XML 62 R39.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Employee Benefit Plans | 12 Months Ended
--- | ---
Dec. 31, 2021
Disclosure of employee benefits [text block] [Abstract] |
EMPLOYEE BENEFIT PLANS | 32. EMPLOYEE BENEFIT PLANS The Company maintains defined benefit pension plans for Telesat Canada employees (“Canadian Pension Plans”). In October 2013, the Company ceased to allow new employees to join certain defined benefit plans, except under certain circumstances, and commenced a defined contribution pension plan for new employees. On completion of the Transaction, the Company also took over the defined benefit pension plans for certain former employees of Loral (“US Pension Plans”). Under the US Pension Plans, certain former Loral employees hired prior to July 1, 2006 contributed until November 18, 2021 in order to receive enhanced pension benefits. In addition to the pension plans, the Company provides certain health care and life insurance benefits for some of Telesat Canada’s retired employees and their dependents (“Canadian Other Post-employment Benefit Plans”). Participants are eligible for these benefits generally when they retire from active service and meet the eligibility requirements for the pension plan. These benefits are funded primarily on a pay-as-you-go basis, with the retiree generally paying a portion of the cost through contributions, deductibles and coinsurance provisions. The Company also provides medical coverage for certain of its retired employees and dependents including certain retired Loral employees (“US Other Post-employment Benefit Plans”). Under the US Other Post-employment Benefit Plans, an annual subsidy is provided to cover for medical benefits to the retired employees and their dependents. For the Loral retired employees, the coverage ends when the retiree reaches age 65. The Company’s funding policy is to make contributions to its defined benefit pension funds based on actuarial cost methods as permitted and required by pension regulatory bodies. Contributions reflect actuarial assumptions concerning future investment returns, salary projections and future service benefits. Plan assets are represented primarily by equity securities, fixed income instruments and short-term investments. The defined benefit plans typically expose the Company to actuarial risks such as investment risk, interest rate risk, longevity risk and salary risk. Investment risk is managed by specifying allowable investment types, setting diversification strategies and determining target asset allocations. The investment objectives of the fund are to optimize the return on investments, taking into account the risks associated with the securities for the protection of the pension benefits of the members of the plan. As part of the risk management process, for Canadian Plans, the Investment Committee establishes a Statement of Investment Policies and Procedures which includes a diversification strategy and processes to manage foreign currency, credit and other risks. Given the long-term nature of plan liabilities, it is considered appropriate to invest a reasonable portion of the plan assets in equity securities and thus ensure higher return. The Statement of Investment Policies and Procedures is reviewed on an annual basis by the Management Level Pension Fund Investment Committee with approval of the policy being provided by the Audit Committee. As regards the US Pension Plans, the funding policy is to fund the qualified pension plan in accordance with the Internal Revenue Code and regulations thereon. Plan assets are generally invested in equity, fixed income and other investments. The expected long-term rate of return on pension plan assets is selected by taking into account the expected duration of the plan’s projected benefit obligation, asset mix and the fact that its assets are actively managed to mitigate risk. A decrease in interest rate will increase the plan liability. However, it will be partially offset by an increase in the return on fixed income instruments. The present value of the plan liabilities is calculated by reference to the best estimates of the mortality and the future salaries of plan participants. Accordingly, an increase in life expectancy or salary will increase the plan liability. Assets-liability matching strategies are geared