City council puts up $8.7M for REAL, Economic Development Regina to pay back wage subsidy
CBC
Regina city council will bail out two municipal corporations by providing them with millions of dollars to pay back pandemic wage subsidies.
In a pair of votes on Wednesday, council unanimously voted to to provide approximately $8.7 million in grants to Regina Exhibition Association Limited (REAL) and Economic Development Regina (EDR).
The organizations will now use that money to pay back what they owe the federal government for accessing the Canada Emergency Wage Subsidy, which was meant to temporarily support businesses that had to shut down or that lost income due to the pandemic.
Council members acknowledged this may leave some residents frustrated.
"Frankly, I don't think there's one member of council or any member of the public who would like to pay this money back to the Canada Revenue Agency for programs that they designed for COVID relief," said Mayor Sandra Masters.
Public employers, such as municipal governments, were not eligible to receive funding from the program.
However, both REAL and EDR believed they qualified since "the definition of what constituted a public employer was not clear," according to a city staff report.
On Wednesday, interim REAL CEO Roberta Engel and EDR CEO Chris Lane maintained their decision was made in good faith and after consulting with legal counsel and the Canadian Revenue Agency.
Despite the approval during the pandemic a recent audit by the Canadian Revenue Agency found that both municipal corporations were not eligible to receive the subsidy.
They are now being directed to pay the money provided through the subsidy back. For REAL that means $8 million, or $6.5 million plus interest. EDR must pay back $918,000, or $755,000 plus interest.
The interest is compounding, which means the longer the two organizations go without paying the debt, the larger the total will be that they are required to pay back.
As of Wednesday, the figures will have increased from when the notice of assessment was issued by the Canadian Revenue Agency — rising to $8.18 million for REAL and $948,000 for EDR.
Both organizations have asked the federal government to waive the interest but it's not clear if that decision will be approved.
The municipal corporations were in agreement that they plan to fight the decision made in the audit.
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