Caps for food delivery services to be implemented in Ontario this weekend
TORONTO – Ontario legislation to cap commission fees for third-party grocery delivery services in the provincial restricted areas goes into effect this weekend.
As of Saturday, food suppliers are only allowed to charge 20 percent per transaction and a maximum of 15 percent commission.
“This new cap provides the necessary support for small and independent restaurants in communities burdened by the devastating effects of COVID-19,” said Prabmeet Sarkaria, deputy minister for small businesses and red tape, in a statement released Friday afternoon.
The Supporting Local Restaurants Act applies to non-franchised restaurants that generally have indoor eateries but whose customers are not allowed to be served due to a COVID-19 order.
As of Friday, only restaurants in regions that are in the last “gray area” of the province’s five-tier COVID-19 framework have been closed to personal dining. Roadside pickup and takeaway are the only options for restaurants in this category.
The regions in the “gray area” include Toronto, Peel Region, York Region and Windsor-Essex.
However, the upper limit does not apply to regions included in the four “red” zones, despite strict restrictions on restaurant capacity. In the “red” zone, restaurants are limited to 10 indoor customers regardless of their size. Eating outdoors is permitted with no capacity restrictions.
The fee cap only applies to the largest grocery stores, according to the province, or to businesses that take orders from 500 or more restaurants.
The legislation allows complaints to be submitted to the government and penalties to be imposed.
A person convicted of a crime under the Supporting Local Restaurants Act can face a maximum sentence of $ 50,000 or less than one year in prison. A company convicted of a crime is subject to a maximum fine of $ 10,000,000.
The city of Toronto has been calling for a cap on grocery delivery charges for months and is finding that many restaurants are struggling with some businesses’ 30 percent commission.