Cleared For Investment: Canada Opens The Door To Private Capital At Its Largest Airports

THE ANNOUNCEMENT: A POTENTIALLY FUNDAMENTAL CHANGE

On September 15, 2026, at an investment summit in Toronto, Prime Minister Mark Carney announced that his government intends to seek private investment through long-term concessions to run Canada’s four largest airports: Toronto Pearson, Vancouver, Montréal-Trudeau and Calgary (the “Big Four”). The Prime Minister framed the initiative as unlocking the “true value” of these airports by bringing in private capital and operating expertise, describing the approach as “following best practice in other countries” without naming a specific jurisdiction.

Finance Minister François-Philippe Champagne and other officials reinforced the announcement over the following two days, emphasizing that proceeds would be reinvested into infrastructure across the country, including but not limited to regional airports, and that Transport Canada would retain regulatory and safety oversight of the Big Four notwithstanding the change in operator.

The confirmed elements of the announcement are:

Ottawa intends to retain ownership of the underlying land and airport assets, with private operators holding long-term concessions rather than acquiring assets outright;
private investors would bring both capital and operating expertise; the government highlighted that Canadian pension funds already invest in and manage airports internationally, framing the initiative as bringing that expertise home;
the government has said the model will draw on international best practices, without naming a specific comparator jurisdiction;
the transactions are expected to unlock tens of billions of dollars, to be recycled into other infrastructure including regional airports, remote air connectivity and local transportation; and
the government will engage with airport authorities, airlines, local governments and other stakeholders as the initiative proceeds.

What has not been announced is the transaction structure. No substantive legislation has been tabled, no procurement framework published, and no term sheet or timeline released. The government has suggested that it may retain a public ownership position in the concessions through the newly established Canada Strong Fund, but this has not been confirmed. Ottawa has also not clarified who would grant the concessions, what would happen to the existing airport authorities, what economic rights private investors would acquire, how airport charges would be regulated, or how existing ground leases and airport debt would be treated.

However, in an interview on September 20, 2026, Transport Minister Steven MacKinnon indicated that the operating model for the airports would remain regulated, with fares and fees subject to partial regulation, and that the concession agreements could be expected to include mechanisms aimed at mitigating unjustified fee increases. The Minister also signalled that the government anticipates providing further details in the coming weeks and months.

What follows unpacks those open questions: the current framework, the policy progression that led here, and what remains to be addressed.

CANADA’S CURRENT AIRPORT FRAMEWORK

Many readers will hear phrases such as “private investment” and “privatization” and assume that Ottawa currently owns and operates Toronto Pearson and Canada’s other major airports. It does not. Understanding the current framework is essential to assessing how significant a departure this announcement represents from the status quo.

The National Airports System Today

The current national airport regulatory structure has its roots in the late 1980s, when Ottawa began commercializing federal air transportation assets, which were then publicly owned. At that time, outright privatization was considered but, apart from the United Kingdom’s experience, there were few models to draw on. Instead, the current “not-for-profit” route was selected. Canada’s Local Airport Authorities were first established in 1992, and the 1994 National Airports Policy formalized devolution to not-for-profit Canadian Airport Authorities tasked with managing airports safely and cost-effectively, with reasonable user charges and equitable carrier access.

Of note, this is not the first time Ottawa has considered moving away from the not-for-profit model. A federally commissioned Canada Transportation Act Review report, tabled in 2016, found, among other things, that the not-for-profit structure constrained access to permanent equity capital and recommended phasing out airport rent and moving toward a share-capital structure under a light-touch regulatory regime. While substantive changes did not come from that process, the history is a useful reminder that this announcement follows nearly a decade of intermittent efforts to revisit Canada’s airport ownership model.

The legacy of such changes, Canada’s National Airports System (the “NAS”) today consists of 26 airports, including the Big Four, each serving a provincial or territorial capital or handling more than 200,000 passengers annually. The Big Four together accounted for over 70% of the passengers who travelled through Canadian airports in 2025 and are also among the country’s leading airports by cargo volume.

