The Proposed Privatization of Canadian Airports

I typically write my weekly reports on Wednesdays, which means that, depending on when you are reading this report, a lot of details on certain events may or may not have changed.

As I write this week’s report, I can tell you that it has already been an extremely busy week, and it is only Wednesday.

I mention that because two somewhat significant announcements have caught the attention of many citizens.

One of those announcements from Prime Minister Carney is the potential privatization of some Canadian airports. The other announcement came from European Commission President Ursula von der Leyen, who stated that she would like Canada to become the first "associate member" of the European Union.

This statement from the EU President came just days after The Wall Street Journal published a story reporting that Prime Minister Carney was pursuing this idea. Prime Minister Carney subsequently denied the report, stating, "We’re not looking to become a member of the European Union."

Today, I will focus on the first of these two announcements, namely Prime Minister Carney’s proposal to privatize some Canadian airports. To unpack this, it is important to understand that, at least for the moment, this announcement applies to the international airports located in Vancouver, Calgary, Toronto, and Montreal.

The announcement indicates that these airports would be put out to tender for a private, for-profit operator to take over and run. Prime Minister Carney has also gone on the record indicating that foreign companies outside Canada would be welcome to bid on these contracts.

Prime Minister Carney has said that he expects this privatization to raise "billions" in new revenue for the federal government, which could then be used to provide funding for regional airports or other "nation-building" projects.

Will this work?

So far, Prime Minister Carney has not explained exactly how this proposal would work in Canada, nor has he provided many details, which has become a common feature of many of his announcements.

As the Official Opposition critic for Transportation, I am quite familiar with this file and have some serious concerns to share.

Primarily, the issue not mentioned by either Prime Minister Carney or most media reports is debt. What is often overlooked is that these four airports collectively carry close to $14 billion in debt. That debt must be paid.

At the same time, a private, for-profit operator would, of course, need to make a profit. Finally, as Prime Minister Carney has indicated, the federal government also expects to receive billions of dollars in new revenue from this privatization deal.

So, to recap, there are billions of dollars in debt that must be repaid. Add to that the billions in revenue the federal government expects to receive from privatization, along with the profits the private-sector operator will need to generate, and there is ultimately only one group left to pay the bill: Canadian air travellers.

It is difficult to imagine a scenario in which this does not significantly increase the cost of air travel in Canada, which is already quite expensive.

The lack of details on how this proposal would work is also concerning and is becoming increasingly common with this Liberal government. Announcements come first, and details come later, if they come at all.

My question this week is this: does the potential privatization of Canadian airports concern you?

As always, you are welcome to share your thoughts on my Facebook page, by email at Dan.Albas@parl.gc.ca, or by calling toll-free at 1-800-665-8711.