Dear Premier Wynne and Minister MacCharles,

Bill 166 which you introduced last week to address years of complaints about the Tarion monopoly has largely ignored Justice Cunningham’s review released in March, 2017.

Concerns I raised on behalf of consumers in the consultations you conducted in June through August this year have all been brushed aside.

To reiterate, here are a few major consumer concerns with Bill 166:

  1. There is no clearly defined purpose statement in the bill. This has been an on-going concern with the former legislation, the ONHWPA. The judge’s 2017 review said new legislation should clearly state the consumer protection intent of the act.  Bill 166 is called “Strengthening Protection for Ontario Consumers”, and includes concert ticket purchasers, who clearly don’t have the same risk profile, or anywhere near the long-standing history of complaints as new home buyers.
  2.   The judge’s #1 recommendation was the multi-provider model for new home warranties. You ruled this out of scope for the ministry consultations, providing no reason. It was clear during consultations that Tarion wanted to hold onto it’s monopoly. How does protecting Tarion’s monopoly protect consumers? You publicly stated, Premier Wynne, (April, 2013), “the days of monopolies are done.” You haven’t explained why this doesn’t apply to Tarion.
  3. The “modern transparency and accountability measures” you promised in March 2017 seem to be just one: the Auditor-General’s power to conduct audits. This isn’t nearly enough. It ignores consumer and Opposition MPP calls for oversight by the Ombudsman of Ontario, and applicability of the Freedom of Information and Registered Lobbyist Acts. What are your reasons for not including these? Bill 166 states (pg. 43) that Tarion fees passed on to consumers “are not public money“. Yet consumers see them as such: they are mandatory, passed on to consumers by builders, money which in turn funds the warranty. This is an indirect tax we are required by law to pay.  If not the public’s money, whose money is it?
  4. The Administrative Authority model you’ve chosen to continue has been critiqued for over a decade as “rowing and steering” at the same time, i.e, setting policy and moving it along with minimal checks and balances. Bill 166 brings consumers little proof  Tarion will act in the public interest. The judge’s review cited problems with a potential conflict in Tarion both protecting the warranty fund and deciding whether to pay out claims. This remains.
  5. Builders still have a heavy presence on Tarion’s board. Where is the mandatory consumer representation on the board, a major concern for over a decade?
  6.  To say (pg. 85) consumers don’t have to prove the cause of defects may seem positive, but there’s no assurance Tarion won’t use its legal department or financial resources to dismiss legitimate claims. Where is the transparency for consumers to find out if claims are handled in a fair and balanced way? The internal ombudsman, reporting to Tarion’s board, has not been perceived as balanced and impartial. Yet you chose to keep this position.  A compliance officer reporting to the ministry would have provided more independence and objectivity for consumers.
  7. You’ve changed the wording of a major consumer protection clause (section 47 (b) because you say it had to be made gender-neutral. This has unfortunately watered-down the consumer protection content of the original wording. Changing the words “defect in workmanship to “built in a skillful way” is much more vague and easier for lawyers to manipulate to their advantage.
  8. The License Appeal Tribunal has been preserved as the appeal mechanism for claims, despite a decade of concerns that homeowners lose over 90% of the cases.
  9. The regulation-making authority of Tarion has been maintained, (pg. ii), despite consumer concerns. The annual oversight fee Tarion pays to the ministry for its own oversight has also been maintained. Board composition requirements (pg. 8) also seem un-changed, with no consumer advocates required.

Premier Wynne and Minister MacCharles, as the only consumer advocate in your 11-person working group, I strongly and repeatedly voiced concerns about ignoring the judge’s review, limiting the scope of discussions, and weighting the participants to favour Tarion and industry interests. I am told, I was “heard“, but nothing was done.

Builders got what they wanted from this bill: their own regulatory authority. Tarion got what it wanted: to keep its powerful monopoly with minimal oversight. What meaningful protection did consumers get?

You say nothing will be implemented until at least 2020. Regulations will take even longer. What of the consumers struggling under the current weak legislation? This ignores the urgency of these problems and leaves consumers to deal with 40-year-old legislation which doesn’t protect them in the biggest investment they make in their lives. An over-priced concert ticket may be forgotten five years from now. A new home with unresolved defects may bring financial and emotional hardship which can last a lifetime.

Bill 166 needs significant amendments to gain credibility among Ontario’s new home buyers.


B.M.C., Oct. 10, 2017

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Just out: opinion leaders urge Premier Wynne to implement judge’s 37 recommendations re Tarion monopoly


Both critics of the Ministry of Government and Consumer Services, MPP McDonell and MPP Gates have written to minister MacCharles, urging her to implement Justice Cunningham’s 37 recommendations in his Tarion Review, released five months ago.

The Premier has been vague about what the new legislation to be introduced this fall will contain. Amid all the talk of fairness and transparency, we still don’t know if the Premier will act in the public interest instead of political expediency, and the interests of big industry and Tarion.

What we do know is that Tarion has made it abundantly clear it doesn’t want to lose its monopoly, no surprises there. But ending the monopoly was the judge’s  #1 recommendation, upon which the other 36 were based and inter-connected.

