The Ontario government on Friday announced a new way to determine the fee municipalities receive for hosting an OLG gaming facility.

The government claims the formula is more "equitable."

"The new formula will provide more money for host municipalities and will be fair and consistent for all municipalities across the province," a media release said.

Under the new formula, host municipalities will receive:

  • 5.25 per cent on the first $65 million of slot revenue.
  • 3.0 per cent on the next $135 million of slot revenue.
  • 2.5 per cent on the next $300 million of slot revenue.
  • 0.5 per cent on slot revenue above $500 million.
  • 4.0 per cent on table game revenue.

The cities of Windsor and Niagara Falls host resort casinos and have, until now, been receiving fixed fees plus payments in lieu of property tax under agreements. They will now also be compensated under the new formula in the form of one annual, lump-sum payment.

Windsor Mayor Eddie Francis said under the old formula, Windsor received three separate annual payments. They included $4.7 million in lieu of property tax; $1.8 million to pay for 20 police officers; and a $2.6-million "hosting fee."

Under the new formula, and based on last year's Caesars Windsor revenue, Windsor would have received an $11-million payment.

Although it's more money than was annually earned under the old system, Francis said "it's not a windfall." That's because the total still pales in comparison to payment made to the city during the casino's most profitable years. For example, the biggest payment in lieu of property tax was $13 million.

"That gap needs to be made up and these deals will go a long way," Francis said.

The changes were announced a day after Toronto Mayor Rob Ford declared the idea of casino in his city "dead."

Ford said it had long been his position that Toronto would need to receive at least $100 million annually to host a casino in order for it to be worthwhile.

"If the province won’t agree to that $100 million, then, folks, the deal is dead," Ford said.

The mayor said his office has made repeated inquiries about the funding formula that the province would use for a Toronto casino, but has been told "they are not ready to make a decision."

In an email to CBC News, Susie Heath, the press secretary for Finance Minister Charles Sousa, said that the government will "put out the formula when we're ready and are confident that it is fair to all municipalities."

But less than an hour later a government sources told CBC News that $53.7 million would be the annual figure Toronto would receive to host a casino — well below what Ford said was necessary.

"The last thing we wanted is one facility in the GTA area with a different funding arrangement than a facility in Windsor, Ottawa or Niagara Falls," Francis said. "The fact all municipalities are on a level footing and equitable is positive."

According to the news release, based on the new formula and implementing OLG's modernization plan, OLG would expect to provide more than $50 million more annually to host municipalities by 2017-18.

All host municipalities must sign a new MCA as a legal requirement before receiving hosting payments under the new formula.

The matter is before Windsor council "in a couple weeks," according to Francis.

"I would certainly recommend this to city council," Francis said.

Casino Rama’s compensation will remain the same due to an earlier Ontario-First Nations agreement.