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]

Tuesday, April 21, 1998

• 1540

[English]

The Chairman (Mr. Dennis J. Mills (Broadview—Greenwood, Lib.)): Order, please.

We have many studies around here that have always dealt with sport in strictly the cultural context, in terms of national unity, but we don't have a set of books on sport in this country. The purpose of our committee is to listen to the people who have dedicated themselves to sport, both at the amateur and the professional levels. This fall, we'll develop our report, with recommendations, and we'll table it in Parliament.

I welcome to the committee today Mr. John Tory, the man who has so bravely taken on the challenge of steering the Canadian Football League through a very difficult period.

I now turn the floor over to you.

Mr. John Tory (Chairman of the Board of Governors, Canadian Football League): Thank you, Mr. Chairman.

May I say at the outset that I had carefully prepared some notes in both English and French. I now understand better why Premier Davis, during the years that I worked for him, didn't deliver probably some 250 speeches that I wrote for him. Upon reading my own speech that I prepared for myself on the way up on the plane, I completely rewrote it in handwriting, so I will not be distributing a copy of these notes.

[Translation]

Since I do not speak French very well, I will talk only in English.

[English]

I hope the members will understand that.

As some of you will know, I have had the responsibility for working with the members of the Canadian Football League board of governors for over seven years now. For five and a half of those years, I've been chairman of the board of governors, which is a volunteer position. I'm not associated with any of the teams. I was minding my business one day, functioning as the league's counsel when I was practising law. They were looking for a new chair, they saw me in the room, and thought it seemed like a good idea. It just shows that you should always read the fine print very carefully.

When the commissioner resigned about a year and a half ago, the commissioner being the full-time chief executive officer who runs the league on a day-to-day basis, I hadn't realized that the chairman succeeds to the office of commissioner in that event. I have therefore been the acting commissioner ever since. With the help of a very capable staff at the office, I spend my time at nights and on weekends as the acting commissioner, and still as the chairman. I have announced that I want to see myself replaced as acting commissioner by the end of the season because of the job in which I spend my days and nights and other times, and that is as president of Rogers Media, a media company that is in publishing, broadcasting and other businesses across Canada.

I accepted the invitation to come here today because I wanted to share a few thoughts with you about the importance of sports in Canada today, to talk a little bit about the CFL and about its particular business model, and to talk about sports as a business. I also wanted to answer any questions that you might have of me, of course, and I really just want to make three points.

I believe sports is vitally important to both the social and cultural fabric of a country. I'm sure you've heard from many other people who have been here, but I believe sports, whether it's amateur or professional, transcends politics, it transcends geography, it transcends language, it transcends age, and many other things. In that sense, I think it's one of those important elements of our society and many other societies. It brings people together and causes people to have a common interest, so I think it is important in that respect.

Often forgotten is the equally important fact that sports, whether it be at the professional or, I would argue, even at the amateur level, is a very important industry upon which many thousands of Canadians depend for their livelihood.

• 1545

During some pretty dark days—and I'm happy to say that I think we have now turned a corner with regard to the health and well-being of the CFL—people have often asked me why I've stayed involved. One of the reasons is that I recognize the importance of sports. Also, when it comes to the Canadian Football League—and I think the same could be said of many other sporting institutions in Canada—there are very few of these uniquely Canadian institutions. I would say the CFL perhaps is first among many in being uniquely Canadian because it is a game played only in this country. It's our game that was invented here, as it were. This institution, like many others in this country, is fragile, and I will talk a little bit about the reasons why it is fragile in terms of its “economic model”, if I can use that expression.

Although chairmen who held the post prior to me had not served for more than a year, I was determined not to let it go once I got involved, first as a lawyer and then as the chairman. It was something that appeared to be in decline, that appeared to be losing support among Canadians. In this country, I think we've just let go a lot of institutions that were and are important national institutions that are uniquely Canadian.

I also have had a bit of a sense that sports was being overtaken in some respects by what I'll call small-p politics and by an overemphasis on business. Sports became too much of a business, and part of the joy that makes or causes or allows sports to transcend politics, geography, language, age and so on was starting to be taken over. I think some of what we've done with the CFL in the last two or three years in order to right it and get it back on its feet addresses this.

I'll come back to what we've done in the CFL, which is to refocus on the models that work the best. In effect, they are very Canadian to me in that they are a little smaller in scale, a little more grassroots in their orientation, a little less grand in their affectations, and so on. I want to talk about what I've always viewed as Canada's team, which is the Saskatchewan Roughriders when it comes to the game of football.

The health and welfare of professional sports, whether it's the CFL or the other leagues, is important as a part of the overall sporting world. People will still be active in sports whether there are any professional teams in Canada or not, in any sport, but I think the amateur sports system would be heavily damaged in ways that would be difficult to measure if all the professional teams were to leave. That's above and beyond the fact that if the professional teams were to leave, disappear or decline precipitously—as I think is happening to some extent now—you are also going to lose jobs, economic activity and tax revenue, the same as is the case in many other industries.

I don't come here arguing that government has any obligation to treat the sports business any better overall than it treats any other industry. As you suggested at the outset, Mr. Chairman, I do think the sports industry, the sports business, the culture of sports in Canada, or whatever you want to call it, has been viewed as different from other job creators and other industries too often in the past, in that it has been seen as a less than serious enterprise. Maybe that's because people associate it with something that you go to do as a pastime, as a leisure activity, and maybe it's because it is seen as games that people are playing.

At the end of the day, as much as I have a fear that you could take it too much in the direction of being a big industrial enterprise as opposed to making sure you maintain what's important about sports that makes it unique, it is a big, important industry that reaches into every part of the country. And this is not just the professional teams. Every amateur sports organization has a whole lot of people who support it, whether it be the people who work in the amateur sports organization offices, the people who keep the arenas going day after day, the hockey leagues, and so on. There are many other jobs that depend on the health and welfare of those sports leagues. Of course, in the professional sports leagues it's a lot easier to demonstrate how many jobs are created and how many millions of dollars in tax revenues flow from the continued existence of those teams.

I spoke to the annual meeting of the Saskatchewan Roughriders on a winter's Saturday in Regina earlier this year, and I'll talk about that meeting. It was a very interesting thing for me to see, and I think it would be for many other Canadians.

At the time I visited there, I said I thought that if things keep going the way they've been going, we will soon be without many of the professional sports teams in Canada. In that respect, I share some of the fears that are attributed to Mr. Bettman in this regard—and I think he and others are going to be coming here in future days.

I don't think this is the place to discuss all of the reasons why that's true, why I believe these sports teams are in jeopardy and may not be able to survive in Canada. But I think it's fair to say that it would probably be as a result of a combination of: our smaller market, which makes it a difficult challenge to begin with, as is the case with so many other things; the lower value of our currency, which is the number one challenge and problem that faces and confronts these sports organizations; in some cases, the quality of the teams, quite frankly, which I think has a lot to do with it; and what I certainly see as a very difficult to rationalize inflation in salaries, which of course makes the costs that have to be borne by Canadian or American franchises alike in sports leagues very difficult for them to bear, particularly the Canadian franchises in international leagues, which have to pay out their salaries in most cases in American dollars and take in their revenues in Canadian dollars.

• 1530

I will return in a moment to the subject of tax treatment and things like that, but I believe it's time we started to look at these things as no different from how we would look at any other industry or enterprise leaving town. I think we often would treat the departure of a sports team as just being sad and too bad, but life moves on. I think that for these teams to leave town is no different from a company pulling up stakes, because the list of negative consequences reads exactly the same. There are lost jobs and tax revenues.