The ownership and operating chain for the Big Four runs as follows: the Government of Canada owns the airport land and acts as landlord; it leases that land to an airport authority under a long-term ground lease; and the airport authority, a private, not-for-profit, non-share capital corporation, operates, maintains, finances and develops the airport. Importantly, Airport authorities are not Crown corporations and are not agents of the Crown. In other words, while the federal government retains ownership of the land under most large airports, non-governmental authorities manage day-to-day operations, capital planning and development. It is therefore critical to understand that the government’s stated plans would not see Canada moving from a fully public model to a fully private one – the shift under consideration is much more nuanced.

The Traditional NAS Economic Model

The NAS economic model has five key features:

it is user-pay rather than taxpayer-supported: most funding for airport services and infrastructure comes from fees paid by airlines and passengers and airport authorities set their own fees subject to certain transparency requirements under federal policy, without formal independent economic oversight;
airport authorities raise private debt to fund infrastructure;
revenues come from airline and aeronautical charges, passenger fees, and a diverse range of non-aeronautical commercial activities, including retail and food services, parking, cargo handling, real-estate development and ground transportation;
the authorities pay rent to Ottawa under their ground leases — a revenue-based charge of up to 12% of annual gross revenues for the largest airports; and
because the authorities have no shareholders, any surpluses remain within the airport system rather than being distributed as dividends.

This last point matters: the proposed concession model currently under consideration by Ottawa would generally be expected to change the economic equation by introducing equity investors who expect a commercial return.

Canada Already Has a Range of Airport Ownership and Operating Models

While the familiar model at many of Canada’s largest airports is federal ownership coupled with a long-term ground lease to a locally based, not-for-profit airport authority, as seen at the Big Four, that model is not universal. Canada already has a range of ownership, operating, financing and infrastructure-delivery structures, both within and outside the NAS. While 23 NAS airports are federally owned and leased to airport operators, the three territorial-capital NAS airports — Iqaluit, Yellowknife and Whitehorse — are owned and operated by their respective territorial governments. A few examples are worth examining to illustrate the diversity of airport ownership and operating models already in place across Canada.

Iqaluit’s international airport provides a useful example of private capital being deployed into a publicly owned Canadian airport in the NAS without transferring ownership of the airport itself. The Government of Nunavut retained ownership but entered into a 30-year public-private partnership with a private infrastructure consortium to design, build, finance, operate and maintain a new passenger terminal, runway rehabilitation and related facilities. The private partner financed a substantial portion of the approximately $298 million capital cost upfront, with the Government of Canada contributing approximately $74 million through the P3 Canada Fund and the Government of Nunavut making payments over the life of the arrangement. The private partner has no ownership rights in the airport but remains responsible for operations, maintenance and lifecycle obligations under the agreement. Iqaluit therefore demonstrates that even within the NAS, public ownership can coexist with integrated private financing, construction, operation and lifecycle responsibility.

Beyond the NAS, Hamilton provides another Canadian example of public airport ownership combined with long-term private operation. The City of Hamilton owns John C. Munro Hamilton International Airport, while a subsidiary of a global airport management group operates it under a long-term management lease. In 2024, the parties entered into a new 49-year agreement providing for approximately $400 million of investment in the airport, including passenger terminal, cargo, taxiway and apron improvements.

At MET – Montréal Metropolitan Airport (St-Hubert), the structure is different again. MET remains the non-profit airport authority responsible for managing, operating and developing the overall airport, while a private infrastructure partnership — formed between a Canadian aviation holding company and a global asset management firm — developed and now operates the new passenger terminal under a long-term lease with MET. The project was privately financed alongside a $90 million loan from the Canada Infrastructure Bank and financing involving institutional and private sector lenders.

Certainly, outside of the NAS, some airports remain more conventionally public. For instance, Abbotsford International Airport is owned and operated directly by the City of Abbotsford, while Region of Waterloo International Airport is owned and operated by the Regional Municipality of Waterloo. These airports demonstrate that substantial commercial airports can also remain municipal or regional public assets without an independent airport-authority structure.

Notably, these examples demonstrate that Canada already sees a variety of airport ownership and operation structures, and that private participation in Canadian airports is not new, nor does it necessarily require privatization of the airport itself. These models offer domestic precedents for introducing private capital into Canada’s larger airports while preserving public ownership and/or public-interest oversight.

