REGINA — Mounting taxes on movie tickets in Regina were a hot topic before the city’s Executive Committee meeting this week.
At issue was a proposal to cut the city’s amusement tax from 10 per cent down to five per cent.
That administration recommendation, which carried Wednesday by a 6-3 vote and now goes to council Sept. 28 for final approval, is meant to help offset the expansion of the provincial sales tax on Oct. 1, with the six per cent PST set to be imposed on movie tickets and other entertainment including sporting events on that date.
Affordability and the overall tax on movie tickets were other reasons cited by administration for lowering the amusement tax to five per cent.
But even with the reduction, overall taxes on movie tickets — with the five per cent amusement tax, five per cent GST and the expanded six per cent PST — are still set to rise in Regina by one per cent after the PST takes effect, up to 16 per cent.
The amusement tax has been in place in the city since 1923 and has been allowed under the Cities Act. But over the years, the tax has gradually been removed from such items as Riders games, events at the Brandt Centre, and other venues.
Since 2003, the amusement tax now only applies to movie theatres in Regina, with cinema operators keep one per cent to cover their costs of administering the tax. Last year there had been discussion at City Hall of expanding to other venues, but in the end, administration did not bring a recommendation forward.
That movie theatres were the only ones still footing the amusement tax was a particular bone of contention for cinema owners, who have repeatedly been before council over the years trying to convince the city to get rid of the tax entirely. They were back at City Hall Wednesday, and made it known to Executive Committee they thought the proposed five per cent reduction wasn't enough.
Delegations want amusement tax gone completely
“It’s time for this tax to go,” said Michael Paris of the Movie Theatre Association of Canada, one of three delegations representing the cinema industry who presented at Executive Committee.
Paris said Regina risked becoming the “highest taxed jurisdiction for movie tickets in North America” if it did not act by Oct. 1, making the point that if nothing was done by that date, moviegoers would pay 21 per cent in taxes.
As for the proposed amusement tax reduction to five per cent, Paris said it was still “five per cent too much”, saying it was “five per cent more than any other business is Regina is made to pay.”
According to the association’s news release, Regina was only one of two municipalities in Canada that levied such a tax, and was set to be the only one to collect it on top of GST and PST. In no other jurisdiction did the total tax top 15 per cent. It was also noted later in the meeting that Saskatoon had gotten rid of its amusement tax in 2007.
Paris pointed to pressures the cinema industry had faced, including COVID-19.
“Not only were cinemas the first to close, the last to reopen, but we’re likely the only sector that had 100 per cent of its customers ushered into the captive arms of our competitors in streaming video,” said Paris. He pointed to competition from Amazon, Apple, Disney and others, “who pay no tax in Regina, employ nobody in Regina and contribute nothing to your local economy.”
Rainbow Cinemas closing in four days
The whole discussion was timely for another reason: the Rainbow Cinema in the Golden Mile Centre on Albert Street is set to close this weekend, with its final screenings happening Sept. 25.
Economic pressures were cited for the decision, and the closure has been widely mourned on social media by movie fans attracted by Rainbow’s low ticket prices and movie selection.
During his presentation, Paris pointed out to councillors that the amusement tax impacted only four cinema businesses in the city, adding that “in five days it will be three businesses, because the Rainbow Cinema at the Golden Mile will be closing.”
The second presenter, Mike Melnyk of the Movie Theatre Association of Central Canada, noted that Wilf Runge, formerly with Rainbow's Golden Mile cinema location, had come to council in 2009 and had spoken on the impact of the amusement tax back then.
“Things haven’t gotten better for cinemas,” said Melnyk, noting cinemas were struggling to compete with people staying at home using streaming services, as well as costs of bigger screens and better projecting systems.
Melnyk made the point that cinemas needed to remain affordable and that customers would be the ones hurt in the end.
“I know who is going to end up paying this tax. It’s young kids and seniors. These are the people who go to the movies because it’s what they can afford.”
Council also heard from Landmark Cinemas Chief Financial Officer Dave Cohen. He noted that as of August 2022 Canadian box office had decreased by one-third compared to pre-pandemic, and that studios had launched their own streaming services and were keeping the titles for themselves. He said cinemas now have to compete with their own suppliers for movie attendance.
The amusement tax “makes a movie ticket less appealing than subscribing to another streaming service, where people in Regina will simply stay home,” said Cohen.
Earlier, Paris had made the same point that the message being sent to people in Regina was to “stay home. Stay on your couch. Don’t go on dates, don’t go to your kid’s birthday party, stay home.”
Council vote was not unanimous
In the end, council went along with the recommendation of lowering the amusement tax to five per cent, but stopped short of scrapping it entirely.
Councillor Bob Hawkins was one of the yes votes, calling the administration recommendation “fair and sound.” Hawkins also made it known he was not persuaded that scrapping the tax would keep ticket prices down.
“I’m just not persuaded that people are staying away from the theatre because of this tax. Nor am I persuaded that if the tax were removed, the price of movie tickets would go down … I suppose this might prevent them from buying popcorn, but I doubt that even that’s the case.”
Councillor Lori Bresciani, who chaired the meeting, cast one of the “no” votes, after she tried to move that the amusement tax should be removed completely. That was deemed out of order, but before the final vote Bresciani made clear her displeasure.
“I think this is an absolute regressive tax for an industry that has been under fire, not just in the pandemic,” said Bresciani. “In four more days, the Rainbow theatre closes its doors. Let’s just call it a theatre tax if that’s what you want to. I constantly hear from many ‘we want to be open for business, we want to be open for business, we want to welcome business here.’… this is 16 per cent, this is the highest in Canada. Are we open for business?”
In speaking to reporters afterward, Bresciani also noted she thought singling out the cinemas for the tax was discriminatory.
“I would not want us to be looking at taxing just one industry, that was my concern today. I think we actually have to look at it … I would say coming out of the pandemic, this is absolutely the wrong time to still be the highest in the country to tax families.”
She was also asked if she thought the amusement tax contributed to Rainbow closing its doors.
“Absolutely, I do,” she said. “There’s only so much you can do.”
The Executive Committee decision to lower the amusement tax now goes to the full council meeting for a final decision Sept. 28.