Winnipeg Free Press - PRINT EDITION

Taking on this foe was a bad bet

Government's about-face not a sign of strength

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Why Finance Minister Jennifer Howard, arguably one of the government's best MLAs, was given the job of shovelling out the barn Wednesday is beyond explanation.

The shovel, boots and gloves should have been handed to Premier Greg Selinger. Heck, he should have rolled up his sleeves and volunteered for the job instead of leaving Howard hung out to dry.

Instead, Howard was marched out of the legislature and into the fangs of the media to explain her government's jaw-dropping about-face with the Manitoba Jockey Club and a settlement that will see tax money going toward horse betting instead of hospitals.

This capitulation by the government will suck $45.1 million out of the provincial treasury over the next 12 years.

Howard spun the settlement as a mutual agreement that will sustain horse racing at Assiniboia Downs over the next decade, as the jockey club develops its new partnership with Peguis First Nation to build two hotels and convention and retail space at the Downs. Peguis First Nation was awarded $126 million from Ottawa in 2010 as part of a century-old land-surrender claim.

That $22.65 million in grant money from you and me will help the jockey club keep its neck above water until Peguis comes in over the next decade and the Downs can make it on its own.

"What we said at the beginning of this, and I think what we said consistently, is that we weren't looking to put the horse-racing business out of business," Howard said. "What we were looking to do is have a sustainable industry."

What Howard is referring to is a decision by former finance minister Stan Struthers a year ago to rip up its video-lottery-terminal agreement with the jockey club. Struther's decree was supposed to slash VLT revenue by $5 million per year.

"From horses to hospitals is the way that I see it," Struthers said at the time, adding government subsidies to horse racing were far too rich given the current economic climate.

With the 12-year agreement, that money has been restored, not from VLT revenue -- the government didn't give up that point -- but from what they call a new grant that will see $5.4 million go to the club next year. The jockey club also keeps its 140 machines and the estimated $950,000 annual revenue from them.

The question now is why? Why did the NDP pull such a complete flip-flop?

A couple of reasons.

One, the jockey club hired aggressive Calgary lawyer Jeff Rath. They sued Struthers, the province and the Red River Ex for $350 million, claiming the NDP was out to bankrupt them and turn the Downs over to the Red River Ex to operate.

Going by all the paperwork that's been filed in court, Rath and the jockey club really didn't have a legal leg to stand on. But that didn't matter. Each time they were in court, the media reported how badly the jockey club was getting screwed by the NDP.

The deal between the two will see all legal action dropped, meaning the NDP doesn't have to worry about those court stories as it gears up for the April 2016 election and a fight to stay in office another four years. It also means the claim against Struthers is dropped. A lawsuit against a cabinet minister is not a good thing to campaign on.

Then there were the attack ads taken out by the jockey club accusing Selinger of trying to kill the horse-racing industry in Manitoba. They were relentless. For Selinger in particular, they had to stop, especially as he tries to pull his own polling numbers up.

The hard lesson for the NDP is it picked on someone who fought back. And won. Easily.

The lesson for the rest of us is if we thought the NDP was already vulnerable, it is now even closer to that edge.

And really, when you think about it, that $22.65 million should be declared an election campaign expense.

bruce.owen@freepress.mb.ca

Republished from the Winnipeg Free Press print edition April 24, 2014 A3

History

Updated on Thursday, April 24, 2014 at 8:43 AM CDT: Corrects that the decision by the government will take $45.1 million out of the provincial treasury over the next 12 years.

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