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Pension and Other Post-Employment Benefits | 12 Months Ended
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Dec. 31, 2025
Retirement Benefits, Description [Abstract] |
Pension and Other Post-Employment Benefits |
23. | Pension and Other Post-Employment Benefits
Ovintiv sponsors defined benefit and defined contribution plans, providing pension and other post-employment benefits (“OPEB”) to its employees in the U.S. and Canada. As of January 1, 2003, the de fined benefit pension plan was closed to new entrants. The average remaining service period of active employees participating in the defined benefit pension plan is four years and the average remaining life expectancy of inactive employees is 12 years. The average remaining service period of the active employees participating in the OPEB plan is 10 years. The Company is required to file an actuarial valuation of its pension plans with the provincial regulator at least every three years, or more frequently if directed by the regulator. The most recent filing was dated December 31, 2024, and the next required filing is expected to be as at December 31, 2027. The following tables set forth changes in the benefit obligations and fair value of plan assets for the Company’s defined benefit pension and other post-employment benefit plans for the years ended December 31, 2025, and 2024, as well as the funded status of the plans and amounts recognized in the Consolidated Financial Statements as at December 31, 2025, and 2024.
|  | Defined Benefits |  |  | OPEB |
As at December 31 |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Change in Benefit Obligations |  |  |  |  |  |  |  |  |  |  |  |
Projected Benefit Obligation, Beginning of Year |  | $ | 124 |  |  | $ | 138 |  |  | $ | 45 |  |  | $ | 48 |
Service Cost |  |  | - |  |  |  | - |  |  |  | 2 |  |  |  | 2 |
Interest Cost |  |  | 6 |  |  |  | 6 |  |  |  | 2 |  |  |  | 2 |
Actuarial (Gains) Losses |  |  | (2 | ) |  |  | 3 |  |  |  | - |  |  |  | (1 | )
Exchange Differences |  |  | 5 |  |  |  | (11 | ) |  |  | 2 |  |  |  | (1 | )
Employee Contributions |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1 |
Benefits Paid |  |  | (12 | ) |  |  | (12 | ) |  |  | (6 | ) |  |  | (6 | )
Curtailment |  |  | - |  |  |  | - |  |  |  | (2 | ) |  |  | - |
Projected Benefit Obligation, End of Year |  | $ | 121 |  |  | $ | 124 |  |  | $ | 44 |  |  | $ | 45 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |  |
Fair Value of Plan Assets, Beginning of Year |  | $ | 110 |  |  | $ | 123 |  |  | $ | - |  |  | $ | - |
Actual Return on Plan Assets |  |  | 4 |  |  |  | 9 |  |  |  | - |  |  |  | - |
Exchange Differences |  |  | 6 |  |  |  | (10 | ) |  |  | - |  |  |  | - |
Employee Contributions |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | 1 |
Employer Contributions |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 5 |
Benefits Paid |  |  | (12 | ) |  |  | (12 | ) |  |  | (6 | ) |  |  | (6 | )
Transfers to Defined Contribution Plan |  |  | (1 | ) |  |  | - |  |  |  | - |  |  |  | - |
Fair Value of Plan Assets, End of Year |  | $ | 107 |  |  | $ | 110 |  |  | $ | - |  |  | $ | - |
Funded Status of Plan Assets, End of Year |  | $ | (14 | ) |  | $ | (14 | ) |  | $ | (44 | ) |  | $ | (45 | )
Total Recognized Amounts in the |  |  |  |  |  |  |  |  |  |  |  |
Consolidated Balance Sheet Consist of: |  |  |  |  |  |  |  |  |  |  |  |
Other Assets |  | $ | 7 |  |  | $ | 6 |  |  | $ | - |  |  | $ | - |
Current Liabilities |  |  | - |  |  |  | - |  |  |  | (5 | ) |  |  | (5 | )
Non-Current Liabilities |  |  | (21 | ) |  |  | (20 | ) |  |  | (39 | ) |  |  | (40 | )
Total |  | $ | (14 | ) |  | $ | (14 | ) |  | $ | (44 | ) |  | $ | (45 | )
Total Recognized Amounts in Accumulated |  |  |  |  |  |  |  |  |  |  |  |
Other Comprehensive Income Consist of: |  |  |  |  |  |  |  |  |  |  |  |
Net Actuarial (Gains) Losses |  | $ | 12 |  |  | $ | 13 |  |  | $ | (67 | ) |  | $ | (73 | )
Net Prior Service Costs |  |  | (7 | ) |  |  | (7 | ) |  |  | 6 |  |  |  | 7 |
Total Recognized in Accumulated Other Comprehensive |  |  |  |  |  |  |  |  |  |  |  |
Income, Before Tax |  | $ | 5 |  |  | $ | 6 |  |  | $ | (61 | ) |  | $ | (66 | )
