FINANCIAL SERVICES TRIBUNAL  
Citation: Crosby Canada Inc. v. Ontario (CEO of FSRA)  
2022 ONFST 11  
FST File No. P0945-2021  
Date: 2022/06/23  
IN THE MATTER OF the Pension Benefits Act, R.S.O. 1990, c. P.8, as amended (the “Act”),  
and, in particular, sections 78, 79 and 89 of the Act;  
AND IN THE MATTER OF the Notice of Intended Decision (“NOID”) regarding FKI Industries  
Canada Limited Group Pension Plan, Registration Number 0561084 (the “Plan”), dated June  
16, 2021, issued by the Head, Pension Plan Operations and Regulatory Effectiveness by  
delegated authority from the Chief Executive Officer of the Financial Services Regulatory  
Authority of Ontario;  
AND IN THE MATTER OF a Request for Hearing in accordance with subsection 89(6) of the  
Act.  
B E T W E E N:  
CROSBY CANADA INC.  
APPLICANT  
and  
CHIEF EXECUTIVE OFFICER of the  
FINANCIAL SERVICES REGULATORY AUTHORITY  
RESPONDENT  
BEFORE:  
Bethune Whiston  
Chair of the Panel and Vice-Chair of the Tribunal  
Caroline Hunt  
Member of the Panel and Member of the Tribunal  
Martin Guest  
Member of the Panel and Member of the Tribunal  
APPEARANCES:  
For the Applicant – Jennifer Agnew, legal counsel (Brown Mills Klinck Prezioso LLP)  
For the Chief Executive Officer – Markus Kremer and Alex Kim, legal counsel (Borden Ladner  
Gervais LLP)  
DATE HEARD (VIA MICROSOFT TEAMS VIDEO CONFERENCE):  
April 1, 2022  
REASONS FOR DECISION  
I.  
INTRODUCTION  
[1]  
This case focusses on one specific issue: Do the documents that create and support the  
Plan and its associated pension fund provide for the payment of surplus to the employer, which  
is also the Applicant, in the particular circumstances of the case? For the reasons that follow,  
our answer to that question is “yes”.  
[2]  
The withdrawal of surplus1 assets from pension plans in Canada has been a challenging  
issue for those administering, participating in, and making decisions about pension plans for  
approximately 40 years. In Ontario, the Act has been amended several times to clarify the use  
of surplus and currently provides detailed rules about withdrawals. There have been numerous  
decisions of the courts and several decisions of this Tribunal that address surplus withdrawals in  
various circumstances. It might be expected that the rules would be fairly clear by this time,  
however, this case brings forward a unique set of circumstances that again require considered  
thought and resolution.  
[3]  
The key issue in this case is what is required for a pension plan text t  
“incorporated  
by reference” in a trust agreement. In this case, the parties agree on many of the facts, and  
they agree on many of the primary legal principles that apply. They do, however, disagree on  
how to interpret the phrase “incorporated by reference” in this context. Consequently, the  
parties disagree on which Plan documents the Tribunal can look to in order to determine  
entitlement to surplus, and thus to determine whether the Applicant is entitled to withdraw the  
surplus in the Plan.  
[4]  
Counsel for both parties offered lengthy and careful analysis of the texts of a variety of  
documents related to the Plan and the panel appreciated the clarity with which they presented  
their arguments. There was no disagreement on two key facts: first, the Plan texts specifically  
permit the payment of surplus to the Applicant; and second, the texts of the trust agreements  
governing the Plan do not specifically address the treatment of surplus money within the Plan.  
The disagreement between the Applicant and the Respondent turns on whether, as a matter of  
law, the trust agreements must be read on their own, without regard to the Plan texts, in respect  
of surplus entitlement, or whether the trust agreements must be read in conjunction with the  
Plan texts.  
[5]  
If the terms of the Plan texts are “incorporated by reference” in the trust agreements,  
then we consider the provisions of both sets of documents to determine the entitlement to  
surplus. If, on the other hand, the terms of the Plan texts are not “incorporated by reference” in  
the trust agreements, then we consider only the provisions of the trust agreements to determine  
the entitlement to surplus. The Respondent urged us to adopt a stricter and narrower approach,  
which would require us to focus only on the most recent trust agreements and to ignore the Plan  
texts, on the basis that the Plan texts are not, as a matter of law, “incorporated by reference”  
into the trust agreements entered into by the company subsequent to the original trust  
agreement. The Applicant argued for a broader approach, whereby we should read the Plan  
1 The term surplus as it relates to pension plans is a very technical concept that can for our purposes, on  
an ongoing basis or on plan wind up, be considered to be the excess of plan assets over plan liabilities  
and expenses subject to any further restrictions of the applicable pension legislation.  
2
texts and the trust agreements, together, as an integrated whole, on the basis that the terms of  
the Plan texts are, as a matter of law, “incorporated by reference” into the trust agreements.  
II.  
ISSUES AND DECISION  
[6]  
The issues to be determined by the Tribunal, as agreed to by the parties, are:  
1. Do the documents that create and support the Plan and its associated fund provide  
for the payment of surplus to Crosby Canada Inc. (the successor to FKI Industries  
Canada Limited) (“Crosby”), on the partial wind up of the Plan effective December  
24, 1999, within the meaning of section 77.11 of the Act and the applicable case  
law?  
2. Based on the answer to issue (1), what order should the Chief Executive Officer (the  
“CEO”) of the Financial Services Regulatory Authority of Ontario (“FSRA”) be  
directed to make?  
[7]  
Following our review of the facts and documentation agreed to by the parties, the  
arguments proposed by the parties and our analysis of the case law and authorities filed by the  
parties in support of their conflicting positions, we accept the Applicant’s arguments. The Plan  
documents provide for the payment of surplus to the Applicant. The CEO of FSRA should take  
whatever steps are appropriate to withdraw its NOID and should approve Crosby’s application  
seeking the CEO’s consent to the payment of surplus in respect of the partial wind up of the  
Plan as it relates to the Mathews Conveyer division.  
[8]  
III.  
[9]  
The background, legal framework and our analysis follow.  
BACKGROUND  
This was an unusually straightforward hearing: there were no witnesses; the only  
evidence submitted for our consideration was contained in an Agreed Statement of Facts  
(“ASF”) and an Agreed Book of Documents (“ABD”), which, together, totalled approximately 500  
pages; and, as we have previously noted, there was no disagreement about the facts or about  
the primary legal principles applicable to the case.  
A.  
