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Canada’s largest provincial labour federation is facing a pension fund deficit, and accounting and solvency experts suggest the Ontario Federation of Labour may need to lay off workers or even trim employees’ benefits if the situation doesn’t improve.

The state of the books prompted an independent auditor to include a note at the bottom of a letter to OFL members this year.

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It says financial conditions in fiscal 2012 (ended June 30) “indicate the existence of a material uncertainty that may cast significant doubt about the Federation’s ability to continue as a going concern.”

The OFL has run deficits for the past two years, and liabilities, led by pension obligations, far outstrip assets on the balance sheet.

While challenges posed by looming pension obligations are not unique to the OFL, the cure may be more difficult for the federation, which bills itself as an umbrella group for Ontario’s working people and their unions, experts suggest.