Prime Minister Carney's airport privatization needs proof of traveller benefits: report | Daily Hive

Prime Minister Mark Carney's airport privatization scheme needs proof of benefits for travellers: report

Vancouver International Airport. (Kenneth Chan)

Vancouver International Airport (YVR) collects considerably less aviation-related revenue per passenger than several major for-profit airports overseas, according to a new report that urges the Government of Canada to strengthen safeguards before handing Canada’s four largest and busiest airports to for-profit private operators.

A new analysis this month by University of Calgary economics professor Aidan Hollis highlights how Canada’s existing non-profit airport model can already completely self-finance major expansion projects and deliver competitive operating and maintenance costs.

It argues that replacing the existing non-profit airport authorities — Vancouver Airport Authority, Calgary Airport Authority (Calgary Airports), Greater Toronto Airports Authority, and Airports of Montreal — should require proof of lasting benefits for passengers.

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The report examines Prime Minister Mark Carney’s proposed privatization of Vancouver International Airport, Calgary International Airport (YYC), Toronto Pearson International Airport (YYZ), and Montreal-Trudeau International Airport (YUL).

The federal government first indicated in its Spring 2026 economic update that it would explore opening up Canada’s largest airports to private investment. Then in September 2026, during the Canada Investment Summit, Carney provided more specific details, naming the four airports being eyed for the scheme and suggesting this could generate tens of billions of dollars in new revenue.

A report by The Globe & Mail last week cited sources that claimed that Vancouver International Airport — Canada’s second busiest airport — is the very first airport in line under Carney’s privatization scheme, with First Nations potentially being given the opportunity to hold a minority stake of up to 20 per cent, while institutional investors with experience operating airports would acquire the remainder for majority control.

The federal government would retain ownership of the underlying land and assets while granting investors the right to operate the airports. The federal government intends to use the proceeds it receives for other infrastructure.

How YVR compares with for-profit airports

However, Hollis argues that the complete distinction between the existing non-profit operators and their potential for-profit replacements is often misunderstood.

Canada’s major airports are already operated by private, non-profit airport authorities, which collect their own revenues and borrow to finance construction. They are financially independent organizations, rather than government departments or Crown corporations.

Their non-profit status means they cannot distribute surplus earnings to shareholders. Instead, all proceeds go back into reinvesting in the airport. In contrast, a for-profit operator would introduce investors entitled to receive a share of the money generated by the airport.

Using Canadian dollar figures, Vancouver generated approximately $16.07 in aviation-related revenue per passenger in 2025, compared with $26.50 at Sydney Kingsford Smith Airport (SYD), $19.70 at Brisbane Airport (BNE), and $49.20 at London Heathrow Airport (LHR) in their respective reporting periods.

That puts Vancouver at approximately 39 per cent below Sydney, 18 per cent below Brisbane, and 67 per cent below London Heathrow on this measure of generating revenue from airport fees collected by passengers and commercial airlines and other aviation-related sources.

Calgary, at $16.92 per passenger, also came in below all five overseas for-profit airports.

Vancouver International Airport. (i viewfinder/Shutterstock)

However, the results varied considerably within Canada. Toronto generated $30.09 per passenger and Montreal saw $31.12, exceeding every overseas airport in the comparison except London Heathrow.

Hollis cautions that differences in passenger mix, airport activities, and accounting limit the precision of these comparisons. The figures provide a broad indication of performance, rather than a definitive ranking.

Vancouver also compares favourably on operating expenses. Excluding federal rent and amortization — the accounting expense associated with using long-lived assets — its operating costs were approximately $14.80 per passenger, compared with $18.20 at Toronto Pearson, $18.40 at Montreal, and $34.30 at London Heathrow. Calgary and Auckland Airport (AKL) were lower, at $12.40 and $13.10, respectively.

Canada lacks an independent economic regulator for non-profit airport authorities

Beyond day-to-day operations, the report challenges the suggestion that non-profit authorities are unable to attract enough money to expand.

Citing the Canadian Airports Council, it states that Canadian airports have invested more than $30 billion into their terminals, facilities, and infrastructure since the early 1990s, financed almost entirely through airport improvement fees paid by passengers and borrowing.

The report points to Toronto Pearson’s LIFT program as a current example: a $3-billion first phase launched in May 2026, within a phased 10-year plan intended to increase YYZ’s capacity to handle approximately 65 million passengers annually.

