who are called B directors, there are former Olympians in their ranks. In our last election, Tricia Smith, who competed in rowing, and Charmaine Crooks were both elected from within that group.

• 1555

The executive committee of the COA is itself elected by the general membership. The president, the two vice-presidents, and the treasurer are elected by the representatives of all the sports and by the athletes. They then make up what's called an executive committee, which is comprised of the officers, five others who are elected from the ranks of the general membership, the chair of the athletes council, and a representative of Canada's coaches, who has a seat at the executive committee table. The executive committee then appoints the chief executive officer or, in an international sport parlance, the secretary general of the COA, and that's Carol Anne.

So one can see that the leadership of the COA is ultimately unquestionably directly accountable to the volunteer sport people in Canada through their representation of their sports in the association itself. They're the ones who elect, together with the athletes, all the leadership positions within the COA.

That's how I came to be elected. I came to the COA by being named by the Canadian Canoe Association to be its representative on the board in 1984.

Interestingly, I can well remember as a volunteer—I'm sure many around this table volunteer as well—when I was asked whether I would take the COA seat. I asked the typical volunteer question: how many meetings will there be? I was told there may be one or two a year. Well, it's now one or two a week, I can assure you, which is the life of a volunteer, as things usually happen.

As for the COA's mission statement, we circulated to you our 1997 annual report, which was just distributed a week ago, actually. On page 17 of that report, which is published in both the English and French languages in one report, you will find the mission statement of the COA.

Related to the mission statement are the tasks of the COA. Many of our tasks are given to us by the Olympic charter itself. In case you've never seen the Olympic charter—I always wondered what it looked like—this is the Olympic charter right here that you hear so much on TV, where they say the Olympic charter says this or that. This is what it actually looks like.

The COA's main task, as provided in the charter, that the public would be aware of is that we're charged with the responsibility to constitute, organize, and lead the Canadian team at the Olympic Games and at any regional games, such as the Pan-American Games.

Another major task we must undertake is to negotiate and endorse selection criteria with each of the national sport-governing bodies to determine which of their athletes may be selected for nomination to the COA for entry onto the Olympic team, since it's only the COA that has the right under the charter to enter athletes at the Olympic Games. Of course, we are tasked with promoting and strengthening the Olympic values and ideals in Canada.

And more and more, perhaps in part because government has retreated from this in a way in the last few years, we are becoming more involved in undertaking substantive programs that directly assist financially the development of athletes, coaches, and sport federations in Canada.

Our mission statement, as I mentioned, on page 17 states:

The Canadian Olympic Association is dedicated to developing and advancing sport and the Olympic Movement for all Canadians from coast-to-coast.

Included in that are these statements in which we:

Maintain an athlete focus that addresses their needs and expectations;

Support the achievement of excellence in high performance sport;

Provide quality programs for clients that foster participation and involvement in the Olympic Movement and sport;

Educate Canadians on Olympic values and the ethical principles of sport;

Create and nurture relevant partnerships with agencies, groups and individuals who share our vision;

Involve Canadians in the Olympic experience which inspires them to reach their potential.

I'm going to now briefly review the sport funding activities that we engage in that actualize some of those elements of our mission statement.

• 1600

The COA is independent of government. It is sometimes perceived by the public to be part of government because it has such a national prominence, particularly at the time of the Olympic Games. Importantly, it's not only structurally independent of government but also financially independent of government. It receives about 2% of its revenue from government, not by direct grant but by a contractually negotiated sponsorship agreement between the federal government, through Sport Canada, and the COA.

The COA established its National Sport Federation grant program in 1989 as a direct result of—and it wouldn't have been established if this had not taken place—the success of the 1998 Calgary Winter Olympic Games. If there's one legacy that made having the Calgary Olympic Games, besides the joy and pride we had in the games themselves, worth having in Canada, it's that legacy fund, which unquestionably has allowed sports to train athletes to a level that resulted in the success, unquestionably, at the Nagano games.

In any event, since 1989, when it was established, the COA has granted over $27 million to the Canadian Olympic and Pan-American sports federations from that fund. It's granted $27 million. The fund was established with a capital fund of $53 million. Notwithstanding that it has granted $27 million, the fund now sits at a capital value of approximately $94 million. We started at $53 million in 1989. We have given out grants of $27 million, and through appropriate investment, we had the fund nevertheless grow, in capital terms, to $94 million.

In the quadrennium between the Atlanta and Sydney Olympics, $16 million will be granted to those federations to prepare for the Sydney games. These funds are given basically without any strings attached, except for one very important string. We have the federation sign an undertaking when they receive their funds from the COA that those funds will be applied only for the development and training of athletes for the Olympic and Pan-American games. How those funds are expended for that purpose are left to the sport federations themselves.

In addition to the direct National Sport Federation funds, we established for this quadrennium, for the first time, partly because of the success in the growth of the endowment fund, a direct athlete fund. That particular fund has been set for this quadrennium, the four-year period between Olympics at Atlanta and Sydney, at $4 million. In 1998, approximately $700,000 is going to be given directly—and it doesn't pass through any filters; it's a cheque made out in the athlete's name—to 200 of Canada's athletes to assist them in preparing for the Pan-American Games in Winnipeg next year and the Olympic Games in Sydney in 2000.

That $4 million was allocated to this program by the board of directors of the COA. The board of directors of the COA did not then say how it was going to be allocated amongst the athletes. That job was given to the athletes council. The athletes themselves deliberated and decided how that $4 million was going to be spent.

That group of athletes decided, first, that $1 million of the $4 million would be set aside to start building an endowment fund for the fund itself. Two, the other $3 million would be spent in direct grants to athletes. The process of determining which athletes was determined by the athletes themselves.

Basically, what it means this year is that all athletes or teams in Canada who participate in Olympic or Pan-American sports and are considered to be ranked in the top eight in the world in their sport receive this money. That's how the 200 were arrived at.

This gives you an idea of how many Canadian athletes are ranked, in many sports, in the top eight in the world. When you think about it, 200 is quite a few.

• 1605

In addition to the $4 million that was allocated to the athlete grant program, another $4 million has been earmarked in this quadrennium to support national training centres, which we believe are the future of the betterment of sport performance for Canada down the road. Certainly the Calgary national sport centre is a success story. Unquestionably, the athletes who competed so well in Nagano owe some of that success to its presence and to the facilities that were made available to them through the Calgary national sport centre.

We have now, in cooperation with others in the sport community in Canada and Sport Canada, opened a centre in Winnipeg and in Montreal. We hope to open one in Toronto this year, and in the near future open one in the Halifax area to serve the Atlantic provinces sport community.

In addition to the $4 million, the COA will hand out, through the Petro-Canada Olympic Torch Scholarships, approximately $2 million over the course of this quadrennium to assist athletes and coaches in their schooling through school scholarships. In the 1997-98 academic year, 140 athletes and 16 coaches were given scholarships from this scholarship fund totalling $450,000.

In addition to that scholarship fund, there's another scholarship fund that is called the Olympic Legacy Coaching Fund. It's another approximately $2 million program over the course of the quadrennium. Its funding is to permit Canadian coaches, specifically in the winter sports, to embellish and enhance their coaching education and training through education. In this past academic year, 16 Canadian coaches were supported through that program totalling $389,000.

In addition to those programs, the games themselves are a big dollar ticket item. You can imagine sending 300 or so people at your cost to Nagano, Japan, and back, housing them during their time there and feeding them. Our cost on that was about $7 million. The cost of the summer games, the Pan-American Games and winter games is about $18 million in total.

We have a $70 million quadrennium budget. We think of everything in quadrenniums, which is the four-year period between summer games and winter games. Historically, the winter games and summer games used to be in the same year. The quadrennium we budget for remains the summer quadrennium, in this case 1996-2000.

Of our $70 million total funding over that period, approximately $30 million is paid out in grants. Approximately $20 million is used to cover the cost of our teams going to the games. Another $10 million covers other programs such as our education program, our marketing program that generates our revenues, which Carol Anne will speak about, and $10 million is applied to cover our administration costs, which are about 14% plus a few points of our total expenditures.