towards maintaining an appropriate asset mix to ensure that liquid assets are available to discharge the liabilities as and when they become due. Any potential liquidity issue arising from mismatching of plan assets and benefit obligations is compensated by a broadly diversified investment portfolio, including cash and short-term investments, and cash flows from dividends and interest. For Canadian Pension Plans, the pension expense for 2021 was determined based on membership data as at December 31, 2019. The accrued benefit obligation as at December 31, 2021 was determined based on the membership data as at December 31, 2020, and extrapolated one year based on December 31, 2021 assumptions. For US Pension Plans, the pension expense for 2021 was determined based on membership data as at December 31, 2020. The accrued benefit obligation as at December 31, 2021 was determined based on the membership data as at December 31, 2020, and extrapolated one year based on December 31, 2021 assumptions. For Canadian Post-employment Benefit Plans, the expense for 2021 was based on membership and eligibility data as at September 30, 2018 and the accrued benefit obligations as at December 31, 2021 was based on membership data as at September 30, 2021. The accrued benefit obligation for US Post-employment Benefit Plans as at December 31, 2021, related to certain retired Loral employees, was determined based on membership data as at December 31, 2020 and adjusted to exclude from the valuation those members reported active as of December 31, 2020 if, as of the November 18, 2021, they were not eligible to retire from the plan. For other US Post-employment Benefit Plans, the accrued benefit obligation as at December 31, 2021 was determined based on membership data as at January 1, 2021 and extrapolated, based on December 31, 2021 assumptions. The most recent valuation of the pension plans for funding purposes was as of December 31, 2020. Valuations will be performed for the pension plans as of December 31, 2021. The expenses included on the consolidated statements of income and the consolidated statements of comprehensive income were as follows:
For the year ended December 31, 2021 |  | Pension Plans |  | Other Post-employment Benefit Plans
Canadian |  | US |  | Total |  | Canadian |  | US |  | Total
Consolidated statements of income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | $ | 7,893 |  |  | $ | 74 |  |  | $ | 7,967 |  |  | $ | 166 |  | $ | — |  |  | $ | 166
Interest expense |  | $ | 743 |  |  | $ | 53 |  |  | $ | 796 |  |  | $ | 552 |  | $ | 92 |  |  | $ | 644
Consolidated statements of comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial (gains) losses on employee benefit plans |  | $ | (55,582 | ) |  | $ | (798 | ) |  | $ | (56,380 | ) |  | $ | 987 |  | $ | (29 | ) |  | $ | 958
|  | Canadian Pension Plans |  | Other Post-employment Benefit Plans
For the year ended December 31, 2020 |  | Canadian |  | US |  | Total
Consolidated statements of income |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | $ | 7,188 |  | $ | 145 |  | $ | — |  | $ | 145
Interest expense |  | $ | 423 |  | $ | 618 |  | $ | 128 |  | $ | 746
Consolidated statements of comprehensive income |  |  |  |  |  |  |  |  |  |  |  |
Actuarial losses on employee benefit plans |  | $ | 11,390 |  | $ | 1,686 |  | $ | 617 |  | $ | 2,303
|  | Canadian Pension Plans |  | Other Post-employment Benefit Plans
For the year ended December 31, 2019 |  | Canadian |  | US |  | Total
Consolidated statements of income |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  | $ | 6,198 |  |  | $ | 116 |  | $ | — |  | $ | 116
Interest expense |  | $ | 524 |  |  | $ | 665 |  | $ | 150 |  | $ | 815
Consolidated statements of comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial (gains) losses on employee benefit plans |  | $ | (3,325 | ) |  | $ | 1,533 |  | $ | 658 |  | $ | 2,191
The Company made contributions of $2.4 million for various defined contribution arrangements during 2021 (December 31, 2020 — $1.9 million). The balance sheet obligations, distributed between pension and other post-employment benefits were as follows:
As at December 31, |  | 2021 |  | 2020
Included in other long-term liabilities |  |  |  |  |  |
Pension benefits |  | $ | 17,927 |  | $ | 22,070
Other post-employment benefits |  |  | 27,294 |  |  | 25,914
