Ontario Taking Action to Strengthen Protection for New Home Buyers

Published on February 20, 2019

February 20, 2019

Province Transforms Tarion Warranty Corporation’s Broken System to Protect Ontario Families

Mississauga - Ontario’s Government is working for the people by protecting hard-working Ontarians when making one of the biggest purchases in their lives — a new home. The province is transforming Tarion Warranty Corporation and implementing initiatives to better protect purchasers of cancelled pre-construction condominium projects.

“There are many families across the province who have faced difficulties over the years when seeking a solution from Tarion,” said MPP Deepak Anand, Member of Provincial Parliament for Mississauga-Malton “For our government one thing is clear, Tarion is broken. That is why our government is pleased to announce that we are taking decisive action to put the People of Ontario first by transforming Tarion and strengthening consumer protection.”

The government is taking action by:

  • Establishing a separate regulator from Tarion for new home builders and vendors to address conflicts of interest.
  • Planning to introduce legislative amendments that, if passed, will enable the government to require Tarion to make executive and board compensation publicly available and move to a more balanced skills-based board composition.
  • Exploring the feasibility of a multi-provider insurance model for new home warranties and protections in Ontario.
  • Introducing new initiatives to better inform and protect purchasers of cancelled condominium projects.

Tarion is expected to continue to provide services to new home owners, builders and vendors during the transformation with greater government oversight. 

The Honourable Justice Douglas Cunningham released a 2016 independent report with several recommendations on transforming Tarion. Noted in the report is an inherent conflict of interest in the current structure of Tarion that leaves new home owners vulnerable.

“Establishing a separate regulator for new home builders and vendors addresses the current conflict of interest with Tarion,” said Bill Walker, Minister of Government and Consumer Services. “Today’s announcement will help make Tarion more accountable and transparent and provide quality service for the people of Ontario.” 

The initiatives announced today support the government’s broader housing supply action plan by helping to remove barriers to home ownership.

QUICK FACTS

  • Tarion has responsibility for administering the Ontario New Home Warranties Plan Act that was passed in 1976. The act deals with new home warranty protections and builder regulation.
  • 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.
  • In 2017, 68,945 new homes were enrolled in the warranty program — 46 per cent of which were condominium units.
  • In 2017, 5,549 builders and vendors were registered with Tarion.