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]

Thursday, November 5, 1998

• 1529

[English]

The Chairman (Mr. Dennis J. Mills (Broadview—Greenwood, Lib.)): Ladies and gentlemen, before we ask our witnesses to begin, we welcome Mr. Edwards and Mr. Giguère, from Racetracks of Canada Inc. We appreciate your coming and we appreciate your brief.

The process this afternoon is that you will take the first 20 minutes or so to talk about your presentation, and then we'll go to questions from members. We usually don't begin these subcommittee meetings without Madam Tremblay. She was on her way and was to be here by 3.30, but because we have a tight schedule today, with the consent of the members I think we should proceed.

Mr. Edwards, we turn the floor over to you and Mr. Giguère.

• 1530

Mr. Stephen Edwards (Executive Vice-President, Racetracks of Canada Inc.): Thank you, Mr. Chairman and members.

Let me begin by thanking you for the honour of appearing here. We are delighted to be here. Our industry is pleased to be recognized and to appear before your committee, the work of which is well known in the country and which we all continue to read about.

It is ironic that coming into the room today my colleague, Yvon Giguère, noticed that the name of the room is the Railway Committee Room, and one could draw an analogy between the railway industry and our industry. They're both old industries. They're both facing extreme competition from all sources, but continue to survive even though the horns or the whistles aren't blowing at as many stops as they were in the past.

Before I get into any specifics, I would like to ask any members who are here who are also members of the appropriation committee that they can put their pens and pencils and chequebooks down. The one thing we are not here to do is to ask for any money or any subsidy.

Some hon. members: Hear, hear!

The Chairman: This meeting is adjourned.

Mr. Stephen Edwards: The government and government regulation are of course very important to our industry. And while in all seriousness we are not here to ask for money or subsidy, and don't expect to be asking either, there are many things that can be done between ourselves and the government to make the industry more successful.

I'm really pleased and flattered to see that Mr. Hec Clouthier has honoured us by joining us today. He knows more about racing than I'm sure anyone around this table. I've been pleased to see him at our hall of fame annual presentations and so forth and so on.

It's a delight to see you here, and I know that you'll correct me if I go wrong.

Racing is quite a large industry. The bets in Canada last year amounted to some $1.8 billion, and that generated taxes of various kinds of about $500 million; in our document we say $517 million. The industry is respected around the world, as you would no doubt know. I'm sure that members of the committee will well remember the names Northern Dancer or perhaps Mr. E.P. Taylor, and certainly the name Cam Fella, whereby Canada has distinguished itself around the world. And although we have not sold any $10 million horses in recent times, the breeding industry from Canada is still a tremendous export for the country and Canadian horses continue to be sold for good prices outside of the country and race all around the world.

In fact, one of our key horses running in the Breeders' Cup this Saturday, Chief Bearheart, is likely to run in the Japan Cup and will remain in Japan as a stallion. So the Canadian export of horses continues to be a very vigorous industry.

Our industry has faced since 1970, when it was perhaps the only form of legalized betting in the country, an onslaught of competition from other forms of gaming. A number of those gaming opportunities are controlled by governments; I refer specifically to items like lotteries, casinos, video operations, etc. We are not commenting in a critical way that they exist; we're merely stating that they do exist. But it is very interesting that our competitors are in many cases our regulators.

We are regulated federally through the Ministry of Agriculture and Agri-Food by the Canadian Parimutuel Agency, and I am pleased to see that they are represented in the audience this afternoon. We are also governed by racing commissions in each province.

• 1535

Let me just take you past page 3 in the presentation we have made, past the page dealing with scope, on to the graph that shows a pie chart of the gaming revenues in Canada in 1996 and 1997. You will see the little piece of pie, a mother-in-law type slice up at the top—4% of the gaming revenue—now obtains to our industry. It would have been substantially higher in the past. One need not be very imaginative to foresee the portion taken by casinos and VLTs will continue to increase and perhaps erode the market share of the other sections shown there. Certainly in racing we know we are in very tough competition.

The page following that is a photocopy of a statistical report from the CPMA, which I previously referred to, and it shows the breakdown of betting in Canada by province. Importantly, in the two charts on the right, the top chart shows a reduction in the number of race days and the number of races. Of course there has been a reduction also in the number of tracks. At the bottom it shows the total amount bet in Canada. You can see that although it looks like the industry has remained steady, there has been no inflationary growth, which is falling behind targets. Without the advent of simulcasting, which we started eight to ten years ago, thereby creating a larger geographical audience, so to speak, the industry would be under even more pressure than it is now.

The industry is very diverse, from providing jobs to entry-level people at the level of grooms, or people working on farms doing hay, doing fences, cutting fence posts, to the very high technological aspects of our business world. We have several tracks. My colleague today from Hippodrome de Montréal, for instance, would have a cost for satellite transmission of about three-quarters of a million dollars per year, and that would not be the largest communication cost of any track in Canada. So the industry has become very complex. It uses a number of other industries as associates, and uses a number of other services from industries.

I am not going to bore you with any more introduction to the industry. We would be well open to questions. What we have done today, Mr. Chairman, is to try to select three items we think are significant to the industry and on which your committee and perhaps the federal government could be of assistance.

I will now ask Yvon Giguère to present the first of those issues.

[Translation]

Mr. Yvon Giguère (Simulcast Director, Hippodrome de Montréal, Racetracks of Canada Inc.): Thank you, Stephen.

The difference in taxes in Canada and the United States for the racetrack industry present a problem. A player who resides in the United States and who places racetrack bets in Canada is not taxed in any way when he places his bets. For example, in New York, for a race that takes place in Montreal, no tax is charged here in Canada on his bet. If a Canadian player in Montreal places a bet on a race taking place in New York, the Canadian bettor is immediately taxed; his gains are immediately taxed at 30 percent. In the United States, taxes are on gains whereas in Canada, taxes are levied before the bet. This is a fundamental difference and Canadian bettors are deprived of access to the American pool because of these prohibitive taxes. A pool is all the bets that are placed for the game.

We believe that negotiations should take place between Canada and the United States on this matter. Given that Canada does not levy any taxes in the case of American citizens, in Canada we could have the same privilege, that is having no taxes on gains earned in the United States when bets are placed here in Canada on a race that takes place abroad.

This sector of the industry has developed exponentially in the last 10 years. To cite a few examples, Montreal presents races from Hong Kong, Melbourne, Australia, as well as from European countries, France and England. These signals are available for Canadian consumers. Canadian racetracks use these opportunities to increase their sales through the daily broadcast of races from all over the world. This specific point is an irritant for our bettors.

• 1540

In the documentation that we presented, we indicate that players could bet on a pool of $5 million. Unfortunately, consumers cannot bet because of the tax treaty that is unfavourable to us for the event that's called the Breeders' Cup. All Canadian racetracks are simulcast via Toronto, but you can see that the amount of the bets will be $800,000, perhaps. Therefore, the $5 million pool cannot be accessible to Canadian consumers.

Given this concern, the industry would like to see a change in the tax treaties between Canada and the United States.

[English]

Mr. Stephen Edwards: Thank you, Yvon.

The second issue deals with the deductibility of losses incurred in the business of racing.

Today we consider racing to be a business. It is part, perhaps, of the sports and the entertainment world, but it is a business. We feel that the tax laws currently do not treat racing in the same light that it treats either businesses or some sports that are in business.

I refer specifically to the restricted amounts on farm losses for part-time farmers or people who own horses. There was a limit of $5,000 set in 1952, and that limit was changed in 1987 to $8,750. So if a person owning a racehorse and running for purses—purses that have become more substantial in recent times—happens to have a loss, they are restricted to $8,750, regardless of the number of horses they own.

The industry today—and when I say the industry, we speak here not only for racetracks, but we have had several meetings with horsemen and horsemen's associations, and so on—feels that we need to move ahead in the area of taxation, and have racing treated simply as a business.

If an individual today decides to invest $10,000 into a restaurant or into a car racing operation, or into some other business pursuit, if that business is successful, they share the spoils; if that business is unsuccessful, they have a business loss that they offset to other income. We are one of the only areas where the offset of that income is restricted to the $8,750.

I'm not going to bore you by going into the various sections, except to say that we are talking about section 31 of the Income Tax Act, with some reference to section 28. There are, I'm sure, some mitigating circumstances, and we have dealt with them. We have a committee mounted to deal with the issue of taxation in the horse industry, and we'll be making some other representations.

The impact on racing is as follows, and this is why we think it's important. If anyone has been attending races recently, they would have noticed that the number of horses per race has declined significantly. People are no longer willing to invest in a racehorse and if they end up with a loss not be able to deduct that loss from other income. So we have suffered a shortage of horses.

If owners are not buying horses, farmers are not breeding horses. If farmers are not breeding horses, people who grow hay, people who manufacture pharmaceuticals for use in the veterinary industry, farriers, a whole number of people and professions suffer accordingly.

Certainly from the bettor perspective, bettors are not interested in betting on races with few horses, and we see time and time again that if we can provide full fields, we can increase our level of wagering.

• 1545

So there is no doubt that we need to have new owners in the business, and we need to attract old owners back to the business. We feel that the only way to do that is to in fact make it a business. Our representation to you, and later to the appropriate ministries, will be to treat racing as any other business and make the losses deductible and any gains fully taxable. That is what that issue refers to.

I will move on to our third issue, and I will take any questions on the issue of tax at the appropriate time.

The third issue deals with the use of communications and communication devices. If you listen to the radio stations in your various ridings around the country, you will no doubt hear advertisements from foreign companies advertising in Canada to attract the wagering dollar on sport. This is not restricted to horse racing; it is on sport in general, but horse racing is certainly a large part of that.

Canada has no control over it, and we as racetracks have no control over it, but the net result to us as racetracks is that revenue that would normally have accrued to our industry is leaving the country, and leaving the country uncontrollably.

When that revenue leaves the country, none of the taxation that would come to governments is available. None of the commissions that would come to the industry and find its way into the farming community is available. So it is a net loss to the entire business, agricultural and racing community of Canada, and it's an area that needs to be addressed and addressed quickly.

The current code or the current law, referring to subsection 204(8)—and I'm on page 10 of the English part of the presentation—allows for wagering or betting in person, of course, or by telephone calls. We are suggesting a modest change to that piece of legislation. The addition of the words “or any other telecommunications devices” would make it possible for racetracks in Canada to start competing with these offshore companies from the Channel Islands, from Antigua, and from everywhere else in the world.

That has already been obtained by our competitors in countries like Australia and New Zealand, and some countries in Europe, where the use of the television to place a wager, or the use of a computer device, which is still using the telephone device to place a wager, is available.

I can speak directly to the losses and the type of losses. If you are at any racetrack, you see people with telephones, and more often than not they are telephoning to their accounts in Philadelphia through a company called Ladbroke, or an offshore called “youbet”. They're watching our races in Canada and deciding who they want to bet on, but declining to bet in Canada and going into larger pools in United States by telephone or through the use of their computers or other betting devices. So I repeat myself in saying that this is a tremendous loss and something that we think needs to be addressed quickly and can be addressed quickly.

