Travel Industry Council of Ontario AGM MINUTES - SEPTEMBER 27... · tico agm – toronto congress ctr –september 27, 2011 minutes of the annual general meeting of the members of

TICO AGM – TORONTO CONGRESS CTR –SEPTEMBER 27, 2011

MINUTES OF THE ANNUAL GENERAL MEETING OF THE MEMBERS

OF THE TRAVEL INDUSTRY COUNCIL OF ONTARIO

Tuesday, September 27, 2011

Toronto Congress Centre

The meeting was called to order at 4:14 p.m. Michael Janigan welcomed everyone to the fourteenth Annual General Meeting (AGM) of the Travel Industry Council of Ontario (TICO) and noted that the meeting was being webcast. 1. Introductions

Michael Janigan introduced himself and advised that he is the first non-industry Chair of the TICO Board of Directors. He noted that he is one of the five Minister’s appointees on the Board. Michael Janigan introduced the current members of the Board of Directors and TICO’s Management Team.

2. Proof of Notice of Meeting

Michael Janigan announced that he had been provided with a Certificate of Service of Notice from Tracey McKiernan, Corporate Secretary, indicating that notice of the meeting was properly given.

Appointment of Scrutineers Michael Janigan asked for a motion to nominate eight scrutineers. Scrutineers are responsible for counting the number of votes. Kathleen Warren moved to appoint Fred Angus, Jana Arthur, Maria Descours, Paula Ferreira, Timothy James, Eric Neira, Tina Shewchuk and Sanja Skrbic as scrutineers for the meeting. Seconded by Patricia Jensen.

MOTION CARRIED


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Determination of Quorum

Michael Janigan requested that all voting members raise their voting cards. He advised that the quorum for the meeting is twenty members. He noted that there were at least twenty members present and advised that there was a quorum in accordance with the TICO by-laws. Michael Janigan declared the meeting properly constituted. Rules of Procedure

Michael Janigan reviewed the Rules of Procedure with the attendees. He asked whether attendees had any questions in relation to the Rules of Procedure.

Attendees posed no questions.

3. Minutes of the Annual General Meeting of the Members held on November

1, 2010 Michael Janigan advised attendees that the bags they received on the way into the meeting contain a copy of the minutes from the Annual General Meeting that was held on November 1, 2010. Michael Janigan asked whether anyone had any discussion points arising from the minutes.

No issues were raised by attendees and no questions were posed.

4. Reports (a) Report from the Chair

Michael Janigan advised that his Report would touch on various issues from the past year, however, to begin, he wanted to provide some background regarding the authorities under which TICO operates to help stakeholders better understand TICO’s role and the constraints under which it operates. Overview of the Authorities under which TICO Operates

Michael Janigan advised that some registrants tend to view TICO as an enforcement agency, an advocacy group or a government entity. While there are elements of truth in each of these views, as TICO wears many hats, none of them captures what TICO is as an organization. Michael Janigan explained that TICO operates under a delegated authority model, which is very unique. He noted that TICO has a number of obligations that it must meet and interests that it must balance.


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He noted that TICO is not government. It is a non-profit corporation. The objects for which TICO is incorporated are set out in its Letters Patent. The main objects being to administer the Travel Industry Act, 2002 and the Regulation in order to maintain a fair and informed marketplace and to enhance consumer protection. As a corporation, TICO has obligations under corporate law.

Michael Janigan advised that TICO is also a membership based organization with by-laws that set out additional rules regarding its operation. He noted that members have both rights and obligations pursuant to those by-laws.

Michael Janigan explained that TICO has been delegated the responsibility by the Ontario government to administer the Travel Industry Act, 2002 and the industry financed Compensation Fund. There is an Administrative Agreement between TICO and the government setting out the terms of the delegation. Pursuant to that Agreement, there are many obligations with which TICO must comply. Michael Janigan stated that one of the motions that would be raised later in the meeting relates to how registrants can submit complaints if they have issues with TICO. Michael Janigan advised that pursuant to the Administrative Agreement, TICO is required to have a system for responding to and assisting in the resolution of complaints received related to the Act or the administration of the Act. Michael Janigan explained that TICO has a mechanism to address service complaints with TICO. He advised that consumers or registrants with complaints about TICO’s activities can contact the Complaints Committee of the TICO Board. The Complaints Committee’s mandate is to review and resolve, as appropriate, complaints against TICO, which are based on dissatisfaction with the quality and fairness of its services to registrants and consumers. He added that the Committee may make recommendations with respect to TICO’s complaint handling procedures in response to reviews of particular complaints. Michael Janigan advised that registrants may submit complaints to TICO by fax, mail or e-mail. He advised that more information can be obtained on the website or by calling TICO’s office.

Michael Janigan advised that as a Regulator, TICO has responsibility to ensure that registrants comply with the Act and Regulation. However, while TICO has a compliance function, the relationship need not be adversarial. TICO’s goal is not to put registrants out of business. It wants to ensure that registrants comply with the rules for the betterment of the whole industry. Where possible, TICO tries to work with registrants to bring them into compliance with the legislation.

