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Ontario Proposes Cap on Delivery Fees



TORONTO — The Ontario government is introducing new legislation that would protect restaurants from high delivery fees. The Supporting Local Restaurants Act, 2020, would cap fees charged by food-delivery companies in areas where indoor dining is prohibited to help more small and independent restaurants stay in business.

After working with the sector, Prabmeet Sarkaria, Associate Minister of Small Business and Red Tape Reduction, says restaurants should expect a cap of 15 per cent for delivery fees, with an overall cap of 20 per cent inclusive of all fees.

Sarkaria described this approach as similar to what has been put in place in New York City and aims to ensure delivery drivers’ pay would be protected and delivery apps would not reduce service areas or restaurant selection. Employees or contractors who perform delivery services would be able to file complaints if their compensation or payments were reduced once the act comes into effect.

If passed, the legislation would also permit fines of up to $10 million to food-delivery companies that do not comply with the law. And, restaurants would be able to file complaints online if a food-delivery service has charged fees in excess of the cap.

“Ontario’s small and independent restaurants have shouldered an outsized share of COVID-19’s economic burdens,” says Sarkaria. “But through it all, they’ve continued to serve our communities, our families and have lifted our spirits. With this legislation, our government is helping local businesses stay in business and providing a solution that will help our local restaurants when every little bit helps.”