After conducting a comprehensive funding framework review, including the Compensation Fund, the Travel Industry Council of Ontario (TICO) has released its proposals for a future funding model. They include lower annual fees for most members (but higher for some others), the removal of end-supplier coverage of airlines and cruise ships, and – controversially – no consumer pay model.
Also notable is a doubling of consumer coverage to $10,000.
And while tourism organizations like ACTA and CATO have actively lobbied against some of the proposals, TICO CEO president and Richard Smart says they are still subject to industry input, which it will get at a series of in-person and virtual consultation sessions (listed below) taking place over the next month. TICO members can also make their views known via an online survey posted on TICO’s website.
ACTA and CATO have suggested that seeking industry input after the proposals have been already formulated (and sent to the provincial government for review) are extremely unlikely to change, Smart told Travel Industry Today that’s not necessarily so and that a “course correction” is entirely possible if TICO’s proposals garner substantial disapproval.
He notes that the process in the lead-up to the formulation of the proposals has already been exhaustive, stating: “Throughout the past year, we researched other comparable regulators and listened to insights from consumers, industry, and stakeholders, and have developed a proposal that reflects what we heard.
“Our approach carefully balances the needs of consumers and of industry, while also being pragmatic. The proposal we’re sharing reflects TICO’s commitment to develop a fair and modern funding model that reflects cost recovery, delivers value to stakeholders during this time of industry renewal, and continues to keep consumer protection at the forefront.”
For registrants, most can expect a modest adjustment to their total fees payable to TICO, says the organization, with 35% of registrants likely to see their total fees (combined registration renewal fees and Compensation Fund payments) decrease.
With the aim of creating a fairer system, higher earners will see increased payments, balancing out to a 3.6% average aggregate rate of increase in total fees paid to TICO by registrants, based on historical Ontario sales.
The rise in fees will help close the long-standing funding gap for TICO, with Smart noting that fees have only been hiked twice in the past 26 years, the last time in 2011. “We have not been aggressive, exorbitant or unfair with our fees,” he says.
The five key proposals TICO is presenting to stakeholders during the upcoming consultation sessions include:
Compensation Fund:
1.Decrease Compensation Fund payments to $0.05/$1,000 from $0.25/$1,000 of Ontario Gross Sales.
2. Remove non-contributing end-supplier coverage (airlines and cruise lines) from the Compensation Fund, subject to government consideration and decision-making.
3. Double the maximum Compensation Fund payment per person to $10,000 from $5,000 for consumers, subject to government consideration and decision-making.
Registration Renewal Fees:
4. Recalibrate registrant renewal fees, with modernized and more equitable fee bands.
Other:
- Institute new late filing fees to encourage timely submission of required documentation and ensure efficient processing.
Proposals 1, 4 and 5 have an anticipated implementation date of April 1, 2024, but Proposals 2 and 3 are subject to government consideration and decision-making and are not within TICO’s authority to actually implement at this time, says Smart.
But if the proposals are not approved by the government (or change as a result of the consultation process) TICO says it may need to reassess its fees.
Consumer pay
Notably missing from the list of proposals is a recommendation for a consumer pay model like Quebec, which has been sought by some in the Ontario industry. Smart discusses why in a YouTube video (linked below) below and cites greater regulatory burden, and greater risk of fraud and double-dipping as some of the reasons TICO did not choose to recommend such a model, at the same time saying the situations in the two provinces are like “apples and oranges.”
See the video HERE.
End user coverage
Another proposal that bears watching is the recommendation that non-contributing end suppliers, such as airlines and cruises, not be covered by the Compensation Fund, wherever the point of purchase is. Currently they are covered (though capped) if booked by consumers through a TICO member, but not if booked direct (examples include Crystal Cruises, or earlier, Canada 3000).
Smart maintains that there are plenty of other consumer protection options available in the marketplace (such as travel insurance and credit card coverage) and that the incidence of large end-supplier failures over the years has been small.
See the proposal
TICO has developed a detailed guide of each proposal, along with key insights and survey data from the funding framework review, which can be found HERE.
And to estimate fees payable to TICO (combined registration renewal fees and Compensation Fund payments) under the proposed funding framework, click HERE.
Consultations
TICO is conducting a comprehensive consultation with registrants and stakeholders about the proposals. There are two ways to get involved:
- Complete an online survey and provide your written feedback
Take the survey HERE.
The survey will remain open until Friday, Nov. 10 and will take approximately 10-15 minutes to complete.
- Attend a virtual or in-person focus group
- 12 – TICO office, Mississauga, Ont.: 10 a.m.-12 p.m.; 1:30-3:30 p.m.; 5-7 p.m.
- 16 – Virtual (Zoom): 12-2 p.m.
- 24 – Hilton Garden Inn Ottawa Airport: 9-11 a.m.; 12-2 p.m.; 4-6 p.m.
- 27 – Virtual (Zoom): 10 a.m. – 12 p.m.
- 30 – Virtual for Northern Ontario registrants (Zoom): 2-4 p.m.
- 2 – Waterloo, The Inn of Waterloo & Centre, Waterloo, Ont.: 9:30-11:30 a.m.; 1-3 pm; and 5-7 p.m.
- 7 – Virtual (Zoom): 3-5 p.m.
To register for a session visit TICO’s website.
Timeline
The timeline for the fund review is:
Oct. 5 – TICO announced proposals and launches consultation period
Nov. 10 – Consultation period concludes
Dec. 31 – Final proposals submitted to government
April 1, 2024 – Anticipated effective date for proposed changes #1, #4 and #5
In conclusion, Smart says, “It’s changing times, our mandate here from day one was to try to address the issues in the funding model, including all aspects, and we think we’ve come up with a fair approach to it. The consultations will either confirm that or not.
“We have to take all the feedback, and there’s a lot of feedback, and synthesize that into a document that’s shared with the board of directors (of TICO) and then share it with the ministry – and I’ve committed to sharing the good, the bad, the ugly. Hopefully more good than bad.”