Illegal Toker Or Legitimate Smoker? Marijuana-Smoking Employee Lawfully Dismissed

Article by Kirsten D. Hume

Given the increasing availability and use of medical marijuana in British Columbia, employers are often faced balancing the need to ensure a safe workplace and an employee’s right to legitimate medical treatment. A recent decision of the BC Human Rights Tribunal gives employers some welcome clarity on the limits of the duty to accommodate, the nature of bona fide occupational requirements (“BFORs”), and the legality of “zero tolerance policies” regarding drug use on the job.

In French v. Selkin Logging, the Tribunal dismissed a complaint brought by Mr. French, a heavy equipment operator for a logging company.  Mr. French alleged that his employer discriminated against him on the basis of disability by, among other things, not permitting him to smoke marijuana for pain management on the job.

Mr. French was treated for cancer in 2009 and returned to work in 2010.  It was widely known, including by his supervisor, that Mr. French was smoking marijuana on the job.  He and another employee shared six to eight joints a day during coffee and lunch breaks.

Mr. French’s supervisor only confronted him about his smoking after months of complaints from other employees and, more particularly, after Mr. French and a co-worker struck a moose with a workplace truck.  Marijuana was later found in the vehicle.  The supervisor told him that the company had a zero tolerance policy for drug use on the job; Mr. French later received a letter stating that his employment would be terminated unless he agreed to return to work “drug free”.

Mr. French asserted that he needed to smoke pot to manage his pain and that his physicians directed him to do so, as his cancer had recurred.  However, on probing this issue further, the Tribunal found that: he did not have a prescription; his doctors had not told him to smoke marijuana, and that there was no evidence that any doctor had condoned his smoking at work.  While the Tribunal could not determine whether the marijuana was “medical grade”, there was also no evidence that Mr. French was impaired on the job.

The Tribunal accepted that Mr. French was disabled, that he used marijuana for pain management, and had been terminated for using marijuana.

However, the Tribunal also found that the employer’s zero tolerance policy was a BFOR, even though it exceeded the minimum standard under occupational safety laws (which focus on impairment and endangerment at the workplace, rather than setting a zero tolerance rule).

First, the zero tolerance policy was created for safety reasons and properly linked to the performance of Mr. French’s job.  Second, it was adopted in the honest belief that it was necessary.  Third, it was reasonably necessary: the employer could not accommodate Mr. French’s smoking without undue hardship.

Because Mr. French’s marijuana use was not authorized, and thus illegal, it could not be treated like other medications.  Although there was no evidence that Mr. French was impaired or posed any danger, that did not mean the zero tolerance policy was unreasonable or unnecessary.  The employer’s delay in enforcing the policy did not preclude it from enforcing it later.  Further, Mr. French had not informed his employer of his need to smoke or otherwise facilitated the accommodation process.

In the circumstances, the requirement for reasonable accommodation did not require the employer to abet Mr. French’s smoking marijuana at work.

Key takeaways

The French decision highlighted several important points for employers:

  1. It may be within employers’ legitimate management rights to impose a general rule prohibiting the consumption of drugs or alcohol at the workplace, especially where workplace safety is of particular concern. On the other hand, policies that rely on strict application of a zero tolerance rule, without considering accommodation in individual circumstances, may offend the Code if, for example, an employee is legitimately using marijuana for medical purposes.
  2. A zero tolerance policy should not be found unreasonable simply because an employee has not shown signs of impairment or inability to work safely.
  3. Where an employee is using drugs such as marijuana on the job without proper authorization, or without disclosure to the employer, a court or tribunal may be less likely to find an employer’s refusal to permit such drug usage to contravene the Code.
  4. An employer’s delay in enforcing a drug policy will not necessarily preclude later enforcement (although it is preferable to administer policies promptly and consistently).
  5. The duty to accommodate is subject to reasonable limits, and does not rest solely on the employer. Employees must facilitate accommodation, and their failure to do so may result in their complaints being dismissed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

RBC profit rises to 2.4B, boosts payout as earnings hit record

By Alexandra Posadzki


TORONTO – The chief executive of Royal Bank of Canada (TSX:RY) says” he’s confident RBC can weather tough economic conditions, even as its loan books have begun to feel the impact of lower oil prices.

