Second reading of Bill S-268, An Act to amend the Criminal Code and the Indian Act

By: The Hon. Marty Klyne

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Hon. Marty Klyne: Honourable senators, I rise to enter into second reading debate on Bill S-268, a Senate public bill initiated by Senator Tannas. In the immortal words of former Senator Baker, I will be brief.

Bill S-268 proposes to amend the Criminal Code and the Indian Act to enact for First Nations governing bodies the option of exercising jurisdiction over gaming.

Currently, running a gaming scheme is a Criminal Code offence in Canada unless permitted by a province under section 207 of the code. Bill S-268, as I understand it, would essentially give First Nations the same statutory power to authorize and regulate this otherwise criminal activity, just as it is done by the provinces.

First, thank you to Senator Tannas for introducing this bill. Thank you also to Senator Prosper for his remarks of April 11. I wholeheartedly agree with our colleagues about the importance of own-source revenue for Indigenous nations, advancing economic reconciliation. We also saw this spirit with the Prosperity Action Group, led by Senator Harder in 2021, aiming for inclusive and sustainable prosperity across our great federation.

As well, we have seen uplifting efforts from many senators to celebrate Indigenous businesses and entrepreneurs in our speech series on that very subject. I am truly grateful for those efforts and continue to invite speeches celebrating Indigenous business successes in your respective regions.

On Bill S-268, which focuses on the promised protection and implementation of treaty promises, I note that Senator Tannas has the support of Chief Roy Whitney of the Tsuut’ina Nation and Chief Bobby Cameron of the Federation of Sovereign Indigenous Nations, or FSIN, representing 74 First Nations in Saskatchewan. Senator Tannas also indicated that he has received the support of the gaming subcommittee of the Assembly of First Nations.

A tip of the hat to that advance consultation. To me, this consideration strongly favours advancing Bill S-268 for committee study, which I support.

Colleagues, I approach my review of Bill S-268 coming from Saskatchewan — Treaty 4 territory and homeland of the Métis Nation — and as a treaty status member of a Treaty 4 band in Saskatchewan. I also approach this bill through my lens as the former president and chief executive officer of the Saskatchewan Gaming Corporation, a Crown corporation operating Casinos Regina & Moose Jaw in Saskatchewan.

Today, I want to make three points on this bill about, first, practicalities in gaming that should be considered as regards the provinces, competition and responsible gaming. Second, the success of revenue sharing among First Nations in Saskatchewan under their existing Gaming Framework Agreement. Third, the timing of a potential transition to Bill S-268’s model.

First, let’s talk about some practicalities that I would like to see examined at committee and perhaps addressed through amendments or observations, as may be appropriate. To me, Bill S-268 needs to speak to ensuring there is a business case with each casino proposal demonstrating that the project is viable. It’s important to evaluate demand for the proposed number of slot machines and table games, not to mention, for instance, the video lottery terminals, or VLTs, owned by the provinces and operated via licences granted to pubs in rural and urban areas.

My concern here is to address the risk of cannibalization in a saturated marketplace, and to avoid the risk of a race to the bottom in terms of safeguards around responsible gaming and jeopardizing prescribed profit-sharing aimed at addressing the economic and social issues of Indigenous non-governmental organizations and community organizations.

Though I don’t have a specific proposal in terms of the bill, a metric of viability for a new casino should be support among local jurisdictions at the municipal, rural and provincial levels. There should also be consideration regarding displacing any existing authorized gaming establishments, including sunk costs and loss of jobs created by any new establishment. In other words, we wouldn’t want to see stranded or devalued assets or jobs lost without a clear path to replacement jobs in terms of a just transition.

Based on my experience in Saskatchewan gaming, a free-for-all competition could present some social risks and disrupt current revenue-sharing arrangements. I’m not saying this is necessarily a roadblock, but it is a question that needs to be addressed with close and careful examination.

As Senator Cotter noted, the preamble of this bill describes the regulation of gaming as an inherent right. I’m not disputing that, although I note that the Supreme Court found in 1996 that the regulation of gaming was not a section 35 constitutional right.

Perhaps this is a point where a Senate committee can provide some clarity and analysis. In any case, we are talking about non-traditional contexts where technology, like online single-event sports betting in Canada, is a game changer. We’re also talking about an exercise of jurisdiction that would lift an otherwise criminal prohibition, indicating there are some universal social risks or concerns to address in the field of gaming. After all, with inherent jurisdiction to apply increasingly through the United Nations Declaration on the Rights of Indigenous Peoples, or UNDRIP, Action Plan, criminal laws will continue from time to time to apply generally.

