More Pension Woes

Now that the the Ontario and Federal governments face the prospect of picking up the tab for GM and Chrysler pension shortfalls, there comes news that the same may happen with Air Canada.

In Friday's Globe and Mail, business reporter Brent Jang outlined the pension problems faced by the airline. Air Canada currently faces a $2.9 billion pension plan shortfall and is seeking concessions from its unions, mainly (once again) the Canadian Auto Workers. An a news release on current negotiations with the airline, the union noted that

protecting worker pensions is one of the union's top priorities in these negotiations.

Contract talks begin at a time when the possibility of Air Canada sliding back in to CCAA bankruptcy protection has surfaced in recent news reports.

The larger issue here must be the willingness and ability of large, regulated corporations to lay off pension underfunding on the public purse. Such funding is a contractual obligation like any other. Moreover, the fact that these plans are regulated suggests that such underfunding rarely comes as a surprise. Government has the means and capacity to monitor and regulate. What it seems to lack is the political will.