Prime Minister Mark Carney expressed his desire on Tuesday for private investors to assume control of operations at the top four airports in Canada, located in Toronto, Montreal, Calgary, and Vancouver. The proposed policy shift, as highlighted during a government-led investment summit in Toronto, aims to retain the federal government’s ownership of airport land and assets while reallocating spending for major airport operations towards smaller regional airports. This strategic move is expected to potentially lower travel costs at these regional destinations.
Under the envisioned model put forth by the prime minister, private investors could oversee airport management through fixed lease agreements, while regulatory oversight would continue to be under Transport Canada.
Current airport operations in Canada involve private, not-for-profit airport authorities leasing facilities from the federal government and independently managing various aspects such as runway maintenance, baggage handling, and terminal upkeep. These authorities have financial autonomy, setting their own fees to cover operational expenses.
Karen Hennessey, a business law group partner at Gowling WLG’s Ottawa office, suggested that Carney’s proposal may necessitate legislative modifications. She likened the concept to a concession agreement, akin to a lease, emphasizing that the government’s stipulations on service standards, safety, cost management, and employee practices would need to be integral to such agreements.
While privately operated airports are less common in North America, they are more prevalent in other regions globally. Notably, a study in the Journal of Air Traffic Management revealed that over half of the top 100 busiest airports in 2018 worldwide had some form of private sector involvement, with Europe leading at 43%, followed by Asia and the Pacific region at 26%.
Carney highlighted the existing investments by Canadian pension plans in foreign airports and expressed the intention to leverage that expertise domestically. Meanwhile, the Australian Competition and Consumer Commission’s monitoring of airport privatization effects in Australia indicated potential price increases for passengers, although satisfaction with services remains high.
The Canadian Airports Council and airport authorities remain cautiously open to discussions on privatization that align with growth and affordability for Canadian travelers. However, opposition parties such as the NDP and Bloc Québécois have voiced concerns over increased costs to travelers under the proposed privatization plan.
Previous attempts to privatize Canada’s major airports under former Prime Minister Justin Trudeau’s government were met with mixed feedback and ultimately did not progress following a review suggesting potential cost implications for travelers.