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Province Reforming Tarion and Overhauling the Ontario New Home Warranty and Protection Program

Backgrounder

Province Reforming Tarion and Overhauling the Ontario New Home Warranty and Protection Program

Today, the government introduced legislative changes that, if passed, would strengthen protection and promote trust and confidence for the people of Ontario when they are investing in one of the biggest purchases of their lifetime — a new home.

Reforming Tarion and overhauling the Ontario new home warranty and protection program

  • Our government is proposing to fix the Tarion Warranty Corporation and Ontario's new home warranty and protection program. Our proposed legislation, if passed, would restore consumer trust by reducing the influence of builders. By focusing Tarion on protecting buyers of new homes, rather than builders, the proposed changes would protect consumers making the biggest purchase of their lifetimes.
  • The proposed changes would respond to recommendations in the Auditor General's 2019 Special Audit of Tarion Warranty Corporation by taking steps to make significant improvements that would be responsive to the needs of consumers.
  • The government is proposing changes to the Ontario New Home Warranties Plan Act and the New Home Construction Licensing Act, 2017, that would:
    • Overhaul the Ontario new home warranty and protection program to make it consumer focused and reduce the role of builders and vendors by making enhancements to the current single administrator model for warranties and protections delivery. An improved warranty and protection program would be launched in fall 2020.
    • Support the new consumer protection priorities that were committed to in spring 2019 as part of the overhauled program, including enhancing the dispute resolution process and delivering new measures to promote better built new homes, such as providing the warranty administrator with greater ability to scrutinize builder applications and conduct inspections before a homeowner moves in.
  • Over the past several months, the government looked at the feasibility of a multi-provider insurance model for new home warranties and protections in Ontario.
  • In spring 2019, the government conducted focused consultations with key stakeholders, including the insurance industry, consumers, builders and vendors, other professionals and subject matter experts, other Canadian jurisdictions, and Tarion.
  • Based on extensive research and consultations, the government is not proceeding with a multi-provider insurance model. Enhancements to the single administrator model for warranties and protections delivery is in the best interest of the people of Ontario, and is a recommendation made by the Auditor General.
  • Our government has already taken action to ensure that Tarion is more transparent, and that protections for consumers are improved. Steps have been taken to support the establishment of a separate regulator for new home builders and vendors, known as the Home Construction Regulatory Authority, which it is anticipated will be designated as the regulator in the fall of 2020.
  • The province has also increased transparency and accountability at Tarion by requiring the public posting of board and executive compensation and changes to Tarion's board of directors' composition to address the perception of builder dominance on the board.
  • Should the bill pass, the ministry plans to consult with the public and other stakeholders, including Tarion, on proposed regulations, some of which would give effect to these legislative changes.

Enhancing the administrative authority model

  • Our government is proposing legislative changes to ensure there are consistent requirements for and stronger oversight of most administrative authorities (AAs) to improve their accountability and Ontarians' trust in them.
  • AAs are responsible for delivering critical programs and services, including ensuring Ontario's consumer protection and public safety laws are applied and enforced. The government oversees AAs and is responsible for making or changing the acts that govern them.
  • Various statutes that govern AAs contain some different governance, accountability and oversight requirements. In addition, these statutes contain some different requirements with respect to transparency and services to the public.
  • Harmonizing these requirements would help ensure that most AAs are subject to a more consistent oversight framework, and that these AAs provide certain information and services to better inform and protect Ontarians.
  • The proposed legislative changes would help to better position most AAs to be:
    • Performance outcome-focused
    • Innovative and transparent
    • Focused on reducing unnecessary burden

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