Naheed Nenshi says the lawsuit is "dangerous" because of its "risk of chilling political discourse and freedom of speech."
It was filed by a developer who was secretly recorded discussing a plan to defeat members of Calgary city council, a video that was later released to the media.
Documents filed in Court of Queen’s Bench allege Nenshi distorted the comments made by Cal Wenzel for his own political gain.
None of the allegations in the lawsuit have been proven in court.
The video showed Wenzel telling a meeting of fellow developers which councillors he approved of and which ones he was supporting with campaign donations.
At the time, Nenshi called for an investigation into whether there was any breach of election laws.
Wenzel later said he had made no secret of how unhappy he was about the governance in Calgary, but said he never requested or received a favour from any alderman.
"Politicians should be able to speak on matters of public policy without the fear of being sued," Nenshi said Monday.
"That is why I must vigorously defend myself in this lawsuit.
Responding to concerns by colleagues on council as to whether taxpayers would have to foot the bill for the legal fight, Nenshi said city officials were checking with its insurer to see if it would be covered.
“I will note, I'm not a wealthy man. I left the private sector 13 years ago to devote myself to education, public service and community work. This suit, including the outrageous damages that Mr. Wenzel is seeking, is clearly designed to scare me and others."