With TICO nearing the completion of its funding review and the Ontario government travel industry regulator’s AGM set for Sept 26, the Canadian Association of Tour Operators (CATO) says it’s “now or never” for reform of the Compensation Fund – something it’s not convinced is going to successfully happen.

CATO execs Brett Walker (chair/Collette), Jean Hebért (executive director and himself a former chair of TICO) and David Green (vice chair/G Adventures) huddled with a small group of media at last week’s ACTA eastern Canada Regional Summit in Mississauga, Ont., to state their case – a position that has been communicated loudly for much of the year, and echoed by ACTA at the Summit and elsewhere.

Here is summary of that conversation:

What does CATO want?

Brett Walker: “The issue is that CATO and ACTA have been advocating for a very, very, long time for better consumer protection for Ontarians. It’s just wholly inadequate, any way you look at – from the Fund itself to the funding of the Fund. All the various caps, from the $5 million per event, the $5,000 per person cap, the $2 million per repatriation cap, have been in place for decades. So, for anyone who really took the time to learn about consumer protection in Ontario… they would realize that there is no guarantee I am protected, and to what extent.

“So how does that make consumer protection in Ontario an advantage for the industry and how does it make it fair for consumers who feel they are booking through registrants so that the Fund can be protected, but the Fund is not funded adequately?

“We see that there’s a role for government, there’s a role for all of the various organizations (like) CATO and ACTA, and there’s a very important role for consumers.”

So, is TICO listening?

Walker: “I had proposed a motion for the upcoming (TICO) AGM that has been denied, and it has been denied for being outside the purview of TICO. And we understand that, we do; but we feel it was an opportunity to start a conversation and create a greater awareness that is, quite frankly, very atypical. It is very atypical that an industry group is advocating for more whole consumer protection.”

Where do consumers fit in?

Walker: “We (CATO) would prefer to share the burden in terms of the funding, but industry can never fund the Fund to the extent that it needs to be funded. So that’s where we feel the role of consumers is. And also, as consumers become more aware of the fact that there is consumer protection, they also become more aware of how inadequate it is.

“And we’ve also learned that consumers are willing to pay for consumer protection… People purchase their travel well in advance of ever taking it, unlike other products, so when they really think about it, they are paying out money for both their deposit and final payment way ahead of ever taking that trip; and while the industry has proven it is rock solid – we’ve just been through a pandemic and we’re still here ­– there’s always an opportunity that the consumer could be at risk, and we just feel that we can make it a lot better.”

How so?

Jean Hebért: “The best way to do that is (consumers) will pay a contribution for re-protection, and also to know their rights.”

Walker: “And without any caps. The consumer should know that when I purchase through an Ontario registrar, my money is protected, period. Right now, TICO is not saying that there is any guarantee your money is protected. They can’t.”

David Green: “The model is there in Quebec. Other provinces are doing this. I come from an international background; I’ve worked in the UK. When you look at a UK consumer, they have ATOL protection; everybody knows about ATOL because there is a small, tiny fee on their booking and customers ask what it is. So, it gives reassurance, and it gives brand awareness to that protection and we feel the same thing will work for TICO here.”

(Green says it’s not CATO’s role to determine how much that fee should be).

Walker: “And it also creates accountability. When the consumer is paying for something, they’re going to hold you accountable. One, it’s got to be value… consumers will hold the government to account more than the industry will – the industry can only do so much.”

Would a voluntary fee work?

Hebért: “They (TICO) might come with a voluntary consumer protection insurance fee, we have discussed it; but we don’t want that. It would not work. It will create a mess across the industry. It has to be legislated.”

Is the amount of the Compensation Fund currently adequate?

Walker: “I’m not an actuary guy, but when TICO did the actuarial study back in 2017-18, it was Deloitte, they determined that the level of the Fund was wholly inadequate. And, so, I’m not sure what the level of the Fund should be, and CATO’s not sure – let other people determine that and based on risk; but it should be at that point. You can’t have a gap between what the actuaries are saying and what consumers expect and, quite frankly, if there’s an event, what they’re going to get. It’s not acceptable.”

