Prime Minister Mark Carney expressed his desire on Tuesday for private investors to assume control of operations at the four largest airports in Canada, located in Toronto, Montreal, Calgary, and Vancouver. This announcement was made during a government-led investment summit in Toronto. The proposed policy change would allow the federal government to retain ownership of airport land and assets while shifting financial resources from major airport operations to support smaller regional airports, ultimately aiming to reduce costs for travelers.
Currently, under Canada’s airport operational framework, private, not-for-profit airport authorities hold leases from the federal government and manage airport facilities independently, overseeing various tasks such as runway maintenance, baggage handling, and terminal upkeep. These airport authorities have financial autonomy, setting their own fees to cover operating expenses.
The Prime Minister’s envisioned model involves investors managing airports through fixed lease periods, with Transport Canada retaining regulatory control and oversight. Legal expert Karen Hennessey from Gowling WLG’s Ottawa office suggests that Carney’s plan may necessitate legislative modifications. She highlights the importance of a concession agreement, resembling a lease, outlining service expectations, safety protocols, cost considerations, and workforce management requirements.
The process of implementing such agreements could span from six to nine months if both parties are motivated, though negotiations might extend longer to ensure a well-structured arrangement. While private airport operations are uncommon in North America, a study in the Journal of Air Traffic Management revealed that over half of the busiest airports globally had some form of private sector involvement, with Europe leading at 43%.
Carney emphasized the potential for Canadian pension plans, already invested in foreign airports, to bring their expertise back home. Despite concerns voiced by opposition parties like the NDP and Bloc Québécois regarding increased costs for travelers under privatization, the Prime Minister seeks to leverage private-sector investments to enhance airport efficiency and capitalize on the experience gained from global airport privatization models.
In response to the proposed changes, the Canadian Airports Council has adopted a cautious stance, emphasizing the need for investment discussions that align with growth objectives and maintain air travel affordability for Canadians. While the debate on airport privatization continues, previous attempts to privatize major Canadian airports under former Prime Minister Justin Trudeau’s government faced mixed feedback, leading to the decision not to proceed with airport sell-offs in 2018.