Air Canada said Monday it is seeking support from its unions for a moratorium on funding its pension deficit "so as to establish financial certainty over the next several years."
The company said in a release that it is negotiating with the unions about a "funding solution which would allow the airline to maintain its defined benefit pension plans."
The airline said its objective is to maintain its current defined benefit plans without restructuring the pension benefit formula.
"The company's proposal does not contemplate a transition of its plans to a defined contribution plan design," Air Canada said, adding that there is no assurance that a deal can be reached with the unions.
The Canadian Auto Workers union called for the federal government to set up a pension benefit guarantee fund to safeguard pensions in the event a company cannot meet its obligations.
CAW president Ken Lewenza, at a press conference in Toronto, issued a warning to Air Canada that the airline must fully fund its pension plans.
"It's a safe bet that our pensions are going to be the first target of the company. The message is forget it.… Our pensions will not be held hostage by the financial meltdown and by corporate greed," he said.
CAW Local 2002 represents approximately 4,500 Air Canada ticket counter and call centre staff whose collective agreement expires at the end of this month.