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Garneau downplays chance of port and airport privatization

Minister of Transport stresses that he is merely “exploring” options
Federal Transport Minister Marc Garneau spoke to the Greater Vancouver Board of Trade January 25 | Photo via @COSBCtweets on Twitter

The federal government’s decision to study privatizing the country’s ports and major airports is simply a matter of “exploring different possibilities” and not an attempt to rationalize a pre-made decision, Federal Transportation Minister Marc Garneau said in a question and answer session after a speech to the Greater Vancouver Board of Trade (VBOT) January 25.

“Please do not make the assumption that because you hear about it in the papers that this is a done deal,” Garneau said.

“It is by no means a done deal. It is just a new government exploring different possibilities.”

Garneau stressed that the decision on whether to privatize the assets would be based on whether the sale is good for air travellers and for port efficiency.

He added that the investigation stemmed from the previous Conservative government’s review of the Canada Transportation Act.

Privatizing airports and ports could bring in countless billions of dollars at a time when the federal government’s deficit for the 2016-2017 fiscal year is projected to be around $34 billion. During the 2015 election campaign, Prime Minister Justin Trudeau promised to keep budget deficits to a maximum of $10 billion.

Last September, the Trudeau government hired Credit Suisse AG to investigate various options associated with privatizing major Canadian airports.

It then announced in November that it has also hired Morgan Stanley Canada Ltd. to study potentially privatizing 18 Canadian ports.

Vancouver Airport Authority (VAA) CEO Craig Richmond told Business in Vancouver after Garneau’s comments that he believes Garneau’s response was “fair.”

“It’s our job to put what our opinion is out there and our opinion is that it is a bad idea,” Richmond said.

Just last week, on January 18, Richmond gave his own passionate plea to a VBOT audience, urging attendees to lobby their MPs to oppose privatization.

“We’re not in favour of [privatization] because, quite frankly, the price of everything would go up,” he said.

“If we have a private operator, two things will happen. To make their return, the prices will go up and it will no longer be a community-run airport. It will be run out of New York, London and Toronto.”

Another part of the reason why prices for things, such as the airport improvement fee and retail goods, would accelerate faster than otherwise is that Canadian airports carry a total of about $13.3 billion in debt.

If airports are sold to private companies, that debt would have to be factored into the sale price of the assets, Richmond said.

Costs for things such as the Airport Improvement Fee may rise regardless, however, given that the VAA has a $5.6 billion plan to expand the airport in the next 20 years.

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