UPDATED: TICO has issued a follow up Registrar Bulletin with additional information about burden relief for TICO registrants and guidance on the use of vouchers, including a FAQ. Click here for more details.
TORONTO — With an eye to reducing the burden on Ontario’s registered travel agencies and tour operators – and providing clarity on vouchers vs. refunds disputes – the Ontario government has announced a number of regulatory amendments to the Travel Industry Act, 2002.
As outlined in a Regulatory Bulletin issued to registrants by TICO, the amendments also aim to boost consumer protection for travellers impacted by the coronavirus outbreak.
The updates include a time-limited exemption, specially created for the coronavirus outbreak, that would allow registrants to choose to provide only a voucher in cases where a supplier failed to provide travel services.
Also new, eligibility for Comp Fund reimbursements will be expanded to cover consumers with vouchers who do not receive their travel services, potentially due to the failure of a registrant.
While the majority of consumers have accepted the offer of vouchers or travel credits for their cancelled flights, packages or trips – understanding that the coronavirus pandemic and the resulting travel restrictions are beyond the control of travel retailers and suppliers – a small but vocal minority of consumers have been demanding refunds.
Many of these consumers have expressed concerns that the vouchers could be worthless in the case of a supplier failure amid the coronavirus fallout. A proposed class action lawsuit is in the works. Meanwhile, if suppliers and retailers are on the hook for refunds, an entire industry is in jeopardy.
Retailers and suppliers can click here to find the regulatory changes on the e-laws website.
The changes announced by the Ontario government include:
- Eliminating review engagement reports for small registrants with annual sales less than $2 million and requiring a verification statement instead.
- Eliminating audit reports for large registrants with annual sales of $10 million or more and requiring a review engagement report instead.
- Removing prescriptive working capital thresholds for all registrants and requiring them to maintain positive working capital instead.
- Clarifying under section 46 in the regulation what a registrant, who has acquired rights to travel services for resale, must provide to a customer when a supplier fails to provide the travel services paid for by the customer, which includes:
- a refund or comparable alternate travel services acceptable to the customer, or
- voucher or similar document for future redemption towards travel services.
- Providing a time-limited exemption under section 46, which would allow registrants to elect to only provide a voucher or similar document for future redemption towards travel services where a supplier fails to provide the travel services after these changes come into effect and that failure is related to the COVID-19 outbreak. If the exemption is applicable, the voucher or similar document issued must meet specified requirements.
- 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 (e.g., flight, cruise or hotel) but for which travel services are not provided may be eligible for a reimbursement claim.
- Temporarily expanding coverage under the Travel Industry Compensation Fund so that consumers with unredeemed vouchers or similar documents issued by a registrant that cannot be redeemed due to the failure of a registrant associated with COVID-19 may be eligible for a claim for reimbursement.
TICO says: “We understand that you may have questions relating to the amendments. TICO will be providing additional details shortly and will continue to support consumers and registrants impacted by the crisis. Please check back often as we will be posting updates as they become available.”