On a blazing summer's day in 1961, a race horse called Puss n Boots decided enough was enough and took an impromptu dip in a nearby lake. The only problem? He was racing at the Fort Erie Race Track at the time.

Jockey Ronnie Behrens was sent flying as the horse made a sharp detour for the scenic infield lake. Adding insult to injury, wilful Puss n Boots had been winning the race at the time.

The fabled plunge has gained almost legendary status in Canada, with Fort Erie now holding an annual Puss n Boots Stakes -- ending with a traditional leap into the lake by the winning jockey and trainer.

But as Canadian government funding cuts take their toll, it seems the jockeys are not the only ones trying to stay afloat.

The picturesque 115-year-old Fort Erie track now looks set for closure after controversial changes to gambling taxes.

"The whole racing industry in Ontario is in trouble," Fort Erie Economic Development and Tourism Corporation manager, Jim Thibert, said.

"Fort Erie Race Track is on a closing plan for the end of this year. The only thing that would interrupt that plan would be if we increased our business from CAD$30million ($30.6million) to CAD$35million ($35.6million) a year."

Thibert said the outlook was fairly bleak for the historic track which employs 240 people. It is thought another 600 jobs could be lost through support services if it is forced to close its doors as planned in December.

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At least 25,000 racing jobs in Canada are under threat from the controversial new laws, says the industry.

Under the plans, funding sourced from a tax on government-owned slot machines at race tracks will be redirected.

The result? Around CAD$345million ($351million) of funding coming into the sport will be lost.

Currently, race tracks and horse owners receive 10% each of this fund to invest in facilities and thoroughbreds.

But from March, that money will instead be directed into the government's general revenues.

Legislators in Toronto have offered CAD$50 million ($51million) of 'transitional funding' to the industry to ease the burden.

But Sue Leslie, president of the Ontario Horse Racing Industry Association, said many in the industry are bracing for the worst.

"We have 17 race tracks in Ontario. Three of them have already had the government slot machines removed and one has said that they are unable to stay in business after the end of the year," she said.

"If that is the way it is going to be when the funding program fully closes in March, we will be down to nine race tracks at most."

She added: "It's about jobs, sure, but it's also about the welfare of the animals too. Who is looking after the horses if no one is buying them? What level of care will they get if the amount of money is cut?"

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Amid austerity, the Ontario provincial government says it was compelled to overhaul its tax system on slot machines.

"Given our current economic situation our government is committed to reviewing all programs in order to reduce the rate of spending growth," said ministerial spokesman Aly Vitunski.

"The Slots at Racetrack Program is no exception. Since 1998 the horse racing industry has received CAD$3.7billion ($3.77billion) in government support -- that's more money than we spend on water and road safety.

"At the end of the day we need to ask ourselves whether the government should be in the business of healthcare and education or horse racing."

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