From the Fraser Institute

By Alex Whalen and Jake Fuss

This holiday season, many Canadians will fly to spend time to with family and friends. But air travellers in Canada consistently report  frustration with service, cost and choice. In its recent budget, the Carney government announced it will consider “options for the privatization of airports.” What does this mean for Canadians?

Up until the 1990s, the federal government served as both the owner and operator of Canada’s major airports. The Chrétien government partially privatized and transferred the operation of major airports to not-for-profit airport authorities, while the federal government remained the owner of the land. Since then, the federal government has effectively been the landlord for Canada’s airports, collecting rent each year from the not-for-profit operating authorities.

What would full privatization of airports look like?

If the government allows private for-profit businesses to own Canada’s major airports, their incentives would be to operate as efficiently as possible, serve customers and generate profits. Currently, there’s little incentive to compete as the operating authorities are largely unaccountable because they only report to government officials in a limited form, rather than reporting directly to shareholders as they would under privatization. Private for-profit airports exist in many other countries, and research has shown they are often less costly for passengers and more innovative.

Yet, privatization of airports should be only the first step in a broader package of reforms to improve air travel in Canada. The federal government should also open up competition by creating the conditions for new airports, new airlines and new investment. Currently, Canada restricts foreign ownership of Canadian airlines, while also restricting foreign airlines from flying within Canada. Consequently, Canadians are left with little choice when booking air travel. Opening up the industry by reversing these policies would force incumbent airlines to compete with a greater number of airlines, generating greater choice and likely lower costs for consumers.

Moreover, the federal government should reduce the taxes and fees on air travel that contribute to the cost of airline tickets. Indeed, according to our recent research, among peer countries, Canada has among the most expensive air travel taxes and fees. These costs get passed on to consumers, so it’s no surprise that Canada consistently ranks as a very expensive country for air travel.

If the Carney government actually privatizes Canada’s airports, this would be a good first step to introducing greater competition in an industry where it’s badly needed. But to truly deliver for Canadians, the government must go much further and overhaul the numerous policies, taxes and fees that limit competition and drive up costs.

Alex Whalen

Director, Atlantic Canada Prosperity, Fraser Institute

Jake Fuss

Director, Fiscal Studies, Fraser Institute

The Audit

David Clinton

Who in Global Affairs Canada was ultimately responsible for those spending choices and will they be held responsible in the event of program failures?

As I’m sure your eyes have been glued to every scrap of news about the recent COP30 climate conference, I need hardly tell you about Canada’s related $392 million commitment. This, of course, will be part of (or perhaps in addition to) our overall $200 billion investment in the fight against global warming since 2015.

$200 billion, by the way, comes to nearly $5,000 for each man, woman, and child in the country. The yearly interest on the loans that were required to spend that money will cost considerably more. And, as far as we can tell, all that money has so far failed to even slow the rise in global temperatures.

Ok. But who’s getting this particular tranche of $392 million? Well, $263 million of it will go to the International Fund for Agricultural Development (IFAD).

IFAD is a fund, so it doesn’t do anything itself. But in this case, it’s expected to distribute money for projects in the Brazilian Amazon and work with local partners on forest and rural development issues. It’s the local partners who will do the work.

No matter who’s holding the shovels, any rural, agricultural, or environmental operations taking place in, for example, the State of Amazonas will require approval or licensing from the government agency, Instituto de Proteção Ambiental do Amazonas (IPAAM).

And that could be interesting. Because that very same IPAAM, as it happens, has been under Brazilian Federal Police investigation for the past year. In other words, the agency in control of issuing licenses and authorizing the work IFAD wants done, is (allegedly) as crooked as a corkscrew.

Well that certainly gets us off to a great start.

The next $106 million from Canada’s commitment has been directed to Deetken Asset Management’s new Inclusive Climate Action Fund (ICAF). As the name suggests, ICAF is a climate-focused investment fund whose broader strategy includes a “gender lens”. Which is another way of saying that financial success is not the fund’s overriding priority.

Under the best of circumstances, deploying climate-focused financial instruments through small and medium-sized enterprises – especially in emerging markets – is notoriously challenging. Besides all the regular headwinds facing any business startup, initiatives in those parts of the world will routinely face risks related to corruption, criminal gangs, and plenty of currency volatility. Being forced to operate while business solvency is your second or third-tier priority is like swimming across a fast-moving river with your legs tied to a tree.

What’s curious is that the government is doubling down on ESG investments at just the moment in history when ESG failures are hitting their stride. U.S.-based ESG funds faced net outflows of $8.6B in Q1 2025, while fund closures outpaced launches in 2024. Major managers like Vanguard approved no ESG proposals at all in 2024.

Closer to home, Canada Pension Plan Investments scrapped its net-zero emissions commitment “after several Canadian banks left the Net-Zero Banking Alliance earlier this year”. It seems that they felt rigid climate targets could conflict with the Plan’s fiduciary duties to maximize financial returns.

I for one would be curious to know who in Global Affairs Canada was ultimately responsible for those spending choices and whether they’ll be held responsible in the event of program failures. Although, all things considered, I’d be surprised if we ever hear anything at all about where all that money really ended up.

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