Prime Minister Mark Carney announced his desire for private investors to assume control of operations at Canada’s top four airports located in Toronto, Montreal, Calgary, and Vancouver during a government-led investment summit in Toronto. This proposed shift in policy would allow the federal government to retain ownership of airport assets and land while reallocating funds from major airport operations to support smaller regional airports, potentially lowering travel costs at those locations.
Currently, private not-for-profit airport authorities lease airports from the government and manage all aspects of airport operations independently, including maintenance, baggage handling, and terminal upkeep. They have financial autonomy to set fees and cover operational expenses.
Carney’s plan would likely necessitate legislative amendments, according to Karen Hennessey, a business law partner at Gowling WLG’s Ottawa office. She explained that the model proposed by the prime minister resembles a concession agreement, requiring clear terms on service levels, safety, costs, and employee management. The concession holder would seek clarity on investment commitments and regulatory frameworks.
Privately operated airports are uncommon in North America but more prevalent in other regions globally. A study in the Journal of Air Traffic Management revealed that over half of the busiest airports worldwide in 2018 had some private sector involvement, with Europe leading at 43%, followed by Asia and the Pacific region at 26%.
Carney highlighted that Canadian pension plans have investments in foreign airports, and he aims to leverage that expertise domestically. The Australian Competition and Consumer Commission’s monitoring of privatized airports in Australia indicated potential price hikes for passengers but generally positive feedback on service quality.
The Canadian Airports Council expressed cautious openness to investment discussions aligned with growth and affordability goals, emphasizing ongoing talks with the government regarding lease extensions. Opposition parties, including the NDP and Bloc Québécois, voiced concerns over increased costs for travelers if airport operations are privatized.
Previous attempts to privatize major Canadian airports were explored under former Prime Minister Justin Trudeau’s administration, with a 2016 review suggesting the sale of long-term leases to raise funds. However, following mixed feedback, the government decided against proceeding with airport privatization in 2018.
