ACTA & CATO Say They're In The Dark On TICO Funding Review

Earlier this year, TICO announced the launch of the largest review of its funding framework and fee structure since inception. Industry organizations ACTA and CATO have now joined to express concerns that they are being "kept largely in the dark" on the potential financial impact on TICO registrants.

The funding review is looking at modernizing TICO's current funding framework to ensure sustainable operations of TICO, as well as a full review of the Compensation Fund and associated contributions.

While TICO says in a statement that the "final recommended approach is subject to a review by the Ontario government prior to being shared publicly," CATO Executive Director Jean Hébert has strong feelings on how things will end up.

"Travel registrants will once again be called upon to pay the rising and staggering costs of an inadequate and costly systems that doesn't offer very much to consumers, (despite) TICO's core mandate being consumer protection," said Hebert, in a joint statement with ACTA.

The two industry association have joined forces 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 says 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.

ACTA's Paradis adds: "We are extremely frustrated with the process. 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 are demanding the creation of a new funding model that will provide "a fairer playing field and real protection to the consumer."

ACTA and CATO are calling 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.

-- A full review of TICO programs and expenses.

-- Initiatives to "fix" the Compensation Fund or eliminate it.

-- An exemption for corporate travel agency clients from Fund contributions.

TICO responded to the ACTA/CATO statement with comments from CEO Richard Smart.

"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," Smart said.

"We have said that all funding options were on the table and would be explored and considered for a future funding model. The goal of the future funding framework is an innovative funding model that meets the needs of consumer protection today and the future."

Smart adds that as part of the review, stakeholders have been engaged to provide their input, including trade associations, registrants and Ontario consumers. Jurisdictional scans were conducted to understand models in other provinces and countries, including their successes and setbacks.

"Once released, all registrants will have an opportunity to provide their feedback through a broad consultation process," Smart said.

Paradis remains concerned that ACTA and TICO's demands for a "fairer funding model" are not being heard.

"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," Paradis said.

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