Subject: New Agency of Government, HCRA, Seems to Promote Builders’ Interests, not Consumers’

Date: Oct. 12, 2021

Dear Minister Romano,

Many consumers were taken aback to read the article published Oct. 9, 2021 in The Toronto Star, (image below) written by your new CEO of the builder regulatory agency, the “Home Construction Regulatory Authority, (HCRA).

In this article, the new CEO and Registrar, Ms. Wendy Acheson, says builders can re-negotiate new home sales contracts they’ve already signed, due to the rising cost of building materials and “other construction costs”, as long as they’re “acting with integrity and honesty”.

THis is a surprising article from a regulatory body. it would seem more appropriate coming from a Builder lobby group. The regulator’s mission is to protect consumers, not the industry it’s regulating.

There are several serious problems with this article from the consumer point of view. I outline a few below.

New home buyers, just as builders, have suffered significant financial hardship during the pandemic. They have also experienced delay after delay in new home construction, while scrambling to find alternative accommodation or financing, as the delivery of the home is pushed further and further into the future. None of these hardships are taken into account in this article.

If builders can re-negotiate sales contracts, can purchasers also do so, if their costs have gone up as well?

But even if they could, few consumers have the extra funds or time to hire experienced lawyers.

The advice from the HCRA CEO is “don’t let yourself be bullied or intimidated“, and “never be misled into thinking there is no choice but to accept new terms”. This doesn’t reflect the real experiences of consumers in the current tight supply market especially when up against large corporations.

Builders must act “honestly and responsibly“, says the HCRA CEO. Have you ever met a builder who would say he doesn’t act honestly and responsibly?

HCRA has a new Code of Ethics we’re told. Most businesses do, but that doesn’t mean it’s enforced, or that anyone has the means to prove anyone else acted unfairly. Unless the purchaser can afford a top lawyer, and has hours of free time, it’s a costly, lengthy battle to try to prove this.

Nowhere in this article does the CEO say that HCRA is the regulator of builders, she only mentions the licensing function. In paragraph 7, she writes “HCRA is responsible for licensing the builders…” This may be a mistake, since it’s in the title of the organization, but for consumers it’s a concerning omission in this article. After the failure of the previous regulator Tarion, consumers need to see the new regulator is doing its job. They want to see clear standards, monitoring of compliance, and transparency in the results and builder track records. Giving permission to builders to renegotiate signed contracts should be at the bottom of the new regulator’s list, if at all.

New home builders already write their own water-tight contracts with the help of top lawyers, and can fend off consumer scrutiny they don’t want during the sales and construction process. Many contracts by major builders I’ve seen include “weasel clauses”, for example forbidding class actions, preventing critiques on social media, and forbidding complaints during construction, …or else the builder can terminate the contract.

Power imbalances in new home purchases are worsening. Where’s the consumer protection?

HCRA’s CEO admits “builders are in a position of power relative to home buyers”. But her advice – “don’t let yourself be bullied or intimidated” – is useless.

She must know builders write their own contracts and include all the extra clauses they like to protect their own interests. Anyone who objects will be shown the door.

Consumers have limited choices in homes they can afford, which might be close to their work or other family members. One buyer told me the advice he got from his own lawyer was to keep quiet about construction problems, or the builder could cancel the contract, since the terms allowed him to do so. For the industry regulator to tell consumers “don’t let yourself be bullied” seems out of touch with what’s really going on in this tight supply market. Some builders may be unfair, unethical, or even by-passing consumer protection laws, but to prove it you’ll need deep pockets for lawyers and months of free time for complex legal battles.

The worn-out advice given to consumers by the Ministry and the HCRA CEO is to “obtain independent legal advice”. This can only make sense coming from government and agencies like HCRA who have their own in-house counsel paid for by taxpayer or home purchaser, and don’t have to pay out of their own pocket.

Sure, lawyers can be “helpful“, as Ms. Acheson says. But these fees could eat up $20,000+ of one’s savings for a simple dispute when the opposing party is a large corporation. HCRA’s advice is blind to the consumer experience and the uphill battle for individuals fighting large builders.

“The HCRA is here to protect new home buyers”, says HCRA’s new CEO. But this article is promoting builders’ interests, not consumers’.

Contracts are supposed to balance the rights and responsibilities of both parties. But if terms are as movable as sand, what credibility do contracts have?

It’s concerning that HCRA in the first months of its operation is coming up with this idea on how builders can protect their profit margins, and promoting this in the pages of major media. If you order a new car to be delivered in six months, and the price of steel goes up, can the dealer renegotiate the price you both agreed to pay in the contract? Would a government agency advocate for this?

Why is HCRA publicizing this practice, which will only decrease home affordability?

This article exemplifies the larger problem: government agencies like HCRA tell us they’re protecting consumers, but show a lack of understanding of the consumer perspective.

A possible solution, which has been suggested to the Consumer Ministry several times, could be to create a Consumer Watchdog Office, to make sure consumer perspectives are understood in policy-making.

After 42 years of the failed regulator Tarion, consumers need to see if HCRA will protect new home buyers, not act as a lobby group for builders. The industry has several of thier own well-financed politically-connected lobby groups to do this.

HCRA still has not answered what is the status of the 95 complaints about licensed builders it received within the first two months of operation, or the Auditor General’s finding that 65% of the time between 2014-18 builders did not repair items they should have under the warranty. These are important questions for consumers who put their life savings into a new home and rely on a well-regulated industry.

We look forward to your response as Minister for consumer protection, part of a government which tells us it’s For The People. How does this article fit into HCRA’s mandate? How does the renegotiation of contracts help housing affordability? How does it create the “fair” marketplace which your ministry promises?

Thank you.


B. Captijn

Consumer Advocate


B.M. Captijn, M.A.,

Consumer Advocate


Twitter: @ReformTarion and @ONTConsmrRights


From: The Toronto Star, Oct. 9, 2021, pg. 5


Filed under Uncategorized

Too Little, Too Late

Tarion’s self report card gives them an “A”. But what’s actually been done in two years since the Auditor General’s report on this government agency responsible for protecting new home buyers and regulating builders?

Not much.

Here’s a fact-check.

Still no independent oversight; little action

Serious problems were brought to light after 43 years of Tarion operating in near secrecy: bias toward builders, lack of deterrents to bad building, and incentives for executives to deny claims, all this from a “consumer protection” agency of government.

Tarion says it has implemented 19 of the 25 recommendations directed to them. The Consumer Ministry has, predictably, rubber-stamped just about everything Tarion says. To try to silence decades of consumer and Opposition complaints about Tarion, they’ve called this “a complete overhaul”. 

Like all self-congratulatory claims from government and its agencies, this needs a fact-check. With my 10 years experience observing Tarion and participating in legislative change, here’s mine below, looking at each of the Auditor’s recommendations one by one.

1)  Auditor General’s Recommendation #1:

Tarion’s board was told it must balance the interests of homebuyers and builders, and that there should be no more financial sponsorship to the Ontario Home Builders Association (OHBA).

Not accomplished:

– Tarion’s board still has no consumer advocates, still two builders, and a total of four people with ties to the real estate industry. Tarion still co-sponsors a Builder Awards programme with the builder lobby group, OHBA.
Where’s the advancement in consumer protection?

2)  Recommendation #2:

Tarion must make sure home buyers understand the Home Buyer Information Package and the importance of the Pre-Delivery Inspection.

Not accomplished

– Pre-delivery “inspection” (PDI) is only a visual walk-through of the new home with a builder’s representative, whose vested interest is completing the sale, not identifying defects. The word inspection is misleading.
– To be meaningful, this inspection should be done by a qualified independent inspector. Consumers should be allowed to video or voice record these walk-throughs (Tarion has always forbidden this), and in the PDI material it should be clear the homeowner can bring his own home inspector.
– Tarion says a new “Warranty Information Sheet” will now be attached to all purchase agreements. No information on how/if this is being enforced.

3)  Recommendations #3 and #4

The Auditor’s Report stated that information on warranty coverage and consumer’s rights should be less confusing. Tarion was to stop telling consumers it provides a warranty since it doesn’t. It’s role is to “hold builders accountable for addressing unresolved homeowner warranty claims to builders.

No meaningful action

Tarion has finally removed the word “warranty” from its name, but not from executive titles such as “VP Warranty Services”. After 43 years, Tarion says it’s only a financial backstop to the warranty provided by the builder. There is still vagueness about Tarion’s responsibility to the consumer. Defects are to be reported to the builder and repaired by them. But the problem still remains: Tarion waits in the background as a “financial backstop” if builders refuse to fix defects. There are still too many extended repair times, while Tarion tries to coax the builder to do repairs. This is still a passive role, and there are too few deterrents to builders who don’t fulfill their obligations.

– Tarion has added a “Homeowner Learning Hub” to their website. This is addressing the wrong problem: the problem of bad building is not lack of consumer education.

4)  Recommendation #8:

Tarion is to create a simpler, less costly, homeowner-friendly appeal process for consumers whose claims have been denied.

