The Ontario government announced that it is capping high food delivery fees to help small and independent restaurants during COVID-19.
The Supporting Local Restaurants Act, 2020 will come into effect tomorrow, December 19, at 12:01 a.m. Food delivery companies will be required to limit the rates they charge to 20% for each transaction — with no more than 15% for commission for food delivery services. The cap applies in areas where indoor dining is prohibited, to help restaurants stay in business and continue contributing to their communities. If indoor dining is prohibited in new regions, the cap will also apply in those locations.
To support this change, the government will provide food delivery company employees or contractors who perform delivery services with protection that their compensation will not be reduced in response to these changes.
It will also enable restaurants and food delivery company employees or contractors to file online complaints if they are charged fees that exceed the cap or if their compensation or payments are reduced.
Fnes of up to $10 million will be imposed on food delivery service companies that do not comply with the law.
“This new cap will provide needed support for small and independent restaurants in communities weighed down by the devastating effects of COVID-19,” said Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction. “We’re all in this together. Food delivery companies, consumers and communities are all part of the solution. This holiday season, let’s support local restaurants by getting takeout, ordering delivery, or buying gift cards for family and friends. By giving to the people who mean so much to us, we can give back to the restaurants that make our main streets bright.”
