Minister of Government and Consumer Services Tracy MacCharles announced planned changes to the role of Tarion in Ontario’s new home warranty program in a speech Tuesday at the Empire Club. Min. MacCharles said the province intends to assume responsibility for setting the terms of new home warranty coverage and create a new standalone regulator for new home builders and vendors, which are both functions currently served by the delegated administrative authority.
“We believe that consumers can be better protected by giving government the lead in making rules and setting standards,” said Min. MacCharles. “It’s also important to separate the delivery of the warranty program for new homes from the regulation of builders and vendors.”
The announcement addresses some of the recommendations contained in a final report from Justice J. Douglas Cunningham, who the province appointed to conduct a review of the Ontario New Home Warranties Plan Act and Tarion. Among other recommendations, Justice Cunningham called for an administrative authority independent from warranty providers to regulate builders and vendors and greater government oversight for writing warranty coverage rules.
Justice Cunningham attributed many of the challenges of the existing new home warranty program and its delivery to Tarion’s several roles, which were established in legislation that dates back four decades. In addition to administering the program, the non-profit corporation makes rules, adjudicates disputes, and regulates builders and vendors.
“I believe that this multiplicity of roles, at a minimum, gives rise to a perception of conflict of interest and can also result in actual conflicts of interest,” he wrote.
Min. MacCharles said that the province also plans to simplify the dispute resolution process for new home owners, who would only have to show evidence of the symptoms of problems, as an example. In his final report, Justice Cunningham recommended that the onus of proof be clarified to reflect the fact that home owners don’t generally have the expertise to diagnose defects.
Min. MacCharles said she hopes to introduce a bill to the legislature this fall. In the meantime, she has directed Tarion to bring in new deposit protection measures that correspond to current house prices and deposit requirements. The ceiling for deposit protection has not been updated for more than 10 years, she said, with protection for condo units topping out at $20,000 and at $40,000 for other homes.
The minister of government and consumer services said the province will continue to review Justice Cunningham’s outstanding recommendations as it takes steps to implement many of his suggestions. But Min. MacCharles said she believed that the planned changes would address most of the concerns that would make one of the outstanding recommendations, to introduce competition into the warranty coverage system, a consideration.
