ACTA Seeks Industry Support Ontario Compensation Fund Reform
Bruce Parkinson, Open Jaw
ACTA President Wendy Paradis
ACTA says it has been aggressively conducting a lobbying campaign directed at the Ontario government, seeking relief for Ontario travel agencies from the financial and administrative burdens of the Travel Industry Act and the Travel Industry Compensation Fund.
In fall 2018, ACTA and CATO formed an industry coalition and hired a lobbyist to guide their efforts and deliver their concerns to the government. A team of ACTA and CATO senior leaders has been actively meeting with Ontario government officials since early 2019.
“The message to every government official has been clear – the status quo in Ontario is not effective or sustainable and places an unfair burden on Ontario travel companies, as well as offering very little meaningful protection to Ontario consumers,” said Wendy Paradis, President, ACTA. “We need to adopt a funding model similar to Quebec for funding consumer protection.”
ACTA says the lobbying efforts are ramping up now that the Ontario government is back in session and ACTA wants all Ontario registrants to get involved.
As part of the campaign, ACTA is asking industry members to support a letter writing campaign to their MPPs and the government. Letter templates can be obtained online from the home page atacta.ca or byclicking here.
“All travel agency owners should be paying attention and we need their help at the grass roots level. In our meetings over the past several months, it became clear that many MPPs have never heard of TICO or the Ontario Travel Compensation Fund. We need to get relief for travel agencies from this archaic and inadequate piece of legislation. Reform is essential or travel agencies will just continue paying more and more,” said Paradis.
“Reform is Essential:” What ACTA is telling the government
ACTA describes the Compensation Fund model as “outdated and significantly broken.” It was designed in the 1970s when consumers paid by cash or cheque, before the internet and e-commerce. Today, well over 90% of travel agency transactions are completed using a credit card, and ACTA says that make travel agency bookings a much lower risk.
“It is an unfair financial and administrative burden on Ontario travel businesses, creating a disadvantage for Ontario travel companies and making them uncompetitive in a global market,” ACTA says.
“Consumer protection is confusing and inadequate”
The Fund currently sits at more than $23 million but an actuarial study conducted for TICO says it should be at $50 million. “If a consumer pay model is not adopted, over time Ontario travel companies will have to contribute a lot more than they do already,” ACTA says.
The industry association says the fund model is “confusing, has many limitations and delays before paying and is the payer of last resort.”
“TICO has a policy of forcing the consumer to first request a charge-back if payment was made by credit card-- or request reimbursement from a travel insurance policy. And if the failure is a large one, there is a cap on total payout per failure, so consumers only get a partial payment.”
ACTA says Ontario “must move to a consumer-pay model similar to the one in Quebec—and in most other countries around the world – if the Compensation Fund is to be sustainable and adequate to provide meaningful protection to consumers in the event of travel company failures.”
ACTA says it is also seeking to reduce the burden of excessive financial reporting. Currently, many Ontario travel businesses are required to submit a costly audited financial statement on an annual basis to TICO. ACTA has strongly recommended to the Ontario Government that the requirement of paying for and submitting audited financial statements is an expensive and unnecessary burden on many Ontario agencies.
After a recent and extensive review of Canada’s financial criteria by IATA, Review Engagements – which are much less expensive that audited financial statements -- were deemed the highest level of reporting necessary for Canadian travel agencies. ACTA is strongly urging the Ontario Government follow suit.
ACTA says it also supports the recommendation proposed by TICO that other less expensive forms of internally prepared financial statements be considered for small travel businesses with Ontario gross sales of under $2M.
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.