BACKGROUNDER (From the Pionairs National News, February 6, 2010)  

Dear Fellow Pionairs:

Last summer, the Air Canada Pionairs and Unions reached an agreement with the Company by which it was granted a 21 month moratorium on past service contributions to the pension fund as well as reduced contributions annually through the year 2013. This Agreement permitted the Company to avoid making a major payment which was due and avoided the possibility of having to file a second time for bankruptcy protection under CCAA (Companies Creditors' Arrangement Act). While the Agreement provided the company with additional financial survival time, it significantly increased the risk to retirees that they will receive less than their full pensions in the event of the company declaring bankruptcy or entering CCAA.

While the Pionairs have made significant progress with Government in bringing about reform to the Pension Beneficiary Standards Act (PBSA), these reforms have yet to be proclaimed by parliament and they provide little security to the Pension Trust Fund should the Company enter CCAA or proclaim bankruptcy under provisions of the Bankruptcy and Insolvency Act (BIA). In these events, any assets will accrue to bondholders and shareholders of the company and the likelihood of the Pension Trust Fund receiving any asset funding under these scenarios is negligible.

To rectify this situation, it is necessary to have the Government enact changes to the BIA so that instead of pensioners being last or not even considered as creditors, (e.g. able to receive asset value when the company is sold in Bankruptcy), they are on a level playing field with other creditors. With the current volatility of the Air Transport Industry and the examples of Nortel and others, there is a very urgent need for retirees to seek changes to the BIA to provide security to the future to their pensions.

It is critical that you voice your personal concern and request assistance, not through government Bail Outs but by requiring that in the event of pension wind up that the Bankruptcy and Insolvency Act be amended to give preferred status to pensioners, long term disabled and severed employees' claims in bankruptcy over unsecured creditors.

We urge everyone, active and retired employees, to write/e-mail Prime Minister Harper, Industry Minister Clement, Finance Minister Flaherty, Minister of State (Seniors) Ablonczy, Parliamentary Secretary to the Minister of Finance Menzies and your local federal MP, as well as to visit those MP's and request their help to bring about urgent reforms to the BIA.

Please feel free to circulate this to your friends in your email contact list and others to convince them to contact their elected officials as well.

This is not just a Pionair's issue, It's a Retiree's issue.