Service fees, delivery fees and menu prices: Canada's drip pricing rule for restaurants

A menu price, an online ordering price and a price on a delivery listing are all advertisements. Canada's Competition Act has a rule about advertisements where the price at the end is higher than the price at the start because of fees added later. The Competition Bureau calls it drip pricing. It was written with online retail in mind, and the Bureau's pages do not mention restaurants. The principle still reaches any business that advertises a price, so it is worth a look at how your own menus and order pages work.

What is drip pricing?

The Bureau describes it as advertising a low price and then adding mandatory fees, so that the price the customer saw cannot be reached. It says the practice raises concerns under the Competition Act, and its advice to businesses is to never promote an unattainable price.

Which fees does it cover?

Mandatory fees that make the advertised price unattainable. The Bureau's page says a charge that is variable rather than fixed could still raise concerns. The one clear exception is government-imposed charges on purchasers, such as sales tax. The Bureau's guide to the June 2024 amendments adds that businesses can no longer treat their own business taxes and compliance costs as mandatory fees that sit outside the advertised price.

When did it become law?

The amendments to the Competition Act in Bill C-59 received Royal Assent on 20 June 2024. The new private access to the Tribunal took effect on 20 June 2025: private parties can now bring deceptive marketing cases, and the Tribunal can order payments to affected persons. Check the Competition Bureau for the drip pricing changes themselves.

What does it mean for a menu?

Think about every extra line a guest sees after choosing. For each one, ask whether the guest can avoid it.

• Sales tax is added on top, and that is allowed.
• A tip the guest chooses is a choice, not a mandatory fee.
• A mandatory service charge on every bill, a mandatory packaging charge on takeout, a mandatory online ordering fee, or a mandatory delivery fee are fees the guest cannot avoid. If they are not in the price the guest sees first, they are the kind of fee the rule is about.
• A surcharge on card payments that is not shown until the till is a late fee of the same kind. Card surcharge rules are covered in credit card surcharges for Canadian restaurants.

The Bureau's pages do not say how it would treat a restaurant service charge or a delivery fee. Treat these as questions for a lawyer. The safest approach, and the simplest, is to include a mandatory charge in the menu price, or show it clearly at the same moment and in the same place as the price.

What about delivery apps?

If you list prices on a delivery platform that are higher than your in-restaurant prices to cover the platform's commission, the price on the platform should be the price the guest pays for the item. The platform's own fees to the customer are the platform's responsibility, but your menu price is your advertisement. Read your platform agreement and compare the listing with what a guest sees at checkout. The commission side is in Ontario delivery app commissions and BC's delivery app fee cap.

What about a large party gratuity?

An automatic gratuity added to a big group is common in restaurants. Whether it is a mandatory fee for these purposes is not addressed on the Bureau's pages. Say it clearly where the group books and again on the menu, and put it in writing in the booking confirmation.

What are the consequences?

The Bureau's page says the consequences depend on whether the conduct falls under the civil or criminal provisions, and it links to a separate page on penalties and remedies. It lists a case against a cinema chain as an example of enforcement.

A quick audit

1. Walk through your online ordering page as a guest, from menu to payment.
2. List every charge added after the menu price.
3. Mark each as tax, optional or mandatory.
4. Move mandatory charges into the price, or show them next to it.
5. Keep screenshots with dates.
6. Repeat after any change to your menu or ordering tool.

Your gift card and deposit wording matters too: see Ontario gift card and loyalty point rules and BC gift card rules.

More in the Canadian guides for food businesses.