finanCe

Frenzied B.C. housing market sets new records

Bryan yu Data Points

Home prices continued to spiral higher in January as overzealous buyers and a low supply environment drove further gains.

The average Multiple Listing Service price in B.C. shot up to a record $1.049 million, up three per cent from December and a mammoth 23 per cent year over year.

While average values are influenced by composition and regional shifts, quality-adjusted benchmark values showed similar patterns. The Lower Mainland benchmark rose 2.9 per cent from December, Vancouver Island came in at 2.6 per cent with a slightly smaller gain in Victoria, Chilliwack increased 4.5 per cent and the Thompson-Okanagan was close to two per cent. Detached price growth continues to dominate.

With the average value up more than 40 per cent since the pandemic began and still rising, there is reasonable concern of excess froth. Demand is indeed robust, and households are enamoured with owning, driving acceleration of home sales by a gain of six per cent in January to 10,201 units, marking an eight-month high due to workfrom-home, demand for space, urban outflow and of course low mortgage rates. However, the recent surge may reflect some irrational behaviour as end-use buyers and investors chase past price appreciation while racing against the clock to execute lower pre-approved mortgage rates.

Lack of supply has only reinforced upward price momentum. Buyers are competing for scant listings in the market, driving seller’s market conditions in nearly all areas of the province. That said, we continue to see this as demand-driven scarcity of inventory as new listings are generally in line with pre-pandemic levels.

While the pricing frenzy will likely continue for a few more months, we see the market cooling thereafter. Buyers are grappling with massive affordability challenges given price increases and the full effect of higher interest rates will soon curtail both end-user and speculative demand to help cool market conditions.

Retail spending closed off 2021 on a lower note in December but ahead of expectations. Sales at B.C. stores fell 1.4 per cent from November to a seasonally adjusted $8.12 billion. Yearover-year sales came in at 3.3 per cent. As with other provinces, spread of the Omicron variant likely hurt consumer confidence and spending, while rotation of office workers back to remote conditions and additional restrictions likely affected ancillary spending.•

INSIDERTRADING

The following is a list of stock trades made by corporate executives, directors and other company insiders of B.C.’s public companies filed in the week ended February 23, 2022. The information comes from a compilation of required reports filed with the BC Securities Commission obtained from DisclosureNet.com.

InsIder William James Garner, 10% owner Company: Tryp Therapeutics Inc. (TSX:TRYP) Shares owned: 18,420,000 Trade date: February 22 Trade total: $1,000,000 Trade: Acquisition of 5,000,000 shares at a price of $0.20 per share InsIder Robert MacKay Buchan, director Bryan Yu is chief economist at Central 1 Credit Union.

Company: Andean Precious Metals Corp. (TSX:APM) Shares owned: 1,873,334 Trade date: February 17 Trade total: $895,000 Trade: Acquisition of 500,000 shares at a price of $1.79 per share InsIder Todd Olson Anthony, officer Company: First Majestic Silver Corp. (TSX:FR) Shares owned: 65,000 Trade date: February 17 Trade total: $535,500 Trade: Sale of 35,000 shares at a price of $15.30 per share InsIder Karen Liu, officer Company: First Majestic Silver Corp. (TSX:FR)

b.c.hOusing market stays hOt

B.C. housing price growth accelerates in January

Prices for all classes of home in the province have surged during the pandemic

15

10

Per cent 5

0

-5

-10

-15 2015 2017 2019

2021 Month-over-month per cent change (L) Average price (R) $1,200,000

1,000,000

800,000

600,000

400,000

200,000

0

SOURCeS: CReA, CenTRAl 1. lATeST: JAnUARY 2022

Home values higher in many B.C. regions

lower Mainland homes remain the province’s priciest

Benchmark price by MLS area (000s) $1,400 1,200 1,000 800 600 400 200

1,293.7

965.2 930.8

705.6 762.6

507.8 528.6 857

424.2 598.9 503.7 722.3

Lower Mainland Victoria Vancouver Island Chilliwack Kamloops and District Okanagan February 2020 January 2022

