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The federal government's 2025 budget has reintroduced a topic that could reshape Canada's aviation landscape: airport privatization. While the budget stops short of announcing a full-scale divestiture, it signals a clear intent to consider options for privatizing airports and to attract private-sector investment in this major infrastructure asset class.
This is not the first time such an idea has surfaced. A similar review in 2016 explored monetizing major airport assets, with interest from private capital. That effort ultimately stalled amid political concerns and resistance from certain airport authorities. But nearly a decade later — and in a markedly different fiscal and geopolitical environment — the conversation has returned.
Is this time different?
Budget 2025 places significant emphasis on attracting private capital to support nation-building infrastructure, trade diversification, and supply-chain resilience. Airports, as essential transportation and logistics hubs, are central to these objectives.
The government's intention to explore new ownership and investment models aligns with a broader move toward leveraging private capital for public infrastructure. Institutional investors — particularly Canadian pension funds — have demonstrated strong appetite for long-duration, inflation-protected assets of this nature. The conditions for privatization are arguably more favourable than they were in 2016.
The Canadian Airports Council (CAC), which represents 100+ airports across Canada, expressed preliminary support to the budget's direction:
"Canada's airports are critical national assets that connect people and goods," said Monette Pasher, CAC President, welcoming the budget's focus on trade and infrastructure. The Council noted its interest in learning more about the government's intent to explore privatization, adding that "there are many ways to work with pension funds and equity partners, and any options government considers must have affordability for Canadians as the top priority."
Differentiated Impacts Across Airports
Canada's major hub airports — including Toronto, Vancouver, Montreal, and Calgary — already operate as self-funded, not-for-profit, non-share capital corporations called airport authorities. These authorities finance their capital programs through user fees (including from air carriers) and access to debt markets, and generally maintain the capacity to reinvest in their infrastructure at scale.
Regional airports perform equally critical transportation and connectivity roles but often operate in a tighter financial position. Compared to the major hub airports, these regional airports may not have the traffic volumes and fee structures to generate sufficient surpluses to fund major reinvestments or long-term upgrades. Alongside increased funding through the Airports Capital Assistance Program (ACAP) in the 2025 budget, access to private capital partnerships, whether through concession models, equity participation, or alternative arrangements (including those referenced in the Transport Canada March 2025 policy statement, such as entering into subleases with airport authorities, providing subcontracted services, or working with airport authority subsidiaries), could provide the means for both major and regional airports to modernize facilities, expand capacity, and enhance resilience without overreliance on limited public funding.
Why This Time Might Be Different
- Fiscal pressure: Ottawa faces deficit constraints and needs to mobilize private capital.
- Investor appetite: Pension funds are liquid and actively seeking domestic, inflation-protected infrastructure assets.
- Policy alignment: The budget explicitly ties airport investment to trade diversification and economic resilience — giving privatization a stronger strategic rationale than before.
- Industry buy-in: CAC's statement signals an openness to creative models, especially if affordability and regional equity are preserved.
The Bottom Line
Airport privatization has re-emerged as a policy consideration within a broader agenda of infrastructure renewal and trade competitiveness. In particular, regional and northern airports could particularly benefit from new avenues of capital access, enabling reinvestment and long-term sustainability.
Whether this renewed initiative advances beyond the exploratory stage will depend on political will and stakeholder alignment. Nevertheless, Budget 2025 marks a meaningful step in reopening a conversation that may, this time, have the momentum to proceed further.
McCarthy Tétrault's Airports and Aviation group is uniquely positioned to advise on these developments, drawing on deep experience in airport infrastructure transactions, corporate governance, regulatory compliance, and debt finance.
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.