Now Carol Anne will describe to the committee how we generate our revenues to fund these programs.

Ms. Carol Anne Letheren: Michael has introduced where we spend it, so let me talk a little about where it comes from, which might be of real interest to this group, given what you're taking a look at.

Mike mentioned that we work in a quadrennium, a four-year period from approximately 1997-2000, which is the period we're in. We have a budget of $70 million to do the things we need to do and would like to do in that time period. Of that, $35 million comes from sponsors, suppliers and licensees. That's divided among what is known as the TOP sponsors, which are the international worldwide sponsors, and there are 12 of them.

• 1610

So the International Olympic Committee is given the opportunity to negotiate worldwide on behalf of all national Olympic committees in 12 categories and then that money is divided between the organizing committees of the games in that quadrennium, the national Olympic committees, the International Olympic Committee and the Olympic solidarity programs for the less-developed nations. And our portion of that is within the 35 million.

Then we have 15 domestic sponsors, so the categories that are exclusive to the international program we don't touch. Coca-Cola, for example, is a worldwide sponsor, so we're not entitled to come and do a deal with Pepsi in Canada.

We then have room, though, among our domestic sponsors— and if you look in the back of the annual report you'll see all of the logos of our sponsors. In that group, for example, Air Canada's domestic, obviously, as are Delta Hotels, ESSO and General Mills. So these are categories that are very difficult to negotiate worldwide, because they have more applicability domestically and we have 15 domestic sponsors.

So together our ambition is to raise $35 million over the four-year period and we already have committed revenues of $21.8 million.

We have six suppliers, and suppliers are in a category of those who provide some kind of good or service. AMJ Campbell Van Lines is our moving company. So they do a lot of the moving of our goods and services. For example, when we go to Winnipeg for the games they'll do a lot of the transport.

Probably one that you have a pretty good feel for now is Roots, our clothing supplier for Nagano and certainly one of our more successful supplier relationships. That's a category that fits in. We get a percentge of each item sold at retail. You might also be interested that when we had budgeted in our supplier dollars we thought we might get about $25,000 from that licensee, and we are now north of $500,000 on that contract and it still isn't over.

We also have 22 licensees. Licensees are people to whom we license our trademarks and our logos and they put it on a product, which may be a glass or a mug, and they sell these at retail or they offer them to the corporate world as premiums. We get our money from them based on an upfront cash amount plus a percentage of the good that's sold. So that represents about $35 million.

I want to talk a little bit about the fact that we don't just get cash from these people. We consider our sponsor, supplier and licensee program to be one of our best communications programs as well. I mentioned Roots. That was a marvellous opportunity for us to connect the team with the public.

We also have the Stentor group of companies as one of our domestic sponsors, and they are people who have been a huge supporter and sponsor of the education program that Mike mentioned. So we have a games education program that goes into all elementary schools in Canada. It's a values-based education program, not a sport-based one. The teachers use it to teach geography, history, language, arts and media training. They use it in a multitude of different areas.

We did some focus group research on it last year. We've been operating it since 1988, and the teachers tell us they can teach kids anything using that as the medium; and the kids, when they are tested, say they love it when the Olympic program comes into the schools because they no longer are in school. So it's obviously accomplishing great things for both sides of the ledger.

This time round, for the first time, we also had a youth Olympic web site with that program. It was a 100-page web site and it received 1.3 million hits. It was named the Yahoo site of the week in its first month of operation because it had received so many hits at the very outset of its operation.

Interestingly enough, 40% of those hits came from outside Canada. We have become a leader in Olympic education worldwide in terms of the quality of the product that's out there.

They have a third component part of that program. They put out a special advance mailing to teachers, and I forget the number but the first x number of teachers who responded received the opportunity to have an athlete come to their school and speak to the kids prior to Nagano.

• 1615

This was a two-pronged opportunity. On the one hand, Stentor provided some dollars so we could give each of the athletes an honorarium, so we were able to put another $100,000 into revenue for athletes. At the same time, the athletes were able to tell their stories to the audience that most loves to hear from them—the young people of this country. It was a win-win situation. It's a three-part program. We view that sponsor relationship of $35 million to be absolutely germane to our communications opportunity.

Mike mentioned the legacy from Calgary. We have a general endowment fund now. The terms of reference allow us to use the interest income once the fund has been capitalized. In this four-year period it will offer $24 million of our $70 million. He also mentioned the Calgary Olympic Winter Games being a phenomenal legacy relative to Nagano, and while this isn't a direct Canadian Olympic Association item, it's really a very important part of the puzzle.

An organization was struck following the Calgary games called the Calgary Olympic Development Association. It has $150 million in investments. The purpose, of course, is to operate the facilities and ensure those facilities that were a part of the Calgary Olympic Winter Games are available for athletes and coaches in perpetuity. It has spent well over $50 million of its endowment and still has $150 million under investment. So those Calgary games brought tremendous opportunity to sport in this country and the federal government was a key partner in making that happen.

Then we have $11 million left of the $70 million, and that comes from grants we received from the organizing committees for the games. We get some grants from the International Olympic Committee, although I must say the national Olympic committees receive most of their money from IOC through the sponsorship program I mentioned. We also have a donations program still operating. It's not a huge fund-raiser for us, but it still brings in the neighbourhood of $2 million to $3 million over the course of a quadrennium. Then we run some promotional events and fund-raisers, which bring in a little bit of that $11 million. Again, they're not huge fund-raisers; they're better communications vehicles than they are fund-raisers.

That brings us to our $70 million. You're probably asking where the government fits in. As Mike mentioned, for the first time ever in Atlanta we made what we call a sponsorship agreement with the government—what you people call a memorandum of agreement—and the terms of it are very similar to the sponsorship agreements with our other sponsors. It amounts to $1.3 million over the course of the four years, and you would find it in the $35 million. Because we consider it a partnership and a sponsorship relationship, that's where we treat the dollars.

That partnership has grown and evolved such that we are real partners in the development of these national sport centres. The Canadian Olympic Association puts in $4 million. I don't know what the total is for Sport Canada, but I do know that on a centre by centre basis it's a fair amount of money. The Coaches Association of Canada is the third partner in those centres. I think it's one of the marvellous outgrowths of the last four to five years in sport that we're really beginning to put the resources together, get rid of duplication, and find good ways to use all of our money effectively. That gives you a sense of where we get the money from.

At this point I want to talk about a project that's in evolution at the moment. To do this I have to give you a bit of a historical understanding. Through the Olympic charter and the International Olympic Committee, one of our mandates is to protect the Olympic symbols and trademarks in Canada. For example, we have to protect the five rings in Canada from any ambush marketing, by way of example, but we are not entitled to use it alone. For our own programs we must use it with some other symbol or logo that has been approved by the IOC. On our documentation you see our logo quite clearly at the top, and the five rings are part of our logo; they're not used independently.

The national sport federations do the same for their sports and they also promote a number of different products. For example, the most successful one in terms of some of the international products that have come into this country would be the figure skating association and some of the world events that are staged here. Part of their revenue generation comes from their ability to sell broadcast rights to those events.

• 1620

Where do we get our protection in Canada? We get it from section 9 of the Trade-marks Act, and we're considered a public authority under that act.

We have been speaking a lot with Sport Canada and, frankly, with the Minister of Canadian Heritage, about the need for the development of an Olympic and sport act that protects all of those properties in a much more fundamental way.

The United States Olympic Committee has such an act, and as a result of that act, some years ago—in fact, it was prior to the Calgary games—they negotiated an arrangement with the International Olympic Committee to receive 12.5% of the broadcast rights of any broadcast agreement with a U.S. broadcaster. If you think of the NBC deal that was recently struck with the International Olympic Committee and you factor it out, it amounts to close to $20 million for the USOC. So if you were to take the recent deal that was done with the CBC, TSN, RSD, the partnership of the four networks, basically, which was a $160 million cash deal, and you were to take a percentage of that to the Canadian Olympic Association for amateur sport, that would be quite an interesting sum of money also.