Accrued benefit liabilities (Note 23) |  | $ | 45,221 |  | $ | 47,984
Included in other long-term assets |  |  |  |  |  |
Pension benefits (Note 15) |  | $ | 30,105 |  | $ | —
The amounts recognized in the balance sheets and the funded statuses of the benefit plans were as follows:
|  | Pension Plans |  | Other Post-employment Benefit Plans
As at December 31, 2021 |  | Canadian |  | US |  | Total |  | Canadian |  | US |  | Total
Present value of funded obligations |  | $ | 348,526 |  |  | $ | 72,906 |  | $ | 421,432 |  |  | $ | — |  | $ | — |  | $ | —
Fair value of plan assets |  |  | (379,740) |  |  |  | (54,979) |  |  | (434,719) |  |  |  | — |  |  | — |  |  | —
|  |  | (31,214 | ) |  |  | 17,927 |  |  | (13,287 | ) |  |  | — |  |  | — |  |  | —
Present value of unfunded obligations |  |  | 1,109 |  |  |  | — |  |  | 1,109 |  |  |  | 22,429 |  |  | 4,865 |  |  | 27,294
(Pension benefits) accrued benefit liabilities |  | $ | (30,105 | ) |  | $ | 17,927 |  | $ | (12,178 | ) |  | $ | 22,429 |  | $ | 4,865 |  | $ | 27,294
|  | Pension Plans |  | Other Post-employment Benefit Plans
As at December 31, 2020 |  | Canadian |  | US |  | Total |  | Canadian |  | US |  | Total
Present value of funded obligations |  | $ | 375,222 |  |  | $ | — |  | $ | 375,222 |  |  | $ | — |  | $ | — |  | $ | —
Fair value of plan assets |  |  | (354,385 | ) |  |  | — |  |  | (354,385 | ) |  |  | — |  |  | — |  |  | —
|  |  | 20,837 |  |  |  | — |  |  | 20,837 |  |  |  | — |  |  | — |  |  | —
Present value of unfunded obligations |  |  | 1,233 |  |  |  | — |  |  | 1,233 |  |  |  | 21,403 |  |  | 4,511 |  |  | 25,914
Accrued benefit liabilities |  | $ | 22,070 |  |  | $ | — |  | $ | 22,070 |  |  | $ | 21,403 |  | $ | 4,511 |  | $ | 25,914
The changes in the benefit obligations and in the fair value of plan assets were as follows:
|  | Pension Plans |  | Other Post-employment Benefit Plans
As at December 31, 2021 |  | Canadian |  | US |  | Total |  | Canadian |  | US |  | Total
Change in benefits obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, January 1, 2021 |  | $ | 376,455 |  |  | $ | — |  |  | $ | 376,455 |  |  | $ | 21,403 |  |  | $ | 4,511 |  |  | $ | 25,914 |
Initial balance from transaction |  |  | — |  |  |  | 74,113 |  |  |  | 74,113 |  |  |  | — |  |  |  | 646 |  |  |  | 646 |
Current service cost |  |  | 7,462 |  |  |  | 74 |  |  |  | 7,536 |  |  |  | 166 |  |  |  | — |  |  |  | 166 |
Interest expense |  |  | 9,872 |  |  |  | 235 |  |  |  | 10,107 |  |  |  | 552 |  |  |  | 92 |  |  |  | 644 |
Remeasurements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial gains arising from plan experience |  |  | (556 | ) |  |  | (70 | ) |  |  | (626 | ) |  |  | 4,895 |  |  |  | 246 |  |  |  | 5,141 |
Actuarial gains from change in demographic assumptions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | (1 | )
Actuarial gains from changes in financial assumptions |  |  | (33,099 | ) |  |  | (942 | ) |  |  | (34,041 | ) |  |  | (3,908 | ) |  |  | (274 | ) |  |  | (4,182 | )
Benefits paid |  |  | (11,067 | ) |  |  | (488 | ) |  |  | (11,555 | ) |  |  | (590 | ) |  |  | (388 | ) |  |  | (978 | )
Contributions by plan participants |  |  | 1,001 |  |  |  | 1 |  |  |  | 1,002 |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign exchange & other |  |  | (433 | ) |  |  | (17 | ) |  |  | (450 | ) |  |  | (89 | ) |  |  | 33 |  |  |  | (56 | )
Benefit obligation, December 31, 2021 |  |  | 349,635 |  |  |  | 72,906 |  |  |  | 422,541 |  |  |  | 22,429 |  |  |  | 4,865 |  |  |  | 27,294 |
Change in fair value of plan assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets, January 1, 2021 |  |  | (354,385 | ) |  |  | — |  |  |  | (354,385 | ) |  |  | — |  |  |  | — |  |  |  | — |
Initial balance from Transaction |  |  | — |  |  |  | (55,511 | ) |  |  | (55,511 | ) |  |  | — |  |  |  | — |  |  |  | — |
Contributions by plan participants |  |  | (1,001 | ) |  |  | (1 | ) |  |  | (1,002 | ) |  |  | — |  |  |  | — |  |  |  | — |
Contributions by employer |  |  | (4,796 | ) |  |  | — |  |  |  | (4,796 | ) |  |  | 590 |  |  |  | 388 |  |  |  | 978 |
Interest income |  |  | (9,129 | ) |  |  | (182 | ) |  |  | (9,311 | ) |  |  | — |  |  |  | — |  |  |  | — |
Benefits paid |  |  | 11,067 |  |  |  | 488 |  |  |  | 11,555 |  |  |  | (590 | ) |  |  | (388 | ) |  |  | (978 | )
