‘It’s full-on buyer beware’: N.B. homebuilding industry calls for regulation of contractors and renovators

W5's Sarah Plowman investigates the lack of regulation around who can become a contractor in Atlantic Canada.

The home construction industry is a “wild, wild west” and contractors should be licensed, according to a group representing homebuilders and renovators in New Brunswick.

“Anyone can build a house,” said Claudia Simmonds, the CEO of the Canadian Homebuilders Association of New Brunswick. “It’s full-on buyer beware.”

In Atlantic Canada there’s no licence required or way of tracking who’s a contractor—whether it be someone who builds new homes or renovates them.

“No other industry, no other profession has this sort of lack of regulation,” Simmonds told W5. “If you look at housing, the plumber’s regulated, the electrician’s regulated, the surveyor’s regulated—everyone’s regulated except for the actual builder.”

Simmonds has been with the association for more than two decades. She said it’s routine for the organization to hear from homeowners in a state of despair, upset about a problem they’ve had with a contractor when a renovation or project isn’t done to their satisfaction.

“They’re losing money,” she said.

Last week, W5 featured two families who alleged they were deceived by a contractor and lost tens of thousands of dollars. One family won money back in court. The other is fighting to do the same.

• Part one: One Canadian couple’s fight against a contractor who defrauded them
• Part two: ‘I’m in financial ruin’: Canadian homeowners sound alarm over contractor accused of fraud

Simmonds argues if home builders and renovators were licensed and required to meet certain training and insurance standards, contractor disputes could be less frequent and give homeowners a place to turn besides court.

“The solution is to have a mandatory contractor registry in the province of New Brunswick,” she said.

For years, provincial Canadian Home Builders’ Associations and other professional associations in Atlantic Canada have lobbied for change.

Simmonds envisions a registry where contractors all have to have commercial liability insurance, WorkSafe New Brunswick coverage, proof of registration with Canada Revenue Agency and third-party warranty on new home construction to protect the homeowner and builder from any structural problems after the build.

In British Columbia, Alberta, Ontario and Quebec, contractors who build new homes or condos must be licensed. But only in Quebec and some cities, such as Toronto, are renovators licensed.

“The conversation really varies province to province,” said Kevin Lee, CEO of Canadian Home Builders’ Association, who added that it’s really important for any jurisdiction considering licensing to make sure it’s done in a smart, streamlined way and it achieves the objectives it sets out to do.

“Licensing, if not done properly, just becomes another layer of red tape,” Lee said.

• Here’s how homeowners can protect themselves from contractor fraud

Renovator and industry representative Peter di Scola notes a licence could add on costs that will fall to the consumer but could also help remove bad actors.

“But as licensing does not make you a better car driver, I don’t think licensing is going to make you a better renovator,” he said.

Another option, di Scola says, is to do more education so consumers have more tools to make better decisions about who they hire.

While Toronto does license contractors, di Scola pointed out how the licences are easy to get and in his near 21 year of being a licenced contractor, he’s never been approached on a job site to prove he has a licence.

“It’s not a prerequisite to pull a building permit,” he said. “I put it in my binder when I give clients my book of my own marketing material to say that I am licensed, but otherwise, most of them have never heard of it.”

What about renovators?

Simmonds wants New Brunswick’s approach to model British Columbia’s where new home builders have to obtain a licence but also have to keep up with training requirements and arrange for third-party new home warranty insurance. But she wants regulations in New Brunswick to go one step further and license renovators--although workers who do small jobs worth a few hundred dollars may not fall under the regulation.

In provinces where there’s mandatory licensing for new home builders there’s also another regulation—a guaranteed warranty on a new home. It’s a safety net if the builder vanishes or goes bankrupt.

“That is a big protection to the homeowners because they have somebody to claim against,” said Mike Stewart, a construction lawyer at ATAC Law in Vancouver, who said renovators should be licensed as well.

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“It’s just too much money at stake and too much risk for homeowners to take on without some kind of regulation in place,” he said.

In New Brunswick, the home building industry plans to make its pitch to the recently elected New Brunswick government, noting they’ve already had conversations with David Hickey, the minister responsible for the New Brunswick Housing Corporation.

“We’ve seen provinces like British Columbia step up with registries. I think we’re seeing some success in that province around these types of measures. It’s certainly something we’d be willing to consider,” Housing Minister Hickey said in an interview with CTV News before the holiday break.