Premier Wynne, Minister Orazietti, PLEASE FIX TARION NOW, or abolish its monopoly

Dear Premier Wynne, Premier of Ontario

Dear Minister Orazietti, Minister of Government and Consumer Services,

You have frequently referred me to your Minister Orazietti, Premier Wynne, and he does not respond.  So I am writing to both of you, again, for help.

New home buyers in Ontario continue to suffer from construction defects in their newly-built homes, and lack of protection by Tarion, the “consumer protection” monopoly of your government.

For years Tarion has been critiqued by consumers, MPPs, members of the press and the legal profession, for lack of transparency in its operations.  Tarion executives continue to tell us they’re protecting new home buyers, while many consumers see Tarion protecting new home builders. Consumers and members of the Legislature have for years implored your government to bring meaningful oversight and transparency to Tarion and deliver on its consumer protection mandate. Yet there has been no meaningful improvement.

There is now another Bill before the Legislature to bring transparency and accountability to Tarion, Bill 60, the Tarion Accountability and Oversight Act.  Minister Orazietti, you have made it known via your press office you will not support it. Your Liberal MPP colleagues have stonewalled consumers who’ve asked to speak with them about supporting Bill 60, and all have passed the buck back to you as minister responsible for Tarion. You’ve indicated you will keep the current “Delegated Administrative Authority” (DAA) oversight model.

In order to try to guess what your government’s thinking might be, since you won’t tell us, I’ve re-read a copy of the “DAA model review” your government commissioned in 2008 with the consultant Todres and Associates.

That report outlined problems with Tarion’s DAA oversight model. Many of these problems still – a full 7 years later – continue to cause financial and personal hardship to Ontario’s new home buyers. You are fully aware of these problems since you’ve been copied on all the correspondence outlining the human cost of these financial and legal nightmares.

The risk of poor construction quality should not be borne by the consumer: the risk needs to be shifted back to the builder who caused it. Tarion should not be shielding marginal builders from accountability. As industry regulator, Tarion should be providing deterrents to shoddy building and enforcing them. This is often not the case.

Many of the specific problems outlined in the 2008 “DAA” model review persist.

Some of these are:

1. The overwhelming influence of the builder lobby group the Ontario Home Builders Association (OHBA) over policy-making at Tarion. This is referred to as the “entrenched primacy” of the OHBA (pg. 268 of the report). A recent example is the builder-friendly changes made to Builder Bulletin #20, after a perfunctory “consultation” with consumers. This consisted in providing a highly legalistic document on-line for consumer feedback. The Tarion Liaison Committee of the OHBA undoubtedly had their lawyers interpret this document for them and make sure their interests were understood and protected. Where was the consumer protection in this process?  I was one of two consumers who participated on-line. I am deeply concerned about this process, and the builder-friendly policy changes which resulted from it.
2.  The DAA review mentions there are to be consumer representatives on all board committees. Who are they, and what are their consumer qualifications? You have not replied to these questions. The CEO of Tarion said that if the Ministry appoints board members, they’re consumer advocates.
   The Tarion website shows 8 builders, 3 financial experts, and 5 board appointees with general corporate backgrounds. No consumer advocates. If a decision were to come before the board, are we to believe the 8 builders would vote in favour of protecting consumers or protecting their own profit motives?
   Tarion has expressly forbidden consumers from contacting board members, as well as the members Consumer Advisory Council (CAC) members. The CAC has made it known they will remain anonymous and will not respond to consumers (Tarion Annual Public Meeting, 2015.)  How are board members to understand consumer issues if they are insulated from them?
   The DAA Review mentions (pgs. 269-274) consumer input is critical to Tarion’s policy-making. Page 274 of the report states:
   “It is clear to board members that the Consumer Committee was not functional (…) new structural approaches are required and a new approach is being taken.”
   What has your ministry done in 7 years to increase consumer input into policy-making? Your ministry, “working with Tarion”, tells us “Tarion is a consumer protection organization.” (Toronto Sun, article by Tarion CEO Bogach, 07/08/15). How can you demonstrate this, if consumer involvement in policy-making is un-transparent, anonymous, and behind closed doors?
3.  The “New Homebuyer Ombudsperson”, a new Tarion position announced in the 2008 DAA review, is not independent. This concern was voiced in the report 7 years ago, and continues to be a serious one. Consumers have brought this to the attention of Tarion and the ministry. No meaningful response. Consumers are led to believe this ombudsperson is independent of Tarion, but find out in several cases he’s shared confidential information with his employer which could negatively impact the consumer’s case, or he’s recommended consumers take their cases to the License Appeal Tribunal (LAT) when his own employer wins 93-99% of the time. How is this position impartial? The only assurances come from the internal ombudsman himself: he’s independent because he says so (Annual Public Meeting, 01/06/15).
4. The nature of “Tarion stakeholder” has “been broadened” according to the DAA review and the Tarion Annual Reports (DAA review, pg. 300). Tarion’s board members and employees are required to “act in the best interests of Tarion and all its stakeholders” according to Tarion’s website. This is very problematic, since denying a claim could be in the interests of Tarion and builders, but not in the homeowner’s interest. This is a serious conflict of interest which has been pointed out repeatedly to Tarion, the ministry, and both Premiers since 2008.  Tarion’s CEO continues to tell the public that Tarion is “a consumer protection organization”. This makes good press and makes politicians look like consumer champions, but it’s misleading the public, masking the imbalance in consumer input at the policy-making table. The DAA review stated power was “too heavily skewed toward one association“, meaning builders. (DAA review, pg. 271). This continues to be an overwhelming concern for consumers.

Premier Wynne, and Minister Orazietti, 7 years has been a long time for families suffering under the current unbalanced Tarion monopoly. The “perception of capture” by other stakeholder groups, builders, (pg. 282 of the report), continues to grow and create injustices for new home buyers.  The risk of poor quality construction should be transferred back to the builder, not the home buyer, as the report mentions.

You seem content with the current DAA model and seem to shun new legislation to bring Tarion under the oversight of the Auditor General and Ombudsman of Ontario. As the DAA review concluded (pg. 280), “Best efforts need to be directed to enhance transparency.”  That’s what Bill 60 proposes to do. If you will not support Bill 60, what is your government doing to make Tarion accountable and transparent? The DAA model has proven to be ineffective and weak.

Many consumers see Tarion as another powerful builder lobby group, masquerading as a consumer protection organization, enjoying one of the weakest oversight models in government.

What is your plan, Premier Wynne and Minister Orazietti, with your majority Liberal government, to fix this lax oversight model you’ve known about for over 7 years?

Consumers rely on you to take meaningful action to make this monopoly truly serve consumers, as the legislation (ONHWPA) intended. Or perhaps its monopoly status should be abolished, and its $400+ million in assets used to fix construction defects in new homes which have been created and tolerated under this faulty system.

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DAA Review 2008

http://www.sse.gov.on.ca/mcs/Documents/DAA_Model_Review_Report.pdf