Illegally built homes and the underground economy have cost the province billions of dollars, says the president of Ontario Home Builders’ Association.
Association president Doug Tarry visited Thunder Bay along with Tarion Warranty’s president and CEO Howard Bogach for a conference held at the Valhalla Inn. Both were there to discuss illegal building as well as the underground economy and economic growth in Thunder Bay with members of the local housing and construction industry.
According to OHBA, the underground economy prior to the implementation of the Harmonized Sales Tax represented an estimated 37 per cent of the total work for residential renovations in Ontario or about $5.2 billion.
Tarry said the province has lost more than $295 million in GST revenues and $1.6 billion in income tax revenue annually.
“That’s huge tax losses to our government during a time where our government doesn’t have any money either,” Tarry said. “From a consumer stand point we’re very concerned that the underground economy doesn’t mean there’s good protection in place for the consumer. Work is being done illegally and insurance may not cover problems that come down the road.”
He said that some homes in Thunder Bay have been built illegally.
Tarry added they want to make it a level playing field for contractors who do follow the rules and that they benefit from doing the job right. He said the consumer may be getting a cheaper deal but it’s not up to the same standards.
Tarion provides warranties for new homes within the province and Bogach said they want to make sure that consumers know to check with their builder to make sure they are registered. People have started to phone in saying that they don’t have a warranty and are asking for help, he said.
While the problem isn’t prevalent in Thunder Bay, it is a growing problem in the province, he said.
“It’s mandated by law to have a warranty and we think it provides great consumer protection,” Bogach said. “All builders who are buying and vending their homes are required to be registered and everybody who purchases a home should be entitled to a warranty.”
If a builder is found to have built an illegal home, they can be charged with possible jail time.
Bogach pointed out that people can still build their own homes but added that’s when the builder usually encourages the consumer to buy the warranty instead of the builder.
