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Life insurance premiums could go up because of pot-infused edibles

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Canadians looking to enjoy soon-to-be-legalized pot-infused edibles could get hit with higher insurance premiums – depending on the size of their appetite.

Many insurers no longer treat cannabis users as cigarette smokers – who pay much higher premiums due to the high-risk activity – provided there is no tobacco or nicotine in the products they use.

The shift came in recent years as Canada moved to legalize cannabis for recreational use, starting with dried flower, oils, plants and seeds.

However, to avoid paying more, cannabis usage must stay below a set number each week and many insurers count any kind of pot, whether it is smoked or sipped or chewed.

The threshold ranges from two to four cannabis usages each week, depending on the insurer, said Lorne Marr, LSM Insurance’s director of new business development.

“More than four, then you would still be treated as a non-smoker with most companies, but there would be an extra rating or extra premium attached to that marijuana use,” he said. “And most companies treat the edibles as similar to smoking.”

But the approach among insurers varies, with some allowing for unlimited edibles consumption and others deeming a client a smoker after more than four weekly pot usages.

“You definitely want to shop around, because there could be a big difference,” Mr. Marr said.

Cannabis-infused foods, beverages as well as topicals such as lotions containing cannabidiol – known as CBD, the non-intoxicating compound found in pot – are set to hit retail shelves as early as mid-December.

Earlier this month, Ottawa said the legislation regulating these new, next-generation cannabis products will come into force on Oct. 17. In turn, because of regulatory requirements, the earliest they can go on sales is 60 days later.

Companies are expecting brisk demand for these products as they appeal to a broader base of consumers, including those who don’t want to smoke.

The Canadian Life and Health Insurance Association said cannabis consumption, for either recreational or medical use, will be taken into account when assessing risk and premiums.

“However, our members are continuing to assess the risks of any form of cannabis and will make adjustments to the risk profile as cannabis becomes more prominent in the market and more evidence of health impacts are known,” a spokesman said in an e-mailed statement.

Manulife Financial Corp. said it reviewed its underwriting around cannabis use in 2016 and currently, any users who do not use any nicotine products or e-cigarettes will be classified as non-smokers.

The insurer’s individual insurance products are available to both recreational or medical cannabis users, but factors affecting the rates include the amounts used, the company said in an e-mailed statement.

“The information about quantity used is proprietary, most recreational users are issued standard premium rates … Edibles are currently considered the same as all other forms of consumption,” a spokeswoman said in a statement.

Canada Protection Plan, which offers no-medical-and-simplified-issue life insurance, said if a client smokes cannabis more than four times a week, including vaping, they are categorized as a smoker.

Consumption of cannabis, in any form, more than four times a week would also mean they are ineligible for certain plans, a spokeswoman for the insurer said in an e-mailed statement.

The impact is significant, as those with smoker status pay as much as two or three times more in premiums, Mr. Marr said.

While most insurers limit weekly consumption of cannabis, few stipulate how much can be consumed in one sitting, he added.

“You could have a huge brownie or a little brownie,” he said. “Or you could have one of those Cheech-and-Chong joints or a little tiny joint … That part hasn’t been properly clarified yet.”

As well, it is unclear how topicals, such as a CBD-infused lotion for joint pain, will be treated.

Manulife said it is an “evolving issue” and it will evaluate specifics as legalization of these new products occurs.

“Based on the research we’ve completed to date, we’re not anticipating any major changes in our approach to underwriting cannabis once it becomes available in other formats.”

Insurance companies will not be monitoring what you are eating while sitting on your couch on a Friday night, but will be basing their assessments on how you answer a series of questions in their initial application forms.

It may be tempting to play down your cannabis usage, but it is important to be transparent, said David Share, a lawyer who specializes in insurance claims.

“Disclosure is very, very important on these applications to be accurate … Insurance companies will look under every rock to find some way to not pay,” he said.

And if there is undisclosed pot usage that shows up in a doctor’s notes or medical history, that could void the insurance, he warned.

“If you’re concerned about the cost of life insurance … then the guidance is to limit your use to moderate use.”

Cannabis edibles will soon be legal in Canada but because insurance companies treat these new pot products the same as smoking a joint, your life insurance premiums may take a hit as a result.