However, when we went to the International Olympic Committee to ask why not the Canadian Olympic Association if they were going to do this for the USOC, the answer was that they have an act that protects the trademarks differently from the way they're protected in Canada.

So we have been working with the Minister of Canadian Heritage, with Sport Canada. We haven't been successful to date, but there's also a bit of an encroachment on the sports side.

By way of example, figure skating, with whom we've been talking a lot, are now discovering that the international federation of figure skaking, which is a joint federation that acts for speed skating and figure skating, is attempting to receive the dollars from the broadcast rights for any international event hosted in Canada, in any country in the world. Because when you are a national sport federation and you sit on an international sport federation it's one vote one country, the voices of Canada and the United States, and maybe Germany, the countries where these kinds of things are really important or revenue-generating, are drowned out by the other 150 countries, where it absolutely doesn't mean much at this point in time.

So those are very important revenue-generating opportunities for sport in this country, and we are in the process of trying to find some domestic legislation that will assist us in protecting those rights here. I raise that because I thought that might be of real interest, given again the mandate of this group.

Do you want to do economic impact?

Mr. Michael Chambers: Yes.

Just before I go on to to economic impact, I want to correct one of my—

The Chairman: Excuse me, how much longer will it be before we can get to questions from some of our members?

Mr. Michael Chambers: About 10 minutes.

The Chairman: Okay.

Mr. Michael Chambers: I want to correct one of my earlier statements. I mentioned that the Olympic Legacy Coaching Fund provides scholarships. In fact, it doesn't provide scholarships; it provides direct funding of coaches, and there are 16 coaching positions that are funded or partly funded through the $389,000 that was received by those coaches over the past year.

I also want to mention that in the annual report you will see reference on page 10 to the Canadian Olympic Foundation. Since it comes from my sport, I'm very proud to mention that there's yet another athlete at a very senior level in the Olympic movement in Canada, and that's John Wood, who won one of Canada's two silver metals at the 1976 games—perhaps the lesser known one, Greg Joy being the most popularly known one.

John Wood won a silver metal in the C-1-500 metre sprint canoe at the Olympic Basin in 1976, and he has just been appointed chair of the Canadian Olympic Foundation, which is the volunteer fund-raising arm of the COA. John has become a very successful businessman and is chief executive officer of the Financial Concept Group and an acquaintance of mine.

About the economic benefit of sport, I'm not going to spend a lot of time on this, because you could spend a day on it. I'll just spend a couple of minutes on it.

Certainly, as Carol Anne mentioned, a concrete example is the success of Roots, a Canadian clothing manufacturer whose supply of clothing to the Canadian Nagano team has greatly broadened demand for its product worldwide, and particularly in the United States, where its phone has been ringing off the hook, almost literally, with requests from the U.S. to supply it with product. Its clothing is manufactured here in Canada, so the greater the demand, the greater the need for supply; and the greater the need for supply, the greater the need to fill employment positions at the manufacturing plant. It's as simple and straightforward as that, and that all arises out of the leverage they got out of supplying the Canadian team with their product in Nagano.

• 1625

In a more mundane way, Statistics Canada and Sport Canada have some interesting statistics that we've been able to dig up. According to their sources, economic activity directly related to sport represents an estimated minimum of 1.17% of Canada's gross domestic product or about $7.7 billion. In the 1992-93 fiscal period, sport and recreation provided direct employment of just over 200,000 jobs. In a period that was studied, 1986-91, it was found that 42% of those jobs—which is not a bad ratio, although it should be 50%, at least—were held by women. In the 1994-95 fiscal period, the Canadian sporting goods industry provided 8,734 jobs for Canada's economy.

Of course—and I'm sure you hear this time after time—none of those statistics that I've ever seen value the volunteer time that's put in across this country to support the Canadian sport system.

The economic impact of hosting major games, again, is seen in Calgary, because of the world events that are attracted to Calgary because of the facilities that are there to host those world events and everything that comes along with those events.

In the initial work-up stage, of course, the economic impact on a community is the capital construction of the venues and infrastructure, a capital impact that I confidently believe and I certainly hope Toronto experiences for the 2008 games.

Then there are the operating expenditures of the games themselves. There's a tourism increase at the time and follow-up, and of course, the legacies left behind by the games we have mentioned previously.

Of course, of more immeasurable importance is the worldwide exposure for the community in question in terms of how that actually ripples to people having more confidence in placement of plant and investment in the community because this is seen as a community that was able to host successfully one of the most complex three-week events the world has, which is the Olympic Games.

There was a study leading into the Calgary games that was commissioned by Sport Canada on behalf of the federal government. To quote from it, on economic impact it reads:

The economic stimulus due to the direct expenditure of about [it was seen then] $875 million on the Games will generate an appreciable amount of economic activity in Canada, the most important aspects of which are:

(1) the contribution of about $1.3 billion to Canada's Gross Domestic Product, fully 68 per cent of which is comprised of direct spending on facilities, operations and tourism.

(2) the creation of approximately 27,400 person-years of employment in Canada during the 1980s.

We have studies that we could provide the committee with that show that the Lillehammer games in 1994 were of great economic benefit to that locale, and the Manchester bid for the games of 2000, which did not succeed, estimated that if it had— KPMG had done a study for its bid committee and estimated that if successful, close to $3 billion of capital investment would have been implanted in the Manchester community, with the creation of up to 3,300 full-year jobs.

Having regard to those figures and factors and what we've been discussing, it has been seen by the COA that parliamentarians, both federal and provincial, are perhaps not as aware as they might be of the importance of sport in Canada and the issues that are impacting sport at a given time in a given era—and we don't place any fault on the members for that; the communication perhaps has not been there.

Therefore, on account of that, the COA is initiating what we call a parliamentary outreach program, which plans on getting that information into the hands of the MPPs and MPs in Canada on a continual and current basis. We hope to have that in place within the next several months, and the members of this committee will themselves be receiving information on that.

With that, I would like to hand it back to Carol Anne to wrap up.

• 1630

Ms. Carol Anne Letheren: Let us wrap up too. We have some more information that we can provide you with on what we're going to call the softer side of the benefits scale, which relates to things like global trade and development, I think probably some of the initiatives that have occurred in the area of the Olympic truce and so forth. So we'll put some of that in writing and you can take a look at that at your leisure.

So just by way of conclusion, there are several things we wanted to point out. One is just to give you a sense of the Olympic organization so you know how it's structured, where its accountability is and how the sport community works within it as part of their parallel stream, because they have their international federation stream as well that they must work within.

Second, we are the largest non-governmental funder of sport in Canada, in the 1997-2000 quadrennium seeing about $30 million going directly into grants. We have recently—and one of the programs was just mentioned, the parliamentary outreach—been asked by our board of directors to begin to develop some broader communications packages that can demonstrate the broader role of sport as well.

We've mentioned the Olympic and sport act, which we think is crucial in that as global frontiers are emerging and disappearing there's a real need to protect some of our capacity to generate revenue within our own geographical boundaries. Also, as has just been pointed out by Mike—and we will get some of those studies to you; I think you would find them interesting—there are economic benefits of hosting if the games are chosen well and placed in communities in a way that derives that benefit.

Some of our member sports have asked us to bring forward two other notions. One is the tax deductibility. We of course in the Canadian Olympic Association have a tax number because we're a national association, but much of what is generated for sport is generated locally, provincially, and that privilege doesn't go beyond. So we have to find sometimes different ways and means of working through and around that and with it. But it would be an interesting subject to look into.

The other thing is that we've mentioned our National Sport Federation grants. The $16 million that we provide to the sports and the sports themselves determine how those grants will be allocated. So every Olympic and Pan-American sport receives a base grant from us if they're on the program. Then the balance of the dollars are distributed based on volume of participants and past achievements. So there's a formula there that gets worked out.

At our recent board meeting there was a motion put on our books for the Olympic association to support the notion of base grants for all Olympic and Pan-American sports within Sport Canada's sport accountability framework, because there are about 10 sports right now, which are either on the Pan-American Games program or one of the two Olympic Games programs, that are absolutely getting no dollars whatsoever.