The Facts & Key Documents  
[10]  
We have summarized below, the facts and key documents as agreed to by the parties in  
the ASF:  
a) Crosby, which is the Applicant, became the administrator of the FKI Industries Canada  
Limited Group Pension Plan through a series of transactions beginning in 1987, when  
Dominion Chain Inc. acquired Mathews Conveyor Company of Canada Limited  
(“Mathews Conveyor”). A number of corporate transactions in the years following  
resulted in Dominion Chain Inc. becoming known first as Babcock Industries Canada  
Inc. (“Babcock”), then as FKI Industries Canada Limited (“FKI”), and finally as Crosby  
Canada Inc.  
b) Following the acquisition of Mathews Conveyor, Babcock (as Crosby was then known)  
established the Pension Plan for Salaried Employees of Mathews Conveyer effective  
May 28, 1987 (“Prior Plan”). The Prior Plan was a defined benefit pension plan  
3
established to provide pension benefits to salaried employees employed at the Mathews  
Conveyor division who were not represented by a union.  
c) In conjunction with the establishment of the Prior Plan, Babcock adopted a plan text for  
the Prior Plan effective May 28, 1987 (“Prior Plan Text”). The Prior Plan Text was  
subsequently amended pursuant to three separate amendments dated July 6, 1993,  
September 6, 1994, and June 8, 1998.  
d) Upon establishment of the Prior Plan, the Prior Plan was funded pursuant to a trust  
agreement between Babcock and the National Trust Company Limited (“National Trust”)  
dated May 28, 1987 (“Original Trust Agreement”).  
e) FKI (as Crosby was then known) entered into an amended and restated trust agreement  
with National Trust for the Prior Plan on April 1, 1993 (“1993 Trust Agreement”). The  
1993 Trust Agreement amended and restated the Original Trust Agreement in its  
entirety.  
f) Canada Trust Company replaced National Trust as the trustee under the 1993 Trust  
Agreement on July 3, 1996.  
g) FKI entered into a Participating Trust Agreement with CIBC Mellon Trust Company  
(“CIBC Mellon”) for the Prior Plan on June 30, 1999, which replaced the 1993 Trust  
Agreement in its entirety.  
h) On July 12, 1999, but effective December 31, 1997, FKI merged the Prior Plan with the  
FKI Industries Canada Limited Group Pension Plan (“FKI Plan”). The FKI Plan was a  
separate registered pension plan maintained by FKI at that time. In conjunction with the  
merger of the Prior Plan with the FKI Plan, FKI adopted an amended and restated FKI  
Plan text effective December 31, 1997 (“FKI Plan Text”).  
i) As of December 31, 1997, the FKI Plan was funded pursuant to a Participating Trust  
Agreement between FKI and CIBC Mellon dated June 30, 1999 (“1999 FKI Plan Trust  
Agreement”).  
j) On October 27, 1999, FKI announced the closing of the Port Hope, Ontario operations of  
its Mathews Conveyor division. As a result of this closure, a partial wind-up of the FKI  
Plan occurred effective December 24, 1999 (“Mathews Conveyor Partial Wind-Up”),  
which impacted six members of the FKI Plan (“Impacted Members”).  
k) An actuarial valuation report for the Mathews Conveyor Partial Wind-Up was prepared  
and filed with the Superintendent of Financial Services (“Superintendent”) at the  
Financial Services Commission of Ontario (“FSCO”)2.  
l) Following payment of the benefit entitlements to all Impacted Members, surplus  
remained in the FKI Plan fund (“FKI Plan Fund”) relating to the Matthews Conveyor  
Partial Wind-Up (“Surplus”), which was estimated at $215,300 as of December 24, 1999.  
2 Effective June 8, 2019, FSCO transitioned into a new regulatory body called the Financial Services  
Regulatory Authority of Ontario. On that date, FSRA assumed all of FSCO’s existing regulatory and  
enforcement responsibilities under the Financial Services Regulatory Authority of Ontario Act, 2016 [S.O.  
2016, c.37, Sched. 8] and the Respondent replaced the Superintendent.  
4
Subsequent valuation reports increased the estimated Surplus to $288,200 (as of March  
31, 2007), and then to $317,900 (as of December 31, 2015).  
m) Crosby fully terminated the FKI Plan effective December 31, 2012.  
n) Crosby subsequently filed an application with the Superintendent dated May 17, 2016,  
for consent to the payment of the Surplus in respect of the Mathews Conveyor Partial  
Wind-Up to Crosby, pursuant to s. 79 of the Act and s. 28.1 of Regulation 909 under the  
Act (“Surplus Application”). The Surplus Application also included applications for  
consent to the payment of surplus for other partial wind-ups of the FKI Plan.  
o) The Surplus Application stated that Crosby is entitled to the Surplus for the Mathews  
Conveyor Partial Wind-Up (along with surpluses for other prior partial wind-ups of the  
FKI Plan) based on the current and historical FKI Plan and FKI Plan Fund documents in  
accordance with s. 77.11 of the Act.  
p) On June 16, 2021, the Head, Pension Plan Operations and Regulatory Effectiveness  
(the “Head”), by delegated authority from the CEO of FSRA, issued a NOID regarding  
the Surplus Application which indicated that the Head intended to refuse to consent to  
the payment of surplus in respect of the partial wind up of the Plan as it relates to the  
Mathews Conveyer division of the company.  
q) The NOID clearly describes the critical issue at the heart of this case; the NOID said, in  
effect, that:  
(a) the documents that create and support the FKI Plan and the FKI Plan Fund do not  
authorize payment of the Surplus to Crosby; because,  
(b) although the Prior Plan Text and FKI Plan Text (the “Plan Texts”) authorize  
payment of the Surplus to Crosby,  
(c) the 1993 Trust Agreement and the 1999 FKI Plan Trust Agreement (the “Trust  
Agreements”) do not incorporate the applicable plan text provisions into the terms  
of the trust3, and  
(d) the Trust Agreements do not provide that Crosby is entitled to the Surplus.4  
3 In fact, there are two trust agreements referred to as 1999 trust agreements in Appendix B and both  
described in the section of our decision titled “Facts and Key Documents” above. The relevant provisions  
of these two trust agreements are identical, therefore it is not significant that the NOID does not address  
both 1999 trust agreements.  
4 In other words, the Plan Texts authorize paying the Surplus to Crosby, but the “Trust Agreements”,  
which are defined in the NOID to exclude the Original Trust Agreement, are silent on the issue of  
entitlement to surplus. The Original Trust Agreement, as we will describe below, specifically declared that  
a copy of the Prior Plan formed part of its terms, but the Trust Agreements do not. The critical issue for  
this Tribunal is how to properly interpret these documents in the context of the applicable legislation and  
case law.  
5
r) Crosby filed the Request for Hearing before the Tribunal with respect to the NOID on  
July 15, 2021.  
s) The parties also included some facts in the ASF related to the amount of surplus which  
existed at different dates and also some references to communications between the  
parties that occurred between May 17, 2016, when the Surplus Application was filed,  
and June 16, 2021, when the NOID was issued.5  
B.  
Excerpts From Key Documents  
[11]  
The ASF included the pension plan text and trust agreement language the parties  
considered relevant to determining entitlement to surplus. For the sake of thoroughness, as  
interpretation of pension plan documentation often relies heavily on the specific wording of the  
relevant documents, we have included this language in Appendix A (Pension Plan Text  
Excerpts Highlighted by the Parties) and Appendix B (Trust Agreement Excerpts Highlighted by  
the Parties) to our decision.  
[12]  
At the Hearing, lawyers for both the Applicant and the CEO spent a significant amount of  
time reviewing and analyzing these excerpts. In our opinion, it is not necessary to engage in the  
body of our decision in an unduly fine parsing of these lengthy and technical documents,  
because the fundamental issue is relatively straightforward. For the reasons set out below, we  
believe that a relatively simple summary of portions of these materials is sufficient.  
[13]  
The documents that create and support the Plan fall into two basic categories: (i) the  
Plan Texts as amended from time to time; and (ii) trust agreements. The Plan Texts provide a  
description of the Plan and how it works. The Plan itself is funded by trusts, which are  
established by formal trust agreements.  
