The federal government is moving ahead with plans to attract private investment in Canada’s four largest airports, Prime Minister Mark Carney said.
“I am announcing today that we will seek private investment through long-term concessions to operate Canada’s four largest airports,” Carney said during his keynote address at an investment summit on Tuesday.
The new model will be based on “best practice in other countries” and the federal government will retain ownership of the underlying land and assets, Carney said.
“But we will unlock their true value, by bringing in new capital and expertise into their operations and growth,” he said.
The money raised from the investment will be spent on infrastructure development, including on regional airports across Canada, Carney added.
“Canadian pension funds already invest successfully in many airports around the world. It is time to bring that same expertise home to more directly benefit all Canadians,” Carney said.
Canada’s regulatory bodies will maintain oversight when it comes to questions of security and standards, he told reporters later in the day.
The four busiest airports in Canada are Toronto Pearson International, Vancouver International, Montreal Trudeau International and Calgary International airports, according to Transport Canada data.
The move will result in higher costs for passengers and airlines, pressure on workers, and more airport revenue flowing to private investors, the Canadian Labour Congress said.
“In the middle of a trade war, handing profitable public infrastructure over to private investors is exactly the wrong move. If the goal is to make Canada stronger and more secure, we should be investing in the assets we depend on, keeping their value here at home,” said Lily Chang, secretary-treasurer of the Canadian Labour Congress.
The privatization of Canadian airports should not “end up being sweetheart deals for corporate power brokers and Liberal insiders at the expense of hard-working Canadians who are already struggling to put food on their table,” Conservative Leader Pierre Poilievre said.
NDP Leader Avi Lewis said the move was a “mistake we do not need to make” and would be “a terrible deal for travellers, workers, and the public purse.”
The Bloc Quebecois said it would oppose the privatization of Montreal airport, one of Canada’s busiest, to “foreign interest,” Bloc Leader Yves-Francois Blanchet said in a statement.
Aside from leaving no guarantees that Ottawa would get to keep the revenue from these airports, Blanchet said he was also concerned about higher ticket prices for ordinary travellers.
The Carney government’s plan to attract private investment in airports has been in the works for some months now, with some details being included in this year’s Spring Economic Statement.
The federal government said in the document it is working to “unlock the full potential” of Canada’s airports by exploring “alternative models of ownership.”
As of 2020, nearly 20 per cent of the airports in the world had been privatized. A 2022 study in the U.S.-based non-profit National Bureau of Economic Research compared the performance of 2,444 airports around the world in 217 countries.
The report found that the number of passengers per flight – a key metric when assessing airport efficiency – increased by 20 per cent when private equity funds buy government-owned airports and overall passenger traffic rises by 84 per cent.
Airports also get bigger with private equity funds as owners, the report found, with private owners adding new terminals and gates. The study also found fewer flight cancellations.
However, flying may get more expensive as the fees that airports charge to airlines tend to rise after an airport is privatized, the report added. The rise in the number of privately owned airports was also associated with a push for deregulation and pushback against government controls, such as caps or limits on fees.
In the early 1990s, Canada chose to retain public ownership of airports but transferred operations of some of the busiest airports in the country to 21 privately owned airport authorities.
Canada currently has 23 airports that are leased to 21 private airport authorities by Transport Canada, with Mirabel International Airport and Pierre Elliott Trudeau Airport in Montreal operated by the same authority.
The federal government collects up to 12 per cent of airport gross revenues in the form of rent, the Canadian Airports Council says. Between 1992 and 2019, airports have paid more than $6.5 billion in “rent” to the federal government, the council says.