Taking A Closer Look At Ontario’s New Home Warranty Program “Tarion” . . . . Continued


The tremendous power of the Internet revealed!

Yesterday I blogged about how “opaque” Tarion (a “tax exempt Ontario Non-Profit Corporation“) actually is.

I’ve always seen them as “the wild card in a Three Card Monty game“.

So, following yesterday’s blog, I received the substance material for today’s blog, obviously from a reader.

This is the kind of stuff that makes all my hard work worth while!

A reader volunteers information that should turn the lights on of most consumers in Ontario.

I can’t thank this reader enough!

I don’t profess to have all the answers.

I do however have lots of questions, informed questions that should be answered!

I thought the most beneficial way to present this information and enlightening material is to simply copy the email and paste it here in my blog (I will not disclose the identity of the writer as he/she did not specifically authorize me to do so).

The email fundamentally consists of a number of charts:

First chart is of the spending by Tarion on their top 5 contractors.  For some years there is no amount showing for some contractors but that just means that the contractor was not in the top 5 of contractors in that year and likely Tarion still spent money in that year with that contractor. 

Here are some key insights from this chart: 

  • Tarion spent over $5.5 Million US with Gowlings in 6 years.  That is almost $1 M per year despite the fact that Tarion has a very large and expensive in house legal team.  
  • Tarion stated that most of this legal expense is to defend appeals from Builders or enforce collection from Builders.  Why???  They simply have the leverage to suspend or revoke for non-payment.  Apparently Tarion rarely uses the leverage they have with builders and then pays high legal costs.
  • Tarion spent over $3 Million US on Branding and Promotion with McDonnel Haynes in 4 years from 2008 to 2011.  Why is Tarion spending so much on Branding??
  • Why is Tarion spending so much on Portfolio Management??
  • In 2012 and 2013 not a single Contractor was in the top 5 of independent contractor involved in claims

Next Chart of interest is some key expense line items from their income statement.  For 6 years here are the key numbers in US$ and it seems very odd to me that Tarion has spent these amounts in these categories. 

  • $13,671,334 Legal costs
  • $  4,641,977  Advertising and Promotion
  • $  2,619,904  Conferences, Conventions and Meetings
  • $  6,140,791  Information Technology

Attached is the analysis of the top 25 Tarion salaries in 2013.  Some interesting findings:

  • Amazing the % of the Bonuses.  What are these Bonuses based on???  Why did the CEO get a bonus of 62.7% of his Base Salary?  Average Bonus for top executives was 30.5% of the Base Salaries
  • Why is the % of Tarion pay going to senior executives going up every year?
  • The Top 4 Tarion Senior Legal Counsel earned $848,000 US in 2013 and that is in addition to the $1.58 M they paid in outside legal costs in 2013.

Hope this information is helpful.

Tarion 2008 Annual Report

Tarion 2009 Annual Report

Tarion 2010 Annual Report

Tarion 2011 Annual Report

Tarion 2012 Annual Report

Tarion 2013 Annual Report

Tarion Spending On Top 5 Contractors 2008 – 2013

Tarion Spending On Key Line Items On Income Statement 2008 – 2013

Tarion 2013 Salary Analysis

Tarion 2013 Salaries

As you can see, Tarion is a “money machine“!

Everyone in this “Non-Profit Tax Exempt Corporation” earns lots of money plus lots of bonuses and enjoys quite the lifestyle.

But what’s in it for the consumer.

The fast answer is “little or nothing“.

You pay for the Warranty (hidden in “adjustments at Closing“) but the developer/builder gets the protection and when you see it going astray, as in my Case Study (search Oakville here on www.simplycharles.com) in Oakville, there is nothing that they will do “until you Close” (because you are not their client until you do so!

But as I’ve blogged about before having had clients go to arbitration with Tarion, Tarion sees its “Client” (get a legal handle on this term as it involves “fiduciary” or protection to which party in a transaction)!

So, Tarion is basically an “Investment Capital Company that pays no taxes” that is funded by consumers who gain no financial benefit whatsoever from the investment side of the use of their money.

Does that sound right to you?

I’m Charles

PS – thanks again to this valued Reader (it’s time for the rest of you to “step up” – Got condo stories or information please send it to me).








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