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CPPIB posts 2.3-per-cent return in second quarter

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CEO Mark Machin walks through the CPPIB office in Toronto in this file photo.

By Mark Blinch

Canada Pension Plan Investment Board posted a 2.3-per-cent return in the quarter ended Sept. 30, helping it maintain double-digit long-term returns and add nearly $10-billion to its total assets.

CPPIB, the investment manager for the Canada Pension Plan, said its five-year and 10-year returns through Sept. 30 averaged 10.3 and 10.2 per cent over the period, and it closed the quarter with assets of $409.5-billion.

CPPIB posts 2.3-per-cent return in second quarter

CPPIB didn’t break out returns by asset class, but said the group that actively manages its equity investments, as well as its private-equities division, were “strong contributors.” The Active Equities department picks specific stocks with an aim to outperforming the market, while private equity is the ownership of private companies, often aided by substantial borrowing.

It received “modest gains” from its passive portfolio, a style of investing designed to match the overall market. CPPIB also said it had positive performance in other asset classes, including its bonds, aided by declining interest rates.

A little less than one-third of the fund’s assets are in stocks traded on the public markets. A quarter of the portfolio is private equity.

All return percentages are net of costs, CPPIB said. Because the CPP must serve plan members for decades to come, CPPIB says long-term results “are a more appropriate measure of CPPIB’s investment performance compared to quarterly or annual cycles.”

Canada Pension Plan, founded in 1966, is the primary retirement-security program for working Canadians. The government created CPPIB in 1999 to professionally manage the Plan’s money. The past two decades have seen a shift first from bonds to stocks, then to assets like real estate, infrastructure and private equity. The government projects the CPP Fund will grow to $545-billion in assets by 2025 and $1.5-trillion in assets by 2040.

Major deals in the quarter included buying publicly traded Pattern Energy Group Inc. for US$2.3-billion in cash, valuing the company at US$6.1-billion, including debt. It also struck a deal to merge data-information provider Refinitiv into the London Stock Exchange, valuing Refinitiv at US$27-billion.

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Trade mission seeks to calm concerns about forestry downturn

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Forests Minister Doug Donaldson says he’s in Asia trying to calm investor concerns about reduced supplies of British Columbia timber for major residential developments and tourism-resort projects in China and Japan.

Donaldson, in a teleconference from Tokyo, says he and 35 senior executives from B.C. forest companies and associations are on a five-day trade mission to Asia that concludes Friday.

He says the Chinese and Japanese are keenly aware of the toll pine beetle infestations and massive wildfires have taken on B.C.’s forests, but business leaders and forests ministry officials are reassuring potential customers the province has abundant supplies of timber.

The Opposition Liberals recently released a document detailing ongoing forest industry struggles, listing almost 60 examples where companies have implemented cost-cutting measures that range from harvest reductions to permanent mill closures.

The detention of top Huawei executive Meng Wanzhou in Canada prompted the minister to postpone his planned participation on a forestry trade mission to China last December.

Donaldson says this week’s trade talks in Japan and China focused only on business.

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Union representing SkyTrain workers considers possible strike action

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SkyTrain in Vancouver/Shutterstock

CUPE Local 7000, the union representing 900 SkyTrain workers, says negotiations with the BC Rapid Transit Company (SkyTrain) have reached a deadlock.

CUPE Local 7000 says that there have been more than 40 sessions at the bargaining table since the beginning of May, and that talks broke down Tuesday, Nov. 12. It says that both sides were unable to reach an agreement on several key issues.

“The Company has failed to offer fair wages or address the sick plan, inadequate staffing levels, forced overtime, and other issues important to our members,” said CUPE 7000 President Tony Rebelo.

“We have been more than proactive and flexible in trying to reach solutions to improve the service, but the employer’s latest package failed to address the key issues. They are simply not interested in bargaining seriously, so we’re left with little choice but to go to our members and seek direction for next steps.”

CUPE 7000 represents approximately 900 SkyTrain workers who provide service as SkyTrain attendants and control operators as well as administration, maintenance, and technical staff.

Vancouver Is Awesome reached out to TransLink for comment and will update the story when they have provided comment.

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