Mandatory lower fees for restaurants where indoor dining is prohibited due to COVID-19
(CORNWALL) – The Ontario government is helping local restaurants by introducing new
legislation that would protect them 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.
Currently, fees placed on restaurants by food delivery companies can reach as high as 30% in
Ontario. After working with the sector, Minister Sarkaria said restaurants should expect a cap of
15% for delivery fees, similar to what has been put in place in New York City, with an overall cap
of 20% inclusive of all fees. This approach aims to ensure that delivery drivers’ pay would be
protected and delivery apps would not reduce service areas or restaurant selection.
If passed, the legislation the government intends to introduce today by Prabmeet Sarkaria,
Associate Minister of Small Business and Red Tape Reduction, and the regulation under it
- Cap the rates charged by food delivery service companies and apps in areas where
- indoor dining is prohibited.
- Permit fines of up to $10 million to food delivery service companies that do not comply
- with the law.
- Provide food delivery service company employees or contractors who perform delivery
- services with protection that their compensation will not be affected by these changes.
“Ontario’s small and independent restaurants have shouldered an outsized share of COVID-19’s
economic burdens,” said Minister 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.”
“Restaurant operators and their employees are among the local heroes in their efforts to
provide quality service to residents,” said Jim McDonell, MPP for Stormont-Dundas-South
Glengarry. “The least we can do, is to make sure that delivery costs don’t drive away muchneeded
To provide additional relief to local restaurants and other businesses required to close or
significantly restrict services in areas categorized as Control or Lockdown, Ontario has
announced $600 million to help with them fixed costs, including property taxes, hydro and
natural gas bills. The government is also supporting small businesses and restaurants through
its Main Street Recovery Plan by:
- Committing to permanently allow licensed restaurants and bars to include alcohol with food as part of a takeout or delivery order before the existing regulation expires;
- Offering the $60-million Main Street Relief Grant that provides up to $1,000 to help eligible small businesses with the cost of PPE;
- Permanently allowing delivery companies to provide deliveries 24/7, providing needed flexibility;
- Helping nearly 23,000 small businesses grow online with $2,500 grants through Digital Main Street;
- and Offering free financial advice and online training to help small businesses make informed decisions and navigate the unprecedented economic circumstances brought on by the pandemic.