One severe winter storm and one airport’s fumbled response to it are not an irrefutable proof that the governance model of Canadian airports needs to be overhauled. Nonetheless, the sudden and barely explained 11-hour “ground stop” at Toronto’s Pearson Airport earlier this month invites serious questions about the peculiar management structure of Canada’s major airports.
The Greater Toronto Airports Authority is a private, not-for-profit corporation with no shareholders. In a sense, its governance is so pure as to disconnect it from consumers and airlines, as well as from the profit motive, ownership and accountability. The largely self-selecting board of directors is appointed under convoluted procedures – for example, a majority of the directors are chosen from among nominees of boards of trade and the self-regulating bodies of lawyers, accountants and engineers.
In the early 1990s, the Mulroney government wanted to privatize the airports. When the Chrétien government took power in 1993, it rejected both private ownership and government management, and instead created a hybrid model. The federal government held on to the land at Pearson and other airports, charging substantial rent, but it handed the running of the airports, and the setting of airport fees, to boards of directors that are not accountable to Ottawa or, really, anyone.
Doug Young, the Liberal transport minister at the time, came to regret this policy. A decade ago, he said there was no “incentive for people to be good managers,” and that either commercial companies or civil servants should run Canada’s airports.
Pearson is among the world’s most expensive airports for travellers, and arguably is overbuilt. Among the major causes for this may be the federal government’s healthy rent revenues and the GTAA’s comparative detachment from consumer concerns.
The GTAA and its equivalents across Canada are neither fish nor fowl. If they were either private-sector companies or Crown corporations, people would at least know where to complain, and where to find a chain of accountability. Mr. Young’s hindsight criticisms may have been harsh, and no one can be blamed for the weather, but it is time for the government to reconsider the legislation that turned Canada’s major airports into non-profit organizations.
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