It’s time for Premier Wynne to put words to action and implement the judge’s 37 recommendations in new legislation this fall. Consumers have waited 40 years for reforms to Tarion,  an “anomaly” model, in the judge’s words, which doesn’t exist anywhere else in the world.

Now it’s time for real action.

Both letters of the Critics are posted below. Please take a moment to contact your local MPP to show your support for the Tarion Review and judge’s 37 recommendations. (Link and commentary on the review in previous posts on this blog.)


Aug. 3, 2017 letter from McDonell to MacCharles re Tarion Review


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“A correct diagnosis is three-fourths of the remedy”. What’s next for the Tarion Review?


We all know someone who’s struggled for years with a medical problem, trying to get a correct diagnosis, with no road map for a cure. As the quotation above puts it (Mahatma Gandhi), there’s no remedy without first a diagnosis.

With this analogy, many similarities come to mind with the recent review of the 40-year old government monopoly, Tarion Warranty Corporation.

For over a decade, consumers, consumer groups, MPPs, journalists, and two former Ombudsmen of Ontario have raised concerns about lack of transparency and accountability at Tarion, it’s loose oversight, monopoly status, and builder-facing culture.

Monopolies don’t like to be critiqued, that’s clear, or lose their market position, that’s clear too. The Tarion monopoly has been left largely un-touched for decades, with ministry officials content to say they’re “working with Tarion“.  Not overseeing, but working with.  Huge difference for consumer protection.

The long-awaited Tarion review, commissioned by the government in Nov. 2015, was finally released in March of 2017. It was conducted by a seasoned judge, Justice Douglas Cunningham, with the assistance of Deloitte Consultants, and held consultations for over a year, costing taxpayers about $750,000.

The judge conducted wide-ranging talks with builders, insurance industry executives, consumers and lawyers. He came to the conclusion the monopoly model should be discontinued in Ontario, and the competitive model used in other provinces should be implemented. This was his recommendation #1, upon which the other 36 were based.

The judge told consumers in mid-2016 that once his review was released, it would be in the hands of the government to do something with it. That’s where we are now.  Premier Wynne’s government has promised new legislation on Tarion this fall, but so far there’s been evasive communication about which of the 37 recommendations will be taken on board. One senses the political spin doctors in the background.

Some of the vague and contradictory information given to consumers so far is:

  • Premier Wynne said in e-mails to consumers that “Ontario …will move forward with the recommendations to further protect owners of newly built homes…” (14/06/17); (All of the 37?)
  • The Ombudsman of Ontario said the Ministry will move forward with “nine” recommendations to fix the dispute resolution process (12/07/17). We only see one in the government’s Terms of Reference for the consultation group it initiated (24/05/17);
  • This consultation group was provided with a list of items “out” of the discussion. The multi-provider model, recommendation #1, is one of them;
  • Some Liberal MPPs told their constituents the government will move forward with “many” of the judge’s recommendations, avoiding saying which ones;
  • Ministry officials told some consumers (28/07/17) that none of the 37 recommendations has been specifically ruled out, to date.

The only recommendation (#5) which seems to have already been taken on board by the government is the separation of the builder regulatory authority from the warranty authority.  Builder lobby groups seem content with this, saying  this would eliminate some conflicts of interest (28/03/17).  Many think this should have been done years ago.

It may serve the government’s interests to be vague about exactly what its plans are for the legislation this fall, keeping as many voters on side as possible during the pre-election period, and trying not to run afoul of top corporate donors.

If past experience with this government is any indication of what they’ll do, they may rule certain recommendations “out of scope” when the new legislation is introduced. They may also give the bill a sales-y title like “Putting Consumers First”, as in the case of Bill 59 earlier this year.

It comes as no surprise that Tarion is reluctant to lose it monopoly status, and is giving push-back to the judge’s review, especially recommendation #1.  Regarding the multi-provider model (recommendation #1), a senior Tarion official put it to me emphatically this way: “the judge was wrong!”

Were the year-long stakeholder consultations, the jurisdictional scans of other warranty programmes, and Deloitte consultants wrong too?

What’s clear to many consumers and journalists is Tarion doesn’t like scrutiny or critique of its policies. The fact that its CEO earns close to $1 million was revealed by an investigative journalist in October, 2016. New home buyers should have a right to see these salaries. They pay a fee to Tarion passed on by builders in the purchase price of the new home. Who benefits from keeping this compensation secret? Oversight by the Auditor-General alone is unlikely to fix the transparency and accountability problems.

To consumers reading the judge’s review, (posted on the ministry’s website), all 37 of the judge’s recommendations make sense, and would help increase protection for new home buyers.

For example, recommendation #22, based on the key recommendation #1, states: “Each warranty provider should be required to have an internal dispute resolution process in place to facilitate the resolution of disputes between new home owners and builders and an internal review process for its decisions.”

If you take a holistic approach in analyzing a complex problem and then prescribe a remedy, you don’t expect someone to implement your plan piecemeal. To do so may distort the overall outcome.

The problems of Tarion are complex and inter-related. To implement only a few of the judge’s recommendations may not fix the serious problems he uncovered in his review. To kick the can further down the road, taking more time and more money for research, will add to the suffering consumers are already experiencing with this out-of-date legislation.

