First permanent delivery-fee cap in Canada will help B.C. ring in new year
Canada’s first permanent cap on fees charged to restaurants by food-delivery companies will go into effect in British Columbia on Jan. 1, 2023, giving restaurant owners more certainty about their costs.
“We all have a favourite local restaurant, somewhere we celebrate as families and friends, eat our favourite foods, or get a taste of home,” said Brenda Bailey, Minster of Jobs, Economic Development and Innovation. “When restaurants were being charged unfair fees, our government acted fast to implement a temporary cap on delivery-service fees. We’re excited to bring in a permanent cap in the new year that will provide more support to restaurants.”
The Food Delivery Service Fee Act was passed on Nov. 3, 2022, in response to delivery companies charging fees to restaurants as high as 30% of an order’s value during the pandemic. It followed a temporary cap put in place in December 2020, and extended in September and December 2021.
The new permanent cap limits the fees that delivery companies can charge restaurants to no more than 20% of the dollar value of an order. The act also allows delivery companies to offer optional, enhanced services for restaurants to opt into at their discretion.
To ensure drivers are treated fairly, the act prohibits delivery companies from downloading costs onto drivers, ensuring employees and contractors will continue to be paid their wages and gratuities.
“We’ve seen dramatic growth in app-based delivery work in recent years,” said Janet Routledge, Parliamentary Secretary for Labour. “But we need to ensure workers are treated fairly. It was a priority to include protections for food-delivery workers in this legislation that prevent the costs of the delivery-fee cap from being downloaded onto them.”
This permanent cap is in addition to the B.C. government’s ongoing supports for the industry, such as:
the ability of bars and tourism operators with liquor licences to permanently purchase beer, wine and spirits at wholesale prices;
the authorization of thousands of temporary patios; and
increasing access to the small-business corporate income tax rate by raising the ceiling from $15 million to $50 million in taxable capital.