TORONTO – Ontario’s law capping commission fees for third-party food delivery services in lockdown areas of the province comes into effect this weekend.
Starting Saturday, food delivery companies will be limited to charging a 20 percent rate per transaction, with no more than 15 percent commission.
“This new cap will provide the necessary support for small independent restaurants in communities weighed down by the devastating effects of COVID-19,” Prabmeet Sarkaria, associate minister of small businesses and red tape reduction, said in a statement released Friday after -midday.
the Local Restaurant Support Law applies to non-franchised restaurants that typically have meals indoors but are prohibited from serving customers due to a COVID-19 order.
On Friday, only restaurants in areas placed in the last “gray” zone of the province’s five-tier COVID-19 framework were closed to in-person meals. Curbside pickup and take out are the only options left for restaurants in this category.
Regions in the “gray” zone include Toronto, Region of Peel, Region of York and Windsor-Essex.
However, the ceiling will not apply in the regions considered in the four “red” zones, despite strict limitations on restaurant capacity. In the “red” zone, restaurants are limited to 10 customers inside, regardless of their size. Outdoor meals are permitted with no capacity limit.
The fee cap will only apply to the largest food delivery companies, the province said, or to those taking orders from 500 or more restaurants.
The legislation allows complaints to be filed with the government and the application of sanctions.
A person convicted of an offense against Local Restaurant Support Law can face a maximum fine of $ 50,000 or less than one year in prison. A company found guilty of an offense is liable to a fine of up to $ 10,000,000.
The city of Toronto has been asking for a cap on food delivery charges for months, noting that many restaurants are struggling because of the 30% commission charged by some businesses.