NEW TICO FEES REVEALED, CONSUMERS WON’T PAY
Starting April 1, the Travel Industry Council of Ontario will introduce a new fee structure that it says is more equitable for registrants across the board, but which will see rates for members increase 3.4 percent on average (based on 2019-20 sales). Notably, the new funding model for TICO and the provincial Compensation Fund will not include a consumer pay option.
The province’s regulator has been conducting a framework and fee review for the past year with the aim, it says, of developing “a fair and modern funding model that reflects cost recovery, delivers value to stakeholders, and continues to keep consumer protection at the forefront.”
In October, TICO shared five proposals with industry and conducted a five-week consultation process, which it acknowledges produced both positive and negative feedback.
However, it points out that the final outcome was also predicted on the provincial Auditor General’s recommendation that TICO revise the fee structure to ensure operating costs are sufficiently funded through registration and other fees charged to registrants (i.e. not consumers, which industry organizations like ACTA and CATO are seeking).
To that end, TICO reports the following fee changes will take place:
- Decreased Compensation Fund payments to $0.05/$1,000 from $0.25/$1,000 of Ontario Gross Sales (proposal #1 from consultation). As a burden reduction measure, Compensation Fund assessments will only be due one time per year, payable within 90 days of year-end. Mid-year filings will no longer be required.
- Recalibrated fee bands and a new method for calculating renewal fees (shown below). Ontario Gross Sales (OGS) continues to be the basis for calculating fees (proposal #4 from consultation).
New late filing fees (proposal #5 from consultation)
When will fees change?
If your year-end is on or after April 1, 2024, you will calculate your renewal fee and Compensation Fund assessment based on the new fee model.
- Compensation Fund assessment – $0.05/$1,000 OGS, calculated using the last 12 months of sales.
- Renewal fee based on the new fee bands, calculated using OGS reported on your last financial filing.
- You can estimate your fees using TICO’s fee estimate calculator(note: renewal fees and Compensation Fund assessments are calculated using sales levels from different years). You will continue to receive an invoice for renewal fees approximately 60 days prior to your payment due date.
- Payments are due to TICO within 90 days of year-end and must be accompanied with a Form 1 submission.
If your year-end is on or before March 31, 2024, you will calculate your renewal fee and Compensation Fund assessment based on the existing fee model. You will switch to the new fee model for your 2024/2025 renewal cycle.
- Compensation Fund assessment – $0.25/$1,000 OGS
- Renewal fee based on existing fee bands
- Payments are due to TICO within 90 days of year-end and must be accompanied with a Form 1 submission.
Status of other proposals
As part of the consultation process, TICO made two additional proposals that require government consideration and decision-making:
- Proposal #2 – Remove end-supplier coverage from the Compensation Fund; and
- Proposal #3 – Double the maximum per person Compensation Fund limit to $10,000.
These proposals have been brought forward to government with a request for consideration.
Voluntary consumer pay model
TICO says it understands that industry is looking for added flexibility to recover regulatory costs. 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. The “overwhelming” answer was “no,” says TICO, with registrants stating that any fees passed to consumers would be a competitive disadvantage, an added burden, and potentially cause consumer confusion.
The bottom line
TICO notes that it hasn’t increased its renewal fees since 2011, in spite of a travel environment that has become more complex with the evolution of technology, the post-pandemic environment and the prevalence of fraud.
The new funding model, it says, represents a 3.4% aggregate increase in total fees paid by registrants, based on sales from 2019/2020, adding that 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 says it 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.
More information contact tico@tico.ca or call 1-888-451-TICO (8426).
First published at Travel Industry Today