Also, something else that's very hard to measure is a certain loss of stature for those communities. In the case of the CFL, you may say it's only the size of a small or medium-sized business. I would estimate that each CFL team probably creates between 80 and 100 direct jobs. This means the players, coaches, and people who work in the ticket office and the administrative office and so on.

It's easier to measure the amount of tax revenue taken in by these teams because there are taxes that are collectable and paid on the sale of tickets in some provinces, GST, income tax paid by the players on their salaries, taxes paid on the concessions that people use at the games and on the souvenirs, and so on. It's fair to say that the number is in the millions of dollars.

But I come back to this question of stature as well. I look at Quebec City. This season...Quebec City would have been mentioned on news and sports broadcasts across North America every day during the hockey season in years gone by. This year it hasn't been, because there isn't an NHL team there.

I think that if you look at how much money cities, provinces, the federal government, and others spend on creating awareness for ourselves in the United States as a matter of having people think about our cities when they look to invest or make economic decisions, or for tourism, I can only conclude that while it would be hard to measure it again and that it's not the end of the world, when you lose this profile, as Quebec and Winnipeg have in the hockey world, it can only be seen as bad news. I think this kind of stature is important for our cities.

I think as well that when these professional teams are lost, it can reduce interest in and support for amateur sports. This is one of the reasons why I believe so strongly in the preservation of the Canadian Football League. It's an institution that's almost as old as the country itself. As I said earlier, it's a league that plays our very own Canadian game. It's supported by Canadian fans. It's widely watched on television.

But maybe, as important as any of those reasons, if it disappeared, I don't think it would be very long at all before our Canadian college football system disappeared with it. That's because if there isn't a professional league playing the Canadian game, then I'm not sure the Canadian college game would survive for very long afterward. I think amateur football would suffer in communities across Canada as well.

If you ask me, I have many memories from last year's Grey Cup in Edmonton, which was such a great success. Frankly, I wish every Canadian could have the chance to attend a Grey Cup, because it's something that's uniquely Canadian.

This year, we were very honoured to have a whole lot of people from the National Football League, including the commissioner, Mr. Tagliabue, and others, as our guests in Edmonton. Fortunately, the weather was reasonably temperate compared to what it might have been.

They were very impressed by what they saw. They noted in talking about what they were seeing at a Grey Cup—it was the only one that they had ever been to—that it was something that was organized more around the fans. I went to the Super Bowl for the first time this year as well, but the Canadian event, the Grey Cup, has much more of a fan feel to it. It's a little less corporate, and it's distinctly Canadian. You really feel that you're Canadian and you feel proud to be a Canadian when you're there.

The one thing I remember from last year's Grey Cup is being in the parade. In the parade last year, they had many of the kids who played amateur football in Edmonton dressed in their full uniform and marching. I was absolutely blown away by how many of them there were. There were just hundreds and hundreds of them who played amateur football.

• 1555

There's no question in my mind that if you see the demise, for example, of something like the Canadian Football League because it just can't survive as a business—that's in part what it is—then it won't be very long after, in my view, before you'll see amateur football start to decline, together with college football.

I'm pleased to tell you that due to the continuing support of loyal fans—this is particularly in western Canada—higher revenues, and really most of all because of strenuous cost controls that we have implemented, including a very rigidly enforced salary cap, which all the teams bought into...not only has this allowed us to create, I believe, a level playing field, which makes it more interesting for the fans, but we've also managed to right the CFL and get it back on its feet. I think it's well on the road to a state of excellent health and many more years of survival.

I certainly don't come here today suggesting that you should give anyone a handout. I'm not here asking for a handout on behalf of the CFL, and I'm not sure that a handout of any kind is even appropriate for other sports, but I'll let them speak for themselves.

I do think, however, that you're engaged in an excellent exercise here as you look seriously at what the Government of Canada might do to ensure that it's treating sport as the big and vital industry that it is. I'll come back to just two or three final comments as to what that means. I think it's fairly simple. I think it involves things that are done in many cases for other industries already.

I think the industry people who are involved in sports, though, have a very substantial obligation to do a better job for themselves. I would say that one of the reasons this industry may not get treated as well or may be treated less favourably than some other industries is because the owners are, by definition, successful people. In order to own a sports team, if you're in professional sports, you have to be financially successful and have the money to undertake that activity.

But it's my experience, with great deference to my friends who own CFL teams, who keep me on as chairman and as acting commissioner for a dollar a year, that their competitive juices often overwhelm their common sense, which made them successful people, when it comes to being involved in sports. The desire to win overwhelms their normally sensible approach to the bottom line and often will overwhelm their sense of obligation to represent the interests of their industry.

You don't see people here in Ottawa meeting with and talking to government about their industry, how important it is, the jobs it creates, the economic activity it creates, and so on, because people seem to get single-mindedly focused on winning at the expense of their own bottom line and at the expense of representing their own interests.

I think there are some things the government can do. I think it means reviewing tax policy, perhaps not to create a tax break, as I've seen suggested, but to make sure at the very least that current tax policy isn't hurting the industry at the professional or amateur level.

The best example I can come up with, unfortunately, is a provincial example. In Ontario at least, and I think at least one other province, there are amusement taxes charged on tickets to sporting events. I think they're charged as well on tickets sold in theatres, and so on. I believe I'm correct in saying that this tax is charged at a higher rate than even the provincial sales tax.

This is something that simply raises the price of tickets, which are high enough as they are, and makes it more difficult for people to attend. And the more difficult you make it for people to attend, first of all, I think it takes away from the community ownership, if I can call it that, of the sports teams. Second, it exacerbates the economic difficulty faced by the team.

I don't think there are many teams, aside from perhaps the two hockey teams in Montreal and Toronto, that aren't facing some degree of economic stress. So the more people they can put in the seats, the better off they're going to be.

I would suggest that there's probably some merit in reviewing tax policy. Again, I would look at tax policy as it affects what I will call non-resident athletes who come into Canada, of whom there are many who do not make their home here all year long, and ensure that we're doing everything we can without being unfair to Canadians so as to encourage these people to come to Canada.

Similarly, I think it means reviewing our immigration policy, for example, to make sure that we are not discouraging these athletes from moving to Canada and having their spouses and families move to Canada. They will not only be here to promote the interests of these sports teams and as resident ambassadors during the course of the off-season and so on, but it's also so that they will think about having a career here.

• 1600

In many cases now, the arrangements that are made to have the players come in are temporary arrangements that don't permit their spouses, for example, to work in Canada and often don't permit them to work outside of their employment playing football or hockey or whatever they play. I think that this too is something that would help Canadian sports teams to at least operate on a more level playing field.

The tax break that I've seen talked about in the papers is a big question mark in my mind. I think that you, as parliamentarians, and others in government have to balance what are the difficult optics of appearing to subsidize large corporations and other individuals who own sports teams, which are a business like others, and many of the salaries they pay and so on. And I'm not denigrating athletes who receive those salaries; I'm suggesting it is becoming harder and harder to rationalize the level of salary that we've arrived at and it certainly is making it more difficult for the Canadian teams.

The question mark in my mind is balancing those difficult optics against undoubtedly the benefits that I myself have sat here and described, which is that you can keep those jobs, keep that economic activity, keep that stature of being talked about all over North America because you have professional sports teams, and keep the tax revenues by giving some sort of a break. It's a difficult issue.

