+ RMA Rural Municipalities
of Alberta

Resolution 19-17F

Builder Licensing Program Impacts

Date:
November 15, 2017
Expiry Date:
December 1, 2020
Active Status:
Active
Sponsors:
County of Paintearth
District:
2 - Central
Year:
2017
Convention:
Fall
Category:
Planning and Development
Status:
Intent Not Met
Vote Results:
Carried
Preamble:

WHEREAS the Government of Alberta regulates the residential construction industry through the Alberta Safety Codes program, and the Alberta Building Code; and

WHEREAS the Government of Alberta further regulates the residential construction industry with the implementation of the New Home Buyers Protection Act; and

WHEREAS the Government of Alberta is furthering its attempt at constricting the ability of journeymen carpenters and residential home builders by the proposed implementation of the Builder Licensing Program; and

WHEREAS the municipalities of Alberta ensure conformity to all residential construction regulations by the diligent and competent enforcement and inspections of safety codes officers;

Operative Clause:

THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties (AAMDC) request that the Government of Alberta delay the implementation of the Builder Licensing Program until such time it can reasonably demonstrate that the impacts of such a program will yield a positive impact on the residential construction industry and its participants;

FURTHER BE IT RESOLVED that the AAMDC request that the Government of Alberta recognize and resolve the negative impacts of the New Home Buyers Protection Act on rural Alberta tradesmen, municipalities, and home owners.

Member Background:

Many residential carpenters and framers in rural Alberta have had their livelihoods affected by the implementation of the New Home Buyer’s Protection Act (NHBPA) where they were unable to secure home warranty coverage due to the size of their operation, inability to post large and cumbersome bonds with insurers, and have removed themselves from residential building projects unless those were under owner-builder exemptions. Thus, making home building a more onerous and expensive process in rural Alberta. The implementation of the NHBPA was fraught with irregularities, problems with processing applications, and generally turned the program into a nightmare or bureaucratic red tape for new home owners.

The proposed builder licensing program – without due diligence and thorough review and neutrality of process – will undoubtedly shape up to the same extent and cause further damage to the small builders and carpentry operators.  The extent that the program will evaluate builders’ performances with a lack of qualitative or quantitative criteria shows the program is fraught with problems at the outset.   Much more thorough review and oversight by those within the construction approving and permitting process would be a wise road to follow prior to implementing such a potentially disastrous program.

RMA Background:

RMA has no active resolutions directly related to this issue.

Government Response:

Alberta Municipal Affairs

Home ownership is one of the biggest financial decisions any family will make, and Albertans deserve to have protection and confidence their home is built to a high standard.

Builder licensing is focused on regulating those in the business of being a builder; builder licensing will not impact trades. The builder is responsible for managing the project, including which sub-trades to hire and how much financial risk they will assume. Sub-trades are not covered under builder licensing because they are the responsibility of the builder.

The program was developed in response to Albertans who participated in focus groups and completed an online survey. Seventy-eight per cent of survey respondents were in favour of government exploring options for licensing builders.

This resolution is premised on the idea that residential construction has fewer issues in rural municipalities than urban ones. However, data from our spring 2017 consultation showed that rural Albertans had a similar level of concern with residential construction as urban Albertans. Only 41.4 per cent of rural Albertans felt satisfied with residential construction compared with 43 per cent in major urban municipalities. The consultation also showed that there was broad support for the program in both rural and urban Alberta and among industry throughout the province with 66 per cent of rural Albertans supporting builder licensing and 60 per cent of residential construction industry members supporting builder licensing.

Alberta Municipal Affairs will continue to monitor and listen to all municipalities with respect to their role in making builder licensing effective. The program will protect consumers by preventing builders with poor track records of safety and consumer protection compliance and bankruptcies from building homes and exposing consumers to undue risk. The program is already having positive impacts for consumers with some poor builders being denied a license.  In fact, one such company who had a several outstanding orders went bankrupt shortly after the license denial.

Alberta Labour

Alberta Labour has no further input beyond the response from Alberta Municipal Affairs.

Development:

The Government of Alberta response indicates a positive reception to the builder licensing program and clarifies that the program does not directly apply to trades involved in residential construction. The resolution requests that the builder licensing program be delayed until “it can reasonably demonstrate that the impacts of such a program will yield a positive impact on the residential construction industry and its participants”. Given that it is unclear whether a “positive impact” is resulting from the existing program, and it is implied in the resolution that the initial program was not having a positive impact, RMA assumes that continuing the program in its current format does not meet the intent of this resolution. Additionally, the government response does not include reference to the New Home Buyers Protection Act. This resolution has been assigned a status of Intent Not Met.

Provincial Ministries:
Municipal Affairs
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