Marginal change

Tarion has made outside mediation available in some cases, on an ad hoc basis, but this week this has been put into regulations by the Ministry. There should be clear guidelines on when mediation can be used, it should be available to all, and the fact that it had to be used to resolve a dispute should be published on Tarion’s or HCRA’s website. Oversight of this process by the Consumer Ministry is needed, or by an independent administrator.

Consumers should be entitled to have a friend or representative of their choice present at mediation, Tarion cannot veto the consumer’s representative; all persons at mediation should be identified on screen in virtual sessions, and Tarion and builder representatives should be limited in number to avoid imbalances of power and perceptions of intimidation.

Tarion should pay the full cost of mediation, (not half as suggested), and this should be seen as part of the warranty fee, as in multi-provider warranty systems.

5) Recommendation # 10

Builders who do not honour their warranty obligations should be held accountable by Tarion, and their poor record taken into account in future licensing decisions.

No meaningful action

All Tarion seems to have done on this, according to their own “Implementation Plan” published in Fall 2020, is to say they will “review and up-dateevidence given to them by builders,provide more guidance“, and “train staff“.

But the problem the Auditor General pointed out (pg. 30, of her 2019 report) remains. There are still too many “exemptions” builders can use to avoid inspections, and documented defects sometimes do not impact future licensing decisions. It is unknown how or if Tarion’s new companion organization, (Home Construction Licensing Authority, HCRA), will disclose these defects, or if they will suspend/revoke licenses when necessary. The pitfall again is lack of independent oversight of these agency’s activities.

There is still few meaningful consequences to builders who deliver shoddy work. This problem, and the same builder-friendly corporate culture, seems now spread across two agencies, both Tarion and HCRA, since HCRA has hired Tarion employees and adopted without sufficient scrutiny their builder track records.

6) Recommendation #11

Tarion is to consider all data about a builder’s past warranty performance when deciding whether to grant a future license.

No meaningful change

Tarion says it has now adopted “a more comprehensive approach” to assessing a builder’s record. But other than promising to “finalize an internal memo and policies“, (pg. 14, Tarion’s draft copy, on implementing Auditor’s report, Jan. 4, 2020 ), it’s not clear anything has changed, either at Tarion or the new HCRA.

The Auditor’s report stated Tarion continued to grant licenses to builders with shoddy records. This is a huge consumer protection failing, and has not been adequately addressed. A commitment to “consider” this information is not the same as fixing it.

Three steps forward, five steps back

7) Recommendation #12

The Auditor’s report stated Tarion should make sure builders have the financial stability to complete proposed projects, and honour their warranty obligations.

No meaningful change

Tarion says it developed “a new process to collect and review this evidence” on a builder’s financial history (see Tarion’s Implementation Plan, pg. 8). But what’s to stop builders from citing “privacy reasons” (as in the 2016 case of Urbancorp), to avoid disclosures, or giving vague reasons for cancelling projects, like not being able to get financing. There’s nothing here to show this consumer protection failing has been fixed.

8) Recommendation #13

Tarion is to protect consumers who purchase pre-construction homes if they are later cancelled or delayed by legal restrictions on land.

No meaningful change

Tarion says it has “conducted an analysis” on what construction projects require a review of the land title. It’s concerning this wasn’t being done before. Why is a builder with dubious legal right to build on a site taking deposit money from consumers? “Publicly disclosing” restrictions, as Tarion says it will now do, seems too little too late.

Why does a project get a building permit in the first place, if the builder has a dubious legal title to build on the land? What’s to stop builders from refusing or delaying to provide information? This is Tarion’s answer: “Tarion has determined the best approach for obtaining information in title searches and has made this a requirement“. What’s the “best approach“, and what are the penalties, if any, for not fully providing this information? No teeth, no effective policy.

9) Recommendation #15

Tarion should ensure homeowner complaints against builders are properly investigated.

No meaningful change

Adding resources” and “eliminating the backlog of complaints” is what Tarion says it has done. That’s not enough to make a difference. The problem remains: lack of independent inspections during construction (it’s not enough to rely on municipal inspections), and lack of enforcement and disclosure of bad conduct or lack of integrity.

Setting up a builder Code of Conduct and establishing clear consequences for those who breach it has been shifted to the new agency, HCRA. There will be no clearly defined Code of Conduct till July 2021.  Tarion has never had one, which has enabled many builders to escape meaningful scrutiny and consequences.

What of the problems cited in the past of hiring unskilled trades, no supervision of trades during construction? If Tarion rarely inspects on-site, the onus is on the homeowner after the home is built to be the whistleblower, which often creates animosity and may adversely affect repair work. Without a clear Code of Conduct, enforcement, and deterrents, this problem is much the same as before. No teeth in enforcement, no transparency, no credible independent oversight.

10) Recommendation #16

Tarion was asked to strengthen the builder licensing process, minimize warranty issues related to the Ontario Building Code, and inspect homes for compliance with the Code during construction.

Marginal Change

Tarion says it has “conducted a pilot programme” for inspecting the work of “relevant builders”, and implemented a “permanent risk-based inspection process.”

This seems to indicate risky builders’ work may be checked, that Tarion knows who they are, but there seems no disclosure to the public. Where’s the list of “relevant builders“, as described above? Why are their licenses not suspended or revoked; where’s the transparency about their risk profile?

11) Recommendation #19

Tarion is to hold builders accountable for the cost of warranty obligations Tarion has to pay on their behalf.  The results of this are to be made public.

Marginal Change

Tarion says it has “implemented a new collections strategy”, without specifying what it is. They say they will “publicly report collection efforts” each year. Will Tarion report this to their companion organization, HCRA, who decides licensing matters?

Builders can still cite “privacy concerns“, and there may still be exceptions and excuses for not paying back the cost of warranty obligations. This is important information for consumers to see on a builder’s record. Making this public, despite builders objections, may be a small incentive for them to pay up.

12) Recommendation # 20

Tarion is to disclose more information on builder track records to help home buyers make informed choices. For example, major structural defects, lack of integrity, not paying back money owed to Tarion, warranty work builders refused to repair, etc.

No Meaningful Change

This responsibility has been shifted to HCRA, which has simply published Tarion’s builder records, with the same content, without apparently fact-checking it.

Tarion says it “sought public input” on what should be added, and “up-dated the Ontario Builder Directory with this information“. This says nothing, and there’s no evidence any records have up-dated or corrected, other than a few cosmetic changes made to the website.

The practice of giving “customer services gestures” to homeowners to settle disputes enables Tarion/HCRA to avoid listing these payments on the builder’s record, as a way to pay to make problems go away and leave the builder a clean record. This should also be disclosed for what it is, a cash payment to settle a dispute regarding defects.

The same for “non-disclosure agreements” or NDA’s: they should be forbidden, since they don’t help consumers, they help hide a builder’s poor record. Most reputable builders will repair defects immediately and never let problems get adversarial or litigious. The public has a right to have access to complete builder track records in order to make informed decisions. 

13) Recommendation # 23

The Auditor’s report found that Tarion should investigate illegal building (i.e. builders who build without registering the new homes under the warranty), in a timely way.

No Meaningful Change

This task has been shifted over to HCRA.  Tarion says it has “added the necessary resources to eliminate the backlog of investigations”.  A back-log of investigations indicates homes are being built and sold without the warranty coverage. This problem has been known to Tarion for over a decade, with minimal real action to stop it. There are too many exceptions builders can use to avoid enrolling homes under the warranty.

ALL new homes should be under the warranty, no loopholes, no exceptions.

14) Recommendation #27

Tarion is to require their staff who are sent on-site to inspect Building Codeviolations to have the Building Code certification.

No Meaningful Change

One of the on-going criticisms of Tarion for years is that they send personnel to inspect defects who have no training in the area of the defect. Tarion says it has implemented a “training programme“, and future warranty assessments “will be reviewed by staff with relevant training“.

ALL Tarion staff sent to inspect homes should have at least minimum Building Code certification, the bare minimum standard. Staff sent to inspect should have expertise in the area of the problem being reported, for example HVAC.  This should be obvious, but has not been done, enabling Tarion to say defects are not warranted.

Tarion staff attending inspections have told consumers they “don’t have any construction knowledge“, and have forbidden consumers from recording or video-ing the inspection.  This raises mistrust, and should never be forbidden, under the threat of Tarion walking away from the inspection.  More training is a long-term goal, and doesn’t fix the problem of ingrained bias toward builders, or fear of offending the the powerful players, which is still part of the Tarion culture. This is perpetuating an organizational culture problem, not fixing it.

15) Recommendation #28

The Auditor’s report advised Tarion to provide homeowners with accurate information in a timely manner through its call center staff.

No Meaningful Change

Tarion says it has hired more staff, trained them properly, and is reviewing phone calls “for quality assurance“. 

This may be a goal, but is not a statement of anything achieved. What are the “clear service standards” Tarion says it has implemented?  Without independent monitoring outside Tarion, this is of little value.

Examples of inaccurate information given by Tarion office staff are: the LAT is less formal and more consumer-friendly than courts, without saying consumers lose over 83% of these cases; the internal Ombudsperson handles fairness issues, without advising that this office is not independent of Tarion. There is no assurance the information given is consumer-focused, and not biased toward Tarion’s or builder’s interests.