[14]  
The Prior Plan Text was amended three times, but its key features (for the purposes of  
this case) remained essentially unchanged:  
(a) The Prior Plan Text required that the Plan be funded by way of a trust, which was  
established by the Original Trust Agreement;  
(b) The Prior Plan Text also provides that the employer (i.e., the Applicant) is entitled to  
any surplus remaining upon termination of the Plan; and  
(c) The exact wording of several provisions of the Prior Plan Text relating to Plan  
termination varies, depending on the context, but a typical clause (from the Prior  
Plan Text, s. 21(c)) reads:  
If, after satisfaction of all liabilities of the Plan, there should remain assets in the  
Trust Fund, such assets shall revert to the Company or be used as the  
Company may direct, subject to the prior written approval of the Pension  
Commission of Ontario, the provisions of the Income Tax Act and the rules of  
Revenue Canada, Taxation as amended from time to time. [Emphasis added]  
5 In her comments, Counsel for the Applicant expressed some concern on behalf of the Applicant  
respecting the delay in the issuance of the NOID, and the Respondent made some comments in this  
regard, but this was not before us as an issue to decide and we have not addressed this in our decision.  
6
[15]  
On December 31, 1997, the Prior Plan was merged with the FKI Plan, but the relevant  
features of the Plan Texts, including the provisions regarding surplus, remained essentially the  
same.  
[16]  
In addition to registering the Plan Texts, which describe the terms of the Plan, the  
employer also entered into trust agreements to appoint a trustee and establish trust funds to  
support the Plan. There were four different trust agreements executed in connection with the  
Plan. Although there were many similar clauses among the various trust agreements, there was  
at least one significant difference, which the CEO says is critically important.  
[17]  
All of the trust agreements contain a variety of conditions that limit the ways in which the  
assets in the trust fund may be used. The nature of most of these conditions is that the assets  
cannot be used for any purpose except for those set out in the trust agreements and in the Plan.  
The general nature of these conditions is the same across the various trust agreements. The  
exact wording of the trust agreements varies, depending on the particular context, but a typical  
clause (from the 1993 Trust Agreement, s. 2.1) reads:  
At no time shall any part of the Fund be used for or diverted to purposes other than  
those pursuant to the terms of this Agreement. The Company shall be responsible for  
ensuring that no Instructions or other directions given to the Trustee shall require  
the Trustee to use or divert any part of the Fund for purposes other than those  
which are in accordance with the Plan. [Emphasis added]  
[18]  
Where the language of the various trust agreements varies is in how they refer to the  
provisions of the Plan Texts and, more specifically, whether they explicitly incorporate the Plan  
Text as part of the trust agreement, or not. The Original Trust Agreement explicitly incorporates  
the Prior Plan Text’s terms (in Article IX(6)) by saying:  
A copy of the Plan, as delivered by the Company to the Trustee and retained by the  
Trustee in its records, or as it may be amended from time to time, is declared to form  
part hereof.  
The other trust agreements do not include this language. All of the trust agreements relating to  
the Plan maintain the general conditions and types of Plan references noted in paragraph [17]  
above, but only the Original Trust Agreement includes language which explicitly declares that  
the Prior Plan Text forms a part of the agreement. The CEO says that this difference – the  
failure to explicitly declare the Plan texts to be a part of the Trust Agreements – is fatal to the  
Applicant’s request to be paid the Surplus in the Plan.  
IV.  
LEGAL FRAMEWORK  
[19]  
Subsection 78(1) of the Act requires that the CEO of FSRA consent before surplus can  
be paid from a pension plan fund to an employer.  
[20] Subsection 79(3.1) of the Act requires that the following criteria be met in order for the  
CEO of FSRA to provide consent where a plan is being partially wound-up:  
a. the CEO of FSRA must be satisfied that the plan has a surplus;  
b. provision must have been made for the payment of all of the plan’s liabilities as  
calculated for purposes of the termination of the plan;  
7
c. the payment of surplus to the employer must be authorized either as provided in  
section 77.11 of the Act or by a court order; and  
d. the applicant and the plan must comply with all other requirements prescribed under  
the Act in respect of the payment of surplus.  
[21]  
The parties agree that the criteria set out in paragraphs (a), (b), and (d) immediately  
above have been met.  
[22]  
The sole remaining issue is whether the condition set out in paragraph (c) has been met,  
namely whether section 77.11 of the Act has been satisfied (given that Crosby’s Surplus  
Application is not based on a court order). Subsection 77.11(1) of the Act provides that the  
documents that create and support the plan and related fund govern an employer’s entitlement  
to surplus.6 Consequently, it is necessary to determine exactly what materials are included in  
“the documents that create and support the plan and related fund” and how they should be  
interpreted. That question, the parties proposed, as a result of the prior case law related to  
surplus withdrawal cases in Canada, requires a determination of when the provisions of the plan  
text can be said to be “incorporated by reference” into the plan’s trust agreement.  
[23]  
FSRA Policy S900-5127 (entitled “Application by Employer for Payment of Surplus on  
Wind Up of a Pension Plan”) requires that, in order to be entitled to withdraw surplus, an  
employer must provide a legal analysis setting out its entitlement based on all plan documents  
from the plan’s inception (referred to in the FSRA policy as an “Historical Analysis”). This  
Historical Analysis must be undertaken in accordance with the common law.  
[24]  
The leading common law case on the issue of whether an employer is entitled to surplus  
based on the documents that create and support a pension plan and fund is the decision of the  
Supreme Court of Canada in Schmidt v. Air Products Canada Ltd., [1994] 2 SCR 611  
(“Schmidt”).  
[25]  
In Schmidt, the Court set out a three-step process to follow when determining whether  
an employer is entitled to surplus upon termination of a plan:  
a. Determine whether the fund is impressed with a trust;  
b. If the fund is impressed with a trust, it is governed by the terms of that trust, whether  
contained in the trust’s documentation or arising at common law; and  
c. If the terms of the trust conflict with the plan text provisions, then the terms of the  
trust must prevail.  
6 Counsel for the CEO argued that s. 77.11(2) and (3) were also relevant to our considerations. Consider  
section 77.11(3), which reads as follows: “If a pension plan does not provide for payment of surplus to the  
employer on the wind up of the pension plan, the pension plan shall be construed to require that surplus  
accrued after December 31, 1986 shall be distributed proportionately on the wind up of the pension plan  
among members, former members, retired members and other persons entitled to payments…” However,  
we have found that the Plan does provide for payment of surplus to the employer and, therefore, this  
need not be further addressed.  
7 FSCO Policy S900-512 has been adopted, with a minor modification in the name, by FSRA as Guidance  
PE0163ORG.  
8
In this case, there is no disagreement about the applicability of the Schmidt test; the parties also  
agree that Crosby’s Plan is impressed with a trust, which is governed by the trust agreements.  
[26]  
In addition to the three-step process described above, Schmidt provided critical  
guidance about when one can look to the provisions of the plan text, in addition to the trust  
agreement, in connection with distribution issues. The Court held that:  
The terms of the pension plan are relevant to distribution issues only to the extent that  
those terms are incorporated by reference in the instrument which creates the  
trust. The contract or pension plan may influence the payment of trust funds but its  
terms cannot compel a result which is at odds with the existence of the trust.  