If the serious problems the judge outlined – the conflicts of interest, transparency and accountability gaps, and imbalances in dispute resolution – are not solved by new legislation this fall, the doctor won’t be to blame, nor his diagnosis, nor the prescription not taken.




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Earl Shuman’s fight for truth and justice: why we’re thankful, why it’s even more important today

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Dr. Earl Shuman, 1951-2016.  Consumer advocate, dentist, proud family man

The last time I saw Earl Shuman was in a crowded, noisy, mid-town cafe, the kind of place he must have abhorred, being a long-time country resident, and recently retired. But it was the venue chosen by the journalist I had arranged for Earl to meet.

A front-page story and a major media investigation into his case is something Earl wanted to expose the injustice (the “fraud”, as he put it) which happened to him. After 27 years of fighting for truth and fairness, he wanted to change the system which had mercilessly crushed him. He had recently met a young couple he related to, who were experiencing some of the same problems he’d had, and he felt increased urgency to expose injustices and get the system fixed. So others wouldn’t suffer like he and his family.

In a nutshell, Earl’s case was this: he bought a new home, found construction defects in it, asked the Tarion Warranty Corporation to fix it under the government’s warranty, but after years of legal wrangling it was decided Earl was the builder since he’d supplied more than 25% of the overall value of the home. Even if the home had been under warranty, he was told he was out of time in reporting defects. No coverage. A dentist by profession, the law decided he was a builder.

He once described it to me his way: if you buy a new home and install a 24-karat gold toilet in it, you’re the builder because you’ve contributed more than 25% of the overall value of the home.  This “legal test”, which once bore his name, the Shuman Test, seems absurd to most of us as laypeople, like arguing what the definition of  “is” is.

The wrong-doers in his case walked away scot free, the warranty corporation sided with the builder, leaving Earl and his family with years of anguish, heavy legal costs, and construction defects. In an excessively harsh punishment, he told me he’d spent a week in jail for refusing to pay Tarion’s legal fees.

He found crucial parts of his hearing missing from the official record with no credible explanation, the case law he found in a confused and contradictory state, and aggressive backroom legal strategies were used to defeat the consumer protection intention of the “Act”, the “Ontario New Home Warranties Plan Act” (ONHWPA).

For 27 years of his life, he fought to expose what most of us would see as absurdities and injustices.

It’s hard to hear Earl’s story and not be shocked that this could happen in Ontario. He made a presentation to a packed media room at Queen’s Park in December, 2014, and attendees came away shaking their heads in disgust at how consumer protection legislation could go so terribly wrong. Tarion is the government-appointed regulator and licensor of builders, and Earl rightly looked to this authority for consumer protection, fairness, and justice.

I remember saying to him, it sounds like we’re living in Russia or something, how could this happen in Ontario? No, its different in Russia, he replied, they don’t tell you there it’s a democracy.

For the meeting with the journalist, Earl had painstakingly prepared a detailed timeline of events relating to his case on a large scroll the size of a coffee table, all meticulously hand-written like a Da Vinci scientific manuscript. Under all the order and detail, he was quietly seething with rage.

That’s perhaps why some people would dismiss Earl and break off contact. He was mad as h..ll, had every right to be, and wasn’t going to take it any more. His take-no-prisoners, uncompromising manner could scare away people who might have helped. Might have. But the months of research, high cost, and legal firewalls required to do a series of investigative articles into this complex, lengthy subject must have deterred most journalists, and their short-staffed, cash-strapped organizations. Go see the movie “Spotlight”, I told him, and you’ll see how tough it is for the media to take on the big bear subjects.

Sadly for most of us, being right and being able to prove you’re right in court, are two different things. This is the legal business, not the justice business, we’re told.  But despite all these roadblocks, Earl still believed in the power of the media to expose injustices and get broken systems fixed. He inspired many of us as volunteer consumer advocates, and kept his faith in justice and the press. But he got little of either.

These are important values we’d like to continue to believe in. On this 1st anniversary of Earl’s passing, I want to thank his family for their tireless and lonely work to expose what happened to them, which hopefully will one day help new home buyers.

Part of the recent review of Tarion by Justice Douglas Cunningham in March 2017, with it’s 37 recommendations for major reform, are partly due to Earl’s and his wife Krista’s work over the last 27 years.

It’s fitting that a memorial scholarship in journalism now bears his name, as opposed to the legal test which crushed and humiliated him for so many years.

Sadly, the light went out last May. We hope to hold a candle to his work, and keep believing in the power of the press to keep the big guys honest.

“Show me a hero, and I will write you a tragedy.”   …. F. Scott Fitzgerald

– By Barbara Captijn, Consumer Advocate, Blogger


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Please read my new blog post: What does Tarion final review mean for consumers? Light at the end of the tunnel

Consumer's Reform Tarion

As I sat last week at the event where Minister MacCharles was scheduled to announce  the results of Justice Cunningham’s review of Tarion, I said to myself, “hope for the best, but prepare for the worst.”

The room was full of building and real estate executives, Tarion senior executives and board members, and ministry staff.

Many consumers have been working hard for years to get their voices heard on consumer protection issues regarding Tarion and the new home buying experience in Ontario. Tarion has operated under the same legislation for over 40 years as both building regulator and sole warranty provider, as an arms-length agency of government administering the “Ontario New Home Warranties Plan Act” (ONHWPA).