Michael Janigan noted that when dealing with registrants, TICO staff is expected to be courteous and respectful, consistent with its Employee Code of Ethics. All TICO employees are expected to adhere to the fundamental principles of ethical service outlined in the Code. The Executive Committee of the TICO Board reviews the Code annually.


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Michael Janigan stressed that while TICO has a role to play in managing the industry, it does not have the authority to make laws. That authority remains with the provincial government. He explained that as an administrative authority, TICO is subject to the Safety and Consumer Statutes Administration Act, 1996. That Act confers certain powers and imposes certain duties upon TICO. Section 8 (5) (a) of the Safety and Consumer Statutes Administration Act, 1996 provides that the board of a designated administrative authority shall suggest to the Minister amendments to Acts and regulations made under Acts that it considers would contribute to the purpose of the designated legislation. Therefore, while the Board has the ability to make recommendations to the Minister, it also has an obligation to suggest amendments that it considers would contribute to the purpose of the Act, namely, consumer protection.

Michael Janigan clarified that it is for that reason that the TICO Board is not always able to advocate for the changes that the industry might want. The TICO Board has to balance competing interests and ultimately be satisfied that anything it puts forward will not diminish consumer protection. The Board has to ensure that it does its due diligence and carries out its delegation in accordance with law.

Michael Janigan advised that the TICO Board is willing to look at issues of concern to the industry and noted that one of the reasons that TICO consults with the industry is because it wants to have fair, practical, workable rules that the industry can comply with. It does not want to unnecessarily burden business.

Michael Janigan encouraged registrants to raise issues of concern with TICO. He advised that registrants can write to TICO’s Legislative and Regulatory Review Committee with respect to issues of concern with the legislation. Michael Janigan stated that the Committee does look at registrant issues and some of the issues do result in proposals to the government recommending changes to the Act or Regulation. He added that trade associations and registrants are also free to make recommendations for change directly to the Ministry of Consumer Services. Ultimately, it is the government that has the ability to change the law.

Legislative and Regulatory Changes

Michael Janigan advised that in the last fiscal year, there were a number of changes to the Act and Regulation. At last year’s AGM, TICO discussed the regulatory changes that came into force on July 1, 2010. Michael Janigan noted that there have also been several legislative changes:

The Open for Business Act, 2010 removed the restriction against registering non-share capital corporations.

The Good Government Act, 2010 amended the definition of “travel services” to clarify who needs to be registered under the legislation. Section 24 (3) of the Travel Industry Act, 2002 was also amended. The Registrar is no longer required to get the approval of the Director to


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require a registered travel agent or registered travel wholesaler to file a financial statement under Section 24 of the Act.

Fee Increase

Michael Janigan advised that in May of 2011, the TICO Board approved a Registration and Renewal Fee Increase, which came into effect on July 1, 2011. Michael Janigan stressed that the TICO Board did not make the decision to increase fees lightly. He noted that the Board appreciates that times are tough and that some travel businesses face challenges. He stated that the Board does not want to unduly burden registrants; however, in order to cover the costs to run TICO, it was necessary to increase fees. Michael Janigan stated that the Board recognizes the need for TICO to be fiscally responsible and to manage its resources efficiently. He advised that the Board regularly reviews TICO’s financial position, its budget, its revenue and expenses, and costs are always carefully considered. Under its mandate from the government, TICO must be vigilant in monitoring the financial health of its registrants. It must also ensure consumer protection and make consumers aware of its services.

Michael Janigan advised that TICO currently spends $500,000 a year on consumer awareness. While this may sound like a lot of money, it does not go far when trying to reach a wide, provincial audience. Reducing the amount allocated would significantly affect TICO’s ability to maintain and build on current awareness levels. He added that in a highly competitive marketplace, where operators from outside the province can easily compete with Ontario registrants via the internet, the Board believes that it is more important than ever to get the message out that consumers should book with TICO-registered agencies because of the high standards and consumer protection available.

Michael Janigan emphasized that registration and renewal fees are distinct from Compensation Fund contributions. While both the Compensation Fund and TICO’s operations are funded by TICO registrants, they are separate revenue streams. Claims are paid out of the Compensation Fund, not from TICO’s operating budget. Therefore, fees are not increased to cover claims resulting from registrant or end supplier failures.

Michael Janigan advised that TICO is transparent in its financial reporting. The costs to run the program are known and reported. TICO’s audited financial statements are made available to registrants and the public. TICO’s Revenue and Expense Forecast shows that, even with the current Registration and Renewal Fee Increase, the TICO Asset is projected to decline over the next few years. Michael Janigan stated that the TICO Board will be considering various options to address this situation. Both cost cutting measures and potential fee adjustments will need to be considered.


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Michael Janigan noted that TICO’s Revenue and Expense Forecast also projects that the Compensation Fund will continue to decline. By 2013/2014, it is projected that the Fund level will fall below the desired range of between $20 million and $25 million recommended in the last Actuarial Report, which was prepared by Eckler Partners Ltd. in 2006. The TICO Board is considering how to ensure that the Compensation Fund is adequately financed to protect consumers.