So that's another issue we would bring forward. They can speak to it more than we can and give you greater detail. But we certainly are happy to bring that notion forward as well, particularly based on the formula we've adopted.

So maybe we'll leave it at that, Mr. Mills.

The Chairman: Thank you very much, Ms. Letheren.

Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): Thank you, Mr. Chairman.

Mr. Denis Coderre (Bourassa, Lib.): It's not only hockey?

Ms. Suzanne Tremblay: No, there is a good deal of interesting information. Are you going to table documents on the presentation you made?

[English]

Ms. Carol Anne Letheren: Yes, it is our intent to do that, and we just wanted, from today's meeting, to ascertain any other types of documentation so we do it all at once.

Ms. Suzanne Tremblay: Okay.

Ms. Carol Anne Letheren: But it is our intent to do that.

[Translation]

Ms. Suzanne Tremblay: I found your presentation very interesting and I took a lot of notes. Frankly, I did not know your organization too well. It seems to be somewhat complex but I find interesting the different streams. The only problem is I am not sure I understood everything.

• 1635

I will start with what you said at the end and ask for some clarifications. As an illustration of what you said, let's take one sport. Is racketball one of the Olympic sports? And bowling?

[English]

Mr. Michael Chambers: It's what we call Pan-American sport only. Bowling is the same. Bowling is a Pan-American sport.

[Translation]

Ms. Suzanne Tremblay: So bowling is a Pan-American sport. Why are you involved in the Pan-American games and not in the Commonwealth games or the Jeux de la Francophonie?

[English]

Mr. Michael Chambers: Because the Olympic charter specifically gives us the responsibility for the continental or regional games, but it stops at that and does not include charging us with the responsibility for games such as the Francophonie.

[Translation]

Ms. Suzanne Tremblay: Okay. The Olympic charter applies to everybody. It does not only apply to you, but to all countries if I understood correctly?

Ms. Carol Anne Letheren: Yes, it applies to everybody.

[English]

Mr. Michael Chambers: The Olympic charter is established by the International Olympic Committee and it is the same charter that applies to all countries that are members of the International Olympic Committee.

[Translation]

Ms. Suzanne Tremblay: How can a Canadian become a member of the International Olympic Committee? How did Mr. Pound, for instance, become the vice-president of the Olympic movement?

[English]

Mr. Michael Chambers: It's important to remember that at the Olympic movement, which is at the IOC, you don't have a Canadian representing Canada. The charter and the IOC is very clear on that. It actually works the other way around. The IOC has representatives in Canada who are appointed by the IOC. Ms. Letheren is one of those two representatives in Canada. Richard Pound of Montreal is the other representative in Canada of the IOC. They are not Canadian representatives at the IOC.

[Translation]

Ms. Suzanne Tremblay: But how is the International Olympic Committee struck? Who appoints its members? Who chooses them? Who votes for them?

[English]

Mr. Michael Chambers: I'll certainly permit Ms. Letheren, who is on the committee, to answer that question.

Ms. Carol Anne Letheren: It's a very unusual structure. It began in 1894 and it is a committee that is struck by its own executive board. For example—

Ms. Suzanne Tremblay: Is it by co-option?

Ms. Carol Anne Letheren: That's probably a good word to use. Something like that.

Ms. Suzanne Tremblay: You're there and you choose me.

Ms. Carol Anne Letheren: Yes, basically the executive board does. For example, let's suppose a country, say China, didn't have a member. The executive board would say China is now a significant national Olympic committee, they're participating significantly in worldwide sporting activity and should have a member on the International Olympic Committee. We should have someone in China representing us. So then they would go to many sources in China to obtain names. They would probably go to the national Olympic committee among those sources, but they are not limited to the national Olympic committee. And then they also would discuss it with the national Olympic committee and with other sources and eventually arrive at a name.

That person is voted by their colleagues in the International Olympic Committee's general assembly, which is a group of 116 but essentially is a rubber stamp.

[Translation]

Ms. Suzanne Tremblay: If I understood correctly, since we do not have a sports and olympic act like the United States, you do not get a percentage of the broadcast rights that Canada pays to broadcast the Games here.

Could Canada have one team only? There were four networks, but could we have added CTV, TVA, and all the Canadian TV stations rather than having them compete between them? Couldn't they have come up as one team, one global team, and say that they would give up to $100 million for the broadcast rights? Could they have done that? This would have cost us less, but is it possible? Can we do as they did in Europe?

• 1640

[English]

Ms. Carol Anne Letheren: You've several points in your statement. First, yes, in the United States there is a special act that does govern the protection of the trademarks in the United States. I don't want to misrepresent it—I don't know, if we had a similar act here in Canada, if we could get a percentage of the broadcast rights—but when we ask the International Olympic Committee why the U.S. and why not Canada, that's the answer we get.

The broadcast negotiations are done by the International Olympic Committee directly with the broadcaster. It has been their choice to offer that opportunity to the broadcasters in this country, and it has been the choice of the broadcasters in this country as to how they come forward with their packages. There's no question that in Europe there is a consortium that is much broader than what has currently occurred here, although I must say this is the first time we've had a consortium come forward in Canada, which is a good sign also.

[Translation]

Ms. Suzanne Tremblay: But nothing prevents them from teaming up?

Ms. Carol Anne Letheren: No.

Ms. Suzanne Tremblay: Nothing that you know of?

Ms. Carol Anne Letheren: No.

Ms. Suzanne Tremblay: One last question before the floor goes to somebody else. I will come back later on. I was very surprised, approximately one month after the Olympic Games, to see in my newspaper a very big Roots ad with the face of the one who got the gold medal in snowboarding—and it was our first gold medal. In the ad, they were inviting the public to come to downtown Montreal to get autographs or meet the young athlete, but there was no mention of the Olympic Games. Was Roots the only one to make money in that case? Did you get something out of it? I think that Roots is already a very large clothing business.

[English]

Ms. Carol Anne Letheren: You're very observant.

Voices: Oh, oh!

The Chairman: They did look good, though.

Ms. Carol Anne Letheren: You're raising, Madame Tremblay, four very interesting points.

First, any company is at liberty to negotiate an arrangement with an athlete and/or a sport of their own accord. So the arrangement Roots has with Ross Rebagliati is entirely their decision.

We are in the process of— as they call it in marketing parlance, a “brand identification” program. We clearly know that as we've grown, with this being, frankly, our biggest quadrennium, we need now to have even greater protection in our arrangements with our sponsors, suppliers, and licensees. That is one issue. If we do our homework in what we're currently working on, Roots should not be allowed to put that ad in without reference to their connection to the Olympic movement. That is something we understand we have to do.

I've lost my train— in terms of your last point.

[Translation]

Ms. Suzanne Tremblay: They were a bit too large.

[English]

Ms. Carol Anne Letheren: Oh, yes.

It definitely was too large. We had our knuckles rapped for that, because when those uniforms arrived they were not able to be sent back. You probably noticed the clever scarf around the necks of the athletes on the medal podium. That was to cover the Roots logo.

Ms. Suzanne Tremblay: Okay.

An hon. member: I thought it was to stay warm.

Voices: Oh, oh!

[Translation]

Ms. Suzanne Tremblay: I must admit that they looked really beautiful and they were very popular. They probably were the nicest looking in Nagano. Everybody is wondering what I did with mine. I must tell you that I gave it to my young nephew who is a staunch federalist. He is very happy to wear it.

[English]

The Chairman: Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): Thank you, Mr. Chairman.

On page 9 of the annual report, I want to get a figure straight. With regard to marketing revenues, is that $7,306,000?

Ms. Carol Anne Letheren: Yes, for 1997.

Mr. Carmen Provenzano: So that's a figure of $7 million.

Ms. Carol Anne Letheren: For one year.

• 1645

Mr. Carmen Provenzano: Yes, okay.

I listened with intent when you indicated the federal government's contribution to your revenues. You indicated that it wasn't a significant amount.

Can you say again, because I don't think I got that, what the percentage of the contribution is?

