“Canadians already pay too much to fly”: CLC warns against airport privatization

Privatizing Canada’s airports could increase the cost of flying and put airport jobs at risk, according to a new report from the Canadian Labour Congress (CLC).

Released on Sept. 11 ahead of the Canada Investment Summit, kicking off in Toronto Monday (Sept. 14), “Public Runways, Private Profits: Why Airport Privatization Would Be Risky and Costly for Canadians” examines airport privatization models in Australia, New Zealand, Portugal, the United Kingdom and the United States.

The report points to what the CLC describes as a recurring pattern of higher charges, pressure on workers and the loss of long-term public value when airports move into private hands.

"Canadians already pay too much to fly. Privatizing our airports risks making that problem worse," said Lily Chang, Secretary-Treasurer of the Canadian Labour Congress, in a press release.  

"Private investors need to make a profit, and that money has to come from somewhere. The evidence shows it can come from higher costs for passengers, lower labour costs and staffing, or revenue that would otherwise stay in public hands."

According to the report, private investors would need airports to generate between 15 and 20 per cent more revenue than under Canada’s current model in order to provide competitive returns.

Potential consequences

The CLC points to Australia as one example of the potential consequences.

Following the privatization of Australian airports, passengers and airlines paid more while airport profits increased, the report states. At Perth Airport, revenue collected from airlines per passenger rose by more than 60 per cent over a decade.

Sydney Airport, meanwhile, cut 40 per cent of its workforce after post-sale job protections expired, according to the report.

"Airport workers in Canada already deal with contract flipping, outsourcing and pressure on wages and staffing," Chang said. "We should be making airport jobs better and more secure, not creating another incentive to cut labour costs to generate returns for investors."

Canada’s airport authorities currently operate as not-for-profit organizations, with surpluses reinvested into airports. Airport rents also return roughly $525 million annually to the federal government, according to the CLC.

While airport privatization is not on the agenda for next week’s Investment Summit, the CLC says the issue remains on the table, noting that the federal government has repeatedly said it is considering privatization and alternative ownership models.

"We want investment that builds infrastructure, expands our productive capacity, and creates good union jobs. The Investment Summit should be about building and strengthening Canada, not putting public infrastructure on the auction block," Chang said.

The CLC is calling on the federal government to reject airport privatization and instead prioritize affordable air travel, improved infrastructure and services, and unionized jobs.

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