The easiest way to see how the Ontario racing industry is already collapsing at its outer edges is to consider the way life is changing for Dr. David Grant.
Last breeding season, before the McGuinty government announced the end of a $345-million-a-year Slots at Racetrack Program (SARP), the travelling Norfolk County veterinarian helped clients breed 60 local mares.
This year, it was six mares, a 90-per-cent drop. That’s 54 foals from a handful of farms in just one region that never will be born.
Across Ontario, thousands of other breedings have been cancelled, disrupting the three-year birth-to-racetrack cycle that is usually the norm. The industry is on pause, waiting nervously for completion of political manoeuvring that will influence whether the $3-billion horse-racing industry is eviscerated or survives.
All in, 60,000 jobs are at risk in the removal of funds that support the business of racing at Ontario’s 17 tracks. Hundreds of jobs have already been lost after slots were pulled at Fort Erie, Windsor and Sarnia.
Agriculture Minister Ted McMeekin assigned an all-party panel to find ways to keep racing alive after the province officially ends the 14-year-old slot-machine revenue-sharing agreement in March 2013.
McMeekin said Tuesday the panel is “encouraged by the industry’s willingness to work together” on a business model to help horse racing become more self-sustaining. The immediate issue is that the three former cabinet ministers on the panel say the government’s proposed $50-million, three-year transition fund will not be enough.
The Spectator has learned the panel will recommend significantly more money. But that option would be hard to sell in cabinet, where Finance Minister Dwight Duncan is scrabbling for deficit-reducing funds.
The horse sector says it should not be a target because the SARP program is revenue sharing, not a subsidy from taxpayers. The slots contribute $1 billion a year to the government — 75 per cent of the profits — with 5 per cent to the municipality and 20 per cent to the horse-racing industry.
Uncertainty about prospects has left all parts of the racing industry flailing.
The panel — which has delayed its final report to mid-October — paints a picture of lost jobs and says it may be necessary to euthanize up to half the industry’s 26,000 horses if a solution is not found.
“If the industry closes, the panel has received expert advice that provision should be made for the humane dispatch and disposal of 7,500-13,000 horses in early 2013,” it said in an interim report in August.
“The horse racing industry now derives 63.6 per cent of its purse revenue from SARP. Few if any industries could survive such a sharp financial loss.”
Uncertainty about prospects has had the most immediate impact on breeders.
Many are now unwilling to invest in stud fees ($4,000 to $9,000 per mare), or the high costs of raising a horse. For instance, a pregnancy in 2012 for a foal in 2013 does not produce a horse ready for racing until 2015 or 2016.
“When you breed a mare, you’re planning for the future,” said Grant, the veterinarian based in Norfolk County. “Right now, there is no future. That’s why breeders are hit the most severely, especially the smaller ones.”
Jim Rigg of Dunnville is a good example. He says he’s been kicking around the business since 1979 and in the past six years has become “heavily involved with the babies,” encouraged by slots-funded breeding programs such as the Ontario Sires Stakes.
Rigg agrees with the panel that an Ontario-based breeding industry — for thoroughbreds, standardbreds and quarter horses — is critical for high-value horse racing. In fact, the panel said, high-quality breeding is actually an export.
“Ontario’s Horse Improvement and Sires Stakes programs … generated foreign revenues,” the panel wrote. “In 2011, in the standardbred industry, 1,321 U.S. mares were bred to stallions standing in Ontario for $9 million in stud fees. And U.S. residents spent $1 million to buy Ontario horses at public auctions.”
Rigg is not in that league, but he owns three horses that he breeds for racing. He is furious at the lack of notice, the abrupt nature of Duncan’s destabilizing announcement in the spring that changed his world.
“We’re all in a real tight spot,” he said. “I’m a small potatoes guy but it’s going to hurt everyone in the industry.”
Grant — who bought a $20,000 ultrasound machine not too long ago — says people forget about the spinoff impact of closures or restructuring, the ma and pa restaurants in rural areas, the trucks that people need, the secondary jobs.
In his case, the way he pays for the machine is “by me performing fertility work on customers’ mares,” all part of a horse-racing economy that is headed off the rails.
“You know how many tractors we all buy?” Grant said. “It’s just incredible. It will be a complete catastrophe, a nosedive.”