Michael Janigan advised that the TICO Board recognizes that there are currently some gaps in the coverage provided by the Compensation Fund. Further, there are concerns that in the event of the failure of a large vertically integrated company, the current scheme may not be adequate to protect consumers. As a result, the Board would like to enhance the protection provided by the Compensation Fund to better protect the travelling public. As it currently stands, the Compensation Fund is entirely financed by travel agents and travel wholesalers. If coverage were to expand, this may necessitate increased contributions by registrants. In light of the fact that many travel agencies are already operating on slim margins, TICO is investigating alternative means of paying for the expanded coverage.

Michael Janigan noted that one of the options that TICO is exploring is whether consumers would be willing to pay for enhanced Compensation Fund coverage or whether it might deter them from dealing with TICO-registered agencies. The end goal for TICO is to ensure that any change made to the Compensation Fund would be beneficial to consumers and not harm travel business in Ontario. The TICO Board would like to have coverage that is comprehensive, easy to understand and affordable for stakeholders.

Michael Janigan advised that TICO hired Ipsos Reid to conduct some public opinion research to evaluate receptivity and response to the enhanced coverage and alternate funding model being considered. In April of this year, TICO held four focus groups (2 groups in London and 2 groups in Mississauga) to gauge initial reactions to TICO’s ideas and to aid in the design of a quantitative survey that could be conducted with a more robust and representative sample of the population. In June of this year, TICO conducted a survey of 826 Ontario residents via the Ipsos Reid online panel. The results of both the focus groups and the online survey are being reviewed by the TICO Board and will be used in developing any future proposals for reform.

Michael Janigan advised that some concerns have been raised by registrants that a consumer pay model may be problematic for travel agencies selling corporate travel. There is concern that corporate clients may avoid dealing with TICO registered entities if such a proposal were implemented. Michael Janigan advised that the TICO Board will be releasing a Corporate Travel Survey to all registrants in order to get feedback on this issue. All registrants that sell corporate travel are asked to respond to the survey. He encouraged registrants to provide their views on this issue. Michael Janigan advised that TICO will also


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be sending a survey to decision makers at some large corporations to determine their views on an alternate funding model.

Michael Janigan reported that the TICO Board still has much work to do in reviewing this issue and developing a proposal for reform. An actuarial analysis will be required to determine the level of the Fund required for expanded coverage. He added that decisions need to be made regarding exactly what expanded coverage will entail. If an alternate funding model were introduced, there would need to be a process for registrants to collect and remit funds. Work on this issue is ongoing. Michael Janigan assured registrants that they will be updated regarding the progress of this initiative.

Conquest Trust Decision

Michael Janigan advised that at TICO’s AGM held on November 1, 2010, TICO provided an extensive update regarding the closure of Conquest Vacations, which ceased operations on April 15, 2009. At that time, TICO advised that the Trustee for Conquest disallowed TICO’s claim against the trust accounts and that TICO had appealed the decision. Michael Janigan reported that TICO’s appeal was disallowed by Registrar Diamond in a decision released on December 14, 2010. Based on the facts of the case, the court found that the consumer funds in Conquest’s trust account were co-mingled with other funds by the registrant to such an extent that the consumer funds were no longer identifiable. Based on this finding, the funds held in Conquest’s trust accounts became assets of the Estate of the bankrupt Conquest. TICO continues to stand as an unsecured creditor against the estate of Conquest.

Michael Janigan advised that the TICO Board has been reviewing the decision and its implications. It is focusing on the following:

Enhancing the current trust agreement

Looking at ways to better trace consumer monies

Considering improvements to TICO’s Trust Account Guidelines

Exploring the possibility of educational courses to assist registrants in better understanding and fulfilling their trust obligations

Reviewing the consequences for failing to properly maintain trust accounting

Michael Janigan advised that the TICO Board will be updating registrants further on these issues as its work progresses.

Michael Janigan advised that over the next year, the Board will be reviewing TICO’s Risk Management Strategies to ensure that there are systems in place to identify and manage risks to the organization. He noted that TICO has many important projects underway. The TICO Board encourages registrants to keep up-to-date regarding these initiatives and to provide feedback on the issues. It is


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in everyone’s interest to ensure that there is a fair and informed marketplace where consumers can be confident in their travel purchases.

(b) Report from the CEO

Michael Janigan introduced Michael Pepper, President & C.E.O., who provided attendees with a report summarizing the activities and accomplishments of TICO during the 2010/2011 fiscal year. Registration Statistics

Michael Pepper reported that the registrant base has been slowly declining at a rate of approximately 3 – 4% each year since TICO received delegation. Michael Pepper reported that the total number of registrants has continued to decline and advised that the number of registrants at the end of the 2010/2011 fiscal year was 2,501 compared to 2,536 in the previous year. Michael Pepper advised that the breakdown of retail and wholesale registrations at March 31, 2011 was as follows: Retail 1,588 Retail Branch 547 Wholesale 358 Wholesale Branch 8 Total 2,501 Education Standards Michael Pepper advised that, since the education standards program began, over 27,000 individuals have taken the exam. This far exceeds the estimated 10,000 – 15,000 anticipated when the program was introduced. Michael Pepper reported that during the 2011 fiscal year, 5,277 individuals had taken the Travel Counsellor, Supervisor/Manager or the Combination Exam. Compensation Fund Contributions Michael Pepper reported that the Compensation Fund contributions in 2010/2011 totalled $616,927 with $461,999 from retailers and $154,928 from wholesalers. This represents $9.24 billion in gross retail sales, compared to $8.51 billion the previous year. This is a significant increase of over $700 million in retail sales from the previous year. Michael Pepper advised that the current Fund contribution rate of 5 cents per thousand was introduced in 2006, at which time the Fund balance exceeded $30 million. The objective when TICO reduced the contribution level was to provide relief to the industry and to decrease the level of the Compensation Fund to $25 million, which was the level of the Fund recommended in an Actuarial Report


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obtained by TICO. Michael Pepper noted that TICO had advised the industry that once the fund reached the desired level of $25 million, a further analysis would be carried out to determine the required level of the fund. Michael Pepper advised that TICO now believes the level of the Compensation Fund should be considerably higher as a result of a number of factors, including changes to the business model and consolidation in the industry. He noted that TICO is currently looking at alternate ways of financing the fund, as reported previously by the Chair.

Compensation Fund Michael Pepper advised that the Compensation Fund balance at March 31, 2011 was $25,343,409. He advised that the total claims paid out in the last fiscal year was broken down as follows: Registrant failure claims: $ 106,820 Trip completion claims: $ 22,474 End supplier claims: $ 89,303 Total claims paid $ 218,597 Michael Pepper advised that the recoveries in 2010/2011 were $38,207. The total net claims paid in 2010/2011 were $180,390.

Financial Inspections Michael Pepper advised that one of the most important aspects of monitoring the industry is the financial inspection program. Michael Pepper explained that all registrants are required to file, at a minimum, a financial statement with a review engagement by an LPA. Each of those financial statements is subject to a bench review by one of TICO’s Financial Inspectors. This, in turn, leads to site inspections of registrants who are not compliant with the financial criteria. Michael Pepper reported that, in 2010/2011, there were 566 site inspections, broken down as follows: 183 working capital 179 trust accounting 70 closed registrants 61 new registrants 73 other reasons - miscellaneous

Non-Financial Inspections Michael Pepper advised that TICO also carries out non-financial compliance functions, which during the year resulted in 110 advertising warnings, 65 invoicing warnings and 65 warnings for operating without registration. He noted that TICO’s goal is to work with agencies that are off side to bring them into


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compliance so that there is a level playing field for all stakeholders and the desired level of consumer protection and disclosure is maintained. Proposals to Revoke Registration Michael Pepper advised that although TICO’s goal is to work with registrants to bring them into compliance with the legislation, at times it becomes necessary to propose to revoke a license because persuasion is unsuccessful. Michael Pepper reported that, during the fiscal year, 57 notices of proposal to revoke a registration were issued for the following reasons: 24 for not filing financial statements, 13 for failing to maintain working capital, 9 for trust account deficiencies and 11 were for other breaches of the Regulation.

Investigations and Prosecutions Michael Pepper advised that TICO investigates breaches of the Travel Industry Act, 2002. Investigations are initiated when there have been serious breaches of the Act or Regulation such as when a registrant has failed to hold consumer monies in trust. Such investigations usually occur after a failure. Also, investigations are initiated for individuals operating without registration, particularly where consumers have been compromised. He added that there have been occasions where an agency has continued to operate after having their registration revoked. Likewise, when an individual has been warned not to operate without registration but continues to do so, an investigation may be initiated, which may result in charges being laid. Michael Pepper reported that during 2010/2011, 43 charges were laid, which resulted in 39 convictions. All convictions are reported to the press and are listed on the TICO website. Complaints Michael Pepper advised that TICO receives complaints from consumers against registrants. Such complaints cover a range of issues from quality of service to arriving at the destination to find the hotel has been switched. During the fiscal year, TICO received 294 written complaints from consumers against registrants. A total of 232 of these were resolved during the year, resulting in restitution of $57,205 for consumers. Michael Pepper noted that the number of complaints received by TICO, compared to the number of transactions in the industry, is minimal. Business Plan Objectives 2011- 2012 Michael Pepper advised that TICO’s Business Plan Objectives for 2011/12 are broken down into 3 horizons: 0-3 years, 0-5 years and 0-10 years. TICO will be focusing on the short term objectives in Horizon 1, which include:

Proposing enhancements to the consumer protection provided by the Compensation Fund. The Alternate Finance Committee of the TICO Board has been working on this objective.


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Reviewing the business model of how travel services are sold. There has been a shift in the business model and TICO is reviewing whether changes need to be recommended in order to maintain the same level of consumer protection.

Changes to the Act and Regulation. Ways to enhance the provisions are always being considered. If required, changes will be recommended to government.