This event was a chance to hear the results of the review of  Tarion by Justice Cunningham, which the government commissioned in Nov. 2015.

As the speech began, I prepared myself for the same-old, same-old “working with Tarion” mantra we’ve heard for years.

I was wrong.

The minister, the Honourable Tracy MacCharles, announced many long-awaited and much-needed reforms to Tarion, based on the judge’s report. She clearly stated that modern transparency and accountability measures are needed at Tarion; she said if the government were creating Tarion today they would have put these measures in place, and would not have combined the building regulator and sole warranty provider in one entity.

This was welcome news to consumers. Finally on these two major issues consumers have been understood and taken seriously.

And there was more.  Much more.

By this time the hot meal on the table had gone cold, and I’d been live-Tweeting to our followers (@ReformTarion), telling them change is on the way.

The minister announced the government’s plans to bring a bill to the Legislature this fall to incorporate many of Justice Cunningham’s recommendations (37 of them in total). A breath of fresh air for consumers.

The judge recommended a multi-provider, competitive model, as in now in effect in other Canadian provinces. The minister said she wouldn’t go forward with that particular step at this point, but would go forward with many of the others.

Many consumers favour choice and multiple warranty providers, as the judge recommended. Accountability and transparency can be enhanced by competition in this field.

The review has cost the taxpayer about $750,000 so far. It would seem to be value-for-money for taxpayers if the government took the judge’s recommendations, all of them, and made the changes he recommended after this year-long review and thorough consultation.

A respected and seasoned judge has reviewed the complex problems festering away for years on Tarion, and has made his decision in writing to the government. There’s no turning back now. He’s clearly said: (pg. 1, letter to the minister):  “… this framework has given rise to real and perceived conflicts of interest and has presented it (Tarion) with challenges in fulfilling its multiple roles.” 

The judge’s review put wind in the sails of our consumer advocacy work. Many ordinary consumers have donated their time, efforts, and experience to help bring about these positive new developments.  This is a political problem, as we’ve said for years, and can only be fixed by our political representatives at Queen’s Park.

Let your MPP know you support these recommendations (summarized below) for transparency and consumer protection in the most important investment of your life, a new home.

Here are some of the judge’s key recommendations:

(The final review is on the Ministry of Government and Consumer Services website (under Tarion)

Some highlights of the judge’s recommendations:

i)  New home warranty should be provided through a competitive model, multiple providers. (Recommendation #1)

ii) A new not-for-profit corporation should assume existing home enrollments and participate in the new multi-provider model (#4)

iii) A separate entity should regulate builders (#5)

iv) The regulator should be subject to accountability and transparency oversight requirements (#7)

v) The new legislation should provide more compliance and enforcement framework for the building regulator (# 11)

vi) Current Tarion “Builder Directory” should be more transparent, accessible to consumers (#6)

vii) Homeowners should have access to neutral and independent dispute resolution by a body separate from the warranty provider (#9)

viii) Homeowners must only prove “credible symptoms” of the defect, not the cause of the defect (#25)

ix) The use of experts should be clearly defined by each warranty provider; an adjudicator may also hire an expert (# 26)

x) Adjudication of disputes must be “accessible, affordable, timely” with “attention to the needs of self-represented homeowners.” (# 27)

xi) Government should have final approval of rule-making on warranty protection and builder standards for registration. (#28)

xii) An immediate review of current deposit protection rules is advised. ( #31)

xiii) All new homes, even if owner-built for personal occupation, should have warranty protection (#35)

These are only some of the 37 recommendations the judge made in his review.

Please help us take these recommendations to the next step. Many can be introduced without the need for new legislation, according to the report.

Please write or Tweet your provincial MPP, or minister MacCharles at    Tell your Queen’s Park representatives what you think. Now is the time to make sure the consumer voice, which Justice Cunningham highlighted in his review, continues to be heard and understood in the drafting of new legislation.

If your MPP has ignored your concerns on Tarion to date, a new door has been opened now for them to listen. The current government, according to minister MacCharles, is in favour of significant change. The Liberal party has a majority in government, so it can pass new legislation more easily.

Sometimes the light at the end of the tunnel is a train.”*  We need to get on this one.


*quotation by Charles Barkley.

Link to Judge Cunningham’s final report


Photo of the author (left) with minister MacCharles (right)


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Another hollow slogan, more broken promises: Tarion

Last week several consumers noticed Tarion Warranty Corporation has changed its slogan on its website and promotional materials from “Protecting Ontario’s New Home Buyers” to “Building Confidence“.

Confidence in whom, about what, for what reason? The slogan doesn’t say.

From years in the advertising business, I learned some things about effective slogans: they indicate the core of what a company does, they are simple, honest, memorable, and resonate with the main target audience. And nothing an ad agency does comes cheap.

Why does a government monopoly like Tarion need a new slogan? It has no competition, and new home buyers are forced to buy the warranty whether they like it or not; it’s mandatory.

Whichever ad agency came up with this new slogan seems to have had little contact with the main stakeholder, the consumer. New home buyers are entitled by law to a “new home free of defects in workmanship and materials.” That’s the law, the Ontario New Home Warranties Plan Act;  “building confidence” has nothing to do with it.

