Carney government eyes privatizing airports to attract investment, cut travel costs

He told reporters Wednesday “we’re in the early stages of a process with airport authorities and other partners to determine the best way forward.”

Yet at the same time, MacKinnon suggested that he has already been in talks with NAV Canada, which oversees air traffic control in civil airspace and over the North Atlantic, and with the Canadian Air Transport Security Authority (CATSA) which oversees aviation security in Canada, about how to proceed.

“The ultimate goal here is to improve passenger experience and to keep air travel affordable for Canadians,” MacKinnon said. “Again…we’re in the early stages of working with partners and assessing what our options might be.”

Tuesday’s spring economic update provided little detail on privatization plans. It said Ottawa is assessing ways to “unlock the full value of airports in support of investments in Canada’s long-term growth, including through alternative models of ownership.”

It declared that airports are “vital national assets that support Canada’s economic competitiveness, trade, tourism, and regional connectivity. Modern and efficient airport operations are essential to ensuring the long-term stability of Canada’s air sector.”

It said the Carney government wants to “reform” the airport system to lower air passenger costs and “better position airports to attract private investment.”

Ottawa “has begun to consider reforms to modernize the governance of airport authorities, explore options to update the framework for airport rents, and to increase the capacity of airports for economic development and reinvestment in infrastructure,” it said.

But the document did not make a business case for why public assets such as airports should be further privatized.

Private operators of airlines, hangars, and airport services already operate on publicly-owned airport lands and in airports.

According to the Canadian Airports Council, about two dozen of the country’s larger airports — known as national airport system airports — are owned by the government but operated by local airport authorities, most of them run as not-for-profit non-share capital corporations. A handful of those are run by local territorial or city governments.

Dozens of other regional and local airports are operated with non-government ownership and operation, under federal regulatory oversight.

MacKinnon acknowledged Wednesday that airports are a “public good, and I don’t think that spirit or that philosophy will change.”

“Indeed, we want to make airports a better experience for Canadians. We want to make air travel more generally more fluid and a better experience and for Canadians, while keeping it affordable,” he said.

He did not offer further detail.

Asked to what extent the proceeds of any airport privatization sales would be used as seed money to finance a national sovereign wealth fund announced by Prime Minister Mark Carney on Monday, MacKinnon said “I don’t think that any determination has been made on that front.”

However, a senior government official, not authorized to speak publicly, confirmed that the potential sale of federal assets like airports is a way of financing the new wealth fund, a point that Finance Minister François-Philippe Champagne confirmed indirectly on Wednesday, after promoting the spring update in Montreal.

“I don’t want to exclude things, you know, we’re going to be looking seriously at different assets. How can they bring value to Canadians? How do you extract the full value for Canadians? And I think if you look at other countries, there’s a lot of best practices that we need to adopt, and I would say, even really modernize.” He said he is looking at other countries, including Australia, the United Kingdom, and in Europe for guidance on “how you can build infrastructure, manage infrastructure for the benefit of people.”

MacKinnon underscored that Toronto’s Billy Bishop airport is “already largely privatized” although the land it sits on is not, “as is the case at most, if not all, airports, but that airport and its operations are currently in private hands.” The transport minister said that he is following the debate at Queen’s Park over the expansion of the Billy Bishop airport and “we’re open to options there.”

“When the province is ready to have some discussions we’ll be there to see what they” are proposing, he said.