Back in “the old days”, when you booked a trip, you went over to your bricks and mortar travel agent on main street.  You would have come to know the owner and the staff and over the years, you would have developed almost a personal, trusting business relationship with them.  These days, most people are using the internet to find a travel company.   While this multiplies the options a thousand times or more, it also means that it’s harder to really know who you’re dealing with.  

As in all sectors of commerce, the reliability of your travel supplier can vary quite a bit.  But often, it can be hard to judge.   As a result, there have been many cases of fraud, misleading advertising and poor financial management on the part of travel suppliers, leading to misunderstandings, dashed expectations, travel problems and even bankruptcies, with travellers left stranded in far away places.

In response to this challenge, some jurisdictions have adopted more or less rigorous consumer protection legislation, designed (to varying degrees) to ensure that businesses operate in a transparent fashion, manage their finances professionally, that the owners are identifiable and that fair advertising practices are adopted.   In some places, the government regulator also sets up a consumer protection fund, designed to refund consumers who may have been inadvertently caught up in a messy situation.

CNH Tours is based in Ottawa, Ontario.  Here, the government of Ontario has passed what we believe is one of the most rigorous consumer protection legislations for travel businesses.  The Ontario Travel Industry Act also enabled the establishment of a regulatory body called the Travel Industry Council of Ontario (TICO).  CNH Tours co-owner was elected to the TICO board of directors in 2017 for a three year period.   Any travel company based in Ontario must meet several requirements to start operating in Ontario.  These include:

• Registering under the Ontario “Travel Industry Act” ($3,000 fee);
• Demonstrating at least 3 years of prior travel industry experience prior to registering;
• Meeting the education standard and obtained TICO certification for both the Travel Counsellor and Supervisor/Manager Exams for the designated manager, and the Travel Counsellor exam for all sales staff;
• Must have at least one officer or director who is a resident of Canada;
• Opening proforma balance sheet or current financial statements indicating a positive working capital;
• Providing a security deposit in the amount of $10,000.00;
• Providing a letter from the business’s financial institution in Ontario, submitted, in the format provided by TICO and clearly designated as a Travel Industry Act Trust Account;
• If a Trade style name is used, it must be registered with the Ministry of Public and Business Service Delivery - Service Ontario.  Provide a copy of the Master Business Licence;
• If applying for both retail and wholesale registration, separate applications and fees must be submitted; 
• Wholesale applicants must provide a business/marketing plan; 
• Wholesale applicants must obtain written approval from Registrar, Travel Industry Act 2002, before entering into any ‘risk contracts’ with scheduled or non scheduled air carriers; 
• Disclose all particulars regarding any bankruptcies, judgements, discharges; 
• Provide criminal record check for each owner, officer, director, shareholder and designated manager named on the application; 
• Provide copy of government photo identification for each owner, officer, director, shareholder and designated manager named on the application.

All of the above is required simply to begin operations.

Once a travel business receives the permission to operate, it must then meet certain operating requirements.  These include:

• Contribute 0.25% of all sales to a provincial traveller compensation fund semi-annually;
• Pay an annual registration renewal fee;
• Provide annual certified financial statements to the provincial regulator;
• Maintain a positive working capital (assents greater than liabilities);
• Maintain a trust account into which all client payments are deposited, and from which supplier payments are made - no operating expenses may be paid out of the trust account;
• Be subjected to financial inspections from the regulator;
• Meet strict disclosure/advertising and invoicing requirements;

Altogether, these requirements amount to a rigorous oversight environment for the travel industry in Ontario. 

COMPENSATION FUND

Beyond ensuring that travel businesses in Ontario are rigorously operated, the government of Ontario has set up the Traveller Compensation Fund.  According to the TICO website:  “The Fund provides reimbursement of monies paid to an Ontario registered travel agent for travel services that are not provided due to the bankruptcy or insolvency of an Ontario registrant or an end supplier airline or cruise line, where a reimbursement has not otherwise been provided. As long as the consumer has dealt through a registered Ontario travel retailer, a claim may be filed against the Compensation Fund for the non-provision of travel services”. 

To the best of our knowledge, only a small handful of jurisdictions in North America have similar consumer protection legislation.  These include:

CANADA: British Columbia, Ontario, Québec

USA: Florida, Hawaii, Iowa, Nevada, Washington

European nations tend to have such legislation as well, while such regulatory oversight is rare in Latin America.  

Short video explaining TICO's role