Could Toronto Pearson Go Private? Canada Wants Investors to Help Run Its Biggest Airports

One of Canada’s biggest airports could soon be run very differently.

Prime Minister Mark Carney announced Tuesday that the federal government plans to seek private investment to operate Canada’s four largest airports — including Toronto Pearson International Airport.

The other airports involved are Vancouver International Airport, Calgary International Airport and Montréal-Trudeau International Airport.

But there’s an important distinction.

Canada isn’t planning to sell Pearson.

The federal government would continue to own the underlying airport land and assets. Instead, Ottawa wants to explore long-term concession agreements that would allow private investors to operate the airports for specified periods.

It’s potentially one of the biggest changes to Canada’s airport system in decades.

How Does Pearson Work Now?

Toronto Pearson isn’t currently operated directly by the federal government.

Like many of Canada’s major airports, Pearson is federally owned but leased to a private, not-for-profit airport authority.

In Pearson’s case, that’s the Greater Toronto Airports Authority.

The GTAA is responsible for running the airport, including its terminals, runways, baggage systems, maintenance and other operations.

Under Carney’s proposed model, private investors could potentially take over those operational responsibilities through long-term concession agreements.

Transport Canada would continue providing regulation and oversight.

Why Does Canada Want to Do This?

Money and investment.

Carney announced the plan during the Canada Investment Summit in Toronto, where his government has been pitching some of the world’s largest investors on putting significantly more capital into Canada.

The government believes private investment could bring new money and expertise into Canada’s largest airports while unlocking some of their financial value.

Carney also argues that changing how Canada’s biggest airports are financed could allow Ottawa to direct more federal resources toward smaller and regional airports across the country.

Canada’s major airports need enormous amounts of capital.

Pearson alone is undergoing a massive long-term transformation as passenger traffic continues growing and the airport prepares for future demand.

Opening the door to major institutional investors could potentially provide another source of funding for airport expansion and infrastructure.

And there appears to be interest.

Transport Minister Steven MacKinnon says the government expects Canadian pension funds to be interested, along with major international infrastructure investors.

Canadian pension funds already invest in airports around the world.

Carney’s argument is essentially: if Canadian retirement money can invest in airports overseas, why shouldn’t some of that expertise and capital be invested in major airports at home?

Could Foreign Companies Run Pearson?

Potentially.

The government says both Canadian and international investors could participate in the competitive process.

Any foreign investment would still be subject to Canadian regulations, including national-security reviews where applicable.

Major infrastructure investors from countries such as Australia are reportedly already showing interest in the Canadian opportunity.

That means the eventual operator of Pearson could theoretically involve Canadian pension money, international infrastructure funds or some combination of investors.

Would Flying Become More Expensive?

That’s probably the biggest question for travellers.

Private investors don’t invest billions of dollars simply because they like airports.

They expect a return.

Critics worry that could eventually translate into higher airport fees that ultimately get passed along to passengers.

Research into privately operated airports internationally has produced a mixed picture.

A University of Alberta study found privately operated airports tended to have fewer cancellations and higher passenger satisfaction with terminal amenities.

But there was a trade-off.

Fees were approximately $20 higher per passenger.

Australia offers another cautionary example.

The country’s competition regulator has warned that privatized airports can effectively become local monopolies capable of raising prices, although passengers have generally remained satisfied with airport services.

That creates the central debate Canada will now have to resolve.

Could private investment produce better airports?

Possibly.

Could travellers end up paying more for them?

Also possibly.

Why Pearson Matters So Much to Toronto

For the GTA, this isn’t an abstract infrastructure debate.

Pearson is Canada’s largest airport and one of Toronto’s most important connections to the rest of the world.

For immigrant communities across the GTA — including Toronto’s massive Latin American population — Pearson is the airport connecting families to Mexico, the Caribbean, Central America and South America.

Changes to how Pearson operates could eventually affect everything from passenger fees and terminal upgrades to airline capacity and the overall airport experience.

Pearson itself has previously indicated that it is open to discussing ways of bringing additional private-sector investment into the airport.

GTAA CEO Deborah Flint has said the existing public-ownership model has served travellers well while also expressing openness to enhancements that could increase private investment.

This Has Been Discussed Before

The idea of bringing private investors into Canadian airports isn’t entirely new.

The federal government studied airport privatization under former prime minister Justin Trudeau.

A major 2016 review recommended considering long-term airport leases to private investors as a way of generating revenue and potentially improving Canada’s aviation system.

The idea faced significant opposition from airlines and other groups concerned about higher costs.

Ottawa eventually decided not to move forward.

Carney is reopening the conversation — but this time the government appears much more serious about actually pursuing it.

What Happens Next?

Don’t expect a private company to take over Pearson next month.

The proposal will require significant negotiations and could require legislative changes.

Any concession agreement would also need detailed rules covering passenger costs, service standards, airport employees, infrastructure investment, public safety and government oversight.

Legal experts say agreements could potentially be negotiated relatively quickly if all sides are motivated, but getting the structure right could take considerably longer.

There is also political opposition.

The NDP and Bloc Québécois have already come out against the proposal, arguing private operation could increase costs for travellers.

Conservative Leader Pierre Poilievre has said he wants to see more details before taking a position.

So the future of Pearson isn’t decided yet.

But the conversation has officially changed.

Canada is looking for enormous amounts of private capital to modernize its economy and infrastructure.

And now one of the most valuable pieces of infrastructure in the country is on the table.

Pearson isn’t being sold.

But who runs Canada’s busiest airport — and how they run it — could eventually look very different.