EVOLUTION OF PRIVATE INVESTMENT POLICY IN THE NAS

The September 15^th announcement affecting the Big Four is the latest, and most significant, step in a policy progression building since at least March 2025, with Transport Canada’s policy statement. That statement encouraged greater private investment, but only within the existing airport-authority model — through subleases, subcontracting and equity investment in authority subsidiaries. Critically, in that statement the airport authority remained responsible for the airport, and private capital could participate alongside or beneath the authority but not displace it.

Budget 2025, made public on November 4, 2025, signalled the government’s openness to attracting private capital, particularly from Canadian pension funds and other institutional investors, into NAS airport infrastructure.

The Spring Economic Update (April 28, 2026) went materially further, confirming the government was “assessing opportunities” for NAS airports, “including through alternative models of ownership.” This marked a shift from facilitating private participation within the existing structure to actively contemplating structural change in who owns and operates Canada’s airports. The update also proposed amendments to the Canada Transportation Act to give the transport minister broader powers to compel airport data — amendments that were subsequently enacted through Bill C-30, which received Royal Assent on June 19, 2026. However, Bill C-30 is limited to information-gathering powers and does not constitute the enabling legislation required to establish or authorize a concession framework. The government committed to introducing that further enabling legislation later in 2026, which as of today has not yet been tabled.

The distinction between the earlier steps and the current proposal is structural — the September 15^th announcement takes the next step: not simply private participation in particular terminals, real estate or airport services, but a long-term private concession over the airport business itself — a step-change, not an incremental extension of the existing NAS model.

POTENTIAL STRUCTURING CONSIDERATIONS

While we currently have few details on what a potential Big Four private investment structure would look like, one legally significant signal in the government’s language is its consistent use of “concession” rather than “sale.” A concession implies that the Crown retains title to the land and grants operating rights for a defined term — materially different from, and more easily reconciled with existing constitutional and property arrangements than, an outright transfer of public assets. This is underscored by the government’s own statements regarding its intention to retain ownership of the land and the core physical assets at the Big Four.

As such, concession term and reversion conditions will be a central negotiating point: the length of the term will shape how much capital a private operator is prepared to commit, and when, over the life of the concession. Because a concession is at its core a contractual arrangement, Canada has considerable flexibility to design a structure tailored to its needs and policy objectives. Various commentators have drawn comparisons to two principal international models. Australia’s major airports were leased for 50-year terms (with 49-year extension options) beginning in the late 1990s, with the federal government retaining freehold title to the land. That model has often been described as successful in attracting private capital and delivering substantial infrastructure investment, though it has also drawn criticism for a light-handed approach to economic regulation. The United Kingdom took a different path, privatizing its principal airport operator outright in the late 1980s through a share sale, with Heathrow and other airports subsequently subject to price-cap regulation by an independent regulator (now the Civil Aviation Authority). The UK experience illustrates both the potential for private ownership to deliver sustained capital investment and the importance of a robust regulatory framework — the Competition Commission ultimately required the break-up of the privatized operator’s multi-airport monopoly in 2009. Canada will need to consider these and other international experiences carefully, but Canadians will need to wait for further details on the government’s preferred approach. We do expect, however, that any proposed concession structure would need to address certain principal legal and commercial considerations as follows:

