Government promises 'complete overhaul' of Tarion home warranty

The Ford government in promising a "complete overhaul" of Ontario's Tarion home warranty program, but critics say the maligned agency is beyond repair.

Consumer Services Minister Lisa Thomson tabled the Rebuilding Consumer Confidence Bill on Thursday, promising it will ensure Tarion balances the interests of homeowners and home builders.

Tarion is a mandatory warranty program covering all new homes in the province, but it's been criticized for favouring the builders over the buyers.

In a scathing report released in October, the province's auditor general found most of the public complaints about Tarion's dispute resolution process were justified, and concluded the Ontario Home Builders' Association (OHBA) "had disproportionate influence over Tarion's decisions and operations."

Making Tarion 'consumer-focused'

If the government's bill passes, Thomson promises Tarion will be reformed to make it "consumer-focused."

Earlier this year, Thomson said the government was considering ending Tarion's mandatory monopoly of home warranties in Ontario, but has since abandoned that idea.

"After extensive consultation with home builders and home buyers it was clear that the best option was to overhaul the current new home warranty model," the minister's press secretary, Nicko Vavassis, wrote in a statement to CBC.

"A private insurance model risks diminished consumer protection, more expensive homes, and increased costs for small builders. Ultimately, privatization will decrease government oversight of new home warranties."

The government, which has been in public consultation about Tarion's future since early last year, said any specific changes will be determined by yet another another round of consultations next year.

The newly reformed Tarion program will come into effect next fall.

CEO retiring, new board to be installed

In addition to the new legislation, Thomson said she has also asked CEO Howard Bogach to step down, and he plans to retire at the end of the year. The chair of Tarion's board of directors has also agreed to step down.

One of the auditor's key criticisms of Tarion was that half of its 16-member board of directors was nominated by the OHBA.

The minister said she has ordered Tarion to shrink its board to 12 members, only one-third of whom can represent the home building industry. Another one-third must have experience in consumer advocacy or dispute resolution.

"There's going to be a balance once and for all," Thomson said at a news conference Thursday. "Stakeholders will be equally represented around the table."

In a statement, a Tarion spokesperson said the agency supports the aims of the bill.

"We share the government's commitment to enhancing protections for new home buyers and owners," the statement read.

'More tinkering'

NDP consumer services critic Tom Rakocevic said his party will be carefully reviewing the legislation, but suspects it doesn't go far enough.

He said the changes will do nothing for the thousands of homeowners whose warranties may expire before they come into effect.

"Today a person could be making an application to Tarion and be disqualified on a technicality," Rokocevic said. "This is something that is absolutely wrong, and we need to have change today. We can't wait."

The advocacy group Canadians for Properly Built Homes has dismissed the proposed changes as mere "tinkering."

The group's president, Karen Somerville, criticized the government for "rearranging the deck chairs" and wasting time with more consultation.

"We believe that Tarion is well beyond repair. It's time to start again," she said. "Fundamentally, this organization needs to go. We need a fresh start in Ontario."

The NDP plans to table its own bill calling for Tarion to be scrapped, as well as a new Crown agency to oversee the opening of the warranty system to other providers.