New home buyers should be entitled to get what they paid for, as in any other area of consumer protection.  Just as they’re entitled to get a properly functioning new car for the money they pay.

Is Tarion is doing its job with the public trust function it’s been given by the Ontario government? Is it protecting consumers, or protecting shoddy builders from accountability, with 8 builders and no consumer advocates on its board? Is Tarion keeping an accurate builder directory of builder defects to warn the public? Is this monopoly regulating builders by having enough deterrents to shoddy building?

Many consumers with experience with the warranty say no to all of the above. Many MPPs, journalists, and lawyers have said without transparency and accountability, no one can verify what Tarion does. Trust is good, verifying is better.

With the disappearance of the promise to “Protect new home buyers“, some consumers have quipped that Tarion has finally admitted they’re not protecting us at all. Others imagine a huddle of lawyers telling Tarion you’d better not say it if you can’t do it … liability concerns!

There was a shocking revelation in the interim review (August 2016, pg. 15) where Tarion admits it doesn’t have enough compliance tools to properly regulate builders. How can they be protecting new home buyers then? Have we been buying new homes from builders who are not properly regulated?

Perhaps that’s the reason for the new empty-headed slogan.

Does it encapsulate Tarion’s core responsibilities? Is it memorable? Does it convey valuable information? Does it resonate with consumers? No. Is it honest? It’s too vague to know.

It’s long overdue for policy-makers to take real action reforming Tarion. Time to stop believing in “consumer protection” agencies of government to self-regulate at arms-length from independent oversight.

Several years ago we noticed the Ministry removed the word “oversight” from its website description of its Tarion responsibilities. Now its “working with” them, not “overseeing” them.  Hugely different, a huge step backwards in transparency and accountability. All to the detriment of the people they’re now asking to have confidence.

The money Tarion spends on sky-high executive pay and hollow advertising slogans could have been used to fix construction defects in new homes caused by Tarion-licensed builders.  Confidence can’t be thrust upon consumers by puffy slogans. It has to be earned.

The new slogan seems to be just about as good as the Tarion warranty.


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“The more you lose, the more you make”.

This contradiction-in-terms seems to hold true for Toronto developer Urbancorp.  A recent article in the Financial Post (National Post, 17/12/16) by P. Kuitenbrower is entitled “Developer could reap #$31 Million from bankruptcy”.  It has prompted much head-scratching. It’s a headline which would have caused our grandparents to roll over in their graves. How can someone profit from his own financial meltdown?  How can a developer use deposit money of his clients (freehold home deposits are uninsured), how can he make off with the loot for an undisclosed purpose, and resurface from bankruptcy later, possibly a millionaire?

It gets crazier.

Another article published a few days later in the monthly magazine Toronto Life (Jan. 2017 issue) by S. Kupferman covers the same real estate disaster and is entitled: “Screwed. Anatomy of a Real Estate Disaster”.

We read on pg. 54 of this article:

Ontario law offers no formal support system to pre-construction purchasers who have been burned by a developer.”

Whaaat? Isn’t that like saying there’s no formal support for bank clients robbed of their deposits? It seems in Ontario developers can make off with their customer’s cash and leave them to flap in the wind, trying to connect on-line to understand what’s happened to them.  Tarion Warranty Corporation, the industry regulator, gave Urbancorp purchasers this helpful advice via their media spokesperson: “Get a lawyer“. Unfortunately, few other than Tarion executives, can afford legal fees of $500-$800+ an hour, and $30,000+ retainers.

What was Tarion’s role as regulator and licensor of builders under Ontario law, and as a “consumer protection” monopoly?

The article from Toronto Life explains, pg. 53:

When developers fall short of their obligations, there’s one organization that’s supposed to keep them honest: Tarion, the private, not for profit corporation that enforces Ontario’s New Home Warranties Plan Act.  By 2015 Tarion had started to worry about Urbancorp’s troubles. The staff met with the company several times and asked to send in a forensic accountant to review Urbancorp’s books, but as a non-government corporation, it had no formal investigative power. Urbancorp was free to refuse – and it did.”

If you’re a regulator asking to send in a forensic accountant, then you already know quite a lot.

Consumers have been telling their MPPS of all parties – for years – that Tarion is not effective as the province’s regulator of builders. It’s a watchdog with no teeth. The Urbancorp example shows the watchdog will go away with its tail between its legs when a builder says “boo”. No way they want a forensic accountant snooping around their business.

Could this lack of regulatory effectiveness have anything to do with the fact there are 8 builders on  Tarion’s board who may favour builder-friendly polices? Could it have anything to do with the Tarion CEO’s compensation of close to $800,000, with a 60% bonus component based on undisclosed criteria? (see The Toronto Star investigative article, 03/10/16 “…Millions in Salaries...)

Consumers have been telling Queen’s Park elected officials for years that a regulator with no transparency and accountability to the public is ineffective. A regulator largely controlled by the industry it’s supposed to regulate is a train crash in slow motion.  To make matters more murky, builders and developers are the largest donors to the two main political parties in Ontario. Political parties may be trying to look the other way to avoid stepping on the toes of their biggest donors. Large, powerful industries don’t like to be regulated. Seems they don’t like forensic accountants either.