This is one of the reasons the Opposition parties called in 2020-21 for an independent administrator to oversee Tarion, to make sure problems of past decades are not repeated. This is sill a good idea, not the self-monitoring and self-reporting Tarion still does with most of the same employees and senior executives as before.

16) Recommendation #29

The Auditor’s report expressed concern over the lack of independence of the internal Tarion ombudsperson. The report stated this office should report to and be evaluated by Tarion’s board.

No Meaningful Change

Tarion says the internal ombudsperson now reports to the board, and her “self-review” will be reviewed by the board. This does not make the ombudsperson independent of Tarion, or gain consumer trust. How would the board evaluate the ombudsperson’s self-review, since complaints given by consumers to her are confidential?

This office has no mandate to get involved in warranty disputes either, so what’s its point of it at all? Consumers have, for over a decade, said this office is a waste of their time, and has in the past shared confidential consumer information with Tarion’s internal legal department (see Auditor’s report, 2019, pg. 48).

If it is to have any credibility or value at all to consumers, and that’s still a big if, this office should help resolve warranty disputes, and report independently to the Ministry, not to Tarion.

17)  Recommendation # 30

Tarion is to review its compensation to be more in line with the intent of legislation it administers. Bonus pay methods must be consistent with public-sector practices.

No Meaningful Change

Tarion has now been forced by the Ministry to disclose executive pay, which has been kept secret for 43 years. This disclosure shows compensation for the retiring CEO of $1.9 million in 2020, with the current CEO still earning $552,000, and seven Vice Presidents, two earning over $400,000. This is still the current pay level, in spite of half of Tarion’s responsibilities having been moved over to the new regulator, HCRA. Tarion paid salaries and benefits of $30 million in 2019, while the total claims paid out were only $13 million. (2019 Annual Report, pg. 8).

These are alarming financials for a government agency, a not-for-profit monopoly.

There’s no indication that bonuses are no longer linked to dismissing claims, which was a concern raised in the Auditor’s report.  Tarion says it has published “key performance indicators’‘, “adjusted bonus pay“, and “hired a third party expert” to review comparable organizations. This expert concluded that all was good with this pay scheme, comparing Tarion’s pay to that of Walmart, while Tarion has 200 employees, and Walmart over 90,000.

This financial picture cries out for further scrutiny.

18) Recommendation #31

Tarion must confirm the sufficiency of assets in the Guarantee Fund to cover any future catastrophic defects.

No Meaningful Change

Tarion says it has hired “independent experts” to review its Guarantee Fund annually. With over $500 million in the Fund, and claims pay-outs in the range of $10 to $13 million, this is of little help to consumers who’ve had their claims denied.

The focus should be on preventing bad building up-front, properly regulating and licensing builders, thus avoiding most catastrophic building deficiencies and pressure on the Guarantee Fund. A multi-provider warranty system would have put the risk assessment on individual insurers, not one warranty fund. But his government decided against opening up this field to competition, without following the advice of the 2017 independent Tarion review.


These following 6 items have been defined by Tarion as not complete, two years after the Auditor’s report:

19) Recommendation #5

Tarion is to ensure consumers who move into new homes which are partially complete have full warranty coverage, even for unfinished items.

Not Accomplished

A new definition of “finished house” is to yet to be released; no new warranty has yet been decided upon to protect homeowners for unfinished items.

20) Recommendation #7

Tarion is to make sure homeowner disputes with builders are resolved in a timely manner.

Not Accomplished

Tarion says it has begun an analysis of these timelines and has “implemented a process to notify all parties if they are unable to meet their own timelines for decisions”. They promise to “conduct training for staff” and “conduct compliance audits” of the new processes.

This shows little hope of change from the current system. Warranty decisions can be drawn out, builders given too much time to delay fixing problems, and then more extensions. Tarion seems still overly concerned with keeping builders happy. All this time during disputes the consumer has to take hours or days off work for multiple visits from Tarion and builder staff, with no resolution to their under-heated home or leaking basement.

If the builder doesn’t repair within a specific time frame laid out in the warranty, Tarion should provide another qualified independent trade to do the work at the cost of the warranty. 

Any audits of this process should be done by an independent compliance officer, not by Tarion itself. Cash settlements and “customer service gestures” are often not helpful, since the consumer has to research and hire trades, supervise the work, which could void the home warranty in some cases. Remedial work should be Tarion’s responsibility, through its engineering and trades network, many of whom testify for Tarion at LAT appeals. 

21) Recommendation #24

Tarion has not followed many recommendations of its own internal ombudsperson since 2008. There have been 38 in total since 2018, Tarion says it has completed 25 of these, and 13 remain unaddressed.

Not accomplished

Tarion says it has addressed “all but one” of these items, and will report on its progress on its website.

The fact that 30 recommendations on “fairness” issues have been made by the internal ombudsperson since 2008, and Tarion has not implemented ALL of them, indicates they themselves don’t take this internal office seriously.

The ombudsperson’s office fulfills no useful purpose for consumers. If Tarion is not even meeting its own internal monitor of “fairness”, that’s a failure of oversight by the ministry. Posting publicly the ombudsperson’s reports on fairness won’t fix a leaking roof or mould in new homes.

This office should be dismantled, and the money used to solve warranty disputes and fix homes.

22) Recommendation #6

Tarion is to make it easier for homeowners to seek its help.

No Progress

Tarion says it is “taking public feedback” on this, and has proposed extending some reporting deadlines by 10 days, enabling consumers to add items to lists, and expanding the definition of emergency claims to include water penetration.

This seems like a stalling tactic, and more window-dressing. Two years after the auditor’s recommendations, Tarion is still seeking public input. Why hasn’t the extra grace period of 10 days ever been done before in its 43-year history?

This is another  indication a builder-friendly, insular culture, not a transparent, consumer protection, pro-active one. A 10-day grace period seems a meager gesture.

23) Recommendation #17

Tarion is to report to municipalities builder instances of non-compliance with the Building Code.

No Change

Why is Tarion not reporting violations of the Building Code to municipal authorities who grant building permits? Tarion’s concern is that “the sharing of this information raises privacy considerations”. That indicates protecting the builder’s privacy takes precedence over protecting new home buyers.

Seeking public input” and “establishing working groups” is a timid plan, Tarion looks torn again between builder protection and consumer protection.

24) Recommendation #32

Tarion is to schedule annual public meetings where consumers can physically attend to ask questions and voice concerns.

No Change

Tarion says it will reinstate in-person annual meetings as in 2009-15, after the current pandemic restrictions of 2020 and 2021 are lifted. Tarion cancelled its in-person meetings after homeowners angrily voiced concerns at the 2015 annual meeting.

Tarion forbids consumers from recording the meetings, and cuts off the microphone when questions become highly critical. They post a redacted, softened version of questions on their website, which has been criticized by consumers, advocates, and media reports since 2011.

Webcasts where Tarion makes speeches and cherry-picks questions by email from anonymous virtual attendees are largely useless. For transparency and accountability, consumers should be allowed to record in-person meetings, the “consumer appointees” to the board should be present to answer questions, as well as at least one senior Ministry official. All questions should be posted verbatim on the website and answered.

As I finish this analysis, I’m left with the starting point of my work 10 years ago: lack of transparency and accountability of this government agency, lack of independent checks and balances and oversight, a builder-friendly monopoly with the same corporate culture as the last 4 decades, writing its own report card, nodding publicly to the Auditor’s directives, but leaving us with the same monopoly, which has now spawned a second one, HCRA.

Tarion cannot be left to fix itself and write its own report card. It may have changed its coat, not its colors.

B. Captijn

Consumer Advocate

April 25, 2021


Related links:

Click to access tarion_ag_implementation_fallupdate20201.pdf


Filed under Uncategorized

“This House is Going to Kill Me”

Daniel Emery’s heartbreaking story: from home-believer to home-wrecked, to advocate for change

Photos of Daniel, from 2015 and 2019

I hope one day, after almost 10 years of writing about the broken Tarion warranty legislation in Ontario, I’ll be able to write a story on how Tarion has protected consumers in crisis, instead of abandoning or over lawyer-ing them to death.

This is not that day.

Last weekend, homeowner Daniel Browne-Emery passed away after a long battle with a cruel and relentless cancer, and the government agency Tarion, which seemed to him just as cruel and relentless.

This is my personal thank you to Daniel and his family for their years of efforts to make Tarion the consumer protection agency the legislature once intended it to be.

Like the rest of us advocates, Daniel wanted the government to follow justice Cunningham’s #1 recommendation in his 2017 review to open the warranty field to competition, and end Tarion’s government-granted monopoly and bias toward builders.

Like most advocates who work toward this goal, many have been victims of Tarion themselves, and have advocated at the Ontario legislature for years for changes to the laws governing Tarion. Daniel was one of us.

Here are some of my memories of this honest, strong, courageous consumer advocate.

I didn’t know Daniel well, but within a few moments of hearing his nightmare story in 2013, anyone could empathize. How is it even possible this could happen in Ontario, a modern democracy with a government agency regulating builders and protecting consumers? Each time I tell his story, it’s met with incredulity and anger. The story continues to haunt us, and should haunt our legislators. But other than the usual platitudes about protecting consumers, they seem focused on keeping the building industry happy.

