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Mr.LeBlanc, media contact for the Ministry of Consumer Services, posted a comment yesterday on this blog in reply to our request to Tarion to release a transcript of the Annual Public Meeting consumer question-and-answer period. He says we’ve already received that in the Tarion-generated “summary” Tarion posted on-line.

Let’s not quibble about semantics. What we are asking for is a correct and accurate rendition of our questions we asked at this public meeting. Many consumers have stated their questions have been substantially modified, or incomplete in this “summary”. This is not an accurate record of what went on at the APM.  We are asking for an actual verbatim transcript.  Tarion does have this, since they were forced to provide parts of it last year in response to consumer complaints, and since The Toronto Star journalist had recorded the meeting.

We are asking for accurate written documentation, a verbatim transcript, call it what you want, of consumer questions  asked at the Annual Public Meeting on April 25th, 2013 and on April 30th 2014. This is not the “summary” which Tarion has posted on-line.

Interesting also is that an important commitment made by a Tarion senior executive to the audience – which was met with a round of applause – does not seem to appear in Tarion’s “summary”.

We are asking for a fully accurate transcript,  an official written documentation of what questions were asked on the record.  Call it what you want, you now have enough consumers writing to your Ministry to say this Tarion “summary” is inaccurate, not a true record of what they asked at that “public” meeting, nor an accurate account of what was promised or answered in the Q&A period. It would be also important to know which board members signed off on this Tarion “summary” as a true and accurate record of what was said.

Several Ministry public servants were at that meeting: four, as far as we can tell.  Transparency and accountability… here’s an opportunity for this government with “oversight” over Tarion, to prove this is more than just another Liberal re-election slogan.

Stop the word games; its clear what consumers are asking for. Over to Tarion and the Ministry of Consumer Services to provide this: a verbatim transcript, without further “ado about nothing”.

Trust with key stakeholders is very important for a large corporation. Even more so with Tarion, which has a public trust function, a government-granted monopoly, a consumer protection mandate, and a regulatory responsibility over the building industry in Ontario.

Consumers who travel great distances to attend Tarion’s ANNUAL PUBLIC MEETING (APM) each year expect their questions answered, and accurately transcribed for the public record.

It is surprising that Tarion took it upon itself starting in 2013 to publish only a “summary” of consumer questions asked, and a somewhat embellished version of the answers they gave at the time.

Despite criticism in writing that this “summary” did not accurately reflect the questions consumers had asked, Tarion decided to proceed once again in 2014 with their controversial “summary” instead of “minutes”.  Not only this, but at the 2014 APM consumers were told they were not allowed to video or audio record their own questions. Consumer requests for transcripts of the 2013 and 2014 APM Question Periods, have not been answered to date by either Tarion or the Ministry of Consumer Services .

Again this year, consumers have written to Tarion executives and Ministry officials to voice their concerns that this “summary” does not accurately reflect their questions or the answers given by Tarion at the time.

If  Tarion is truly a “consumer protection” organization, as it keeps telling us, and if “the consumer’s interests are paramount” as they tell us, then why wouldn’t they embrace consumer input at this meeting, have it properly recorded for the public record, learn from it, and fix the problems which could make things better in the future? Consumers voicing concerns at this public meeting should not be painted as one-off, tough-luck cases, or perpetual malcontents. Listening carefully to consumer concerns and recording them accurately is the first step to making things better for the very people the warranty was created to protect in the first place – the new home buyer.

In the interests of transparency, fairness, accountability, and good corporate governance, why not publish actual minutes of the meeting, a full transcript of consumer concerns raised?

If the consumer is “paramount” to you Tarion, prove it.  Publish a true transcript of your 2013 and 2014 APM question and answer period.

“When you’re telling the truth, you’ve only got one story”.

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At a recent media event, June 20th, Howard Bogach, President and CEO of Tarion rather breezily stated: “Virtually all new homes have some kind of defect.” 

And you think that’s no big deal? If you’re spending your life savings on a new home or condo, it sure is. Would you expect to hear from the President of General Motors, for example, that “virtually all” new cars he’ll sell you have “some kind of defect”? You’d chose another manufacturer.

