What to know
- Mark Carney wants private investors to operate Canada’s four largest airports through long-term concessions.
- The federal government says it would retain ownership of the underlying airport land and assets, while private investors would bring capital and expertise to airport operations and growth.
- Carney says the government could raise tens of billions of dollars through the concessions and reinvest the money into regional airports, local transportation and other infrastructure.
- Doug Ford supports the proposal and says Toronto’s Billy Bishop should also be opened to private investment, despite the federal government previously rejecting his proposal to expand the island airport for jets.
- Experts say key details remain unclear, including how investors would be selected, how profits and existing airport debt would be handled, and what the arrangement could mean for passengers and airlines.
Ontario Premier Doug Ford has voiced his support for Prime Minister Mark Carney’s plan to seek private investment to operate some of the country’s largest airports, but experts say questions about the proposal remain unanswered.
On Tuesday, Carney announced that the federal government is seeking private investors to take over the operation of four large Canadian airports, including in Toronto, Montreal, Vancouver, and Calgary.
According to the prime minister, under the new system, the government would remain as the owner of the airport land and assets, while investors would manage airports in certain lease periods. Airport regulations and oversight would still be managed by Transport Canada.
This would allow the government to reduce its spending on major airports and allocate more towards regional airports, reducing costs for travellers.
“The government of Canada will retain ownership of the underlying land and assets, but we will unlock their true value by bringing in new capital and expertise to their operations and their growth,” Carney said during the Canada Investment Summit on Tuesday.
How would this work?
Canada’s main airports are owned by Transport Canada, while private not-for-profits oversee their operations by leasing them from the government. Airport authorities currently are the ones responsible for setting their own fees and operating costs independently.
McGill University’s faculty lecturer in aviation management John Gradek said the new system would involve long-term leases or concessions, under which these private investors would overview operations instead.
“They’ve chosen are the [airports] that they figure that have got the greatest possibility of monetizing the value and to offer it into the long-term concession market, and have those concessions manage those airports with due regard to improving levels of service and improving the utilization of those assets and getting those assets to generate additional revenues for the airport,” he explained.
However, as pointed out by Toby Lennox, the former Vice-President, Strategy Development and Stakeholder Relations at the Greater Toronto Airports Authority, without more details on the plan, it is difficult to determine exactly what would change.
“It’s not clear. The government is expecting a significant return out of the sale, and that appears to be what their primary objective is. So, quite how that is actually going to impact passengers as they come and go into the terminal and air carriers as they operate there, I don’t think we can. I don’t think we can know yet what it means,” he said.
Doug Ford supports plan
Speaking with reporters at a press conference on Wednesday, Ford voiced his support for the project, referring to the idea as “fabulous.”
“I think it’s fabulous. I have to give credit where credit is due. The PM is on fire, he is moving… He’s privatizing airports that should’ve been done years ago,” the premier said.
In addition to endorsing the plan, Ford also said Toronto’s Billy Bishop airport should also be open for private investors, reopening conversations about expanding the island airport.
“There’s one airport that has to be privatized, and that’s Billy Bishop. It’s shovel-ready, [it has] $5 billion to $7 billion of private investment, not costing the taxpayers anything, and creating thousands and thousands of jobs. So, I look forward to sitting down with [Carney] when he is back,” the premier said.
Earlier this year, Ford announced plans to expand Billy Bishop airport, saying he had seen surveys suggesting support for the project that would bring larger plans to the island.
The federal government has since shut down the idea, after Transportation Minister Steven MacKinnon announced the federal government wouldn’t support the expansion plan. However, discussions around the expansion remain, as Carney failed to declare the decision permanent, leading experts to call for more concrete plans about the project.
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Ontario’s NDP Leader Marit Stiles has criticized the premier for taking the opportunity to reignite conversations about a Billy Bishop airport expansion.
“Our airports are on the table for privatization, and Ford’s response is to pitch his takeover of the Toronto Islands. Not a word about travellers or airport workers. Just another run at one of the last public spaces every family in this city can afford. Toronto said no. He’s trying again anyway,” she said in a statement on X.
Federal opposition leaders weigh in
While Ford seems to be on board with Carney’s privatization plan, some federal opposition party leaders have voiced concerns about it.
Canada’s NDP Leader Avi Lewis said privatizing the major airports would be a “mistake we must avoid,” suggesting that doing so could potentially raise costs for travellers.
“Airport privatization is a very bad deal for travelers, workers, and public finances. All over the world, it has led to an increase in service fees, a reduction in the number of jobs, and a deterioration in working conditions,” Lewis said in a statement shared on X.
“Private capital barons and fund managers love it! Once in place, they hold a share of a natural monopoly and print money for decades.”
Speaking at a press conference in Vancouver, Conservative Leader Pierre Poilievre said he would like to have more information about the plan before offering his opinion, also raising concerns over increasing travel costs.
“We want to make sure that it doesn’t 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,” he told reporters.
Experts call for more information
Based on the initial statements given by Carney, Lennox said more information about how it works is still needed to determine whether it will actually be beneficial.
The expert said he would like to have more details on how investors would be selected, how the government plans to cap their profit, and how they will deal with airports’ existing debt.
“At the end of the day, does it make the Canadian aviation industry stronger, and does it guarantee the kind of access that Canadians have to destinations around the world? Because if it compromises on that in any way, I would say, ‘No, don’t do it,’” he told Now Toronto.
Meanwhile, Gradek said bringing in private investors to manage operations could be beneficial for Canadian travellers, explaining that the system has successfully been adopted in other countries, as they can not only bring new investment to expand and maintain service, but also expertise in the industry.
“We’re getting professionals that understand the airport market that have gone through this process before. All of these funds, including a number of Canadian funds, pension plans, and sovereign funds, have already invested in airports in various domains around the world, and they’ve been in there for decades,” he said.
“I think that we’re [benefitting] the Canadian people in this exercise of buying professional airport managers that understand how to maximize the underlying value, commercial value, and real estate value of an airport property, and I think that’s going to be a significant change in terms of how we run our airports.”
