- with Senior Company Executives and HR
- with readers working within the Accounting & Consultancy and Aerospace & Defence industries
Taxiing Forward
Since our last bulletin in December 2025, the federal government has taken incremental but significant steps toward enabling private investment in, and potential privatization of, airports within Canada’s National Airports System (the “NAS“). While the policy framework remains at an early stage, the trajectory has shifted meaningfully—from exploratory review toward formal groundwork for structural reform. In this update, we summarize the key developments and consider what they may mean for prospective investors, airport stakeholders, and the broader aviation sector.
The Departure Gate – Budget 2025 Recap
As discussed in our prior bulletin, Budget 2025 (released November 4, 2025) established the foundational policy direction for airport reform. At its core, the Budget signaled the government’s openness to attracting private capital—particularly from Canadian pension funds—into NAS airport infrastructure. It also committed to reviewing ground lease rents payable by airport authorities to the federal government, examining governance structures of existing not-for-profit airport authorities, and enabling broader economic development on airport lands. While the Budget did not commit to a specific model or timeline, its explicit references to “privatization”, among other options, marked a noteworthy shift in tone and set the stage for the developments that have followed.
Gaining Altitude – The Spring Economic Update
The Spring Economic Update, released on April 28, 2026, formally accelerated the government’s plans. The Update confirms that the government is “assessing opportunities” for NAS airports “including through alternative models of ownership.” While it does not materially advance the substantive policy framework beyond Budget 2025, it introduces several notable developments that suggest the conversation is moving from policy exploration toward implementation.
Perhaps most significantly, the government has committed to introducing legislation later in 2026 to support a comprehensive review of airport reforms. This may include amendments to the Canada Transportation Act to grant the Transport Minister authority to compel data and information from airport operators—a procedural shift that signals the government is laying the institutional groundwork necessary to move from broad policy statements to concrete action.
The Update also reaffirms and sharpens the government’s interest in “alternative models of ownership,” moving beyond the more general language of attracting private investment used in Budget 2025. This evolution in language is worth noting, as it suggests the government is actively contemplating structural changes to how Canada’s airports are owned and operated, not merely how they are financed.
On the ground lease front, the government is considering examining rent formulas and extending the terms of the leases. As we noted in our prior bulletin, such extensions could provide the certainty required to attract meaningful private investment, particularly from institutional investors and pension funds with long-duration investment horizons.
Transport Minister Steven MacKinnon has confirmed that the government is in the “early stages” of discussions with airport authorities, airlines, and other stakeholders regarding the preferred approach to reform. The breadth of these consultations will be an important indicator of how the government intends to balance competing interests as it moves forward.
Turbulence Ahead? – Stakeholder Reactions
As with any significant policy shift, the prospect of increased private investment or participation in airport businesses has generated a range of reactions. The Union of Canadian Transportation Employees has expressed strong opposition to suggestions of privatization, citing concerns regarding increased user costs, diminished safety standards, and potential job losses, and has advocated for the retention of the current not-for-profit, local-authority model. Conversely, Canadian pension funds have historically expressed interest in airport asset ownership, and the government appears to view unlocking this capital as a central objective of the reform initiative. How the government navigates these competing perspectives will be critical to the success and public acceptance of any reform model.
In a Holding Pattern – Outstanding Questions
Notwithstanding the momentum building behind the reform agenda, the government has not yet addressed several key commercial and structural questions that will be of particular interest to prospective sponsors, lenders, and institutional investors. Among the most pressing: will the government pursue outright asset sales, long-term concession arrangements, or hybrid structures? How will existing airport authority governance arrangements and ground leases be treated? Will foreign ownership restrictions or rules governing pension fund participation be modified? And will there be any sequencing, prioritization, or identification of pilot transactions involving specific airports? Until these questions are answered, market participants will be watching closely but may find it difficult to assess the full scope of the opportunity.
Final Approach?
As of May 2026, the government’s airport privatization initiative remains in the planning and evaluation phase. The Spring Economic Update signals a clear transition toward implementation, but does not yet provide the substantive detail necessary to assess transaction structures, timelines, or commercial terms. The introduction of enabling legislation later in 2026 will be a key milestone, as it will provide greater clarity on the scope and pace of reform. It is clear that the conversation around airport investment continues to gain momentum. The decisions made in the coming months could shape the future of Canada’s air transportation system for decades to come, and we will continue to track developments and provide updates as the policy framework evolves.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.
© McMillan LLP 2025
[View Source]
