During the pandemic, while gaming communities across Canada have taken a financial hit, the Cape Breton Regional Municipality (CBRM) is doing fine. Unlike many similar entities, it doesn’t receive a share of revenue or profits and is therefore not subject to downturns.
The local gaming venue, Casino Nova Scotia in Sydney, does not pay its host community a commission. Per the municipality communications advisor, Christina Lamey, it gets rent and property taxes only. But this may not be enough.
“It is the CBRM’s position that the province of Nova Scotia should enter
into a revenue sharing agreement with CBRM as the host municipality of
a casino to fairly compensate costs associated with having a casino.”
This might be the right time to change the existing arrangement to provide additional revenue to the municipality.
The casino first opened in 1995. The awakening of the local gambling sector had economic and social impact. The problem arises when revenues are redirected out of the community instead of the local industries.
Most of the money wagered – $98.2 million in 2019 – flows to British Columbia (where Great Canadian Gaming Corporation is headquartered) and to Halifax. The more limited provincial revenue is split between First Nations that signed gaming agreements with the province and general spending on health care and roads.
The situation in Nova Scotia is not mirrored in other provinces like Ontario and British Columbia. It is called a “hosting fee” or percentage of slot and table game profits. It can be the largest source of non-tax revenues to reinvest in the community.
However, a tangible benefit from casinos are jobs, wherever they are located. The unemployment rate in the province in the early 1990s reached twenty-five percent. This benefit could outweigh hosting fees, but it may not be the case at present.
Nonetheless, it is a vital issue to discuss and it may well be on the agenda of the new municipal government.