Tarion is a political problem. It was created by politicians, and only they can solve it.

And they have not.

I first met Daniel at the office of an Opposition MPP at the Ontario Legislature in 2013. We were there to support a bill brought by the NDP to fix broken Tarion. That, and many other meaningful bills were never passed by either the Liberal or the PC Parties, both well-known to have close relationships with builders and developers, while telling us they’re champions of the little guy.

What happened to Daniel, and sadly continues to happen to new home buyers in Ontario, should never should have happened, and could have been avoided.

In short, here’s Daniel’s troubling story, which I wrote about on this blog site in 2018. I hoped after that the Consumer Ministry would take action, but nothing happened.

Daniel moved into a newly-constructed home in 2007. A few weeks later, he discovered water on the basement floor, which led to flooding. He contacted Tarion, and the builder; Tarion requested the builder take action, but little was done. Months and years passed with Daniel pleading with Tarion to help him. Mold began to take hold, with black slick and patches “as big as pizzas” in Daniel’s words. Tarion finally did some visual mold remediation, but didn’t fix the underlying cause of the water infiltration. By 2008, Daniel said there were four feet of standing water in his basement, and slimy black mold on the staircase carpet and walls.

In 2011, his bank refused to renew his mortgage, because he couldn’t get insurance for the home under these conditions. The bank then foreclosed, and Daniel was left homeless, and lost over $270,000 he’d invested in the home.

Financially devastated, he then was hit with bad health news, a diagnosis of throat cancer. His oncologist asked if he’d ever been exposed to mold. “My heart sank when I heard this”, Daniel explained.

When I spoke to him in the summer of 2018, he could barely talk due to the ravages of cancer and the on-going treatments. He was at work, driving a heavy truck, on one of the routes he liked to drive from Toronto to Quebec City. He stopped to have a coffee at a roadside shop and half-joked to me that he seemed to scare people away now, they looked askance at him with his weight loss, long hair, and misshapen smile.

He said when he read my blog post, it made him break down. He was grateful I’d sent it to the Minister and various journalists to try to get someone to do something about the nightmare he’d suffered.

When a consumer threatens to go public, Tarion often swoops in to stop the wheels turning, secret meetings are held, consumers are sworn to confidentiality, and many who are in dire financial straits have no choice but to sign a non-disclosure agreement (NDA).

There’s been no meaningful action from our government, except window-dressing weak bills, and posturing about how Tarion protects consumers.

Daniel’s local MPP had written a letter on his behalf on Sept. 27, 2013, to the then Liberal Minister, stating: “He lost his home due to the actions, or more specifically the lack of action from Tarion. Mr. Emery was forced to foreclose on the home and lost everything waiting for Tarion to take action again the builder.”


Now this long-time PC MPP is part of the current PC government, but he’s gone silent. In the meantime, the builder has gone on building more homes, with nothing mentioned on his Tarion record, and no way for future home buyers to be forewarned.

In the fall of 2019, Daniel felt the cancer again pressing at his heels. He wanted to make sure, if he couldn’t do anything in his own case, that others wouldn’t be devastated like him. He offered to drive to Toronto and tried to arrange meetings with journalists, even though he was weak and could barely speak.

I asked if there was one point which encapsulated his ordeal, one dark moment when he was about to give up. He thought for a split second, and said, yes. Every Saturday, he said to me, he’d spend scraping black, slimy mold from the basement staircase and walls, with his dog often beside him. In a moment of desperation, he turned to his dog and said, “I think this house is going to kill me”.

Tarion refused to give Daniel certain reports, like the mold report they had commissioned, and which was requested by his oncologist. Tarion told him repeatedly his case was closed, because he no longer owned the house. They also refused to issue him a “Decision Letter” which would have allowed him to have his claim heard at the License Appeal Tribunal.

If two major corporations want to battle it out for years on a legal matter, fine, they’re equal adversaries, and fighting on a level playing field, with comparable finances and resources. But most new home buyers are on their own, self-represented, and can’t afford $400-$1,000 per hour for experienced lawyers, and even more for engineering reports. This is not the time for a consumer protection agency to bring out the heavy legal artillery, hard-hitting emails, and heavy-handed tactics. But that’s what Tarion did in Daniel’s case. And too many others I’ve seen.

This tragedy should have been prevented. If the root cause of water infiltration isn’t addressed, it will recur and get worse. Tarion failed to get to the root of the problem and fix it. Treating symptoms doesn’t work long term. The builder and Tarion ended up blaming the homeowner, as happens too often, and they let time slip away until Daniel was too ill and financially devastated to keep fighting for justice.

One of the serious problems with Tarion is it says it can’t force the builder to do anything, the warranty is the builder’s, and Tarion is only there to ‘back-stop” it, and make sure they fulfill their obligations. But often they don’t even do that. The Auditor General’s report (Oct. 2019) found that in 64% of cases from 2014-18, Tarion did not get builders to fix warranted defects.

Why is this still going on?

Too much influence from builders, too much concern about protecting the builder’s “privacy”, no teeth to enforce the Building Code, buck-passing from municipalities to builders to Tarion, too lax oversight by government. Still a deeply flawed system.

But builder lobbyists like it, say it’s “working well”. However, the legislation wasn’t created to protect builders, but to protect new home buyers.

Daniel and his wife finally got a meeting with Tarion’s CEO in early 2020, thanks to the continued advocacy of a not-for-profit consumer organization. The current Tarion CEO is a former in-house lawyer, as are many of his VP colleagues. All are well-versed in legal tactics to protect Tarion and builders, and get claims dismissed.

This last contact Daniel had with Tarion top executives at their head office, was physically and emotionally painful, he told me. He was asked to sign a non-disclosure agreement. A dying man? What’s the objective of that, where’s the decency?

He told me a few details of the meeting. One made him smile, he said, telling me he knew it sounded childish, but as he was leaving, he asked the CEO if he knew where he could get one of the glass coffee mugs with the Tarion logo they had in their offices. The CEO said he wasn’t sure. His colleague lawyer then disappeared into the kitchen and came back with a mug.

After 13 years of battling Tarion, maybe this was for Daniel a spoil of war, something physical taken from the enemy to prove you’ve survived.

Refusing to give this dying man a mold report so he could give it to his oncologist, is an unnecessary bully tactic; making a dying man sign a non-disclosure agreement for a meager settlement while he’s lost his life savings through the actions of a shoddy builder, while he relied on this government agency to protect him, is unforgivable. Not listing these defects on the builder’s record is adding insult to injury, and worse, complicit with shoddy builders, and a disservice to future new home buyers.

I know Daniel would have liked to hear that his work in the end counts, and won’t be forgotten. The house may have killed him, but Tarion and our lawmakers look like willing accomplices.

——— by B.M. Captijn, Jan. 5, 2021


Filed under Uncategorized

The Spin Doctors are Back: Tarion

More consultants, more training, more round tables and focus groups, more brochures, and pilot projects, the list goes on. More money is being spent out of the $400+million warranty fund, but still no fix to “broken Tarion”.

That’s the conclusion many have made after looking at Tarion’s progress report it issued this month on the implementation of the Auditor-General’s 32 recommendations.

The spin-masters are back in full force.

Why hasn’t government learned from their past lapses in oversight, why do they still expect Tarion to fix itself and write its own report card?

Tarion’s task was to implement the 32 recommendations of the Auditor General after what the Toronto Star called in July 2020 a “blistering” report on their operations.

The problem with Tarion’s self-evaluation is they re-frame serious systemic issues as simply a lack of communication, lack of training, lack of resources, or misunderstandings. As if we new home buyers just don’t get it, or are confused.

But the major problems the Auditor revealed in her 2019 report were not miscommunications or misunderstandings. They were conflicts of interest favouring builders over homeowners, executive incentives to minimize claim pay-outs, letting builders off the hook for warranty obligations and pay-backs, not reporting builder performance accurately, bias toward builders in the investigation of honesty and integrity complaints, and corporate governance imbalances favouring builders.

Here’s part of Tarion’s self-evaluation below. Of the 25 recommendations under their control, 19 have been “completed” they say, with 6 to be done next year. Let’s check this.

“Auditor General’s Implementation Plan – Fall update” … published by Tarion, 2020, on website

Based on the continuing desperate calls from homeowners to consumer advocates, the Tarion problems have been getting worse, not better.

It would be too long to go through all 25 of these in one blog post, but for brevity’s sake, let’s fact-check 6 of them.

Point 11 in the Auditor’s report:

The auditor advised Tarion take all information about a builder’s track record into account before granting a future licence to build.

Tarion has marked this item as “completed” by saying it “has revised its processes and currently requires this type of information to be considered when deciding to grant a license.”

Problems with this:

  • This process is not transparent; who knows what information Tarion is taking into account before licensing builders? Is the oversight ministry checking this?
  • “Considering information” is too vague to mean anything; not the same as taking action on it or disclosing it on a builder’s record;
  • No specifics on what “processes” Tarion says it has “revised”.
  • This is another “trust us” from Tarion

Point 12:

Tarion is to confirm that builders have the financial resources to complete projects and cover cost of their warranty obligations.

