The Agenda with Steve Paikin (Audio) - What Would Airport Privatization Mean for Canadians?

Episode Date: May 28, 2026

TQuestions are now being raised about whether Canada's aviation system is facing a dual test of structure and capacity at a critical moment. For decades, major airports have operated under a hybrid model in which non-profit authorities manage operations while the federal government retains ownership of land and core assets. Now, with the Carney government considering a potential shift toward privatization, what could that mean for oversight, costs, and the public interest? At the same time, recent travel disruptions tied to staffing shortages, including a lack of air traffic controllers, have exposed operational strain across the system just as demand is expected to surge ahead of the summer season and the World Cup. Is this a sign of deeper systemic pressure, and are proposed fixes keeping pace with demand? We examine what is changing, what is at stake, and how these parallel pressures may be reshaping Canada's air travel landscape with Jake Fuss of the Fraser Institute, Lily Chang of the Canadian Labour Congress, and Jonathan Bagg of NAV Canada.See omnystudio.com/listener for privacy information.

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Prime Minister Mark Carney says he's open to the idea. We will look at options for the airports so that they better serve Canadians and so that the capital that is tied up in those airports can be redeployed potentially in other ventures. And he's also opened the idea of foreign investment. We are wide open for foreign investment. Now, the government hasn't shared a lot of details,

but the idea is generating a whole lot of controversy. Both of Canada's largest newspapers have weighed in on opposite sides. So, would privatization be a flight path to accountability or should Canada think twice? We dig into the possible risks and benefits. Then, last year, a shortage of air traffic controllers and other staff led to disruptions. Now, we're heading into a busy travel season with the FIFA World Cup and more. We look at whether Canada's airports are ready for the challenge.

Welcome to the rundown. For decades, Canada's large airports have worked the same way. They're run by non-profit authorities, but the federal government owns the land and fixed assets. Now, the Carney government is thinking of going in a new direction. From Calgary, Jake Fuss is director of fiscal studies for the Frazier Institute. And here in studio, Lily Chang is Secretary-Treasurer of the Canadian Labor Congress. Jake, thank you so much for joining us on the line. Lily, thank you so much for joining us in studio.

Jake, I want to start with you. The federal government is talking about changing how, airports are run. What's the model currently? So before the 1990s, the federal government owned and operated all of the major airports in Canada. That then changed in the 1990s when the federal government then leased those airports to not-for-profit airport authorities, but the federal government maintained ownership over the land that those airports operated on. And essentially what happens is they now operate as the landlord for those airports. So they collect rent from these airport authorities to the tune of about $525 million a year currently. And now the federal

government is discussing fully privatizing those airports similar to other countries like Australia, New Zealand, or some of the examples that we see in the European Union. And give us a sense, how many airport authorities are we talking about in this country? So roughly about 26 major airport authorities in Canada. Those are kind of, you know, the major hubs that we see in the big cities and also some of the, you know, less big cities that we see in Canada as well. But generally speaking, we're talking about anywhere from 21 to 26 airports in Canada. All right. For a number of travelers, Jake, people may not understand, you know, the airports that

they're walking into if they are run by, you know, a private company or if they are run by these authorities. Help us understand some of the possible benefits of privatization. Yes. So in Canada right now, ultimately, we have a system that has very high, taxes and fees relative to other countries, in part because these airport authorities have to recoup the revenue that they're losing to the federal government. So these airport improvement fees, for instance, can be about $40 per person on a lot of flights if you're leaving from

Pearson Airport, for instance, in Toronto. But what privatization will actually allow you to do is become more efficient, improved service quality. It could potentially lead to lower fees in the long run and ultimately could also help lower airfares as part of a broader package of reforms. We've seen the examples in Australia, New Zealand, and the European Union following those privatization reforms in conjunction with a broader package of reforms, they were ultimately able to bring down air fares for their customers. They were able to become more efficient, improve service quality, and ultimately generate more employment in the sector as well in the long run. So it's really a win-win benefit. But the thing I always caution is it's not just privatization

of airports. It also has to be other reforms that are made in the system. Otherwise, it's not going to work as an intended. All right, Lily, let's get you in here. I'm listening to reduced fees, potential efficiencies in service. These all sound pretty good. Are you convinced? I'm absolutely not convinced. Why not? Because all the examples that I have, just in my own backyard in Ontario, for example, tell me that privatization actually leads to less accountability, less accessibility, and worse in terms of safety. So, you know, there's lots of examples we can talk about later, but certainly I don't believe that privatizing the airports fully will do that. I think that it'll bring in higher costs because we will have private corporations that are accountable to