But Mr.Bogach’s comment seems even more surprising since Tarion is the “regulator of the building industry” and the “licensor of builders” in Ontario. So you’d think he’d be concerned about trying to clamp down on those builders he licenses who cause the problems. Seems not. “Because the warranty fund pays for it“, he’s been quoted as saying to consumers who’ve asked.

Our question to Tarion: even if you warrant a defect, shouldn’t the builder still be at all times accountable to the licensing authority? Isn’t there a difference between “warrantability” and “accountability”? A defect might not be warranted because it was discovered after the deadlines, but the builder should still be held accountable for it on his record.

If there’s no accurate record of defects for the future home-buying public to see, if builders don’t have to pay for fixing their shoddy work, why should they stop short-cutting, squeezing sub-trades, or using low quality materials if they can maximize their profits with impunity? If there’s no deterrent to shoddy building, you’ll get… guess what… more  shoddy building. 

What’s the point of a “licensing authority” or “regulator of the building industry” with no bark or bite?

The above words from Shakespeare’s “Hamlet” are much-quoted, and for good reason. They indicate if someone makes frequent and earnest attempts to convince others of something, it usually ends up convincing others the opposite is true.

The media event/breakfast organized by Tarion for select media on June 20th, 2014 seems a case in point. Tarion senior executives did their utmost to portray Tarion as a consumer champion. Tarion’s self-congratulatory presentation at this event shows a very different picture of Tarion than that which came to light at the acrimonious question period at the Annual Public Meeting on April 30th this year.

Tarion described itself at the recent media event as coming to the rescue of homeowners who’ve discovered cracked foundations, or been delivered the wrong fireplaces or square footage contrary to their purchase contracts. Yet for years, consumers and consumer organizations have described Tarion as builder-biased and subservient to the influence and power of the building industry.

The well-known consumer columnist Ellen Roseman of The Toronto Star wrote about this event: “Despite the charm offensive, I think Tarion will continue to draw criticism”.  See her full article at this link:

http://www.thestar.com/business/personal_finance/2014/06/20/tarion_needs_more_accountability_roseman.html

Many consumers have had their claims denied by Tarion for new home defects, and see no record of these defects on the “Builder Directory” which is supposed to give “full disclosure” of all defects Tarion has inspected. For years consumers have voiced concerns to the Liberal governement about lack of transparency and accountability at Tarion. This is hard to independently verify since Tarion is not subject to any independent oversight. Neither the Auditor General of Ontario nor the Ombudsman of Ontario have authority to look into Tarion, nor does Tarion have to disclose its executive salaries over $100,000 under the government’s “Sunshine List”. Add to this the fact that Tarion enjoys a govenment-mandated monopoly in home warranties and a government-mandated consumer protection mandate, with passive “oversight” by the Ministry of Consumer Services whose Ministers are a revolving door of change every year or so. In the light of recent government spending scandals, all at arms-length corporations from the govenment, this should be sending up red flags. It is not. The government seems content to get Tarion’s report card – from Tarion itself.

Consumers responded to the article about the Tarion media event, the  “charm offensive“, with two letters to the editor (one by the author of this Blog) which were published by The Toronto Star on June 27th. See the letters at this link:

http://www.thestar.com/opinion/letters_to_the_editors/2014/06/27/make_tarion_case_study_public.html

Elsewhere in this blog consumer issues with Tarion are explained in detail, but all revolve around one concern: a monopoly without meaningful oversight is a slippery slope. No one but the monopoly itself has the right to look into its own business practices and decide if and when to compensate homeowners, if and when to let builders completely off the hook for defects, and whether to list any of this on the public record for the future home-buying public to see. Of additional concern is that Tarion has also a monopoly in licensing builders and “regulating the building industry”. But are there enough deterrents for shoddy builders, or are the penalties strong enough to change behavoir?

As this media event demonstrated, Tarion completely controls the flow of information. Journalists were told they would not be given the name of the builder of the “case study” development which got a $5 million settlement, and the underlying cause of the defect (of course it wasn’t the builder’s fault!) were varied and contradictory. Consumers are now urging Tarion to make this case study public. The unfortunate thing is they don’t have to. There is no oversight authority with real teeth over Tarion, no consumer watchdog, inadequate transparency in their business practices, and no consumer advocates advising Tarion on consumer policy. A group of Tarion employees themselves questioned these practices in a detailed letter to Premier Wynne on March 31st, 2014. Which she seems to have promptly ignored.

