Manipulating Home Inspections

September 24th, 2017

“Several individuals gave high praise …there was even a round of applause.  Once I saw this positive reaction I informed them that it was I who conceived, planned and implemented the whole thing.”

This is from an internal Industry Canada email, it absolutely must be sarcasm.

The email continued; “There was general recognition that this would not have happened without OCA’s [Industry Canada’s Office of Consumer Affairs] leverage and coordination.”

Their subject was the Canadian Standards Association’s (CSA’s) new home inspection standard.  Industry Canada was heavily involved in developing this new standard.  So heavily, in fact, that in researching hundreds of pages of internal documents acquired through Access to Information laws, it’s often hard to tell the difference between Industry Canada and CSA, as who was driving whom in the process.  This is the same tranche of documents that yielded CSA’s accidental admission to taking “$60-70MM” per year in influence payments.  Anyway, the documents reveal how both CSA and Industry Canada use the powers of Government to expand their own authorities.

We’ve seen CSA do this before, and we’ve reported on it, and they’ve now started the same process in the energy sector.

What follows is the record of how CSA inserted itself as a new regulatory layer in Canadian real estate transactions. 

First, the target, in this case; home inspections.  Typical real estate transactions include a home inspection.  These are done to ensure that the new home is safe and sound, and it can also be a requirement for insurance coverage, mortgages, etc.  It’s all pretty straightforward;  You contract a credible home inspector to explore the house and report its condition and defects.  No problem.

It is a problem though, for CSA, because home inspections are taking place without anyone paying money to CSA Group.  There have been decades of home inspections all across Canada and all without CSA’s oversight, certification, invoicing (obviously) or legislated control.  This isn’t healthy for bureaucracy; something must be done!

According to the Government of Alberta; the “CSA first approached the provinces and territories in 2012 about creating a uniform standard for all home inspections”.  Indeed, Industry Canada’s emails confirm that it was CSA who’s been trying to insert themselves into the home inspection process.  “In December 2012,” said Industry Canada, “CSA contacted various Federal, provincial and territorial Ministers with a goal to identify key individuals to participate in the development of a CSA Standard on Home Inspection.”

But CSA said the opposite to the Calgary Herald when they called to confirm the story;  “requests to develop standards,” said the CSA’s Allison Hawkins, “come from a variety of sources.” 

Well no, actually.  The CSA was the only source requesting new home inspection standards.  Regardless….

Having picked their target, being home inspection standards, the CSA needed some enablers inside Government to get the process going.  Civil servants are usually keen to expand their authorities and were only too willing to help CSA build a new bureaucracy in which both parties could plod profitably onward.

The CSA worked to get Government onto CSA’s committees, both for imprimatur of Government among affected parties, and for access to taxpayer’s dollars to pay for everything, and Government power to pass the resulting legislation, and Federal Government influence with other governments to ensure total subservience of the public.

From Industry Canada;  “Mr George Yates [Govt of Alberta] is leading the proposed [CSA] standards committee [to develop the home inspection standard] and Mr. Michael Barnes, Senior Consumer Policy Analyst, Office of Consumer Affairs [Industry Canada], will also participate on that committee.”  See?  It’s starting.

They crammed the committee with fellow travellers.  By the time CSA’s committee stacking was through, the list was so worrying that even CSA’s management urged that it be kept secret.  In a CSA email to Barnes; ““Here you go.  Please ensure no distribution.”  Industry Canada saw the awful optics too;  “Hello Jay,” said Barnes to Industry Canada’s Jay Jackson, “Here is the breakdown of the membership and affiliations for both the Technical Committee (TC) and Regulatory Affairs Committee (RAC).  As you will see, [redacted] requests that the list is not distributed.”

Jay Jackson is a Senior Policy Officer at Industry Canada.  It was Jackson’s job to brief the Deputy Minister on why home inspection standards were needed, what Industry Canada planned to do with them, and why CSA should be the Agency empowered to draft them.  There was no doubt expressed in Jackson’s brief about the nature of the new standard, that it wasn’t going to be voluntary.  Rather, this standard, like so many of CSA’s “voluntary” standards, was planned from the start to be transitioned into legislation.

On December 10th, Jackson told the Minister that; “If passed, the text would likely be referred to the Standards Council of Canada to have it recognized as a National Standard of Canada.”  Next, he said, the Government could ”facilitate coast-to-coast consumer awareness initiatives [and] ultimately, a national standard could serve as a vehicle to promote the development of a national curriculum to train home inspectors.”  And that’s the next step for CSA too, mandating national training for inspectors, all run by CSA of course, and that quite profitably.  The more they extend their mandate, the more money makes it to CSA.

In another document, Jackson also admitted to “some questions from [CSA] members as to how consumers can help encourage their provincial legislators to adopt this standard as quickly as possible into provincial building codes.  A marketing plan is apparently being developed.”

