Key points:

  • The federal government is opening the door to private investment in airports.Four airport authorities appear to be on the block: Vancouver, Calgary, Toronto and Montreal
  • Canadian airports are currently owned by the federal government but operated by airport authorities who run on a non-profit model, in part to avoid price gouging.
  • Any sale or lease of an airport authority to a private owner would mean it would stop being a non-profit and would instead have to start generating a profit relatively quickly. 
  • There are a variety of ways a for-profit buyer can take today’s non-profit airport structure and turn them into a cash cow for themselves, none of which are going to be good for travellers.
  • The most obvious and likely way is for the federal government to simply cut the rents they charge privatized airports to guarantee immediate profits for the new owners—a direct transfer of hundreds of millions of dollars from federal coffers to shareholder profit.
  • Layoffs or wage rollbacks for airport workers is another obvious way to cut costs and increase profits. Fewer clearers and baggage handlers would likely decrease the quality of airports, but it could certainly increase profits. 
  • Another important expenditure for airports in this category is meeting strict safety regulations. Cutting staff and staff pay isn’t only about comfort in an airport, it can also be about traveller safety.
  • For-profit airports will certainly look to increase the cost to airlines to use the airport. Those higher fees charged to airlines will inevitably be passed on as higher ticket prices for travellers. 
  • For-profit airports will certainly also look at charging higher fees for everything that’s not on the ticket, from parking to ground transport, to retail prices to food prices. All will be subject to increased prices or decreased quality to boost profits. And travellers will pay the price.
  • Any way you cut it, privatizing airports is a good deal for private buyers and a terrible deal for travellers and workers.

There are 23 airport authorities in Canada—the not-for-profit entities which govern and operate airports—but there are only eight that took in over $100 million in revenue as of 2022. Figure 1 looks at those eight biggest airports to show how much of the airport pie they make up. The federal government is looking to privatize four of them: Vancouver, Calgary, Toronto and Montreal.. Toronto Pearson takes in a little over a third of all airport revenue in the country.

Canadian airports are owned by the federal government but operated by airport authorities. Their goal is to manage these “natural monopolies” (there is, after all, generally only one airport per city) on a non-profit basis in order to avoid price gouging, which will become possible if they’re privatized. These airport authorities made no profit at all off the $3.95 billion they brought in in 2022—expenses and revenues were basically identical when aggregated across all airport authorities. 

A privatized airport authority wouldn’t balance revenues and expenditures, instead it would attempt to drive up revenues and/or drive down expenditures to create a profit that it could pay to shareholders.

Driving up airport revenues

Any lease of an airport authority to a private owner would mean it would stop being a non-profit and would instead have to start generating a profit relatively quickly. Figure 2 shows the breakdown of expenditures among the major categories in Canada’s top eight airports.

Large airports’ biggest source of revenues are Airport Improvement Fees, which make up 37 per cent of their revenue. These are fees tacked onto every consumer’s plane ticket, over and above what the airline charges. For big airports, these fees amount to $30 to $40 a ticket for departing passengers. This is a specific surcharge earmarked towards capital improvements (that is, permanent improvements to airport infrastructure) at each airport. The airport authorities have to strictly isolate the revenue from this source and only spend it on those improvements. Presumably, if privatized, this revenue source would remain restricted and could not be used as a new profit source. It isn’t likely where a new private company would look to extract profits.

The other two revenue categories—aeronautical and non-aeronautical—are where a company would look for new revenue. The non-aeronautical revenue category contains any airport revenues that are not related to planes taking off, landing, and taking on passengers. It includes revenue from parking fees, ground transportation and rent from retail and food outlets in the airport. 

A private company would look quickly at increasing rents and parking fees to generate profits. These increases would be directly passed on to anyone who buys food in airports or parks in their parking lots. These are hardly affordable services to begin with, but they’d become even less so in a privatized model. And while these are somewhat avoidable for passengers—get dropped off, bring a sandwich—higher commercial rents also makes airports less appealing for businesses to seek to operate in..

Longer term, private companies would look to rebuild terminals as overpriced malls and food courts to generate higher revenue.

The third category is aeronautical revenues. These are the airport authority’s charges directly to airlines for landing, spending time at a gate and taking on passengers. Airport authorities directly control these charges and could certainly raise them. However, airlines would just increase ticket prices to ensure that passengers ultimately pay these fees. Unlike non-aeronautical revenues, there’s no way for travellers to avoid these fees. They would just be baked into ticket prices. 

Some academics cite evidence that some privatized airports could increase aeronautical revenues by increasing the number of planes landing instead of jacking up ticket prices. However, this effect is most pronounced when a privatized airport could steal travellers from other nearby airports. This may be possible in places like Europe where cities and airports are closer, but it simply doesn’t apply in Canada. It’s hard for Edmonton airport to steal passengers from a nearby airport as there isn’t one. 

Privatized airport authorities could generate profits by driving up revenues. But ultimately this is just passengers paying more to guarantee corporate profits, either because tickets cost more or because they’re forced to buy a $30 hamburger if their flight is delayed.

