Regina Exhibition Association Limited (REAL) was in the spotlight of Regina’s executive committee meeting.
A report before the committee said that REAL would owe $6.9 million by September and won’t be able to make its “obligated payments” without taking on more debt or getting a cash injection.
Over nearly five hours, councillors questioned REAL’s current business model and overall sustainability as an organization.
Despite those questions, the executive committee voted to let REAL arrange to take on $3.4 million of debt, within its $21-million debt ceiling, to help pay off what it already owes.
It also voted to direct the city administration to develop a long-term financial plan for REAL to be presented to city council.
President and CEO of REAL Tim Reid said they did everything possible to save as much money as possible while organizing events for residents to take in.
“We cut about as deep as we possibly could,” he said. “We furloughed many of our staff. We shuttered buildings when they weren’t in use, and you can see that in how the expenses turned off. The problem with it is, you couldn’t turn off all of the expenses.”
In a year where the Queen City Ex saw record attendance, Canadian Western Agribition saw pre-pandemic levels, and the City hosted both the Grey Cup and the Grey Cup Festival, 2022 proved to be a challenging year still.
“I think those were good times, and that’s exactly why we’re in the business of doing what we do,” he said. “The challenge that we had in 2022 wasn’t the end of the year. It was the start. In quarter one, we were shut down by municipal bylaws. The end of last year was as good as it could ever get in our business. The problem with it was the start of last year was less than good.”
Looking short-term, Reid said that REAL should be able to return to being profitable.
“I think we’ll see this year we’ll be another year of recovery. I think by next year; we’ll be back to standardizing our business,” he said. “The next 12 to 20 months, we’ll see the entertainment business and the recreation business settle, and I think we’ll be back to traditional times.”
Reid said looking long-term, the success of the next 12 to 20 months will determine the future of REAL.
“I would say long term; if we can’t get back to the position where we’re as profitable as we once were, then we are going to have to have a different relationship with the city.”
Mayor Sandra Masters said that REAL’s struggles aren’t surprising.
“It would seem to me over the last couple years, even in terms of presenting the past few budgets, that it was a bit of wait and see because no one could have predicted when COVID ended and when there’s a full recovery from COVID as well.”
Masters said that the City could have done more to support REAL during the pandemic.
“Coming out of COVID, the City was supposed to federal money and (REAL) received no support from the City of Regina during COVID. They laid off 82 per cent of their workers, and the City of Regina laid off none.”
As for the decision to restructure the organization’s debt, Masters believes that its the best option going forward.
“I think that the restructuring of debt is probably, appropriate now, given the last fourth quarter of 2022 was fantastic and a little bit more in line with kind of the expectation for the site. If that continues, and we can do that every year or every other year and have at least one quarter like that and not have a quarter shut down, it should work itself out.”
Regina’s city council will now have to approve REAL to take on the existing debt to make it official.
