A rushed plan to sell two casinos ends in surly finger-pointing

by Gregory Beatty

Brad Wall in a scrum (photo by Darrol Hofmeister)

Legendary slapstick director Mack Sennett has been dead for decades, but had he been at the legislature on Feb. 10 he would have appreciated the spectacle of Premier Brad Wall, NDP Opposition leader Cam Broten and Federation of Saskatchewan Indian Nations Chief Perry Bellegarde holding three press conferences on the merits of selling casinos in Regina and Moose Jaw to FSIN.

What unfolded was essentially a gong show.

Bellegarde reportedly approached the government with the idea in January. The catch: to sell the casinos, the Government would have to circumvent the Crown Corporations Public Services Act. And they wanted to Opposition to agree to the exception in what Wall called “this one instance”.

The NDP was in the loop but ultimately decided it couldn’t support the deal without broader consultations.

“Selling Crowns is an important matter, because the benefits are for everyone in the province,” Broten said at his scrum. “And to fast-track, to be pressured to urgently pass legislation in violation of the Crown Ownership Act — that game is not on.”

The Wall government has history of acting rashly and then suffering political fallout: the ongoing constitutional challenge to essential services legislation passed in 2008, a $2 billion budget boo-boo on potash royalties in 2009, and letting ideology trump economics in killing the film employment tax credit in 2012, are three prime examples.

This move didn’t seem to be well thought out either, says University of Saskatchewan political science professor David McGrane.

“They didn’t consult much with the public, or many First Nations leaders outside of the FSIN leadership. Then all of a sudden they needed the opposition’s permission to get this through, which put the NDP in an awkward situation. So it did make them look like a bunch of Keystone cops.”

According to the memorandum of understanding between the government and FSIN, the sale price would be $100-$200 million. In 2012, the two casinos recorded $53 million in profits — with half that going to government. That same year, the Saskatchewan Indian Gaming Association made $87 million on six other casinos that it runs.

At present, 11 per cent of gaming money that SIGA distributes to aboriginal communities goes to education, employment and economic development. The rest is spent on recreation, health, culture and other areas. Under the MOU, more money would be spent on initiatives in the former category that, in Wall’s words, “deliver results.”

SIGA would also be permitted to develop online gambling, which is currently prohibited here, and expand its VLT network. The government would still receive some casino revenue, and the provincial auditor would be authorized to review SIGA’s books.

Wall and Bellegarde were keen to get a deal done. But under the Crown Ownership Act, which the NDP passed with Saskatchewan Party support after the big Elwin Hermanson privatization scare of 2003, before a Crown entity can be sold a special committee has to be struck and public hearings held. And no sale can proceed until 90 days after the next election — which is set for November 2, 2015 (or April 4, 2016 if that date overlaps with an expected federal election).

With its huge majority, the Wall government could simply amend the act to permit the sale, or even axe the act itself. But that would resurrect the old privatization boogeyman. Instead, Wall asked Broten and the NDP for their unconditional support.

“The premier should either say ‘We’re going to follow the process, or we’re going to change the act,’” says McGrane. “Instead, he says ‘We want to maintain the act but have this shadowy new process’. I think the NDP called it right. They might take a bit of heat from First Nations now but they couldn’t let the Sask. Party get away with flouting the act.”

Broten felt some of that heat when he attended FSIN’s Winter Assembly at Dakota Dunes Casino on Feb. 12. With the Harper government having cut $1.9 million in funding to FSIN, forcing the impending layoff of 66 staff in March, tensions were already high.

But Broten also had defenders who said he’d been put in an untenable position by Wall and Bellegarde.

In the 2011 election, the NDP under Dwain Lingenfelter campaigned on the promise to explore revenue sharing with First Nations. Wall and the Sask. Party vigorously opposed the idea, and scored political points against the NDP for proposing it.

Does the casino deal represent a change in heart? McGrane isn’t so sure. “It does give FSIN a source of funding that doesn’t come from government, but I think there’s an unspoken quid pro quo where the government is saying ‘We’ll give you the casinos, but don’t touch our natural resource revenue.’”

Ken Coates, director of the University of Saskatchewan’s International Centre for Northern Governance and Development, is more hopeful.

“There’s no question that for First Nations revenue sharing is a high priority. There’s also no question that for the government it’s a low priority — in fact, the premier’s said several times it’s off the table.

“They could stare at each other across the table and see nothing move forward. Or they could agree to disagree and deal with it [at some future time]. What you’re seeing is two mature partners in a very important partnership for Saskatchewan saying ‘How do we make things better?’ And the government knows full well, as does FSIN, that entrepreneurship and business development are key to the long-term success of aboriginal communities.”

That’s how Bellegarde characterized the proposal too, as a first step that would lead to further talks on revenue sharing in forestry, mining, tourism and other industries.

In the end, Wall said he wouldn’t proceed without the NDP’s support. Does that mean the casino deal is dead? Maybe. Although the consensus of pundits was that if due diligence was done on issues like what was a fair purchase price, the government’s plans for the money (use it to kickstart a Heritage Fund perhaps?) and the wisdom of having First Nations’ economic interests tied tightly to gaming, it was an idea worth revisiting.

That’s Coates’s belief.

“I think it’s one of those situations where everyone is going to look back and say ‘All right, if we can rehabilitate this, let’s do that and let’s learn a lesson about how we do it going forward.’ My reaction was, this is the kind of province-building stuff we need and a really positive development for the province and First Nations people.’”

McGrane sums up the whole L’affaire Casino: “On one hand, it could be seen as a win for the Sask. Party as they’ve set up a tension between the NDP and First Nations, where really the tension should be between the Sask. Party and First Nations — as [it’s the government that doesn’t] want resource revenue sharing and are taking out ads critiquing it.

“They’re also in government and have their hands on the purse strings to improve First Nations communities and their economic well-being,” he says. “So that’s where the tension should be.”