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CATO hammers home case for consumer-pay model for Comp Fund

CATO hammers home case for consumer-pay model for Comp Fund

Wednesday, January 22, 2020

TORONTO — There can be no rebuilding of consumer confidence without a properly funded Compensation Fund, and that includes a consumer-pay model, says CATO Chair Brett Walker.

Walker laid out CATO’s position as part of consultations on Bill 159: ‘Rebuilding Protection for Consumers Act’, to a meeting with government officials on Jan. 20. CATO made the case for the need to reform the inadequate Comp Fund to a room of close to two dozen MPPs and Ministry officials.

Yesterday ACTA spoke out about its anger and frustration at the stalemate with the Comp Fund and discussions with the government. Despite lengthy and costly joint lobbying efforts by ACTA and CATO, the Ontario government does not intend to revise the current funding model for Ontario’s Compensation Fund.

The announcement, made in December, not only made no mention of proposed revisions to the Fund, but it also included more regulations for Ontario registrants, says ACTA.

Both CATO and ACTA will be further pressing the case in a meeting with the Ontario Minister of Government and Consumer Services, Lisa Thompson, scheduled for Jan. 28.

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Walker made the following points …

. CATO’s position is that there can be no rebuilding of consumer confidence without a properly funded Compensation Fund which a Deloitte study called for a target of $40 million to $60 million.

. This requires a different funding model such as the consumer pay model in Quebec

. The results would produce complete consumer protection with no per person caps or event payout limits

. It would also provide ample funding for TICO

. A minimal fee would also provide greater awareness by consumers of the existence of a compensation fund and the protection afforded them by booking with an Ontario registered travel seller.

. Funding reform would result in reduced costs and burden on the Ontario travel industry

. A robust fund would make Ontario registrants more competitive in a global and digital marketplace

Walker says the majority of the questions from both government and opposition members focused on Quebec’s successful funding model. The Quebec fund currently stands at some $150 million, providing protection for Quebec consumers and substantial marketing advantages to Quebec travel businesses. The fund in Quebec is so high that contributions have been temporarily suspended.

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ACTA President Wendy Paradis says: “We must reduce this burden now, as what is being proposed will result in more travel agencies either moving to other provinces or shutting their doors.”

The government indicated it will hold consultations in 2020 but to date, no information on the new proposed regulations have been provided and no consultation dates have been set.

ACTA is asking industry members to continue to write to their MPPs and the government, expressing the need for Compensation Fund reform. Letter templates can be obtained at acta.ca.

For more information on ACTA’s letter-writing campaign, go to https://www.travelweek.ca/news/acta-issues-call-for-help-from-all-ontario-agents-to-lobby-for-comp-fund-reform/.

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