Ontario Caps Food Delivery Fees to Protect Small Businesses
Lower fees to support restaurants where indoor dining is prohibited
The Ontario government says it is helping small and independent restaurants during COVID-19 by capping high food delivery fees.
The Supporting Local Restaurants Act, 2020 will come into effect 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.
“This new cap will provide needed support for small and independent restaurants in communities weighed down by the devastating effects of COVID-19. 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.” – Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction
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.
- 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.
- Impose fines of up to $10 million to food delivery service companies that do not comply with the law.
The Supporting Local Restaurants Act is one of many ways the government is supporting small businesses and restaurants when and where they need it most. This includes permanently allowing licensed restaurants and bars to sell alcohol with delivery and takeout orders, and offering up to $1,000 to help small businesses with two to nine employees to recover the costs of personal protective equipment (PPE) through the $60-million Main Street Relief Grant.
The government is also providing $600 million in COVID-19 support for businesses required to close or significantly restrict services in areas categorized as Red-Control or Grey-Lockdown. This funding helps cover costs associated with property taxes and energy bills.
- Caps will apply to the largest food delivery companies in the province that serve 500 or more restaurants.
- Applications for the Main Street Relief Grant and COVID-19 property tax and energy cost rebates can be made quickly and easily online. Businesses can expect to receive their grants or rebate payments within a few weeks of submitting their completed applications.