We can envision universal risks, for example, such that criminal laws will continue to apply in analogous areas like firearms sales, controlled drugs and substances or sensitive materials like explosives, where safeguards prevail. Certainly, we all know or should know that gambling addictions can have devastating social and health consequences.

On the other hand, responsible gaming is a legitimate entertainment and an important source of revenue for Indigenous peoples. I’m proud to have played a leadership role in the gaming sector, with a focus on responsible gaming. To avoid market cannibalization and a race to the bottom, I tend to think negotiation of gaming machines and table game ownership should involve dialogue between Indigenous people, the Responsible Gambling Council and entities conducting responsible gaming research and advisory services, including gaming operators’ responsible gaming programs in terms of how this may responsibly proceed.

The same goes for licensing VLTs independently operated under the regulation of provincial governments. I have an open mind about what this might look like legally in terms of an end goal.

At any rate, I agree that First Nations should have a much greater legal say in the organization of gaming than is the case today. That said, we need to avoid upsetting this delicate and currently stable industry in Saskatchewan, for instance.

As food for thought — as a best practice — I think there should be a gaming framework agreement for each new casino, one that involves a level of consultation with the respective province, local community and municipality, including in terms of the size of a proposed operation — regarding the number of tables and slots — with consideration also to the number of VLTs that are currently operating in the same marketplace or catchment area.

As a gaming framework agreement, it should give financial consideration and commitment to making the investments to develop the casino and establish its own financial structure. It should also have a fund for infrastructure maintenance and expansion, as well as its own tourism and marketing program, a responsible gaming and addictions rehab program, and economic development, charity and social trusts for the community, including programs aimed at addressing Indigenous social and economic issues.

Again, I have an open mind as to what this might look like in terms of legalities and best practices. However, I would expect a Senate committee to include, in its study, a deep dive on best practices and the risk assessment, and have meaningful consultations with Indigenous elders, women and relevant chief and councils, or tribal councils, in advance of third reading.

Turning to my second point, I will say a few words about the current situation in Saskatchewan. Currently, not every First Nation is directly involved in running a gaming operation, and certainly not every First Nation would be a viable economic candidate in terms of remote locations and so forth. However, through the Gaming Framework Agreement, all First Nations as well as Métis organizations in our province benefit from current operations through profit-sharing, and also employment opportunities and wealth creation through procurement set-aside programs and Indigenous hiring preferences aimed at achieving a workforce representing a minimum of 50% Indigenous employees working in the casino.

In Saskatchewan, the First Nations casino net profit is redistributed: 50% to the First Nations Trust, which is distributed to the 74 First Nations in the province; 25% to community development corporations, which reinvest the money into local community initiatives; and 25% to the provincial general revenue fund.

The Saskatchewan Indian Gaming Authority, or SIGA, is the operator of seven First Nations-owned casinos across the province. In 2023, SIGA achieved record-breaking revenues of $292.6 million, resulting in a net income of $126 million — nearly double the previous year. Much of this success has been due to the introduction of single-event sports betting in Canada. For comparison, SaskGaming — operating casinos in Regina and Moose Jaw — had $116.3 million in revenue in the 2022-23 fiscal year, including $42.6 million in net income. SIGA has national certification through its responsible gambling check program. In addition, SIGA contributes $2.5 million annually to the provincial First Nations Addictions and Rehabilitation Foundation.

All this to say that there’s a lot of money to be made, and there’s a stable and successful regulator, and a new negotiated revenue-sharing model in place, all spelled out in a bilateral Gaming Framework Agreement.

I would like one of our Senate committees to take a close look at how these dynamics may be affected by Bill S-268 — positive or otherwise — and whether any amendments or observations would be appropriate through this lens. Everyone involved and affected — both prospective winners and losers — should be heard. For example, how might competition affect the revenue going to First Nations who might not have a suitable location or desire to participate directly, not to mention maintaining the current agreements made with the Métis to participate in the profit-sharing?

Finally, as food for thought, I would note that Bill S-268 currently proposes an immediate coming into force at Royal Assent. I raise for consideration whether some additional time might be advisable to plan for a transition and to include provinces and municipalities in those discussions.

With all this in mind, I support Bill S-268 at second reading, and would expect to see these questions addressed at committee while embracing the spirit underlying this bill and its potential for creating jobs and wealth, leading ultimately to self-determination and independence for Indigenous nations.

Thank you. Hiy kitatamihin.

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