“What gives me confidence during this period of market and economic uncertainty is that RBC is diversified across different businesses, client segments and geographies, has strict risk and cost discipline, and is backed by a strong capital position,” David McKay told analysts during a conference call Wednesday, after the bank announced its third-quarter results.

RBC boosted its dividend as it reported a profit of $2.475 billion, up four per cent from a year ago. That amounted to $1.66 per share of net income.

On an adjusted basis, RBC’s cash earnings were $1.68 cents per share one cent above analyst estimates.

The bank says its quarterly dividend will be increased by three per cent to 79 cents per share, up two cents per share.

However, the bank said it is beginning to be affected by the decline in the price of crude oil, which is now worth less than half what it was in the summer of 2014 and recently traded at the lowest levels in years.

“As we expected, low oil prices are challenging for some of our clients,” McKay said Thursday. “This quarter, we saw an uptick in impairments (impaired loans).”

The bank said total gross impaired loans rose more than 10 per cent over a three-month period to $2.38 billion as of July 31 a $234-million increase from the previous quarter, including $137 million linked to the oilpatch.

Impaired loans to the oilpatch soared to $183 million in the third quarter almost four times the $46 million recorded in the previous quarter.

RBC is the second bank to report an increase in impaired loans in the May to July quarter. On Tuesday, the Bank of Montreal (TSX:BMO) reported the oil and gas sector’s impaired loans grew $80 million from the previous quarter to $106 million.

Analysts say impaired loans to the oilpatch are manageable for Canada’s biggest lenders. The real trouble could come if consumer loans, such as residential mortgages, begin to suffer due to a rise in unemployment an impact that would take some time to materialize.

Mark Hughes, RBC’s chief risk officer, said the bank has a cautious outlook, but its consumer loan book isn’t showing any signs of stress.

About half of RBC’s total profit during the third quarter was from personal and commercial banking, including $1.239 billion from its Canadian operations a record for Royal driven by more volume and a 10 per cent rise in fee-based revenue.

Some of the bank’s other divisions didn’t do as well as last year.

RBC Capital Markets had $545 million of net income, down 15 per cent or $96 million from last year’s record high. The bank says RBC Capital experienced lower trading activity and lower equity origination.

In addition, a lower profit at RBC’s insurance business offset most of a year-over-year gain at its treasury services arm and wealth management had net income of $285 million little changed from last year.

The bank says its insurance results with net income falling $41 million or 19 per cent to $173 million were affected by a change in Canadian tax legislation and higher net claims costs in part of its business.


Solve insurance gaps and set stage for new businesses, chamber of commerce urges province, federal government.

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Survey: Low-interest rates and cyber crime top concerns for Canadian insurers

Survey: Low-interest rates and cyber crime top concerns for Canadian insurers

TORONTO, July 15, 2015 /CNW/ – A risk survey, by the Centre for the Study of Financial Innovation (CSFI) in association with PwC, identified the regulatory environment, cyber risk and low interest rates as top concerns for the Canadian insurance industry. Consistent with global counterparts, cyber risk and interest rates are new to the rankings this year alongside perennial concerns around regulatory developments and the broader macro-economy.

Regulatory risk emerged as the overall top risk for Canadian and global participants in the survey for the third successive year. While regulatory change is top of mind globally, for Canadians, the regulatory environment remains consistent with concern being driven by the impact of policy decisions and intrusion on product pricing and design.

Cyber risk and interest rates round out the top three risks for Canadian insurers, indexing slightly higher than their global counterparts, Canada did not diverge widely from the global response with nine of the top ten risks in the country also appearing on the global list. With their large data bases and complex business ecosystems, cybercrime continues to create challenges for the industry and rocketed to second place as a concern for Canadian insurers.  Similarly, while insurers were able to make adjustments accounting for low interest rates, as rates remain low, a focus on further product and pricing changes is required often at the cost of product innovation.

“Canadian insurance companies are some of the biggest international operators. It is no surprise that, given the scale of their operations and rich data holdings, cyber security emerged this year as a top concern leaving many players in the sector believing that a data breach is not a matter of if but when,” said Chris Couture, PwC Canada’s National Insurance Leader. “Between more regulatory scrutiny around data security and greater demand for online services in an often strained and antiquated IT environment, there is no doubt that this will remain at the forefront as a driver of change within the industry.”

