Sikura: Restitution ‘Necessary and Justified’ for Ontario Breeders

by | 10.03.2013 | 12:08pm
Hill 'N' Dale Farms Canada

R. Glenn Sikura owns and operates Hill ‘N' Dale Canada, a perennial leading consignor in Toronto representing many Canadian clients selling in the U.S.  The farm has a small racing stable and does a limited amount of select boarding.

Sikura is active within the Canadian Thoroughbred industry, sitting as President of the CTHS Ontario, Past President/current Director of the CTHS National division, Past President/current Director of the Canadian Horse Racing Hall of Fame, Past President/current Director of OHRIA, and sits as a Member of the Jockey Club of Canada.

He submitted the following editorial on the travails facing the Ontario breeding and racing industries.

The opinions expressed below are mine and mine alone. None of what I have written is on behalf of any group or board that I represent nor has it been reviewed or edited by anyone other than myself.

Let me first state that I have never heard anyone from government comment negatively towards the Ontario breeding sector. In short, when the province took aim at the Slots At Racetracks Program, breeders apparently were never an intended target. That being said, the reality is that Ontario's breeders are on the front lines of a battle we did not create and have been hit harder than any other sector. We are collateral damage and thus far have been treated like the proverbial “red headed step child” by our elected officials and their representatives.

The 2013 Canadian Premier Yearling Sale has recently concluded and the results were crushing. By my estimation about 80% of the yearlings offered in the “Selected” portion of the sale were sold at a loss. The Open portion of the sale was even worse. While incredibly disappointing, perhaps this should not be entirely surprising. Fact: the Keeneland September Yearling Sale was flourishing as my fingers hit the keys to my computer.

In large part the irresponsible, irrational and reprehensible actions of the Ontario government (under Premier McGuinty and Finance Minister Dwight Duncan), have resulted in the financial and emotional devastation of several of the provinces breeders (seemingly more will follow). The Ontario Lottery and Gaming Corporation and its ill-fated modernization strategy were willing accomplices under the leadership of Paul Godfrey. Losing your way of life and your economic viability is quite an exactor to digest.

While breeders and others in the horse industry have done their best to trudge forward it is noteworthy that Mssrs. McGuinty and Duncan simply bailed out on the Province, opting for a generous pension at taxpayers expense. As for Mr. Godfrey, he was given his walking papers by our current Premier, his ridiculous and unpopular vision for this once mighty economic Province never to be realized.

With regards to this year's sale, there were double digit declines in averages for the second consecutive year, ridiculously high RNA rates and the fleeing of many non-Ontario Sired yearlings to American vendues (hence the lack of foreign participation).

Time and time again industry representatives have asked the government to send investors a timely message (before the Yearling Sale not after), that this crisis, that was of their creation, will have a solution that will lead to the long term stability of our once proud business. You don't have to have a PHD in Economics to understand that uncertainty does not create an appropriate investment climate. Trust between industry and government will take a long time to be regained; “fool me once shame on you, fool me twice shame on me.”

”Those who fail to learn from history are doomed to repeat it”, is a famous quote attributed to George Santaya and it has been co-opted by many others. While industry representatives remain willing to do whatever they can to work through the multitude of issues that have been created, I will personally never forget the treachery that was inflicted upon Ontario's horse racing and breeding industry.

It was approximately 18 months or so ago when the Drummond Report called for a “review” of SARP as one of his few hundred recommendations. As our Finance Minister cherry picked his way through the document, he focused on and embellished this recommendation to the point where he called for SARP's cancellation.

There was no need for consultation or study of this hugely successful partnership, after all our industry could seemingly be easily villainized. With the correct combination of misinformation and rhetoric surely the public would buy in to the false notion that everyone in the horse industry had unimaginable wealth and our $345,000,000 “subsidy” would be better off utilized in health care and education.

