Ottawa To Give Air Canada A Break On Pensions

Canada's Finance Minister Jim Flaherty is changing pension rules and giving cash-strapped Air Canada a 21 month moratorium on plugging a hole in its pension plan.

Canada's biggest airline has asked the government to allow it to waive payments to fund a CAD$2.9 billion (USD$2.7 billion) deficit in its pension fund until April 2011. The company's five unions have also agreed to the plan.

"That will be a 21 month moratorium with respect to the payment of additional capital into the pension plans," Flaherty told reporters in Toronto.