Private Investment In Canadian Airports: A New Chapter On The Horizon

Prime Minister Mark Carney announced on September 15, 2026, that the federal government will open Canada’s four largest airports to private investment through long-term concession arrangements. Speaking at the inaugural investment summit, Prime Minister Carney outlined a vision to unlock new capital and operational expertise while retaining public ownership of the underlying land and assets.

The government’s stated objective: reinvest the billions of dollars generated from such concession arrangements into regional airports to improve domestic transportation, alongside new infrastructure projects benefiting communities across the country.

Understanding Prime Minister Carney’s intentions for private sector investment

At the Investment Summit, the Prime Minister emphasized that the government was not looking to privatize airports. Instead, the government aims to restructure operations so that private operators can "manage the airports for a period of decades" under government oversight.

Prime Minister Carney also announced plans to retain a public stake through the newly established Canada Strong Fund. "Our intention is to retain an ownership position in these concessions,” he said in his remarks, “so that as the value of the airports improve, Canadians will benefit directly.” While there are a number of potential options for structuring the investment and protecting the interest of the Federal Government (including direct equity participation, preferred share arrangements, or protected minority interests), it remains unclear at this stage which specific structure or approach will ultimately be adopted.

Put differently, this is less about selling Canada’s airports and more about unlocking the value within them. Private investment doesn’t necessarily mean selling the airport or simply charging passengers more. The critical question is how to structure a partnership that brings in private capital while protecting the public interest, understanding that maintaining and, eventually improving efficiencies and operations to the levels that Canadians expect will require capital and revenues.

Regardless of how any concession is ultimately structured, the Prime Minister confirmed in his remarks that regulatory authority will remain with Transport Canada, and that the upcoming consultation sessions will address the operational details of this new framework.

A departure from the current model

Today, 26 not-for-profit airport authorities manage airport operations across the country. While such authorities may have engaged private contractors to handle certain ancillary services, including retail, parking, security, baggage handling, and facility maintenance, operational control has remained with the airport authorities, limiting private sector involvement to supporting roles. A move to long-term operational concessions will likely require a revised regulatory framework. This is a topic expected to feature prominently in the government’s consultations.

From a fiscal perspective, we anticipate that the government will be trading recurring annual revenue for upfront payments, potential revenue sharing arrangements and ongoing commitments to capital investment, thereby making the structure of any future concession agreement the most critical element of the policy.

How concessions work

Under a concession arrangement, a private operator assumes responsibility for operating, maintaining, financing, and investing in public infrastructure for a defined period. Because a concession is fundamentally a contractual arrangement, Canada is not bound by international precedent and has considerable flexibility to design a structure tailored to its specific needs and policy objectives. Below are the principal legal considerations we anticipate must be resolved before any concession agreement can be finalized:

• Investment and service obligations: The government will establish expectations around capital investment, service levels, performance, safety, and other public-interest considerations. Concession agreements typically include a capital expenditure program or investment plan, potentially linked to a master planning process. In turn, the concessionaire will want clarity on these commitments and the regulatory framework in which investments will be made.
• Risk allocation is critical: Who bears the risk of traffic downturns, regulatory changes, force majeure events, and cost overruns?
• Revenue model: A central commercial negotiation point will be the revenue model. Typically, this involves some combination of an upfront premium paid to the government and an ongoing annual rent or revenue-sharing mechanism. Airports are much more than terminals and runways. They are significant commercial ecosystems. There are opportunities to generate revenue through numerous avenues, including commercial and real-estate development, cargo and logistics, retail and hospitality, parking and transportation, advertising, and technology.

• End-of-term transition: The agreement must provide for the orderly handback of the airport, including minimum condition requirements for runways, terminals, and other facilities to prevent underinvestment in the final years of the concession.
• Early termination: The agreement must address termination for cause in the event of a material breach, insolvency, prolonged force majeure as well as the consequences, including compensation and step-in rights.

The key is creating a model where investors have an opportunity to generate a reasonable return while Canadians continue to receive reliable, competitive and affordable airport services.

Regulatory framework considerations

The shift to private concessions raises interesting questions about economic oversight. Canadian airports currently operate without formal economic regulation; airport authorities set their own fees subject to certain transparency requirements under federal policy. If private ownership (and therefore operators) assumes control of major airports, the government will need to determine whether to introduce independent economic regulation (as exists in the UK and Australia) or rely on contractual mechanisms within the concession agreement itself to constrain pricing and ensure service standards.

As set out above, we understand that Transport Canada will retain authority over aviation safety, security, and operational standards (matters that are non-negotiable regardless of ownership structure). The more complex question is who regulates the economic terms: aeronautical charges, service quality benchmarks, capital investment obligations, and consumer protections.

International experience suggests three principal approaches:

1. Price-cap regulation: Where an independent regulator sets maximum allowable charges that are periodically reset.
2. Rate-of-return regulation: Where the operator is permitted to recover costs plus a regulated return on invested capital.
3. Contractual regulation: Where pricing and service obligations are embedded in the concession agreement and enforced through contract rather than by a regulator.

Each approach carries trade-offs. Independent economic regulation provides ongoing oversight and the ability to adapt to changing circumstances but introduces regulatory risk for investors and requires the establishment of a new institutional framework. Contractual regulation offers certainty at the outset and avoids the cost of a standing regulator but may prove inflexible over a 30- to 50-year concession term and depends heavily on the government’s capacity to negotiate and enforce complex commercial arrangements.

A hybrid model (combining contractual commitments with periodic regulatory review or a light-touch oversight body) may offer the most practical path forward for Canada.

Implications for key airport stakeholders

Any concession arrangement will need to address its impact on key stakeholders such as passengers, airport employees and bondholders.

The Canadian Labour Congress has raised concerns about privatization’s effects on workers and travellers. The Canadian Labour Congress noted that international experience often shows workforce reductions in pursuit of efficiency gains, as well as higher costs for travellers following airport privatization. Prior to Prime Minister Carney’s announcement, unions such as Unifor, delivered a firm message that Canada’s airports are not for sale.

Private investment and protecting the public interest do not have to be mutually exclusive. If structured properly, private capital can help modernize Canada’s largest airports while freeing public dollars for infrastructure that may not attract private investment as easily, including the regional and remote airports.

As we noted in our previous article, Airport Privatization in Canada: Models and Legal Issues, international experience makes clear that independent economic regulation, meaningful stakeholder engagement, competition safeguards, and labour protections are the common threads in jurisdictions where airport privatization has succeeded. Canada has an opportunity to look at what has worked internationally, and what hasn’t, and build a model that works for Canadian passengers and Canadian infrastructure.

The announcement also raises pressing questions about the four not-for-profit airport authorities that currently operate Canada's largest airports. These organizations have managed their respective facilities for over three decades, accumulating deep operational expertise and cultivating strong relationships with a wide range of key stakeholders. Given this extensive experience, the government should honour its commitment to collaborate with these authorities, leveraging their knowledge of the Canadian aviation landscape to chart a clear path forward. As the consultation process advances, these four authorities must have a meaningful seat at the table.

Read the original article on GowlingWLG.com