A lot has happened since those darkest days. The horse industry has made great inroads into educating the government and the public as to our true value within the Ontario economy. We have received a stay of execution from Premier Wynne and the OMAFRA Panel has been working towards solutions.

While I do not accept the premise that SARP was in need of a major overhaul, I accept that we will be moving forward under a new reality. As Panel member John Snobelen has said, “government, like horses, aren't very good at going backwards”.

Speaking of the Panel, they have put in many hours of hard work while being well compensated for their time. Those in the horse industry would like to make that same claim but unfortunately that is not our reality. So much of our future is resting in the hands of the Panel and their recent recommendations to government. We have to hope that the document that they have produced is favourable and if so

that it is well received and accepted as such. Anything less will lead to further irreparable harm.

There are many facts that are undeniable and will need to be dealt with including but not limited to the following:

The sales market has been devastated. Breeders have lost millions of dollars and many are either on the brink of complete failure or are well beyond that point. There simply must be an opportunity for commercial breeders to earn a living.

The industry's breed association (CTHS) has taken a dramatic hit to its finances of late and is in a far inferior position to help its besieged members at a time when they need it most. In addition to considerable sums spent on the various political and educational initiatives relating to the SARP cancellation, there has been a significant decrease in revenues as sales entries and commissions have plummeted.

The foal crop and the stallion population have decreased in both size and stature and there is currently no reason to expect this to reverse. This fact will play out in a harmful manner in the future when field size is further diminished.

There has been no meaningful dialogue to date between the OLG and the horse racing and breeding industry. While horse racing and the provinces gaming corporation are supposed to be working in unison, there is still talk of putting a casino in Vaughan, just a few bus stops away from Woodbine Racetrack.

Then there is Fort Erie…

Without solutions to our issues a commentary such as this serves little purpose. While we can't be sure what the Panel's recommendations to our Premier are, and therefore at the risk of being redundant, here are some thoughts that I feel have some merit (I am not claiming ownership of all of these thoughts).

Restitution is necessary and justified. You cannot expect breeders to continue their participation under the current situation that exists and they deserve to be reimbursed for a portion of the losses inflicted upon them. One way this could be done would be for government to match the breeders' awards that are currently in play through the CTHS. In 2013 roughly 2.6 million dollars is budgeted for distribution. Providing matching funds for 2012, when the cancellation was announced, over a 5-year period, breeders would be given a well-earned financial reprieve (far less expensive than the cancellation of a gas plant).

Entries for the CTHS Mixed Sale are currently being accepted. You don't have to be the “Amazing Kreskin” to know that this sale has the potential to be a disaster of biblical proportions. With a minimum fee of $700 plus all related expenses there will be any number of horses that won't come near to covering costs. Buyers and sellers alike need to know what the landscape will look in plenty of time to make appropriate decisions. The OLG appears to have endless sums of money in their marketing budget, perhaps they could provide some for the sale and the breeders could have their fees reduced.

There should be immediate discussion on the current residency requirement. With the deadline fast approaching, it is easy to imagine both Ontarians and outsiders forgoing their Ontario eligibility and taking part in other jurisdictions who have a more friendly economic climate. Going forward we will need as many foals as possible to put on a racing card that will be well received by our patrons.

The OLG needs to sit down with the horse industry forthwith. The Premier, whom so many insiders say has a genuine interest in our industry, must force their hand if necessary. There are innumerable complimentary opportunities for the both parties if there is a willingness to co-operate. A shared vision makes sense and is long overdue.

We have been told over and over again to be patient. We have been assured that the current government and the Panel is concerned with our preservation. We have been polite and respectful, hopefully not to a fault. Without question however, we are in need of concrete and immediate solutions.

The actions of Mssrs. McGuinty, Duncan, Godfrey et al has put in peril the livelihood of thousands of hard working Ontarians within the horse racing and breeding industry (9,000 job losses thus far according to a recent article in the Guelph Mercury). Inaction or insufficient action of the current Premier and her associates will spell doom for thousands more.

