Regulation Update

Constant contact

Many inspectors have been waiting patiently for news of the Regulation process, and as yet, nothing concrete has been forthcoming from the Ministry of Government and Consumer Services.   Some inspectors may have read the news piece by Cam Allen at the Whig (here).   
In summary,  Mr. Allen says in his piece “it looks like it will be another 2 to 3 years before every home inspector in Ontario will be licensed”.   We disagree with his opinion, and would like to provide an analysis of this piece and other information that we can share with inspectors about what we see as the likely timeline.

Members of your board of directors have been in constant contact with the Ministry of government and Consumer services.  Anyone who understands how the internal process of government works will realise that there are many things to consider, and sometimes the response is not always as rapid as one would like.  One thing we have found while dealing with the ministry is that they always respond, and they have been nothing less than stellar in their professional approach to dealing with us and the issues facing the Home Inspection Profession.

Timeline hasn’t changed

Way back at the beginning of this process, we identified a timeline for the regulation.   We informed everyone of the consultation process, and explained what happened in the recommendations consultation.  We explained that the regulatory process consisted of creating an Act to regulate home inspectors,  period to establish a DAA, a further period to develop the regulations, and a transfer-in period to ensure any current inspector had the chance to bring themselves up to the required skills and competency level in order to achieve the level needed for obtaining a Home Inspector License. 

We said back in February 2016 when Han Dong MPP (Trinity-Spadina) introduced his private member’s bill, that if the Bill passed, there would be a process that would take around 18 months to two year to complete, when regulation would be fully enforced.

We do not believe that timeline has altered.  It slipped slightly with the alteration of the Private members bill to a government sponsored bill, which was finally passed by the provincial parliament in May of this year (2017) culminating in the Home Inspectors Act, 2017.

Counting forward 2 years from May 2017 takes us to May 2019, and 18 months takes us to December 2018.   While the former is still 18 months off, the latter is only a year away.  So what’s got to happen between now and then?

The process left in place

The Home Inspection Act, 2017 is in place.  This lays the basic foundation for the overarching framework for regulating Home Inspectors in Ontario.   There are several actions taking place within government right now, and probably have been since the act was passed back in May.  This includes a series of internal consultancy to establish a whole host of things before the actual regulations can even be looked at.

How the initial financing of the regulation process will be one of the major items, and how to make it sustainable.   We know, from our conversations with the ministry, that the staff at the ministry are aware of the issues that have faced the Home Inspection Profession over the last year to eighteen months, and they are working with the profession to try to establish an understanding on how regulation can assist in stabilising the profession, thereby making regulation sustainable.

The administration of the regulation is also high on the “to-do” list.  The current model of regulatory administration for the Ontario Government is one of administration by Delegated Administrative Authority (DAA).   To set-up a brand new DAA is not just time-consuming but also expensive.  Because the government are tasked with minimising the cost to the public purse, was of reducing the cost of a DAA needs to be established.  One obvious way is to charge more for a license.   Given that the Profession has been hit hard with the buying frenzy over the last year, and a large number of inspector have left the profession, this would likely create a cost that was too high to bear, killing the profession outright.  Another thought process, which we discussed openly with members of the MGCS staff earlier this year, was administrative sharing  of costs.  There have been a number of recent initiatives for regulation over the last couple of years, all dealing with fairly small professional groups.  It is likely that the DAA with be a hybrid model of a shared administrative staff, with specialised, subject matter experts, working in the compliance area of the DAA.   Creating such a hybrid model is a new idea, and will likely add a few extra cycles to the development process.  We do believe however, based on our talks with the Ministry, that this should all be in good time.

Next comes the Standards and Ethics.  The prime driver for the regulation process was the fact that the consumers could not rely on any single standard.  Each Association Standard was slightly different, and almost all of them told the consumer more about what the Inspector was NOT going to do, rather than the other way round.  The CSA-A770 standard is an almost polar opposite.  In our opinion, the A770 standard is so vague in areas, we believe if it is used as a Standard of Practice, it will lead to misinterpretation by the consumer, misunderstanding by the Inspector ad fodder for the lawyers in a barrage of lawsuits to establish precedents around the vagueness.  OntarioACHI has been working with others in the profession to develop a Unified Standard of Practice for the Home Inspection Profession which is based upon a simple idea.   If it’s not explicitly stated in the standard, then it’s implicitly not part of the standard.  This is along the lines of other professional standards.  For example, if you go to see a Heart Surgeon about a heart problem, you would expect them to be able to diagnose a problem with your ears.  Similarly the CUSPHIP established clearly what WILL be inspected by a Home Inspector and does not concern itself with what will not.  In addition, the CUSPHIP is written by Professionals from the Profession, with the focus of protection of the consumer.   It is not influenced by social groups or trade and engineering specialists who might pull it in either a vague direction or suc a specific direction as to make Home Inspections in a sensible time-frame impossible.

The ethics approach was outlined in the 2013 recommendations paper for the MGCS, and again, it was decided to build this into the CUSPHIP making it a single document.  The Code of Ethics in the CUSPHIP is again based upon the professional responsibilities of the inspector to the consumer first, and the profession second, and less biased towards which Association or society they belong to.  We have made strong presentations to the ministry to look at the adoption of this standard of something very akin to it.

What to expect in the next few months

First and foremost, we believe you can expect to see more information coming out of the Ministry.  we have been told all along that this process will be consultative, and nothing we have heard in our discussions with the ministry has led us to believe otherwise.  At the start of this process the home Inspection Profession was seen as a bit of an unknown.  Many press reports slammed the bad inspectors, without recognising the real benefit a Professional Inspector brings in the way of consumer protection.   The regulation process has been as much of a learning curve for the Government, as working through the issues with the government has been to the Home Inspection Profession.  We have both learned much from each other, and we believe this learning process will continue.

