The use of a ticket tax to repay a portion of Calgary’s new Event Centre was a prominent part of last year’s agreement, but it’s not sitting well with some Calgarians following recent news coverage.

While initially reported last year by LWC as a part of ongoing arena coverage, a March 31 story by CBC Calgary is reigniting debate over the user tax being Calgary Sports and Entertainment Corporation’s (CSEC) payback mechanism to the City of Calgary.

Under the agreements, the City of Calgary is covering the lion’s share of the upfront costs of building the arena. Included in that is the Facility Fee Agreement, where it clearly outlines that a 9.5 per cent ticket tax structure and how the City of Calgary would be repaid over 35 years, starting with $10 million in the first year, with one per cent added on to each additional year.

At that time, Project Calgary’s Peter Oliver said that the problem with a ticket tax being used to reimburse the city is that the taxpayers are already on the hook for costs.

“The ticket tax is paid by citizens of the city who are already paying for the arena right there. They are paying 97 per cent of the upfront cost, 52 per cent of the capital cost over 35 years of combined municipal and provincial contribution, and they’re getting zero per cent of the revenue,” Oliver said back in February 2024.

Oliver also noted that the increased revenue CSEC would get over 35 years would be in the neighbourhood of $3.4 billion on a new arena, with the City of Calgary unable to tap into that.

Significant anger was also expressed over the surcharge on social media, with members of the Calgary Flames subreddit decrying the fee last year.

According to former councillor and current mayoral contender Jeromy Farkas, the issue is that the same taxpayer is being used three times to fund the arena project – the city taxpayer, the provincial taxpayer, and the user.

“This means that between the money from the city, the province and the ticket tax, the public is now on the hook for about 85 per cent of the deal, and that’s not the partnership the Calgarians were first sold,” he told LWC.

Ticket tax is more transparent than hiding the costs: Coun. Penner

Farkas said if you try to compare this to an airport, which charges a surtax for upgrades, that’s a piece of critical infrastructure, vital to a city’s economic interests.

“The other is for the benefit of a for-profit corporation, and it’s pretty astounding,” he said.

“Council found hundreds of millions of dollars for a private arena, but they can’t seem to find the money for broken pipes. Our community facilities are crumbling. They’re cutting essential services around safety, security, mental health, struggling to find funding for things like the low-income transit pass.”

Farkas said that there should be no additional arena-related taxes, fees, or surcharges without public debate. If there is, it should go to pay for publicly accessible facilities.

Ward 11 Coun. Kourtney Penner said that councillors were generally aware that the Facility Fee Agreement would be a mechanism to help pay back CSEC’s portion of the arena project.

She said that when examining the streams to pay the City of Calgary back, CSEC could have increased base ticket prices, increased concession prices, increased parking prices, or found other ways.

“They could have hidden the cost through different avenues of goods and services that they sell throughout the building, and they’ve made the decision that they’re going to put it up front on a ticket, so that those users of the facility, those who are purchasing tickets, there is a direct correlation between the ticket sale and the repayment to the city,” she said.

“So, in that way, it’s transparent.”

Penner also said that they’d heard loud and clear from the public that the building shouldn’t be a publicly funded space. She said this furthers that notion by having the ticket tax—the users—paying the repayment portion.

“I would see that as a win; that this is a good way to measure the correlation between use and repayment,” she said.

Ward 1 Coun. Sonya Sharp, who chaired the Event Centre Committee, said councillors were well aware the ticket tax would be used to repay CSEC’s portion of the event centre.

“It could have been articulated maybe a little bit differently, but that was negotiated with the city and the partners, and council was aware. It’s not a surprise,” she said.

“It’s really unfortunate that there are candidates out there that are still trying to die on this hill. We’re moving forward with this project, and it’s getting built.”

Mayor Jyoti Gondek said the new arena is going to breathe life into an area that right now is a bunch of parking lots.

“The ticket tax is part of a shared responsibility model that is common in major infrastructure projects—similar to airport or concert facility fees,” she said.  
 
I”t’s important to note that CSEC remains contractually obligated to make its annual payments to the City regardless of how much ticket tax revenue is collected, providing the City with stable and predictable returns.”

In Edmonton, where there was an arena agreement struck 11 years ago, there is a 9.5 per cent ticket surcharge. It was also used by the Edmonton Arena Corporation to make quarterly payments to the City.

Other venues, such as the TD Place Arena in Ottawa, and Scotiabank Arena in Toronto also charge fees on top of ticket prices for users of their venues.