Travelers check the status of their flights at Pearson Airport in Toronto.Sammy Kogan/The Globe and Mail
Federal Transport Minister Steven MacKinnon said Ottawa’s efforts to potentially monetize airports are in the early stages, in response to questions about vague references in this week’s fiscal update that linked such options to a proposed new sovereign wealth fund.
The update said Ottawa is looking at “alternative models of ownership” for airports and said it would introduce legislation “to ensure it can obtain the information necessary for a comprehensive evaluation of airport reforms.”
In the fall budget, the government had said it would “consider options for the privatization of airports.”
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One of the major items in the spring fiscal update, which Prime Minister Mark Carney preannounced on Monday, was a plan to create the country’s first sovereign wealth fund, to be named the Canada Strong Fund.
The fiscal update included $25-billion to launch the fund.
A graphic in Tuesday’s update said the new fund would also raise capital by “generating the full value from federal assets.” The reference to alternative models of airport ownership was directly under that graphic.
Speaking with reporters on his way into a caucus meeting Wednesday, Mr. MacKinnon was asked whether Ottawa is planning to privatize airports.
“We’re in the early stages of a process with airport authorities and other partners to determine the best way forward,” Mr. MacKinnon said. “The ultimate goal, of course, is to improve the passenger experience, to improve the efficiency of our air transport system. This is something that we’ve been working on for some time.”
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He was then asked whether the government is planning to sell off stakes in airports to finance the Canada Strong Fund.
“I don’t think that any determination has been made on that front,” he said.
The most logical buyers for government-owned assets would be institutional investors, including Canada’s largest pension funds. The chief executives of some of those funds have advocated for years that Ottawa should sell off assets such as airports, which are sometimes already privately owned in other countries.
Months ago, in discussions with the government, some pension funds gave the Ministry of Finance a list of the types of assets that would be most attractive as potential investments, two sources with knowledge of the discussions said.
That list included airports, but also certain port authorities, bridges in need of refurbishment, pipelines, highways that could charge tolls and utilities serving military bases, the sources said.
The Globe and Mail is not identifying the sources because they were not authorized to publicly discuss interactions with the government.
Pension-fund executives are now waiting to see the government’s next steps and were not consulted in advance about Ottawa’s intention to explore monetizing some of its assets, or to create a sovereign wealth fund.
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Finance Minister François-Philippe Champagne said Canada needs to “modernize” the way it manages federal assets as it looks to fund major projects, to “extract the full value for Canadians.”
Speaking with reporters on Wednesday after addressing a conference hosted by the Montreal Council on Foreign Relations, he pointed specifically to Australia and Britain, which have privatized many of their airports, when asked about the fiscal update’s reference to airports and asset sales.
“We need to build so much that we need to look at the kind of assets we have,” he said. “There might be different types of ownership that might be providing better value for money for Canadians.”
Another item in the fiscal update that the Prime Minister had preannounced was a plan to host an investment summit in September.
The update said the event will showcase Canada “as a compelling investment destination and a trusted convener of global capital, with a focus on priority sectors such as energy and critical minerals, artificial intelligence, defence and infrastructure.”
Then-prime-minister Justin Trudeau hosted a similar summit in the fall of 2016 in Toronto.
Ottawa was preparing to launch the Canada Infrastructure Bank. At the time of its launch, the government said it would provide loans, loan guarantees and equity investments alongside the private sector to spur more economic activity.
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The November budget increased the bank’s budget to $45-billion, from $35-billion.
The Canada Infrastructure Bank Act says the Crown corporation has the power to make investments, “including by way of equity investment.”
When asked this week how the $25-billion Canada Strong Fund would differ from the Infrastructure Bank, Mr. Carney said the bank primarily provides loans, while the new fund would hold equity stakes in projects. He did not address the fact that the bank can also make equity investments.
Conservative Leader Pierre Poilievre referenced the history of Liberal governments with investment summits and the Infrastructure Bank Tuesday evening in his House of Commons speech responding to the update.
“One meeting with a bunch of global financial elites will cost $11-million,” he said in reference to the coming summit. “In case anyone is worried that this is something new, Justin Trudeau held the same meeting with the same people at a Shangri-La hotel 10 years ago to set up the Infrastructure Bank, and how did that work out?”