We need to be able to compete on the global stage. I had a meeting at the Ministry of Agriculture recently. The minister is on, or will be going on, a trade mission to China, and we were pointing out that we are looking at export business in China ourselves.

The entire racing world is looking at the population of China, where there is no horse racing, and deciding to offer some type of communication-type betting to the Chinese population, who have a high propensity to bet or to wager. It is an untapped market. Countries, again, like Australia, the United Kingdom and France are way ahead of Canada in their ability to go into a country like China—and there are others—and offer the technology and the capability of having those people bet on our product.

We need to be part of that market. The industry is now global, and we in Canada need to play our part. We ask no subsidy in being able to play that part. We don't ask for money for tours or for marketing, or money to develop the industry. We simply need very small adjustments to the tools that we have currently, and that tool I refer to would be a change to that subsection 204(8). We need that amendment, and we would like some assistance to get that amendment done quickly so we can ebb the tide of revenue being lost to our international competitors, and the flow of Canadian money going outside of the country benefiting no one.

• 1550

Mr. Chairman, there are the three issues we have brought to you this afternoon, which we think we can make some progress on, or perhaps your committee might be able to assist us on, and we would now be open for questions at your discretion.

The Chairman: Thank you very much, Mr. Edwards. It was very enlightening.

I will turn the floor over immediately to Mr. Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): I realize the time constraints, Mr. Chair. Thank you very much for that.

I really appreciate the nature of the presentation that was made, because some of the comments made with respect to the range of activity involved in the industry from farms that provide the foodstuffs, from the farms that provide the breeding stock, to the tracks that hire grooms and employ drivers and trainers, right to the technological aspects that are involved in the communications to deliver the product everywhere, were very interesting.

In your submissions, Mr. Edwards, with respect to the ability to deduct farm losses, the restrictive way in which these losses are treated with respect to owner horsemen who are in the business, you made the point that lately there seem to be fewer horses for the races. And you extrapolated that fewer horses means less business for the breeding farms and so on and so forth.

In relation to the three submissions that were made, if you were to rate those submissions in terms of government action that would most address this aspect of the problem and would go to preserving this industry, which I might add is one of the few places where it could be a growth industry in the traditional sense, because what we've seen is industries that are growth industries are displaced usually by high technology— We have a traditional industry here that is hands-on and labour-intensive, which hasn't really changed for a long time. I think your presentation evokes that kind of thinking. If you had to identify measures that would directly speak to the preservation of the industry, which measures of the ones you propose would they be? Maybe it's all of them. Secondly, do you care to comment on that nature of your industry?

Mr. Stephen Edwards: Thank you, Mr. Provenzano. It's a complex and tough question. I thank you for it.

I don't know that I would care to rate in terms of priorities the issues we've put forward, only because they're so different in nature. The issue of taxing you have quite rightly and succinctly identified.

We employ a wide range of people in this industry, and there are thousands of jobs, well over 100,000 jobs, generated by horse racing in Canada. The range of jobs is very wide. For instance, with the new technology there is a department at the Ontario Jockey Club in Toronto where over 40 people are employed now in television production, because our races are exported to tracks all across Canada, sometimes the United States and sometimes overseas. But we have a large agricultural sector, grooms, hot walkers, and people who work on the backstretch, who would perhaps—some of them, or a large percentage of them—be on the government string one way or another were they not racing, because they have no skills they could take into another industry. Certainly they're not capable in the high-tech world of today.

There is a huge spinoff from racing, particularly in the agricultural sector. Harness racing in particular has been a family type of activity. It is a group of small farms; some of them are large and world-famous in Canada. But wherever you go in the country you can find farmers with two or three horses who race and train them themselves, sometimes on tracks right on the farm. There is a tremendous amount of spinoff from this activity.

• 1555

So certainly it is important that in order to keep the horse racing industry going at all we need to make sure we can attract the people who provide the product, and they are the owners. If the owners are not buying the horses because of tax reasons, the breeders cannot sell their horses for competitive prices. It's a set of dominos from there on in.

The other two issues are also very important, and we don't think they are issues of the magnitude that would take a long time, or should take a long time, to put into effect. The issue of the telecommunication devices, for instance, and the negotiations of the U.S.-Canada tax treaty, which we understand is an ongoing affair anyway that needs constant adjustment, should be things we could achieve in the short term and the short run.

I don't know if I've answered your question. There is lots of employment and lots of stability for those people, but we do need to make sure we can keep an owners' base.

In the motor-racing industry, there are large groups of people who get together and have sponsors and finance the racing car as a business. We feel that this is how horse racing has to go. The ownership of a racing horse is in fact a business. If you win money by owning it, you should pay the taxes. If you have losses, those taxes should be deductible.

Mr. Carmen Provenzano: Thanks.

The Chairman: We will go to Mr. Mark and then we'll come back to Mr. Clouthier.

Mr. Inky Mark (Dauphin—Swan River, Ref.): Thank you, Mr. Chairman.

Thank you for appearing before the committee. I'd like to continue on that same topic and the same line of questioning.

I come from central Manitoba. My riding is rural. As a former mayor, for many years I spent a lot of energy trying to figure out how to sustain harness racing in rural Manitoba. I know the biggest concern they have is the frequency of races and the amount of money in the purse. I agree with you that there is a huge impact certainly for the farm economy when it comes to the whole racing sector. You can drive almost anywhere in rural Canada and never escape seeing a horse somewhere, whether it's for recreation or for racing.

I'm sure that section 31 of the Income Tax Act will certainly be of help. That is a good idea and a good proposal. My question to you is, how do we make this whole business equitable and sustainable outside of large urban centres, in small communities and small cities, where it is more difficult to sustain a level of interest?

Mr. Stephen Edwards: Thank you, Mr. Mark. That was a very good question.

We are in touch with Manitoba. Only this week I called Mr. Wayne Anderson, who is the chairman of the Manitoba Racing Commission.

In answer to your question of how we can sustain it in rural rather than urban Canada, in many cases the person who is victimized by the $8,500 deduction is a person who has another job or is carrying on another business. Those people are rural. Some of the urban groups who might own horses quite often do it on a full-time basis. They have a stable of 15 or 20 horses and they live at the racetrack and that is their full-time business. They don't have a problem because they are only in the business of racing.

However, it is the person you're referring to who may work at a plant and live 70 miles from Winnipeg or in Brandon who is affected. He has a horse in the backyard, or he has a horse at the farm down the street, and the horse does not perform and he breeds it. Then all of a sudden he has $20,000 worth of losses that he can do nothing with.

We think that by changing this particular section of the act, not making loss restrictive, it will encourage a number of those people to get back into horses and therefore provide more jobs in the rural areas of Canada.

And the jobs are real. I took a provincial minister on a farm tour, and as we arrived at this farm—and this was not set up in any way—in drove a truck with 500 fence posts and about 200 metres of wire fencing. These are the types of jobs and sales that occur if we can keep this industry going.

• 1600

Mr. Yvon Giguère: I want to add to what Stephen referred to, when you have numbers of days in different locations. I think the industry is moving more and more to the simulcasting world, so that simulcast revenue will create the possibility of adding racing days or creating a racing season in different locations in rural Canada, as well as the metropolitan areas.

Mr. Inky Mark: Another question deals with how you deal with technology. I understand there is a huge potential to market technology, racing technology. At the same time, can that become a threat to small-town racing?

Mr. Stephen Edwards: It does not at all in the way we are structured in Canada. It could not become a threat to small-town racing. In Canada, we have designated home-market areas, and all betting and all wagering that is placed from that area accrue to that area. So whichever track would normally have gotten the revenue from a person betting in Coquitlam, British Columbia, they will still get the revenue regardless of the technology being used, or regardless which track he might be betting into. Those conventions are respected in Canada and in fact are laid down by various racing commissions and by our regulatory body, the CPMA.

We have already established telephone betting, where anyone in Canada can bet, and the home marketing area agreements control how that revenue is distributed or how any profits from that wagering are distributed.

Mr. Inky Mark: Thank you.

The Chairman: Mr. Clouthier.

Mr. Hec Clouthier (Renfrew—Nipissing—Pembroke, Lib.): Thank you very much, Mr. Chair, and thank you very much, Steve and Yvon, for being here today.

As you well know, I've been involved in harness racing all my life, and my father before me. At one time I owned over 150 racehorses. The only trouble, Steve, was that many of them were about the same speed as my friend down here, Denis Coderre. They were more like Clydesdale horses instead of racehorses.

But leaving all joking aside, you may not want to prioritize it, but I will. I believe the number one problem in our sport, and I say our sport because I'm still a licenced trainer, driver, owner, breeder, without a doubt is—

The Chairman: Excuse me, Mr. Clouthier, after hearing all this I think we should duly declare your conflict of interest.

Mr. Hec Clouthier: My wife wanted me to declare that when I was in Joe Fontana's riding last week and bought another horse.

You're right. It is unbelievable, Mr. Chair, that section 31 of the tax act, where you had a $5,000 restricted farm loss, was only jumped up to $8,500 in 1987. That is incredulous, because coming from the field of business, you show me anything else— If you bought a truck in 1952 and buy that same truck in 1998, the price may be a hundredfold different. In my estimation, this is the number one problem with drawing new ownership into our sport.

I bought two horses down in Harrisburg for a total of $190,000. I can't write that money off? That's ludicrous. It's because of the restricted farm loss. So I personally believe that should be raised to at least $50,000, or go to the same as you do in business and have a 15% tax write-off on your investment.

It's not costing the government anything, Mr. Chairman. Am I getting you in hot water here? Finance Minister Martin will be yelling at me. But that is the number one problem.

You know well, Yvon, the average sale this year for the yearlings at Blue Bonnets is around $20,000. At the Canadian standardbred horses sale, it was around $26,500. By the time those yearlings get to the market they have another $15,000 invested into them through training and stake payments, and they can only write off $8,500. It doesn't make sense to me.

With the VLTs you're absolutely right, without the video lottery terminals and simulcasts harness horse racing, and even thoroughbred racing in this country, is dead. We needed that. That is exactly what kept the industry alive. As you well know, down in Dover Downs in Delaware the purses are now $10,000 a race. Why?—Because of simulcasting and TV betting.

The television betting is a key, and, Steve, I didn't realize until now, but I guess I should elucidate and tell you that I'm working with the minister of justice right now, and we should get together on it, for the Ontario Jockey Club to have betting, television betting, which is a key down the road for our sport.

So maybe I have statements more than questions.

• 1605

You're right about Ladbroke. They take payments in Europe and the United States, where our money is going.

[Translation]

Mr. Giguère, one moment please. The Giguères are probably the family that is the most involved in this sport throughout Canada and perhaps even in North America. Mr. Giguère's brother is currently race secretary at Blue Bonnets, a Quebec racetrack. His father is in the Hall of Fame and is an extraordinary judge, and his uncle, Georges, is also in the Hall of Fame.

[English]

So if we had more families like the Giguère family involved in horse racing, we wouldn't find ourselves in the trouble we're in today.

The Chairman: Thank you very much.

Now that we have heard from our third witness, I will hand it over to Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay (Rimouski—Mitis, BQ): Thank you, Mr. Chairman. You took the words out of my mouth. I was even going to ask you to put the ribbon back where it was before he began to speak. But let's start over again. Enough joking.