[Emphasis added]  
[Schmidt at 639-640]  
[27]  
In our view, consistent with the view of both parties, the critical phrase in the passage  
above is “incorporated by reference”. We have already observed that the Plan Texts, in this  
case, clearly assign the Surplus to Crosby. On the other hand, we have noted that the Trust  
Agreements, both (or, more accurately, all three) of which followed the Original Trust  
Agreement, are silent on the entitlement to Surplus. If we can look to the Plan Texts, then the  
answer is clear: Crosby succeeds, and Crosby will be entitled to the Surplus. In contrast, if we  
cannot consider the Plan Texts, then there is nothing in the Trust Agreements themselves to  
specifically entitle Crosby to the Surplus: its application must fail, and Crosby will need to find  
another way to deal with the Surplus. Thus, the case turns on the question of what is required  
in order for the Plan Texts to be “incorporated by reference” in the Trust Agreements.  
V.  
ANALYSIS AND DISCUSSION OF FURTHER CASE LAW  
[28]  
Proceedings before the Tribunal are de novo, meaning “…that the Tribunal hears the  
evidence relevant to the issues and makes a decision on the merits of the matter without regard  
or deference to the prior decisions of either the Superintendent or the Plan Administrator. In  
other words the prior decisions of the Superintendent…are not relevant - the Tribunal hears the  
matter afresh and all relevant evidence upon which the parties seek to reply [sic] in support of  
their positions must be submitted to the Tribunal for fresh consideration.”8  
[29]  
In this case, therefore, the Tribunal must review the material and arguments submitted  
by the parties and arrive at its own conclusion as to the correct result, regardless of the prior  
decision of either the Superintendent of FSCO or the CEO of FSRA.  
[30]  
Counsel to the CEO pointed out, correctly, that the onus in this case is on Crosby, as the  
Applicant, to prove that it is entitled to the Surplus. The test is strict, and the Tribunal must deny  
the Application unless Crosby’s rights are clear. On balance, we find that Crosby has met this  
test.  
VI.  
THE RESPONDENT’S POSITION  
[31]  
The CEO’s position was that we should distinguish between two different types of  
clauses in the Trust Agreements, referred to by counsel for the CEO as (1) “incorporation  
8 Roubinchtein v. Ontario (CEO of FSRA), 2020 ONFST 6 at paras 16(d)-(e).  
9
clauses”; and (2) “limiting clauses”. Incorporation clauses are provisions, like the one referred  
to in paragraph [18] above, in which a plan text is specifically made part of a trust agreement.  
Limiting clauses are provisions, like the one referred to in paragraph [17], above, in which rights  
set out in a trust agreement are made subject to limits contained in plan texts.  
[32]  
The CEO’s position can be summarized as follows:  
a) A plan text is “incorporated by reference” into a trust agreement only where there is  
an “incorporation clause”, and the existence of “limiting clauses” is not sufficient to  
“incorporate by reference” a plan text; and  
b) The Original Trust Agreement incorporated the Prior Plan Text, because it contained  
an explicit incorporation clause; but  
c) The subsequent Trust Agreements did not incorporate the Plan Texts, because none  
of them included an incorporation clause, even though they all included various types  
of limiting clauses.  
[33]  
We do not accept the position put forward by the CEO in paragraph [32](a). It is true  
that the Trust Agreements which followed the Original Trust Agreement did not have the same  
explicit language incorporating the Plan Texts. The Respondent argued that the exclusion of this  
language must be considered to be intentional9, but intentional for what purpose? There was no  
evidence provided respecting the reason for the initial inclusion or eventual exclusion of this  
language, and, as we have found that explicit incorporating language is not necessary in the  
circumstances of this case, we do not find it necessary to determine this point.  
[34]  
It was not suggested to us that the concepts of “incorporation clauses” and “limiting  
clauses” has been endorsed by this Tribunal or any court in the context of a surplus entitlement  
case (or in any other context, as far as that goes), and we do not believe it is legally binding  
upon us. We do not believe the distinction is helpful in the context of interpreting the  
“incorporated by reference” language contained in Schmidt. Instead, we prefer a  
straightforward approach, an approach that takes the documents at their face value, without  
trying to ascribe some hidden intent. An approach where the Trust Agreements are given  
precedence if there is a conflict, but where the Plan Texts are considered inherently relevant  
and, if their terms do not conflict with the terms of the trust, are able to provide guidance where  
the context permits or requires.  
[35]  
If the Supreme Court of Canada (“SCC”) in Schmidt had intended to require an explicit  
incorporation clause, it could have done so. We note the language at page 639 of the Schmidt  
decision does not use the word “explicitly” when it notes that the “terms of the pension plan are  
relevant to distribution issues only to the extent that those terms are incorporated by  
reference…” But the term “explicitly” is used later in the decision, when, in addressing  
revocation powers, Mr. Justice Cory for the majority notes at page 647, “A revocation power  
must be explicitly reserved in order to be valid.” [Emphasis added]  
[36]  
We are also persuaded to the Applicant’s position by the fact that neither the trust  
agreements nor the plan texts have ever included any language that the courts have found  
9 As authority for this proposal the Respondent referred to Human Logistics Inc. v. PAL Airlines, 2018  
ONSC 7433, at para 81(v).  
10  
establish entitlement to surplus on behalf of the members of a pension plan. There have been  
many cases where historical pension plan documentation has included provisions that state that  
the employer’s contributions are irrevocable, or that no part of the fund can revert to the  
employer, or that no part of the fund can be used for purposes other than for the exclusive  
benefit of members. In the case at hand, the plan documents never included any of that type of  
language or any other language that could be considered inconsistent with the language in the  
Plan Texts specifying that the company was entitled to any surplus in the Plan.  
[37]  
In Canada, registered defined benefit pension plans, including the Plan in this case, are  
generally founded upon both a plan text and a trust agreement. Where the trust agreement  
clearly refers to the plan text those references will, in appropriate cases, be sufficient to  
consider the terms of the plan text to be “incorporated by reference” in the trust agreement. In  
our opinion there is no special formula of words needed to create an incorporation by reference.  
Rather, ordinary “references” from one document to another can be sufficient. In the case at  
hand, the argument in favour of the company entitlement to the surplus is very strong, as there  
are numerous references to the distribution provisions of the Plan Texts in the Trust  
Agreements. Consider, for example, section 16.3 of the 1999 Prior Plan Trust Agreement10,  
“…the Trustee shall distribute the assets of the Fund…as directed by the Company in  
accordance with the terms of the Plan…”  
[38]  
In cases where the terms of the plan text have been incorporated by reference into a  
trust agreement in the way we have described, we think the two documents should be read  
together, as an integrated whole. Further, we believe that the documents should be interpreted,  
if possible, to find harmony, rather than conflict and inconsistency. We do not accept in this  
case the suggestion that the Trust Agreements should be read in isolation, without regard to the  
Plan Texts in respect of entitlement to surplus.  
[39]  
The strict interpretive approach urged upon us by the CEO can be seen in a previous  
decision of this Tribunal in Independent Order of Foresters v. Ontario (Superintendent Financial  
Services), 2002 ONFST 19 (“IOF”), which also involved an application by an employer to be  
paid surplus from a pension plan, however in that case the application was made in furtherance  
of an agreement between the plan members and the employer. In the IOF case, the majority  
held that “in the absence of an explicit incorporation by reference, the terms of the Plan Text  
cannot be used to read … IOF’s rights as a beneficiary … into the Trust Agreement.” We do not  
accept the CEO’s submissions on this point, and we do not feel bound by the IOF decision. We  
respectfully note that higher decision-making authorities have issued subsequent decisions that  
we find more persuasive, in particular to the case at hand. Three of these are addressed below.  
