Prime Minister Mark Carney announced his intention on Tuesday to have private investors take control of operations at Canada’s major airports in Toronto, Montreal, Calgary, and Vancouver. This move aims to shift the federal government’s focus on airport management costs to smaller regional airports, potentially reducing travel expenses for passengers. Under this proposed model, investors could oversee airport operations for fixed lease periods while regulatory oversight remains under Transport Canada.
Currently, private, not-for-profit airport authorities lease these airports from the government and handle various tasks such as runway maintenance and terminal services independently. They are financially autonomous, setting their own fees to cover operational expenses.
Karen Hennessey, a business law partner at Gowling WLG in Ottawa, mentioned that Carney’s plan would likely necessitate legislative adjustments. The proposed concession agreement would outline the government’s expectations regarding service standards, passenger costs, and safety measures. Hennessey emphasized the importance of striking a balance between the interests of both parties involved.
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 top 100 busiest airports in 2018 had some form of private sector involvement, with Europe leading at 43%, followed by Asia and the Pacific region at 26%.
Carney highlighted that Canadian pension funds are already invested in foreign airports, and he aims to bring this expertise back home. However, concerns have been raised regarding potential price hikes for passengers when airports transition to private ownership, as seen in Australia’s experience with privatization.
While some Canadian airport authorities are open to exploring private investment opportunities, opposition parties like the NDP and Bloc Québécois have expressed reservations, citing potential cost increases for travelers. Conservative Leader Pierre Poilievre emphasized the need for transparency in the policy’s implementation to ensure it benefits Canadians.
Previous attempts to privatize Canadian airports, including a study initiated by former Prime Minister Justin Trudeau’s government, have faced mixed feedback, leading to the decision not to proceed with airport privatization in 2018.