What happened to bill 166 on Tarion reform? Where’s the “For The People” government?

Consumer's Reform Tarion

A promising article in The Toronto Star published on March 28th, 2017, written by an investigative reporter announced –

“Province Stripping Tarion of Builder-regulator Role”.

It quoted the Liberal minister saying Tarion’s multiple roles as warranty provider and regulator “can give rise to a perception of conflict of interest, and could result in actual conflict, or conflicts of interest.”

This came as no surprise to many observers.

Consumers and provincial MPPs have known for years that Tarion is the only government agency on the planet to have the two conflicting roles of warranty provider and builder regulator. We can thank former Premier Bill Davis for this in his 1976 legislation. And every Premier after him, for doing nothing to fix this.

Consumers have complained that Tarion favours builders, leaves homeowners to pay for construction defects, and doesn’t properly regulate builders. The two-headed monopoly should end, that was a key recommendation of Judge Cunningham’s Tarion review released in March 2017.

What has the government done since then?

In June, 2017, former Premier Wynne’s government put together a “working group” to hammer out recommendations for new legislation in June 2017. But the 10-person group was skewed toward Tarion and the building industry executives, who vowed to fight the judge’s review, and to keep the monopoly. The group was sworn to secrecy and instructed to ignore several of the judge’s key recommendations.

I was the only consumer advocate in this working group, and was told several times, once in a whispered coffee-break encounter by a former Tarion CEO, and another time openly in the working group by a senior Tarion official, to stop critiquing Tarion’s policies. The whole point of new legislation is to do just that. However, anyone who’s ever critiqued Tarion’s policies will tell you what it’s like to be on the receiving end of their displeasure..

The Liberals finally introduced a weak bill 166, in late 2017. It called for a standalone builder regulator, but was silent on most other areas of consumer protection recommended in the judge’s review. All Opposition parties voted against the bill as lacking in consumer protection legislation. Which it is.

But where is bill 166 now? 

Most of us think if a bill is passed, it becomes law. Not so. Why are laws designed to protect the consumer so difficult to understand, even by those who’ve read the 93-page bill several times? Consumer protection laws should have a summary at the beginning to inform consumers what the bill says, and what it means to them, and when it will become law.

I called a friend of mine this week who follows Queen’s Park and legislation very closely, to OpenBookask him to find out what the current status of the bill is. For us as ordinary citizens, minsters are hard to reach, and they often stay aloof from these questions, unless you’re championing one of their issues du jour, or do something outrageous and get media attention.

Here are five quick points he explained to me:

1)  A bill passed by the Legislature comes into force “upon proclamation”, i.e. on a date to be set by Cabinet. It is not law until that date. If Cabinet doesn’t set a date, there’s no law. Some laws may be on the books for years, and never proclaimed. Many bills have been put under review by the new Ford government, if they had not previously been proclaimed.

2)   Bill 166 consists of five “schedules”.  Each schedule can come into force on a date to be named by Cabinet, the Premier’s inner circle of ministers.

3) For schedules 1 and 2, no date has been named. These will only come into force “upon proclamation”, if a date is set. Schedule 2 is the one which creates two separate entities, but neither of the entities is named. As long as no date is chosen, these schedules are not in force.

4) The current government is under no legal obligation to proclaim anything which has not already been proclaimed. Laws could sit there for years, and ultimately expire. (Even Wynne’s Liberals seem to have been reluctant to proclaim their own bill 166. Maybe they too knew it was a lemon.)

5) Schedule 4 allows for some amendments to the existing New Home Warranties Act, and it came into force when the bill was passed by the Liberals last December 2017, largely due to Opposition parties pushing for this. This allows, in section 5.4, for the Auditor-General to conduct value-for-money audits of Tarion.

This is a ray of light.

No independent authority such as the Auditor-General’s office has ever been able to look at Tarion through the microscope, or analyze its effectiveness or efficiency in carrying out its mandate to protect consumers. Sunshine is a good disinfectant.

Tarion should finally be open to scrutiny, show the public why it denies claims, show if its dispute resolution is impartial, show what it pays executives, and if its board includes any bona fide consumer advocates, etc.

The Auditor-General’s office now has the authority under bill 166 to examine Tarion from a value for money perspective. This audit will apparently be released sometime in 2019.

As for the new PC government, Premier Ford promised to be a leader #ForThePeople , to fight for the little guy. But many of us are seeing strong indications that developers have his ear. His minister’s social media posts show them smiling and socializing with members of the major building lobby groups. Ford is apparently against anything he sees as “anti-business”.

But there’s nothing more anti-business than allowing shoddy builders to sell new homes with construction defects to consumers. No reputable builder would want to do this, or survive in any business doing this.

The problem is Tarion too often shields the bad apples from accountability, uses heavy-lawyering, technicalities of the warranty, and delay tactics to wear down the consumer. This too often results in builders walking away scot free, and the consumer left to pay for their wrong-doing, or facing long, unaffordable legal battles.

The Tarion CEO’s compensation of over a million dollars is made up of 60% bonus, but no one knows what the bonus is based on. With eight builders on Tarion’s board approving it, this is one conflict of interest which begs an answer.

As the Consumer minister said in the 2017 in The Toronto Star article, : “Tarion is too far removed from government”.

True, and that’s bad for business. Without consumer protection, which creates consumer confidence, there will be fewer new home sales.

We have no clear answer why the Ford government is not acting on the legislation by at least choosing a date for proclamation of the other schedules, or announcing it will come with its own bill. Non-answers like we’re studying the issues, etc., are all we have.

The judge’s review already studied Tarion in a year-long review. It takes no more than 3 or 4 hours for an average person to read and understand most of it. Why the delay in implementing it, or even announcing anything whatsoever? The ministry’s website is a big void on this important consumer protection subject.

More years of discussion, debate, and research won’t change the well-known problems with this 40-year old legislation.  Many agree with Premier Ford that government shouldn’t have a monopoly in anything. Monopolies are an outdated business model and provide poor service. To open up the new home warranty field for competition would be good for business, and good for the clients of those businesses too.  Consumer protection legislation is to protect consumers. Time to do that.

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If the people cannot trust their government to do the job for which it exists – to protect them and to promote their common welfare – all else is lost.” Barack Obama

 

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