Regina Airport Authority will receive over $1 million in municipal tax exemptions over the next five years.
Published Feb 22, 2023 • 3 minute read
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Regina Airport Authority (RAA) will not be required to pay a portion of municipal property taxes for the next five years, following the renewal of an agreement with the City of Regina.
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City council considered the request during Wednesday’s meeting, concluding with a unanimous 8-0 vote to approve the request.
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Coun. Landon Mohl (Ward 10) and Coun. Councillor Shanon Zachidniak (Ward 8) were absent.
“I don’t think I have to reiterate the importance of an airport to a capital city,” said Coun. Jason Mancinelli (Ward 9), ahead of the vote.
The now-approved agreement exempts the municipal portion of the airport’s property taxes, identified at $311,400 a year, for the next five years.
It also exempts the education and library portions included in the property tax, in the amount equal to the percentage of the municipal portion exempted each year.
This equates to a total of $1,557,000 in mitigated municipal costs for the airport, over the agreement term.
The RAA was previously granted a municipal property tax exemption from the City of Regina in 2019, on a five-year term that expires in 2023.
That agreement contained conditions which required RAA to cap airline fees, according to the Statistics Canada consumer price index (CPI) for Regina, and to ensure no outstanding property taxes were owed to the city of Regina.
An amendment, agreed to in 2021, also required the airport to secure an airline to provide daily, year-round flight service from Regina to a U.S. hub city by the end of December 2022, with service to commence by end of 2023.
RAA said it has requested the extension because is has yet been unable to fulfill that commitment.
The airport cited the disruption to air travel caused by COVID-19 in the past two years as a notable contributing factor in failing to land such a service.
Regina International Airport has had a tumultuous two years, including changes to federal guidelines that put the airport at risk of losing it’s international designation.
The airport saw an average of 65 per cent of pre-pandemic passenger levels in 2022, and posted a loss of $5.5 million in 2021.
A full recovery to pre-pandemic traffic is expected by 2025, but RAA said there are still straggling concerns delaying growth.
“RAA believes they are through the worst of the storm,” said the submission.
“As the airport has had millions in losses these past few years, the assistance provided by the tax exemption has been invaluable.”
Competitiveness in the travel industry has intensified since 2021, said the RAA, and administrators anticipate it could take up to two years to see “significant interest” from U.S. airline to connect to a mid-sized Canadian city like Regina.
All other terms of the original agreement have been met, according to the RAA.
Airline fees did not change until a recent five per cent increase announced this January, which remains below the CPI increase of 11 per cent over the same period, and RAA has no outstanding taxes owed to the city.
A continued exemption allows Regina International Airport to continue controlling expenses and keep fees low, to attract airline interest and expand flight offerings.
“Air service plays an important role in Regina’s economy and can be directly connected to corporate investment, tourism and the attraction and retention of employees,” said the RAA.
“As the airport has had millions in losses these past few years, the assistance provided by the tax exemption has been invaluable.”
As outlined in the submission to council, the renewed agreement approved Wednesday is an extension of the deal approved in 2019.
It will also span five years, from 2023-2027, and match previously outlined conditions, including extending the deadline to secure a U.S. connection from Regina.
lkurz@postmedia.com
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