I think the professional sports infrastructure is important to the strength and success of sports overall, so that I think for you to sit here and examine these issues and receive opinions and information from people like me and many others is a very valuable initiative. I congratulate you for taking the initiative to examine this important area.

I believe sports is a business. I believe one of the reasons we've been able to get the CFL on the road to recovery is because we're treating it more like a business and running it more like a business. At the same time, I hope you will have a chance to discuss and get advice on how to ensure that sports doesn't completely morph itself, professional sports, into a business just like any other. As much as I would sit here and argue, as I have, that it deserves no less favourable treatment, I also think it's something that shouldn't end up as a business like any other, because I think it will take away from what makes it special. It may end up diminishing the kind of example that sports teams and athletes can set for kids.

As my final point, I come back to something I mentioned a few minutes ago, which is how much I look to the Saskatchewan Roughriders as an example of something that is very Canadian and that works. I realize you can't be part of major league baseball, or it would be very hard to be part of major league baseball or the National Basketball Association or the NHL, with a model like the Saskatchewan Roughriders, but what we have there is something, as I've kept reminding myself as I've been working with the owners to try to fix the CFL, that works. It's a model where the people go out and do all kinds of things to support the team.

The first thing they do is buy tickets, but they do many other things in the community to raise money to support the team. The team operates on a level playing field with all of its competitors because we have a salary cap; that is, a reasonable and affordable salary cap that means the large cities like Toronto, Vancouver and Montreal can't dominate just because they have bigger markets in which to sell more tickets and thereby afford higher salaries.

They have an annual meeting each year, where the management of the team is accountable to all these people from across the province who come into the room. As I said, I was there this year and saw it with my own eyes. It creates a real sense of ownership of that team by the people. It creates a major affection for that team. I don't think they've ever let that team die. I've told the people in the NFL and others who have talked to me about the CFL from the United States that if every CFL team disappeared, the last one to go would be the Saskatchewan Roughriders, because the people own it and they want it to stay. They recognize the importance of it as a business, but there's an emotional attachment to it that goes way beyond that.

That's what we're really trying to do with the CFL. It's hard to replicate that model in the big cities, but what we're trying to do is take it back to the basics, to re-emphasize the importance of sports, to put reasonable controls on the costs so that we can have a level playing field and ensure the survival of these teams. It's difficult, if not impossible and unrealistic, for me to suggest that other teams could take a lesson from that, especially from a league that had several near-death experiences in the last number of years. I'm not sure the other way, which is spiralling up and up and I'm not sure where it's going to end up, is necessarily the right course for them to be on.

I apologize for rambling. That's what happens when you rewrite your speech on an airplane. I am happy to answer your questions and perhaps be more specific than I have been in these remarks about some of my own views on these issues. They're difficult issues and they're driven largely by forces that are often outside the country, but I think that, as I say, it's importnat that you are grappling with them and trying to come to some constructive resolution on how the the government can be helpful.

The Chairman: Thank you very much, Mr. Tory.

[Translation]

Mr. Louis Plamondon (Richelieu, BQ): I have the same problem as you. I am going to have to speak in French, because if I spoke English, you would still need to listen to the interpretation.

• 1605

I have been following the Canadian Football League since I was very young and, this year for the first time, I decided to buy two season's tickets for the Alouettes, during the Christmas promotion. I said to myself: Wow! Two season's tickets. My only condition was that I did not want to sit next to Denis.

I feel that the Alouettes' marketing plan this year has been very well done. One reason that I like the league even more is the pay ceiling. I cannot get myself to go to the Forum now because I hate seeing millionaires play hockey. It makes me sick to see them not developing any sense of belonging to a team. They are individualists.

Last Sunday, in my riding, the Alouettes came to play a charity hockey game. The players were friendly and very accessible and didn't act like millionaires.

I think that you have a winning formula because of the pay ceiling. In baseball, it is the same thing. I have been following the Expos more closely for the last few years, since they started getting rid of the millionaires every year and bringing up younger players. That's how you often get the best games and the best baseball. They do not always win, but the game is interesting and it is good to see people who want to improve and who are not there just for financial reasons.

I have just one question. I came to listen to you, wondering what specific question I could ask your Chairman, other than an explanation of why you continue to have different rules than the Americans. American football—

As you know, the Americans set the trend in music, theatre, film and sport, but perhaps less so in soccer and certain specialized sports. Why do we have three downs in football? Why do we have a longer field, different rules, for example the one-point rule? Why haven't we taken a big step and made our league strong by ensuring that people watching not be put off by the differences in rules, etc., between Canadian and American football?

Do you understand what I mean? It seems to me that if we had the same rules and the same fields as the Americans, our sport might be more American, but it would be easier to interest those who are used to watch American football. It seems to me that getting people used to that type of football might be easier. I may be wrong. I am wondering. Why do you continue to have... In soccer, the rules are the same everywhere. In hockey, the rules are the same everywhere. Why is it different in football?

[English]

Mr. John Tory: I will begin, Mr. Plamondon, by thanking you for buying the tickets from the Montreal franchise. The improved health of the Montreal franchise this year will be because of a grassroots ticket selling campaign that has sold tickets two by two by four by six. I think it's why the Montreal team will be much healthier this year. I really thank you most sincerely, because there are many people like you who have stepped up to buy those tickets and the team will be better supported.

I want to associate myself with some of your comments and not with others. First of all, I think you're right that one of the reasons the CFL is on a path to recovery is because it has looked at its economic model, has decided it couldn't afford inflated salaries based on the size of our market, the price of our tickets and so on, and has enforced a rigid salary cap.

Now, I should tell you that has not been without sacrifices made by the players. I want to acknowledge here today, as I have publicly before, that the players and the players' association have made sacrifices in the course of trying to write the CFL's economic model, and that sacrifice has certainly been acknowledged and respected by me. At the same time, it has allowed the league to survive.

• 1610

As I said, while I find it difficult to rationalize the level to which professional sport salaries have risen—and many other things too; I mean, what people are paid to make a movie or do other things—it's not been my experience that the people are completely self-centred, or whatever expression you use. I think by and large they're still people who have many fine qualities, who do go out and try very hard, and who I think are still good people. I think they're getting paid what the market says they can get paid.

The fact of the matter is—and it's one of the frustrations you occasionally face in the CFL or in a team like the Montreal Expos, which simply can't afford to keep the millionaire players, as you describe them—that people pay to see the millionaires, and people pay to see winners.

While we've had the luxury of creating a model that creates a level playing field by having all the teams operate under the same salary cap, and one that is modest and affordable by Canadian standards, in these other leagues that luxury doesn't exist. If you have a major league baseball team, you are competing with the New York Yankees or the Los Angeles Dodgers, which are owned by huge corporations that pay free agents big salaries and put winning teams on the field and have more fans. It's kind of a self-perpetuating cycle.

As far as your question about three-down versus four-down football is concerned, I would only say this to you. Canadians actually had a large hand in starting the game of football. I think it was a game between Harvard and McGill that lies at the very roots of the game of football as it's played in North America. I would argue that our rules were first, and furthermore, I think our game is at least as exciting, if not more exciting many times, than the American game. I don't think it's better or worse, but I think it's ours and it's Canadian.

I've said repeatedly that if it got to the point where in order to keep this league going you had to give up our rules that we've played by for more than 100 years and that are uniquely Canadian, I wouldn't be mad, but they could find somebody else to implement that change, because I think that would take away the one thing that makes this league uniquely Canadian. I mean, aside from the fact that it has Canadian players and is played in Canadian cities, we play it by our own rules.

