OHBA Commends Ontario Government for Advancements in Surety Bonds Consultation

The Ontario government announced on September 16 that they are initiating a formal consultation process to introduce pay-on-demand surety bonds as an alternative to Letters of Credit (LOCs) for home builders.

The Ontario Home Builders’ Association (OHBA) views this as a significant and forward-thinking development for the housing industry. They express gratitude towards Minister Calandra and the Ministry of Municipal Affairs and Housing for their dedication to modernizing the administration of new housing approvals.

‘Precisely the type of innovative regulatory updates we need to effectively increase our housing supply’

OHBA has long advocated for the use of surety bonds as a financial security tool to assist home builders in accessing capital for new housing projects. They believe that this will streamline the construction of more homes in Ontario. The organization is proud that their efforts have shed light on the benefits of surety bonds and looks forward to working with municipalities to facilitate their adoption.

“This is a significant advancement for Ontario’s housing industry and the issue of housing affordability,” says OHBA CEO Scott Andison, who has played a key role in advancing this initiative. He highlights the importance of allowing builders to reinvest capital from LOCs into new projects to increase housing supply effectively.

What’s next

During the consultation period, OHBA will focus on ensuring a smooth transition for builders currently using LOCs to switch to surety bonds, freeing up crucial capital for new projects.

As part of the legislative framework established under Bill 109 and Bill 185, the government is investigating regulations to authorize the use of surety bonds for securing municipal obligations related to land-use planning approvals.

The consultation will run for 30 days, ending on October 16, with OHBA submitting feedback on behalf of the industry and the 28 local associations across Ontario.