The Liberal government is reviving a plan to hand airport operations to private investors a move that promises billions in short-term cash but carries risks for travellers, regional communities, and taxpayers alike.
Ottawa has floated the idea of selling off Canada’s airports and this time, the financial pressure behind the proposal is hard to ignore. The Liberal government’s latest spring economic update confirmed a deficit that, while slightly better than forecast, remains enormous. With debt piling up and a sovereign wealth fund on the drawing board, officials are once again eyeing airport infrastructure as a potential cash windfall worth tens of billions of dollars.
Right now, 21 of Canada’s major airports are federally owned and run by not-for-profit authorities. They generate around $512 million annually in lease revenue for the government. Selling them off would end that steady income stream but it would also unlock an immediate surge of capital that could reshape Ottawa’s fiscal picture overnight.
The case for selling isn’t just financial. Canadian air travel has been stuck in a rut since the COVID years rattled the system. Air Canada and WestJet currently manage to get flights out on time just 73 percent of the time placing them near the bottom of North American carriers. Air Canada alone racked up more than 10,800 flight cancellations in 2024. Frustrated travellers and deterred tourists are a drag on the country’s economy and its reputation as a destination.
Research backs the idea that private ownership could turn that around. A 2022 study from the U.S.-based National Bureau of Economic Research found that privately run airports invested in more gates and terminals, leading to fewer cancellations and higher passenger volumes overall. Without the constraints of a not-for-profit mandate, airport operators would have every incentive to make the experience better not out of public service, but because more passengers means more revenue.
The retail equation is part of that logic too. Modern airports are increasingly experience-driven, with restaurants, retail outlets, and amenities that keep layovers from feeling like punishment. A profit-motivated operator is far more likely to develop these revenue streams aggressively and as a side effect, improve the overall passenger experience than a not-for-profit running on a public-sector ethos. Efficiency in security lines, faster check-ins, and better terminal flow all make business sense when the clock before a shopping opportunity is ticking.
There’s also the pressing question of infrastructure. Many of Canada’s airports are aging, and upgrades are overdue. Private capital could fund those renovations without adding to the public debt load and in theory, competitive management could keep the costs of those projects in check.
But the critics have legitimate concerns. A private operator eager to recoup a massive upfront purchase price may look for every available lever to extract returns raising landing fees for airlines, hiking rents for retail tenants, or cutting corners on maintenance to fatten short-term margins. Those costs don’t disappear; they get passed to passengers in the form of higher ticket prices or reduced service.
Perhaps the thorniest issue is what privatization would mean for Canada’s smaller, more remote communities. Air service is not a luxury for many of them it’s a lifeline. A private operator laser-focused on profitable routes has little reason to maintain service to communities that can’t generate enough passengers to justify the overhead. The government would either need to regulate those obligations into existence or subsidize them either of which could eat away at the very savings privatization was supposed to deliver.
History offers some reassurance that this can work. Margaret Thatcher’s controversial privatization of UK airports in 1987 was rocky at first, but the system eventually settled into an efficient, revenue-generating model. Australia followed a similar path in the 1990s and 2000s, with private operators upgrading infrastructure and growing revenues. Canada has the benefit of learning from those early-mover mistakes before making the leap itself.
Whether Ottawa can strike the right regulatory balance protecting consumers, preserving regional access, and ensuring long-term infrastructure investment while still making privatization attractive to buyers remains the defining question. Airports are not ordinary businesses. They are arteries of the national economy, and when they fail, the consequences ripple widely.
If the government moves forward, it will need to bring more than a balance sheet calculation to the table. It will need a plan that Canadians especially those in smaller communities far from major hubs can actually trust.
