As seen in today’s Hill Times: Giving away our future – The Hill Times – The Hill Times
The federal government appears poised to move ahead with plans to bring private investment into Canada’s four largest airports. The simple question Canadians should be asking is why are they proposing to hand over the airports in Toronto, Montreal, Calgary, and Vancouver?
This country has a made-in-Canada airport model that works. Before we hand greater control of these critical public assets to private interests, the government should explain what problem it is trying to solve.
Airport privatization has been tried in Australia, New Zealand, Portugal, the United Kingdom, and the United States with mixed results and serious concerns for workers and the communities they serve.
Private investment may bring an influx of capital, but investors expect a return—and that money has to come from somewhere. International experience has raised legitimate concerns about higher costs, reduced services, and pressure on jobs and working conditions.
Canada’s airport system is safe, efficient and economically important. It generates significant revenue for the federal government and the Canadian taxpayer. Our airports pay approximately $525-million a year in ground rent.
Our airport authorities operate on a not-for-profit basis, with revenues reinvested into airport operations and infrastructure rather than distributed to shareholders. Privatization would fundamentally change that equation. Private investors expect competitive returns, meaning that revenues currently retained within the airport system would instead be directed toward investors.
It has been estimated that, under a privatized model, airports would need to generate 15 to 20 per cent more revenue to provide competitive returns. That additional revenue would have to come from somewhere—and Canadians deserve to know where.
This made-in-Canada model has proven effective. Our major airports are well-maintained regularly upgraded, and continue to invest in infrastructure to meet passenger and community needs. Their governance includes representation from the communities and regions they serve, helping keep development connected to local economic and transportation priorities.
The Union of Canadian Transportation Employees represents workers at airports across the country, including Calgary and Vancouver.
Visit either airport and you will see efficient operations and thriving economic hubs. These airports are already open to investment. The question is whether attracting investment requires fundamentally changing a model that is already delivering for Canadians.
We don’t oppose investment. We oppose giving away our assets; giving away our future.
We are also concerned that this initial phase of airport privatization will lead to future damage to our overall civil-aviation regime. The four main airports mentioned are already providing the lion’s share of rental income to Transport Canada by nature of their size and business operations. Some of those monies are going to offset the costs of running some of this country’s smaller airports which do not generate enough income now to pay the full rental value. Will that mean further cutbacks in service for a country that relies so heavily on air transportation for many different reasons? Nobody knows.
What we know is that Canada has an airport system that works, and provides economic benefits across the country. If it ain’t broke, why fix it? We manage the risks of air travel in Canada very well. We could do better and we’re working on that. We should continue improving our current airport system instead of making a risky bet with critical national infrastructure.
Before moving ahead, the federal government should clearly explain what problem privatization is intended to solve, what protections will be put in place for workers and communities, and how Canadians will be better served under a new model.
