Update on ACTA’s lobbying efforts re: Ontario’s TIA
As you know, due to a strong mandate from Ontario members, ACTA has been actively conducting a lobbying campaign directed at the new Ontario government for most of this year, seeking relief from the many financial burdens of the Travel Industry Act and the Travel Industry Compensation Fund.
In the fall of 2018, ACTA and CATO (Canadian Association of Tour Operators) formed an industry coalition to hire a lobbyist to guide their efforts and deliver their concerns to the government. A team of ACTA and CATO senior leaders have 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.
Our lobbying efforts will continue once the Ontario government is back in session and we have strategically decided to send details of our campaign to the trade media, so that all Ontario Travel Agencies are ware of our efforts and support the campaign going forward.
As part of this ongoing campaign, ACTA will be asking members to support a letter writing campaign to their MPPs and the government and will be providing members with a suggested template.
The key messages of our campaign are:
· The Compensation Fund model is outdated and significantly broken.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, making 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.
- The Compensation Fund does not work for consumers. It 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 requesting reimbursement from a travel insurance policy.
- For agencies who are credit card merchants, this has resulted in credit card processors charging travel industry companies much higher merchant fees.
- Ontario must move to a consumer-pay model like the one in Quebec—and in most other jurisdictions in 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.
- The Compensation Fund is also not based on any kind of risk profile. There is no perceived benefit from the Compensation Fund for Corporate Travel Agency clients, yet they pay significant amounts into the Fund.
- The Fund currently sits at more than $23 million but an actuarial study conducted for TICO says the Fund should be at $50 million. If a consumer pay model is not adopted, Ontario travel companies will have to contribute a lot more than they do already.
· ACTA is seeking to reduce the burden of excessive and 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 Travel Agencies.
· After a recent and extensive review of Canada’s financial criteria by IATA, Review Engagements were deemed the highest level of reporting necessary for Canadian travel agencies. We are strongly urging the Ontario Government follow suit.
· ACTA supports the recommendation proposed by TICO that other forms of internally prepared financial statements be considered for small travel businesses with Ontario gross sales of under $2M.
We will continue to keep members updated. Should you have any questions or concerns, please contact Heather Craig-Peddie, Vice President of Advocacy and Member Relations at firstname.lastname@example.org or Wendy Paradis, President at email@example.com.