OTTAWA – Canadian Prime Minister Mark Carney has expressed his desire for private investors to assume operational control of Canada's four largest airports: Toronto, Montreal, Calgary, and Vancouver. Speaking at a government-led investment summit in Toronto, Carney noted that this policy change would allow the federal government to maintain ownership of airport land and assets while reallocating funds from major airports to smaller regional ones, potentially lowering travel costs for those destinations.

Under Carney's proposed model, private investors would manage the airports for designated lease periods, with regulation and oversight remaining under the jurisdiction of Transport Canada. The plan aims to bring in private sector efficiencies while not relinquishing government control over essential airport operations.

Current Operations of Airports

At present, Canada’s airports are operated by private, not-for-profit airport authorities that lease the facilities from the federal government. These authorities oversee a wide range of operational tasks, including runway maintenance, baggage handling, and terminal upkeep. They are financially independent, with the obligation to set their own fees and cover their operating costs.

Implementation of Carney's Plan

According to Karen Hennessey, a partner in the business law group at Gowling WLG's Ottawa office, implementing Carney's plan would likely necessitate legislative changes. She elaborated that the prime minister's approach resembles a concession agreement, similar to a lease. This agreement would have to clearly outline the government's expectations regarding service levels, performance, public safety, passenger costs, and employee management.

Hennessey emphasized that the concessionaire would not be free to operate the airports solely as a business venture. Instead, they would need to ensure compliance with the regulatory framework while balancing the interests of all stakeholders. She mentioned that negotiations could take six to nine months if both sides were motivated, but the complexity of getting the structure right might extend this timeline.

Global Context of Private Airports

Privately operated airports are uncommon in North America; however, they are more prevalent in other parts of the world. A study in the Journal of Air Traffic Management revealed that, as of 2018, 51% of the busiest 100 airports globally involved some form of private sector participation, with Europe leading at 43% and Asia/Pacific at 26%. Carney highlighted that Canadian pension funds are already investing in airports internationally and expressed interest in bringing that expertise back to Canada.

Insights on the benefits of privatization were shared by the Australian Competition and Consumer Commission, which indicated that while passengers may face price hikes when airports become private monopolies, they generally experience satisfaction with services. A 2023 University of Alberta study suggested that private airports often operate more efficiently, leading to fewer cancellations and enhanced customer satisfaction, albeit with increased passenger fees averaging around $20.

Reactions from Canadian Airport Authorities