In two months councillors will decide whether the city should hand over financial responsibility for the Canadian National Exhibition after the fair’s board of directors approved a deal that would make the Old Lady by the Lake an independent entity.
On Friday, the Canadian National Exhibition Association (CNEA) announced it had come to a deal with the board of governors of Exhibition Place that would see the 133-year-old annual fair — known for its big midway, horse shows and tiny doughnuts — become financially independent.
Council will debate the proposal March 5-6. If approved the CNE would be independent from both the city and its landlord, the Exhibition Place Board of Governors.
The move was recommended in a report crafted by consultant KPMG last summer. The company was contracted by the city to find money-saving opportunities. The idea is that making the CNE an independent entity will save the city money, should the fair have a bad year, according to CNEA chair Coun. Mark Grimes.
“You have a bad year, the Toronto taxpayer is kind of on the hook,” Grimes told CityNews. “If there’s a good year, there’ll be a surplus and the city would take that back into the coffers. If there’s a bad year the city would write the cheque to cover the CNE.”
The fair’s had a good run over the past few years and there are reserves, Grimes said. Last year the Ex recorded a surplus of about $1.3 million.
CNE president Brian Ashton said he’s confident the Ex will have the financial power to keep the midway running even if the fair goes through a slump, as was the case during the SARS crisis and the 2003 blackout.
“We looked at our 10-year financial history and projections and we’re comfortable that we can establish a reserve, or rainy day fund, that would meet any losses that would occur in the future,” Ashton said.
“We made a profit of almost $10 million over the past 10 years, so we feel fairly comfortable that we can achieve two goals: that we can establish a rainy day fund … and create a reserve where we can draw upon it for investment in the CNE.”
Ashton said attendance actually went up during the recession.
Grimes said he started studying the idea of making the Ex independent months before the KPMG report was released. If council approves the deal, the process of making the CNE fully-independent will be phased in over 10 years. The phase-in process would begin April 2013.
Ex attendees won’t see any immediate changes if the deal’s approved, Ashton added.