Industry response muted as provincial builder licensing expands across the country
November 28, 2017 by John Bleasby
Alberta joins Ontario, Quebec and British Columbia this Friday, December 1, when the province begins to require all residential builders to hold a provincial builder license. It’s a reflection of a cross-country movement to protect consumers by legitimizing and supervising those wishing to put a sign and call themselves ‘contractors’, ‘builders’ or ‘developers’.
For Albertans, it means anyone constructing new homes, including condominiums and large multi-family homes, as well as renovations that require new home warranty coverage, will need to apply and be granted a license. Existing builders in good standing will be issued provisional licenses valid until May 1, 2018, at which point they too must for an annual license. However, only builders who have constructed at least two homes in Alberta within the last two years are even eligible for the provisional licence. Building permits will only be approved for license holders after that May 1, 2018. Licenses are valid one year, and will cost $600 initially and $500 annually.
Industry reaction is muted
Reaction to the builder licensing process from current builders is largely muted. “I don’t have a good sense of whether or not this is a huge problem in the industry — it’s not something I’ve heard many people complaining about, “Les Yochim, President of Edmonton-based Belvan Construction told Canadian Contractor. “There are a lot of individuals out there building homes as a “side job”, and I suspect that it’s this type of builder that they are trying to get rid of.”
A comprehensive list of company information must be submitted
To protect homeowners from those who might not be either experienced or totally legitimate in some way, Alberta will ask applicants to provide business information including contact information for directors, to identify all associated building companies, and to demonstrate backing by one of the seven warranty providers in Alberta. In addition they will be required to provide information about any history of fraud, building-related court proceedings, and compliance record with safety and consumer protection legislation, plus information concerning any undischarged bankruptcies, or any arrangements under the Companies’ Creditors Arrangement Act that have not been fully satisfied.
Will additional licensing protect consumers from scammers?
It is not clear whether the new provincial builder licensing requirements will in fact give Alberta consumer the added protection they need from some of the renovation scammers in the marketplace. For example, existing legislation already requires those taking deposits for future work to hold a Pre-Paid Contracting Licence. Yet Calgary renovation contractor Kieron Warren was taken into custody after being found guilty this past summer under Alberta’s Fair Trading Act charges for misleading numerous customers, not being licensed, failing to comply with contracts, and failing to refund payment for incomplete work done in 2011 and 2012. In addition, a numbered company connected to Warren and his mother was also fined for Fair Trade Act violations. (See original report from Canadian Contractor) In total, Warren was sentenced to six months in jail and ordered to pay nearly $300,000 in restitution. The conviction and sentence sent a strong message, but few of the consumers who were bilked expect any of the restitution to be paid.
Who is a ‘General Contractor’?
Many Canadian Contractor readers would be classified as ‘General Contractors” under the new builder licensing requirements, meaning they are involved with the construction of residential buildings that are one to four units and less than three storeys in height, projects which the Alberta Building Code does not require involvement of a coordinating registered professional.
The focus of builder licensing is regulating those in the actual business of being a builder. Therefore certain exemptions under the new licensing regime will be allowed. Owner-builders constructing their own home are not required to apply for a builder licence, but will need to apply to the Registrar for an Owner Builder Authorization. Also, some charitable organizations, such as Habitat for Humanity, are exempt from builder licensing. Furthermore, residential renovators will not require licensing unless their project requires new home warranty coverage.
Builder licensing; Coming to a jurisdiction near you!
The licensing trend for builders is expanding across Canada. In addition the provinces mentioned above, many larger municipalities are also requiring some form of licensing or registration of the contractor or builder prior to issuing a building permit. It’s all in the interest of consumer protection, of course. Sadly the industry continues to suffer from a relatively poor record in terms of fraud and deception by unscrupulous individuals and companies.
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