Gov't Amends Travel Industry Act, TICO's Smart Says More On The Way
ACTA pleased but laments missed opportunity to reform funding

The Ontario government has announced amendments to Ontario's Travel Industry Act that aim to offer "burden relief" to TICO-registered travel agencies and tour operators, as well as "enhanced consumer protection" for those travellers impacted by the COVID-19 outbreak. The amendments were announced 30MAR, 2020.

"The Ontario Government recognizes the extraordinary nature of the current situation of the COVID-19 outbreak and relief is being provided for travel agents and wholesalers during this financially difficult time," wrote Kelly Houston-Routley, Director of Consumer Policy and Liaison Branch with the Ministry of Government and Consumer Services in a letter to travel advisors. 

TICO has been collaborating with the Ontario Government on these changes. The council's president and CEO Richard Smart tells Open Jaw that it's been "all hands on deck" to devise a plan to help agencies and operators. 

"All the registrants I've spoken to are saying that this [coronavirus] pandemic is far worse to the industry than SARS and MERS, 9/11, Zika, all of them combined and multiplied by 10," says Smart.

"It's very devastating and we certainly understand what our registrants are going through. We've been working hard with the government for some time to indicate the acute impact this is having on the travel industry, from the layoffs to major cutbacks."

The changes include:

Temporarily accepting the issuance of travel vouchers

With the uncertainly surrounding the COVID-19 pandemic, the Travel Industry Act is providing a temporary exemption under section 46 to allow registrants to issue travel vouchers or credit as a form of reimbursement for travel services that have been cancelled or indefinitely delayed, instead of a refund. The regulation is in effect until 31MAR, 2021.

"There is a lot of uncertainty and therefore, consumers are concerned when they receive a piece of paper promising future travel services," explains Smart. "In the age of COVID-19, registrants can elect to issue a voucher of equivalent value of the service being cancelled or delayed."

The benefit for agencies, says Smart, is that it alleviates wariness for booking travel during the coronavirus outbreak on the part of the consumer because it provides them a certainty that they will be protected should the operator fail to deliver travel services.

"It's good for agency owners, but it also clarifies to travel advisors that they can tell the consumer that the provincial travel regulators have sanctioned the use of vouchers for future travel," says Smart. 

If consumers are unable to redeem a voucher because the travel agency or tour operator has become bankrupt or insolvent, they can make a claim against the Travel Industry Compensation Fund until 31MAR, 2022.

More details on travel vouchers or similar documents can be found here. 

Reduced financial reporting

TICO has provided permanent relief on financial reporting. 

"Two-thirds of our registrants are small business owners and some of the reporting that they needed to provide TICO was very expensive. We've eliminated that forever," says Smart. 

This means that:

  • Review engagement reports are eliminated for small registrants with annual sales less than $2 million and require a verification statement instead;
  • Audit reports are eliminated for large registrants with annual sales of $10 million or more and require a review engagement report instead.

 

Elimination of prescriptive working capital thresholds

Prescriptive working capital thresholds have been removed for all registrants. Instead, they are required to maintain positive working capital. 

"Before, registrants needed to maintain certain level of working funds to cover their short term cash requirements. That was more prohibitive than it needed to be. Now, all registrants no longer need to maintain working capital requirements. They just need to ensure their positive working capital," Smart explains.


ACTA expresses mixed feelings

ACTA says it welcomes the amendments to the Travel Industry Act that bring "much needed relief to our travel agency members." But glaringly missing from the amendments were any change to the funding model for the Consumer Compensation Fund. 

“ACTA remains very concerned with the funding model of the Travel Industry Consumer Compensation Fund,” said Wendy Paradis, President, ACTA. 

“The COVID-19 pandemic has highlighted the vulnerability of the significantly inadequate Fund, and as such, ACTA will continue to lobby for recommended changes for the benefit of Ontario Travel Agencies, and the consumers they represent.” 

More measures on the way

These amendments, said Smart, are only the initial measures that TICO hopes it can roll out with the collaboration of the Ontario Government.

"There are additional amendments on the way. Every option is on the table and we continue to work with the government to identify all the recourses. I have the assurance of the Ministry of Government and Consumer Services that they understand the impact that's taking place in the travel industry and that all options are on the table."

Although Smart wasn't able to share which other measures for which TICO is advocating, he said, "I think it's clear that agencies revenue streams are drastically reduced. All the airlines and cruise ships are grounded and there's no revenue coming in. [The additional measures may be looking at] how we can simplify the financial burden."

Click here to find the regulatory changes on the e-laws website.
Additional details on the amendments can be found here.

Anna Kroupina

Anna Kroupina Journalist

Anna is OJ's newest member and she joins the team as a writer/reporter. She co-writes the daily news and covers events. Although she's new to the industry, pursuing a career path in travel/tourism has been a goal since her first family road trip to the Florida Keys sparked a desire to discover the world and this exhilarating, fast-paced industry.

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