Has there been any progress with the government?

Hebért: “I think the government is listening to us, because the message we are sending now is clearer and louder, (but) I think there are two things that need to be improved: the consultation process for those changes and the funding, and there is a problem with the government structure. That’s why in July we (CATO and ACTA) pulled our representative(s) from the board of TICO – because they were in a conflict of interest and it was a way since the inception of TICO to maybe keep the industry quiet because the TICO board was only based on industry representation and when you sit at the board, it’s not based on where you’re coming from, it’s based on where you sit…”

(Last month, the government announced that the TICO board would be reduced and re-constituted, a move that Hebért believes will not lessen the industry’s input and which shows “the government, I think, is listening much better to our concerns.”)

So, what’s the problem?

Hebért: “The consultation (with the industry) started a year ago, and it’s at the same time an information session, and we’ve been informed of the direction that TICO wanted to take. And I would say personally it was more of an information session than a consultation (and we won’t see) the outcome of that until it’s published and until it’s approved by… the government, and the minister. So, the next consultation, what will it be? Once the decision is made on a recommendation, how can you reverse? They will try to (implement it) without considering what we are asking for.

“From day one (when I was at TICO) I fought for the consumer protection system myself and the consumer contribution model, but the government considers it as a tax instead of a consumer protection insurance model.”

Hebert adds that CATO made a presentation to the auditor general of Ontario, whose report, he says is not expected until well after TICO’s recommendations to the government, prompting him to wonder “How can they (TICO) make a decision without all the information in place to make the right decision?”

What is CATO doing about it?

Green: “Our role at CATO is advocacy, we just want to be heard, and I think our belief is that if we stay quiet on this, we’re not going to get what we expect for consumers. And we’re aligned: We know that TICO wants consumer protection, and we want consumer protection. It’s just not adequate consumer protection and we don’t think consumers are fully aware of what they are protected for, and that’s why we’re calling for change.”

Why is this change so important now?

Walker: “Nothing has changed in decades. We have been having this conversation over and over again (but) the world has completely changed. So, if nothing’s changed, how can the consumer be better off? We’re dealing with a Travel Act that was written 40 years ago, and all of those caps that I spoke about that were appropriate 40 years ago, what would they be today? And how has the industry changed in terms of all the vertical integration the industry has gone through? – it’s completely different. So, we are determined for sure, like never before, that this is the time that there has to be change. The status quo is not acceptable.”

Hebért: “Consumer protection, I don’t really think it’s a concern for this government. And when they use the reason of the taxing the citizen, it’s a very false myth and reason.”

Walker: “Here’s the thing, we have all of the industry on board. They aren’t advocating getting rid of TICO. We want to work with government, work with TICO, to enhance the consumer protection for Ontarians who book through a registrant. We have industry together on that point (and) usually industry would be the last on board.

“The last part of this is educating the consumer, maybe that’s the way we can force the hand of the government. When consumers begin to care, or feel like they’re being given a false bill of goods or a half truth, then hopefully (the government) will begin to listen.

“But we need to do whatever we’ve got to do, because this is the time. Time will tell whether the government was listening and there’s any change.”

Ed. note: TICO recently stated that it will launch a “broad and comprehensive consultation process” with registrants and stakeholders in the coming weeks about its funding framework and fee model proposals, including the Compensation Fund, and members can expect to receive a package during the first week of October that outlines the proposals that have come out of its review.

The Council further plans to host both virtual and in-person sessions to hear directly from members and to provide an opportunity to share feedback via an online survey.

At ACTA’s Summit last week, association president Wendy Paradis was not convinced on the timing of the consultation and urged travel advisors to attend TICO’s virtual AGM on Sept. 26 to make their voices heard.

“In our experience, when the report goes from TICO to the minister, it is very difficult to change it afterwards,” she said.