Review TICO’s Risk Management Strategies. This involves managing the risks of the organization. TICO is finalizing its Business Continuity Plan.

Michael Pepper advised that TICO is also doing preliminary work on the objectives in Horizons 2 & 3, which are longer term. For example, TICO is working on promoting harmonized standards with other jurisdictions.

(c) Financial Statements for the year ended March 31, 2011 and the

Auditor’s Report Michael Janigan introduced Mary-Ann Harrison, Director of Operations and Chief Financial Officer for TICO, to review the financial statements. Mary-Ann Harrison summarized the financial position of TICO and the Compensation Fund for the fiscal year ended March 31, 2011.

Mary-Ann Harrison reported that the audited financial statements for the year ended March 31, 2011 are included in Appendix 1 of the Annual Report and Business Plan, which was included in the bags provided to everyone when they arrived for the meeting.

Mary-Ann Harrison advised that she was pleased to present the audited financial statements at today’s meeting as the statements show all stakeholders TICO’s financial position. She added that she believed that TICO is the only one of the regulated travel provinces where stakeholders can actually see the financial performance of the provincial regulator.

Mary-Ann Harrison advised that overall, TICO’s revenues have remained relatively consistent with the prior year. Registration revenues, which include both renewals and new registration fees, have decreased by 4% from the prior year. Revenues from registration renewals have decreased by approximately 6%, while new registration revenue has increased slightly by 2%. The decline in renewal revenues is consistent with the decline in overall registrations. Mary-Ann Harrison noted that new registrant revenue is unpredictable.

Mary-Ann Harrison reported that the contributions to the Compensation Fund in 2011 increased by 8% from the prior year. This is a result of an increase in over all gross sales by registrants during the year.


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Mary-Ann Harrison advised that the investment Income is down by 10%. She noted that this decline was a result of a decline in the underlying assets. At the end of 2010, TICO had $26.3 million in investments. At the end of 2011, this had declined to $23.4 million. Overall, TICO’s investments have earned an average of 4%, which is really good in the current environment. TICO’s investment policy only allows TICO to invest in very safe investments, which are primarily Canadian government bonds. This return is very strong given the current economic environment and reflects TICO’s investment policy of allocating funds to investments with low risk.

Mary-Ann Harrison advised that TICO’s total expenses, including claims, have decreased by 38% from the prior year. She noted that, in the prior year, claims were just over $3 million. In the current year, claims were $218,597. Mary-Ann Harrison added that claims this year related to a number of small failures and to end supplier failures.

Mary-Ann Harrison advised that some registrants may be aware that TICO’s largest costs are staffing and the Consumer Awareness Campaign. TICO is acutely aware of the need to manage costs and we are always working to maintain efficiencies. However, during the year there were some new expenses that TICO had not incurred in the past. She noted, for example, that last year was the first time that TICO held a webcast of its AGM. The AGM is also being webcast this year. TICO believes the webcast expense is warranted as it makes the AGM accessible to more stakeholders. As previously mentioned, TICO conducted some consumer research in fiscal 2011 to evaluate the receptivity to expanded Compensation Fund coverage. This research also resulted in additional costs in 2011.

Mary-Ann Harrison advised that part of TICO’s mandate is to ensure that TICO is properly funded. She noted that Michael Janigan spoke earlier about the work being done on alternate ways of funding the Compensation Fund and the declining TICO Asset. The Registration and Renewal Revenues are allocated to the TICO Asset, while Fund Contributions, as well as the majority of the investment income are allocated to the Compensation Fund. She noted that projecting revenues is difficult. TICO can try to forecast renewal revenue with some accuracy based on the current registrations and the historical rate of decline in registrations. However, predicting new registration revenue is difficult as TICO does not have a crystal ball to determine how many new registrations we will have in any given year. Historically, we have been somewhat fortunate as new registration revenues have exceeded our estimates. She added that it is better to be conservative estimating these revenues than to over estimate.

Mary-Ann Harrison reported that the net result at the end of March 2011 is that the Compensation Fund balance was $25.3 million and the TICO asset has a value of approximately $300,000. She noted that the TICO asset is lower than it was in the previous year and is projected to continue to decline such that TICO needs to prudently focus on this issue in the future.