Lucky for Premier Wynne, the president of her Liberal party is a senior Tarion Vice-President, a former Liberal government lobbyist. A cozy relationship indeed, which has been repeatedly questioned as a conflict of interest, but even this has been promptly dimissed by Tarion as coming from people who are “not reasonable”.

In the words of a Tarion expert, a former MPP with over 20 years experience in all matters Tarion – their CEO really “doesn’t have to give a d…m.”

There wil be undoubtedly more self-congratualtory media events from Tarion.  But “The dog who barks the loudest is not always the best observer.“  (W.S.Downey, Proverbs)

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The horses are out of the barn, and Premier Wynne now begins her next four years as Premier of Ontario.

She has promised she’ll be a “no more scandals” Premier. Voters have given her a hall pass with “I’m sorry” and “I didn’t know anything about it” as acceptable reasons for the wasteful spending revelations of the last several years.

Any spending scandals from here on in, though, are her responsibility.

An interesting foreboding of some rocky roads ahead came from The Toronto Star’s columnist Martin Regg Cohn in his post-election column of June 15th, 2014.

He wrote:

“Wynne must reduce the lingering stench of past scandals from her predecessor’s premiership – not just by cleaning up – but by avoiding future repetitions . (…) It is a major undertaking, given that most memorable boondoggles on McGuinty’s watch occurred in outside agencies: ORNGE, eHealth, OLG, The Power Authority.

The accountability model is broken. We need a way to flag outside agencies for closer scrutiny based on a watch-list of risk factors (opacity, public health an safety, cash flow, over-sized operations, past problems, sheer complexity).

Accountability isn’t sexy, but boondoggles can be deadly. To avoid tarnishing her own image, preemptive action must be a priority.”   (emphasis mine)

Its curious that Premier Wynne continues to ignore clear warning signals from the public and  from MPPs in the Legislature about TARION WARRANTY COPRORATION. Even Tarion’s own employees wrote an Open Letter to Premier Wynne in March this year questioning various Tarion business practices and bias toward the building industry. Its clear to many new home buyers, MPPs, consumer groups, and even to some of their own employees, that the “accountability model” governing Tarion, whatever it is, is not only broken but may never have existed at all.

The Auditor General has no authority to examine Tarion’s books, the Ombudsman of Ontario has no authority over Tarion, and the Sunshine List for disclosure of executive salaries does not apply either.  Tarion enjoys a government-granted monopoly in new home warranties and also is responsible for “regulating the building industry“. But who is minding the shop, making sure the new home/condo buyer is protected ? Builders? Tarion’s board is dominated by the building industry (8 builders out of 13 on the board), yet the government  tells us Tarion is “protecting new home buyers“.

Premier Wynne seems to find the status quo just fine.  She has done her utmost to ignore concerns brought to her attention about Tarion – for years – brushing them aside to her Minister MacCharles, who seems little more than a Tarion spokesperson. No one seems to be the watchdog over this government-granted monopoly with a very important consumer protection mandate.

One thing is for sure: Premier Wynne won’t be able to say she’s not aware of the increasing concerns about Tarion, this “Delegated Administrative Authority” of her government. It may be difficult for her to blame McGuinty, since she herself has personally received ample warnings of the problems since she became Premier in Feb. 2012, and also in her position as Minister of Municipal Affairs and Housing, a member of McGuinty’s inner circle.

The Star’s columnist Mr. Cohn hit the nail on the head: “the accountability model is broken“. Or perhaps it never existed at all in a meaningful way. The Toronto Star’s own investigative reports of Tarion in late 2013 uncovered many serious concerns with transparency and oversight, eventually all brushed aside by Tarion and Ministry authorities, maintaining their chief concern is the consumer.

A troubling problem with oversight, just one of them, is Tarion’s internal “ombudsman“.  Tarion senior executives say their internal “ombudsman“, reporting to Tarion’s board, is “independent” and “impartial“. Yet this ombudsman is responsible for investigating (impartially)  his own employer’s business, reporting back to his own employer, and his performance is judged, you guessed it, by his own employer. This makes no sense. Unless all you want to do is give the appearance of oversight without seriously providing it. According to the Ombudsman of Ontario, in a speech to a government Standing Committee in 2006 regarding the role of an ombudsman in general,  he states: “under no circumstances should ombudsmen be employees of the organizations they oversee.” It seems Premier Wynne and Tarion don’t agree with him.