The accumulated defined benefit obligation for all defined benefit plans was $165 million as at December 31, 2025 (2024 - $169 million). The following table sets forth the defined benefit plans where the accumulated benefit obligation and projected benefit obligation are in excess of the fair value of the plan assets:
|  | Defined Benefits |  |  | OPEB |
As at December 31 |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Projected Benefit Obligation |  | $ | (40 | ) |  | $ | (40 | ) |  | $ | (44 | ) |  | $ | (45 | )
Accumulated Benefit Obligation |  |  | (40 | ) |  |  | (40 | ) |  |  | (44 | ) |  |  | (45 | )
Fair Value of Plan Assets (1) |  |  | 18 |  |  |  | 20 |  |  |  | - |  |  |  | - |
(1) The Company does not aggregate benefit plans. Following are the weighted average assumptions used by the Company in determining the defined benefit pension and other post-employment benefit obligations:
|  | Defined Benefits |  |  | OPEB |
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Discount Rate |  |  | 4.60 | % |  |  | 4.50 | % |  |  | 5.09 | % |  |  | 5.12 | %
Rates of Increase in Compensation Levels |  |  | 3.49 | % |  |  | 3.37 | % |  |  | 4.93 | % |  |  | 4.93 | %
The following sets forth the total benefit plans expense recognized by the Company:
|  | Pension Benefits |  |  | OPEB |
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Net Defined Periodic Benefit Cost |  | $ | 1 |  |  | $ | 1 |  |  | $ | 2 |  |  | $ | (3 | ) |  | $ | (3 | ) |  | $ | (4 | )
Defined Contribution Plan Expense |  |  | 23 |  |  |  | 26 |  |  |  | 25 |  |  |  | - |  |  |  | - |  |  |  | - |
Total Benefit Plans Expense |  | $ | 24 |  |  | $ | 27 |  |  | $ | 27 |  |  | $ | (3 | ) |  | $ | (3 | ) |  | $ | (4 | )
Of the total benefit plans expense, $20 million (2024 - $23 million; 2023 - $22 million) was included in operating expense and $5 million (2024 - $5 million; 2023 - $5 million) was included in administrative expense. Excluding service costs, net defined periodic ben efit gains of $4 million (2024 - $4 million; 2023 - $4 million) were recorded in other (gains) losses, net. The net defined periodic benefit cost is as follows:
|  | Defined Benefits |  |  | OPEB |
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Service Cost |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 2 |  |  | $ | 2 |  |  | $ | 2 |
Interest Cost |  |  | 6 |  |  |  | 6 |  |  |  | 7 |  |  |  | 2 |  |  |  | 2 |  |  |  | 2 |
Expected Return on Plan Assets |  |  | (5 | ) |  |  | (5 | ) |  |  | (5 | ) |  |  | - |  |  |  | - |  |  |  | - |
Amounts Reclassified from Accumulated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other Comprehensive Income: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Amortization of net actuarial (gains) and losses |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (6 | ) |  |  | (7 | ) |  |  | (8 | )
Curtailment of net prior service costs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1 |  |  |  | - |  |  |  | - |
Curtailment |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (2 | ) |  |  | - |  |  |  | - |
Total Net Defined Periodic Benefit Cost (1) |  | $ | 1 |  |  | $ | 1 |  |  | $ | 2 |  |  | $ | (3 | ) |  | $ | (3 | ) |  | $ | (4 | )
(1) The components of total net defined periodic benefit cost, excluding the service cost component, are included in other (gains) losses, net. Actuarial gains related to changes in the projected benefit obligations for the Company’s defined benefit pension plan were due were due to an increase in the discount rate used to measure the obligation. The amounts recognized in other comprehensive income are as follows:
|  | Defined Benefits |  |  | OPEB |
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Net Actuarial (Gains) Losses |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (4 | ) |  | $ | - |  |  | $ | (1 | ) |  | $ | 1 |
Amortization of Net Actuarial Gains and (Losses) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6 |  |  |  | 7 |  |  |  | 8 |
Curtailment of Net Prior Service Costs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (1 | ) |  |  | - |  |  |  | - |
Total Amounts Recognized in Other Comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Income) Loss, Before Tax |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (4 | ) |  | $ | 5 |  |  | $ | 6 |  |  | $ | 9 |