Investment and service obligations: The government will need to establish expectations around capital investment, service levels, performance, safety and other public-interest considerations. Concession agreements typically include a capital expenditure program or investment plan, potentially linked to a master planning process. In turn, any concessionaire will require clarity on these commitments and the regulatory framework within which investments are to be made.
Risk allocation: A key structuring question is the allocation of risk between the government and the concessionaire — including traffic volume risk (explicit or implied), regulatory change, force majeure events and cost overruns. The allocation of these risks will directly affect the pricing of any concession and the return expectations of private investors.
Revenue model: The revenue model will be an essential commercial negotiation point. Typically, concession arrangements involve some combination of an upfront premium paid to the government and an ongoing annual rent or revenue-sharing mechanism. The balance between these elements will determine the fiscal trade-off for the government: recurring annual revenue under the current model versus upfront payments, potential revenue sharing and ongoing capital investment commitments under a concession.
User Cost Considerations: If a for-profit concessionaire assumes operational control, the government will need to consider whether to introduce independent economic regulation or rely on contractual mechanisms within the concession agreement itself to manage costs to users and ensure service standards. International experience suggests three principal approaches: (a) price-cap regulation, where an independent regulator sets maximum allowable charges that are periodically reset; (b) rate-of-return regulation, where the operator is permitted to recover costs plus a regulated return on invested capital; and (c) contractual regulation, where pricing and service obligations are embedded in the concession agreement and enforced through contract rather than by a standing regulator. Each approach carries trade-offs that will need to be considered throughout the consultation process.
End-of-term transition: The concession agreement must provide for the orderly handback of the airport at the end of the concession term, including minimum condition requirements for runways, terminals and other facilities. Without such provisions, there is a well-documented risk of underinvestment in the final years of a concession as the operator’s incentive to maintain and improve assets diminishes.
Early termination and step-in rights: The agreements must also address termination for cause in the event of material breach, insolvency or prolonged force majeure, together with the consequences of termination — including compensation, step-in rights enabling the government or a substitute operator to assume control, and the treatment of outstanding debt and capital commitments.
Other Legal Considerations: Any proposed concession structure would also need to address myriad other legal considerations, including those relating to the particularities of operating in an aviation environment — in particular, safety and security — Indigenous matters, labour and employment, competition law, tax, foreign ownership and environmental and impact assessment requirements, all of which may affect the scope and implementation timeline for any ultimate transaction.

TRANSITION AND THE FUTURE ROLE OF AIRPORT AUTHORITIES

Any proposed concession structure also raises questions about transition, as well as the future role of the four not-for-profit airport authorities that currently operate the Big Four. These organizations have managed their respective facilities for decades, accumulating deep operational expertise and cultivating strong relationships with airlines, municipalities and other stakeholders, as well as in certain cases carrying significant debt that would need to be addressed. Whether and how these authorities participate in shaping the concession framework — and what role, if any, they retain following any transition — remains an open question as the consultation process advances.

IMPLICATIONS FOR KEY STAKEHOLDERS AND WHAT TO WATCH

For infrastructure investors, operators, lenders and their advisors, this announcement represents a potentially generational opportunity in Canadian infrastructure. If the government proceeds as signalled, the Big Four concessions could rank among the largest infrastructure transactions in Canadian history. Participants should be considering now what capabilities, relationships and capital structures a competitive process would require, while actively monitoring the policy and legislative developments that will shape the eventual transaction framework.

The implications of the proposed concession model will vary considerably across stakeholder groups, including airlines, existing airport authorities, airport users and municipalities and local governments. For Canadian pension funds and institutional investors, the announcement presents a major domestic deployment opportunity in a sector where many already have deep international expertise; however, the terms of any concession — including the regulatory framework, permitted returns and foreign ownership rules — will determine whether the risk-return profile is competitive with international alternatives.

Given the public debate that followed the 2016 Canada Transportation Act Review, and the range of reactions already voiced by aviation economists, airline industry representatives, labour organizations and other stakeholders since the September 15th announcement, stakeholder response to the eventual transaction structure is likely to be an important factor shaping how, and how quickly, the initiative proceeds.

We will continue to monitor developments as the framework develops, including the government’s proposed concession model and transaction structure, whether Ottawa or the airport authorities run any procurement process, amendments to the federal ground leases, legislative changes to airport-authority governance, the government’s signalled review of airport rents, the establishment of any economic regulatory regime for private concessionaires, the treatment of existing airport debt, rules governing foreign and pension-fund ownership, labour and employment transition arrangements, Indigenous consultation requirements, competition law considerations, and whether the model is extended beyond the Big Four to the broader 26-airport NAS. Our infrastructure, aviation, competition, tax, environmental and Indigenous law teams are actively tracking these developments and are available to assist clients in assessing the opportunities and risks presented by this initiative as further details emerge.

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.

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