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I’ll start this post by stating my support for gambling and casinos. I would also like to confirm my support for cigarettes and alcohol sales. I look to these simple human pleasures as contributing to lower taxes for those of us who choose not to indulge. In this regard I guess I’m painting myself as a libertarian; people can do what they want as long as they are aware of the consequences, and they don’t impact the rights of others. But, I think we need to ensure that people are properly informed of the possible consequences of indulging these simple human pleasures. Businesses and individuals who profit off these activities should not be permitted to suggest that they don’t have possible, and quite likely, consequences.

I have been asked by a few people what I think about a casino in Parry Sound. I don’t have a strong opinion at this point, but I am interested in understanding what the impact of a casino might be on tax revenues, expenses and the community. I have read that Mayor McGarvey supports the idea of a casino in Parry Sound as it will be a boon to businesses on a twelve month a year basis. I won’t dispute this suggestion, but I wonder how it will benefit me as a Parry Sound taxpayer, and what provisions can be made to ensure I don’t end up subsidizing a casino, in the near and long term.

Let me explain.

The Town of Parry Sound currently has two major sources of revenue – government grants and property taxes. Yes, there are other sources of revenue, for example water services, but these are largely self-sustaining and have no impact on the property taxes that we pay quarterly. How might a casino in Parry Sound impact taxes?

Well, the obvious benefit to the Town is that a casino will involve the creation of facilities and businesses that would be subject to municipal taxation at a commercial rate. One could imagine that the development would include a casino building, probably one or more waterfront hotels to house the visitors, and possibly a marina to service clients who prefer boating, rather than driving, to make their supplemental tax payments.

What might the tax revenues be from these facilities? Will Parry Sound end up ahead, break even, or end up in a hole? Well I could imagine that a reasonably full build of a casino and supporting hotels might have a property only assessment on the order or $20 to $50 million. (Let’s hope for the sake of all of us it won’t be done on the cheap. The quality of any casino will have an impact on how Parry Sound is viewed, upscale or tacky.) How much might the Parry Sound tax revenue be increased? At first I thought the assessment would be based on the value of the buildings with a commercial tax rate applied to that figure. Doing a little research, it seems that this isn’t the case. The value of a casino and probably the associated hotels is more likely to be calculated based on what these businesses generate in revenues. But I’m not sure. Here is a link to an article at MPAC that outlines the process for assessing the value of a casino. MPAC presents three different approaches to determining valuation for assessment purposes, not all of which necessarily converge. I’ll be looking forward to a detailed analysis from the Town and the developers at an appropriate time, well before any decision is made to approve a casino development.

What expenses will the Town be responsible for in any casino development? We have considerable infrastructure in place but I suspect that there will be a need for upgrades ‘all round’; water services as well as new and upgraded roads immediately come to mind. There will also be considerable legal and consulting fees. Do we pay for all of this upfront with a hope that it will be paid off in the near term? Probably not, which suggests we will be taking on long term debt for future generations to pay. Let’s remember that the only way the Town benefits from a casino is from taxes related to property or business assessment. The Town doesn’t get a cut of the take unless that’s part of the assessment model decided by MPAC.

But what about the jobs that will be created and the construction work itself? Well, that benefit is not likely to flow to Parry Sound directly if recent history repeats itself. At best, it may help the surrounding municipalities, but that might be a stretch. The hospital certainly created jobs, but Parry Sound saw less of the municipal tax benefits benefits than the surrounding municipalities. Most of the higher end people, physicians, nurses and administrators, choose not to live in Parry Sound because of more desirable properties (waterfront) and lower taxes in Seguin, McKellar and Carling. Why live in Parry Sound if you can have a waterfront property a kilometre away on Rose Point Road? Will it be different with a casino? Not really, casinos don’t deliver that many high paying jobs, so it would be unlikely to raise local residential property values and taxes. What about new construction jobs? Hmmm, is a local company doing the Cascade Street build? And how many of the high value materials that are required for the Cascade project, notably concrete and the pre-engineered parts, come from businesses in Parry Sound? Concrete might be coming from Seguin, helping a business in that municipality, or it might be coming from as far away as Bracebridge. The engineered parts are coming from Southern Ontario. The trades doing the work also seem to be sourced from outside Parry Sound. It was the same situation with the build on Seguin Street across from Tulloch. The work was contracted to out-of-town, actually out-of-district, suppliers.

But the added traffic, twelve months a year, will be good for local businesses, won’t it? Yes, but Parry Sound won’t be sharing in the upside unless these businesses receive a higher assessment value and pay higher property taxes. It’s interesting that what is good for businesses doesn’t necessarily show up in increased tax revenues for the Town, and then pay for the associated increase in costs for town services.

What about the social issues? The new Parry Sound District OPP commander has stated that his experience suggests casinos attract seniors, especially if they are slot type casinos. Seniors are beyond any type of criminal activity aren’t they? Who knows, but let’s assume there will be additional policing costs associated with a casino if only because there will be more people and there will be more ’social friction’. You don’t add more of this type of activity without a corresponding increase in police services, and probably EMS services as well.

Will people on the Carrington side of Parry Sound bit by bit be pushed out by the local development? Possibly, but probably not. There is enough land with redevelopment of the former petroleum properties that there shouldn’t be too much real estate pressure. Perhaps it won’t be a very family friendly area to live. I don’t know. I don’t frequent casinos nor have I studied their impact on local communities. A good proxy for a Parry Sound casino might be the casino in Gananoque, a small town about 50 km outside Kingston. For those of you interested, an article in the Kingston Whig-Standard goes into considerable detail, financial and social, about Ganaonoque’s casino as part of a decision by the voters of Kingston to reject a casino in their own town. I suspect much of the analysis is well considered as it was probably developed in discussions with the Queen’s University School of Urban and Regional Planning. Here is a link to that 2014 Kingston Whig-Standard article. I heartily recommend the article to anyone interested in the topic of a Parry Sound casino. It’s well written and easy to understand. It has a conclusion that may be surprising.

Here are some other casino related links that may be of value to the interested.

http://www.niagarafallsreview.ca/2013/02/24/city-of-niagara-falls-fuming-over-casino-tax-cuts

http://www.cbc.ca/news/canada/windsor/ontario-casinos-to-pay-host-municipalities-more-money-1.1304652

http://business.financialpost.com/financial-post-magazine/can-casinos-spearhead-economic-development-efforts-in-canadas-cities

http://www.wellesleyinstitute.com/wp-content/uploads/2013/01/Real-Cost-of-a-Casino_Wellesley-Institute_2013.pdf

Still feeling lucky? Let’s hope that Parry Sound Council decides to provide local residents and businesses with a full analysis of the implications of a casino if the discussion ever get that far. Let’s not have one of those Closed Session discussions that is then brought into Open Session and voted on without any input from the residents and businesses of Parry Sound. It’s our town, and we have a right to not only understand what is going on, but to express our support or opposition.

Will This Be the Way It Was?

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