v3.25.4

Pension and Other Post-Retirement Benefit Obligations | 12 Months Ended
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Dec. 31, 2025
Retirement Benefits [Abstract] |
Pension and Other Post-Retirement Benefit Obligations | Note 12. Pension and Other Post-Retirement Benefit Obligations Defined Benefit Plans Pension benefits are based on employees’ earnings and years of service. The defined benefit plans are funded by contributions from the Company based on actuarial estimates and statutory requirements. Information about the Celgar and Peace River defined benefit plans, in aggregate for the year ended December 31, 2025 was as follows:
|  | 2025 |
|  | Pension |  |  | Other Post- Retirement Benefits |  |  | Total |
Change in benefit obligation |  |  |  |  |  |  |  |  |
Benefit obligation, December 31, 2024 |  | $ | 82,382 |  |  | $ | 9,254 |  |  | $ | 91,636 |
Service cost |  |  | 2,658 |  |  |  | 140 |  |  |  | 2,798 |
Interest cost |  |  | 4,023 |  |  |  | 442 |  |  |  | 4,465 |
Benefit payments |  |  | (4,123 | ) |  |  | (514 | ) |  |  | (4,637 | )
Actuarial gains |  |  | (4,564 | ) |  |  | (1,206 | ) |  |  | (5,770 | )
Foreign currency exchange rate changes |  |  | 4,065 |  |  |  | 438 |  |  |  | 4,503 |
Benefit obligation, December 31, 2025 |  |  | 84,441 |  |  |  | 8,554 |  |  |  | 92,995 |
Reconciliation of fair value of plan assets |  |  |  |  |  |  |  |  |
Fair value of plan assets, December 31, 2024 |  |  | 89,148 |  |  |  | — |  |  |  | 89,148 |
Actual returns |  |  | 8,295 |  |  |  | — |  |  |  | 8,295 |
Surplus refund |  |  | (3,025 | ) |  |  | — |  |  |  | (3,025 | )
Benefit payments |  |  | (4,049 | ) |  |  | — |  |  |  | (4,049 | )
Foreign currency exchange rate changes |  |  | 4,464 |  |  |  | — |  |  |  | 4,464 |
Fair value of plan assets, December 31, 2025 |  |  | 94,833 |  |  |  | — |  |  |  | 94,833 |
Funded status, December 31, 2025 |  | $ | 10,392 |  |  | $ | (8,554 | ) |  | $ | 1,838 |
Components of the net benefit cost recognized |  |  |  |  |  |  |  |  |
Service cost |  | $ | 2,658 |  |  | $ | 140 |  |  | $ | 2,798 |
Interest cost |  |  | 4,023 |  |  |  | 442 |  |  |  | 4,465 |
Expected return on plan assets |  |  | (5,504 | ) |  |  | — |  |  |  | (5,504 | )
Amortization of unrecognized item s |  |  | (324 | ) |  |  | (743 | ) |  |  | (1,067 | )
Net benefit cost |  | $ | 853 |  |  | $ | (161 | ) |  | $ | 692 |
Information about the Celgar and Peace River defined benefit plans, in aggregate for the year ended December 31, 2024 was as follows:
|  | 2024 |
|  | Pension |  |  | Other Post- Retirement Benefits |  |  | Total |
Change in benefit obligation |  |  |  |  |  |  |  |  |
Benefit obligation, December 31, 2023 |  | $ | 85,988 |  |  | $ | 10,516 |  |  | $ | 96,504 |
Service cost |  |  | 2,745 |  |  |  | 125 |  |  |  | 2,870 |
Interest cost |  |  | 3,861 |  |  |  | 461 |  |  |  | 4,322 |
Benefit payments |  |  | (3,059 | ) |  |  | (550 | ) |  |  | (3,609 | )
Actuarial losses (gains) |  |  | 27 |  |  |  | (469 | ) |  |  | (442 | )
Foreign currency exchange rate changes |  |  | (7,180 | ) |  |  | (829 | ) |  |  | (8,009 | )
Benefit obligation, December 31, 2024 |  |  | 82,382 |  |  |  | 9,254 |  |  |  | 91,636 |
Reconciliation of fair value of plan assets |  |  |  |  |  |  |  |  |
Fair value of plan assets, December 31, 2023 |  |  | 88,783 |  |  |  | — |  |  |  | 88,783 |
Actual returns |  |  | 10,242 |  |  |  | — |  |  |  | 10,242 |
Contributions |  |  | 675 |  |  |  | — |  |  |  | 675 |
Benefit payments |  |  | (2,996 | ) |  |  | — |  |  |  | (2,996 | )
Foreign currency exchange rate changes |  |  | (7,556 | ) |  |  | — |  |  |  | (7,556 | )
Fair value of plan assets, December 31, 2024 |  |  | 89,148 |  |  |  | — |  |  |  | 89,148 |
Funded status, December 31, 2024 |  | $ | 6,766 |  |  | $ | (9,254 | ) |  | $ | (2,488 | )
Components of the net benefit cost recognized |  |  |  |  |  |  |  |  |
Service cost |  | $ | 2,745 |  |  | $ | 125 |  |  | $ | 2,870 |
Interest cost |  |  | 3,861 |  |  |  | 461 |  |  |  | 4,322 |
Expected return on plan assets |  |  | (5,160 | ) |  |  | — |  |  |  | (5,160 | )
Amortization of unrecognized items |  |  | 55 |  |  |  | (815 | ) |  |  | (760 | )
Net benefit cost |  | $ | 1,501 |  |  | $ | (229 | ) |  | $ | 1,272 |