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Attendees were invited to ask questions regarding the Financial Review. Bruce Bishins representing Helen Thompson Travel referred to the Notes to the Financial Statements and the cost related to a senior management termination agreement. Bruce Bishins asked what the cost was for, how much money was involved as well as how it impacts the salaries that are being reported. Michael Janigan advised that the amount relates to the retirement of the CEO. He stated that the Executive Committee of the Board entered into negotiations with the CEO to make effective the termination and a termination allowance. Michael Janigan advised that the Executive Committee had consulted with human resources specialists when preparing the agreement. He advised that in December of last year, an agreement was finalized and the financial implications are set out in the audited financial statements. Bruce Bishins questioned whether someone was actually terminated. Michael Janigan advised that no one was terminated. The Agreement leads up to the departure of the CEO and is in line with ordinary practices throughout the industry. The Executive Committee sought advice as to what was the appropriate amount and what the contents of the agreement should be and it was negotiated accordingly. Efforts were made to ensure that the agreement was equitable but was not a leader in the industry. Bruce Bishins questioned whether this relates to succession planning. Michael Janigan confirmed that it was succession planning. Bruce Bishins asked what the amount of the agreement was. Mary-Ann Harrison advised that it is set out in Note 7(d) under Commitments and Contingencies to the Notes to the Financial Statements. The minimum obligation is $268,000 and $241,000 was expensed for 2011. Bruce Bishins questioned whether the amount represented a departure payment, should that occur. Michael Janigan confirmed that it did. Gerry Kinasz, Publisher of TravelWeek, advised that he had two questions in relation to the Statement of Operations in the audited financial statements. He noted that the Board meeting expense increased from $101,052 in 2010 to $139,660 in 2011. He questioned what the expense represents and why there was an increase. Mary-Ann Harrison advised that it includes the costs of board and committee meetings, per diems for board members and amounts paid to the Statutory Directors. It also includes the costs for the AGM. She advised that part of the increase is due to the cost of webcasting last year’s AGM. She noted that board member per diems are reviewed each year and increased by the cost of inflation so that accounts for part of the increase. Michael Janigan advised that every second year the Board holds a retreat so that would account for part of the expense as well. Gerry Kinasz asked what the Ontario government oversight fees represent. Mary-Ann Harrison advised that this represents an amount that TICO is required to pay to the government each year for oversight of TICO. Michael Janigan noted that this year, TICO was successful in negotiating a reduction of this fee.


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Mary-Ann Harrison advised that the government can charge up to $130,000, but charged $109,010 this year. Auditors Report

Michael Janigan introduced Glen McFarlane of McGovern, Hurley, Cunningham.

Glen McFarlane presented the Auditor’s Report. He advised that the financial statements present fairly, in all material respects, the financial position of the corporation as at March 31, 2011.

Attendees were invited to ask questions regarding the Auditor’s Report.


5. Appointment of the Auditors Michael Janigan asked if there were any questions regarding the Auditors prior to requesting a motion to appoint the Auditors for the next year. Attendees posed no questions. Jeff Element moved to retain McGovern, Hurley, Cunningham as Auditors and to authorize the Board of Directors to fix the Auditor’s remuneration. Seconded by Scott Stewart.

MOTION CARRIED 6. Update on TICO’s Consumer Awareness Campaign

Michael Janigan asked Dorian Werda to provide an update on TICO’s 2011/2012 Consumer Awareness Campaign. Dorian Werda advised that the goal of the Campaign is to increase consumer awareness as to the benefits of purchasing travel services from TICO registered travel agencies. TICO’s message is “Look Before You Book”. Dorian Werda advised that TICO is asking consumers to look for the TICO logo when they purchase their travel services to ensure that the travel agency they are dealing with is TICO registered. She added that the Campaign drives consumers to TICO’s website where they can learn about TICO, its services, the consumer protection that is available and the benefits of purchasing travel services from TICO registered travel agencies. Dorian Werda noted that each year, TICO measures the success of its Campaign by conducting an omnibus survey. She advised that last year’s results were very good with overall gains in awareness as well as in the level of understanding. Dorian Werda reported that TICO’s awareness was up 30% from 25% in the previous year. The results indicated that 70% of consumers surveyed were


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aware that they must purchase their travel services from a TICO registered travel agency to obtain consumer protection. Dorian Werda advised that TICO hopes to increase awareness further with this year’s campaign. The Campaign will include a 30-second television ad on Rogers TV Listings Channel as well as a 15-second pre-roll ad on Globaltv.com. There will be an out-of-home advertising component that will include a GO Train wrap, posters in all GO Train stations and transit shelters, posters in Union Station as well as in The Path in downtown Toronto. Dorian Werda advised that there will also be a public relations strategy to reach various ethnic markets to increase awareness as to the benefits of booking with TICO registered travel agencies. An online strategy will also be used incorporating pay-per-click advertising, the creation of a mobile version of TICO’s website as well as a social media campaign using Face Book, Twitter and You Tube. There will be a contest to build awareness and a social media following for TICO and its registrants. Dorian Werda advised that TICO would like to encourage registrants to use TICO’s Consumer Awareness Campaign to benefit their business. Consumers will be looking for you and the TICO logo. TICO encourages all registrants to display TICO’s window decal and to use the TICO logo on marketing materials. She added that TICO has a “Good To Go” pamphlet that provides information to consumers about TICO and why they have made a good decision when booking with a TICO registered travel agency. Dorian Werda advised that TICO has other collateral materials available on its website for download, including the TICO logo, e-ticket stuffer, web banner ads as well as videos. Dorian Werda played a short video with some industry members explaining how they use TICO’s Consumer Awareness Campaign to benefit their businesses.