Ms. Carol Anne Letheren: It's roughly $1.3 million over the four years. So in any given year, divide that by four, and you get the annual amount.

Mr. Carmen Provenzano: Well, is it roughly somewhere between 20% and 25%?

Mr. Michael Chambers: No, no.

Ms. Carol Anne Letheren: Of our total? It's probably about 2.5%.

Mr. Michael Chambers: Take the zero out. It's about 2.5% of our total.

Mr. Carmen Provenzano: Now, maybe I missed it, but I was wondering whether you have any source of revenue that comes from major league sports, whether it's baseball, basketball, or hockey, in terms of cash contributions or money's worth. Is there any percentage from that revenue?

Ms. Carol Anne Letheren: None.

Mr. Michael Chambers: No, there is no such percentage of revenue that comes to the COA.

Ms. Carol Anne Letheren: However, we would love to have gotten $10,000—this would be like a chocolate bar to us—from each of the NHL players in Nagano as a contribution to our athletes fund.

Mr. Carmen Provenzano: This is all interesting information to the committee, I think.

Ms. Carol Anne Letheren: We tried that on them.

The Chairman: We'll ask Mr. Goodenough that when he comes.

Ms. Carol Anne Letheren: Please do.

Mr. Carmen Provenzano: I'd like to follow up on those questions.

One of your core strategies is to acquire, manage, and maintain assets to execute the purposes of the organization. I was wondering whether there's any interest or whether there have been any endeavours in the past to partner up with—this may or not be major league sports—functioning groups within communities, such as a National Hockey League team or whatever, in sort of a value-added way for them—it would certainly be a beneficial way for the training of athletes—to use facilities and equipment consistent with that fourth objective. Is there any effort or has anything been explored in that area where you could partner up and get into a win-win situation? It means that if you don't have to buy the equipment or the time in an arena or on a field, well, that's revenue you don't have to raise, so it's money's worth.

Are you doing anything in that area?

Ms. Carol Anne Letheren: The national sports centres do that, but as for the International Olympic Committee, no, not directly. The national sports centres that we spoke of earlier are currently in Calgary, Winnipeg, and Montreal.

For example, in Calgary, I do know that there have been arrangements with the Saddledome and through the Calgary Flames. I can't give you the exact nature of it, but part of the role of those national sports centres—that's why we, Sport Canada, and the coaching association are so intent on these—is to make accessible for our amateur athletes the facilities, expertise, and leadership they require at a rate we can afford.

The Chairman: Perhaps I could intervene for a second, because I think it's important. Yesterday Mr. Hotchkiss, from the Calgary Flames, was one of our witnesses. There's a specific reference in their brief as to what that particular club does for the Olympic movement in Calgary.

Mr. Carmen Provenzano: That's basically what I'm getting to. My understanding is that it's not done on any global scale. I'm wondering—you may not be able to answer this question now—whether there's interest in examining that aspect of utilizing facilities and equipment and partnering up somehow with the major league sport organizations that might be interested to do that in return for some kind of concession, some kind of tax credit or whatever. Is there's something we can explore there in the nature of win-win situations?

You know, we hear from these major league organizations about how they are very interested in promoting their fan base and getting into the development of their sport in terms of not only the sport itself but the fan appreciation. Somewhere in there, there may be a win-win situation where the Canadian Olympic Association could utilize what's there in a value-added way and in a way in which maybe the government might be able to recognize the contributor.

Is that of any interest at all?

• 1650

Mr. Michael Chambers: The COA has an interest in any proposal that would augment the development of training opportunities for Canada's athletes, be they Pan-American athletes or Olympic athletes. If it's better, more efficient, or more cost-efficient for the sports system and frees up more dollars to help more athletes and coaches, the COA is interested in talking about this. There's no question about it.

Historically, to this point, we've been entering into similar type of arrangements that you're speaking about with universities and what not. You can imagine that they have plant out there that are interesting to look at. Certainly the facilities that a professional sports franchise would have could be looked at in the same way. There's no question about that.

Mr. Carmen Provenzano: Maybe in conjunction possibly with universities—

Mr. Michael Chambers: Yes.

Mr. Carmen Provenzano: I'm thinking of looking at basically your resources on a global scale and what you can access. It doesn't matter who owns them, whether it's the universities or a national league hockey club.

Mr. Michael Chambers: It doesn't matter to us who owns them; it matters to us what's best for the athletes. I can tell you that there's no question about that.

Mr. Carmen Provenzano: Those are my questions, Mr. Chairman.

The Chairman: Thank you.

With your indulgence, because there are still a few minutes left in your 10 minutes— I realize, Mr. Ianno, that you are part of the group in Toronto that will be working on the bid, for downtown Toronto especially, for the Olympic Games. So would you have any questions that you'd like to put forward?

Mr. Tony Ianno (Trinity—Spadina, Lib.): Yes, I have a couple of questions, I guess. They aren't related necessarily to being in downtown Toronto, although we're pleased that this may be the case.

Carol Anne, we spoke when the Sandhu situation occurred. I noticed how Suzanne Tremblay mentioned—you referred to this—that the name “Roots” was being covered by the scarf.

I have the same concern, which is that Canadians believe the COA is really government. What I'd like to see, if possible, is a delineation so in effect, people can see that it's an organization of individuals who are appointed by the IOC, which is international and has really nothing to do with Canada. You happen to be the individuals in Canada who are representing the IOC. Is that not what I just—

Mr. Michael Chambers: No, we are actually Canadians appointed in Canada. There are two—

Mr. Tony Ianno: No, I understand that, but you're representing the IOC.

Mr. Michael Chambers: No, no, not within the COA. The COA is a group of Canadian-appointed sport representatives, most of whom are volunteers, just like you or me, who are appointed by the given sport we're volunteering in.

Our board has more than 70 members. Of these more than 70 members of the board who represent all these sports and the athletes, there are two who are the IOC representatives in Canada who sit on that board. Carol Anne is one, and Dick Pound is the other. They are the only two who are appointed by the IOC, though. The entire rest of the organization is in Canada and has appointed Canadian sport representatives.

Mr. Tony Ianno: Okay. I guess what I'm looking at is the democracy of the organization, and I guess part of it was with the Sandhu situation. The concern wasn't so much whether or not he should have come to represent Canada, but that because there was the perception as a result of this specific event— and being the first time that it wasn't part of the qualifying process, Canadians believed somehow there was unfairness in it. We got calls in our constituency office from people who were concerned that somehow there was an injustice done.

I guess the difficulty is that we didn't really have any way of communicating with the Canadian Olympic authority, or Dick Pound or Carol Anne, other than a phone call that she graciously returned.

I know how the system works. Yes, there are lots of books on how the IOC works, but I'd like a clearer message to Canadians that in effect there is a specific system and it's not the Government of Canada that in any way influences the Canadian Olympic authority. This is so that they realize it's an independent board and they're looking for ways of making profits so that they can in effect fund in whichever way they want.

Part of the question I have is an aside on that: what's the budget of the IOC, and who are they—

• 1655

The Chairman: Excuse me, Tony. I realize you had another committee meeting and you had to come late, but for the previous hour and a half we went through all of those relationships, associations and numbers.

Mr. Tony Ianno: I looked for the numbers in here but I couldn't find them on the IOC and the overall IOC.

The Chairman: Well, not the IOC, but the—

Mr. Tony Ianno: That's what I'm asking about, though. I wasn't asking about the COA. I saw that in here and that's why I was curious in terms of—

Ms. Carol Anne Letheren: We don't have the IOC ones with us at all. That's not the reason we're here today.

Mr. Tony Ianno: No, I understand that.

Ms. Carol Anne Letheren: But we'll be quite happy to provide them for you. We can get you the address of where to write to get information about the International Olympic Committee. It will provide you with a report.

Mr. Tony Ianno: But do you understand where I'm coming from as a parliamentarian?

Ms. Carol Anne Letheren: I'll tell you where I really understand you're coming from, because it is a huge grey area for us as well, and we have difficulty with this. Part of the reason we're doing this brand idea exercise I spoke of is to try to get a really tight sense and focus around the message we want to get out there, and then try to find the means by which to do it. You are absolutely right.

