Canada Gazette, Part I, Volume 155, Number 50: Canada Post Corporation Pension Plan Funding Regulations

December 11, 2021

Statutory authority
Pension Benefits Standards Act, 1985

Sponsoring department
Department of Finance


(This statement is not part of the Regulations.)


The Canada Post Corporation (Canada Post) is responsible for making current service contributions to its pension plan as well as special payments to cover any funding shortfalls. As of December 31, 2020, Canada Post had a solvency deficit to be funded of approximately $6.3 billion.

Agent Crown corporations, such as Canada Post, are permitted to reduce their solvency special payments under the Pension Benefits Standards Act, 1985 (PBSA) and the Pension Benefits Standards Regulations, 1985 (PBSR), up to a limit of 15% of the plan’s liabilities. In order to reduce its solvency payments, the agent Crown corporation must receive letters of acknowledgement and of non-objection from its responsible Minister and the Minister of Finance, as the Government of Canada is ultimately responsible for the financial obligations of agent Crown corporations.

Canada Post had reduced its solvency special payments in accordance with the PBSA by an aggregate amount of $4.1 billion as at December 31, 2019. Canada Post was also provided relief from its 2020 solvency payment obligations through the April 1, 2020, to December 31, 2020, moratorium period set out in the Solvency Special Payments Relief Regulations, 2020. This allowed Canada Post to preserve its remaining room to reduce solvency payments for its 2021 obligations and it is expected that Canada Post will reach the 15% agent Crown solvency reduction limit (as a share of plan liabilities) by mid-2022.

Canada Post is facing difficult market conditions, including persistent erosion in transaction mail revenue, increased costs stemming from the COVID-19 pandemic, and a need to adapt to remain competitive in the e-commerce and parcel delivery sectors. If Canada Post, based on the expectation that it will reach the limit for agent Crown corporation payment reductions in 2022, were to make its required solvency payments, its cash reserves would be depleted and its ability to make capital investments in strategic initiatives and infrastructure would be severely inhibited.


The federal PBSA and PBSR apply to pension plans that are linked to employment that falls under federal jurisdiction. Areas of employment that fall under federal jurisdiction include work in connection with navigation and shipping, banking, interprovincial transportation and communications, employment in certain federal Crown corporations, and all private sector employment in the Yukon, the Northwest Territories and Nunavut.

The PBSA requires that federally regulated defined benefit pension plans fund promised benefits in accordance with the prescribed tests and standards for solvency that are set out in the PBSR. Defined benefit (DB) pension plans must file actuarial valuations using two different sets of actuarial assumptions. “Solvency valuations” use assumptions consistent with a plan being terminated on the valuation date and the benefits paid out as annuities, while “going concern valuations” are based on the assumption that the plan will continue to operate indefinitely. Where these valuations show a pension plan’s assets to be less than its liabilities (i.e. the value of the accrued pension benefits), special payments by the employer must be made into the plan, in addition to normal cost contributions, to eliminate the deficiency over a period of 5 years for solvency deficits and 15 years for going concern deficits.

One of the main objectives of federal pension regulation is to set out standards for the funding and investments of pension plans so that pension plan assets are sufficient to meet pension plan obligations, which serves to protect the rights and interests of pension plan members, retirees, and other beneficiaries. At the same time, the PBSA recognizes that pension plans may find themselves in deficit positions because of a variety of factors such as changes in actuarial valuations resulting in actuarial losses to the fund and downturns in the financial markets. Plan sponsors may also experience situations where they are unable to meet the PBSA’s pension funding obligations due to financial challenges that could threaten the sponsor’s corporate sustainability, and subsequently negatively impact pension benefit security.

Under the PBSA, the Minister of Finance may recommend to the Governor in Council that special funding regulations be made to provide pension funding relief to the employer in order to improve the plan’s long-term sustainability. Funding relief is typically only granted in extraordinary situations where normal funding obligations would exacerbate corporate financial challenges and when other available funding relief options, such as letters of credit (or agent Crown corporation solvency reductions), have already been considered.

In 2014, special funding regulations were made in respect of the Canada Post pension plan that provided the Corporation with temporary relief from its going concern and solvency special payment obligations from their date of registration on February 28, 2014, to December 31, 2017. At the time, the cash requirements for Canada Post’s special payment obligations would have significantly strained its financial position.

