International passengers arrive at Pearson Airport in Toronto in February. Ottawa could raise money by selling Canada's airports or leasing them out on a long-term basis, writes Tony Keller.Jon Blacker/The Canadian Press
Two years ago, France’s Vinci SA, a construction and infrastructure firm, paid £1.27-billion ($2.35-billion) for 50-per-cent ownership of Britain’s sixth-busiest airport, in Edinburgh. It was minor news in the business pages, and nowhere else. Airports in Britain were privatized decades ago. Yawn.
In 2019, a share of the ownership of Gatwick, London’s second airport, changed hands in a transaction that valued the asset at $10.7-billion. In 2024, a stake in Heathrow, London’s main airport, was sold at a price that valued the business at £8.66-billion, or $16-billion.
And in 2021, a group of pension funds and international investors bought the main airport in Sydney, Australia, for 23.6 billion Australian dollars. At current exchange rates, that’s $23.1-billion.
Sydney’s Kingsford Smith Airport last year handled slightly fewer passengers than Toronto’s Pearson International Airport, and slightly more cargo.
I could go on. You get the picture.
The world’s largest pools of patient capital, including Canadian pension funds, have taken ownership stakes in airports around the world. Just not in Canada. It’s not an option here. Our airports are publicly owned, mostly by Ottawa.
The spring economic statement said that the federal government wants to “position airports to attract private investment,” and is “assessing opportunities to unlock the full value of airports in support of investments in Canada’s long-term growth, including through alternative models of ownership.”
Transport Canada owns 23 large and mid-sized airports, notably the country’s six busiest in Toronto, Vancouver, Montreal, Calgary, Edmonton and Ottawa. Collectively, these facilities are worth tens of billions of dollars. Let’s guesstimate the total value – perhaps generously, perhaps conservatively; federal studies could soon tell us – at $100-billion.
Today, that’s dead money. But it could be unlocked through asset sales to pension plans and other investors, and used to finance needed infrastructure elsewhere.
Instead of borrowing tens of billions of dollars to build infrastructure, the federal government could raise money by selling the airports, or leasing them out on a long-term basis.
This is old hat in Australia, our southern twin. In Canada, it’s always been a political third rail.
If the Carney government wants its brainwave to go anywhere, it needs to follow the KISS principle. Keep it simple, stupid.
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Make it easy for Canadians to see where the money is going. Make it easy to see what airport privatization is paying for. Do not engage in opaque financial necromancy. Do not raise tens of billions of dollars and then disappear them into a bottomless warren of unknown and unmeasurable government schemes on infinite timelines.
Put every cent from airport sales into something Canadians want and need, and that government already has to pay for.
Put every cent into a public transit fund.
Tens of billions of dollars from airport privatization? Tens of billions of dollars into transit infrastructure.
To make the benefits even clearer, spend all funds in the same metropolitan area as the airport.
Privatize Pearson International in Toronto to pay for the federal share of the next round of major transit expansions in the Greater Toronto Area. Start with the $1-billion Ottawa recently committed to Toronto’s future Waterfront East LRT. Continue from there.
Toronto’s airports authority announces ‘decade-long investment’ in Pearson Airport
Privatize Vancouver International to pay for the federal contribution to a future SkyTrain extension to the University of British Columbia, and new transit to the south and east of the Lower Mainland.
Privatize Montreal’s Trudeau Airport to pay the federal share of a future expansion of the REM network, and other new subway, tram and busway projects.
Do likewise from Edmonton to Halifax and from Victoria to St. John’s.
Pension funds would also love to invest in Canadian highways and bridges, but that would only be possible if the infrastructure were tolled. Canada has spent the last few decades moving in the opposite direction, transferring financial responsibility from drivers to taxpayers.
In any case, Canada’s roads are almost entirely owned by provinces. Airports, in contrast, are nearly all federally owned. And they already operate on the basis of user-pay.
Since the 1990s, most have been run by airport authorities, arms-length bodies responsible for operations and for financing tens of billions of dollars of new infrastructure. The money comes from airport activities: landing fees, rent from merchants and passenger-paid airport improvement fees.
Privatization, whether through an outright sale or 50- or 100-year leases, would sell the right to manage the airports and collect those fees, in return for an upfront payment to the airport’s current owner, the government of Canada.
If the money raised is wisely deployed, the country will be better off.
Ottawa must not study this to death. Get moving already.