Prime Minister Mark Carney has expressed his desire for private investors to assume control of operations at Canada’s major airports located in Toronto, Montreal, Calgary, and Vancouver. During a government-led investment summit in Toronto, he highlighted the proposal, emphasizing that while the federal government would retain ownership of the airport land and assets, the shift in focus would enable Ottawa to redirect funds from major airport operating costs to support smaller regional airports, potentially reducing travel expenses at these locations.
Under the envisioned model by the prime minister, investors would be granted the opportunity to manage airports for specific lease periods, with Transport Canada maintaining regulatory oversight. Currently, Canada’s airport operational structure involves private, not-for-profit airport authorities leasing airports from the federal government and independently managing various aspects such as runway maintenance, baggage handling, and terminal upkeep.
Karen Hennessey, a partner in the business law group at Gowling WLG’s Ottawa office, noted that Carney’s plan would likely necessitate legislative modifications. She explained that the proposed concession agreement would entail clear expectations set by the government on aspects like service quality, public safety, passenger costs, and employee management.
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 in 2018, 51% of the top 100 busiest airports had private sector involvement, with Europe leading at 43%, followed by Asia and the Pacific region at 26%.
At the investment summit, Carney highlighted that Canadian pension plans have investments in foreign airports, and he aims to leverage that expertise domestically. However, concerns have been raised regarding potential price hikes for passengers when airports are privatized. Nevertheless, studies have shown that privately operated airports often lead to smoother operations and increased customer satisfaction, albeit with higher fees.
The response from Canadian airport authorities to privatization discussions has been cautious, with a focus on ensuring growth aligns with affordability for Canadian travelers. Opposition parties, including the NDP and Bloc Québécois, have voiced strong objections to the prime minister’s plan, citing concerns about increased costs for travelers and potential negative impacts on airport workers.
Previous attempts to privatize airports in Canada have faced mixed feedback, with a 2016 review suggesting the sale of long-term leases to raise funds but ultimately resulting in the government deciding against airport sell-offs in 2018 after evaluating various considerations.