Workers Compensation Board wants businesses to develop policy for use of pot

SASKATOON _ A spokesman for a Saskatchewan agency that provides insurance and compensation for workers and employers says businesses should have policies in place before Canada legalizes marijuana.

Ed Secondiak with ECS Safety Services spoke Tuesday at a meeting of the Saskatchewan Workers’ Compensation Board.

He says businesses should develop ways to test workers for marijuana; penalties for employees who use marijuana at or before work, or perhaps consider allowing the drug at work.

Secondiak says employers should come up with those policies soon because medical marijuana is already out there and workers’ use could affect safety on the job.

He says medical marijuana can cause people to be impaired as well.

Prime Minister Justin Trudeau said earlier this month that his government plans to introduce marijuana legislation by the summer, but added current laws haven’t changed.

“We don’t have a level of impairment for law enforcement to follow and we lack a lot of research on the actual benefits, what is should be used for,” Secondiak said.

“Right now it’s been used as a miracle drug for everything and the science might not be there, so we know it’s beneficial, but what is it beneficial for?”

Square One finds that 41% of renters with roommates don’t have home insurance

Square One finds that 41% of renters with roommates don’t have home insurance

Square One Insurance Services recently surveyed over 1,500 renters in British Columbia, Alberta and Ontario. The survey revealed that 30% of renters share their homes with unrelated roommates. Alberta had the highest percentage at 34%, followed by Ontario at 31% and British Columbia at 26%.

“We conducted this survey because we’ve been receiving more inquires for home insurance by those living with roommates,” states Daniel Mirkovic, Square One’s President. “We wanted to understand what was driving this trend.”

While there are many reasons why renters choose to have roommates, the top reasons for those surveyed were:

  • To help with rent (63%);
  • For companionship (25%); and,
  • For added security (7%).

According to Statistics Canada, residential property values across the country increased by 11% in 2016. While increased property values build equity for homeowners, they make it even harder for first-time buyers to enter the real estate market. This, in turn, causes more pressure on the already tight rental market. In fact, the average cost to rent a two-bedroom apartment continues to rise every year across Canada.

“With the high cost of rent, it makes sense that most renters have roommates for financial reasons,” states Daniel Mirkovic, Square One’s President. “However, it is surprising how many renters (and their roommates) go without home insurance given the increased risks faced when living with unrelated persons.”

Square One’s survey found that renters are 8 times more likely to go without home insurance than homeowners. As illustrated in the table below, renters in British Columbia are the least likely to have home insurance whereas those in Alberta are the most likely.

Based on Square One’s experience, renters have three common misconceptions about home insurance:

  1. Landlord’s insurance protects renters.
    Landlord’s insurance specifically excludes the personal property and liability exposures of renters. Accordingly, renters need a home insurance policy to protect their belongings, cover extra expenses if their homes are damaged and can’t be occupied, and pay amounts for unintentionally injuring someone else.
  2. Home insurance is too expensive for renters.
    Policies can start from as little as $15 a month. And, most insurance providers offer both annual and monthly payment options. To help reduce costs even further, renters can increase the standard policy deductible. A deductible is the amount the renter must pay before the policy will respond.
  3. It’s difficult for renters to get home insurance.
    Of the three misconceptions, this one has some truth to it. Many renters, especially those living with roommates, may have had difficulty getting home insurance. In recent years, providers, like Square One, are actively offering insurance to renters. So, renters are encouraged to shop around to find a policy that works for them.

For those living with unrelated roommates, you can expect to pay a little more for the added exposure. Most companies charge an extra 10%, which isn’t very much on a $15 a month policy. You can also expect to be assessed a $2,500 deductible for crime-related losses. That means you’ll have to pay the first $2,500 if your belongings are stolen or mysteriously disappear.

When applying for home insurance, you should be prepared to describe how many roommates you have. If you have just one roommate, then you can often be insured under a single policy. If you have multiple roommates, then each of you will need to purchase separate policies. It’s also important to describe your relationship with each roommate. While you may consider a sibling or partner to be your roommate, the insurance provider may classify them as a family member. Most policies automatically cover family members at no extra cost.

Getting the right home insurance, while essential, is just one side of the coin. With a greater pool of roommates to choose from, it’s now more important than ever that you do your due diligence when finding and selecting a roommate. A bad roommate can cause countless headaches and financial stress.

Square One has created an online resource centre for tenants. It offers tips to Canadians on how to find the perfect roommate, structure a lease, and prepare a roommate agreement. To view this resource centre, please visit www.squareoneinsurance.ca/tenant-resource-centre.

One of the articles in this resource centre outlines how to avoid selecting the wrong roommate. As a short summary, here are the top tips to finding the right roommate:

  • Be upfront about your lifestyle and ask a potential roommate to describe theirs. If you’re an early sleeper, then you might not get along with a night owl. Alternatively, if you wake up early for work, then you probably don’t want a roommate who enjoys partying on weeknights.
  • Ask potential roommates to complete an in-depth application about their work, income, and references. Keep in mind you cannot ask questions around certain topics, such as religion, sexual preference, or marital status.
  • After obtaining permission, conduct a background check. If an applicant provides consent, check their credit score, employment history, and rental history. You can also browse their social media profiles on Facebook, Twitter, or LinkedIn.