Tarion has checked this item off as “completed”, saying it has “reviewed the best available external evidence to determine which information builders should provide“, the “reasons they cancel construction projects“, and that they’ve “implemented a new process to collect and review this information.”


  • What is this “new process”? How is this different from before? Does it protect consumers, just because it’s “new”?
  • In the past, builders have refused to disclose to Tarion certain key information in their financial records, (eg: the Urbancorp case), by refusing investigations, and Tarion has said it has no authority to require a closer look at the builder’s books.
  • The same has been the case with the reasons builders give for cancelling condo projects. The reasons are often vague, such as not being able to get financing, while they quickly go onto to build other projects.
  • What is the “new process” to “collect and review” this information? Saying it’s new and improved doesn’t make it so. Especially since Tarion considers builders as one of their main stakeholders, and two builders are long-term Tarion board members and builder lobby group members.

Point 15:

This recommendation states that Tarion is to ensure homeowner complaints against builders are properly investigated.


Tarion has checked off this item saying it “has added additional resources to initiate and complete investigations… and eliminate the backlog”.

But this is not an under-staffing problem, it’s a conflict of interest problem. It can’t be remedied by adding staff and clearing the backlog of complaints. This seems like re-framing the problem to minimize it and chose a desired solution.

Another similar problem of bias toward builders is reported in the Auditor’s analysis, pg. 9. When builders say homeowners denied them entry to the home to fix defects, Tarion didn’t bother to get the homeowner’s side of the story. This is an ingrained problem of bias toward builders, not an under-staffing problem, or a lack of training.

Point 20:

Tarion was told to make the Builder Directory show results of their investigations into honesty and integrity issues, show the amount of money still owing to Tarion by builders, show the number of defects under warranty the builder refused to repair, and number of Building Code violations builders refused to repair. This has been checked off as “completed”, but it hasn’t been.


In the vaguest language possible, Tarion says it has added “past convictions” to the list (meaning when builders were building homes without providing the Tarion warranty), but for the other important aspects of builder records we read: “Tarion sought public input on additional information that should be posted on the Builder Directory”, […] “and has up-dated the Builder Directory with this new information”.

This is meaningless: it says we’ve added nothing to the list, and added that nothing to the list too. How can this be taken seriously? Are our government oversight experts asleep or complicit?

Point 27

Tarion was to make sure their staff had Building Code certification before they inspect homes for Building Code violations. This item has also been checked off as completed.


  • Tarion says it’s added “a training program” for staff in this area. But the Auditor’s report called for Building Code certification, not training of internal staff.
  • Building Code violations are now going to be “reviewed by staff with the relevant qualifications” or “by external experts as needed.” But this gives too much discretion to Tarion to decide if defects are Building Code violations or not, and to use outside experts only if they decide to do so. This is an on-going problem with Tarion: lack of specific training in the defects they are sent to investigate, lack of qualified Building Code inspectors, and secrecy surrounding what experts are hired and when, and often no action even when engineer’s reports are obtained.
  • What has changed here? More training and reviewing.

Point 29

The Auditor’s report said the internal Ombudsperson’s office is to have formal independence from Tarion.


This has also been checked off by Tarion as complete, but that’s not correct.

The Ombudsperson is to report to Tarion’s board and be reviewed by the board, after doing her own “self-review”. There were serious problems cited in the Auditor’s report regarding exorbitant pay raises for the Ombudsperson herself, and the potential sharing of confidential homeowner information with the internal legal department. These are all huge conflicts of interest, and should have prompted resignations, but all this was kept secret until October 30, 2019.

This Ombuds office is still paid by Tarion, and housed within their offices. Although it is formally supposed to be reporting to the board, it is not in any sense independent of its employer. The office has recently changed its name to New Home Ombusperson’s Office, eliminating the word Tarion, but that fools no one.

There has recently been – you guessed it – a consultant, another lawyer, hired to find out whether this office adheres to the general ombudsperson principles. Undoubtedly chosen and paid for by Tarion, so one can already guess the outcome.

Since the Ombudsperson doesn’t have a mandate to get involved in warranty claims or disputes, it’s hard to see what purpose the office has at all. Most consumers say it’s a time-consuming, frustrating, and useless exercise to contact this office. This money would be better spent fixing homes.

The list could go on and on, with each of the 25 recommendations showing more spin than substance.

We rely on the Ministry of Consumer Services as oversight authority and the Auditor general’s office in her next audit, to see through the PR and do their fact checking, instead of relying on Tarion’s version of reality. We’ve seen what that has yielded after 43 years.

In early 2020, the Ministry promised the public a “complete overhaul from top to bottom”, after admitting repeatedly Tarion was “broken”. But it’s a sad joke on consumers to call this an overhaul.

For many consumers still suffering in newly-built homes with serious construction defects, this report card is no more than a promise to consult, review, hire more consultants, and conduct pilot projects. That’s what Tarion has been doing all along, it’s a gold mine for consultants.

The same executives are in place at this monopoly, and many have been at Tarion for over a decade, including the board Chair, CEO, and several senior VPs. So….

…why didn’t they take action before? Because there was no effective oversight which would have forced them to do so. Now these same executives stated they found the Auditor’s report “a useful exercise in self-examination”.

Why does the government allow Tarion to keep this lucrative monopoly which forbids other providers from entering the field? What’s the product or service they provide? Why is it mandatory?

Many consumers say Tarion has cost them more in a long, exhausting, costly whodunits, without resolution. They’ve lost years of their lives, and suffered financial ruin and health problems trying to get defects resolved through Tarion. It has cost many consumers more than it’s worth. Ask the Shuman family, the Emery, Bellefeuille, Ferland or Wheeler families, just to name a few.

Since Tarion has had its regulatory duties taken away, (as of Feb. 2021), and is not allowed to use the word warranty in its name anymore, (since the Auditor said it doesn’t provide a warranty), what is Tarion’s purpose?

This Tarion “Implementation Plan” of the Auditor’s 32 recommendations is just that, a plan. But worse, it’s a fig leaf for the serious underlying, decades-long problems of conflict of interest, and bias toward builders, which remain unresolved.



Filed under Uncategorized

One year later – what’s still wrong with Tarion Warranty Corporation?

After the hard-hitting Auditor General’s report on Tarion released in October of 2019, what’s changed at Tarion, the broken warranty and builder regulatory monopoly?

Not much.

Tarion executives and Consumer Ministry officials unanimously and immediately accepted all thirty-two of the Auditor’s recommendations. So you’d expect to see the marching orders have by now had some effect.

Hard to find any progress.

The executive team has been left largely the same, with some big promotions from within, and a long-time board member has been rewarded with the top position of Chair of the board. How could those who were fine with the broken system in the past be those you trust to fix it? Where have they been all these years? Seems an odd way to make a new start and bring about a major culture change.

The NDP Critic, MPP Rakocevic, suggested an independent administrator, reporting to the Ministry, be appointed to oversee Tarion’s processes and activities. That idea was quickly dismissed by Premier Ford’s government.

Big mistake.

We understand the Auditor’s team will do an up-date of their findings next year, in 2021.

Here’s what many consumers on the receiving end of Tarion’s broken system have found during the last year….

12 continuing problems:

  • 1) Still – the burden of proof is often on homeowner to prove construction defects, whereas they should only have to show credible symptoms. Tarion’s representatives say they won’t climb up ladders or look on roofs, so they won’t warrant anything they can’t see. The consumer loses, Tarion and builders win.
  • 2) Still – too many non-disclosure agreements and “services gestures” are being used by Tarion, which allow builders to avoid having defects listed on their records, and allow bad builder track records to remain hidden from the public. Consumers lose.
  • 3) Still – too few investigative inspections on home defects by qualified inspectors. Consumers lose.
  • 4) Still – no independent dispute resolution (DR). Tarion’s DR is not seen by consumers as independent of Tarion, or impartial. Too much discretion is left to Tarion to decide methods of DR without proper independent oversight. Consumers lose.
  • 5) Still – no consumer advocates on Tarion’s board (or the new regulatory board, “HCRA”) . Two long-time board members are builders, four others have ties to the real estate industry, and none appear to have any background with the consumer experience with the warranty. Consumers lose.
  • 6) Still – no transparency in policy-making: consumers have no idea what becomes of their input into policy consultations, or what influence builder lobby groups have had on the end result. Consumers lose.
  • 7) Still – there are conflicts of interest in Tarion’s stated mandate: serving its own interests, those of builders, and government officials, but also the new home buyer. Serving the “public interest”, meaning everyone, is too broad, and no one has the same at stake as the homeowner. This is a 43-year-old flaw in governance. Why is everyone afraid of consumer advocates on a consumer protection board? We lose.
  • 8) Still – no cap on legal fees used out of the warranty fund to fight consumers; no cap on executive salaries, and no transparency about how executive bonuses are calculated. Consumers lose.
Why are we still here?
  • 9) Still – Tarion seems to be continuing to license builders with shoddy records. There are too few consequences if the builder doesn’t pay back money owed to Tarion, and there is continuing secrecy about their records. Consumers lose.
  • 10) Still – consumers are told if they dispute a Tarion decision they can appeal it to the License Appeal Tribunal (LAT), where about 85% of consumer cases fail. The 2017 Tarion review recommended the LAT not be used for these appeals. It’s not a level playing field, since most consumers are self-represented, and Tarion is always represented by experienced litigators. Consumers lose.
  • 11) Still – consumers are being blamed for denying entry to a builder to fix defects when this isn’t true. Tarion often doesn’t hear the homeowner’s side, and will use this to deny claims. If the relationship between builder and homeowner has broken down, Tarion should appoint another builder to do repairs, and not subject the homeowner to humiliating or hostile confrontations in their own home. Consumers lose.
  • 12) Still – Tarion has kept the word “warranty” in its name, whereas the Auditor’s report said they don’t provide a warranty. Consumers misled, confused.