Major airport authorities — including Vancouver Airport Authority — also have strong credit ratings, allowing them to borrow from financial institutions and investors.

“The gap in the Canadian model is not capital. It is scrutiny,” reads the report. Hollis’ criticism centres instead on the lack of independent scrutiny of how the money is raised and spent by non-profit airport authorities under the existing model.

According to the report, Canada lacks an independent economic regulator that reviews airport charges, airport improvement fees, and major construction projects. Being a non-profit airport authority does not automatically prevent an airport from overspending, pursuing unnecessarily elaborate projects, or charging users more than needed.

Hollis argues that stronger oversight is necessary regardless of whether the airports change operators.

Calgary International Airport. (Ronnie Chua/Shutterstock)

Privatization does not guarantee better performance

The report also reviews international research that challenges the assumption that for-profit operations and ownership inherently produces 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 were more important than ownership alone.

Some of the strongest evidence supporting privatization comes from airports previously operated directly by governments. However, Hollis cautions that Canada has already transitioned from government-operated airports to commercially operated, independently financed airport authorities, limiting how readily those overseas findings can be applied here.

This shift that began in 1992 addressed the funding and operational challenges Canada’s largest airports faced under the previous system of direct management by the federal government.

That shift helped support substantial reinvestment in Canada’s largest airports. YVR is one example: the 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 of the airport under the new model.

With all that said, there some areas where for-profit operators appear to perform better.

Across Auckland, Sydney, Brisbane, and Melbourne Airport (MEL), average commercial revenue per passenger was approximately $19.34 — about 63 per cent above the $11.83 average for Canada’s four largest airport authorities. These revenues include activities such as retail, parking, and property.

Brisbane generated approximately $20.57 in commercial revenue per passenger, nearly double Vancouver’s $10.61, despite the airports handling broadly similar passenger volumes.

A stronger commercial business could help support airport operations. But Hollis cautions that higher revenue can come from either providing better and more services or charging people more for the same services they already use.

Whether passengers benefit also depends on the rules. Additional retail and property income could help reduce aviation-related charges, or it could flow to for-profit investors without lowering users’ costs.

McArthurGlen Designer Outlet Vancouver Airport YVR

McArthurGlen Designer Outlet Vancouver Airport mall, partly owned by Vancouver Airport Authority for an ongoing non-aeronautical revenue stream. (Kenneth Chan)

Combined equity of Canada’s top four airports could be worth up to $29 billion

The federal rent paid by Canada’s largest airports further complicates the comparison.

The four Canadian airport authorities paid approximately $477 million in rent to the federal government in 2025, including $78 million from Vancouver, $56 million from Calgary, $236 million from Toronto, and $107 million from Montreal. Under the existing system, rent can reach 12 per cent of gross airport revenues.

Hollis argues that this formula can weaken the incentive to expand commercial activities because the federal government takes a share of each additional revenue dollar. Reforming rent could therefore deliver some improvements without replacing the non-profit operators.

The report estimates the combined equity value of the four airport businesses at roughly $12 billion to $21 billion with federal rent retained, based on their 2025 financial results. Removing the federal rent raises that potential range to approximately $18 billion to $29 billion.

But a larger upfront payment would also lead to the federal government surrendering future rental income. Hollis argues that this should not be mistaken for newly created economic value.

pret a manger yvr vancouver international airport

The first Pret A Manger location at Vancouver International Airport, located inside the post-security international food court. (Vancouver International Airport)

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

Hollis recommends establishing an independent Canadian airport economic regulator before inviting bids. Its responsibilities would include reviewing major investments, linking improvement fees to approved construction programs, setting service expectations, and resolving disputes over charges and access.

Airport improvement fees already account for between 32 per cent and 42 per cent of revenue at the four Canadian airports, including 32 per cent at YVR, making their future application particularly significant.

Any proposed concession should then be judged against an improved, regulated non-profit airport authority, with a business case showing benefits that ownership change itself would deliver.

“Canada should not sell first and regulate later,” reads the report.

“The government has announced that it will seek long-term concessions at the four largest airports, but the terms have not been set, and the period of consultation is the opportunity to set them in the right order.”

Comparative Airport Indicators (Most Recent Reported Year, In C$). (University of Calgary)

Inputs From The 2025 Financial Statements (C$ Millions). (University of Calgary)

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