their shareholders, to their investors, and they will demand a return on their money. I also think that there'll be less public oversight, there'll be less accountability. It'll be decisions made behind closed doors in a closed corporate boardroom as opposed to in a board, for example, which happens right now and comprised of people who are in the community

who have a stake in that particular service. So I don't think that that would work at all. And also in terms of the safety, if we're going to be cutting corners to make more money for the shareholders, is that going to mean translation to people who are not qualified to do the job, people who are going to be coming and going, and less stability in the workforce, like, you know, in terms of supplies and equipment, are there

going to be, like, there's ways to make money, and I'm sure a private company will think of all kinds of ways to make money, but the end result will not necessarily benefit the people who are using the services of the airport. Well, Jake, help us understand what's to stop private owners from hiking fees? As we know at the moment, a lot of the fees go, back into these airports to sort of help build, keep the modern. But if it goes private, the question is, are we going straight to the shareholders and making sure that they're satisfied? What is the response to that? So not necessarily. It's ultimately up to those private corporations to decide whether, you know, fees are increasing or decreasing. But what we have seen under the

current model in Canada is that fees are already increasing with those airport improvement fees nearly year after year in Canada. And those costs are ultimately passed on to consumers at the end of the day in the form of higher airfares. So about 25 to 35% of your ticket cost is ultimately just being consumed by taxes and fees in Canada currently. And we have some of the most expensive taxes and fees in the world. Whereas if you look at other privatized countries

like Australia, New Zealand, many of the European Union airports that are a large volume, in some cases, fees might have gone up, sometimes they go down. But what we're ultimately seeing is that airfares, the total price that you're paying at the end of the day, are dropping because they have more competition that they've introduced into the sector.

They've allowed for that greater accountability to customers in terms of improving that service quality while also generating more employment in the sector too. So that's ultimately what we're seeing from the best practices of other international countries around the world. All right. Well, let's talk about examples, Lily, as you mentioned. Around this conversation, critics have cited

Ontario's Highway 407, as evidence of a bad idea to privatize public assets. As we can remember, 1999, the provincial government leased, it was a 99-year lease for about $3 billion to a conglomerate of companies. Drivers have ended up paying billions of dollars so far in toll. Should we see this as a cautionary tale? Absolutely. I mean, it's a real shame because it was public money that went into building that highway in the first place, it was to be able to serve a public good, which is to relieve congestion on the 401. Instead, what happened is that the government took a one-time cash grab and undervalued the actual worth of that 407.

Today, I think you would say that they probably undervalued by at least 10 to 12 times in terms of its current value. And so not only is it not, is that money not coming back into public hands in the public purse, but also the fees were hiked immediately. They went up, I think, in the very beginning, they tripled, or they doubled and tripled. And so right now we're having people who are not taking that highway because it's unaffordable. To take the whole stretch, I understand it costs about $50 one way. Who can afford that on a daily basis commuting back and forth? And so right now we have a worse congestion problem than ever on the 401. We've got a private highway that people aren't

using because they can't afford it. And now we're talking about building another highway tunnel underneath the 401. So with more public money, which we've already spent, and we cannot do anything about this until the rest of the 99 years is up. Jake, what do you think about? When we have this conversation, the 407 seems to come up. Some may say apples to oranges, perhaps, when we're talking about airports and sort of what's involved versus a highway, but is there perhaps a lesson to be learned here with a 407? Well, I think ultimately the process that you follow, in order to privatize also matters. So having a competitive bidding process, for instance, is something that the airports could do or the government could do when selling the airports to make sure that they're

getting a good return, but they're also selling to people that are going to be good managers of those airports in the long run as well. So it ultimately matters not just in terms of privatizing the airports, but also the process that you follow to actually get to that point. And that's something that we've seen has been successful in New Zealand and Australia, which are similar to Canada because they used to have a very similar operation of their airports to Canada back in the 90s and before that. And they've moved in a different direction with good results, ultimately dropping those airfares and ultimately generating more investment and employment in the sector in the long run. Jake, I do have to ask, you know, you've brought up Australia and New Zealand a few times.

