Side By Side

With a separation of duties, how will Tarion and the HCRA work together?

BY TED McINTYRE WITH HCRA INTERIM CEO TIM HADWEN AND TARION PRESIDENT/CEO PETER BALASUBRAMANIAN

IN SOME RESPECTS, life has gotten a little simpler at Tarion. While the consumer protection organization had, for more than 40 years, been responsible for ensuring that buyers of newly built homes in Ontario receive the coverage they are entitled to under their builder’s warranty, the agency had also been tasked with licensing new builders and sniffing out illegal builders. But with the launch of the Home Construction Regulatory Authority (HCRA) on Feb. 1, the latter duties of Tarion have been handed over.

What does that mean for builders, consumers and the respective agencies? We asked both Tarion President/CEO Peter Balasubramanian and HCRA interim CEO Tim Hadwen.

OHB: HOW HAS STAFFING BEEN AFFECTED AT TARION?

PETER BALASUBRAMANIAN:

“We’ve separated the licensing process and the management of conduct complaints and enforcement side, so that has seen us reduce our staff in certain sections. For example, our enforcement inspection team has moved over to the HCRA. At the same time, other parts of our business have seen an increase in resourcing. We’ve actually added resources to increase our customer service teams. We have added additional internal expertise on building code matters, and increased areas of our underwriting and risk management, such as the risk-based inspection program that we’re going to be implementing.

“So yes, there is a lot of change, but it isn’t just about the creation of two new authorities, it’s also a longer-term strategy that is the combination of almost five years of public review to improve overall services in the sector.”

Tarion Presdient/CEO, Peter Balasubramanian

DOES THIS ALLOW YOU TO BE EVEN MORE FOCUSED ON THE WARRANTY SIDE?

PB: “The creation of the HCRA— and this is the message that is important—doesn’t change the way that Tarion administers the warranty. The majority of Ontario builders are proud of what they build and stand behind their product. And in the vast majority of cases we don’t need to be involved. But when we do get involved with warranty issues, or the general process for warranty administration, that’s not changing in terms of our approach or our commitment.”

DO YOU EXPECT THERE TO BE A LEARNING CURVE?

PB: “My commitment as the CEO of Tarion is that as we work through the implication of these changes, we will continue to listen closely to our stakeholders. And where there are bumps in the road or elements of change that don’t make business sense, we will listen and work through our processes with our stakeholders to make reasonable adjustments. One example was the feedback we received from folks who specialize in buying and selling contract homes, where the homeowner owns the land that the home is built upon. Some of the business processes we put out for consultation didn’t really fit well with some of the elements of that sector, and we were able to listen to feedback from builders who specialize in that area, and make changes to the process to make it work more smoothly. The system isn’t going to be perfect, we’re gonna have to test it as it goes, and where there are issues we can reasonably fix, we are open to listening and fixing them.”

IS THERE ANY GREY AREA BETWEEN THE TWO GROUPS?

PB: “It’s really important that we both focus on communications and explain the differences between HCRA and Tarion. But I do think that the separate mandates between the two is very clear: The HCRA will take over Tarion’s registration function, so licensing and conduct is now with the them, and warranty protection is with Tarion.

“Both organizations are really working together towards a smooth

Our diverse stone product offering leaves no one out. For every design, from ultra-modern to classic traditional, you’ll find the perfect stone from our natural Adair® limestone and premium Building Stone product lines.

transition with minimal disruptions for homeowners and builders. A phrase we’ve been using is ‘no wrong door.’ Our contact centre has received training so calls that come to us can be smoothly transitioned with minimal wait times to the HCRA.

“That being said, we have to remember that all this has occurred during a pandemic. There are a lot of factors that have challenged service delivery for all kinds of organizations.”

YOU’VE BEEN THE INTERIM CEO SINCE MAY 2019. WHEN WILL YOUR SUCCESSOR BE NAMED?

TIM HADWEN: “The permanent CEO will be figured out in the next little while so that they can take on longerterm strategic planning and prepare for our first public AGM in the fall.”

HCRA Interim CEO, Tim Hadwen

I SEE REGISTRATION FEES HAVE GONE UP.

TH: “Our fees were consulted on and we posted them in December. They involved modest increases overall, which is needed to finance the consumer protection activities of the organization. There are two parts to them. The first is the fees for the new licence for the renewal. The other part is the per-home regulatory oversight fee. To have it be dealt with in the most efficient way, those fees are paid at the same time as the Tarion enrollment fee. Tarion remits all the per-home regulatory oversight fees to the HCRA. The combination of the two fees supplies the HCRA with the funding it needs to conduct both the licensing process and the ongoing compliance process—dealing with complaints, investigating concerns and, if necessary, moving through investigations and enforcement, etc., as well as putting us in a position to address illegal builders. And we are committed to maintaining our fees for the next three years.”

WHY WAS THE CREATION OF SEPARATE AGENCIES A GOOD THING FOR BUILDERS?

TH: “Because the industry wants there to be good regulation, which instills confidence in the sector. And they want a fair marketplace where all builders

are held to consistent standards for conduct, confidence and financial responsibility, so that unethical and illegal activity is deterred. That’s going to produce a sector where the competition is fair and where the consumer is better served.

“We’ve been given a mandate to implement the New Home Construction Licensing Act, and that means being ready to determine if compliance measures of an encouragement and warning kind are going to be sufficient to remedy the problem and ensure that the builder is meeting the standards expected—or if it’s necessary to engage in stronger measures, with enforcement up to and including prosecution. We won’t hesitate to take decisive action.”

WHAT COMES NEXT AFTER THE ORIENTATION PHASE FOR BUILDERS AND CONSUMERS?

TH: “It’s going to be refining our risk management. Because the whole point of the regulation is consumer protection, and that means assessing what risks there are or what potential concerns there are for consumers, and ensuring that we’re doing the right job to our licensing and regulatory oversight to build confidence that the industry is being well regulated. That means being ready to assess our processes and adjust—both in terms of strengthening our focus where there are risks we need to be responsive to, and also looking at situations where we may be engaging in oversight in a low-risk area, where we could perhaps reduce the regulatory burden and have a more streamlined approach.

“And then we’ll be doing that in consultation with the sector and homebuyers, because consultation engagement is a really important part of what we’re doing. We want to have some really good transparency, and for people to have the sense that we are engaging with them and are listening.

“We are pretty excited about opening the doors of Ontario’s newest regulator. We want a smooth transition so that there is no disruption for the sector, while at the same time, of course, being ready to take action for consumer protection if it’s needed.” OHB

Peace of mind – it’s built into all our building insulation products and everything we do. We make installation easier and more efficient for our contractors and installers, so you can help keep her and her family safe, comfortable and healthy. Our building system is a product of Amvic responsive design that is driving the evolution of insulation. • Greenguard certified • less job site waste • R30 walls • superior continuous insulation • 30% more energy savings