Mark Pestronk
Mark Pestronk

Q: I have some good business contacts in Canada, and I am considering making a proposal to handle their travel from our U.S. office. I have heard that I need to be registered under Canadian seller of travel laws in order to sell to them. Is that really true? If not, can I actively prospect for and solicit Canadian corporate accounts and leisure travelers, or does solicitation cross a line? Can I go as far as to open an office in Canada? What about having a single, home-based employee or independent contractor in Canada?

A: The bad news is that the three most populous provinces -- Ontario, Quebec and British Columbia -- have travel agency licensing laws. Compared with states' seller of travel laws in the U.S., the Canadian statutes and regulations are formidable in complexity, and compliance is high in cost. In Quebec, the requirements are only in French.

The good news is that, unlike the U.S. states that have seller of travel laws, the provincial governments' policy is not to enforce their laws against U.S.-based sellers of travel with no physical presence in the province. I don't think that you can find this policy written anywhere, but my Canadian legal colleagues assure me that it is true.

So, you don't need any government agency's permission to handle travel for residents of any province or to solicit Canadian companies and individuals, as long as you do so from the U.S. If the policies change, or if my Canadian legal colleagues tell me that I have misstated them, I'll follow up in a future column.

On the other hand, opening an office in any of the three licensing provinces will require you to register. In addition, in Saskatchewan, you will need to be licensed by the Insurance Department, which regulates travel agencies.

I found a terrific summary of each province's requirements here.

Some of the more burdensome requirements in Ontario, for example, are a $3,000 registration fee, $5,000 in working capital, a $10,000 security deposit, a trust account and renewal fees of up to $1,800. In addition, travel advisors and their supervisors must pass an exam and maintain their own licenses.

There is no exemption for having just one home-based employee or independent contractor advisor in Canada. In fact, this configuration would require you to register, as the advisor must have a licensed employer or host, and the advisor's home would be considered your agency's office in the province.

If you need to have at least some presence in Canada for marketing purposes but want to avoid the red tape, you can set up an office or a home-based advisor in one of the six provinces with no registration or licensing laws. You can also do what many large U.S. agencies do: Establish a joint venture with an established Canadian agency.

One example that could work is having the Canadian agency open a location in your business' name but under the Canadian agency's ownership, along with a management agreement giving you a role in decision-making.

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