IFIC worries about possible postal strike

(July 16, 2003) A strike at Canada Post would result in “serious cost consequences” for mutual fund firms, which depend on mail service for the delivery of documents to investors, IFIC says. The association for Canada’s fund industry has written a letter to federal transport minister David Collenette, expressing concern about the possibility of a disruption in postal service. The strike deadline is Friday.

“We are writing to you in your capacity as minister responsible for Canada Post to express serious concern on the part of our member firms that the current negotiations between Canada Post and the Canadian Union of Postal Workers (CUPW) will result in a strike,” states the letter, signed by IFIC president Tom Hockin.

The letter notes that most IFIC members rely on Canada Post to fulfill their regulatory obligations in an efficient and cost-effective way. “Given recent market conditions, our members are particularly concerned about the serious cost consequences to the industry, and to investors, should a Canada Post labour disruption make it necessary for them to source and utilize alternative delivery methods.”

“Our members have a number of documents that they are obligated to deliver to investors: statements, confirmations, that kind of thing,” explains IFIC vice-president John Murray. In the event of a strike, fund companies would have to find alternative and higher priced delivery methods, such as private couriers, he told Advisor.ca.

Although Murray was unable to provide a specific figure, he says the cost of a postal strike to the mutual fund industry would be “substantial,” adding that some firms have electronic delivery systems in place, which would reduce the financial impact of a mail disruption.

IFIC held a postal strike contingency meeting with members yesterday and is holding another one today.

During the last postal dispute in 1997, IFIC approached regulators and asked if they would be willing to temporarily suspend some mutual fund reporting and disclosure requirements.

“They flatly said no,” Murray says. “We’re going to ask again but I expect the answer might be the same.”

The letter stops short of asking the federal government to step in and impose a settlement. But it does ask Collenette to “monitor this ongoing situation so as to ensure a resolution without an interruption in postal service.”

Canada Post and CUPW are negotiating in Ottawa through a mediator. The 45,000 unionized postal workers, who have been without a contract since February, voted 92% in favour of a strike mandate last month.

Are you worried about the possibility of a postal strike? If it happens, how will your business be affected? Share your concerns in the “Free For All” forum of the Talvest Town Hall on Advisor.ca.

Filed by Doug Watt, Advisor.ca, dwatt@advisor.ca