Tarion’s CEO says he didn’t get any love from Urbancorp’s Israeli investors either. In the Toronto Life article he states:

“The investors in Israel never bothered to inquire what Urbancorp’s status was with Tarion “, says Howard Bogach, the watchdog’s CEO. “Had they inquired, we would have told them there were concerns.”

“Concerns”? Why wasn’t Tarion pro-active in red-flagging the financials they claim to have been so worried about? As a huge government monopoly with over $400+ million in investment income, they had less to lose than consumers who put up their life savings. On Tarion’s Builder Directory on their website there was no mention of Urbancorp’s shaky financials, dubious cheques, or shoddy construction raised by mainstream and social media by spring 2015.

Urbancorp’s foreign investors didn’t call Tarion? If they had, they may have gotten the same brush-off answers consumers get: “this is a live issue“, “we’re looking into it”,privacy concerns, we can’t disclose“, “we lost the tapes“…

Knock on doors” is the advice Tarion executives give to consumers who want information on builder track records. In the final paragraph of the Toronto Life article, one of the unfortunately duped purchasers says, “Maybe I’ll do a bit more research into the builder next time“. But research where? If he’d checked Tarion’s website for Urbancorp’s track record, there were no red flags there, even though Tarion says it scrutinizes each builder’s financial records annually before renewing licenses. Did Tarion keep their “worries” and “concerns” about Urbancorp to themselves, to the detriment of the public?

Tarion’s lack of transparency in builder records has been highlighted in the press since July 2013 and underlined by former Minister MacCharles as an important “cornerstone of consumer protection“.  Another article on Tarion (31/08/2016) in the Toronto Star is entitled “Consumers Lack Faith in Tarion’s Builder Records” and raises this concern again. No meaningful action.

Knocking on doors is often useless since many homeowners fear negatively affecting their sales values by talking about construction defects, some have been muzzled by settlements, others have on-going litigation, or say they feel intimidated by builders for speaking out.

It’s the job of the provincial building licensor/regulator to red-flag shaky financials of builders and shoddy construction. As long as Tarion is a watchdog heavily run by the builders it’s supposed to regulate, there may unfortunately be more Urbancorp-like disasters.

Justice Douglas Cunningham was hired by the Ontario government in Nov. 2015 to conduct a review of Tarion. The review has not yet been released, as of this writing. The Premier knows a review is not legislation. She has for years refused, as did her predecessor McGuinty, to vote in favour of bills to reform Tarion. She shuffles ministers on this portfolio every year or so, resulting in too little time to understand the complexities of this opaque monopoly and its multiple roles.

A review could be shelved by the governing party, if they think that’s politically expedient for them, or they could commission yet another review. We as volunteer consumer advocates hope for the best outcome for Ontario’s new home buyers in this “consumer protection” review.

As a well-known journalist once said, politics can change your life.  For many consumers affected by this faulty government policy, it sadly has.


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Open Letter to Premier Wynne: leading backwards?

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?






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Mopping up the floor while the tap’s still running


It’s common sense you can’t fix a problem unless you find the root cause. As the old Dutch saying goes, no sense mopping up if you ignore the source of the leak.

So, it seems, with the License Appeal Tribunal (LAT), the appeal court for Tarion warranty (ONHWPA) decisions. Consumers have pointed out problems with the LAT for over a decade, but no meaningful action has been taken to correct the dysfunction so many have experienced.

No one in authority in the legal establishment seems to be actually listening to the end-users of this flawed system. It’s not “dissatisfaction with the outcome”, as is often cited which ails consumers, it’s dissatisfaction with the process, the highly legalistic courtroom forum, and the imbalances inherent in a large corporation (Tarion) fighting the little guy.

Tarion, a government monopoly,  is always represented by experienced lawyers at the LAT;  consumers have to self-represent due to the high cost of experienced counsel. Under these circumstances, it’s no surprise consumers lose about 90% of the time. (See 10-year analysis of the LAT by Canadians for Properly Built Homes at

A case in point is the following. In 2014-15, a young well-educated couple, Jeffrey Ferland and Aleksandra Ferenc, filed a public complaint with SLASTO, the LAT’s oversight body, about bullying by the adjudicator, and missing recordings of the bullying complaint itself. After months of delay, and partly due to MPP Hillier raising a question about this in the Legislature,  SLASTO finally launched an “investigation”.  A respected retired judge and a lawyer were hired as “investigators”. I suggested in writing to SLASTO that they include a member of the public on the investigative team to create a public perception of balance in the handling of the complaint. No response.


I attended the Ferland/Ferenc hearing as an observer for 12 of the total 26 days in 2014-15. I had no skin in the game, no financial interest in their investment, and I’m not an employee of the LAT, SLASTO or Tarion.

I was shocked, on several occasions, by the conduct of the adjudicator toward the applicants. I made hand-written notes on each day I attended the hearing. I also made an appeal to the head of SLASTO, Ms. Lamoureux, together with the applicants, in the winter of 2015 urging her to investigate the adjudicator’s conduct, and find out how the how recordings of the bullying complaint itself could have gone missing.  No response.

