Proposals For ON Travel Industry Act Changes Could Benefit Agents
Bruce Parkinson, Open Jaw
The Ontario Ministry of Government and Consumer services has released its Phase 2 Report as part of its review of the Travel Industry Act, 2002. The report includes proposals for possible changes to the Act and aims to address concerns and suggestions raised throughout the review.
There is good news for agents in the proposed changes, including suggestions to reduce onerous financial requirements, especially for smaller travel retailers. There’s also a proposal that the Travel Industry Compensation Fund could be expanded, with consumers funding more robust coverage.
Members of the public and the travel industry are encouraged to review the Phase 2 Report and provide feedback on the proposed changes by emailing TravelIndustryAct@ontario.ca by 24JUL.
TICO says that as a next step, the Ministry will develop proposals for changes to TIA and/or the Regulation based on the feedback it receives.
Here are the highlights of the proposed changes:
Maintaining Travel Industry-Specific Regulation, With Changes: While Ontario’s travel marketplace has changed since TIA was last reviewed, there remains a strong consumer protection rationale for maintaining travel-industry specific regulatory requirements. We are proposing to maintain TIA and continue its focus on protecting consumers from the financial and access to information risks associated with purchasing travel. At the same time, we are proposing possible changes to TIA in order to address some of the specific issues that were identified during the review.
Definitions and Registration Requirements: We are proposing possible changes to update the definitions under TIA in order to clarify the scope of TIA and bring the act up to date with changes in the marketplace. We are also proposing changes to the classes of registrants in order to create a class for travel sellers (currently travel agent and wholesaler) and a new class for individual travel counsellors.
Consumer Protection Issues: We are proposing possible changes to introduce a number of measures to strengthen consumer protection, such as:
Strengthening requirements for advertisements and other representations (e.g., a brochure) for travel agents and wholesalers who are based outside of the province, but are targeting their advertising of travel services to Ontarians, by requiring them to follow the province’s rules regarding representation (advertising) regardless of where they are located. This requirement is intended to help reduce confusion and prevent surprises for Ontario travel consumers, while also helping to provide a more level playing field for Ontario registrants.
Introducing new disclosure requirements for registrants, including displaying the TICO logo in a prominent manner on all advertisements, including websites and social media, for travel services prior to purchase, and requiring that registrants disclose additional information to consumers, such as information about coverage under the fund. This is intended to help consumers have greater clarity around whether, and how, they are protected when purchasing travel services in Ontario.
Requiring registered travel counsellors to meet continuing education requirements to be established in consultation with registrants. These requirements are intended to help ensure that registered travel professionals follow a code of ethics, and have a minimum level of knowledge about the requirements under TIA necessary to protect Ontario travel consumers.
Regulatory Burden on Industry: We are proposing possible changes to the requirements for registrants to help lessen the regulatory burden, including:
Amending the financial reporting requirements so that the smallest registrants who have under $2M in annual sales are required to provide TICO with internally prepared financial statements instead of a Review by a licensed accountant. The thresholds for financial reporting requirements for larger registrants could also be amended to reflect inflationary increases and the growth in the travel industry that has occurred since TIA was last reviewed.
Remove the trust accounting requirements and give the registrar the authority to impose trust accounting requirements for registrants who are deemed a financial risk.
Amending the security deposit requirements to differentiate the requirements based on the annual sales of the registrant, increase the length of time that the deposit, and provide additional options to registrants around how this security may be provided. This requirement is intended to help strengthen security requirements and bring Ontario in line with requirements in other jurisdictions which have travel industry-specific regulations.
Amending the working capital requirements to require registrants to maintain positive working capital at all times relative to their total annual sales in Ontario, as opposed to on a fixed basis (develop working capital tables based on ratios).
Introduce alternative regulatory requirements around access to and storage of financial records for registrants who have sales staff physically located in Ontario, but not a physical place of business in the province to reflect the growth in flexible work arrangements and e-commerce in Ontario’s travel marketplace.
Compliance and Enforcement: Granting TICO the authority to issue administrative monetary penalties, and expanding TICO’s inspection powers with respect to non-registrants. We are proposing to include an appeals mechanism to help ensure that individuals and companies have recourse in the event that they disagree with the application of an administrative monetary penalty. We are also proposing to require that the proceeds from any new financial penalties for non-compliance with TIA go into the fund, while maintaining TICO’s ability to incur reasonable expenses from the fund to promote public awareness and education. This change is intended to allow TICO to better tailor their enforcement activities so that they are proportionate to the risk for consumers, while also helping to support increased consumer awareness.
Travel Industry Compensation Fund: We are proposing to enable the potential development of an expanded fund with contributions directly from consumers, while undertaking additional research and consultations with consumers to determine whether to implement the expanded model. We heard a number of compelling arguments about the potential consumer protection benefits of expanding coverage under the compensation fund to include all services that are listed on a consumer’s invoice (such as additional end suppliers and out of province tour operators) as well as cover fraudulent activities by a registrant or a non-registrant who is claiming to be a registrant. However, there is currently not enough available evidence to determine whether the expansion of the fund is warranted and whether consumers would see value in such a change.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years.