Remeasurements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on plan assets, excluding interest income |  |  | (21,927 | ) |  |  | 214 |  |  |  | (21,713 | ) |  |  | — |  |  |  | — |  |  |  | — |
Administrative costs |  |  | 431 |  |  |  | — |  |  |  | 431 |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign exchange & other |  |  | — |  |  |  | 13 |  |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | — |
Fair value of plan assets, December 31, 2021 |  |  | (379,740 | ) |  |  | (54,979 | ) |  |  | (434,719 | ) |  |  | — |  |  |  | — |  |  |  | — |
(Pension benefits) accrued benefit liabilities, December 31, 2021 |  | $ | (30,105 | ) |  | $ | 17,927 |  |  | $ | (12,178 | ) |  | $ | 22,429 |  |  | $ | 4,865 |  |  | $ | 27,294 |
As at December 31, 2020 |  | Canadian Pension Plans |  | Other Post-employment Benefit Plans
Canadian |  | US |  | Total
Change in benefits obligations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit obligation, January 1, 2020 |  | $ | 332,823 |  |  | $ | 19,399 |  |  | $ | 4,109 |  |  | $ | 23,508 |
Current service cost |  |  | 6,695 |  |  |  | 145 |  |  |  | — |  |  |  | 145 |
Interest expense |  |  | 10,723 |  |  |  | 618 |  |  |  | 128 |  |  |  | 746 |
Remeasurements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Actuarial gains arising from plan experience |  |  | 2,212 |  |  |  | — |  |  |  | 184 |  |  |  | 184 |
Actuarial gains from change in demographic assumptions |  |  | — |  |  |  | — |  |  |  | 11 |  |  |  | 11 |
Actuarial gains from changes in financial assumptions |  |  | 33,278 |  |  |  | 1,735 |  |  |  | 373 |  |  |  | 2,108 |
Benefits paid |  |  | (10,294 | ) |  |  | (494 | ) |  |  | (232 | ) |  |  | (726 | )
Contributions by plan participants |  |  | 1,018 |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign exchange |  |  | — |  |  |  | — |  |  |  | (62 | ) |  |  | (62 | )
Benefit obligation, December 31, 2020 |  |  | 376,455 |  |  |  | 21,403 |  |  |  | 4,511 |  |  |  | 25,914 |
Change in fair value of plan assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value of plan assets, January 1, 2020 |  |  | (324,257 | ) |  |  | — |  |  |  | — |  |  |  | — |
Contributions by plan participants |  |  | (1,018 | ) |  |  | — |  |  |  | — |  |  |  | — |
Contributions by employer |  |  | (5,497 | ) |  |  | (494 | ) |  |  | (232 | ) |  |  | (726 | )
Interest income |  |  | (10,300 | ) |  |  | — |  |  |  | — |  |  |  | — |
Benefits paid |  |  | 10,294 |  |  |  | 494 |  |  |  | 232 |  |  |  | 726 |
Remeasurements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Return on plan assets, excluding interest income |  |  | (24,100 | ) |  |  | — |  |  |  | — |  |  |  | — |
Administrative costs |  |  | 493 |  |  |  | — |  |  |  | — |  |  |  | — |
Fair value of plan assets, December 31, 2020 |  |  | (354,385 | ) |  |  | — |  |  |  | — |  |  |  | — |
Accrued benefit liabilities, December 31, 2020 |  | $ | 22,070 |  |  | $ | 21,403 |  |  | $ | 4,511 |  |  | $ | 25,914 |
For the Canadian Pension Plans, the weighted average duration of the defined benefit obligation and weighted average duration of the current service cost as at December 31, 2021 are 15 years and 22 years, respectively. For the Canadian Other Post-employment Benefit Plans, the weighted average duration of the defined benefit obligation and weighted average duration of the current service cost as at December 31, 2021 are 14 years and 27 years, respectively. For the US Pension Plans, the weighted average duration of the defined benefit obligation as at December 31, 2021 is 13 years. The estimated future benefit payments for the defined benefit pension plans and other post-employment benefit plans until 2031 are as follows:
|  | Pension Plans |  | Other Post-employment Benefit Plans
2022 |  | $ | 15,169 |  | $ | 1,056
2023 |  | $ | 15,361 |  | $ | 1,072
2024 |  | $ | 16,416 |  | $ | 1,222
2025 |  | $ | 17,244 |  | $ | 1,263
2026 |  | $ | 18,232 |  | $ | 1,298
2027 to 2031 |  | $ | 101,879 |  | $ | 7,121
Benefit payments include obligations to 2031 only as obligations beyond this date are not quantifiable. The fair value of the plan assets were allocated as follows between the various types of investments: Canadian Pension Plans
As at December 31, |  | 2021 |  | 2020
Equity securities |  |  |  |  |  |
Canada |  | 22.8 | % |  | 22.9 | %
United States |  | 19.3 | % |  | 19.7 | %
