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TICO provides more details on changes to Travel Industry Act

TICO provides more details on changes to Travel Industry Act

Wednesday, April 1, 2020

TORONTO — TICO is providing follow up details to this week’s amendments by the Ontario government to the Travel Industry Act, 2002.

As reported yesterday, In response to the COVID-19 global pandemic, changes were made to the General regulation under the Travel Industry Act, 2002 to provide immediate burden relief to Ontario’s registered travel agencies and tour operators, and help certain travellers impacted by COVID-19.

From the outset of the crisis TICO has collaborated with the Ontario government to consider burden relief measures aimed at maintaining customer protection while reducing burden on registrants during this difficult time, says Richard Smart, TICO’s President and CEO.

“These are unprecedented times for the travel industry and it was important for us to explore opportunities to provide relief to TICO’s registrants, while ensuring the continuity of customer protection,” says Smart.

“We recognize the extraordinary nature of the current situation of COVID-19, and the effect it is having on the travel sector during this financially difficult time,” said Lisa Thompson, Minister of Government and Consumer Services. “Our government will continue to do whatever it takes to ensure the health and safety of all Ontarians, while also taking necessary steps to protect consumers and the travel industry.”

Here’s a look at all of the changes as per TICO’s Registrar Bulletin issued March 31. TICO has also put together a FAQ for clients which can be accessed here.

Vouchers or similar documents for future travel services

Provide a time-limited exemption for registrants under section 46. For a period up to and including March 31, 2021, allow registrants who acquired the rights to travel services for resale to another registrant or to customers, to elect to issue a voucher or similar document to customers where a supplier fails to provide a component of the travel package on or after these changes came into effect, and that supplier’s failure is related to COVID-19.

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This applies to registrants with risk contracts and in situations where a registrant has engaged suppliers to bundle multiple travel services, which are advertised and sold to either other registrants or customers for a single price.

The voucher or similar document issued under this time-limited exemption must be of at least equal value to the travel services not provided and be valid for redemption for at least one year following the date of issue – though travel can happen beyond the one-year mark. Subsections 46 (2-5) of the Regulation are in effect until March 31, 2021.

Beginning on April 1, 2021, Section 46 will require a registrant who has acquired rights to travel services for resale to provide to a customer the following when a supplier fails to provide the travel services paid for by the customer:

  • a refund;
  • comparable alternate travel services acceptable to the customer; or
  • a voucher or similar document that is acceptable to the customer for future redemption towards travel services.

More guidance about the use of vouchers or similar documents is available here.

Reduced financial reporting

To reduce administration and expenses associated with financial reporting, depending on a registrant’s Ontario gross sales, eliminate the requirement for an audit report and reduce reporting requirements for small registrants.

  • Replace review engagement report requirement with a verification statement for registrants with Ontario gross sales of less than $2 million (a TICO form will be provided to registrants).
  • Replace audit report requirement with review engagement report for all registrants with Ontario gross sales of more than $10 million.
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Reduced working capital requirements

Existing working capital requirements are eliminated, and registrants must simply maintain a positive working capital, with current assets being greater than current liabilities.

Expanding coverage under the Travel Industry Compensation Fund for customers with redeemed vouchers or similar documents for customers with redeemed vouchers or similar documents

Expanding the coverage under the Travel Industry Compensation Fund for consumer claims involving vouchers or similar documents that may be eligible for reimbursement. This will help ensure that any voucher or similar document that a customer redeems for travel services with a registrant (e.g., flight or cruise), but for which travel services are not provided, may be eligible for a reimbursement claim.

Temporarily expanding coverage under the Travel Industry Compensation Fund for customers with unredeemed vouchers or similar documents

If a customer is unable to redeem a voucher or similar document issued by a TICO-registered travel agency or tour operator (for greater clarity, does NOT include a voucher issued directly by any end supplier to a customer including airline, cruise line or hotel) for future travel services because of a registrant failure associated with COVID-19, the customer may be eligible for a claim for reimbursement under the Travel Industry Compensation Fund until March 31, 2022.

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