A new motion is once again raising the question of potentially dissolving REAL, in the absence of a clear financial plan from the operator.
Regina’s city council is poised to once again debate whether to get involved in cleaning up the mess of finances lingering around Regina Exhibition Association Ltd. (REAL).
Coun. David Froh (Ward 3) is bringing a motion to today’s council’s meeting, asking city administration to draft a report on alternate ownership options for the arms-length municipal corporation.
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It specifies examining the merits of folding REAL partially back into the city, dissolving REAL entirely or maintaining REAL as an arm’s-length municipal corporation but with an new governance model.
Froh’s draft of the motion explains the desire to revisit the idea is because currently, there is “no clear short- or medium-term road map that provides a definitive picture of financial sustainability and public service for REAL.”
REAL was directed in October to develop such a road map and return to council for approval, but has not yet presented one.
The call to review the entertainment district operator follows public upset after documents revealed REAL has not made a profit since 2020 and a “sexist” tourism campaign scandal in 2023, when REAL was running Tourism Regina.
REAL has received $22.3 million in operating funding from the city since 2023, of which $15.4 million was above-and-beyond the corporation’s budget in order to cover deficits.
This includes a $3.4 million debt restructure in 2023, a $4-million top-up in 2024 to cover operations, and $8 million to cover a pandemic subsidy clawback by the Canada Revenue Agency.
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Last time the question of scrapping REAL was put before Regina’s city council, they decided the move would put more financial pressure on the city than if REAL was allowed to right itself.
As third-party MNP Consulting reminded in a 2023 report into REAL’s viability, the City of Regina is REAL’s sole stakeholder and guarantor for REAL’s assets and debts.
Should REAL default, the city would be responsible for taking over operating all facilities at REAL District, for the $16 million in accrued debt on REAL’s books and for another $44 million in deferred maintenance needs.
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This new motion arrives in the lead-up to Regina’s 2025 budget deliberations. A preliminary summary of budget details anticipates REAL will need $12.7 million in operational funding in 2025.
This would be a $7 million increase from 2024, equating to about a 2 per cent increase of the city’s overall mill rate.
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REAL warned city council it would need at least $12 million in funding earlier in the fall. A more detailed budget ask from REAL is expected ahead of budget talks set for March 17.
If this motion passes as written, city administration would deliver a report in the next 18 months.
More to come…
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