City councillors discuss cutting Regina's amusement tax in half

On Wednesday Regina's executive committee discusses a potential reduction of the city's amusement tax. (CBC - image credit)
On Wednesday Regina's executive committee discusses a potential reduction of the city's amusement tax. (CBC - image credit)

It has been a bad two years for movie theatres in Regina, judging by the amusement tax revenue the city received from commercial cinemas.

Cinemagoers pay the tax when buying movie tickets in the city. During pre-pandemic times, four commercial cinemas in Regina collected around $700,000 per year in amusement tax for the city on average, according to the executive committee's revised public agenda for Wednesday.

Due to COVID-19 and the closure of businesses, that revenue dropped to $169,000 in 2020 and $219,000 in 2021, the document said.

While revenue trends are starting to return to pre-pandemic levels this year, the city is still considering cutting its current amusement tax rate in half.

On Wednesday, the city's executive committee will discuss a potential tax reduction from 10 per cent down to a rate of five per cent. If approved, the committee will send the cut to city council for a final vote.

If approved, the change would come into effect in October, the revised public agenda said.

Theatre operators in Regina would continue to keep one-tenth of the total amusement tax to cover the costs of collecting it on behalf of the city, according to the document.

Revenue loss could be offset, city says

The amusement tax reduction would bring an estimated revenue loss of $350,000, the agenda said.

The city expects to offset this loss with a revenue increase through the Municipal Revenue Sharing Grant funding, according to the document. This is tied to the provincial sales tax (PST) expansion announced in March.

The Saskatchewan government is raising the cost for people who want to attend sporting events, concerts, movie theatres or trade shows in the province.

The PST changes come into effect in October 2022 and will see people paying an extra six per cent on ticket prices.

While initially included, gym and fitness memberships are no longer included in the admissions, entertainment and recreation PST expansion, the province said in August.

"Taking into account this revision, the province estimates that the PST expansion would generate total additional PST revenue of $18 million," said the city's document. "It is projected that the city could receive an increase in MRS Grant funding of approximately $350,000 due to the PST expansion."

No full benefit of PST expansion for city until 2025

Regina wouldn't see this additional revenue for a while, since the MRS Grant is allocated based on money collected two years prior, the city's revised public agenda said.

"It is expected that the first full year this additional revenue will be available to the city would be 2025 (based on 2023/2024 PST revenues collected by the province)," the document said.

"Therefore, there will be a net revenue reduction until 2025."

City administration also mentions other options for the executive committee to discuss Wednesday. Councillors could also choose to completely eliminate the amusement tax or keep the 10 per cent tax rate.

Rainbow has been 1 of 4 cinemas paying amusement tax in Regina

For one cinema in the city, any potential amusement tax change comes too late.

Rainbow Cinema will screen its last film on Sunday before closing its doors for good in the Golden Mile Shopping Centre.

"While at one time Rainbow Cinemas was a very popular location for cheap entertainment — you could see a movie cheaper than rent a movie at Blockbuster — like Blockbuster, its appeal had faded," said Magic Lantern Theatres president Tom Hutchinson in an email.

"COVID, of course, accelerated this decline."

The amusement tax in Regina applied to the city's four commercial cinemas: Galaxy Cinema, Southland Cineplex, Landmark Cinemas and Rainbow Cinema.