Spring Economic Update 2026: Canada Considers Private Investment In The Airport Sector

On April 28, 2026, the Government of Canada released its Spring Economic Update, signalling its intention to explore "alternative models of ownership" for Canada's federally owned airports, which encompasses most of the largest airports in the country.¹ This builds on Budget 2025, which raised the prospect of opening the Canadian airport sector to private investment and identified several potential measures, including lease extensions, economic development on airport lands and a review of the ground lease rent formula.² The federal government has also announced its intention to introduce legislation to gather the information needed for a comprehensive evaluation of reform options.

Airport sector reform in Canada is still at an early stage. However, given the scale and economic and social importance of the assets involved, the implications for airport users, investors, airport authorities and airlines are significant. Here are some key considerations.

Current structure of Canadian airports

Canada's airport model is unique. The federal government owns the airport land and assets, while not-for-profit airport authorities manage day-to-day operations under long-term ground leases. In exchange, the authorities pay rent to Transport Canada calculated as a percentage of gross revenues.³ There are currently 23 airports in the National Airports System (NAS), operated by 21 airport authorities.⁴ Because the authorities are not-for-profit, all surpluses are reinvested in the airports (or theoretically may be used to reduce user fees), rather than distributed to shareholders.

The ground leases themselves also contain several constraints that could impact any reform scenario. All airport infrastructure reverts to the federal government owner at lease expiry without compensation to the airport authority, disincentivizing long-term capital investment as that date approaches. Share capital issuance is prohibited, limiting financing to debt and self-generated revenues. Authorities must also be debt-free at maturity, which increasingly constrains investment capacity as such date approaches. While these restrictions would not by themselves impede a reform of the sector, since the government could cancel or restructure the leases, they do limit certain reform alternatives such as permitting local authorities to take on a more active ownership role.

What airport reform could mean

Airport sector reform, in the Canadian context, covers a wide spectrum of arrangements, from limited outsourcing to full ownership transfers. These could include:

• Service contracts: Outsourcing specific non-core functions such as cleaning, concessions, maintenance or landscaping. Such service contracts are already common at Canadian airports.
• Management contracts: A private company manages specific facilities or an entire airport for a fixed term, without an ownership transfer.
• Design-Build-Finance-Operate-Maintain (DBFOM): The private sector designs, finances, builds, operates and maintains specific assets such as terminals, parking garages or cargo facilities under a long-term arrangement, without an ownership transfer.
• Full or partial privatization: The airport authority is transformed into a for-profit corporation with share capital, with the government selling all or a portion of shares to private investors, generally in exchange for capital improvements and/or an upfront payment or profit-sharing arrangement.

The Spring Economic Update's reference to "alternative models of ownership" spans this entire spectrum. The government has not yet indicated which model or models it intends to potentially pursue, and has acknowledged that not all airports will necessarily be suitable for reform.

Evidence suggests private ownership can improve airport performance. A 2022 study by the National Bureau of Economic Research (US) examined the effects of airport privatization around the globe between 1996 and 2019. The study found that privatization was associated with significant improvements, including increased net operating income, passenger traffic and reduced flight cancellations.⁵ Beyond improved operations, private ownership would also unlock new capital structures, reducing the sector's reliance on debt financing at a time when Canada's major airports face significant infrastructure renewal needs.

The role of Canadian pension funds

The government has publicly identified Canadian pension funds as a natural source of private capital for airport investment.⁶ Canadian pension funds already have substantial experience in airport equity. For example, PSP Investments, which manages the retirement savings of the federal public service, Canadian Armed Forces and RCMP, holds international airport stakes through its subsidiary AviAlliance, including following its £1.53 billion acquisition of AGS Airports, the operator of Aberdeen, Glasgow and Southampton airports, in January 2025.⁷ CPP Investments, which manages the Canada Pension Plan on behalf of 21 million contributors and beneficiaries, holds a stake valued at approximately €791 million in Groupe ADP, the operator of Paris' Charles de Gaulle, Orly and Le Bourget airports.⁸ CDPQ, which manages the Québec Pension Plan, was for many years a significant investor in London’s Heathrow Airport, selling its 37.6% ownership stake in 2024 and 2025 after nearly twenty years. The case for increased private investment, in part, rests on redirecting the capital currently deployed by Canadian institutional investors in foreign airport assets toward Canadian infrastructure.

Key issues to watch

Ground lease restructuring. Reforming ground leases, including provisions requiring airports to revert to federal ownership and airport authorities to be debt-free at maturity, would require renegotiation and potentially new legislation. The government has signalled its intention to negotiate lease extensions as part of this process.⁹

Governance and ownership rules. Any private investment framework will need to address how ownership is allocated, what restrictions apply to foreign investors and how public accountability is maintained.¹⁰

Enabling legislation. The government's first concrete step will be legislation enabling it to collect financial and operational information from airport authorities. The scope of that legislation will provide the earliest indication of which airports and which reform models are under active consideration.

Conclusion

Canada's airports are among the country's most significant infrastructure assets. The Spring Economic Update 2026 provides a clear indication that Canada is seriously considering a change to its airport ownership model. The process is at an early stage, but the range of stakeholders with a direct interest is broad: users, infrastructure investors, pension funds, airlines and airport authorities, among others. For those stakeholders, understanding the legal and regulatory implications of reform will be essential as the process unfolds.

For more information on the Spring Economic Update, airport reform and assets, or on public infrastructure and public-private partnerships (PPPs), please contact any member of the Infrastructure and Public-Private Partnerships team.

This article was prepared by Ilan Dunsky (Montréal), Lampros Stougiannos (Ottawa) and Anoosh Loertscher (Montréal), together with the valuable contribution of Naomi Jauvin, a law student in the Montréal office.

Footnotes

1. Canada Strong For All, Spring Economic Update 2026 (April 28th 2026).

2. Budget 2025 – Canada Strong (November 2025).

3. Canadian Airports Council, Canadian Airport Model.

4. Transport Canada, List of Airports Owned by Transport Canada: National Airports System.

5. Juanita Gonzalez-Uribe, M. Chatib Basri, and co-authors, All Clear for Takeoff: Evidence from Airports on the Effects of Infrastructure Privatization, NBER Working Paper No. 30544 (October 2022).

6. Government of Canada, Policy Statement on Investment at National Airports System Airports Operated by Airport Authorities (March 7, 2025).

7. PSP Investments, AviAlliance Completes Acquisition of AGS Airports (January 28, 2025).

8. CPP Investments, CPP Investments Acquires Additional Stake in ADP (November 16, 2022).

9. The Canadian Airport Ownership Model at the Crossroads, report submitted by Aéroports de Montréal in the context of the review of the Canada Transportation Act (April 2015).

10. https://www.infrastructure.gov.au/infrastructure-transport-vehicles/aviation/airports/ownership-control-airports (example from Australia).