Canada Is Legalizing Marijuana and Employers Need to Prepare
By Kathryn Hendy-Ford, Senior Manager, HR Advisory, Radius
Canada’s Cannabis Act, which legalizes marijuana, goes into effect October 17, and companies with employees in Canada need to re-examine their HR policies to set rules governing use of the drug in the workplace.
The new law applies to all aspects of recreational production and use. Medicinal marijuana is already legal in the country, and has been since 2001. Legislators said they passed the new law in order to remove the sale and control of the drug from the criminal underworld and to keep it away from children, as well as to ensure safe production.
The Act will also create a lucrative new source of tax revenue. Production and storage facilities will pay property taxes. Retailers will pay taxes on their profits, as well as licensing fees. Industry employers and employees will pay provincial and federal income taxes, as well as contributing to employment insurance and the national pension plan. According to some reports, total government revenue could be as high as $2 billion in Canadian dollars (USD 1.52 billion).
Canada will also save money by avoiding the costs of arresting and incarcerating people associated with the trade. More than half of Canada’s drug offenses are cannabis-related. In 2016, approximately 23,000 cannabis-related charges were processed, according to the government.
Decriminalizing marijuana will do much more than fatten government coffers and lower court costs. The new industry could add $6 billion to Canada’s GDP, according to the country’s parliamentary budget officer. Other estimates are much higher, ranging from $10 billion to $37 billion.
Financially distressed towns are hoping the industry will spark an economic turnaround. Some former politicians and government officials who once opposed legalization are now forming companies to grow or distribute marijuana, including a former officer in Prime Minister Justin Trudeau’s party, who runs a company that has invested in 12 separate marijuana-growing operations.
Though the law makes marijuana legal, it also imposes restrictions. It limits the quantity adults are allowed to possess to 30 grams, as well as up to four plants per residence. It also severely restricts advertising. Growers must have a federal license. Provinces can decide whether to allow private companies to sell the product or establish government stores, similar to those that have sold alcohol since Prohibition ended in the US.
Effect on Employers
The fact that marijuana is becoming legal does not mean that employers must allow people to use it in the workplace. They do need to provide reasonable accommodations for workers who use it for medical purposes and have a prescription, as has been the case for over 15 years. A prescription, however, does not enable an employee to be impaired at work or endanger the safety of others.
Aside from accommodating medical needs, employers have the right to set rules to maintain a safe workplace and avoid impairment on the job. They can prohibit the use of marijuana at work, just as they do alcohol.
However, enforcing the rules could pose problems. Testing for drugs and alcohol is controversial in Canada, and employers must take care to stay on the right side of evolving case law. In industries other than those where physical safety concerns are paramount, widescale or random drug and alcohol testing is generally not permitted. Instead, employers should “use the least intrusive means of assessing impairment or fitness for work,” according to a government website.
Legal measures include work performance tests, monitoring employees for signs of impairment, peer monitoring, and “random checks” that do not include blood or breath sampling. Employers can also set up smoke-free zones, just as they do for cigarette smoking. In addition, the government suggests creating employee assistance programs, health promotion and substance awareness programs, and addiction accommodation policies.
Alongside monitoring employees from a health and safety perspective, employers also have a duty to provide reasonable support for employees who have substance abuse issues with cannabis, as well as other illegal and legal substances. Employers must therefore manage a balancing act between sanctioning employees from a health and safety perspective and supporting them when they have genuine personal issues.
In light of the above, companies with workers in Canada should review their employee manuals and HR policies, revising them to mention marijuana explicitly in any sections dealing with alcohol or drugs and ensuring that fair and robust disciplinary procedures are in place. They should also keep abreast of drug case law, especially as it relates to the workplace.