In an e-mail sent to consumers dated June 13th, 2014, copied to the Ministry, Tarion’s V.P. writes: “The Ministry has indicated it finds the current structure to be appropriate.”  Well now that’s a relief.

Premier Wynne, its your responsibility to fix the oversight model. The buck stops with you.  Transparency and accountability are values you have repeatedly told us your government holds dear.

We hope fixing the problem doesn’t prove inconvenient, given that the building industry – with its considerable vested interests in Tarion – has just made huge financial contributions to your  re-election campaign.

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//twitter.com/ReformTarion/status/478316316026097664

“A body of men holding themselves accountable to nobody ought not to be trusted by anybody.”

–Thomas Paine,  political thinker/writer; 1737-1809

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Although its hard for consumers to contact their MPPs during the run-up to the Ontario election, two enterprising young homeowners got a call-back on June 6th from PC MPP Toby Barrett answering their questions about what his party will do regarding reforms to Tarion.

MPP Barrett was Critic for the Ministry of Consumer Services in the last Legislature, and this is the Ministry which is supposed to have “oversight” over Tarion. Barrett is one of the best-informed MPPs in the PC party on problems new home/condo buyers have had with the warranty programme.

In a short video clip published this week on You Tube, and on the Facebook page http://www.facebook.com/maketarionaccountable, homeowner Jeffrey Ferland asks MPP Barrett what the PCs will do to address these problems if his party is elected June 12th, 2014.

“Ministers must be held accountable”, he emphasizes. This is one of the concerns consumers have repeatedly raised – inadequate oversight. The various Ministers of Consumer Services over the years under the Wynne/McGuinty government have focused on “customer service” issues at Tarion, as though that could be of any use at all to someone suffering construction defects in their new home.

MPP Barrett also noted “the government created Tarion, therefore it is accountable for making it work correctly“. The word accountability is key in this current climate of  “I’m sorry“, “it wasn’t me”, “it was my predecessor“, “I’ve fixed everything now”.  With the backdrop of various Liberal government spending scandals, special audits by the Auditor General of Ontario seem to be the only way to bring sunlight to organizations like Tarion who enjoy a monopoly, collect indirect warranty fees for every home or condo sold in Ontario, and are supposed to act in the public interest. Tarion seems to be an example of an organization crying out for closer scrutiny and meaningful oversight. To leave new home buyers on their own to fight builders for construction defects in court, after Tarion has aligned its interests in getting rid of the claim with the builder’s in walking away from the whole thing, is not in the public interest. Especially if there is no record of the builder’s defects on the licensing authority’s (Tarion’s) record.

Greater scrutiny, transparency, and effective oversight are urgently needed to reform this monopoly, this “Delegated Administrative Authority” of the government of Ontario. It needs to be made accountable to the consumers it was created to protect.

Thank you also MPP Barrett for supporting Bill 190 in the last Legislature which called for the Auditor General of Ontario to investigate Tarion. This is the only credible way to examine how this organization is spending the mandatory fee new home buyers are forced to pay, passed on to them by new home builders.

– Why are so many new home and condo buyers finding out they don’t have the warranty protection they thought they paid for?…

– Why are so many defects under-reported by the licensing authority, Tarion?…

– Why do construction defects continue to proliferate in the new home/condo market in Ontario?…

– Why is the industry which is supposed to be regulated by Tarion dominating policy-making by occupying 8 out of 13 board positions at Tarion?

That’s like setting the rules of the game and being referee as well. A sure way for the building industry to protect its own vested interests.

Tarion seems, in the opinion of many consumers, MPPs, and consumer advocates, to have drifted too far away from its government-mandated mission of “protecting new home buyers.”

Thank you, MPP Barrett, for telling consumers its time now for “REAL ACTION“.

We rely on you and your PC colleagues to bring forward new Bills in the new Legislative Assembly to bring effective and credible oversight to Tarion, starting with a special audit by the Auditor General of Ontario.

Tarion must be brought back its consumer focus, to protect those the legislation was created to help in the first place.