The “complete overhaul”, announced by the Ford government’s Minister Thompson in early 2020 looks like a sad joke.

The PC government’s frenzy to build more homes faster, cut red tape for builders, and keep the Ontario Home Builder’s Association (OHBA) on side, has been their overriding objective, with the OHBA President describing Tarion as “a good system” in June 2020. (Legislative Committee on General Government).

The reason for creating a new home warranty in the first place is to protect new home buyers, full stop. Its purpose shouldn’t be to protect its own executives, or builders who build defective homes, or government officials who are lax in their oversight responsibilities.

In late February, 2019, the Ford government announced “Tarion is broken”. Still, almost two years later, that’s exactly right.


Filed under Uncategorized

STEPPING BACKWARDS: Premier Ford’s Bill 159 on Tarion

Many parts of the the PC government’s new bill 159 on Tarion Warranty are concerning.

The bill purports to fix “broken Tarion”, but ignores much of the independent advice government has been given for over a decade on how to fix it. This advice has come not only from independent reviewers such as judge Cunningham, but also from the Auditor General’s special audit in 2019, and advice from senior ministry officials dating back to 2014, based on a decade of consumer complaints about the warranty provider.

Minister Lisa Thompson and her Parliamentary Assistant, long-time MPP Bob Bailey, led the praise for their own bill during Legislature debates, March 5th. The Opposition Critic, MPP Rakocevic, countered with thoroughly researched evidence from the independent review, and nightmare stories of consumer experiences with Tarion, which never should have happened under Ontario consumer protection laws.

Parliamentary Assistant to the Minister, MPP Bailey
Consumer Services Minister Lisa Thompson

A complex legal forum…

Let’s take just one example of one of the major failings of bill 159: the government decided to keep the License Appeal Tribunal (LAT) as the appeals forum for Tarion claims. Why? This goes directly against the advice of the Tarion review, and consumer complaints for over a decade to the ministry. The LAT is a complex legal forum, most consumers have to self-represent due to the high cost of legal assistance, and they lose 83% of the time.

As far back as 2014, Tarion was advised to find less litigious forum than the LAT. The top official of the Ministry stated in a letter to Tarion’s CEO dated Oct. 7, 2014, pg. 3:

A less litigious and adversarial process would also address concerns the ministry has heard from homeowners that they are dissuaded from pursuing LAT appeals because the existing processes are non transparent, and are complicated, time-consuming, costly, and un-balanced.” (Assistant Deputy Minister F. Denton)

The PC government has a chance to make this right in their new bill, and they have a majority in the Legislature, so why didn’t they follow expert advice and eliminate the LAT as a dispute resolution method, since it’s obviously not working for consumers? Perhaps because it’s working well for Tarion and builders.

It gets more concerning.

In his speech to the Legislature on March 5th, MPP Bailey said the new bill would also “remove builders and vendors as parties at the License Appeal Tribunal”. He claimed this would “restore balance for consumers.” As it stands now, Tarion usually adds the builder as an “Added Party” to the hearings. Removing the builder from the hearings will only encourage more behind-closed-doors legal strategizing between Tarion and builders on how to get homeowner appeals dismissed. Currently, the builder’s collaboration with Tarion is on the record, and transparent for the adjudicator to take into account before making a judgement.

More secrecy creates more imbalance, and doesn’t bring transparency which the LAT needs to show its decisions are fair. Who advised the government on this idea is unknown.

Minister Thompson and MPP Bailey also say Tarion will now have access to other dispute resolution methods. But they have all along, and have not chosen, to my knowledge, to use other methods such as mediation or arbitration. They win 83% of the cases at the LAT, they can afford to hire top outside counsel and engineers, so they have no incentive to look for other options. They can make their own regulations with very little oversight, and the governing legislation dating back to 1976 has given them the power to use arbitration (section 17 (4), which to my knowledge has rarely, if ever, been used.

To give more discretion to Tarion to decide when and which other dispute resolution methods are to be used is repeating the problems of the past: lack of transparency and accountability to the homeowner and the public.

Consumers should also not be made to sign “non-disclosure agreements” or NDA’s, no matter what type of dispute resolution is chosen. Future home buyers have the right to know who the shoddy builders are, and Tarion and the ministry often tell consumers to “do their research” on builders before buying. So their track records should be public.

The last point which has totally escaped the PCs in this bill is that the dispute resolution processes at Tarion, whatever they are, are not independent of Tarion. They should be. In order for justice to be done, it has to be seen as being fair, transparent, and balanced.

The judge’s review summed up this problem on pg. 5 of his 2017 review:

“(…) there is a potential for conflict when the same person receives a claim, investigates it, attempts to assist the parties in resolving the claim, and then sits in judgement if the claim is not resolved.” (Justice Cunningham, Tarion review, 2017)

Keeping the LAT as the appeals forum, and giving Tarion more discretion which methods to choose, allowing them to train their own employees as in-house mediators (as was announced last year), is all reinforcing Tarion’s power, but not protecting consumers and building trust in a broken system.

There is no credible dispute resolution if it remains internal at Tarion.

This is not an “overhaul” as the Ford government tries to spin it, with the promotion of a few in-house lawyer executives, the retirement of the CEO, and more Liberal party platitudes about “enhancing consumer protection.” There’s no point re-arranging the deck chairs when you have a hole in the boat.



Filed under Uncategorized

Premier Ford: Follow the Review’s Advice – End Tarion Warranty Monopoly

A year-long independent review of Tarion Warranty Corporation, conducted by Judge Cunningham and Deloitte Consultants in 2016-17 recommended: end the monopoly, open the field to competition.

The PC party was then in Opposition and fully supported this. But this year, the PC government, now with a healthy majority, has done a flip-flop. They’ve brushed the review under the rug like it never existed.

What’s changed in a year? What research does the government have to over-ride a year-long independent review, which interviewed a broad range of stakeholders, and surveyed warranty programmes around the world? We see none.

The conclusion of the review was clear: warranty providers are not “a natural monopoly”, as regulators are; competition in providers would better serve consumers.

The Minister of Consumer Services, Ms. Lisa Thompson, is not disclosing what research they may have to justify keeping Tarion’s monopoly. Two things are clear: the government wants more homes built faster, less red tape for builders, and builders themselves like to keep the monopoly, probably because they can control it better than several independent providers. Forty-two years of Tarion history have shown this to be the case.

In a recent public statement, the Minister cited “higher costs” for consumers if the government were to decide on the competitive model. Not true, according to a B.C. housing official, Mr. T. Gioventu, in one of the ministry’s consultations I attended in March 2019. He said the cost would be “about the same” as what Tarion charges now. He also said the multi-provider system was “working quite well” in B.C. He pointed out that dispute resolution was independent and timely, with both parties incentivized to reach a solution through arbitration if an initial resolution can’t be reached.

Keeping Tarion’s monopoly in Ontario means consumers are still stuck with the License Appeal Tribunal as an appeal court for Tarion’s decisions, where they are up against two adversaries with their lawyers, Tarion and the builder. Consumers are mostly self-represented, and lose 83% of the time. This makes no sense from the “For The People” government, and seems tone-deaf on consumer protection.

Consumers, at every consultation I’ve attended over the past 3 years, have been unanimously in favour of ending Tarion’s monopoly status, having indirect choice in providers through the builder’s choice of insurer.

What’s happened to this feedback? Journalists, oddly, leave Tarion pretty much alone and don’t seem to want to poke a big litigious monopoly of government. But here’s an opportunity to find the story behind the story, and inform consumers before they buy new homes. Industry lobbyists and political donations are part of the picture, no doubt.

The Minister also stated her concern that smaller builders may not be able to get insurance if Tarion’s monopoly is removed. But that’s good for consumer protection, isn’t it? If a marginal builder can’t get insurance to build new homes because he has a poor record, who wants to buy a new home from him and risk their life savings? The consumer shouldn’t be a proving ground for those who want to build homes but don’t have the expertise or financial stability to complete the task properly.

It seems on this point the government is off-loading part of the risk of new home building to the consumer, the person least able to bear the financial burden of construction defects. Tarion has continued to license builders with poor records, says the Auditor General’s report, pg. 7: “builders with poor warranty records continued to get licenses from Tarion.” So consumers continued to buy homes from builders who should have had their licenses removed. The Builder Directory track record, administered by Tarion and a builder-heavy board, is no help either, and has been critiqued for a decade, as “less than useless”.

