A new meeting took place, on Monday 10th, December, at the offices of the Ontario Ministry of Government and Consumer Services to discuss the potential costs of regulation and licensing.
It was attended by Len Inkster from OntarioACHI as well as representatives from CAHPI, PHPIC, the NHICC, the CMRAO, OAHI and members of the MGCS and Ministers Office.
The Home Inspection Act, 2017 was passed through the Ontario Assembly, with all-party support, in May of 2017. Although the received Royal Assent, it does not come into effect until the government has completed drafting regulations to implement the details of the legislation and then proclaim the Act.
The primary goal, from the Government’s perspective, after implementing greater protection for consumers, is to implement any new regulation at a net-zero budget cost.
This means that ongoing running costs for the Home Inspection Regulation should not be at the expense of the public purse. This means that the cost of licensing and any regulatory compliance charges will have to 100% fund the administration of the DAA and its operations.
It was realised back in 2013, during the expert panel meetings, this was going to be a difficult hurdle. At the time there were an estimated 1200-1500 inspectors operating in Ontario. Following two years of aggressive marketing by the Real-Estate profession and many houses sold without inspections.
The primary Professional Home Inspectors Designations capable of being earned by inspectors in Ontario (CCHI, RHI, NHI) are self-regulated and require standards compliant to or in excess of those recommended for licensing, Membership of the Association and adherence to their Code of Ethics and Standards of Practice was seen as an indication of bonafide operation as a Professional Home Inspector.
The Profession – By the numbers
As many Inspectors with membership in the NHICC, PHPIC, ASHI, InterNACHI or CAHPI were also recognised to be members of either OntarioACHI or OAHI, it was suggested that registration figures between OntarioACHI and OAHI should be able to provide the closest figures of how many Professional Inspectors exist in the province.
The cost of operating the Home Inspection regulation is estimated at around $1.5m per year, meaning the cost burden would have to be supported by those still in the business.
A quick calculation would show that $1.5m divided by 500 would come out to around $3,000. If we took the upper end of the estimate of culled inspectors (600), the number is $2,500. Again, looking at the figures from B.C. and Alberta, we can see that the number of inspectors rose again following a period of 2 years to recover to slightly more inspectors than immediately preceding licensing.
This would reduce the apportioned cost of licensing in Ontario again using the estimated annual figures.
If the numbers of Inspectors were to rise to the levels of 2013 (around 1,500) the apportioned price of funding the regulation would be $1,000.
Discussions about introducing a type of trickle fund were discussed, and licensing costs of between $700 to $1,400 were discussed to gauge the pain-points to the profession. Obviously, a number of around $700 seems more palatable, and even $1,400, although at the upper end of any licensing program, would be certainly more preferable to a figure of $3,000 per year.
Benefits of Regulation
Entrance to Licensing
The MGCS provided two options to the meeting for the actual licensing process. A “Light” option 1 which did not require Insurance, and a more robust option 2.
Everyone in the meeting recognised that, in order for the Home Inspection Profession to be taken seriously by both regulators and the consumers we server, option 1 was not feasible.
Option 2 looked at the requirements and costs of entry for three categories of the profession
- Established Full-time Inspectors
- Part-Time Inspectors and
- New Entrants.
The next steps are for the MGCS to work with the Minister’s office and the CMRAO to establish if the financing solutions are feasible for the Home Inspection regulation to move forward. It was apparent that everyone at the meeting still had the same appetite for moving forward. Everyone saw the huge potential for increasing consumer protection, and this was in-line with the views of the prior assembly that saw support from all three parties in the passing of the bill that saw the Royal Assent of the Home Inspection Act, 2017.
This Act elevates the Home Inspection Profession, provides increased protections to Consumers, Lenders and Insurers alike and can provide a sustainability to the Home Inspection Profession going forward.
One last thought
If regulation was settled at even $1,400 per license, this would equate to less than $30 per week. If this meant the probability of adding 1-2 inspections per week to the earning potential of Inspectors, I’m sure there’s not a single Inspector that would baulk at this cost, and we should urge the government to proceed at all haste.