VII.  
THE APPLICANT’S POSITION  
[40]  
We accept the submissions of Counsel to the Applicant who argued that the terms of a  
plan text may be “incorporated by reference” into a trust agreement without needing to be  
specifically made a part of the trust agreement. This is the approach set out in Burke v.  
Hudson's Bay Company, 2008 ONCA 394, upheld at 2010 SCC 34, which, as in this case,  
involved a dispute over the entitlement to surplus in a pension plan, albeit the dispute in that  
case was related to a situation where the plan was ongoing, not terminated, and therefore there  
was no crystallization of the surplus. Regardless, the decision in Burke provides an example of  
10 The same wording is also found in the Trust Agreement that existed on the date of the Mathews  
Conveyor Partial Wind-Up.  
11  
how to apply the Schmidt framework. The facts in Burke were similar to this case: the plan text  
provided that any surplus could be paid to the employer; but the trust agreement was silent on  
the entitlement to any surplus.  
[41]  
In Burke, the Ontario Court of Appeal articulated the law eloquently:  
Reading the Plan text and Trust Agreement as an “integrated whole” is consonant also  
with the direction of the Supreme Court of Canada in Buschau v. Rogers  
Communications Inc., [2006] 1 S.C.R. 973 at para. 2, where Deschamps J., writing for  
the majority, noted that a pension trust agreement is not a “stand-alone” instrument.  
[paragraph 43]  
We believe the approach described above is the correct way to interpret the documents in this  
case.  
[42]  
In Burke, unlike this case, the trust agreement did specifically incorporate the plan text  
into the trust agreement, but we accept the submissions of the Applicant’s counsel that the  
Ontario Court of Appeal did not rely exclusively upon the explicit “incorporation clause” to find  
that the plan text was incorporated by reference. The Burke trust agreement, like those of  
Crosby, included a number of references to the plan text, and, as the Court referred to these  
provisions, it is reasonable to infer that the Court found the existence of those other provisions  
persuasive in determining that the two documents should be interpreted with reference to each  
other.  
[43]  
The Supreme Court of Canada upheld the Burke judgment, and said, in its own opinion,  
that: “The pension plan text and the trust agreement have to be read together.” [Burke,  
supra, paragraph 79.] We accept that proposition, both as a matter of common-sense, and as a  
statement of the law to which this Tribunal is bound. Where a trust agreement explicitly  
incorporates a plan text into the trust agreement, then it is clear that the two documents must be  
read as one. But we do not believe that it is only where such an explicit “incorporation clause”  
exists that the pension plan text and related trust agreement should be read together to  
determine how to administer the plan; in appropriate circumstances, we believe plan text  
provisions may be “incorporated by reference” even without an explicit clause incorporating the  
plan text in its entirety.  
[44]  
The interpretative approach set out in the Court of Appeal decision in Burke was  
followed in Sybron Canada Ltd. v. RBC Dexia Investor Services Trust, 2008 59110 (Sup.  
C.J. - Ont.)11, despite the fact that there was no provision in two separate trust agreements  
purporting to explicitly incorporate the terms of the plan, at para. 43:  
11 The Sybron case was a complex case involving several issues. It differed significantly from the case at  
hand in that the trust agreement specifically provided for the return of surplus assets to the employer.  
However, the plan text also addressed ownership of surplus assets, using different wording, and the plan  
text wording created some uncertainty in that respect. Burke was cited by the Court and the Court went  
on to address the language in the plan text, concluding that it was possible to construe the surplus-related  
wording of the plan text in a manner that created harmony between the plan text and the trust agreement  
(while also acknowledging that the clear intent of the trust agreement should prevail over any ambiguity in  
the plan).  
12  
…a pension trust agreement is not a stand-alone instrument and the plan and trust  
agreement should be read as an integrated whole. As the Court of Appeal noted in  
Burke, above, it is a basic principle of contract interpretation that provisions should be  
interpreted, if possible, so as to find harmony, rather than conflict and inconsistency.  
[45]  
Each pension surplus case must be decided on its own facts. In our opinion, where a  
trust agreement contains references to the plan text and in particular, where the trust agreement  
contains references to the distribution provisions of the plan, for example requiring payments  
out of the fund to be made, “in accordance with the Plan”12, then the two documents should be  
read together in respect of the distribution of the trust funds as an integrated whole, in a way  
that seeks to interpret them harmoniously, and without conflict or inconsistency. If there is a  
conflict between the plan text and the trust agreement, then Schmidt requires that the trust  
agreement must prevail, but where there is no conflict – such as in this case – then we believe it  
is clearly appropriate to consider both documents, together.  
[46]  
In this case, all of the Trust Agreements contain a number of references to the Plan  
Texts and all of the Plan Texts contain references to the Trust Agreements. Therefore, in our  
opinion, it seems clear that the two sets of documents were intended to be read together, and  
that is the approach that we have adopted. To do otherwise seems to this Tribunal to be an  
artificial and unnatural interpretation, which could lead to an unwarranted windfall for some or all  
of the Impacted Members, who could never have had a reasonable expectation of being entitled  
to any Surplus.13 In our opinion, the approach of reading the Plan Texts and Trust Agreements  
as an integrated whole allows us to arrive at a correct and reasonable outcome.  
[47]  
Using the process mandated by Schmidt, as applied by Burke and Sybron, we find that:  
a. The Plan is impressed with a trust, and is therefore governed by the terms of the  
Trust Agreements and applicable common law;  
b. The Trust Agreements incorporate by reference the terms of the Plan Texts, and the  
two documents should be read together, as an integrated whole, in a way that seeks  
to interpret them harmoniously, and without conflict or inconsistency;  
c. The Plan Texts clearly entitle the Applicant to the Surplus and have always done so;  
d. The Trust Agreements have no provisions which conflict with that entitlement and  
have never included any language that the courts have found establish entitlement to  
surplus on behalf of the members of a pension plan; and  
e. Crosby has met the onus to prove its entitlement to the Surplus.  
VIII. ORDER  
[48] The Tribunal hereby orders that:  
a) The Chief Executive Officer of the Financial Services Regulatory Authority of Ontario  
(“CEO”) not carry out his Notice of Intended Decision regarding FKI Industries  
12 A requirement of several provisions of each of the Trust Agreements.  
13 On this point, although it is not determinative, we note that no Impacted Members sought party status  
or attended the hearing.  
13  
Canada Limited Group Pension Plan, Registration Number 0561084, dated June 16,  
2021, issued, by delegated authority, by the Head, Pension Plan Operations and  
Regulatory Effectiveness; and  
b) The CEO approve the application dated May 17, 2016, made by Crosby, for consent  
to the payment of the Surplus in respect of the Mathews Conveyor Partial Wind-Up  
to Crosby, pursuant to s. 79 of the Act and s. 28.1 of Regulation 909 under the Act.  
Dated at Toronto, this 23rd day of June, 2022.  
“Bethune Whiston”  
Bethune Whiston  
“Caroline Hunt”  
Caroline Hunt  
“Martin Guest”  
Martin Guest  
14  
APPENDIX A  
Pension Plan Text Excerpts Highlighted by the Parties  
Prior Plan Text  
Since inception, the Prior Plan Text required that the Prior Plan be funded by way of a trust. The  
Prior Plan Text provided the following with respect to the establishment of the Prior Plan fund  
(“Prior Plan Fund”):  
SECTION 2 DEFINITIONS  
The following words and phrases shall, for the purposes of the Plan, have the following  
meanings respectively, unless a different meaning is plainly required by the context. […]  
“Trust Agreement” shall mean the agreement entered into between the Company and  
the Trustee establishing the Trust Fund.  