International (other than United States) |  | 13.5 | % |  | 14.3 | %
Fixed income instruments |  |  |  |  |  |
Canada |  | 42.3 | % |  | 41.0 | %
Cash and cash equivalents |  | 2.1 | % |  | 2.1 | %
US Pension Plans
As at December 31, |  | 2021
Equity securities |  |  |
United States |  | 33.4 | %
International |  | 22.8 | %
Fixed income instruments |  |  |
United States |  | 29.9 | %
Canada |  | 0.4 | %
International |  | 4.8 | %
Other investments |  |  |
United States |  | 4.4 | %
International |  | 4.3 | %
Plan assets are valued at the measurement date of December 31 each year. The following are the significant assumptions adopted in measuring the Company’s pension and other benefit obligations: Pension plans
|  | Canadian |  | US |  | Canadian
As at December 31, |  | 2021 |  | 2021 |  | 2020
Actuarial benefit obligation |  |  |  |  |  |  |
Discount rate |  | 3.20% |  | 2.85% |  | 2.60 | %
Benefit costs for the year ended |  |  |  |  |  |  |
Discount rate |  | 2.80% |  | 2.75% |  | 3.20 | %
Future salary growth |  | 2.50% |  | N/A |  | 2.50 | %
Other Post-employment Benefit Plans
|  | Canadian |  | US
As at December 31, |  | 2021 |  | 2020 |  | 2021 |  | 2020
Benefit costs for the year ended |  |  |  |  |  |  |  |  |
Discount rate |  | 3.20% |  | 3.20% |  | 2.50% to 2.85% |  | 2.95 | %
Health care cost trend rate |  | 3.49% to 5.49% |  | 3.49% to 5.49% |  | N/A |  | N/A |
Other medical trend rates |  | 4.00% to 4.56% |  | 4.00% to 4.56% |  | N/A |  | N/A |
For certain Canadian Post-retirement Plans the above trend rates are applicable for 2021 to 2029 which will decrease linearly to 4.75% in 2029 and grading down to an ultimate rate of 3.57 % per annum in 2040 and thereafter. Sensitivity of assumptions The calculation of the defined benefit obligation is sensitive to the assumptions set out above. The following table summarizes how the impact on the defined benefit obligation as at December 31, 2021 and 2020 would have increased or decreased as a result of the change in the respective assumptions by one percent. Pension plans
|  | Canadian |  | US
As at December 31, 2021 |  | 1% increase |  | 1% decrease |  | 1% increase |  | 1% decrease
Discount rate |  | $ | (45,732 | ) |  | $ | 58,488 |  |  | $ | (8,418 | ) |  | $ | 10,317
Future salary growth |  | $ | 8,606 |  |  | $ | (6,839 | ) |  |  | N/A |  |  |  | N/A
|  | Canadian
As at December 31, 2020 |  | 1% increase |  | 1% decrease
Discount rate |  | $ | (53,058 | ) |  | $ | 67,549 |
Future salary growth |  | $ | 10,423 |  |  | $ | (9,165 | )
Other Post-employment Benefit Plans
|  | Canadian |  | US
As at December 31, 2021 |  | 1% increase |  | 1% decrease |  | 1% increase |  | 1% decrease
Discount rate |  | $ | (2,961 | ) |  | $ | 3,734 |  |  | $ | (408 | ) |  | $ | 474
Medical and dental trend rates |  | $ | 2,216 |  |  | $ | (1,826 | ) |  |  | N/A |  |  |  | N/A
|  | Canadian |  | US
As at December 31, 2020 |  | 1% increase |  | 1% decrease |  | 1% increase |  | 1% decrease
Discount rate |  | $ | (3,067 | ) |  | $ | 3,860 |  |  | $ | (419 | ) |  | $ | 491
Medical and dental trend rates |  | $ | 2,222 |  |  | $ | (1,839 | ) |  |  | N/A |  |  |  | N/A
The above sensitivities are hypothetical and should be used with caution. Changes in amounts based on a one percent variation in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in amounts may not be linear. The sensitivities have been calculated independently of changes in other key variables. Changes in one factor may result in changes in another, which could amplify or reduce certain sensitivities. The Company expects to make contributions of $4.2 million to the Canadian defined benefit plans and $0.9 million to the defined contribution plan during the next fiscal year.

X
- Definition The entire disclosure for employee benefits. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Name IAS -Number 19 -IssueDate 2021-01-01 -Section Scope -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=19&code=ifrs-tx-2021-en-r&doctype=Standard&dita_xref=IAS19_g2-7_TI -URIDate 2021-03-24 + Details
Name: | ifrs-full_DisclosureOfEmployeeBenefitsExplanatory
Namespace Prefix: | ifrs-full_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | tsat_DisclosureOfEmployeeBenefitsTextBlockAbstract
Namespace Prefix: | tsat_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration