TICO Responds To Industry Feedback; Phases In Rate Increase
The Board of Directors of the Travel Industry Council of Ontario (TICO) says they have reviewed feedback from stakeholders on the proposed increase to the Compensation Fund Contribution Rate. The Board had proposed increasing the Compensation Fund Contribution Rate from $0.15 to $0.25 per thousand dollars of Ontario sales eff. 01JUL16. But, in response to stakeholder input, the Board has approved a phased-in increase over the next 2 years as follows:
Phase 1 - The Compensation Fund Contribution Rate will increase from $0.15 to $0.20 per thousand dollars of Ontario sales eff. 01JUL16.
Phase 2 - The Compensation Fund Contribution Rate will increase from $0.20 to $0.25 per thousand dollars of Ontario sales eff. 01APR17.
"The TICO Board heard the feedback of registrants" stated Board Chair, Jean Hébert. "We understand that the industry is facing difficult challenges from global economic uncertainties, terrorism and other social unrest, as well as locally from continued fiscal/monetary volatility. TICO does, however, require additional funding to effectively perform its mandate.
TICO acknowledges its fiduciary responsibilities, including a focus on prudent cost management. While revenues are lower, including investment income as a result of lower interest rates, TICO has maintained strong control over costs, and this focus will continue.
By phasing in the increase, some relief will be provided to registrants.
The Board understands the concerns of industry members that the legislation and funding model is dated and needs to be reviewed. Both the Board and Senior Management are committed to continued collaboration with the Ministry to ensure these concerns are understood and considered accordingly".
TICO's CEO, Richard Smart added, "Our goal has been to keep fees to registrants as low as possible while ensuring that TICO has appropriate resources to execute its consumer protection mandate in an efficient and effective manner".
TICO's Rate Review Consultation received 42 responses, including responses from ACTA, CATO, OMCA and the CCTA. TICO currently has 1863 registered entities in the province. The majority of registrants were opposed to the increase for the following reasons:
Travel agencies are experiencing tight operating margins and cannot afford an increase
The amount of the increase was too high.
TICO should be cutting costs and/or charging consumers or other service providers a fee rather than increasing fees to registrants
The legislation and funding model is antiquated and needs reform as it does not reflect the current state of the industry and needs of consumers.