From 2018 to 2020, Canada Post reduced its solvency payment obligations to the extent permitted under the agent Crown provisions in the PBSR. The PBSR set a limit for a plan’s aggregate amount of all solvency reductions of 15% of plan liabilities and, in 2020, Canada Post’s reduction amount was expected to approach the regulatory limit. However, in order to support federally regulated pension plans during the COVID-19 pandemic, the Government enacted the Solvency Special Payments Relief Regulations, 2020 in May 2020, which provided all federally regulated plans with a moratorium on any solvency payment obligations due between April 1, 2020, and December 31, 2020. This allowed Canada Post to preserve its remaining room to reduce solvency payments under the agent Crown solvency reduction provisions for its 2021 obligations and part of its 2022 obligations.

Canada Post

The Canada Post Group of Companies is one of Canada’s largest employers with close to 67 000 employees involved in the delivery of mail and parcels. It consists of the Canada Post segment and three non-wholly owned subsidiaries: Purolator Holdings Ltd., SCI Group Inc., and Innovapost Inc. The Canada Post segment operates three major business lines — parcels, direct marketing, and letter mail — and is mandated, via the Canada Post Corporation Act, to provide a standard of postal service that meets the needs of Canadians, in a financially self-sustainable manner. In addition, the Canadian Postal Service Charter requires that the Corporation provide universal, affordable, frequent and reliable service. The Corporation operates the largest retail network in Canada, with over 6 100 retail post offices across the country.

The Canada Post pension plan provides defined benefits to active members and retirees of Canada Post. The Canada Post defined benefit pension plan has, as of year-end 2020, 53 132 active members; 4 476 deferred members, survivors, and beneficiaries; and 42 711 retired members.


The objective of the Canada Post Corporation Pension Plan Funding Regulations (the proposed Regulations) is to provide Canada Post with temporary relief from its solvency funding obligations.


The proposed Regulations would provide Canada Post with temporary relief from its solvency payment obligations. The relief would commence on January 1, 2022, or, if the Regulations are registered after that day, on the day on which the Regulations come into force and cease to apply on December 31, 2024. During this time, Canada Post would continue to be subject to the other funding standards set out in the PBSR, such as going concern funding requirements and the requirements to make normal cost contributions.

The proposed Regulations would prohibit plan amendments that would have the effect of granting a benefit improvement unless the plan has a solvency ratio above 105% and the amendment in question would not cause the ratio to drop below 105%.

Lastly, the proposed Regulations would ensure that Canada Post discloses to members, retirees and other beneficiaries that the plan is being funded in accordance with the proposed Regulations. Canada Post would also be obligated to inform members, retirees and other beneficiaries of the solvency payments that would have been made under the normal PBSR funding rules.

Regulatory development


After the Canada Post Corporation Pension Plan Funding Regulations were put in place in 2014, the Office of the Superintendent of Financial Institutions (OSFI) mandated Canada Post to consult with stakeholder groups regarding any actions or requests related to the pension plan. The Communications and Consultation Group (CCG) was established in 2015 to facilitate the exchange of information between Canada Post and the different employee and retiree stakeholder groups within the plan. The CCG performs this role alongside the Pension Advisory Council (PAC), which consists of representatives of members, retirees, unions and associations, and Canada Post. The PAC has other responsibilities as well, such as promoting awareness and an understanding of the plan among active members and beneficiaries; and reviewing/advising on financial, actuarial, and administrative aspects of the pension plan.

In early 2020, Finance Canada officials consulted with Canada Post, the PAC and the CCG on the pension plan funding situation and potential relief measures. Canada Post has indicated support for the proposed Regulations and it is anticipated that PAC and CCG members will also be supportive based on the consultations undertaken to date.

The 30-day prepublication comment period in the Canada Gazette, Part I, will provide an opportunity for stakeholders and other interested parties to comment on the proposed Regulations. All comments received will be considered prior to the proposed Regulations being finalized.

Modern treaty obligations and Indigenous engagement and consultation

No impacts on modern treaty obligations have been identified. Given that the proposed Regulations serve to provide Canada Post with temporary relief from its solvency funding obligations, Indigenous groups were not specifically consulted.

Instrument choice

Canada Post’s DB pension plan is federally regulated and subject to the funding standards in the PBSA and the PBSR. If no action were taken, Canada Post would be subject to the PBSR requirement to make yearly solvency special payments that would liquidate its pension solvency deficit over a five-year amortization period. Other potential options for achieving the objective of providing pension relief are primarily regulatory in nature. In choosing the proposed approach of providing temporary solvency funding relief for a three-year period, factors such as Canada Post’s sizable pension solvency deficit and the significant market economic headwinds faced by the Corporation in fulfilling its mandate were considered.

