Government of Canada Releases Policy Statement on Airport Investment

At a Glance 

• The Government of Canada is encouraging more private investment in National Airports System (NAS) airports to help grow and build more resilience into Canada’s air transportation system to meet growing demands.
• The Government’s policy statement outlines three avenues for private investment: co-development through subleases, subcontracting airport services and investment through airport authority subsidiaries.
• When working with private investors, airport operators must ensure their obligations under ground leases with the Government of Canada and all applicable laws are complied with and that the airport authority remains responsible for providing airport services, among others.
• The Government of Canada intends to explore negotiations to extend ground leases and facilitate more third-party investment and development, albeit the timing and details of such changes are unclear.

Background 

On March 7, 2025, the Minister of Innovation, Science and Industry, the Honourable François-Philippe Champagne, on behalf of the Minister of Transport and Internal Trade, the Honourable Anita Anand, released a policy statement on private investments in Canadian National Airports System (NAS) airports. This policy statement was published as a follow-up to Canada’s 2024 budget wherein the Government of Canada committed to (1) supporting investments in airport facilities and (2) releasing a policy statement that highlights flexibilities under the existing governance model to encourage more private investment in airports, including from Canadian pension funds (Budget 2024, pp. 204-205).

Governance and Investment Models 

Most NAS airports are operated on federal lands by private, not-for-profit, non-share capital corporations (known as airport authorities) through long-term ground leases with the Government of Canada.

The Government of Canada identified three mechanisms for private investment in NAS airports:

1. Co-development through subleases. Private investors can enter into commercial subleases with NAS airport authorities to invest in and develop airport lands. Subleases can involve aeronautical activities (e.g., cargo facilities) or non-aeronautical activities (e.g., energy generation). While formal partnerships or joint ventures are currently not permitted, the Government of Canada noted that it plans to explore changes to ground leases, which could make it easier for NAS airport authorities to enter into such arrangements. The Government of Canada also stated that it intends to explore extensions to ground leases, which could enable longer-term subleases. No information regarding the timing and details of such changes was provided.
2. Subcontracting airport services. NAS airport authorities can subcontract with private entities to provide airport services, such as facilities operations and maintenance, provided that (1) such subcontracts comply with the applicable ground leases and (2) NAS airport authority board members retain their decision-making responsibility and fulfill their fiduciary duties.
3. Investment through airport authority subsidiaries. NAS airport authorities can create for-profit share capital subsidiaries, subject to compliance with the applicable ground lease. Accordingly, private investors can buy or be issued shares, as long as the NAS airport authority maintains a controlling interest. Since NAS airport authority subsidiaries are not subject to the same limits as the NAS airport authority parent, subsidiaries can enter into partnerships or joint ventures with private investors. Such arrangements can enable private investors to (1) share risks and rewards; (2) build or operate facilities at NAS airports for aeronautical or non-aeronautical purposes; (3) undertake joint investment projects to develop new airport facilities; and (4) make equity investments that provide non-aviation services and infrastructure (e.g., hotels or shopping centres).

Key Considerations 

When working with private partners, the Government of Canada expects airport operators to ensure that:

• NAS airport authorities retain key board functions and decision-making responsibility
• NAS airport authority directors fulfil their fiduciary duties under the Public Accountability Principles for Canadian Airport Authorities and do not hold shares in a subsidiary in their own name nor to their own benefit
• NAS airport authorities remain responsible for providing airport services
• All facilities and assets on airport lands become and remain the property of the Government of Canada, free of encumbrances upon termination or expiry of any ground lease
• Private business activities do not restrict air carrier competition and are consistent with national security policies
  • For non-Canadian investors, the Government of Canada recently introduced a new “economic security” factor that the Minister of Innovation, Science and Industry can use in assessing whether a proposed investment is injurious to Canada’s national security. For more on this topic, please see our recent Blakes Bulletin: Canada Revises its National Security Review Guidelines for Investments.
• The terms of applicable ground leases and federal and provincial laws are complied with
• Operations continue to enable Canada to meet its international obligations

The Government of Canada’s policy statement highlights the need for, and Canada’s openness to consider, more private capital in NAS airports through mechanisms that would enable Canadian institutional investors, like pension funds, to diversify their portfolios with stable long-term investments.

For further information, please reach out to the authors or any other member of our Major Projects, Infrastructure or Aviation & Aerospace groups.