Investigations into professional misconduct by the members of the same profession rarely seem to get at the whole truth. This was the case with the CBC’s internal investigation of Jian Ghomeshi’s conduct in the workplace, and more recently a major Toronto newspaper’s response to allegations of a “toxic” work environment. Employees often require anonymity,  since they have too much to lose by speaking out against their co-workers or managers. Whistle-blowers are rare because they are often not protected by their employers for speaking the truth about the behaviour of management or co-workers.

That brings me to some of the major weaknesses I see with the SLASTO public complaint investigation (link below) published August 3, 2016:

  1. Of the 18 interviewees, 11 of them seem to have been employees of either the LAT, SLASTO, or Tarion. Many of these employees were not present in the hearing room, so could not have seen first-hand for any extended period of time the conduct of the adjudicator. Only 3 were members of the public; I was one. None of the interviewees are named. This is not a balanced or impartial feedback on what went on during the hearing. Several of the LAT employees interviewed were not in the hearing room, or were not there for enough days to witness patterns in the adjudicator’s behavior. The adjudicator was on her best behaviour when management’s eyes were upon her, in my observation.
  2. I was not questioned about my affidavit I signed (03/15) after witnessing the Nov. 27th 2014 “missing recording” incident. I find it odd that investigators didn’t ask me about it,  a sworn statement regarding one of the specific incidents under their investigation. My observation differs from what the adjudicator and respondent said happened. I was not asked for my recollection of what happened on that day. I gave the investigators a copy of my affidavit and some of my hand-written notes made during the  hearing. The adjudicator claims she simply “forgot” to record the bullying allegation on Nov. 27th, 2014. The investigators believed her version of events: “human error”, no one to blame. On pg. 21 the investigators wrote: “Without a recording, we will never know for certain what Mr.Ferland said during the portion of the hearing when the recording device was not running.” No one asked me what was said and what I noted down during this exchange. Seems odd for an investigation of this important point.
  3. No explanation was given in the report why the COO of the LAT, Mr.McDermott abruptly left the LAT around the time the public investigation was announced. He had previously told the applicants the LAT wouldn’t investigate the bullying allegations until after the hearing was over. I believe the LAT management failed to take meaningful, and timely action, perhaps to protect their own reputation and head off potential negative public feedback.
  4. No explanation seems to be given for why the adjudicator herself resigned from the case before it was completed.
  5.  In late 2015, the applicants asked the adjudicator, on the record during the hearing, and later they asked LAT staff, for someone in management to be present in the hearing room because they felt bullied. On the record, the Adjudicator denied this request, citing cost concerns. LAT management also denied this request. This was a clear cry for help by the applicants, and it was brushed aside. The adjudicator then ruled in March and April 2015 that her conduct did not constitute bullying. The adjudicator may have had good reason to keep management’s eyes away from the hearing room, and management may have had good reason to turn a deaf ear to complaints of bias and bullying against an adjudicator.
  6.  The recommendations in this report seem weak.  The investigators advise (pg. 2), more “skills-based train for adjudicators and staff“, more “templates, (…) checklists, and other materials for adjudicators to make sure they are “well-prepared“; and more “practical, accessible materials for self-represented parties..” .

More training of LAT staff and adjudicators is a vague and long-term goal. What about the self-represented litigants who come to the LAT today? Are they expected to experience the LAT a work-in-progress, and continue to suffer the financial and emotional consequences? Even the investigators themselves stated on pg. 25 of their report: “We were surprised by the degree of formality and rigidity we observed in the process to resolve homeowner appeals, especially since the tribunal system was set up to avoid costly adversarial and complex court procedures.”

We can all agree on that. But this is not new information, and it’s hard to see why it took an 8-month investigation to find out a lot of what SLASTO already knows.

The LAT is a highly legalistic and complex forum; it’s not a problem-solving body. It costs taxpayers and new home buyers dearly, but seems a good source of revenue for prominent Bay Street law firms who charge an hourly rate higher than what most adjudicators earn per day.

Even the Assistant Deputy Minister of the “working-with-Tarion” Ministry of Consumer Services stated in Oct. 2014, in a letter to Tarion’s CEO, that the LAT processes were too complex and adversarial, and not solving problems for consumers.

Another red flag, ignored.

The Attorney(s)-General of Ontario, both the former A-G Ms.Meilleur and the current A-G Mr. Naqvi are silent on the issue of reforms to the LAT. Both are also members of the legal profession.

One of the suggestions the report makes is to use a round table for hearings to “create a more informal and less intimidating atmosphere.” In the category of band-aid solutions, this takes the cake. This completely ignores the long-lasting financial and emotional toll the LAT takes on consumers.

The behavior I witnessed from the adjudicator in the Ferland/Ferenc hearing was inappropriate for an officer of the court, or for any member of the legal profession. It doesn’t matter how long the hearing went on, or how frustrating lawyers and adjudicators find it to deal with self-represented consumers. The adjudicator’s conduct in the Ferland/Ferenc case was shocking and intimidating to me as a member of the public. I believe it clearly violated SLASTO’s own published code of conduct.