I always used to argue, in all the years I was involved in politics, that when voters were faced with a choice, if they had someone who was pretending to be a Conservative, and somebody who was a Conservative, which I am, they would pick the real thing probably nine times out of ten. I think that if we simply put a league in place that was our own version of American football, with scaled-down salary requirements and played in smaller cities and so on, that's what you'd have—a scaled-down version of an American rules football league.

I think what we have now is ours. It's uniquely ours; it's going to get back on its feet and succeed. I think we've proven, in western Canada in particular, that you can draw large, enthusiastic crowds to see Canadian football.

So as much as I respect your suggestion and your comments, my efforts will be devoted to preserving the Canadian game and making it work in cities like Montreal and across Canada—and I hope one day, if we can get the thing stablized, in eastern Canada, because then it would be truly national from sea to sea.

[Translation]

Mr. Louis Plamondon: You would have been a good minister. You give long answers.

Some Hon. Members: Oh, oh!

Mr. Louis Plamondon: I was not making a value judgement about the rules. I was wondering whether, in your market studies or your surveys, these rule differences have not come out as a problem.

For you, it is a positive factor rather than a negative one. I am talking as a businessman. Let us forget national loyalties. Would business be better, according to the surveys or market studies, if all of North America used the same rules, as is the case in hockey and other sports?

[English]

Mr. John Tory: I find it difficult to leave aside the sense of belonging, but having said that, I'll answer your question this way. There is no question that the viability of the CFL is hurt in cities like Toronto by the fact that there are a lot of people in that city who like the NFL game, the American game. I think it causes them to look at the CFL somehow as being a lesser sort of product than the American game.

Having said that, I could look at the biggest market study you could ever do, which is to look at television audiences and what people do with their remote controls. On Sunday afternoons quite often during the fall, when you have Canadian and American football on television at the same time up against one another, I can tell you that in most of the major markets most Sundays in this country, the Canadian game outdraws by a significant margin the American game.

So I would suggest that by no means is the view unanimous, and while there are many people who would support the view that you advanced—including as a business proposition, as you suggested—there are just as many or more, I would argue, who would support maintenance of the Canadian game, and would support that more readily than they would support an imitation of the American rules.

• 1615

It's an issue we've had to grapple with over time. There are many who have suggested to me, as you have, that this might be more sensible from a business standpoint. I don't think it would be, and I also have difficulty with it, as you can tell, from an emotional standpoint. So I don't think you're likely to see it happen, but your points are certainly points that have been raised by others before.

The Chairman: Mr. Riis and then we'll go to Mr. Iftody.

Go ahead, Nelson.

Mr. Nelson Riis (Kamloops, NDP): There are so many questions coming out of your excellent presentation, John, and I sure appreciate your being here. I'll restrict mine to just three short ones.

You talked about the CFL being one of Canada's unique institutions, and we agree, no question, that that's the case. We see around us the dismantling of many Canadian institutions for a variety of reasons. Let's call it globalization.

I'll just ask the questions and then let you respond to all three.

To what extent do you see the challenges that you folks are up against as more globalization and people turning to other sports, such as the martial arts, soccer, and the snowboarding thing, and becoming more international, moving into the Latin American countries? In other words, there are so many new activities to compete with football as we know it in Canada. That's question number one.

Question number two, I was pleased to hear you were cautious in your comments about the need for more support for this business, because this is not a good time for us to be looking at ways and means of supporting business of any kind in a direct way, particularly that kind of business. But in terms of the subsidies that exist with football in the United States, if we're competing in that sense, perhaps not only for football but more for hockey and so on, could we not initiate a NAFTA challenge to say, “Listen, subsidies are inappropriate under NAFTA, and goodness knows you're using subsidies for this particular franchise, big time”? Why wouldn't we do that? The Americans do it easily against us. Why wouldn't we do that against the American franchises?

Lastly, as you probably know, we've had people here before us who have looked what they say is objectively at the value of sports franchises in a community, and they've said that other than promoters of the particular franchise, there is little if any empirical evidence that suggests that having a franchise in your town is a good deal economically. There may be other spinoffs, as you've suggested, but economically they said it's actually a loser when you add up all the benefits that will accrue compared with all the costs and so on, particularly the flight of high salaries, which normally would leave the area and yet have come from the ticket-holders. That is money not spent in the local tavern, the bowling alley, or whatever. It's spent there, and then so much of that leaves the area because of the high salaries.

Mr. John Tory: Let me try to respond to those questions briefly and in order.

I think you're right: the challenges that face Canadian football and indeed every Canadian institution are the same. My company includes publishing interests, and it's a struggle to continue to produce a Canadian news magazine such as Maclean's each week, or L'Actualité. Well, not so much L'Actualité, because there isn't the American competition in the French language, but Maclean's faces American competition, and the pressures to have everything be global as opposed to Canadian are unending.

What has happened that encourages me in that regard in terms of the future of the CFL is that the organization that is most likely to take football global, namely the National Football League, has chosen to form an alliance with the Canadian Football League whereby we in effect are their partners that play the game of football in Canada. They indicated very clearly, at the time we negotiated the deal and subsequently, that they have absolutely no interest in changing our rules or trying to cause us to become more American or global in our approach. They're quite happy with our game. In fact Mr. Tagliabue has told me that from time to time they've had discussions in some of their owners' meetings about importing some of the features of the Canadian game, because they see features of our game that they quite like.

So the answer to your question is yes, those pressures of globalization are there. Yes, they are very similar pressures to those faced in almost every other business or cultural undertaking. The Canadian Football League may be able to resist those, because of this alliance we've formed with the people who are trying to take the game global.

As far as your idea of a NAFTA challenge is concerned, I'm not sure if that's practical. I do think we have to be careful in examining what subsidies have or have not been granted in this country that have been granted in the United States. I think in the United States most of the subsidies have come through assistance provided by taxpayers in one way or another with the construction of facilities, which in turn are then used to generate revenues for a private enterprise, namely the sports team.

• 1620

If you look at most of the experiences of professional sports teams in Canada, with some notable exceptions—and I think I'm right in saying this—notable exceptions being the Molson Centre in Montreal and the new Air Canada Centre that is being built in Toronto, those don't have a lot of government subsidies in them, direct or indirect. But I would suggest that things like the SkyDome in Toronto, B.C. Place in Vancouver, the McMahon Stadium in Calgary, which is owned by the university, thereby funded directly or indirectly by our tax dollars, and so on, many of the stadiums in western Canada in which we play football are owned by the municipalities so that we probably already have some of those subsidies in place in this country.

I guess what we don't have is subsidies on as grand a scale to build facilities that are as grand, that give us the opportunity to then have those revenues available to pay higher salaries. Often what has happened in the Canadian way, again, has been that where the taxpayers have stepped up and subsidized the construction of those facilities, the public in some ways still owns them and they keep the revenue.

So in B.C. Place, the government spent the money to build that facility, and when it comes to who gets the money when events are held in there, from boxes and seats and so on, the team gets some of it but the landlord—namely, in this case, the government—keeps a lot of the money.

The SkyDome is now privately owned. The government got a lot of its money back—not all—but there's a lot of government subsidy that went into building the SkyDome.

So I think we've had some of those subsidies here, and it's really a question you have to grapple with as to whether you think those subsidies should be extended to include other kinds of tax credits that others are going to come forward here to discuss with you.