SOURCeS: CReA, CenTRAl 1. lATeST: JAnUARY 2022

OmicrOn hits b.c. retail

Province’s retail sales slip but remain elevated

Spending in B.C. is above pre-pandemic levels

Per cent 20 15 10 5 0 -5 -10 -15 -20 -25

2020

Retail sales (R) 2021

Month-over-month change (L) $8,500 8,000 7,500 7,000 6,500 6,000 5,500 5,000

SOURCeS: STATiSTiCS CAnADA, CenTRAl 1. lATeST: DeCeMBeR 2021

Shares owned: 20,000 Trade date: February 17 Trade total: $461,400 Trade: Sale of 30,000 shares at a price of $15.30 to $15.50 per share InsIder Marc Lustig, 10% Owner Company: Briacell Therapeutics Corp. (TSX:BCT) Shares owned: 1,640,000 Trade date: February 17 Trade total: US$432,850 Trade: Sale of 55,000 shares at a price of US$7.87 per share InsIder Gerald Miller, director Company: West Fraser Timber Co. Ltd. (TSX:WFG) Shares owned: 6,142 Trade date: February 18 Trade total: $248,000 Trade: Sale of 2,000 shares at a price of $124.00 per share InsIder Keith Neumeyer, director Company: First Majestic Silver Corp. (TSX:FR) Shares owned: 4,043,067 Trade date: February 17 Trade total: $193,750 Trade: Sale of 12,500 shares at a price of $15.50 per share InsIder Charles Edgar Fipke, director Company: Cantex Mine Development Corp. (TSX:CD) Shares owned: 19,477,036 Trade date: February 17, 18, 22 Trade total: $191,000 Trade: Sale of 598,000 shares at prices from $0.30 to $0.34 per share InsIder Mani Alkhafaji, officer Company: First Majestic Silver Corp. (TSX:FR) Shares owned: 25,097 Trade date: February 17 Trade total: $116,100 Trade: Sale of 7,500 shares at a price of $15.48 per share

InsIder Blair Lawrence Naughty, 10% owner Company: York Harbour Metals Inc. (TSX:PXA) Shares owned: 5,485,500 Trade date: February 17, 22 Trade total: $62,700 Trade: Acquisition of 70,000 shares at a price of $0.87 to $0.93 per share•

Businesses bearing significant costs of statutory leave legislation

Podium

J. Geoffrey Howard

The recent introduction of five days of mandatory paid sick leave in B.C. marks the high water mark of a tidal wave of legislation increasing B.C. employers’ obligations to provide job-protected statutory leaves.

While popular with employees, these expanded obligations effectively force an employer to incur significant costs and lost productivity to accommodate events in employees’ personal lives. Statutory leave rights need to strike a fair balance between the needs of employees and employers. Where the leave is paid, the issue is whether the cost should be borne by the employer or shared by all workers and employers through a government-paid benefit, as is the case for maternity and parental leave benefits.

In a series of amendments to the Employment Standards Act (ESA) over the past few years, the government has:

1. Multiplied the number of grounds on which employees can take statutory leaves: the ESA now lists 14 separate grounds of leave, each with its own set of rules. 2. Substantially increased the length of time employees can be off work on statutory leaves: birth mothers can now take up to 18 months off work, up from 12 months. Employees caring for critically ill family members can take up to 36 weeks to care for minors. Those who lose a child can take up to two years. 3. Required some leaves to be employer-paid: employers must now provide five paid days annually for sickness and five for absences due to sexual or domestic violence.

There is no question that employees need to have the legal right to take job-protected leave in some situations, such as having children, bereavement and sickness. However, the proliferation and extension of statutory leaves overlooks the reality that statutory leaves, particularly the longer ones, have significant impacts on employers and co-workers, including:

A. Because the employer is required to reinstate the employee returning from leave, employers are faced with hard choices: manage around an absence or hire a replacement. The former solution necessarily imposes significant additional workload on co-workers and managers. Finding a replacement is also often difficult if not impossible, as well as costly. Few employees are interested in short-term leave replacement contracts, particularly in the current labour market. For many roles, it is not practical to train a replacement to the point they become productive during a leave.

B. Employees on leave must continue to receive benefit coverages, a cost incurred with no work provided in return.

C. Under the current ESA, vacation time off and, in some cases, vacation pay must continue to accrue to employees who are off work on statutory leaves. This does not make sense.

D. Most statutory leaves are available to all types of employees, with little or no service requirement. Does it make sense that a part-time employee working two days a week gets the same number of paid sick days as a full-time employee?

E. Employees taking longer leaves must transition their work to others then need time to reintegrate to full productivity on their return. This results in reduced productivity of the leave-taker at either end of the leave.

F. Mandating paid leaves effectively imposes significant new costs on employers. Under the new sick leave amendments, most employers expect all employees to take all five days. This is a major wage cost increase to the approximately 60 per cent of employers who did not offer paid sick leave prior to the amendments. Forcing employers to pay for leave time is a departure from the previous approach under which compensation to employees on leave was “socialized” by being paid through the employment insurance (EI) system financed by employers and employees collectively.