From what I gather, you know, there are mixed reviews in terms of how things have operated there. So, yes, in Australia, there is the aspect. of in some cases, fees have gone up post-privatization, but what we see is that Australia still has significantly lower fees than Canada does under its current model. We also see that airfares have dropped in Australia post-privatization by a significant amount as well. Because they also made other reforms beyond just privatizing their airports,

they also signed Open Skies agreements with other countries, they deregulated part of their industry, and they also had the entrance of new competitors in terms of the airlines, especially low-cost carriers that we're coming into the market, that ultimately drops airfares in the long run. And ultimately, what we're seeing in Canada is under the current model, fees are still going up, customers are frustrated.

We have some of the most expensive airfares in the world. And when we learn from the best practices of other countries like Australia, we can see that there is a different model that we can use to actually improve service quality and airfares in Canada. All right. I want to change gears a little bit. Talk about labor. If the federal government follows through on this, Lily, what could it mean for airport jobs?

Well, I certainly believe that it could mean that there would be cuts to jobs. It cuts to the quality of the workers. It cuts to, for example, wages, benefits. And I think this is in order to be able to achieve a better bottom line. So oftentimes, under privatization, in an effort to increase the profit. share for the shareholders or the investors, the first place they look at is cutting workers' wages. And so I think I'm very concerned about that. It isn't just a shortage of staff. We see what happens. When that happens, there is a safety issue that happens. But also, you know, we believe in good

quality jobs. The job that can, you can do one job that can support you and your family to have a decent life in this country. And so we don't want to see all the money going into the pockets of shareholders. and I've heard, for example, that these companies are open to foreign investment as well. So we could be talking about foreign shareholders, and meanwhile, our local community workers are not going to be benefiting at all. I want to pick up on the foreign investment,

but one question that seems to come up around labor is risks of sort of the quality of workers and the training that's provided. What are the risks, say, if it's about de-icing, maintenance workers, if those contracts are contracted out. Right. So it could be the skill, the experience, the licensing, you know, of the workers. It could also be the materials that are being used, the supplies, the cleaning supplies.

It could be the equipment. So it's just whatever area you can find where you might be able to squeeze a little bit more profit out of, it could possibly affect the operations. And so I think government's job is to maintain accessibility for essential services. It's also to make sure there's safety in providing those services, and there's public accountability. And I don't know how that's supposed to happen with privatization of airports. All right. Jake, I want to pick up on the foreign investment angle here. Prime Minister Mark Carney has made it clear that he wants to boost Canada's economic sovereignty.

So I am curious, you know, he is open to foreign investment in airports. Is there a contradiction here? No, I mean, ultimately we need significantly more investment into the Canadian economy, whether that's domestic or foreign. And in the case of Australia and New Zealand, they remove the restrictions on foreign investment into airports with great results. They're able to expand their passenger volume over time with more investments into those places. And that helps you generate more income for those airports over time and more employment as well. As you have more money, now you have that access to capital that provides more good paying jobs over time. So we've seen this, you know, the empirical evidence suggests that after you privatize these airports,

after you open up to more foreign investments in these economies, you're actually generating more employment in the long run in Australia, in New Zealand, in the European Union that have these privatized airports while also serving more routes and increasing passenger volume at the same time. Lily, your thoughts. Is there a contradiction here with sort of what the Prime Minister is saying in terms of economic sovereignty and private investments or foreign investments? Yeah, absolutely. I mean, I think if we're talking about boosting up Canada, we should have more public investment. We should be making sure that we don't have foreign corporations taking over. I mean, we have other examples where we have domestic crown corporations that have been invested by international, multinational companies, and they have not done well. They do not serve Canadians. So an example I'm thinking of is con out laboratories, which used to be a crown-owned, public-owned, vaccine lepertory. And what happened was when this was privatized, it eventually ended up

being merged into a multinational pharmaceutical company, which, you know, prioritized global profits instead of domestic health and safety. And so we found that's to be a problem when we had COVID-19. We couldn't manufacture our own vaccines, for example. So, you know, there are real problems when we only think about short-term gains, and we don't think about long-term benefits. And the examples that we have, and I'm not talking about, you know, theoretical, what may or may not happen. There are examples of airport privatizations that have not gone well. So it's not a for sure thing. And I do agree that the restrictions and the way you do things is important. But the examples that we have all show governments not doing a very good job

in this area at all, not protecting the public assets and the future benefits of those assets to the people who are supposed to benefit from them. So, yeah, I'm not persuaded at all. All right. Jake, help us understand. Are there wrong ways and right ways to privatize airports? Not necessarily asking you to give some advice to the prime minister here, but what is the right way and wrong way of going about this?

