Canada Post Corp., Ottawa, would be allowed to avoid making special contributions to its pension fund for the next four years under regulations to be introduced by the Canadian government.
Canada Post recommended the move as part of its five-point plan for financial stability issued on Wednesday.
Kevin Sorenson, Canadian minister of state (finance), said in a statement that the regulations would allow Canada Post to concentrate on its long-term viability before addressing its C$6.5 billion (US$6.1 billion) pension deficit.
“The regulations provide Canada Post with more time to pay off its significant pension deficit so that it can restructure its operations for long-term viability,” Mr. Sorenson said in the statement on the ministry's website. “We believe these circumstances merit one-time transitional assistance. As part of Canada Post's commitment to return to long-term viability, executive compensation will be restricted while the regulations remain in effect.”
Canada Post had C$16.8 billion in pension fund assets as of Dec. 31, according to its 2012 annual report.
According to the ministry, the regulations will be posted for public comment before being implemented; no time frame for the regulations was indicated.
