Travellers make their way through Pearson Airport in Toronto in February. The federal government says Pearson, along with three other airports, will be opened up for private investment.Sammy Kogan/The Globe and Mail
Canada will open up its four largest airports to private investment, Prime Minister Mark Carney told a gathering of global investors on Tuesday.
The federal government is proposing that it will retain ownership of the underlying land and assets, but seek private investment through long-term agreements that will bring in new capital and expertise for airport operations and growth.
Mr. Carney said the decision reflects a shift in how the country approaches investment, a message aimed at the hundreds of executives attending the Canada Investment Summit in Toronto this week.
Canada’s four largest airports are in Toronto, Vancouver, Montreal and Calgary.
Mr. Carney said the capital raised will be invested in infrastructure, including regional airports, and will lead to an improved passenger experience.
“We, as a government, will be able to get tens of billions of dollars of proceeds from this process,” he later told reporters at a news conference.
The government had signalled in its 2025 budget that it would “consider options for the privatization of airports,” and included a similar pledge in its spring update.
Key moments from Carney’s investment summit
It currently delegates the management of major airports to not-for-profit airport authorities through long-term ground leases. Airport authorities provide about half a billion dollars in annual revenue to Ottawa.
The model being proposed by Mr. Carney appears similar to that in Australia, where the government maintains ownership of major airports but signs long-term leases with private-sector investors.
The Prime Minister said Canada intends to draw on the experience of other countries with the process – and learn from the pension funds and others who already own airports.
That includes the Public Sector Pension Investment Board, known as PSP Investments, whose chief executive officer Deborah Orida was on stage with Mr. Carney Tuesday morning.
She noted that PSP Investments owns seven airports around the world.
“We do think that the operating expertise and the capital can provide advantages, and we’re glad to have the opportunity to have a constructive conversation with you about it,” she said.
At his news conference, Mr. Carney highlighted the experience of Canadian pension funds related to airport investments but said foreign investors can also compete for the opportunity.
Federal Transport Minister Steven MacKinnon said he expects Canadian pension funds will want to be involved.
“I think they are likely to have a very high interest. They’ll be very motivated bidders,” he said in an interview on the sidelines of the summit.
The proposal was not mentioned in a 66-page “prospectus” booklet circulated among summit participants. The event began on Monday.
It was not immediately clear how the for-profit model would affect the fees airports charge, given the rate of return demanded by investors. Nor is it known what the plan could mean for large infrastructure projects that are already underway at Canada’s major airports.
A decade ago, then-prime-minister Justin Trudeau’s government looked seriously at airport privatization and ultimately shelved the idea.
At the time, privatization was opposed by some airport authorities and had little public support, according to opinion surveys.
Mr. Carney said Tuesday that these are different times, and the government is trying to build up the country in a difficult market environment while still maintaining fiscal discipline.
“As we do that, we need to be smart with how we use the assets we have,” he told reporters.
Mr. MacKinnon, who has been a Liberal MP since 2015, briefed the Liberal caucus Monday about the airports plan in a conference call ahead of the announcement. He said times have changed since the Liberals last considered new ownership models for airports.
“Ten years is a long time. We are in a completely different context,” he said.
The Transport Minister said the government is planning informal consultations with stakeholders before finalizing plans.
Monette Pasher, chief executive officer of the Canadian Airports Council, which describes itself as the voice of Canada’s airports, called a switch to for-profit airports a “big change” from the current system. Ms. Pasher said she looks forward to talking with the government about ensuring money is reinvested into the airports.
“How do we make sure that this ecosystem and our aviation network have the investment we need to grow?” Ms. Pasher said by phone. Canada’s small- and medium-sized airports are in need of $19-billion in investments over the next 10 years, she said. “So, we also need that investment to grow, to grow the connectivity for Canadians and to make sure that it’s affordable” to travel.
At the top of the airports’ wish list is the roll-out of a digital system to streamline the passenger’s journey, including using biometrics and digital travel credentials, she said.
Canada’s airports have long pushed for the government to reinvest the rent it receives from the airport authorities. Since the 1990s, the airports have paid a cumulative total of $8.4-billion in rent to the government, including $556-million in 2025, while spending more than $30-billion in infrastructure and improvements.
Canada’s airports are run by non-profit companies that pay rent to the government and fund operations through a host of fees charged to users – passengers, airlines, restaurants and shops.
This model makes it challenging for airport operators to raise money to pay for the massive construction projects that they require from time to time. The operators can raise the money by borrowing but are then forced to pass on those interest costs to passengers, said John Gradek, who teaches aviation leadership at McGill University.
This means most of Canada’s airports have outdated terminals and older shops and restaurants, which lack the efficiency and customer experience available in the world’s most-lauded hubs. These include Singapore, Dubai and Heathrow.
Canada’s largest airports, including Toronto, Montreal and Vancouver, have all announced multiyear infrastructure projects worth billions of dollars, and would welcome private money as a way to pay for them, Mr. Gradek said.
“That source of funding will come from the fund itself. There’s going to have to be a return on that investment to be provided to the investment firm, but it’ll come from operations, not just from the passenger’s back. So, it’ll come from higher quality concessions, better use of the land, restaurants and shops,” he said.
Still, he cautioned that Canada lacks an economic airport regulator to govern user fees, and he said the government should establish one before the privatization goes ahead. He points to Britain and Australia, which formed regulators only after user fees soared with privatization.
Conservative Leader Pierre Poilievre said if the government’s airport plan doesn’t save money for Canadians, there’s no point.
“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 in Vancouver. “So, we’ll wait for the details. We will judge it based on how we can save more money for Canadians.”
With a report from James Bradshaw