Calgary economist warns: regulate airports before any privatization sale
University of Calgary professor Aidan Hollis argues Ottawa must establish independent oversight and fee controls before inviting bids for four major Canadian airports.
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Before Ottawa hands over control of major Canadian airports to private operators, the government must first establish independent regulation and clear rules on what companies can charge travellers, a University of Calgary economist argues.
Aidan Hollis, an economics professor, released a paper this week examining a federal proposal to privatize Toronto Pearson, Vancouver, Montréal-Trudeau and Calgary airports through long-term concession agreements. Prime Minister Mark Carney announced the plan September 15 at the Canada Investment Summit, saying Ottawa would retain ownership of land and assets while seeking private investment to operate the facilities.
"The regulations should be established in advance, and what they should do is set out the terms of what the owner of the airport can charge and on what basis," Hollis said. "Canada needs economic regulation of its major airports with or without a sale. If a sale is contemplated, the regulatory framework must be established before bids are invited."
Currently, the four airports operate under not-for-profit airport authorities that reinvest all revenue. A private concessionaire would operate the airport for a set period and keep revenue with no obligation to reinvest in the facility.
Without rules limiting what companies charge, Hollis warned, operators could raise fees dramatically to recover the billions they spend securing a concession. If investors remain uncertain about restrictions, they might bid lower — costing taxpayers money.
Hollis recommends tying improvement fees to approved capital programs, independent review of major projects, and restrictions preventing operators from passing acquisition costs to airport users.
Conservative Leader Pierre Poilievre said he wanted to see further details before judging the plan. NDP Leader Avi Lewis called it a "disastrous deal" for Canadians.
What does Ottawa's current timeline look like for moving forward with privatization?
Has Calgary's airport authority responded to the privatization proposal?
We'll update this story as answers emerge.
The facts
Which four Canadian airports would be privatized under Ottawa's plan?
Toronto Pearson, Vancouver, Montréal-Trudeau, and Calgary airports would be privatized through long-term concession agreements, with the federal government retaining ownership of land and assets.
Who is Aidan Hollis and what is his main concern?
Aidan Hollis is an economics professor at the University of Calgary who argues that Ottawa must establish independent regulation and fee controls before inviting private bids to operate the four major airports.
When did Prime Minister Mark Carney announce the privatization plan?
Prime Minister Mark Carney announced the plan on September 15 at the Canada Investment Summit.
