Canada’s airports are at a crossroads. For three decades, the country’s major airports have operated under a unique not-for-profit model, with airport authorities managing federally owned land under long-term ground leases.

That framework is now under active review.

Budget 2025 signaled the federal government’s interest in attracting private capital to airports. The Spring 2026 Economic Update went further, confirming the government’s intention to explore “alternative models of ownership” and to introduce enabling legislation later in 2026. The stated objectives? To help airports better serve Canadians and to unlock the capital tied up in airport infrastructure for reinvestment in broader economic growth in Canada.

1. What is airport privatization?

Airport privatization refers to the transfer of ownership, management, or operational control of airport assets from the public sector to private entities. As of 2025, more than 850 airports in over 90 countries involve some form of private-sector participation, handling approximately 43% of global air passenger traffic. Europe leads, with roughly 75% of traffic at airports with private involvement; North America stands at just 1%.

Privatization is not a binary concept. It encompasses a spectrum of models, each involving different degrees of private participation, risk transfer, and public oversight:

  • Full divestiture (IPO or trade sale):

    The government sells 100% of its ownership interest in the airport outright, typically through an initial public offering or a trade sale to a strategic buyer. The private owner assumes full operational and financial responsibility. The United Kingdom's 1987 privatization of the British Airports Authority (BAA) is the paradigmatic example. Birmingham, Bristol, Cardiff, Liverpool, and London City were also fully or partially privatized through trade sales during the 1990s and 2000s.

  • Partial privatization (mixed ownership):

    The government retains a significant ownership stake while selling a minority (or in some cases majority) interest to private investors. This model allows governments to monetize assets while maintaining influence over governance and strategic direction. France's Aéroports de Paris (ADP) and Germany's Fraport AG operate under variants of this model.

  • Long-term lease or concession:

    The government retains ownership of the underlying assets but grants a private operator a long-term lease (typically 30 to 99 years) to operate, maintain, and invest in the airport. The operator collects revenues and bears operational risk. Australia's 50-year airport leases and numerous Latin American concessions follow this approach. As of January 2025, 132 concession transactions were in the global pipeline.

  • Public-private partnerships (P3/DBFOM):

    Under a design-build-finance-operate-maintain (DBFOM) structure, a private consortium finances and delivers a specific terminal or infrastructure project, operating it for a defined concession period before it reverts to public control. Recent examples include the US$4 billion LaGuardia Terminal B and the US$9.5 billion JFK New Terminal One projects.

  • Management contracts:

    The government retains ownership and financial risk but engages a private firm to manage day-to-day operations for a fee. This is the lightest form of private participation and is common at smaller airports, such as Gary/Chicago International and Indianapolis.

Furthermore, each model can accommodate the financial structuring required to address a particular issue or desired outcome. For example, either:

  • A revenue-risk model, under which the operator collects revenues and bears demand risk.
  • An availability-payment model, under which the operator receives fixed payments tied to performance standards while the authority retains demand risk.
  • A hybrid combining elements of both.

The choice of model has significant implications for governance, regulation, capital investment, labour relations, and public interest. Privatization under any of these models can also be segmented, with different components of airport operations or infrastructure subject to different ownership or management arrangements. No single model is universally superior; each reflects trade-offs between efficiency, accountability, and control.

2. What does airport privatization mean for Canada?

Current structure and ownership of Canadian airports

Before 1994, Canada’s major airports were owned and operated directly by the federal government through Transport Canada. Under this model, taxpayers were responsible for all capital investments and operational costs not covered by airport charges.

In 1994, the government established the National Airports Policy, which created the National Airports System (“NAS”). The NAS currently oversees 26 airports, including three airports owned and operated by territorial governments. An additional 71 regional airports were identified as non-NAS airports, with ownership and operations being handed down to other levels of government or the private sector.

Under the NAS framework, 23 airports are owned by Transport Canada and leased under long-term ground leases to airport authorities. The airport authorities operate pursuant to the Airport Transfer (Miscellaneous Matters) Act. Airport authorities are private, not-for-profit, non-share capital corporations. They are not Crown corporations, nor agents of the Crown. An airport authority’s board typically has between 9-15 directors. The governance structure is composed of member/directors nominated by: the Minister of Transport; the applicable provincial government; local municipalities; and local non-governmental organizations. Directors have a fiduciary duty to the airport authority and not to the entity that nominated them.

