Ontario’s regulation of new home builders “not consistently effective”

The Office of the Auditor General of Ontario has released a series of independent auditors’ reports, one of which is focused on the province’s Home Construction Regulatory Authority (HCRA) responsible for licensing and regulating Ontario’s new home builders.

“We conducted this audit to assess whether HCRA effectively licenses and regulates new home builders and vendors to protect homebuyers,” the independent auditor’s report states. “We found that HCRA’s systems, processes and policies to license and regulate new home builders and vendors were not consistently effective in protecting consumers when purchasing a new home.” 

Tabled in the Ontario legislature on October 1, the auditor’s report says the HCRA automatically and routinely renewed the licenses of licensees with a history of conduct issues. “HCRA did not have any controls in place to ensure it checks its own complaints and inspections data against applicant responses to questions on their past conduct declarations,” the report adds. “Complaints and inspections data contradicted the information provided by some licensees who declared a clean history of compliance.” 

Since its inception in February 2021, it was also found that the HCRA approved licenses without conditions for more than 99 per cent of the 2,042 applicants whose credit scores failed to meet the regulator’s threshold. Of the 16 applications it approved during that time with conditions, only one included conditions related to the applicant’s financial position. 

The regulator also has a backlog of more than 1,500 complaints. “HCRA has not set any targets or benchmarks for how long on average complaints should take to close,” they continue. After obtaining and reviewing the HCRA’s complaint data, they say the average time it takes the regulator to close complaints against licensees has increased each year since it began operations. In 2024 and 2025, the average wait time was 419 days.

In addition, it was noted that the HCRA does not use municipal building permit data in its oversight to proactively identify illegal builders.

As of March 31, 2025, the HCRA had 70 employees overseeing 7,232 licensed new home builders and vendors. In the 2024-2025 fiscal year, the regulator was operating at a $3.2-million deficit.