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Employee Future Benefits (Tables)
 12 Months Ended
Dec. 31, 2020
Text block [abstract]  
Summary of Pension and Retiree Welfare Plans
(c) Pension and retiree welfare plans
 
   Pension plans      Retiree welfare plans 
For the years ended December 31,
  
2020
   2019      
2020
   2019 
Changes in defined benefit obligation:
                        
Opening balance
  
$
4,817
 
  $4,675       
$
645
 
  $640 
Current service cost
  
 
41
 
   40       
 
–
 
   – 
Interest cost
  
 
150
 
   182       
 
20
 
   25 
Plan participants’ contributions
  
 
–
 
   1       
 
3
 
   3 
Actuarial losses (gains) due to:
                        
Experience
  
 
2
 
   8       
 
(14
) 
   (10) 
Demographic assumption changes
  
 
(67
) 
   –       
 
(12
) 
   – 
Economic assumption changes
  
 
333
 
   413       
 
49
 
   56 
Benefits paid
  
 
(318
) 
   (358)       
 
(45
) 
   (46) 
Impact of changes in foreign exchange rates
  
 
(57
) 
   (144)       
 
(8
) 
   (23) 
Defined benefit obligation, December 31
  
$
  4,901
 
  $  4,817       
$
  638
 
  $645 
    
   Pension plans      Retiree welfare plans 
For the years ended December 31,
  
2020
   2019      
2020
   2019 
Change in plan assets:
                        
Fair value of plan assets, opening balance
  
$
4,453
 
  $4,187       
$
598
 
  $  610 
Interest income
  
 
140
 
   164       
 
19
 
   25 
Return on plan assets (excluding interest income)
  
 
310
 
   529       
 
33
 
   25 
Employer contributions
  
 
71
 
   75       
 
11
 
   12 
Plan participants’ contributions
  
 
–
 
   1       
 
3
 
   3 
Benefits paid
  
 
(318
) 
   (358)       
 
(45
) 
   (46) 
Administration costs
  
 
(7
) 
   (9)       
 
(2
) 
   (2) 
Impact of changes in foreign exchange rates
  
 
(54
) 
   (136)       
 
(11
) 
   (29) 
Fair value of plan assets, December 31
  
$
4,595
 
  $4,453       
$
606
 
  $598 
 
Summary of Amounts Recognized in Consolidated Statements of Financial Position
(d) Amounts recognized in the Consolidated Statements of Financial Position
 
   Pension plans      Retiree welfare plans 
As at December 31,
  
2020
   2019      
2020
   2019 
Development of net defined benefit liability
                        
Defined benefit obligation
  
$
4,901
 
  $  4,817       
$
  638
 
  $  645 
Fair value of plan assets
  
 
4,595
 
   4,453       
 
606
 
   598 
Deficit
  
 
306
 
   364       
 
32
 
   47 
Effect of asset limit
(1)
  
 
–
 
   4       
 
–
 
   – 
Deficit (surplus) and net defined benefit liability (asset)
  
 
306
 
   368       
 
32
 
   47 
Deficit is comprised of:
                        
Funded or partially funded plans
  
 
(446
) 
   (391)       
 
(134
) 
   (120) 
Unfunded plans
  
 
752
 
   759       
 
166
 
   167 
Deficit (surplus) and net defined benefit liability (asset)
  
$
  306
 
  $368       
$
32
 
  $47 
 
(1)
 
In 2019, the Company recognized an impairment of $4 on the net defined benefit asset for one of its registered pension plans in Canada.
Summary of Disaggregation of Defined Benefit Obligation
(e) Disaggregation of defined benefit obligation
 
   U.S. plans      Canadian plans 
   Pension plans   Retiree welfare plans      Pension plans   Retiree welfare plans 
As at December 31,
  
2020
   2019   
2020
   2019      
2020
   2019   
2020
   2019 
Active members
  
$
551
 
  $550   
$
27
 
  $31       
$
211
 
  $301   
$
–
 
  $25 
Inactive and retired members
  
 
2,528
 
   2,529   
 
445
 
   447       
 
1,611
 
   1,437   
 
166
 
   142 
Total
  
$
  3,079
 
  $  3,079   
$
  472
 
  $  478       
$
  1,822
 
  $  1,738   
$
  166
 
  $  167 
Summary of Major Categories of Plan Assets and Actual Per Cent Allocation to Each Category
(f) Fair value measurements
The major categories of plan assets and the allocation to each category are as follows.
 