On your final question, and that is the value of sports franchises, I think you could do the math any way you want. I think there are always examples in other kinds of businesses as well, where you could argue that a lot of the money and a lot of the benefit leaves the country in some way or other. But I don't think you can get around the fact that if you added up all of the jobs that are created just by professional teams, as an example, that exist in Canada, it is a substantial number of jobs that people in the Parliament of Canada would be very upset to see leave in any other industry. If you added them all up and said they were all going to disappear, there would be a great deal of concern expressed in Parliament if those jobs were leaving in any other industry.

So I think there are a number of direct jobs. I don't think there is any mistaking the fact that there are millions and millions of dollars in tax revenues that are received by governments at all levels as a result of the activities of professional sports teams and the salaries paid in many cases to those players.

Finally, there's this question of stature. I don't sit here and argue for a minute that any Canadian cities or communities are going to fold up and disappear if they don't have a professional sports team or more than one, but I do think it is a rallying point that the community can focus on. It is something that transcends politics and business and all those other problems and the things that beset us, and it is something that lends stature to communities and does help with things like economic development.

There's no doubt to me that when the Toronto Blue Jays are out playing all around North America, it helps to promote Toronto, and the same with all the other teams from around the country. I think that's a good thing.

So that's a small point, and you can't measure that, but I think you could do the math probably just as easily, and I'm surprised if no one has been here to tell you that you could make a strong case for these franchises making a contribution economically in many different ways.

The Chairman: Thank you, Nelson.

From the Winnipeg Blue Bombers, Mr. Iftody.

Mr. David Iftody (Provencher, Lib.): Thank you, Dennis.

Thank you very much for your presentation. You've made some very, very interesting points.

I want to ask essentially two questions. The first deals with the success of the football teams in western Canada, and the demise, particularly in the last 10 years in eastern Canada, of Canadian football. We haven't been able to capture the imaginations of folks.

I too, John, was at the Edmonton game, and you could see the people from Saskatchewan had driven 500, 600 and 700 miles to go to Edmonton, and at great expense. I remember even at that time a number of commentators saying that here you have the Toronto team, and there were very few flights from Toronto to Edmonton to participate in that game.

So perhaps my first question is why is there this apparent cultural and social difference and acceptance in the Canadian Football League between the east and the west? Does it, for example, have something to do with the changes in the types of people who are going to games or, as some were suggesting, that there's a greater interest in Toronto and Montreal for soccer than there is for football?

• 1625

The second one, of course, is with the salary caps. As a Manitoban, and somebody who played hockey in rural Manitoba pretty well all my life and who used to go to Winnipeg Jets games, I can tell you how disappointed I was that day—and we were discussing this in the industry committee at that time with the chairman of this committee—about the salary cap in the NHL. We knew that if they, the players and the associations, were not successful in working out that deal, we were going to lose our hockey club in Winnipeg, notwithstanding the efforts of the local business people. You may know the story quite well of us trying to save the Jets. There were rallies out in the streets, and people were sending in donations to radio stations. We had a commitment from the federal government. The provincial government, Premier Filmon, had put in money as well for a new facility, because we were trying to save this hockey club because it was a significant loss of stature to our community.

If you look now at the map in terms of regions, there is no NHL hockey club in Minneapolis. They've gone to Dallas. We have none in Winnipeg. We have none in Regina. This whole region is void of any kind of that entertainment.

As you say, having Winnipeg mentioned on the TV stations in Los Angeles or New York a couple of times a week certainly didn't hurt us in terms of our business. When we tried to attract conferences to western Canada, to Winnipeg, one of the selling features was that if you stayed at the local hotel on Thursday or Friday evening, you could go out for a game.

My point is this on salary cap. And I'm eager to talk to the people from the NHL about this, because I find it was a great blow to Canadian hockey and, I believe, to Canada. We've lost Quebec; we've lost the Winnipeg Jets. Edmonton has been struggling.

I note with interest, John, for example, that Chris Walby, a 14-year vet from Manitoba, who played for the Winnipeg Blue Bombers...I believe his top salary, Mr. Chairman, as one of our Hall of Famers, was $70,000 a year. The same year that he played his final year as a Blue Bomber, I think, we had a young 19-year-old Canadian come to play for the Winnipeg Jets. His starting salary, Mr. Chairman, for the first year was $985,000 U.S.

Here we have two Canadians, two people, one who grew up playing hockey, another one football, and those are the discrepancies. And I'll tell you that with this kind of competition it's very difficult to get ordinary Canadians to bring their wives and children to a hockey game to pay those kinds of salaries.

Related to that point is the question of taxation. As my colleague from the Bloc has said, there is an emotional difficulty there, Mr. Tory, in terms of getting Canadians to provide tax breaks, as it were, for millionaire hockey players. There's something perhaps Canadian about us whereby we are generally uncomfortable with that, and I think the salary cap and taxation question are not separate issues that need to be talked about.

So there are two questions, then, if I might summarize. One is the cultural differences between western Canada and the east with respect to football, which is important in terms of the long-term success of your league. If you're not getting young players coming up in Canada in the high schools, if there's no interest, we're in trouble in eastern Canada.

The second was the relationship of the salary cap and Canadians' expectations in terms of taxpayers' money going towards those sports.

Mr. John Tory: Thank you very much for the questions.

With regard to the question of west versus east, I wish I had an explanation for that. I like to convince myself from time to time—and I believe it to be true—that probably the single biggest impact that caused the decline of the CFL in eastern Canada was the image of the league, in that every time we had a business crisis where we looked like we're going out of business, it always happened in the east, and people came to look at us as an organization with a bad image they didn't want to associate themselves with.

• 1630

When some of the owners used to complain about the bad press we were getting, I used to say that if we didn't act like the Keystone Kops, the media wouldn't cover us as if we were the Keystone Kops. I believe that as we improved the way in which we organized our affairs last year we received much better coverage. It was more positive and focused more on the players, which is as it should be.

The second thing that happened in the east was that the quality of teams in a couple of communities, particularly Hamilton and Ottawa, was poor. We did a market survey in Hamilton last year, where they had a very bad year at the box office. We asked people what their favourite team in the Hamilton market was, and on the list we put the Blue Jays, the Toronto Maple Leafs, the Buffalo Bills, and all the teams you'd expect, and the answer that came back—overwhelmingly—was the Hamilton Tiger-Cats.

Of course we then asked in the same survey why they didn't go to the games the previous year if they liked the Tiger-Cats, and they said they didn't go because the team was pathetic. They said they didn't want to go and see a team that couldn't win. And I think this is very much related to the other question of the salaries and so on. So the quality of teams was an issue.

In some of these cities, particularly Toronto, there's also a great deal of competition, as Mr. Mills and others know, for the entertainment dollar. You have a basketball team and a baseball team and all kinds of theatres and so on that provide stiff competition for entertainment dollars.

All of those things have combined to create a sense that the CFL is not seen in the same light. It's not “respected” to the same degree, if I can use that expression, by Canadians in the east as it is by Canadians in the west, where the thing is very much a part of the fabric of those communities, as you suggested, in all of the western cities.

To get to your second question, I'm a great believer in the marketplace. You can't be a Progressive Conservative and not believe in the marketplace. But the marketplace cuts both ways. On the one hand, a salary cap such as the one we've imposed—or any salary cap—by definition goes against market forces. It's limiting what people can do. So on the one hand it's going against the marketplace, and you might argue that if somebody can earn $900,000 or $9 million playing hockey or basketball or anything else, they should be allowed to do so.

