Liberals eye privatization of Canada's airports

Ottawa is exploring ways to generate revenue from federal assets—such as airports—to help expand its new sovereign wealth fund, alongside getting buy-in from retail investors, reports the Globe and Mail.

Prime Minister Mark Carney, on Monday (April 27), unveiled a $25-billion initiative called the Canada Strong Fund. It’s intended to invest in major companies and infrastructure projects aligned with the government’s national development priorities.

Tuesday’s spring economic update provided limited new details about how the fund will operate. However, it did indicate that Ottawa plans to grow the fund beyond its initial $25-billion by inviting retail investors to participate and by leveraging existing public assets.

According to the Globe, citing a “government source,” the plan involves recycling capital currently tied up in assets like airports—freeing up that money to reinvest in national projects through the fund.

The update also reaffirmed that the government is considering new approaches to airport ownership.

These could include extending leases with airport authorities, allowing more commercial development on airport lands, revising lease structures, or even exploring privatization.

“Asset optimization will help address two complementary priorities: unlocking the full value of existing federal assets and directing that capital toward investments with the highest potential return for Canada and Canadians,” the economic update said.

The Canadian government has weighed the possibility of privatizing airports before.

Late last year, it revived a concept that was examined, and then abandoned, nearly ten years ago.

In a statement last November, the Canadian Airports Council (CAC) welcomed the proposal. "Airports are at the heart of Canada's growth story," said Monette Pasher, president of the CAC, at the time. "We are pleased to see the federal government's recognition of airports' role in trade diversification and economic resilience.”

“Investments in trade and infrastructure will help strengthen our competitiveness and create opportunities across every region of the country."

The CAC notes that in the early 1990s, Canada's airports were privatized to local control, divested from direct federal operation and placed under the management of local airport authorities as non-share capital corporations.

“This model has allowed airports to operate as a business and reinvest billions into infrastructure, positioning them as key trade and transportation hubs,” the CAC said.

The council is interested to learn more on government's intent to consider options for airport privatization.

"There are many ways to work with pension funds and equity partners, and any options government considers must have affordability for Canadians as the top priority," stated Pasher.

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