Vancouver Airport may be first privatized under government plan, sources say

Vancouver International Airport is slated to become Canada’s first major aviation hub privatized by the federal government, with Ottawa’s advisers offering British Columbia Indigenous groups an opportunity to take a minority stake of up to 20 percent, according to The Globe and Mail.

Timeline of the Privatization Pitch and First Nations Talks

The privatization initiative follows an announcement made by Prime Minister Mark Carney during a downtown Toronto investment summit in September. Carney gathered executives to draw new capital to Canada and reframe the country’s approach to investment by opening four of its largest airports to private capital. Bankers and lawyers advising Ottawa subsequently decided that Vancouver International Airport, known as YVR, should be the first facility to sell a long-term lease on its ground operations. YVR earned the top spot because the government and its advisers expect to secure First Nations investment, sources involved in the process reported.

Indigenous investors listening to pitches for stakes in YVR include the Musqueam First Nation, whose unceded territory hosts the airport in the Vancouver suburb of Richmond. Musqueam chief administrative officer Robyn McVicker stated that the First Nation wants a role in YVR’s future. Ottawa’s advisers have also reached out to MST Development Corp., a Vancouver-real estate company backed by the Musqueam, Squamish, and Tsleil-Waututh First Nations, according to participating sources.

Alongside YVR, the federal government plans to sell leases to run all or part of the airports in Calgary, Toronto, and Montreal. The move has sparked concerns regarding potential increases in traveller prices and airline fees. Transport Minister Steven MacKinnon acknowledged in an interview with CTV that while the operating model will be regulated, fares and fees will only be partially regulated, declining to guarantee that airfares will not increase.

Protesters and Airlines Oppose Private Investment Plan

The push for private investment drew opposition during the September 14 summit, where more than 2,000 protesters demonstrated against the focus on private capital without clear control mechanisms, as detailed by The Pointer. An executive at the International Air Transport Association warned that major airlines oppose the plan over fears that increased fees would be passed directly to passengers. A report from the University of Calgary's economics department published on Wednesday cautioned that the government must establish operational rules before inviting institutional investors. Economist Aidan Hollis estimated that Canada’s four largest airports could fetch between $12-billion and $29-billion, noting that the valuation ultimately depends on regulatory design.

Potential majority control is expected to be sold to institutional investors experienced in operating complex facilities. Meanwhile, Ministry of Transport spokesperson Marie-Justine Torres stated on Wednesday that the government is working on plans to bring private investment into airports in partnership with Indigenous groups, adding that details will be developed in the coming months alongside airport authorities.