Taxpayers group questions public dollars in arena deal as supporters hail district revamp

The deal to replace the Saddledome is only in principle, with a lot of details still to be worked. (Derek Leung/Getty Images - image credit)
The deal to replace the Saddledome is only in principle, with a lot of details still to be worked. (Derek Leung/Getty Images - image credit)

A day after the city officials and the Alberta government announced they'd reached an arena deal in principle with the Calgary Sports and Entertainment Corporation (CSEC) and the Calgary Stampede, critics are taking aim at the use of public dollars to build an arena, saying there are more critical issues facing taxpayers.

"We've got record-high dependence on food banks, people are struggling with inflation, they're struggling to afford their homes. Is this really appropriate use of taxpayers money to build an NHL arena? No, it's not," said Kris Sims, the Alberta director of the Canadian Taxpayers Federation.

But as critics attacked the use of public dollars in the proposed development, supporters emphasized the deal goes beyond replacing the aging Saddledome and offers much-needed revitalization in the surrounding area.

"There is so much to gain from having a 'master planned' culture and entertainment district," said David Lo, executive director of the Victoria Park Business Improvement Area. "That's the real prize here."

The city is committing $537 million toward a new event centre that will replace the Saddledome and anchor the Rivers District, which includes East Village and Victoria Park, the city said. The project's total price tag is pegged at $1.2 billion.

The provincial government said it will contribute $300 million toward surrounding infrastructure, such as roads, utilities and parking. It's investing another $30 million to cover half the cost of a separate community arena. The city and CSEC will split the other half of that cost.

The Calgary Flames ownership group will be spending $40 million upfront, and an additional $17 million per year, increasing one per cent each year over 35 years.

The Canadian Taxpayers Federation is not opposed to a new arena, Sims said, but it's against public funds being used to build one, especially given the likelihood the price tag will go up over time.

"Are Calgarian property owners going to have an eight or 10-per-cent property tax hike? Are businesses going to have their taxes go way up and hollow out the downtown again? Are we going to have to beg for more funding from other levels of government, which is, again, taxpayers?" Sims said.

Questions on the deal

The deal is only in principle with a lot of details still to be worked out, such as who would cover cost overruns. But, in a document posted on the Flames' website, it says both CSEC and the city will share cost overruns. It's just not clear what the split would be.

Former city councillor Jeromy Farkas, who was opposed to an earlier deal that collapsed more than year ago, says he has a lot of questions around this one.

"Especially when you think about the hundreds of millions of dollars that the province and the city have to fork out upfront and the Flames [ownership] only has to put in five per cent of that (upfront) and a marginal payment every year," he said. "It just makes zero sense to me."

Calgary Mayor Jyoti Gondek is defending the new deal with the Flames ownership, saying its larger scope makes it better than the one that fell apart 16 months ago.

She said adding in the provincial portion allows much-needed improvements to be done, such as an underpass at 6th Street to improve connectivity in the area. The mayor says the deal will also include indoor and outdoor event spaces.
"So now that that's clear and there's funding in place for it, the district can actually support the event centre," she said. "Previously, we were fixated on the building alone."

Smith hopes it won't be an election issue

Premier Danielle Smith faced questions Wednesday regarding the province's contribution, but she repeated the fact that the money will be spent on infrastructure, not construction of the arena.

She said she hopes the deal won't become an issue in the upcoming election.

"I would hope that, in the spirit of unanimity, we would see the same kind of approach of all the political parties in supporting this deal," Smith said.

"It really is a partnership between Calgary and the Flames, and the additional dollars that we're investing in infrastructure, the kind of things that Calgary needs anyway to build out that district. So, I'm really hopeful that the next government, regardless of who it is, is going to honour the deal."


Smith said the province has committed more than $100 million a year over the next three years. She believes the provincial government's contribution should be a separate debate, not hinged on the arena deal.

"If you wanted to argue [about whether] that's a good use of taxpayers money, fair enough," she said. "They could probably have that chat, but having it connected to this big and expensive NHL arena is what's causing our concern."

Opposition NDP Leader Rachel Notley said Smith doesn't get to take the arena deal out of the election.

She said Smith has openly and directly tied the project to the ballot box and is now obligated to give voters as much information as possible so they can make an informed decision.

That includes, said Notley, any secret financial details of who is on the hook for what in the deal involving the province, the city and the Flames ownership. 
"I am calling on Danielle Smith to make those details public," Notley said.

An investment in Calgary

Calgary Chamber of Commerce CEO Deborah Yedlin sat on the event centre committee and she believes the deal is a great investment by both levels of government.

She believes the deal that will result in spin-off private investments — creating jobs, future tax revenues and a sense of pride that will help Calgary shine on the world stage.

"There are always tough choices that governments are faced with … but the reality is we need to continue to revitalise the city and its infrastructure," she said.

"We have to take risks and we have to believe in ourselves and that's what this step forward with an event centre says to me, and what it should say to Calgarians."

The Business Council of Alberta also supports the deal.

In a statement Wednesday, council president Adam Legge said the deal would be an investment in the city's core, prompting growth not only for Calgary but for the province overall.

With a deal in principle, city officials are now tasked with starting formal discussions on definitive agreements. That's expected to get underway through spring and summer 2023.