Sept 15 (Reuters) – Canada’s transport minister said on Tuesday he expects strong interest from Canadian pension funds and possible participation from Australians, as the country opens its four largest airports to private investment.
“We anticipate a very, very strong Canadian presence in these concession agreements,” Transport Minister Steven MacKinnon told Reuters in an interview.
“The Canadian investors, notably pension plans, have made it known over the years that they’ve become very good at this sort of investment in other jurisdictions.”
Earlier, Canadian Prime Minister Mark Carney said his government was seeking private investment through long-term concessions to operate airports in Toronto, Montreal, Vancouver and Calgary as part of a campaign to boost the economy.
The move would not open the door to a sale or change in public ownership. Carney said investors would not have to be “strictly” from Canada and there would be a competition.
MacKinnon added that foreign investment approvals and national security tests would be part of any deal.
Infrastructure companies, seeing strong, long-term demand for air travel, are investing billions of dollars in revamping airport terminals in countries like the United States and Australia.
Australia’s Macquarie Asset Management, which has invested in a new airport terminal south of Montreal, sees “significant potential for further investment” in Canada’s transportation infrastructure sector, said Karl Kuchel, the company’s head of infrastructure in the Americas. Opportunities in that transport space “have been relatively limited in recent years compared to other infrastructure sectors,” he added.
Spokespeople from Canadian pension fund La Caisse and Australia’s IFM Investors both said they see opportunity from the announcement.
MacKinnon said it was fair to say that “Australian investors who invest around the world and who welcome Canadian investment in their country in infrastructure and in other things would be eligible investors.”
Carney’s plan has drawn criticism from labour groups who warn that private investment in airports has led to higher costs for passengers.
“Private investors don’t put billions into airports unless they expect to make billions back,” said Lily Chang, secretary-treasurer of the Canadian Labour Congress.
MacKinnon said Canada would learn from the experience of other countries.
“We are far from the first movers on this,” he said. “So we’ll want to follow the best practices that we’ve observed in conducting an open, fair process and one that certainly opens the door wide to Canadian investment in these facilities.”
(Reporting By Allison Lampert in Montreal, David Ljunggren in Ottawa and Nivedita Balu in Toronto; Editing by David Gregorio)