Morgan Stanley, CIBC win mandate for sale of Canadian airport concessions

A newly renovated duty free shop greets international travellers at Vancouver International Airport in Richmond, B.C., January, 30, 2025. Photo by Richard Lam/PNG

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The Canadian government has hired Morgan Stanley and Canadian Imperial Bank of Commerce to advise on selling the operating rights to the country’s four largest airports, according to people with knowledge of the discussions.

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Prime Minister Mark Carney formally announced plans to seek private investment in the government-owned assets during a speech at an investment conference on Tuesday. Canada’s four busiest airports by passenger volume are Toronto Pearson International Airport and the hubs in Montreal, Vancouver and Calgary.

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Representatives for Morgan Stanley and CIBC declined to comment on Thursday. Canadian government officials didn’t immediately reply to requests for comment.

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The government expects the deals to raise tens of billions of dollars, according to Carney. The proceeds would be directed toward regional airports and other infrastructure, including local transportation projects and potentially a sovereign broadband network linking Canada more directly with Europe and Asia. The people with knowledge of Morgan and CIBC’s role spoke on condition they not be identified because the matter is still private.

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Under the proposed structure, Canada would retain ownership of the underlying airport land and assets while granting investors long-term “concessions” to operate the facilities.

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The hiring of advisers marks another step toward what may become one of Canada’s largest-ever infrastructure transactions — and a sizable new investment opportunity for pension funds and other infrastructure investors.

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“The federal government has now moved from considering airport privatization to committing to it,” lawyers from McCarthy Tetrault wrote in a bulletin published the day after Carney’s speech. “This marks a decisive step beyond the incremental, exploratory posture of earlier announcements, each of which stopped short of a firm commitment and was expressly characterized as being in its ‘early stages.’”

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The prime minister said Tuesday that Canadian pension funds were “very interested” and that bringing private capital into the airports could improve passenger service and make their operations more efficient.

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Canadian pensions were in active discussions with the government about potentially investing in the airports, La Caisse chief executive Charles Emond said in June. Those funds are already major investors in such assets overseas — La Caisse, for example, held a significant stake in London’s Heathrow for nearly two decades. But they have been unable to make similar investments at home because large Canadian airports are generally operated by not-for-profit authorities on government-owned land.

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It’s not yet clear what terms the government is willing to give — such as the length of the concessions — or how the existing not-for-profit airport authorities would fit into the new structure.

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The potential bidder pool may extend well beyond Canadian investors. Carney has said the concessions will be awarded through a competitive process, while Transport Minister Steven MacKinnon told the Toronto Star that while the government is open to foreign investors, and he expects “very solid, if not majority, Canadian participation.”

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Still, the plan is likely to face political and public scrutiny. A Nanos Research Group survey conducted for Bloomberg News in June found 53% of respondents opposed or somewhat opposed to opening airports to private investors.

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