Prime Minister Mark Carney said Tuesday he wants private investors to take over operations at Canada’s four largest airports, in Toronto, Montreal, Calgary and Vancouver.
Speaking at a government-led investment summit in Toronto, he said the policy change — which would maintain the federal government’s ownership of airport land and assets — would allow Ottawa to shift spending on major airports’ operating costs toward smaller regional airports. That, he said, could reduce traveller costs at those destinations.
Under the prime minister’s proposed model, investors could manage airports for set lease periods, while regulation and oversight would remain with Transport Canada.
Here’s what you need to know about the proposal.
How do airports operate now?
Under Canada’s current airport operational structure, private, not-for-profit airport authorities lease airports from the federal government and run the facilities themselves, overseeing everything from runway maintenance and baggage handling to terminal building maintenance.
Airport authorities are financially independent and are responsible for setting their own fees and recovering their operating costs.
How could Carney’s plan work?
Karen Hennessey, a partner in the business law group in Gowling WLG’s Ottawa office, said Carney’s plan likely would require legislative changes.
Hennessey said what the prime minister is proposing is a concession agreement, something similar to a lease. She said the government’s expectations on service levels, performance, public safety, passenger costs and employee management would have to form part of that agreement.
“This isn’t going to be the situation where the concessionaire is allowed to just take over and run it the way they would run any other business,” she said.
The concession holder, in turn, would want clarity on their investment commitments and the regulatory environment, Hennessey said.
“Like any commercial arrangement, there’s going to be some balancing to be done to meet those competing interests,” she said.
She said such deals could materialize within six to nine months if both sides are motivated. They could also take much longer to negotiate.
“Getting the structure right, I think, is more important than moving quickly,” she said. “So I don’t think we’re going to see this happening in the short term.”
Are private airports common?
Privately operated airports are rare in North America but not everywhere around the world.
A study published in the Journal of Air Traffic Management found 51 per cent of the top 100 busiest airports in 2018 had some type of private sector participation. Europe had the most private involvement at 43 per cent, followed by Asia and the Pacific region at 26 per cent.
Carney told the investment summit Tuesday that Canadian pension plans are already invested in airports abroad and he wants to bring that expertise home.
The Australian Competition and Consumer Commission has been tracking the effects of privatization on Australia’s airports, has said that passengers face price increases when airports become privatized local monopolies.
Its most recent report says while increased infrastructure spending will likely mean higher costs for passengers, people are generally satisfied with the services.
A 2023 University of Alberta study found privately operated airports tended to operate more smoothly, with fewer cancellations and more customer satisfaction with terminal amenities. The study noted this comes with increased fees — about $20 more per passenger.
What do Canadian airport authorities think about privatization?
Earlier this year, as talk of privatization swirled, the head of Toronto’s Pearson airport said the existing public ownership model has served travellers well but she remained open to “enhancements” that tap into private-sector investment.
Deborah Flint, CEO of the Greater Toronto Airports Authority, said she shares the federal government’s goal of expanding Pearson’s capital value. She also said the current management structure has shown its worth by steering Canada’s biggest air travel hub through major expansions over the decades.
The Canadian Airports Council took a cautious approach to the privatization talk.
“Canada’s airports are always open to investment conversations that align with our growth and have affordability of air travel for Canadians at the forefront,” said CEO Monette Pasher in an emailed statement.
She added that Ottawa had indicated it would “work with airports to … extend airport leases. Those conversations are underway.”
What are opposition parties saying?
The NDP and Bloc Québécois both issued statements firmly opposing the prime minister’s plan. Both parties said putting airport operations into private hands will mean increased costs for travellers.
“We should be making air travel more affordable, protecting good airport jobs and improving public infrastructure, not turning critical public assets into decades-long money printing machines for CEOs and their shareholders,” NDP Leader Avi Lewis said in a media statement.
Conservative Leader Pierre Poilievre told a press conference in Vancouver he wants to see details of the policy before passing judgment.
“We want to make sure that it doesn’t end up being sweetheart deals for corporate power brokers and Liberal insiders at the expense of hard-working Canadians who are already struggling to put food on their table,” Poilievre said.
Where did previous attempts to privatize airports land?
Former prime minister Justin Trudeau’s government launched a study on privatizing Canada’s largest airports in cities like Toronto and Vancouver.
A 2016 review led by former cabinet minister David Emerson suggested the federal government could sell long-term leases for airports like Toronto Pearson to private investors in a bid to raise money.
The review found the high cost of running airports has made air travel more expensive for Canadians than for travellers in other countries.
In 2017, then-National Airlines Council of Canada CEO Massimo Bergamini called for a “clear repudiation of an idea that carries no demonstrable benefits for travellers, communities or Canada’s airlines.”
The federal government opted against moving forward on reforms after receiving mixed feedback. It announced in 2018 it did not have plans to sell off Canadian airports.
