Canada is again asking fundamental questions about how its major airports should be financed, governed and developed.

The federal government has indicated that it is examining alternative ownership and investment models for federally owned airports, alongside changes to airport leases, rents and the commercial development of airport lands. The prospect of greater participation by pension funds and other institutional investors—and potentially some form of privatization—has inevitably attracted attention.

The discussion is taking place at a consequential time. Canada is confronting significant economic and fiscal pressures arising from its trade dispute with the United States, while seeking to mobilize domestic and international capital for infrastructure, strengthen economic resilience and protect strategic national interests. That effort will be particularly visible at the federal government’s Canada Investment Summit in Toronto on September 14–15, which will bring together major Canadian and international investors around opportunities to invest in Canada’s economy and infrastructure. Airports themselves are experiencing some of the effects of the changing Canada–U.S. relationship: transborder passenger traffic declined significantly in 2025 and has remained below previous levels through much of 2026, even as domestic and other international traffic has generally performed more strongly.

Against this backdrop, the possibility of unlocking greater investment—and potentially economic value—from Canada’s airport assets takes on added significance. But “should Canada privatize its airports?” may be the wrong question.

The more useful public-policy question is: what combination of ownership and control, governance, economic regulation and accountability would best protect the public interest while giving Canada’s airports the capital and commercial flexibility they need to develop?

Answering that requires first being clear about the problem the government is trying to solve.

Recent polling suggests that a majority of Canadians remain skeptical about opening the country’s major airports to private investment, echoing concerns expressed when airport privatization was considered nearly a decade ago. The persistence of public skepticism across successive debates also suggests that any reform will ultimately require not only a compelling financial case, but public confidence in the governance model that replaces or modifies the present one.

Canada’s existing model was itself an innovation

The present system emerged from similar questions more than 30 years ago.

Under the National Airports Policy of the 1990s, the operation and development of Canada’s major airports was transferred from the federal government to locally based, private, not-for-profit airport authorities under long-term leases. Ottawa retained ownership of the underlying assets, while airport authorities became responsible for operating, financing and developing their airports.

The model was neither traditional public ownership nor conventional privatization. Airport authorities could operate commercially, raise debt and undertake major capital programs, but had no shareholders requiring dividends or a return on equity. Surpluses were reinvested in the airports.

The model has mobilized tens of billions of dollars of investment without direct federal financing and supported the transformation of Canada’s major gateways. At the same time, airport authorities pay substantial ground rents to Ottawa and depend heavily on airport charges, passenger fees, commercial revenues and debt to finance continued development.

Thirty years later, the environment has changed. Major airports face another substantial investment cycle involving terminals, airfields, ground access, digital infrastructure, sustainability and resilience. Governments are seeking ways to mobilize private and institutional capital for infrastructure. Airports want greater commercial flexibility. And the federal government must consider whether substantial public value embedded in these assets could be used more effectively.

The recent decline in transborder traffic is also a reminder that airport economics are exposed to risks extending well beyond the airport itself. Trade relations, geopolitics, changing travel behaviour, airline network decisions and economic cycles can materially affect traffic and revenues. Any discussion of future ownership and financing therefore needs to consider not only potential returns, but also who ultimately carries these risks.

Those are legitimate questions. They do not, however, point automatically to any particular ownership model.

What problem are we trying to solve?

Ownership should be considered as a means, not an objective.

If the principal constraint is access to capital, extending airport leases, reforming ground rents or enabling airport authorities to establish subsidiaries, joint ventures and partnerships with institutional investors might be sufficient.

If the objective is to unlock the commercial value of airport lands, changes to lease conditions and development rights might be more relevant than changing ownership.

If the objective includes monetizing federal assets and redeploying public capital toward other national priorities, some form of concession, partial privatization or asset sale becomes a different proposition altogether. In today’s more challenging fiscal environment, that possibility deserves consideration—but so too does the long-term value being transferred and the obligations that should accompany such a transaction.

And if shortcomings exist in governance, competitiveness or accountability, changing ownership may not necessarily resolve them. It may simply change the interests that the governance framework must reconcile.

The starting point should therefore be a clear definition of the policy problem, followed by an assessment of which institutional model best addresses it.

Airports are businesses—but not ordinary businesses

Well-run airports can be attractive infrastructure investments. They possess long-lived assets, relatively predictable demand over the long term, diversified revenue streams and, in some cases, strong credit ratings. It is therefore unsurprising that Canadian pension funds and international infrastructure investors have shown interest in the opportunities that greater private participation in Canada’s airports could create.

That interest is potentially valuable. Private and institutional capital can broaden access to financing, bring commercial and infrastructure expertise and create additional capacity for investment. But the availability of capital does not, by itself, determine the appropriate ownership or governance model.