On the other hand, if we let the marketplace govern in terms of the future of Canadian franchises in professional sports, that comes back to what I said in Regina. If the marketplace is allowed to govern or the marketplace threshold that is set is one that's set in Los Angeles or New York as opposed to Quebec City or Winnipeg, then, by definition, that's what causes me to believe that all of the professional teams in Canada, save and except maybe the Montreal Canadiens and the Toronto Maple Leafs—and maybe the Vancouver Canucks—are in trouble. Because of all the reasons we've mentioned, including the currencies, you cannot sustain those salaries in Canada that are set at that marketplace level of some bigger, richer market in the United States, especially with the Canadian dollar.

You asked if we could find some tax mechanism that could solve this problem. I'm not sure you could find a tax mechanism that would solve the problem or that there would be the appetite to subsidize to the extent necessary to make these teams viable.

I hope Mr. Bettman and others who appear here will tell you the magnitude of the losses—I'm aware of them, for a variety of reasons—that some of these teams have sustained in these sports in international leagues based principally in the United States. And I'm not sure that the government—or any government—is in a position to write a cheque big enough to make up the difference. Really, in effect what you're doing is sort of artificially saying you're going to make the Canadian dollar at par with the American dollar, and if you had to do that for every industry we'd run out of money pretty quickly.

In the paper this morning I saw a suggestion that maybe we should return to having a Canadian hockey league of some kind, with all of our teams from Canadian cities playing in that league.

I would argue this—back to the CFL, where we have a salary cap of $2.1 million. I would challenge you to find a more exciting game than the eastern final that was played in the SkyDome between the Toronto Argonauts and the Montreal Alouettes last year. It was the most exciting football game I'd been to in ten years, and I've been to a lot of them. That game was played by people who were playing their hearts out for salaries that were controlled, not in terms of the precise dollar amount but in the aggregate, and I think it was every bit as exciting as any other sports game that I've seen played by any other set of athletes paid any level of salary at all.

I'm not sure the excitement provided for the sports fans in Canada is necessarily to be measured by the amount of salary dollars that are paid and I'm not sure this idea of a Canadian league where we play, and then, as somebody facetiously suggested in this morning's paper, we might let them challenge us for the Stanley Cup once in a while from these other leagues in the States and maybe they might even win once in a while...this is all wrong. I'm not sure it's a serious answer, but I don't know where this is all going to end up. I just don't think there are the mechanisms available in governments to solve these problems.

The Chairman: Thank you very much, Mr. Iftody.

Mr. Coderre.

Mr. Denis Coderre (Bourassa, Lib.): Thank you. I guess I represent the Alouettes now, from Montreal, don't I?

• 1635

[Translation]

I used to participate back then; I would go to watch the Alouettes games when Marv Levy was coach. There were about 65,000 spectators in the stadium for the last big game against the Hamilton Tiger Cats, and we literally creamed them.

I was also there in Nelson Skalbania's time; those were the disastrous times of the Montreal Concordes. After that, the league dropped drastically. Now it's beginning to come back to normal bit by bit. I know that Serge Savard is presently working very hard with Larry Smith, with the Alouettes, to make sure we have a stadium. As a matter of fact, the Alouettes are going to play in the Molson stadium downtown from now on. We can see that there is some resurgence after all.

All that goes to say that Montreal is a football town. We no longer have the Wally Buonos, the Peter Dalla Rivas and the Joe Barnes of those days, but some interesting things still seem to be showing up on the horizon.

We're still talking about markets and salaries. My first question, regarding the Canadian Football League's present problem, is that it might be due to the disastrous effect that the Concordes had at the time. People no longer felt that they belonged to this league as Montreal had been excluded from it at a certain point. The Canadian Football League was playing out West, and there was no team in the Atlantic provinces.

Isn't that really the Canadian Football League's basic problem, being selectively Canadian and not really coast to coast? If we really want to make people feel that they belong, we should go in that direction, and so we should think more in terms of expanding and setting up things in other Canadian cities.

[English]

Mr. John Tory: I completely agree with you, Mr. Coderre. I think that when teams either go bankrupt and leave a city completely, as happened in Montreal nine or ten years ago, or even left Ottawa two years ago, there is no question that it diminishes the level of interest in the league, and it makes it more difficult for you to come back at some point in the future and re-create that interest.

However, all I can say to you is that we recognize that fact. We recognize the damage that was done by all of the poor management of the league in the past and by having it looking like it didn't know what it was doing, and we have tried to stabilize it over the last couple of years.

One of the things that I'm proudest has happened on behalf of the entire league is that we returned to Montreal after being away for nine years, and that thanks to the efforts of Serge Savard and Larry Smith in particular, we're rebuilding that franchise.

The next two things I'd like to see us do, once we have ourselves completely stabilized, is to return to Ottawa. We had a team here for 116 years, and it's not right that the national capital of this country and a big market shouldn't have a CFL team, given that history. Then I'd like to seriously examine whether or not we could put a team into Atlantic Canada somewhere—probably Halifax, because they've expressed interest over time.

I can only agree with you that one of the reasons the CFL diminished over the ten years, say, preceding 1996 was because teams kept folding. Cities like Montreal, one of the premier cities, if not the premier city, in Canada, disappeared entirely from the league. You can't have that kind of thing going on and at the same time have the fans believe they're part of something that's growing and exciting and, as my kids put it, “cool”.

Our objective is to try to make the CFL cool again so the kids will come out and see this as something exciting, something they want to be part of and so on. As I said earlier, you have to do it in Montreal ticket by ticket, family by family, and that's what Larry Smith and Serge Savard and others are doing.

I have no doubt in my mind that you're right that our image took a terrible battering over the last...not the last ten years, because I except last year. I think last year was good.

Mr. Denis Coderre: Better.

Mr. John Tory: Better. That's the right word. So I accept what you say, and we're working on fixing it.

[Translation]

Mr. Denis Coderre: Mr. Tory, we could spend a long time philosophizing and discussing the great principles of life, but I would like to stick to the facts as they are if we want to make finely tuned recommendations which are truly relevant to the situation. Just as you do, I also recognize that finally, sports is an industry as well and must be considered as such. Therefore we need figures. What is the average salary of a Canadian Football League player?

[English]

Mr. John Tory: It's under $50,000. It's in the high $40,000 range.

Mr. Denis Coderre: Okay.

• 1640

Mr. John Tory: I'm happy to share these. These are all part of the collective agreement, and it's all publicized in the newspapers.

The starting salary for a first-year CFL player is $28,000. That's to play 18 games. So it's a season that's not quite as long, but it doesn't take away from the fact that it's a relatively small amount compared with what you see in the other sports.

The maximum any CFL player can now be paid—and there are two exceptions to this rule that are historic—is $150,000.

Mr. Denis Coderre: Okay.

Mr. John Tory: The average hovers around $50,000.

Interestingly enough, because there's a Canadian quota, if you want to call it that—we call it the non-import quota, for legal reasons—there's a required number of Canadian players who have to play on each team. The law of supply and demand again kicks in, and a lot of the Canadian players in fact are among the higher paid at their positions because there's a much smaller pool of Canadian football players. Chris Walby, to whom Mr. Iftody referred, at $75,000 was actually getting a salary that's considerably above the average, because he was a very much in demand Canadian player when he was playing.

Those are the numbers. The payroll of a CFL team is within dollars of $2.1 million, because they all try to get as close to the salary cap as they can without going over.

