Pro IQRA News Updates.
It’s been two bad years for Regina movie theaters, according to the amusement tax revenue the city received from commercial movie theaters.
Moviegoers pay the tax when buying movie tickets in the city. During pre-pandemic times, Regina’s four commercial movie theaters collected about $700,000 a year in entertainment tax for the city on average, according to the Executive Committee’s revised public agenda on Wednesday.
The document said that due to COVID-19 and business closures, this revenue fell to $169,000 in 2020 and $219,000 in 2021.
While revenue trends have begun to return to pre-pandemic levels this year, the city is still considering halving its current entertainment tax rate.
On Wednesday, the city’s executive committee will discuss a possible tax cut from 10 percent to a 5 percent rate. If approved, the commission will send the cut to city council for a final vote.
The revised Public Agenda said that if the change is approved, it will take effect in October.
Theater operators in Regina will continue to keep a tenth of the total amusement tax to cover the costs of collecting it on behalf of the city, according to the document.
Citi says the revenue loss can be compensated
The agenda said the amusement tax cut would result in an estimated revenue loss of $350,000.
The city expects to compensate for this loss by increasing revenue through municipal revenue-sharing grant funding, according to the document. This is related to the expansion of the regional sales tax (PST) announced in March.
The Saskatchewan government raises the cost for people who want to attend sporting events, concerts, movie theaters or trade fairs in the province.
The PST changes take effect in October 2022 and will see people pay an additional six percent on ticket prices.
The county said in August that although it was initially included, gym and fitness memberships are no longer included in admissions, entertainment and recreation processes.
“Taking into account this review, the county estimates that the expansion of PST will generate additional total PST revenue of $18 million,” the city document said. “The city is expected to receive an increase in MRS grant funding of approximately $350,000 due to the expansion of the PST.”
There is no full benefit to expanding the city’s PST until 2025
Regina won’t see this additional revenue for a while, as the MRS scholarship is allocated based on money raised two years ago, according to the city’s revised public agenda.
“It is expected that this additional revenue in the first full year will be available to the city in 2025 (based on 2023/2024 revenue collected by the county),” the document said.
“Therefore, there will be a decline in net revenue until 2025.”
The city administration also mentions other options for the executive committee to discuss on Wednesday. Council members can also choose to eliminate the amusement tax entirely or keep the 10 percent tax rate.
Rainbow is one of 4 movie theaters that pay entertainment tax in Regina
For one cinema in town, any potential amusement tax change comes too late.
Rainbow Cinemas will show its last movie on Sunday before closing its doors permanently at the Golden Mile Mall.
While Rainbow Cinemas was at one time a very popular location for cheap entertainment — you could have seen a movie for cheaper than renting a movie at Blockbuster — Like Blockbuster, its appeal has faded, said Tom Hutchinson, president of the Magic Lantern Theater, in an email.
“COVID, of course, has accelerated this decline.”
The Regina entertainment tax has been applied to the city’s four commercial cinemas: Galaxy Cinemas, Southland Cineplex, Landmark Cinemas and Rainbow Cinemas.