General Regulation under the Supporting Local Restaurants Act, 2020
Regulation - LGIC
Bill or Act:
Supporting Local Restaurants Act, 2020
Summary of Proposal:
The Supporting Local Restaurants Act, 2020 prohibits food delivery services providers, who are identified in the regulations, from charging restaurants more than the prescribed amount for food and beverage delivery services or related services. The prohibition applies in respect of restaurants that are not chain restaurants, that have indoor dining, and that are prohibited from permitting indoor dining by an order or direction under the Reopening Ontario (A Flexible Response to COVID-19) Act, 2020 or the Health Protection and Promotion Act.
This regulation provides clarification on the prescribed elements indicated in the Supporting Local Restaurants Act, 2020 (the "Act").
Defines Food Delivery Service Provider:
Establishes that a "Food Delivery Service Provider" is a person or partnership that provides food and beverage delivery services or related services to a restaurant and that any food delivery service provider that provides these services to fewer than 500 restaurants is exempt from this Act.
This regulation prescribes, for the purposes of section 2 of the Act, the maximum amount that a food delivery services provider may charge is an overall cap of twenty per cent (20%) for combined delivery and other related services per transaction. It further establishes:
• a maximum of fifteen per cent (15%) charged for delivery in each transaction; and
• a maximum of ten per cent (10%) charged for other related services.
The regulation also excludes fees agreed to by the restaurant, unrelated to individual orders, that they may choose to opt into. These fees might include but are not limited to marketing and promotional services.
Coming into Force Date:
The regulation will come into force on the same day the Act comes into force.
Analysis of Regulatory Impact:
The combined impacts of the Supporting Local Restaurants Act, 2020 and the General Regulation are described below:
Delivery service businesses:
Since the regulation does not require reporting or licensing of any form, no upfront costs paid to government are expected to be incurred by the delivery companies in order to comply. No new administrative cost for business. However, there may be costs related to updating technology platforms to ensure that the appropriate caps are in place for the areas where indoor dining is prohibited.
The records that will be required to demonstrate non-compliance by a food delivery service provider are expected to be copies of existing agreements, invoices, and bills that the restaurant currently receive from the service provider.
There is an expectation that restaurants will benefit from this regulation because it is expected to increase the proportion of the total food order payment received by restaurant owners.
November 30, 2020
Comments Due Date:
December 6, 2020