Another advantage of the competitive model is that warranty providers, for example in B.C. and Alberta, can inspect a builder’s work during construction. They do this to manage their own risk. Although Tarion has had the authority to inspect, it rarely has, and has not hired many qualified inspectors. So more risk is passed on to the consumer. But who’s been watching them?

Prevention is the best warranty. Preventing defects from happening in the first place can be partly done through professional inspections on worksites, and proper supervision of trades on site, but Tarion has had no incentive to do so. They often pass the buck to municipalities on inspections, who then pass it back to Tarion and the courts. And the Ministry’s advice has too often been “sue the builder”. Why should the taxpayer fund part of Tarion’s dispute resolution?

With no oversight by the Auditor General in 42 years, and minimal oversight by the Ministry, there’s been a mission creep from the original intention of consumer protection in 1976 to builder and Tarion protection. See pg. 8, of the Auditor General’s report stating that executives have been incentivized to deny claims and bolster their own pay. Shocking. Has it stopped?

Interesting that when Tarion was confronted with 32 hard-hitting recommendations of the Auditor-General in October 2019, they immediately accepted all of them without reservation. Makes one wonder what they’ve been doing all these years, and what the oversight Ministry has been doing: they knew the processes and compliance tools weren’t working, but did next to nothing. Because they could. What’s changed now? What will change by government keeping Tarion as the sole provider?

It’s hard to find an example of a government-granted monopoly which provides an excellent product. Monopolies have little incentive to improve: they have no competition which can keep them on their toes or coax away customers.

If there were competition, maybe some insurers could offer a 5-year instead of a 2-year HVAC warranty, or provide a menu of other warranty options. We are forced by law to buy Tarion’s product, whether we like it or not.

Tarion says it offers a “backstop” to the builder’s warranty, but according to the judge’s review this is not an insurance product, (pg. 5, Tarion review). And it shouldn’t be called a warranty either, according to the Auditor’s report, (pg. 22).

The competitive model for warranties would guarantee each provider is offering a true insurance product, and would come under the regulation of the Insurance Act. Tarion offers an insurance-like product but isn’t regulated like an insurance provider. Too often the finger-pointing takes over after a defect is discovered, the buck gets passed back and forth between the builder and homeowner, then there are months or years of delays, and often the defects don’t get fixed at all. The Auditor’s investigation found “about 65% of the time between 2014 and 2018 the builder should have fixed defects under warranty but did not.” (Pg. 7 Auditor’s report, 2019).

Consumers want competition, more innovation in warranty features, independent dispute resolution, end the monopoly

Many believe Premier Ford’s “partnering” with the building industry to build more homes faster with less regulatory red tape has put this political agenda above consumer protection.

Premier Ford has been quoted saying governments shouldn’t be running monopolies. We agree. Both the Tarion review and the Auditor’s report show why Tarion is not protecting consumers. The government is not disclosing why they are ignoring the review and keeping the status quo, except for announcing the retirement of the CEO a few months ago.

This is not a ‘transformation” as the minster has announced, it is not fixing a broken system. It is leaving consumers with the same risks and un-transparent system that both judge Cunningham and the Auditor-General came to the table to solve.

Consumer protection is the responsibility of the Ontario government by law. But builders and Tarion seem to have gotten their wish lists. When will Premier Ford stop selling “we need a million homes”, and start making sure these homes are properly built and consumers are properly protected in the biggest purchase of their lives?

Tarion was created by the Bill Davis PC government in 1976 after a building boom and a rise in shoddy new home building. Here we are again at the same table four decades later. But Premier Ford has side-stepped consumer protection entirely in his new bill 159.

“Those who don’t learn from history are destined to repeat it.”


Filed under Uncategorized

“We’ve Been Lied To”

It’s hard to imagine a more serious critique of a government agency than the report released last week on Tarion “Warranty” Corporation by the Auditor-General of Ontario (link below, Oct. 30, 2019).

The report came as no surprise to consumers who’ve been hammering at the doors of Queen’s Park for over a decade with complaints about exactly the kind of corporate wrong-doing the report documented.

Just a few of the revelations of wrong-doing are:

– Tarion has given disproportionate influence to builders and their industry lobby group on its board and its policy-making;

– Tarion makes its own regulations without sufficient oversight by government;

– Tarion’s senior management was rewarded financially for minimizing financial aid paid to homeowners;

– Their legal department tried to obtain internal confidential information to use against consumers in court;

– Tarion doesn’t do enough due diligence to ensure builders have the financial stability to be licensed and build;

– Tarion keeps secret information on builder’s track records;

– 65% of the time between 2014-2018 builders should have fixed the defects under the warranty, but did not. (pg. 7, Auditor’s report).

– Tarion can’t call itself a “warranty” corporation because they don’t provide a warranty.

Added to this scathing critique of Tarion’s policies is the equally hard-hitting review of Tarion in 2017 by a seasoned judge and Deloitte Consultants, which recommended removing Tarion’s monopoly, opening the field to competition, a separate regulator for builders, and a total of 37 recommendations. Nothing meaningful has been done.

Many consumers have been sabre-rattled into silence by Tarion and some of their builders and lawyers over the years, warned not to use words like “corruption” or “collusion” regarding Tarion’s business practices, warned to stop saying there are loopholes in Tarion’s “warranty”, threatened with defamation lawsuits, spent time in jail for refusing to pay Tarion’s legal fees, (yes, jail), and some sternly admonished by the Chair of the board not to be “disruptive” at its Annual Meetings (see 2015).

Even a quick reading of the Auditor-General’s report shows Tarion has reason to muzzle its critics, block them on social media, and prevent them from speaking out publicly.

Tarion’s laizzez-faire model of oversight was praised by a former Chair of Tarion, (in a 05/15/15 article in the Ottawa Citizen) stating the oversight model “keeps the government’s nose out of doing things”.

Yes, no kidding.

Tarion was given a public trust mandate in 1976, a monopoly to protect consumers and regulate builders. They have clearly too often failed in both of these duties to the public.

Consumers feel they’ve been sent on a fool’s errand by the governing Liberals and PC’s for over a decade, some have lost their life savings and endured family hardships trying to get construction defects fixed in their new homes. This agency set up to protect us has too often failed in its mandate, and been successful in covering it up.

What makes disturbing reading is the “Tarion agrees and accepts” text after each of the serious critiques of their activities. Where has the Tarion CEO been for 10 years? Where have the in-house lawyers been, with their professional code of ethics to act in the public interest?

The Tarion mea culpas seem fake and hollow. As does the well-meaning promise of the Minister of Consumer Services who welcomes the Auditor’s report, vowing to “work together” with Tarion, and better educate consumers.

What needs to be done?

1) The Tarion board and CEO should be asked to step down. They’ve lost credibility. They don’t deserve our trust any more.

2) Our legislators need to bring new legislation to protect consumers against shoddy builders, not builders against consumers.

3) Legislation needs to end Tarion’s monopoly. Other warranty providers will refuse to license bad builders due to their responsibility to manage their own risk. Let Tarion continue to license as many bad apples as they want, let’s see how that works out for them. They may fall on their own sword.

The response from the current PC government to the Auditor’s report is timid. Premier Ford himself has said not one single word. The minister says consumers need to be better educated, a page right out of the builder lobbyist’s and Tarion playbook. Tarion has seen the light, we’re meant to believe, and vows to “work with” the government to fix itself.

Premier Ford’s much-publicized plan in early 2019 to “partner” with the building industry to build more homes, faster, and cut red tape, seems directly opposed to any serious effort to rein in this rogue monopoly and make it accountable and transparent.

Tarion has failed in its responsibility to the public, while too often taking advantage of vulnerable consumers. We’re being asked to trust them. Again. We’re not buying it. They’ve been selling us a product they don’t have, and masqueraded as consumer protectors while protecting builders, their monopoly, and their pocketbooks.

The message to the public is we’re working with Tarion, and Tarion with the Ministry. Which is what brought us this policy failing in the first place.

This is a political problem, and only our governing MPPS can fix it. Have they already made promises to the building industry and its puppet? The refrain of we agree and we’ll do better is not credible. Too little, too late. Beware of the crocodile who sheds a tear before devouring his prey. Drain the swamp.



