TICO opts for phased-in Comp Fund rate increase; starts July 1

TICO opts for phased-in Comp Fund rate increase; starts July 1

TORONTO — In response to stakeholder input TICO’s Board of Directors has approved a phased-in Compensation Fund Contribution Rate increase.

The Board was proposing to increase the Compensation Fund Contribution Rate from $0.15 to $0.25 per thousand dollars of Ontario sales effective July 1, 2016.

Instead the Compensation Fund Contribution Rate will increase from $0.15 to $0.20 per thousand dollars of Ontario sales effective July 1, 2016, and from $0.20 to $0.25 per thousand dollars of Ontario sales effective April 1, 2017.

“The TICO Board heard the feedback of registrants,” said Board Chair, Jean Hébert. “We understand that the industry is facing difficult challenges from global economic uncertainties, terrorism and other social unrest, as well as locally from continued fiscal/monetary volatility.  TICO does, however, require additional funding to effectively perform its mandate. TICO acknowledges its fiduciary responsibilities, including a focus on prudent cost management.  While revenues are lower, including investment income as a result of lower interest rates, TICO has maintained strong control over costs, and this focus will continue.”

By phasing in the increase, some relief will be provided to registrants, he said. He added that the Board also understands the concerns of industry members that the legislation and funding model “is dated and needs to be reviewed”.

“Both the Board and Senior Management are committed to continued collaboration with the Ministry to ensure these concerns are understood and considered accordingly,” he said.

“Our goal has been to keep fees to registrants as low as possible while ensuring that TICO has appropriate resources to execute its consumer protection mandate in an efficient and effective manner,” said TICO CEO Richard Smart.

TICO’s Rate Review Consultation took place from March 21 to April 20. Overall, TICO received 42 responses, including input from ACTA, CATO, OMCA and the CCTA. TICO currently has 1,863 registered entities in the province.  The majority of registrants were opposed to the increase for the following reasons:

  • Travel agencies are experiencing tight operating margins and cannot afford an increase.
  • The amount of the increase is too high.
  • TICO should be cutting costs and/or charging consumers or other service providers a fee rather than increasing fees to registrants.
  • The legislation and funding model is antiquated and needs reform as it does not reflect the current state of the industry and needs of consumers.