By the way, we just started our own marketing program five years ago, so we're very new in this business. We're learning a little as we go, but we're certainly learning about the power of that marketplace in terms of driving our message. We have to step back, as to your point, Madame Tremblay, and figure out how to make sure we're the ones whose message is getting out there.

The other grey area is that the federal government is very involved in the funding of sport, so it is very tough to get a message out to the public where we, as an Olympic association, have a certain mandate and the sport bodies are part of that mandate because they form the board, make the rules and give us the policy by which we're to operate, and they are also funded by the federal government. Then, of course, when you go to the games you're under the Canadian flag, so it's pretty tough for the public to get a real sense of who does what and where.

So I'm not at all surprised you receive phone calls; so do we and, I'm sure, so do the sports. It's kind of a mélange. But we are trying to get the message out in terms of our own backyard that we're a non-governmental agency accountable to the sport associations in this country.

Mr. Tony Ianno: Thank you.

The Chairman: Mr. Riis.

Mr. Nelson Riis (Kamloops, NDP): Thank you, Mr. Chairman.

This has been most interesting. It's very revealing in terms of the major complexity of our perception. I must admit I had not thoroughly differentiated the role.

I wonder if you can help me understand one thing. As you know, we had many Olympians here on Parliament Hill the other day. During their visit we chatted with many of them, and by and large they complained about the lack of support they get. They made it very clear they felt they were spending a whole lot of their own time and dedicating their own lives. I remember on many occasions even being approached by the parents of Olympians who said it was bankrupting their families trying to help their sons or daughters row or skate.

When I look through your material, I see you have a legacy of $94 million. You have $1 million here and all these corporate sponsors and so on. Then on page 18 you say a typical athlete grant ranges from $2,000 to $5,000 and is designed to help high-performance athletes defray basic living, training and competition expenses. That looks really small. Just going to a competition, if you're going to fly there, will probably cost you that whole grant. So how bad is it out there?

Mr. Michael Chambers: It's bad.

Mr. Nelson Riis: The presentation you gave today was very helpful, but unbelievably glowing, to me. There seems to be money everywhere. We have tens of millions here—well, you know, you went through the presentation. I thought, my gosh, this is so contrary to anything I've ever heard about the support we give our Olympians.

So help me understand. If you have $94 million, why are you only handing out a total of $654,000 to these 200 athletes?

Mr. Michael Chambers: That debate went on within sport when the fund was first set up. Should we pay out the capital and let it be spent in the preparation and dissipate it as that preparation is expended, or should we retain the capital and create an endowment fund that is—

Mr. Nelson Riis: How much money would that $94 million generate per year?

Mr. Michael Chambers: About 10% of that.

Mr. Nelson Riis: Yes, $9 million.

Mr. Michael Chambers: That's right.

Mr. Nelson Riis: How do you spent $9 million if you only spend this amount on these athletes?

• 1700

Mr. Michael Chambers: Remember, we have the sport grants directly to the national sport federations.

Mr. Nelson Riis: Are they funding these athletes too, then?

Mr. Michael Chambers: Oh, absolutely.

Mr. Nelson Riis: Okay.

Mr. Michael Chambers: In fact, as I mentioned to you, when we provide that $16 million over the course of the quadrennium to the national sport federations, they're required to sign an undertaking that they will spend that money on the development and training of their athletes.

What people don't understand is the incredible cost, which you alluded to, of an athlete participating in sport—what it costs to get canoes from Canada to Europe where the competition is, then to store those canoes over there, and then to bring the athletes over there.

Of course, the reason mom and dad are paying so much money as well is that when the canoeists or fencers, whoever they might be, are over there, they don't have summer jobs. So if they don't have summer jobs, they don't have any opportunity to raise income to support themselves when they come back to go to school. The only place they can get that income, of course, is from mom and dad, so mom and dad are funding that during the course of the year.

That's where this tax deductibility may be an idea to consider. What about allowing mom or dad a tax deduction if they're paying $1,000 to support their national team athlete—if you need some parameters here; I'm just choosing that—to participate in sporting events around the world? That could be a tax deduction if it was paid for that purpose. I know it's been queried by many parents in many sports. They wish they could do that.

So there's much more money going to the athletes than that $2,000 to $5,000. Of course, the $2,000 to $5,000 is per year, not over the course of the quadrennium. It's $2,000 in the year that's furthest away from the quadrennium, going up to $5,000 in the year just before the Olympics. So it's approximately $14,000 per athlete over the course of the quadrennium.

Mr. Nelson Riis: You make that sound as though that's not bad. I mean, $14,000 over four years? That's terrible. At $14,000 over one year, let alone over four years, it puts you below the poverty line. I mean, my God, we're torturing these people.

Mr. Michael Chambers: We are not claiming that our support for the athletes puts them on easy street. We just have this support for the athletes to assist them in their goals. In addition to that, though, as I say, $16 million goes to their sport federations. We also have the support that goes to the coaches, and an athlete doesn't achieve without the coaches being there to help them. We have the money that's designated for that as well.

I showed you the cost—$7 million—of sending just one team to the Nagano games, which is about a third of the size of a summer team.

Mr. Nelson Riis: The canoeists, you mean.

Ms. Carol Anne Letheren: No, the whole team.

Mr. Michael Chambers: The whole winter team to Nagano.

Mr. Nelson Riis: To Nagano, yes.

Mr. Michael Chambers: Although it's a lot of money, once it's taken out of the bank it doesn't last very long. The sports decided—and the athletes are part of that decision—that of the $4 million we had allocated to them, they wanted to take $1 million of that and not put it in their pockets but start a little savings account that would generate interest and create more money over a longer term with certainty for the athletes who would come behind them.

So it's a balancing act, and it's understood that with the money we provide, it's not luxury time for athletes. Everybody contributes a bit.

Mr. Nelson Riis: Just as a comment—and I'm trying to be helpful, before anything—you made a presentation to us for almost an hour. At the end of that hour I wrote down here, “Do you have any problems?” The impression I got was that you folks are doing really well, with the Roots people now providing all of this, and on and on.

If you are going to, as you say, do this parliamentary outreach program, make sure that early in the presentation you indicate, to those of us who perhaps are not well versed in this area, that there are some serious problems as well. This is just a suggestion in terms of presentation, because in one hour you didn't give me the impression that there was any problem at all.

Ms. Carol Anne Letheren: We felt our goal was to provide you with as many facts as we could to help you understand who we are and what we do.

Mr. Nelson Riis: The fact that I drew from your presentation, Carol Anne, was not, as I say, that there were any problems at all. It certainly sounded well funded to me. Obviously I misinterpreted what you said.

Ms. Carol Anne Letheren: Fund generation is a huge problem for sport. I think we addressed that through the Olympic and sport act. We addressed it through a number of our comments in terms of raising money.

• 1705

We ourselves are like a blip on the screen. We provide, over four years, approximately $50 million of the $70 million we raise to athletes, coaches and sport-governing bodies, through the national sport centres, through the athlete grants, through the coaches scholarships, through direct grants to the National Sports Federation for the training and competition of athletes, and through scholarship programs. So that's where the bulk of our money goes. But you're absolutely right; we're like the flea.

Then you have to look at what Sport Canada provides to sport, what they also provide directly in the way of athlete grants, because there is a direct athlete assistance program. So all of these people who receive from us also receive money from there.

Then we try to work out job opportunity programs. We've been able to find close to 100 jobs this year for athletes. Again, maybe that sounds like a lot, but maybe that's the point we have to say to you: 100 is like dealing with the skim of what's out there in terms of Canadian sport. It's what we're able to contribute, but we are very small relative to what's required.

[Translation]

The Acting Chairman (Mr. Denis Coderre (Bourassa, Lib.)): Before giving the floor to someone else, I'd like to ask two brief questions. To solve the perception problem and to make the connection between government and the Canadian Olympic Association more obvious, shouldn't the association become a Crown corporation or a government body?