Filed under Uncategorized

Ontario’s Consumer Protection Act needs an up-date. My Open Letter to Premier Ford

Dear Premier Ford,
You stated this week, in answer to allegations that lobbyists have direct access to you and direct influence over your policy-making: “No one can influence Doug Ford or our cabinet.”
That’s good to hear from you directly.
The optics over the past year in the media indicate something different, however. We’ve seen building industry and real estate lobbyists in photo ops at Queen’s Park, presenting their public submissions to Ministers, and later applauding your new legislation, such as the “More Homes More Choice” Act.
You promised in many of your speeches to be “For the People” and “to Protect What Matters Most”. Many are still hoping this is more than a slogan.
By means of this Open Letter, I’m asking you to consider making an amendment to what seems to be a gap in Ontario’s Consumer Protection Act, (CPA).
Currently, the Consumer Protection Act, S.O. 2002, Chapter 30, Schedule A, says no business can force a consumer to agree to arbitration to resolve disputes, or prevent them from engaging in a class action suit. Your Consumer Ministry’s website says: You are not bound bythese clauses, even if you have accepted the agreement.”
However, the Act excludes real estate transactions from these protections.There is also no ‘cooling off period” allowed for freehold new home purchases, as in the case of condos.
The Act states, under “Exceptions”, Part 1, (2) (f): “This Act does not apply in respect of: (f) consumer transactions for the purchase, sale or lease of real property…”
Why are real estate transactions excluded from the Consumer Protection Act? A new home is often the largest purchase many Ontarians make in their lifetime.
If you buy a fitness club membership, it seems, you have more dispute resolution options than if you buy a new freehold home. This doesn’t make sense.
No one to date, either lawyers, legal academics, current Ministers or Opposition MPPs I’ve spoken to has been able to explain how this exception got into the Act in 2002. Where’s the consumer protection in this?
I am asking you to consult with consumers, and consider an amendment to the Act, taking out this “exception (f)”, and including real estate purchases under the protections of the CPA. With the growing concern about complex, developer-friendly new home contracts, the legislation seems weak in achieving its overall intent of consumer protection.
I hope you will take action on this. If not, can you provide your reasoning?
Thank you,
Barbara Captijn
Independent Consumer Advocate




Leave a comment

Filed under Uncategorized

Lions versus Lambs. The Sad State of Consumer Protection in Ontario Real Estate Purchases


As a consumer advocate, I sometimes accompany self-represented litigants to court to provide a bit of moral support. I often feel I need to write about what I see.

I found myself recently apologizing to new immigrants to Canada for how they were treated by a major developer during a new home purchase, and the complex legal maneuvering which followed. (This was a freehold home purchase, not a condo.)

I’ll tell you why below, and what I think needs urgent attention.

For nine years now, I’ve watched our politicians drag their feet on reforms to consumer protection laws and changes to the builder/warranty provider, Tarion. Consumers are still left to flap in the wind in too many of these important consumer protection areas.

Other provinces like Alberta and B.C. have a Consumer Protection Watchdog, or Homeowner Protection Office. Ontario has neither. Our members of the provincial Legislature have recently been in the media announcing their “partnering” with building industry officials to build homes faster. They’ve also admitted the regulator/warranty provider, Tarion, is broken, but they still force consumers to deal with a broken agency. The government and industry’s joint PR efforts to make us #homebelievers, and their combined push to “cut red tape”, is concerning.

Who’s protecting the consumer? That’s supposed to be the provincial government under The Consumer Protection Act.

The couple whose court case I attended, I’ll call them Ann and John, submitted copious documents to the court, which I read, as well as the developer’s documents. Ann and John are self-represented litigants up against one of the largest home builders in Ontario. English is not their first language, so they were supported by an interpreter/paralegal.

Here’s a brief summary of their story from the court documents:

Ann and John were one of 350 consumers who obtained a ticket to a sales event organized by a high-profile developer/builder selling 90 pre-construction homes outside Toronto.

At the filled-to-capacity event, they met with two sales representatives of the builder. These are not licensed real estate agents, and they’re apparently not required to be.

Ann and John were told they had to sign a 58-page sales agreement (APS) the same day, if they wanted to buy one of the homes. In a pressure-packed and hurried atmosphere, they chose the model of the home they wanted from several designs shown to them.

They were told they had 15 minutes to review and sign the 58-page APS. There was no highlighting of fine-print clauses waiving certain rights, no explanation of these special clauses.

They signed the APS, and gave the initial deposit required of $25,000 to purchase a specific model of one of the 90 homes.

As the completion date drew near, they made the other payments totaling $150,000 for the deposit.

They were allowed to visit the newly-constructed home on the day before closing. During the builder’s walk-through (the Tarion “PDI”), they noticed a bay window promised in the plans for the second floor was not there, and several interior layout features had been omitted or changed. They objected to this, since it was not what was agreed in the plans. They asked to extend the closing date to resolve this, but their request was denied.

They refused to close because of this. The developer then forfeited their full deposit, held Ann and John in default, and sold the home to someone else.

We trust we have laws to protect consumers from companies who don’t deliver what they say they will in their contracts. We trust reputable, long-standing builders with a positive corporate image. We know government, lawyers and lawmakers have an obligation to act in the public interest. We trust the government agency, Tarion, to publish accurate builder track records, even though this has been critiqued for years as inadequate, and the entire agency is now described by the Minister of Consumer Services as “broken”.

Despite all the laws we have, well-paid government agencies, and their duty to serve the public, I’m concerned about what I learned reading these court documents.

Developers hire top lawyers to draft these APS contracts to protect their interests. They’re filled with fine print, which can deprive you of rights you thought you had. A top litigator once told me you can include any clause in an APS you want, but the developer wants buyers who make no changes and have no conditions. He’ll move on to the next person waiting in line, if you want to add or change anything.

It’s not fair to blame the consumer for not doing research on builders, or being naive. The broken Tarion builder track record is the responsibility of government, and it’s next to useless. Where is one to look for accurate builder track records?

Many of the cases like this one finally get settled with a gag order on the consumer before the media writes about them, so the public can’t get a lot of information on high-pressure sales tactics and lop-sided contracts.

Well-established developers are major advertisers, often high profile philanthropists too, politically well-connected, and backed by powerful industry lobby groups. Consumers tend to believe prominent builders are good corporate citizens, and will be transparent and fair in their business dealings, because that’s the law.

The APS signed by Ann and John contained several clauses which take away certain rights a consumer ordinarily has, and shift too much risk from the developer to the purchaser. Here are a few examples:

The APS waived rights such as:

i) their ability to obtain independent legal advice;

ii) there was no cooling-off period after the signing of the documents, as allowed as in condo purchases;

iii) The consumers were made to agree that disputes must be resolved by arbitration.

But the Consumer Protection Act says even if a consumer signs a contract agreeing to arbitration, he’s not bound by it. However, real estate transactions seem to be specifically excluded from this Act. I found this in reading the developer’s court documents and checking the legislation itself: “The Consumer Protection Act: 2002, SO 2002, c.30, Sch A. ss. 2(2)(f)”. The Act specifically exempts from its application “transactions for the purchase, sale, or lease of real property“.  This is not mentioned on the Ministry’s website under the section “Your right to seek help.” Why not?

How can the consumer be aware of this? Several lawyers I asked about this didn’t know real estate transactions were excluded in the Act.

iv) Another clause in the APS states that the buyers must give up their rights to commence or participate in a class-action suit. How can a developer take away anyone’s rights to legal remedies? Shouldn’t this be overruled in the Consumer Protection Act? No, apparently, because the Act doesn’t apply to real estate transactions.

That doesn’t make sense, if the purpose is to protect consumers.

The Tarion warranty doesn’t apply either, unless the deal closes. In any case, Tarion is “broken”, as stated by former Consumer Minister Walker, on Feb. 20, 2019, in the ministry’s news release.

v) The APS also included a list of 18 types of “permitted alterations” the developer can make to the home or lot  – “for any reason”. Bay windows, the main feature in dispute, are not mentioned as a permitted alteration. The municipal building plans, also filed as a court document, still show the home still with bay windows, no revisions.

Transparency? … full disclosure?

The case is scheduled to proceed in October. Many of these cases can drag on for years, until the consumer is exhausted, financially and emotionally, and gives up.

We need our legislators to step up to the plate and act in the public interest.

I have three specific questions for the new Minister of Consumer Services, Hon. Lisa Thompson, (the third minister in one year in this portfolio):

1) Why is there no cooling-off period mandatory for new freehold home sales, as for condos? Why discriminate based on type of home ownership?

This is a major purchase, and consumers need the 10-day period to review the complex 58+ page contract with an independent, highly experienced lawyer. This might reduce the number of disputes, cut down on court time, make closings more smooth for both parties, and create more harmonious communities.

2) Why are real estate transactions specifically excluded from protections of the Consumer Protection Act?

The new Condo Act protects condo purchasers, but what about freehold home buyers? Why should developers be allowed to mandate the use of arbitration, or forbid class action suits?

3) Why not require written disclosure of any changes to the layout of the home, if it differs from the one attached to the  signed APS? Why aren’t all physical changes to the exterior structure required to be filed at the municipal building authority? (Or why is there no enforcement?)

No one likes surprises in contracts. Both parties expect full and timely disclosure. Harmony on closing day is better for both sides.

Good consumer protection laws balance the risks and responsibilities of both parties, and don’t disadvantage the consumers they’re meant to protect. The new Minister should take action to fix these gaps in consumer protection.

For example:

make a standard purchase contract for all new home sales, protecting the rights of both parties;

– create a Consumer Watchdog Office to protect new home buyers from heavy-handed sales tactics by large corporations, and oversee fair and balanced contracts, regardless of type of ownership.

Lambs are no match for lions in court; the lions always seem to be able to afford more justice. 

Premier Ford and his government promised to “protect what matters most”, and act #ForThePeople. These gaps in consumer protection laws are concerning. This needs Minister Thompson’s urgent attention.




Filed under Uncategorized