Ontario doubling fines for unfair cancellation of new home projects

Minister of Municipal Affairs and Housing Steve Clark made the announcement in Windsor, Ont., Thursday, Oct. 20, 2022. (Bob Bellacicco/CTV News Windsor)

Ontario government officials say they are doing more to protect new home buyers by doubling the maximum fines for unethical builders and vendors of new homes who unfairly cancel a new home project or terminate a purchase agreement.

Minister of Public and Business Service Delivery Kaleed Rasheed and Minister of Municipal Affairs and Housing Steve Clark were in Windsor on Thursday for the announcement.

Proposed changes under the New Home Construction Licensing Act (NHCLA), would, if passed, increase existing maximum financial penalties from $25,000 to $50,000 per infraction, with no limit to additional monetary benefit penalties.

“With these stiffer penalties, we are cracking down on bad actors and taking a zero-tolerance approach to unethical and illegal behaviour by builders and vendors of pre-construction projects. Instead of profiting on bad behaviour, they will face hundreds of thousands of dollars in fines that will go back into the pockets of their victims,” said Rasheed.

Under these new changes, the government says unscrupulous developers could now be on the hook for hundreds of thousands of dollars in fines for each unfairly cancelled contract. Unethical developers who engage in these practices could also face the risk of permanently losing their builder’s licence.

The proposed changes will also enable the Home Construction Regulatory Authority (HCRA) to use the money received from these penalties to make payments back directly to consumers who have been adversely affected by builders and vendors who break the law. This change would make Ontario the first jurisdiction in Canada to provide such compensation to consumers.

Once proclaimed into force, the HCRA would have the authority to impose financial penalties retroactively to contraventions that occurred on or after April 14, 2022 – the date the More Homes for Everyone Act received Royal Assent.

“Ontarians who have saved and sacrificed to purchase a new home deserve to be treated fairly,” said Clark. “With today’s announcement, our government is making clear that illegal and predatory behaviour on the part of developers will not be tolerated, full stop.”

The government is also doubling maximum financial penalties for repeat offenders of the NHCLA, with individuals now facing charges of $100,000 and corporations of $500,000, up from $50,000 and $250,000 respectively. Individuals found guilty may also face a sentence of up to two years in prison.