TORONTO — As the Compensation Fund showdown wages on between ACTA, CATO and TICO, travel retailers are sounding off to Travelweek.

They say they’re in favour of a consumer-pay model for the Ontario travel industry’s Comp Fund, and some had choice words now that simmering tensions between ACTA and CATO on one side, and TICO on the other, have reached a boiling point.

Just over three weeks ago ACTA and CATO temporarily withdrew their appointees from the TICO board – until the TICO AGM this September, or until they were given a copy of TICO’s recommendations to the Ontario government on TICO’s future fee structure and Comp Fund funding. ACTA and CATO have also requested a meeting with Minister of Public and Business Service Delivery of Ontario, Kaleed Rasheed, to discuss the funding model before TICO’s consultation with registrants and stakeholders takes place this fall.

They were the latest moves in a back-and-forth that has erupted over potential changes to the Fund, after TICO announced the start of a comprehensive review back in September 2022. For months ACTA and CATO have been demanding more transparency on potential changes to the Comp Fund model, which they say could impact their members at a time when the industry is still getting back on its feet.

TICO has long maintained that any potential changes to the funding model must be reviewed by the Ontario government first, before they’re made public to anyone – and that includes ACTA and CATO.

Last Friday TICO announced that, per five new orders from Minister Rasheed, TICO will decrease the number of TICO Board members from 11 to 9. ACTA said it was expecting the change.

The new TICO board will have three Industry Directors involved with the industry, and three Public Directors with no stake in travel. The election process will bring in two new Industry Directors, joining a third Industry Director already on the board, whose term continues until 2024. TICO notes that the board composition will be 3/3/3 – Industry, Public, Minister’s appointees.

According to the four other orders from Minister Rasheed, TICO must “ensure all Board members possess a positive orientation for proactive consumer protection initiatives.”

TICO must also “ensure no more than 34% of the members of the board are drawn from the travel agent and travel wholesaler industry.”

TICO also must establish a nominations committee with requirements around eligibility criteria for nominated Board members.

Finally, TICO must establish an industry advisory council, “comprised of members representing the interests of travel agents and travel wholesalers to report to and advise the board.”

According to TICO, these changes will help enhance consumer protection, enhance accountability for the sector; present an opportunity for TICO’s board to lead in governance best practices, mirroring the recommendations given by the Auditor General of Ontario to other Ontario regulators; and provide a forum for industry to identify issues and provide advice to TICO’s board.

“While TICO’s existing board structure has served the organization well for many years, this governance change brings added balance to the board and reflects best-in-class governance practices,” said TICO CEO Richard Smart. “This change allows for a more diverse range of voices to actively contribute to TICO’s consumer protection mandate, while still ensuring the industry has a strong voice at the table.”

“THE LESS GOVERNMENT, THE BETTER”

When it comes to the Comp Fund, TICO has always said all options are on the table, from a risk-based funding model, to a consumer co-pay funding model, to no Fund at all.

The future of the Fund, and what form it will take, has been up for debate for many years. And just when it seems change is in the cards, along comes a new provincial government.

Travel retailers Travelweek spoke to are in favour of a consumer-pay model like in Quebec. “I absolutely believe it should be a consumer pay model, we should not pay into a system that really only … benefits the public and never ever … benefits the trade,” says Gilbert Manza, owner, Executive Travel Services.

He adds: “I’m sure that most in our industry would like to see TICO disbanded all together and have a different model. It’s a bureaucratic mess … [the system is] broken and needs to be either fixed to be fair to the industry or just dismantle it and let the industry police itself. The less government, the better.”

Christine James, Vice President, Canada, Travel Leaders Network, says she favours a consumer-pay model too, and she shares ACTA’s concerns. “Like most retailers, I’m in support of a model similar to the Quebec one.”

James notes that “for obvious reasons, it’s far less of a financial impact for the consumer to pay the fee on their trip than it is for the retail agencies to take on the burden of every transaction they make on behalf of their entire clientele.”

“A TRAVESTY”

One industry insider says that what the government and TICO are doing is “a travesty. I am shocked that a conservative (and supposedly pro-business) government has done this. And to what end? Where is the huge consumer problem? Where are all the bankruptcies? And why won’t they allow consumer pay like Quebec so that then there could be REAL consumer protection, and not the one they have now that is all funded on the backs of travel companies? It stinks to high heaven.”

The insider is also concerned about regulatory creep, with more red tape and bureaucracy: “This basically is back to before we ever had TICO and the government ran it all.”

TICO plans to host a webinar in the coming weeks to provide more information about how the Minister’s orders will be implemented and provide an opportunity for registrants and stakeholders to ask questions. “More information will be shared soon,” says TICO.

Meanwhile TICO is making the necessary by-law changes to implement the five orders, which will be presented at its AGM, scheduled virtually for Sept. 26, 2023 at 5 p.m.

TICO adds that similar governance changes have been implemented at other Delegated Administrative Authorities, including the Ontario Motor Vehicle Industry Council (OMVIC), Home Construction Regulatory Authority (HCRA) and Tarion.

AUG. 21 DEADLINE

ACTA notes that the deadline to apply for the industry position on new TICO board is Aug. 21.

“Regardless of this change in board composition, it is important that the voice of the industry is heard by TICO and the Ontario government – and to this end, there will be two industry directors on the new board and there will be an industry advisory council formed,” says Paradis. “Anyone interested in being considered for the TICO board must apply by August 21, 2023.”

Paradis adds that ACTA is still in the dark about recommendations for any changes to the TICO fee structure and the mechanism for funding the Comp Fund.

“The Ontario government continuously ‘says’ it is committed to red tape reduction – a reduction in administrative and financial burden on Ontario business. They say…Ontario is ‘open for business’,” said Paradis in her statement earlier this week.

“The message that ACTA has delivered to government is clear. The industry cannot and should not be bogged down by unnecessary administrative burden to run a travel business in Ontario. The industry cannot and should not be required to financially support an ever-expanding regulator with increased unnecessary legislation and fees.

“Our message has been consistent. If the Ontario government is committed to a Traveller Consumer Compensation Fund in Ontario to cover potential bankruptcies, the current compensation should be fixed, including … that the beneficiary of the fund – the travel consumer – should be the contributor to that Fund as is the model in Quebec.”

Paradis adds that the industry “is recovering from a catastrophic global pandemic and should not and cannot support unnecessary administrative and financial burden.”

This article originally appeared in the Aug. 17, 2023 issue of Travelweek. To read the issue, click here.