Monday, October 22, 2012

There's Life After Subsidies In Ontario, If We Change

The OMFRA final report is to be handed down in Ontario this week (perhaps, it was supposed to be last week), which will portend what Ontario racing may look like next year. It is almost certain that slot machines will no longer subsidize race purses, but there is hope for something new - an olive branch in the way of $100M or so dollars over a few years to try and stabilize an industry that will be decimated.

How that money will be spent is key. Will it be another subsidy to be spread around to ease the pain? Or will it be something new and fresh, to hopefully spur a new racing paradigm?

If it's the former, I don't hold out much hope.

I was reading on Real Clear Politics today about stimulus cash for the steel industry in eastern Ohio. This paragraph struck a chord with me.
  •  “There were so many things thrown at towns like ours, like stimulus dollars and bailouts, but the problem is deeper. No one running the town over the years ever prepared for what might happen if the steel or coal industries left,” she said. “Too much dependency, not enough independent thought.”
I feel that's what we may see happen in Ontario. No one was prepared for what would happen if slots were shut off, and no one has a plan for the stimulus money (i.e. transitional funding) either. How can it work if we just become dependent on a new source of income without independent thought and change?

It is not impossible to get the racing industry in Ontario through this rough patch, in my opinion. Empirically it has been done before.

In New Zealand in the 1980's farming subsidies were cut off, cold turkey. Everyone thought the industry would simply die, including the Finance Minister. But it didn't.
  • Farming today is 16.6 percent of total gross domestic product, up from 14.2 percent in the late 1980s, and in the year to April 2005 it racked up exports worth $12.7 billion, more than half of all New Zealand exports.The farmers have learned to diversify. During the subsidy era New Zealand had 72 million sheep — 18 for every human. By last year the number was just 39 million, but more efficient methods mean the islands still produce the same amount of meat, and meanwhile freed-up land is being turned over to growing grapes for wine and other exotic crops. There are even niche markets of deer, goats, ostriches and llamas.
The world is not over. I think racing can succeed in the Province. But make no mistake, just like an Eastern Ohio steel town, it will not survive without change, leadership, and a rock-solid, no holds-barred data-driven plan. 

The treasurer in Ohio said what her town needs:

 “We don't want a handout. We need a plan and a vision to build a better future, to function within our means and keep our community going.”

That's what horse racing in our Province should want, too.

1 comment:

Eric Poteck said...

The Panel will not be able to solve the industry's problems. The industry will have to do that. The Panel (I assume) will attach criteria in order for the race tracks to receive funding. My hope is that funding will be tied to making the customer, the HORSEPLAYER the central figure in the equation. Perhaps the bigger question is, do the current members of the industry have the expertise to solve the problems?
My answer would be yes, but they would need to be given full rein to do the job and the dead wood, would need to be chopped out.....