According to the 2015 Insurance Banana Skins Survey, the top ten Canadian and Global Industry risk factors in 2013 include the following:

2015 Top 10 Risks (2013 results in brackets)



Regulation (1)

Regulation (1)

Macro-economy (3)

Cyber risk (-)

Interest rates (-)

Interest rates (-)

Cyber risk (-)

Macro-economy (2)

Investment performance (2)

Change management (16)

Change management (15)

Guaranteed products (4)

Guaranteed products (6)

Distribution channels (11)

Distribution channels (11)

Investment performance (5)

Natural catastrophes (5)

Quality of risk management (14)

Quality of risk management (7)

Political interference (10)

Global Results

The EU’s Solvency 2 Directive, to be introduced next year, was the focus of strongest concern, but many other countries are introducing similar measures, often modelled on Solvency 2. While the beneficial impact of tighter regulation was acknowledged, the survey responses showed regulation is also widely seen as excessive and overbearing.

This view was held both by practitioners and outside observers of the industry (academics, consultants, analysts etc.)  Typical responses from insurance company directors included: “A sound regulatory environment is absolutely essential. At the same time, over-regulation potentially strangles perfectly good and sound insurers from conducting good and sound business.”

A second cluster of concerns surrounds macro-economic risk, where respondents were cautious about the outlook for growth, as well as for interest rates whose low levels have depressed investment yields and made savings products more difficult to manage and sell.

A third cluster of risks is emerging in the area of industry change, particularly the impact of new technology on security, product delivery and data management.  Cyber risk appears for the first time since the survey was initiated in 2007, and is highly placed at No. 4 overall (no.1 for non-life insurance), reflecting rapidly growing concern about cybercrime and data security.

The digitization of the industry also threatens traditional business models in the areas of distribution, new entrants and client interface. Many respondents expect to see major structural change in the industry in the coming years.

A number of risks have receded, among them the quality of management and corporate governance in insurance companies, where marked improvements are seen to have taken place. These were once ranked among the top risks facing the industry.  Also declining is reputation risk as insurers become more pro-active in public relations, though the growth of social media is seen as a rising threat to reputation management.

The 2015 Banana Skins Index, which measures the level of anxiety in the industry, is at a record high despite the improving global situation. David Lascelles, survey editor, said: “The insurance industry faces enormous challenges in the growth of regulation, a difficult operating environment, and the looming threat of structural change.  This is reflected in the negative sentiment behind this survey”.

Stephen O’Hearn, PwC Global Insurance Leader, commented: “The long-term prospects for insurers are positive as people around the world live longer and have more wealth to protect. Yet they also face the disruptive impact of new technology, changing customer expectations, more exacting regulation and enduring economic uncertainty. Insurers’ ability to identify and manage emerging as well as familiar risks will be one of the key differentiators for success in this volatile competitive environment.”

Mark Train, PwC Global Insurance Risk leader, said: “We’re pleased to support the CSFI’s Insurance Banana Skins initiative, which provides valuable insights into the risk concerns at the top of the boardroom agenda. The ability to identify and manage emerging as well as familiar risks will be one of the key differentiators for success in a marketplace that offers considerable long-term opportunities, but also disruptive threats.”

The survey is the latest in the CSFI’s long-running Banana Skins series on financial risk.  Previous Insurance Banana Skins surveys were in 2007, 2009, 2011 and 2013. The 2015 global report can be downloaded at or the CSFI website: and the Canadian report can be viewed.


Risk factors to watch as possible recession looms

By Terry Pedwell


OTTAWA – There are some troubling signals and conflicting messages about the direction Canada’s economy will take just as voters are preparing to head to the polls once again.

On Monday, TD Bank said that Canada was likely already in a recession in the first half of this year.

And even though just last week Finance Minister Joe Oliver was dismissing the “R-word,” by Tuesday he was softening his stand, saying it’s just too early to tell if Canada’s economy has, indeed, slid backwards.

Oliver also said Canada is well positioned to deal with another economic downturn, although he acknowledged the country’s finances are in a fragile state.

So, what lies ahead for the economy?

Here are some facts:

— The 2015 federal budget projected a surplus this year of $1.4 billion. However, that was partly because the government stopped setting aside an annual $3 billion contingency reserve. It also assumed there would be nearly $1 billion in savings through the negotiation of new contracts with civil servants. Those savings have yet to be realized and the largest union, the Public Service Alliance of Canada, is currently seeking a court injunction to prevent the government from unilaterally taking much of that money out of employee sick time reserves.

