Canada Opens Four Major Airports to Private Investment, Eyes Pension Funds

Canada is inviting private investors to take part in long-term concessions to operate its four biggest airports, a move the government says is aimed at spurring economic activity while keeping the facilities under public ownership.

Prime Minister Mark Carney said the plan covers airports in Toronto, Montreal, Vancouver and Calgary. The arrangement would not amount to a sale or a change in ownership, and investors would not have to be exclusively Canadian, he said, adding that the process would be competitive.

Transport Minister Steven MacKinnon said he expects a substantial showing from domestic pension funds. "We anticipate a very, very strong Canadian presence in these concession agreements," he said in an interview, noting that Canadian pension plans have built expertise in similar investments abroad.

MacKinnon said Australian investors could also qualify, describing them as active global investors who welcome Canadian infrastructure investment in their own country. He added that foreign investment approvals and national security reviews would form part of any transaction.

Infrastructure firms have been pouring money into airport upgrades in markets such as the United States and Australia, drawn by long-term growth in air travel. Macquarie Asset Management, which has backed a new terminal south of Montreal, said it sees considerable room for further investment in Canada's transportation infrastructure, a sector where opportunities have been comparatively scarce in recent years. Spokespeople for Canadian pension fund La Caisse and Australia's IFM Investors both said the announcement presents an opening.

The proposal has run into opposition from labour groups, who argue that private involvement in airports has pushed up costs for travellers. "Private investors don't put billions into airports unless they expect to make billions back," said Lily Chang, secretary-treasurer of the Canadian Labour Congress.

MacKinnon said Canada intends to draw on the experience of other countries that have already opened airports to private operators. "We are far from the first movers on this," he said, adding that Ottawa wants a process that is open and fair and that leaves the door wide open to Canadian investment.