In the Minister’s brief, Jackson pointed out that “if the standard was adopted [as law] by Alberta, BC and Ontario, this would result in 70% of the Canadian population having regulatory protection with respect to this important service.  This may prompt other jurisdictions to regulate as well.”

Indeed.  The whole affair, at least on the inside, was being treated like a market-share discussion.  More regulations means more regulators, and more money and more power for those already regulating. 

The CSA was proposing an entirely new regulatory layer, with itself as the regulatory authority.  The CSA was clear about that in their internal presentations to Industry Canada, showing before and after slides of what the new home inspection standard would accomplish (shown below).

Home Inspections Chart - Before CSA

Home Inspections Chart - After CSA

Having got the Government onto the committee, the CSA’s friends at Industry Canada were then asking the Deputy Minister to authorize Industry Canada’s representatives on CSA’s committees to vote according to CSA’s direction.  As one briefing recorded it;  “A positive vote by the official representing ISED [Innovation, Science and Economic Development Canada] on the committee will serve to demonstrate federal support for” CSA’s regulatory expansion.  Remember the “imprimatur” comment above?  Well, that’s part of why they’re there.

And then, in response, the bombshell closer;

“ISED’s representative will vote in favour of the standard.  We will monitor the results of the vote and next steps as set out by CSA Group.”

Note who’s driving the process.  It’s not the Government of Canada; it’s CSA that sets out the steps that Industry Canada will take.

Alright, let’s pause for a moment.  The home inspection standard development was really hotting up by the fall of 2015.  So what do you suppose RestoreCSA was reporting on earlier that summer?  Well, in May we ran an article on how CSA’s committees are being used to manipulate the market.  Then, in June we published on the “manipulation of legislation for commercial interests.”  Sounds topical, doesn’t it?  By the fall of 2015, there appears to have been concern at Industry Canada that being so tightly in the service of CSA wasn’t going to look good.

By December, 2015, Industry Canada’s David Clarke wanted better cover, he urged a more compelling argument for his Department’s support of CSA, saying; “More detail [is needed] on what it is; why ISED [Industry Canada] is involved.  (CSA sought consumer perspecti9ve input, becuase…)”  [typos in original]  Specifically, Clarke had concerns which he outlined at length, and which were released as follows;

“Considerations; […]” and the entire section that followed was redacted by Access to Information censors.

In mid-December, there was concern that the Deputy Minister was getting cold feet.  On December 14th, Clarke provided reassurance;  “Since this is a voluntary standard, there is no obligation for Canadian home inspectors or governments to adopt the standard.  Supporting the publication of the standard by providing a yes vote does not bind the voting party to undertake any specific action to implement or promote the standard.” 

But remember that the Minister had already been briefed four days previously that the home inspection standard was on a clear track to recognition as a “National Standard of Canada”, (i.e.: for legislation) and would be the basis for broad new bureaucratic powers in training and certification.  And remember also that “a marketing plan” was being developed to “promote the standard.”  To get CSA what they wanted, Industry Canada was arguing two opposite positions at the same time.

The office of the Deputy Minister had heard about CSA’s conduct, likely about RestoreCSA as well, and there were growing rumblings about how voluntary the home inspection standard would really be if CSA got its way.

In a draft internal document; “Some home inspectors claim the new standard will substantially increase both the time to conduct and cost of home inspections.”  The document quoted one inspector; “Our concern is that its going to drive up the cost because the time to do that is going to now be in the magnitude of three or four times what we’re doing now.”  The next page is entirely redacted. 

On an Advice to the Director General document, some insider scribbled notes in the margin;  “why are we involved” and “interventions from IC”.  The “IC” is Industry Canada.

Sensing pushback, the minions of Industry Canada dreamed up a means of reassuring everyone on the inside that everything was going swimmingly.  What did they come up with?  Well….

“It is recommended that the Office of Consumer Affairs enter a… contract [with] the Canadian Standards Association to report on the field testing of the draft CSA home inspection standard.”

That’s right, the CSA would be paid to review the CSA.  The new contract was sent to Michael Barnes for approval.  Barnes was Industry Canada’s representative on CSA’s committee, he was working for them.  In other words, the approval to pay taxpayer money to CSA to review CSA was authorized by CSA. 

Meanwhile, the marketing of CSA’s new home inspection standard fell to the Government of Canada.  Letters were edited by Industry Canada to be sent to “several hundred or more inspectors and their associations” to introduce them to the coming new standard.  Critically, it was Industry Canada that edited the letter directly, not its Agency CSA.  “Here is the draft home inspection letter that will be sent to home inspectors” said Michael Barnes to Monica Gilbert [Industry Canada, Office of Consumer Affairs], “It would help to have someone review and amend it….I am available to provide further insights and answer questions.  I would like to send it back to CSA next week.”

With CSA busy reviewing their own standard, the Government got worried that the people these regulators wanted to regulate might not want to be regulated.  Naturally then, taxpayer funding was provided for Industry Canada officials to travel to CSA’s offices to work directly on CSA’s development of the standard, hoping to “help anticipate issues that may otherwise thwart successful development of the standard and its implementation.”

