The Executive Committee supports the halving of the entertainment tax to reduce the tax burden on cinemas; others want it gone completely
REGINA — Regina’s movie ticket tax hike was a hot topic ahead of the city’s executive committee meeting this week.
This was a proposal to reduce the city’s amusement tax from 10% to 5%.
The administration’s recommendation, which passed by a 6-3 vote on Wednesday and is now going to council Sept. 28 for final approval, is intended to help offset the provincial sales tax expansion on Oct. 1. , with 6% PST to be imposed on cinema tickets and other entertainment, including sporting events on that date.
Affordability and the overall tax on movie tickets were other reasons cited by the administration for lowering the entertainment tax to five percent.
But even with the reduction, overall movie ticket taxes – with 5% entertainment tax, 5% GST and expanded 6% PST – are still expected to increase by 1% in Regina after entry. in force of the PST.
Amusement tax has been in place in the city since 1923 and was authorized under the Cities Act. But over the years the tax has been phased out on things like Riders games, events at the Brandt Center and other venues.
As of 2003, the entertainment tax now only applies to cinemas in Regina, with cinema operators retaining one percent to cover their costs of administering the tax. Last year, there were discussions at city hall about expanding to other sites, but ultimately the administration did not make a recommendation.
The fact that movie theaters were the only ones still paying the amusement tax was a particular bone of contention for movie theater owners, who have appeared before the council several times over the years to try to convince the city to stand down. get rid of the tax entirely. They were back at City Hall on Wednesday and let the executive committee know they thought the proposed 5% cut was not enough.
Delegations want the entertainment tax to disappear completely
“It’s time for this tax to go,” said Michael Paris of the Canadian Motion Picture Theaters Association, one of three delegations representing the film industry who presented to the Executive Committee.
Paris said Regina risks becoming the “highest taxing jurisdiction for movie tickets in North America” if it does not act by October 1, stressing that if nothing is done by then, the moviegoers would pay 21% tax.
As for the proposed reduction of the entertainment tax to 5%, Paris said it was still “5% too much”, saying it was “5% more than any other company that Regina is forced to pay. pay “.
According to the Association’s press release, Regina was only one of two municipalities in Canada to levy such a tax and was to be the only one to collect it in addition to GST and PST. In no other jurisdiction did the total tax exceed 15%. It was also noted later in the meeting that Saskatoon got rid of its own entertainment tax in 2007.
Paris highlighted the pressures the film industry had faced, including COVID-19.
“Not only were theaters the first to close, the last to reopen, but we’re probably the only industry that has had 100% of its customers brought into the captive arms of our competitors in video streaming,” Paris said. He pointed to competition from Amazon, Apple, Disney and others, “who pay no taxes in Regina, employ no one in Regina, and contribute nothing to your local economy.”
Rainbow Cinemas closes in four days
The whole discussion was timely for another reason: The Rainbow Cinema at the Golden Mile Center on Albert Street is set to close this weekend, with its final screenings taking place on September 25.
Economic pressures were cited for the decision, and the shutdown was widely mourned on social media by moviegoers drawn to Rainbow’s low ticket prices and movie selection.
During her presentation, Paris pointed out to councilors that the entertainment tax only affected four cinema companies in the city, adding that “in five days it will be three companies because the Rainbow Cinema on the Golden Mile will close.”
The second presenter, Mike Melnyk of the Central Canada Movie Theaters Association, said the former owner of Golden Mile Theaters came to the council in 2009 and spoke about the impact of the entertainment tax on the time.
“Things haven’t improved for cinemas,” Melnyk said, noting that cinemas are struggling to compete with people staying at home using streaming services, as well as the costs of bigger screens and better projection systems.
Melnyk argued that movie theaters need to remain affordable and that customers will ultimately be the hardest hit.
“I know who will end up paying this tax. These are young children and the elderly. These are the people who go to the movies because that’s what they can afford. »
The Council also heard from Dave Cohen, Chief Financial Officer of Landmark Cinemas. He noted that by August 2022, the Canadian box office had shrunk by a third from the pre-pandemic period, and studios had launched their own streaming services and were keeping titles to themselves. He said cinemas now had to compete with their own suppliers for movie attendance.
The entertainment tax “makes a movie ticket less appealing than subscribing to another streaming service, where Regina residents will just stay home,” Cohen said.
Earlier, Paris had made the same remark that the message sent to the people of Regina was to “stay at home. Stay on your couch. Don’t go on dates, don’t go to your kid’s birthday party, stay home.
The council’s vote was not unanimous
In the end, the council accepted the recommendation to lower the amusement tax to 5%, but refrained from removing it altogether.
Com. Bob Hawkins was one of the upvotes, calling the administration’s recommendation “fair and sound.” Hawkins also said he was not convinced that removing the tax would reduce ticket prices.
“I’m just not convinced that people are staying away from the theater because of this tax. I’m also not sure that if the tax were removed the price of movie tickets would go down… I guess that might stop them from buying popcorn, but I doubt that’s even the case.
Councilor Lori Bresciani, who was chairing the meeting, ended up in one of the ‘no’ votes, after she tried to propose the complete abolition of the entertainment tax. This was ruled out of order, but before the final vote, Bresciani made his displeasure clear.
“I think this is an absolute regressive tax for an industry that has come under fire, not just during the pandemic,” Bresciani said. “In four days, the Rainbow Theater will be closing. Call it a theater tax if that’s what you want. I constantly hear many “we want to be open for business, we want to be open for business, we want to welcome businesses here. “…it’s 16%, it’s the highest in Canada. Are we open for business? »
Speaking to reporters afterward, Bresciani also noted that she believed singling out movie theaters for the tax was discriminatory.
“I wouldn’t want us to consider taxing just one industry, that was my concern today. I think we actually need to look at it…I would say coming out of the pandemic, that’s absolutely not the time to always be the highest in the country to tax families.
She was also asked if she thought the entertainment tax contributed to Rainbow’s closure.
“Absolutely I do,” she said. “There’s not much you can do.”
The executive committee’s decision to cut the entertainment tax now goes to the full council meeting for a final decision on September 28.