In an effort to help local restaurants at this time, the Ontario government is introducing new legislation that would protect them from high delivery fees.
If passed, the Supporting Local Restaurants Act, 2020, would “cap” fees that are charged by food delivery companies where indoor dining is prohibited.
Along with these changes, under the regulation, fines of up to $10 million to food delivery service companies that do not follow the rules would be allowed. This would also give food delivery service company employees or contractors protection so that their compensation will not be affected by these new measures.
“Ontario’s small and independent restaurants have shouldered an outsized share of COVID-19’s economic burdens,” said Minister Sarkaria in a news release.
“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.”
According to the release, at the moment, fees placed on restaurants by food delivery companies can reach as high as 30% in the province; however, after working with the sector, Sarkaria said that restaurants should is to drop to 15% for delivery fees.
Though this may be good news for local restaurant owners, Kevin Edwards, CEO of SkipTheDishes, is “disappointed” in the new measures.
“While we are glad the Ontario government recognizes the work SkipTheDishes has been doing since March to support our restaurant partners, we are disappointed that they have decided to regulate private enterprise by enforcing a commission cap on food delivery services operating in the province,” said Edwards.
“When taking into account the 25% commission rebate we have implemented in affected regions of the province, all local independent restaurant partners on the SkipTheDishes platform are already paying less than 20% in commission while their dining rooms are closed.”
As Toronto remains under lockdown with indoor dining closed, Mayor John Tory has advocated for these changes and welcomes them with open arms.
“Throughout the pandemic we have been urging food delivery companies to substantially help their restaurant customers so they can stay in business. While some companies have offered some help, we have heard loud and clear from restaurants that more needs to be done right now. That’s why I have been advocating for a cap on delivery fees and why City Council unanimously asked the province to take action,” said Tory.
“This is the right thing to do and will help our restaurants who are working to provide takeout and delivery options right now.”
In October of this year, the province also introduced the Main Street Recovery Act, which would support “small businesses and modernize rules” in order to allow them to “innovate and meet the challenges of today.”