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New laws place outfitters in same boat as travel agents (11/03)

By IAN ROSS Ecotourism operators in northeastern Ontario are balking at paying government licensing fees that classify them as registered travel agents under new provincial consumer protection laws.


Ecotourism operators in northeastern Ontario are balking at paying government licensing fees that classify them as registered travel agents under new provincial consumer protection laws.

They want the Ministry of Consumer and Business Services to exempt them from the onerous financial requirements of the Travel Industry Act that places ecotourism outfitters, lodge owners and paddle sport companies who package tours in the same vein as booking agents, charter airlines and cruise lines.

Mary Nelder of Mindemoya on Manitoulin Island remembers the mantra repeatedly preached last year during a provincially-sponsored Sudbury ecotourism conference. That mantra was to “package, package, package” their tours and to utilize partnerships wherever possible.

Little mention was made of the Travel Industry Act and its financial implications, until Nelder received notification late last fall from the Travel Industry Council of Ontario (TICO), the government’s tourism regulatory body, advising her that her business was in contravention of the new legislation.

Nelder, who conducts cycle tours on Manitoulin Island, provides a one-fee package that includes meals and accommodations, baggage transfer, road support and maps. She contracts out meals and accommodations to other businesses on the island during the slower off-seasons.

“I love it and I think it benefits the economy of the island,” says Nelder, who also serves as Central Manitoulin township reeve and works for the Lacloche Manitoulin Business Assistance Corp.

“I primarily operate in the shoulder seasons because cyclists prefer spring and fall, and that’s ideal for the accommodations and restaurants on the island. I bring them customers during a time of year when they don’t have much business.”

But under the legislation, ecotourism operators who collect a single payment from clients for services such as accommodations and meals, that they do not directly provide themselves, are considered travel agents.

Refusal to bring her part-time, seasonal company - Bike Manitoulin - into compliance would result in a $25,000 fine or a year in jail.

Nelder says the application fee was $2,375, followed by an annual fee of $325.

She was also told to provide a minimum $5,000 line of credit to be kept in a trust account, as well as lay down a $10,000 security deposit to be held by TICO for two years.

In addition, registrants must pay into an Ontario Travel Compensation Fund twice a year according to a retail rate of 25 cents per $1,000 of sales, to reimburse consumers when travel companies go bankrupt.

Under the act, all Ontario travel agencies and wholesalers are required to register with TICO and participate in a compensation fund developed to protect consumers. The fund is aimed at reimbursing consumers who paid for, but did not receive, travel services due to bankruptcy or insolvency.

Nelder says she has briefly considered her options including the economics of biting the bullet and paying up, or working under a TICO-licensed travel agent and losing some autonomy in operating her business. But in the end, she opted to terminate package tours as of April 1.

“I haven’t had a single registration since I un-packaged, a few phone inquiries, but not one registration,” says

Nelder. “Prior to April 1, I had seven.”

How much of her business loss can be attributed to un-packaging her tours is unknown, she says, especially when fears over West Nile, SARS and the deteriorating state of Canada-U.S. relations are factored in.

Nelder was part of a Sudbury delegation from Partners in Eco-Adventure Tourism (PEAT) that met in Toronto with Ministry of Consumer and Business Services officials, including assistant deputy minister Sue Corke on June 12.

The group was petitioning for a regulatory exemption so that northern ecotourism operators can be included in the same category as organizers of school field trips, non-profit church groups and university field researchers.

Though Nelder described ministry officials’ reaction to her story as “surprisingly sympathetic” and says she was offered reassurances a solution was in the offing, “they were not exactly sure what it was and weren’t quite prepared to accept the solution that we were proposing.”

Carol-Lynn Lepard, a Ministry of Consumer and Business Services spokesperson, says staff are working on drafting new regulations for the Travel Industry Act, which received all-party support in Queen’s Park last December.

“The details for industry regulations will change,” says Lepard, explaining it is easier to adjust an existing piece of legislation rather than introduce an entirely new one.

When the new draft regulations are finalized, public consultation will be invited and tourism groups such as PEAT will be asked for comment.

Nelder says she understands and supports the spirit of the Act, but not its application.

“I don’t have a problem with the legislation,” says Nelder. “I think it’s excellent for what it’s intended for. How it’s being applied is the issue. It was obviously designed for tour companies and travel agents that operate on a much larger scale than what we operate on.

“I think there has to be some way to ensure consumer protection without holding small tour operators to the same standard as Signature Vacations or Sunquest Tours.”

Nelder says if a suitable resolution is not reached by next year she will probably fold up her four-year-old excursion business.

Unlike tour companies who accept bookings over the Internet and never see their customers, Nelder says she backs up what she advertises.

“We’re small local tour operators,” says Nelder, who usually employ a summer student, until this year. “We actually accompany our customers on their tour. We meet them when they arrive, we tour with them and shake their hands and say goodbye.”

“We don’t see ourselves as travel agents in any way. Yes, we put together a tour package, but we’re there. If any problems arise, we fix it on the spot.”

Meredith Armstrong, PEAT’s development co-ordinator of about 25 Sudbury area ecotourism operators is spreading the word this summer about the Travel Industry Act to the membership.

Armstrong says ecotourism represents a lifestyle choice for many operators and she suspects many members will likely un-package their offerings rather than pay the fees, which would not bode well for the fledgling regional industry.

“There are a lot of people who really wouldn’t want to be licensed under TICO,” says Armstrong. “They think there should be (legislation) changes (since they) aren’t people sitting in offices somewhere booking people for

trips all over the world.”