Yeah. Ultimately, I think, you know, a competitive bidding process where you're opening it up to competition in terms of who you're selling to for privatization efforts is really important. If you're just picking your friends and buddies and you're just going to do a sole source you know, sale to somebody that you already had in mind. That's obviously not going to maximize your returns, and it could also end up in the hands of somebody who's maybe not a great manager of those airports as well in the long run.

So ultimately, you know, I think having a competitive bidding process like what we've seen in other countries is going to be really important. And there's a lot of different ways you can go about it too. You can have a fully privatized model where, you know, it's not listed on the stock exchange. You can have more of a public listing like Auckland Airport does. and governments are even allowed to buy shares into those airports as well. That's something that we see in Australia and New Zealand as well.

So there's many different ways you can go about it, but ultimately you need to have that competitive bidding process. Lily, I am curious, you know, with the points that Jake has made, do you see any role for private investment here? I think a lot of people who are planning trips, whether it was earlier this year during spring break or planning trips this summer, albeit there is a lot going on in this world when we look at oil prices and all of that,

but they probably are looking for a better experience at the airport. And so I am curious, do you see a role for a private investment here? Well, what I do see is actually a role for private corporations to be taxed properly, that there should be a profit tax. There should also be a tax on the wealthy. And this will generate more income for the government to be able to do these kinds of public projects and expand and improve services.

The examples that we have of failures have, you know, there's such big failures that I actually don't trust the government to be making the right decisions here at all. And all the examples that we can think about, I believe in every instance, the government of the day thought they were doing a very, very smart thing, right? Based on their advice, based on their valuation, they all would claim at that point in time that they, you know, took the best bid, took the best, you know, deal. but it's turned out that that wasn't the case. And so we can't afford to have another wrong mistake happen. I think this is a place that we are going to leave our conversation. Jake, Lily, I want to thank you so much for your insights. I really appreciate your time.

Thank you. Last year, a shortage of air traffic controllers and other staff caused disruptions and delays at airports across the country. With the World Cup and busy summer travel just around the corner, Nav Canada says it's got to be. plan. Jonathan Bagg is Director of Stakeholder in Industry Relations at Nav Canada. Great to have you on the show.

How are you doing? Hi, Jan. Thanks for having me on the rundown today. Of course. Now, Nav Canada owns and operates Canada's civil air navigation system. I'm hoping you can break this down for us a little bit. What are you guys in charge of exactly? Great question.

So we're actually responsible for a variety of services, as critical services that are provided to airlines and other. aircraft operators. So when you go to the airport and you see that control tower in the background, it's our air traffic controllers that work in that tower. And they're providing critical services, giving takeoff clearances, landing clearances. We also have other facilities, including area control centers where they're providing service around the airport once they leave the immediate vicinity, as well as on route as they evolve in Canadian airspace. Now, last year, there was a lot of attention on some of the issues surrounding air traffic.

controllers and the shortage there. What are the staffing levels right now? So a staffing or resource constraints in the air traffic patrol field is a global issue. It's not unique to Canada. We're in a relatively good position, but we are working to increase our staffing, and that includes ensuring training. We're training at record levels today, more than 500 people in our training programs. In the past two years, we've licensed 600 air traffic service professionals. About half of those traffic controllers. And so we're now at a point where our rate of new licenses outstrips the attrition that can be experienced by 26%. That's very impressive. I am curious, help us understand what causes this shortage. As you mentioned, this is not unique to Canada. This is a

global issue. But what's causing the shortage? So if you look, there's a few factors, obviously demographic pressures that are experienced across a range of industries with a workforce that's approaching retirement. But in addition to that, it was exacerbated by the pandemic period where we really had low traffic levels. And that unfortunately made it very difficult to train because there wasn't a lot of aircraft in the sky. So it makes it challenging to prove proficiency. And at the same time, we want to protect the operation from outbreaks. So that pandemic period unfortunately also impacted our throughput in terms of new licenses. And now most of the industry and internationally, we're all working to catch up on that perspective.

You mentioned training. I think a lot of people do not understand how much and how intensive the training is for air traffic controllers. So help us understand. What does it take to be one? So it's a very intense training program. take up to 30 months to qualify as an air traffic controller. Our field doesn't have, let's say, university or college program, that's a precursor to becoming an air traffic controller.