   U.S. plans
(1)
      Canadian plans
(2)
 
   Pension plans   Retiree welfare plans      Pension plans   Retiree welfare plans 
As at December 31, 2020
  Fair value   % of total   Fair value   % of total      Fair value   % of total   Fair value   % of total 
Cash and cash equivalents
  
$
17
 
  
 
1%
 
  
$
30
 
  
 
5%
 
      
$
10
 
  
 
1%
 
  
$
–
 
  
 
–
 
Equity securities
(3)
  
 
612
 
  
 
20%
 
  
 
49
 
  
 
8%
 
      
 
339
 
  
 
22%
 
  
 
–
 
  
 
–
 
Debt securities
  
 
2,175
 
  
 
71%
 
  
 
520
 
  
 
86%
 
      
 
1,186
 
  
 
77%
 
  
 
–
 
  
 
–
 
Other investments
(4)
  
 
254
 
  
 
8%
 
  
 
7
 
  
 
1%
 
      
 
2
 
  
 
0%
 
  
 
–
 
  
 
–
 
Total
  
$
3,058
 
  
 
100%
 
  
$
606
 
  
 
100%
 
      
$
1,537
 
  
 
100%
 
  
$
  –
 
  
 
–
 
    
   U.S. plans
(1)
      Canadian plans
(2)
 
   Pension plans   Retiree welfare plans      Pension plans   Retiree welfare plans 
As at December
 31, 2019
  Fair value   % of total   Fair value   % of total      Fair value   % of total   Fair value   % of total 
Cash and cash equivalents
  $32    1%   $35    6%       $12    1%   $–    – 
Equity securities
(3)
   563    19%    45    8%        311    21%    –    – 
Debt securities
   2,155    72%    511    85%        1,123    78%    –    – 
Other investments
(4)
   255    8%    7    1%        2    0%    –    – 
Total
  $3,005    100%   $598    100%       $1,448    100%   $–    – 
 
(1)
All the U.S. pension and retiree welfare plan assets have daily quoted prices in active markets, except for the private equity, timber and agriculture assets. In the aggregate, the latter assets represent approximately 7% of all U.S. pension and retiree welfare plan assets as at December 31, 2020 (2019 – 7%).
(2)
All the Canadian pension plan assets have daily quoted prices in active markets, except for the group annuity contract assets that represent approximately 0.1% of all Canadian pension plan assets as at December 31, 2020 (2019 – 0.1%).
(3)
Equity securities include direct investments in MFC common shares of $1.1 (2019 – $1.3) in the U.S. retiree welfare plan and $nil (2019 – $nil) in Canada.
(4)
Other U.S. plan assets include investment in private equity, timberland and agriculture, and managed futures. Other Canadian pension plan assets include investment in the group annuity contract.
Summary of Components of Net Benefit Cost for Pension Plans and Retiree Welfare Plans
(g) Net benefit cost recognized in the Consolidated Statements of Income
Components of the net benefit cost for the pension plans and retiree welfare plans were as follows.
 
   Pension plans      Retiree welfare
plans		 
For the years ended December 31,
  
2020
   2019      
2020
   2019 
Defined benefit current service cost
  
$
  41
 
  $40       
$
–
 
  $– 
Defined benefit administrative expenses
  
 
7
 
   9       
 
2
 
   2 
Service cost
  
 
48
 
   49       
 
2
 
   2 
Interest on net defined benefit (asset) liability
  
 
10
 
   18       
 
1
 
   – 
Defined benefit cost
  
 
58
 
   67       
 
3
 
   2 
Defined contribution cost
  
 
84
 
   80       
 
–
 
   
–

 
Net benefit cost
  
$
142
 
  $     147       
$
    3
 
  $    2 
Summary of Re-measurement Effects Recognized in Other Comprehensive Income
(h)
Re-measurement
effects recognized in Other Comprehensive Income
 
   Pension plans      Retiree welfare plans 
For the years ended December 31,
  
2020
   2019      
2020
   2019 
Actuarial gains (losses) on defined benefit obligations due to:
                        
Experience
  
$
(2
) 
  $(8)       
$
14
 
  
$
10
 
Demographic assumption changes
  
 
67
 
   –       
 
12
 
  
 
–
 
Economic assumption changes
  
 
(333
) 
   (413)       
 
(49
) 
  
 
(56
) 
Return on plan assets (excluding interest income)
  
 
310
 
   529       
 
33
 
   25 
Change in effect of asset limit
  
 
5
 
   5       
 
–
 
   – 
Total
re-measurement
effects
  
$
47
 
  $113       
$
10
 
  $(21) 
Summary of Key Assumptions Used by to Determine Defined Benefit Obligation and Net Benefit Cost for Defined Benefit Pension Plans and Retiree Welfare Plans
(i) Assumptions
The key assumptions used by the Company to determine the defined benefit obligation and net benefit cost for the defined benefit pension plans and retiree welfare plans were as follows.
 
