Saskatoon's Proposed Economic Development Merger Meets Strong Opposition
The City of Saskatoon is actively investigating a potential merger between two key economic development organizations: the Saskatoon Regional Economic Development Authority (SREDA) and Discover Saskatoon. This exploration comes despite Discover Saskatoon's leadership making their position unequivocally clear—they believe such a consolidation would be detrimental to the city's economic growth and tourism efforts.
Funding Discussions Reveal Tensions
Discussions about the potential organizational change emerged this week as Saskatoon's governance and priorities committee addressed Discover Saskatoon's fee-for-service agreement, which is scheduled for renewal in 2026. The tourism organization has requested nearly double its current funding, highlighting what they describe as significant financial pressures.
City manager Jeff Jorgenson spoke about potential efficiencies that could be realized through a merger between SREDA and Discover Saskatoon. However, Discover Saskatoon's CEO and board chair have publicly expressed concerns about such a move, warning that reducing their capacity would not simply shift work elsewhere but would instead bring it to a complete stop.
Financial Arrangements and Performance Metrics
The committee considered several funding options for Discover Saskatoon, including:
- Maintaining the current funding arrangement
- Fully funding the organization's increased request
- Gradually increasing core contributions from $637,673 in 2026 to $1,237,673 by 2029
City funding currently represents approximately 30 percent of Discover Saskatoon's operating budget, with the remaining 70 percent covered by revenue from hotel partners through voluntary destination marketing fees.
The committee ultimately reached a compromise decision, voting in favor of a three percent annual core contribution increase for inflation while also establishing an annual bonus payment of up to $125,000 contingent on Discover Saskatoon meeting specific performance metrics.
Additional Funding for Major Events
Councillor Zach Jeffries successfully moved to add $50,000 to the major special events reserve from 2027 through 2029. This reserve provides Discover Saskatoon with $300,000 annually to bid on and attract significant events to the city.
City administration noted that Discover Saskatoon believes it operates at a funding disadvantage compared to other cities, putting Saskatoon at a competitive disadvantage when attempting to attract major events. Administration maintains that the city's annual contribution aligns with funding levels in comparable municipalities.
Structural Challenges in Tourism Funding
A significant structural challenge identified in the discussions is Saskatchewan's lack of a legislated accommodation tax. Such a tax would create a mandatory charge on accommodations including hotels and Airbnb properties, potentially generating substantial tourism funding.
City manager Jeff Jorgenson noted that this proposal has been presented to the provincial government in the past but was rejected. "Some tourism organizations and industry were opposed to it, frankly. So the province took that off the table," Jorgenson explained.
According to city reports, an accommodation tax would typically create higher funding shares for tourism organizations and could potentially replace city contributions currently drawn from property taxes. Instead, Saskatoon relies on a voluntary destination marketing fee that some hotels opt into to support Discover Saskatoon's marketing activities.
The ongoing discussions reveal fundamental tensions between city administrators seeking organizational efficiencies and tourism leaders concerned about maintaining effective economic development capacity. As Saskatoon approaches the 2026 renewal deadline for Discover Saskatoon's agreement, these conversations will likely continue to shape the city's approach to economic development and tourism promotion.