And then there was concern over CSA’s translation of the standard into French.  Specifically, “if the draft goes directly out with flaws it could attract a lot of unflattering attention which detracts from the attention to the standard.”  Well, as David Dupuis wrote in response; ““Michael [Barnes] will work with his various contacts to ensure the French is good quality.”  Remember, Barnes works at both Industry Canada and CSA.  But Barnes wasn’t working his CSA contacts, he was trying to use his Federal contacts to obtain translation services, paid by the taxpayer, on behalf of CSA.  If that didn’t work, wrote Barnes, “the second option for text to be reviewed by the translation services of the Government of Ontario…. Perhaps if you approached one of the Ontario [govt] participants [to see if] they could see if [it] was possible.”

Throughout the email back and forth, the idea that CSA should pay for its own translation wasn’t even considered.  Finally, in a summary report to the Assistant Deputy Minister, it was admitted that “the Department paid for the translation of the standard for public review.” 

Next came the vote.  Not in Parliament or a provincial legislature, mind you.  No.  Foisting of new regulatory burdens on the taxpayer would be decided by a closed committee whose members were hand-picked by CSA. 

Still, if the proposed policy is unnecessary and unpopular, and CSA’s home inspection standards would surely qualify, there’s always the danger that committee members would vote according to their judgement rather than as they were told to.  Both CSA and Industry Canada were worried about this.

From an internal email;  “If there are any negative votes, the TC [Technical Committee] Chair, acting on behalf of the Committee, will take one or more of the following courses of action to disposition negative votes.”  Note that the root of “disposition” is “dispose;” it means “to dispose of” or to place “in a different position.”  This doesn’t bode well.  The email continued;

If any negative votes, CSA can…
“a) Rule as non-germane if not accompanied by supporting reasons or the supporting reasons are not relevant to the items being balloted;
b) Attempt to resolve the negative with editorial changes or explanation;
c) Rule as non-persuasive if the reasons for the vote have previously been considered and not accepted by the TC, [or;]”
d) Refer the negative vote back to committee

By November 2015, concern over negative votes had heightened.  In an email string between Jackson and Barnes for instance, one asked what happens if people don’t vote they way they wanted them to.  The answer;  “The vote will then be dispositioned to deal with any objections.”  There’s that word again.  Votes are only counted if they’re the right votes.

Stacked or not, the committee would have to face down a barrage of complaints made by actual home inspectors, the people whose whole careers would be placed in CSA’s hands by the new home inspection standard.  Industry Canada fretted that the committee members might water down the authorities provisions of the standard when faced with a strong backlash.

Specifically, they fretted that “the coordinated preparation and presence by the home inspection industry members at forthcoming meeting [sic] is likely to favour the changes to the standard that they seek.”

In its Advice to the Assistant Deputy Minister, Industry Canada argued that “it is vital to protect the consumer interest against a strong and coordinated home industry presence which is likely to dilute those interests in the national standard.”  Note how “consumer interest” is the term civil servants use to describe their own interests.  Then; “The CSA […] has called on the Federal Government to be present at this pivotal meeting.”

Wow.  The Government of Canada is taking orders from one of its Agencies?  Isn’t that backwards?

Of course, the Government happily showed up for the meeting.  Why wouldn’t they?  After all, the expansion of regulatory authority is in the interest of every bureaucrat.  In this cause, Industry Canada took its orders from CSA.

Back in February 2015, they had even sent one of their officials to CSA headquarters to “train” him in how CSA wanted the Government to behave on committee, which way to vote, etc.

In November 2015, Industry Canada sent officials to Geneva for a “training session” in how to publicly sell people on voluntary standards, and then to privately transition the standards into legislation.  From the summary; “The training session concentrated almost exclusively on how to incorporate standards by reference in regulations.”

What amazes so many people is the arrogance of the CSA / Industry Canada mindset.  Home inspectors weren’t demanding a new regulatory layer.  Home purchasers had lots of choice, they weren’t clamouring for new regulations.  The only people pushing for regulatory expansion were the regulators. 

The result is a large, legislated increase in the cost of home ownership.  The CSA now has the power to define home inspections, the power to establish curriculum for home inspection courses, the power to mandate that all inspectors pay CSA to take their courses, and the power to eliminate uncooperative inspectors thereby denying them their vocation.  And all this has to be paid for somehow, and that’s where you come in.

It is your role to do as you’re told, to pay as you’re told, and bow and scrape as you’re scolded.  Apparently, increasing regulatory burdens on the little people is a good thing because it’s in the interest of your betters, specifically those at CSA and Industry Canada.

This awful attitude and the awful people who hold it, and the needless, pointless burdening of society, and the graft and the grifting, is all the more maddening in the coercion of the people having to pay for it. 

Yet here we are.  This is how CSA, and bureaucrats everywhere, expand their powers over the people they’re supposed to be serving.