REGINA - The future of the Regina Exhibition Association Ltd. (REAL) is up in the air after the Regina city council passed a motion to consider options for the corporation's future.
The motion was brought forward by Ward 3 Coun. David Froh. He mentioned during the city council meeting that REAL remains one of the city's biggest civic assets. Froh also noted, "we can’t simply understate how critical it is to have a community hub that welcomes over 3 million visitors annually."
By most measures, REAL still remains one of the best sport-complexes in Canada, said Froh.
However, the municipal corporation has experienced challenging financial situations over the past number of years.
A 2024 report from MNP outlined that REAL is not meeting the requisite contribution margin of nearly 44 per cent to operationally breakeven.
Additionally, the report found that REAL's operational centre has incurred over $18 million in negative earnings before interest, taxes, depreciation, and amortization are factored in.
Because of these negative earnings, the city has had to increase funding towards REAL to cover its debt, cashflow challenges and operating deficit.
In Dec. 2023, the city gave REAL $5.7 million to help with these challenges. Then, in Sept. 2024, the city gave REAL an additional $4 million.
While it’s not official yet, it’s estimated REAL is expected to ask for a 2.21 per cent mill rate increase in the 2025 budget, which would be over $12 million for this year.
Froh believes that the pandemic did not cause this situation, but rather, "a symptom of a challenging business model and a corporation that has relied on multiple councils for corporate investment."
During his presentation, Froh said he and his fellow councillors "can’t in good faith or conscious[ly] ignore the challenge in particular [with] the rising, escalating financial requests."
Froh later said, "money is tight at the household level in Regina. He added REAL’s ask from city council has gone from $400,000 in the past few years to now asking for over $12 million.
So, the request from the motion is that city administration come up with several options regarding the future of REAL within 18 months. City administration will work with REAL’s board of directors on the options, where REAL will provide financial reporting and its milestones to the city.
Part of that ask from REAL is to provide monthly financial updates instead of quarterly.
It’s worth noting the motion has already laid out potential options, which include integrating most, if not all, of REAL’s physical assets and operational responsibility into the City of Regina.
Another option is dissolving REAL as a municipal corporation, which would lead the city to take over its operational responsibility and assets.
A third option could be maintaining REAL as a municipal corporation. This option would see advancing financial efficiencies to reduce REAL’s costs and management positions while developing a new governance and business model. This would aim to provide effective public services while managing public spending better.
All other councillors in attendance agreed with the decision to look at REAL’s future, with the motion passing 9-0.
After city council, Froh met with reporters and was asked about his take on the motion and what he hoped the outcome would be.
Froh said, "I would prefer to motion without prejudice or pre-consideration. I don't believe that I have enough information yet to make a decision, but I also don't want to wait many years to make a decision and revisit this every single year."
Froh also noted there isn’t a short-term or medium-term solution for REAL and that the corporation will require materials and public dollars for a long-time. As city councillors, Froh said, "we owe it to the taxpayers to make a decision and stick with it."
He was also asked about the public’s opinion on REAL and if it can have a fresh start, to which he said, "absolutely." He added, "It wasn't too long ago when REAL was, you know, do[ing] a little bit better than breaking even. [So, if] you hire a new CEO, you have a fabulous new board [and] you have a brand new council [that can all make it work]."
Regina Mayor Chad Bachynski also spoke to reporters and was asked about the importance of REAL having success in fulfilling the goals the city has for it.
Bachynski said ,"it's important because it is a part of our city and provides a number of services that you know we all enjoy whether it's you know hockey, soccer [Rough]Rider games, you know, we have so many activities that make our city vibrant that are pinned around what REAL can provide with their assets and their staff and so I think them being successful is imperative to holding on to that vibrancy and you know make it sustainable in the future."