You really come work for now Canada as a trainee. It's a paid training. And you go through classroom and then simulation, and then finally on the job training, where you're paired with another licensed air traffic controller until you qualify and receive your own license. and so it's a pretty lengthy process. And in terms of you talk about record numbers

and the people that you're training this time around, tell me sort of the skills and things that they're learning. As you mentioned during the pandemic, some of the challenges of not having a plane or planes to sort of practice on, but sort of what does the process look like in those months of training? Absolutely. So it's a, like I said, an intensive program. When we look at the types of people in terms of they join our programs.

They go through some testing, some aptitude testing. We're looking for certain skills, such as spatial reasoning, the ability to visualize airspace, looking at a two-dimensional radar image and visualizing that in multiple dimensions, including speed and time and altitude. So that's an example of the type of skill set

we're looking for. And then it takes a very strong commitment to go through training. It is full-time training, and we have a very high standard. It is true that not every qualifies, but that is because of the stringent standards around the type of service we provide. All right. I want to change gears a little bit with you, Jonathan. Talk about what we can

expect this summer, anticipation for a rise in air traffic, not just because of the World Cup, but because it's summer and people want to get out. So tell me what are you seeing this summer? That's a great point. Summer is the busiest travel season in Canada, as a whole and then of course the summer we have key international events the you know one of the large soccer tournaments in the world coming to Canada so we're on the big stage we've been preparing for well over a year for this summer and that includes working with our airline and airport partners to plan the operation and anticipate what the demand is going to be but it also from our perspective in terms of how we

resource that we've been investing heavily in terms of of course I mentioned our training but beyond that we're doing some some some innovative things which includes a critical shift incentive program which helps incentivize coverage during critical high-demand shifts. That's an example. We also have technology tools that have been deployed in the operation. So altogether, while no responsible organization could guarantee that there will be no delays in the air traffic system this summer because there's all kinds of reasons for delay including weather. We see a lot of convective weather in the summer. We are in a good position to provide the best service we can.

Help me understand a little bit in terms of how you're planning for you. You mentioned the incentives there. I understand that you that NAF Canada is bringing back and encouraging people who may have been promoted where managers to come back to the front lines asking retirees to come back to the front lines as well. Is that correct? So we have a whole suite of of initiatives that we brought to bear to provide the best service the summer and that includes some items such as bringing back retired air traffic controllers. We have about 50 in the workforce currently that have come back on contract. Also, as you mentioned, people who recently left an operational role voluntarily

and being incentivized to come back for the summer period to ensure we have the most resilient service possible. What do you say to travelers who are frustrated with delays? I know there's a lot of focus right now on air travel. lots of conversations about just airports in general. But at the end of the day, people just want to be able to get from point A to point B with minimal disruptions. And so I am curious, what do you say to travelers who may not necessarily understand the intricacies that are happening behind the scenes? Yeah.

That's a great question. And we do take any delays related to our traffic system very seriously. What passengers should know is that every decision we make, is based on safety first and foremost. So in a situation where we have to slow traffic to ensure that it's at a rate that we can effectively and safely manage, we will do so. But that's always in the interest in safety.

And on that front, we have one of the best safety traffic records in the world. Lastly, Jonathan, I wanted to ask, you know, as I mentioned, Af Canada is recalling retirees, bringing managers back into our operation, limiting time off in ways that mirror sort of, You know, you mentioned the pandemic. It kind of mirrors what nurses had to do during the pandemic. And I am curious, you know, you talked about where we are sort of with shortages and sort of this being a global issue.

But do you see where we will get back to a time where this won't be a conversation or a cause for concern? I mean, I think it's important when we talk about these things that we contextualize it in operational performance. staffing is one key aspect of that. But for the average passenger, the key point is what is the passenger journey I'm experiencing and how can we deliver on that? And so these measures that we put in place are to a large extent about that. When we look at our horizon because of the rate of, you know, I mentioned demographic pressures, you know, as people retire and we bring in new license, it will take some time to get to our

target staffing levels. No, we're still a few years out. But in the interim, using technology, using the great skills of our professionals, our aim is to provide a smooth service for passengers. Jonathan, I really appreciate you taking the time talking with us. Thank you so much. Thank you so much, Jan. I'm Jan. Thanks for watching The Rundown. We're proud to say this was our 100th show. And we hope you like what you've seen so far.

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