Let's go to page 11 of the French document. I would like to get back to the question my colleague Mark had broached. It's on page 10 of the English document, regarding the wording that you want added to the legislation.

You say that this would have advantages for the industry and you cite four. One would be an advantage for Canada; it "would help the government in its fight to reduce the opportunity of crime, particularly illegal bookmaking."

How does access to betting through the Internet, by satellite or by digital television prevent or reduce crime in illegal bookmaking? I don't see the link between the two.

Mr. Yvon Giguère: Ms. Tremblay, right now, bookmakers outside of Canada who operate in Canada contribute no taxes whatsoever and do not participate in the pools created in each of the Canadian racetracks. Therefore, no taxes are raised, be they federal or provincial. Even the part that does benefit the association, which allows us to produce the show, is taken away from us by these people who engage in illegal activity.

Ms. Suzanne Tremblay: If someone is capable of placing a bet with an illegal bookie, it's because he knows that that bookie exists. If his existence is known and this is against the law, why isn't he arrested?

Mr. Yvon Giguère: You are referring to action that the government could take, but does not take.

Ms. Suzanne Tremblay: But the current legislation would allow it.

Mr. Yvon Giguère: The law would allow it, but it is very difficult to identify individuals who commit this crime. It's not up to the racing industry to do that for you.

Ms. Suzanne Tremblay: No, I understand.

Mr. Yvon Giguère: We're asking that an opportunity be offered and that Canadians be allowed to bet in a legal way, within Canada, on the racetrack pool. We would increase pools because of the new bettors.

Ms. Suzanne Tremblay: If I understand that reference to the 30 percent, you want us to amend the treaty between Canada and the United States so that Americans who bet in Canada are not taxed, or is it the reverse?

Mr. Yvon Giguère: It's the reverse. Right now, an American citizen who bets on races in Canada is not taxed.

Ms. Suzanne Tremblay: You want him to be taxed.

Mr. Yvon Giguère: That's not what we want. We want to see a Canadian citizen who wants to bet on American races not have his gains subject to American taxes. When the bet is placed in Canada, it is immediately struck with a provincial tax, a federal tax and a fee for the association that accepts the bet. That's the reality we're denouncing here: we in Canada are taxed as soon as the bet is placed—

Ms. Suzanne Tremblay: But not on the gains.

Mr. Yvon Giguère: —and not on the gains, whereas in the United States, people are taxed on the gains.

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If the betting activity takes place in Canada, for the benefit of Canadians, we want this activity to be taxed in Canada and subject to the Canadian rules and regulations. We don't want the gains of Canadian betters taxed at source by the United States. Since the source of the bet is Canadian, the gains should not be taxed in the United States.

Ms. Suzanne Tremblay: Yes, but that's the approach of the Americans. All lotteries are taxed in the United States, every single one, whereas here, lottery winnings are not taxed. Those are two different approaches. I don't see how we can ask the Americans to amend their legislation.

Have you asked for a legal opinion with a view to going before the WTO to see whether the Americans are entitled to do that? We criticize the Americans for having passed the Helms-Burton Act. How can we ask them to change their legislation? I don't see how we could tell the Americans not to tax gains. That's their business.

Mr. Yvon Giguère: I just want to point out that there are three countries that are subject to that tax: Canada, Mexico and Australia. If a French better bets on American races, he doesn't have to pay those taxes. We're talking about a global market, but Canadian betters are confronted with— Let's take the example of a race that will take place this weekend, the Breeders' Cup. Frenchmen who bet on this race, in the American pool, will not have to pay taxes to the Internal Revenue Service, but Canadians who do the same thing have to pay taxes there. So in a world market, Canada, Mexico and Australia are in an unfavourable situation compared to other foreign countries.

Ms. Suzanne Tremblay: Since we have a treaty between Canada, Mexico and the United States, there might be a way to— Have you met with the minister responsible for NAFTA to ask whether something could be done that way?

Mr. Yvon Giguère: I think that our presence before this committee is a first step toward these kinds of representations.

Ms. Suzanne Tremblay: Thank you.

The Chairman: Thank you, Ms. Tremblay.

Mr. Yvon Giguère: Allow me to get back to the issue of sports. There's a lot of talk about money and the industry, but this is a sport for die-hard fans and as far as racing is concerned, Canadians excel throughout the world. In harness racing, especially, Canadians have a great reputation and are on top of the list with the United States. One could state the names of Luc Ouellette and Michel Lachance, who represent Canada in an extraordinary way in the United States.

[English]

The Chairman: Thank you, Mr. Giguère.

[Translation]

Mr. Coderre.

Mr. Denis Coderre (Bourassa, Lib.): I won't reply to what my colleague said about me earlier, Mr. Chairman. I thought he'd taken steroids. I will calm down. Perhaps we should have antidoping tests before we come in here and sit down, Mr. Clouthier. Maybe that would explain certain things. I'm sure that horses are not subjected to steroids.

What interests me is the situation of l'Hippodrome de Montréal. I won't repeat the whole issue of the contract and links with the City of Montreal and what this seems like or should be like. Rather, I will talk to you about the men and women in the racing world, because I have met with them on a few occasions. Mr. Giguère, we can talk about sport, but we also have to think of the animals. We must also think of the jockeys. I think we have to examine the situation.

I'm a neophyte and I'm not familiar with this whole phenomenon. One single time I bet $2, but I won. I'm not a gambler, but I know that this is an important industry that creates jobs and contributes significantly to Montreal's economy. Incidentally, it's too bad that when the Montreal Casino appeared, there were regrettable incidents that could have led one to believe that there were things happening at the Hippodrome de Montreal that were not quite kosher, when that was not the case. At one point, when an attempt was made to empty the enclosures and the police entered, we got the impression that this was staged rather than reality. I think that horse people are honest. I don't see problems where none exist. We often get the impression that the animals are injected and so forth. I think that veterinarians and people in the horse world respect their animals and do excellent work. Let me close that parenthesis.

• 1615

One gets the feeling that in Montreal, there are problems in the relationship between the horse people and the management, and that there's a lot of raiding, especially to send owners to Toronto and Vancouver. Apparently some were even prepared to pay all their expenses. They're paid for six months in advance and if it doesn't work in the end, no problem; they pay for the return to Montreal.

There's also a lot of talk about that notorious enclosure rental contract. We hear that there was an agreement that should have been respected and has not always been. I would like you to elucidate the situation of the Hippodrome the Montreal. If you want us to help you, there has to be transparency and there especially has to be an harmonious relationship between the people in the horse world and the situation of the hippodrome.

How are things going in Montreal in that regard? Is this settled? I must admit that when I visited these enclosures, it looked like Sarajevo. It was full of holes and there were areas that were not sanitary. I know that you will invest money in this eventually. First of all, have relations improved in this regard and secondly, will the facilities be adequate for people in the horse world?

Mr. Yvon Giguère: Mr. Coderre, in your preamble, you referred to unfortunate incidents that took place in December 1991, where the integrity of the games that took place in Montreal were called into question. After this police intervention, no charges were laid in court. Therefore, no charges led to any conviction. As far as that's concerned, time heals all wounds and public confidence has been restored.

You say that the people in—

Mr. Denis Coderre: Perhaps the casino strike helped restore the balance. There's also the fact that you have more video poker games. We agree on that.

Mr. Yvon Giguère: We do agree on that. Competition in the gambling industry is fierce. New sectors have been introduced. During the 1993 strike, the Montreal Casino opened. The Hippodrome de Montréal had enormous financial difficulties after the opening of the Montreal Casino, which is a very important competitor.

However, we must underscore the intervention of the provincial government which enabled the Hippodrome de Montréal to continue its operations and establish a plan for the future that will give Montrealers a horse-racing centre. We're talking about an investment of $25 million on the site. There will therefore be a radical change in the area that, as you put it, looks like Sarajevo. We want to create an immense racing centre for Montrealers and all Quebeckers where there may be green spaces and pedestrian trails. People will be able to visit the renovated facilities. This is a significant intervention by the Government of Quebec for the Hippodrome de Montréal. Of course, this does relate to the 4,000 jobs at the Hippodrome de Montréal and all the economic activity that it generates.

Mr. Denis Coderre: You talk like a politician. How are things going with the horse people?

Mr. Yvon Giguère: No doubt you're asking us to discuss the negotiations. There are negotiations going on between the horse people and the hippodrome management with a view to coming to some agreement concerning a contract. We're talking about significant gains for the horse people in terms of the purses, the injection of new revenue for the purses that are paid out to the owners. These revenues will come from various sources: simulcast activities, activities outside the hippodrome and other fields of activity and an improved purse fund for these horse people, which will create better conditions.

• 1620

We also want to make changes at the site. We want a world- class raceway in Montreal. We want Montreal to regain its status as an international raceway, a status it lost in the past few years. The creation of a new 7/8th of a mile race track will allow us to hold international events. We want to be a Canadian leader in presenting international events.

The Chairman: Excuse me.

[English]

Mr. Matthews, did you have a question? No? Then I will go to Mr. O'Brien, and that will be our last question, as we have tight time constraints today and we still have more witnesses.

Mr. Pat O'Brien (London—Fanshawe, Lib.): Thank you, Mr. Chairman.

I don't have a lot of experience in this industry other than a few years on the Western Fair Raceway board. In fact that Western Fair Raceway is in the riding of my colleague, Joe Fontana. But I know they certainly have their problems, as all the tracks do.

I have a couple of factual questions that I didn't see the answers to here. I guess it's 37 tracks in total that I see on your list here. If you just treat the racing by itself, how many of those tracks in Canada lose money?

Mr. Stephen Edwards: It's difficult to say. I have no financial statements from the tracks. A number of the tracks, for instance, are agricultural societies or cooperatives between the horse people and the tracks. I can tell you that a number of tracks have closed.

Mr. Pat O'Brien: Thank you.

As to the other question, then, factually, because it relates to one of your issues on the use of communications, do you know what percentage of the bet at the tracks annually in Canada is simulcast as opposed to live? Have you a percentage breakdown there?

Mr. Yvon Giguère: I can talk about the figure for Montreal as a racetrack: 65% of our business is simulcast, and 35% is revenue from our live product.

Mr. Pat O'Brien: Do you think that would be consistent across the country?

Mr. Stephen Edwards: It's consistent, probably a little less, in the area of 60-40. The reason for that is with some of our climate a number of tracks don't race through the winter but they continue to offer simulcasting. But I should point out that the simulcasting revenue stays with the track.

Mr. Pat O'Brien: Right, yes.

Mr. Stephen Edwards: Only a small percentage is paid to the track that originates the race. All of the remaining money is treated as though the race were held on that site.

Mr. Pat O'Brien: Thank you.

Lastly, is there any provincial involvement in any of the actions you're seeking, or is it strictly— I was under the impression that there's quite a bit of provincial involvement in the horse racing industry in Canada. Are all of these areas in which you're looking for help totally federal jurisdiction? That's my question.

Mr. Stephen Edwards: Thank you for the question, Mr. O'Brien.

