Ontario Court of Appeal Ruling Jeopardizes Event and Wedding Planners

Ontario Court of Appeal Ruling Jeopardizes Event and Wedding Planners
Monday, October 31, 2011 by Anne Thornley-Brown @executiveoasis

In a dangerous precedent, an Ontario Court of Appeal decision has blurred the distinction between event planners and travel agents. Dangerous, because rulings in one jurisdiction usually spread to others.

Section 4(1)(a) of Ontario's Travel Industry Act 2002, S.O. 2002, c. 30 Schedule D. indicates that it is an offense for an individual or firm that has not been registered as a travel agent to act in that capacity. Fair enough. In most jurisdictions, travel agents

* sell travel services to consumers
* collect and hold client funds in trust accounts
* disperse funds to hotels, resorts, airlines, tour operators and other travel suppliers
* issue tickets and vouchers

In Monsanto Canada vs Ontario (Superintendent of Financial Services) "sales in Ontario by a registered travel agent" were determined to be "the amount paid through the travel agent for all travel services sold in Ontario." On July 22, 2010, an Ontario Court of Appeal ruling reversed earlier decisions and broadened the definition of "travel agent":

Travel Council of Ontario vs David Thomas Gray O/A All Sport Accommodations

"[25] ...the proper interpretation of "travel agent" in the Act includes a person who sells travel services to consumers as an agent for the provider of those services"

All Sport Accommodation collected no funds from client, yet it was deemed to be a de facto agent for the hotels because it received commissions. The TICO website has a long list of similar convictions.

Implications for Event Planners: More Red Tape...Higher Overhead

Quebec uses a definition of "travel agent" consistent with other US and Canadian jurisdictions. A common sense approach does not require registration by planners who occasionally handle hotel or travel arrangements.

Ontario event planners and wedding planners who assist clients with transportation, accommodation or meeting venues at hotels or resorts arrangements can be charge unless they register with the Travel Industry Council of Ontario (TICO).

This is in spite of the fact that commissions are not paid until after the event when there is no longer any risk to the client. The registration process is long and expensive involving:

* a $3,000 application fee
* an opening pro forma statement showing minimum working capital of $5,000
* a $10,000 security deposit
* scrutiny of bank statements
* evidence of a trust account(s)
* a lengthy exam with content intended for travel agents
* annual renewal fees

To pay commissions, some airlines (e.g. WestJet) also require IATA or TIDS registration. All of these fees are prohibitive for independent meeting planners and small event planning firms. They lack the resources to handle the red tape. Generating enough income to stay afloat through fees for planning business meetings, weddings, special events, or corporate events will be a challenge. Without commissions or fees for assisting clients in finding hotels, event venues and transportation companies, some small firms will not remain afloat.

Against the backdrop of travel industry bankruptcies that stranded thousands of Canadians in foreign destinations, TICO plays a vital role. High profile bankruptcies resulting in payouts by TICO have involved tour operators, airlines, and hotels. Yet hotels are not required to contribute to TICO's compensation fund and airlines are exempt as they are federally regulated. Declaring war on event planners who do not hold funds for clients does not get to the root of the problem or address the industry's deeper systemic problems.

MPI, PCMA, GBTA, SITE, and CanSPEP need to advocate now to protect the interests of the public and the profession. In the meantime, event planners should refer clients requiring hotel facilities or transportation facilities to TICO travel agents or direct them to search the Cvent Supplier Network