These impacts will continue to motivate employers to either move their labour force elsewhere or convert employees to contractors, who have no right to statutory leaves. To avoid this, it is time for a rebalancing of leave rights. Some changes that would help strike a fairer balance include: •Reducing the number of leaves to the most common ones and limiting them to situations beyond the control of the employee; •Reducing the duration of leaves with a guarantee of reinstatement to more reasonable durations, with 12 months as a maximum. This could be supplemented by a

“first right of return” to a job opening for employees taking more than 12 months rather than an iron-clad right of reinstatement; •Shifting benefit costs on longer leaves (e.g. exceeding 12 months) to the employee; •Amending the ESA to clarify that no vacation rights accrue on leaves exceeding a few weeks; •Pro-rating leave rights for part-time employees where appropriate (e.g. sick leave) and making longer leaves conditional on a minimum period of prior employment; and •Requiring the EI or WorkSafe system to provide all compensation for employees on leaves, with the cost shared amongst all employers and employees. This could include introducing higher levels of benefits for some leaves such as sick leave.

Together these reforms would help rebalance the current leave regime to better accommodate the needs of employers while still protecting employees’ rights to reasonable amounts of time off work. •

J. Geoffrey Howard (ghoward@ howardlaw.ca) is a senior employment lawyer and principal of Howard Employment Law.

Covert recordings: cause for termination or evidence of harassment?

Podium

Pam Costanzo

Smartphones and voice recording apps make recording conversations easy. Employees may be tempted to create a record of a performance review or salary negotiation, but surreptitiously recording conversations at work breaches trust and privacy.

According to a recent court case, it may also constitute cause for termination.

In Shalagin vs. Mercer Celgar, 2022 BCSC 112, the court considered the case of an employee who was terminated without cause after a disagreement over his bonus. He filed a human rights complaint and a wrongful dismissal action. In the course of litigation, he revealed that he had been recording conversations at work for several years, including training sessions, safety meetings, and “at least 30” meetings with supervisors and human resources. He said he made the recordings for two purposes: to help him learn English and because the meetings were “related to his rights.”

When Mercer Celgar learned about the recordings, it asserted that was just cause to terminate his employment.

The court agreed with the employee that it is legal to record a conversation as long as one party consents. The question was therefore whether doing so “fundamentally ruptured the relationship, such that the mutual trust between the parties is broken.” The employee admitted he had kept the recordings a secret because he knew his colleagues would be uncomfortable. The court accepted that the recordings were not malicious, but also accepted his co-workers felt “violated.” In the absence of any real justification for the recordings, the employee’s conduct justified terminating his employment for cause.

As is typical, this case rests on a particular set of facts, and employers should examine the circumstances before imposing discipline or terminating employees who record workplace interactions. It was significant in the Shalagin case that there was no justification for the recordings. The result may be different if an employee is recording conversations because of real concerns about bullying or harassment as those recordings may be evidence. Disciplining an employee in those circumstances could be retaliatory.

In New Westminster vs. IBEW, 2021 Can LII 7391, two employees had a conversation in a change room at work. A third employee overheard their conversation, became concerned and recorded it on his cellphone. One of the employees appeared to be making threats. Neither employee consented to having their conversation recorded. The recording was provided to the employer; unfortunately, it was poor quality and difficult to hear. In its investigation, the employer relied on witness statements rather than the recording. The employee making threats was terminated from his employment. The union grieved his termination.

At the hearing, the union argued it was discriminatory not to also discipline the employee who recorded the conversation without permission. The arbitrator decided it was “inappropriate” to record colleagues in a workplace, but also found the employee acted as a whistleblower. He said the employee “could not be faulted” for bringing forward safety concerns and that if he had been disciplined for making the recording, WorkSafeBC could have viewed it as retaliatory.

Employers should consider whether recordings are being made for a purpose related to safety. If so they could be accepted as evidence by WorkSafeBC or workplace investigators. For example, in City of Calgary and CUPE Local 37, 2018 CanLII 53482, an employee recorded incidents of sexual harassment on her cellphone. When she offered to play them for the human resources employee investigating the allegations, he refused to listen to them and said she would have to email them to him.

He submitted a report stating the allegations were unsubstantiated without hearing the recordings. The arbitrator expressed concern that the investigator “simply ignored firsthand evidence of conversations” in a “she said/he said situation” and said, “any potentially corroborating evidence should have been pursued.”

There was no suggestion that the employee had been wrong to record the conversations; rather, she won a large award in damages. •

Pamela Costanzo is an associate at Roper Greyell, practising in all areas of workplace law with a focus on workplace investigations and labour arbitrations.