Carney’s airport privatization plan must prove benefits for travellers, report says

A new analysis by University of Calgary economics professor Aidan Hollis examines Prime Minister Mark Carney’s proposed privatization of Vancouver International Airport (YVR), Calgary International Airport (YYC), Toronto Pearson International Airport (YYZ) and Montréal-Trudeau International Airport (YUL). The federal government first said in its spring 2026 economic update that it would explore private investment in Canada’s largest airports. At the Canada Investment Summit in September 2026, Carney named the four airports under consideration and suggested the plan could generate tens of billions of dollars in new revenue. The federal government would retain ownership of the land and assets, grant investors operating rights and use the proceeds for other infrastructure. The Globe and Mail reported last week, citing sources, that YVR could be first in line; First Nations could have an opportunity to hold a minority stake of up to 20 per cent, while institutional investors experienced in airport operations could acquire the rest and hold majority control.

The report says replacing the existing non-profit airport authorities—Vancouver Airport Authority, Calgary Airport Authority (Calgary Airports), Greater Toronto Airports Authority and Aéroports de Montréal—should require proof of lasting benefits for passengers. Canada’s major airports are already run by private, non-profit airport authorities that collect their own revenue and borrow to fund construction. They are financially independent organizations, rather than government departments or Crown corporations. Non-profit authorities cannot distribute surplus earnings to shareholders, so revenue is reinvested in the airports. A for-profit operator would bring in investors entitled to a share of the money the airport generates.

In 2025, YVR generated about $16.07 in aviation-related revenue per passenger. Sydney Kingsford Smith Airport (SYD), Brisbane Airport (BNE) and London Heathrow Airport (LHR) reported $26.50, $19.70 and $49.20, respectively, in their most recent reporting periods. On this measure, Vancouver was about 39 per cent below Sydney, 18 per cent below Brisbane and 67 per cent below Heathrow. Calgary’s $16.92 per passenger was also below all five overseas for-profit airports in the comparison. Results varied within Canada: Toronto generated $30.09 per passenger and Montréal $31.12, exceeding every overseas airport in the comparison except Heathrow. Hollis cautions that passenger mix, airport activities and accounting differences limit the precision of the comparison; the figures offer a broad indication of performance, not a definitive ranking.

YVR also compares favourably on operating costs. Excluding federal rent and amortization, the accounting expense associated with using long-lived assets, its costs were about $14.80 per passenger. Toronto Pearson’s were $18.20, Montréal’s $18.40 and Heathrow’s $34.30. Calgary and Auckland Airport (AKL) were lower, at $12.40 and $13.10, respectively.

Citing the Canadian Airports Council, the report says Canadian airports have invested more than $30 billion in terminals, facilities and infrastructure since the early 1990s, financed almost entirely through passenger-paid airport improvement fees and borrowing. Toronto Pearson’s LIFT program is a current example: its $3-billion first phase launched in May 2026 as part of a phased 10-year plan intended to raise YYZ’s annual passenger capacity to about 65 million. Major airport authorities, including Vancouver Airport Authority, also have strong credit ratings that allow them to borrow from financial institutions and investors.

“The gap in the Canadian model is not capital. It is scrutiny,” the report says. Hollis’s criticism centres on the lack of independent review of how non-profit airport authorities raise and spend money. Canada has no independent economic regulator to review airport charges, airport improvement fees and major construction projects. Non-profit status alone does not prevent overspending, unnecessarily elaborate projects or charges above what users need to pay. Hollis says stronger oversight is needed whether or not the airports change operators.

The analysis also reviews international research challenging the assumption that for-profit operations or ownership inherently produce better results. One study it cites found no statistically significant efficiency disadvantage for North American independent airport authorities compared with airports under majority-private ownership. Other research found that competition and regulation mattered more than ownership alone. Some strong evidence for privatization comes from airports formerly operated directly by governments. But Hollis cautions that Canada has already moved from direct government operation to commercially run, independently financed airport authorities, limiting how readily those overseas findings apply here. The transition, which began in 1992, addressed funding and operational challenges at the country’s largest airports under federal management and supported substantial reinvestment. YVR’s locally governed, non-profit Vancouver Airport Authority took over operations in 1992 and built a new international terminal, completed in 1996, marking a major expansion under the new model.

The report identifies commercial revenue as an area where for-profit airports appear to do better. Across Auckland, Sydney, Brisbane and Melbourne Airport (MEL), average commercial revenue was about $19.34 per passenger—roughly 63 per cent above the $11.83 average for Canada’s four largest airport authorities. Commercial revenue includes retail, parking and property. Brisbane generated about $20.57 per passenger, nearly double YVR’s $10.61, despite broadly similar passenger volumes. A stronger commercial business could support airport operations, but Hollis cautions that higher revenue can reflect better or more services—or higher charges for the same services. Whether passengers benefit depends on the rules: retail and property income could help reduce aviation-related charges, or flow to for-profit investors without lowering users’ costs.

Federal rent further complicates the comparison. Canada’s four largest airport authorities paid about $477 million in rent to the federal government in 2025: $78 million from YVR, $56 million from Calgary, $236 million from Toronto and $107 million from Montréal. Under the current system, rent can reach 12 per cent of gross airport revenue. Hollis says the government’s share of each additional revenue dollar can weaken incentives to expand commercial activities, and that rent reform could bring improvements without replacing non-profit operators.

Based on 2025 financial results, the report estimates the four airport businesses’ combined equity value at roughly $12 billion to $21 billion with federal rent retained. Removing the rent raises the potential range to about $18 billion to $29 billion. A larger upfront payment would also mean the federal government gives up future rental income, which Hollis says should not be mistaken for newly created economic value.

Australia offers a warning about private airport ownership without effective controls. Its competition regulator monitors major airports but does not set their charges. The report says Sydney earned a 20.8 per cent return on aviation-related assets in 2024/2025, while the Australian regulator concluded that monitoring did not effectively constrain the major airports’ market power.

Hollis recommends creating an independent Canadian airport economic regulator before bids are invited. It would review major investments, link airport improvement fees to approved construction programs, set service expectations and resolve disputes over charges and access. Airport improvement fees already account for 32 to 42 per cent of revenue at the four Canadian airports, including 32 per cent at YVR, making their future use especially significant. Any proposed concession should be assessed against an improved, regulated non-profit airport authority, with a business case showing the benefits that the change in ownership itself would deliver.

“Canada should not sell first and regulate later,” the report says. It adds that the government has announced plans to seek long-term concessions at the four largest airports, but the terms have not been set; the consultation period is an opportunity to set them in the right order.