Canada

The federal government has appointed the judge who oversaw Air Canada's insolvency filing six years ago to mediate the latest pension dispute between the company and its unionized employees, The Canadian Press reported. Finance Minister Jim Flaherty, acting on his own initiative, asked James Farley to devise a sustainable path for the airline's pension plan that is acceptable to Air Canada, its unions and its retiree association. Farley, currently in private practice for McCarthy Tetrault, presided over Air Canada's bankruptcy restructuring that began in April 2003 and lasted 18 months.

While General Motors Corp. will almost certainly file for bankruptcy protection in the U.S. on Monday, its Canadian subsidiary should emerge from a massive restructuring process relatively unscathed, The Canadian Press reported. The restructuring, which has already been in the works for months and will cost governments around the world tens of billions of dollars, will see the company that once defined the automobile--and capitalism--in North America emerge a government-controlled shadow of its former self.

Air Canada is in a cash crunch partly because the previous management group "lost the plot" as the economy turned last year. But the company may still be able to avoid a return to bankruptcy protection, provided it can strike a deal with its unions that doesn't increase costs and ensures labour peace, said Robert Milton, chairman and CEO of Air Canada's controlling shareholder, ACE Aviation Holdings Inc. Pensions have emerged as the central issue in the talks with pilots, flight attendants and other unionized employees for new contracts.

One of Putnam County's largest employers is seeking protection from its creditors in a Canadian court, LimaOhio.com reported. W.C. Wood Corp., a Canadian manufacturer with a plant in Ottawa, filed a Companies' Creditors Arrangement Act application for protection in the Canadian courts. It has also filed a Chapter 15 application, which assures that any action stemming from the CCAA would also apply to the company's U.S. plant. The action will allow W.C. Wood to hold off creditors while it works on a restructuring plan.

The Canadian government will not move to limit interest rates on credit cards, Finance Minister Jim Flaherty said on Thursday, confirming that new credit card rules in Canada will not be as far-reaching as those just introduced in the United States. Flaherty said the government will not limit credit card interest rates because of a belief "in consumer choice", Reuters reported. Read more.

General Motors Canada has demanded concessions far greater than the Canadian Auto workers granted to Chrysler Canada last month, the union said Friday, as both parties face a looming midnight deadline to reach a cost-cutting labor agreement, The Associated Press reported. The federal and Ontario governments set the deadline for the two sides to agree on a deal to replace a pact that was negotiated in March. The governments have asked the union to give GM Canada the same concessions that it recently gave Chrysler Canada. "It's slow, but we're making progress.

A Quebec company’s financial troubles are no excuse to renege on a new collective agreement provision for early pension, the Quebec Superior Court has ruled, Canadian Employment Law Today reported. Montreal-based forestry and newsprint company AbitibiBowater negotiated a new collective agreement with its union that changed the company’s retirement policy and pension plan. However, Abitibi experienced financial problems after the signing of the new collective agreement and is currently under bankruptcy protection in both Canada and the United States.

Bankruptcies in Canada soared by over 50 per cent in March from a year ago as the rising unemployment rate left more consumers unable to pay their bills, the Toronto Star reported. At the same time, business bankruptcies declined during the month, according to figures released yesterday by the Office of the Superintendent of Bankruptcy Canada. There were 10,578 personal bankruptcies across the country in March, up 17.3 per cent from the month before, and up a staggering 57 per cent from March 2008. The biggest year-over-year increases came from the western provinces.

A superior court judge in Quebec has approved a further $100 million in debtor-in-possession financing for North America's largest newsprint producer, AbitibiBowater Inc., as it navigates joint bankruptcy proceedings in Canada and the U.S., Bankruptcy Law360 reported. The order, which was approved by a judge in Quebec Superior Court on Wednesday, will allow AbitibiBowater to enter a loan agreement with Canada's Bank of Montreal, the company announced. Investissement Quebec, the province's investment agency, will guarantee the $100 million loan, according to AbitibiBowater.

The leader of GM Canada's largest union says a filing by the car maker for court protection from creditors is likely, The Globe and Mail reported. The federal and Ontario governments have ordered the Canadian Auto Workers and General Motors of Canada Ltd. to slash hourly labour costs by May 15. CAW president Ken Lewenza says the company faces liquidation if a cost-saving agreement is not reached. “This is an unbelievable situation,” says Mr. Lewenza, who believes the car maker may have to file for Chapter 11 and CCAA creditor protection.