The City of Ottawa is anticipating issuing more letters of credit (L/Cs) to cover a deficit in the pension fund of the urban transit service in the Canadian capital city.

In 2012, the deficit in the OC Transpo pension fund was estimated at $98 million Canadian dollars (C$98 million).

Deficit situation

The City of Ottawa has already issued L/Cs to the value of C$30.2 million to shore up the transit service's pension fund.

According to documents released by the city in early July, additional L/Cs may be required if the C$536.1 million fund remains in a deficit situation.

Unlikely scenarios

The L/Cs would only be called in if the city were to go bankrupt or the pension fund wound up immediately.

Deputy city treasurer, Mona Monkman, commented that these were both extremely unlikely scenarios.

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