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First Nation Communities.


Frequently Asked Questions
Casino Rama Development & Litigation
  1. What does the Ontario First Nations Limited Partnership do?

  2. Why is there a court case involving Mnjikaning First Nation (MFN) and the other First Nations in Ontario (OFNs)?

  3. What is the position of the Chiefs of Ontario (COO) and OFNLP in this matter?

  4. Wasn’t the question of net profits resolved by the Chiefs in the All Ontario Chiefs Conference (AOCC) in June, 2001?

  5. What efforts have been made to talk through this disagreement?

  6. What is the 20% WinTax issue?

  7. Regarding the 20% WinTax, why are both MFN and OFN sides suing the Provincial government to claim these funds?

  8. It is really difficult to understand why MFN is suing for more money. Haven’t they already benefited greatly from hosting the OFN Casino?

  9. How much are we spending in legal and consulting fees?

  10. What is the Project Fund?

  11. Are there any other issues that could affect the revenue distribution to First Nations?
1. What does the Ontario First Nations Limited Partnership do?

OFNLP came into being to monitor, receive, invest and distribute the net revenues of Casino Rama on behalf and for the benefit of all the First Nations in Ontario and, in doing so, to act in a reasonable and responsible manner. OFNLP is involved in related matters as approved by the Partners, including the 20% and 35% litigation, and certain collective funding initiatives.

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2. Why is there a court case involving Mnjikaning First Nation (MFN) and the other First Nations in Ontario (OFNs)?

MFN has initiated a lawsuit against the Province and the Ontario Lottery & Gaming Corporation (OLGC) claiming a perpetual right to receive 35% of the net revenues from the Ontario First Nations Casino. The lawsuit impacts on the other 133 Ontario First Nations because funds totaling 35% of the net revenues of the Ontario First Nations Casino, which would otherwise be available for distribution to FN communities, are suspended in a provincial account until the lawsuit is resolved. The Chiefs in Assembly at the 2001 AOCC voted, as was their right, to have the 35% shared fairly among all OFNs after July 31, 2001.
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3. What is the position of the Chiefs of Ontario (COO) and OFNLP in this matter?

The First Nations Casino at Rama is owned by all of the First Nations in Ontario. Mnjikaning First Nation is the host community. No one denies the important role played by MFN in agreeing to host the Ontario First Nations Casino on MFN territory, but the Casino exists to serve the needs of First Nations across the Province. The Casino is operated by a professional gaming company, Penn National and not by MFN. The revenues are owned by all First Nations in Ontario, including MFN.

The Chiefs want swift resolution of the court case initiated by MFN in order to ensure the maximum flow of funds to FN communities. MFN held up the 20% and 35% court actions by opposing procedural motions. In particular and in direct opposition to the wishes of the Chiefs, MFN tried to stop COO and OFNLP from representing the interests of First Nations other than MFN in the lawsuits. This caused unnecessary delay and expense. MFN’s objections were dismissed by Judge Campbell on February 24, 2003, who agreed that OFNLP and COO should represent OFNs in the court cases.
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4. Wasn’t the question of net profits resolved by the Chiefs in the All Ontario Chiefs Conference (AOCC) in June, 2001?

Yes. As stated above, the Chiefs determined that the 5-year agreement under which MFN received 35% of net Casino revenues for Casino enhancement would not be renewed after July 31, 2001 and these revenues should now be shared equitably among all FN communities in Ontario. It is important to note that MFN did not accept the decision of the Chiefs in Assembly and that is why it launched the lawsuit in October of 2001 in an attempt to obtain the 35% allocation in perpetuity.

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5. What efforts have been made to talk through this disagreement?

Under the Protocol Agreement, OFNLP set up a 35% Committee to negotiate with MFN. The OFN and MFN committees spent one full year prior to the 2001 AOCC attempting to negotiate with MFN. However, MFN took the position that they were entitled to 35% of the net profits in perpetuity. The unwillingness of MFN to negotiate with the OFN committee was noted at the Chiefs Assembly. The Chiefs decided that MFN would receive a formula share, the same as all of the other First Nations in Ontario.

The Chiefs in Assembly authorized further negotiations in 2004 and early 2005. In January 2005 the OFNLP Negotiating Team, authorized by an Extraordinary Resolution, began new negotiations with MFN. Unfortunately, the Team concluded the new round of negotiations in March 2005 when it became clear that MFN was not prepared to change their position.
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6. What is the 20% WinTax issue?