“Trust Fund” shall mean the assets for the time being in the hands of the Trustee under  
the terms of the Trust Agreement and to which contributions are made, and from which  
pension and other benefits payable under the Plan are to be paid.  
“Trustee” shall mean National Trust Company or such other trust company or successor  
trustee as the Company may appoint from time to time. […]  
SECTION 4 TRUST FUND  
(a)  
The Company will establish and maintain during the terms of the Plan, a  
Trust Fund for the purpose of providing the benefits called for by this Plan. The  
Trust Fund shall be administered and invested in accordance with the provisions of the  
Trust Agreement, and in compliance with the provisions of the Pension Benefits Act and  
any other applicable legislation concerning the investment of pension funds. […]  
SECTION 5 ADMINISTRATION OF THE PLAN  
(a)  
The Plan shall be administered by the Company which […] shall conclusively  
decide all matters relating to the administration, interpretation, and application of the  
Plan, consistently, however, with the text of the Plan and the terms of the Trust  
Agreement. […]  
[emphasis added]  
Also since inception, the Prior Plan Text provided that the employer (being Crosby) is entitled to  
any surplus remaining in the Prior Plan Fund upon termination of the Prior Plan. More  
specifically, the Prior Plan Text provided the following with respect to entitlement to surplus  
upon termination of the Prior Plan:  
SECTION 11 CONTRIBUTIONS […]  
(b)  
Contributions by the Company […]  
Subject to the provisions of the Pension Benefits Act, any surplus determined by  
actuarial valuation may be applied in whole or part to reduce the contributions of the  
15  
Company otherwise required under the Plan, or may to the extent allowed and  
subject to any conditions or approval procedures under the Pension Benefits Act,  
be returned to the Company. […]  
SECTION 21 FUTURE OF THE PLAN […]  
(c)  
Should the Plan be wholly discontinued or terminated, the contributions on  
deposit in the Trust Fund shall be used to provide benefits as outlined in the Plan for the  
Members, their respective estates, beneficiaries and Spouses, in accordance with their  
respective shares of the Trust Fund through the purchase of annuity contracts from an  
insurance company licensed to do business in Canada, or by the transfer of the benefits  
to which the respective Members are entitled to the pension plans of subsequent  
employers or to approved retirement savings plans or by the continuation of the Trust  
Fund for the provision of deferred pensions as determined by the Company or by the  
payment of cash refunds, subject to the requirements of the Income Tax Act, the rules of  
Revenue Canada, Taxation and the Pension Benefits Act. If, after satisfaction of all  
liabilities of the Plan, there should remain assets in the Trust Fund, such assets  
shall revert to the Company or be used as the Company may direct, subject to the  
prior written approval of the Pension Commission of Ontario, the provisions of the  
Income Tax Act and the rules of Revenue Canada, Taxation as amended from time  
to time.  
(d)  
In the event the Company shall have been wound up or become bankrupt,  
the contributions in the Trust Fund pursuant to or for the benefits provided under the  
Plan shall be applied for the benefit of Members, their respective estates, beneficiaries  
and Spouses, in accordance with their respective shares of the Trust Fund, through the  
purchase of immediate or deferred annuity contracts from an insurance company  
licensed to do business in Canada, or by the transfer of the benefits to which the  
respective Members are entitled to the pension plans of subsequent employers, to  
approved retirement savings plans or by the continuation of the Trust Fund for the  
provision of such deferred pensions, all as determined by the liquidator or trustee in  
bankruptcy and subject to the requirements of the Income Tax Act, the rules of Revenue  
Canada, Taxation and the Pension Benefits Act. If, after satisfaction of all liabilities of  
the Plan, there should remain assets in the Trust Fund, such assets shall revert to  
the Company or be used as the Company may direct, subject to the prior written  
approval of the Pension Commission of Ontario, the provisions of the Income Tax  
Act and the rules of Revenue Canada, Taxation as amended from time to time. […]  
(f)  
Notwithstanding any other provisions of the Plan, any surplus determined  
by actuarial valuation and certified by the Actuary remains the property of the  
Company. If, at any time while the Plan continues in existence and the Actuary confirms  
that the assets of the Trust Fund exceed the actuarial liabilities of the Plan in respect of  
benefits defined in the Plan, then such surplus may be applied in whole or part by the  
Company to reduce its contribution obligations under the Plan, or may to the extent  
allowed and subject to any conditions or approval procedures under the Pension  
Benefits Act and with the prior written consent of the Pension Benefits Act and with the  
prior written consent of the Pension Commission of Ontario be refunded to the  
Company. If, in the event of the discontinuance or termination of the Plan and the  
Actuary confirms that the assets of the Trust Fund exceed the wind-up actuarial  
liabilities of the Plan, then such excess assets or surplus shall be refunded to the  
Company or used as the Company may direct provided that the Company obtains  
16  
the prior written consent of the Pension Commission of Ontario, and if the  
Company in its sole discretion elects to use all or a portion of such surplus to provide  
benefits to in respect of a Member that are in addition to benefits defined under the Plan,  
the total benefit provided to a Member shall not be greater than the maximum benefit  
permitted to be provided as identified in SECTION 12, AMOUNT OF PENSION under  
the sub-section titled Maximum Benefit Limitation and the portion of such surplus not  
used to provide additional benefits shall be refunded to the Company.  
[emphasis added]  
Amendments to the Prior Plan Text  
Amendment No. 1 (July 6, 1993) amended the Prior Plan Text to, among other things, amend  
Section 21 effective January 1, 1992 to: (i) add reference to partial wind-ups in addition to full  
plan wind-ups in subsection (c); and (ii) delete certain duplicative wording in subsection (f).  
These two changes do not substantively impact the employer’s entitlement to surplus upon  
termination of the Prior Plan under the Prior Plan Text.The other amendments included in  
Amendment No. 1 do not impact any of the Prior Plan provisions that deal with entitlement to  
surplus upon termination of the Prior Plan.  
The amendments included in Amendment No. 2 (September 6, 1994) and Amendment No. 3  
(June 8, 1998) also do not impact any of the Prior Plan provisions that deal with entitlement to  
surplus upon termination of the Prior Plan.  
FKI Plan Text  
The FKI Plan Text required that the FKI Plan be funded pursuant to a trust:  
SECTION 2 DEFINITIONS  
The following words and phrases shall, for the purposes of the Plan, have the following  
meanings respectively, unless a different meaning is plainly required by the context. […]  
“Trust Agreement” shall mean the agreement entered into between the Company and  
the Trustee establishing the Trust Fund.  
“Trust Fund” shall mean the assets for the time being in the hands of the Trustee under  
the terms of the Trust Agreement and to which contributions are made, and from which  
expenses, pension and other benefits payable under the Plan are to be paid.  