Total Amounts Recognized in Other Comprehensive |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(Income) Loss, After Tax |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (3 | ) |  | $ | 4 |  |  | $ | 5 |  |  | $ | 7 |
Following are the weighted average assumptions used by the Company in determining the net periodic pension and other post-retirement benefit costs:
|  | Defined Benefits |  |  | OPEB |
For the years ended December 31 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Discount Rate |  |  | 4.60 | % |  |  | 4.50 | % |  |  | 5.10 | % |  |  | 5.25 | % |  |  | 4.96 | % |  |  | 5.30 | %
Long-Term Rate of Return on Plan Assets |  |  | 3.95 | % |  |  | 4.00 | % |  |  | 3.85 | % |  |  | - |  |  |  | - |  |  |  | - |
Rates of Increase in Compensation Levels |  |  | 3.49 | % |  |  | 3.37 | % |  |  | 3.24 | % |  |  | 4.93 | % |  |  | 4.93 | % |  |  | 4.93 | %
The Company’s assumed health care cost trend rates are as follows:
For the years ended December 31 |  |  |  |  |  |  |  | 2025 |  |  | 2024 |  |  | 2023 |
Health Care Cost Trend Rate for Next Year |  |  |  |  |  |  |  |  | 7.15 | % |  |  | 7.04 | % |  |  | 6.96 | %
Rate to Which the Cost Trend Rate is Assumed to Decline (Ultimate Trend Rate) |  |  |  |  | 5.00 | % |  |  | 5.00 | % |  |  | 5.00 | %
Year that the Rate Reaches the Ultimate Trend Rate |  |  |  |  |  |  |  | 2033 |  |  | 2032 |  |  | 2030 |
The Company does no t expect to contribute to its defined benefit pension plans in 2026. The Company’s OPEB plans are funded on an as required basis. The following provides an estimate of benefit payments for the next 10 years. These estimates reflect benefit increases due to continuing employee service.
|  |  |  |  | Defined Benefit Pension Payments |  |  | Other Benefit Payments |
2026 |  |  |  |  |  | $ | 11 |  |  | $ | 5 |
2027 |  |  |  |  |  |  | 11 |  |  |  | 4 |
2028 |  |  |  |  |  |  | 11 |  |  |  | 4 |
2029 |  |  |  |  |  |  | 11 |  |  |  | 4 |
2030 |  |  |  |  |  |  | 10 |  |  |  | 3 |
2031 - 2035 |  |  |  |  |  |  | 45 |  |  |  | 17 |
The Company’s registered and other defined benefit pension plan assets are presented by investment asset category and input level within the fair value hierarchy as follows:
As at December 31 |  | 2025 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Investments: |  |  |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 11 |  |  | $ | - |  |  | $ | - |  |  | $ | 11 |
Fixed Income |  |  | - |  |  |  | 60 |  |  |  | - |  |  |  | 60 |
Equity |  |  | - |  |  |  | 36 |  |  |  | - |  |  |  | 36 |
Fair Value of Plan Assets, End of Year |  | $ | 11 |  |  | $ | 96 |  |  | $ | - |  |  | $ | 107 |
As at December 31 |  | 2024 |
|  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Investments: |  |  |  |  |  |  |  |  |  |  |  |
Cash and Cash Equivalents |  | $ | 13 |  |  | $ | - |  |  | $ | - |  |  | $ | 13 |
Fixed Income |  |  | - |  |  |  | 61 |  |  |  | - |  |  |  | 61 |
Equity |  |  | - |  |  |  | 36 |  |  |  | - |  |  |  | 36 |
Fair Value of Plan Assets, End of Year |  | $ | 13 |  |  | $ | 97 |  |  | $ | - |  |  | $ | 110 |
Fixed Income investments consist of Canadian bonds issued by investment grade companies. Equity investments consist of international securities and securities held in the U.S. The fair values of these securities are based on dealer quotes, quoted market prices and net asset values. Registered pension plan assets were invested by the Company in the following as at December 31, 2025: 67 percent Bonds (2024 - 66 percent), 33 percent U.S. and Foreign Equity (2024 - 31 percent) and nil Cash Equivalents (2024 ‑ three percent). The expected long-term rate of return is 4.9 percent. The expected rate of return on pension plan assets is based on histor ical and projected rates of return for each asset class in the plan investment portfolio. The actual return on plan assets was $4 million (2024 ‑ $9 million). The asset allocation structure is subject to diversification requirements and constraints, which reduce risk by limiting exposure to individual equity investment, credit rating categories and foreign currency exposure.

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