I get the point, really, I do, but there has to be some measure of academic performance. During a college career during which one will complete some 45-50 courses, however, I don't think that having one lone course with a 'free A' will harm anyone.
It's just my opinion, but anyone taking a 4th year of physics is probably pretty serious about the subject.
It's their school, but the university is much better off with him than without him. As traditionally liberal as the schools in Canada are, I'm surprised this his methods would be met with such opposition by fellow staff members.