— Oil prices aren’t in freefall, but they don’t appear to be on the rise either. While the spring federal budget pegged average crude prices in the $60 to $70 per barrel range, the August crude contract closed Tuesday at $52.33 U.S. per barrel. Continued low oil prices could further erode the federal government’s balanced budget pledge if revenues fail to materialize.

— The 2015 budget assumes 2.0 per cent growth in real GDP this year, based on private-sector forecasts. But TD now projects just 1.2 per cent for the year — a revision that could take yet another bite out of Ottawa’s bottom line.

— Relying on a booming economy south of the border to bolster Canada’s fortunes appears may be a bust. Statistics Canada reported Tuesday a widening merchandise trade deficit of $3.3-billion in May, up from $3-billion in April. It was Canada’s eighth consecutive trade shortfall and the second-largest in history, despite a Canadian dollar that’s been hovering at or below 80 cents U.S. BMO Capital Markets senior economist Benjamin Reitzes said the trade deficit numbers counter expectations that improving U.S. growth and a weaker loonie will provide a boost to Canada.

— There are also continuing concerns about the situation in Greece, and how that country will affect the Eurozone economy — and ultimately Canada. But Dominion Lending Centres chief economist Sherry Cooper notes that while all the attention has been on Greece, the Chinese stock market has fallen nearly 30 per cent in the past month as China’s economy slows. China, with the second largest economy in the world and a population 120 times the size of Greece, has until recently dominated a rising demand for Canada’s natural resources.

— A growing group of economists are anticipating that the Bank of Canada will lower its key lending rate next Wednesday, in an effort to stimulate growth.

— One cash cow for the feds right now is the Employment Insurance system. The federal government is currently collecting more money in EI premiums than it spends on benefits. And that means it can prop up its books with what’s left over — until the premium rate start to drop off in 2017.


Canada agency warns institutions to keep eye on transactions

By Mike De Souza

OTTAWA (Reuters) – Canada’s financial intelligence agency has issued detailed guidelines to financial institutions to help them identify signs of terrorism funding in the wake of two deadly terror attacks last October against the country’s soldiers.

The list, released by the Financial Transactions and Reports Analysis Centre (FINTRAC), includes keeping an eye out for clients who suddenly pay down debt, show transactions or travel plans to conflict zones or appear to be selling property and their possessions.

FINTRAC wants institutions to increase customer scrutiny and flag suspicious cases to the agency, its spokesman said on Wednesday. Last November, the agency reported a jump in suspicious transactions following the attacks in Ottawa and near Montreal.

“FINTRAC is not issuing these indicators in order to ask reporting entities to do additional work, but to be more vigilant in the review of transactions involving their clients,” spokesman Darren Gibb said of the new guidelines, sent out to financial institutions in May.

The agency was launched in 2000 to track money movements it feels may be related to money laundering, or national security issues such as terrorism. It passes any intelligence it gathers on to other government bodies for further investigation.

FINTRAC Director Gerald Cossette asked institutions to be diligent in the guidelines, noting that transactions associated with terrorism often fall below the C$10,000 ($8,153) mandatory threshold for reporting to FINTRAC.

The new instructions also call for the institutions – which include banks, life insurance companies, real estate agencies and developers, accounting firms and casinos – to be on the lookout for transactions involving people associated with terrorism in media reports, social media websites and those identified by law enforcement agencies.

FINTRAC urged institutions to review cases where multiple warnings are flagged as individual warning signs might not identify suspicious activity on their own.

Cossette wrote that previous reporting by the institutions following the October attacks was “extremely useful” for intelligence agencies.

“Indeed, your employees are often the first ones to have a suspicion regarding a transaction, which means that your efforts in submitting to us timely, relevant and high-quality suspicious transaction reports are fundamental to Canada’s ability to combat money laundering and terrorism financing,” Cossette wrote in a May 7 email to the institutions.

FINTRAC said the number of terrorism financing related cases it has studied and referred to other law enforcement partners more than doubled to 337 cases in 2014-2015, up from 159 in 2011-2012.

(Reporting by Mike De Souza; Editing by Alan Crosby)

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