As a regulator of your industry, we are working to provide helpful information to you as soon as information becomes available. As the situation related to the COVID-19 pandemic continues to evolve, we understand how important it is for your business to be able to continue operating in a time of social distancing or possible quarantine. The content on this page is intended to clarify some questions you may have.
The Canadian Transportation Agency (CTA) has issued guidance to the airline industry that giving vouchers or credits instead of refunds is an acceptable practice during the pandemic response. We’ve been getting questions about whether travel vouchers or credits would be covered under the Travel Assurance Fund (TAF) if the travel agency, or third-party supplier, ceased operation.
The direct answer is that the TAF would not apply. Here’s why:
If a travel agent, or third-party travel supplier, ceases operations, there needs to be contracted travel services in order for a consumer, or licensee, to apply to the TAF for compensation. A travel voucher or credit is not considered to be a travel service and can’t be claimed against the TAF. When travel agents or third-party suppliers cancel arrangements and offer credit in the form of vouchers or certificates, the consumer no longer has a contract for travel services, but simply a promise of being able to book travel at some future point in time.
Also, a “force majeure” (such as weather, war, or pandemic) that results in the cancellation or delay of travel services is not typically covered by the TAF. However, if the end supplier failed as a result of a force majeure and the consumer is no longer able to get travel due to the business failure then they may be covered. TAF claims are assessed on a case by case basis.
We’re hearing from consumers that travel agents are updating their cancellation policy to include COVID-19 information after the consumer purchased travel services.
As a business, you must adhere to your refund policy that formed as part of the contract that was in place when you sold the travel services. Failure to do so could be construed as a breach of contract.
