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Former Ontario Superior Court Judge James Farley, who oversaw Air Canada's 2003 bankruptcy, will seek a solution on the company's pension and other issues
Ottawa (5 June 2009) – The federal government has appointed a mediator to try to settle disagreements between Air Canada and its unions and retirees over the future of the airline's pension plan.
Air Canada, the country's largest carrier, drew complaints last month when it asked unions to support a moratorium on funding its $2.85 billion pension deficit.
A solution to pension funding woes is seen as crucial to keeping Air Canada from filing for bankruptcy protection for the second time in six years.
Former Ontario Superior Court Judge James Farley, who oversaw Air Canada's 2003 bankruptcy, will seek a solution on the company's pension and other issues, the government said.
The carrier's agreements with unions representing about 18,000 employees expire at the end of May and June.
News of the mediator came as a surprise to the Canadian Auto Workers union, which said it was awaiting Air Canada's response to its latest offer when Ottawa's announcement was made. Air Canada told the union an official response to its latest offer will not come until Sunday, as the carrier determines the mediator's terms of reference.
The CAW, which has been in talks with the airline for the past two weeks, has demanded it continue funding its pension plan.
"Obviously, we welcome the assistance," CAW President Ken Lewenza said of Farley's appointment. "We'll see how this works out.
The CAW has been pushing the federal government to deal with the broader economic context of the airline industry beyond the pension issue - including the impact of deregulation and privatization and urging the government to take an equity stake in the national carrier.
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