If you’re a renter living with a roommate, it’s important to stay informed and to have the right insurance coverage in place. To learn more, speak with your insurance provider or call Square One at 1.855.331.6933.

Established in 2011 and based in Vancouver, British Columbia, Square One offers the only home insurance policy in Canada that can be personalized to your unique needs. That means you only pay for the protection you need. Square One is also one of the few providers to automatically include earthquake, sewer backup and broad water protection in its policies. Square One currently serves British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. For more information about Square One, or to get an online quote, visit www.squareoneinsurance.ca.

SOURCE Square One Insurance Services Inc.

Mortgage premium hikes reduce case for borrowing to boost down payment

With mortgage insurance premiums rising, homebuyers whose down payments are just shy of 20 per cent may be considering whether to tap extra sources of credit in order to avoid the higher costs.

But mortgage brokers say recent government rule changes lessen the case for doing so because people may end up paying a higher interest rate on their mortgage in addition to the additional debt they will have to repay.

“What we’re seeing in the market now is people that have insured mortgages are getting much better interest rates than someone with 20 per cent down,” says Steve Pipkey, co-founder of Vancouver-based Spin Mortgage.

Ottawa announced new restrictions last fall to portfolio insurance, a type of bulk insurance that lenders would use to insure mortgages with down payments of 20 per cent or more.
That has made it more difficult for lenders to insure mortgages with lower loan-to-value ratios and resulted in more competitive rates for borrowers with smaller down payments, brokers say.

According to Pipkey, a borrower can get a rate as low as 2.44 on a five-year fixed insured mortgage, whereas if they have more than 20 per cent down, the rate will be more in the range of 2.69 per cent, depending on individual circumstances such as one’s creditworthiness.

Canada Mortgage and Housing Corp. announced in January that mortgage premiums would be rising effective March 17.

Those with down payments of around five per cent will now pay mortgage insurance premiums of four per cent, up from 3.6 per cent, while down payments of 10 per cent will now cost 3.1 per cent in insurance premiums, up from 2.4 per cent.

Those with a 15 per cent down payment will see their premiums rise to 2.8 per cent from 1.8 per cent, and those with 20 per cent down will now pay 2.4 per cent for mortgage insurance, up from 1.25 per cent.

“There’s definitely a skew towards increasing the premiums more for people that have a little bit more of a down payment available,” says Marcus Tzaferis, a Toronto-based mortgage broker with MorCan Direct.

In the past, many borrowers close to the 20 per cent threshold would consider taking out a secondary loan _ for example, through a line of credit _ to increase their down payment and avoid mortgage insurance premiums.

“So if somebody had 15 per cent down, they would probably consider borrowing five per cent to get to 20 per cent down and avoid having to pay an insurance premium altogether,” Tzaferis says.

But now, people within that threshold who have somewhere between 10 and 20 per cent down are reconsidering that approach, Tzaferis says.

“There’s a lot of tinkering going on right now,” Tzaferis says. “There’s a lot of interest rate changes. There’s a lot of insurance changes. There’s a lot of regulatory changes, and it’s creating a really complicated landscape for the Canadian borrower.”

Tzaferis recommends seeking out unbiased advice when trying to determine the best approach.

If you are still considering taking out a secondary loan, Hamilton-based broker Blair Anderson says it’s important to consider how quickly you will be able to pay off that debt.

Also, keep in mind that the additional debt will be added in when the bank calculates your debt-service ratio, which lenders use to determine how much you can afford in monthly payments.

“Meagre” Plaintiff Income Keeps Court From Awarding Costs to Successful Defendant

Today’s guest post comes from B.C. injury claims lawyer Erik Magraken

Reasons for judgement were released today by the BC Supreme Court, Vancouver Registry, demonstrating judicial discretion in dealing with costs after a plaintiff fails to beat a defence formal offer at trial.

In today’s case (Barta v. DaSilva) the Plaintiff was injured in a 2007 collision and sued for damages.  The Plaintiff alleged traumatic brain injury and argued that he had millions in losses as a result.  At trial a jury rejected the alleged brain injury and awarded damages of $77,000 for the Plaintiff’s proven injuries.  Prior to trial ICBC offered to settle the case for $150,000.

The Plaintiff sought full costs for the trial where ICBC sought to have the Plaintiff pay their post offer costs or simply strip each party of costs for the trial itself.  In the end the court ordered that each party bear their own costs of the trial.  In finding this fair the court noted that due to the Plaintiff’s ‘meagre‘ income there would be “no utility in imposing the costs of the trial on the plaintiff.”.