[English]

Mr. Michael Chambers: As I mentioned, Mr. Coderre, in our scheme of things, that would be unlawful under the Olympic charter. So that's something—

The Acting Chairman (Mr. Denis Coderre): Out of order.

Mr. Michael Chambers: —that we could not consent to. Yes, we'd be declared out of order from Lausanne.

The Acting Chairman (Mr. Denis Coderre): Okay.

[Translation]

Secondly, we talked about the tax incentives at the professional sport level. I am happy to see that you are also raising that question at the level of amateur sport. One has to understand that the private sector, through a fiscal agreement, can bring about incentives. Do you think that we should increase the deductions for entertainment allowances for the private sector for its investments in the Canadian Olympic Association, for instance? What would you specifically consider in that regard?

[English]

Mr. Michael Chambers: If a company invests in the Canadian Olympic Association now or it provides a donation to the Canadian Olympic Association, it's a write-off. If they're getting some leverage out of it, they can call it promotion as a business expense, and if it's a direct donation, the Canadian Olympic Association as a national amateur sport governing body has a charitable number anyway. Where the relief is really required and would be very helpful is at the provincial and particularly the local level.

I'm a member of the local Rideau Canoe Club, and I can tell you it would be of great benefit to our parent members who are starting their children at the grassroots level to have some relief by having a tax deduction for the activities of their children at the club. But because the club is local, it doesn't have access to a charitable donation number, and as you know, historically in law, sport has not been seen as a charity, so therefore it can't get it directly. A local club cannot get a charitable number as a charity.

[Translation]

The Acting Chairman (Mr. Denis Coderre): If we increase the fiscal incentives, will we see more investments? Can you make the commitment that the athletes, for instance, will get more money if you are raising more?

[English]

Mr. Michael Chambers: The initiatives we're speaking about are not going to generate more funds for the Canadian Olympic Association. I'm talking about generating more funds for the local clubs, and perhaps provincial organizations. Really at that level, you're talking about age of athletes where you're not wanting to put money necessarily in the hands of the athletes themselves; you're wanting to put money into the operations of a club, your basic level of renting buses and what not, having the money to rent buses to transport the athletes to a provincial competition or something. You want to get more money into the clubs to be able to do that to promote the development of athletes at the very basic level. That is not available right now: after-tax dollars.

The Acting Chairman (Mr. Denis Coderre): Okay.

[Translation]

Ms. Suzanne Tremblay: Who would get the deduction? The club?

[English]

Mr. Michael Chambers: No, it would be the parents.

[Translation]

Ms. Suzanne Tremblay: The parents. If I register my kid in canoeing, if I purchase a canoe for him, I don't pay any tax on the canoe. I get a repayment for the tax because I registered my kid with the canoe club.

• 1710

[English]

Mr. Michael Chambers: The suggestion would be that by providing that money to the club to purchase the canoe, you would get a tax deduction equal to perhaps the whole amount you provided to the club, a percentage or whatever. Therefore, it wouldn't cost parents the after-tax absolute dollars it now does to help their children out at their local club level.

The Acting Chairman (Mr. Denis Coderre): Mr. Cannis.

Mr. John Cannis (Scarborough Centre, Lib.): Thank you, Mr. Chairman.

I don't want to start by saying how disappointed I am that my colleagues from the Reform Party aren't here, who showed such interest in congratulating the athletes the other day.

But I want to start by welcoming you and congratulating you two and the entire Olympic family. Suzanne and I had the privilege of being over in Nagano and seeing the result and the organization. Canada House is an example of all the work that was done—the government representatives ended up taking a great degree of the credit for it, supposedly—behind the scenes and how it unfolded. I know I felt—and the minister, Suzanne and everybody—the vibrations when we went up to the athletes, spoke to them, congratulated them and comforted them at times because of some of the unexpected disappointments. It meant so much.

It brings me to the comments you made, Michael, that our government has retreated over the past two years. I don't know if it was intentional, economics or whatever, but I get the sense the government really doesn't want to. I get the sense the government wants to play a role.

This committee is but one example, and the many people who come and go from this committee. What does either one of you think the government can do to come back into this mode of working with your organization and every other organization, aside from just saying here's $50 million over the next five years?

We all know very well, aside from the percentage you quoted of 2.7% that goes to your organization, the tremendous amounts of money—the $500,000 or so that goes to Soccer Canada, for example, and an amount to the aquatic association. The list goes on and on, and the perception of the average individual out there is that your organization is part of the government and we fund the government.

I'm very pleased to hear about the parliamentary outreach program and your suggestion, Carol Anne, of developing an Olympic sport act, which is really the direction I would strongly recommend we go. But what can we do? This government and previous other governments— The heritage minister is an enthusiast and she's from the centre. Are there any other suggestions you might have so we could enhance our position as a government?

I know we talked about Calgary and that was a benchmark. We have to build on that. Of course, with Toronto embarking on its proposal we are, at least within the greater Toronto area, very optimistic that with your help and our support we will get a successful bid.

The other question I have is what methodology is used to identify early talent? Does the organization support this, or is it from the local community level that we see a great swimmer, for example, or a great skater? Does the organization wait until they get to a certain age and then pick them up? There's confusion with respect to the carding of the athletes out there. How do we identify their talent at the early stages. How do we enhance it and support it?

I'm inclined to believe the government wants to do more than just say “Here you are, Aquatics Federation of Canada. Here you are, Canadian Lacrosse Association. Here you are, Candian Soccer Association.” I think it wants to play a role.

My sense, in talking to the minister, is that the government does want to play a role. But I think today you said the best words I've heard in a long time: “Look, we want to work together”. There's the sense from some of us that you want to do your thing. That's the feeling my colleagues have. But I think your coming here today, doing a presentation unlike other presentations— My colleague Mr. Riis said he didn't hear any negative things. You didn't come here to paint a doom and gloom picture; you came here to paint a realistic picture and say, “Here we are; this is what we do; we can do more.”

• 1715

How do we bring parliamentarians and government into this mode of cooperation with you? That's the bridge we have to work on together.

Mr. Michael Chambers: First of all I want to say this, because it's something kind of personal and this affords me the opportunity to do so. I consider that the Canadian Olympic Association and most of the sports now have a very good working relationship with Sport Canada. Part of that arises from the fact that circumstantially, or whatever, the people in Sport Canada are people who grew up in sport with me. All of the people I speak to and deal with at Sport Canada are people who were just coming into Sport Canada 15 years ago or so, when I was just coming into the Olympic movement. They've done their thing and I've done my thing and now we find ourselves bumping into each other. Once again, we have a very good working personal relationship.

I think right now the relationship between government and sport is a good one. Sport, and we with our constituency, would like to see that all Olympic and Pan-American sports have at least some government funding, which is in effect Canadian people funding, because they all compete for Canada. If the non-funded group has a particularly rewarding experience at a games event, all of Canada cheers for them whether they're funded or not. So we believe a basic funding level should be required.

In terms of early talent identification, historically there's been a bit of a rough edge on that because the federal government originally saw itself as responsible only for national team level programs, so it was only interested in funding sports at a national team level. I can remember back in my days in my national sport arguing with the federal government—Sport Canada people—over allowing our National Sport Federation to use federal dollars to get down to the early talent identification level. But the federal government at that point, and I don't know what it's currently saying, said that was a provincial responsibility. It said the development of athletes was a provincial responsibility and the funding of national team athletes, the international connection, was its responsibility.

Early talent identification-wise, what do sports do? Most sports have very effective systems. I can speak for my own, although I don't want people to think I'm only representing canoeing here. It has a very effective early talent identification system where, through a connection between provincial coaches and the national coaches, and the provincial coaches with the local club coaches and trials at the elementary level or entry level into the sport, talent is identified very early.

Then, depending on the province you're in, once identified in the early or mid-teens, you immediately go on to a provincial card system that provides you with funding, in respect of which there have been significant cutbacks over the past years. Then you're brought through that provincial system until you're able to make it to what you might call the development level of the national team, and you're brought into that system.

