Toronto – Tarion is seeking public feedback on proposed changes to the enrolment fee schedule to ensure that the Guarantee Fund can continue to support a comprehensive new home warranty program and protect current and future new home purchasers.
As a result of a higher than normal volume of builder receiverships and recent extraordinary claims payments to support consumers (i.e. over $100 Million), the Guarantee Fund for consumers is in need of capital replenishment to return it to a position where it can continue to withstand possible future catastrophic losses, provide the ongoing financial foundation for the warranty program, and protect consumers in Ontario.
To protect against the risks of the Guarantee Fund facing insolvency in the event of a further catastrophic event, Tarion is proposing to implement specific changes to our existing fee structure for enrolment fees, specifically:
- Implement a temporary enrolment fee increase of $250 to replenish the Guarantee Fund’s capital and would to be maintained until an internal financial target is met (projected to be by end of 2027).
- Apply a separate non-capital related fee adjustment of $55 per home.
The temporary enrolment fee increase of $250 is intended to increase the capital available to the program to address unexpected catastrophic losses in the future. Recent market conditions resulted in an unprecedented increase in builder bankruptcies and an unprecedented number of consumers whose deposits on new homes were put at risk.
The amount of consumer supporting deposit payouts reached over $100 Million, which is the largest amount of consumer support required in the history of the warranty program. While the Guarantee Fund was sufficient to manage that catastrophic claim situation, it is necessary to replenish it so that it will remain strong enough to weather future unanticipated catastrophic events, whether they are financial, or construction related. The current plan projects to raise close to $30 Million over three years, depending on the level of new home construction activity.
The non-capital related fee adjustment of $55 relates to inflationary costs to run the program, and the impact of inflation on the general costs of repairs that are funded through the claim compensation program.
Please review this consultation discussion guide and submit any feedback on the proposed changes to submissions@tarion.com by May 22, 2025.
While this consultation focusses on specific proposed changes and questions, if you have additional comments, please send them to submissions@tarion.com. Please title these with the subject “Additional Submissions.” Tarion recognizes that not every topic will be relevant to each individual or organization. Please provide comments on the topics that are relevant to you or your organization.
About Tarion
Tarion is an independent, not-for-profit, consumer protection organization designated by the provincial government to administer the Ontario New Home Warranties Plan Act (ONHWPA). Tarion provides education, warranty support and dispute resolution services to Ontario’s new home buyers and builders and has been providing consumer protection to Ontarians since 1976.
For media requests please contact:
Andrew Donnachie
media.inquiries@tarion.com