Next April, Ontario TICO registrants will see a return to registration and renewal fees that were waived during the pandemic. The question is how much will they be?
Initially the fees will “temporarily” revert to pre-pandemic rates, but after that “all options are on the table” says TICO president and CEO Richard Smart, who reports that the province’s self-regulatory body has begun a comprehensive review of its funding model, which includes maintaining the Compensation Fund for consumers and sets fees for travel agencies and tour operators amongst its many regulatory services.
Smart says “fixing the fund” – considered to be maintained at too high a level by many in the travel industry, and solely financed by the industry – was his first goal when taking the post as registrar eight years ago, but the task was too complex, and the province wasn’t ready.
Now, he says government is “squarely behind” an A-to-Z review of the TICO’s funding framework and the Fund, which will be conducted by TICO management in consultation with Optimus SBR, an Ontario-based consulting firm, with recommendations for TICO’s board of directors expected by the end of the year.
This extensive review follows a 2021 TICO fee review and industry consultation that is being followed up and expanded upon through the prism of the travel industry’s pandemic recovery process.
Smart says a consumer pay model – utilized in other jurisdictions in Canada and the US – will be one option considered, with the implication that fees from industry registrants would be mitigated by the new funding model.
But he’s quick to add that other models will be considered as well, such as a “risk-based” model that would see a flexible fee scale based on the individual risk of the registrant (including business model and history).
The review will include comprehensive consultations with TICO registrants and stakeholders, likely next summer, followed by submission to the Minister of Public and Business Service, leading to a new framework (and timing for a new fee structure) hopefully revealed by Fall, 2023.
Ultimately, TICO says, it is seeking an “innovative model that meets the needs of consumer protection today and the future…” and to further address both registrant fees and the Compensation Fund, the latter currently sitting at $23.5 million.
Smart stresses TICO’s need to return to a self-financed model – a provincial mandate that was temporarily shelved (and supported) by the provincial government during the pandemic when the “the tap was turned off” for most Ontario registrants, who were largely unable to conduct business during travel’s halt.
“TICO was never meant to be government funded,” he says of the reinstatement of fees. (Currently, all registrants with a year-end or six-month period-end on or after Jan. 1, 2023, will have fees owing again starting on April 1, 2023).
Smart acknowledges that it’s too early to speculate whether registrants’ fees will go up or down.
And while many in the industry advocate a consumer pay model, he warns that getting the government to sign off on what is effectively a consumer tax would be a “tall order.”
Similarly, consideration of dumping the Compensation Fund, which is used to reimburse consumers (up to a $5,000 cap, and as a last resort) for registrant or end supplier failure (the latter when purchased through a TICO-registered travel agency or tour operator), may not be the answer either based on some less-than-glowing reports from Australia, which has tried the move.
But he nevertheless notes that all such fundamental questions will be considered as part of an exercise that amounts to “the most significant review in TICO history.”
TICO says registrant input is critical to the process of shaping its future funding model in support of its consumer protection mandate and encourages questions and feedback to be sent to tico@tico.ca.