I implore those who are in a position to do so to step up to your responsibilities and do the right thing directly. The E.P. Taylors, Ernie Samuels, Steve Stavro's etc., left us all a rich tradition that is world-renowned. It is worthy of preservation and enrichment.

R. Glenn Sikura,
Hill ‘N' Dale Canada owner

  • Right then, Right now

    Sounds like whining is a shared family privilege.

    • Craig Brogden

      Making nasty negative comments under a pseudonym must also be a shared family privilege.
      I commend Glen for standing up and making suggestions to help improve and correct a huge thoughtless wrong by the Canadian Government. At least he is brave enough to voice his opinion just as John is, so that a discussion can take place to make things better.
      Neither of these men are afraid to hide behind a screen name and take cheap shots at others.

      • Tinky

        You’re guilty of conflating. RtRn’s comment warrants criticism, but his use of a pseudonym is irrelevant. The substance of any contribution is what is important, not the name attached to it.

        • Right then, Right now

          He’s an Aussie, Tinky.

  • ITP

    This is hilarious…..Industry received multi-billions in subsidy funds and spent basically zero on promotion and it’s customers while having larcenous takeout rates the entire time they were getting the slot money.

    Stop whining and just admit the entire industry was moronically negligent.

    • Tinky

      You ain’t heard nothin’ yet! Just wait until the chorus of those in the U.S. whose bloated pensions are being cut reaches a crescendo in the coming years. Hoo boy.

    • kyle

      Yeah, when you hitch a ride with the scorpion instead of sharing a boat with the unwashed what do you expect?

    • fb0252

      congrats to sikura for putting effort into lengthy post. I might agree with ITP (from what i know about Ontario) last sentence. Sympathize due to losses and change of direction. However, is this symptomatic of promoting the sport to those that seek to rip it off for $$$ instead of promoting the sport to the unlimited market of those interested in sports and their own franchises. Those folks would be competing instead of whining, and we need many more of them.

    • FastBernieB

      The breeders were the one segment of the industry that did act responsibly. During the Slot partnership they reinvested in their farms and improved the quality of their breeding stock. Very little promotion of racing was done by the tracks or horsemen and I don’t think anyone ever dreamed the slot partnership would end. Personally, I thought percentages would be halved but not cancellation of the partnership. (And yes it was a partnership – not a subsidy. Nobody wanted slot parlors in their neighborhood so the racetracks were the only place they could go.)
      During the slot days, WEG wrote lots of allowance races with 5 horse fields and $70,000 purses. Now, with a dwindling horse supply and a greater reliance on wagering for purse money those days are fading in the rear view mirror.
      Tracks like Tampa Bay Downs are proof that full fields of even the worst horses on the planet will attract wagering. Short fields will not. Ontario racing needs to adjust dates to reflect horse supply. Fewer dates with full fields is the only way that the industry can survive without subsidies. Racing 1 day per week at Fort Erie and 2 at Woodbine is the most that makes sense if full fields are to be the norm.

  • J_W_C_NM

    I’ve heard it all now. Mr. Sikura thinks that the $345,000,000 slot windfall would be better utilized subsidizing the lifestyles of the rich and famous horse owners instead of assuring baby formula, nappies, and schooling for underprivileged children. Nice to see a man with proper priorities.

    • FastBernieB

      Not sure if it matters but $345 million represents the negotiated share that went back to racing. At the same time, well over $1 billion went to the government for their use. While some funds will be “utilized subsidizing the lifestyles of the rich and famous horse owners” I’m willing to make that trade to get the 9,000 people who lost their jobs on short notice back working.

      • J_W_C_NM

        The best way to ensure steady employment is to administer a profitable enterprise. Relying on charitable legislation is a recipe for failure when that charity is redirected to the special interest de jour. In the US, slot machine welfare to gazillionaires was supposed to be a temporary measure to allow the racing industry to restructure its outdated business model. After a decade of grandma’s social security check subsidizing the horseracing hobby of the politically connected along the Paris Pike, the outdated business model is more entrenched than ever.

