Canada’s Advertising Rules to Have Uneven Impact

Canadian travel agencies in provinces where travel sales have been unregulated, until now, run the risk of a fine if they don’t heed the nation’s new inclusive airfare advertising rules.

The rules, which went into effect in December, require that advertised or quoted prices for air travel originating in Canada include all taxes, fees and charges that consumers must pay.

The Canadian Transportation Agency, which will monitor the situation, is prepared to issue fines for noncompliance of up to $5,000 for an individual or $25,000 for a corporation.

Broad application
The rules apply to all advertisers of air services.

They also cover all types of advertising vehicles, including interactive media, such as online booking agents, call centers and service desks; non-interactive media, including print publications, television and radio, and social media, including Tweets, YouTube videos and Facebook posts.

Ontario, Quebec and British Columbia, which have their own travel regulatory bodies, won’t see much change, according to travel industry attorney Tim Law, a partner in Heifetz, Crozier, Law in Toronto.

Travel Market Report asked Law to discuss Canada’s new rules and their impact on travel agents.

What do Canadian travel agents need to know about the new inclusive airfare advertising rules?
Law: They need to be aware of their obligation to do exactly what the regulation says. You have to advertise air travel so the purchasing member of the public knows exactly what they’re paying for.

In the past, an airfare for Toronto-New York was advertised for $50 on a billboard. When you looked at it, it was $50 for the flight. But when you added taxes and fees it was $350. Now you have to let the public know what the total price of that flight will be.

How will the situation differ among provinces?
Law: Ontario is regulated when it comes to the sale of travel, and the same thing applies to the provinces of Quebec and British Columbia. Agents in those provinces [already] had to make sure that someone who buys from their agencies would know the [total] price of what they buy.

There won’t be much of a difference for those travel agencies that are regulated and have had to advertise travel products like that for some time.

What about agencies in the unregulated provinces?
Law: Agents in unregulated provinces, however, need to change their advertising or if they don’t, they may be running afoul of those regulations.

You need to advertise in a certain way for the type of travel that the regulations apply to.

What about airfare prices in tour packages?
Law: This regulation doesn’t apply to packaged travel service –that week in the sun in Bermuda, the Bahamas or Dominican Republic.

So if you compare a travel agent in Ontario with an agent in Manitoba, the agent in Manitoba is not obliged by the [new] regulation to give price exposure. But Ontario law requires [agents and advertising] to specify exactly what a packaged trip to Cuba will cost.

The travel agent in Manitoba with no provincial regulation, and an exception under the new regulations, is not required to disclose the prices [for packaged tours].  

How long do you estimate it will take for full compliance?
Law: It won’t take long at all, because lots of people have been already doing it since mention was made last year.

Travel agents are good businesspeople. They get that if you tell somebody in the Saturday newspaper that a flight is $50, but when someone calls, it’s $250, that just doesn’t make sense.