Don’t privatize Canada’s airports ‒ Commons committee

By ThinkPol Staf

A Parliamentary committee is recommending against the Liberal government’s plan to sell off Canada’s airports to raise billions in capital to be used towards other public infrastructure projects.

“Limit rising passenger and operational costs by preventing the privatization of Canadian airports,” the House of Commons Standing Committee on Finance, said in its report of the Pre-budget consultations in advance of the 2018 federal budget.

“The Committee’s report, entitled Driving Inclusive Growth: Spurring Productivity and Competitiveness in Canada, is the culmination of the Committee’s consultations in advance of the 2018 budget,” said Committee chair Honourable Wayne Easter said upon presenting the report on Friday. “The pre-budget consultation process is a critical means by which Canadians are able to express their priorities for forthcoming budgets. The proposals submitted this year focused on ways to help improve the productivity and competitiveness of Canadians and their businesses.”

The report summarized the strong opposition to airport privatization by various stakeholders, including the Air Transport Association of Canada (ATAC), which believes that the sale is near-sighted and will result in significantly higher costs for airlines and passengers^[1]http://www.ourcommons.ca/Content/Committee/421/FINA/Brief/BR9073633/br-external/AirTransportAssociationOfCanada-e.pdf#page=1.

“Recent experience in such projects, for example in Australia, has resulted in costs per passenger to increase by 50% in the decade following airport privatization,” ATAC told the committee in a briefing. “To add insult to injury, the government would impose a huge new burden on our industry and its passengers while not reinvesting one penny of the billions generated back into aviation.”

The report also points out that the National Airlines Council of Canada’s view that the discussion around airport privatization should be done in public and the Department of Finance Canada should make market surveys on this matter public so that an optimal regulatory framework can be created^[2]https://www.ourcommons.ca/DocumentViewer/en/42-1/FINA/meeting-108/evidence#T1600.

Prime Minister Justin Trudeau’s government commissioned Credit Suisse Group AG in september to study the benefits of privatizing the Canada’s eight largest airports, including in Toronto, Vancouver, Montreal, and Ottawa.

The government has refused to release the report, or reveal how much it paid Credit Suisse AG to conduct it^[3]https://openparliament.ca/debates/2017/9/25/robert-aubin-5/.

Instead of privatizing the Airports, the Commons Committee has recommended a number of other proposals to support the air transportation in Canada, including the introduction of duty-free stores upon arrival from international flights and the establishment of limits on rents at Canada’s airports.
The report also calls for developing a plan designed to lead to full reinvestment of rents paid
into Canada’s airports and allocating all revenue from the Air Travelers Security Charge to the
Canadian Air Transport Security Authority.

[Photo Credit: Ed Bierman]