[Translation]

Mr. Denis Coderre: Right now, there is certainly substantial revenue. We're talking about ticket prices. But what about television royalties, marketing royalties, for instance? What kind of agreement is there, for instance, between the Canadian Football League and TV and radio stations? How much is that presently bringing in? Is there a different agreement for each city or is there one global agreement?

[English]

Show me the money.

Mr. John Tory: There's a national contract in place. We have not publicly disclosed the details of that contract. Suffice it to say we have entered into a much better and more generous television contract this year with TSN/RDS. It is going to pay a much more handsome dividend to CFL teams, I hope, if we can keep our affairs in order for the rest of this year.

Having said that, the CFL, which is unlike any other professional sports team in North America, is still dependent on live gate for about 80% of its revenues, even with this new television deal. People have to sit in the seats to pay the bills. At the end of the day, with the better television contract in place this year, the television and other activities unrelated to gate revenue will pay about 20% of the costs of running a CFL team.

Mr. Denis Coderre: That's 20%. And the marketing for the shirts and things like that?

Mr. John Tory: That produces a negligible percentage. It might be 5% for the very best team. Actually, Winnipeg is one of the best merchandising operations in the country, and it might produce 5%.

The average expenditures of a CFL team are between $5 million and $6 million, depending on the variable factors like stadium rent. The SkyDome costs more to rent than some of the other stadiums. McMahon Stadium in Calgary is very expensive, relatively speaking, so the owner in Calgary has to bear a lot more expense to rent the stadium.

Those are the average expenditures, so they have to take in a total of, say, $5.5 million to $6 million in revenue. If you subtract from that, say, $1 million if they can take in from ancillary activities, including some contribution from the league for television rights, then that leaves them with $5 million to take in, essentially from live gate and sponsorships at the local level.

[Translation]

Mr. Denis Coderre: Have any franchisees made money this year or are they all in deficit?

[English]

Mr. John Tory: Are there franchises that made a profit?

Mr. Denis Coderre: Yes.

Mr. John Tory: Yes. This year I would say there were—let me do a quick mental count—three franchises that I would be certain made a profit, two others were close to breaking even, and three others had reasonably significant losses.

[Translation]

Mr. Denis Coderre: Very well. Now regarding baseball, to help the smaller markets, last year an agreement was reached among the owners, according to which they decided that some form of equalization would apply and that a sum of money would be granted by the baseball league.

So I would have two final questions. First, is the Canadian Football League doing the same thing? Is there an overall agreement according to which the profits are granted to the franchisees?

Secondly, I have a question which might perhaps not be directly relevant to the point we're discussing now. Do you think that the Canadian Football League should... How should I say? Should a government invest in building a stadium, if we were to do as other cities have done? Should the government invest any money in this and in what manner? Should it be done through a fiscal agreement or through direct subsidies?

• 1645

Finally, if we want to foster a stronger sense of identity between fans and professional franchises, why did the Toronto Argos have to have blackouts? Why should I, a Montrealer, not have the right to watch Doug Flutie? Of course, he is no longer there. But why do I not have the right to watch some other things because of this blackout? Wouldn't you think that it might in fact help, if a Montrealer could watch the BC Lions or the Winnipeg Blue Bombers?

[English]

Mr. John Tory: I'll deal with your third question first. I've forgotten the second one, but you can remind me.

Mr. Denis Coderre: I'll remind you.

Mr. John Tory: On the blackouts, you will be able to see the games. The only people who won't be able to see the Argos play are the people who live in Toronto. Their games will be on across the rest of the country, but they'll be blacked out in the local area. I've taken some criticism for it, but it was a decision we made unanimously.

The reason for it is very simple: attendance in Toronto has been declining for four or five years. When all of the blackouts were lifted, the games were shown in the Toronto market when they were played at SkyDome. We decided this obviously wasn't working if the attendance was going down, so we thought we would try reimposing the blackouts for home games to see if the live gate increased. We'll have to examine the results of that at the end of the season to see how we did.

On your second question, which I think was whether or not governments should invest in stadium facilities and arena facilities, I would say, yes, they should help. The reason I think they should help differs perhaps from what some others might argue, but I think the way in which the government might help is to assist in floating the financing necessary to build these facilities. That money should then be repaid—

Mr. Denis Coderre: For any sport, or just football?

Mr. John Tory: Any sport. I think these are.... I'll come to my reasons—

Mr. Denis Coderre: So the Expos should have their stadium and we should pay for it.

Mr. John Tory: I think governments could make a logical argument as to why they might contribute to the cost of those stadiums—or maybe “help in the financing” is a better way of putting it. Those stadiums are part of the infrastructure of a city and will allow the team to remain there and be viable. That will allow other events to come to the city and be played in that facility, such as other kinds of games, tournaments, track and field competitions or whatever.

I would also go a step further and say the money should be collected back by means of some sort of tax on the ticket. That way, the people who go to the games, and perhaps the enterprises that use them, are effectively repaying the money over a period of time. It would be the users, in effect—in this case, both the teams and the fans—who are paying that money back. It could be a long time. It could be ten years. Government has some luxury to be able to raise large sums of money and so on.

But I think these stadiums are valuable parts of our community infrastructure. They can be used by the community when the professional teams aren't there, which is many days of the year, and they preserve these teams in place. That's the only kind of role I could see the government playing. When you see that the Winnipeg Enterprises Corporation builds and maintains the stadium and the arena in Winnipeg, I don't see any problem with that. I'm sure that on many days of the year, they're used by groups other than the professional teams. I don't think the taxpayers begrudge that sort of investment, as long as it's reasonable.

So your questions were on blackouts and stadiums. Do you remember what the first one was, or was that it?

Mr. Denis Coderre: No, that's okay. That's it.

The Chairman: Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): I just have a brief question, Mr. Chairman.

Your presentation certainly leads to many questions, many of which I think are of questionable relevance to this committee. You made the statement that governments need to ensure that sport, including professional football, is treated as the big and vital interest that it is. Canadian football ventured into the American market, and there are a lot of questions that could be asked surrounding that particular event. What I'm particularly interested in, Mr. Tory, is whether or not that effort yielded any data or information that pointed out glaring differences in the manner in which governments in the U.S., at whatever level, treated those CFL franchises from the way they're treated here in Canada. If there are such differences, I think those are the kinds of things that maybe we want to hear on this committee.

Mr. John Tory: I think the fair answer to your question, Mr. Provenzano, would be no. If anything, the role of government in Canada, the way we see it, actually provided some advantages to the Canadian teams when the CFL had teams in the United States in the following respects.

• 1650

For example, we have government-operated workers' compensation in Canada, which produces premiums that are more reasonable than was the case in the United States, where our teams had to pay premiums that I guess are based on marketplace rates set in the private sector. The premiums were almost unbelievable. The cost of medical insurance in the United States was prohibitive for these teams. I would say the tax treatment they faced and things like that were no different. They didn't receive any handouts from the cities they went to; they didn't ask for any.

I think the real reason Canadian football expansion to the United States failed is it was very badly handled. It was handled in a way that was out of necessity. In fact we were out looking for franchises at the time because the franchise fees would keep the league going for another year, rather than looking at going to the right markets at the right time in a businesslike way. I'm being very frank with you in saying that.

So I don't think we had time, given the way the thing was handled. And I was there for that chapter, so I have to accept my share of the responsibility for those decisions. I think that expansion experiment saved the CFL, because it allowed us time to reorganize and realize that what we really wanted to be and should be was a Canadian league based on a reasonable, affordable model of football in North America, principally in Canada, and that if we ever expanded into the United States again—which I don't see happening in the foreseeable future—it would be on a much more considered basis, providing, again, the same sort of affordable product in the United States in cities that frankly could never contemplate having another kind of football franchise.