I can't think of a sport where that's not the case. If someone is born in Canada and at least has the opportunity to become associated with a sport club and has a natural acquired talent in that sport that would enable that person to achieve the highest level, that person will make their way through the system, not without a lot of heartache because of the lack of funding, etc. That process and system is in place in all sports.

But I think members of Parliament and government can continue this positive attitude of discussion and negotiation of sport matters with national organizations like ourselves and the national sport federations.

Carol Anne, I'm sure you have some points you'd like to make.

Ms. Carol Anne Letheren: Yes, I could probably give you some great examples of things that happened in Nagano, where there was some tremendous opportunity for government officials and departments in government to work closely with the Canadian Olympic Association.

• 1720

One such incident was around the Ross Rebagliati case. Frankly, the ambassador for Canada in Japan, and through the deputy minister, the Department of Canadian Heritage, were absolutely instrumental in assisting us. Those kinds of services we can't buy. I consider that a consulting service pro bono, because they understand the systems in those countries and they were able to guide us through working with the police authorities.

Ms. Suzanne Tremblay: They were very good.

Ms. Carol Anne Letheren: Yes, totally wonderful. Our staff actually has about six to eight meetings a year with the Sport Canada staff to talk about things they're facing and things we're facing. We have a very good partnership and I don't believe it has to be dollars that create that partnership. It's the same with any one of our sponsors. I talked about the Stentor program with the education. They're capable of maintaining a web site because they're in the communications industry, so they lend that expertise to us and therefore we benefit and the youth of the country benefits. And that's the way we view our relationship with Sport Canada.

I think Michael's reference earlier on was to how over the last number of years there's been a diminishing dollar going into sport directly from all governments. Recently, obviously, there's been an increase injected in with the $50 million that was just recently noted, but I can tell you that sport is not complaining about this. Sport recognizes that's a problem; but it's a problem right now in government, it's in our society, and we have to be part of trying to figure it out too. We want to be a partner in understanding what can we do then and what can our role be to try to move that forward. Frankly, that's one of the reasons we invested our Calgary endowment, because we wouldn't have $24 million today from the interest income of that endowment if we hadn't invested it. If we'd spent it immediately, we would have been without dollars today all around, which would have been a worse situation.

Mr. John Cannis: Carol Anne, since this article came out describing the endowment you talked about, it has come to the attention of many other people who weren't aware of this news. So maybe what I'm really saying is—and I say this constructively—we have failed to communicate—

Ms. Carol Anne Letheren: No question.

Mr. John Cannis: —this win-win message out there. I know people I've spoken to who caught their eye on this article and said it's wonderful news how they maintain the facilities, how they support what you mentioned earlier, Michael.

What I'm saying is it's great that you're speaking to Sport Canada, and we're very pleased with this. I think, as I said earlier, you get a sense that the federal government on all sides— I know how enthusiastic we were. There were Suzanne and I cheering on the women's hockey team that night, and on every call she made she was right; and the other speed skaters and so on— You see the interest around this government, and there are no political lines separating us here.

But as much as I respect Sport Canada and your organizations collectively, I think you have to get this good news out to the public so that we can bridge together this perception that they're miles apart and show that indeed we care for the youth out there. I recall Suzanne saying to me that if we get into the communities and we're helping these young kids and giving them the facilities to get involved, not only will crime drop, in my personal opinion and I believe in that of others, but you're giving these kids a purpose. You're giving them the dream that was discussed the other day at the luncheon. But we have to get this news out there.

I want to close by one question. Other countries fund their athletic programs differently from how we do. I know you talked about the U.S., but leave them for a second. Are there any other models out there that we could— We know what's happened with our lotteries, and unfortunately there's nothing we can do there on the federal side. But other countries are very front and centre and very active in supporting their programs.

[Translation]

The Acting Chairman (Mr. Denis Coderre): Before you answer, I want to tell you that it is 5.25 p.m. We only have five minutes left and we still have two short questions. Could you answer briefly please?

[English]

Mr. John Cannis: That was my question. Are there any countries, any models we can look at?

Ms. Carol Anne Letheren: The closest for us is Australian model. That's where we get our greatest exchange, if I could call it that, in terms of knowledge and information. The U.S. is 100% privately funded, so it's a model that just doesn't work in Canada and there's no way it ever could work. But Australia is about on par with us in the way their sport system is constructed and the way they gain their revenues. The European countries don't fund sport from their Olympic committees to the extent that we do. Really, from an Olympic committee perspective, they simply put a team on the field, and that's about it. And they probably have a lot more government money going into the Olympic committee.

• 1725

[Translation]

The Acting Chairman (Mr. Denis Coderre): Mrs. Tremblay.

Ms. Suzanne Tremblay: You talked about the top eight for all countries. Is the ranking done a little like in tennis? I'm thinking of a young guy we saw who was among the first, but he did not get ranked because he fell during the freestyle ski competition. He nevertheless became the world champion. Is being the world champion taken into account in the ranking? I am asking you that question because Sport Canada talked about A licences and B licences. If you have A licence, you get more money than if you have a B licence, etc. Is all this taken into account or is everybody doing things differently? When an athlete is ranked, he can be first, second, fifth, eighth or sixteenth in his category. Who makes the decision?

[English]

Mr. Michael Chambers: The ranking is decided as a result of discussion and agreement on the ranked athletes with each sport. That's how the Canadian Olympic Association does it.

In the year immediately following an Olympic Games, the Olympic Games results are used. And then in other years, if there's a world championship in a sport, that will be used. But in some years there are no world championships for a sport and there are no Olympic Games, and therefore there is discussion simply between officials of the COA with officials of the sport to decide how we're going to rank if someone's in the top eight. We agree on it and that's how it's done; and that's not done in conjunction with the Sport Canada criteria.

[Translation]

Ms. Suzanne Tremblay: How is it with someone in Harvey's situation for whom the European competitions he was involved in were not taken into account here for is ranking? Are the rankings to be decided within given associations? You take care of the Pan- American Games and the Olympic Games, but are you going to take into consideration those athletes, because they are the same athletes, and they are our best athletes, who are going to compete at the Commonwealth Games and at the Jeux de la Francophonie? Are you going to take those competitions into account?

[English]

Mr. Michael Chambers: It would be done and discussed on a sport-by-sport basis whether that would be appropriate. It would depend on the competition that is at the games, etc.

Of course, some sports and international federations rank their athletes and some don't. It's a real mixture, and we try to come up with the best result we can.

[Translation]

Ms. Suzanne Tremblay: Very well.

The Acting Chairman (Mr. Denis Coderre): To conclude, I would like to talk about the Olympic and sport act which we do not have in Canada and which could have an impact on the broadcast rights. You do not get anything from broadcast rights. Could we agree that, if such was the case, we could put money into a special fund for athletes and coaches? Could that be a possibility?

[English]

Ms. Carol Anne Letheren: As I did say in my presentation, don't let me misrepresent that if we get an Olympic and sport act we automatically get dollars from the broadcast rights negotiation. I can only tell you that's the answer given when we ask why the USOC and not us, but it doesn't follow like the night follows the day that we will.

The Acting Chair (Mr. Denis Coderre): But if you do—

Ms. Carol Anne Letheren: But if we did, there's no question that what we are looking for continuously are additional dollars to put into coaches and athletes in different ways.

Our athlete fund is now the recipient of just about every promotional event we have going. So I don't know if Ottawa is going to have a Delta ride, but maybe we could get some teams from among the MPs to ride in the bicycle ride of that and raise some money for the athlete fund. That would be another wonderful way government could contribute.

The Acting Chair (Mr. Denis Coderre): We tried hockey.

Mr. Michael Chambers: It is going to have a Delta ride on June 12. I was at the kick-off and you're all welcome to sign up. We're going to have the stationary bikes on the Sparks Street Mall.

The Acting Chair (Mr. Denis Coderre): That would be nice.

[Translation]

Thank you very much for coming. Special greetings to Mr. Warren who is a friend of mine. I am still ready to become a volunteer. Thank you.

The meeting is adjourned.