        • FastBernieB

          “The best way to ensure steady employment is to
          administer a profitable enterprise.”
          I can’t argue with that because you are absolutely correct. However, the Ontario model brought money and employment into the agricultural sector that provided a badly needed boost in the areas far away from the bright lights of the city. Abruptly ending the program and throwing 9,000 people with limited skills out of work means that the government will ultimately end up paying out through various social programs such as unemployment and welfare so the government’s slot revenue gain will be neutralized to some extent.
          In a saner environment, reducing the racetrack / horseman share of the slots from 20% to zero over a five to 10 year period would have made a lot more sense. That way the various stakeholders would have been able to evaluate their options and chart a course for the future that would lead to the ideal that you outlined in your statement.

          • laterush

            stakeholders have had it too good for much too long.

    • hesmyboy

      First of all, it was not a subsidy. Secondly, not all horse owners are well off and live the life of the rich and famous, most do not. The SARP program did not take money out of anyones mouth so do your homework before you spew your garbage.

    • Arika Everatt-Meeuse

      Nice to see you are a brain-washed typical Government puppet. You know nothing about how the people in our industry support employees, feed companies, blacksmiths, vets, tack stores, etc by raising race horses, just like farmers growing crops. The Government called our “agreement” secured by the horse breeders years ago, to allow slots to come to Ontario, the reason slots were brought here and the horse people got an 8% share, the rest went to the Government to spill out to the people in their education and health-care, oh and the “hand-outs” It was never a subsidy!! it was an agreement to allow slots at the racetracks, it was the horse industry’s “share” in the arrangement with the Government to put the OLG slots at the horse race tracks. Oh and by the way, to a self-supporting hard work horse breeder (or farmer), we have families too, we have children, but our children go when we can’t make a living because we don’t qualify for “hand-outs” and we are too proud to take them. In our world, if you are going to have kids, be prepared to feed them, cloth them, buy them formula and nappies (whatever they are) yourself, or don’t have’em. Priorities!

  • Jill Perkins

    I think Mr. Sikura is talking about the industry as a whole…not just the wealthy who breed the horses. In Ontario, the ‘trickledown” effect has been devastating to the horse people, feed suppliers, farm and track workers, tack suppliers, blacksmiths and more. The worst effect is the horses themselves. The markets have been flooded with horses because of the cutbacks and it will only get worse when the season ends.

    • 14151617

      The poor horses will suffer more than the racing folks.
      They will be sent straight to the slaughter houses for which Canada is infamous.
      Depressed prices, market flooded means just one thing.The kill floor.
      At least that is the reason we use in the U S for sending horses to slaughter.

    • hesmyboy

      I hope he is speaking about the industry as a whole and not just breeders like himself who will never go broke. There are people (owners) at Fort Erie who are starving because of all the damage that has been done.

    • Arika Everatt-Meeuse

      Yes the “trickledown” is devastating, but back-up….. The “wealthy” that breed… are you calling the breeders that have to maintain the broodmare band, foal the foals, pay the stud fees, register and maintain the foal, get it to the sales…. and get nothing for it, “wealthy” they are the HUB of the wheel that is falling off fast. Those so called wealthy breeders no longer exist. They are crippled and broke and still face having to feed the horses, try to employ good people that they respect and adore, but cannot keep them on the payroll. Breeders are not broke and broken. As we lay off good people that have been with us for years and try to not let mares and racehorses that we love fall into bad hands… please don’t speak so ill of people you don’t know

      • laterush

        not too many breeders ever concern themselves with where a TB ends up after a
        whopping 5 or 6 years of life. the rest of us feed your horses for the next 20 years. perhaps farm other livestock if times get too tough.any of your homebreds landed not so bright futures at Thistledown,Finger lakes and Beulah?breeders like Bear stables, Di Giuilio ….crippled and broke? not quite.

