"Missed opportunity" to reform Consumer Compensation Fund: ACTA

The Association of Canadian Travel Agencies (ACTA) is applauding the recent decision to make amendments to the Travel Industry Act as a way of reducing the burden on travel agencies and tour operators.

“ACTA has long awaited proposed amendments to the Ontario Travel Industry Act and we are very pleased to see many of the recommendations we advocated for,” said Wendy Paradis, President, ACTA. “These changes will bring much needed relief to our travel agency members, including the removal of Audited Financial Statements and Review Engagement requirements for smaller registrants (under $2M) during this critical time.”

ACTA also applauds the exemption under Section 46 which allows registrants to only provide a travel voucher or credit instead of a refund.

However, the association is wondering why the province didn’t make changes to the funding model for the Consumer Compensation Fund.

READ MORE: Ontario Travel Industry Act amendments will reduce burden on agencies, tour ops

In a press release issued Tuesday night (March 31), ACTA said such changes were “glaringly missing from the amendments.”

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

On March 30th, 2020, the Ontario Government advised ACTA that the general regulation under the Travel Industry Act, 2002 (TIA) has been amended to reduce the burden on travel agents and wholesalers (registrants).

In their advisory, the Ontario Government stated that they recognize 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.

The regulatory changes include:

1. Eliminating review engagement reports for small registrants with annual sales less than $2 million and requiring a verification statement instead.

2. Eliminating audit reports for large registrants with annual sales of $10 million or more and requiring a review engagement report instead.

3. Removing prescriptive working capital thresholds for all registrants and requiring them to maintain positive working capital instead.

4. 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) A refund or comparable alternate travel services acceptable to the customer, or;

b) A voucher or similar document for future redemption towards travel services.

5.  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.

6. 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.

7. 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.

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