Airports, however, occupy a distinctive position in the economy.

They connect communities and regions to domestic and international markets. They enable trade and tourism, generate employment and stimulate economic activity well beyond airport boundaries. They are essential to emergency response and national resilience and constitute important strategic infrastructure. At a time of greater geopolitical and trade uncertainty, that strategic role arguably deserves even greater consideration.

This also raises questions about foreign ownership and control. International capital can broaden the pool of potential investors and bring valuable infrastructure expertise. But ownership of a major international gateway is not equivalent to investment in an ordinary commercial asset. Any alternative ownership model would need to consider not only the extent to which foreign investment should be permitted, but where effective control should reside, how strategic decisions should be governed, and what safeguards are required to protect national security, resilience and Canada’s long-term sovereign interests.

Major airports also possess characteristics of natural monopolies. An airline, passenger or shipper generally cannot substitute one major gateway for another in the same way that consumers can choose between ordinary competing businesses.

This does not argue for or against private or foreign investment. It means that ownership, control, incentives, economic regulation and the strategic public interest cannot sensibly be considered in isolation from one another.

Private capital changes the equation

Canada’s current airport authorities have creditors, but they do not have equity shareholders seeking returns on invested capital. Introducing equity investors would change that incentive structure.

Investors reasonably expect returns commensurate with the capital and risk they assume. Airport management would therefore have responsibilities to investors as well as airlines, passengers, communities, governments and other stakeholders.

That raises legitimate questions.

How should airport charges be determined? What constitutes an appropriate return on invested capital? How should commercial and aeronautical revenues be treated? What protections should airport users have against the exercise of market power? What obligations should investors assume for long-term capital investment, service quality and resilience?

International experience offers many approaches, including price-cap and rate-of-return regulation, negotiated airline agreements, concession requirements and more light-handed forms of economic oversight. None is inherently correct for Canada.

But if ownership changes, the economic-regulatory framework should be consciously designed with it rather than addressed afterwards.

Governance ultimately determines how interests are reconciled

Ownership attracts attention because it is visible. Governance may ultimately matter more.

Airports sit at the intersection of sometimes conflicting interests: governments seeking economic development and fiscal value; communities seeking connectivity and responsible development; airlines seeking efficient infrastructure and competitive charges; passengers seeking service and affordability; investors seeking predictable returns; and airport management seeking the freedom and capital to develop for the long term.

No ownership model makes these tensions disappear.

The essential governance questions are therefore: Who makes the important decisions? To whom are they accountable? Who bears the risks? Who receives the benefits? And what happens when commercial incentives and broader public objectives diverge?

Canada’s own aviation history provides a useful reminder that the choice need not be binary.

The privatization of Canada’s air navigation system and its sale to the user-funded NAV CANADA created a private, non-share-capital model rather than a conventional government agency or investor-owned utility. Its structure reflected deliberate choices about stakeholder governance, financing, charging, safety regulation and accountability appropriate to a strategic national infrastructure service.

Airports have different economics and NAV CANADA is not a template for airport ownership. The relevant lesson is broader: institutional structures can be designed around the particular characteristics of the infrastructure and the interests that must be balanced.

A framework for considering what comes next

Before choosing an alternative model, six questions deserve particular attention:

1. Purpose: What specific problem would a change in financing or ownership solve?
2. Incentives: How would the model affect investment, airport charges, service quality, efficiency and commercial development?
3. Governance: How would airlines, passengers, communities, governments, management and investors be represented or protected?
4. Risk and reward: Who would bear traffic, financing, development, operational and strategic risks, and who would receive the corresponding economic benefits?
5. Ownership and control: What role should Canadian and foreign investors be permitted to play, where should effective control reside, and what safeguards would be necessary for infrastructure of national strategic importance?
6. Public interest: How would connectivity, competitiveness, resilience, security and Canada’s long-term strategic interests be safeguarded?

Different airports may produce different answers. Toronto Pearson, Montréal-Trudeau, Vancouver and smaller National Airports System airports serve different markets and have different investment requirements, balance sheets and strategic roles. A single solution need not necessarily fit all.

The current federal review therefore presents an opportunity broader than privatization. It provides an opportunity to examine whether an airport governance and financing model created three decades ago remains appropriate for the next three decades.

Canada should neither preserve the existing model simply because it has served the country well nor change it simply because substantial private capital is available—or because near-term fiscal pressures may make asset monetization attractive. The objective should be to establish the combination of capital, commercial freedom, governance, economic discipline and public accountability that enables Canada’s airports to develop while safeguarding their wider role in the economy and society.

Getting that institutional design right is ultimately more important than the label attached to the ownership model.