Yes, the issues we have brought here today are issues of a federal nature. We have tackled a number of issues with the provinces where, in general, they have seen it fit to reduce the amount of tax they have taken out of racing, and so on, basically right across the country. There are a few exceptions.

The issues we have brought are all federal. Racing and wagering in Canada is regulated by federal statute, and as you know, certainly the Income Tax Act is federal. The other two issues are federal statutes.

Mr. Pat O'Brien: So it's totally federal.

Okay then, thank you very much for that information. I appreciate it.

The Chairman: Mr. Edwards and Mr. Giguère, we appreciate you coming before us today. You've given us some good suggestions, good ideas. I think a number of us didn't realize the number of people who are employed in your industry. It's a huge industry in terms of job creation. We will deliberate over the next few weeks and consider your recommendations, and we'll go from there. So thank you very much for coming today.

Mr. Stephen Edwards: Mr. Chairman, thank you for being here. And members, thank you for the questions, which were very helpful.

The Chairman: Colleagues, I think we should move right on to our next witnesses, because I know we're working against the clock today and we're running a little bit behind.

• 1625

Perhaps we could invite our friends from the Canadian Hockey League to come forward. Mr. David Branch, come on up here and make yourself at home, sir. You're here with members of Parliament who have major junior franchises in their ridings, so I'm sure they're going to be very interested in what you have to say.

Colleagues, I'll give a short preamble before we hand it over to our witnesses. As you know, the Canadian Hockey League is almost coast to coast. We have with us today Mr. David Branch, who is the president of the Canadian Hockey League. He is also the commissioner of the Ontario Hockey League.

We also have Mr. Gilles Courteau, who represents the Quebec Major Junior Hockey League, which also has teams in Atlantic Canada; and Mr. Dev Dley, who is representing all of the teams in western Canada and four teams in the United States.

We're sorry to rush you like this, gentlemen, but we're working against the clock. We thank you for coming before us. You've probably read about us over the last few months; this is the twelfth month that we've been working at this. We're studying the linkages between sport and the economy.

Of course our national winter sport, hockey, is generating a lot of interest, not only among members, but also among the media. Even though the emphasis in our hearings has been on amateur sport in this country, the couple of times that we've had witnesses related to professional sport have seemed to attract more media attention. Nonetheless, all of us in this room feel the sport and the league you all represent are pretty important. We're therefore appreciative of the fact that you've taken the time to come before us as this committee winds up. This committee has to report to Parliament by the end of November if we're going to be considered for this year's budget activity.

Mr. Branch, we hand it over to you.

Mr. David Branch (President, Canadian Hockey League; Commissioner, Ontario Hockey League): Thank you very much, Mr. Chairman and members of the committee.

With his knowledge about my fellow associates, Dennis has taken away some of my introduction here. However, allow me to carry on and extend to you, first of all, the issue of the Canadian Hockey League.

We are the largest hockey league in this country. In fact we are the largest league in the world, with 53 teams, of which 47 stretch from Cape Breton in the east to Kamloops in the west. Having said that, we have three distinct leagues that administer to the day-to-day operations, needs, and requirements of the 53 member teams.

Mr. Dley, as Chairman Mills pointed out, is the commissioner of the Western Hockey League. His office is located in Alberta, and it administers to the member teams in the four western provinces. Gilles Courteau is the president of the Quebec Major Junior Hockey League, and he administers to those teams in the province of Quebec and in the Maritimes, with his office situated in the province of Quebec. As commissioner of the Ontario Hockey League, I administer out of the province of Ontario to the 18 teams that we have in the province. And we also have a national office for the Canadian Hockey League, which we will speak about a little bit later in our presentation. The CHL office is located in Ontario as well.

To provide a quick overview of the Canadian Hockey League and what it means not only to the great sport of hockey but to this great country of ours as well, we would like to share with you a very brief video that we have made specifically for this presentation.

• 1630

[Editor's Note: Video presentation]

• 1635

The Chairman: That's pretty impressive, Mr. Branch.

Mr. David Branch: We have, of course, distributed a copy of our brief to each of the members of the committee. We certainly do appreciate the opportunity to simply highlight, if we may, a couple of the key areas of the brief. As we understand the process, there will be a Q and A session following that, and we would be more than willing to attempt to answer any and all questions.

To just start off, we'll go through the brief and highlight a couple of areas. As was mentioned in the video, we will be celebrating our hundredth anniversary next season, which in itself is a true landmark. Our teams compete for the Memorial Cup, which has been up for competition since 1919. The first two teams to compete for the Memorial Cup were the University of Toronto Schools and the Regina Pats. It's interesting to note that the Pats still operate in Regina, of course, and are a very valued member our league.

We have approximately 1,300 young men competing annually in our programs across the country. Directly involved as employees with teams and league offices, we have some 1,400 full-time and part-time staff.

What's interesting and I think important to note is that many of us in this room are old enough to remember or recall the old sponsorship days when the National Hockey League had total ownership of junior teams in this country. In 1967, of course, that was set aside in favour of the universal entry draft, so the sponsorship of junior teams was no longer permitted.

Since that time, junior teams have by and large been operated and funded through private individuals or community-based relationships, etc. There are a couple of instances in which NHL teams still continue to own and operate junior teams, but we're really only at about two there. That really has gone by the wayside, and it's not a factor in how we do our business. That allows us, of course, to legislate and regulate our area of the hockey industry as we see fit.

On the video, you also saw the attendance numbers, which are quite interesting. When you look at the 1990s, we in junior hockey consider it a renaissance in junior hockey. There has been a tremendous explosion that has not only added additional teams across the country, but has seen increased interest and awareness, live spectator support, and ability to market and promote ourselves to a much greater and better extent. We have a new national TV contract that we were able to secure through the new cable channel, CTV Sportsnet, which will see some 65 nationally televised games this year, including the entire Memorial Cup tournament.

The CHL is an interesting league in terms of its scope when you consider that we touch on eight provinces. We take up any number of different market sizes, from major centres like Toronto and Calgary, to provincial capitals and large centres like Halifax, Quebec, Ottawa and Regina. Intertwined with that, you have Cape Breton, Victoriaville, Owen Sound, Belleville and others. And when you look at the northern elements in various provinces, we're proud to have Rouyn-Noranda, Sault Ste. Marie, Prince Albert and Prince George, to name a few. So we're truly representative of every size, area and region of this great country.

Virtually every Canadian province has someone who has played or is playing in our league. In just a quick summary here, I think it's interesting to note just where some of the players come from. You have Jonathan Cheechoo, from Moose Factory. Yellowknife's Peter Bergman is now playing in Calgary. The list goes on, and it's quite a diverse representation of our country both geographically and in terms of its makeup.

We suggest to you that the Canadian Hockey League clearly promotes and supports national unity. In fact, of all the players in the Canadian Hockey League, 90% are Canadian.

• 1640

The CHL is about young men experiencing people and places across the country. It is about being in a dressing room in Prince Albert with virtually every teammate representing all other western provinces and areas. It's about four teams representing all regions of our country coming together in May to compete for the Memorial Cup. It's about the top prospects' game, in which the top forty players from across the country come together to play. We intermingle them, so you might have a left-winger from Rimouski, a centreman who plays for Regina, and a right-winger who happens to be from Bathurst, New Brunswick.

It's a real interesting mix, a real opportunity for the country and the regions to come together in an environment known as hockey. These friendships and experiences will be remembered and cherished for the rest of their lives, and we suggest it provides the foundation for their character and their understanding of Canada's different cultural regions.

In terms of some of our future goals in this particular area, as touched on, we currently have a prospects' game that allows the three leagues to come together with forty players from the various areas of our country. We also have our national junior team program. The Canadian Hockey League supplies 95% of the players to that program. There's a summer camp, and there's an opportunity for the twenty successful candidates to represent our country during the Christmas period for three to four weeks of the year. This is a very important program for all of us, and we have taken great pride in the five consecutive world championships that we had in the last six years.

The Memorial Cup allows us to come together in May. As mentioned before, it consists of four club teams. What we would like to do is expand upon the number of times we have the ability to interact, interface, play against one another in terms of points to count. This would help to create that interest and, once again, bring our country together. We'd like to see regular season games where suddenly Drummondville could be playing in Kamloops on a weekend. We think there's tremendous opportunity to bring our country together. Great awareness would be created through the national TV exposure and the like.

We have plans for a bilingual kids' fan club, in which kids get involved in our game, through our game, in the power of sport, in the power of hockey. Through your proceedings, I'm sure the power of this whole area is something that has really made you feel something special as you've gone through your hearings. We would like to utilize this to get kids involved, to bring them to special events like the Memorial Cup, etc., to talk about the great game we have and what it means to them and to this country.

As well, we wish to encourage through this committee that the Prime Minister recognize our national champions. That may sound a little American, but we think there's merit to having the Memorial Cup champions brought annually to Parliament Hill to be recognized as true Canadian heroes.

[Translation]

Mr. Gilles Courteau (Vice-President, Canadian Hockey League): As you know, the Canadian Hockey League has, over the years, become the official supplier to the National Hockey League. Since 1996, that's the slogan that we use in the Canadian League: we define ourselves as the official supplier of clubs in the National Hockey League.

That slogan resulted in a long period of reflection. We contribute not only in terms of players, managers, trainers, coaches and club support staff for the National Hockey League but also, for several years now, we've been able to develop and provide referees and linesmen who work for the National Hockey League.

Over 65% of the players now in the National Hockey League come from the Canadian League. Nearly 70% of the managers and head coaches began as players or managers in a club that is a member of the Canadian Hockey League.

In 1998, during the last NHL draft in Buffalo, 21 of the 27 first-round selections were from the Canadian Hockey League, including Vincent Lecavalier, the top draft choice. Of the 259 players drafted, 138 were from the Canadian Hockey League. From the very start of the NHL entry draft, 70.8% of the players drafted in the first two rounds were from the Canadian Hockey League. And 53.9% of the players selected in all the NHL draft rounds since 1969 have been from the Canadian Hockey League.

• 1645

At the international level, the Canadian Hockey League has achieved a great deal by working closely with the Canadian Hockey Association. Since 1978, we have put together the National Junior Team which competes in the World Junior Hockey Championships.

Since the inauguration of these championships, Canada has won 10 gold medals, more than any other country, even in the 1990s. Of the 212 players who represented the country on those championship teams, 191 came from Canadian Hockey League clubs. Seven of the ten head coaches of gold-winning national junior teams were Canadian Hockey League coaches. The other three coaches who were not directly associated with the CHL as head coaches gained their experience as players or became coaches in the CHL.

The members of the Executive Committee, made up of Dave Branch, Dev Dley and myself, sit on the Policy Committee of the Canadian Hockey Association. We make sure that the National Junior Team works well, establish guidelines and see to everything related to a group of 20 hockey players and their management and support team, so as to maintain our level of excellence and make sure we take our place on the highest step of the podium, that of the gold winners.

Fifteen of our CHL coaches have served as coaches at different levels of the National Junior Team. The support staff has also been a key element.

It is very important to note the sacrifice that the owners of Canadian junior clubs must make when asked to lend players for the World Junior Hockey Championships. These players, who are the star players of their clubs, are away from their club for one month. They may be away even longer because, when these players return from the World Junior Championships, their head coach and their junior club usually give them some time off.

