WINTER SUN READY

August 17, 2023

By Kathryn Folliott

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.

“ACTA and CATO have been denied details on the fee mechanism despite a decade of advocating for change,” said ACTA President Wendy Paradis last month. “Both ACTA and CATO have appointees on the TICO board and yet, have been excluded from this information despite numerous requests.”

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 be limited to two Industry Directors involved with the industry, and three Public Directors with no stake in travel.

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 … 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,” she tells Travelweek.

“A TRAVESTY”

An 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