Airport authorities provide airport facilities and related infrastructure to allow ongoing commercial air service, including runways, air terminal buildings, baggage handling facilities, check-in facilities, facilities to allow government inspection, and for various ancillary activities.Per the National Airports Policy, airport authorities are to be financially independent, receiving minimal to no public funding, though some exceptions have occurred through various government infrastructure programs. Rather, the facilities and operations are sustained solely by the people and entities who use them. Authorities set their own fees and meet their own costs through charges to aircraft operators, passengers, and commercial revenues. Canadian airport revenue is derived primarily from three sources:

  1. Aeronautical revenue: Landing and terminal fees, mostly charged to passenger and air carriers as well as general aviation tenants.
  2. Non-aeronautical revenue: Revenues generated through business engagements, land leasing, and other commercial activities within the airport campus, such as parking, retail, and hotels.
  3. Airport improvement fees (AIFs): Fees collected from passengers that are used exclusively for capital infrastructure programs.

The user-pay basis fails to drive the capital investment required for large-scale infrastructure improvement. Under the current framework, many Canadian airports have taken on a considerable amount of debt to support airport infrastructure needs. In fact, the current model focuses on revenue-protection measures, designed around access to the debt markets as the primary capital channel, in the absence of public funding or equity. This adds complexity for airport authorities as any change to revenue streams or asset arrangements must preserve debt-service coverage and the collateral supporting outstanding debt instruments.

Compounding these constraints, airport authorities face sustained public pressure to keep aeronautical charges low for airlines and passengers, limiting the ability to raise revenues from core aviation activities to fund necessary infrastructure investments.

Recent policy developments

A March 2025 Policy Report from François-Philippe Champagne, then-Minister of Innovation, Science and Economic Development, and Anita Anand, then-Minister of Transportation, noted three avenues the Federal Government was considering for private investment within the existing airport framework:

  1. Co-development through subleases.
  2. Subcontracting of airport services.
  3. Private investment through for-profit subsidiaries.

Budget 2025 went beyond the foregoing, signaling the government's openness to attracting private capital, particularly from Canadian pension funds.

The Spring 2026 Economic Update, released on April 28, 2026, confirmed the government's intention to explore “alternative models of ownership” and committed to introducing enabling legislation later in 2026. The Spring Economic Update 2026 Implementation Act (S.C. 2026, c. 22) received Royal Assent on June 18, 2026 and with it, the Canada Transportation Act was amended to require certain individuals and entities to provide the Minister of Transport with information that the Minister considers necessary, including information respecting: (a) the assessment of the value of an airport or other aviation facility or an entity that owns or operates an airport or other aviation facility; or (b) the capacity and development of all or part of the national air transportation system

3. What to watch for

Airport privatization in Canada is at an early but consequential stage. The federal government has signaled a clear intention to explore alternatives to the existing not-for-profit model, and enabling legislation may be introduced before the end of 2026. Any move toward airport privatization in Canada would engage a complex web of federal legislation and regulatory frameworks.

International experience demonstrates that a wide range of models are available—from full divestiture to partial privatization, long-term concessions, public-private partnerships, and management contracts; each with distinct implications for governance, investment, regulation, and labour.

What that international experience also makes clear is that the choice of ownership model matters less than the quality of the regulatory and governance framework that accompanies it. Independent economic regulation, meaningful stakeholder engagement, competition safeguards, and labour protections are the common threads in jurisdictions where airport privatization has succeeded.

As Canada charts its path forward, the legal architecture will be as important as the policy ambition. Amendments to the Aeronautics Act, the Canada Transportation Act, the ground lease framework, and potentially enabling legislation to allow for the conversion of not-for-profit corporations to for-profit corporations will be required. New regulatory institutions may need to be established and the interests of airlines, passengers, airport workers, communities, and investors will all need to be balanced in a manner that serves the long-term public interest.

We will continue to monitor these developments and advise clients as the legislative and policy landscape evolves. For questions about these legislative developments or their implications for your organization, please contact the authors.