Ottawa will have to think very carefully about the precedents it could set if it changes pension laws to accommodate struggling Air Canada, says Finance Minister Ralph Goodale.

The federal pension regulator says it's willing to extend the amount of time Air Canada is given to pay a massive $1.2 billion shortfall in the airline's pension plan, a key issue as Air Canada tries to emerge from bankruptcy protection. But such a major change would need the approval of federal cabinet - and there, things get sticky.

"If you adjust the rules in a one-off situation ... then you do run the risk of setting a precedent," Goodale, minister responsible for the federal pension regulator, said yesterday outside the House of Commons. "That's one of the things that government ... would have to weigh very carefully, to make sure that whatever precedent might be set is not one that is impossible for the future."

Germany's largest bank came to the aid of the struggling carrier recently with a planned $850 million injection. But Deutsche Bank set several conditions that caught the attention of MPs, who grilled the government yesterday on how far it will go to help close the deal.

Transport Minister Tony Valeri has suggested Ottawa will consider easing some of the regulatory restrictions facing Air Canada, the country's dominant airline. That raised concerns among Quebec MPs about whether the carrier will continue to offer bilingual service and whether the head office will remain in Montreal.

Valeri told the Commons that's all guaranteed in existing legislation.

"Certainly the government of Canada is aware of the agreement in principle between Deutsche Bank and Air Canada. We are certainly encouraged by this private-sector development," Valeri said. "We continue to expect Air Canada to meet all of its obligations under the Air Canada Public Participation Act and any other applicable legislation."

It's believed that cabinet will be asked soon to consider several proposals to help the entire airline industry, from increasing foreign-ownership limits to reducing airport rents.

But before any decisions could be made, Goodale said, he would want to see the full package of all proposals affecting Air Canada. And, he added, he hasn't even been asked yet by the Office of the Superintendent of Financial Institutions to double the current five-year deadline for pension debt repayment.

"I will answer the question when I'm asked" by the superintendent's office, Goodale said.

"This is a very complex set of issues involving Air Canada. There are a variety of issues that need to be resolved, and it's important for the government to respond in a comprehensive way and not in a series of disconnected one-offs.

"That's why I think we should wait until we see the entire scope of what's being proposed, what's being asked for, and then answer in a comprehensive way and not just in bits and pieces."