Two influential travel industry associations are set against a new funding framework for TICO and say they’re not going to stay quiet.
In a letter signed by ACTA and CATO, officials for both groups said TICO earlier this year announced the launch of the largest review of its funding framework and fee structure since inception. But ACTA and CATO said they’ve been “kept in the dark” on the financial impact on TICO registrants and that TICO and the Ontario government are placing an “unfair and uncompetitive burden on travel businesses.”
“Travel registrants will once again be called upon to pay the rising and staggering costs of an inadequate and costly system that doesn’t offer very much to consumers. TICO’s core mandate being consumer protection,” said Jean Hébert, CATO Executive Director.
CATO and ACTA say they have joined forces once again to speak out about shared concerns regarding the provincial regulator and in particular their opposition to maintaining the current registrant fee system to fund the Ontario Consumer Compensation Fund.
“While both organizations applaud the review of TICO, a full review of all TICO programs and administrative costs is needed,” said Wendy Paradis, ACTA President. “We hope the current audit conducted by the office of the Ontario Auditor General –dubbed the ‘Value for Money audit’- will provide positive results and responses to our concerns. However, we are very concerned that nowhere does it appear to mention moving to a consumer “insurance” contribution model, that we have long been advocating.”
ACTA and CATO not sitting on sidelines
Hébert said that ACTA and CATO will not stay silent until they are informed of the final decision.
“We will mobilize to make sure TICO and the Ontario government will consider our recommendations and stop placing this unfair and uncompetitive burden on travel businesses. This is the biggest fee review in TICO’s history and yet when we met with TICO’s consultants, we have been provided with very partial information and no financial impact analysis on the industry.
“We do not appreciate being kept in the dark, we do not appreciate being told that our asks will once again be ignored without any reason or explanation,” said Hébert.
“We are extremely frustrated with the process,” said Paradis. “Since the pandemic, the travel industry is still struggling to recover from the decimating effects of the COVID-19 health and financial crisis. Travel businesses in Ontario are struggling with a post-pandemic debt load that is significant.”
ACTA, CATO demands
Both ACTA and CATO have long demanded a new funding model that will provide a fairer playing field and real protection to the consumer. The two associations have been working together and increased their advocacy efforts on this review process and have called for:
- A legislated Consumer “insurance” contribution system similar to the one in Québec for an adequate Compensation Fund and real protection- In Québec, the consumer pays for that protection approximately $3.50 per $1,000 in travel expense.
- Full review of TICO programs and expenses
- Fix the Compensation Fund or eliminate it.
- Exempt Corporate Travel agency clients from Fund
“We are very concerned that after many, many years of the industry calling for a fairer funding model of TICO -- where the consumer is aware of the benefits of paying into an insurance program and receives better protection--- once again our demands have been ignored. The burden of enhanced consumer protection will continue to be placed squarely on the industry and at a higher cost than ever,” said Paradis.
And from TICO…
TICO put out a statement in reply, saying the organization is being transparent and that stakeholders have been given a chance to provide their input.
“TICO is actively conducting a comprehensive review of its funding framework, including the Compensation Fund,” TICO CEO Richard Smart said in an email. “Since the start of the review, we have been committed to this being a transparent process. We have said that all funding options were on the table and would be explored and considered for a future funding model.
“As part of the review, a variety of stakeholders have been engaged to provide their input, including the trade associations, registrants, and Ontario consumers,” Smart said. “Jurisdictional scans were conducted to understand models in other provinces and countries, their successes and also their setbacks.”
Smart said the final recommended approach is subject to a review by the Ontario government prior to being shared publicly.
“Once released, all registrants will have an opportunity to provide their feedback through a broad consultation process. The goal of the future funding framework is an innovative funding model that meets the needs of consumer protection today and the future.”