Regulatory analysis

Benefits and costs

Overall, the proposed Regulations may impose minimal compliance costs on Canada Post associated with the additional disclosure requirements. No new costs would be imposed on the Government of Canada, Canada Post plan members, retirees or beneficiaries. The qualitative impacts associated with the proposed Regulations are described below.

Positive impacts
Negative impacts

Small business lens

The proposed Regulations are intended to ease financial pressures faced by Canada Post by providing it with temporary relief from solvency special payment requirements to address the pension solvency deficiency. The proposed Regulations would not result in cost impacts for any affected small businesses, such as Canada Post franchisees.

One-for-one rule

The one-for-one rule does not apply as the proposed Regulations would not result in an incremental change in the administrative burden on business.

Regulatory cooperation and alignment

There is no regulatory cooperation or alignment (with other jurisdictions) component associated with the proposed Regulations.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required.

Gender-based analysis plus

The proposed Regulations may have an indirect downstream impact on certain groups, as the relief provided would ease financial pressures on Canada Post’s net cash reserves. The proposed Regulations may have an indirect positive impact on Canada Post’s employees/active pension plan members and retirees and beneficiaries; however, they would not disproportionately benefit any one particular socio-economic group (i.e. any benefits would be realized equally among all Canada Post employees).

In addition, Canada Post is mandated to deliver letter mail and parcels to any address in Canada, including remote, rural, and Indigenous communities. The proposed Regulations could indirectly have a positive impact on these communities to the extent that they support Canada Post in the delivery of its mandate and the continuation of its services in the future.

Implementation, compliance and enforcement, and service standards


The proposed Regulations would come into force on January 1, 2022, or if the Regulations are registered after that day, they would come into force on the day on which they are registered. Once the Regulations come into force, Canada Post will not be required to make solvency special payments until after the proposed Regulations cease to have effect on December 31, 2024.

OSFI supervises federally regulated private pension plans and ensures they are in compliance with the PBSA, the PBSR, and other regulations made under the PBSA, including the proposed Regulations. OSFI’s Superintendent is required to report to Parliament on the operations of the PBSA annually.


Kathleen Wrye
Director Pensions Policy
Financial Crimes and Security Division
Department of Finance Canada
90 Elgin Street, 13th Floor
Ottawa, Ontario
K1A 0G5


Notice is given that the Governor in Council, pursuant to paragraphs 39(1)(h.2) footnote a and (o) of the Pension Benefits Standards Act, 1985 footnote b, proposes to make the annexed Canada Post Corporation Pension Plan Funding Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Kathleen Wrye, Director, Pensions Policy, Financial Crimes and Security Division, Department of Finance, 90 Elgin Street, 13th floor, Ottawa, Ontario K1A 0G5 (email:

Ottawa, December 2, 2021

Mirza Lončar
Acting Assistant Clerk of the Privy Council

Canada Post Corporation Pension Plan Funding Regulations

Definitions and Application


1 The following definitions apply in these Regulations.

1985 Regulations
means the Pension Benefits Standards Regulations, 1985 (Règlement de 1985)
means the Pension Benefits Standards Act, 1985. (Loi)
solvency special payment
means a special payment required under paragraph 9(4)(c) or (d) of the 1985 Regulations. (paiement spécial de solvabilité)

Defined benefit plan

2 These Regulations apply to the Canada Post Corporation’s defined benefit plan in respect of which certificate of registration number 57136 has been issued by the Superintendent under the Act.

Payment Relief

Solvency special payments

3 Despite paragraphs 9(4)(c) and (d) of the 1985 Regulations, no solvency special payment is required in respect of a plan year ending after the coming into force of these Regulations.

Solvency ratio

4 Despite subsections 9.3(1) and (3) of the 1985 Regulations, the prescribed solvency ratio level for the purposes of paragraphs 10.1(2)(c) and (d) of the Act is 1.05.


5 The following information is prescribed, in addition to the information referred to in subsections 23(1) and (1.1) of the 1985 Regulations, for the purposes of subparagraphs 28(1)(b)(iv) and (b.1)(ii) of the Act:

Cessation of Effect

December 31, 2024

6 These Regulations cease to have effect on December 31, 2024.

Coming into Force

January 1, 2022

7 These Regulations come into force on January 1, 2022, but if they are registered after that day, they come into force on the day on which they are registered.