7. Results of the TICO Election and the Composition of the New TICO Board of Directors Michael Janigan asked Michael Pepper to announce the results of the election for the position on the TICO Board of Directors. Election Results Michael Pepper reviewed the composition of the TICO Board:

3 ACTA Representatives

3 CATO Representatives

1 CITC Representative

1 OMCA Representative

5 Appointed by the Minister of Consumer Services

2 Elected by the Registrant Members


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Michael Pepper advised that the two elected members on the Board this year were Jim Diebel and David Shaw. As David Shaw’s term was completed, there was one two year elected position available on the Board. This position was open to a retail candidate. TICO sought nominations for this open position. Two nominations were received. Ballots were sent to all registrants. Each registrant had one vote for each registration held. Michael Pepper noted that ballots had to be received by TICO’s Auditors by September 16, 2011. Michael Pepper announced that Paul Samuel was the successful candidate. He noted that it was a very close election. Michael Pepper reviewed the number of votes each candidate received as follows: Paul Samuel 193 David Shaw 179 Michael Pepper advised that the total number of ballots cast was 378. Of these, 6 ballots were spoiled or invalid. Michael Pepper congratulated Paul Samuel of Overseas Travel Limited in Toronto, who will serve on the Board of Directors for a two-year term. Michael Janigan advised that the Auditor is still in possession of the ballots. He asked if there were any questions about the election prior to requesting a motion authorizing the Auditor to destroy the ballots.


Jim Diebel moved to authorize the Auditor to destroy the ballots. Seconded by Linda Wright.

MOTION CARRIED Announcement of New TICO Board Michael Janigan asked Michael Pepper to announce the composition of the TICO Board of Directors for 2011/2012. Michael Pepper advised that the new TICO Board of Directors will be as follows:

3 ACTA Representatives: Mike Foster, Richard Vanderlubbe and Thanushka

Nanayakkara. 3 CATO Representatives: Denise Heffron, Jeff Element and Linda Wright. 1 CITC Representative: Kathleen Warren. 1 OMCA Representative: Scott Stewart.

2 Elected: Jim Diebel and Paul Samuel. 5 Government Appointees: Michael Janigan, Patricia Jensen, S. Bano Noor,

James Savary and Jean Hébert.

On behalf of the Board, Michael Pepper thanked retiring Board members Maria Mendes, Jill Wykes and David Shaw for their contributions to TICO and the


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Board. Michael Janigan also thanked the retiring members of the Board and extended a warm welcome to Paul Samuel.

8. Other Business

Michael Janigan advised that notice was received by the Corporate Secretary that Darren Swidler of TruExperiences Tours in Toronto intended to bring motions at the Annual General Meeting. He noted that copies of the motions are included in the bags that attendees received coming into the meeting. Michael Janigan advised that if the Members want the TICO Board to review the issues submitted by TruExperiences Tours, the Board is prepared to do so. Michael Janigan advised that each motion would be addressed in turn. He reviewed the first motion received from TruExperiences Tours, which reads as follows:

WHEREAS, the annual review engagement requirement has become an unfair and costly burden on small- and medium-sized registrants; and WHEREAS, registrants at other Ontario consumer protection administrative authorities including the Real Estate Council of Ontario and the Ontario Motor Vehicle Industry Council are not required to submit annual financial statements with a review engagement. BE IT RESOLVED, THAT the registrant requires the Board of Directors to consider submitting, on behalf of registrants, a written suggestion to the Minister of Consumer Services on November 14, 2011 requesting that the Minister make the following amendment: 1) the review engagement requirement for registrants with less than ten

million dollars in sales shall be eliminated and replaced with a requirement that registrants shall submit annual financial statements with a Notice to Reader.

This request shall also contain any additional recommendations from the Legislative & Regulatory Review Committee to reduce the regulatory burden on registrants.

A copy of the above written request shall be distributed to all registrants no later than November 30, 2011.

Michael Janigan asked Mr. Swidler if he wished to address the meeting. Mr. Swidler of TruExperiences Tours introduced himself and addressed attendees. He advised that he introduced this motion because he believes that the costs to registrants related to preparation of financial statements are far too high. He stated that he is asking that the Legislative & Regulatory Review


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Committee of the Board to come up with ideas and make suggestions to the Ministry on how to reduce these costs to benefit all registrants. Mr. Swidler advised that his suggestion is to follow the requirements in British Columbia and change the requirement from a Review Engagement to a Notice to Reader. He advised that not having to file a review engagement would save those registrants approximately $1,500 per year. Mr. Swidler noted that approximately 800 registrants would be affected by that change. Therefore, collectively, his suggestion would amount to a savings of $1.2 million per year for registrant overhead costs. Mr. Swidler acknowledged that if registrants are IATA accredited, they may still have to submit a review engagement to IATA. However, Mr. Swidler advised that he hoped his motion would compel the Board of Directors to start to focus on other ways that they can reduce the compliance costs for registrants. Michael Janigan asked if there was anyone else who wished to speak in relation to the motion. No other attendees came forward. Michael Janigan called for a vote on the motion. The results of the vote were as follows: In Favour: 45 Against: 77 Absentions: 0 Total votes: 122

MOTION DEFEATED Michael Janigan proceeded to the second motion. Michael Janigan read the second motion received from TruExperiences Tours:

WHEREAS, greater protection is needed for registrants when dealing with TICO.