The components of the net benefit cost other than service cost are recognized in “Other income” in the Consolidated Statements of Operations. The amortization of unrecognized items relates to net actuarial losses (gains) and prior service costs. The Company anticipates that it will make contributions to the defined benefit plans of approximately $nil in 2026. Estimated future benefit payments under these plans as of December 31, 2025 were as follows:
|  | Pension |  |  | Other Post-Retirement Benefits |
2026 |  | $ | 4,002 |  |  | $ | 505 |
2027 |  | $ | 4,251 |  |  | $ | 518 |
2028 |  | $ | 4,490 |  |  | $ | 531 |
2029 |  | $ | 4,742 |  |  | $ | 541 |
2030 |  | $ | 4,968 |  |  | $ | 549 |
2031-2035 |  | $ | 27,627 |  |  | $ | 2,870 |
Weighted Average Assumptions The weighted-average assumptions used to determine the benefit obligations at the measurement dates and the net benefit costs for the years ended December 31, 2025, 2024 and 2023 were as follows for Celgar’s defined benefit plan:
|  | For the Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Benefit obligations |  |  |  |  |  |  |  |  |
Discount rate |  |  | 5.10 | % |  |  | 4.70 | % |  |  | 4.60 | %
Rate of compensation increase |  |  | 2.50 | % |  |  | 2.50 | % |  |  | 2.50 | %
Net benefit cost for year ended |  |  |  |  |  |  |  |  |
Discount rate |  |  | 4.70 | % |  |  | 4.60 | % |  |  | 5.00 | %
Rate of compensation increase |  |  | 2.50 | % |  |  | 2.50 | % |  |  | 2.50 | %
Expected rate of return on plan assets |  |  | 5.50 | % |  |  | 5.45 | % |  |  | 5.45 | %
The weighted-average assumptions used to determine the benefit obligations at the measurement dates and the net benefit costs for the years ended December 31, 2025, 2024 and 2023 were as follows for Peace River’s defined benefit plan:
|  | For the Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Benefit obligations |  |  |  |  |  |  |  |  |
Discount rate |  |  | 5.10 | % |  |  | 4.70 | % |  |  | 4.60 | %
Rate of compensation increase |  |  | 2.75 | % |  |  | 2.75 | % |  |  | 2.75 | %
Net benefit cost for year ended |  |  |  |  |  |  |  |  |
Discount rate |  |  | 4.70 | % |  |  | 4.60 | % |  |  | 5.00 | %
Rate of compensation increase |  |  | 2.75 | % |  |  | 2.75 | % |  |  | 2.75 | %
Expected rate of return on plan assets |  |  | 6.23 | % |  |  | 6.18 | % |  |  | 6.18 | %
The discount rate assumption is adjusted annually to reflect the rates available on high-quality debt instruments, with a duration that is expected to match the timing and amount of expected pension and other post-retirement benefit payments. High-quality debt instruments are corporate bonds with a rating of “AA” or better. The expected rate of return on plan assets is a management estimate based on, among other factors, historical long-term returns, expected asset mix and an active management premium. The expected rate of compensation increase is a management estimate based on, among other factors, historical compensation increases and promotions, while considering current industry conditions, the terms of collective bargaining agreements with employees and the outlook for the industry. The assumed health care cost trend rates used to determine the other post-retirement benefit obligations as of December 31, 2025 and December 31, 2024 were as follows:
|  | December 31,
|  | 2025 |  | 2024
Health care cost trend rate assumed for next year |  | 4.25% |  | 4.50%
Rate to which the cost trend is assumed to decline (ultimate trend rate) |  | 3.50% |  | 3.50%
Year that the rate reaches the ultimate trend rate |  | 2029 |  | 2029
The expected health care cost trend rates are based on historical trends for these costs, as well as recently enacted health care legislation. The Company also compares health care cost trend rates to those of the industry. Investment Objective and Asset Allocation The investment objective for the defined benefit pension plans is to sufficiently diversify invested plan assets to maintain a reasonable level of risk without imprudently sacrificing the return on the invested funds, and ultimately to achieve a long-term total rate of return, net of fees and expenses, at least equal to the long-term interest rate assumptions used for funding actuarial valuations. To achieve this objective, the Company’s overall investment strategy is to maintain an investment allocation mix of long-term growth investments (equities) and fixed income