Dear Premier Wynne,
Premier of Ontario,
Consumers have written to you for years with serious concerns about the Tarion Warranty monopoly. You continue to refer these concerns to the Minister of Government/Consumer Services. Unfortunately, there have been about eight of these ministers in as many years. None of them seem to have been in office long enough to understand this complex monopoly, let alone fix the myriad problems with it.
You have been present in the legislature for many years listening to debates on bills to bring transparency and accountability to Tarion, two of the principles you say are key to your government. The legislation governing Tarion is over 40 years old, yet your party has refused to support every bill to reform it, without explanation.
Many feel the revolving door of ministers is a deliberate delaying and deflection tactic; many also feel your refusal to support Tarion reforms is to avoid running afoul of your biggest donors, the building industry.
Whatever the reason, you seem to avoid all things Tarion, and consumers are left to bear the consequences of this out-dated legislation and flawed policy.
A devastating recent example is Urbancorp.
The financial demise of this developer has left thousands of new home buyers stranded, losing their hard-earned deposits on these new homes. Yet for years the regulator Tarion has received complaints about shoddy construction and unfinished projects of this builder. Social media sites and blogs have for over a year reported a shaky financial record and bounced cheques.
Why wasn’t the building regulator regulating? No red flags on Urbancorp were noted on Tarion’s builder track record. Why not? Whose interests did that serve?
Consumers and MPPs have pointed out for years the apparent conflict of interest in the building regulator being dominated by the industry it’s supposed to regulate. Premier Wynne, you have never responded to consumer concerns about this. Except to shift responsibility to a revolving door of junior ministers who say they’re happy with Tarion’s progress, and “working with Tarion”. Working with is quite different from overseeing, which is what consumers rely on.
We understand you recently asked a consumer in a constituency meeting in August what Tarion has to do with the Urbancorp debacle. We hope you were being tongue-in-cheek. As you know, Tarion is responsible under Regulation 892 (ONHWP Act, RSO 1990) for scrutinizing the financials of all builders it licenses each year. This Regulation (under 10 (3) states Tarion will review “financial statements of the applicants and such other information relating to the applicant’s financial affairs.” It also states an applicant who fails to comply “may be refused registration.” Which as you know, Tarion rarely does.
How can it be that the regulator, “protecting new home buyers”, administering legislation on behalf of government, failed to red-flag this shaky financial record? How can it be the regulator didn’t take action immediately after seeing the red flags? Why was this license not revoked? Why was there no warning of shoddy building practices which had been reported to Tarion listed on its Builder Directory?
Financial debacles of this magnitude can’t happen overnight. The warranty corporation is in the business of assessing risk. How is it possible these financial problems were overlooked? How many more cases similar to Urbancorp may be looming in the future? If the regulatory body has no teeth, this could happen again.
Tarion recently advised consumers, the victims of the Urbancorp debacle, to “hire a lawyer”. These consumers have already suffered substantial losses of their deposits, some far exceeding the bare minimum covered by Tarion, the “consolation prize” as Tarion’s CEO nonchalantly referred to it last month. These consumers can hardly afford lawyers for prolonged legal battles.
Premier Wynne, why is your new minister, Ms.Lalonde, silent on this problem? Why are you silent?
The Tarion review now under way has been charged with looking at whether the regulator should be the sole warranty provider, and whether this is a conflict of interest. Minister Orazietti said in 2015 he anticipated the review would reaffirm Tarion’s good consumer protection; the Tarion reviewer stated several weeks ago he was unaware of Urbancorp details, and the new Minister Lalonde in charge of consumer protection and Tarion is utterly silent.
Consumers deserve an answer, Premier Wynne.
The Urbancorp debacle shows the human cost of failed government policies, the failure of the regulator to regulate.
We cannot afford another ORNGE, another arms-length agency of government without transparency and accountability, in this case governed by decades-old legislation, with regulatory powers it seems reluctant to use. This could bring further weakness to your leadership, with your popularity this week reported to be around 15%. (Toronto Star, 20/09/16, pg. A10)
Premier Wynne, with all of the policy advisors and lawyers available to you, and all the major media coverage on Urbancorp, it’s not credible you don’t see what’s going on.
We are waiting for you to take real action, however inconvenient this may be for your major builder donors. How can you let consumers pay the price for failed government policies, while shoddy builders and their regulators walk away virtually unscathed, shielded by their lawyers?