Does my Safe Food for Canadians licence transfer when I sell my food business?

A Safe Food for Canadians (SFC) licence is the federal licence the Canadian Food Inspection Agency (CFIA) issues for food activities such as trade within and outside Canada, manufacturing, processing, packaging and labelling. The Safe Food for Canadians Act says the licence is not transferable. The CFIA adds that the licence is issued to a specific person, for example an individual or a business, who is identified in the application. So a sale is not just a handover of paperwork. It raises a question about who the licensed person will be after closing.

What the CFIA says you must assess

The CFIA states that the person named in the licence must always be the same person who conducts the activities the licence authorizes. As the licence holder, you are responsible for deciding whether a particular change results in a change to that person. The CFIA names a sale or change in ownership, a change in controlling shareholders and an amalgamation, and adds “or other change related to the business”. The CFIA also notes that the Canada Revenue Agency publishes guidance on change of legal status that may help with this question.

What follows from the answer

The CFIA says that, depending on the circumstances, you may need to amend or surrender your existing licence to reflect the change. If you determine the change amounts to a different person holding the licence, a new licence would be required for the new person to conduct the activities set out in it. The CFIA points the new person to its My CFIA user guidance for applying. If you are unsure whether your change creates a different person, the CFIA says you may wish to consult a lawyer or another professional who specializes in this area.

The licence term

The Safe Food for Canadians Regulations say a licence expires two years after the date of issuance or renewal specified in it, unless it is cancelled before then. The CFIA adds that if a licence expires, its number is no longer valid and it cannot be renewed, although you can apply for a new licence on your existing My CFIA party profile. Note the expiry date on your licence when you plan the sale timetable.

What to check or ask before closing

• Ask your lawyer how the structure of the sale affects who holds the licence; see asset sale vs. share sale for the two structures.
• Contact the CFIA, through your My CFIA account or the contact details on its licence pages, before closing.
• Plan the buyer’s licence timing with your lawyer, so the purchase agreement addresses it.
• Ask your province or municipality whether any separate food premises requirements apply to the business.