REAL must repay $8M in COVID relief payments after CRA audit

Regina Exhibition Association Limited (REAL) is facing an $8-million bill from the federal government.

According to the agenda for Tuesday’s Audit and Finance Committee meeting, the Canada Revenue Agency did an audit of Canada Emergency Wage Subsidy (CEWS) payments to REAL and Economic Development Regina (EDR).

CEWS was introduced in 2020 during the COVID-19 pandemic to help businesses dealing with restrictions and shutdowns retain and pay employees.

“Both REAL and EDR are required to pay back wage subsidies of $8 million and $918,000 respectively ($6.5 million and $755,000 before interest),” the agenda item says.

“Requests to waive the interest have been made by both organizations; however, these service level partners will likely seek assistance from the City in order to repay CRA.”

A memo from city manager Niki Anderson to Mayor Sandra Masters and city councillors that was leaked on social media featured more background.

The memo said REAL used the funds to pay for its operations through the pandemic, and those included serving as the site for the Saskatchewan Health Authority’s drive-thru COVID test centre, its drive-thru vaccination clinic and its emergency field hospital.

Other items also were paid for by the CEWS payments.

“The funds helped REAL provide sport and rec opportunities to the community and safe entertainment options such as parking lot events,” the memo said. “REAL also took the opportunity to perform maintenance, deep cleans and upgrades to some of its buildings at a time when they were not fully utilized.”

REAL confirmed it had received the CEWS money when it was seeking financial assistance from the City of Regina. During budget discussions REAL asked the city for five times more funds than it had received previously, citing a need to right its financial ship.

Anderson’s memo said the CRA audit determined REAL and EDR “were not eligible for CEWS funding,” meaning the money they received would have to be repaid.

“The CRA decision that the funds need to be repaid stemmed from the ownership structure of REAL and EDR,” Anderson wrote.

“These entities are solely owned by the City through a Unanimous Membership Agreement. Similar organizations across the country were also required to repay the funds.”

In a statement late Friday afternoon, the city confirmed the memo that appeared on social media was real.

“This a legitimate internal document that was shared with City Council in advance of the upcoming Audit and Finance Report on April 9th to make them aware of the audit findings in the report that is to be released this afternoon for the public agenda,” the city’s statement said.

However, the entire memo doesn’t appear in the agenda. The city declined to send a copy of the memo to 980 CJME, saying it doesn’t share internal documents.