Ottawa legislated a data room for airports it already owns

Bill C-30 is the act that implements Canada's spring economic update, so most of it is what those acts usually are. Fuel excise tax. Alcohol duty. Deduction rules for tradespeople.

Then there is Division 6.

Division 6 amends the Canada Transportation Act so that the Minister of Transport can require you to hand over your financial data, your passenger forecasts, your business and capital plans, your material contracts, your asset condition and technical information and your financing information, in the form and manner and within the time the Minister specifies. It applies if you own or operate an airport. It also applies, in the words of the Department of Justice charter statement, to "any individual or entity whose activities might affect thevalue of the airport or aviation facility, such as airport tenants or subtenants, airport contractors or subcontractors." That reaches the duty-free operator and the firm resurfacing the apron. The Minister may then pass what he collects to Crown corporations and to outside advisers working on transportation policy.

Royal assent was June 18.

I went looking for this because of the privatisation coverage, which has been steady since Mark Carney said in May that his government would look at options so the capital tied up in airports could be redeployed into other ventures. The coverage is all about ownership: should airports be public or private, should a pension fund own a runway, what happens to fees. Division 6 is about none of that, which is why it is the most interesting thing the government has actually done.

Because here is the part that makes it strange. Ottawa already owns those airports.

What a Canadian airport actually is

Canada's model is genuinely unusual and it explains almost everything about this story. The federal government owns the land and the assets at the 23 airports in the National Airports System, which is most of the big ones. It does not run them. Twenty-one not-for-profit airport authorities do, under long-term ground leases, and they pay rent to Transport Canada calculated as a percentage of gross revenue.

Not-for-profit does not mean small or soft. It means there are no shares and no shareholders, so every surplus goes back into the airport (or, in theory, into lower fees) instead of out to owners. The Greater Toronto Airports Authority runs Pearson this way. It has bondholders, not investors.

It is also, in the plain legal sense, a tenant. The organisation whose name is on the airport is a tenant at the airport, and I find that worth sitting with for a second longer than the file usually allows. American Airlines learned the same thing from the other end of the lease in 2024, having spent years mistaking running the distribution layer for owning it.

The leases are stranger still, and worth reading before having an opinion about selling them. An authority is forbidden from issuing share capital, so it can finance itself with debt and its own revenue and nothing else. It has to be debt-free when the lease matures. And at expiry, every building on the site reverts to the federal government without compensation. Terminals, piers, the people-mover, the parking structures. All of it, for nothing, because Ottawa owned the ground the whole time and the buildings go with it.

That last clause does real work as the date approaches, and inevitably so: an authority looking at reversion has steadily less reason to pour money into a terminal it is about to hand over. Which is roughly why the GTAA exercised a twenty-year extension in December 2024. Pearson's ground lease now runs to December 1, 2076.

The rent tells you what the landlord knows

Now go back to the rent, because that is where the actual argument is.

Ottawa charges a percentage of the top line. Not a share of profit, not a return on capital, not a fee tied to what the place costs to run. A slice of gross revenue.

That is a specific choice and it has a specific meaning. A share of the top line is what you charge when you cannot see the costs. It needs no audit of the tenant's operations, no view of its capital plan, no judgment about whether a contract was good. Revenue is the one number a landlord can verify without understanding the business at all. Percentage rent is standard in exactly this situation, which is why shopping centres have always used it, and I argued two years ago that airport authorities are the most under-discussed landlords in the business. Parking, concessions, land. The rent formula has been taxing all of that for thirty years without ever needing to know what it was.

So the arrangement was designed around not knowing. That was not a flaw in 1992, it was the point: hand operations to a local body, take a clean cut of the top, stop being an airport operator.

Division 6 is the bill for thirty years of that.

The moment you want to sell a position, or restructure a lease, or let an investor buy into one, a percentage of revenue tells you almost nothing. You need the cost base, the capital plan, the material contracts, the condition of the concrete. You need, in other words, precisely the list in the statute. Ottawa is not gathering intelligence on a counterparty here. It is assembling a data room, which is what a seller builds when a buyer is coming to look, except that this seller had to pass a law to build one about buildings it owns.

The government had already said the quiet part, in the driest possible venue. Budget 2025 raised opening the sector to private investment and named the measures it was considering: longer lease terms, more commercial development on airport land, and a review of the ground lease rent formula. The formula was on the list from the beginning. You do not review a rent formula you understand.

The debate is arguing about the wrong verb

Which makes most of the public argument miscast. "Public versus private" does not describe the decision, because the operators are already private. They are private non-profit corporations, financed with private debt, run by boards, and they have been for three decades. Nobody is proposing that Ottawa start staffing gates.

Two things would actually change. A for-profit structure with share capital would let someone take a surplus out of an airport, and that surplus currently has nowhere to go but back into the airport. And a restructured lease would put the 2076 reversion back on the table, which is the part nobody is costing, because it is a real asset Ottawa is currently scheduled to receive for free.

Where the money would go is also less settled than the coverage suggests. The Canada Strong Fund starts at $25 billion over three years and can grow with federal assets allocated to it, but the government has not designated airport proceeds as a source (which has not stopped anyone from drawing the arrow).

The tell was always in what the government asked for. It asked for information, not authority.

The investors are further along than the file is

The circling is not speculative. Gian-Carlo Peressutti of IFM Investors, the Australian manager that invests for that country's pension funds and holds more than $250 billion, told the Financial Post in July that Ottawa is serious, that "a couple of government and quasi-government organizations" have told IFM they are drafting options for the Prime Minister's Office, and that "that tells me that they're decently far along." IFM wants up to $10 billion of Canadian assets over the next decade and expects Canada's own big pension funds to be part of any consortium. The Canada Investment Summit runs September 14 and 15 in Toronto.

Peressutti also said this, and it is the best line anyone has offered on the file: "Most failures in the public-private partnership and asset recycling space have come when one side wasn't exactly sure of the deal they were getting themselves into."

He meant it as a warning to his own side. Read it next to Division 6 and it lands somewhere else, because we now know which side was not exactly sure. That side has since legislated a remedy.

None of which says a sale is wrong. It says the government is not yet in a position to know what it would be selling, and it is the first party to admit it. When the file moves in the autumn, the question worth asking is not whether Canada should sell its airports. It is whether anyone has finished reading what the lease already promises to give back.

—TJ