The Canadian government is moving in the right direction with a renewed look at privatizing the country’s largest airports , which are in the “sweet spot” for institutional investors looking to deploy more of their assets at home, says a senior executive at Canada’s largest pension fund .
The latest indication Ottawa is seriously considering opening up Canada’s airports to more private investment — 23 airports including Toronto’s Pearson that sit on federal land are currently run by not-for-profit airport authorities — came in this week’s spring economic update, which also included plans to create a $25-billion sovereign wealth fund to help finance nation-building projects alongside private sector and international investors.
Prime Minister Mark Carney’s first fiscal update since last fall’s budget said his government is consulting with airport authorities, airlines and municipal governments to assess “opportunities to unlock the full value of airports in support of investments in Canada’s long-term growth, including through alternative models of ownership.”
Michel Leduc, senior managing director at the Canada Pension Plan Investment Board , said core national infrastructure that provides an international platform — such as a hub airport in a G7 country — is a “sweet spot” for institutional investors like the nearly $732-billion CPP fund.
“We look forward to seeing the details, valuations (and) growth opportunities,” he said, adding that flexible partnerships, predictable regulatory terms and professional fiduciary boards are among the characteristics the pensions look for in such assets. “This is trending in the right direction…. We stand ready.”
The previous Liberal government studied the idea of privatizing airports a decade ago but didn’t follow through. Among the signs this government is serious is new legislation in the works that will compel “entities that own or operate an airport” or individuals whose activities “may affect the value of an airport” to hand over information the government requests on the transportation minister’s timetable.
The government may seek such information to assess the value of airports and the capacity to develop all or part of the national air transportation system, according to an act to implement provisions of the spring economic update, which was tabled in Parliament on April 28.
Carney’s inner circle includes former senior pension executives, including Clerk of the Privy Council Michael Sabia and chief of staff Marc-André Blanchard, and his government has made the rounds at institutional investors including pension funds to suss out ways to entice them to invest in priority nation-building infrastructure projects.
Several of these global players have told the government they are interested in buying Canadian airports, according to senior pension officials, who say their wish list of assets also includes nuclear power generation, pipelines, bridges, toll roads, electricity transmission grids and ports.
Carney has also now formally floated the idea of asset recycling, an idea popular with Canada’s largest globe-trotting pension funds known as the Maple 8, in which government-owned assets are leased or sold to private sector investors and the proceeds are used by governments to invest in priority infrastructure.
As laid out in the economic update, Ottawa’s new sovereign wealth fund will build on its initial $25-billion base through returns on the fund’s investments and other assets that the government may allocate to it.
“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 government said in a 167-page document released Tuesday titled Canada Strong for All.
Airports are among the highest-value federally owned assets that could be considered for sale as much of the infrastructure owned by governments across Canada resides in either provincial or municipal hands.
Andras Vlaszak, a director in the global infrastructure advisory at KPMG Canada , said fully privatizing airports and using the proceeds to fund government initiatives through the Build Canada Strong Fund is just one option.
“Another option would be to sell the airports to a majority investor while retaining a federal stake (and) placing the remaining minority ownership into the Build Canada Strong Fund as a seed investment,” he said.
A spokesman for Transport Canada did not respond to questions about the likelihood that airports — or stakes in them — would be sold to private investors, or what the government meant by “alternative models of ownership” in the economic update. However, he said the focus is on lowering costs for travellers and better positioning airports to attract private investment.
Over the past two decades, Canada’s largest pension funds have demonstrated an appetite for airport ownership, with the Ontario Teachers’ Pension Plan Board , the Caisse de dépôt et placement du Québec and PSP Investments taking significant stakes in international airports over the years in the United Kingdom, Australia and Europe. The same opportunities have not been available in Canada.
The Caisse recently sold the remains of a stake in London Heathrow airport first purchased in 2006, while the Ontario Teachers’ Pension Plan, which first began investing in airports in the United Kingdom in 2001, sold off the last of its airport holdings in Europe after taking in significant profits, which tend to be largest in the early years of ownership.
But neither fund has ruled out further such investments.
In March, Jo Taylor, chief executive of the Ontario Teachers’ Pension Plan, said he sees more potential infrastructure investment opportunities in Ontario than at the federal level, but added that airports are desirable for pension funds.
“Pearson and Vancouver (Airport) are the two choices really that you could start with,” Taylor said, noting that his fund has decades-long experience investing in airports including those with links to international travel.
Last June, PSP’s chief executive Deb Orida also raised airports in a discussion about ways to fulfill a desire to invest more in Canada.
“We have airport operating expertise, and capital to pair with that operating expertise,” Orida said at the time. “So, if the opportunity were to become available to invest in the Canadian airports, I think we would be very well positioned to do that.”
The idea of privatizing Canadian airports was last studied in 2015, shortly after the Liberals were swept to power under then-prime minister Justin Trudeau. Picking up on a process started by the previous Conservative government, Trudeau’s government hired investment bank Credit Suisse Group AG to study the benefits of privatization and the C.D. Howe Institute pegged the value of Toronto’s Pearson International Airport and seven others at $17 billion.
Pension executives were on record lining up to buy. But sources familiar with the process say the Liberals got cold feet because they feared turning airport operations into a for-profit venture would cost them votes .
Last fall, Carney’s government reignited the idea of privatization in his inaugural budget, with an initial pledge to look at negotiating lease extensions with not-for-profit airport authorities across the country and ways to enable more economic development activities on airport lands. The budget said the government would also examine existing airport ground lease rent formulas and, notably, was open to considering options for the privatization of airports.
This came on the heels of a policy statement from Transport Canada , which, in March of 2025, laid out ways private investors could develop airport lands with the not-for-profit airport authorities without changing legislation, such as through commercial subleases and as minority investors in share-capital subsidiaries. The policy statement suggested such development on airport lands could include terminals, hotels and shopping centres.
Some pension executives said it was a positive step, but others indicated that it would be difficult to meet their investment criteria with anything short of a controlling stake in an airport.
The Canadian Airports Council , a trade association for the sector, has suggested that institutional investors should be financing partners rather than major stakeholders in airports that are already run with a business mindset, while some unions have opposed privatization and argued that it would result in lower wages for workers.
“Canada’s airports are working with government on the evolution of the airport model and exploring investment opportunities,” Monette Pasher, president of the Canadian Airports Council, said in an emailed statement Thursday.
• Email: bshecter@nationalpost.com
The Carney government is circling closer to airport privatization and potential investors 'stand ready'
2026-05-01 16:04:37
