Ontario has various laws that go a long way in the attempt to provide an element of transparency and accountability from the government.
We have legislation creating the office of the Ontario ombudsman, for example. The ombudsman has the power to investigate complaints about provincial government services.
We also have public sector salary disclosure legislation. This sunshine legislation mandates disclosure of the names, positions, salaries, and taxable benefits of public sector employees paid $100,000 or more in any calendar year. Strangely enough, there’s a huge loophole in these laws. In essence, all the government has to do is delegate a public service to a private corporation and all of the transparency and accountability laws disappear.
That’s precisely the situation with Tarion Warranty Corp., the private non-profit corporation empowered to administer and enforce the Ontario New Home Warranties Plan Act. The act is remedial consumer protection legislation designed to protect purchasers of new homes in Ontario, but the province has delegated its powers to Tarion.
The government doesn’t fund Tarion, which instead relies on mandatory fees passed onto and paid by new home purchasers as well as builder registration and renewal fees and investment income. In other words, it’s really the public that funds Tarion’s operations. Although it receives no government funding, all of Tarion’s revenue comes from its legislated mandate.
MPP Jagmeet Singh of the NDP has tabled a private member’s bill to remedy most of Tarion’s transparency and accountability problems. Bill 60, the Tarion accountability and oversight act, would bring Tarion under the jurisdiction of both the Ontario ombudsman and the auditor general as well the public sector salary disclosure legislation.
The legislation would also force Tarion to disclose all of its detailed performance-related information concerning builders. Currently, Tarion provides a builder directory with admitted deficiencies. According to Tarion, the information in the builder directory provides “some insight into a builder’s performance, but it does not represent a complete picture of their service record.”
Providing for transparency and accountability by Tarion would be no mere academic exercise. According to a Toronto Star report, the office of the ombudsman received almost 300 complaints about Tarion from 2007-13 and ombudsman André Marin has publicly stated he has “long believed that Tarion lacks proper oversight.”
Being unable to investigate Tarion directly, Marin has reviewed the relationship between it and the Ministry of Government and Consumer Services. His 2008 report criticized the ministry for its failures concerning Tarion.
Bill 60 is the latest proposed Tarion reform. Former Ontario ombudsman Daniel Hill recommended having Tarion fall under his office’s mandate in 1986. Former MPP Rosario Marchese tabled bills to reform Tarion in 2010, 2011, and 2012.
According to Tarion’s 2013 annual report, it collected $33.9 million in new home enrolment fees in 2013. It also earned $3.2 million in builders’ registration and renewal fees. With investment income, its total revenue for the year was $71 million. Tarion paid $7.3 million “to new homeowners for warrantable claims made where the builders were unable to resolve the issues.”
Excess of revenue over expenses was $29.8 million in 2013. Total equity as of Dec. 31, 2013, stood at $216 million.
These would be stellar numbers if Tarion was a for-profit business. But Tarion isn’t a for-profit business and, aside from the numbers themselves, we have little verifiable or relevant information on whether the public is receiving value for its money or if new home purchasers are receiving fair treatment with full value for the warranties provided in the legislation.
Reforming Tarion to render it more transparent and accountable should be the starting point. With transparency and accountability, the public can assess Tarion’s accomplishments in administering its public trust, which is to protect new home purchasers. Without such an assessment, the government will never undertake reforms to protect the public.
Alan Shanoff was counsel to Sun Media Corp. for 16 years. He currently is a freelance writer for Sun Media and teaches media law at Humber College. His e-mail address is firstname.lastname@example.org.