Today our large seaports and airports have two important similarities: how they are financed, and who controls them:
- You cannot buy a share in them—because both sea and airports are structured without shares: and
- The people on their boards of directors are nominated by stakeholder groups—not elected by shareholders.
The Buzz About Privatization Now
The buzz began a year ago when the government published the Canada Transportation Act review chaired by the Honourable David Emerson. It moots changes in both finance and control. On seaports, Dr. Emerson recommends the government should “examine the feasibility of adopting a share capital structure for ports, including receiving proposals from institutional investors or private equity investors”. And he suggests new regulation of port changes by the Canada Transportation Agency, with a light touch. On airports, Dr. Emerson goes beyond “examining feasibility” to say “just do it”. He calls explicitly for privatization of the large airports (within three years — that is two years from now) so that they can tap into equity financing from large institutional investors. And there is a related recommendation to scrap onerous lease payments by airports to Ottawa. Where would the money raised by selling shares go? To build new infrastructure in those same ports and airports? Or into the treasury? Or somewhere else? The buzz got louder when the government spoke of a Canada Infrastructure Bank and the notion of cycling of infrastructure assets. Does this mean selling one asset to buy or build another elsewhere?
Acknowledgment and Thanks to Cargo Logistics Canada
The Institute acknowledges the 4th Cargo Logistics Expo and Conference for the opportunity to present as session T07 of its conference to address the topic of airport and port privatization. Specific thanks are extended to Mr. Peter Hurme, Show Director and Editor, Global Exhibition.
Our thanks are also offered to keynote guest speakers Dr. Michael Tretheway, Chief Economist and Chief Strategy Officer with the InterVISTAS Consulting Group and Mr. Brad Eshleman, President Western Stevedoring.Is Privatization of Our National Ports and Airports in Canadians’ Best Interest? ProceedingsCILTNAPacificCLCSeminar170209Final