HAVE YOUR SAY – Should Ontario’s Travel Industry Compensation Fund Be Scrapped?

Open Jaw

There are few people who know the ins and outs of the Ontario Travel Industry Act and the Ontario Travel Industry Compensation Fund better than Richard Vanderlubbe. The president of TripCentral.ca has spent a great deal of his spare time over the past 20 years in volunteer positions on the TICO board.

So it is probably worth sitting up and listening when he says the Fund and its funding model is “broken” and we should “either fix it or get rid of it.”

Vanderlubbe’s frustration around the Travel Industry Act and the Fund was palpable during a meeting with trade media, where he spent three hours tracing the history of travel industry legislation, the development and evolution of TICO and the massive changes to the way travel is bought and sold.

We want to hear your opinions on the Ontario Travel Industry Compensation Fund and the value of the Ontario Travel Industry Act in regulating the industry. HAVE YOUR SAY in the space below. Here are some key points raised by Vanderlubbe:

  • The Ontario Travel Industry Compensation Fund has a payout cap of $5 million per event plus up to $2 million in repatriation fees. A Deloitte study predicts that the failure of a large operator would cost $37-$65 million in claims and repatriation and would result in between 14,000 and 24,000 people stranded in destination.

  • ‘payer of last resort’ for claims concerning travel services purchases through a TICO registrant. Claimants who paid by credit card – approximately 93% today – are told to first ask credit companies for a chargeback.
  • Credit card companies have paid most claims in smaller failures – but they are not legally mandated to do so, and some are writing exclusions for travel services into their terms and conditions. If a large failure occurred, would they pay out?

  • Since its founding in 1988, TICO has taken in $106 million in revenues (fund contributions, registration fees and investment income) and paid out just $14.3 million in Compensation Fund claims.
  • Since 1988, the consumer price index has risen 49.3%. During that same period, TICO salaries have increased by 290% and the rent it pays for offices by $219%. Vanderlubbe isn’t suggesting any malfeasance, just that industry complexity, an increase in government expectations and “mission and vision creep” have resulted in steep cost increases.
  • Despite promising a comprehensive review of the Travel Industry Act, the Travel Industry Compensation Fund and its funding model, the last Liberal government came back with changes that include new provisions for individual registration and mandatory education -- increasing cost and resource expenditure for registrants. The one major thing they didn’t respond to: proposals for changes to the Travel Industry Compensation Fund.

“The worst outcome is the status quo,” said Vanderlubbe, who says contributions to the Fund and the financial requirements under the Travel Industry Act cost TripCentral.ca over $100,000 per year.

“Does a failure have to happen to wake people up? If consumers want protection for their travel investment, great, but it has to be user-pay. Why should travel agents pay for this?”


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