We feel after an initial short period of fact finding and consultation, the government will announce the framework of the DAA. 

Another period of public consultation will then likely take place, with the regulations we believe being developed, communicated, publicly discussed and finalised by the Spring of 2018.

How can regulations be made if the Act is not yet proclaimed?

The Legislation Act, 2006 addresses the situation where an Act which must be proclaimed into force confers regulation-making powers. Under s. 10(1), such powers “may be exercised at any time after Royal Assent even if the Act is not yet in force.” Thus, regulations may be made under the authority of an unproclaimed Act; however, in general, the exercise of the regulation-making powers will have “no effect” until the Act comes into force.

How will existing designations likely be considered?

We believe that part of the regulations developed will be the “transferring-in” portion of the regulations.   

Until such time as we see the initial thoughts on regulation on paper, we can only go on discussions we have had with members of the Government and Ministry, as past experience of regulation of professions in Ontario.  Similar to the regulation of other trades and professions, we believe the regulations will demand proof of prior learning and/or operation as a Home Inspector in Ontario.  This is where, we believe, the mentoring, proctoring and continued professional and education recording required by the OntarioACHI awarded CCHI designation will provide massive benefit.   If regulation of the Home Inspection Profession follows other Ontario regulatory frameworks, it is Ontario specific skills and education that will be recognised primarily.  This is something we have told our members from the get-go.   International and Federal recognition will likely take a back place and require further prior-learning assessment.

National Programs and International programs that can prove past Ontario experience, with a confirmed audit trail may get some level of recognition.   We know the NHI designation has a full audit trail within Ontario, as does our own CCHI. 

OAHI-RHI-defined

Recent OAHI – R.H.I. designates are also likely to have a full audit trail with respect to their certifications but the actual validity of the qualification of every R.H.I. operating in Ontario raises concerns.

The concern is that the R.H.I., in-law, is entitled to any member of the Ontario Association of Home Inspectors under the Ontario Association of home Inspectors Act, 1994.   Here it clearly states in the Act,  (in section 12) that “Every member of the Association Designation whose name appears in the register may use the designations ‘Registered Home Inspector’ and ‘R.H.I.’  ”    The OAHI has, and to date has several categories of “membership” including Applicant, Candidate, Associate, RHI.  All of these categories of membership are considered “registered”.

In addition, there is a concern, certainly amongst some OAHI members that have contacted us directly that the R.H.I. designation may be lost with the enactment of the Home Inspection Act,2017.    This is because currently, the R.H.I. is a restricted term in Ontario, and it is restricted to inspectors who are on the Register of OAHI.  Anyone who is NOT on the Register of OAHI and displays the credentials Registered Home Inspector and/or R.H.I. is committing a provincial offence.

Why we believe our estimated timeline is accurate

Without doubt, second guessing what the machinations of Government are up to is at best difficult.   There are a number of factors that we have taken into account in order to project out the timeline we feel is most likely to occur.

The Ontario general election has to be scheduled to be held on or before June 7, 2018.  This will likely be a highly charged political battle in Ontario.  The Liberal party, we believe, will need to show the fruit of its labours in order to persuade the electorate that they are the party to vote for.  The Liberals have stood on a number of platforms for a number of years.   Two of the most consistent have been those of Consumer Protection and Government Cost Reduction.   2017 is a critical year for both these platforms and a number of regulatory reviews have been pushed through with a view to addressing one or both of these platforms.  These include the ongoing WSIB review, the Condominium Regulation, the TARION review, the PayDay Loan changes, the Door-to-door sales regulation changes, and the Home Inspection Act.

From a political perspective, it is obviously important that closure is provided on as many of these initiatives as possible.  With respect to the Home Inspection Act it is, possibly, one of the most flammable pieces of regulation.    As there was all-party support for the Home Inspection Act, 2017, if the incumbent party does not manage to get this Act proclaimed before the election, then the opposition press will have the fodder they need for a massive public attack on the Consumer Protection front.

In addition to the political pressure to get things done, we know that a lot of effort has been done behind the scenes already, and we believe that we will see a more rapid flow of information coming from the Ministry over the next few months, culminating in a public review of the proposed regulations.  Again, we have worked, and will continue to work, with the Ministry and elected officials to ensure the Regulation is pushed through in a timely manner and to the benefit of both the Consumers and the Profession.

We see no real impediment to either the Government, politically or administratively, why this timeframe should be able to work.  Derailment of the process is only likely if there was a major challenge from any one major lobbyist, and given the explosive nature of Home Inspections in the press over the past few years, going against this regulation would, we believe, be tantamount to political suicide.

it is with this in mind that we believe, should a change in political party take place in July, and the Regulation has not at that time be proclaimed, such a change in political leaning of any incoming ruling party would not reverse any decisions made or impact the process negatively, and any delay caused by the electoral process would be minimal.

We still believe that the Home Inspection Act, 2017 regulations will be ready before the election as will the administrative authority framework, with the proclamation immediately following the release of the finalised regulations.  We believe that there will be a 12 month phase-in of the regulations for existing Inspectors to provide proof of their status, and full enforcement of the regulations by Summer recess of Provincial Parliament 2019.

If this turns out to be an accurate prediction, any inspector without a recognised and provable designation by the proclamation date, may find they have a hard time getting a license to practice without having to go through an extensive prior-learning assessment program, prescribed courses and examination.   The question you need to ask is yourself is “do you wait until then or do you prove your mettle now?”

We believe you should put your efforts in sooner than later.  The real question is “Are you ready for the CCHI Certification?”