Pushing down airport expenditures

Beyond raising revenues, there’s another way that privatized airport authorities could generate profit: cutting expenditures. Figure 3 breaks down the major expenditure categories at Pearson airport in Toronto, although the same basic breakdown of expenditures exist at the other major Canadian airports.

It’s important to note that Canadian airports sit on federally owned land. Major airports actually pay rent to the federal government for the use of that land. In total, airport authorities paid the federal government $525 million in 2025, with Pearson alone paying $236 million of that. Rent is calculated as a proportion of airport revenues. 

While federal entities, like airports, are technically exempt from municipal property taxes, they pay them anyway in most cases. For airports it’s called Payment in Lieu of Taxes and Pearson paid $41 million to the City of Mississauga and the Region of Peel as a result. These payments are based on passenger volume, not land value. 

It’s unlikely that Mississauga wants to cut its taxes for a new for-profit owner to improve its profit margin. However, the feds just might.

In the 2026 spring economic statement in the section on airport privatization, the federal government stated that it wants to “update the framework for airport rents.” What this could easily mean is that the feds may want to charge less (or zero) rent to for-profit airports to ensure they generate immediate profits. This would effectively be the federal government sending cash directly to a private company that they can declare as “profit.”

If the federal government is willing to cut airport authorities’ rent, shouldn’t the proceeds go to lowering ticket fees instead of going to increase corporate profits? The federal government could cover a portion of the airport improvement fee, for instance, and actually lower costs for travelers rather than being pure profits for investors.

Workers’ wages and the purchase of goods and services will be another obvious target for reduced spending. Layoffs or wage rollbacks for airport workers is an obvious way to cut costs and increase profits. Historically, this has meant contracting out and contract flipping to drive down wages. Fewer clearers and baggage handlers would likely decrease the quality of airports, but it could certainly increase profits. Another important expenditure for airports in this category is meeting strict safety regulations. Cutting staff and staff pay isn’t only about comfort in an airport, it can also be about traveller safety.

When it comes to interest expense and write downs, another expense category, there is little room to lower these expenditures. A private operator would have to continue paying the interest on the airport’s debts.

The final major expense is amortization. While this isn’t an expense that can be cut, it hints at a broader possible issue—amortization isn’t a cash expense, like paying wages. Instead, it’s the spreading of an asset’s cost, like to build a new terminal, over its useful life. So each year over its lifetime, say 40 years, there will be a smaller expense instead of having a single massive expense in the year it’s built. There can be ways to change amortization, particularly to accelerate it, but this won’t change the actual cash generated. 

The problem, though, is that at the tail end of a long-term lease (as the federal government has hinted at as a privatization model), the privatized airport authority has a real incentive to cease investing and milk the asset for cash before handing it back to the federal government when the lease ends. Underinvestment in new terminals, runways and expansion can help a for-profit company ensure it gets the most out of the airport before it has to hand it back. This results in older and broken facilities for travellers but higher profits for the owner.

A better model

There are a variety of ways a for-profit buyer can take today’s non-profit airport structure and turn them into a cash cow for themselves—none of which are going to be good for travelers.

The most obvious and likely way is for the federal government to simply cut the rents they charge privatized airports to guarantee immediate profits for the new owners. Of course if the feds were willing to decrease rents, they could equally well guarantee that any rent decrease yielded decreased ticket prices instead of government guaranteed profits, but that’s not looking likely.

For-profit airports will certainly look to increase the cost to airlines to use the airport, it’s a monopoly after all, and airlines have no choice but to pay the higher fees. Although any higher fees charged to airlines are going to be passed on as higher ticket prices for travellers. 

For-profit airports will also look at charging higher fees for everything that’s not on the ticket, from parking to ground transport, to retail prices to food prices. All will be subject to increased prices or decreased quality to boost profits. On the expenditure side, wages, goods and services are another likely source of profits. This could involve staff layoffs in, say, cleaning or baggage handling, or wage cuts, or both. In the worst case scenario it could lead to compromised safety.

While there are clearly ways for corporate owners to create and expand airport profits, these are being financed by regular travellers trying to get to their destination. 

The present focus of airport reform is all wrong. The federal government focuses on their abstract “asset recycling” scheme that in reality is about maximizing profits for a private company. If we are to change airports, let’s focus on how regular Canadians can see lower ticket prices, safer travel and a more pleasant experience.

About the author

David Macdonald

David joined the CCPA as its Senior Ottawa Economist in 2011, although he has been a long time contributor as a research associate. Since 2008, he has coordinated the Alternative Federal Budget, which takes a fresh look at the federal budget from a progressive perspective. David has also written on a variety of topics, from child care to income inequality to federal fiscal policy. He is a regular media commentator on national policy issues, often speaking to the CBC, Globe and Mail, Toronto Star and Canadian Press. David received his BA from the University of Windsor and his MA from the University of Guelph, both in Philosophy. Follow David on Bluesky at @davidmaccdn.bsky.social