“Trustee” shall mean such trust company as the Company may appoint from time to  
time. […]  
SECTION 4 TRUST FUND  
(a)  
The Company will establish and maintain during the terms of the Plan, a  
Trust Fund for the purpose of providing the benefits called for by this Plan. The  
Trust Fund shall be administered and invested in accordance with the provisions of the  
Trust Agreement, and in compliance with the provisions of the Pension Benefits Act,  
Income Tax Act and and any other applicable legislation concerning the investment of  
pension funds. […]  
17  
SECTION 5 ADMINISTRATION OF THE PLAN  
(a) The Plan shall be administered by the Company which […] shall conclusively  
decide all matters relating to the administration, interpretation, and application of the  
Plan, consistently, however, with the text of the Plan and the terms of the Trust  
Agreement. […]  
(g)  
The Company shall direct the Trustee concerning all benefit payments which are  
to be made out of the Trust Fund pursuant to the provisions of this Plan and all  
terminations of such payments. […]  
[emphasis added]  
The FKI Plan Text also provided that the employer (being Crosby) is entitled to any surplus  
remaining in the FKI Plan Fund upon termination of the FKI Plan. More specifically, the FKI Plan  
Text provided the following with respect to entitlement to surplus upon termination of the FKI  
Plan:  
SECTION 11 CONTRIBUTIONS […]  
(c)  
Contributions by the Company […]  
Subject to the provisions of the Pension Benefits Act, any surplus determined by  
actuarial valuation may be applied in whole or part to reduce the contributions of the  
Company otherwise required under the Plan or may, to the extent allowed and  
subject to any conditions or approval procedures under the Pension Benefits Act,  
be returned to the Company. […]  
SECTION 21 FUTURE OF THE PLAN […]  
(c)  
Should the Plan be partially or wholly discontinued or terminated, the  
contributions on deposit in the Trust Fund shall be used, after provision for payment of  
expenses, to provide benefits as outlined in the Plan for the Members, their respective  
estates, beneficiaries and Spouses, in accordance with their respective shares of the  
Trust Fund through the purchase of annuity contracts from an insurance company  
licensed to do business in Canada, or by the transfer of the benefits to which the  
respective Members are entitled to the pension plans of subsequent employers or to  
approved retirement savings plans or by the continuation of the Trust Fund for the  
provision of deferred pensions as determined by the Company or by the payment of  
cash refunds, subject to the requirements of the Income Tax Act and the Pension  
Benefits Act. If, after satisfaction of all liabilities of the Plan, there should remain  
assets in the Trust Fund, such assets shall, on application by the Company, revert  
to the Company, subject to the prior written approval required under the Pension  
Benefits Act and the provisions of the Income Tax Act.  
(d)  
In the event the Company shall have been wound up or become bankrupt,  
the contributions in the Trust Fund pursuant to or for the benefits provided under the  
Plan shall be applied, after provision for payment of expenses, for the benefit of  
Members, their respective estates, beneficiaries and Spouses, in accordance with their  
respective shares of the Trust Fund, through the purchase of immediate or deferred  
annuity contracts from an insurance company licensed to do business in Canada, or by  
the transfer of the benefits to which the respective Members are entitled to the pension  
18  
plans of subsequent employers, to approved retirement savings plans or by the  
continuation of the Trust Fund for the provision of such deferred pensions, all as  
determined by the liquidator or trustee in bankruptcy and subject to the requirements of  
the Income Tax Act and the Pension Benefits Act. If, after satisfaction of all liabilities  
of the Plan, there should remain assets in the Trust Fund, such assets shall, on  
application by the Company, revert to the Company, subject to the prior written  
approval required under the Pension Benefits Act and the provisions of the  
Income Tax Act. […]  
[emphasis added]  
19  
APPENDIX B  
Trust Agreement Excerpts Highlighted by the Parties  
Original Trust Agreement  
The Original Trust Agreement for the Prior Plan was established effective May 28, 1987, and  
provided the following with respect to the establishment of the Prior Plan Fund:  
Article I  
THE FUND  
The Company hereby establishes with the Trustee a trust fund (hereinafter  
referred to as “the Fund”) consisting of such sums of money and such property  
acceptable to the Trustee, as shall from time to time by paid or delivered to the  
Trustee and the earnings and profits thereon. All such money and property, all  
investments made therewith and proceeds thereof and all earnings and profits thereon  
less payments made from the Fund shall constitute the Fund hereby created and  
established. The Fund shall be held by the Trustee in trust and be dealt with in  
accordance with the provisions of this Agreement. […]  
The Trustee hereby accepts and trusts herein set out and agrees to hold, invest,  
distribute and administer the Fund in accordance with the provisions of this Agreement.  
[…]  
[emphasis added]  
Trust agreement between Babcock Industries Canada Inc. and the National Trust  
Company made as of May 28, 1987  
The Original Trust Agreement also provided the following regarding payments out of the  
Prior Plan Fund (including upon termination of the Prior Plan and Prior Plan Fund):  
Article I  
THE FUND  
[…] At no time shall any part of the Fund be used for or diverted to purposes other  
than those pursuant to the terms of this Agreement and the Plan. […]  
ARTICLE II PAYMENTS OUT OF THE FUND  
The Trustee shall from time to time on the written directions of the Company,  
make payments out of the Fund certified by the Company to be in accordance with  
the provisions of the Plan to such persons and in such manner and in such  
amounts as may be specified in the written directions of the Company and upon  
any such payments being made, or specifically set aside for the payee, the amount  
thereof shall no longer constitute a part of the Fund. The Trustee may accept any such  
written direction and certificate as conclusive evidence of the truth of any statement  
made therein relating to the Plan or the Fund. […]  
ARTICLE VI TERMINATION AND RESIGNATION […]  
On the retirement or resignation of the Trustee, the cash, securities and other property  
then constituting the Fund, less the compensation of the Trustee and any other proper  
20  
charges against the Fund, shall be paid out, transferred or delivered by the Trustee in  
accordance with the written directions of the Company. The Trustee shall be entitled to  
rely on the certificate of the Company that such payments and deliveries of the assets of  
the Fund on the direction of the Company are in accordance with the Plan, and the  
Trustee shall be under no duty or obligation to determine whether such payments and  
deliveries of assets constitute any use of the assets of the Fund for purposes other than  
payment to or for persons entitled to benefit from payments out of the Fund under the  
terms and conditions of the Plan. […]  
ARTICLE VII EVIDENCE OF ACTS OF COMPANY […]  
All requests, directions and requisitions for the payment of monies out of the Fund and  
all certificates and other instructions and directions given by the Company to the Trustee  
shall be in writing and shall include such certification as the Trustee may require  
attesting that such requests, directions and requisitions are in accordance with the terms  
and conditions of the Plan […]  
ARTICLE IX MISCELLANEOUS […]  
5.  
This Agreement may be amended in whole or in part from time to time or be  
terminated at any time by an instrument in writing executed by the Company and the  
Trustee; provided that no such amendment shall authorize or permit any part of the Fund  
to be used for or diverted to purposes other than those specified in the Plan.  
6.  
A copy of the Plan, as delivered by the Company to the Trustee and retained by  
the Trustee in its records, or as it may be amended from time to time, is declared to form  
part hereof, but no terms or provisions of this Agreement shall be construed or  
interpreted as imposing upon the Trustee any obligation to see to the administration of or  
the carrying out of any of the terms or provisions of the Plan.  
[emphasis added]  
The 1993 Trust Agreement  
The Original Trust Agreement was subsequently amended and restated in its entirety effective  
April 1, 1993, pursuant to the 1993 Trust Agreement. The 1993 Trust Agreement stated the  
following with respect to the continuation of the Prior Plan Fund:  
Article I – DEFINITIONS  
1.1  
In this Agreement, the following terms mean: […]  
(e)  
“Fund” means the trust fund which was established for the purposes of the Plan  
and which is hereinafter administered in accordance with the terms of this Agreement.  
