Regina's amusement tax is only one city council vote away from dropping by 50 per cent next month.
On Wednesday, the city's executive committee voted in favour of reducing the tax to five per cent from its current 10 per cent. The matter will now go to city council, which will meet again next week, for final approval.
While its title might indicate otherwise, only commercial cinemas in Regina have been collecting the tax money on behalf of the city, with cinemagoers paying when buying their movie tickets.
"If we want to have an amusement tax, make an amusement tax across the board, but do not just go after one industry and hope they stay alive," said Ward 4 Coun. Lori Bresciani on Wednesday.
"Saskatoon abolished theirs back in 2007, and I think there's a time where we want to ensure we want our businesses to stay and remain here."
Revenue from the amusement tax was down over the last two years, due to the pandemic and the closure of businesses, said the city in the executive committee's revised public agenda for Wednesday.
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 city's document.
That money dropped to $169,000 in 2020 and $219,000 in 2021, but revenue trends are starting to return to pre-pandemic levels, the agenda said.
Last movie set to run on Sunday at Regina's Rainbow Cinema
Bresciani was one of the three city councillors voting against the proposed amusement park reduction. After the meeting, she said that even with the reduction, there would still be too much tax on movie tickets.
"The theatre is just like any other business … trying to make a go as they come forward out of the pandemic," said Bresciani.
"We've already seen one that's going to be closing in the next four days. I don't want to see another theatre close in our city."
Regina's Rainbow Cinema will open its curtains for the last time on Sunday before closing its doors for good in the Golden Mile Shopping Centre.
An expired lease, declining audiences and the COVID-19 pandemic made it impractical to continue, according to an email from Magic Lantern Theatres.
Bresciani said she believes the amusement tax on movie tickets contributed to the closing of the Rainbow Cinema.
The cost of reducing the amusement tax
Cutting the amusement tax by 50 per cent comes with an estimated revenue loss of $350,000, the executive committee's revised public agenda said.
However, the city expects this loss to be offset by a revenue increase through the Municipal Revenue Sharing Grant funding, which is tied to the provincial sales tax (PST) expansion announced in March.
Starting October, the province is raising the cost for people who want to attend a variety of events such as sport games, concerts, professional theatre, and movie theatres.
With the provincial PST expansion and no amusement tax reduction, Regina would become the highest taxed jurisdiction on movie tickets across Canada, according to the public agenda.
As of October, moviegoers would then pay a tax rate of 21 per cent on their tickets, which would include 10 per cent amusement tax, 5 per cent GST and 6 per cent PST. Reducing the amusement tax to 5 per cent would bring the overall tax rate to 16 per cent.
"I think this is the absolute wrong time to … still be the highest in the country to tax families," said Bresciani. "I think it's just too much to bear."
On Wednesday Regina's Mayor Sandra Masters was among the majority of councillors voting in favour of sending the proposed amusement tax reduction to city council for approval.
The city's amusement tax has been around for quite some time, and used to apply to other venues as well, she said.
"What you saw from council was to take the recommendation of administration with some view, perhaps over the next year or two to look at either eliminating it or adding it to other venues."