However, from the standpoint of your question as to the nuts and bolts of the practical aspects of a report you'll want to write, I do think you might look at what might be done with regard to assisting in the construction, maintenance, and operation of facilities, because that's something you can help with, perhaps with better optics, if I can put it that way, because those are community assets that can be used for other things. You could have that money get repaid, whereas it's difficult, if you give a tax break to sports teams, to get that money repaid. By definition you're giving them a break, so you normally wouldn't get it back.

You can look at other aspects to our taxation laws. I realize it's not your jurisdiction to deal with provincial amusement taxes and things like that, but those are the kinds of things you might well ask some questions about of the people who come here before you, because they make it difficult for more people to go to games, which reduces gate revenues.

You might look at things such as the immigration laws in order to make it as attractive as possible for players and other people who are associated with these increasingly international sports leagues to come to Canada, to stay here, to be part of the community, to get jobs here and work here, and for their families to work here.

These are all small things that will contribute to what is government's responsibility, which is to create the environment in which these sports teams and sports leagues can do business on a level playing field.

I'm not sure you're going to be able to make any recommendations to fix the fundamental problems we've talked about today, starting with the value of our currency, which you're not going to fix by any government measure, and going through to the level of the salaries. Those are marketplace forces at work, and I don't know that there's any easy answer to that. If there were one, I guess somebody would have come up with it by now.

I'm sorry I can't help more than that and I'm sorry my presentation by definition today has been perhaps a little less precise on some of those scores, because I'm not here looking for your help. I may be in trouble with the owners of the CFL when I get back, because they may say, “What are you doing going down there and telling them we don't want a tax break?” Some of them might welcome it and take it happily, but I think a lot of them have learned a lot of lessons in the last few years and realize that the way to run this thing is to have your revenues match your expenses, and you do that by controlling your expenses and trying to increase your revenues. If you achieve that balance, then you don't need anybody's help.

So I'm just not sure that's the answer, but that may be an unrealistic point of view vis-à-vis these other leagues. I can't speak for them; I'm not involved with them.

The Chairman: We only have a few minutes left. I believe Mr. Proud has a question.

Mr. George Proud (Hillsborough, Lib.): I would like to thank you for your presentation, Mr. Tory, but I come from that part of the country where we don't have a CFL team. I come from the east coast. You mentioned there is a possibility that this might happen, and being the ardent football fan I am, although I am a Calgary Stampeders fan, I believe that—

The Chairman: You're just saying that because Jim Silye is here.

Mr. George Proud: Yes, I knew Silye was sitting back there.

I don't know what kinds of studies you've done on it. We were that close one time, I think, to having the Atlantic Schooners in Halifax. They had the name and everything ready.

We do have a pretty good university system down there. It's very competitive. In my province of Prince Edward Island, they did away with the university team some years ago, and that hurt football right across the province.

• 1655

In the last five years, high school football has come back. Mr. Smith was down to talk to us one night down there, and there's a great enthusiasm for it. I would hope that, as you continue your work in the league, some day we will see a team, and I would say Halifax, yes, would be the place it would have to go because I think it's the largest area. We don't have an NHL team down there either, but we have several AHL teams and they seem to be very successful.

Mr. John Tory: Mr. Proud, I agree with your suggestion. I think this league will only be truly national if it's truly national, and it won't be truly national until it's in Atlantic Canada. I think two of the things we've been talking about are important to look at in the context of the possibility of that occurring. It's something that I don't have as a short-term priority because I'm trying to stabilize the existing league first, and we're some way there.

The first is that there will have to be a stadium, and there's no question that if there is going to be a stadium built of adequate proportions in Halifax—which doesn't have to be gigantic, it only has to be perhaps 20,000 people—probably there will be some form of public assistance required. Again, if we have all these infrastructure programs that exist to build all kinds of other things, I'm not sure a stadium should be any less deserving of consideration under those programs than anything else.

The second thing that has to be examined is for people from Halifax to go to Saskatchewan. It would be good for the country anyway. Have them go to Saskatchewan and sit down with the people who run the Saskatchewan Roughriders franchise and ask how they have done this, because if they can run a sports team in Saskatchewan that has been as successful as that one has been in a province that has a slightly higher population than Nova Scotia but in the actual city of Regina, a relatively small population, I think the model can work in Halifax and I think it would be a great thing for the country.

I don't overemphasize, and never have, the importance of the CFL, but I think if we can be seen to be strengthening one of these national institutions and see something that is Canadian expanding to become national, that would be a good thing for the country. I hope there will be a group that resurrects that interest in Halifax. By the time they have a visit to Saskatchewan and talk to the governments about some help for a stadium, then we might be ready to accept them and be on our feet and able to give them a proper welcome and have them part of a strong, well-managed organization, which is really what we're trying to do.

The Chairman: Thank you very much, John. You did a terrific job today. Your insights have been most valuable to our committee, and we'll be in touch with you over the next little while.

Mr. John Tory: Thank you, Mr. Chairman. There probably aren't three people in the country who agree with anything I've said, but I'm here representing myself and in my capacities with the CFL. I may be in trouble with the owners, but I'll get over that.

The Chairman: You're doing a terrific job. You have a very difficult task.

The one little question that I have has to do with the high school realm. I realize it's a provincial jurisdiction, but in my community, the greater Toronto area, we notice that fewer and fewer teams at the high school level are getting involved in the sport. I don't know if the Canadian Football League is doing anything to inspire high schools or coaches to maybe rededicate themselves to football at the high school level. Is there any kind of plan in your program?

Mr. John Tory: Mr. Chairman, we're doing three things. We give a very modest sum to the Canadian Amateur Football Association, and it is very modest because in previous years we couldn't afford to give much more. I hope as we become more prosperous we can do more in that regard. That's number one.

Number two, if we can run our own affairs better and improve the image of the league and increase interest in football generally, it will increase interest at the high school level. If kids think it's cool to go to a CFL game and they all want to go and convince their parents to go and so on, they'll also be more interested in playing football.

The third thing we're doing is what I think is really the key to all of this in terms of resurrecting interest in football or increasing interest, which is grassroots activity. We are working, for example, with the NFL on a flag football program, which boys and girls can play across Canada. It's a touch football game. And these are the kinds of initiatives we recognize that we have to do.

There is no magic answer to create interest in anything. Whether it's a game or a product, you have to go out and work person by person, school by school and neighbourhood by neighbourhood. We hope that by doing that, the grassroots initiative with the flag football among other things, we will again increase interest. I think it can happen and we're going to work at it.

You go back to that Grey Cup I talked about in Edmonton and see all those kids, little kids, big kids—I didn't even know they made football equipment that small. You see those hundreds of kids in Edmonton and you know that it's possible that if you play your cards right you can keep interest high in the game and all the other games. I think it is so important that we do that, because the amateur part in some respects is the part that's more important, not just because of producing players to play professional—most of them won't—it's because sports does transcend all of those other things and it is such a part of the lives of young people and so on, and should be in the future.

So I share that concern and I hope that by improving the overall affairs of the CFL we will increase overall interest in participation in amateur football at high schools and otherwise.

• 1700

The Chairman: Thank you very much for coming today.

Mr. John Tory: Thank you for having me.

The Chairman: Colleagues, we're adjourned. Thank you.