On June 19, 2018, the Senate voted to pass Bill C-45, the federal government’s bill to legalize and regulate recreational cannabis in Canada. This paves the way for Royal Assent. After a “buffer period” to allow provinces and municipalities to complete preparations, legalization is expected to take place sometime in the Fall of 2018. Regardless of personal opinions, legalization will likely have far-reaching consequences on the Canadian insurance industry.
Generally, the proposed Act will allow adults to purchase, share, and possess up to 30 grams of dried cannabis, grow up to four plants per residence for personal use, and make cannabis products including food or drink. Certain rights can be modified by corresponding provincial legislation, such as Ontario’s Cannabis Act2017, SO 2017, c. 26, Sched. 1, which restricts the age of purchase to 19 as opposed to the federal minimum of 18.
In addition to legalizing the possession and production of recreational cannabis, Bill C-45 provides a regulatory framework for the distribution and management of the cannabis supply in Canada. It grants significant powers to a Cabinet designate to levy administrative monetary penalties on individuals who are in violation of various provisions. Significant restrictions will also be placed on marketing, branding, and advertising targeted at youth.
Additionally, new criminal penalties will be imposed on the illegal distribution or sale of marijuana outside of the regulated systems put in place by the provinces, possession over the 30 gram limit, or production of cannabis beyond the personal use limits. These penalties will range from modest tickets and fines for small infractions to up to 14 years in prison for more serious offences. Notably, the act of taking cannabis across Canada’s borders carries with it a penalty of up to 14 years in jail.
It will be up to the individual provinces to determine how cannabis will be distributed in their respective jurisdictions. Ontario has opted for a centralized government monopoly where cannabis will be sold through the Ontario Cannabis Store (“OCS”). Nova Scotia has put in place a similar government monopoly. In contrast, Manitoba plans to allow a cluster of four private companies to distribute cannabis. Similarly, each province and municipality will be entitled to restrict the consumption of cannabis on public property.
After 95 years of prohibition, insurance policies and practices have generally excluded anything to do with cannabis. It was only recently that some insurers have begun to include medical cannabis in their group benefit plans, despite medical cannabis having been legalized many years previous. Previously, losses arising from fires caused by growing cannabis were excluded as arising from criminal acts. With the legalization of home growing, questions remain as to whether failing to tell your insurer about your four cannabis plants would be sufficient to constitute a material change in risk. Certain independent adjusting firms are also rolling out specialized claims services for the cannabis industry in an effort to get ahead of the coming changes. Although the full impact of legalization remains to be seen, disputes involving coverage under home owner policies, reasonable medical expenses, and human resources practices will likely be quite common in the initial transition.
In the midst of the current NHL season, which is seeing more stringent enforcement of concussion protocol implemented to protect professional athletes from potentially life altering brain injuries, the Ontario Government passed a bill that affords the same type of protections to amateur athletes. On March 6, 2018, Ontario enacted Rowan's Law (Concussion Safety), 2017 – legislation inspired by the late Rowan Stringer, a 17-year old girl who suffered a fatal brain injury playing rugby in 2013.
The purpose of the legislation is simple: protect amateur athletes from brain injuries. Rowen’s Law places an obligation on sports organizations, which are defined broadly to include “persons or entities that carry out, for profit or otherwise, a prescribed activity in connection with an amateur competitive sport”, to implement a “concussion protocol” that will effect athletes, their parents, and coaches.
The Act articulates four principles:
Athletes, or the parents of an athlete if they are under the age of 18, must confirm that they reviewed the sport organization’s concussion code of conduct. This duty extends to the coaches of sport organizations who are also required to be familiarized with the concussion protocol of the entity that they work for.
The sport organization must establish a concussion code of conduct which must be adhered to and be enforced by the members of the sport organization.
The sport organization must establish a “removal-from-sport” protocol that would be triggered when an athletes suffers or is suspected of suffering from concussion-like symptoms. This obligation requires the sport organization to immediately remove the athlete from training, practicing, or competing. The athlete is not allowed to return to the sport, except in accordance with the organizations “return-to-sport” policy.
The sport organization must establish a “return-to-sport” protocol which requires the designation of a person who is responsible for ensuring that an athlete who sustained, or is suspected of sustaining, a brain injury is able to return to the sport. The protocol must be designed to account for potential injuries that the athlete sustained in the course of participating in the subject organization, as well as injuries they may have sustained prior to joining the organization.
The Act is a good start on the road to ensuring a safer environment for amateur athletes to train and compete in, but it also places a significant obligation on entities to ensure that their athletes are safe. A significant challenge that entities will be confronted with is selecting a “designated person” who will be responsible for determining whether an athlete is “cleared” to resume athletic activity. While teams like the Toronto Maple Leafs have professional medical staff to make such determinations, amateur sport organizations will need to carefully develop their concussion protocol to ensure effective compliance with the Act and safeguard the health of its athletes.
The Act appears to have broad application which would include varsity teams at universities, private athletic clubs, municipal programs aimed at improving athletic skills of amateur athletes, and more. Entities that may assume they are unaffected by the passing of the Act, will have significant liability exposure in the unfortunate event that an amateur athlete suffers a brain injury. It will be important to develop, or update, a concussion protocol that is in keeping with the Act as well as the insurance policy covering the entity to ensure no coverage issues arise in the future.
We urge all individuals and entities operating amateur sport programs to develop, or update, their concussion protocols and seek assistance to ensure compliance with the law, to protect all athletes from life-threatening injuries, and make sport a safer space.
This article was written by Stas Bodrov. Having competed on the York Varsity swim team, served as a head coach of a lifesaving club, and being heavily involved with the Lifesaving Society of Ontario, Stas is uniquely positioned to provide legal advice with respect to all aspects of sport and injury prevention initiatives for athletic organizations.
Stas practices in insurance-related litigation. He has a broad range of experience including tort claims, accident benefits, subrogation, priority and loss transfer disputes, WSIB matters, and fraudulent claims. Read more...