Prime Minister Mark Carney expressed his desire for private investors to assume control of Canada’s largest airports located in Toronto, Montreal, Calgary, and Vancouver during a government-led investment summit in Toronto. Carney’s proposal involves maintaining federal government ownership of airport land and assets while allowing a shift in spending towards smaller regional airports to potentially reduce traveler expenses at those locations. Under this plan, investors would operate the airports under lease agreements for specific periods, with Transport Canada retaining regulatory oversight.
Currently, private, not-for-profit airport authorities lease airports from the government and manage operations independently, covering tasks ranging from runway maintenance to terminal upkeep. These authorities are financially self-sufficient and determine their own fees to cover operating expenses.
Karen Hennessey, a business law group partner at Gowling WLG’s Ottawa office, suggested that Carney’s plan would likely necessitate legislative adjustments. The proposed concession agreement would outline the government’s expectations regarding service quality, safety, costs, and employee management for the investors. Hennessey emphasized that the concessionaires would need clarity on investment commitments and the regulatory framework.
Privately operated airports are uncommon in North America but more prevalent in other regions worldwide. A study in the Journal of Air Traffic Management revealed that over half of the busiest airports globally had private sector involvement in 2018. Carney highlighted that Canadian pension plans already invest in airports abroad, and he aims to attract this expertise back to Canada.
The Australian Competition and Consumer Commission monitored the impact of airport privatization in Australia, noting potential price hikes for passengers due to increased infrastructure spending. Despite higher costs, passengers generally expressed satisfaction with the services provided. Additionally, a University of Alberta study found that privately operated airports tend to offer smoother operations, fewer cancellations, and better terminal amenities, albeit with slightly higher fees per passenger.
While some airport authorities are open to private investments aligning with growth and affordability goals, the NDP and Bloc Québécois criticized Carney’s plan, fearing increased costs for travelers. Conservative Leader Pierre Poilievre called for a cautious approach pending further details on the policy’s implementation. Previous privatization attempts in Canada, led by former Prime Minister Justin Trudeau, faced mixed feedback, ultimately resulting in the decision against selling off Canadian airports in 2018.