For example, if Alex Tanguay of the Halifax Mooseheads were to be on the National Junior Team, he would be absent as a regular player from the Halifax Mooseheads Club for eight matches. If Brad Stewart of the Regina Pats were on the National Junior Team, he could miss up to nine of the matches scheduled for the Regina Pats.

I asked the New York Rangers if they would agree to giving up their star player Wayne Gretzky, for eight games so that he could defend Team Canada's colours in professional hockey.

All of this brings us to a third consideration. The Canadian Hockey League, as you saw a few minutes ago on the video and as indicated in the report that we handed out to you, is the league with the highest attendance figures of all sport leagues in Canada for 1997-98.

For the 13th straight year, CHL attendance has increased. What are the ingredients of this success? With 47 Canadian-based clubs, the CHL has more teams than any other professional or amateur league in the country. We are really what can be called a national league at the junior level.

In addition, the tickets are very affordable for families. For under $50, a family of four can attend a junior game and have a lot of fun.

There's also a great deal of interest in the community. Ninety percent of the players are Canadian and generally are from the same city or town where the team plays. It's entertainment where you see a lot of enthusiasm, it's very intense, very emotional because the team plays to its fans night after night.

• 1650

There's something else that should be noted. The players and managers display great loyalty to everything associated with them directly or indirectly.

Fans of NHL teams attend an average of 4.9 games. However, the average for CHL fans is 11.9 games, which is a very interesting finding. This is why we are pleased to say today that the Canadian Hockey League, over the years, has achieved a great deal by bringing together, at the outset, the three leagues from the West, Ontario and Quebec. It has been able to form a large family, a Canadian unit, and to train 16 to 19-year-olds for a future in the Canadian Hockey League.

[English]

Mr. Dev Dley (Vice-President, Canadian Hockey League; Commissioner, Western Hockey League): My colleagues have touched upon the growth and importance of the CHL within their respective communities and the magnitude this league has across this country. I think we should also always keep in mind that this is amateur hockey. When we speak of an amateur organization, we sometimes lose sight of the impact it has within its respective communities. We have covered this in detail in our brief. The economic impact that the respective teams have, and what the respective leagues contribute to the overall economy of this country, are set out commencing at page 12.

In spite of the fact that these are all amateur clubs, their average annual expenditures to operate are approximately $1.3 million. The total direct economic spending that the teams have across this country exceeds $62 million. The vast majority of revenue that sustains these hockey clubs comes from people who attend the hockey games. Some 85% of the revenue that's generated is through ticket sales. Those ticket sales are not restricted just to the immediate community within which a team sets up its residency. For example, a club in Halifax would draw from the general Halifax region. Similarly, a very small community in the Western Hockey League, such as Swift Current, with a population less than 20,000, also draws from far-reaching areas around Swift Current. All of those people spend money not only to come into town to watch the hockey games, they spend their disposable income as well. The indirect contributions that are made within those economies exceeds $73 million. That's a large sum of money as an injection into each particular region, each particular city.

In addition to those expenditures, all of the clubs form a partnership within their community. They become very much a part of the fabric, involved in the community in all sorts of ways: donating to charities; being involved in various fundraising events around the community; and, very specifically, being involved with respect to the development of minor hockey. During the course of any season, the total contributions that CHL teams make back to minor hockey associations, to the provincial amateur hockey associations, and to the Canadian Hockey Association total almost $1 million. That's through direct contributions, through assessments, and through development assistance as well.

One area that's critical to many of these cities is the facility itself. In most cities the facility in the wintertime is the focal point of the community. Each of those facilities requires a major tenant. In most instances, the major tenant is in fact the CHL team. The disproportionate share paid—and willingly paid—by the CHL franchise assists other users of the facility. Take a city such as Kamloops, for example. It has a 5,500-seat arena. Without the major junior team being the major tenant and paying the bulk of the expenses associated with that facility, that city would not have the opportunity to attract other recreational events and other cultural events that enhance this particular community.

• 1655

If you look at the city of Halifax, for example, 40% of the facility's ticket sales for the entire year are generated by the major junior club on the 35 dates that the team plays in that arena. Obviously that's reflected in the rent it pays to help to allow that facility to continue as a viable entity.

Along with the economic impact and included as some of the costs is a very material element of the CHL, and that is the commitment to education. Every player in the CHL is entitled, as a participant in the game, to post-secondary scholarship assistance. When you look at the numbers of players who go through the league, 98% of the players—and that includes players who come from Europe—have either completed high school or are attending post-secondary instruction. Every team makes it a point to schedule practices during off-school hours. Almost three-quarters of the games are played on weekends. These participants are very much student athletes.

Last year's Memorial Cup champions are an example of one team in particular that has been successful. In Portland, every single player was either attending high school or taking classes at a community college or university. That obviously takes money, and we would certainly ask for consideration as the years go on for assistance in establishing a foundation for scholarship assistance for all players. Perhaps one avenue that could be explored is the Prime Minister's millennium fund, because this, the education side, is a very critical component of being a major junior player.

One of the other issues that faces us involves lifestyle issues. All teams have programs in place in which there is a very close working relationship with local authorities, police departments and local counsellors in order to deal with issues of drug and alcohol abuse. In turn, the players then go out into the community to speak with various groups, to speak with school children, giving those participants within the community that kind of education.

Two years ago we were confronted with the Graham James revelations as they pertained to the issues of abuse. Since that knowledge came to our attention, the CHL has commissioned and adopted the Players First report written by Gordon Kirke. The result of that report is that every player who plays in the CHL is provided with counselling, provided with education, provided with awareness, and also provided with a cost-free analysis of what abuse is and how to deal with it. The resources are made available to the players, and they're made available with the hope and expectation that those in hockey will never have to be faced with that kind of situation again.

The reality is that the teams make a point of being partners within their community. It's not a situation in which the teams come into a community, take the benefits, and leave. The owners, the businessmen and the fans all intertwine themselves with the hockey club. The reality is that within their franchise cities, the players are very prominent. In many cases, those players will be the closest contact that local people have with an NHL player or someone who may potentially go on to be a professional player.

We view the players and the fans as the most important participants in the game. With respect to those young men who provide the entertainment, they're not only players, they're also students and citizens, and they become the community leaders.

• 1700

Mr. David Branch: The Canadian Hockey League is proud to be entrenched in communities across this country as a vital part of their cultural activities in many respects. At the focal point, as Mr. Dley outlined in terms of the facilities, teams are certainly an important and integral part of the economy in those communities and surrounding areas.

We would also suggest that the Canadian Hockey League represents a huge part of the future of this country in terms of being responsible for developing so many of tomorrow's leaders, whether that development takes place in a hockey arena, in a boardroom, or in some other activity that puts back into the community and serves our country. As we have seen, through the power of sport, high-performance people—which these young men we are blessed to have in our leagues tend to be—go on to contribute and give things back.

We would appreciate any support and consideration so that together with you we can work toward supporting the interests of the educational foundation that we would ideally like to structure for the benefit of the players so that we can continue to support their educational needs. We hope you will explore the Prime Minister's millennium trust fund in this regard, as Mr. Dley pointed out. We also hope you can assist in supporting in any way the lifestyle programs that we provide and must continue to provide, and which only enhance drug and alcohol programs, other lifestyle issues, and abuse issues.

As well, we would appreciate any support that you may provide in the interlocking portion of our plans for a schedule. We're a little different from professional leagues in terms of interlocking schedules. Teams in professional leagues can go on a swing out west and spend three to six days on the road. We're dealing with student athletes. The reality is that if our goal is to be realized to send Rimouski to Medicine Hat, the team must leave on a Friday and come back on a Sunday in order to support, accommodate, and serve the needs of their educational interests. A short stay like that, in which they would play one or two games, just does not generate the necessary resources for us to move forward with that undertaking at this time.

We are very grateful for the opportunity to appear before you, and we thank you for your time.

The Chairman: Thank you, Mr. Branch.

Before I go to Madam Tremblay, who will be our first questioner, I was asked by the Liberal whip of the House to give you his regards. Mr. Bob Kilger is a graduate of the Canadian Hockey League, and he very much wanted to be here, but he could not make it because the House is active today.

[Translation]

Ms. Tremblay.

Ms. Suzanne Tremblay: There were certainly many subjects of discussion in the presentation you have just made. I thank you for this presentation and for the quality of the documents that you are providing to us. We will probably run out of time. Every one around the table probably would like to ask questions.

There's one thing that I am very concerned about, and that's violence in hockey. Since the beginning of this season, we have seen Eric Lindros in the NHL—I was glad to see it was the helmet he knocked off and not the head—get away with a hit that had someone carried out on a stretcher. It was in all the headlines. We read that, by the end of the season, 80 NHL players will have suffered a concussion.

A number of these players come from your league. In late August or early September, the newspapers were full of talk about the make up of certain junior teams. We read that a certain player didn't have much talent, but that he had been signed up for boxing lessons and that this kind of player was needed as an enforcer on the ice.

It's true that, in places like Rimouski, the arena is full and I'm not complaining. There are a lot in Gaspésie to, and on the North Shore, they're doing well.

• 1705

Things are going well almost everywhere, and there are still some young people who are developing their talents, who are playing hockey and who are perhaps heading for a quite interesting career, but we are also turning out Alexandre Daigles, young people who go up too fast to the NHL. We have seen the pressure put on the young Vincent Lecavalier. His every move was followed. After playing four games, he hadn't even made a pass. It was becoming a dreadful spectacle. People wondered whether he had enough talent to play in the NHL. One day, they said: "Look, he scored his first goal." He was very happy to have scored while his parents were watching. Everyone is watching it and it doesn't look easy.

Do you not think that the quality of hockey is not as good as it used to be? When the European teams arrived here we told ourselves that we would finally see players who knew how to skate gracefully. We thought that NHL players would learn how to play, but it's the Europeans who learned how to fight so that they could come and play in the leagues that paid money instead of staying in their own country.

There is something that worries me. Yesterday, I learned the results of a study. It showed that hockey ranked sixth in importance for men; for women, it was so far down the list that there wasn't even a number for it. That was in the test group. In the control group, hockey ranked 21st in importance for men and 19th for women.

The importance of hockey is on the decline. Attendance is dropping everywhere. Fox network has trouble keeping its ratings up. What are you, the bigwigs of hockey, going to do to save the sport? I am talking about the kind of hockey we watched when I was young, the kind of hockey that drew us to the sport. That kind of hockey no longer exists. There aren't any more players like Béliveau, Richard, Gordie Howe. Those people knew how to play hockey and how to pass the puck. There are a few left.

An Hon. Member: Cournoyer.

Ms. Suzanne Tremblay: He wasn't the scrappiest of the lot. Léo Labine was perhaps worse. I am talking about people who knew how to play hockey with elegance, how to pass the puck, and put themselves in the right place. There aren't any more like that. That is not what we see. We see people who shoot the puck any old place, who get rid of it as soon as they get it. They rush into the corners. Hockey is no longer an elegant game. It seems like people are playing hockey without using their heads. That's the impression I have. In football, players play intelligently. What are you going to do to save hockey? To start with, it has to be interesting, there has to be good hockey.

