City reveals it has $818 million in working capital to help pay for new downtown arena

A year after city council approved a new arena deal, the City of Calgary has revealed it can tap into an $818 million fund to help pay for the new facility.

When the deal for the $926.4 million arena in Victoria Park was announced by council in April 2023, the city said it had $537 million in cash ready for the project.

Officials have been asked repeatedly since that time how the project could be built without the full amount of money available.

The only answer provided, until now, was that something called working capital could be utilized, meaning the city wouldn't need to raise property taxes or take on debt.

However, no details were provided on just how much working capital the city has available.

The city's chief financial officer, Carla Male, said she decided to include information on the working capital account in the city's 2023 annual financial report for the first time.

"We've always had working capital. We just haven't had that disclosure," said Male. "I think it's just the evolution of continuous improvement in reporting and getting better and better. There's certain other disclosures that change from time to time as we continue to mature transparency with the public."

The Calgary Sports and Entertainment Corporation (CSEC), which owns the NHL's Calgary Flames and other local professional sports franchises, will contribute $40 million toward the new arena, while the government of Alberta will pledge $30 million. 

In total, the city has agreed to contribute $850.3 million toward the project.

In her time as the city's CFO, Male said the available working capital tends to fluctuate between $600 million and $1 billion.

But the amount that's available at any point in time varies every day.

The city has provided these working capital figures for the past four years: $818 million (2023), $837 million (2022), $598 million (2021), and $735 million (2020).

Male said the city often spends working capital on capital projects. Later on, it can make recoveries on those projects in grants or other fees. In addition to those funds, the city also has immediate access to $600 million in short term borrowing.

Besides accessing working capital, the city will use money from its major projects reserve fund and the fiscal stability reserve to pay for the arena.