Amendments to the New Home Construction Licensing Act, 2017 to support the proclamation of administrative monetary penalties
Regulation - Minister
Bill or Act:
The New Home Construction Licensing Act, 2017
Summary of Proposal:
Sections 75-79 of the New Home Construction and Licensing Act, 2017 (NHCLA) will be proclaimed into force on February 1, 2023. These sections grant the Home Construction Regulatory Authority (HCRA) the power to impose administrative monetary penalties (AMPs) in accordance with the regulations made under the NHCLA. The HCRA may impose an AMP on a person who contravenes a prescribed provision of the NHCLA, of the Ontario New Home Warranties Plan Act, or of the regulations under those statutes, or on a person who contravenes a condition of a licence.
AMPs are a tool that the HCRA may use to ensure compliance with the statutes and regulations referenced above as well as conditions of a licence, and to prevent a person from deriving an economic benefit from contraventions. Before AMPs may be imposed, new regulations under the NHCLA must be developed and brought into force to address matters that may arise in administering AMPs.
The Ministry's proposed regulations will aim to enhance the HCRA's enforcement powers and ensure adherence to the requirements currently set out under the NHCLA and its regulations, among other things. The proposed regulations would:
1. Prescribe specific provisions of the Licensing Act and Ontario New Homes Warranties Plan Act (and their regulations), pursuant to section 76 of NHCLA, such that AMPs may be imposed for contraventions of those provisions.
2. Prescribe a maximum base penalty amount associated with each prescribed provision. Maximum base penalties range from $5,000 to $50,000. The highest maximum base penalties are reserved for provisions where a contravention would result in a very high impact on consumer protection and/or the HCRA's ability to fulfill its purposes. A separate regulatory provision sets the maximum base penalty amount for a contravention of a condition of a licence at $25,000. Please see the attached table of contraventions for the maximum base penalty amount associated with each prescribed provision.
3. Prescribe the procedure that the Registrar must follow for imposing an AMP. This would include the consideration of factors to determine the AMP amount to impose in each individual case. The AMP amount may be comprised of: (1) a base penalty amount; and (2) an amount relating to the monetary benefit acquired by the person as a result of a contravention.
4. Designate the Licence Appeal Tribunal as the appeal body to whom a person may appeal an AMP order.
5. Prescribe the purposes for which HCRA may use the funds that it collects as discipline committee fines and AMPs, notably to provide payments to persons adversely impacted by contraventions and support HCRA operations.
6. Require the HCRA to establish, maintain and comply with a policy (subject to the Minister's approval) to govern payments the HCRA makes to persons adversely impacted by contraventions, with such payments being made from the funds the HCRA collects as discipline committee fines and AMPs.
7. Make technical amendments to section 24 of the Code of Ethics regulation (O. Reg. 245/21) under the NHCLA to ensure that the language in section 24 of the Code of Ethics aligns with language in section 56.1 of the NHCLA.
The proposed regulations under the Licensing Act will help strengthen compliance with the NHCLA and its regulations and ensure consumers are better protected when making one of the biggest purchases of their lives - a new home.
The ministry welcomes your feedback.
Analysis of Regulatory Impact:
The proposed Minister's regulations are not expected to create a burden on the new home construction sector as builders and vendors should be adhering to the requirements and rules currently set out under the Licensing Act and its regulations. The proposed regulations are intended to deter future conduct issues and to give the HCRA the tools to better protect consumers.
There are no costs or cost savings to small businesses associated with the Ministry's proposed regulations.
The proposal is not expected to create any fiscal impacts for government since implementation would be carried out by the HCRA, an administrative authority that is financially and operationally independent from the government. The administrative authority model is expected to be cost neutral to the government.
The administrative authority's operating costs are funded from the sector through licensing and other fees.
November 4, 2022
Comments Due Date:
November 14, 2022
Ministry of Public and Business Service Delivery, 56 Wellesley St. W., 6th Floor, Toronto ON, M7A 1C1