[English]

The Chairman: Your answer must be less than thirty seconds long.

Some hon. members: Oh, oh!

The Chairman: Just before you begin your answer, Mr. Branch, very rarely does the chair challenge Madame Tremblay, but I think I'm going to have to challenge her today. I have watched Vincent Lecavalier play hockey, and he'd be a pretty graceful hockey player from where I come from. I think everybody should also know that Monsieur Lecavalier comes from Madame Tremblay's riding, so you forgot to talk about him.

Go ahead.

Mr. David Branch: I think Madame Tremblay illustrates the passion so many of us have for our game. I think there are a number of statements she has made with which we would agree.

Recently we had a most unfortunate incident in Ontario. A young man clearly violated what I think we all would agree would be proper deportment on the ice, and he has been banished for the balance of his junior career. That's because we clearly accept the burden and understand that the value system must be such that in the Canadian Hockey League, which is the number one development league in the world, we must provide an atmosphere in which players may develop their skills to play the game as you described, without fear of injury and other needless acts. We do that, and we'll continue to do that to the best our ability.

• 1710

There has been a tremendous evolution in our game. Without question, hockey has become a universal game, and I think we should share our game with great pride. However, we must continue to work even more diligently to maintain our position as the number one hockey-playing nation in the world. Working along with Canadian Hockey—Bob Nicholson and his organization—we have a number of outstanding programs under way, in place, that we are all involved in for the benefit of skills development: strength and conditioning, nutrition, all the latest ways and means in which players should train, coaching programs, referee programs, athletic therapist programs. All of these things are out in the field. They've been generated and they're working. But yes, we can do better; and yes, we will do better.

On some of the situations you described, I went with great pride to Bathurst, New Brunswick—which happens to be my hometown—and watched the opening game of the Acadie-Bathurst Titan. It was an outstanding evening and a great hockey game. I commended Mr. Courteau on the quality, style, and level of play.

We have the benefit of going around and watching these young people play, and I think there comes a time when we ask ourselves if it's right or fair that players like Vincent Lecavalier or Alexandre Daigle or Chad Kilger should leave at the age of 18, when they haven't fully developed. We wonder if they will ever reach their potential. There is a lot of evidence to suggest that it's not good, but that's out of our hands, out of our control. We'd love to have these players come back to our program to continue to foster their own development and to help the development of others that they play with and against.

I think there is a much more enlightened approach to the game, and we will continue to take strides to serve what we feel are the best needs for our game.

[Translation]

Ms. Suzanne Tremblay: You've touched on a very important point. Who could set the stage so that young players are eligible for the draft at age 18 but remain in the junior leagues until they are 20? Why can't you reach that kind of agreement? Physically, a young man undergoes a lot of changes between the age of 18 and 20.

[English]

Mr. David Branch: Well, possibly through support from this committee and from the federal Government of Canada, we could go together to the National Hockey League and speak about that issue once again. In the past there have been challenges to the idea of a person of the age of 18 having the ability to work for a living. There was the Ken Linseman case back in the 1970s, and it was upheld. The National Hockey League had to change their entry draft rules so as to provide the opportunity for players of the age of 18 to go forward. But if you were to ask the NHL people themselves, Madame, they'd love to see a 20-year-old draft, because they would then have a better sense of who's going to be good, who's going to be ready, who's going to meet their needs.

Dev, is there anything else that you might want to add to that by way of your—

Mr. Dev Dley: No, I think you've covered it.

The Chairman: Mr. Mark.

Mr. Inky Mark: Thank you, Mr. Chair. I just have a short question following on the same topic of player development.

I've asked this of other delegations here regarding the sport of hockey, which is our national game, obviously. Regarding the whole area of development from the perspective of the Americans, they've taken a high school or college route versus the junior hockey we have in this country—and we have many tiers of hockey. Certainly where I come from, it's tier two hockey, but we're also very proud of the Brandon Wheat Kings. It's unfortunate that a province of the size of Manitoba doesn't have more than one Canadian Hockey League team.

What's your answer when people ask you if this is the right approach in the long term? I understand you're producing a lot of good hockey players at this time, but in the long term, say twenty years down the road, should we be switching somewhere, midstream?

Mr. David Branch: Do you mean the system in terms of where our players—

Mr. Inky Mark: In terms of the system of development.

Mr. David Branch: Not unlike any other industry or walk of life, you must continue to look at what is best, what you can do to work towards the future. Two summers ago I was asked to go down to speak to a gathering of the United States Amateur Hockey Association general assembly in Boston. What became apparent is that there is a very strong movement and there are very definite and specific results they are attempting to achieve. They are attempting to move their hockey development program out of the educational system and into club team programs known as that animal, junior hockey.

• 1715

In the last two years we have seen the involvement of two junior leagues in the United States, and now there's a third. They have clearly said that in order for them to compete at the level we're at in Canada, to compete internationally, to compete in terms of the number of players going on to the NHL, we've come to realize that the best way to develop these young men is through having them playing in a program that's very demanding.

We are on the ice virtually every day of the week, and we get top-level coaching and top competition in order to meet the needs of high standards. In fact the Americans have taken it a step forward and now have a program in place in Ann Arbor, Michigan. They bring the top forty players from across their country into an intensive training program period. In speaking to Jeff Jackson, who runs that program on behalf of U.S.A. Hockey, I asked him if he was worried that this may even take away development opportunities in those areas from which a player is taken away—say, the top player from Edina, Minnesota—and what about those players left back there. He said I was right, but that what they're trying to do is initially create a spark that will show Americans they can compete with us damn Canadians at a high level. Once they establish a better mindset, they will then push them all back to their club team programs.

So in consideration of that, in looking at what's happening around the world, we have virtually—and I guess I have to be careful what I say before a parliamentary committee—put a program in place that limits the number of Europeans who wish to come here to play. In our opinion, that's to serve and to protect the best interests of Canadians in order to develop their skills.

I think people from all over the world regard our system as being the best system to develop hockey players. To pick up on what Madame Tremblay said, that's not to say we can't do better work to improve some individual skills, and we're seeing a huge change back to that. Hockey goes through cycles. I think the National Hockey League is starting to set a better example in this area, and all of us can work together for the betterment of the game.

The Chairman: Thank you, Mr. Mark.

[Translation]

Mr. Coderre.

Mr. Denis Coderre: First of all, I would like to welcome Mr. Courteau. I know that he has been convalescing. You are looking very well and we are happy to have you with us.

I am going to nuance what Ms. Tremblay said. I remember some games between the Trois-Rivières Draveurs and the Shawinigan Cataractes, where there were some all-out brawls. They gave each other dirty looks before the game started and they battled it out.

During the 1980s, there were a huge number of brawls and the numbers have dropped off slightly. We have teams like the Val-d'Or Foreurs with Lionel Brochu, who has done extraordinary work, and the quality of Huskies' game. We are sad however to have lost the Granby Prédateurs because they did win the Memorial Cup. And it's more or less from that perspective that I'd like to talk to you.

I would like to thank you for the figures you have given us, because that is exactly what the committee requires under its mandate. We see the economic impact a franchise has on a region and on a province.

Mr. Courteau, I want to talk to you about the future. A new team is being set up, the Montreal Rockets, and it will be managed by Serge Savard's son. Has the contract been signed? And that leads me to a question about the cost of franchises. We've seen that with respect to operations, the budget is $1.3 million, but if I remember correctly, a franchise costs $850,000. Is that accurate? How are things going on that side? I will get back to that.

I would also like you to talk a little bit about the impact of losing a franchise. We want to show the importance of sport as an industry in a region. What is the impact of losing a franchise? We lost the Trois-Rivières Draveurs and the Granby Prédateurs. The Beauport Harfangs and the Quebec City Ramparts are still around. There were several teams. I remember the good old times in Sorel. There was Saint-Jean. We lost a lot of teams. Have you been able to measure the impact of losing a franchise?

Ms. Suzanne Tremblay: —

[Editor's Note: Inaudible]—

Mr. Denis Coderre: That bothers her, because she thinks that Gordie Howe was a good player. Forget about that.

[English]

An hon. member: He still is.

Mr. Denis Coderre: He was a goon. Everybody knows that, but it's okay.

Voices: Oh, oh!

Mr. Denis Coderre: When Bob Gainey was playing for the Canadiens, he said he was tremendous player, but ask the other teams.

• 1720

[Translation]

Mr. Gilles Courteau: First of all, with respect to the Montreal franchise, we are currently negotiating with a group of businessmen interested in obtaining a franchise in the Montreal metropolitan region. The team would play in the Maurice-Richard arena. We agreed, at the Quebec Major Junior League, that by mid-December a final decision would be made as to whether or not everything is in order so that they can obtain a Quebec Major Junior League franchise.

Secondly, at the Major Junior League level, the cost of an expansion franchise is $850,000. My partners David Branch and Dev Dley will be able to give you more details on the cost of an expansion franchise for their league. It's specific to each league.

What is the impact of losing a Major Junior League franchise or a Canadian League franchise in a city? There is no doubt that we do not want to lose franchises when a city is granted a franchise. However, there are circumstances that explain and justify decisions that are made by club owners when the time comes to decide whether they continue their operations in the same city, transfer their franchise or sell it.

Over the years, we have experienced those situations at the Quebec Major Junior League level and at the Canadian Hockey League level, but at the end of the day, these are positive elements.

You mentioned earlier that with respect to the Quebec Major Junior League, for example, we have expanded to the regions and have been very successful. Ten or fifteen years ago, that was out of the question. The same thing happened in the OHL and the WHL. They expanded for the good of hockey and the Canadian League, to maintain the level of development of hockey players, coaches and managers. Moreover, we went into cities where major junior Canadian hockey was the number one event. You can see how successful we have been.

When we talked about bringing Chicoutimi into the league, in the mid 1970s, a club owner in the metropolitan region wondered if all the trees in the park would have to be cut down to put in a road to get to Chicoutimi. I remember when there was talk about bringing Rimouski—

Mr. Denis Coderre: Was that—

[Editor's Note: Inaudible]— who said that?

Mr. Gilles Courteau: No, it wasn't him. He was not there.

When we talked about Rimouski, people wondered if they would have to take a boat to get there. All that to say that the new vision we had at the Canadian League has been very beneficial over the years, with the new franchises that have been put in place.

Mr. Denis Coderre: I'd like to go back to what Ms. Tremblay said about developing players. Basically, it is true that 18 years of age is too young. The problem is not the National League or you. It's one Bob Goodenow. We will be meeting with him next Tuesday. We have some juicy questions to ask him.

Put yourself in our shoes. What question would you like to ask him? Let yourself loose, like we say back home. Now is the time.

[English]

I don't know the translation for this expression.

Voices: Oh, oh!

Mr. David Branch: I suppose the number one question would be whether or not the NHL Players' Association would support an initiative to see the draft age raised. I think that's the number one question that would be on the lips of every person involved in hockey across this country, and not only at our level. For us to say it, it sounds like we just want Vincent back. Yes, they do want him back in Rimouski because of what he brings. As you say, it's beautiful to watch him play, but he also helps development as a whole.

