TORONTO — Two hours after ACTA and CATO issued a joint statement protesting the lack of transparency so far in the TICO funding review, TICO released its own statement in response.

In September 2022 TICO announced it was initiating a review process that includes an end-to-end look at TICO’s current funding framework, as well as a full review of the Compensation Fund.

It’s the most comprehensive review in TICO’s 25-year history, and as TICO CEO Richard Smart told trade media at the September 2022 press conference, “all options are on the table” for the Comp Fund, from a consumer-pay model, to a risk-based model, to eliminating the Fund altogether.

At that time, Smart noted that over the course of its 25-year history TICO has facilitated close to $5 million in restitution, and paid out $14.8 million from the Fund, to assist 24,037 consumers.

As part of a process that started back in 2016 and 2017, TICO made a number of recommendations to Ontario’s then-Liberal government for changes to the Travel Industry Act. Many of those recommendations were implemented – but not the consumer-pay model.

In January 2020, just before the pandemic, industry groups including ACTA and CATO voiced their frustration with the Comp Fund stalemate. At that time, both groups said it was clear that despite extensive lobbying efforts, the Ontario government did not intend to revise the funding model.

More details from TICO’s September 2022 press conference with the trade media can be found here.

In January 2023 TICO provided an update on the review process.

ACTA & CATO STATEMENT

Yesterday ACTA and CATO released a joint statement, raising the issue of what they say is a lack of transparency in the TICO funding review.

Here is the statement in full:

“Earlier this year, TICO announced the launch of the largest review of its funding framework and fee structure since inception.

“However, ACTA and CATO have been kept largely in the dark on the financial impact on TICO registrants.

“This comprehensive review includes modernization of TICO’s current funding framework to ensure sustainable operations of TICO, as well as a full review of the Compensation Fund and associated contributions.

“‘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 have joined forces once again to speak out about shared concerns about 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.’

“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.’

“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.”

TICO STATEMENT 

TICO issued its own statement, from TICO CEO Richard Smart, in response:

“TICO is actively conducting a comprehensive review of its funding framework, including the Compensation Fund.

“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.

“Jurisdictional scans were conducted to understand models in other provinces and countries, their successes and also their setbacks.

“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.”