In reaching this decision Mr. Justice Affleck provided the following reasons:

[12]        The defendant’s offer of $150,000 plus costs and disbursements was a serious offer. The plaintiff ought to have known that the defendant’s legal advisers had a plausible basis for concluding that the plaintiff would be unable to prove a causal connection between his accident injuries and his financial losses. In my opinion the defendant’s offer ought reasonably to have been accepted.

[13]        The relative financial position of the parties is of no consequence on this application. The defence was conducted by ICBC, which obviously has much greater financial strength than the plaintiff, but unless it used that strength improperly in this litigation that is a neutral factor: See Vander Maeden v. Condon, 2014 BCSC 677.

[14]        When its offer to settle was not accepted the defendant had no serious option but to defend the action at trial. The result was an award of damages about one half the offer made by the defendant. In that circumstance the deterrent function of the costs rule would be nullified if I exercise my discretion by awarding costs to the plaintiff throughout as he submits I should. I declined to do so.

[15]        The evidence at trial indicates that the plaintiff’s assets were severely depleted by the effects of the financial downturn in 2008 and 2009. Mr. Creighton informed me that his client’s income is now meagre. I can see no utility in imposing the costs of the trial on the plaintiff.

[16]        My order is that the plaintiff is entitled to his costs and disbursements to and including May 15, 2014, and that thereafter the parties will each bear their own costs and disbursements. I recognize that the usual order would be to impose the costs following the defendant’s offer on the plaintiff. The defendant, however, has proposed the disposition which I have made, which I consider to be generous to the plaintiff in the circumstances.

Where to Invest With Increasing Interest Rates

South of the border, the chair of the Federal Reserve, Janet Yellen, is primed to announce a hike in interest rates in the coming weeks. Although this move may already be largely priced in to the equity markets, Canadian investors still need to stop and take a serious look at their investment holdings.

Although a small interest rate increase is by no means a disastrous event for investors, the reality is, what were otherwise fantastic returns may diminish to adequate returns. Higher interest rates translate to higher interest costs and lower net profit. Investors need to reset expectations in the years to come.

Many asset classes will decline in value if interest rates rise, so investors need to ask the question: “Where do I invest to benefit from rising interest rates?”

Obviously, long term bonds, REITs, and utility companies are not going to be anywhere the top of the list. Instead, the list will be topped by banks and insurance companies. In Canada, we have three large insurance companies that dominate the marketplace. Let’s look at each insurance company.

Manulife Financial Corp. (TSX:MFC)(NYSE:MFC)

Currently, Manulife is Canada’s biggest insurance company. Investors taking a new position will be offered a dividend yield of almost 3.5% and are picking up shares at a premium to tangible book value of 50% with a trailing price-to-earnings (P/E) ratio of 17 times.

Great-West Lifeco Inc. (TSX:GWO)

While the shares of Canada’s second-largest insurer are much less volatile, the dividend yield is approximately 4%, and shares trade at more than double the tangible book value. Although the trailing P/E is less than 14, shares are not necessarily a fantastic deal depending on what metric is used to evaluate the security.

Sun Life Financial Inc. (TSX:SLF)(NYSE:SLF)

Shares of Sun Life offer new investors a dividend yield of just under 3.5% and trade at a premium to tangible book value in the amount of 82%. The trailing P/E ratio is currently 12.3 times.

While investors may be looking for somewhere to hide in the face of rising interest rates, the truth is that many other investors have already found their way into Canada’s insurance companies and big banks. Although valuations may not seem very attractive at current levels, the importance for investors is to understand what rising rates mean for the companies they are investing in.

As insurance companies invest the premiums received (this is called the float) into short-term, very low risk investments, the increase in interest rates will greatly benefit these companies over time.

Looking at all three Canadian insurers, investors should note the volatility and dividend yield of each stock. While low payout ratios translate to more money reinvested into the company, the truth is, growth is only good if it is profitable. Sometimes boring is better!

Six “pro” strategies for today’s highly uncertain market

Motley Fool Canada’s $250,000-real-money-portfolio service, Motley Fool Pro, is currently closed to new members. But lead advisor Jim Gilles is doing something special for investors who are worried about the market and where it will head in 2017.

He’s revealing the six strategies he uses in Pro to help members guardrail their portfolios and make money in up, down, and sideways markets.

B.C. emergency programs receive $80 million for protection efforts

VICTORIA _ The British Columbia government will spend $80 million this year in emergency programs, up from the $65 million it spent last year.

Naomi Yamamoto, minister of state for emergency preparedness, says $32 million will go to the Union of B.C. Municipalities to establish a fund that supports disaster response and recovery programs, including mapping evacuation routes.

She says the government will provide $10 million to numerous public safety groups, including Vancouver’s heavy urban search and rescue team, to support skills training and purchase equipment.

Yamamoto says the $80 million comes from the government’s budget surplus and money in its emergency preparedness fund.

She says spending in community emergency programs will help the province cope with floods, fires and earthquakes.

Bill Adams of the Insurance Bureau of Canada says there are estimates that a major earthquake in southern B.C. could cause damage valued at $75 billion.

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