  • ON Breeder

    After the globe articles the breeders should be looking to WEG for restitution NOT the government.

    • LongTimeEconomist

      Who or what is WEG?

      • FastBernieB

        Woodbine Entertainment Group. Operators of Woodbine Racetrack in Toronto and also Mohawk raceway in Campbellville.

    • hesmyboy

      And the poor owners at FE who have had to give their stock away because of it all.

  • lakeays

    While Mr. Sikura’s editorial perpetuates the mythology espoused and demanded by Industry Leadership, his long list of positions suggest that he had a ‘front-row’ seat in the fiasco currently devastating the Horse Racing Industry in Ontario.
    Mr. Sikura was at the table when the Site Holder Agreements were signed, requiring the establishment of benchmarks and monitoring of program performance. He should have also been aware of the 270 day termination clause. The $2 Billion provided to the Race Tracks in Ontario came with the stipulation of funds surplus to the operation and maintenance of race tracks be used for the promotion of racing and breeding in Ontario. Instead of program development, funds disappeared from corporate balance sheets and into personal enrichment schemes. While government agencies (Ontario Lottery and Gaming Corporation and Ontario Racing Commission) failed to monitor or regulate, good stewardship on behalf of participating members was also required of the leaders of organizations such as the CTHS and the HBPA (Ontario).
    During Mr. Sikura’s tenure on the CTHS and OHRIA, the racing industry has consistently maintained its ‘traditional’, out-moded and self-indulgent attitudes. Those who presented alternative argument or suggestion were ridiculed, derided, threatened and bullied. OHRIA (Ontario Horse Racing Industry Association) adopted the hegemonic consensus (veto) decision making process, rather than a representational majority rule governance policy. The Government commissioned Sadinsky Report of 2008, which identified major misuse of funds, non-compliance with contractual obligations, poor governance, lack of oversight and program mismanagement was ignored and dismissed by Industry Leadership.
    While the original SAR Program had a positive impact on the newly conceived government plans to fund provincial programs through gambling revenues, it was also devised to encourage development of a sustainable economy for horse racing. It seems most have forgotten horse racing was floundering as gambling alternatives were appearing. Instead of developing sustainable strategies, we relied on ‘tradition’, sanctioned and promoted by Industry Leadership.
    Most know the controlling element which has led to the devastation of a rural Ontario industry and the decimation of personal capital investment. Contractual obligations aside, Not-for-Profit Race Tracks have requirements under their incorporation charters to invest surpluses in mandated responsibilities. Leadership of membership organizations poorly represented the needs of their constituents and should accept responsibility for condoning mismanagement and misappropriation of SARP funds. Blaming government for consistently unexamined and self-serving Racing Industry ideologies, though convenient, has done nothing to address the identified failings of the program.

  • Jacquie

    I think everyone needs to sit back and look at the whole picture. First off all the tracks knew of the 2008 Sadinsky report and just kept taking the money. Nordic Gaming which owns Fort Erie ran away with millions and did nothing to fix the back stretch which left the horsepeople high and dry. Woodbine has always looked after themselves. It is not possible for people in certain positions to not of known this was going to happen. The Government had to do something about this mess. I do not agree with how it was done but the Tracks would not do what was asked of them so they pulled the plug.

  • Windways

    There is no doubt that the Slots at Racetrack Program was in need of some fairly significant revisions to rectify the obvious inequities. However, if we look at the result of the governments cancellation of SARP we see the following: price of yearlings decline over 50%, revenue for tack shops, feed mills and other related suppliers are significantly lower, an estimated 9,000 jobs are lost, and Provincial and Municipal government gaming and tax
    revenues decline. In conclusion, the cancellation of SARP has resulted in a Lose Lose scenario for everyone in Ontario.

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