Canada minister to meet Abitibibowater on pensions

* Company in bankruptcy protection, has pension shortfall

* Union, firm seek govt action to overcome shortfall

OTTAWA Nov 20 (Reuters) - Finance Minister Jim Flaherty will meet with the union and management of AbitibiBowater ABWTQ.PK, a forestry company in bankruptcy protection, to deal with a pension shortfall.

"The federal finance minister has agreed to meet with both parties," Ted Menzies, parliamentary secretary to the minister, told the House of Commons on Friday.

He was responding to a question from New Democrat lawmaker John Rafferty, who said the management and union had agreed to a plan to overcome a C$1.3 billion ($1.2 billion) pension shortfall but it needed provincial and federal government action.

Flaherty encouraged the two parties to meet the provincial governments first, because such pension arrangements fall in their jurisdictions, and "then he'll sit down and meet with them."

Rafferty did not say what government action was being sought. But the Communications, Energy and Paperworkers Union (CEP) said on Oct. 30 that company-union proposal would establish a trust for existing pensioners with government guarantees and regulation changes to allow the trust to continue current pension benefits.

"Governments must understand the reality that without a solution to the pension issue, this company will not be successfully restructured," CEP President Dave Coles said at the time.

Menzies did not say how far the government prepared to go. (Reporting by Randall Palmer; Editing by Frank McGurty)