Home Business & Economy Business BC Restaurants boosted by cap on delivery fees to year-end 2022

BC Restaurants boosted by cap on delivery fees to year-end 2022

Monday December 20, 2021 | VICTORIA, Bc

by Mary P Brooke | Island Social Trends

Calling it a “considerable” announcement, Minister of Jobs, Economic Recovery and Innovation, Ravi Kahlon, has extended the cap on service delivery fees for another year, through to December 31, 2022.

He made the announcement from a White Spot restaurant in the Vancouver area, along with MLA Brenda Bailey, and representatives from the food industry (including the White Spot CFO and the vice-president of Restaurants Canada).

ravi kahlon
Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation at White Spot for delivery service fee cap announcement, Dec 20, 2021.

“Restaurants and bars facing ongoing challenges from the COVID-19 pandemic will continue to receive support from the Province through extension of the food delivery cap,” it was stated in today’s government release.

The cap limits the total fees delivery companies can charge food establishments, helping restaurants to continue to operate and build their own recovery while serving their communities.

COVID impacts on the restaurant industry:

“Over the last two years, the restaurant industry has shown such resilience and tenacity as it has adapted to overcome immense challenges from this pandemic,” said Ravi Kahlon, Minister of Jobs, Economic Recovery and Innovation. “We know food delivery charges were hurting hard-working businesses and their bottom line. That’s why we are here: to provide a helping hand by extending the cap to put more hard-earned money back into the pockets of people working in the restaurant industry.”

The temporary cap, which was set to expire at midnight on December 31, 2021, is being extended until December 31, 2022.

The cap limits fees charged to restaurants from food delivery companies at 15%. An additional cap of 5% will also be extended for other related fees associated with use of the service, such as online ordering and processing fees. This will ensure companies cannot shift their delivery costs to other fees.

brenda bailey, mla
Brenda Bailey, MLA (Vancouver-False Creek) at White Spot for delivery service fee cap announcement, Dec 20, 2021.

The measure also prohibits delivery companies from reducing compensation for their drivers or retaining staff gratuity, making sure employees will continue to be paid their regular wages.

“The food delivery fee cap extension is like unwrapping a new gift just days before Christmas,” Ian Tostenson, president and CEO, BC Restaurant and Foodservices Association. “This is great news for the industry and allows so many restaurants from across our province to continue to provide take-out options to their customers. We want to thank government for listening to our concerns over these fees and continuing to take action to support our industry through these incredibly challenging times.”

The food delivery service fee cap is being extended under the COVID-19 Related Measures Act. The original order was put in place on Dec. 22, 2020, under the Emergency Program Act and extended in September 2021.

Unintended consequences:

Today the government says that the small-delivery service businesses that serve less than 500 restaurants will continue to be exempt from the order. That could mean that many small delivery service operators will be overlooked by restaurants unless their fees stay within the 20% cap.

It shows one way that small businesses sometimes become caught in the mechanisms of serving another or broader industry sector.

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Helping restaurants:

The key reason of the delivery cap is of course to help the hospitality and food service sector which has been among the hardest hit sectors during the ongoing pandemic. Changes to people’s restaurant purchasing habits started back in March 2020 when COVID lock-downs happened; even with more nuanced COVID guidelines in today’s economy, cutting back on dining in restaurants has continued to varying degrees.

“The extension of the food delivery fee cap is great news for the restaurant industry,” said Warren Erhart, president and CEO, White Spot and Triple O’s restaurants. “This cap allows us to deliver meals to people on a more financially viable basis and continue to support our staff. We appreciate the extension of the cap as we continue to navigate these unique and challenging times.”

Restaurants Canada, vp
Mark von Schellwitz, vice-president, Restaurants Canada at the BC government’s announcement about capping service delivery fees, Dec 20, 2021.

The food delivery fee cap extension is part of government’s ongoing support for the industry to allow restaurants to stay open and serve their communities during the pandemic. Earlier this year, the Province announced restaurants, bars and tourism operators with liquor licences were able to purchase beer, wine and spirits at wholesale prices permanently.

“Throughout the pandemic, our industry has faced a number of challenges – including high delivery fees,” said Mark von Schellwitz, vice-president, Restaurants Canada. “The cap brought in by the Province has helped bring down the costs associated with delivering meals to people. We are thrilled that this cap is being extended as we work to continue to adapt and recover from the pandemic.”

Liquor pricing maintained at wholesale:

In 2021, the Province amended B.C.’s liquor- and food-primary liquor licence to allow restaurants to sell and deliver sealed, packaged liquor products alongside the purchase of a meal for off-site consumption.

The Province has taken action to allow more than 2,000 temporary patios to become permanent under amended provincial liquor regulations.

Wholesale pricing of liquor sales to restaurants continues on a permanent basis, Kahlon said today.

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