People Mentioned
Special Advisor, Ottawa
Canada’s pension funds, which are among the largest institutional investors and have billions of dollars invested in airports around the globe, could deploy that capital at home, says Stephen Poloz, Osler Special Advisor and former Governor of the Bank of Canada. Stephen was appointed by the federal government last spring to chair a new working group dedicated to finding opportunities for Canadian pension funds to invest and drive economic growth domestically.
Current rules have prevented private investment in Canadian airports since the 1990s, when the government exited airport ownership. Since that time, 21 of the country’s have operated as not-for-profit, non-share capital corporations as part of the National Airports System, from which the federal government collects rent.
“I do think there’s a path” toward such investment, Stephen says. This could begin with investments in “adjacent” assets like parking garages, freight services or other projects on airport lands not directly related to its core operations, followed by the required legislative and rule changes to allow direct investments by pensions further down the road.
“It could be something new on a vacant piece of land,” he suggests. “And all they need then … is a deal for how much rent goes to the government and how much remains for the equity holders of that SPV [special purpose vehicle].”
Stephen notes that there is desire to make this kind of investment from the major Canadian pension funds, as he learned from speaking to them after his appointment. This could take the form of minority stakes, as some of them have done outside Canada. In 2020, the Ontario Teachers’ Pension Plan, for example, said it was the largest private investor in European airports.
“If the pension plan could own 40 or 49 per cent of an airport, they’d be just fine with that,” he says. “But they would like a seat at the table, and we’d want them at the table because they own other airports. They have expertise to offer.”
You can read the full article, “Poloz: Path emerges for pensions to invest in Canadian airports,” on the Financial Post website.
People Mentioned
Special Advisor, Ottawa
