Do I have to get a WorkSafeNB clearance certificate when I buy a business in New Brunswick?

For a sale the Act covers, the Workers’ Compensation Act of New Brunswick says yes. Section 72.3(1) of the Workers’ Compensation Act applies to a sale of an industry to which the Act applies, or of the stock or equipment in bulk used in connection with that industry. In that case, under section 72.3(1) of the Act, the purchaser shall demand of the vendor, and the vendor shall deliver to the purchaser, a certificate from the Commission stating that it has no claim against the vendor of the industry, stock or equipment. Section 72.3(1) of the Act requires this before the purchaser pays any of the purchase price for the industry, stock or equipment.

What happens if the vendor does not provide it

Section 72.3(2) of the Workers’ Compensation Act says that if the vendor fails to provide the certificate, the purchaser is liable to the Commission for an amount equal to the amount due from the vendor to the Commission, up to an amount equal to the fair market value of the industry, stock or equipment. The Workers’ Compensation Act defines the Commission as the Workplace Health, Safety and Compensation Commission established under the Workplace Health, Safety and Compensation Commission and Workers’ Compensation Appeals Tribunal Act. Read section 72.3 itself, or ask a lawyer, to confirm how it applies to your sale.

Why amounts owed can follow the property

Section 72(2) of the Workers’ Compensation Act says that, notwithstanding any other Act, any amount due to the Commission by an employer under an assessment, any amount the employer is required to pay the Commission under the Act, or a judgment for either, creates a fixed, specific and continuing charge in favour of the Commission. Under section 72(2) of the Act, the charge is on the employer’s property or proceeds of property in New Brunswick, real or personal, and on any property or proceeds of property in New Brunswick, real or personal, that the employer uses in or in connection with, or produces in, the industry for which it is assessed or the amount becomes due. Section 72(4) of the Act adds that, notwithstanding subsection (2), a charge that attaches to property produced in or by that industry is extinguished on a bona fide sale of that property made in the ordinary course of business. If you are buying assets, ask the seller and WorkSafeNB about any amount owing to the Commission.

What WorkSafeNB says

WorkSafeNB says that, before buying any existing business, you should obtain a clearance letter from WorkSafeNB. It describes a clearance certificate as a document that states in writing that the business in question does not have overdue premiums owed to WorkSafeNB. Ask the seller early whether a certificate has been requested. For the wider purchase steps, see buying a business in New Brunswick. This page covers New Brunswick only.