As we say, we'd love to go to Winnipeg and win back our pride at the World Junior Hockey Championships, and have Vincent, Manny Malhotra, and others in the lineup. So I think that's the number one question.

• 1725

Mr. Goodenow has a real strong understanding of the hockey industry, because he moved to Canada at a time when his son was about 12 years old and therefore came up through the program. Of course Bob also played U.S. college hockey, so he has an appreciation of both sides of the fence in terms of development. So I think it would be very interesting to see how he would respond to that particular question.

Dev, is there something you would ask as question two?

Mr. Dev Dley: No, I think you might be stuck with question one most of the day.

The Chairman: I think we should now move on to Mr. O'Brien. The phone's going to be ringing pretty soon, and we're going to be getting a cancellation from Mr. Goodenow.

Some hon. members: Oh, oh!

Mr. Pat O'Brien: You're not going to be allowed in any arena in the NHL.

A witness: The owners would love it.

Mr. Pat O'Brien: I think it would be great. Unfortunately, I think we all know the courts give 18-year-olds the right to seek employment in the NHL, and there will always be 18-year-olds who will want to seek that employment. As much as I like the idea, I think it's a non-starter, but I'd love to be proven wrong.

I know a little bit about the education program, having had Brendan Shanahan right at a school I taught at. He was a very bright young man, as well as an awesome hockey player—of Irish extraction, I might note.

I know there are individual awards, but is there a team academic award? There's a reason I ask that. for fans of college football, if you took a look at the athletes who actually graduate from those programs, Notre Dame is far and away ahead of all other colleges, but that's not well known unless you're interested in the academic future of these student athletes. So I wonder if there are OHL, WHL, and Quebec league academic team awards for the students who actually finish their program, and what the criteria you would use would be.

Mr. David Branch: I'll allow each of us to respond to that on behalf of our respective leagues.

In the case of the Ontario Hockey League, first of all there is educational assistance, post-OHL and post-secondary school, if they do not proceed to play professionally. We do recognize student athletes at the team level, and we then have an award for what we call the academic player of the year. Each team puts forward its own academic player of the year, one of whom will then be recognized as the Ontario Hockey League academic player of the year. He will receive the Bobby Smith trophy. While Bobby Smith was playing with the Ottawa 67's, he was an Ontario Scholar, and he actually proceeded to medical school while playing for the 67's. So that's one way in which we attempt to recognize, foster, support, and promote that aspect.

Since the days of Brendan, too, we've also started a program involving what we call our educational consultants. Each team has an educational consultant who works with the players and the teams. In our league, they now meet at least twice a year to discuss issues of common interest, and to support the educational component for the student athlete.

Mr. Dley touched on the issue of the Memorial Cup champions from Portland, where all the players were going to school. The Guelph Storm, which was also at the tournament in Spokane last spring, brought their educational consultant with the team at the team's expense, and she conducted study halls. They brought six laptop computers and players wrote exams during Memorial Cup week.

Junior hockey used to conjure up two visions for people of my age: one, that players couldn't go to school; and two, violence. I believe there have been huge strides made in those areas.

I'm taking too long to respond. I'm sorry. I'll hand it over to Mr. Dley and Mr. Courteau.

Mr. Pat O'Brien: I appreciate that, but I knew some of that. It's very interesting to hear, but my question was pretty simple: is there a Memorial Cup type of academic award? I don't mean for the team that wins the Memorial Cup—which is great and is the purpose of junior hockey—but for the team that, as a team, has the best performance by its student athletes. I'm just curious.

The Chairman: You mean a collective award for the team as a whole.

Mr. Pat O'Brien: That's right, exactly. That's what I meant to say. Maybe I didn't express it well.

Mr. David Branch: Oh, I'm sorry. I didn't quite understand that.

• 1730

Mr. Dev Dley: We don't have a collective award, but I think that's a great initiative to put forward. We recognize a scholastic player on a league level and then nationally, and then there's further assistance. Once the players go on to university, we give monthly scholarships over and above what their normal scholarship would be for a deserving student athlete who is attending a particular university.

Mr. Pat O'Brien: I think what you're doing is great. I can say that as a teacher who has coached some hockey at the high school level. I think those are wonderful initiatives. I just throw that other one out as an idea.

Mr. Chairman, with my last question, I want to go right to what I think is the heart of a lot of the work of this committee vis-à-vis hockey, although we're not just talking hockey.

As Denis said, the fact is that the issue that has gotten the greatest attention has been whether the Government of Canada should give some financial assistance to the pro franchises—not just hockey, but pro sports franchises—in this country, considering the number of unfair problems they face as compared to their American competitors. I polled my constituents informally in what we call a householder, and they are overwhelmingly opposed.

Because I've been asked to by the local media, I'm going to put the case to the public in writing soon. I think there is a very good argument to offer support to pro franchises in Canada, but I need all the help I can get to sell it, because I don't think the public is onside, despite our passion for hockey. This leads me to my question.

Monsieur Courteau mentioned the slogan “official supplier to the NHL” as a very neat marketing strategy. What's the negative impact of a loss of an NHL franchise on the CHL? What did it do to junior hockey in the west, in Manitoba specifically, when we lost the Jets out there?

Mr. David Branch: First of all, we're not entirely privy to everything the National Hockey League has brought forward to you and requested consideration on. Not knowing the specifics—and hopefully you recognize that—we are certainly of the opinion that losing NHL franchises has an adverse effect on our country in terms of hockey: on its presence, on the interest in it, on the support for it, and everything that goes with it. While we're not here to show for the National Hockey League, and while we don't know just what they've necessarily asked for in terms of tax concessions or to what extent they've asked for them—obviously we've read the newspapers—yes, we do think there is merit to considering support to maintain their presence and profile in this country.

The Chairman: Mr. Provenzano.

Mr. Carmen Provenzano: Thank you, Mr. Chairman.

The Chairman: From Sault Ste. Marie.

Mr. Carmen Provenzano: From Sault Ste. Marie, home of the Sault Ste. Marie Greyhounds.

The Chairman: Did you play hockey in the Sault?

Mr. Carmen Provenzano: I'm proud of our team and its wonderful history.

As we were talking, I just had a chance to go through the various issues in the content of the brief. I don't say this in a critical way, but it seems to me there's an important point that isn't being made—and I say that respectfully. There seems to be a tendency on the part of the CHL, maybe in its brief as well, to measure its success in terms of the number of players that come out of the CHL and graduate, so to speak, to the NHL, whereas there's an entire industry to be considered.

Hockey is an industry. I'm sure there are a lot more players who earn a livelihood in the minor pros. If we were looking at any trade, whatever that trade might be, there's an apprenticeship time. I see the Canadian Hockey League as providing the opportunity to apprentice, in a sense, for what has become an industry and a vocation, that being that of a hockey player.

• 1735

Whether you make it to the NHL or the minor pros, hockey affords the opportunity for a career and a livelihood that is very attractive. Of course we recognize that such a career has a limitation. Especially with respect to the minor pros, though, I would think the average longevity of a career is greater than the average longevity of a career in the NHL.

It seems to me that in providing this opportunity to apprentice—and that's what the CHL does—there is some benefit. There's a general benefit there that has to be understood and somehow characterized as providing an opportunity for people to earn a gainful livelihood, because hockey is an industry. It's a sport, but it's a business. In the larger sense, it's a big business. It's a big industry that employs a lot of people.

If you look at yourselves as being involved in the apprenticeship business and you present that aspect—because I personally think it has great value—then I think you can ask for consideration for the provision of that function, which nobody seems to come and ask for. Nobody seems to make that point, and I think it's a big one.

I read that section on education. Really, your entire brief centres around the fact that there are dollars provided for education, whether they're provided in post-secondary education or as tutorial services to secondary school students. But at the moment, gentlemen, I think you'd have to admit that not every player who plays in the OHL is offered post-secondary assistance to go to university if he in fact doesn't choose to continue in hockey for whatever reason. Maybe there's something in that area where there should be some consideration given, especially to the Canadian Hockey League.

We have a whole set of considerations to think about when we get to the professional level, but shouldn't the Canadian Hockey League be asking for that consideration? Maybe you can somehow link that up with the kinds of dollars that have to go out if you want to provide viable educational packages to people who “graduate” from your league but do not graduate into a professional role.

Mr. David Branch: If I could respond, I'll try to be brief, Mr. Chairman.

I think the area Mr. Provenzano touches on is a very important one. We didn't know the extent of what our brief should necessarily encompass—how much and so forth. He's right on the issue of the number of our graduates playing minor professional hockey, playing in Europe. We did list the current players playing in the CIAU, and we think that's a very important element to our overall program as well.

All leagues now do provide financial assistance to every player who plays. When a player comes into the program, it's guaranteed that he gets a bare minimum. The Western Hockey League has a program that has certain elements that are unique to it, as does the Quebec league as opposed to the Ontario league, and so forth, but we all do provide support.

In the case of the Ontario Hockey League, the contingent liability to an OHL member team for post-OHL educational support averages around $125,000. That's a huge commitment. Not everybody will in fact draw upon it, because you have the Joe Thorntons of the world who will go on to sign a professional contract. But clearly, one of the things we have asked is whether there is some resource that we could work on through you to allow us to be provided some assistance for education and the continuing scholarship opportunities that keep kids playing in Canada, as well as at the CIAU level.

Mr. Carmen Provenzano: Why not put a value on the training you give these people for jobs in hockey? To me, that's something very important.

The Chairman: Just before we move on to our next questioner, Mr. Provenzano, I'm trying to understand something here. Are you suggesting that if it was designed as an apprenticeship program, then it might have consideration under the Department of Human Resources Development as a sort of apprenticeship, training-type function?

• 1740

Mr. Carmen Provenzano: Mr. Mills, it's something like that, but I guess what I'm saying is that I'm amazed a group providing this kind of training doesn't come here saying, “Look, this is what we're doing. We're providing valuable training for people to take up an occupation in a big industry. We get no consideration for it. What can you do for us?”

The Chairman: When we in fact help nearly every other sector of the economy through Human Resources Development Canada.

Mr. Carmen Provenzano: That's my point.

The Chairman: I think it's an excellent point. Thank you very much.

Mr. John Cannis.

Mr. John Cannis (Scarborough Centre, Lib.): Thank you, Mr. Chairman, and let me welcome the presenters and congratulate them on a very nice presentation.

I want to start off by saying I do agree with you that we have failed, and I think we've begun a program where we do recognize our athletes. I think your suggestion about bringing the champions in and giving them the recognition they deserve should be something we should commence immediately. I'm sure you're aware that we've already done this with other athletes.

My colleague Mr. Clouthier made a statement earlier. I'd like to make a brief statement now. I want to refer to page 17. I was very moved by some of the things on that page of your submission, under “Community Relationships”. Just as some examples, you note that the Swift Current Broncos helped out the community in those difficult times; that the Kamloops Blazers provided stuffed teddy bears to needy children during Christmas; that the Halifax Mooseheads raised over $120,000 for hospitals, etc. I believe this stuff has to be highlighted even more, because I'm inclined to believe this is refreshing news to hear—and I use myself just now as an example. It's news I intend to talk about out there. Inasmuch as they've addressed some difficult issues, your league has to put this at the forefront.

