Photo: Richard Smart, President and CEO, TICO

TICO has posted its Notice of Fee Change, outlining how new fees will be implemented starting this spring.

The Notice of Fee Change can be viewed here, with full details on the new fee bands and renewal fees.

TICO first signalled its intention to decrease Comp Fund payments, modernize registrant fee bands, bring in late filing fees and more back in October 2023, as part of TICO’s list of 5 proposals put to the industry following a lengthy funding framework and fee review.

A month-long consultation period took place through early November, with opportunities for the industry to share their feedback online, in-person in cities across Ontario, and virtually via Zoom meetings.

Says TICO in its Notice of Fee Change posting: “While registrants’ feedback on the five proposals was generally positive, we did also hear from registrants who had concerns about TICO’s approach. We thoroughly considered all feedback when deciding how to move forward and will continue to use the input we received as we consider any future changes.”

A summary of the consultation feedback can be found in the most recent edition of TICO Talk.

In December 2023 TICO was taken to task in an audit from the Office of the Auditor General of Ontario. In yesterday’s posting TICO says: “An important consideration is that TICO’s new funding framework and fee structure addresses the Auditor General’s recommendation that TICO revise its fee structure to ensure operating costs are sufficiently funded through registration and other fees charged to registrants.”

The audit noted that using TICO’s own recent estimate for its updated fee model for allocating TICO’s expenses to the Comp Fund, since its inception in 1997 TICO had used an estimated $31 million from the Fund to cover its own operating costs.

TICO has long maintained that the recalibration of registrant renewal fees with new fee bands aims to address TICO’s long-standing funding gap that led TICO to use Fund monies for its operating costs, an ongoing concern for TICO and the industry.

Feedback on point of-sale consumer pay model 

Also in yesterday’s Notice of Fee Change posting, TICO addressed the issue of a voluntary point-of-sale consumer pay model.

Other Ontario regulators, including OMVIC, have implemented voluntary approaches where the industry has the option to pass on certain regulatory fees to consumers.

Many in the Ontario travel industry have advocated for a consumer-pay model similar to Quebec’s. TICO CEO Richard Smart, in a video message in October 2023, said that “while Quebec’s model seems simple on the surface, each consumer is required by law to pay a consumer protection fee. The operational side of this is a massive challenge.”

The point-of-sale consumer pay option was one potential compromise.

“As part of the consultation, TICO asked registrants if there was an interest in a voluntary consumer pay model, where regulatory fees would be disclosed and passed through to consumers at the point of sale,” said TICO in yesterday’s posting.

“Overwhelmingly, we heard that registrants were not interested in this option. Registrants expressed concerns that any fees passed to consumers would be a competitive disadvantage, an added burden and potentially cause consumer confusion.”

Fee changes-why? 

TICO also addressed its reasons for the fee changes. Here’s what TICO had to say …

“TICO has not changed its renewal fees since 2011. However, the travel environment has become more complex with the evolution of technology, the post-pandemic environment and the prevalence of fraud.

TICO runs a lean operation and in the past 10 years, expenses have grown by an average of approximately 3% each year. TICO has done its best to keep expenses reasonable while adapting to these new demands. During this time, inflation has accumulated at a rate of approximately 30% (according to the Bank of Canada).

TICO’s new funding model represents a 3.4% aggregate increase in total fees paid by registrants, based on sales from 2019/2020.

“While some registrants will see fee increases higher than this rate, the new fee bands are more equitable at distributing fees across all registrants. Additionally, there is a minimum cost to regulating a registrant of any size, which the new minimum fee of $750 addresses.

“TICO is open to revisiting the lowest fee band within 1-2 years of implementation to better understand the impact on registrants, to consider the transition to an enhanced risk-based model, and the broader recommendations contained in the Auditor General’s report.”

Source: Travelweek