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.
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.
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CONSUMERS' REFORM TARION 
Thank you for focusing on the issues of the dispute resolution aspect of Bill 159, Barbara Captijn. This is vitally important for Ontario’s purchasers of newly built homes.
MPP Rakocevic was absolutely right when, on Mar. 5, 2020 in the Ontario Legislature, he said that the Ford Government, through its Bill 159, is giving crumbs to starving consumers, and trying to convince us that it is a loaf of bread. Once again the Ontario Government is more interested in pleasing builders than protecting consumers.
This is an excellent critique, Barbara. Thus far, MPPs Lisa Thompson & Bill Bailey have ignored requests for their research from which decisions re Bill 159 were made.
This is a great report! I was looking for that fox to show up in this piece, but he’s lounging on a deck-chair in the hen-house; more healthy, sleek, and fat as the years roll by.
The Government’s handling of Bill 159 is not “For the People”. This faux philosophy might apply to new licence plates; the Licence Appeal Tribunal is in much more need of attention and re-design.
Thank you for this blog Barbara. The history of Tarion has created enormous mistrust for homeowners. The lack of an independent dispute resolution option here – and the failure to even recognize this issue – means that there is no credible impartial party here for homeowners to appeal to for dispute resolution. Their position as commonly self-represented of course further exacerbates the power imbalance and lack of trust. The use of NDAs in dispute resolution to gag complainants who want to talk about their outcomes only reinforces the need for professional, credible, best practice dispute resolution which is truly consensual and balanced.
This incredibly accurate critique of the Tarion issues is only an undeniable testimony of the inefficiency of government …. decades of evidence accumulate and yet consumers must start over ‘proving’ their causes, claims , grief , lack of justice to a body that simply fails to listen and UNDERSTAND . Each time a new government and its administrators enter the scene ..consumers must re state the burden, the burden that keeps on gaining weight … are you waiting until it happens to you ? …I certainly hope it does
another Judas – Robby Ford! – for a few pieces of Silver from the construction industry – you have betrayed Ontario new homeowners – many of your own grass-roots supporters
Is anybody surprised? Builders lobby and make donations to political parties and MPPs while consumers do not lobby and do not make donations.
There are few votes in fixing Tarion. There is no money. There is no incentive to really fix this unless, of course, you believe governments should do the right thing as part of governing.
Thank you! So true! And so sad for consumers.