  U.S. Plans      Canadian Plans 
  Pension plans  Retiree welfare plans      Pension plans  Retiree welfare plans 
For the years ended December 31,
 
2020
  2019  
2020
  2019      
2020
  2019  
2020
  2019 
To determine the defined benefit obligation at end of year
(1)
:
                                    
Discount rate
 
 
2.4%
 
  3.2%  
 
2.4%
 
 
 
3.2%
 
     
 
2.5%
 
  3.1%  
 
2.6%
 
  3.1% 
Initial health care cost trend rate
(2)
 
 
n/a
 
  n/a  
 
7.3%
 
 
 
7.5%
 
     
 
n/a
 
  n/a  
 
5.5%
 
  5.6% 
To determine the defined benefit cost for the year
(1)
:
                                    
Discount rate
 
 
3.2%
 
  4.3%  
 
3.2%
 
 
 
4.3%
 
     
 
3.1%
 
  3.8%  
 
3.1%
 
  3.8% 
Initial health care cost trend rate
(2)
 
 
n/a
 
  n/a  
 
7.5%
 
 
 
7.8%
 
 
 
 
 
 
 
n/a
 
  n/a  
 
5.6%
 
  5.7% 
 
(1)
Inflation and salary increase assumptions are not shown as they do not materially affect obligations and cost.
(2)
The health care cost trend rate used to measure the U.S. based retiree welfare obligation was 7.3% grading to 4.5% for 2032 and years thereafter (2019 – 7.5% grading to 4.5% for 2032) and to measure the net benefit cost was 7.5% grading to 4.5% for 2032 and years thereafter (2019 – 7.8% grading to 5.0% for 2030). In Canada, the rate used to measure the retiree welfare obligation was 5.5% grading to 4.8% for 2026 and years thereafter (2019 – 5.6% grading to 4.8% for 2026) and to measure the net benefit cost was 5.6% grading to 4.8% for 2026 and years thereafter (2019 – 5.7% grading to 4.8% for 2026).
Assumptions regarding future mortality are based on published statistics and mortality tables. The current life expectancies underlying the values of the obligations in the defined benefit pension and retiree welfare plans are as follows.
Summary of Life Expectancies Underlying Values of Obligations in Defined Benefit Pension and Retiree Welfare Plans
As at December 31, 2020
 
U.S.
  Canada 
Life expectancy (in years) for those currently age 65
        
Males
 
 
21.9
 
 
 
23.8
 
Females
 
 
23.4
 
 
 
25.6
 
Life expectancy (in years) at age 65 for those currently age 45
        
Males
 
 
23.3
 
 
 
24.7
 
Females
 
 
24.8
 
 
 
26.5
 
Summary of Potential Impact on Obligations Arising From Changes in Key Assumptions
(j) Sensitivity of assumptions on obligations
Assumptions used can have a significant effect on the obligations reported for defined benefit pension and retiree welfare plans. The potential impact on the obligations arising from changes in the key assumptions is set out in the following table. The sensitivities assume all other assumptions are held constant. In actuality, inter-relationships with other assumptions may exist.
 
As at December 31, 2020
 Pension plans  Retiree welfare plans 
Discount rate:
        
Impact of a 1% increase
 
$
(467
) 
 
$
(67
) 
Impact of a 1% decrease
 
 
554
 
 
 
82
 
Health care cost trend rate:
        
Impact of a 1% increase
 
 
n/a
 
 
 
20
 
Impact of a 1% decrease
 
 
n/a
 
 
 
(17
) 
Mortality rates
(1)
        
Impact of a 10% decrease
 
 
143
 
 
 
16
 
 
(1)
If the actuarial estimates of mortality are adjusted in the future to reflect unexpected decreases in mortality, the effect of a 10% decrease in mortality rates at each future age would be an increase in life expectancy at age 65 of 0.8 years for U.S. males and females and 0.7 years and 0.8 years for Canadian males and females, respectively.
Summary of Weighted Average Duration of the Defined Benefit Obligations
(k) Maturity profile
The weighted average duration (in years) of the defined benefit obligations is as follows.
 
     Pension plans        Retiree welfare plans 
As at December 31,
    
2020
     2019        
2020
     2019 
U.S. plans
    
 
9.9
 
     9.3         
 
9.8
 
    
 
9.7
 
Canadian plans
    
 
12.5
 
     12.3         
 
14.7
 
    
 
14.3
 
Summary of Cash Payments
(l) Cash flows – contributions
Total cash payments for all employee future benefits, comprised of cash contributed by the Company to funded defined benefit pension and retiree welfare plans, cash payments directly to beneficiaries in respect of unfunded pension and retiree welfare plans, and cash contributed to defined contribution pension plans, are as follows. 
 
     Pension plans        Retiree welfare plans 
For the years ended December 31,
    
2020
     2019        
2020
     2019 
Defined benefit plans
    
$
  71
 
    $75         
$
  11
 
    $12 
Defined contribution plans
    
 
84
 
     80         
 
–
 
     
–

 
Total
    
$
155
 
    $  155         
$
11
 
    $  12