[…]  
ARTICLE II - CONTINUATION OF THE FUND  
2.1  
[…] The Company hereby confirms the continuation of the appointment of  
the Trustee as trustee of the Fund. All sums of money and other assets held by  
the Trustee or as shall, from time to time, be paid or delivered to the Trustee, all  
21  
investments made therewith and proceeds thereof and all earnings and profits thereon  
less payments made shall continue to constitute the Fund. […]  
2.2  
The Trustee hereby agrees to continue to act as Trustee of the Fund, accepts the  
amendments to the trusts as herein set out and agrees to hold, invest, distribute and  
administer the Fund in accordance with the terms of this Agreement. […]  
[emphasis added]  
Trust agreement between the Mathews Conveyor division of FKI Industries  
Canada Limited and the National Trust Company made as of April 1, 1993  
The 1993 Trust Agreement also stated the following with respect to payments out of the  
Prior Plan Fund (including upon termination of the Prior Plan and Prior Plan Fund):  
ARTICLE II - CONTINUATION OF THE FUND  
2.1  
[…] The Fund shall be held by the Trustee in trust and shall be dealt with in  
accordance with the terms of this Agreement. At no time shall any part of the Fund  
be used for or diverted to purposes other than those pursuant to the terms of this  
Agreement. The Company shall be responsible for ensuring that no Instructions  
or other directions given to the Trustee shall require the Trustee to use or divert  
any part of the Fund for purposes other than those which are in accordance with  
the Plan. […]  
ARTICLE III - PAYMENTS OUT OF THE FUND  
3.1  
The Trustee shall, from time to time on the directions of the Company  
(which directions shall be certified by the Company as being made in accordance  
with the terms of the Plan), make payments out of the Fund to such persons, in  
such manner and in such amounts as may be specified in such directions of the  
Company. Upon any such payments being made, or specifically set aside for the payee,  
the amount thereof shall no longer constitute a part of the Fund. The Trustee may accept  
any such direction and certificate as conclusive evidence of the truth of any statement  
made therein relating to the Plan or the Fund. […]  
ARTICLE XI - MISCELLANEOUS […]  
11.5 This Agreement may be amended in whole or in part from time to time or be  
terminated at any time by an instrument in writing executed by the Company and the  
Trustee. In the event of termination of the Fund, all assets then constituting the  
Fund, less any amounts constituting charges and expenses payable from the  
Fund shall, within a reasonable time following such termination be distributed in  
accordance with the Instructions of the Company (which Instructions shall be  
certified by the Company as being made in accordance with the terms of the Plan).  
[…]  
11.9 A copy of the Plan, as well as any amendments thereto, shall be delivered by the  
Company to the Trustee and shall be retained by the Trustee in its records. […]  
[emphasis added]  
22  
Canada Trust was appointed as the successor trustee for the Prior Plan Fund on July 3, 1996.  
This appointment did not impact the terms of the 1993 Trust Agreement regarding payments out  
of the Prior Plan Fund.  
The 1999 Prior Plan Trust Agreement  
The 1993 Trust Agreement was replaced in its entirety effective June 30, 1999, pursuant to the  
Participating Trust Agreement between FKI Industries Canada Limited and CIBC Mellon Trust  
Company for the Pension Plan for Salaried Employees of Mathews Conveyer made as of June  
30, 1999 (the “1999 Prior Plan Trust Agreement”). The 1999 Prior Plan Trust Agreement stated  
the following with respect to the continuation of the Prior Plan Fund:  
1.1  
Definitions.  
The terms used herein shall have the following meanings: […]  
h)  
“Fund” means the Property held pursuant to this Agreement as such shall exist  
from time to time together with any earnings, profits, increments and accruals arising  
therefrom, including all amounts delivered to and accepted by the Trustee from any prior  
trustee or other funding agent, less any payments and disbursements. […]  
2.1  
Appointment of Trustee and Acceptance of Trust Fund.  
The Company hereby appoints the Trustee as trustee of the Fund and continues  
with the Trustee the trust fund established in connection with the Plan as  
transferred by the Prior Trustee to the Trustee. Such appointment shall be effective  
immediately following the removal or resignation of the Prior Trustee. The Trustee  
hereby accepts the trusts herein set out and agrees to hold, invest, distribute and  
administer the Fund upon the terms and conditions of this Agreement. […]  
[emphasis added]  
The 1999 Prior Plan Trust Agreement stated the following with respect to payments out of the  
Prior Plan Fund (including upon termination of the Prior Plan and Prior Plan Fund):  
5.1 Payments from the Fund.  
Except as otherwise provided in this Agreement, the Trustee shall make payments  
from the Fund only pursuant to Authorized Instructions which may direct that  
such payments be made to any person, including the Company, or to any paying  
agent. Upon any such payments being made by the Trustee, the amount thereof shall  
no longer constitute a part of the Fund. In each instance the Authorized Instructions  
shall be deemed to include a certification from the Company to the Trustee that  
such payments are in accordance with the terms of the Plan and Applicable Laws.  
[…]  
14.1 Reliance on Authorized Instructions.  
The Trustee […] shall not be under any duty of making enquiries with respect to whether  
any application of the Fund as directed complies with the terms of the Plan or Applicable  
Laws. […]  
14.3 Plan Administration.  
[…] The Company shall have the exclusive right and obligation to determine the rights  
of any person to participate in the benefits from the Fund under the terms of the Plan.  
The Company shall be responsible for ensuring that no Authorized Instructions or  
23  
other directions given to the Trustee shall require the Trustee to use or divert any  
part of the Fund for purposes other than those which are in accordance with the  
terms of the Plan. […]  
16.3 Termination of the Fund.  
The Company may terminate the Fund by providing ninety (90) days' prior written notice  
to the Trustee. Upon written notice from the Company to the Trustee, in  
accordance with Section 17, the Trustee shall distribute the assets of the Fund,  
less such amounts as may be reasonable and necessary to cover its compensation,  
expenses and any other amount owing hereunder in accordance with Section 13.2, as  
directed by the Company in accordance with the terms of the Plan, provided that  
no such payment shall be made without the Company first obtaining such  
approvals of the appropriate federal and/or provincial regulatory authorities as  
may be required under Applicable Laws. […]  
[emphasis added]  
The 1999 Prior Plan Trust Agreement also provided the following with respect to the ability to  
amend the trust agreement terms:  
16.1 Amendment  
No provision of this Agreement shall be deemed waived, amended or modified by any  
party unless such waiver, amendment or modification is in writing and signed by the  
parties hereto.  
The Original Trust Agreement, the 1993 Trust Agreement and the 1999 Prior Plan Trust  
Agreement do not include provisions that state that the employer’s contributions are irrevocable,  
that no part of the Prior Plan Fund can revert to the employer, or that no part of the Prior Plan  
Fund can be used for purposes other than for the exclusive benefit of members.  
The 1999 FKI Plan Trust Agreement  
As of the Prior Plan and FKI Plan merger effective December 31, 1997, the FKI Plan was  
funded pursuant to the 1999 FKI Plan Trust Agreement. The relevant terms of the 1999 FKI  
Plan Trust Agreement are identical to the terms excerpted and summarized above for the 1999  
Prior Plan Trust Agreement.  
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