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Ontario overhauls its provincial home warranty program

“Tarion is broken. We are taking decisive action,” says Minister Bill Walker


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February 21, 2019 by John Bleasby

The Ontario government has announced a major overhaul to the province’s Tarion Warranty Corporation, declaring the current home warranty program broken. “There are many families across the province who have faced difficulties over the years when seeking a solution from Tarion,” said Bill Walker, Minister of Government and Consumer Services. The government is, in fact, now moving on many of the recommendations contained in a 2016 independent report issued by Justice Cunningham, most of which were never acted upon by the previous Liberal government.

Bill Walker, Ontario Minister of Government and Consumer Services, announces the major overhaul of the province’s home warranty program in Port Hope, ON

Three major faults cited with the present-day Tarion
In a live feed news announcement from Port Hope, ON, Walker summarized the three main problems with the current Tarion warranty program, in the government’s view. “First, there is a conflict of interest in that Tarion is both responsible for new home warranties and regulating the industry. Second, Tarion is difficult to deal with when making a claim, and that is probably an understatement. Lastly, Tarion does not do a good job educating purchases about a builder’s history.”

Tarion Warranty Corporation has been responsible for administering home warranty protections and builders in Ontario since those regulations were passed in 1976. Under that legislation, new homes built for resale or under contract with an owner must be enrolled in the statutory home warranty program, and builders must be registered with Tarion.

Warranty and regulator conflict to be resolved
Walker continued, saying the government is determined to make Tarion more transparent and accountable. Steps that would affect Ontario home builders in particular would include the separation of Tarion’s warranty activities from its duties as a building regulator. This is a major change that government believes “will provide more effective protection for consumers and regulation of builders and vendors. It also addresses concerns about the conflict of interest with Tarion performing both functions.” Tarion will be asked to work with the Home Construction Regulatory Authority (HCRA), a not-for-profit corporation, in order for the HCRA to develop its new role as the building industry regulator. This will presumably leave Tarion to deal exclusively with warranty claims, at least during the transition period.

More transparency is designed to increase consumer confidence
From an oversight perspective, and in a move to “give consumers greater confidence in the organization”, the government also hopes to introduce legislative amendments requiring Tarion to make executive and board compensation publicly available and move to a more balanced skills-based board composition.

Multi-provider insurance is a new twist to the province’s warranty protection
However, while Tarion may continue its dual role as warranty administrator and building regulator in the near term, the consideration of a multi-provider insurance model may influence the final outcome. “The multi-provider insurance model was a key recommendation for government consideration that came out of the independent public review of the Ontario New Home Warranties Plan Act and Tarion completed by the Honourable Justice Douglas Cunningham,” the government said in a media release. “This proposal has also been recommended by the public and some key stakeholders.” The government will consider this idea before making a final decision on whether to go forward, hopefully later this year.

Read the full Ontario Government announcement text

Watch the full video conference 16m in length (sequence starts at the 2:30 minute mark approx)

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