Mrs Carol Claus (Elizabeth Mitchell) is about to give birth at Christmas, the busiest time of the year. Carol is emotional at the prospect of becoming a mother and misses her family. Santa (Tim Allen) is under a lot of pressure and devises a ruse for bringing Carol’s parents to the North Pole by disguising it as Canada and thus not breaking any Santa secrets. To add to Santa’s troubles, an emergency meeting is held by the Council of Legendary Figures to discuss what to do with Jack Frost (Martin Short). He has been unashamedly promoting himself and trying to upstage Santa. The Council wants to expel him, but he begs for another chance. Santa takes him on as an additional helper.

Jack Frost has ambitious plans and sets out to sabotage Santa’s efforts to get presents ready in time for Christmas. He discovers that there is an escape clause to being Santa and tricks the overstressed Santa into invoking it. Jack Frost assumes the role of Santa and turns the North Pole into a ghastly theme park. Meanwhile the real Santa, who has returned to a miserable life as Scott Calvin, has to devise a way of putting things back the way they were.