investments (debt securities). Investment allocation targets have been established by asset class after considering the nature of the liabilities, long-term return expectations, the risks associated with key asset classes, funded position, inflation and interest rates and related management fees and expenses. In addition, the defined benefit pension plan’s investment strategy seeks to minimize risk beyond legislated requirements by constraining the investment managers’ investment options. There are a number of specific constraints based on investment type, but they all have the general purpose of ensuring that the investments are fully diversified and that risk is appropriately managed. For example, there are constraints on the book value of assets that can be invested in any one entity or group, and all equity holdings must be listed on a public exchange. Reviews of the investment objectives, key assumptions and the independent investment managers are performed periodically. Concentrations of Risk in the Defined Benefit Pension Plans’ Assets The Company has reviewed the defined benefit pension plans’ equity investments and determined that they are allocated based on the specific investment managers’ stated investment strategies with only slight over- or under-weightings within any specific category, and that those investments are within the constraints that have been set by the Company. Those constraints include a limitation on the value that can be invested in any one entity or investment category. The Company has concluded that there are no significant concentrations of risk. The following table presents the Celgar and Peace River defined benefit pension plans’ assets fair value measurements as of December 31, 2025 under the fair value hierarchy:
|  | Fair value measurements as of December 31, 2025 using: |
Asset Category |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Equity securities |  | $ | — |  |  | $ | 58,286 |  |  | $ | — |  |  | $ | 58,286 |
Debt securities |  |  | — |  |  |  | 33,655 |  |  |  | — |  |  |  | 33,655 |
Other |  |  | — |  |  |  | 2,892 |  |  |  | — |  |  |  | 2,892 |
Total assets |  | $ | — |  |  | $ | 94,833 |  |  | $ | — |  |  | $ | 94,833 |
The following table presents the Celgar and Peace River defined benefit pension plans’ assets fair value measurements as of December 31, 2024 under the fair value hierarchy:
|  | Fair value measurements as of December 31, 2024 using: |
Asset Category |  | Level 1 |  |  | Level 2 |  |  | Level 3 |  |  | Total |
Equity securities |  | $ | — |  |  | $ | 57,338 |  |  | $ | — |  |  | $ | 57,338 |
Debt securities |  |  | — |  |  |  | 29,621 |  |  |  | — |  |  |  | 29,621 |
Other |  |  | — |  |  |  | 2,189 |  |  |  | — |  |  |  | 2,189 |
Total assets |  | $ | — |  |  | $ | 89,148 |  |  | $ | — |  |  | $ | 89,148 |
Defined Contribution Plans Effective December 31, 2008, the defined benefit plans at the Celgar mill were closed to new members. In addition, the related defined benefit service accrual ceased on December 31, 2008, and members began to receive pension benefits, at a fixed contractual rate, under a defined contribution plan effective January 1, 2009. The Company’s head office employees also participate in a defined contribution plan. During the year ended December 31, 2025, the Company made contributions of $2,752 to these plans (2024 – $2,634; 2023 – $2,477). Multiemployer Plan The Company participates in a multiemployer plan for the hourly-paid employees at the Celgar mill. The contributions to the plan are determined based on a percentage of pensionable earnings pursuant to a collective bargaining agreement. The Company has no current or future contribution obligations in excess of the contractual contributions. During the year ended December 31, 2025, the Company made contributions of $2,253 to this plan (2024 – $2,128; 2023 – $2,193). Plan details for the years ended December 31, 2025, 2024 and 2023 were as follows:
|  | Provincially Registered Plan |  | Expiration Date of Collective Bargaining |  | Are the Company's Contributions Greater Than 5% of Total Contributions
Legal name |  | Number |  | Agreement |  | 2025 |  | 2024 |  | 2023
The Pulp and Paper Industry Pension Plan |  | P085324 |  | April 30, 2029 |  | Yes |  | Yes |  | Yes

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