Monthly Archives: March 2015

A self-congratulatory swan song from Tarion’s Chair

The Ottawa Business Journal recently published an admiring interview (16/03/15) with Chris Spiteri, out-going Chairman of the board of  Tarion Warranty Corporation to showcase “accomplishments” of his ten-year term.

Mr. Spiteri claims he’s “proud of Tarion’s record when it comes to protecting consumers.   He cites”remarkable” results in keeping disputes away from the provincial License Appeal Tribunal (LAT), saying he’s “boosted protection” for consumers, and Tarion “sucessfully resolves cases almost 100 % of the time”.

To many consumers, this article was like throwing oil on the flames.

It ignited anger from individual consumers and consumer groups who’ve been urging the Ontario government for  years to bring transparency and accountability to Tarion, an arms-length monopoly of the government.

Many consumers have found Tarion unresponsive, its coverage inadequate, many have had to fight for compensation in court, and found Tarion lawyering up against them and shielding builders from accountability. Furthermore, since its also regulator of the building industry, many find Tarion’s Builder Directory inaccurate and misleading about builder performance.

Mr. Spiteri is well aware of all of this.

He also witnessed an angry backlash from over 200 consumers at Tarion’s Annual Public Meeting (30/04/14) where he and his CEO struggled to keep control of the meeting. “I understand the level of frustration”, he said, regarding complaints about Tarion’s use of the License Appeal Tribunal to fight self-represented consumers. “The use of attorneys, the use of lawyers creates an imbalance“, he admitted. He promised to “take this back to the board.

Another year has passed. A few promises, no action.

The board has known about these “imbalances” for years.  Tarion and builders win 83-96% of LAT appeals, and are presumably happy with the staus quo. With eight buidlers on Tarion’s board, consumer reforms are a hard sell. Mr. Spiteri’s claim of having “dramatically boosted consumer protection” is unconvincing to consumers.

The Ontario Home Builders Association (OHBA) has its own “Tarion Liaison Committee” to develop policy to protect their interests, and they nominate eight builders to Tarion’s board. Its not hard to see why many Tarion policies end up protecting builders instead of consumers. Policies get re-packaged and presented to the public and the oversight Ministry as “protecting new home buyers“, whether they actually do or not.

There are no consumer advocates on Tarion’s board. How does Tarion get feedback from consumers if there are none on its board? This is unclear.

Consumers have been told not to contact Tarion board members, not to contact the so-called “Consumer Advisory Council”, the CEO rarely answers consumer correspondence, and consumers are told all inquiries are to be sent to the Director of “Stakeholder Outreach”, who also happens to be President of the Liberal Party of Ontario. Anyone finding this a conflict of interest is told he’s “not a reasonable person”.

The following statement from Tarion’s chair is puzzling:

“The agency (Tarion) has also launched an external review of its dispute resolution mechanism to ensure its as fair as possible, he noted, adding it sucessfully resolves such cases “almost 100 per cent of the time.”

If Tarion resolves cases almost 100% of the time, why is it launching an “external review” of its dispute mechanism?

Perhaps he means builders and Tarion win almost 100% of the time. True, they win 83-96% of the LAT cases. But that can hardly be sold to us as “dramatically boosting consumer protection.

Tarion’s Chair says “I dont’ hear (those complaints) anymore”  – referring to complaints Tarion is biased toward builders.  Guess he missed the Annual Public Meeting questions in 2013 and 2014, as well as two bills brought to the Legislature in the past two years, and a petition for Bill 60 by MPP Singh in which states: “Tarion is controlled by the builders it is supposed to regulate, not by the new home buyers it is supposed to protect.”

The title of the Ottawa Business Journal article also seems out of touch: “Tarion Chair says confidence in firm steadily building“?  You must be kidding.  Tarion has a government-granted monopoly, no competition, they collect fees on every new home or condo sold in Ontario, they bring in $33 million in annual revenues (2013), pay themselves $26 million in salaries and pay only $3.5 million in claims. The Chair annonces “confidence” in Tarion  is “steadily building“?!  – in a monopoly?

Consumers often hear Tarion executives tell the media what a great job they’re doing. It sounds like a totally different company than the one many have experienced. Many new home buyers have had to bear the costs of defects not resolved by Tarion, many have resorted to “patch and run”, many have lost their appeals to Tarion at the LAT.  This is surely the opposite of what the Legislature intended when it passed consumer protection legislation, the ONHWPA.

Tarion’s top brass have regular columns in all major print media, they have huge marketing budgets to spin any story they want to the public, they have strong political connections, and the building industry is the largest contributor to political parties in Ontario. We hope we can rely on the press to provide scrutiny of government monopolies and chest-beating executives.

Mr. Spiteri says “I think maybe we’re a little too humble in getting that message out.

Sorry, Mr. Spiteri, we think Tarion has a lot to be humble about.


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