OFNLP, (along with the Chiefs of Ontario) is representing the First Nations other than MFN in a lawsuit to recover 20% of the gross revenues of the Casino which the Province has been confiscating since 1996 as a “WinTax”. This amounts to nearly $700 million so far. The Province violated the fundamental agreement that led to the development of the First Nations Casino. According to this agreement, First Nations were entitled to all available revenue from the Casino. The Province agreed, in fact, not to collect the 20% WinTax against the First Nations Casino.

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7. Regarding the 20% WinTax, why are both MFN and OFN sides suing the Provincial government to claim these funds?

It does not make sense for MFN to be suing now for the recovery of the 20% WinTax. COO filed a lawsuit in 1998 to recover these same funds. COO and OFNLP are vigorously pursuing this lawsuit on behalf of all First Nations. In fact, the discovery process is well underway. OFNs have the best legal and factual base for recovering the 20% WinTax. MFN is using this issue to support its claim to keep the 35% of net revenues for itself forever. MFN has stated on many occasions that it has no real interest in the 20%. In negotiating the Development and Operations Agreement (DOA) in March 1996, in fact, MFN waived its right to the 20%, but did not have the authority to speak for all the other FNs. MFN, therefore, signed away any claim to the 20%.

As far as the Chiefs are concerned, all of the other First Nations in Ontario are fully entitled to the 20% of gross Casino revenues as agreed to in the fundamental agreement with Ontario.
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8. It is really difficult to understand why MFN is suing for more money. Haven’t they already benefited greatly from hosting the OFN Casino?

It is difficult to think of any real negatives suffered by MFN for hosting the OFN Casino. Some of the benefits MFN enjoys include new social and recreational facilities; nearly full employment; cash payments to its citizens; 35% of the net profits for the first five years, subject to certain conditions; millions of additional dollars in rental payments, bonuses (Rama Allocation), service contracts, and construction management contracts. It is estimated that as of March 31, 2003, MFN has received more than one quarter billion dollars ($250,000,000.00) in various kinds of benefits. This number keeps growing.

On a per capita (or per person) basis, OFN citizens have been entitled to receive about 1% of what MFN citizens have received (directly or indirectly) in the first five years of Casino operations
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9. How much are we spending in legal and consulting fees?

Audits are completed at the end of each fiscal period (March 31). These statements are available to all Partners. The legal fees for the 35% and 20% cases are significant, but they should be viewed as a business investment. If one or both of the lawsuits are successful, the cash flow for Limited Partners should be significantly increased. Again, if there is success in court, OFNLP will be entitled to some reimbursement of legal costs. Legal and other costs are carefully monitored by the OFNLP Board to ensure value for dollar.
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10. What is the Project Fund?

The Project Fund Policy was approved by the Chiefs in Assembly (Resolution 02/33) at the 2002 AOCC. Under this policy, 2% of the total amount of net revenues for distribution from the Ontario First Nations Casino at Rama would be set aside annually for eligible projects that met the criteria of the policy and were approved by the Partners. By a decision reached by the Chiefs in November, 2003, an independent committee was established to review the proposals submitted for funding through the Project Fund. At the 2004 AOCC at Hiawatha First Nation, the Chiefs voted to disband the Fund and distribute the accumulated funds (approx. $1.2 million) to the communities according to the established distribution formula.
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11. Are there any other issues that could affect the revenue distribution to First Nations?

The OFNLP, on behalf of the First Nations in Ontario, and as directed by the Chiefs/Partners, is opposing MFN in its attempts to (1) initiate a cash sweep to accelerate loan repayments on the Casino hotel and entertainment centre, and, (2) construct and operate a cultural centre with Casino revenues.

Either scenario holds devastating consequences for the flow of revenue to First Nations and could lead to a situation where there is no net revenue to distribute to First Nations. OFNLP liaises regularly with the Ontario Lottery and Gaming Corporation (OLGC) and is continuously advocating the OFNLP and First Nation position regarding these particular issues.

The Superior Court ruled on January 2, 2004 that MFN does not have the right to force a cash sweep, but MFN is appealing the ruling.

MFN has stated that it will default on the loan for the hotel and entertainment centre when it comes due in 2007. This position caused the OLGC to inform OFNLP that it would have to impose its own cash sweep plan in order to repay the loan. Neither cash sweep plan is acceptable to OFNLP.

As part of the negotiated Gaming and Revenue Sharing Agreement-in-Principle signed March 29, 2006 there will be no cash sweep during the lead-up to the ratification of the Formal Business Agreements, which must be completed by December 31, 2006. If the formal Agreements are ratified by all parties there will be no subsequent cash sweep based on the Casino expansion. However, if the Formal Agreements are not ratified, it is possible that the cash sweep will be brought back in some form.
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