TORONTO — CATO is calling on the government to take swift action following an audit of TICO by the Office of the Auditor General of Ontario (OAGO).

As reported by Travelweek on Dec. 7, the 51-page analysis included several key takeaways, namely that “TICO’s cost to administer the Compensation Fund may outweigh the benefits it provides to consumers.”

TICO (Travel Industry Council of Ontario) was first created by the Ontario government in 1997 to regulate travel agents and travel wholesalers in the province. It is responsible for administering and enforcing the Ontario Travel Industry Act, 2002, as well as managing the Travel Industry Compensation Fund, which is used to reimburse eligible customers who purchase travel services through TICO registrants and subsequently suffers financial losses due to the bankruptcy or insolvency of a registrant or an end supplier airline or cruise line.

CATO has long voiced its frustrations over the 40-year-old Travel Industry Act, which it says no longer reflects the Ontario travel industry today. The organization, along with ACTA (Association of Canadian Travel Agencies and Travel Advisors), is in favour of a consumer-pay model to fund the Compensation Fund, similar to that in Quebec. Currently, the burden of funding the Compensation Fund lies with Ontario’s registered travel agents and travel wholesalers.

CATO’s Executive Director, Jean Hébert, issued a response following the release of OAGO’s audit. His response in its entirety is as follows:

“CATO acknowledged the findings published by the Office of the Auditor General of Ontario Report, “value-for-money” audit of the Travel Industry Council of Ontario (TICO).

“We can be optimistic, but we also need to be realistic about the next steps, and CATO will have to continue its representation to promote a more effective traveller protection system, if it is confirmed there is still a need for it, and to advocate stopping constant additional administrative and financial burden on the shoulders of the travel businesses in Ontario. We create jobs, we provide a positive impact in our economy, but the more fees (taxes) we pay to fund a para governmental organization, the more it reduces our capacity to invest in the future of our industry.

“First and foremost, the findings by OAGO about the Compensation Fund will require a quick response, once and for all, by the government of Ontario, based on their level of concerns about consumer protection.

“The AG found that “The Cost to Administer the Compensation Fund May Outweigh the Benefits It Provides Consumers”. An effective consumer protection system for a real consumer protection must include a Compensation Fund, as stated by TICO that “The Compensation Fund is at the foundation of TICO’s consumer protection framework”. However, it must be fully funded by the travellers and, even maybe, administered independently from TICO. Without those improvements, there is currently no value, and we will support its abolishment.

“The other recommendations by OAGO provide essentially to TICO and the ministry guidelines to improve efficiencies in TICO’s processes and for the ministry to exercise more control on TICO.

“What will be the cost of implementing those measures of control additional, for example: a mandatory code of ethics for registrants and individuals and discipline committee to enforce it, implementing new regulations, managing individual travel salesperson, disciplinary process, an enforcement system, a risk rating system, more inspection to oversee registrants, more data collection, tracking information, monitoring, a better system for complaints handling, and overall, additional red tape for the registrant, including non-financial factors and an obligation for the registrants to become an agent of promotion for TICO by handling their brochures and being able to explain what is TICO’s for. If TICO couldn’t be efficient in the past, in order to respond to the OAGO’s recommendations, there will have a cost that the industry will have to pay for once again. In fact, OAGO report supports TICO’s plan for expansion of its activities in terms of more regulations and more control over the industry.

“Of all recommendations contained in the report, we fully support the Recommendation 16 for a more comprehensive review of the Travel Industry Act (TIA).

“Now, the ball is not only in TICO’s court. It is especially a responsibility of the Ontario government to make the right decision that will address the real issues once and for all, and to stop putting band aids and to react on a piece by piece to a bigger problem. We hope that the OAGO report will be the sparking plug to go in the right direction.

“We still hope, as we have requested on many occasions, to have an opportunity of a conversation with the Minister; this is what government should at least be able to do in a democratic society, giving the possibility to expose their concerns to the decision maker. We want to explain our concerns about the next steps and about the future of a system that needs to be aligned with an environment in constant change.

“In conclusion, we do not think that the best decision is the one that Australia has made in 2014 to repeal the country’s travel seller regulation, but we support changes that are oriented through the future assuming that we live in “a province that is opened for business” and where the consumer is protected against all forms of wrongdoings. We appreciate OAGO’s statement related to opportunities to improve efficiency and economies of scale by having a regulator that oversees more industries like other jurisdictions. That needs a serious reflection.”