Ontario caps food delivery fees

by Inside Logistics Online Staff

TORONTO – The Ontario government is moving to cap food delivery fees.

The Supporting Local Restaurants Act, 2020 came into effect on December 19. Food delivery companies will be required to limit the rates they charge to 20 per cent for each transaction – with no more than 15 per cent for commission for food delivery services.

The cap applies in areas where indoor dining is prohibited, to help restaurants stay in business. If indoor dining is prohibited in new regions, the cap will also apply in those locations.

The government will ensure that food delivery company employees or contractors who perform delivery services will not have their compensation reduced in response to these changes.

It will also allow 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.

Fines of up to $10 million may be imposed on food delivery service companies that do not comply with the new 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.

The caps will apply to the largest food delivery companies in the province that serve 500 or more restaurants.