Getting rid of Crown rents on Canada’s airports better than privatization: IATA

Getting rid of Crown rents on airports better than privatization: IATA

MONTREAL — IATA is calling on the federal government to improve the competitiveness of Canada’s aviation sector by prioritizing the elimination of Crown rents over consideration of airport privatization.

“The Canadian government has already pocketed about $5 billion as the historical landlord of airport property,” said Alexandre de Juniac, IATA’s Director General and CEO. “That’s a $5 billion disincentive to travel, to visit this wonderful country or to plan a business trip. Eliminating crown rents would boost Canada’s GDP by over $300 million annually, create more than 4,000 jobs and generate an additional $111 million in tax receipts. This should be the priority.”

In Montreal for a speech before the city’s Council on Foreign Relations, de Juniac congratulated the Canadian government for not including airport privatization in its March 22 budget announcement. “We hope that Transport Minister Marc Garneau’s motivation to defend the interests of travelers will keep the privatization idea on the back-burner permanently. Let me be completely unambiguous. Canada will regret it if the crown jewels are sold,” said de Juniac.

De Juniac said the industry had been disappointed with privatizations to date. “We have not seen a regulatory framework anywhere in the world that has been able to successfully balance profit and public interest over the long-term. But we have seen airport privatizations dent a country’s competitiveness by increasing the costs of mobility and compromising service levels.

“Airports should focus on enabling economic vibrancy in the communities they serve. That means providing sufficient capacity, with high service levels at affordable costs so that airlines can develop connectivity. Community owned airports – as is the case in Canada today – have every incentive to do so. Private companies, however, have a different goal which is to maximize profits for their shareholders,” said de Juniac.