In addressing some of the issues you have raised, I want to also commend you on your initiatives on addressing the abuses you were unfortunately faced with, as you discussed. The program that you now have in place was a quick response.

My question to you is with respect to non-Canadian players who come into the league. How are those players and their expenses addressed? We have Canadian boys going from one city to another, etc., and there are provisions for that. But if an individual from Kazakhstan or wherever is brought into the league, knowing how the league has changed and is now operating under different rules, how are his expenses addressed?

With respect to the scholarship fund that you referred to, I don't see why the young men would not have the opportunity to access these funds if they indeed meet the prerequisites for entering into post-secondary programs. It seems to me you've provided a forum in which they indeed can secure the credits or the programs needed to apply for post-secondary education. So, Mr. Chairman, I don't see why they would not have access to the millennium fund money that the Prime Minister has allocated.

In closing, let me tell you of one experience that Madame Tremblay and I had. We've officially designated hockey as our winter sport, and when we're there in the arena celebrating at the Olympics, we all come together, as Madame Tremblay will remember. We're there cheering Canada on, etc., and then we walk out of that arena and it stops. Beyond bringing the champions to Parliament Hill for recognition and congratulations, do you have any other suggestions about what we could do to celebrate these successes and these young people, whether they be male or female? And you know women's hockey today is really very exciting and on the move up.

I think this cooperation that now exists, as you have described, can only enhance the opportunities for young men and women to promote hockey and their future careers. What can we do to promote this good news you've presented us with here?

Mr. David Branch: I wish we had a nice easy answer to that. I don't know what it's like in the political arena, but in the sport industry it's sometimes tough to get those newspaper people to write nice things and good news. I'm sure it's not like that in—

The Chairman: No, Mr. Branch, it's the reverse in politics. We're really tough on one another in here, but we're okay when we go out there.

Voices: Oh, oh!

Mr. David Branch: Anyway, we appreciate your comments, and we can assure you that they are not isolated to these examples we've given you. As you say, I think it's important for us to continue to work toward recognizing some of the work that does go on in a very positive vein.

• 1745

Let me be so bold as to come back to you to say that one of our recommendations for consideration about interlocking regular season games is important to us, because what we have clearly seen is that our country is very regionalized in a number of its views and attitudes.

Our leagues are very regionalized. When we look at TV, we get very good ratings when we play our Memorial Cup games. When we play our prospects game, with the top forty players together, we get very good ratings. But if Rimouski is playing Halifax, people in the east love it, but from central Canada on over they could care less. As a way to try to keep the momentum going, as you say, to get the people excited and keep them excited, we think having interlocking regular season games on a regular basis would keep a lot of focus on the big picture and keep the interest high.

The Chairman: I don't want you to lose your train of thought, but has anyone ever approached a major air carrier on that specific point? It would seem the biggest cost there would be air travel. Obviously, moving from one part of the country to another could be done if you had the support of Air Canada or Canadian Airlines through reduced—

Mr. John Cannis: Discount fares.

The Chairman: Has anybody in your—

[Translation]

Ms. Suzanne Tremblay: They could redo it for $199.

[English]

An hon. member: Do you think they could do it for $199.

The Chairman: No, it has to be less.

Have you ever looked at that?

Mr. Dev Dley: If I could answer that, yes, it's certainly a consideration we've had, but our interest is in trying to expose our players, our fans, to various components and various regions of the country. Those are not necessarily the same interests a sponsor may have.

The Chairman: Interesting. That's unless it was a sponsor who believed in pulling the country together and believed in major junior hockey as a vehicle that could really do it.

Mr. John Cannis: Just on my other question, maybe you can give me a quick answer. For the players who come from outside the country, how are their expenses looked after?

Mr. Dev Dley: We bring the players over, and they are then treated exactly the same as any other player. It's encouraged that those players go to school and that they take English as a second language. It's critical for us to make sure they become adapted to the Canadian and North American way of life, because those players ultimately come into our country and into the CHL so that they can also take the next step forward and become professional hockey players. It's the best training for them in terms of getting integrated into the North American way of life.

Mr. John Cannis: This is my last question. On the $12 average ticket price that you have listed here, are you referring to Canadian dollars?

Mr. Dev Dley: Yes.

Mr. John Cannis: Can you give me the price of the average ticket in the U.S.?

Mr. Dev Dley: It wouldn't be significantly different.

Mr. John Cannis: Would it be $12 U.S.?

Mr. Dev Dley: It would be $10 to $12 U.S.

Mr. John Cannis: Thank you, Mr. Chair.

The Chairman: Madame Tremblay.

[Translation]

Ms. Suzanne Tremblay: Have you counted the number of players from your leagues who were drafted in the first round in Buffalo and who made the National League club in the fall? I know that Vincent Lecavalier made it to the club, along with the player who was drafted by the Calgary Flames, but did the others go to the National League? I'm only talking about the players drafted in the first round.

[English]

The Chairman: What's the number of players who stuck?

[Translation]

Mr. Gilles Courteau: There are eight or nine, but they are still junior players. They are 18 or 19 years old.

Ms. Suzanne Tremblay: What about some kind of regulation that would make an agreement possible? Could there be some way of ensuring that players from abroad—not those from the U.S., but those from Europe, Eastern Europe or Asia—are not drafted before the third pick? Is there any way to ensure that the two first picks are reserved for Canadians, regardless of whether they are trained here or in the U.S.?

Mr. Gilles Courteau: You mean picked for the National Hockey League?

Ms. Suzanne Tremblay: That's right. Is that sort of regulation feasible?

• 1750

Mr. Gilles Courteau: Ms. Tremblay, when you set up a collective recruitment centre like the one run by the National Hockey League, or the two other junior hockey leagues, your principle—your primary goal, is to rank players according to talent, regardless of where they come from.

Ms. Suzanne Tremblay: But there were two categories in the book submitted to Buffalo, Canadian League players and others.

Mr. Gilles Courteau: That's right.

Ms. Suzanne Tremblay: So you could easily decide who ends up in table 2, just on the basis of the third or the second draft. Canadian players would be recruited first.

Mr. Gilles Courteau: I don't think we would want to do that for a national league club, but it is a point we could raise during our next round of negotiations with the National League.

Ms. Suzanne Tremblay: Mr. Coderre asked about the $850,000. I would like two of your colleagues to answer, so that we have some idea how much a franchise costs in Ontario and in the West. Does that $850,000 amount go to the league? For example, what happened when the Laval Titan went to Bathurst, who paid whom, how is the money divided?

Mr. Gilles Courteau: When the Laval Titan was transferred to Bathurst, no money was paid as such—the franchise was transferred. The only money actually paid out was $30,000, so that a special committee could do some assessment, determine whether the arena was satisfactory and met established criteria and specifications, as well as get on with the other related activities.

If approval is given, expenses are then deducted from $30,000, and the rest is made over to the club or to the individuals who gave us the $30,000 to do the study in the first place.

Now, as for how the $850,000 are distributed, here is how the LJMQ works. Out of the $850,000, we keep $75,000, and put it into an equity fund. All LJMQ clubs have $75,000 in an equity fund, and we give them the interest on that each year. In previous years, the remaining $775,000 was divided among all clubs in the LJMQ when an expansion franchise was added.

For the Ontario league, an expansion franchise costs $1.5 million. For the western league, it costs $750,000.

Ms. Suzanne Tremblay: And the procedure—the investment in equity funds and distribution among clubs—is about the same.

Mr. Gilles Courteau: Yes, it is.

Ms. Suzanne Tremblay: Thank you.

The Chairman: Thank you, Ms. Tremblay.

[English]

Mr. Branch, I have a couple of short questions. On the scholarship question, we're talking about all sports, of course, but what type of impact would a full scholarship program in the realm of CIAU hockey have on the Canadian Hockey League?

Mr. David Branch: As we know, we sometimes get involved in a recruitment process when there's a young man who has to make up his mind about whether he wishes to play in the CHL or pursue an athletic scholarship opportunity with the NCAA. If the CIAU were to have a scholarship program per se, I believe it would only serve to assist the CHL in some respects—recruiting players to stay at home and so forth—provided there was an arrangement made between the CHL and the CIAU. We would need an understanding in terms of how those funds would in fact be applied, and would need to know if they would in fact offset some of our costs. In some situations, what we have seen is that some of the CIAU schools that do provide support for athletes will say that they know a player is getting so much from team X, so they will then just give him y dollars to bring it up to a certain level.

• 1755

The Chairman: Mr. Coderre, did you have a short question? We must leave here at six o'clock.

Mr. Denis Coderre: Yes.

[Translation]

I'd like to ask you a question about the future. Rather than have the three leagues play out their season and then have the Memorial Cup, why shouldn't we think of a true Canadian national hockey league? Somewhat like the National Hockey League, during the whole year, Quebec's teams would play against teams from the West and Ontario. This would allow the players to get better acquainted with our country, and would make hockey much more exciting. Is this in your plans for the future?

[English]

Mr. David Branch: We would very much like to see that type of arrangement come about, because we see that there is great interest when we do get together at the Memorial Cup. We feel that if we could only expand it by having an interlocking schedule of games, it would really assist us. We have also spoken about even doing away with the Memorial Cup tournament and having playdowns that would see the top two teams come together and so forth. So there are a number of things we're considering.

The Chairman: Mr. Provenzano, it has to be very short.

Mr. Carmen Provenzano: Mr. Chairman, I have to comment on your question that relates to the scholarship program, because it goes right back to my question.

If you put a value on the training and said it was x number of dollars a year, and if you linked that up to whatever dollars might come from whatever government source and used those dollars somewhere else in your educational programming, you could then offer to each member of the team who goes on x number of dollars. You could have a trust and divide the pie. That reduces the contingent liability on these teams, which is getting to be horrendous. Isn't that a fact?

The Chairman: Mr. Provenzano, you've touched on a very important issue here. I think we're going to have to explore it in a little more depth with HRDC.

Mr. Carmen Provenzano: But the value, the contingent liability—

The Chairman: There's no question about what it would do.

We only have a couple of minutes left, and I want to just ask one sensitive question before we wrap this up.

It's been a very tough week because of this incident with the player in Windsor. Does the league ever think that maybe sometimes the coach could have some role to play in an incident like that, and that there should be some kind of consideration of discipline for the coach as well?

Mr. David Branch: I think there are times when you certainly consider that through the process that was conducted in this instance. There was a hearing held, and the player and the coach were both there. Questions were asked and that avenue was certainly considered with them, but there was certainly no reason to think that was the case. In fact I think Windsor acknowledged—as did the player—that they had been working extra hard with this young man to see if he could in fact improve his skills to a higher level.

The Chairman: On behalf of all of our members, I want to thank you for coming before us today with a great report. You are leaders of a league in this country that is providing a great service to many different communities. You are providing an example to many young kids, young children, and you're pulling families together.

Again, on behalf of not just the committee, but the whole House, we thank you. We're going to take all of your comments under consideration, and I'm sure your presence will be there when our report comes out at the end of November. Thank you very much.

Mr. David Branch: Thank you, Mr. Chairman.

The Chairman: The meeting is adjourned.