Ontario to cap fees for lockdown food delivery as Peel pushes for small businesses to reopen

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Peel Region joined the scores of small businesses pushing back against Ontario’s new lockdown restrictions for the sector Thursday, as the province made one move to help restaurants by capping the fees that app companies can charge for delivery services.

Associate Small Business Minister Prabmeet Sarkaria said the province will limit the fees that apps such as UberEats, DoorDash and SkipTheDishes charge to restaurants in locked-down communities to a total of 20 per cent of the order price, while threatening fines of up to $10-million for violations.

The announcement came nearly a week after Ontario declared Toronto, Mississauga, Brampton and Caledon would return to the highest level of pandemic restrictions. All retailers, except for stores selling “essential” goods such as grocers and hardware stores, can rely only on curbside pickup and delivery for sales, while restaurants must do the same – even if they’ve set up spacious, heated patios.

Small businesses in the region, one of the country’s most heavily populated, have since pushed back against these restrictions. Such an approach threatens their already-diminished revenues, they say, while lining the coffers of megaretailers such as Amazon.com and Wal-Mart, and delivery services such as UberEats that have recently charged commissions as high as 30 per cent.

The announcement came as Mississauga Mayor Bonnie Crombie tried to convince councillors in Peel Region – which includes Brampton and Caledon – to force big-box stores that sell groceries and essential goods to cordon off anything that is non-essential. This approach is already in use by Manitoba.

Though council instead decided that such a request was impractical, Ms. Crombie said in an interview that Peel would instead focus its efforts on asking the province to find a way to let small retailers reopen. “Some are using their life’s savings to stay afloat, and many will not reopen their doors,” she said. “There’s a fundamental unfairness and inequity in the system.”

Premier Doug Ford did not address Peel’s request Thursday, but David Williams, Ontario’s Chief Medical Officer of Health, said that now was not the time to loosen restrictions on retailers in lockdown zones as Ontario’s infection rates appeared to be slowly decelerating.

In the days after Ontario saw broad pushback to its approach, Alberta and Nova Scotia enacted new restrictions that would allow most small retailers to remain open, provided stores reach no more than one quarter their total capacity.

At his news conference Thursday, Mr. Sarkaria declined to answer repeated questions from The Globe and Mail and other media about whether the province was considering such measures.

Instead, he said the province was taking advice from public-health officials – despite assertions by Auditor-General Bonnie Lysyk this week that his Progressive Conservative government had been pushing those officials to the sidelines.

Without chastising individual delivery-app providers – which he said were consulted as the new legislation was drafted – Mr. Sarkaria acknowledged that their fees undercut restaurants’ bottom lines at a moment when many entrepreneurs need their services for survival. “For many of them, it’s their only way to keep the lights on,” he told reporters.

In legislation to be tabled Thursday, the Ontario government said such app providers must cap delivery fees at 15 per cent of sales, and the total of all fees charged by providers should top out at 20 per cent. Mr. Sarkaria warned that compensation for workers delivering the food – who have long fought for stronger rights in Ontario – could not be lowered just because of the new fee caps.

Both restaurateurs and couriers will be able to file complaints if a delivery service violates the new rules. When dine-in service resumes in locked-down areas, Mr. Sarkaria said, the fee cap would be lifted.

Jurisdictions across Canada have struggled to find a balance between public safety and measures to ensure the survival of small businesses, which form the backbone of communities and contribute nearly half the country’s economic output.

Mr. Sarkaria said SkipTheDishes, which was founded in Winnipeg but is now a division of Amsterdam’s Just Eat Takeaway.com NV, was part of the consultations and voluntarily reduced its fees in Toronto and Peel.

In a statement Thursday, however, Kevin Edwards, the company’s chief executive officer, said “we are disappointed that they have decided to regulate private enterprise by enforcing a commission cap on food delivery services operating in the province.”

The statement pointed to a number of other initiatives that SkipTheDishes has enacted to reduce costs for restaurant clients. Those include a 25-per-cent commission rebate for locked-down regions that “already” effectively lowers fees below 20 per cent for independent restaurants, and a zero-per-cent commission rate for new clients that join during lockdown.

Laura Miller, Uber Canada’s head of policy and communications, declined to comment on Ontario’s new restrictions directly, but said in an e-mail that it had supported local restaurants through various initiatives such as marketing campaigns and flexible fee structures. “We appreciate the opportunity to engage with the government on this issue,” she said. DoorDash Inc. similarly declined to comment directly on the fee restrictions.

With files from Jeff Gray and Oliver Moore

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