The investigation side-steps the real problem: the courtroom should not be used for ONHWPA appeals where applicants are self-represented. Mediation could be a better option, but only with fair representation for each side. The LAT is an uneven playing field. The rules are made by the big battalions who have a map of the battlefield and the most powerful weapons and tactics.  The principles of natural justice, and even human decency, how we expect to deal with each other as human beings, were not observed by those in authority in the Ferland/Ferenc hearing.

The the SLASTO-commissioned investigation did not properly balance input from the consumer point of view with that of SLASTO/LAT employees. Nor did it recognize the fundamental absurdity of the little guy up against a large powerful corporation in the courtroom.

The problems are not hard to see if one looks at what happened outside the lens of the legal establishment. Meaningful solutions can only be found by getting at the root cause of the problem: access to a courtroom is not access to justice, it’s access to a courtroom.

The consumer’s voice must be heard and respected in much-needed, urgent reforms to the Tribunal system. But that’s a step apparently too big for the legal establishment to make.

SLASTO and the LAT management, as well as the Attorney-General himself, continue to turn a blind eye to consumer cries for help, mopping up the floor while the tap’s still running.

– – –

Thomson-Cohl investigation_Final Report_Aug 3, 2016


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Andrea Horwath Gets It

Ontario NDP leader Andrea Horwath recently signed a petition at to end the Tarion monopoly. Tarion is an arms-length agency of government, a “Delegated Administrative Authority” (“DAA”) with a monopoly in new home warranties and responsibility for regulating the new home building industry.

In her statement accompanying her signature, Ms. Horwath explains why she’s in favour of ending Tarion’s monopoly status: “The NDP has long recognized that Tarion is an unaccountable monopoly that protects the developers who control it, and not the home buyers who pay the bills. Other provinces give consumers a proper choice when it comes to home warranty protection, and it is time for Ontario to catch up.”

Many MPPs of both the NDP and PC parties have also signed.

Premier Wynne, on the other hand, has remained silent on all things Tarion, refusing to meet with or respond to consumers who’ve written to her about “horror stories” they’ve experienced with Tarion. A revolving door of Liberal ministers during the last 12 years has brushed aside problems, saying they’re “working with Tarion“, while their mandate is to oversee it. Working with and overseeing are two entirely different things, but no one in government has answered concerns about this contradiction.

A recent revelation in The Toronto Star (29/03/16 by M. Regg Cohn) that Liberal ministers have “fundraising targets” does not surprise consumers who’ve raised red flags about this for years with both Premiers Wynne and McGuinty. No answer from either.  It’s no secret the top donors to the governing Liberals are the building and construction industry, the same industry the government is supposed to be overseeing through its monopoly, Tarion.

The only people who seem to favour the monopoly model are government officials and Tarion executives. Tarion’s former board Chair, a real estate lawyer and 10-year Tarion board member said in an interview with The Ottawa Citizen (May 15, 2015): “The model that we fall under is a really good one.  It allows for efficiency (…) and keeps the government’s nose out of doing things.”  That’s the problem: keeping the government’s nose out of doing things, like the butcher inspecting his own meat.

No economics textbook or any concrete examples we’ve been able to find can demonstrate that monopolies benefit consumers. Here’s the Wikipedia definition:

“In economics, a government-granted monopoly is a form of coercive monopoly by which a government grants exclusive privilege to a private individual or firm to be the sole provider of a good or service; potential competitors are excluded from the market by law or regulation.” The words “coercive” and “privilege” set off alarm bells with many consumers. Alberta, Manitoba, and B.C. all have gone to the multiple-provider model for new home warranties. There, the regulatory function is the responsibility of government, not the provider.

Premier Wynne herself seems to be no fan of monopolies, however, since she was quoted in The National Post in April 2015 as saying: “the days of monopoly are done.”

Tarion is not only a monopoly, it’s also exempt from oversight by the Auditor General and the Ombudsman of Ontario, and all its executive salaries are secret. This seems very outdated.  Response to the petition at to #EndTarionMonopolyNOW indicates consumers want choice, and independent regulation of the industry.

What may change the landscape is the recent scandal revealed in March this year regarding political fundraising. The current Wild West rules are to be significantly reformed by January 2017. This means generous donations the government has enjoyed from the building industry will be hopefully banned. This may level the playing field for consumers and reduce the influence of big corporations on public policy-making.

Before this political fundraising scandal was revealed in March 2016, the Minister responsible for Tarion had announced a wide-ranging review of Tarion by a respected Ontario Superior Court Judge, J. Douglas Cunningham. Public complaints and pressure from Opposition MPPs had been mounting for years. The review was seen at the time either as a political stalling tactic, or a way to back into reforms the building industry may find uncomfortable.

Again at that time, Andrea Horwath hit the nail on the head. In a statement to The Toronto Star (05/11/2015) she explained: “The review is not necessary. The problems are rampant. If the government doesn’t know what’s wrong with Tarion yet, after all the private members bills and all the criticisms we’ve been raising, then they simply have been turning a blind eye to a very bad situation.”

The government’s excuses for turning a blind eye to problems with Tarion for over a decade may have run their course. The tide seems to have turned on the outdated monopoly model. Tarion is finally under the microscope of a seasoned judge.

Sometimes a perfect storm, a confluence of unrelated events, produces unexpected results. Sometimes, as the Dutch saying goes, the shore stops the ship.


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