BE IT RESOLVED, THAT the registrant requires the Board of Directors to clearly outline on the TICO website the mechanism for registrants to submit service complaints for issues with TICO such as: 1) poor or misleading information; 2) staff conduct; or 3) mistakes, such as misunderstandings, omissions, or oversights.

The Board of Directors shall also examine the feasibility of implementing the following measures: 1) appoint an ombudsman to manage unresolved service complaints from

registrants;


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2) create a Registrant “Bill of Rights”; and 3) provide a feedback mechanism to communicate with TICO committee

members and the TICO Board of Directors. The Board of Directors shall provide an update to registrants on the above items no later than December 15, 2011.

Michael Janigan allowed Mr. Swidler to address the meeting. Mr. Swidler advised that the purpose of the motion is to ensure that there is better protection for registrants when they deal with TICO. Mr. Swidler noted that although the TICO website was redesigned and includes ten subsections under Industry Information, there is no data regarding how a registrant can make a complaint against TICO. Mr. Swidler stated that he is requesting that information about the complaints process be included on TICO’s website. He noted that registrants finance the TICO organization. He stated that, in his view, corporate governance at TICO is virtually non-existent and registrants should be better protected in their dealings with TICO. Michael Janigan suggested that the motion may be better served if it were divided into two parts and voted on separately. He asked whether that would be agreeable to the Members. Gerry Kinasz of Travelweek noted that individuals holding proxy votes may find that difficult as individuals may have based their decision on how the individual planned to vote on the motion in its entirety. Michael Janigan noted that Mr. Kinasz raised a valid point of order. He noted that there were proxies collected in advance of the meeting. Michael Janigan advised that he would call one vote on the motion in its entirety as it was circulated in advance of the meeting. Richard Vanderlubbe of Travel Superstore advised that he was surprised to see such a motion brought forward. He advised that in all the years he has been involved with TICO, there have only been approximately eight complaints dealt with by TICO’s Complaints Committee. He advised that the majority of those complaints have involved unresolved consumer complaints, not service complaints against TICO. Richard Vanderlubbe advised that he agreed that there should be information on TICO’s complaints process for registrants on the TICO website; however, in his view, the appointment of an ombudsman would be overkill considering the number of complaints received at TICO. He noted that typically, demands for an independent ombudsman are made when there is some kind of controversy or when an organization has demonstrated that it is unable to deal with complaints appropriately. He stated that he did not believe that to be the case here. Richard Vanderlubbe advised that TICO is accountable to the Ministry of Consumer Services. He advised that there is currently a complaints process. TICO staff adheres to a Code of Conduct. A Committee of the Board reviews complaints against TICO. As a result, he stated that he had difficulty supporting a motion seeking the appointment of an ombudsman. He stated that TICO needs to handle complaints that are received appropriately, but he did not see


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any evidence that complaints were not being handled properly under the current process. Mr. Swidler advised that TICO is essentially governing itself without an ombudsman. The recommendation for appointing an ombudsman is to allow an independent third party review of a TICO decision. TICO is dealing with very sensitive financial information of registrants and making broad interpretations of the legislation. He stated that having an ombudsman would provide registrants with a final opportunity or last resort to address decisions made by TICO. Otherwise, there is no other avenue for registrants except dealing with TICO itself. Michael Janigan asked if there was anyone else who wished to speak in relation to the motion. No other attendees addressed the issue raised in the motion. Michael Janigan called for a vote on the motion. The results were as follows: In Favour: 39 Against: 90 Absentions: 0 Total votes: 129

MOTION DEFEATED Darren Swidler asked whether TICO had reconciled the number of votes registered against the number of votes on the floor. Tracey McKiernan advised that there were 140 votes registered for the meeting so the total number of votes cast is less than the total number of votes registered for the meeting. She noted that some individuals may be out of the room or have already left the meeting. Michael Janigan advised that although the motion was defeated, the TICO Board of Directors would ensure that TICO’s website contains information for registrants on TICO’s complaints process. He stated that he was impressed with Mr. Swidler’s desire to see TICO reduce administrative costs to reduce the burden on registrants. Michael Janigan advised that the TICO Board of Directors heard Mr. Swidler’s concerns about costs to registrants and would consider those concerns during its deliberations this year. Michael Janigan asked if there were any questions or any other business to be raised. There were no further questions posed or issued raised by attendees.

9. Conclusion of Meeting

Michael Janigan thanked all those who attended the Annual General Meeting. Michael Janigan requested a motion to adjourn the meeting.


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Scott Stewart moved to adjourn the meeting. Seconded by Bano Noor. MOTION CARRIED

The meeting was adjourned at 5:45 p.m.

Documents

Travel Industry Council of Ontario AGM MINUTES - SEPTEMBER 27... · tico agm – toronto congress ctr –september 27, 2011 minutes of the annual general meeting of the members of