Selling off Canada’s airport could result in sky-high prices

Originally published: March 17, 2017

If the leaks are true, the upcoming federal budget will include an ill-advised move to sell off Canada’s airports, which would result in both travellers and governments paying a heavy price.

The potential sale of Canada’s airports is part of a larger trend of “asset recycling,” the politically popular term describing government sales of public assets to investors who then control prices and quality, often with little to no competition.

There is little rationale for taking airports out of public control. Financially, Canada can afford to maintain ownership: both the federal debt ratio and interest rates are near all-time lows.

As it stands, Canadians get a better deal through publicly owned airports than if they would be controlled by private companies.

Canada’s airports are not funded by the taxpayer. Funding comes from airport improvement fees directly on tickets, landing and other charges to the airlines (which are charged back to travellers), parking lot fees, and concession/retail rents. Travellers can’t avoid the first two, but they may be able to avoid the second two.

In fact, airports pay the federal government $305 million a year for land rental (as estimated by a recent C.D. Howe study) in addition to paying city property taxes.

The first thing to recognize about this plan is that the federal government can’t just sell off airports wholesale. In fact, airports aren’t actually controlled by the federal government — they are controlled by airport authorities with representatives from a variety of sources.

Read the rest at the Toronto Star.