Motion for TICO’s AGM calls for consumer contribution protection ‘insurance’ system for Ontario travel industry

TORONTO — The Canadian Association of Tour Operators is calling for a legislated consumer contribution protection ‘insurance’ system for Ontario’s travel industry, “for a meaningful Compensation Fund, without all the current event caps, to [replace] the proven inadequacies of the current Compensation Fund.”

In a statement issued this morning, CATO outlined its position on the Comp Fund review, including its motion for TICO’s Sept. 26 AGM.

CATO’s 10-point motion argues that the current funding model for the Comp Fund is “outdated” and “unsustainable for Ontario’s travel industry in a global travel market.”

Brett Walker, TICO registrant and chair of CATO, signed the motion. The 10 points are laid out below, in their entirety.

TENSE BACK-AND-FORTH

As reported in the Aug. 17 lead story in Travelweek, the future of the Fund has been up for debate for many years. CATO’s statement is the latest in a tense back-and-forth between CATO, ACTA and TICO over the review process, with CATO and ACTA demanding more transparency. TICO announced the start of a comprehensive review of the Fund back in September 2022, saying that all options were on the table, from a risk-based funding model, to a consumer co-pay funding model, to no Fund at all. TICO has also sent reminders that any potential changes to the funding model must be reviewed by the Ontario government first, before they’re made public.

Last month ACTA and CATO temporarily withdrew their appointees from the TICO board – until the TICO AGM, 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 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. Minister Rasheed’s five orders for TICO include a reduction in the board (from 11 members to nine). The new TICO board will have three Industry Directors involved with the travel 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. The board composition will be 3/3/3 – Industry, Public, Minister’s appointees. There will also be an Industry Advisory Committee.

“UNACCEPTABLE CONFLICT-OF-INTEREST”

CATO issued this statement this morning:

“CATO welcomed the decision by the Ontario Minister of Public and Business Service Delivery, the Honorable Kaleed Rasheed, to make significant changes to TICO’s governance, as announced in the five Ministerial Orders issued on August 11.

“CATO also applauds the Minister’s declaration to place consumer protection at the heart of TICO’s mandate. Let’s hope that concrete improvements will be made as soon as possible to modify the funding rules for TICO and the Consumer Compensation Fund. The industry can no longer accept to bear the increased costs of an inadequate protection system for both the consumers and for the burden it imposes on the industry.

“We are also very positive about the Minister’s decision to create an Industry Advisory Council. We are ready to offer our cooperation for the rapid implementation of this new council, which will provide a more effective means for the industry to share its concerns and challenges for the future of travel businesses in Ontario.

“On July 25th, in a joint position, CATO and ACTA withdrew their four appointees from the TICO Board of Directors in protest at TICO’s inadequate consultation process on the funding of this regulatory body and on industry funding of the Travellers Compensation Fund.

“The other fundamental reason for the withdrawal was to put an end to an unacceptable conflict-of-interest situation that had gone on for too long and was becoming counterproductive on issues fundamental to the entire travel industry in Ontario.

“The changes introduced by the Minister finally resolve this situation. What remains now is to continue working on improving the consultation process as well as fixing the major issue of funding TICO and the Travelers’ Compensation Fund.

“In fact, all industry members will be asked to vote in favor of a motion to be presented by a registered member at TICO’s Annual General Meeting on September 26.”

NEW MOTION FOR TICO AGM

As CATO’s statement notes, the following motion was submitted to the Secretary of TICO on Aug.11, 2023, as it is to be made at the 2023 Annual Meeting [on Sept. 26].

TITLE: On behalf of The Travel Industry in Ontario, the Ontario registrants, we require a fundamental change in the Funding framework of TICO and ask for a legislated consumer contribution protection insurance system to provide meaningful and sustained protection to Ontarian travellers.

This motion is brought before the Annual Meeting of the members of the Travel Industry Council of Ontario (TICO) to be held on Tuesday, September 26, 2023, for its consideration and approval.

Whereas TICO (the Travel Industry Council of Ontario) has launched the largest review of its funding framework and fee structure since inception;
Whereas TICO has proceeded with consultation through a third-party consultant, without providing all the relevant information and has rejected out of hand a fundamental change in the funding of the Compensation Fund to introduce a meaningful and sustained protection system including a legislated consumer contribution protection insurance as requested by the industry for many years;
Whereas both ACTA and CATO have long insisted for a new funding model that will provide a fairer playing field for Ontario travel and tourism businesses and meaningful protection to the consumer;
Whereas TICO, under the control of the Minister of Public and Business Service Delivery, is still ignoring the industries’ request;
Whereas the Funding Review process doesn’t allow any consultation with all the proposed recommendations before it receives Minister’s approval, and preventing to take into consideration the Associations’ (CATO and ACTA) proposal;
Whereas the TICO Consumer Compensation Fund, as it is structured today, is significantly broken. It was designed in the 70s in an era of a cash and cheque economy, and before the internet, e-commerce and where more than 90% of travel purchases are transacted using credit cards;
Whereas the outdated model is unsustainable for Ontario’s travel industry in a global travel market, creating a disadvantage for Ontario travel companies making them uncompetitive;
Whereas the industry is also recovering from a catastrophic global pandemic and adding new financial and administrative burden is not acceptable;
. Whereas if there had been no federal and provincial financial assistance, there would have been countless bankruptcies of our travel businesses in Ontario, and a total disaster for TICO’s underfunded compensation fund;
Whereas in Québec, the consumer benefits from that protection for an insignificant fee;

It is proposed to this Assembly that: A legislated consumer contribution protection ‘insurance’ system be instated, for a meaningful Compensation Fund, without all the current event caps, to [replace] the proven inadequacies of the current Compensation Fund.

Proposed by: Brett Walker, TICO registrant