Prime Minister Mark Carney announced on Tuesday his intention to invite private investors to take control of operations at Canada’s primary airports located in Toronto, Montreal, Calgary, and Vancouver. This initiative aims to retain federal government ownership of airport land and assets while redirecting funds from major airport operations to smaller regional airports, potentially reducing costs for travelers at these destinations.
Currently, private, not-for-profit airport authorities lease these airports from the government and manage all aspects of their operation independently, including runway maintenance, baggage handling, and terminal upkeep. They set their own fees and cover their operating expenses.
Under Carney’s proposed model, investors could oversee airport management through fixed lease periods, while Transport Canada would continue to regulate and supervise operations.
To implement Carney’s plan, legal adjustments may be necessary, according to Karen Hennessey, a partner at Gowling WLG’s business law group in Ottawa. She highlighted the importance of establishing a concession agreement that outlines service standards, safety measures, passenger costs, and employee management expectations.
Private airport operations are less common in North America but are prevalent in other regions worldwide. A study on air traffic management revealed that over half of the busiest airports globally in 2018 involved private sector participation.
Carney emphasized that Canadian pension funds already invest in international airports and aims to leverage this expertise domestically. However, concerns about potential price hikes for passengers due to privatization have been raised based on experiences in other countries.
While opposition parties like the NDP and Bloc Québécois criticize the privatization plan, Conservative Leader Pierre Poilievre awaits further details before forming an opinion. Previous attempts to privatize Canadian airports faced mixed feedback, leading the government to decide against selling off these assets in 2018.